UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934


Date of Report (Date of Earliest Event Reported): July 9, 2021

 

 

 

Sunlight Financial Holdings Inc.
(Exact name of registrant as specified in its charter)

 

 

 

Delaware
(State or Other Jurisdiction
of Incorporation)
001-39739
(Commission File Number)
85-2599566
(IRS Employer
Identification No.)

 

101 N. Tryon Street
Suite 1000
Charlotte, NC
(Address of Principal Executive Offices)
28246
(Zip Code)

 

(888) 315-0822
(Registrant’s telephone number, including area code)
 
Spartan Acquisition Corp. II
9 West 57th Street, 43rd Floor
New York, NY 10019
(Former Name or Former Address, if Changed Since Last Report)

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

Title of each class

  Trading Symbol(s)   Name of each exchange
on which registered
Class A Common Stock, par value $0.0001 per share   SUNL   New York Stock Exchange
Warrants, each whole warrant exercisable for
one share of Class A Common Stock at an exercise price of $11.50 per share
  SUNL WS   New York Stock Exchange

 

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

 

Emerging growth company x

 

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. ¨

 

 

 

 

 

INTRODUCTORY NOTE

 

On July 9, 2021 (the “Closing Date”), Sunlight Financial Holdings Inc., a Delaware corporation (formerly known as Spartan Acquisition Corp. II) (the “Company”), consummated the previously announced business combination pursuant to that certain Business Combination Agreement (the “Business Combination Agreement”), dated January 23, 2021, by and among Spartan Acquisition Corp. II, a Delaware corporation (“Spartan”), SL Invest I Inc., a Delaware corporation and wholly-owned subsidiary of Spartan (“MergerCo1”), SL Invest II LLC, a Delaware limited liability company and wholly-owned subsidiary of Spartan (“MergerCo2”), SL Financial Investor I LLC, a Delaware limited liability company and wholly-owned subsidiary of Spartan (“Holdings I”), SL Financial Investor II LLC, a Delaware limited liability company and wholly-owned subsidiary of Spartan (“Holdings II”), SL Financial Holdings Inc., a Delaware corporation and wholly-owned subsidiary of Spartan (“Spartan Sub”), SL Financial LLC, a Delaware limited liability company and wholly-owned subsidiary of Spartan Sub (“OpCo Merger Sub” and collectively with MergerCo1, MergerCo2, Holdings I, Holdings II and Spartan Sub, the “Spartan Subsidiaries”), Sunlight Financial LLC, a Delaware limited liability company (“Sunlight”), FTV-Sunlight, Inc., a Delaware corporation (“FTV Blocker”), and Tiger Co-Invest B Sunlight Blocker LLC, a Delaware limited liability company (“Tiger Blocker,” and collectively with FTV Blocker, the “Blockers”). The transactions contemplated by the Business Combination Agreement are collectively referred to herein as the “Business Combination.”

 

Upon the completion of the Business Combination and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions,” and such completion, the “Closing”), the post-combination company is organized in an “Up-C” structure, such that all of the material assets of the combined company are held by Sunlight, and the only material asset of the Company (together with its wholly-owned subsidiaries, Spartan Sub, Holdings I and Holdings II) is its indirect equity interests in Sunlight.

 

The total consideration paid to (i) FTV V, L.P, a Delaware limited partnership (“FTV Blocker Holder”) and Tiger Infrastructure Partners Co-Invest B LP, a Delaware limited partnership (“Tiger Blocker Holder” and collectively with FTV Blocker Holder, the “Blocker Holders”) and (ii) certain persons and entities, other than the Blockers, who owned prior to the Closing (A) existing units representing limited liability interests in Sunlight (other than forfeited and unallocated units representing limited liability interests in Sunlight), (B) equity awards issued pursuant to the Sunlight Financial LLC 2017 Long-Term Incentive Plan (the “LTIP Unitholders”) and (C) warrants to purchase equity interests in Sunlight (the “Former Sunlight Warrantholders”) (the persons in the foregoing subclauses (A), (B) and (C), collectively, the “Unblocked Sunlight Unitholders”) was comprised of, (x) with respect to the Blocker Holders and the Unblocked Sunlight Holders (other than the LTIP Unitholders and the Former Sunlight Warrantholders), rights under the Tax Receivable Agreement, as described in greater detail below, and (y) with respect to the Blocker Holders, the Unblocked Sunlight Holders, the LTIP Unitholder and the Former Sunlight Warrantholders, approximately $1.175 billion, of which:

 

(a) approximately $458,617,507 of the consideration (based on an assumed value of $10.00 per share consideration) was paid to the Blocker Holders consisting of:

 

1. an aggregate of approximately $121,526,569 in cash; and

 

2. an aggregate of 33,709,094 shares of the Company Class A common stock, par value $0.0001 per share (“Class A Common Stock”).

 

(b) approximately $647,543,632 of the consideration (based on an assumed value of $10.00 per share of consideration) was paid to the Unblocked Sunlight Unitholders consisting of:

 

1. an aggregate of approximately $171,589,079 in cash; and

 

2. 47,595,455 units representing limited liability company interests in Sunlight designated as Sunlight Class EX Units (“Sunlight Class EX Units”) (together with a corresponding number of shares of Class C Common Stock, par value $0.0001 per share (“Class C Common Stock” and, together with the Class A Common Stock, “Common Stock”) which is a new class of common stock issued at the Closing).

 

(c) approximately $68,838,862 of the consideration (based on an assumed value of $10.00 per share of consideration) was paid to the LTIP Unitholders and Former Sunlight Warrantholders consisting of:

 

1. an aggregate of approximately $17,861,117 in cash;

 

2. 4,954,324 shares of Class A Common Stock; and

 

3. 627,780 shares of Class A Common Stock reserved for issuance at an exercise price of $7.715 per share pursuant to the TCU Amendment (as defined below).

 

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In connection with the entry into the Business Combination Agreement, but effective immediately prior to the Closing, Spartan, Spartan Acquisition Sponsor II LLC (the “Sponsor”), and the other holders of the Founder Shares entered into the Founders Stock Agreement (the “Founders Stock Agreement”), pursuant to which, among other things, subject to and effective immediately prior to the Closing, the Sponsor agreed to surrender up to 25% of the Founder Shares held by the Sponsor (at a 1:4 ratio to the percentage, if any, of redemptions by holders of Class A Common Stock); provided that no such surrender will occur unless more than 5% of the outstanding shares of Class A Common Stock are actually redeemed by Spartan. As a result, an aggregate of 1,187,759 of the Founder Shares were surrendered to Spartan for cancellation. After giving effect to the forfeiture contemplated by the Founders Stock Agreement (as defined below), each outstanding share of the Company’s Class B common stock, par value $0.0001 per share (“Founder Shares” or “Class B Common Stock”), was converted into a share of Class A Common Stock on a one-for-one basis and the Founder Shares ceased to exist. The foregoing description of the Founders Stock Agreement is a summary only and is qualified in its entirety by reference to the Founders Stock Agreement, a copy of which was attached as Exhibit 10.1 to the Current Report on Form 8-K filed by Spartan with the U.S. Securities Exchange Commission (the “SEC”) on January 25, 2021, and is incorporated herein by reference.

 

In connection with the Closing, the Company changed its name from “Spartan Acquisition Corp. II” to “Sunlight Financial Holdings Inc.” Unless the context otherwise requires, the “Company” refers to the registrant and its subsidiaries, including Sunlight and its subsidiaries, after the Closing, and “Spartan” refers to the registrant prior to the Closing.

 

The aggregate cash consideration paid at the Closing of $310,976,765 consisted of (a) the amount of cash from (i) funds available for release to Spartan in Spartan’s trust account established in connection with Spartan’s initial public offering (the “Trust Account”), net of the payments of funds from the Trust Account required to be made to the Redeeming Stockholders (as defined in the Business Combination Agreement), plus (ii) cash held by Spartan without restrictions outside of the Trust Account, plus (iii) cash paid to Spartan pursuant to the subscription agreements, dated as of January 23, 2021 by and among Spartan, Sunlight, as applicable, and the investors named therein (the “Subscription Agreements”) in which such investors purchased an aggregate of 25,000,000 shares of Class A Common Stock for a purchase price of $10.00 per share (the “PIPE Investment”), (b) less $50,000,000 to be retained by the combined company as working capital less (c) an amount equal to all unpaid Sunlight transaction expenses and Spartan transaction expenses on the Closing Date (collectively, the “Transaction Expenses”).

 

The foregoing description of the Business Combination Agreement is a summary only and is qualified in its entirety by reference to the Business Combination Agreement, a copy of which was attached as Exhibit 2.1 to the Current Report on Form 8-K filed by Spartan with the SEC on January 25, 2021, and is incorporated herein by reference. A more detailed description of the Business Combination can be found in the section titled “The Business Combination” in the Company’s definitive proxy statement/prospectus filed with the SEC on June 21, 2021, as supplemented on July 2, 2021 (the “Proxy Statement”) prepared in connection with the solicitation of the proxies from Spartan’s stockholders to approve, among other things, the Business Combination.

 

Item 2.01 of this Current Report on Form 8-K discusses the Closing and various other transactions contemplated by the Business Combination Agreement and is incorporated herein by reference.

 

Item 1.01 Entry into a Material Definitive Agreement

 

The disclosure set forth in the “Introductory Note” above is incorporated into this Item 1.01 by reference.

 

Sunlight Support Agreement

 

In connection with the entry into the Business Combination Agreement, on January 23, 2021, certain members of Sunlight whose approval is sufficient to approve and adopt the Business Combination Agreement and the Business Combination on behalf of Sunlight’s members (the “Requisite Sunlight Members”), entered into a support agreement (the “Support Agreement”), pursuant to which, among other things, the Requisite Sunlight Members agreed to execute and deliver a written consent approving the Business Combination Agreement and the Business Combination (the “Written Consent”) within two business days after the effectiveness of Spartan’s registration statement on Form S-4 and to vote in favor of the approval and adoption of the Business Combination Agreement and the Business Combination.

 

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The foregoing description of the Support Agreement is a summary only and is qualified in its entirety by reference to the Support Agreement, a copy of which is attached as Exhibit 10.15 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Founders Stock Agreement

 

The description of the Founders Stock Agreement and related forfeiture set forth in the “Introductory Note” above is incorporated into this Item 1.01 by reference.

 

Sunlight A&R LLC Agreement

 

On the Closing Date, Sunlight, the Company, Spartan Sub and certain members named therein entered into the Fifth Amended and Restated Limited Liability Company Agreement of Sunlight (the “Sunlight A&R LLC Agreement”), pursuant to which, among other things: (a) Spartan Sub became the sole managing member of Sunlight, (b) the outstanding units representing limited liability company interests in Sunlight were recapitalized into Sunlight Class X Units and Sunlight Class EX Units and (c) each Sunlight Class EX Unit holder has certain redemption rights to cause Sunlight to acquire all or a portion of its Sunlight Class EX Units (together with the corresponding number of shares of Class C Common Stock) for, at Sunlight’s election (i) shares of Class A Common Stock on a one-for-one basis or (ii) cash. The foregoing description of the Sunlight A&R LLC Agreement is a summary only and is qualified in its entirety by reference to the Sunlight A&R LLC Agreement, a copy of which is attached as Exhibit 3.3 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Investor Rights Agreement

 

On the Closing Date, Spartan, the Sponsor, Tiger Blocker Holder and Tiger Infrastructure Partners Sunlight Feeder LP (“Tiger IPSF” and together with Tiger Blocker Holder, collectively “Tiger”), FTV Blocker Holder and certain holders party thereto (together with Tiger and FTV Blocker Holder, the “IRA Holders”), entered into the Investor Rights Agreement, dated July 9, 2021 (the “Investor Rights Agreement”) pursuant to which, among other things, (i) that certain Registration Rights Agreement, dated November 24, 2020, was terminated, (ii) Tiger and FTV Blocker Holder agreed to the same lock-up restrictions applicable to the Sponsor and the board of directors and management team of Spartan (as described below) and (iii) Spartan agreed that, within thirty (30) calendar days after the Closing, the Company will file with the SEC (at the Company’s sole cost and expense) a registration statement registering the resale of certain securities held by or issuable to the IRA Holders, and the Company will use its reasonable best efforts to have such registration statement declared effective as soon as reasonably practicable after the filing thereof. In certain circumstances, pursuant to the Investor Rights Agreement, Tiger and FTV Blocker Holder can demand up to three underwritten offerings in the aggregate and the Sponsor can demand up to one underwritten offering. Each IRA Holder will be entitled to customary piggyback registration rights.

 

Furthermore, pursuant to the Investor Rights Agreement, the board of directors of the Company consists of nine directors, divided into three classes serving staggered three-year terms, and the Company is required to take all necessary action, to the fullest extent permitted by applicable law (including with respect to any fiduciary duties under Delaware law), to cause the following nominees to be elected to serve as directors on its board of directors:

 

if the Sponsor and its affiliates collectively beneficially own at least 50% of the number of shares of Class A Common Stock and Class C Common Stock (collectively, “Common Stock”) as such persons owned immediately following the Closing, one nominee designated by the Sponsor;

 

if FTV Blocker Holder and its affiliates collectively beneficially own at least 50% of the number of shares of Common Stock as such persons owned immediately following the Closing, one nominee designated by FTV Blocker Holder; and

 

if Tiger and its affiliates collectively beneficially own at least 50% of the number of shares of Common Stock as such persons owned immediately following the Closing, one nominee designated by Tiger.

 

In addition, for as long as the Sponsor, FTV Blocker Holder or Tiger maintains its nomination rights described above, under the Investor Rights Agreement, such person also has the right to appoint an observer to attend meetings of the board of directors of the Company, subject to customary limitations.

 

The foregoing description of the Investor Rights Agreement is a summary only and is qualified in its entirety by reference to the Investor Rights Agreement, a copy of which is attached as Exhibit 10.16 to this Current Report on Form 8-K and is incorporated herein by reference.

 

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Lock-Up Agreements

 

In connection with the Business Combination Agreement, at the Closing:

 

pursuant to the Investor Rights Agreement, as referenced above, Tiger and FTV Blocker Holder agreed to the same lock-up restrictions applicable to the Sponsor and the board of directors and management team of Spartan;

 

subject to certain exceptions, all Sunlight employees and former employees who, as of immediately after the Closing, held 100,000 shares or more of Class A Common Stock or Sunlight Class EX Units and a corresponding number of shares of Class C Common Stock, agreed that: (x) 20% of the Class A Common Stock or Sunlight Class EX Units and a corresponding number of shares of Class C Common Stock (as applicable, “Restricted Stock”) held by it, him or her will be subject to lock-up transfer restrictions until the one-year anniversary of the Closing, with the potential for Early Release (as defined below) after six months following the Closing and (y) 80% of the Restricted Stock held by it, him or her will be subject to lock-up transfer restrictions until the 15-month anniversary of the Closing, with the potential for Early Release after nine months following the Closing;

 

certain executives of Sunlight agreed that: (a) 20% of the Restricted Stock held by it, him or her will be subject to lock-up transfer restrictions until the 16-month anniversary of the Closing, with the potential for Early Release after nine months following the Closing and (b) 80% of the Restricted Stock held by it, him or her will be subject to lock-up transfer restrictions until the 20-month anniversary of the Closing, with potential for Early Release after 14 months following the Closing; and

 

all other persons who held equity or equity-based awards in respect of less than 100,000 shares of Restricted Stock as of immediately prior to at the Closing, agreed that 100% of the Restricted Stock held by it, him or her will be subject to lock-up transfer restrictions until the six-month anniversary of the Closing; provided, that with respect to any such person that is not a Sunlight employee, Sunlight will request and use commercially reasonable efforts to obtain such agreement from such person;

 

where applicable, subject to exceptions included in such lock-up agreements, including for “net settlement” of distributions of Class A Common Stock to holders of certain company awards as contemplated by Section 2.02(e) of the Business Combination Agreement in respect of applicable tax withholding obligations.

 

An “Early Release” shall be achieved if the last sale price of the Class A Common Stock equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period commencing at the period specified above after the Closing.

 

The foregoing description is a summary only and is qualified in its entirety by reference to the forms of Lock-Up Agreements and Investor Rights Agreement, copies of which are attached as Exhibit 10.8, 10.9, 10.10 and 10.16 to this Current Report on Form 8-K and are incorporated herein by reference.

 

Amendment to Letter Agreement

 

In connection with the entry into the Business Combination Agreement, but effective upon the Closing, Spartan, the Sponsor and each member of the board of directors of Spartan (the “Pre-Closing Spartan Board”) entered into the Letter Agreement Amendment, dated as of January 23, 2021 (the “Letter Agreement Amendment”), which amended that certain letter agreement, dated as of November 24, 2020, by and among Spartan, the Sponsor and each member of the Pre-Closing Spartan Board (the “Letter Agreement”), to modify the lock-up restrictions set forth in the Letter Agreement as follows:

 

80% of the Founder Shares (including any shares of Class A Common Stock issued in respect of the conversion of such Founder Shares upon the Closing) held by it, him or her will be subject to lock-up transfer restrictions until the one-year anniversary of the Closing, or earlier, if, subsequent to the Closing, (i) the last sale price of the Class A Common Stock equals or exceeds $12.00 per share for any 20 trading days within a 30-day trading period commencing at least 150 days after the Closing or (ii) Spartan consummates a transaction which results in all of Spartan’s stockholders having the right to exchange their shares of Class A Common Stock and Class B Common Stock for cash, securities or other property; and

 

20% of the Founder Shares (including any shares of Class A Common Stock issued in respect of the conversion of such Founder Shares upon the Closing) held by it, him or her will be subject to lock-up transfer restrictions until the six-month anniversary of the date of the Closing, or earlier, if, subsequent to the Closing, (i) the last sale price of the Class A Common Stock equals or exceeds $12.00 per share for any 20 trading days within a 30-day trading period ending at least 90 days after the Closing (ii) Spartan consummates a transaction which results in all of Spartan’s stockholders having the right to exchange their shares of Class A Common Stock and Class B Common Stock for cash, securities or other property.

 

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The foregoing description of the Letter Agreement Amendment is a summary only and is qualified in its entirety by reference to the Letter Agreement Amendment, a copy of which is attached as Exhibit 10.12 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Tax Receivable Agreement

 

On the Closing Date, the Company entered into the Tax Receivable Agreement with the TRA Holders and the Agent (as defined therein). The Tax Receivable Agreement generally provides for the payment by the Company to the Agent, for disbursement to the TRA Holders on a pro rata basis, of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the Closing as a result of (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of a TRA Holder’s Sunlight Class EX Units upon the exercise of the redemption or call rights set forth in the Sunlight A&R LLC Agreement and (ii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the Tax Receivable Agreement. The Company will retain the benefit of the remainder of the actual net cash savings, if any.

 

If the Company elects to terminate the Tax Receivable Agreement early or if it is terminated early due to the Company’s failure to honor a material obligation thereunder or due to a Change of Control (as defined in the Tax Receivable Agreement), the Company will be required to make a payment equal to the deemed present value of the anticipated future payments to be made by it under the Tax Receivable Agreement (based upon certain assumptions and deemed events set forth in the Tax Receivable Agreement), which amount may substantially exceed the actual cash tax savings realized by the Company. In the case of an early termination upon a Change of Control (as defined in the Tax Receivable Agreement), such early termination payment may, at the Company’s election, be paid ratably over the two-year period following the Change of Control.

 

The foregoing description of the Tax Receivable Agreement is a summary only and is qualified in its entirety by reference to the Tax Receivable Agreement, a copy of which is attached as Exhibit 10.13 to this Current Report on Form 8-K and is incorporated herein by reference.

 

PIPE Financing

 

In connection with the execution of the Business Combination Agreement, on January 23, 2021, Spartan entered into the Subscription Agreements with the New PIPE Investors (as defined in the Proxy Statement) pursuant to which the New PIPE Investors agreed to purchase, and Spartan agreed to sell to the New PIPE Investors, an aggregate of 25,000,000 shares of Class A Common Stock (the “PIPE Shares”), for a purchase price of $10.00 per share, or an aggregate purchase price of $250.0 million, in a private placement (the “PIPE Financing”).

 

The closing of the sale of the PIPE Shares pursuant to the Subscription Agreements was contingent upon, among other customary closing conditions, the subsequent or substantially concurrent consummation of the Business Combination. The purpose of the PIPE Financing was to raise additional capital for use by the combined company following the Closing.

 

Pursuant to the Subscription Agreements, Spartan agreed that, within 30 calendar days after the Closing Date (the “Filing Deadline”), the Company will file with the SEC (at the Company’s sole cost and expense) a registration statement registering the resale of the PIPE Shares (the “PIPE Resale Registration Statement”), and the Company will use its commercially reasonable efforts to have the PIPE Resale Registration Statement declared effective as soon as practicable after the filing thereof.

 

The foregoing description of the Subscription Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Subscription Agreement, a copy of which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.

 

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Indemnification Agreements

 

The Second Amended and Restated Certificate of Incorporation of the Company (the “Charter”), which became effective in connection with the completion of the Business Combination, contains provisions limiting the liability of directors, and the Amended and Restated bylaws of the Company (the “Bylaws”), which became effective in connection with the completion of the Business Combination, provides that the Company will indemnify each of its directors to the fullest extent permitted under Delaware law. The Charter and the Bylaws also provide the board of directors of the Company (the “Board”) with discretion to indemnify officers and employees when determined appropriate by the Board. Copies of the Charter and Bylaws are attached as Exhibit 3.1 and 3.2, respectively to this Current Report on Form 8-K and are incorporated herein by reference.

 

On the Closing Date, the Company entered into indemnification agreements (the “Indemnification Agreements”) with each of its directors and executive officers and certain other key employees. The Indemnification Agreements provide that the Company will indemnify each of its directors, executive officers and such other key employees against any and all expenses incurred by that director, executive officer or other key employee because of his or her status as one of the Company’s directors, executive officers or other key employees, to the fullest extent permitted by Delaware law, the Charter and the Bylaws. In addition, the indemnification agreements provide that, to the fullest extent permitted by Delaware law, the Company will advance all expenses incurred by its directors, executive officers and other key employees in connection with a legal proceeding involving his or her status as a director, executive officer or key employee.

 

The foregoing description of the Indemnification Agreements is a summary only and is qualified in its entirety by reference to the form of Indemnification Agreement, a copy of which is attached as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 2.01 Completion of Acquisition or Disposition of Assets

 

The disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference. The material provisions of the Business Combination Agreement are described in the Proxy Statement in the section titled “The Business Combination” beginning on page 110 of the Proxy Statement, which description is incorporated by reference herein.

 

On the Closing Date, the Company consummated the previously announced Business Combination pursuant to the Business Combination Agreement. Holders of 19,227,063 shares of Class A Common Stock sold in Spartan’s initial public offering (the “public shares”) exercised their right to have such shares redeemed for a pro rata portion of the Trust Account, or approximately $10.00 per share and $192,297,042.41 in the aggregate.

 

On July 7, 2021, the parties to the Business Combination Agreement agreed to waive the Minimum Cash Consideration Condition (as defined in the Business Combination Agreement) set forth in Section 8.03(f) of the Business Combination Agreement.

 

On July 9, 2021, the parties to the Business Combination Agreement agreed to waive the closing condition that certain individuals enter into lock-up agreements as set forth in Section 8.02(m) of the Business Combination Agreement, with respect to one individual investor.

 

In January 2021, Spartan entered into the Subscription Agreements to give effect to the PIPE Financing. At the Closing, the Company consummated the PIPE Financing and the New PIPE Investors received an aggregate of 25,000,000 shares of Class A Common Stock at a purchase price of $10.00 per share pursuant to the terms of the Subscription Agreements.

 

As consideration for the Business Combination, in addition to the $310,976,765 in cash consideration as described in the “Introductory Note” above, an aggregate of approximately 38.7 million shares of Class A Common Stock were issued to Blocker Holders, LTIP Unitholders and former holders of Sunlight Warrants who elected to exercise their Sunlight Warrants prior to the Closing and approximately 47.6 million Sunlight Class EX Units (and a corresponding number of Class C Common Stock) were issued to Unblocked Sunlight Unitholders.

 

On July 8, 2021, Sunlight and Tech Capital LLC entered into Amendment No. 1 to Warrant to Purchase Units (the “TCU Amendment”), which amended the Warrant to Purchase Units, dated February 27, 2021 (the “Warrant to Purchase Units”). Pursuant to the TCU Amendment, Tech Capital LLC holds outstanding warrants, exercisable for an aggregate of 627,780 shares of Class A Common Stock at an exercise price of $7.715 per share. The foregoing description of the Warrant to Purchase Units and TCU Amendment is a summary only and is qualified in its entirety by reference to the Warrant to Purchase Units and TCU Amendment, copies of which are attached as Exhibit 4.2 and 4.3, respectively to this Current Report on Form 8-K and are incorporated herein by reference.

 

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As of the Closing Date and following the completion of the Business Combination, the Company had the following outstanding securities:

 

84,837,655 (excludes 1,535,941 of shares held by Sunlight in respect of net withholding for tax payments) shares of our Class A Common Stock;

  

47,595,455 shares of our Class C Common Stock; and

 

17,250,000 and 9,900,000 public warrants and private placement warrants, respectively; and

 

Sunlight had the following outstanding securities:

 

a Sunlight Warrant exercisable for a total of 627,780 shares of Class A Common Stock; and

 

84,837,655 (excludes 1,535,941 of units held by Sunlight in respect of net withholding for tax payments) Sunlight Class X Units and 47,595,455 Sunlight Class EX Units.

 

As of the Closing Date and after forfeiture of 1,187,759 of the Founder Shares pursuant to the Founders Stock Agreement, the Sponsor owned an aggregate of 7,337,241 shares of Class A Common Stock and 9,900,000 private placement warrants. The description of the Founders Stock Agreement and related forfeiture set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference.

 

The Company’s Class A Common Stock and public warrants commenced trading on the New York Stock Exchange (the “NYSE”) under the symbols “SUNL” and “SUNL WS” on July 12, 2021, subject to ongoing review of the Company’s satisfaction of all listing criteria following the Business Combination. Spartan’s publicly traded units automatically separated into their component securities upon the Closing and, as a result, no longer trade as a separate security and have been delisted from the NYSE.

 

FORM 10 INFORMATION

 

Prior to the Closing, the Company was a shell company (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with no operations, formed as a vehicle to effect a business combination with one or more operating businesses. After the Closing, the Company became a holding company whose only assets consist of equity interests in Sunlight. Accordingly, pursuant to Item 2.01(f) of Form 8-K, the Company is providing below the information that would be included in a Form 10 if it were to file a Form 10. Please note that the information provided below relates to the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.

 

Cautionary Note Regarding Forward-Looking Statements

 

The Company makes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act in this Current Report on Form 8-K and in documents incorporated by reference herein. All statements, other than statements of present or historical fact, included in or incorporated by reference in this Current Report on Form 8-K regarding the Company’s future financial performance, as well as the Company’s strategy, future operations, future operating results, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “project” or the negative of such terms and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on various assumptions, whether or not identified herein, and on the current expectations of the Company’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as a guarantee, an assurance, a prediction or a definitive statement of, fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions, and such differences may be material. Many actual events and circumstances are beyond the control of the Company. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about the Company that may cause the actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. If any of these risks materialize or the Company’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that the Company does not presently know or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date hereof. The Company anticipates that subsequent events and developments will cause the Company’s assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, except as otherwise required by applicable law, the Company specifically disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Current Report on Form 8-K. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date hereof. Accordingly, undue reliance should not be placed upon the forward-looking statements. The Company cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are all difficult to predict and many of which are beyond the control of the Company.

 

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In addition, the Company cautions you that the forward-looking statements regarding the Company, which are included in this Current Report on Form 8-K, are subject to the following factors:

 

the outcome of any legal proceedings that have been or may be instituted against the Company following announcement of the Business Combination;

 

the risk that the Business Combination disrupts current plans and operations of the Company as a result of the announcement and consummation of the Business Combination;

 

the Company’s ability to realize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably following the Business Combination;

 

costs related to the Business Combination;

 

the Company’s success in retaining or recruiting, or changes in, its officers, key employees or directors following the Business Combination;

 

the possibility of third-party claims against the Trust Account;

 

changes in applicable laws or regulations;

 

the possibility that the COVID-19 pandemic may adversely affect the results of operations, financial position and cash flows of Sunlight or the Company;

 

technological changes;

 

data security breaches or other network outages;

 

the possibility that Sunlight or the Company may be adversely affected by other economic, business and/or competitive factors;

 

Sunlight’s failure to retain or replace existing contractors or to grow its contractor network;

 

Sunlight’s ability to either expand the commitments of its existing capital providers or find additional capital providers to fund additional volume; and

 

the risk that certain third-party service providers and vendors that Sunlight relies on may be unable or unwilling to provide their services or products.

 

Business and Properties

 

The business and properties of Sunlight prior to the Business Combination are described in the Proxy Statement in the section titled “Information about Sunlight” beginning on page 201, which is incorporated herein by reference. The business and properties of Spartan are described in the sections titled “Part I, Item 1. Business” and “Part I, Item 2. Properties” in Spartan’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2020, which was filed with the SEC on May 11, 2021 (the “Form 10-K”), which are incorporated herein by reference.

 

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Risk Factors

 

The risks associated with the Company’s business are described in the Proxy Statement in the section titled “Risk Factors” beginning on page 41, which is incorporated herein by reference.

 

Financial Information

 

Unaudited Pro Forma Condensed Combined Financial Information

 

The unaudited pro forma condensed combined financial information of the Company as of and for the three months ended March 31, 2021 and for the year ended December 31, 2020 is set forth in Exhibit 99.1 hereto and is incorporated by reference herein. The Company has applied the amendment to Regulation S-K Item 301 which became effective on February 10, 2021.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Management’s discussion and analysis of the financial condition and results of operations of Sunlight prior to the Business Combination is included in the Proxy Statement in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Sunlight” beginning on page 171, which is incorporated herein by reference. Management’s discussion and analysis of the financial condition and results of operation of the Company prior to the Business Combination is included in the Proxy Statement in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Spartan” beginning on page 220, which is incorporated herein by reference.

 

Executive Compensation

 

Spartan

 

None of Spartan’s officers or directors have received any cash compensation for services rendered to Spartan. Commencing on the date that Spartan’s securities were first listed on the NYSE through the Closing, Spartan paid the Sponsor a total of $10,000 per month for office space, utilities, secretarial support and administrative services. In addition, the Sponsor, Spartan’s executive officers and directors, and any of their respective affiliates, have been reimbursed for out-of-pocket expenses incurred in connection with activities on Spartan’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, was paid by Spartan to the Sponsor, Spartan’s officers and directors, or any of their respective affiliates, prior to the Closing.

 

Sunlight

 

Executive Compensation Prior to Closing

 

A description of the compensation of the named executive officers of Sunlight before the consummation of the Business Combination is set forth in the Proxy Statement in the section titled “Executive Compensation” beginning on page 236 and that information is incorporated herein by reference.

 

Director Compensation Prior to Closing

 

A description of the compensation of the directors of Sunlight before the consummation of the Business Combination is set forth in the Proxy Statement in the section titled “Executive Compensation—Fiscal Year 2020 Director Compensation” on page 245 and that information is incorporated herein by reference.

 

Executive Compensation After Closing

 

2021 Equity Incentive Plan and 2021 Employee Stock Purchase Plan

 

On June 17, 2021, the board of directors of Spartan adopted the 2021 Plan and the ESPP (as such terms are defined below), subject to and effective upon approval by Spartan’s stockholders at the special meeting of Spartan’s stockholders held on July 8, 2021 (the “Special Meeting”). Spartan’s stockholders approved the 2021 Plan and the ESPP at the Special Meeting. Each of Matthew Potere, Barry Edinburg and Timothy Parsons, the Company’s principal executive officer and its next two most highly compensated executive officers, who are referred to herein as the “named executive officers,” will be eligible to participate in both the 2021 Plan and the ESPP. For a description of these plans, see “Proposal No. 4 — The 2021 Plan Proposal” and “Proposal No. 5 — The ESPP Proposal” in the Proxy Statement beginning on page 158, which sections of the Proxy Statement are incorporated herein by reference.

 

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Employment Agreements for Named Executive Officers

 

In connection with the Business Combination, we entered into new employment agreements with each of the named executive officers (each, a “Sunlight Employment Agreement”) that become effective at Closing. Pursuant to the Sunlight Employment Agreements, each of the named executive officers have the following position at the Company (collectively, the “Employer”): Mr. Potere — Chief Executive Officer, Mr. Edinburg — Chief Financial Officer, and Mr. Parsons — Chief Operating Officer. The Sunlight Employment Agreements do not have a fixed term and may be terminated at any time in accordance with their terms. Upon any termination of employment by Messrs. Potere, Edinburg and Parsons or the Employer, each will be subject to a non-competition covenant that covers a period of 18 months (for Mr. Potere) or 12 months (for each of Messrs. Edinburg and Parsons) after the date of termination and a non-solicitation covenant that covers a period of 18 months (for Mr. Potere) or 12 months (for each of Messrs. Edinburg and Parsons) after the date of termination.

 

Base Salary and Annual Bonus

 

The base salaries and target bonus opportunities of the named executive officers are set forth in the Sunlight Employment Agreements. The initial base salaries set forth in the Sunlight Employment Agreements are $300,000 for Mr. Potere, $300,000 for Mr. Edinburg and $290,000 for Mr. Parsons. Base salaries will be reviewed and subject to adjustment, at least annually, by the Compensation Committee of the Board (the “Compensation Committee”).

 

Each of the named executive officers has a target annual bonus opportunity based on both the Company’s achievement of certain financial performance objectives and the named executive officer’s achievement of certain individual performance objectives. Each named executive officer’s target annual bonus opportunity is stated as a percentage of the named executive officer’s base salary and requires the named executive officer’s continued employment through December 31 of the calendar year during which the annual bonus is earned. The initial target annual bonuses set forth in the Sunlight Employment Agreements are 60% for Mr. Potere, 50% for Mr. Edinburg and 50% for Mr. Parsons.

 

Equity Compensation

 

The named executive officers are eligible to receive annual equity awards from time to time in the sole discretion of the Compensation Committee.

 

Employee and Additional Benefits

 

The named executive officers are eligible to receive benefits that are substantially similar to those of other executives of the Employer of like status. In addition, Sunlight will reimburse the named executive officers for certain incremental self-employment taxes associated with their K-1 filing status (for so long as they remain K-1 filers) and their business expenses incurred in the ordinary course of business, in accordance with the Employer’s expense reimbursement policies and procedures.

 

Severance Benefits — Termination of Employment for Cause and without Good Reason

 

Pursuant to the Sunlight Employment Agreements, upon termination of the named executive officer’s employment by the Employer for Cause (as defined below), or by the named executive officer without Good Reason (as defined below), such named executive officer will receive: (i) any accrued and unpaid base salary through the date of termination; (ii) payment for any previously unreimbursed business expenses; (iii) vested amounts under the Sunlight Employment Agreement and any other agreement with the Employer, (iv) except in the case of a termination for Cause (as defined below), an annual bonus for any completed fiscal year to the extent then unpaid, and (v) any previously unreimbursed incremental self-employment taxes due under the Sunlight Employment Agreement associated with their K-1 filing status (collectively, the “Accrued Rights”).

 

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Severance Benefits — Termination by the Employer without Cause or by the Named Executive Officer for Good Reason Not in Connection with a Change in Control

 

Under the Sunlight Employment Agreements, each named executive officer is entitled to the following severance payments in the event of termination of his employment without Cause or upon his resignation for Good Reason outside of the Protection Period (as defined below) (collectively, the “Involuntary Termination Severance Benefits”):

 

Accrued Rights;

 

Multiple of base salary (2 times for Mr. Potere and 1.5 times for each of Messrs. Edinburg and Parsons);

 

Multiple of the target annual bonus (2 times for Mr. Potere and 1.5 times for each of Messrs. Edinburg and Parsons);

 

Full and immediate vesting of all outstanding Class C Units (including any provisionally vested Class C Units) granted prior to the effective date of the applicable Sunlight Employment Agreement (and any cash, securities or other consideration into which such Class C Units are converted) and a 12-month post-termination exercise period with respect to vested stock options and stock appreciation rights (or, if shorter, the remainder of the full term); and

 

An amount equal to the monthly premium payment to continue the named executive officer’s (and the named executive officer’s family members who were participants in the group health, dental and vision plans immediately prior to the named executive officer’s termination of employment) existing group health, dental coverage and vision for 18 months, calculated under the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 without regard to whether the named executive officer actually elects such continuation of coverage (the “COBRA Benefits”).

 

The cash-based portion of the Involuntary Termination Severance Benefits (other than the Accrued Rights) will be paid in equal monthly installments over a 24-month period (for Mr. Potere) or an 18-month period (for each of Messrs. Edinburg and Parsons). As a condition to the receipt of the Involuntary Termination Severance Benefits, each of the named executive officers must timely execute and not revoke a release of claims.

 

Under the Sunlight Employment Agreements, “Cause” generally means the named executive officer’s (a) willful and material breach of any material term or provision of the Sunlight Employment Agreement, (b) indictment or conviction of or plea of nolo contendere to a felony or other crime involving dishonesty or moral turpitude or that would otherwise reasonably be expected to impair or impede the operations of the Employer, (c) gross negligence, violence or threat of violence, fraud, theft or embezzlement (including any violation of federal securities laws), (d) willful breach of any material, written policy of the Employer or the rules of any governmental or regulatory body that, in either case, is (or reasonably could be) materially and demonstrably injurious to the Employer, (e) willful and repeated refusal to follow the lawful directions of the board of directors of the Employer, or (f) any other willful misconduct or breach of fiduciary duty that is (or reasonably could be) materially injurious to the financial condition, operations or business reputation of the Employer.

 

Under the Sunlight Employment Agreements, “Good Reason” generally means, without the named executive officer’s written consent, (a) a material reduction in the named executive officer’s base salary or target annual bonus opportunity, provided however, that prior to a Change in Control (defined below) any diminution in the named executive officer’s base salary shall not be considered a material diminution to the extent the amount of the diminution, when stated as a percentage, is applied uniformly among all similarly situated employees and does not represent more than a 20% diminution of base salary, (b) a material diminution in the nature or scope of the named executive officer’s authority, duties or responsibilities, (c) a diminution in the named executive officer’s title or change in the reporting relationship of the named executive officer, (d) any material breach by the Employer of any provision of the Sunlight Employment Agreement, and (e) any requirement by the Employer that the named executive officer work primarily from an office or location more than 25 miles from the location stated in the Sunlight Employment Agreement.

 

Under the Sunlight Employment Agreements, “Change in Control” generally means (a) any “person” or “group” (as defined in Section 13(d) and 14(d) of the Exchange Act), excluding for this purpose, (i) any trustee or other fiduciary holding securities under an employee benefit plan of the Employer, or (ii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the Company’s common stock), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly of 50% or more of the total voting power represented by the Company’s then-outstanding securities; (b) a change in the composition of the Board during any 12 consecutive month period the result of which fewer than a majority of the members of the Board are Incumbent Directors (as defined below); (c) a reorganization, merger, statutory share exchange, acquisition, consolidation or similar corporate transaction involving the Company or any of its affiliates; a sale or other disposition of the assets of the Company or an acquisition of assets or stock of another entity by the Company or any of its affiliates, in each case, unless, following such transaction, (x) all or substantially all of the individuals and entities that were the beneficial owners of the voting securities of the Company outstanding immediately prior thereto continue to own at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such transaction, and (y) at least a majority of the members of the board of directors of the entity resulting from such transaction were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such transaction; or (d) approval of the shareholders of Sunlight of a liquidation or dissolution of Sunlight.

 

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Under the Sunlight Employment Agreement, “Incumbent Directors” generally means members of the Board who are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors as the time of such election or nomination (but does not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of members of the Board).

 

Under the Sunlight Employment Agreements, “Protection Period” means the 24-month period immediately following a Change in Control and the 12-month period immediately preceding a Change in Control.

 

Severance Benefits — Termination by Sunlight without Cause or by the Named Executive Officer for Good Reason in Connection with a Change in Control

 

Under the Sunlight Employment Agreements, each named executive officer is entitled to the following severance payments in the event of his termination of employment without Cause or upon his resignation for Good Reason within the Protection Period (collectively, the “Change in Control Severance Benefits”).

 

Accrued Rights;

 

Multiple of base salary (2.5 times for Mr. Potere and 2.0 times for each of Messrs. Edinburg and Parsons);

 

Multiple of annual bonus paid with respect to the calendar year immediately preceding the calendar year within which the named executive officer was terminated, or if such bonus has not yet been paid as of such termination, the target annual bonus for such preceding calendar year (2.5 times for Mr. Potere and 2.0 times for each of Messrs. Edinburg and Parsons);

 

Full and immediate vesting of all outstanding equity awards, equity-based awards and other long-term incentives (with performance-based awards to vest at the greater of target or actual performance) and a 30-month post-termination exercise period with respect to vested stock options and stock appreciation rights (or, if shorter, the remainder of the full term); and

 

The COBRA Benefits.

 

The cash-based portion of the Change in Control Severance Benefits (other than the Accrued Rights) will be paid in the form of a lump sum payment for each of Messrs. Potere, Edinburg and Parsons. As a condition to the receipt of the Change in Control Severance Benefits, each of the named executive officers must timely execute and not revoke a release of claims.

 

Severance Benefits — Termination in Connection with the Named Executive Officer’s Death or Disability

 

Under the Sunlight Employment Agreements, the named executive officers are entitled to the following severance payments upon a termination of employment due to his death or Disability (as defined below):

 

Accrued Rights;

 

Pro-rated target annual bonus, payable in a lump sum;

 

Full and immediate vesting of all outstanding Class C Units (including any provisionally vested Class C Units) granted prior to the effective date of the Sunlight Employment Agreement (and any cash, securities or other consideration into which such Class C Units are converted) and a 30-month post-termination exercise period with respect to vested stock options and stock appreciation rights (or, if shorter, the remainder of the full term); and

 

The COBRA Benefits.

 

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Under the Sunlight Employment Agreements, “Disability” generally has the meaning ascribed to such term (or substantially similar term) in the disability insurance program that is sponsored by the Employer, or if no such definition exists or the named executive officer is not covered by such a program, then Disability means (a) the named executive officer is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (b) the Social Security Administration has determined the named executive officer to be disabled.

 

Grants of New Equity Awards

 

The Company intends to develop an executive compensation program that is designed to align compensation with the Company’s business objectives and the creation of stockholder value, while enabling the Company to attract, retain, incentivize and reward individuals who contribute to the Company’s long-term success. Decisions on the executive compensation program will be made by the Compensation Committee.

 

We anticipate making one-time grants of time-based restricted stock units of the Company (collectively, the “2021 Restricted Stock Units”) to the Company’s named executive officers in fiscal year 2021 following the Closing Date.

 

If granted, it is expected that the 2021 Restricted Stock Units will vest over the three-year period following the Closing Date, with one third of the 2021 Restricted Stock Units vesting on the second anniversary of the Closing Date and two thirds of the 2021 Restricted Stock Units vesting on the third anniversary of the Closing Date, in each case, subject to the named executive officer’s continued employment through the applicable vesting date. While the value and terms of the 2021 Restricted Stock Units are subject to the discretion of the Compensation Committee, such that they may ultimately change prior to the grant date and may differ than those set forth below, we anticipate that the aggregate estimated grant date dollar values of the 2021 Restricted Stock Units granted to the Company’s named executive officers will be as follows: (i) Matthew Potere: $5,100,000; (ii) Barry Edinburg: $829,000; and (iii) Timothy Parsons: $636,000. We anticipate that the award agreements underlying the 2021 Restricted Stock Units granted to each of the named executive officers will provide that (i) the tranche of the 2021 Restricted Stock Units scheduled to vest on the vesting date immediately following the named executive officer’s (x) termination of employment due to his or her death or “Disability” (as defined in the 2021 Plan), (y) termination of employment by the Company without “Cause” (as defined in the Sunlight Employment Agreements) or (z) resignation for “Good Reason” (as defined in the Sunlight Employment Agreements) shall immediately vest on the date of such named executive officer’s termination of employment; and (ii) all outstanding and unvested 2021 Restricted Stock Units shall immediately vest on the date of such named executive officer’s termination of employment by the Company without Cause or resignation for Good Reason that occurs within the 12-month period immediately preceding a “Change in Control” (as defined in the 2021 Plan) or the 24-month period immediately following a Change in Control. The foregoing description of the anticipated terms of the 2021 Restricted Stock Units does not purport to be complete and is qualified in its entirety by the full text of the form of the Day 1 RSU Agreement, which is attached hereto as Exhibit 10.35 and incorporated herein by reference.

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information known to the Company regarding the beneficial ownership of the Common Stock immediately following the Closing, by:

 

each person who is known by the Company to be the beneficial owner of more than five percent (5%) of the outstanding shares of Common Stock;

 

each named executive officer and director of the Company; and

 

all current executive officers and directors of the Company, as a group.

 

Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. A person is a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of the security, or “investment power”, which includes the power to dispose of or to direct the disposition of the security or has the right to acquire such powers within 60 days.

 

The beneficial ownership percentages set forth in the table below are based on 132,433,111 (excludes 1,535,941 of shares held by Sunlight in respect of net withholding for tax payments) shares of Common Stock issued and outstanding as of immediately following the Closing.

 

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Unless otherwise noted in the footnotes to the following table, and subject to applicable community property laws, the persons and entities named in the table have sole voting and investment power with respect to their beneficially owned common stock.

 

Name and Address of Beneficial Owners(1)   Number of shares of Common Stock   %
Five Percent Holders of the Company:        
Spartan Acquisition Sponsor II LLC(2)   7,337,241   5.5%
FTV V, L.P.(3)   25,271,539   19.1%
Tiger Infrastructure Partners Sunlight Feeder LP(4)   21,179,369   16.0%
Tiger Co-Invest B Sunlight Blocker LLC(5)   8,437,552   6.4%
Directors and Executive Officers of the Company        
Matthew Potere   3,510,541   2.7%
Barry Edinburg   2,341,446   1.8%
Timothy Parsons   1,386,399   1.0%
Brad Bernstein   0   0.0%
Jeanette Gorgas     0.0%
Emil W. Henry, Jr.(6)   8,437,552   6.4%
Toan Huynh     0.0%
Jennifer D. Nordquist     0.0%
Philip Ryan     0.0%
Kenneth Shea     0.0%
Joshua Siegel     0.0%
All Directors and Executive Officers of the Company as a Group (13 Individuals)   18,056,530   13.6%

 

 

 

(1) This table is based on a total of 132,433,111 (excludes 1,535,941 of shares held by Sunlight in respect of net withholding for tax payments) shares of Common Stock outstanding immediately after the Closing on July 9, 2021, consisting of 84,837,655 (excludes 1,535,941 of shares held by Sunlight in respect of net withholding for tax payments) shares of Class A Common Stock and 47,595,455 shares of Class C Common Stock. Unless otherwise noted, the business address of each of the entities, directors and executive officers in this table is 101 N. Tryon Street, Suite 1000, Charlotte, NC 28246.

 

(2) Spartan Acquisition Sponsor II LLC (the “Sponsor”) is managed by affiliates of Apollo Global Management, Inc. AP Spartan Energy Holdings II, L.P. (“AP Spartan”) is the sole member of the Sponsor. Apollo ANRP Advisors III, L.P. (“ANRP Advisors”) is the general partner of AP Spartan. Apollo ANRP Capital Management III, LLC (“ANRP Capital Management”) is the general partner of ANRP Advisors. APH Holdings, L.P. (“APH Holdings”) is the sole member of ANRP Capital Management. Apollo Principal Holdings III GP, Ltd. (“Principal Holdings III GP”) is the general partner of APH Holdings. Scott Kleinman, James Zelter, Joshua Harris and Marc Rowan are the directors of Principal Holdings III GP, and as such may be deemed to have voting and dispositive control of the shares of Class A Common Stock held of record by the Sponsor. Each of the Sponsor, AP Spartan, ANRP Advisors, ANRP Capital Management, APH Holdings, Principal Holdings III GP and each of Messrs. Kleinman, Zelter, Harris and Rowan, disclaims beneficial ownership of the Class A Common Stock, in each case except to the extent of any pecuniary interest therein, and this report shall not be deemed an admission that any such entity or person is the beneficial owner of or has any pecuniary interest in, such securities for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, or for any other purpose. The addresses of each of the Sponsor, AP Spartan and Messrs. Kleinman, Zelter, Harris and Rowan is 9 West 57th Street, 43rd Floor, New York, New York 10019. The address of each of ANRP Advisors and Principal Holdings III GP is c/o Walkers Corporate Limited; Cayman Corporate Centre; 27 Hospital Road; George Town; Grand Cayman KY1-9008. The address of each of ANRP Capital Management and APH Holdings is One Manhattanville Road, Suite 201, Purchase, New York, 10577.

 

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(3) FTV V, L.P. directly holds 25,271,539 shares of Class A common stock. The general partner of FTV LP is FTV Management V, L.L.C. (“FTV LLC”). FTV LLC is controlled by its managing members. Any action by FTV LLC with respect to the reported securities, including voting and dispositive decisions, requires at least a majority vote of the managing members.

 

(4) Includes 21,179,369 shares held directly by Tiger Infrastructure Partners Sunlight Feeder LP (“Fund I Sunlight Holdco”). Tiger Infrastructure Partners LP (the “US Advisor”) is the investment manager of Tiger Infrastructure Partners AIV I LP (“Fund I AIV”) and Tiger Infrastructure Partners Co-Invest B LP (“Co-Invest B”). Fund I Sunlight Holdco is a wholly-owned subsidiary of Fund I AIV. The US Advisor is managed by its general partner, Emil Henry III LLC (“EH III”); EH III is managed by its sole managing member, Henry Tiger Holdings LLC (“HTH”); HTH is managed by its sole managing member, Emil Henry LLC (“EH LLC”). Emil W. Henry, Jr. is the sole managing member of EH LLC.

 

(5) Includes 8,437,552 shares held directly by Co-Invest B. The US Advisor is the investment manager of Fund I AIV and Co-Invest B. Fund I Sunlight Holdco is a wholly-owned subsidiary of Fund I AIV. The US Advisor is managed by its general partner, EH III; EH III is managed by its sole managing member, HTH; HTH is managed by its sole managing member, EH LLC. Emil W. Henry, Jr. is the sole managing member of EH LLC.

 

(6) See footnote 5.

 

Directors and Executive Officers

 

Information with respect to the Company’s directors and executive officers immediately following the Closing is set forth in the Proxy Statement in the section titled “Management After the Business Combination” beginning on page 246 of the Proxy Statement, which is incorporated herein by reference.

 

Subsequent to the date of the Proxy Statement, Kenneth Shea resigned from the Board of Trustees of Equity Commonwealth, a commercial office real estate investment trust, where he was Chairman of the Compensation Committee, effective June 30, 2021. Accordingly, revised biographical information for Mr. Shea is set forth below.

 

Kenneth Shea. Mr. Shea is currently an independent consultant and an investor. Mr. Shea served as Senior Managing Director at Guggenheim Securities, LLC from 2014 to 2019. Prior to joining Guggenheim Securities, LLC, Mr. Shea served as President of Coastal Capital Management LLC from 2009 until 2014, and Managing Director for Icahn Capital LP from 2008 to 2009. Mr. Shea currently sits on the Board of Directors of Viskase Companies, Inc., a food packaging and service company, where he is a member of the Audit Committee. Mr. Shea also serves on the Advisory Board of WhyHotel, a privately-held, venture-backed real estate company. Previously, Mr. Shea served on the board of Hydra Industries, a special purpose acquisition company, and CVR Refining, a mid-continent refiner. Mr. Shea received his M.B.A. from the University of Virginia and his B.A. in Economics from Boston College. We believe Mr. Shea is qualified to serve as a member of the board of directors due to his extensive experience in corporate finance and financial services and his knowledge of the capital markets.

 

In addition, since the date of the Proxy Statement, Toan Huyn’s biographical information has been revised as set forth below.

 

Toan Huynh. Ms. Huynh has served as a director of Flagstar Bancorp, Inc. since her appointment in December 2020. Since 2018, she has served as Partner of Baylane Capital, making early stage investments into B2B SaaS and enterprise software and advising growth focused companies in technology and IT services. In 2008, she co-founded and served as Global Head of Insurance and Financial Services for Cloud Sherpas/Global One, a boutique, cloud advisory firm, which was acquired by Accenture in 2015. Ms. Huynh was a Managing Director with Accenture until 2018 and a partner for Information Venture Partners until 2020. She was also an Entrepreneur-in-Residence for Citi Ventures. Ms. Huynh is a seasoned cloud and digital leader with over 20 years of experience working with various industries to better compete in the new digital economy.  She also currently serves on the board of Bankers Financial Group.

 

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Directors

 

Effective immediately after the Closing, the Board is comprised of nine directors and is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. The Company’s directors are divided among the three classes as follows:

 

the Class I directors are Jeanette Gorgas, Kenneth Shea and Joshua Siegel, and their terms will expire at the Company’s annual meeting of stockholders to be held in 2022;

 

the Class II directors are Brad Bernstein, Emil W. Henry, Jr. and Jennifer D. Nordquist, and their terms will expire at the Company’s annual meeting of stockholders to be held in 2023; and

 

the Class III directors are Toan Huynh, Matthew Potere and Philip Ryan, and their terms will expire at the Company’s annual meeting of stockholders to be held in 2024.

 

Directors in a particular class will be elected for three-year terms at the annual meeting of stockholders of the Company in the year in which their terms expire. As a result, only one class of directors will be elected at each annual meeting of the Company’s stockholders, with the other classes continuing for the remainder of their respective three-year terms. Each director’s term continues until the election and qualification of his or her successor, or the earlier of his or her death, resignation or removal. Biographical information for these individuals is set forth in the Proxy Statement in the section titled “Management After the Business Combination” beginning on page 246 of the Proxy Statement, which is incorporated herein by reference, as updated by the biographical information for Mr Shea and Ms. Huynh presented herein.

 

Independence of Directors

 

The Board has determined that each member of the Board, other than those continuing from the prior Sunlight Board (Matthew Potere, Emil W. Henry, Jr. and Brad Bernstein), is independent within the meaning of Section 303A.02 of the NYSE Listing Manual and applicable SEC rules. In addition, the Board has appointed Mr. Shea to serve as lead independent director until the 2022 annual meeting of stockholders.

 

Committees of the Board of Directors

 

Effective as of the Closing, the standing committees of the Board consist of an audit committee (the “Audit Committee”), a compensation committee (the “Compensation Committee”) and a nominating and corporate governance/ESG committee (the “N&G Committee”). Each of the committees reports to the Board.

 

Effective as of the Closing, the Board appointed Ms. Huynh and Messrs. Ryan and Siegel to serve on the Audit Committee, with Mr. Ryan as chairperson. The Board appointed Mss. Gorgas and Nordquist and Mr. Shea to serve on the Compensation Committee, with Ms. Gorgas as chairperson. The Board appointed Mss. Huynh and Nordquist and Mr. Siegel to serve on the N&G Committee, with Ms. Huynh as chairperson.

 

Executive Officers

 

The Company’s executive officers are described in the Proxy Statement in the section titled “Management After the Business Combination” beginning on page 246 of the Proxy Statement, which is incorporated herein by reference.

 

Certain Relationships and Related Transactions, and Director Independence

 

Certain relationships and related party transactions are described in the Proxy Statement in the section titled “Certain Relationships and Related Party Transactions” beginning on page 269 of the Proxy Statement, which is incorporated herein by reference.

 

The independence of our directors is described in the section above titled “Directors and Executive Officers” of this Current Report on Form 8-K, which is incorporated herein by reference.

 

Legal Proceedings

 

Information about legal proceedings is set forth in the Proxy Statement in the section titled “The Business Combination—Litigation Relating to the Business Combination” on page 152 of the Proxy Statement. Although Spartan believed no supplemental disclosures were required under applicable law to address the claims made in the legal proceedings described in the Proxy Statement in the section titled “The Business Combination—Litigation Relating to the Business Combination” on page 152 of the Proxy Statement, in order to alleviate the costs, risks and uncertainties inherent in litigation and provide additional information to its stockholders, Spartan determined to voluntarily supplement the Proxy Statement as described in a Current Report on Form 8-K that Spartan filed with the SEC on June 21, 2021, which is incorporated herein by reference.

 

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Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

 

Market Information

 

Spartan’s units, Class A Common Stock and warrants were historically listed for trading on the NYSE under the symbols “SPRQ U”, “SPRQ” and “SPRQ WS”, respectively. On July 12, 2021, the Class A Common Stock and public warrants began trading on the NYSE under the new trading symbols of “SUNL” and “SUNL WS”, respectively. Spartan’s units automatically separated into their component securities upon the Closing and, as a result, no longer trade as a separate security and have been delisted from the NYSE.

 

Prior to the Closing, there was no established public trading market for Sunlight’s member interests.

 

Holders of Record

 

As of the Closing Date and following the completion of the Business Combination and the redemption of public shares described above, the Company had 84,837,655 (excludes 1,535,941 of shares held by Sunlight in respect of net withholding for tax payments) shares of Class A Common Stock issued and outstanding held of record by 122 holders, 47,595,455 shares of Class C Common Stock outstanding and held of record by 21 holders, 27,150,000 warrants outstanding held of record by 2 holders and no shares of preferred stock outstanding. Such amounts do not include DTC participants or beneficial owners holding shares through nominee names.

 

As of the Closing Date and following the completion of the Business Combination, Sunlight had outstanding 84,837,655 (excludes 1,535,941 of units held by Sunlight in respect of net withholding for tax payments) Sunlight Class X Units held of record by Spartan Sub, Holdings I and Holdings II and, 47,595,455 Sunlight Class EX Units held of record by 21 holders. In addition, Sunlight had outstanding warrants held by Tech Capital LLC, exercisable for an aggregate of 627,780 shares of Class A Common Stock at an exercise price of $7.715 per share. There is no established market for any of the Sunlight Class X Units, Class EX Units or warrants. Subject to the limitations set forth in the Sunlight A&R LLC Agreement executed at Closing, the holder of a Sunlight Class EX Unit together with a share of Class C Common Stock may be surrendered for redemption in exchange for one share of Class A Common Stock.

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

Reference is made to the disclosure in the Proxy Statement in the section titled “Proposal No. 4—The 2021 Plan Proposal—Securities Authorized for Issuance under Equity Compensation Plans” beginning on page 163 of the Proxy Statement, which is incorporated herein by reference. As described below under Item 5.02 of this Current Report on Form 8-K, the 2021 Plan and the ESPP and the material terms thereunder were approved by Spartan’s stockholders at the Special Meeting.

 

Dividends

 

The Company has not paid any cash dividends on the Common Stock to date. The Company may retain future earnings, if any, for future operations, expansion and debt repayment and has no current plans to pay cash dividends for the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of the Board and will depend on, among other things, the Company’s results of operations, financial condition, cash requirements, contractual restrictions and other factors that the Board may deem relevant. In addition, the Company’s ability to pay dividends is limited by covenants regarding its existing outstanding indebtedness.

 

Certain Indebtedness

 

Information about certain indebtedness of the Company is set forth in the Proxy Statement in the section titled “Notes to Unaudited Condensed Consolidated Financial Statements” beginning on page F-77 of the Proxy Statement, which is incorporated herein by reference.

 

Recent Sales of Unregistered Securities

 

Reference is made to the disclosure set forth under Item 3.02 of this Current Report on Form 8-K, which is incorporated herein by reference.

 

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Description of Registrant’s Securities

 

A description of the Company’s securities is in the Proxy Statement in the section titled “Description of Securities,” beginning on page 253 which is incorporated herein by reference.

 

Indemnification of Directors and Officers

 

In connection with the Business Combination, the Company entered into indemnification agreements with each of its directors and executive officers. These indemnification agreements provide the directors and executive officers with contractual rights to indemnification and expense advancement.

 

A description of the indemnification obligations of the Company are included in the Proxy Statement in the section titled “Certain Relationships and Related Party Transactions – Indemnification Agreements,” beginning on page 273 which is incorporated herein by reference.

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

The information set forth under Item 4.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Financial Statements, Supplementary Data and Exhibits

 

The information set forth under Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 3.02 Unregistered Sales of Equity Securities

 

The issuance of Class A Common Stock upon automatic conversion of Class B Common Stock at the Closing was not registered under the Securities Act in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act.

 

The disclosure set forth above in the Introductory Note, Item 1.01 and Item 2.01 of this Current Report on Form 8-K with respect to the issuance of Class A Common Stock to the New PIPE Investors is incorporated herein by reference. The 25,000,000 shares of Class A Common Stock issued to the New PIPE Investors were not registered under the Securities Act in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. The PIPE Financing was consummated concurrently with the Closing. The parties receiving the securities represented their intentions to acquire the securities for investment purposes only and not with a view to any distribution of the securities in any manner that would violate the securities laws of the United States or any other jurisdiction, and appropriate restrictive legends were affixed to the certificates representing the securities (or reflected in restricted book entry with the Company’s transfer agent). The parties also had adequate access, through business or other relationships, to information about the Company.

 

At the Closing, 47,595,455 shares of Class C Common Stock (in addition to an equal number of Sunlight Class EX Units) were issued to the Unblocked Sunlight Unitholders in the Business Combination and were not registered under the Securities Act in reliance on an exemption provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

 

Item 3.03 Material Modification to Rights of Security Holders

 

The information set forth in Item 5.03 of this Current Report on Form 8-K is incorporated herein by reference.

 

As disclosed in Item 2.01 of this Current Report on Form 8-K, the Class A Common Stock and public warrants commenced trading on the NYSE under the symbols “SUNL” and “SUNL WS” on July 12, 2021.

 

Item 4.01 Changes in Registrant’s Certifying Accountant

 

On July 9, 2021 the Audit Committee of the Board dismissed WithumSmith+Brown, PC (“Withum”), following completion of the quarterly review for the period ended June 30, 2021, which consisted only of the accounts of the pre-Business Combination Special Purpose Acquisition Company, Spartan’s independent registered public accounting firm prior to the Business Combination.

 

Withum’s report on Spartan’s balance sheet as of December 31, 2020 and the related statements of operations, changes in stockholders’ equity and cash flows for the period from August 17, 2020 (inception) through December 31, 2020, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

 

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During the period from August 17, 2020 (inception) through December 31, 2021 and the subsequent period through July 9, 2021, there were no: (i) disagreements with Withum on any matter of accounting principles or practices, financial statement disclosures or auditing scope or procedures, which disagreements if not resolved to Withum’s satisfaction would have caused Withum to make reference to the subject matter of the disagreement in connection with its report or (ii) reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

 

The Company has provided Withum with a copy of the disclosures made by the Company in response to this Item 4.01 and has requested that Withum furnish the Company with a letter addressed to the SEC stating whether it agrees with the statements made by the registrant in response to this Item 4.01 and, if not, stating the respects in which it does not agree. A copy of the letter from Withum is attached as Exhibit 16.1 to this Current Report on Form 8-K.

 

On July 9, 2021, the Board approved the engagement of RSM US LLP (“RSM”) as the Company’s independent registered public accounting firm to audit the Company’s consolidated financial statements for the year ended December 31, 2021. RSM served as the independent registered public accounting firm of Sunlight prior to the Business Combination.

 

During the period from August 17, 2020 (inception) through December 31, 2020 and through July 9, 2021, neither the Company nor anyone on the Company’s behalf consulted RSM with respect to either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s financial statements, and no written report or oral advice was provided to the Company by RSM that RSM concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is described in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act and the related instructions to Item 304 of Regulation S-K under the Exchange Act, or a reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act.

 

Item 5.01 Changes in Control of Registrant

 

The information set forth above under “Introductory Note” and “Item 2.01. Completion of Acquisition or Disposition of Assets” 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.

 

The information set forth above in the sections titled “Executive Compensation Prior to Closing,” “Directors and Executive Officers,” “Certain Relationships and Related Transactions, and Director Independence,” “Executive Compensation After Closing,” and “Grants of New Equity Awards” in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Sunlight Financial Holdings Inc. 2021 Equity Incentive Plan

 

At the Special Meeting, Spartan’s stockholders approved the Sunlight Financial Holdings Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan was also approved by the board of directors of Spartan on June 17, 2021. The 2021 Plan became effective upon the Closing.

 

A description of the 2021 Plan is included in the Proxy Statement in the section titled “Proposal No. 4—The 2021 Plan Proposal” beginning on page 158 of the Proxy Statement, which is incorporated herein by reference. The foregoing description of the 2021 Plan does not purport to be complete and is qualified in its entirety by the full text of the 2021 Plan, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

 

Sunlight Financial Holdings 2021 Employee Stock Purchase Plan

 

At the Special Meeting, Spartan’s stockholders approved the Sunlight Financial Holdings Inc. 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP was also approved by the Board on June 17, 2021. The ESPP became effective immediately upon the Closing.

 

A description of the ESPP is included in the Proxy Statement in the section titled “Proposal No. 5—The ESSP Proposal” beginning on page 165 of the Proxy Statement, which is incorporated herein by reference. The foregoing description of the ESPP does not purport to be complete and is qualified in its entirety by the full text of the ESPP, which is attached hereto as Exhibit 10.2 and incorporated herein by reference.

 

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Sunlight Employment Agreements

 

Effective as of the Closing, the Company entered into new employment agreements with each of Messrs. Potere, Edinburg and Parsons, as described in the section titled “Executive Compensation After Closing—Employment Agreements for Named Executive Officers” in Item 2.01 of this Current Report on Form 8-K. For the avoidance of doubt, such section is incorporated herein by reference. The foregoing description of the Sunlight Employment Agreements does not purport to be complete and is qualified in its entirety by the full text of the form of the Sunlight Employment Agreements, which is attached hereto as Exhibit 10.33 and incorporated herein by reference.

 

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

 

On July 9, 2021, the Company amended and restated its amended and restated certificate of incorporation (as so amended and restated, the “Charter”) and its bylaws (as so amended and restated, the “Bylaws”).

 

Copies of the Charter and the Bylaws are attached as Exhibit 3.1 and Exhibit 3.2 to this Current Report on Form 8-K, respectively, and are incorporated herein by reference.

 

The material terms of each of the Charter and the Bylaws, a description of the provisions adopted or changed by amendment and the general effect upon the rights of holders of the Company’s capital stock are included in the Proxy Statement under the sections titled “Proposal No. 2—The Charter Proposals” beginning on page 154 of the Proxy Statement, which is incorporated herein by reference.

 

Item 5.05 Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.

 

In connection with the Closing of the Business Combination, on July 9, 2021 and effective as of such date, the Board adopted a new code of business conduct & ethics (the “Code”) applicable to the Company’s employees, officers and directors. The new Code clarifies (i) the types of permitted conduct under the Code, including business activities and opportunities and (ii) procedures for the reporting, oversight and investigation of alleged violations of the Code. We intend to post any amendments to or any waivers from a provision of the Code on our website.

 

The foregoing description of the Code does not purport to be complete and is qualified in its entirety by reference to the full text of the Code, which is included as Exhibit 14.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

Item 5.06 Change in Shell Company Status

 

As a result of the Business Combination, which fulfilled the definition of a business combination as required by Spartan’s amended and restated certificate of incorporation, the Company ceased to be a shell company (as defined in Rule 12b-2 under the Exchange Act) as of the Closing Date. The material terms of the Business Combination are described in the Proxy Statement in the section titled “The Business Combination” beginning on page 110 of the Proxy Statement, which is incorporated herein by reference. Further reference is made to the information contained in Item 2.01 of this Current Report on Form 8-K, which information is incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits

 

(a) Financial Statements of Business Acquired

 

The audited consolidated financial statements of Sunlight as of December 31, 2020 and 2019 and for the years ended December 31, 2020 and 2019 are included in the Proxy Statement beginning on page F-45, and are incorporated herein by reference.

 

The unaudited consolidated financial statements of Sunlight as of and for the three months ended March 31, 2021 and 2020 are included in the Proxy Statement beginning on page F-73, and are incorporated herein by reference.

 

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(b) Pro Forma Financial Information

 

The unaudited pro forma condensed combined financial information of the Company as of and for the three months ended March 31, 2021 and for the year ended December 31, 2020 is set forth in Exhibit 99.1 hereto and is incorporated by reference herein.

 

(d) Exhibits.

 

Exhibit No.   Description
2.1* +   Business Combination Agreement, dated as of January 23, 2021, by and among Spartan, the Spartan Subsidiaries, FTV Blocker, Tiger Blocker and Sunlight (incorporated by reference to Exhibit 2.1 to Spartan’s Current Report on Form 8-K, filed with the SEC on January 25, 2021).
3.1   Second Amended and Restated Certificate of Incorporation of the Company.
3.2   Amended and Restated Bylaws of the Company effective as of July 9, 2021.
3.3   Fifth Amended and Restated Limited Liability Company Agreement of Sunlight Financial LLC.
4.1*   Warrant Agreement, dated November 24, 2020, between Spartan Acquisition Corp. II and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to Spartan’s Current Report on Form 8-K (File No. 001-39739) filed with the SEC on December 1, 2020).
4.2   Warrant to Purchase Units, dated February 27, 2021 between Sunlight Financial LLC and Tech Capital LLC.
4.3   Amendment No. 1 to Warrant to Purchase Units, dated July 8, 2021 between Sunlight Financial LLC and Tech Capital LLC.
10.1* †   Sunlight Financial Holdings Inc.’s 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).  
10.2* †   Sunlight Financial Holdings Inc.’s Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to Amendment No.1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).  
10.3* ***   Form of Subscription Agreement (incorporated by reference to Exhibit 10.3 to Spartan’s Current Report on Form 8-K (File No. 001-39739) filed with the SEC on January 25. 2021).
10.4*   Letter Agreement, dated November 24, 2020, among Spartan, its officers and directors and the Sponsor (incorporated by reference to Exhibit 10.1 to Spartan’s Current Report on Form 8-K (File No. 001-39739) filed with the SEC on December 1, 2020).
10.5*   Form of Indemnification Agreement (incorporated by reference to Exhibit 10.7 to Spartan’s Registration Statement on Form S-1 (Reg. No. 333-249430) filed with the SEC on October 9, 2020).
10.6*   Securities Purchase Agreement, dated August 17, 2020 between Spartan and Sponsor (incorporated by reference to Exhibit 10.5 to Spartan’s Registration Statement on Form S-1 (Reg. No. 333-249430) filed with the SEC on October 9, 2020).
10.7*   Private Placement Warrants Purchase Agreement, dated November 24, 2020, between Spartan and the Sponsor incorporated by reference to Exhibit 10.5 to the Spartan’s Current Report on Form 8-K (File No. 001-39739) filed with the SEC on December 1, 2020).
10.8*   Form of Lock-Up Agreement for large shareholders (incorporated by reference to Exhibit 10.12 to Amendment No. 2 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on June 1, 2021).

 

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Exhibit No.   Description
10.9*   Form of Lock-Up Agreement for small shareholders (incorporated by reference to Exhibit 10.13 to Amendment No. 2 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on June 1, 2021).
10.10*   Form of Lock-Up Agreement for Sunlight Executives (incorporated by reference to Amendment No. 2 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on June 1, 2021).
10.11*   Founders Stock Agreement, dated January 23, 2021 by and between Spartan, the Sponsor and the initial stockholders (incorporated by reference to Exhibit 10.1 to the Spartan’s Current Report on Form 8-K (File No. 001-39739) filed with the SEC on December 1, 2020).
10.12*   Letter Agreement Amendment, dated January 23, 2021 among Spartan, its officers and directors and the Sponsor (incorporated by reference to Exhibit 10.2 to the Spartan’s Current Report on Form 8-K (File No. 001-39739) filed with the SEC on December 1, 2020).
10.13**   Tax Receivable Agreement by and among the Company, the TRA Holders and the Agent.
10.14*   Indemnity Agreement, dated January 23, 2021, among Spartan, the Blockers, FTV Blocker Holder, the Spartan Subsidiaries and Sunlight (incorporated by reference to Exhibit 10.16 to Spartan’s Registration Statement on Form S-4) (Reg. No. 333-254589) filed with the SEC on March 22, 2021).
10.15*   Company Support Agreement, dated January 23, 2021, among Spartan, the Spartan Subsidiaries, the Blockers and Sunlight (incorporated by reference to Exhibit 10.17 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on March 22, 2021).
10.16   Investor Rights Agreement, dated July 9, 2021, by and among the Company, and certain stockholders and equityholders of the Company.
10.17* **   Amended and Restated Loan Sale Agreement, dated as of February 12, 2018, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.19 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.18* **   First Amendment to Amended and Restated Loan Sale Agreement, dated as of August 28, 2019, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.20 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.19* **   Seventh Amendment to First Amended and Restated Loan Program Agreement and Second Amendment to Amended and Restated Loan Sale Agreement, dated as of June 3, 2020, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.21 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.20* **   Omnibus Waiver and Tenth Amendment to First Amended and Restated Loan Program Agreement and Waiver and Third Amendment to Amended and Restated Loan Sale Agreement, dated January 28, 2021, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.22 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.21* **   First Amended and Restated Loan Program Agreement, dated as of February 12, 2018, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.23 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.22* **   Third Amendment to Residential Solar Energy Loan Program Agreement, undated, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.24 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).

 

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Exhibit No.   Description
10.23* **   Fee Letter to First Amended and Restated Loan Program Agreement, as amended, dated February 18, 2020 (incorporated by reference to Exhibit 10.25 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.24* **   Fee Letter to First Amended and Restated Loan Program Agreement, as amended, dated June 18, 2018 (incorporated by reference to Exhibit 10.26 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.25* **   Fourth Amendment to Loan Program Agreement, dated March 8, 2019, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.27 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.26* **   Fifth Amendment to First Amended and Restated Loan Program Agreement, dated December 1, 2019, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.28 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.27* **   Sixth Amendment to First Amended and Restated Loan Program Agreement, dated March 31, 2020, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.29 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.28* **   Seventh Amendment to First Amended and Restated Loan Program Agreement and Second Amendment to Amended and Restated Loan Sale Agreement, dated June 3, 2020, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.30 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.29* **   Eighth Amendment to First Amended and Restated Loan Program Agreement, dated January 5, 2021, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.31 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.30*   Ninth Amendment to First Amended and Restated Loan Program Agreement, dated February 17, 2021, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.32 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.31* **   Omnibus Waiver and Tenth Amendment to First Amended and Restated Loan Program Agreement and Waiver and Third Amendment to Amended and Restated Loan Sale Agreement, dated January 28, 2021, by and between Cross River Bank and Sunlight (incorporated by reference to Exhibit 10.33 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.32* **   Loan and Security Agreement, dated as of April 26, 2021, between Sunlight Financial LLC and Silicon Valley Bank (incorporated by reference to Exhibit 10.34 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.33*   Form of Employment Agreement (incorporated by reference to Exhibit 10.35 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).

 

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Exhibit No.   Description
10.34*   Form of Restrictive Covenants Agreement (incorporated by reference to Exhibit 10.36 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
10.35*   Form of Day 1 RSU Agreement (incorporated by reference to Exhibit 10.37 to Amendment No. 1 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on May 12, 2021).
14.1   Sunlight Financial Holdings Inc. Code of Business Conduct and Ethics
16.1   Letter from WithumSmith+Brown, PC to the U.S. Securities and Exchange Commission dated July 15, 2021.
99.1   Unaudited pro forma condensed combined financial information of the Company as of and for the three months ended March 31, 2020 and for the year ended December 31, 2020.
99.2***   Schedule of New PIPE Investors (incorporated by reference to Exhibit 99.11 to Amendment No. 2 to Spartan’s Registration Statement on Form S-4 (Reg. No. 333-254589), filed with the SEC on June 1, 2021).

 

 

* Previously filed.

** Pursuant to Item 601(b)(10) of Regulation S-K, certain portions of this exhibit (indicated by asterisks) have been omitted.

*** The Subscription Agreements are substantially identical in all material respects to the form of Subscription Agreement filed as Exhibit 10.3 hereto, except as to the identity of each New PIPE Investor, the number of shares of Class A Common Stock subscribed for by each New PIPE Investor and the purchase price to be paid by each New PIPE Investor. Pursuant to Instruction 2 to Item 601 of Regulation S-K, we have omitted filing copies of each such Subscription Agreement as exhibits to this Current Report on Form 8-K and have filed a schedule as Exhibit 99.2 hereto identifying each New PIPE Investor, the number of shares of Class A Common Stock subscribed for by each New PIPE Investor and the purchase price to be paid by each New PIPE Investor.

Indicates management contract or compensatory plan or arrangement.
+ The schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

 

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SIGNATURES

 

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

 

  SUNLIGHT FINANCIAL HOLDINGS INC.
     
  By: /s/ Matthew Potere
    Name: Matthew Potere
    Title: Chief Executive Officer

 

Date: July 15, 2021

 

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Exhibit 3.1

 

SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
Spartan Acquisition Corp. II

 

Spartan Acquisition Corp. II, a corporation existing under the laws of the State of Delaware, hereby certifies as follows:

 

1.            The name of the corporation is Spartan Acquisition Corp. II.

 

2.            The corporation’s original Certificate of Incorporation was filed in the office of the Secretary of State of the State of Delaware on August 17, 2020, as amended and restated in its entirety by that Amended and Restated Certificate of Incorporation on November 24, 2020 (the First Amended and Restated Certificate of Incorporation);

 

3.            This Second Amended and Restated Certificate of Incorporation (this Second Amended and Restated Certificate of Incorporation) restates and amends the First Amended and Restated Certificate of Incorporation;

 

4.            This Second Amended and Restated Certificate of Incorporation was duly adopted in accordance with the applicable provisions of Sections 103, 242 and 245 of the General Corporation Law of the State of Delaware (as it may be amended from time to time, the DGCL) and has been adopted by the requisite vote of the stockholders of the corporation; and

 

5.            The text of the First Amended and Restated Certificate of Incorporation is hereby amended and restated to read, in full, as follows:

 

First: The name of the corporation is Sunlight Financial Holdings Inc. (hereinafter called the “Corporation”).

 

Second: The registered office of the Corporation is to be located at c/o Corporation Services Company, 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808. The name of its registered agent at that address is Corporation Service Company.

 

Third: The nature of the business or purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized under the DGCL.

 

Fourth: The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Corporation is authorized to issue is 540,000,000 shares, classified as: (a) 420,000,000 shares of Class A Common Stock, par value $0.0001 per share (Class A Common Stock), (b) 20,000,000 shares of Class B Common Stock, par value $0.0001 per share (Class B Common Stock), and (c) 65,000,000 shares of Class C Common Stock, par value $0.0001 per share (Class C Common Stockand together with the Class A Common Stock and Class B Common Stock, the Common Stock); and (d) 35,000,000 shares of Preferred Stock, par value of $0.0001 per share (Preferred Stock).

 

A.            Reference is made to that certain Business Combination Agreement, dated as of January 23, 2021 (the Business Combination Agreement), by and among Spartan Acquisition Corp. II, a Delaware corporation (Spartan), SL Invest I Inc., a Delaware corporation, SL Invest II LLC, a Delaware limited liability company, SL Financial Investor I LLC, a Delaware limited liability company, SL Financial Investor II LLC, a Delaware limited liability company, SL Financial Holdings Inc., a Delaware corporation, SL Financial LLC, a Delaware limited liability company, Sunlight Financial LLC, a Delaware limited liability company, FTV-Sunlight, Inc., a Delaware corporation, and Tiger Co-Invest B Sunlight Blocker LLC, a Delaware limited liability company. Upon the closing of the transactions contemplated by the Business Combination Agreement (such time of such closing, the Effective Time), each former share of Class B Common Stock of the Corporation outstanding immediately prior to the Effective Time automatically will convert into one issued and outstanding, fully paid and nonassessable share of Class A Common Stock, without any action required on the part of the Corporation or the holders thereof, in accordance with paragraph C(i) of this Article FOURTH.

 

 

 

B.            Preferred Stock. The Board of Directors is expressly granted authority to issue shares of the Preferred Stock, in one or more classes or series, and to fix for each such class or series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such class or series (a Preferred Stock Designation) and as may be permitted by the DGCL. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any classes or series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation. There shall be no limitation or restriction on any variation between any of the different classes or series of Preferred Stock as to the powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof; and the several classes or series of Preferred Stock may, except as otherwise expressly provided in this Article FOURTH, vary in any and all respects as fixed and determined by the resolution or resolutions of the Board of Directors, providing for the issuance of the various classes or series; provided, however, that all shares of any one class or series of Preferred Stock shall have the same powers, designation, preferences and relative participating, optional or other special rights and qualifications, limitations and restrictions.

 

C.            Common Stock.

 

(a)            Except as may otherwise be provided in this Second Amended and Restated Certificate of Incorporation, each share of Common Stock shall have identical rights and privileges in every respect. Common Stock shall be subject to the express terms of Preferred Stock and any series thereof, if any. Except as may otherwise be provided in this Second Amended and Restated Certificate of Incorporation, in a Preferred Stock Designation or by applicable law, the holders of shares of Common Stock shall be entitled to one (1) vote for each such share on all matters which to the stockholders are entitled to vote. Except as may otherwise be provided in this Second Amended and Restated Certificate of Incorporation, in a Preferred Stock Designation or by applicable law, the holders of shares of Common Stock shall have the exclusive right to vote for the election of directors and on all other matters upon which the stockholders are entitled to vote, and the holders of Preferred Stock shall not be entitled to vote at or receive notice of any meeting of stockholders, other than as provided in the applicable Preferred Stock Designation. Each holder of Common Stock shall be entitled to notice of any stockholders’ meeting in accordance with the bylaws of the Corporation (as in effect at the time in question) (the Bylaws) and applicable law on all matters put to a vote of the stockholders of the Corporation. Except as otherwise required in this Second Amended and Restated Certificate of Incorporation or by applicable law, the holders of Common Stock 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, the holders of Common Stock and the Preferred Stock shall vote together as a single class).

 

(b)            Notwithstanding the foregoing, except as otherwise required by applicable law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) 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 Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) or pursuant to the DGCL.

 

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(c)            Subject to the prior rights and preferences, if any, applicable to shares of any Preferred Stock or any series thereof then outstanding, the holders of shares of Class A Common Stock shall be entitled to receive ratably in proportion to the number of shares of Class A Common Stock held by them such dividends and distributions (payable in cash, stock or otherwise), if any, as may be declared thereon by the Board of Directors at any time and from time to time out of any funds of the Corporation legally available therefor. Dividends and other distributions shall not be declared or paid on the Class B Common Stock and Class C Common Stock unless (i) the dividend consists of shares of Class B Common Stock or Class C Common Stock, as applicable, or of rights, options, warrants or other securities convertible or exercisable into or exchangeable or redeemable for shares of Class B Common Stock or Class C Common stock, as applicable, paid proportionally with respect to each outstanding share of Class B Common Stock or Class C Common Stock, as applicable, and (ii) a dividend consisting of shares of Class A Common Stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable or redeemable for shares of Class A Common Stock on equivalent terms is simultaneously paid to the holders of Class A Common Stock. If dividends are declared on the Class A Common Stock, the Class B Common Stock or Class C Common Stock that are payable in shares of Common Stock, or securities convertible or exercisable into or exchangeable or redeemable for Common Stock, the dividends payable to the holders of Class A Common Stock shall be paid only in shares of Class A Common Stock (or securities convertible or exercisable into or exchangeable or redeemable for Class A Common Stock), the dividends payable to the holders of Class B Common Stock shall be paid only in shares of Class B Common Stock (or securities convertible or exercisable into or exchangeable or redeemable for Class B Common Stock), the dividends payable to the holders of Class C Common Stock shall be paid only in shares of Class C Common Stock (or securities convertible or exercisable into or exchangeable or redeemable for Class C Common Stock), and such dividends shall be paid in the same number of shares (or fraction thereof) on a per share basis of the Class A Common Stock, Class B Common Stock and Class C Common Stock, respectively (or securities convertible or exercisable into or exchangeable or redeemable for the same number of shares (or fraction thereof) on a per share basis of the Class A Common Stock, Class B Common Stock and Class C Common Stock, respectively). In no event shall any shares of Class A Common Stock, Class B Common Stock or Class C Common Stock be split, divided, or combined unless the outstanding shares of the other class of Common Stock shall be proportionately split, divided or combined.

 

(d)            In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, after distribution in full of the preferential amounts, if any, to be distributed to the holders of shares of Preferred Stock or any series thereof, if any, the holders of shares of Class A Common Stock shall be entitled to receive all of the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of Class A Common Stock held by them. The holders of shares of Class B Common Stock and Class C Common Stock, as such, shall not be entitled to receive any assets of the Corporation in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation. A dissolution, liquidation or winding-up of the Corporation, as such terms are used in this Subparagraph (d), shall not be deemed to be occasioned by or to include any consolidation or merger of the Corporation with or into any other corporation or corporations or other entity or a sale, lease, exchange or conveyance of all or a part of the assets of the Corporation.

 

(e)            Shares of Class C Common Stock shall be redeemable for shares of Class A Common Stock on the terms and subject to the conditions set forth in the Fifth Amended and Restated Limited Liability Company Agreement of Sunlight Financial LLC (as it may be amended, restated, supplemented and otherwise modified from time to time, in accordance with its terms, the LLC Agreement). The Corporation 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 redemption of the outstanding shares of Class C Common Stock for Class A Common Stock pursuant to the LLC Agreement, such number of shares of Class A Common Stock that shall be issuable upon any such redemption pursuant to the LLC Agreement; provided, however, that nothing contained herein shall be construed to preclude the Corporation from satisfying its obligations in respect of any such redemption of shares of Class C Common Stock pursuant to the LLC Agreement by delivering to the holder of shares of Class C Common Stock upon such redemption, cash in lieu of shares of Class A Common Stock in the amount permitted by and provided in the LLC Agreement or shares of Class A Common Stock which are held in the treasury of the Corporation. All shares of Class A Common Stock that shall be issued upon any such redemption will, upon issuance in accordance with the LLC Agreement, be validly issued, fully paid and non-assessable. All shares of Class C Common Stock redeemed shall be cancelled.

 

(f)            The number of authorized shares of Class A Common Stock, Class B Common Stock, Class C Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the outstanding shares of 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 Class A Common Stock, Class B Common Stock, Class C Common Stock or Preferred Stock voting separately as a class shall be required therefor; provided, however, that any amendment to increase the aggregate number of shares of Class C Common Stock that the Corporation has authority to issue shall also require approval by the affirmative vote of the holders of a majority in voting power of the outstanding shares of Class C Common Stock entitled to vote thereon.

 

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(g)           The Corporation has the authority to create and issue rights, warrants and options entitling the holders thereof to acquire from the Corporation any shares of its capital stock of any class or classes, with such rights, warrants and options to be evidenced by or in instrument(s) approved by the Board of Directors. The Board of Directors is empowered to set the exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that the consideration to be received for any shares of capital stock issuable upon exercise thereof may not be less than the par value thereof.

 

(h)           No stockholder shall, by reason of the holding of shares of any class or series of capital stock of the Corporation, have any pre-emptive or preferential right to acquire or subscribe for any shares or securities of any class, whether now or hereafter authorized, which may at any time be issued, sold or offered for sale by the Corporation, unless specifically provided for in a Preferred Stock Designation and except for an exercise of redemption rights in accordance with the LLC Agreement.

 

(i)            Shares of Class B Common Stock are convertible into shares of Class A Common Stock on a one-for-one basis (the Initial Conversion Ratio) and shall automatically convert into Class A Common Stock at the time of the closing of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving the Corporation and one or more businesses (a Business Combination).

 

(i)            Notwithstanding the Initial Conversion Ratio, in the case that additional shares of Class A Common Stock or Equity-linked Securities (as defined below) are issued or deemed issued in excess of the amounts sold in the Corporation’s initial public offering of securities (the Offering) and related to the closing of the initial Business Combination, all issued and outstanding shares of Class B Common Stock shall automatically convert into shares of Class A Common Stock at the time of the closing of the initial Business Combination at a ratio for which:

 

the numerator shall be equal to the sum of (A) 25% of all shares of Class A Common Stock issued or issuable (upon the conversion or exercise of any Equity-linked Securities or otherwise) by the Corporation, related to or in connection with the consummation of the initial Business Combination (excluding any securities issued or issuable to any seller in the initial Business Combination) plus (B) the number of shares of Class B Common Stock issued and outstanding prior to the closing of the initial Business Combination; and

 

the denominator shall be the number of shares of Class B Common Stock issued and outstanding prior to the closing of the initial Business Combination.

 

(ii)            For purposes of this Second Amended and Restated Certificate of Incorporation, Equity-linked Securities shall mean any securities of the Corporation or any of the Corporation’s subsidiaries which are convertible into, or exchangeable or exercisable for, equity securities of the Corporation or such subsidiary, including any securities issued by the Corporation or any of the Corporation’s subsidiaries which are pledged to secure any obligation of any holder to purchase equity securities of the Corporation or any of the Corporation’s subsidiaries.

 

(iii)            Notwithstanding anything to the contrary contained herein, (a) the foregoing adjustment to the Initial Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional shares of Class A Common Stock or Equity-linked Securities by the written consent or agreement of holders of a majority of the shares of Class B Common Stock then outstanding (without the necessity of calling, noticing or holding a meeting of holders of Class B Common Stock), and (b) in no event may the Class B Common Stock convert into Class A Common Stock at a ratio that is less than one-for-one. Pursuant to the Founders Stock Agreement, dated as of January 23, 2021, by and among Spartan, Spartan Acquisition Sponsor II LLC, a Delaware limited liability company, Jan C. Wilson and John M. Stice, the holders of a majority of the shares of Class B Common Stock agreed to irrevocably waive the foregoing adjustment to the Initial Conversion Ratio.

 

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(iv)            The foregoing conversion ratio shall also be adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, exchange, reclassification, recapitalization or otherwise) or similar reclassification or recapitalization of the outstanding shares of Class A Common Stock into a greater or lesser number of shares occurring after the original filing of this Amended and Restated Certificate without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalization of the outstanding shares of Class B Common Stock.

 

(v)            Each share of Class B Common Stock shall convert into its pro rata number of shares of Class A Common Stock pursuant to this paragraph C(i) of this Article FOURTH. The pro rata share for each holder of Class B Common Stock will be determined as follows: Each share of Class B Common Stock shall convert into such number of shares of Class A Common Stock as is equal to the product of one multiplied by a fraction, the numerator of which shall be the total number of shares of Class A Common Stock into which all of the issued and outstanding shares of Class B Common Stock shall be converted pursuant to this paragraph C(i) of this Article FOURTH and the denominator of which shall be the total number of issued and outstanding shares of Class B Common Stock at the time of conversion.

 

Fifth: Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, if any, and to the terms of any investor rights agreement between the Corporation and any stockholder that may be in effect from time to time (as amended or supplemented in accordance with their terms, each an “Investor Rights Agreement”), the number of the directors of the Corporation shall be fixed from time to time in the manner provided in the Bylaws. The Board of Directors shall be divided into three classes: Class I, Class II and Class III. The number of directors in each class shall be as nearly equal as possible. The term of office for the directors in Class I shall expire at the first Annual Meeting of Stockholders following the effectiveness of this Second Amended and Restated Certificate of Incorporation; the term of office for the directors in Class II shall expire at the second Annual Meeting of Stockholders following the effectiveness of this Second Amended and Restated Certificate of Incorporation; and the term of office for the directors in Class III shall expire at the third Annual Meeting of Stockholders following the effectiveness of this Second Amended and Restated Certificate of Incorporation. At each succeeding Annual Meeting of Stockholders following the effectiveness of this Second Amended and Restated Certificate of Incorporation, directors elected to succeed those directors whose terms expire shall be elected to hold office for a three-year term and until the election and qualification of their respective successors in office, subject to their earlier death, resignation or removal. Except as the DGCL may otherwise require or pursuant to the terms of any Investor Rights Agreement, in the interim between Annual Meetings of Stockholders or Special Meetings of Stockholders called for the election of directors and/or the removal of one or more directors and the filling of any vacancy in that connection, newly created directorships and any vacancies in the Board of Directors, including unfilled vacancies resulting from the removal of directors for cause, may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum (as defined in the Bylaws), or by the sole remaining director. All directors shall hold office until the expiration of their respective terms of office or, if earlier, their respective death, resignation or removal and until their successors shall have been elected and qualified. A director elected to fill a vacancy resulting from the death, resignation or removal of a director shall serve for the remainder of the full term of the director whose death, resignation or removal shall have created such vacancy and until his successor shall have been elected and qualified. In case of any increase or decrease, from time to time, in the number of directors, the number of directors in each class shall be apportioned as nearly equal as possible so as to maintain the number of directors in each class as nearly equal as possible, but in no case shall a decrease in the number of directors shorten the term of any incumbent director. Subject to the terms of any Investor Rights Agreement, the Board of Directors is authorized to assign members of the Board of Directors already in office, or those filling vacancies resulting from an increase in the size of the Board of Directors, to Class I, Class II, or Class III, with such assignment to become effective, with respect to members of the Board of Directors already in office, as of the initial effectiveness of this Second Amended and Restated Certificate of Incorporation, and, with respect to members filling vacancies resulting from an increase in the size of the Board of Directors, upon such appointment or election, as applicable. Unless and except to the extent that the Bylaws shall so require, the election of directors need not be by written ballot. Notwithstanding any other provision of this Article FIFTH, and except as otherwise required by law or pursuant to the terms of any Investor Rights Agreement, whenever the holders of one or more series of the Preferred Stock shall have the right, voting separately by class or series, to elect one or more directors, the term of office, the filing of vacancies, the removal from office and other features of such directorships shall be governed by the terms of such series of the Preferred Stock as set forth in this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) and such directors shall not be included in any of the classes created pursuant to this Article FIFTH unless expressly provided by such terms.

 

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Sixth: The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

 

A.            Except as otherwise required by the DGCL or as provided in this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation), the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

 

B.            The Board of Directors shall have the power to adopt, amend or repeal the Bylaws without any action on part of the stockholders of the Corporation. Any adoption, amendment or repeal of the Bylaws by the Board of Directors shall require the approval of a majority of the full Board of Directors. The stockholders shall also have power to adopt, amend or repeal the Bylaws; provided, however, that, notwithstanding any other provision of this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) or any provision of law that might otherwise permit a lesser or no vote, but in addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock issued pursuant to any Preferred Stock Designation), the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Bylaws. No bylaws of the Corporation hereafter made or adopted, nor any repeal of or amendment thereto, shall invalidate any prior act of the Board of Directors that was valid at the time it was taken.

 

C.            Except as may be otherwise provided for or fixed pursuant to this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) relating to the rights of the holders of any outstanding series of Preferred Stock or pursuant to paragraph C(i)(iii) of Article FOURTH, any action required or permitted to be taken by the stockholders of the Corporation must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders.

 

D.            Except as otherwise required by applicable law and subject to the rights of the holders of any series of Preferred Stock, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board of Directors or any two directors of the Board of Directors. Only such business shall be considered at a special meeting of stockholders as shall have been stated in the notice for such meeting.

 

E.            Advance notice of stockholders nominations for the election of directors and of business to be brought by stockholders before any meeting of stockholders of the Corporation shall be given in the manner and to the extent provided in the Bylaws.

 

Seventh: To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. Any repeal or modification of this paragraph A. of this Article SEVENTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation with respect to events occurring prior to the time of such repeal or modification.

 

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Eighth: The Corporation, to the fullest extent permitted by Section 145 of the DGCL, as amended from time to time, shall indemnify any director or officer of the Corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the person 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 or officer of another corporation or of a partnership, joint venture, trust or other enterprise, whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, against all liability and loss suffered and expenses reasonably incurred by such director or officer in connection with such proceeding. Expenses (including attorneys’ fees) incurred by a director or officer in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which such director or officer may be entitled to indemnification hereunder shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized hereby. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation or any former employee or agent of the Corporation and to any other person who is or was serving at the request of the Corporation as an employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, to the maximum extent of the provisions of this Article EIGHTH with respect to the indemnification and advancement of expenses under this Article EIGHTH, on such terms and subject to such procedures as the Corporation may determine.

 

Ninth: Unless the Corporation consents in writing to the selection of an alternative forum, and to the fullest extent permitted by law and subject to applicable jurisdictional requirements, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding as to which the DGCL confers jurisdiction upon the Court of Chancery, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders in such capacity, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL or this Second Amended and Restated Certificate of Incorporation or the Corporation’s bylaws, or (iv) any action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the federal securities laws of the United States.

 

Tenth: If any action the subject matter of which is within the scope of Article NINTH immediately above is filed in a court other than the Court of Chancery (or, if the Court of Chancery does not have jurisdiction, another state court or a federal court located within the State of Delaware) (a Foreign Action) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Article NINTH immediately above (an Foreign Enforcement Action) and (ii) having service of process made upon such stockholder in any such Foreign Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

 

Eleventh: If any provision or provisions of Article NINTH or Article TENTH or this Article ELEVENTH shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of Article NINTH, Article TENTH or this Article ELEVENTH, as applicable (including, without limitation, each portion of any sentence of Article NINTH, Article TENTH or this Article ELEVENTH containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article ELEVENTH and Article NINTH and Article TENTH.

 

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Twelfth: In recognition and anticipation that (i) certain directors and executive officers of Sunlight Financial LLC and their Affiliates (as defined below) (the Sponsor Group) may also serve as directors of the Corporation, (ii) the Sponsor Group and their respective Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, and (iii) members of the Board of Directors who are not employees of the Corporation (Non-Employee Directors) and their respective Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, the provisions of this Article TWELFTH are set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve the Sponsor Group, the Non-Employee Directors or their respective Affiliates and the powers, rights, duties and liabilities of the Corporation and its directors, officers and stockholders in connection therewith.

 

A.            None of (i) any Sponsor Group member or any of its Affiliates or (ii) any Non-Employee Director or his or her Affiliates (the Persons (as defined below) identified in (i) and (ii) above being referred to, collectively, as Identified Persons and, individually, as an Identified Person) shall have any duty to refrain from directly or indirectly (x) engaging in a corporate opportunity in the same or similar business activities or lines of business in which the Corporation or any of its Affiliates proposes to engage or (y) otherwise competing with the Corporation, and, to the fullest extent permitted by the DGCL, no Identified Person shall (A) be deemed to have acted in bad faith or in a manner inconsistent with the best interests of the Corporation or its stockholders or to have acted in a manner inconsistent with or opposed to any fiduciary duty to the Corporation or its stockholders or (B) be liable to the Corporation or its stockholders for breach of any fiduciary duty, in each case, by reason of the fact that such Identified Person engages in any such activities. The Corporation hereby renounces any interest or expectancy in, or in being offered an opportunity to participate in, any business opportunity which may be a corporate opportunity for an Identified Person and the Corporation or any of its Affiliates, except as provided in Paragraph B. of this Article TWELFTH. In the event that any Identified Person acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity for itself, himself or herself and the Corporation or any of its Affiliates, such Identified Person shall have no duty to communicate or offer such transaction or other business opportunity to the Corporation or any of its Affiliates and, to the fullest extent permitted by the DGCL, shall not (A) be deemed to have acted in bad faith or in a manner inconsistent with the best interests of the Corporation or its stockholders or to have acted in a manner inconsistent with or opposed to any fiduciary duty to the Corporation or its stockholders or (B) be liable to the Corporation or its stockholders for breach of any fiduciary duty as a stockholder, director or officer of the Corporation, in each case, by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, himself or herself, or offers or directs such corporate opportunity to another Person.

 

B.            The Corporation does not renounce its interest in any corporate opportunity (i) offered to any Non-Employee Director (including any Non-Employee Director who serves as an officer of the Corporation or any of its subsidiaries) if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Corporation or (ii) is identified by any Non-Employee Director solely through disclosure by or on behalf of the Corporation, and the provisions of Paragraph A. of this Article TWELFTH shall not apply to any such corporate opportunity.

 

C.            In addition to and notwithstanding the foregoing provisions of this Article TWELFTH, a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Corporation if it is a business opportunity that the Corporation is not financially able or contractually permitted or legally able to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy.

 

D.            For purposes of this Article TWELFTH, (i) “Affiliate” shall mean (A) in respect of any member of the Sponsor Group, any Person that, directly or indirectly, is controlled by such member of the Sponsor Group, controls such member of the Sponsor Group or is under common control with such member of the Sponsor Group and shall include any principal, member, director, partner, stockholder, or officer, of any of the foregoing (other than the Corporation and any entity that is controlled by the Corporation), (B) in respect of a Non-Employee Director, any Person that, directly or indirectly, is controlled by such Non-Employee Director (other than the Corporation and any entity that is controlled by the Corporation) and (C) in respect of the Corporation, any Person that, directly or indirectly, is controlled by the Corporation; and (ii) “Person” shall mean any individual, corporation, general or limited partnership, limited liability company, joint venture, trust, association or any other entity.

 

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E.            To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article TWELFTH.

 

Thirteenth: The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation), and other provisions authorized by the laws of the State of Delaware at the time in force that may be added or inserted, in the manner now or hereafter prescribed by this Second Amended and Restated Certificate of Incorporation and the DGCL; and, except as set forth in paragraphs C, D and E of Article SIXTH, all rights, preferences and privileges of whatever nature herein conferred upon stockholders, directors or any other persons by and pursuant to this Second Amended and Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article THIRTEENTH.

 

Fourteenth: Notwithstanding any other provision of this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) except for paragraph C(f) of Article FOURTH or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any vote of the holders of any class or series of the stock of the Corporation required by law or by this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation), the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to amend or repeal, or to adopt any provision of this Second Amended and Restated Certificate of Incorporation.

 

Fifteenth: If any provision of this Second Amended and Restated Certificate of Incorporation becomes or is declared on any ground by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Second Amended and Restated Certificate of Incorporation, and the court will replace such illegal, void or unenforceable provision of this Second Amended and Restated Certificate of Incorporation with a valid and enforceable provision that most accurately reflects the Corporation’s intent, in order to achieve, to the maximum extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Second Amended and Restated Certificate of Incorporation shall be enforceable in accordance with its terms.

 

(Remainder of Page Intentionally Left Blank)

 

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IN WITNESS WHEREOF, the Corporation has caused this Second Amended and Restated Certificate of Incorporation to be signed by an authorized officer this 9th day of July, 2021.

 

  Spartan Acquisition Corp. II
   
  By:  /s/ Geoffrey Strong
  Name: Geoffrey Strong
  Title: Chief Executive Officer

 

 

 

Exhibit 3.2

 

AMENDED AND RESTATED

 

BYLAWS

 

OF

 

SUNLIGHT FINANCIAL HOLDINGS INC.

 

(the “Corporation”)

 

Dated July 9, 2021

 

ARTICLE I
OFFICES

 

1.1            Registered Office. Except as otherwise determined by the Corporation from time to time, the registered office of Sunlight Financial Holdings Inc. in the State of Delaware shall be established and maintained at 251 Little Falls Drive, Wilmington, County of New Castle and the registered agent of the Corporation shall be Corporation Services Company.

 

1.2            Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the board of directors of the Corporation (the “Board of Directors”) may from time to time determine or the business of the Corporation may require.

 

1.3            Books and Records. The books and records of the Corporation may be kept outside the State of Delaware at such place or places as may from time to time be designated by the Board of Directors.

 

ARTICLE II
MEETINGS OF STOCKHOLDERS

 

2.1            Place of Meetings. All meetings of the stockholders shall be held at such time and place, if any, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. The Board of Directors may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board of Directors. The Board of Directors may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a)(2) of the General Corporation Law of the State of Delaware (“DGCL”). If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication: (a) participate in a meeting of stockholders; and (b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that: (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder; (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

 

 

 

2.2            Annual Meetings. The annual meeting of stockholders shall be held on such date and at such time as may be fixed by the Board of Directors and stated in the notice of the meeting, for the purpose of electing directors and for the transaction of only such other business as is properly brought before the meeting in accordance with these Bylaws (the “Bylaws”).

 

Written notice of an annual meeting stating the place, within or without the State of Delaware as permitted by the DGLC, or by means of remote communications as the Board of Directors in its sole discretion may determine, date and hour of the meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the annual meeting, except as otherwise required by law.

 

To be properly brought before the annual meeting, business must be either (i) specified in the notice of annual meeting (or any supplement or amendment thereto) given by or at the direction of the Board of Directors, (ii) otherwise brought before the annual meeting by or at the direction of the Board of Directors, or (iii) otherwise properly brought before the annual meeting by a stockholder who is a stockholder of record at the time the notice provided for in this Article II, Section 2.2 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Article II, Section 2.2. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or after 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 not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the date on which public announcement of the date of such meeting is first made by the Corporation. In no event shall an adjournment or recess of an annual meeting, or a postponement of an annual meeting for which notice of the meeting has already been given to stockholders or a public announcement of the meeting date has already been made, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. For the purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

 

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A stockholder’s notice to the Secretary shall set forth (a) as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the Corporation, the language of the proposed amendment) and the reasons for conducting such business at the annual meeting, and (ii) any substantial interest (within the meaning of Item 5 of Schedule 14A under the Exchange Act) of the stockholder or any beneficial owner on whose behalf the proposal is made in such business, (b) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the business is proposed (i) the name and record address of the stockholder and beneficial owner, (ii) the class, series and number of shares of capital stock of the Corporation that are beneficially owned by the stockholder and beneficial owner as of the date of the notice (including, if such stockholder or beneficial owner is an entity, the ownership of each director, executive, managing member or control person of such entity), and a representation that the stockholder will notify the Corporation in writing not later than five business days after the record date for such meeting of the class or series and number of shares of stock of the Corporation owned of record by the stockholder and such beneficial owner as of the record date for the meeting, (iii) a representation that the stockholder (or a qualified representative of the stockholder) intends to appear at the meeting to propose such business, (iv) any agreement, arrangement or understanding with respect to such proposed business between or among such stockholder, beneficial owner or control person and any other person, including, without limitation, any agreements that would be required to be disclosed pursuant to Item 5 or Item 6 of Exchange Act Schedule 13D (regardless of whether the requirement to file a Schedule 13D is applicable) and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting, (v) any agreement, arrangement or understanding (including, without limitation, any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, such stockholder, beneficial owner or control person, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price of any class or series of the Corporation’s stock, or maintain, increase or decrease the voting power of the stockholder, beneficial owner or control person with respect to securities of the Corporation, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting, (vi) a representation whether the stockholder or the beneficial owner, if any, will engage in a solicitation with respect to such proposed business and, if so, the name of each participant in such solicitation (as defined in Item 4 of Schedule 14A under the Exchange Act) and whether such person intends or is part of a group which intends to deliver a proxy statement and/or form of proxy to holders of shares representing at least 50% of the voting power of the stock entitled to vote generally in the election of directors, (vii) a representation that the stockholder will certify to the Corporation in writing ten days before such meeting that all information provided to the Company is true and correct as of such date (including updating any information to the extent required) and (viii) a representation that the stockholder will otherwise comply with all applicable requirements of the Exchange Act.

 

Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Article II, Section 2.2 (other than a proposal included in the Corporation’s proxy statement pursuant to and in compliance with Rule 14a-8 under the Exchange Act). The officer of the Corporation presiding at an annual meeting shall, if the facts warrant, determine and declare to the annual meeting that business was not properly brought before the annual meeting in accordance with the provisions of this Article II, Section 2.2, and if such officer should so determine, such officer shall so declare to the annual meeting and any such business not properly brought before the meeting shall not be transacted.

 

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2.3            Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Second Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”), may only be called by any two directors of the Board of Directors or Chairman of the Board of Directors.

 

Unless otherwise provided by law, written notice of a special meeting of stockholders, stating the time, place, within or without the State of Delaware, or by means of remote communication as the Board in its sole discretion may determine, and purpose or purposes thereof, shall be given to each stockholder entitled to vote at such meeting, not less than ten (10) nor more than sixty (60) days before the date fixed for the meeting. Business transacted at any special meeting of stockholders shall be limited to the purpose(s) stated in the notice.

 

2.4            Quorum. The holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation; provided, however, that where a separate vote by a class or series or classes or series is required, a majority of the voting power of the stock of such class or series or classes or series outstanding and entitled to vote on that matter, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to such matter. If, however, such quorum shall not be present or represented at any meeting of the stockholders, then the officer of the Company presiding over the meeting, or the holders of a majority of the voting power of the stock present in person or represented by proxy at the meeting, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.

 

2.5            Organization. The Chairman of the Board of Directors shall act as chairman of meetings of the stockholders. The Board of Directors may designate any other officer or director of the Corporation to act as chairman of any meeting in the absence of the Chairman of the Board of Directors, and the Board of Directors may further provide for determining who shall act as chairman of any stockholders meeting in the absence of the Chairman of the Board of Directors and such designee. The Board of Directors may adopt such rules and regulations for the conduct of any meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of the meeting shall have the authority to adopt and enforce such rules and regulations for the conduct of any meeting of stockholders and the safety of those in attendance as, in the judgment of the chairman, are necessary, appropriate or convenient for the conduct of the meeting. Rules and regulations for the conduct of meetings of stockholders, whether adopted by the Board of Directors or by the chairman of the meeting, may include without limitation, establishing: (i) an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies and such other persons as the chairman of the meeting shall permit; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; (v) limitations on the time allotted for consideration of each agenda item and for questions and comments by participants; (vi) regulations for the opening and closing of the polls for balloting and matters which are to be voted on by ballot (if any); and (vii) procedures (if any) requiring attendees to provide the Corporation advance notice of their intent to attend the meeting. Subject to any rules and regulations adopted by the Board of Directors, the chairman of the meeting may convene and, for any reason, from time to time, adjourn and/or recess any meeting of stockholders pursuant to Section 2.10 of these Bylaws.

 

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The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but in the absence of the Secretary the Board of Directors or the presiding officer may appoint any other person to act as secretary of any meeting.

 

2.6            Voting. Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, any question (other than the election of directors) brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock present or represented by proxy and entitled to vote thereat. At all meetings of stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect. Each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share of the capital stock entitled to vote thereat held by such stockholder, unless otherwise provided by the Certificate of Incorporation. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize any person or persons to act for him or her by proxy. No proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his or her discretion, may require that any votes cast at such meeting shall be cast by written ballot.

 

2.7            Action of Shareholders Without Meeting. Except as may be otherwise provided for or fixed pursuant to the Certificate of Incorporation (including any Preferred Stock Designation) relating to the rights of the holders of any outstanding series of Preferred Stock or pursuant to paragraph C(i)(iii) of Article FOURTH of the Certificate of Incorporation, any action required or permitted to be taken by the stockholders of the Corporation must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders.

 

2.8            Voting List. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the election, either (i) at a place within the city, town or village where the election is to be held, which place shall be specified in the notice of the meeting, or, if not specified, at the place where said meeting is to be held, (ii) at the principal executive offices of the Corporation or (iii) on a reasonably accessible electronic network as permitted by applicable law (provided that the information required to gain access to the list is provided with notice of the meeting). If the meeting is held at a location where stockholders may attend in person, the list shall be produced and kept at the time and place of election during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise required by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 2.8 or to vote in person or by proxy at any meeting of stockholders.

 

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2.9            Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Article II, Section 2.8 of these Bylaws or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

 

2.10          Adjournment. Any meeting of the stockholders, including one at which directors are to be elected, may be adjourned for such periods as the presiding officer of the Corporation presiding over the meeting or the stockholders present in person or by proxy and entitled to vote shall direct. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the place, if any, date and time thereof, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a new record date for notice of such adjourned meeting in accordance with Section 5.5 of these Bylaws, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.

 

2.11          Inspectors. The election of directors and any other vote by ballot at any meeting of the stockholders shall be supervised by at least one inspector. Such inspectors shall be appointed by the Board of Directors in advance of the meeting. If the inspector so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

 

ARTICLE III
DIRECTORS

 

3.1            Powers; Number; Qualifications. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by law or in the Certificate of Incorporation. The number of directors which shall constitute the Board of Directors shall be not less than three (3) nor more than ten (10). The exact number of directors shall be fixed from time to time, within the limits specified in this Article III, Section 3.1 or in the Certificate of Incorporation, by the Board of Directors. Directors need not be stockholders of the Corporation. The Board may be divided into Classes as more fully described in the Certificate of Incorporation.

 

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3.2            Election; Term of Office; Resignation; Removal; Vacancies. Each director shall hold office until the next annual meeting of stockholders at which his or her Class stands for election and until his or her successor shall have been duly elected and qualified or until such director’s earlier resignation, removal from office, death or incapacity. Unless otherwise provided in the Certificate of Incorporation, vacancies and newly created directorships resulting from any increase in the authorized number of directors or from any other cause may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director and each 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, or until such director’s earlier resignation, removal from office, death or incapacity.

 

3.3            Nominations. Nominations of persons for election to the Board of Directors at a meeting of stockholders of the Corporation may be made at such meeting (i) by or at the direction of the Board of Directors, (ii) by any committee or persons appointed by the Board of Directors for such purposes or (iii) by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who is a stockholder of record at the time the notice provided for in this Article III, Section 3.3 is delivered to the Secretary of the Corporation, who complies with the notice procedures set forth in this Article III, Section 3.3. In addition to any other applicable requirements set forth in these Bylaws, for such nominations to be properly brought before an annual meeting by any stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or after 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 not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the date on which public announcement of the date of such meeting is first made by the Corporation. In no event shall an adjournment or recess of an annual meeting, or a postponement of an annual meeting for which notice of the meeting has already been given to stockholders or a public announcement of the meeting date has already been made, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

 

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Any such stockholder’s notice to the Secretary of a nomination(s) for director shall set forth (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (a) the name, age, business address and residence address of the person, (b) the principal occupation or employment of the person, (c) the class and number of shares of capital stock of the Corporation that are beneficially owned by the person, (d) a written representation and agreement, which shall be signed by such person and pursuant to which such person shall represent and agree that such person: (1) consents to serving as a director if elected and (if applicable) to being named in the Corporation’s proxy statement and form of proxy as a nominee, and currently intends to serve as a director for the full term for which such person is standing for election; (2) is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity: (A) as to how the person, if elected as a director, will act or vote on any issue or question that has not been disclosed to the Corporation; or (B) that could limit or interfere with the person’s ability to comply, if elected as a director, with such person’s fiduciary duties under applicable law; (3) 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 or regarding his or her holdings of securities of the Corporation in connection with service or action as a director or nominee that has not been disclosed to the Corporation; and (4) if elected as a director, will comply with all of the Corporation’s corporate governance, conflict of interest, confidentiality, and stock ownership and trading policies and guidelines, and any other Corporation policies and guidelines applicable to directors (which will be provided to such person promptly following a request therefor), (e) all completed and signed questionnaires required of the Corporation’s directors (which will be provided to such person promptly following a request therefor) and (f) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to the Rules and Regulations of the Securities and Exchange Commission under Section 14 of the Securities Exchange Act of 1934, as amended, and (ii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (a) the name and record address of the stockholder and beneficial owner and (b) the class and number of shares of capital stock of the Corporation that are beneficially owned by the stockholder and beneficial owner as of the date of the notice (including, if such stockholder or beneficial owner is an entity, the ownership of each director, executive, managing member or control person of such entity), and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of the class or series and number of shares of stock of the Corporation owned of record by the stockholder and such beneficial owner as of the record date for the meeting, (c) a representation that the stockholder (or a qualified representative of the stockholder) intends to appear at the meeting to make such nomination, (d) any agreement, arrangement or understanding with respect to the nomination between or among such stockholder, beneficial owner or control person and any other person, including, without limitation, any agreements that would be required to be disclosed pursuant to Item 5 or Item 6 of Exchange Act Schedule 13D (regardless of whether the requirement to file a Schedule 13D is applicable) and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting, (e) any agreement, arrangement or understanding (including, without limitation, any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, such stockholder, beneficial owner or control person, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price of any class or series of the Corporation’s stock, or maintain, increase or decrease the voting power of the stockholder, beneficial owner or control person with respect to securities of the Corporation, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting, (f) a representation whether the stockholder or the beneficial owner, if any, will engage in a solicitation with respect to the nomination and, if so, the name of each participant in such solicitation (as defined in Item 4 of Schedule 14A under the Exchange Act) and whether such person intends or is part of a group which intends to deliver a proxy statement and/or form of proxy to holders of shares representing at least 50% of the voting power of the stock entitled to vote generally in the election of directors, (g) a representation that the stockholder will certify to the Corporation in writing ten (10) days before such meeting that all information provided to the Company is true and correct as of such date (including updating any information to the extent required) and (h) a representation that the stockholder will otherwise comply with all applicable requirements of the Exchange Act. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth herein. The officer of the Corporation presiding at an annual meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedures, and if he or she should so determine, such officer shall so declare to the meeting and the defective nomination shall be disregarded.

 

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Notwithstanding anything to the contrary contained in this Section 3.3, for so long as the Investor Rights Agreement (as defined in the Certificate of Incorporation) remains in effect with respect to any Principal Stockholder (as defined in the Investor Rights Agreement), such Principal Stockholder (so long as such Principal Stockholder has the right to designate one or more nominees for election to the Board pursuant to the Investor Rights Agreement) shall not be subject to this Section 3.3 with respect to any annual or special meeting of stockholders.

 

3.4            Meetings. The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware. Unless otherwise determined by the Board, the first meeting of each newly elected Board of Directors shall be held immediately after and at the same place as the meeting of the stockholders at which it is elected and no notice of such meeting shall be necessary to the newly elected directors in order to legally constitute the meeting, provided a quorum shall be present. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman, the President or a majority of the entire Board of Directors. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone, facsimile, telegram or e-mail on twenty-four (24) hours’ notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.

 

3.5            Remote Meetings Permitted. Members of the Board of Directors, or any committee of the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of telephone or other remote communications by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to conference telephone or other remote communications shall constitute presence in person at such meeting.

 

3.6            Quorum. Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors or any committee thereof, a majority of the entire Board of Directors or such committee, as the case may be, shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors or of any committee thereof, a majority of the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

 

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3.7            Organization of Meetings. The Board of Directors shall elect one of its members to be Chairman of the Board of Directors. The Chairman of the Board of Directors shall lead the Board of Directors in fulfilling its responsibilities as set forth in these Bylaws and shall determine the agenda and perform all other duties and exercise all other powers which are or from time to time may be delegated to him or her by the Board of Directors.

 

Meetings of the Board of Directors shall be presided over by the Chairman of the Board of Directors, or in his or her absence, by the Chief Executive Officer, or in the absence of the Chairman of the Board of Directors and the Chief Executive Officer by such other person as the Board of Directors may designate or the members present may select.

 

3.8            Actions of Board of Directors Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, by unanimous consent of the Board of Directors or of such committee, as the case may be, in writing. The writing or writings shall be filed with the minutes of proceedings of the Board of Directors or committee, as applicable.

 

3.9            Removal of Directors by Stockholders. The entire Board of Directors or any individual director may be removed from office by a majority vote of the holders of the outstanding shares then entitled to vote at an election of directors. Notwithstanding the foregoing, if the Corporation’s board is classified into one or more classes of directors, stockholders may effect such removal only for cause. In case the Board of Directors or any one or more directors is so removed, new directors may be elected pursuant to Section 3.2 at the same time for the unexpired portion of the full term of the director or directors so removed.

 

3.10          Resignations. Any director may resign at any time by submitting his or her written resignation to the Board of Directors or Corporate Secretary. Any such resignation shall take effect at the time of its receipt by the Corporation unless another time be fixed in the resignation, in which case it shall become effective at the time so fixed. The acceptance of a resignation shall not be required to make it effective.

 

3.11          Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided by law and in the resolution of the Board of Directors establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation consistent with the powers of such committee as established in the charter of such committee and approved by the Board of Directors or as otherwise delegated by the Board of Directors in a resolution thereof, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution or any amendment of the Bylaws of the Corporation; and, unless by resolution the Board of Directors expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or to adopt a certificate of ownership and merger. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required by the resolution or charter authorizing the powers of such committee or on request of the Chairman of the Board.

 

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3.12          Compensation. Unless otherwise restricted by the Certificate of Incorporation, directors not employed by the Corporation may receive such compensation, if any, for their services on the Board of Directors and its committees, and such reimbursement of expenses, as may be fixed or determined by resolution of the Board of Directors. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

 

3.13          Confidentiality. Each director shall maintain the confidentiality of, and shall not share with any third party person or entity (including third parties that originally sponsored, nominated or designated such director (the “Sponsoring Party”)), any non- public information learned in their capacities as directors, including communications among directors in their capacities as directors. The Board of Directors may adopt a board confidentiality policy further implementing and interpreting this bylaw (a “Board Confidentiality Policy”). All directors are required to comply with this bylaw and any such Board Confidentiality Policy unless such director or the Sponsoring Party for such director has entered into a specific written agreement with the Corporation, in either case as approved by the Board of Directors, providing otherwise with respect to such confidential information

 

3.14          Interested Directors. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose, if (i) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

 

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ARTICLE IV
OFFICERS

 

4.1            General. Except as otherwise determined by the Board of Directors, the officers of the Corporation shall be elected by the Board of Directors and may consist of: a Chief Executive Officer, Chief Financial Officer, Corporate Secretary and Treasurer (together with an Chairman of the Board or Vice Chairman of the Board that is also an officer of the Company and the Executive Vice Presidents as described below, the “Executive Officers”). In addition, the Board of Directors may appoint a Chairman of the Board and one or more Vice Chairman of the Board, which may (or may not) also be officers of the Corporation, as determined by the Board of Directors in its sole discretion. The Chief Executive Officer, in his or her discretion, may also elect one or more Vice Presidents (including Executive Vice Presidents (subject to the approval of the Board of Directors), Senior Vice Presidents and First Vice Presidents), Assistant Secretaries, Assistant Treasurers, a Controller and such other officers as in the judgment of the Chief Executive Officer may be necessary or desirable (all Executive Vice Presidents and other officers of the Corporation (the “Corporate Officers”). Any number of offices may be held by the same person and more than one person may hold the same office, unless otherwise prohibited by law, the Certificate of Incorporation or these Bylaws. The officers of the Corporation need not be stockholders of the Corporation, nor need such officers be directors of the Corporation.

 

4.2            Election. The Board of Directors at its first meeting held after each annual meeting of stockholders shall elect the Executive Officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. Except as otherwise provided in this Article IV, any Executive Officer elected by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. All other Corporate Officers may be removed at any time at the discretion of the Chief Executive Officer (provided that the removal of any Executive Vice President shall require the prior approval of the Board of Directors). Any vacancy occurring in any executive office of the Corporation shall be filled by the Board of Directors. The salaries of all officers who are directors of the Corporation shall be fixed by the Board of Directors.

 

4.3            Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chief Executive Officer or any Corporate Officer, and any such officer may, in the name and on behalf of the Corporation, take all such action as any such officer may deem necessary or advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

 

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4.4            Chief Executive Officer. Subject to the provisions of these Bylaws and to the direction of the Board of Directors, the Chief Executive Officer shall have ultimate authority for decisions relating to the general management and control of the affairs and business of the Corporation and shall perform such other duties and exercise such other powers which are or from time to time may be delegated to him or her by the Board of Directors or these Bylaws, all in accordance with basic policies as established by and subject to the oversight of the Board of Directors. Unless otherwise provided in these Bylaws or determined by the Board of Directors, all other Corporate Officers may be appointed by the Chief Executive Officer and shall report directly to the Chief Executive Officer or as otherwise determined by the Chief Executive Officer.

 

4.5            Chief Financial Officer. The Chief Financial Officer shall have general supervision, direction and control of the financial affairs of the Corporation and shall perform such other duties and exercise such other powers which are or from time to time may be delegated to him or her by the Board of Directors, the Chief Executive Officer or these Bylaws, all in accordance with basic policies as established by and subject to the oversight of the Board of Directors. In the absence of a named Treasurer, the Chief Financial Officer shall also have the powers and duties of the Treasurer as hereinafter set forth and shall be authorized and empowered to sign as Treasurer in any case where such officer’s signature is required.

 

4.6            Executive Officers . At the request of the Chief Executive Officer or in the absence of the Chief Executive Officer, or in the event of his or her inability or refusal to act, the Executive Officers (in the order designated by the Board of Directors) shall perform the duties of the Chief Executive Officer, and when so acting, shall have all the powers of and be subject to all the restrictions upon such office. Each Executive Officer shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Executive Officers, the Board of Directors shall designate the Corporate Officer of the Corporation who, in the absence of the Chief Executive Officer or in the event of the inability or refusal of such officer to act, shall perform the duties of such office, and when so acting, shall have all the powers of and be subject to all the restrictions upon such office.

 

4.7            Corporate Secretary. The Corporate Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the standing committees when required. The Corporate Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the Chief Executive Officer, under whose supervision the Corporate Secretary shall be. The Corporate Secretary may appoint an Assistant Corporate Secretary (with the approval of the Chief Executive Officer and the Board of the Directors) to whom the duties of the Corporate Secretary may be delegated. If the Corporate Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, then any Assistant Corporate Secretary shall perform such actions. If there be no Assistant Corporate Secretary, then the Chief Executive Officer may choose another officer to cause such notice to be given. The Corporate Secretary shall have custody of the seal of the Corporation and the Corporate Secretary or any Assistant Corporate Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Corporate Secretary or by the signature of any such Assistant Corporate Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature. The Corporate Secretary and any Assistant Corporate Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

 

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4.8            Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors or the Chief Executive Officer. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors or the Chief Executive Officer, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his or her office and for the restoration to the Corporation, in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.

 

4.9            Assistant Corporate Secretaries. Except as may be otherwise provided in these Bylaws, Assistant Corporate Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the Chief Executive Officer , or the Corporate Secretary, and in the absence of the Secretary or in the event of his or her disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.

 

4.10          Assistant Treasurers. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the Chief Executive Officer, or the Treasurer, and in the absence of the Treasurer or in the event of his or her disability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his or her office and for the restoration to the Corporation, in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.

 

4.11          Controller. The Controller, if there by one appointed, shall establish and maintain the accounting records of the Corporation in accordance with generally accepted accounting principles applied on a consistent basis, maintain proper internal control of the assets of the Corporation and shall perform such other duties as the Board of Directors, the Chief Executive Officer or the Chief Financial Officer may prescribe.

 

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4.12          Other Corporate Officers. Such other officers as the Board of Directors or the Chief Executive Officer may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors or the Chief Executive Officer. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

 

4.13          Vacancies. Subject to applicable law and the rights of holders of any series of Preferred Stock then outstanding and the then-applicable terms of the Investor Rights Agreement, the Board of Directors and the Chief Executive Officer shall have the power to fill any vacancies in any office occurring from whatever reason (provided that the approval of the Board of Director shall be required for the Chief Executive Officer to fill any vacancy in any executive office).

 

4.14          Resignations. Any officer may resign at any time by submitting his or her written resignation to the Corporate Secretary. Such resignation shall take effect at the time of its receipt by the Corporation, unless another time be fixed in the resignation, in which case it shall become effective at the time so fixed (or such earlier time as determined by the Chief Executive Officer provided that the determination by the Chief Executive Officer of an alternative resignation date for any Executive Officer shall be approved by the Board of Directors). The acceptance of a resignation shall not be required to make it effective.

 

4.15          Removal. Subject to the provisions of any employment agreement approved by the Board of Directors, any officer of the Corporation may be removed at any time, with or without cause, by the Board of Directors or by any duly authorized officer granted such authority by the Board of Directors.

 

ARTICLE V
CAPITAL STOCK

 

5.1            Form of Certificates. The shares of stock in the Corporation shall be in uncertificated form, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the Corporation’s stock shall be represented by certificates. Stock certificates shall be in such forms as the Board of Directors may prescribe and signed by any two authorized officers of the Corporation, including, without limitation, the Chief Executive Officer, an Executive Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation.

 

5.2            Signatures. Any or all of the signatures on a stock certificate may be a facsimile, including, but not limited to, signatures of officers of the Corporation and countersignatures of a transfer agent or registrar. In case an 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.

 

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5.3            Lost Certificates. The Board of Directors may direct a new stock certificate or certificates to be issued in place of any stock certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new stock certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

 

5.4            Transfers. Stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of certificated stock shall be made on the books of the Corporation 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, which shall be canceled before a new certificate shall be issued. Transfers of uncertificated stock shall be made on the books of the Corporation only by the person then registered on the books of the Corporation as the owner of such shares or by such person’s attorney lawfully constituted in writing and written instruction to the Corporation containing such information as the Corporation or its agents may prescribe. No transfer of uncertificated 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. The Corporation shall have no duty to inquire into adverse claims with respect to any stock transfer unless (a) the Corporation has received a written notification of an adverse claim at a time and in a manner which affords the Corporation a reasonable opportunity to act on it prior to the issuance of a new, reissued or re- registered share certificate, in the case of certificated stock, or entry in the stock record books of the Corporation, in the case of uncertificated stock, and the notification identifies the claimant, the registered owner and the issue of which the share or shares is a part and provides an address for communications directed to the claimant; or (b) the Corporation has required and obtained, with respect to a fiduciary, a copy of a will, trust, indenture, articles of co-partnership, Bylaws or other controlling instruments, for a purpose other than to obtain appropriate evidence of the appointment or incumbency of the fiduciary, and such documents indicate, upon reasonable inspection, the existence of an adverse claim. The Corporation may discharge any duty of inquiry by any reasonable means, including notifying an adverse claimant by registered or certified mail at the address furnished by him or her or, if there be no such address, at his or her residence or regular place of business that the security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within thirty days from the date of mailing the notification, either (a) an appropriate restraining order, injunction or other process issues from a court of competent jurisdiction; or (b) an indemnity bond, sufficient in the Corporation’s judgment to protect the Corporation and any transfer agent, registrar or other agent of the Corporation involved from any loss which it or they may suffer by complying with the adverse claim, is filed with the Corporation.

 

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5.5            Fixing Record Date. In order that the Corporation may determine the stockholders entitled to notice or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, 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 of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If no record date is fixed:

 

(a)            The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

 

(b)            The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the first date on which a signed written consent is delivered to the Corporation.

 

(c)            The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

 

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

5.6            Registered Stockholders. Prior to due presentment for transfer of any share or shares, the Corporation shall treat the registered owner thereof as the person exclusively entitled to vote, to receive notifications and to all other benefits of ownership with respect to such share or shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.

 

ARTICLE VI
NOTICES

 

6.1            Form of Notice. Notices to directors and stockholders other than notices to directors of special meetings of the Board of Directors which may be given by any means stated in Article III, Section 3.4, shall be given by any means permitted by law. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to each such director or stockholder at such director’s or stockholder’s address as it appears on the records of the Corporation. Notice by electronic transmission shall be deemed given as provided in Section 232 of the DGCL. Notice to directors may also be given by telephone, facsimile, email in accordance with the DGCL. Whenever stockholders are required or permitted to take any action at a meeting, notice of the place, if any, date, and time of the meeting of stockholders, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for determining the stockholders entitled to notice of the meeting) and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, shall be given.

 

6.2            Waiver of Notice. Whenever any notice is required to be given under the provisions of law or the Certificate of Incorporation or by these Bylaws of the Corporation, a written waiver, signed by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular, or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation.

 

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ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

7.1            The Corporation shall indemnify, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he or she is or was a director or officer of the Corporation or, while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

 

7.2            The Corporation shall indemnify, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director or officer of the Corporation or, while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

 

7.3            To the extent that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 7.1 or 7.2 of this Article, or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith.

 

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7.4            Any indemnification under Sections 7.1 or 7.2 of this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he or she has met the applicable standard of conduct set forth in such section. Such determination shall be made:

 

(a)            by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less Than a quorum;

 

(b)            by a committee of such directors designated by majority vote of such directors, even though less than a quorum;

 

(c)            if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or

 

(d)            by the stockholders.

 

7.5            Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Corporation as authorized in this Article.

 

7.6            The indemnification and advancement of expenses provided by, or granted pursuant to the other sections of this Article shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of this Article shall not be eliminated or impaired by an amendment to these Bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought.

 

7.7            The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of this Article.

 

7.8            The Corporation may grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation or to any person serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise to the fullest extent of the provisions of this Article with respect to the indemnification and advancement of expenses of directors and officers of the Corporation, on such terms and subject to such procedures as the Corporation may determine.

 

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7.9            For purposes of this Article, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation of its separate existence had continued.

 

7.10          For purposes of this Article, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article.

 

7.11          The indemnification and advancement of expenses provided by, or granted pursuant to, this Article shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

7.12          No director or officer of the Corporation shall be personally liable to the Corporation or to any stockholder of the Corporation for monetary damages for breach of fiduciary duty as a director or officer, provided that this provision shall not limit the liability of a director or officer (i) for any breach of the director’s or the officer’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director or officer derived an improper personal benefit.

 

ARTICLE VIII
GENERAL PROVISIONS

 

8.1            Reliance on Books and Records. Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation, shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation, including reports made to the Corporation by any of its officers, by an independent certified public accountant, or by an appraiser selected with reasonable care.

 

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8.2            Maintenance of Records. The Corporation shall, either at its principal executive office or at such place or places as designated by the Board of Directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these Bylaws, as may be amended to date, minute books, accounting books and other records.

 

8.3            Inspection by Directors. Any director shall have the right to examine the Corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director.

 

8.4            Dividends. Subject to the provisions of the Certificate of Incorporation, if any, dividends upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

 

8.5            Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other persons as the Board of Directors may from time to time designate.

 

8.6            Fiscal Year. The fiscal year of the Corporation shall be as determined by the Board of Directors.

 

8.7            Seal. The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary of the Corporation. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the appropriate officers.

 

8.8            Amendments. The Board of Directors shall have the power to adopt, amend or repeal these Bylaws without any action on part of the stockholders of the Corporation. Any adoption, amendment or repeal of these Bylaws by the Board of Directors shall require the approval of a majority of the full Board of Directors. The stockholders shall also have power to adopt, amend or repeal these Bylaws; provided, however, that, notwithstanding any other provision of the Certificate of Incorporation or any provision of law that might otherwise permit a lesser or no vote, but in addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by the Certificate of Incorporation, the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Bylaws. No bylaws of the Corporation hereafter made or adopted, nor any repeal of or amendment of these Bylaws, shall invalidate any prior act of the Board of Directors that was valid at the time it was taken. So long as the Investor Rights Agreement remains in effect, the Board of Directors shall not approve any amendment, alteration or repeal of any provision of these Bylaws, or the adoption of any new Bylaw, that would be contrary to or inconsistent with the then-applicable terms of the Investor Rights Agreement.

 

8.9            Interpretation of Bylaws. All words, terms and provisions of these Bylaws shall be interpreted and defined by and in accordance with the DGCL, as amended, and as amended from time to time hereafter.

 

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Exhibit 3.3

 

FIFTH AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

SUNLIGHT FINANCIAL LLC

 

DATED AS OF July 9, 2021

 

THE LIMITED LIABILITY COMPANY INTERESTS IN SUNLIGHT FINANCIAL LLC HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAWS OF ANY STATE, OR ANY OTHER APPLICABLE SECURITIES LAWS, AND HAVE BEEN OR ARE BEING ISSUED IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE SECURITIES LAWS OF ANY STATE AND ANY OTHER APPLICABLE SECURITIES LAWS; (II) THE TERMS AND CONDITIONS OF THIS FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT; AND (III) ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BETWEEN THE MANAGING MEMBER AND THE APPLICABLE MEMBER. THE LIMITED LIABILITY COMPANY INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS, THIS FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT AND ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BY THE MANAGING MEMBER AND THE APPLICABLE MEMBER. THEREFORE, PURCHASERS AND OTHER TRANSFEREES OF SUCH LIMITED LIABILITY COMPANY INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT OR ACQUISITION FOR AN INDEFINITE PERIOD OF TIME.

 

 

 

TABLE OF CONTENTS

 

ARTICLE I              DEFINITIONS 2
     
Section 1.1 Definitions 2
Section 1.2 Interpretive Provisions 18
     
ARTICLE II              ORGANIZATION OF THE LIMITED LIABILITY COMPANY 19
     
Section 2.1 Company’s Continued Existence 19
Section 2.2 Filing 19
Section 2.3 Name 19
Section 2.4 Registered Office; Registered Agent 19
Section 2.5 Principal Place of Business 19
Section 2.6 Purpose; Powers 19
Section 2.7 Term 19
Section 2.8 Intent 20
     
ARTICLE III              CLOSING TRANSACTIONS 20
     
Section 3.1 Reorganization Transactions 20
     
ARTICLE IV              OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS 20
     
Section 4.1 Authorized Units; General Provisions With Respect to Units 20
Section 4.2 Voting Rights 25
Section 4.3 Capital Contributions; Unit Ownership 25
Section 4.4 Capital Accounts 26
Section 4.5 Other Matters 26
Section 4.6 Redemption of Units 27
     
ARTICLE V              ALLOCATIONS OF PROFITS AND LOSSES 35
     
Section 5.1 Profits and Losses 35
Section 5.2 Special Allocations 36
Section 5.3 Allocations for Tax Purposes in General 38
Section 5.4 Other Allocation Rules 39
     
ARTICLE VI              DISTRIBUTIONS 39
     
Section 6.1 Distributions 39
Section 6.2 Tax-Related Distributions 40
Section 6.3 Distribution Upon Withdrawal 41
Section 6.4 Issuance of Additional Equity Securities 41
     
ARTICLE VII              MANAGEMENT 41
     
Section 7.1 The Managing Member; Fiduciary Duties 41
Section 7.2 Officers 42
Section 7.3 Warranted Reliance by Officers on Others 43
Section 7.4 Indemnification 43

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Section 7.5 Maintenance of Insurance or Other Financial Arrangements 44
Section 7.6 Resignation or Termination of Managing Member 44
Section 7.7 No Inconsistent Obligations 44
Section 7.8 Reclassification Events of PubCo 45
Section 7.9 Certain Costs and Expenses 45
     
ARTICLE VIII              ROLE OF MEMBERS 46
     
Section 8.1 Rights or Powers 46
Section 8.2 Voting 47
Section 8.3 Various Capacities 47
Section 8.4 Investment Opportunities 48
     
ARTICLE IX              TRANSFERS OF INTERESTS 48
     
Section 9.1 Restrictions on Transfer 48
Section 9.2 Notice of Transfer 50
Section 9.3 Transferee Members 50
Section 9.4 Legend 50
     
ARTICLE X              ACCOUNTING; CERTAIN TAX MATTERS 51
     
Section 10.1 Books of Account 51
Section 10.2 Tax Elections 51
Section 10.3 Tax Returns; Information 52
Section 10.4 Company Representative 52
Section 10.5 Withholding Tax Payments and Obligations 52
     
ARTICLE XI              DISSOLUTION AND TERMINATION 54
     
Section 11.1 Liquidating Events 54
Section 11.2 Bankruptcy 55
Section 11.3 Procedure 55
Section 11.4 Rights of Members 56
Section 11.5 Notices of Dissolution 56
Section 11.6 Reasonable Time for Winding Up 56
Section 11.7 No Deficit Restoration 57
     
ARTICLE XII              GENERAL 57
     
Section 12.1 Amendments; Waivers 57
Section 12.2 Further Assurances 58
Section 12.3 Successors and Assigns 58
Section 12.4 Certain Representations by Members 58
Section 12.5 Entire Agreement 59
Section 12.6 Rights of Members Independent 59
Section 12.7 Governing Law 59
Section 12.8 Jurisdiction and Venue 59
Section 12.9 Headings 59
Section 12.10 Counterparts 59
Section 12.11 Notices 60
Section 12.12 Representation By Counsel; Interpretation 60

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Section 12.13 Severability 61
Section 12.14 Expenses 61
Section 12.15 Waiver of Jury Trial 61
Section 12.16 No Third Party Beneficiaries 61

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FIFTH AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

SUNLIGHT FINANCIAL LLC

 

This Fifth Amended and Restated Limited Liability Company Agreement (as amended, supplemented or restated from time to time, this “Agreement”) is entered into as of July 9, 2021, by and among Sunlight Financial LLC, a Delaware limited liability company (the “Company”), Sunlight Financial Holdings Inc., a Delaware corporation formerly known as Spartan Acquisition Corp. II (“PubCo”), SL Financial Holdings Inc., a Delaware corporation and a wholly owned subsidiary of PubCo (“Holdings”), SL Financial Investor I LLC (“Investor I”), a Delaware limited liability company and a wholly owned subsidiary of PubCo, SL Financial Investor II LLC (“Investor II”), a Delaware limited liability company and a wholly owned subsidiary of PubCo, the other parties listed on Exhibit A hereto (collectively, the “Legacy Owners”) and each other Person who is or at any time becomes a Member in accordance with the terms of this Agreement and the Act. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in Section 1.1.

 

RECITALS

 

WHEREAS, the Company was formed as a limited liability company under the Act by the filing of the Certificate of Formation of the Company with the Office of the Secretary of State of Delaware on January 23, 2014 and the member party thereto entered into an amended and restated limited liability company agreement of the Company dated as of August 17, 2015;

 

WHEREAS, immediately prior to the adoption of this Agreement, the Company was governed by the Fourth Amended and Restated Limited Liability Company Agreement, dated as of May 25, 2018 (as amended, the “Existing LLC Agreement”);

 

WHEREAS, on January 21, 2021, the Company, PubCo, Holdings, SL Invest I Inc., a Delaware corporation, SL Invest II LLC, a Delaware limited liability company, Investor I, Investor II, SL Financial LLC, a Delaware limited liability company, FTV-Sunlight, Inc., a Delaware corporation (“FTV Blocker”), and Tiger Co-Invest B Sunlight Blocker, LLC, a Delaware limited liability company (“Tiger Blocker”), entered into that certain Business Combination Agreement (as amended, modified or supplemented from time to time in accordance with the terms thereof, the “Business Combination Agreement”), pursuant to which, among other things, as of the Effective Time and pursuant to the transactions contemplated by the Business Combination Agreement, Holdings will acquire Class X Units in exchange for the consideration described in the Business Combination Agreement;

 

WHEREAS, the Members desire to amend and restate the Existing LLC Agreement in its entirety as of the Effective Time to reflect: (a) the recapitalization of the Company to convert all Pre-Closing Units into Class X Units and Class EX Units in such amounts as set forth in this Agreement and the Business Combination Agreement (the “Recapitalization”), (b) the consummation of the transactions contemplated by the Business Combination Agreement and the other Transaction Agreements (as such term is defined in the Business Combination Agreement), (c) Holdings’ designation as the sole Managing Member of the Company, and (d) the rights and obligations of the Members and other terms and provisions, in each case as set forth in this Agreement;

 

 

WHEREAS, following the Effective Time, each Class EX Unit may be redeemed, at the election of the holder of such Class EX Unit (together with the surrender and delivery by such holder of one share of Class C Common Stock), for one whole share of Class A Common Stock in accordance with the terms and conditions of this Agreement, or, at the Company’s election, for cash pursuant to the Cash Election in accordance with this Agreement;

 

WHEREAS, the Members of the Company desire that Holdings become the sole managing member of the Company (the “Managing Member”);

 

WHEREAS, the Members of the Company desire to amend and restate the Existing LLC Agreement in its entirety as set forth herein and adopt this Agreement; and

 

WHEREAS, this Agreement shall supersede the Existing LLC Agreement in its entirety as of the date hereof.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Existing LLC Agreement is hereby amended and restated in its entirety and the parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1      Definitions. As used in this Agreement and the Schedules and Exhibits attached to this Agreement, the following definitions shall apply:

 

Act” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law).

 

Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Entity.

 

Additional Tax Distribution” is defined in Section 6.2(b).

 

Adjusted Basis” has the meaning given such term in Section 1011 of the Code.

 

Adjusted Capital Account Deficit” means the deficit balance, if any, in such Member’s Capital Account at the end of any Fiscal Year or other taxable period, with the following adjustments:

 

(a) credit to such Capital Account any amount that such Member is obligated to restore under Treasury Regulations Section 1.704-1(b)(2)(ii)(c), as well as any addition thereto pursuant to the next to last sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) after taking into account thereunder any changes during such year in Company Minimum Gain and Member Minimum Gain; and

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(b) debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

 

This definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with such Person. For these purposes, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; provided that, for purposes of this Agreement, (a) no Member shall be deemed an Affiliate of the Company or any of its Subsidiaries and (b) none of the Company or any of its Subsidiaries shall be deemed an Affiliate of any Member.

 

Agreement” is defined in the preamble to this Agreement.

 

Assumed Rate” means the highest effective marginal combined U.S. federal, state and local income tax rate (including, if applicable, under Section 1411 of the Code) applicable to an individual resident in New York, New York (or if the highest effective marginal combined U.S. federal, state and local income tax rate applicable to a U.S. corporation is higher, such combined corporate income tax rate), taking into account (a) the character of any income, gains, deductions, losses or credits, the deductibility of state income taxes (in each case taking into account all jurisdictions in which the Company is required to file income tax returns and the relevant apportionment information, in effect for the applicable Taxable Year; provided, that, for administrative convenience, it shall be assumed that no portion of any state or local taxes shall be deductible for so long as the limitation set forth in Section 164(b)(6)(B) of the Code as of the date hereof remains applicable), and (b) deductions under Section 199A of the Code (assuming that such Person’s only income from any qualified trade or business as determined under Section 199A of the Code is income received in connection with this Agreement and that such Person’s total taxable income exceeds the threshold amount (as defined in Section 199A(e)(2) of the Code) plus $100,000, as applicable. The Assumed Rate shall be the same for all Members regardless of the actual combined income tax rate of the Member or its direct or indirect owners.

 

Attribution Parties” is defined in Section 4.6(e)(iv).

 

Available Cash” means an amount equal to the excess of (a) the amount of cash on hand (including cash equivalents, temporary investments of Company cash, and funds that are available to be borrowed under an existing credit facility or similar existing arrangement) from time to time over (b) the sum of (i) the amount of cash and borrowing capacity required, in the Good Faith judgment of the Managing Member, to maintain liquidity of the Company to meet its obligations as and when they become due, and (ii) the amount of any distributions reasonably expected to be made pursuant to Section 6.2(a), but only to the extent reasonably contemporaneously with such Tax Distribution Date.

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beneficially own” and “beneficial owner” shall be as defined in Rule 13d-3 of the rules promulgated under the Exchange Act.

 

Beneficial Ownership Limitation” means 4.99% (or as such limitation may apply to Tiger, upon written notice from Tiger to PubCo, 19.99%) of the number of shares of Class A Common Stock outstanding immediately after giving effect to the issuance of shares of Class A Common Stock issuable upon redemption of Units and shares of Class C Common Stock held by Tiger. Subject to the last sentence of this definition, Tiger may, upon written notice to PubCo, increase or decrease the Beneficial Ownership Limitation provisions applicable to its shares of Class A Common Stock provided (i) that the Beneficial Ownership Limitation may in no event exceed 19.99% of the number of shares of Class A Common Stock outstanding immediately after giving effect to the issuance of shares of Class A Common Stock upon redemption of the Class EX Units and shares of Class C Common Stock held by Tiger and the provisions of this definition shall continue to apply. Any such written notice from Tiger to increase in the Beneficial Ownership Limitation applicable to Tiger will not be effective until the 61st day after such notice is delivered to PubCo.

 

Business Combination Agreement” is defined in the recitals to this Agreement.

 

Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York or Atlanta, Georgia are authorized or required by law to be closed.

 

Business Opportunities Exempt Party” is defined in Section 8.4.

 

Call Right” is defined in Section 4.6(m).

 

Capital Account” means, with respect to any Member, the Capital Account maintained for such Member in accordance with Section      4.4.

 

Capital Contribution” means, with respect to any Member, the amount of cash and the initial Gross Asset Value of any property (other than cash) contributed to the Company by such Member. Any reference to the Capital Contribution of a Member will include any Capital Contributions made by a predecessor holder of such Member’s Units to the extent that such Capital Contribution was made in respect of Units Transferred to such Member.

 

Cash Election” means an election by the Company to redeem Class EX Units and a corresponding number of shares of Class C Common Stock for cash pursuant to Section 4.6(d) or an election by PubCo (or such designated member(s) of the PubCo Holdings Group) to purchase Units and a corresponding number of shares of Class C Common Stock for cash pursuant to an exercise of its Call Right set forth in Section 4.6(m).

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Cash Election Amount” means with respect to a particular Redemption for which a Cash Election has been made, (a) other than in the case of clause (b), if the shares of Class A Common Stock are listed for trading on a U.S. securities exchange or automated or electronic quotation system, an amount of cash equal to the product of (i) the number of shares of Class A Common Stock that would have been received in such Redemption if a Cash Election had not been made and (ii) the average of the volume-weighted closing price for a share of Class A Common Stock on the principal U.S. securities exchange or automated or electronic quotation system on which the shares of Class A Common Stock are listed for trading, as reported by Bloomberg, L.P., or its successor, for each of the five (5) consecutive full Trading Days ending on and including the last full Trading Day immediately prior to the related Redemption Notice Date, subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the share of Class A Common Stock; (b) if the Cash Election is made in respect of a Redemption Notice issued by a Redeeming Person in connection with a Registered Offering, an amount of cash equal to the product of (i) the number of shares of Class A Common Stock that would have been received in such Redemption if a Cash Election had not been made and (ii) the price per share of Class A Common Stock sold to the public in such Registered Offering (reduced by the amount of any Discount associated with such share of Class A Common Stock), and (c) if the shares of Class A Common Stock are no longer listed for trading on a U.S. securities exchange or automated or electronic quotation system, an amount of cash equal to the product of (i) the number of shares of Class A Common Stock that would have been received in such Redemption if a Cash Election had not been made and (ii) the fair market value of one share of Class A Common Stock, as determined by the Managing Member in Good Faith, that would be obtained in an arms’ length transaction for cash between an informed and willing buyer and an informed and willing seller, neither of whom is under any compulsion to buy or sell, and without regard to the particular circumstances of the buyer or seller and without any discounts for liquidity or minority discount.

 

Change of Control” means the occurrence of any of the following events or series of related events after the date hereof:

 

(i) any Person (excluding a corporation or other entity owned, directly or indirectly, by the stockholders of PubCo in substantially the same proportions as their ownership of stock of PubCo) is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the rules promulgated under the Exchange Act), directly or indirectly, of securities of PubCo representing more than 50% of the combined voting power of PubCo’s then outstanding voting securities;

 

(ii) there is consummated a merger or consolidation of PubCo with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (A) the members of the board of directors of PubCo immediately prior to the merger or consolidation do not constitute at least a majority of the members of the board of directors of the company surviving the merger, or if the surviving company is a Subsidiary, the ultimate parent thereof, or (B) all of the Persons who were the respective “beneficial owners” (as defined above) of the voting securities of PubCo immediately prior to such merger or consolidation do not continue to beneficially own more than 50% of the combined voting power of the then-outstanding voting securities of the Person resulting from such merger or consolidation or, if the surviving company is a Subsidiary, the ultimate parent thereof; or

 

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

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Notwithstanding the foregoing, except with respect to clause (ii)(A) above, 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 shares of PubCo immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in, and own substantially all of the shares of, an entity that owns, either directly or through a Subsidiary, all or substantially all of the assets of PubCo immediately following such transaction or series of transactions.

 

Change of Control Exchange Date” is defined in Section 4.6(p).

 

Chief Executive Officer” means the person appointed as the Chief Executive Officer of the Company by the Managing Member pursuant to Section 7.2(c).

 

Class A Common Stock” means, as applicable, (a) the Class A Common Stock of PubCo, par value $0.0001 per share, of PubCo, or (b) following any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other Person or cash or other property that become payable in consideration for the shares of Class A Common Stock or into which the shares of Class A Common Stock are exchanged or converted as a result of such consolidation, merger, reclassification or other similar event.

 

Class C Common Stock” means, as applicable, (a) the Class C Common Stock, par value $0.0001 per share, of PubCo or (b) following any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other Person that become payable in consideration for the Class C Common Stock or into which the Class C Common Stock is exchanged or converted as a result of such consolidation, merger, reclassification or other similar event.

 

Class EX Units” means the Units designated as “Class EX” Units pursuant to this Agreement.

 

Class X Units” means the Units designated as “Class X” Units pursuant to this Agreement.

 

Code” means the United States Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law).

 

Commission” means the U.S. Securities and Exchange Commission, including any governmental body or agency succeeding to the functions thereof.

 

Common Stock” means the shares of Class A Common Stock and Class C Common Stock.

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Company” is defined in the preamble to this Agreement.

 

Company Level Taxes” means any federal, state or local taxes, additions to tax, penalties and interest payable by the Company or any of its Subsidiaries as a result of any examination of the Company’s or any of its Subsidiaries’ affairs by any federal, state or local tax authorities, including resulting administrative and judicial proceedings under the Partnership Tax Audit Rules.

 

Company Minimum Gain” has the meaning of “partnership minimum gain” set forth in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d). It is further understood that Company Minimum Gain shall be determined in a manner consistent with the rules of Treasury Regulations Section 1.704-2(b)(2), including the requirement that if the adjusted Gross Asset Value of property subject to one or more Nonrecourse Liabilities differs from its adjusted tax basis, Company Minimum Gain shall be determined with reference to such Gross Asset Value.

 

Company Representative” has, with respect to taxable periods beginning after December 31, 2017, the meaning assigned to the term “partnership representative” in Section 6223 of the Code and any Treasury Regulations or other administrative or judicial pronouncements promulgated thereunder, and with respect to taxable periods beginning on or before December 31, 2017, and for any applicable state and local tax purposes, the meaning assigned to the term “tax matters partner” as defined in Code Section 6231(a)(7) prior to its amendment by Title XI of the Bipartisan Budget Act of 2015, in each case as appointed pursuant to Section 10.4.

 

Contract” means any written agreement, contract, lease, sublease, license, sublicense, obligation, promise or undertaking.

 

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

 

Covered Audit Adjustment” means an adjustment to any partnership-related item (within the meaning of Section 6241(2)(B) of the Code) to the extent such adjustment results in an “imputed underpayment” as described in Section 6225(b) of the Code or any analogous provision of state or local Law.

 

Covered Person” is defined in Section 7.4.

 

CST” means Continental Stock Transfer & Trust Company.

 

Debt Securities” means, with respect to PubCo, any and all debt instruments or debt securities that are not convertible or exchangeable into Equity Securities of PubCo.

 

Depreciation” means, for each Fiscal Year or other taxable period, an amount equal to the depreciation, amortization or other cost recovery deduction (excluding depletion) allowable with respect to an asset for such Fiscal Year or other taxable period, except that (a) with respect to any such property the Gross Asset Value of which differs from its Adjusted Basis for U.S. federal income tax purposes and which difference is being eliminated by use of the “remedial method” pursuant to Treasury Regulations Section 1.704-3(d), Depreciation for such Fiscal Year or other taxable period shall be the amount of book basis recovered for such Fiscal Year or other taxable period under the rules prescribed by Treasury Regulations Section 1.704-3(d)(2), and (b) with respect to any other such property the Gross Asset Value of which differs from its Adjusted Basis for U.S. federal income tax purposes at the beginning of such Fiscal Year or other taxable period, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such Fiscal Year or other taxable period bears to such beginning Adjusted Basis; provided, however, that if the Adjusted Basis for U.S. federal income tax purposes of an asset at the beginning of such Fiscal Year or other taxable period is zero, Depreciation with respect to such asset shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Managing Member.

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Designated Individual” means the designated individual appointed by the Company pursuant to Treasury Regulations Section 301.6223-1 (and any similar provision of state, local or foreign Law).

 

DGCL” means the General Corporation Law of the State of Delaware, as amended from time to time (or any corresponding provisions of succeeding law).

 

Discount” is defined in Section 4.6(i).

 

Effective Time” means the time of “Closing” as defined in the Business Combination Agreement.

 

Equity Securities” means (a) with respect to a partnership, limited liability company or similar Person, any and all units, interests, rights to purchase, warrants, options or other equivalents of, or other ownership interests in, any such Person as well as debt or equity instruments convertible, exchangeable or exercisable into any such units, interests, rights or other ownership interests and (b) with respect to a corporation, any and all shares, interests, participation or other equivalents (however designated) of corporate stock, including all common stock and preferred stock, or warrants, options or other rights to acquire any of the foregoing, including any debt instrument convertible or exchangeable into any of the foregoing.

 

ERISA” means the Employee Retirement Security Act of 1974, as amended.

 

Escrow Agent” means CST in it capacity as the escrow agent pursuant to the Escrow Agreement, or any successor person appointed as escrow agent pursuant to the Escrow Agreement as amended.

 

Escrow Agreement” means that certain Escrow Agreement, dated as of July 9, 2021, as same may be hereafter amended or modified, among PubCo, Holdings, the Company, and CST, as Escrow Agent.

 

Excess Shares is defined in Section 4.6(e)(iv).

 

Excess Tax Amount” is defined in Section 10.5(c).

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Exchange Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, as the same may be amended from time to time (or any corresponding provisions of succeeding law).

 

Existing LLC Agreement” is defined in the recitals to this Agreement.

 

Fair Market Value” means the fair market value of any property as determined in Good Faith by the Managing Member after taking into account such factors as the Managing Member shall deem appropriate.

 

Federal Bankruptcy Code” means Title 11 of the United States Code, as amended from time to time, and all rules and regulations promulgated thereunder.

 

Fiscal Year” means the calendar year unless, for U.S. federal income tax purposes, another fiscal year is required. The Company shall have the same fiscal year for U.S. federal income tax purposes and for accounting purposes.

 

GAAP” means U.S. generally accepted accounting principles at the time.

 

Good Faith” means a Person having acted in good faith and in a manner such Person reasonably believed to be in or not opposed to the best interests of the Company and the PubCo Holdings Group and, with respect to a criminal proceeding, having had no reasonable cause to believe such Person’s conduct was unlawful.

 

Governmental Entity” means any federal, national, supranational, state, provincial, local, foreign or other government, governmental, stock exchange, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.

 

Gross Asset Value” means, with respect to any asset, the asset’s Adjusted Basis for U.S. federal income tax purposes, except as follows:

 

(a) the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross Fair Market Value of such asset as of the date of such contribution;

 

(b) the Gross Asset Values of all Company assets shall be adjusted to equal their respective gross Fair Market Values as of the following times: (i) the acquisition of an interest (or additional interest) in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution to the Company or in exchange for the performance of more than a de minimis amount of services to or for the benefit of the Company; (ii) the distribution by the Company to a Member of more than a de minimis amount of Company assets as consideration for an interest in the Company; (iii) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)-(2)(ii)(g)(1), (iv) the acquisition of an interest in the Company by any new or existing Member upon the exercise of a Warrant or other noncompensatory option in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(s); or (v) any other event to the extent determined by the Managing Member to be permitted and necessary or appropriate to properly reflect Gross Asset Values in accordance with the standards set forth in Treasury Regulations Section 1.704-1(b)(2)(iv)(q); provided, however, that adjustments pursuant to clauses (i), (ii) and (iv) above shall be made only if the Managing Member reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company. If any Warrants or other noncompensatory options are outstanding upon the occurrence of an event described in this paragraph (b)(i) through (b)(v), the Company shall adjust the Gross Asset Values of its properties in accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)-(iv)(h)(2);

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(c) the Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross Fair Market Value of such asset on the date of such distribution;

 

(d) the Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the Adjusted Basis of such assets pursuant to Code Section 734(b) (including any such adjustments pursuant to Treasury Regulation Section 1.734-2(b)(1)), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (f) in the definition of “Profits” or “Losses” below or Section 5.2(h); provided, however, that the Gross Asset Value of a Company asset shall not be adjusted pursuant to this subsection to the extent the Managing Member determines in Good Faith that an adjustment pursuant to clause (b) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (d); and

 

(e) if the Gross Asset Value of a Company asset has been determined or adjusted pursuant to clauses (a), (b) or (d) of this definition of Gross Asset Value, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits, Losses and other items allocated pursuant to Article V.

 

Holdings” is defined in the preamble to this Agreement.

 

Indebtedness” means (a) all indebtedness for borrowed money (including capitalized lease obligations, sale-leaseback transactions or other similar transactions, however evidenced), (b) any other indebtedness that is evidenced by a note, bond, debenture, draft or similar instrument, (c) notes payable and (d) lines of credit and any other agreements relating to the borrowing of money or extension of credit.

 

Interest” means the entire interest of a Member in the Company, including the Units and all of such Member’s rights, powers and privileges under this Agreement and the Act.

 

Investment Company Act” is defined in Section 8.1(b).

 

Investor Rights Agreement” means the Investor Rights Agreement, by and among PubCo and the Members, to be entered into concurrently with the closing of the BCA.

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Law” means any federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

 

Legacy Owners” is defined in the preamble to this Agreement.

 

Legacy Warrants” means the warrants of the Company that are issued and outstanding as of the date of this Agreement pursuant to and in accordance with the terms of that certain Warrant to Purchase Units, dated February 27, 2021, by and between the Company and Tech Capital LLC, as amended by Amendment No. 1 thereto, dated July 8, 2021.

 

Legal Action” is defined in Section 12.8.

 

Liability” means any liability or obligation, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated and whether due or to become due, regardless of when asserted.

 

Liquidating Event” is defined in Section 11.1.

 

Lock-Up Period” means the period set forth in the lock-up agreement to which the particular Member is a party to; provided, however, that in the case of Class EX Units and corresponding shares of Class C Common Stock held in escrow pursuant to the Escrow Agreement that are forfeited, the Lock-Up Period in respect of such Class EX Units and corresponding shares of Class C Common Stock shall be deemed automatically and without further action to end on the date of such forfeiture.

 

Managing Member” is defined in the recitals to this Agreement.

 

Member” means any Person that executes this Agreement as a Member and any other Person admitted to the Company as an additional or substituted Member, in each case, that has not made a disposition of such Person’s entire Interest.

 

Member Minimum Gain” has the meaning ascribed to “partner nonrecourse debt minimum gain” set forth in Treasury Regulations Section 1.704-2(i). It is further understood that the determination of Member Minimum Gain and the net increase or decrease in Member Minimum Gain shall be made in the same manner as required for such determination of Company Minimum Gain under Treasury Regulations Sections 1.704-2(d) and 1.704-2(g)(3).

 

Member Nonrecourse Debt” has the meaning of “partner nonrecourse debt” set forth in Treasury Regulations Section 1.704-2(b)(4).

 

Member Nonrecourse Deductions” has the meaning of “partner nonrecourse deductions” set forth in Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

 

Minority Member Redemption Date” is defined in Section 4.6(n).

 

Minority Member Redemption Notice” is defined in Section 4.6(n).

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National Securities Exchange” means an exchange registered with the Commission under the Exchange Act.

 

Nonrecourse Deductions” has the meaning assigned that term in Treasury Regulations Section 1.704-2(b)(1).

 

Nonrecourse Liability” is defined in Treasury Regulations Section 1.704-2(b)(3).

 

Officer” means each Person appointed as an officer of the Company pursuant to and in accordance with the provisions of Section 7.2.

 

Partnership Tax Audit Rules” means Sections 6221 through 6241 of the Code, together with any final or temporary Treasury Regulations, Revenue Rulings and case law interpreting Sections 6221 through 6241 of the Code (and any analogous provision of state or local tax Law).

 

Permitted Transferee” means, with respect to any Member: (a) any Affiliate of such Member; (b) any successor entity of such Member; (c) with respect to any Member that is a natural person or of which a majority of the outstanding Equity Securities and voting power with respect to the election of directors (or the selection of any other similar governing body in the case of an entity other than a corporation) are beneficially owned (as such term is defined under Rule 13d-3 of the Exchange Act) by a single natural person, a trust established by or for the benefit of such natural person of which only such natural person and his or her immediate family members are beneficiaries; and (d) upon the death of any Member that is a natural person, an executor, administrator or beneficiary of the estate of the deceased Member.

 

Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

 

Plan Asset Regulations” means the regulations issued by the U.S. Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the Code of Federal Regulations, or any successor regulations as the same may be amended from time to time.

 

Post-BCA TRA” means any tax receivable agreement (or comparable agreement), other than the TRA, entered into by PubCo or any of its Subsidiaries pursuant to which PubCo is obligated to pay over amounts with respect to tax benefits resulting from any tax attributes to which PubCo becomes entitled.

 

Pre-Closing Taxes” means any (a) U.S. federal, state, or local or non-U.S. tax obligations owed by the PubCo Holdings Group for any taxable period (or portion thereof) ending at or before the Effective Time in excess of (b) any cash on hand (including cash equivalents and temporary investments of cash) of either the FTV Blocker or Tiger Blocker as of the Blocker Mergers Effective Time (as defined in the Business Combination Agreement) to the extent such cash is not contributed to the Company substantially contemporaneously with the Effective Time.

 

Pre-Closing Units” means all of the Equity Units (as defined in the Existing LLC Agreement) of the Company issued and outstanding as of the Effective Date and prior to the OpCo Merger (as defined in the Business Combination Agreement).

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Proceeding” is defined in Section 7.4.

 

Profits” or “Losses” means, for each Fiscal Year or other taxable period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be separately stated pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):

 

(a) any income or gain of the Company that is exempt from U.S. federal income tax or otherwise described in Section 705(a)(1)(B) of the Code and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss;

 

(b) 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 Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses, shall be subtracted from such taxable income or loss;

 

(c) in the event the Gross Asset Value of any Company asset is adjusted pursuant to clause (b) or (c) of the definition of Gross Asset Value above, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the Company asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the Company asset) from the disposition of such asset and shall, except to the extent allocated pursuant to Section 5.2, be taken into account for purposes of computing Profits or Losses;

 

(d) gain or loss resulting from any disposition of Company assets with respect to which gain or loss is recognized for U.S. federal income tax purposes shall be computed with reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value;

 

(e) in lieu of the depreciation, amortization and other cost recovery deductions (excluding depletion) taken into account in computing such taxable income or loss, there shall be taken into account Depreciation;

 

(f) to the extent an adjustment to the adjusted tax basis of any asset pursuant to Code Section 734(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Account balances 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 an item of loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and

 

(g) any items of income, gain, loss or deduction that are specifically allocated pursuant to the provisions of Section 5.2 shall not be taken into account in computing Profits or Losses for any Taxable Year, but such items available to be specially allocated pursuant to Section 5.2 will be determined by applying rules analogous to those set forth in clauses (a) through (f) above.

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Property” means all real and personal property owned by the Company from time to time, including both tangible and intangible property.

 

PubCo” is defined in the recitals to this Agreement.

 

PubCo Approved Change of Control” means any Change of Control of PubCo that meets the following conditions: (i) such Change of Control was approved by the board of directors of PubCo prior to such Change of Control, (ii) such Change of Control results in an acceleration of payments under the TRA, (iii) the terms of such Change of Control provide for the consideration for the Units in such Change of Control to consist solely of (A) freely and immediately tradeable common equity securities of an issuer, which common equity securities are listed for trading on a National Securities Exchange and/or (B) cash, and (iv) if such consideration includes common equity securities of an issuer, the market value of the outstanding common equity securities of such issuer held by non-affiliates of such issuer is at least twice as large as the market value of all of the outstanding common equity of PubCo, in each case on a fully-diluted basis immediately before the public announcement of such Change of Control.

 

PubCo Holdings Group” means PubCo, Holdings, Investor I, Investor II and each other Subsidiary of PubCo (other than the Company and its Subsidiaries).

 

PubCo Shares” means all classes and series of common stock of PubCo, including the Common Stock.

 

PubCo Tax Distribution Limitation” means all or a portion of a distribution that would otherwise be made pursuant to Section 6.2(a) that: (a) based on written advice of legal counsel may reasonably constitute a fraudulent conveyance, or (b) would be required to be funded by a financing, the terms of which could reasonably, in the Good Faith judgment of the Managing Member, cause the Company to become insolvent within the twelve (12) month period following the date of such distribution.

 

PubCo Tax-Related Liabilities” means (a) any U.S. federal, state and local and non-U.S. tax obligations (including any Company Level Taxes for which the PubCo Holdings Group is liable hereunder) owed by the PubCo Holdings Group (other than any obligations to remit any withholdings withheld from payments to third parties or any Pre-Closing Taxes) and (b) any obligations under the TRA and any Post-BCA TRA payable by the PubCo Holdings Group.

 

PubCo Warrants” means warrants of PubCo that are exercisable for shares of Class A Common Stock on the terms set forth therein that are issued and outstanding on the date hereof.

 

Reclassification Event” means any of the following: (a) any reclassification or recapitalization of PubCo Shares (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination or any transaction subject to Section 4.1(g)), (b) any merger, consolidation or other combination involving PubCo, or (c) any sale, conveyance, lease or other disposal of all or substantially all the properties and assets of PubCo to any other Person, in each case of clauses (a), (b) or (c), as a result of which holders of PubCo Shares shall be entitled to receive cash, securities or other property for their PubCo Shares.

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Redeeming Person” is defined in Section 4.6(a).

 

Redemption” means any redemption and cancellation of Class EX Units and a corresponding number of shares of Class C Common Stock for shares of Class A Common Stock or, pursuant to a Cash Election by the Company, cash, in each case pursuant to this Agreement.

 

Redemption Date” means a Regular Redemption Date or a Special Redemption Date.

 

Redemption Notice” is defined in Section 4.6(b).

 

Redemption Notice Date” means, with respect to any Redemption Date, the date specified by PubCo that is no later than 10 Business Days before such Redemption Date, provided that if such date falls on a weekend or holiday, the Redemption Notice Date shall be on the following Business Day.

 

Redemption Right” is defined in Section 4.6(a).

 

Registered Offering” means any secondary securities offering (which may include a “bought deal” or “overnight” offering), and any primary securities offering for which piggyback rights are offered, pursuant to the Investor Rights Agreement.

 

Regular Redemption Date” means a date within each fiscal quarter specified by PubCo from time to time, which will generally be set so that the corresponding Redemption Notice Date falls within 5 days after PubCo’s earnings announcement for the prior fiscal quarter or in connection with a Registered Offering.

 

Regulatory Allocations” is defined in Section 5.2(i).

 

Securities Act” means the Securities Act of 1933, and the rules and regulations promulgated thereunder, as the same may be amended from time to time (or any corresponding provisions of succeeding law).

 

Special Redemption Date” means a date specified by PubCo in addition to or in lieu of the Regular Redemption Date during the same fiscal quarter. PubCo must specify a Regular Redemption Date or Special Redemption Date effective with any Registered Offering, effective with respect to the applicable Member(s) upon (a) the expiration of any equity lock-up agreement to which any of the Members (other than any member of the PubCo Holdings Group) and PubCo are parties, (b) the adoption by PubCo of a plan of liquidation or dissolution, which Special Redemption Date shall be the date of adoption of such plan of liquidation or dissolution or (c) solely with respect to any Class EX Units and corresponding number of shares of Class C Common Stock held in escrow under the Escrow Agreement that are forfeited, promptly following any month in which such Class EX Units and corresponding number of shares of Class C Common Stock are forfeited in accordance with the terms of the Escrow Agreement.

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Subsidiary” means, with respect to any specified Person, any other Person with respect to which such specified Person (a) has, directly or indirectly, the power, through the ownership of securities or otherwise, to elect a majority of directors or similar managing body or (b) beneficially owns, directly or indirectly, a majority of such Person’s Equity Securities.

 

TRA” means that certain tax receivable agreement, dated as of the date hereof, by and among PubCo, the Company, the Agent (as defined in the TRA) and the TRA Holders (as defined in the TRA).

 

Tax Contribution Obligation” is defined in Section 10.5(c).

 

Tax Advances” is defined in Section 10.5(a).

 

Tax Amount” means, with respect to a Taxable Year commencing after the Effective Time (or, in the case of a Taxable Year that includes the Effective Time, the portion thereof after the Effective Time), the excess, if any, of (a) the product of (i) an amount, if positive, equal to the product of (A) the taxable income of the Company allocable to a Member pursuant to this Agreement with respect to the relevant Taxable Year (or portion thereof) (determined based upon a good faith estimate by the Managing Member and updated to reflect the final Company tax returns filed for such Taxable Year, and, for purposes of this definition, (w) including adjustments to taxable income in respect of Section 704(c) of the Code, (x) excluding adjustments to taxable income in respect of Section 743(b) of the Code, (y) calculated as if allocations of such taxable income were, for such Taxable Year (or portion thereof), the sole source of income and loss for such Member (or, as appropriate, of its direct or indirect partners or members), and (z) taking into account the carryover of items of loss, deduction and expense, including the utilization of any excess business interest expense under Code Section 163(j), previously allocated to such Member for a Taxable Year (or portion thereof) that begins after the Effective Time to the extent usable by such Member under the Code for the Taxable Year to which they are carried and not previously taken into account for purposes of determining the Tax Amount for a Taxable Year (or portion thereof) times (B) one-fourth (1/4) in the case of the first quarter, one-half (1/2) in the case of the second quarter, three-fourths (3/4) in the case of the third quarter, and one (1) in the case of the fourth quarter times (ii) the Assumed Rate with respect to such Taxable Year (or portion thereof), over (b) the excess, if any, of (i) the sum of (x) the amount of any distributions previously made to such Member pursuant to Section 6.1 and Section 6.2 at any time after the Effective Time and (y) any distribution reasonably expected to be made to such Member pursuant to Section 6.2(a) that is taken into account in the determination of Available Cash for purposes of Section 6.2(b) over (ii) the aggregate amounts described in clause (a) with respect to such Member for all prior Taxable Years and the current Taxable Year (or portion thereof), in each case, after the Effective Time, other than the quarter for which such determination of the Tax Amount is being made. For each Member that is treated as a partnership for applicable state and/or local income or franchise tax purposes, there shall be added to the amount in clause (a) of this definition, if the information described in clause (2) of this definition below is timely provided, an amount sufficient to enable such Member to pay its applicable state and local entity-level income and franchise tax liability (without duplication) imposed on entities treated as partnerships for applicable state and/or local income or franchise tax purposes, to the extent arising from allocations of taxable income of the Company for the relevant Taxable Year (or portion thereof after the Effective Time) as a result of such Member’s ownership of Units, calculated (1) using the conventions set forth in clauses (w)-(z) of this definition above and (2) based on information timely provided by such Member to the Managing Member sufficient for the Managing Member to calculate such amount, assuming the highest effective marginal state and local income and franchise tax rates imposed on an entity treated as a partnership for state or local income or franchise tax purposes in the applicable jurisdiction; provided that (I) the aggregate amount described in this sentence shall in no event be greater than $100,000 per Taxable Year in the aggregate for all Members and (II) the aggregate amount payable under Section 6.2 to all Members solely as a result of the amount added to clause (a) as described in this sentence shall in no event be greater than $400,000 per Taxable Year in the aggregate for all Members, and if such cap in clause (I) or (II) of this sentence is exceeded, the required reduction shall be applied pro rata among the Members based on their respective numbers of Units. The Managing Member shall reasonably determine the Tax Amount for each Member based on such assumptions as the Managing Member deems necessary acting in Good Faith (provided that any such assumptions that apply to multiple Members shall be applied in a substantially equivalent manner with respect to each such Member), including for purposes of determining estimates of a Member’s Tax Amount with respect to any portion of a Taxable Year; provided that, for purposes of determining a Member’s Tax Amount for the portion of the Taxable Year including the Effective Time that begins at the Effective Time, the Managing Member shall use an interim closing of the books as of the date immediately preceding the Effective Time.

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Tax Distribution Date” means April 10, June 10, September 10, and December 10 of each calendar year, which shall be adjusted by the Managing Member as reasonably necessary to take into account changes in estimated tax payment due dates for U.S. federal income taxes under applicable Law (but in no event shall the Managing Member make adjustments such that there are more than four (4) Tax Distribution Dates in any calendar year).

 

Tax Offset” is defined in Section 10.5(c).

 

Taxable Year” means the Company’s taxable year for U.S. federal income tax purposes, which shall be the Fiscal Year unless otherwise required by applicable Law.

 

Tiger” means Tiger Infrastructure Partners Sunlight Feeder LP, a Delaware limited partnership.

 

Tiger Entity” means each of Tiger, its Affiliates and any Transferee (for the avoidance of doubt, other than PubCo and any Subsidiary of PubCo) to whom any of the foregoing entities Transfer Units in a Transfer permitted under this Agreement.

 

Trading Day” means a day on which the New York Stock Exchange or such other National Securities Exchange on which the shares of Class A Common Stock are listed or admitted to trading is open for the transaction of business (unless such trading shall have been suspended for the entire day).

 

Transfer” means, when used as a noun, any voluntary or involuntary, direct or indirect (whether through a change of control of the Transferor or any Person that controls the Transferor, the issuance or transfer of Equity Securities of the Transferor, by operation of law or otherwise), transfer, sale, pledge or hypothecation or other disposition and, when used as a verb, voluntarily or involuntarily, directly or indirectly (whether through a change of control of the Transferor or any Person that controls the Transferor, the issuance or transfer of Equity Securities of the Transferor or any Person that controls the Transferor, by operation of law or otherwise), to transfer, sell, pledge or hypothecate or otherwise dispose of. The terms “Transferee,” “Transferor,” “Transferred” and other forms of the word “Transfer” shall have the correlative meanings.

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Transfer Agent” means Continental Stock Transfer and Trust Company or such other agent or agents of PubCo as may be designated by the board of directors of PubCo as the transfer agent for the Shares of Class A Common Stock.

 

Treasury Regulations” means pronouncements, as amended from time to time, or their successor pronouncements, that clarify, interpret and apply the provisions of the Code, and that are designated as “Treasury Regulations” by the United States Department of the Treasury.

 

Uniform Commercial Code” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of Delaware.

 

Units” means the Units (including Class EX Units and Class X Units) issued hereunder and shall also include any Equity Security of the Company issued in respect of or in exchange for Units, whether by way of dividend or other distribution, split, recapitalization, merger, rollup transaction, consolidation, conversion or reorganization.

 

Waiver Notice” is defined in Section 4.6(e)(iv).

 

Warrant or Warrants” means the Legacy Warrants and Holdings’ mirror rights with respect to the PubCo Warrants Under Section 4.1.

 

Winding-Up Member” is defined in Section 11.3(a).

 

Section 1.2      Interpretive Provisions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

 

(a) the terms defined in Section 1.1 are applicable to the singular as well as the plural forms of such terms;

 

(b) all accounting terms not otherwise defined herein have the meanings assigned under GAAP;

 

(c) all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars;

 

(d) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;

 

(e) whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”;

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(f) “or” is not exclusive;

 

(g) pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms; and

 

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

 

ARTICLE II

 

ORGANIZATION OF THE LIMITED LIABILITY COMPANY

 

Section 2.1      Company’s Continued Existence. The Company shall continue its existence as a limited liability company subject to the provisions of the Act upon the terms, provisions and conditions set forth in this Agreement.

 

Section 2.2      Filing. The Company’s Certificate of Formation was filed with office of the Secretary of State of the State of Delaware in accordance with the Act. The Members shall execute such further documents (including amendments to such Certificate of Formation) and take such further action as is appropriate to comply with the requirements of Law for the formation or operation of a limited liability company in Delaware and in all states and counties where the Company may conduct its business.

 

Section 2.3      Name. The name of the Company is “Sunlight Financial LLC” and all business of the Company shall be conducted in such name or, in the discretion of the Managing Member, under any other name.

 

Section 2.4      Registered Office; Registered Agent. The registered agent and location of the registered office of the Company in the State of Delaware is PHS Corporate Services, Inc., 1313 N. Market Street, Suite 5100, Wilmington, Delaware 19801, or such other agent or at such other place as the Managing Member from time to time may select.

 

Section 2.5      Principal Place of Business. The principal place of business of the Company shall be located in such place as is determined by the Managing Member from time to time.

 

Section 2.6      Purpose; Powers. The nature of the business or purposes to be conducted or promoted by the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act. The Company shall have the power and authority to take any and all actions and engage in any and all activities necessary, appropriate, desirable, advisable, ancillary or incidental to the accomplishment of the foregoing purpose.

 

Section 2.7      Term. The term of the Company commenced on the date of filing of the Certificate of Formation of the Company with the office of the Secretary of State of the State of Delaware in accordance with the Act and shall continue indefinitely. The Company may be dissolved and its affairs wound up only in accordance with Article XI.

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Section 2.8      Intent. It is the intent of the Members that the Company be operated in a manner consistent with its treatment as a “partnership” for U.S. federal and state income tax purposes. It is also the intent of the Members that the Company not be operated or treated as a “partnership” for purposes of Section 303 of the Federal Bankruptcy Code. Neither the Company nor any Member shall take any action inconsistent with the express intent of the parties hereto as set forth in this Section 2.8.

 

ARTICLE III

 

CLOSING TRANSACTIONS

 

Section 3.1      Reorganization Transactions. As of the Effective Time and as contemplated by the Business Combination Agreement, (a) the Existing LLC Agreement shall be amended and restated and this Agreement shall be adopted and (b) all of the membership interests in the Company prior to the adoption of this Agreement shall be recapitalized to consist solely of Class X Units and Class EX Units with the rights and privileges as set forth in this Agreement and each Member will receive and own its pro rata share of such Class X Units or Class EX Units in accordance with the Business Combination Agreement and as set forth next to such member’s name on Exhibit A hereto. In addition, the Company shall issue to Holdings, in exchange for the Acquiror Contribution Amount (as defined in the Business Combination Agreement), additional Class X Units and mirror rights with respect to the PubCo Warrants under Section 4.1.

 

ARTICLE IV

 

OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS

 

Section 4.1      Authorized Units; General Provisions With Respect to Units.

 

(a) Subject to the provisions of this Agreement, the Company shall be authorized to issue from time to time such number of Units and such other Equity Securities as the Managing Member shall determine in accordance with Section 4.3. Each authorized Unit may be issued pursuant to such agreements as the Managing Member shall approve, including pursuant to options and warrants. The Company may reissue any Class X Units that have been repurchased or acquired by the Company. The Company shall not, and the Managing Member shall not cause the Company to, issue any Units if such issuance would result in the Company having more than 100 partners, within the meaning of Treasury Regulations Section 1.7704-1(h) (determined taking into account the rules of Treasury Regulations Section 1.7704-1(h)(3)); provided that, for such purposes, the Company and the Managing Member shall be entitled to assume that each Legacy Owner is treated as a single partner within the meaning of Treasury Regulations Section 1.7704-1(h) (determined taking into account the rules of Treasury Regulations Section 1.7704-1(h)(3)), unless otherwise required by applicable Law.

 

(b) The Class X Units shall be Units issued to and held solely by the Managing Member or other members of the PubCo Holdings Group and are hereby designated as voting units with the rights to vote in accordance with Section 4.2. The Class EX Units shall be Units issued to and held by the Members other than the PubCo Holdings Group and are hereby designated as voting units with the rights to vote in accordance with Section 4.2. The Class EX Units shall, if subject to a Redemption, be redeemed and canceled, together with the corresponding number of shares of Class C Common Stock, for shares of Class A Common Stock in accordance with Section 4.6. Except to the extent explicitly provided otherwise herein (including Section 4.3), each outstanding Unit shall be identical.

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(c) Initially, none of the Units will be represented by certificates. If the Managing Member determines that it is in the interest of the Company to issue certificates representing the Units, certificates will be issued and the Units will be represented by those certificates, and this Agreement shall be amended as necessary or desirable to reflect the issuance of certificated Units for purposes of the Uniform Commercial Code. Nothing contained in this Section 4.1(c) shall be deemed to authorize or permit any Member to Transfer its Units except as otherwise permitted under this Agreement.

 

(d) The Members as of the date hereof are set forth on Exhibit A. The total number of Units and Warrants issued and outstanding and held by each Member as of the date hereof is set forth in the books and records of the Company. The Company shall update such books and records from time to time to reflect any Transfers of Interests, the issuance of additional Units or Equity Securities, the Redemption of Class EX Units, and, subject to Section 12.1(a), subdivisions or combinations of Units made in compliance with Section 4.1(f), in each case, in accordance with the terms of this Agreement.

 

(e) If, at any time after the Effective Time, PubCo issues a share(s) of Class A Common Stock (including, without limitation, the issuance of shares of Class A Common Stock upon the exercise of any of the PubCo Warrants or other securities convertible or exchangeable for shares of Class A Common Stock) or any other Equity Security of PubCo (other than Class C Common Stock), (i) one or more member(s) of the PubCo Holdings Group shall concurrently contribute to the Company the net proceeds (in cash or other property, as the case may be), if any, received by PubCo for such share of Class A Common Stock or other Equity Security and (ii) the Company shall concurrently issue to such member(s) of the PubCo Holdings Group, in accordance with the contributions made by each such member pursuant to clause (i), one Class X Unit for each share of Class A Common Stock so issued (if PubCo issues a share of Class A Common Stock), or such other Equity Security of the Company (if PubCo issues Equity Securities other than shares of Class A Common Stock) corresponding to the Equity Securities issued by PubCo, and with substantially the same rights to dividends and distributions (including distributions upon liquidation, but taking into account differences as a result of any tax or other liabilities borne by PubCo) and other economic rights as those of such Equity Securities of PubCo to be issued. Notwithstanding the foregoing:

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(i) If PubCo issues any shares of Class A Common Stock in order to acquire or fund the acquisition from a Member (other than any member of the PubCo Holdings Group) of a number of Class EX Units (and Class C Common Stock) equal to the number of shares of Class A Common Stock so issued, then the Company shall not issue any new Class X Units (except upon reclassification of such Class EX Units so acquired) in connection therewith and, where such share of Class A Common Stock has been issued for cash to fund such an acquisition by any member of the PubCo Holdings Group pursuant to a Cash Election, the members of the PubCo Holdings Group shall not be required to transfer such net proceeds to the Company, and such net proceeds shall instead be transferred by such member of the PubCo Holdings Group to such Member as consideration for such acquisition. For the avoidance of doubt, if PubCo issues any shares of Class A Common Stock or other Equity Security for cash to be used to fund the acquisition by any member of the PubCo Holdings Group of any Person or the assets of any Person, then PubCo shall not be required to contribute such cash proceeds to the Company but instead such member of the PubCo Holdings Group shall be required to contribute the equity interests in such Person or the assets acquired and liabilities assumed from such Person, or cause such Person to contribute its assets and liabilities, to the Company or any of its Subsidiaries.

 

(ii) This Section 4.1(e) shall not apply to (x) the issuance and distribution to holders of PubCo Shares of rights to purchase Equity Securities of PubCo under a “poison pill” or similar shareholders rights plan (and upon any redemption of Class EX Units for shares of Class A Common Stock in accordance with Section 4.6, such shares of Class A Common Stock will be issued together with a corresponding right under such plan), or (y) to the issuance under PubCo’s employee benefit plans of any warrants, options, other rights to acquire Equity Securities of PubCo or rights or property that may be converted into or settled in Equity Securities of PubCo, but shall in each of the foregoing cases of clauses (x) and (y) apply to the issuance of Equity Securities of PubCo in connection with the exercise or settlement of such rights, warrants, options or other rights or property.

 

(iii) Except pursuant to Section 4.6, (x) the Company may not issue any additional Class X Units to any member of the PubCo Holdings Group unless substantially simultaneously therewith such member of the PubCo Holdings Group issues or transfers an equal number of newly-issued shares of Class A Common Stock of PubCo to another Person, and (y) the Company may not issue any other Equity Securities of the Company to any member of the PubCo Holdings Group unless substantially simultaneously therewith such member of the PubCo Holdings Group issues or transfers, to another Person, an equal number of newly-issued shares of a new class or series of Equity Securities of PubCo or such member of the PubCo Holdings Group with substantially the same rights to dividends and distributions (including distributions upon liquidation, but taking into account differences as a result of any tax or other liabilities borne by PubCo) and other economic rights as those of such Equity Securities of the Company.

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(iv) If at any time any member of the PubCo Holdings Group issues Debt Securities, such member of the PubCo Holdings Group shall transfer to the Company (in a manner to be determined by the Managing Member in its reasonable discretion) the proceeds received by such member of the PubCo Holdings Group in exchange for such Debt Securities in a manner that directly or indirectly burdens the Company with the repayment of the Debt Securities.

 

(v) In the event any Equity Security outstanding at PubCo is exercised or otherwise converted and, as a result, any shares of Class A Common Stock or other Equity Securities of PubCo are issued, (a) then the corresponding Equity Security outstanding at the Company, if any, shall be similarly exercised or otherwise converted, as applicable, and an equivalent number of Class X Units or other Equity Securities of the Company shall be issued to the PubCo Holdings Group as contemplated by the first sentence of this Section 4.1(e), and (b) the PubCo Holdings Group shall concurrently contribute to the Company the net proceeds received by the PubCo Holdings Group from any such exercise or conversion.

 

(vi) No member of the PubCo Holdings Group may redeem, repurchase or otherwise acquire (other than from another member of the PubCo Holdings Group) (a) any shares of Class A Common Stock (including upon forfeiture of any unvested shares of Class A Common Stock) unless substantially simultaneously the Company redeems, repurchases or otherwise acquires from the PubCo Holdings Group an equal number of Class X Units for the same price per security or (b) any other Equity Securities of PubCo (other than shares of Class C Common Stock), unless substantially simultaneously the Company redeems, repurchases or otherwise acquires from the PubCo Holdings Group an equal number of Equity Securities of the Company of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation, but taking into account differences as a result of any tax or other liabilities borne by PubCo) and other economic rights as those of such Equity Securities of PubCo for the same price per security. The Company may not redeem, repurchase or otherwise acquire (x) except pursuant to Section 4.6, any Class X Units from the PubCo Holdings Group unless substantially simultaneously the PubCo Holdings Group redeems, repurchases or otherwise acquires an equal number of shares of Class A Common Stock for the same price per security from holders thereof, or (y) any other Equity Securities of the Company from the PubCo Holdings Group unless substantially simultaneously the PubCo Holdings Group redeems, repurchases or otherwise acquires for the same price per security an equal number of Equity Securities of PubCo of a corresponding class or series with substantially the same rights to dividends and distributions (including distribution upon liquidation, but taking into account differences as a result of any tax or other liabilities borne by PubCo) and other economic rights as those of such Equity Securities of PubCo. Notwithstanding the foregoing, to the extent that any consideration payable by the PubCo Holdings Group in connection with the redemption or repurchase of any shares of Class A Common Stock or other Equity Securities of the PubCo Holdings Group consists (in whole or in part) of shares of Class A Common Stock or such other Equity Securities (including, for the avoidance of doubt, in connection with the cashless exercise of an option or warrant), then the redemption or repurchase of the corresponding Class X Units or other Equity Securities of the Company shall be effectuated in an equivalent manner.

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(f) The Company shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding Units unless accompanied by an identical subdivision or combination, as applicable, of the outstanding PubCo Shares, with corresponding changes made with respect to any other exchangeable or convertible securities. Unless in connection with any action taken pursuant to Section 4.1(h), PubCo shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding PubCo Shares unless accompanied by an identical subdivision or combination, as applicable, of the outstanding Units, with corresponding changes made with respect to any other exchangeable or convertible securities.

 

(g) Notwithstanding any other provision of this Agreement (including Section 4.1(e)), the Company may redeem Class X Units from the PubCo Holdings Group for cash to fund any acquisition by the PubCo Holdings Group of another Person, provided that promptly after such redemption and acquisition the PubCo Holdings Group contributes or causes to be contributed, directly or indirectly, such Person or the assets and liabilities of such Person to the Company or any of its Subsidiaries in exchange for a number of Class X Units equal to the number of Class X Units so redeemed.

 

(h) Notwithstanding any other provision of this Agreement (including Section 4.1(e)), if the PubCo Holdings Group acquires or holds any material amount of cash in excess of any monetary obligations it reasonably anticipates (including as a result of the receipt of distributions pursuant to Section 6.2 for any period in excess of the PubCo Tax-Related Liabilities for such period), PubCo may, in its sole discretion, use such excess cash amount in such manner, and make such adjustments to or take such other actions with respect to the capitalization of PubCo and the Company, as PubCo in Good Faith determines to be fair and reasonable to the holders of PubCo Shares and as Holdings, in its capacity as the Managing Member, determines in Good Faith to be fair and reasonable to the Members and to preserve the intended economic effect of this Section 4.1, Section 4.6 and the other provisions hereof.

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Section 4.2      Voting Rights. No Member has any voting right except with respect to those matters specifically reserved for a Member vote under the Act and for matters expressly requiring the approval of Members under this Agreement. Except as otherwise required by the Act, each Unit will entitle the holder thereof to one vote on all matters to be voted on by the Members. Except as otherwise expressly provided in this Agreement, the holders of Units having voting rights will vote together as a single class on all matters to be approved by the Members; provided, however, that, except as otherwise expressly provided for in this Agreement, with respect to matters affecting the Class EX Units or the holders thereof, the holders of Class EX Units will vote together as a single class and any such matter must be approved or consented to by holders of a majority of the Class EX Units then outstanding.

 

Section 4.3      Capital Contributions; Unit Ownership.

 

(a) Capital Contributions. Except as otherwise set forth in Section 4.1(e) with respect to the obligations of the PubCo Holdings Group, no Member shall be required to make additional Capital Contributions.

 

(b) Issuance of Additional Units or Interests. Except as otherwise expressly provided in this Agreement, the Managing Member shall have the right to authorize and cause the Company to issue on such terms (including price) as may be determined by the Managing Member, subject to the limitations of Section 4.1, (i) additional Units or other Equity Securities of the Company (including creating preferred interests or other classes or series of interests having such rights, preferences and privileges as determined by the Managing Member, which rights, preferences and privileges may be senior to the Units), and (ii) obligations, evidences of Indebtedness or other securities or interests convertible or exchangeable for Units or other Equity Securities of the Company; provided that, at any time following the date hereof, in each case the Company shall not issue Equity Securities of the Company to any Person unless such Person shall have executed a counterpart to this Agreement and all other documents, agreements or instruments deemed necessary or desirable in the discretion of the Managing Member. Upon such issuance and execution, such Person shall be admitted as a Member of the Company. In that event, the Managing Member shall update the Company’s books and records to reflect such additional issuances. Subject to Section 12.1, the Managing Member is hereby authorized to amend this Agreement to set forth the designations, preferences, rights, powers and duties of such additional Units or other Equity Securities of the Company, or such other amendments that the Managing Member determines to be otherwise necessary or appropriate in connection with the creation, authorization or issuance of any class or series of Units or other Equity Securities in the Company pursuant to this Section 4.3(b); provided that, notwithstanding the foregoing, the Managing Member shall have the right to amend this Agreement as set forth in this sentence without the approval of any other Person (including any Member) and notwithstanding any other provision of this Agreement (other than Section 12.1(ii), (iii) or (iv)) if such amendment is necessary, and then only to the extent necessary, in order to consummate any offering of PubCo Shares or other Equity Securities of PubCo provided that the designations, preferences, rights, powers and duties of any such additional Units or other Equity Securities of the Company as set forth in such amendment are substantially similar to those applicable to such PubCo Shares or other Equity Securities of PubCo.

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Section 4.4      Capital Accounts. A Capital Account shall be maintained for each Member in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and, to the extent consistent with such regulations, the other provisions of this Agreement. Each Member’s Capital Account shall be (a) increased by (i) allocations to such Member of Profits pursuant to Section 5.1 and any other items of income or gain allocated to such Member pursuant to Section 5.2, (ii) the amount of cash or the initial Gross Asset Value of any asset (net of any Liabilities assumed by the Company and any Liabilities to which the asset is subject) contributed to the Company by such Member, and (iii) any other increases allowed or required by Treasury Regulations Section 1.704-1(b)(2)(iv), and (b) decreased by (i) allocations to such Member of Losses pursuant to Section 5.1 and any other items of deduction or loss allocated to such Member pursuant to the provisions of Section 5.2, (ii) the amount of any cash or the Gross Asset Value of any asset (net of any Liabilities assumed by the Member and any Liabilities to which the asset is subject) distributed to such Member, and (iii) any other decreases allowed or required by Treasury Regulations Section 1.704-1(b)(2)(iv). In the event of a Transfer of Units made in accordance with this Agreement (including a deemed Transfer for U.S. federal income tax purposes as described in Section 4.6(g)) the Capital Account of the Transferor that is attributable to the Transferred Units shall carry over to the Transferee Member in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv)(l).

 

Section 4.5      Other Matters.

 

(a) No Member shall demand or receive a return on or of its Capital Contributions or withdraw from the Company without the consent of the Managing Member. Under circumstances requiring a return of any Capital Contributions, no Member has the right to receive property other than cash.

 

(b) No Member shall receive any interest, salary, compensation, draw or reimbursement with respect to its Capital Contributions or its Capital Account, or for services rendered or expenses incurred on behalf of the Company or otherwise in its capacity as a Member, except as otherwise provided in Section 7.9 or as otherwise contemplated by this Agreement.

 

(c) The Liability of each Member shall be limited as set forth in the Act and other applicable Law and, except as expressly set forth in this Agreement or required by Law, no Member (or any of its Affiliates) shall be personally liable, whether to the Company, any of the other Members, the creditors of the Company or any other third party, for any debt or Liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being a Member of the Company.

 

(d) Except as otherwise required by the Act, a Member shall not be required to restore a deficit balance in such Member’s Capital Account, to lend any funds to the Company or, except as otherwise set forth herein, to make any additional contributions or payments to the Company.

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(e) The Company shall not be obligated to repay any Capital Contributions of any Member.

 

Section 4.6      Redemption of Units.

 

(a) Each Member (other than any entity in the PubCo Holdings Group) and the Escrow Agent in respect of Class EX Units and Class C Common Stock forfeited in accordance with the Escrow Agreement, shall be entitled from time to time to cause the Company to redeem and cancel all or a portion of such Member’s Class EX Units, or in the case of forfeited Class EX Units, the forfeited Class EX Units submitted by the Escrow Agent for redemption in accordance with this Agreement and the Escrow Agreement (such Member or the Escrow Agent submitting Class EX Units for redemption, a “Redeeming Person”), together with an equal number of shares of Class C Common Stock, in exchange for (i) a number of shares of Class A Common Stock equal to the number of Class EX Units of such Redeeming Person to be redeemed or, (ii) at the Company’s election under certain circumstances, cash in accordance with Section 4.6(d) (such right of a Redeeming Person being referred to herein as a “Redemption Right”), in each case, upon the terms and subject to the conditions set forth in this Section 4.6 and subject to PubCo’s (or such designated member(s) of the PubCo Holdings Group’s) Call Right as set forth in Section 4.6(m).

 

(b) In order to exercise a Redemption Right, each Redeeming Person shall provide written notice (the Redemption Notice”) in the appropriate form attached hereto as Exhibit B to the Company and PubCo, on or before any Redemption Notice Date, stating that the Redeeming Person elects to have redeemed on the next Redemption Date a stated number of Class EX Units, together with an equal number of shares of Class C Common Stock; provided, however, that in the event of a Special Redemption Date that is triggered upon the adoption by PubCo of a plan of dissolution or liquidation, concurrently with such adoption all of the Members holding Class EX Units and the Escrow Agent with respect to any escrowed Class EX Units shall be deemed, automatically and effective immediately upon such election and without the obligation to deliver any Redemption Notice, to have made an election to have redeemed all of their Class EX Units, together with an equal number of shares of Class C Common Stock, redeemed as of such adoption date. If a Redeeming Person delivers a Redemption Notice on or before any Redemption Notice Date, such Redeeming Person may not revoke or rescind such Redemption Notice after such Redemption Notice Date. Any Redemption Notice delivered for a Redemption on a Regular Redemption Date may not be contingent. Any Redemption Notice delivered for a Redemption on a Special Redemption Date may be made contingent solely upon the consummation of the Registered Offering or other transaction described in the notice of the Managing Member specifying such Special Redemption Date. Any notice by any Member pursuant to the Investor Rights Agreement to demand or participate in any Registered Offering shall be deemed to constitute a Redemption Notice for the related Special Redemption Date.

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(c) On any Redemption Date for which any Redeeming Person has delivered a Redemption Notice on or prior to the related Redemption Notice Date, unless the Company elects to pay cash in accordance with Section 4.6(d) or PubCo (or such designated member(s) of the PubCo Holdings Group) exercises its Call Right pursuant to Section 4.6(m), the number of Class EX Units set forth in any such Redemption Notice, together with an equal number of shares of Class C Common Stock held by such Redeeming Person, shall be redeemed and canceled in exchange for a number of shares of Class A Common Stock equal to the number of Class EX Units redeemed. Notwithstanding anything herein to the contrary, the effective date of the forfeiture of Class EX Units and corresponding shares of Class C Common Stock shall be the last day of the month in which the applicable forfeiture occurs and the effective date of the redemption of such Class EX Units and corresponding shares of Class C Common Stock shall be the first day of the succeeding month.

 

(d) The Company shall be entitled to elect to settle any Redemption by delivering to the Redeeming Person, in lieu of the applicable number of shares of Class A Common Stock that would be received in such Redemption, an amount of cash equal to the Cash Election Amount for such shares.

 

(e) Each Member’s Redemption Right shall be subject to the following limitations and qualifications:

 

(i) The first Redemption shall only be permitted on the first Redemption Date after the Lock-Up Period;

 

(ii) thereafter, except as provided herein, Redemptions shall only be permitted on each Redemption Date;

 

(iii) a Member shall only be permitted to redeem less than all of its Class EX Units if (A) after such Redemption it would continue to hold at least 50,000 Class EX Units and (B) it redeems not less than 50,000 Class EX Units in such Redemption;

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(iv) the Company shall not effect any Redemption of any Class EX Units, together with any shares of Class C Common Stock, held by Tiger, and Tiger shall not have the right to redeem any of its Class EX Units, along with any shares of Class C Common Stock, to the extent that, after giving effect to such redemption, Tiger (together with its affiliates and any persons acting as a group together with Tiger or any of Tiger’s affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation; provided, however, that upon Tiger providing the Company with at least sixty-one (61) days’ written notice (pursuant to Section 12.11 hereof) at any time (the “Waiver Notice”), that Tiger wishes, to waive this Section 4.6(e)(iv) with regard to any or all shares of Class A Common Stock issuable upon redemption of the Class EX Units that are the subject of a Redemption Notice validly delivered by Tiger, together with a corresponding number of shares of Class C Common Stock, this Section 4.6(e)(iv) shall be of no force or effect with regard to those shares of Class A Common Stock referenced in the Waiver Notice. For purposes of the foregoing sentence, the number of shares of Class A Common Stock beneficially owned by Tiger shall include the number of shares of Class A Common Stock issuable upon redemption of the Class EX Units, together with the shares of Class C Common Stock, with respect to which such determination is being made, but shall exclude the number of shares of Class A Common Stock which are issuable upon (i) redemption of the remaining Class EX Units, together with shares of Class C Common Stock, beneficially owned by Tiger or any of its affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of PubCo subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by Tiger or any of its affiliates or Attribution Parties. Except as set forth in the preceding sentence, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4.6(e)(iv), in determining the number of outstanding shares of Class A Common Stock, Tiger may rely on the number of outstanding shares of Class A Common Stock as stated in the most recent of the following: (i) PubCo’s most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by PubCo and (iii) a more recent written notice by PubCo or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of Tiger, PubCo shall within one Trading Day confirm orally and in writing to such holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the redemption, conversion or exercise of securities of PubCo, including the shares of Class C Common Stock, by Tiger or its affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. In the event that the issuance of shares of Class A Common Stock to Tiger upon redemption of Tiger’s Class EX Units, together with its shares of Class C Common Stock, results in Tiger and its affiliates and Attribution Parties being deemed to beneficially own, in the aggregate, shares of Class A Common Stock in excess of the Beneficial Ownership Limitation (as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which Tiger, its affiliates and its other Attribution Parties’ aggregate beneficial ownership exceeds the Beneficial Ownership Limitation (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and Tiger shall not have the power to vote or to transfer the Excess Shares. The provisions of this Section 4.6(e)(iv) shall not be construed and implemented in a manner otherwise than in strict conformity with the definition of Beneficial Ownership Limitation to correct this section (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation; and

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(v) any Redemption of Class EX Units issued after the date hereof (other than in connection with any recapitalization), including such Class EX Units issued to Members as of the date hereof, may be limited in accordance with the terms of any agreements or instruments entered into in connection with such issuance, as deemed necessary or desirable in the discretion of the Managing Member.

 

(f) If the Company has more than 100 partners  within the meaning of Treasury Regulations Section 1.7704-1(h) (determined taking into account the rules of Treasury Regulations Section 1.7704-1(h)(3)), assuming for such purpose that each Legacy Owner is treated as a single partner within the meaning of Treasury Regulations Section 1.7704-1(h) (determined taking into account the rules of Treasury Regulations Section 1.7704-1(h)(3)), the Managing Member may impose additional limitations and restrictions on Redemptions (including limiting Redemptions or creating priority procedures for Redemptions), to the extent it determines, in Good Faith, such limitations and restrictions to be necessary to avoid undue risk that the Company may be classified as a “publicly traded partnership” within the meaning of Section 7704 of the Code.

 

(g) For U.S. federal income (and applicable state and local) tax purposes, each Redemption and, in the event PubCo (or another member of the PubCo Holdings Group) exercises its Call Right, each transaction pursuant to a Call Right, shall be treated as a sale of the applicable Class EX Units (together with the same number shares of Class C Common Stock) to PubCo (or such other member of the PubCo Holdings Group) in exchange for shares of Class A Common Stock or cash, as applicable; provided, however, if the Redemption is requested by the Escrow Agent, the resulting Redemption or exercise of the Call Right, shall be treated consistent with the disposition of the proceeds resulting therefrom.

 

(h) Each Redemption shall be deemed to have been effected on the applicable Redemption Date. Any Person causing Class EX Units to be redeemed in accordance with this Agreement may request that the shares of Class A Common Stock to be issued upon such Redemption be issued in a name other than such Member. Any Person or Persons in whose name or names any shares of Class A Common Stock are issuable on any Redemption Date shall be deemed to have become, on such Redemption Date, the holder or holders of record of such shares.

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(i) Unless a member of the PubCo Holdings Group has elected its Call Right pursuant to Section 4.6(m) with respect to any Redemption, on the relevant Redemption Date and immediately prior to such Redemption, (i) PubCo (or such other member(s) of the PubCo Holdings Group) shall contribute to the Company the consideration the Redeeming Person is entitled to receive under Section 4.6(c) (including in the event the Company exercises its right to deliver the Cash Election Amount pursuant to Section 4.6(d)) and the Company shall issue to PubCo (or such other member(s) of the PubCo Holdings Group) a number of Class X Units or, pursuant to Section 4.1(e), other Equity Securities of the Company as consideration for such contribution, (ii) the Company shall (A) cancel the redeemed Class EX Units and (B) transfer to the Redeeming Person the consideration the Redeeming Person is entitled to receive under Section 4.6(c) (including in the event the Company exercises its right to deliver the Cash Election Amount pursuant to Section 4.6(d)), and (iii) PubCo shall cancel the surrendered shares of Class C Common Stock, if applicable. Notwithstanding any other provisions of this Agreement to the contrary, in the event that the Company makes a Cash Election that is funded with proceeds from a primary offering of PubCo Equity Securities, the PubCo Holdings Group shall only be obligated to contribute to the Company an amount in cash equal to the net proceeds (after deduction of any underwriters’ discounts or commissions and brokers’ fees or commissions (including, for the avoidance of doubt, any deferred discounts or commissions and brokers’ fees or commissions payable in connection with or as a result of such Registered Offering)) (such difference, the “Discount”) from the sale by PubCo of a number of shares of Class A Common Stock equal to the number of Class EX Units to be redeemed with such cash or from the sale of other Equity Securities of PubCo used to fund the Cash Election Amount; provided that PubCo’s Capital Account (or the Capital Account(s) of the other member(s) of the PubCo Holdings Group, as applicable) shall be increased by the amount of such Discount in accordance with Section 7.9; provided further, that the contribution of such net proceeds shall in no event affect the Redeeming Person’s right to receive the Cash Election Amount.

 

(j) If (i) there is any reclassification, reorganization, recapitalization or other similar transaction pursuant to which the shares of Class A Common Stock are converted or changed into another security, securities or other property (other than as a result of a subdivision or combination or any transaction subject to Section 4.1(f)), or (ii) except in connection with actions taken with respect to the capitalization of PubCo or the Company pursuant to Section 4.1(h), PubCo, by dividend or otherwise, distributes to all holders of the shares of Class A Common Stock evidences of its indebtedness or assets, including securities (including shares of Class A Common Stock and any rights, options or warrants to all holders of the shares of Class A Common Stock to subscribe for or to purchase or to otherwise acquire Shares of Class A Common Stock, or other securities or rights convertible into, redeemable for or exercisable for Shares of Class A Common Stock) but excluding (A) any cash dividend or distribution or (B) any such distribution of indebtedness or assets received by PubCo, in either case of clauses (A) or (B) received by PubCo from the Company in respect of the Class X Units, then upon any subsequent Redemption, in addition to the shares of Class A Common Stock or the Cash Election Amount, as applicable, each Member shall be entitled to receive the amount of such security, securities or other property that such Member would have received if such Redemption had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization, other similar transaction, dividend or other distribution, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the shares of Class A Common Stock are converted or changed into another security, securities or other property, or any dividend or distribution (other than an excluded dividend or distribution, as described above in clause (A) or (B)), this Section 4.6 shall continue to be applicable, mutatis mutandis, with respect to such security or other property.

 

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(k) PubCo shall at all times keep available, solely for the purpose of issuance upon a Redemption, out of its authorized but unissued shares of Class A Common Stock, such number of shares of Class A Common Stock that shall be issuable upon the Redemption of all outstanding Class EX Units (together with a corresponding number of shares of Class C Common Stock); provided, that nothing contained herein shall be construed to preclude PubCo from satisfying its obligations with respect to a Redemption by delivery of cash pursuant to a Cash Election or shares of Class A Common Stock that are held in the treasury of PubCo. PubCo covenants that all shares of Class A Common Stock that shall be issued upon a Redemption shall, upon issuance thereof, be validly issued, fully paid and non-assessable. In addition, for so long as the shares of Class A Common Stock are listed or admitted to trading on a National Securities Exchange, PubCo shall use its reasonable best efforts to cause all shares of Class A Common Stock issued upon a Redemption to be listed or admitted to trading on such National Securities Exchange at the time of such issuance.

 

(l) The issuance of shares of Class A Common Stock upon a Redemption shall be made without charge to the Redeeming Person for any stamp or other similar tax in respect of such issuance, except that if any such shares of Class A Common Stock are to be issued in a name other than that of the Redeeming Person, then the Person or Persons in whose names such shares are to be issued shall pay to PubCo the amount of any tax payable in respect of any Transfer involved in such issuance or establish to the satisfaction of PubCo that such tax has been paid or is not payable. Each of the Company and PubCo shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable upon a Redemption (and the Redeeming Person agrees to indemnify the Company and PubCo with respect to) such amounts as may be required to be deducted or withheld therefrom under the Code or any provision of applicable Law, and to the extent deduction and withholding is required, such deduction and withholding may be taken in shares of Class A Common Stock. Prior to making such deduction or withholding, the Company shall use commercially reasonable efforts to give written notice to the Redeeming Person and reasonably cooperate with such Redeeming Person to reduce or avoid any such withholding. To the extent such amounts are so deducted or withheld and paid over to the relevant governmental authority, such amounts shall be treated for all purposes under this Agreement as having been paid to the Redeeming Person, and, if withholding is taken in shares of Class A Common Stock, the relevant withholding party shall be treated as having sold such shares of Class A Common Stock on behalf of such Redeeming Person for an amount of cash equal to the Fair Market Value thereof at the time of such deemed sale and paid such cash proceeds to the appropriate governmental authority.

 

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(m) Notwithstanding anything to the contrary in this Section 4.6, a Redeeming Person shall be deemed to have offered to sell its Class EX Units (together with a corresponding number of shares of Class C Common Stock) as described in any Redemption Notice to each member of the PubCo Holdings Group, and PubCo (or such other member(s) of the PubCo Holdings Group designated by PubCo) may, in its sole discretion, in accordance with this Section 4.6(m), elect to purchase directly and acquire such Class EX Units (together with a corresponding number of shares of Class C Common Stock) on the Redemption Date by paying to the Redeeming Person the number of shares of Class A Common Stock that the Redeeming Person would otherwise receive in a Redemption pursuant to Section 4.6(c) or, if PubCo (or such designated member(s) of the PubCo Holdings Group) makes a Cash Election, the Cash Election Amount for such shares of Class A Common Stock (the “Call Right”), whereupon PubCo (or such designated member(s) of the PubCo Holdings Group) shall acquire the Class EX Units (together with a corresponding number of shares of Class C Common Stock) offered for redemption by the Redeeming Person. Such Class EX Units will be recapitalized into an equal number of Class X Units, and such Member of the PubCo Holding Group shall be treated thereafter for all purposes of this Agreement as the owner of such Class X Units.

 

(n) In the event that (i) the Members (other than any member of the PubCo Holdings Group) beneficially own, in the aggregate, less than 10% of the then outstanding Units and (ii) the shares of Class A Common Stock are listed or admitted to trading on a National Securities Exchange, then the Managing Member shall have the right, in its sole discretion, to require any Member (other than any member of the PubCo Holdings Group, or a Tiger Entity) that beneficially owns less than 5% of the then-outstanding Units to effect a Redemption of some or all of such Member’s Class EX Units (together with the surrender and delivery of the same number of shares of Class C Common Stock); provided that a Cash Election shall not be permitted pursuant to such a Redemption under this Section 4.6(n). The Managing Member shall deliver written notice to the Company and any such Member of its intention to exercise its Redemption right pursuant to this Section 4.6(n) (a “Minority Member Redemption Notice”) at least five Business Days prior to the proposed date upon which such Redemption is to be effected (such proposed date, the “Minority Member Redemption Date”), indicating in such notice the number of Class EX Units (and corresponding number of shares of Class C Common Stock) held by such Member that Managing Member intends to require to be subject to such Redemption. Any Redemption pursuant to this Section 4.6(n) shall be effective on the Minority Member Redemption Date. From and after the Minority Member Redemption Date, (x) the Class EX Units and shares of Class C Common Stock subject to such Redemption shall be deemed to be transferred to the Managing Member on the Minority Member Redemption Date and (y) such Member shall cease to have any rights with respect to the Class EX Units and shares of Class C Common Stock subject to such Redemption (other than the right to receive shares of Class A Common Stock pursuant to such Redemption). Following delivery of a Minority Member Redemption Notice and on or prior to the Minority Member Redemption Date, the Members shall take all actions reasonably requested by Managing Member to effect such Redemption, including taking any action and delivering any document required pursuant to the remainder of this Section 4.6 to effect a Redemption.

 

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(o) No Redemption shall impair the right of the Redeeming Person to receive any distributions payable on the Class EX Units redeemed pursuant to such Redemption in respect of a record date that occurs prior to the Redemption Date for such Redemption. For the avoidance of doubt, no Redeeming Person, or a Person designated by a Redeeming Person to receive shares of Class A Common Stock, shall be entitled to receive, with respect to such record date, distributions or dividends both on Class EX Units redeemed by the Company from such Redeeming Person and on shares of Class A Common Stock received by such Redeeming Person, or other Person so designated, if applicable, in such Redemption.

 

(p) In connection with a PubCo Approved Change of Control, PubCo shall have the right, in its sole discretion, to require each Member (other than any member of the PubCo Holdings Group) to effect a Redemption of all or a portion of such Member’s Class EX Units (together with the corresponding number of shares of Class C Common Stock) (and including, for the avoidance of doubt, any Class EX Units and corresponding number of shares of Class C Common Stock held in escrow under the Escrow Agreement). Any Redemption pursuant to this Section 4.6(p) shall be effective immediately prior to the consummation of the PubCo Approved Change of Control (and, for the avoidance of doubt, shall not be effective if such PubCo Approved Change of Control is not consummated) (the “Change of Control Exchange Date”). From and after the Change of Control Exchange Date, (i) the Class EX Units and shares of Class C Common Stock subject to such Redemption shall be deemed to be transferred to PubCo on the Change of Control Exchange Date and (ii) such Member shall cease to have any rights with respect to the Class EX Units and shares of Class C Common Stock subject to such Redemption (other than the right to receive shares of Class A Common Stock pursuant to such Redemption). PubCo shall provide written notice of an expected PubCo Approved Change of Control to all Members within the earlier of (x) five (5) Business Days following the execution of the agreement with respect to such PubCo Approved Change of Control and (y) ten (10) Business Days before the proposed date upon which the contemplated PubCo Approved Change of Control is to be effected, indicating in such notice such information as may reasonably describe the PubCo Approved Change of Control transaction, subject to applicable Law, including the date of execution of such agreement or such proposed effective date, as applicable, the amount and types of consideration to be paid for shares of Class A Common Stock in the PubCo Approved Change of Control, any election with respect to types of consideration that a holder of shares of Class A Common Stock, as applicable, shall be entitled to make in connection with such PubCo Approved Change of Control, and the number of Class EX Units (and the corresponding number of shares of Class C Common Stock) held by such Member that PubCo intends to require to be subject to such Redemption. Following delivery of such notice and on or prior to the Change of Control Exchange Date, the Members shall take all actions reasonably requested by PubCo to effect such Redemption, including taking any action and delivering any document required pursuant to the remainder of this Section 4.6(p) to effect a Redemption. Nothing contained in this Section 4.6(p) shall limit the right of any Member to vote for or participate in any proposed Change of Control of PubCo with respect to such Member’s Class EX Units or exchange all Class EX Units of such Member for shares of Class A Common Stock in connection with such Change of Control, even if such Change of Control was not approved by the board of directors of PubCo.

 

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(q) In the event that any holder of a Legacy Warrant exercises such Legacy Warrant, the holder thereof shall receive Class EX Units and corresponding shares of Class C Common Stock as set forth in the applicable warrant agreement. Unless such Legacy Warrant holder elects otherwise, on the day immediately following the receipt of such Class EX Units and Class C Common Stock, which shall be deemed to be a Redemption Notice Date in respect of such Class EX Units and Class C Common Stock, the holder thereof shall be deemed to have delivered a Redemption Notice pursuant to Section 4.6(b) to the Company and PubCo with respect all Class EX Units and Class C Common Stock received by the holder upon exercise of such Warrant and the provisions of this Section 4.6 shall apply.

 

ARTICLE V

 

ALLOCATIONS OF PROFITS AND LOSSES

 

Section 5.1      Profits and Losses. After giving effect to the allocations under Section 5.2 and subject to Section 5.4, Profits and Losses (and, to the extent determined by the Managing Member to be necessary and appropriate to achieve the resulting Capital Account balances described below, any allocable items of income, gain, loss, deduction or credit includable in the computation of Profits and Losses) for each Fiscal Year or other taxable period shall be allocated among the Members during such Fiscal Year or other taxable period in a manner such that, after giving effect to the special allocations set forth in Section 5.2 and all distributions through the end of such Fiscal Year or other taxable period, the Capital Account balance of each Member, immediately after making such allocation, is, as nearly as possible, equal to (i) the amount such Member would receive pursuant to Section 11.3(b) if all assets of the Company on hand at the end of such Fiscal Year or other taxable period were sold for cash equal to their Gross Asset Values, all liabilities of the Company were satisfied in cash in accordance with their terms (limited with respect to each nonrecourse liability to the Gross Asset Value of the assets securing such liability), and all remaining or resulting cash was distributed, in accordance with Section 11.3(b), to the Members immediately after making such allocation, minus (ii) such Member’s share of Company Minimum Gain and Member Minimum Gain, computed immediately prior to the hypothetical sale of assets, and the amount any such Member is treated as obligated to contribute to the Company, computed immediately after the hypothetical sale of assets.

 

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Section 5.2      Special Allocations.

 

(a) Nonrecourse Deductions for any Fiscal Year or other taxable period shall be specially allocated to the Members on a pro rata basis, in accordance with the number of Units owned by each Member as of the last day of such Fiscal Year or other taxable period. The amount of Nonrecourse Deductions for a Fiscal Year or other taxable period shall equal the excess, if any, of the net increase, if any, in the amount of Company Minimum Gain during that Fiscal Year or other taxable period over the aggregate amount of any distributions during that Fiscal Year or other taxable period of proceeds of a Nonrecourse Liability that are allocable to an increase in Company Minimum Gain, determined in accordance with the provisions of Treasury Regulations Section 1.704-2(d).

 

(b) Any Member Nonrecourse Deductions for any Fiscal Year or other taxable period shall be specially allocated to the Member who bears economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i). If more than one Member bears the economic risk of loss for such Member Nonrecourse Debt, the Member Nonrecourse Deductions attributable to such Member Nonrecourse Debt shall be allocated among the Members according to the ratio in which they bear the economic risk of loss. This Section 5.2(b) is intended to comply with the provisions of Treasury Regulations Section 1.704-2(i) and shall be interpreted consistently therewith.

 

(c) Notwithstanding any other provision of this Agreement to the contrary, if there is a net decrease in Company Minimum Gain during any Fiscal Year or other taxable period (or if there was a net decrease in Company Minimum Gain for a prior Fiscal Year or other taxable period and the Company did not have sufficient amounts of income and gain during prior periods to allocate among the Members under this Section 5.2(c)), each Member shall be specially allocated items of Company income and gain for such Fiscal Year or other taxable period in an amount equal to such Member’s share of the net decrease in Company Minimum Gain during such year (as determined pursuant to Treasury Regulations Section 1.704-2(g)(2)). This section is intended to constitute a minimum gain chargeback under Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

 

(d) Notwithstanding any other provision of this Agreement except Section 5.2(c), if there is a net decrease in Member Minimum Gain during any Fiscal Year or other taxable period (or if there was a net decrease in Member Minimum Gain for a prior Fiscal Year or other taxable period and the Company did not have sufficient amounts of income and gain during prior periods to allocate among the Members under this Section 5.2(d)), each Member shall be specially allocated items of Company income and gain for such year in an amount equal to such Member’s share of the net decrease in Member Minimum Gain (as determined pursuant to Treasury Regulations Section 1.704-2(i)(4)). This section is intended to constitute a partner nonrecourse debt minimum gain chargeback under Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

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(e) Notwithstanding any provision hereof to the contrary except Section 5.2(a) and Section 5.2(b), no Losses or other items of loss or expense shall be allocated to any Member to the extent that such allocation would cause such Member to have an Adjusted Capital Account Deficit (or increase any existing Adjusted Capital Account Deficit) at the end of such Fiscal Year or other taxable period. All Losses and other items of loss and expense in excess of the limitation set forth in this Section 5.2(e) shall be allocated to the Members who do not have an Adjusted Capital Account Deficit in proportion to their relative positive Capital Accounts (as adjusted pursuant to clauses (a) and (b) of the definition of “Adjusted Capital Account Deficit”) but only to the extent that such Losses and other items of loss and expense do not cause any such Member to have an Adjusted Capital Account Deficit.

 

(f) Notwithstanding any provision hereof to the contrary except Section 5.2(c) and Section 5.2(d), in the event any Member unexpectedly receives any adjustment, allocation or distribution described in paragraph (4), (5) or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d), items of income and gain (consisting of a pro rata portion of each item of income, including gross income, and gain for the Fiscal Year or other taxable period) shall be specially allocated to such Member in an amount and manner sufficient to eliminate any Adjusted Capital Account Deficit of that Member as quickly as possible; provided that an allocation pursuant to this Section 5.2(f) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article V have been tentatively made as if this Section 5.2(f) were not in this Agreement. This Section 5.2(f) is intended to constitute a qualified income offset under Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

(g) If any Member has an Adjusted Capital Account Deficit at the end of any Fiscal Year or other taxable period, that Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 5.2(g) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit in excess of such sum after all other allocations provided for in this Article V have been made as if Section 5.2(f) and this Section 5.2(g) were not in this Agreement.

 

(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Sections 734(b) (including any such adjustments pursuant to Treasury Regulation Section 1.734-2(b)(1)) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution to any Member in complete liquidation of such Member’s Interest, the amount of such adjustment to the 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 item of gain or loss shall be allocated to the Members in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) if such section applies or to the Member to whom such distribution was made if Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

 

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(i) The allocations set forth in Sections 5.2(a) through 5.2(h) (the “Regulatory Allocations”) are intended to comply with certain requirements of Treasury Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding any other provision of this Article V (other than the Regulatory Allocations), the Regulatory Allocations (and anticipated future Regulatory Allocations) shall be taken into account in allocating other items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocation of other items and the Regulatory Allocations to each Member should be equal to the net amount that would have been allocated to each such Member if the Regulatory Allocations had not occurred. This Section 5.2(i) is intended to minimize to the extent possible and to the extent necessary any economic distortions that may result from application of the Regulatory Allocations and shall be interpreted in a manner consistent therewith.

 

(j) Items of income, gain, loss, deduction or credit resulting from a Covered Audit Adjustment shall be allocated to the Members in accordance with the applicable provisions of the Partnership Tax Audit Rules.

 

Section 5.3      Allocations for Tax Purposes in General.

 

(a) Except as otherwise provided in this Section 5.3, each item of income, gain, loss, deduction, and credit of the Company for U.S. federal income tax purposes shall be allocated among the Members in the same manner as such item is allocated under Sections 5.1 and 5.2.

 

(b) In accordance with Code Section 704(c) and the Treasury Regulations thereunder (including the Treasury Regulations applying the principles of Code Section 704(c) to changes in Gross Asset Values), items of income, gain, loss and deduction with respect to any Company property having a Gross Asset Value that differs from such property’s adjusted U.S. federal income tax basis shall, solely for U.S. federal income tax purposes, be allocated among the Members to account for any such difference using the “remedial method,” under Treasury Regulations Section 1.704-3(d) or such other method or methods as determined by the Managing Member to be appropriate and in accordance with the applicable Treasury Regulations.

 

(c) Any (i) recapture of depreciation or any other item of deduction shall be allocated, in accordance with Treasury Regulations Sections 1.1245-1(e) and 1.1254-5, to the Members who received the benefit of such deductions, and (ii) recapture of grants or credits shall be allocated to the Members in accordance with applicable law.

 

(d) Tax credits of the Company shall be allocated among the Members as provided in Treasury Regulation Sections 1.704-1(b)(4)(ii) and 1.704-1(b)(4)(viii).

 

(e) Allocations pursuant to this Section 5.3 are solely for purposes of U.S. 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 Profits, Losses, or other items pursuant to any provision of this Agreement.

 

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(f) If, as a result of an exercise of a non-compensatory option to acquire an interest in the Company (including any Warrant), a Capital Account reallocation is required under Treasury Regulations Section 1.704-1(b)(2)(iv)(s)(3), the Company shall make corrective allocations pursuant to Treasury Regulations Section 1.704-1(b)(4)(x).

 

Section 5.4      Other Allocation Rules.

 

(a) The Members are aware of the income tax consequences of the allocations made by this Article V and the economic impact of the allocations on the amounts receivable by them under this Agreement. The Members hereby agree to be bound by the provisions of this Article V in reporting their share of Company income and loss for income tax purposes.

 

(b) The provisions regarding the establishment and maintenance for each Member of a Capital Account as provided by Section 4.4 and the allocations set forth in Sections 5.1, 5.2 and 5.3 are intended to comply with the Treasury Regulations and to reflect the intended economic entitlement of the Members. If the Managing Member determines, in its sole discretion, that the application of the provisions in Sections 4.4, 5.1, 5.2 or 5.3 would result in non-compliance with the Treasury Regulations or would be inconsistent with the intended economic entitlement of the Members, the Managing Member is authorized to make any appropriate adjustments to such provisions.

 

(c) All items of income, gain, loss, deduction and credit allocable to an interest in the Company that may have been Transferred shall be allocated between the Transferor and the Transferee in accordance with a method determined by the Managing Member and permissible under Code Section 706 and the Treasury Regulations thereunder.

 

(d) The Members’ proportionate shares of the “excess nonrecourse liabilities” of the Company, within the meaning of Treasury Regulations Section 1.752-3(a)(3), shall be allocated to the Members on a pro rata basis, in accordance with the number of Units owned by each Member.

 

ARTICLE VI

 

DISTRIBUTIONS

 

Section 6.1      Distributions.

 

(a) Distributions. To the extent permitted by applicable Law and hereunder, and except as otherwise provided in Section 11.3, distributions to Members may be declared by the Managing Member out of funds legally available therefor in such amounts and on such terms (including the payment dates of such distributions) as the Managing Member shall determine using such record date as the Managing Member may designate; any such distribution shall be made to the Members as of the close of business on such record date on a pro rata basis (except that, for the avoidance of doubt, repurchases or redemptions made in accordance with Section 4.1(e)(vi), Section 4.6 or payments made in accordance with Sections 7.4 or 7.9 need not be on a pro rata basis), in accordance with the number of Units owned by each Member as of the close of business on such record date; provided, however, that the Managing Member shall have the obligation to make distributions as set forth in Sections 6.2 and 11.3(b)(iii); and provided, further, that, notwithstanding any other provision herein to the contrary, no distributions shall be made to any Member to the extent such distribution would render the Company insolvent or violate the Act. For purposes of the foregoing sentence, insolvency means the inability of the Company to meet its payment obligations when due. Promptly following the designation of a record date and the declaration of a distribution pursuant to this Section 6.1, the Managing Member shall give notice to each Member of the record date, the amount and the terms of the distribution and the payment date thereof.

 

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(b) Successors. For purposes of determining the amount of distributions, each Member shall be treated as having made the Capital Contributions and as having received the distributions made to or received by its predecessors in respect of any of such Member’s Units.

 

(c) Distributions In-Kind. Except as otherwise provided in this Agreement, any distributions may be made in cash or in kind, or partly in cash and partly in kind, as determined by the Managing Member. In the event of any distribution of (i) property in kind or (ii) both cash and property in kind, each Member shall be distributed its proportionate share of any such cash so distributed and its proportionate share of any such property so distributed in kind (based on the Fair Market Value of such property). To the extent that the Company distributes property in-kind to the Members, the Company shall be treated as making a distribution equal to the Fair Market Value of such property for purposes of Section 6.1(a) and such property shall be treated as if it were sold for an amount equal to its Fair Market Value. Any resulting gain or loss shall be allocated to the Member’s Capital Accounts in accordance with Sections 5.1 and 5.2.

 

Section 6.2      Tax-Related Distributions. The Company shall, subject to any restrictions contained in any agreement to which the Company is bound, make distributions out of legally available funds to all Members on a pro rata basis in accordance with Section 6.1:

 

(a) at such times and in such amounts as the Managing Member reasonably determines is necessary to cause a distribution to the PubCo Holdings Group, in the aggregate, sufficient to timely satisfy any PubCo Tax-Related Liabilities, to the extent that such distribution does not result in a PubCo Tax Distribution Limitation; and

 

(b) on each Tax Distribution Date, in an amount not to exceed Available Cash, to the extent required to cause each Member who on such Tax Distribution Date holds (together with its Affiliates) at least 1% of the then-outstanding Units to receive a distribution at least equal to such Member’s Tax Amount (not to be less than zero) with respect to such Tax Distribution Date (each, an “Additional Tax Distribution”); provided, that if the amount of the Additional Tax Distributions actually made with respect to a quarter or a Taxable Year is greater than or less than the Additional Tax Distributions that would have been made under this Section 6.2(b) for such period based on subsequent tax information and assuming no limitations based on prohibitions under applicable Law or Available Cash, then, on subsequent Tax Distribution Dates, starting with the next Tax Distribution Date, the Managing Member shall, subject to Available Cash, cause the Company to adjust the next Additional Tax Distribution and subsequent Additional Tax Distributions downward (but not below zero) or upward (but in any event pro rata in proportion to the Members’ respective number of Units) to reflect such excess or shortfall.

 

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Section 6.3         Distribution Upon Withdrawal. No withdrawing Member shall be entitled to receive any distribution or the value of such Member’s Interest as a result of withdrawal from the Company prior to the liquidation of the Company, except as specifically provided in this Agreement.

 

Section 6.4         Issuance of Additional Equity Securities. This Article VI shall be subject to and, to the extent necessary, amended to reflect the issuance by the Company of any additional Equity Securities.

 

ARTICLE VII

 

MANAGEMENT

 

Section 7.1         The Managing Member; Fiduciary Duties.

 

(a) Holdings shall be the sole Managing Member of the Company. Except as otherwise required by Law, (i) the Managing Member shall have full and complete charge of all affairs of the Company, (ii) the management and control of the Company’s business activities and operations shall rest exclusively with the Managing Member, and the Managing Member shall make all decisions regarding the business, activities and operations of the Company (including the incurrence of costs and expenses) in its sole discretion without the consent of any other Member and (iii) the Members other than the Managing Member (in their capacity as such) shall not participate in the control, management, direction or operation of the activities or affairs of the Company and shall have no power to act for or bind the Company.

 

(b) In connection with the performance of its duties as the Managing Member of the Company, except as otherwise set forth herein, the Managing Member acknowledges that it will owe to the Members the same fiduciary duties as it would owe to the stockholders of a Delaware corporation if it were a member of the board of directors of such a corporation and the Members were stockholders of such corporation. The Members acknowledge that the Managing Member will take action through its board of directors, and that the members of the Managing Member’s board of directors will owe comparable fiduciary duties to the owner of the Managing Member.

 

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Section 7.2      Officers.

 

(a) The Managing Member may appoint, employ or otherwise contract with any Person for the transaction of the business of the Company or the performance of services for or on behalf of the Company, and the Managing Member may delegate to any such Persons such authority to act on behalf of the Company as the Managing Member may from time to time deem appropriate.

 

(b) Except as otherwise set forth herein, the Company’s Chief Executive Officer will be responsible for the general and active management of the business of the Company and its Subsidiaries and will see that all orders of the Managing Member are carried into effect. The Chief Executive Officer will report to the Managing Member and have the general powers and duties of management usually vested in the office of president and chief executive officer of a corporation organized under the DGCL, subject to the terms of this Agreement, and will have such other powers and duties as may be prescribed by the Managing Member or this Agreement. The Chief Executive Officer will have the power to execute bonds, mortgages and other contracts requiring a seal, under the seal of the Company (if the Company has a seal), except where required or permitted by Law to be otherwise signed and executed, and except where the signing and execution thereof will be expressly delegated by the Managing Member to some other Officer or agent of the Company.

 

(c) Except as set forth herein, the Managing Member may appoint Officers at any time, and the Officers may include the Chief Executive Officer, a president, one or more vice presidents, a secretary, one or more assistant secretaries, a chief financial officer, a general counsel, a treasurer, one or more assistant treasurers, a chief operating officer, an executive chairman, and any other officers that the Managing Member deems appropriate. Except as set forth herein, the Officers will serve at the pleasure of the Managing Member, subject to all rights, if any, of such Officer under any contract of employment. Any individual may hold any number of offices, and an Officer may, but need not, be a Member of the Company. The Officers will exercise such powers and perform such duties as specified in this Agreement or as determined from time to time by the Managing Member.

 

(d) Subject to this Agreement and to the rights, if any, of an Officer under a contract of employment, any Officer may be removed, either with or without cause, by the Managing Member. Any Officer may resign at any time by giving written notice to the Managing Member. Any resignation will take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation will not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the Officer is a party. A vacancy in any office because of death, resignation, removal, disqualification or any other cause will be filled in the manner prescribed in this Agreement for regular appointments to that office.

 

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(e) The Officers, in the performance of their duties as such, shall owe to the Company and the Members duties of loyalty and due care of the type owed by the officers of a corporation to such corporation and its shareholders under the DGCL.

 

Section 7.3      Warranted Reliance by Officers on Others. In exercising their authority and performing their duties under this Agreement, the Officers shall be entitled to rely on information, opinions, reports or statements of the following Persons or groups unless they have actual knowledge concerning the matter in question that would cause such reliance to be unwarranted:

 

(a) one or more employees or other agents of the Company or subordinates whom the Officer reasonably believes to be reliable and competent in the matters presented; and

 

(b) any attorney, public accountant, financial advisor or other Person as to matters which the Officer reasonably believes to be within such Person’s professional or expert competence.

 

Section 7.4      Indemnification. The Company shall indemnify and hold harmless, to the fullest extent permitted by applicable Law as it presently exists or may hereafter be amended (provided, that no such amendment shall limit a Covered Person’s (as defined below) rights to indemnification hereunder with respect to any actions or events occurring prior to such amendment except to the extent required by a non-waivable and non-modifiable provision of applicable Law), any person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (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 Manager (as defined in the Existing LLC Agreement) entitled to indemnification under the Existing LLC Agreement, a Member, an Officer, an Observer, the Managing Member, or the Company Representative (or Designated Individual) of the Company or any Subsidiary, or any Person that is or was serving at the request of the Company as a member, director, officer, trustee, employee or agent of another limited liability company or of a corporation, partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (a “Covered Person”), whether the basis of such Proceeding is alleged action in an official capacity as a member, director, officer, trustee, employee or agent, or in any other capacity while serving as a member, director, officer, trustee, employee or agent, against all expenses, Liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by such Covered Person in connection with such Proceeding, unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of such act or omission, and taking into account the acknowledgements and agreements set forth in this Agreement, such Covered Person engaged in fraud, gross negligence or willful misconduct. The Company shall, to the fullest extent not prohibited by applicable Law as it presently exists or may hereafter be amended (provided, that no such amendment shall limit a Covered Person’s rights to indemnification hereunder with respect to any actions or events occurring prior to such amendment except to the extent required by a non-waivable and non-modifiable provision of 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 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 by final judicial decision from which there is no further right to appeal that the Covered Person is not entitled to be indemnified under this Section 7.4 or otherwise. The rights to indemnification and advancement of expenses under this Section 7.4 shall be contract rights and such rights shall continue as to a Covered Person who has ceased to be a member, director, officer, trustee, employee or agent and shall inure to the benefit of his heirs, executors and administrators. Notwithstanding the foregoing provisions of this Section 7.4, except for Proceedings to enforce rights to indemnification and advancement of expenses, the Company shall indemnify and advance expenses to a Covered Person in connection with a Proceeding (or part thereof) initiated by such Covered Person only if such Proceeding (or part thereof) was authorized by the Managing Member. No amendment, modification or deletion of this Section 7.4 will apply or have any effect on the right of any Covered Person to indemnification for, or with respect to, any acts or omissions of such Covered Person occurring prior to such amendment, modification or deletion.

 

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Section 7.5      Maintenance of Insurance or Other Financial Arrangements. To the extent permitted by applicable Law, the Company (with the approval of the Managing Member) may purchase and maintain insurance or make other financial arrangements on behalf of any or all Covered Persons, for any Liability asserted against such Covered Person and Liability and expenses incurred by such Covered Person in such Covered Person’s capacity as such, or arising out of such Person’s status as such, whether or not the Company has the authority to indemnify such Person against such Liability and expenses.

 

Section 7.6      Resignation or Termination of Managing Member. Holdings shall not, by any means, resign as, cease to be or be replaced as Managing Member except in compliance with this Section 7.6. No termination or replacement of Holdings as Managing Member shall be effective unless proper provision is made, in compliance with this Agreement, so that the obligations of Holdings, its successor (if applicable) and any new Managing Member and the rights of all Members under this Agreement and applicable Law remain in full force and effect. No appointment of a Person other than Holdings (or its successor, as applicable) as Managing Member shall be effective unless Holdings (or its successor, as applicable) and the new Managing Member (as applicable) provide all other Members with contractual rights, directly enforceable by such other Members against Holdings (or its successor, as applicable) and the new Managing Member (as applicable), to cause (a) Holdings to comply with all Holdings’ obligations under this Agreement (including its obligations under Section 4.6) other than those that must necessarily be taken in its capacity as Managing Member and (b) the new Managing Member to comply with all the Managing Member’s obligations under this Agreement.

 

Section 7.7      No Inconsistent Obligations. The Managing Member represents that it does not have any contracts, other agreements, duties or obligations that are inconsistent with its duties and obligations (whether or not in its capacity as Managing Member) under this Agreement and covenants that, except as permitted by Section 7.1, it will not enter into any contracts or other agreements or undertake or acquire any other duties or obligations that are inconsistent with such duties and obligations.

 

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Section 7.8      Reclassification Events of PubCo. If a Reclassification Event occurs, the Managing Member or its successor, as the case may be, shall, as and to the extent necessary, amend this Agreement in compliance with Section 12.1, and enter into any necessary supplementary or additional agreements, to ensure that following the effective date of the Reclassification Event: (i) the redemption rights of holders of Class EX Units set forth in Section 4.6 provide that each Class EX Unit (together with the surrender and delivery of one share of Class C Common Stock) is redeemable for the same amount and same type of property, securities or cash (or combination thereof) for which one share of Class A Common Stock becomes exchangeable for or converted into as a result of the Reclassification Event and (ii) PubCo or the successor to PubCo, as applicable, is obligated to deliver such property, securities or cash upon such redemption. PubCo shall not consummate or agree to consummate any Reclassification Event unless the successor Person, if any, becomes obligated to comply with the obligations of PubCo (in whatever capacity) under this Agreement.

 

Section 7.9      Certain Costs and Expenses. The Company shall (a) pay, or cause to be paid, all costs, fees, operating expenses and other expenses of the Company and its Subsidiaries (including the costs, fees and expenses of attorneys, accountants or other professionals and the compensation of all personnel providing services to the Company and its Subsidiaries) incurred in pursuing and conducting, or otherwise related to, the activities of the Company and (b) in the Good Faith discretion of the Managing Member, reimburse the Managing Member for any costs, fees or expenses incurred by it in connection with serving as the Managing Member and any Pre-Closing Taxes. To the extent that the Managing Member determines in its Good Faith discretion that such expenses are related to the business and affairs of the Managing Member that are conducted through the Company and/or its Subsidiaries (including expenses that relate to the business and affairs of the Company and/or its Subsidiaries and that also relate to other activities of the Managing Member or any other member of the PubCo Holdings Group), the Managing Member may cause the Company to pay or bear all expenses of the PubCo Holdings Group, including, without limitation, costs of securities offerings not borne directly by Members, board of directors compensation and meeting costs, costs of periodic reports to stockholders of PubCo, litigation costs and damages arising from litigation, accounting and legal costs; provided that the Company shall not pay or bear any income tax obligations of any member of the PubCo Holdings Group (other than any Pre-Closing Taxes) or any obligations of any member of the PubCo Holdings Group pursuant to the TRA or any Post-BCA TRA (but the Company shall be entitled to make distributions in respect of these obligations pursuant to Article VI). In the event that (i) shares of Class A Common Stock or other Equity Securities of PubCo were sold to underwriters in any public offering after the Effective Time, in each case, at a price per share that is lower than the price per share for which such shares of Class A Common Stock or other Equity Securities of PubCo are sold to the public in such public offering after taking into account any Discounts and (ii) the proceeds from such public offering are used to fund the Cash Election Amount for any redeemed Class EX Units or otherwise contributed to the Company, then the Company shall reimburse the applicable member of the PubCo Holdings Group for such Discount by treating such Discount as an additional Capital Contribution made by such member of the PubCo Holdings Group to the Company, issuing Class X Units in respect of such deemed Capital Contribution in accordance with Section 4.6(i) (but, for the avoidance of doubt, without duplication of the Units issued pursuant to the Business Combination Agreement), and increasing the Capital Account of such member of the PubCo Holdings Group by the amount of such Discount. For the avoidance of doubt, any payments made to or on behalf of any member of the PubCo Holdings Group pursuant to this Section 7.9 shall not be treated as a distribution pursuant to Section 6.1(a) but shall instead be treated as an expense of the Company.

 

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Section 7.10      Exculpation. No Covered Person shall be personally liable for the return of any portion of the Capital Contributions (or any return thereon) of any Member. The return of such Capital Contributions (or any return thereon), if any, shall be made solely from the Company’s assets. No Covered Person shall be required to pay to the Company or to any Member any deficit in the Capital Account of any Member upon dissolution of the Company or otherwise. No Member shall have the right to demand or receive property other than cash except as provided herein for its Units in the Company. No Covered Person shall be liable, responsible or accountable in damages or otherwise to the Company or any Member for any loss incurred as a result of any act or failure to act by such Covered Person on behalf of the Company unless such loss is finally determined by a court of competent jurisdiction to have resulted solely from such Covered Person’s fraud, willful misconduct or gross negligence.

 

ARTICLE VIII

 

ROLE OF MEMBERS

 

Section 8.1      Rights or Powers.

 

(a) Other than the Managing Member, the Members, acting in their capacity as Members, shall not have any right or power to take part in the management or control of the Company or its business and affairs or to act for or bind the Company in any way. Notwithstanding the foregoing, the Members have all the rights and powers specifically set forth in this Agreement and, to the extent not inconsistent with this Agreement, in the Act. A Member, any Affiliate thereof or an employee, stockholder, agent, director or officer of a Member or any Affiliate thereof, may also be an employee of the Company or be retained as an agent of the Company. The existence of these relationships and acting in such capacities will not result in the Member (other than the Managing Member) being deemed to be participating in the control of the business of the Company or otherwise affect the limited liability of the Member. Except as specifically provided herein, a Member (other than the Managing Member) shall not, in its capacity as a Member, take part in the operation, management or control of the Company’s business, transact any business in the Company’s name or have the power to sign documents for or otherwise bind the Company.

 

(b) The Company shall promptly (but in any event within three Business Days) notify the Members in writing if, to the Company’s knowledge, for any reason, it would be an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”), but for the exceptions provided in Section 3(c)(1) or 3(c)(7) thereunder.

 

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Section 8.2      Voting.

 

(a) Meetings of the Members (i) holding the outstanding Units of all classes may be called upon the written request of Members holding at least 50% of the outstanding Units, (ii) holding the outstanding Class EX Units may be called upon the written request of Members holding at least 50% of the outstanding Class EX Units or (iii) holding the outstanding Class X Units may be called upon the written request of Members holding at least 50% of the outstanding Class X Units. Such request shall state the location of the meeting and the nature of the business to be transacted at the meeting. Written notice of any such meeting shall be given to the Members of the applicable class(es) of Units not less than two Business Days and not more than 30 days prior to the date of such meeting. Members may vote in person, by proxy or by telephone at any meeting of the Members and may waive advance notice of such meeting. Whenever the vote or consent of Members is permitted or required under this Agreement, such vote or consent may be given at a meeting of the Members or may be given in accordance with the procedure prescribed in this Section 8.2. Except as otherwise expressly provided in this Agreement, the affirmative vote of the Members holding a majority of the issued and outstanding Units shall constitute the act of the Members, except for matters for which a vote of the holders of the Class EX Units voting separately as a class is required in accordance with Section  4.2, in which case the affirmative vote of the Members holding a majority of the issued and outstanding Class EX Units shall constitute the act of the holders of Class EX Units.

 

(b) Each Member may authorize any Person or Persons to act for it by proxy on all matters in which such Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by such Member or its attorney-in-fact. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise expressly provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it.

 

(c) Each meeting of Members shall be conducted by an Officer designated by the Managing Member or such other individual Person as the Managing Member deems appropriate.

 

(d) Any action required or permitted to be taken by the Members or the holders of Class EX Units may be taken without a meeting if the requisite Members or holders of Class EX Units, as applicable, whose approval is necessary consent thereto in writing.

 

Section 8.3      Various Capacities. The Members acknowledge and agree that the Members or their Affiliates will from time to time act in various capacities, including as a Member and as the Company Representative.

 

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Section 8.4      Investment Opportunities. To the fullest extent permitted by applicable law, the doctrine of corporate opportunity, or any analogous doctrine, shall not apply to any Member (other than Members who are officers or employees of the Company, PubCo or any of their respective Subsidiaries), any of their respective Affiliates (other than the Company, the Managing Member or any of their respective Subsidiaries), or any of their respective officers, directors, agents, shareholders, members, managers and partners (each, a “Business Opportunities Exempt Party”). 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 presented to any Business Opportunities Exempt Party. No Business Opportunities Exempt Party who acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Company or any of its subsidiaries shall have any duty to communicate or offer such opportunity to the Company. No amendment or repeal of this Section 8.4 shall apply to or have any effect on the liability or alleged liability of any Business Opportunities Exempt Party for or with respect to any opportunities of which any such Business Opportunities Exempt Party becomes aware prior to such amendment or repeal. Any Person purchasing or otherwise acquiring any interest in any Units shall be deemed to have notice of and consented to the provisions of this Section 8.4. Neither the alteration, amendment or repeal of this Section 8.4, nor the adoption of any provision of this Agreement inconsistent with this Section 8.4, shall eliminate or reduce the effect of this Section 8.4 in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Section 8.4, would accrue or arise, prior to such alteration, amendment, repeal or adoption.

 

ARTICLE IX

 

TRANSFERS OF INTERESTS

 

Section 9.1      Restrictions on Transfer.

 

(a) Except as provided in Section 4.6 and Section 9.1(c), no Member shall Transfer all or any portion of its Interest without the Managing Member’s prior written consent, which consent shall be granted or withheld in the Managing Member’s sole discretion. If, notwithstanding the provisions of this Section 9.1(a), all or any portion of a Member’s Interests are Transferred in violation of this Section 9.1(a), involuntarily, by operation of law or otherwise, then without limiting any other rights and remedies available to the other parties under this Agreement or otherwise, the Transferee of such Interest (or portion thereof) shall not be admitted to the Company as a Member or be entitled to any rights as a Member hereunder, and the Transferor will continue to be bound by all obligations hereunder, unless and until the Managing Member consents in writing to such admission, which consent shall be granted or withheld in the Managing Member’s sole discretion. Any attempted or purported Transfer of all or a portion of a Member’s Interests in violation of this Section 9.1(a) shall be null and void ab initio and of no force or effect whatsoever. For the avoidance of doubt, the restrictions on Transfer contained in this Article IX shall not apply to the Transfer of any capital stock of PubCo; provided that no shares of Class C Common Stock may be Transferred unless a corresponding number of Class EX Units are Transferred therewith in accordance with this Agreement.

 

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(b) In addition to any other restrictions on Transfer herein contained, including the provisions of this Article IX, in no event may any Transfer or assignment of Interests by any Member be made (i) to any Person who lacks the legal right, power or capacity to own Interests; (ii) if such Transfer (A) would be considered to be effected on or through an “established securities market” or a “secondary market or the substantial equivalent thereof,” as such terms are used in Treasury Regulations Section 1.7704-1, (B) would result in the Company having more than 100 partners, within the meaning of Treasury Regulations Section 1.7704-1(h)(1) (determined taking into account the rules of Treasury Regulations Section 1.7704-1(h)(3)), or (C) would cause the Company to be treated as a “publicly traded partnership” within the meaning of Section 7704 of the Code or a successor provision or to be classified as a corporation pursuant to the Code or successor of the Code; (iii) if such Transfer would 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 Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(e)(2) of the Code); (iv) if such Transfer would, in the opinion of counsel to the Company, cause any portion of the assets of the Company to constitute assets of any employee benefit plan pursuant to the Plan Asset Regulations or otherwise cause the Company to be subject to regulation under ERISA; (v) if such Transfer requires the registration of such Interests or any Equity Securities issued upon any exchange of such Interests, pursuant to any applicable U.S. federal or state securities Laws; or (vi) if such Transfer subjects the Company to regulation under the Investment Company Act or the Investment Advisors Act of 1940, each as amended (or any succeeding law). Any attempted or purported Transfer of all or a portion of a Member’s Interests in violation of this Section 9.1(b) shall be null and void ab initio and of no force or effect whatsoever.

 

(c) Notwithstanding the provisions in Section 9.1(a), but subject to the other provisions in this Article IX, a Member may Transfer all or a portion of its Units to a Permitted Transferee without the consent of any other Member or Person, but only if immediately after the proposed Transfer by such Member, taking into consideration the anti-abuse rule set forth in Treasury Regulations Section 1.7704-1(h)(3), and as determined in the reasonable discretion of the Managing Member:

 

(i) in the case of a proposed Transfer by a Tiger Entity, all Tiger Entities, in the aggregate, would not represent more than 10 “partners” for purposes of calculating the number of “partners” in the Company under Treasury Regulations Section 1.7704-1(h)(1)(ii); or

 

(ii) in the case of a proposed Transfer by a Member other than a Tiger Entity and any member of the PubCo Holdings Group, such Member and its Transferees (for the avoidance of doubt, other than any member of the PubCo Holdings Group), in the aggregate, would not represent more than one “partner” for purposes of calculating the number of “partners” in the Company under Treasury Regulations Section 1.7704-1(h)(1)(ii).

 

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Section 9.2      Notice of Transfer.

 

(a) Other than in connection with Transfers made pursuant to Section 4.6, each Member shall, after complying with the provisions of this Agreement, but in any event no later than three Business Days following any Transfer of Interests, give written notice to the Company of such Transfer. Each such notice shall describe the manner and circumstances of the Transfer.

 

(b) A Member making a Transfer (including a deemed Transfer for U.S. federal income tax purposes as described in Section 4.6(g)) permitted by this Agreement shall, unless otherwise determined by the Managing Member, (i) have delivered to the Company an affidavit of non-foreign status with respect to such Transferor that satisfies the requirements of Section 1446(f)(2) of the Code or other documentation establishing a valid exemption from withholding pursuant to Section 1446(f) of the Code or (ii) contemporaneously with the Transfer, properly withhold and remit to the Internal Revenue Service the amount of tax required to be withheld upon the Transfer by Section 1446(f) of the Code (and provide evidence to the Company of such withholding and remittance promptly thereafter).

 

Section 9.3      Transferee Members. A Transferee of Interests pursuant to this Article IX shall have the right to become a Member only if (a) the requirements of this Article IX are met, (b) such Transferee executes an instrument reasonably satisfactory to the Managing Member agreeing to be bound by the terms and provisions of this Agreement and assuming all of the Transferor’s then existing and future Liabilities arising under or relating to this Agreement, (c) such Transferee represents that the Transfer was made in accordance with all applicable securities Laws, (d) the Transferor or Transferee shall have reimbursed the Company for all reasonable expenses (including attorneys’ fees and expenses) of any Transfer or proposed Transfer of a Member’s Interest, regardless of whether consummated, and (e) if such Transferee or his or her spouse is a resident of a community property jurisdiction, then such Transferee’s spouse shall also execute an instrument reasonably satisfactory to the Managing Member agreeing to be bound by the terms and provisions of this Agreement to the extent of his or her community property or quasi-community property interest, if any, in such Member’s Interest. Unless agreed to in writing by the Managing Member, the admission of a Member shall not result in the release of the Transferor from any Liability that the Transferor may have to each remaining Member or to the Company under this Agreement or any other Contract between the Managing Member, the Company or any of its Subsidiaries, on the one hand, and such Transferor or any of its Affiliates, on the other hand. Written notice of the admission of a Member shall be sent promptly by the Company to each remaining Member.

 

Section 9.4      Legend. Each certificate representing a Unit, if any, will be stamped or otherwise imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND THE OFFER AND SALE OF THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

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THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT.

 

THE TRANSFER AND VOTING OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF SUNLIGHT FINANCIAL LLC (THE ISSUER OF THESE SECURITIES) AS IT MAY BE AMENDED, SUPPLEMENTED AND/OR RESTATED FROM TIME TO TIME, AND NO TRANSFER OF THESE SECURITIES WILL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE ISSUER OF SUCH SECURITIES.”

 

ARTICLE X

 

ACCOUNTING; CERTAIN TAX MATTERS

 

Section 10.1      Books of Account. The Company shall, and shall cause each Subsidiary to, maintain true books and records of account in which full and correct entries shall be made of all its business transactions pursuant to a system of accounting established and administered in accordance with GAAP, and shall set aside on its books all such proper accruals and reserves as shall be required under GAAP.

 

Section 10.2      Tax Elections.

 

(a) The Company and any eligible Subsidiary shall make an election (or continue a previously made election) pursuant to Section 754 of the Code for the Taxable Year of the Company that includes the date hereof and shall not thereafter revoke such election. In addition, the Company shall make the following elections on the appropriate forms or tax returns, if permitted under the Code or applicable law:

 

(i) to adopt a Taxable Year allowable under law;

 

(ii) to adopt the accrual method of accounting for U.S. federal income tax purposes;

 

(iii) to elect to amortize the organizational expenses of the Company as permitted by Section 709(b) of the Code;

 

(iv) except where the Managing Member elects to apply Section 10.5(c), to elect out of the application of the partnership-level audit and adjustment rules of the Partnership Tax Audit Rules by making an election under Section 6226(a) of the Code, commonly known as the “push out” election, or any analogous election under state or local tax law, if applicable; and

 

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(v) except as otherwise provided herein, any other election the Managing Member may in Good Faith deem appropriate and in the best interests of the Company.

 

(b) Upon request of the Managing Member, each Member shall cooperate in Good Faith with the Company in connection with the Company’s efforts to make any election pursuant to this Section 10.2.

 

Section 10.3     Tax Returns; Information. The Managing Member shall arrange for the preparation and timely filing of all income and other tax and informational returns of the Company. The Managing Member shall furnish to each Member a copy of each approved return and statement, together with any schedules (including Schedule K-1) or other information that a Member may require in connection with such Member’s own tax affairs as soon as practicable (but in no event more than 75 days after the end of each Fiscal Year). In addition, not later than 60 days following the end of each Taxable Year, the Managing Member shall provide to each member an estimated schedule K-1 for such Taxable Year. The Members agree to furnish to the Company (i) all reasonably requested certificates or statements relating to the tax matters of the Company (including without limitation an affidavit of non-foreign status pursuant to Section 1446(f)(2) of the Code), and (ii) all pertinent information in its possession relating to the Company’s operations that is reasonably necessary to enable the Company’s tax returns to be prepared and timely filed.

 

Section 10.4     Company Representative. The Managing Member is specially authorized and appointed to act as the Company Representative and in any similar capacity under state or local Law for all Taxable Years of the Company. For each Taxable Year of the Company beginning on or after January 1, 2018, the Managing Member shall appoint an individual selected by and subject to the control of the Managing Member for such Taxable Year as the Designated Individual and the Managing Member shall revoke such appointment for any Taxable Year for which the Designated Individual is no longer subject to the control of the Managing Member. The Company and the Members (including any Member designated as the Company Representative prior to the date hereof) shall cooperate fully with each other and shall use reasonable best efforts to cause the Managing Member (or any other Person subsequently designated) to become the Company Representative with respect to any taxable period of the Company with respect to which the statute of limitations has not yet expired, including (as applicable) by filing certifications pursuant to Treasury Regulations Section 301.6231(a)(7)-1(d). In acting as Company Representative, the Managing Member shall act, to the maximum extent possible, to cause income, gain, loss, deduction, and credit of the Company and adjustments thereto, to be allocated or borne by the Members in the same manner as such items or adjustments would have been borne if the Company could have effectively made an election under Section 6221(b) of the Code (commonly known as the “election out”) or similar state or local provision with respect to the taxable period at issue. The Company Representative may retain, at the Company’s expense, such outside counsel, accountants and other professional consultants as it may reasonably deem necessary in the course of fulfilling its obligations as Company Representative.

 

Section 10.5     Withholding Tax Payments and Obligations.

 

(a) Withholding Tax Payments. Each of the Company and its Subsidiaries may withhold from distributions, allocations or portions thereof if it is required to do so by any applicable Law, and each Member hereby authorizes the Company and its Subsidiaries to withhold or pay on behalf of or with respect to such Member, any amount of U.S. federal, state or local or non-U.S. taxes that the Managing Member determines, in Good Faith, that the Company or any of its Subsidiaries is required to withhold or pay with respect to any amount distributable or allocable to such Member pursuant to this Agreement.

 

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(b) Other Tax Payments. To the extent that any tax is paid by (or withheld from amounts payable to) the Company or any of its Subsidiaries and the Managing Member determines, in Good Faith, that such tax (including any Company Level Tax) relates to one or more specific Members, such tax shall be treated as an amount of tax withheld or paid with respect to such Member pursuant to this Section 10.5. Any determinations made by the Managing Member pursuant to this Section 10.5 shall be binding on the Members.

 

(c) Tax Contribution and Indemnity Obligation. Any amounts withheld or paid with respect to a Member pursuant to Section 10.5(a) or (b) shall be offset against any distributions to which such Member is entitled concurrently with such withholding or payment (a “Tax Offset”); provided that the amount of any distribution subject to a Tax Offset shall be treated as having been distributed to such Member pursuant to Section 6.1 or Section 11.3(b)(iii) at the time such Tax Offset is made. To the extent that (i) there is a payment of Company Level Taxes relating to a Member or (ii) the amount of such Tax Offset exceeds the distributions to which such Member is entitled during the same Fiscal Year as such withholding or payment (“Excess Tax Amount”), the amount of such (i) Company Level Taxes or (ii) Excess Tax Amount, as applicable, shall, upon notification to such Member by the Managing Member, give rise to an obligation of such Member to make a capital contribution to the Company (a “Tax Contribution Obligation”), which Tax Contribution Obligation shall be immediately due and payable. In the event a Member defaults with respect to its obligation under the prior sentence, the Company shall be entitled to offset the amount of a Member’s Tax Contribution Obligation against distributions to which such Member would otherwise be subsequently entitled until the full amount of such Tax Contribution Obligation has been contributed to the Company or has been recovered through offset against distributions, and any such offset shall not reduce such Member’s Capital Account. Any contribution by a Member with respect to a Tax Contribution Obligation shall increase such Member’s Capital Account but shall not reduce the amount (if any) that a Member is otherwise obligated to contribute to the Company. Each Member hereby unconditionally and irrevocably grants to the Company a security interest in such Member’s Units to secure such Member’s obligation to pay the Company any amounts required to be paid pursuant to this Section 10.5. Each Member shall take such actions as the Company may reasonably request in order to perfect or enforce the security interest created hereunder. Each Member hereby agrees to indemnify and hold harmless the Company, the other Members, the Company Representative and the Managing Member from and against any liability (including any liability for Company Level Taxes) with respect to income attributable to or distributions or other payments to such Member.

 

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(d) Continued Obligations of Former Members. Any Person who ceases to be a Member shall be deemed to be a Member solely for purposes of this Section 10.5, and the obligations of a Member pursuant to this Section 10.5 shall survive until 30 days after the closing of the applicable statute of limitations on assessment with respect to the taxes withheld or paid by the Company or a Subsidiary that relate to the period during which such Person was actually a Member; provided, however, that if the Managing Member determines in its sole discretion that seeking indemnification for Company Level Taxes from a former Member is not practicable, or that seeking such indemnification has failed, then, in either case, the Managing Member may (A) recover any liability for Company Level Taxes from the substituted Member that acquired directly or indirectly the applicable interest in the Company from such former Member or (B) treat such liability for Company Level Taxes as a Company expense.

 

(e) Managing Member Discretion Regarding Recovery of Taxes. Notwithstanding the foregoing, the Managing Member may choose not to recover an amount of Company Level Taxes or other taxes withheld or paid with respect to a Member under this Section 10.5 to the extent that there are no distributions to which such Member is entitled that may be offset by such amounts, if the Managing Member determines, in its reasonable discretion, that such a decision would be in the best interests of the Members (e.g., where the cost of recovering the amount of taxes withheld or paid with respect to such Member is not justified in light of the amount that may be recovered from such Member).

 

ARTICLE XI

 

DISSOLUTION AND TERMINATION

 

Section 11.1     Liquidating Events. The Company shall dissolve and commence winding up and liquidating upon the first to occur of the following (each, a “Liquidating Event”):

 

(a) The sale of all or substantially all of the assets of the Company; and

 

(b) The determination of (i) the Managing Member and (ii) if at such time the Members (other than any member of the PubCo Holdings Group) beneficially own, in the aggregate, more than 2.5% of the outstanding Units, the holders of at least 66 ⅔% of the issued and outstanding Class EX Units, voting as a separate class, and, for so long as a Tiger Entity holds an interest herein, such Tiger Entity, to dissolve, wind up and liquidate the Company; provided that no such Liquidating Event shall be consummated until at least five Business Days after written notice is provided to the Members that such determination has been made in accordance with the foregoing, and, for the avoidance of doubt, any Member, including any Member not consenting to such determination, shall have the right to file a Redemption Notice prior to the consummation of such Liquidating Event.

 

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The Members hereby agree that the Company shall not dissolve prior to the occurrence of a Liquidating Event and that no Member shall seek a dissolution of the Company, under Section 18-802 of the Act or otherwise, other than based on the matters set forth in clauses (a) and (b) above. If it is determined by a court of competent jurisdiction that the Company has dissolved prior to the occurrence of a Liquidating Event, the Members hereby agree to continue the business of the Company without a winding up or liquidation. In the event of a dissolution pursuant to Section 11.1(b), the relative economic rights of each class of Units immediately prior to such dissolution shall be preserved to the greatest extent practicable with respect to distributions made to Members pursuant to Section 11.3 in connection with such dissolution, taking into consideration tax and other legal constraints that may adversely affect one or more parties to such dissolution and subject to compliance with applicable laws and regulations.

 

Section 11.2     Bankruptcy. For purposes of this Agreement, the “bankruptcy” of a Member shall mean the occurrence of any of the following: (a) any Governmental Entity shall take possession of any substantial part of the property of that Member or shall assume control over the affairs or operations thereof, or a receiver or trustee shall be appointed, or a writ, order, attachment or garnishment shall be issued with respect to any substantial part thereof, and such possession, assumption of control, appointment, writ or order shall continue for a period of 90 consecutive days; or (b) a Member shall admit in writing of its inability to pay its debts when due, or make an assignment for the benefit of creditors; or apply for or consent to the appointment of any receiver, trustee or similar officer or for all or any substantial part of its property; or shall institute (by petition, application, answer, consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debts, dissolution, liquidation or similar proceeding under the Laws of any jurisdiction; or (c) a receiver, trustee or similar officer shall be appointed for such Member or with respect to all or any substantial part of its property without the application or consent of that Member, and such appointment shall continue undischarged or unstayed for a period of 90 consecutive days or any bankruptcy, insolvency, reorganization, arrangements, readjustment of debt, dissolution, liquidation or similar proceedings shall be instituted (by petition, application or otherwise) against that Member and shall remain undismissed for a period of 90 consecutive days.

 

Section 11.3     Procedure.

 

(a) In the event of the dissolution of the Company for any reason, the Members shall commence to wind up the affairs of the Company and to liquidate the Company’s investments; provided that if a Member is in bankruptcy or dissolved, another Member, who shall be the Managing Member (“Winding-Up Member”) shall commence to wind up the affairs of the Company and, subject to Section 11.4(a), such Winding-Up Member shall have full right and unlimited discretion to determine in Good Faith the time, manner and terms of any sale or sales of the Property or other assets pursuant to such liquidation, having due regard to the activity and condition of the relevant market and general financial and economic conditions. The Members shall continue to share profits, losses and distributions during the period of liquidation in the same manner and proportion as though the Company had not dissolved. The Company shall engage in no further business except as may be necessary, in the reasonable discretion of the Managing Member or the Winding-Up Member, as applicable, to preserve the value of the Company’s assets during the period of dissolution and liquidation.

 

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(b) Following the payment of all expenses of liquidation and the allocation of all Profits and Losses as provided in Article V, the proceeds of the liquidation and any other funds of the Company shall be distributed in the following order of priority:

 

(i) First, to the payment and discharge of all of the Company’s debts and Liabilities to creditors (whether third parties or Members), in the order of priority as provided by Law, except any obligations to the Members in respect of their Capital Accounts;

 

(ii) Second, to set up such cash reserves as the Managing Member reasonably deems necessary for contingent or unforeseen Liabilities or future payments described in Section 11.3(b)(i) (which reserves when they become unnecessary shall be distributed in accordance with the provisions of clause (iii) below); and

 

(iii) Third, the balance to the Members, pro rata in accordance with the number of Units owned by each Member.

 

(c) No Member shall have any right to demand or receive property other than cash upon dissolution and termination of the Company.

 

(d) Upon the completion of the liquidation of the Company and the distribution of all Company funds, the Company shall terminate and the Managing Member or the Winding-Up Member, as the case may be, shall have the authority to execute and record a certificate of cancellation of the Company, as well as any and all other documents required to effectuate the dissolution and termination of the Company.

 

Section 11.4     Rights of Members.

 

(a) Each Member irrevocably waives any right that it may have to maintain an action for partition with respect to the property of the Company.

 

(b) Except as otherwise provided in this Agreement, (i) each Member shall look solely to the assets of the Company for the return of its Capital Contributions and (ii) no Member shall have priority over any other Member as to the return of its Capital Contributions, distributions or allocations.

 

Section 11.5     Notices of Dissolution. In the event a Liquidating Event occurs or an event occurs that would, but for the provisions of Section 11.1, result in a dissolution of the Company, the Company shall, within 30 days thereafter, (a) provide written notice thereof to each of the Members and to all other parties with whom the Company regularly conducts business (as determined in the discretion of the Managing Member), and (b) comply, in a timely manner, with all filing and notice requirements under the Act or any other applicable Law.

 

Section 11.6     Reasonable Time for Winding Up. A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Company and the liquidation of its assets in order to minimize any losses that might otherwise result from such winding up.

 

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Section 11.7     No Deficit Restoration. No Member shall be personally liable for a deficit Capital Account balance of that Member, it being expressly understood that the distribution of liquidation proceeds shall be made solely from existing Company assets.

 

ARTICLE XII

 

GENERAL

 

Section 12.1     Amendments; Waivers.

 

(a) The terms and provisions of this Agreement may be waived, modified or amended (including by means of merger, consolidation or other business combination to which the Company is a party) with the approval of (y) the Managing Member and (z) if at such time the Members (other than the PubCo Holdings Group) beneficially own, in the aggregate, more than 2.5% of the outstanding Units, the holders of at least 66 ⅔% of the issued and outstanding Class EX Units, voting as a separate class; provided that no waiver, modification or amendment shall be effective until at least five Business Days after written notice is provided to the Members that the requisite consent has been obtained for such waiver, modification or amendment, and, for the avoidance of doubt, any Member, including any Member not providing written consent, shall have the right to file a Redemption Notice prior to the effectiveness of such waiver, modification or amendment; provided, further, that no amendment to this Agreement may:

 

(i) modify the limited liability of any Member, or increase the liabilities or obligations of any Member, in each case, without the consent of each such affected Member;

 

(ii) materially alter or change any rights, preferences or privileges of any Interests in a manner that is different or prejudicial (or would have a different or prejudicial effect) relative to any other Interests, without the approval of a majority in interest of the Members holding the Interests affected in such a different or prejudicial manner;

 

(iii) materially alter or change any rights, preferences or privileges of a Tiger Entity in its capacity as a holder of Interests or otherwise under this Agreement in a manner that is different or prejudicial (or that would have a different or prejudicial effect) relative to one another or other holder of Interests (including PubCo or a member of the PubCo Holdings Group), without the approval of the party affected in a different or prejudicial manner;

 

(iv) (A) amend or alter Section 8.4 without the prior written consent of Tiger and a majority of Members (other than PubCo Holdings Group) holding a majority of the then issued and outstanding Units (other than Units held by the PubCo Holdings Group), or (B) alter or change any rights, preferences or privileges of any Member that are expressly for the benefit of such Member, without the approval of such member; or

 

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(v) modify the requirement that a majority of the directors of PubCo who are independent within the meaning of the rules of the Nasdaq Stock Market (or such other National Securities Exchange on which the shares of Class A Common Stock are listed or admitted to trading) and Rule 10A-3 of the Securities Act and do not hold any Class EX Units that are subject to the applicable Redemption must approve a Cash Election pursuant to Section 4.6(d) without the approval of a majority of the directors of PubCo who are independent within the meaning of the rules of the Nasdaq Stock Market (or such other National Securities Exchange on which the shares of Class A Common Stock are listed or admitted to trading) and Rule 10A-3 of the Securities Act.

 

(b) Notwithstanding the foregoing clause (a), the Managing Member, acting alone, may amend this Agreement, including Exhibit A, (i) to reflect the admission of new Members, as provided by the terms of this Agreement, (ii) to the minimum extent necessary to comply with or administer in an equitable manner the Partnership Tax Audit Rules in any manner determined by the Managing Member, and (iii) as necessary to avoid the Company being classified as a “publicly traded partnership” within the meaning of Section 7704(b) of the Code.

 

(c) No waiver of any provision or default under, nor consent to any exception to, the terms of this Agreement or any agreement contemplated hereby shall be effective unless in writing and signed by the party to be bound and then only to the specific purpose, extent and instance so provided.

 

Section 12.2     Further Assurances. Each party agrees that it will from time to time, upon the reasonable request of another party, execute such documents and instruments and take such further action as may be required to accomplish the purposes of this Agreement.

 

Section 12.3     Successors and Assigns. All of the terms and provisions of this Agreement shall be binding upon the parties and their respective successors and assigns, but shall inure to the benefit of and be enforceable by the successors and assigns of any Member only to the extent that they are permitted successors and assigns pursuant to the terms hereof. No party may assign its rights hereunder except as herein expressly permitted.

 

Section 12.4     Certain Representations by Members. Each Member, by executing this Agreement and becoming a Member, whether by making a Capital Contribution, by admission in connection with a permitted Transfer or otherwise, represents and warrants to the Company and the Managing Member, as of the date of its admission as a Member, that such Member (or, if such Member is disregarded for U.S. federal income tax purposes, such Member’s regarded owner for such purposes) is either: (i) not a partnership, grantor trust or Subchapter S corporation for U.S. federal income tax purposes (e.g., an individual or Subchapter C corporation), or (ii) is a partnership, grantor trust or Subchapter S corporation for U.S. federal income tax purposes, but (A) permitting the Company to satisfy the 100-partner limitation set forth in Treasury Regulations Section 1.7704-1(h)(1)(ii) is not a principal purpose of any beneficial owner of such Member in investing in the Company through such Member, (B) such Member was formed for business purposes prior to or in connection with the investment by such Member in the Company or for estate planning purposes, and (C) no beneficial owner of such Member has a redemption or similar right with respect to such Member that is intended to correlate to such Member’s right to Redemption pursuant to Section 4.6.

 

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Section 12.5     Entire Agreement. This Agreement, together with all Exhibits and Schedules hereto and all other agreements referenced therein and herein, constitute the entire agreement between the parties hereto pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as specifically set forth herein and therein.

 

Section 12.6     Rights of Members Independent. The rights available to the Members under this Agreement and at Law shall be deemed to be several and not dependent on each other and each such right accordingly shall be construed as complete in itself and not by reference to any other such right. Any one or more and/or any combination of such rights may be exercised by a Member and/or the Company from time to time and no such exercise shall exhaust the rights or preclude another Member from exercising any one or more of such rights or combination thereof from time to time thereafter or simultaneously.

 

Section 12.7     Governing Law. This Agreement, the legal relations between the parties and any Action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware applicable to contracts made and performed in such state and without regard to conflicts of law doctrines.

 

Section 12.8     Jurisdiction and Venue. The parties hereto hereby agree and consent to be subject to the jurisdiction of any federal court of the District of Delaware or the Delaware Court of Chancery over any action, suit or proceeding (a “Legal Action”) arising out of or in connection with this Agreement. The parties hereto irrevocably waive the defense of an inconvenient forum to the maintenance of any such Legal Action. Each of the parties hereto further irrevocably consents to the service of process out of any of the aforementioned courts in any such Legal Action by the mailing of copies thereof by registered mail, postage prepaid, to such party at its address set forth in this Agreement, such service of process to be effective upon acknowledgment of receipt of such registered mail. Nothing in this Section 12.8 shall affect the right of any party hereto to serve legal process in any other manner permitted by law.

 

Section 12.9     Headings. The descriptive headings of the Articles, Sections and subsections of this Agreement are for convenience only and do not constitute a part of this Agreement.

 

Section 12.10    Counterparts. This Agreement and any amendment hereto or any other agreement (or document) delivered pursuant hereto may be executed in one or more counterparts and by different parties in separate counterparts any may delivered by email or other electronic means. All of such counterparts shall constitute one and the same agreement (or other document) and shall become effective (unless otherwise provided therein) when one or more counterparts have been signed by each party and delivered to the other party.

 

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Section 12.11     Notices. Any notice or other communication hereunder must be given in writing and (a) delivered in person, (b) transmitted by facsimile, by telecommunications mechanism or electronically, receipt of which is affirmatively acknowledged by or on behalf of the intended recipient, or (c) mailed by certified or registered mail, postage prepaid, receipt requested as follows:

 

If to the Company or the Managing Member, addressed to it at:

 

Sunlight Financial LLC
101 N. Tryon Street
Suite 1000

Charlotte, NC 28246
Attention: General Counsel
Email: notices@sunlightfinancial.com

 

With copies (which shall not constitute notice) to:

 

Hunton Andrews Kurth LLP

600 Travis, Suite 4200

Houston, TX 77002

Attention: G. Michael O’Leary

Telephone: (713) 220-4360
Email: moleary@huntonak.com

 

or to such other address or to such other Person as either party shall have last designated by such notice to the other parties. Each such notice or other communication shall be effective (i) if given by telecommunication or electronically, when transmitted to the applicable number or email address so specified in (or pursuant to) this Section 12.11 and an appropriate answerback is received or, if transmitted after 4:00 p.m. local time on a Business Day in the jurisdiction to which such notice is sent or at any time on a day that is not a Business Day in the jurisdiction to which such notice is sent, then on the immediately following Business Day, (ii) if given by mail, on the first Business Day in the jurisdiction to which such notice is sent following the date three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, on the Business Day when actually received at such address or, if not received on a Business Day, on the Business Day immediately following such actual receipt.

 

Section 12.12     Representation By Counsel; Interpretation. The parties acknowledge that each party to this Agreement has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of Law, or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived.

 

60

 

 

Section 12.13     Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable by any Governmental Entity, the remaining provisions of this Agreement, to the extent permitted by Law shall remain in full force and effect, provided that the essential terms and conditions of this Agreement for all parties remain valid, binding and enforceable.

 

Section 12.14     Expenses. Except as otherwise provided in this Agreement, each party shall bear its own expenses in connection with the transactions contemplated by this Agreement.

 

Section 12.15     Waiver of Jury Trial. EACH OF THE COMPANY, THE MEMBERS, THE MANAGING MEMBER AND ANY INDEMNITEES SEEKING REMEDIES HEREUNDER HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.

 

Section 12.16     No Third Party Beneficiaries. Except as expressly provided in Sections 7.4, nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective successors and permitted assigns, any rights or remedies under this Agreement or otherwise create any third party beneficiary hereto.

 

[Signature Pages Follow]

 

61

 

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Fifth Amended and Restated Limited Liability Company Agreement to be executed as of the day and year first above written.

 

  COMPANY:
   
  SUNLIGHT FINANCIAL LLC
   
  By: /s/ Matthew Potere
  Name: Matthew Potere
  Title: Chief Executive Officer
   
  MANAGING MEMBER:
   
  SL FINANCIAL HOLDINGS INC.
   
  By: /s/ Matthew Potere
  Name: Matthew Potere
  Title: Chief Executive Officer
   
  PUBCO:
   
  SUNLIGHT FINANCIAL HOLDINGS INC.
   
  By: /s/ Matthew Potere
  Name: Matthew Potere
  Title: Chief Executive Officer

 

A-1

 

 

MEMBERS:

 

EXHIBIT A

 

List of Members and Total Units

 

[Intentionally omitted]

 

A-2

 

 

EXHIBIT B

 

Redemption Notice for Unitholder

 

Dated: ____________

 

Sunlight Financial LLC
101 N. Tryon Street
Suite 1000
Charlotte, NC 28246
Attention: General Counsel

 

copy to:

Sunlight Financial Holdings Inc.

101 N. Tryon Street

Suite 1000

Charlotte, NC 28246

Attention: General Counsel

 

Reference is hereby made to the Fifth Amended and Restated Limited Liability Company Agreement of Sunlight Financial LLC, dated as of July 9, 2021 (as amended, supplemented or restated from time to time, the “LLC Agreement”), by and among Sunlight Financial LLC, a Delaware limited liability company (the “Company”), Sunlight Financial Holdings Inc., a Delaware corporation formerly known as Spartan Acquisition Corp. II (“PubCo”), SL Financial Holdings Inc., a Delaware corporation and a wholly owned subsidiary of PubCo (“Holdings”), SL Financial Investor I LLC (“Investor I”), a Delaware limited liability company and a wholly owned subsidiary of PubCo, SL Financial Investor II LLC (“Investor II”), a Delaware limited liability company and a wholly owned subsidiary of PubCo, the other Members set forth on Exhibit A to the LLC Agreement (collectively, the “Legacy Owners”) and each other Person who is or at any time becomes a Member in accordance with the terms of the LLC Agreement and the Act (such Persons, together with PubCo, Holdings, Investor I, Investor II, and the Legacy Owners, the “Unitholders”). Capitalized terms used but not defined herein shall have the meanings given to them in the LLC Agreement.

 

Effective as of the next applicable Redemption Date as determined in accordance with the LLC Agreement, the undersigned Unitholder hereby transfers and surrenders to the Company the number of Class EX Units set forth below and an equal number of shares of Class C Common Stock held by such Unitholder in exchange for the issuance to the undersigned Unitholder of that number of shares of Class A Common Stock equal to the number of Class EX Units of such Unitholder to be redeemed (to be issued in its name as set forth below), or, at the Company’s election under certain circumstances, cash to the account set forth below, in each case in accordance with the LLC Agreement. The undersigned hereby acknowledges that the redemption of Class EX Units shall include the cancellation of an equal number of outstanding shares of Class C Common Stock held by the undersigned that have been surrendered in such Redemption.

 

B-1

 

 

Legal Name of Unitholder: ___________________________________

 

Address: __________________________________________________

 

Number of Class EX Units to be redeemed: ______________________

 

Cash payment instructions: ___________________________________

 

If the Unitholder desires the shares of Class A Common Stock be settled through the facilities of Continental Stock Transfer and Trust Company (“CST”), please indicate the account of the CST participant below.

 

__________________________________________________

 

In the event the Company elects to certificate the shares of Class A Common Stock issued to the Unitholder, please indicate the following:

 

Legal Name for Certificate Delivery: ___________________________

 

Address for Certificate Delivery: ______________________________

 

If this Redemption Notice is delivered for a Redemption on a Special Redemption Date, please indicate whether the Unitholder desires that the Redemption be contingent upon the consummation of the Registered Offering or other transaction described in the notice of the Managing Member specifying such Special Redemption Date: __________

 

The undersigned hereby represents and warrants that the undersigned is the owner of the number of Class EX Units the undersigned is electing to redeem pursuant to this Redemption Notice, and that such Class EX Units are not subject to any liens or restrictions on transfer (other than restrictions imposed by the LLC Agreement, the charter and governing documents of PubCo and applicable Law).

 

The undersigned acknowledges and agrees that, if the undersigned fails to provide a duly completed and signed IRS Form W-9, then the Redemption of Class EX Units (and corresponding shares of Class C Common Stock) will be subject to withholding as required by Sections 1445 and 1446(f) of the Code. The undersigned acknowledges and agrees that any required withholding may be paid by the Company and/or Pubco (or any of their Affiliates) (1) seeking indemnity from the undersigned and/or (2) selling shares of Class A Common Stock that are otherwise transferrable pursuant to this notice and using the proceeds from such sale (net of any applicable offering costs) to pay such withholding taxes. If shares of Class A Common Stock are sold for such purposes, those shares will be treated as having been sold on behalf of the undersigned for an amount of cash equal to the fair market value thereof with such cash proceeds paid to the appropriate governmental authority and/or to cover offering costs on behalf of the undersigned. The undersigned agrees to indemnify Company, Pubco and their Affiliates for any amounts required to be withheld in connection with the Redemption pursuant to this notice and/or any offering costs associated with the sale of any shares of Class A Common Stock pursuant hereto.

 

B-2

 

 

The undersigned hereby irrevocably constitutes and appoints any officer of PubCo, as applicable, as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, solely to do any and all things and to take any and all actions necessary to effect the Redemption elected hereby.

 

[Signatures on Next Page]

 

B-3

 

 

IN WITNESS WHEREOF the undersigned has caused this Redemption Notice to be executed and delivered as of the date first set forth above.

 

  [Unitholder]
   
  By:
  Name:
  Title:

 

B-4

 

 

Redemption Notice for Escrow Agent

 

Dated: ____________

 

Sunlight Financial LLC
101 N. Tryon Street
Suite 1000
Charlotte, NC 28246
Attention: General Counsel

 

copy to:

Sunlight Financial Holdings Inc.

101 N. Tryon Street

Suite 1000

Charlotte, NC 28246

Attention: General Counsel

 

Reference is hereby made to the Fifth Amended and Restated Limited Liability Company Agreement of Sunlight Financial LLC, dated as of July 9, 2021 (as amended, supplemented or restated from time to time, the “LLC Agreement”), by and among Sunlight Financial LLC, a Delaware limited liability company (the “Company”), Sunlight Financial Holdings Inc., a Delaware corporation formerly known as Spartan Acquisition Corp. II (“PubCo”), SL Financial Holdings Inc., a Delaware corporation and a wholly owned subsidiary of PubCo (“Holdings”), SL Financial Investor I LLC (“Investor I”), a Delaware limited liability company and a wholly owned subsidiary of PubCo, SL Financial Investor II LLC (“Investor II”), a Delaware limited liability company and a wholly owned subsidiary of PubCo, the other Members set forth on Exhibit A to the LLC Agreement (collectively, the “Legacy Owners”) and each other Person who is or at any time becomes a Member in accordance with the terms of the LLC Agreement and the Act (such Persons, together with PubCo, Holdings, Investor I, Investor II, and the Legacy Owners, the “Unitholders”). Capitalized terms used but not defined herein shall have the meanings given to them in the LLC Agreement.

 

Effective as of the next Special Redemption Date as determined in accordance with the LLC Agreement, the undersigned Escrow Agent hereby transfers and surrenders to the Company the number of Class EX Units set forth below and an equal number of shares of Class C Common Stock subject to escrow in exchange for the issuance to ________ of that number of shares of Class A Common Stock equal to the number of Class EX Units to be redeemed, or, at the Company’s election under certain circumstances, cash to the account set forth below, in each case in accordance with the LLC Agreement. The undersigned hereby acknowledges that the redemption of Class EX Units shall include the cancellation of an equal number of outstanding shares of Class C Common Stock that have been surrendered in such Redemption.

 

Escrow Agent: ___________________________________

 

Address: __________________________________________________

 

B-5

 

 

Number of Class EX Units to be redeemed: ______________________

 

Cash payment instructions: ___________________________________

 

In the event the Company elects to certificate the shares of Class A Common Stock issued, please indicate the following:

 

Legal Name for Certificate Delivery: ___________________________

 

Address for Certificate Delivery: ______________________________

 

The undersigned acknowledges and agrees that, if the undersigned fails to provide a duly completed and signed IRS Form W-9, then the Redemption of Class EX Units (and corresponding shares of Class C Common Stock) will be subject to withholding as required by Sections 1445 and 1446(f) of the Code. The undersigned acknowledges and agrees that any required withholding may be paid by the Company and/or Pubco (or any of their Affiliates) by selling shares of Class A Common Stock that are otherwise transferrable pursuant to this notice and using the proceeds from such sale (net of any applicable offering costs) to pay such withholding taxes. If shares of Class A Common Stock are sold for such purposes, those shares will be treated as having been sold for an amount of cash equal to the fair market value thereof with such cash proceeds paid to the appropriate governmental authority and/or to cover offering costs on behalf of the undersigned. The undersigned agrees to indemnify Company, Pubco and their Affiliates for any amounts required to be withheld in connection with the Redemption pursuant to this notice and/or any offering costs associated with the sale of any shares of Class A Common Stock pursuant hereto, but only from funds subject to escrow.

 

The undersigned hereby irrevocably constitutes and appoints any officer of PubCo, as applicable, as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, solely to do any and all things and to take any and all actions necessary to effect the Redemption elected hereby.

 

[Signatures on Next Page]

 

B-6

 

 

IN WITNESS WHEREOF the undersigned has caused this Redemption Notice to be executed and delivered as of the date first set forth above.

 

  Escrow Agent
   
  By:
  Name:
  Title:

 

B-7

 

Exhibit 4.2

 

THIS WARRANT AND THE UNITS ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

 

WARRANT TO PURCHASE UNITS

 

Issuer: Sunlight Financial LLC (“Company”)

 

Number of Units: 7,000

 

Class of Units: Class A-3 Units

 

Exercise Price Per Unit: $691.90

 

Issue Date: February 27, 2021

 

Expiration Date: February 27, 2031

 

THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other good and valuable consideration, TECH CAPITAL LLC or its permitted assignees (including Technology Credit Union) (“Holder”) is entitled to purchase the number of fully paid and nonassessable Class A-3 Units of membership interest in Company (the “Units”) at the Exercise Price Per Unit set forth above, as the same may be from time to time adjusted pursuant to Article 2 hereof and subject to the provisions and upon the terms and conditions set forth in this Warrant.

 

ARTICLE 1
EXERCISE; CONVERSION

 

1.1            Method of Exercise. This Warrant is exercisable, in whole or in part, at any time and from time to time on or before the Expiration Date set forth above. Holder may exercise this Warrant by delivering a duly executed Notice of Exercise, in substantially the form attached as Appendix 1, to Company in accordance with Section 4.7. Unless this Warrant is automatically converting as set forth in Section 1.2, Holder shall also deliver to Company a check for the aggregate Exercise Price for Units being purchased.

 

1.2            Automatic Conversion. Upon the occurrence of the Transaction (as defined herein), this Warrant shall automatically, and without any further action by Company or Holder, convert into a warrant (the “Converted Warrant”) to acquire a number of Company’s Class EX Units and corresponding shares of the Class C Common Stock of Spartan Acquisition Corp. II (“Specified Company”) equal to (a) (i) the number of Units issuable pursuant to this Warrant, multiplied by (ii) the fair market value of each Unit as of the closing of the Transaction, divided by (b) the fair market value of Company’s Class EX Units and Specified Company’s Class C Common Stock as of the closing of the Transaction. Such rights shall be exercisable, subject to the terms of this Warrant otherwise applicable thereto by the delivery of a Notice of Exercise, in substantially the form attached as Appendix 1, to Company in accordance with Section 4.7. The Exercise Price for the Converted Warrant shall be equal to (a) the number of Units issuable pursuant to this Warrant, multiplied by (b) the Exercise Price Per Unit described above, divided by (c) the number of Class EX Units and corresponding shares of the Class C Common Stock of the Specified Company calculated pursuant to this Section 1.2.

 

1.3            Fair Market Value. If the Units are traded in a public market, the fair market value of the Units shall be the closing price of the Units reported for the applicable business day in the State of New York (“Business Day”) immediately before Holder delivers its Notice of Exercise to Company. If the Units are not traded in a public market, the Board of Directors (or comparable body) of Company (the “Board”) shall determine fair market value in its reasonable good faith judgment. The foregoing notwithstanding, if Holder advises the Board in writing that Holder disagrees with such determination, then Company and Holder shall promptly agree upon a reputable investment banking firm to undertake such valuation. If the valuation of such investment banking firm is more than ten percent (10%) greater than that determined by the Board, then all fees and expenses of such investment banking firm shall be paid by Company. In all other circumstances, such fees and expenses shall be paid by Holder.

 

     

 

 

1.4            Delivery of Joinder and New Warrant. Upon any exercise or conversion of this Warrant that results in Holder continuing to own this Warrant, the Converted Warrant and/or any equity interests of Company (each, a “Qualifying Warrant Event”), Holder shall automatically be bound by all of the terms and conditions of Company’s Fourth Amended and Restated Limited Liability Company Agreement, dated as of May 25, 2018, or any successor thereto (as amended, restated, supplemented or otherwise modified from time to time, the “Operating Agreement”), with respect to the Units acquired and, if not already a member of Company, shall be admitted as a member upon the delivery to Company of a duly executed counterpart signature page or joinder to the Operating Agreement, pursuant to which Holder agrees to be bound by the terms and conditions of the Operating Agreement, together with all other and additional documents and agreements reasonably requested by Company. In addition, upon any Qualifying Warrant Event, Holder shall promptly deliver to Company (a) a duly executed waiver unconditionally and irrevocably waiving all anti-dilution or other similar rights under the Operating Agreement in connection with the issuance of Units from time to time upon such exercise or conversion of this Warrant, and (b) a duly executed and enforceable proxy pursuant to which Holder agrees for the benefit of Company to vote from time to time all Units in a manner consistent with the votes cast, on a pro rata basis, by all of the other members of Company holding Class A-3 Units, so as to not influence or effect the votes otherwise cast, and Holder agrees to timely deliver to Company (i) any and all waivers of preemptive or other similar rights which the other holders of Class A-3 Units deliver or supply from time to time in connection with the issuance of Class A-3 Units on an arm’s length basis to third parties (“Approved Units”), and (ii) any and all waivers of anti-dilution or other similar rights which the other holders of Class A-3 Units deliver or supply from time to time in connection with the issuance of any securities of Company on an arm’s length basis to third parties. Holder hereby irrevocably appoints the Board and any officers of Company or other individuals appointed by the Board as its true and lawful attorney-in-fact, with full power of substitution, to make, execute and sign, on its behalf, any and all waivers of preemptive, anti-dilution and other similar rights referred to in the preceding sentence. Promptly after the exercise or conversion of this Warrant, if this Warrant has not been fully exercised or converted and has not expired, Company shall deliver to Holder a new Warrant representing Units and other equity interests not so acquired (including pursuant to Section 1.2 above). As of the Issue Date, the Units are uncertificated, but in the event the Units become certificated at some time in the future, promptly after Holder exercises or converts this Warrant, Company shall deliver to Holder certificates for Units acquired.

 

1.5            Replacement of Warrants. On receipt of evidence reasonably satisfactory to Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to Company or, in the case of mutilation, on surrender and cancellation of this Warrant, Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

 

1.6            Sale, Merger or Consolidation of Company. For the purpose of this Warrant, (a) “Acquisition” means any sale, license, or other disposition of all or substantially all of the assets of Company, or any reorganization, consolidation, or merger of Company where the holders of Company’s securities before the transaction beneficially own less than fifty percent (50%) of the outstanding voting securities of the surviving entity after such transaction, (b) “Specified Transaction” means the business combination more particularly described in that certain Form 8-K filed by Specified Company with the U.S. Securities and Exchange Commission (the “SEC”) on or around January 25, 2021 (the “Transaction Filing”) and (c) “Transaction” means the Specified Transaction and any Acquisition. Except as expressly provided in Section 2.1, upon the closing of any Transaction, the successor entity shall assume the obligations of this Warrant, and this Warrant shall be exercisable for the same securities, cash, and property as would be payable for Units issuable upon exercise of the unexercised portion of this Warrant as if such Units were outstanding on the record date for such Transaction and any subsequent closing, and the Exercise Price shall be adjusted accordingly; provided that if pursuant to such Transaction the entire outstanding class of Units issuable upon exercise of the unexercised portion of this Warrant are cancelled and the total consideration payable to the holders of such class of Units consists entirely of cash, then, upon payment to the holder of this Warrant of an amount equal to the amount such holder would receive if such holder held Units issuable upon exercise of the unexercised portion of this Warrant and such Units were outstanding on the record date for the Transaction less the aggregate Exercise Price of such Units, this Warrant shall be cancelled.

 

     

 

 

1.7            Automatic Cashless Exercise Upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Unit (or other security issuable upon any exercise or conversion hereof) as determined in accordance with Section 1.3 is greater than the Exercise Price in effect on the Expiration Date, then this Warrant shall automatically be deemed on and as of the Expiration Date to be converted pursuant to Section 1.2 as to all Units (or such other securities) for which it shall not previously have been exercised or converted, and, if the Units (or such other securities) are certificated, Company shall, within a reasonable time, deliver a certificate representing the Units (or such other securities) issued upon such conversion to Holder; provided, however, that Company shall have no obligation to deliver any such certificate or to recognize Holder as the owner of such Units unless Holder shall, within one hundred eighty (180) days thereafter or within thirty (30) days after demand therefor by Company, whichever is earlier, have executed and delivered to Company such other and additional documents (other than notice of exercise) as are otherwise required hereunder in connection with or as a condition to exercise of this Warrant, and in the event that Holder fails to do so this Warrant will be deemed to have terminated without exercise due to a failure of a condition subsequent to exercise.

 

ARTICLE 2
ADJUSTMENTS

 

2.1            Dividends, Splits, Etc. If Company declares or pays a dividend or distribution on the Units payable in units or other securities or property, subdivides the outstanding units into a greater amount of units, or subdivides the Units in a transaction that increases the amount of units into which such Units are convertible, then upon exercise of this Warrant, for each Unit acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned Units on the record date the dividend or subdivision occurred since the original issue date of this Warrant; provided, however, that this Section 2.1 shall not apply to any Class A Preferred PIK Distribution (as defined in the Operating Agreement) and Holder shall have no right to receive any Class A Preferred PIK Distribution made prior to any exercise or conversion of this Warrant.

 

2.2            Reclassification, Recapitalization, Exchange or Substitution. Except in the case of a Transaction to which Section 1.6 is applicable, upon any reclassification, recapitalization, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon any exercise or conversion of this Warrant, Holder shall be entitled to receive, upon such exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for Units if this Warrant had been exercised immediately before such reclassification, recapitalization, exchange, substitution, or other event. Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Exercise Price and to the number of securities or property issuable upon exercise of the new Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, recapitalizations, exchanges, substitutions or other events.

 

2.3            Adjustments for Combinations, Etc. If the outstanding Units are combined or consolidated, by reclassification or otherwise, into a lesser number of units, the Exercise Price shall be proportionately increased and the number of Units as to which this Warrant is exercisable shall be proportionately decreased.

 

2.4            Adjustments for Diluting Issuances. In the event of the issuance by Company, after the Issue Date, of any Units at a price per unit less than the then Exercise Price, then the Exercise Price shall automatically be adjusted to such lower price; provided, however, that this Section 2.4 shall not apply to the issuance by Company of any Class A Units in connection with a Class A Preferred PIK Distribution or any other Excluded Units (as defined in the Operating Agreement) or any Approved Units.

 

     

 

 

2.5            Adjustment for Pay-to-Play Transactions. In the event that the Operating Agreement provides, or is amended to so provide, for the amendment or modification of the rights, preferences or privileges of the Units, or the reclassification, conversion or exchange of the outstanding Units, in the event that a holder of units thereof fails to participate in an equity financing transaction (a “Pay-to-Play Provision”), and in the event that such Pay-to-Play Provision becomes operative in a transaction occurring after the Issue Date, this Warrant shall automatically and without any action required become exercisable for that number and type of units of equity securities as would have been issued or exchanged, or would have remained outstanding, in respect of the Units issuable hereunder had this Warrant been exercised in full prior to such event, and had Holder participated in the equity financing to the maximum extent permitted.

 

2.6            No Impairment. Company shall not, by amendment of its Certificate of Formation or the Operating Agreement, or through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by Company, but shall at all times in good faith assist in carrying out of all the provisions of this Article 2 and in taking all such action as may be necessary or appropriate to protect Holder’s rights under this Article 2 against impairment. If Company takes any action affecting Units as described above that adversely affects Holder’s rights under this Warrant, the Exercise Price shall be adjusted downward and the number of Units issuable upon exercise of this Warrant shall be adjusted upward in such a manner that such action is offset and the aggregate Exercise Price of this Warrant is unchanged.

 

2.7            Fractional Units. No fractional Units shall be issuable upon any exercise or conversion of this Warrant and the number of Units to be issued shall be rounded down to the nearest whole Unit. If a fractional unit interest arises upon any exercise or conversion of this Warrant, Company shall eliminate such fractional unit interest by paying Holder an amount computed by multiplying the fractional interest by the fair market value of a full Unit.

 

2.8            Certificate as to Adjustments. Upon each adjustment of the Exercise Price, Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. Company shall, upon written request, furnish Holder a certificate setting forth the Exercise Price in effect upon the date thereof and the series of adjustments leading to such Exercise Price.

 

ARTICLE 3

REPRESENTATIONS, WARRANTIES AND COVENANTS OF COMPANY

 

3.1            Representations and Warranties. Company hereby represents and warrants to Holder as follows: (a) the initial Exercise Price referenced on the first page of this Warrant is not greater than the fair market value of the Units as of the Issue Date; (b) all Units which may be issued upon the exercise of the purchase right represented by this Warrant, and all securities, if any, issuable upon any conversion of the Units, shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws; and (c) Company’s capitalization table attached to this Warrant as Appendix 2 is true and complete in all material respects as of the Issue Date.

 

3.2            Valid Issuance. Company shall take all steps necessary to insure that all Units which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon any conversion of the Units, shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.

 

     

 

 

3.3            Notice of Certain Events. If Company proposes at any time: (a) to declare any dividend or distribution upon the Units, whether in cash, property, stock, or other securities and whether or not a regular cash dividend (other than any Class A Preferred PIK Distributions or any Tax Distributions, each as defined in the Operating Agreement); (b) to offer for subscription pro rata to the holders of any class or series of its units any additional units of any class or series or other rights; (c) to effect any reclassification or recapitalization of the units; (d) to consummate any Transaction or merge or consolidate with or into any other entity, or sell, lease, license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up; or (e) offer holders of registration rights the opportunity to participate in an underwritten public offering of Company’s securities for cash, then, in connection with each such event, Company shall give Holder (i) in the case of the matters referred to in (a) and (b) above at least twenty (20) days’ prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the unitholders will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (c) and (d) above; (ii) in the case of the matters referred to in (c) and (d) above at least twenty (20) days’ prior written notice of the date when the same will take place (and specifying the date on which the unitholders will be entitled to exchange their units for securities or other property deliverable upon the occurrence of such event); and (iii) in the case of the matter referred to in (e) above, the same notice as is given to the holders of such registration rights.

 

3.4            Information. So long as Holder holds this Warrant and/or any of the Units, Company shall deliver to Holder (a) promptly, copies of all notices or other written communications to which Holder would be entitled if it held Units as to which this Warrant is then exercisable and (b) within sixty (60) days after the end of each of the first three (3) quarters of each fiscal year, Company’s quarterly, unaudited financial statements and within one hundred eighty (180) days after the end of each fiscal year, Company’s annual, audited financial statements; provided, however, that Company shall not be obligated to deliver to Holder such financial statements to the extent such financial statements are filed with the SEC and publicly available.

 

ARTICLE 4
MISCELLANEOUS

 

4.1            Legends. As of the Issue Date, the Units (and the securities issuable, directly or indirectly, upon any conversion of Units, if any) are uncertificated, but in the event the Units (or the securities issuable, directly or indirectly, upon any conversion of Units, if any) become certificated at some time in the future, then each certificate representing the Units (or the securities issuable, directly or indirectly, upon conversion of Units, if any) shall be imprinted with a legend substantially in the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

 

4.2            Compliance with Securities Laws on Transfer. This Warrant and the Units issuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon any conversion of Units, if any) may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to Company, as reasonably requested by Company), and compliance with the terms of the Operating Agreement or other organizational documents governing or pursuant to which the Units (and the securities issuable, directly or indirectly, upon any conversion of Units, if any) are issued, including any restriction on transfer of the Units or such securities.

 

     

 

 

4.3            Transfer Procedure. Subject to compliance with the provisions of Section 4.2 and upon providing Company with written notice, Holder may transfer all or part of this Warrant or the Units issuable upon exercise of this Warrant (or the securities issuable, directly or indirectly, upon any conversion of Units, if any) to any transferee (including Technology Credit Union), provided, however, that in connection with any such transfer, Holder will give Company notice of the portion of this Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to Company for reissuance to the transferee(s) (and Holder if applicable). Notwithstanding the foregoing, unless Company is filing financial information with the SEC pursuant to the Securities Exchange Act of 1934, as amended, Holder may not, without Company’s prior written consent, transfer this Warrant or any portion hereof to any person or entity who directly competes with Company, except in connection with (a) an Acquisition of Company by such a direct competitor or (b) a merger, acquisition, sale or reorganization involving Holder, or the sale/disposition of all or a portion of Holder’s assets or its portfolio.

 

4.4            Notices. All notices and other communications from Company to Holder, or vice versa, shall be in writing and shall be deemed delivered and effective when given personally or mailed by first- class registered or certified mail, postage prepaid, or by overnight courier, at such address as may have been furnished to Company or Holder, as the case may be, in writing by Company or such Holder from time to time.

 

4.5            Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable and documented attorneys’ fees.

 

4.6            Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

 

4.7            Notices. All notices and other communications hereunder from Company to Holder, or vice versa, shall be deemed delivered and effective (a) when given personally, (b) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient or (c) on the first Business Day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, in any case at such address as may have been furnished to Company or Holder, as the case may be, in writing by Company or Holder from time to time in accordance with the provisions of this Section 4.7. All notices to Holder shall be addressed as follows until Company receives notice of a change of address in connection with a transfer or otherwise:

 

Tech Capital LLC

2010 North First Street, Suite 200
San Jose, CA 95131

Attn: Richard Hanz

Email: rhanz@techcu.com

 

All notices to Company shall be addressed as follows until Holder receives notice of a change in address:

 

Sunlight Financial LLC

234 W 39th St., 7th Floor

New York, NY 10018

Attn: General Counsel

Email: notices@sunlightfinancial.com

 

4.8            Holder Investment Representations. Holder makes the representations to Company set forth in Appendix 3 hereof in connection with the issuance of this Warrant and the Units (or the securities issuable, directly or indirectly, upon any conversion of Units, if any).

 

[signature page follows]

 

     

 

 

IN WITNESS WHEREOF, Company has caused this Warrant to be duly executed by its authorized officer, all as of the day and year first above written.

 

  Company:
     
  SUNLIGHT FINANCIAL LLC
     
  By: /s/ Barry Edinburg
  Name: Barry Edinburg
  Title: CFO

 

     

 

 

APPENDIX 1

 

Notice of Exercise

 

1.            The undersigned hereby elects to purchase Class A-3 Units of Sunlight Financial LLC pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such Class A-3 Units in full.

 

2.            If the Class A-3 Units are certificated, please issue a certificate or certificates representing said Class A-3 Units in the name of the undersigned or in such other name as is specified below:

 

Name:  
Address:  

 

3.            The undersigned represents it is acquiring the Class A-3 Units solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws.

 

   
  (Signature)
   
  (Date)

 

     

 

 

APPENDIX 2

 

Capitalization Table

 

See attached.

 

     

 

 

APPENDIX 3

 

Investment Representations

 

(a)            Holder is aware of Company’s business affairs and financial condition, and has acquired sufficient information about Company to reach an informed and knowledgeable decision to acquire the Warrant and the Units issuable upon any exercise or conversion thereof (collectively with the securities issuable, directly or indirectly, upon any conversion of Units, if any, the “Securities”). Holder is purchasing the Securities for its own account for investment purposes only, not as a nominee or agent, and not with a view towards, or for resale in connection with, any “distribution” thereof for purposes of the Securities Act of 1933, as amended (the “Securities Act”). Holder has such knowledge and experience in financial business matters and is capable of evaluating the merits and risks of the purchase of the Securities and of protecting its interests in connection therewith.

 

(b)            Holder understands that the Securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Holder’s investment intent as expressed herein.

 

(c)            Holder further understands that the Securities must be held indefinitely, and the undersigned must therefore bear the economic risk therewith, unless the Securities are subsequently registered under the Securities Act or unless an exemption from registration is otherwise available. In addition, Holder understands that any certificates evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required.

 

(d)            Holder is familiar with the provisions of Rule 144, promulgated pursuant to the Securities Act, which, in substance, permits limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions.

 

(e)            The Securities may be resold in certain limited circumstances subject to the provision of Rule 144, which requires, among other things, the existence of a public market for the Securities, the availability of certain current public information about Company, the resale occurring not less than one year after a party has purchased and paid for the security to be sold, the sales being effected through a “broker’s transaction” or in transactions directly with a “market maker” and the number of securities being sold during any three-month period not exceeding specified limitations. Holder further understands that in the event that all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act or compliance with a registration exemption will be required.

 

(f)            Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

 

     

 

Exhibit 4.3

 

AMENDMENT NO. 1
TO

WARRANT TO PURCHASE UNITS

 

This Amendment No. 1 (this “Amendment”) to Warrant to Purchase Units is entered into and effective as of July 8, 2021 by Sunlight Financial LLC, a Delaware limited liability company (the “Company”), and Tech Capital LLC or its permitted assignees (the “Holder”), and constitutes an amendment to that certain Warrant to Purchase Units, dated February 27, 2021 (the “Original Warrant”), by and between the Company and the Holder. Capitalized terms used but not defined herein have the meanings ascribed to them in the Original Warrant.

 

RECITALS

 

WHEREAS, on February 27, 2021, the Company issued to the Holder the Original Warrant;

 

WHEREAS, Spartan Acquisition Corp. II (the “Acquiror”) and certain affiliates as well as the Company and certain of its equity holders entered into that certain Business Combination Agreement, dated January 23, 2021 (the “Business Combination Agreement”), pursuant to which, among other things, upon the closing of the Company’s business combination with Acquiror pursuant to the Business Combination Agreement (the “Closing”), the membership interests in the Company owned by the Unblocked Company Unitholders (as defined in the Business Combination Agreement) will be exchanged for a number of units representing limited liability company interests in Sunlight designated as Class EX Units (the “Class EX Units”) and a corresponding number of shares of Acquiror Class C Common Stock (as defined in the Business Combination Agreement) (the “Class C Common Stock”), and will have received the amount of the Company Cash Consideration (as defined in the Business Combination Agreement), in each case in the amounts to be set forth in the Final Payment Spreadsheet (as defined in the Business Combination Agreement);

 

WHEREAS, the Original Warrant entitles the Holder upon exercise to receive from the Company 7,000 of Class A-3 Units of the Company (the “Company Class A-3 Units”), representing membership interests in the Company, at an exercise price of $691.90 per Class A-3 Unit;

 

WHEREAS, upon the consummation of the Business Combination pursuant to the Business Combination Agreement, the Original Warrant shall automatically convert into a warrant (the “Converted Warrant”) to acquire a number of the Class EX Units and corresponding shares of Class C Common Stock as described in Section 1.2 of the Original Warrant and the Company and the Holder desire to amend the Original Warrant to specify such number of units and to specify the related exercise price per unit;

 

WHEREAS, the Company and the Holder desire to amend the Original Warrant to provide that, following the exercise after the Closing (as defined in the Business Combination Agreement) by the Holder of the Converted Warrant, in lieu of receiving Company Class EX Units and a corresponding number of shares of Class C Common Stock, the Holder will receive the same number of shares of Acquiror’s Class A Common Stock as the Holder would have received upon an exercise before giving effect to this Amendment (the “Class A Common Stock”);

 

     

 

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree to amend the Original Warrant as follows:

 

1.            Amendment of Original Warrant. The Original Warrant shall be amended as follows, without any further action required by any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, government or department or agency thereof or any other entity (a “Person”):

 

a.            The information at the top of the Original Warrant is hereby amended and restated in its entirety as follows:

 

Issuer: Sunlight Financial LLC (“Company”) and Sunlight Financial Holdings Inc. (“PubCo”)

 

Number of Units: 627,780

 

Class of Units: Class EX Units of the Company (“Class EX Units”) and Class C Common Stock of PubCo (“Class C Common Stock”)

 

Exercise Price Per Unit: $7.715

 

Issue Date: June 8, 2021

 

Expiration Date: February 27, 2031

 

b.            Article 4 of the Original Warrant is hereby amended to add a new Section 4.9 at the end thereof as follows:

 

4.9 Consummation of Specified Transaction. If the Specified Transaction is not consummated by July 22, 2021, this Amendment will be deemed void ab initio and of no further force and effect, with the Original Warrant automatically reverting to its prior iteration without any additional action required by either the Company or the Holder, and the Holder will be entitled upon exercise of the Original Warrant to receive from the Company 7,000 of Company Class A-3 Units, at an exercise price of $691.90 per Class A-3 Unit.

 

c.            Appendix 1 is hereby amended and restated in its entirety as follows:

 

Notice of Exercise

 

1.            The undersigned hereby elects to purchase          Class EX Units and         shares of Class C Common Stock pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such Class EX Units and Class C Common Stock in full.

 

     

 

 

2.            If the Class EX Units or Class C Common Stock are certificated, please issue a certificate or certificates representing said Class EX Units or Class C Common Stock in the name of the undersigned or in such other name as is specified below:

 

Name:  
   
Address:  

 

3.            The undersigned represents that it is acquiring the Class EX Units and Class C Common Stock solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws.

 

4.            The undersigned hereby acknowledges and accepts that the Class EX Units and Class C Common Stock that the Holder will receive upon exercise of the Warrant will immediately be exchanged for and converted into Class A Common Stock of PubCo, with no further action required by the Holder.

 

   
  (Signature)
   
  (Date)

 

2.            Agreement in Effect. Except as amended by this Amendment, the Original Warrant shall remain in full force and effect.

 

3.            Applicable Law. This Amendment shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of laws.

 

4.            Severability. Each provision of this Amendment shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Amendment that are valid, enforceable and legal.

 

5.            Counterparts. This Amendment may be executed in any number of facsimile or other electronic transmission (including portable document format (*pdf)), and any such executed facsimile or electronic copy shall be treated as an original, and all such counterparts shall together constitute but one and the same instrument.

 

     

 

 

6.            Entire Agreement. The Original Warrant, as amended by this Amendment, constitutes the entire understanding of the parties and supersedes all prior agreements, understandings, arrangements, promises and commitments, whether written or oral, express or implied, relating to the subject matter hereof, and all such prior agreements, understandings, arrangements, promises and commitments are hereby cancelled and terminated.

 

[Signature Pages Follow]

 

     

 

 

IN WllNESS WHEREOF, each of the parties has caused this Amendment to be duly executed as of the date first above written.

 

  COMPANY:
     
  SUNLIGHT FINANCIAL LLC
     
  By: /s/ Barry Edinburg
  Name: Barry Edinburg
  Title: Chief Financial Officer
     
  HOLDER:
     
  TECH CAPITAL LLC
     
  By: /s/ Joe Anzalone
  Name: Joe Anzalone
  Title: Managing Director

 

     

 

Exhibit 10.13

 

[***] = Certain marked information has been omitted from this exhibit because it is both not material and is the type that the registrant treats as private or confidential.

  

TAX RECEIVABLE AGREEMENT

 

This TAX RECEIVABLE AGREEMENT (this “Agreement”), dated as of July 9, 2021, is hereby entered into by and among Sunlight Financial Holdings Inc., a Delaware corporation (the “Corporate Taxpayer”), the TRA Holders, and the Agent.

 

RECITALS

 

WHEREAS, the Corporate Taxpayer is the sole owner of SL Financial Holdings Inc., a Delaware Corporation (“Holdings” and together with the Corporate Taxpayer and their wholly owned subsidiaries, the “Corporate Taxpayer Group”), and a member of a group filing a consolidated income Tax Return pursuant to Sections 1501 et seq. of the Code of which the Corporate Taxpayer is the parent;

 

WHEREAS, Holdings is the managing member, and holds, directly and indirectly, Class X Units of Sunlight Financial LLC, a Delaware limited liability company (“Sunlight Financial LLC”), an entity classified as a partnership for U.S. federal income tax purposes;

 

WHEREAS, Sunlight Financial LLC will have in effect an election under Section 754 of the Code, for each Taxable Year in which a Redemption occurs;

 

WHEREAS, each Blocked TRA Holder previously held membership interests of Sunlight Financial LLC indirectly through a Blocker, and, pursuant to the Blocker Mergers (as defined in the BCA), each Blocker became a wholly owned subsidiary of the Corporate Taxpayer;

 

WHEREAS, each of the Unblocked TRA Holders held membership interests in Sunlight Financial LLC, and pursuant to the OpCo Merger (as defined in the BCA), after the BCA Date, hold Class EX Units that may be transferred to Sunlight Financial LLC or the Corporate Taxpayer Group in one or more Redemptions (as defined herein), and as a result of such Redemptions, the Corporate Taxpayer Group is expected to obtain or be entitled to certain tax benefits as further described herein;

 

WHEREAS, this Agreement is intended to set forth the agreement among the parties hereto regarding the sharing of the tax benefits realized by the Corporate Taxpayer Group as a result of the Redemptions;

 

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

 

ARTICLE I 

DEFINITIONS

 

Section 1.1      Definitions. As used in this Agreement, the terms set forth in this Article I shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

 

Accrued Amount” has the meaning set forth in Section 3.1(b) of this Agreement.

 

Acquired Interests” means the equity of the Blockers and the membership interests of Sunlight Financial LLC acquired, directly or indirectly, by the Corporate Taxpayer Group pursuant to the transactions contemplated by the Business Combination Agreement.

 

Actual Tax Liability” means, with respect to any Taxable Year, the actual liability for U.S. federal income Taxes of (i) the Corporate Taxpayer Group, and (ii) without duplication, Sunlight Financial LLC, but only with respect to Taxes imposed on Sunlight Financial LLC and allocable to the Corporate Taxpayer Group; provided that the actual liability for U.S. federal income Taxes of the Corporate Taxpayer Group shall be calculated assuming deductions of (and other impacts of) state and local income and franchise Taxes are excluded.

 

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.

 

 

 

 

Agent” means a “Big Four” accounting firm or similar national accounting firm, or such independent Person selected by a Supermajority TRA Holders; or such other Person designated as such pursuant to Section 7.6(b).

 

Agreed Rate” means the Benchmark plus 100 basis points.

 

Agreed Tax Treatment” has the meaning set forth in Section 6.2 of this Agreement.

 

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

 

Amended Schedule” has the meaning set forth in Section 2.3(b) of this Agreement.

 

Assumed State and Local Tax Rate” means, with respect to any Taxable Year, (i) the sum of the following amounts for each state and local jurisdiction in which Sunlight Financial LLC (or any of its direct or indirect subsidiaries that are treated as a partnership or disregarded entity) or the Corporate Taxpayer Group files an income or franchise tax return for the relevant Taxable Year: (A) the Corporate Taxpayer Group’s income and franchise tax apportionment factor(s) for such applicable state or local jurisdiction, multiplied by (B) the highest corporate income and franchise tax rate(s) for such state or local jurisdiction, reduced by (ii) the product of (A) the highest marginal U.S. federal income tax rate applicable to the Corporate Taxpayer Group for the relevant Taxable Year (determined based on the calculation of the Hypothetical Tax Liability for the relevant Taxable Year) and (B) the aggregate rate calculated under clause (i).

 

Basis Adjustment” means any adjustment to the Tax basis of a Reference Asset as a result of a Redemption or any Iterative Payment (as calculated under Section 2.1 of this Agreement), including, but not limited to: (i) under Sections 734(b) and 743(b) of the Code (including in situations where, following a Redemption, Sunlight Financial LLC remains classified as a partnership for U.S. federal income tax purposes); and (ii) under Sections 732(b) and 1012 of the Code (in situations where, as a result of one or more Redemptions, Sunlight Financial LLC becomes an entity that is disregarded as separate from its owner for U.S. federal income tax purposes). For the avoidance of doubt, the amount of any Basis Adjustment resulting from a Redemption of Class EX Units shall be determined without regard to any Section 743(b) adjustment attributable to such Class EX Units prior to such Redemption, and further, payments made under this Agreement shall not be treated as resulting in a Basis Adjustment to the extent such payments are treated as Imputed Interest.

 

BCA Date” means the Closing Date as defined in the Business Combination Agreement.

 

Benchmark” means SOFR. If SOFR ceases to be published in accordance with the definition thereof or otherwise is not available, the Corporate Taxpayer and the Agent shall work together in good faith to select an alternate Benchmark with similar characteristic that gives due consideration to the prevailing market conventions for determining rates of interest in the United States at such time.

 

Blockers” means FTV-Sunlight, Inc. and Tiger Co-Invest B Sunlight Blocker LLC.

 

Blocked TRA Holders” means FTV V, LP, a Delaware limited partnership and Tiger Infrastructure Partners Co-Invest B LP, a Delaware limited partnership.

 

Board” means the board of directors of the Corporate Taxpayer.

 

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 be closed.

 

Business Combination Agreement” or “BCA” means the Business Combination Agreement, dated January 23, 2021, by and among the Corporate Taxpayer (formerly known as Spartan Acquisition Corp. II, SL Invest I Inc., SL Invest II LLC, SL Financial Investor I LLC, SL Financial Investor II LLC, SL Financial Holdings Inc., SL Financial LLC, Sunlight Financial LLC, FTV-Sunlight, Inc., and Tiger Co-Invest B Sunlight Blocker LLC.

 

2

 

 

Call Right” has the meaning set forth in the Sunlight Financial LLC Agreement.

 

Change of Control” means the occurrence of any of the following events or series of related events after the BCA Date:

 

(i) any Person (excluding a corporation or other entity owned, directly or indirectly, by the stockholders of the Corporate Taxpayer in substantially the same proportions as their ownership of stock of the Corporate Taxpayer) is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the rules promulgated under the Exchange Act), directly or indirectly, of securities of the Corporate Taxpayer representing more than 50% of the combined voting power of the Corporate Taxpayer’s then outstanding voting securities;

 

(ii) there is consummated a merger or consolidation of the Corporate Taxpayer with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (A) the members of the Board immediately prior to the merger or consolidation do not constitute at least a majority of the members of the board of directors of the company surviving the merger, or if the surviving company is a Subsidiary, the ultimate parent thereof, or (B) all of the Persons who were the respective “beneficial owners” (as defined above) of the voting securities of the Corporate Taxpayer immediately prior to such merger or consolidation do not continue to beneficially own more than 50% of the combined voting power of the then-outstanding voting securities of the Person resulting from such merger or consolidation or, if the surviving company is a Subsidiary, the ultimate parent thereof; or

 

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

 

Notwithstanding the foregoing, except with respect to clause (ii)(A) above, 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 shares of the Corporate Taxpayer immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in, and own substantially all of the shares of, an entity which owns, either directly or through a Subsidiary, all or substantially all of the assets of the Corporate Taxpayer immediately following such transaction or series of transactions.

 

Class A Shares” means shares of Class A common stock of the Corporate Taxpayer.

 

Class EX Units” has the meaning set forth in the Sunlight Financial LLC Agreement (and, for the avoidance of doubt, refers only to those Class EX Units held after giving effect to the transactions contemplated by the Business Combination Agreement and not to any Acquired Interests).

 

Class X Units” has the meaning set forth in the Sunlight Financial LLC Agreement.

 

Code” means the Internal Revenue Code of 1986, as amended (or any successor U.S. federal income Tax statute).

 

Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

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

 

Corporate Taxpayer Group” has the meaning set forth in the Recitals of this Agreement.

 

3

 

 

Corporate Taxpayer Return” means the U.S. federal income Tax Return of the Corporate Taxpayer (including the Corporate Taxpayer Group or any other consolidated group of which the Corporate Taxpayer is a member, as further described in Section 7.12(a) of this Agreement) filed with respect to any Taxable Year.

 

Cumulative Net Realized Tax Benefit” for a Taxable Year means the cumulative amount (but not less than zero) of Realized Tax Benefits for all Taxable Years of the Corporate Taxpayer Group, 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 Payment Schedule or Amended Schedule, if any, in existence at the time of such determination.

 

Default Rate” means the Benchmark plus 400 basis points.

 

Determination” has the meaning ascribed to such term in Section 1313(a) of the Code or any other event (including the execution of IRS Form 870-AD) that finally and conclusively establishes the amount of any liability for Tax.

 

Dispute” has the meaning set forth in Section 7.9(a) of this Agreement.

 

Early Termination” has the meaning set forth in Section 4.1 of this Agreement.

 

Early Termination Date” means the date of an Early Termination Notice, or the date on which the Early Termination Notice is deemed to have been delivered pursuant to Section 4.2 or Section 4.3, for purposes of determining the Early Termination Payment.

 

Early Termination Effective Date” has the meaning set forth in Section 4.4 of this Agreement.

 

Early Termination Notice” has the meaning set forth in Section 4.4 of this Agreement.

 

Early Termination Payment” has the meaning set forth in Section 4.5(b) of this Agreement.

 

Early Termination Rate” means the Benchmark plus 100 basis points.

 

Early Termination Schedule” has the meaning set forth in Section 4.4 of this Agreement.

 

Exchange Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, as the same may be amended from time to time (or any corresponding provisions of succeeding law).

 

Expert” means such nationally recognized expert in the particular area of disagreement as is mutually acceptable to the Corporate Taxpayer and the Agent.

 

Holdings” has the meaning set forth in the Recitals of this Agreement.

 

Hypothetical Tax Liability” means, with respect to any Taxable Year, the liability for U.S. federal income Taxes of (i) the Corporate Taxpayer Group, and (ii) without duplication, Sunlight Financial LLC, but only with respect to Taxes imposed on Sunlight Financial LLC and allocable to the Corporate Taxpayer Group (using the same methods, elections, conventions, U.S. federal income tax rate and similar practices used on the relevant Corporate Taxpayer Return), but without taking into account (A) any Basis Adjustments, (B) any deduction attributable to Imputed Interest for the Taxable Year and (C) any Post-BCA TRA Benefits. For the avoidance of doubt, Hypothetical Tax Liability shall be determined without taking into account the carryover or carryback of any U.S. federal income Tax item (or portions thereof) that is attributable to any Basis Adjustments, Imputed Interest or any Post-BCA TRA Benefits. Furthermore, the Hypothetical Tax Liability shall be calculated assuming deductions of (and other impacts of) state and local income and franchise Taxes are excluded.

 

Imputed Interest” means any interest imputed under Section 1272, 1274 or 483 or other provision of the Code, and the principles of any similar provisions of state or local law, with respect to the Corporate Taxpayer’s payment obligations under this Agreement.

 

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

 

Iterative Payment” means any payment made under this Agreement (including any Accrued Amount, but other than amounts accounted for as Imputed Interest) to an Unblocked TRA Holder.

 

Material Objection Notice” ha