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):
November 12, 2014
ENOVA INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware | 1-35503 | 45-3190813 | ||
(State of incorporation) | (Commission File No.) | (IRS Employer Identification No.) |
200 West Jackson Boulevard
Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: (312) 568-4200
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)) |
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
As previously announced, at 12:01 Eastern Time on November 13, 2014 Cash America International, Inc. (Cash America) completed the distribution of 80 percent of the outstanding shares of Enova International, Inc. (Enova) to Cash Americas shareholders in a tax-free distribution (the Spin-off). Cash America distributed to its shareholders 0.915 shares of Enova common stock for every one share of Cash Americas common stock held as of the close of business on November 3, 2014, which was the record date for the Spin-off. Fractional shares of Enova common stock were not distributed. Any fractional shares of Enova common stock were aggregated and sold in the open market, and the aggregate net proceeds of the sales were distributed ratably in the form of cash payments to Cash Americas shareholders of record who were otherwise entitled to receive a fractional share of Enova common stock. As a result of the Spin-off, Enova is now an independent public company, and its common stock is listed on the New York Stock Exchange under the ticker symbol ENVA.
In connection with the Spin-off, on November 12, 2014, Cash America and Enova entered into various agreements to effect the separation and to provide a framework for Cash Americas relationship with Enova after the Spin-off, including the following agreements:
| Separation and Distribution Agreement; |
| Tax Matters Agreement; |
| Transition Services Agreement; |
| Stockholders and Registration Rights Agreement; and |
| Software Lease and Maintenance Agreement. |
A summary of certain material features of the agreements can be found in the section entitled Certain Relationships and Related Party TransactionsAgreements Between Us and Cash America in Enovas Information Statement, filed as Exhibit 99.1 to Enovas Current Report on Form 8-K furnished on October 30, 2014 (the Information Statement), which section is incorporated herein by reference. The summary is qualified in its entirety by reference to the complete terms and conditions of each of the Separation and Distribution Agreement, Tax Matters Agreement, Transition Services Agreement, Stockholders and Registration Rights Agreement and Software Lease and Maintenance Agreement attached hereto as Exhibit 2.1, Exhibit 10.1, Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4, respectively, which are incorporated herein by reference.
ITEM 5.01 CHANGES IN CONTROL OF THE REGISTRANT
See Item 1.01 for a description of the Spin-off.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR
On November 13, 2014, in connection with the Spin-off, Enova amended and restated its Certificate of Incorporation (the Amended Certificate) and its Bylaws (the Amended Bylaws). A summary of the material provisions of each of the Amended Certificate and the Amended Bylaws is included under the section Description of Capital Stock in the Information Statement, which section is incorporated herein by reference. The summary is qualified in its entirety by reference to the full text of each of the Amended Certificate and Amended Bylaws, which are filed as Exhibit 3.1 and Exhibit 3.2, respectively, and are incorporated herein by reference.
ITEM 5.05 AMENDMENTS TO THE REGISTRANTS CODE OF ETHICS, OR WAIVER OF A PROVISION OF THE CODE OF ETHICS
In connection with the Spin-off, effective November 13, 2014, Enova adopted the Enova International, Inc. Code of Business Conduct and Ethics (the Code of Conduct). A copy of the Code of Conduct is available under the Investor Relations section of Enovas website, http://ir.enova.com, and is filed as Exhibit 14.1 to this Current Report on Form 8-K and incorporated herein by reference.
ITEM 8.01 OTHER EVENTS
In connection with the Spin-off, effective November 13, 2014, Enova adopted the Enova International, Inc. Corporate Governance Guidelines. A copy of Enovas Corporate Governance Guidelines is available under the Investor Relations section of its website, http://ir.enova.com, and is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) | Exhibits |
Exhibit No. |
Description |
|
2.1 | Separation and Distribution Agreement between Cash America International, Inc. and Enova International, Inc. | |
3.1 | Enova International, Inc. Amended and Restated Certificate of Incorporation | |
3.2 | Enova International, Inc. Amended and Restated Bylaws | |
10.1 | Tax Matters Agreement between Cash America International, Inc. and Enova International, Inc. | |
10.2 | Transition Services Agreement between Cash America International, Inc. and Enova International, Inc. | |
10.3 | Stockholders and Registration Rights Agreement between Cash America International, Inc. and Enova International, Inc. | |
10.4 | Software Lease and Maintenance Agreement between Cash America International, Inc. and Enova International, Inc. | |
14.1 | Enova International, Inc. Code of Business Conduct and Ethics | |
99.1 | Enova International, Inc. Corporate Governance Guidelines |
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This report contains forward-looking statements about the business, financial condition, operations and prospects of Enova. The actual results of Enova could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties including, without limitation: the effect of, compliance with or changes in domestic and foreign consumer credit, tax and other laws and governmental rules and regulations applicable to Enovas business or changes in the interpretation or enforcement thereof; the regulatory and examination authority of the Consumer Financial Protection Bureau in the United States and the Financial Conduct Authority in the United Kingdom, including the effect of and compliance with a consent order entered into with the Consumer Financial Protection Bureau in November 2013 and changes to Enovas U.K. business practices as a result of adapting Enovas business in response to the requirements of the Financial Conduct Authority; changes in the political, regulatory or economic environment in foreign countries where Enova operates or in the future may operate; risks related to the spin-off of Enova from Cash America; Enovas ability to process or collect consumer loans through the Automated Clearing House system; the actions of third parties who provide, acquire or offer products and services to, from or for Enova; public and regulatory perception of Enovas business, including its consumer loan business and its business practices; the effect of any current or future litigation proceedings or any judicial decisions or rule-making that affect Enova, its products or its arbitration agreements; fluctuations, including a sustained decrease, in economic conditions; a prolonged interruption in Enovas operations of its facilities, systems and business functions, including its information technology and other business systems; changes in demand for Enovas services and changes in competition; Enovas ability to maintain an allowance or liability for estimated losses on consumer loans that are adequate to absorb credit losses; Enovas ability to attract and retain qualified executive officers; interest rate and foreign currency exchange rate fluctuations; changes in the capital markets, including the debt and equity markets; changes in Enovas ability to satisfy its debt obligations or to refinance existing debt obligations or obtain new capital to finance growth; security breaches, cyber-attacks or fraudulent activity; acts of God, war or terrorism, pandemics and other events; the effect of any of such changes on Enovas business or the markets in which it operates; and other risks and uncertainties indicated in Enovas filings with the SEC. These risks and uncertainties are beyond the ability of Enova to control, nor can Enova predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this report, terms such as believes, estimates, should, could, would, plans, expects, anticipates, may, forecasts, projects and similar expressions and variations as they relate to Enova or its management are intended to identify forward-looking statements. Enova disclaims any intention or obligation to update or revise any forward-looking statements to reflect events or circumstances occurring after the date of this report.
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.
ENOVA INTERNATIONAL, INC. | ||||||
Date: November 18, 2014 | By: | /s/ Lisa M. Young | ||||
Lisa M. Young | ||||||
Vice PresidentGeneral Counsel & Secretary |
EXHIBIT INDEX
Exhibit No. |
Description |
|
2.1 | Separation and Distribution Agreement between Cash America International, Inc. and Enova International, Inc. | |
3.1 | Enova International, Inc. Amended and Restated Certificate of Incorporation | |
3.2 | Enova International, Inc. Amended and Restated Bylaws | |
10.1 | Tax Matters Agreement between Cash America International, Inc. and Enova International, Inc. | |
10.2 | Transition Services Agreement between Cash America International, Inc. and Enova International, Inc. | |
10.3 | Stockholders and Registration Rights Agreement between Cash America International, Inc. and Enova International, Inc. | |
10.4 | Software Lease and Maintenance Agreement between Cash America International, Inc. and Enova International, Inc. | |
14.1 | Enova International, Inc. Code of Business Conduct and Ethics | |
99.1 | Enova International, Inc. Corporate Governance Guidelines |
Exhibit 2.1
SEPARATION AND DISTRIBUTION AGREEMENT
BY AND BETWEEN
CASH AMERICA INTERNATIONAL, INC.
AND
ENOVA INTERNATIONAL, INC.
Dated as of November 12, 2014
TABLE OF CONTENTS
ARTICLE I |
DEFINITIONS |
2 | ||||
ARTICLE II |
RELATED TRANSACTIONS |
11 | ||||
2.1 |
Ancillary Agreements |
11 | ||||
ARTICLE III |
THE DISTRIBUTION AND RELATED ACTIONS |
12 | ||||
3.1 |
Actions Prior to the Distribution Date |
12 | ||||
3.2 |
Cooperation for Distribution |
13 | ||||
3.3 |
Conditions Precedent to Consummation of the Distribution |
13 | ||||
3.4 |
Sole Discretion |
15 | ||||
3.5 |
The Distribution |
15 | ||||
ARTICLE IV |
DISPUTE RESOLUTION; ARBITRATION |
16 | ||||
4.1 |
General Provisions |
16 | ||||
4.2 |
Consideration by Senior Executives |
16 | ||||
4.3 |
Binding Arbitration |
17 | ||||
ARTICLE V |
MUTUAL RELEASES; INDEMNIFICATION |
19 | ||||
5.1 |
Mutual Release of Pre-Distribution Date Claims |
19 | ||||
5.2 |
Indemnification by Enova |
22 | ||||
5.3 |
Indemnification by Parent |
23 | ||||
5.4 |
Indemnification Obligations Net of Insurance Proceeds |
24 | ||||
5.5 |
Procedures for Indemnification of Third-Party Claims |
24 | ||||
5.6 |
Additional Matters |
27 | ||||
5.7 |
Remedies Cumulative |
29 | ||||
5.8 |
Survival of Indemnities |
29 | ||||
5.9 |
Guarantees and Other Obligations |
29 | ||||
5.10 |
Right of Contribution |
30 | ||||
5.11 |
No Impact on Third Parties |
30 | ||||
5.12 |
No Cross-Claims or Third-Party Claims |
30 | ||||
5.13 |
Severability |
30 | ||||
5.14 |
Ancillary Agreements |
31 | ||||
ARTICLE VI |
INSURANCE |
31 | ||||
6.1 |
Insurance Policies and Rights |
31 | ||||
6.2 |
Administration and Reserves |
32 | ||||
6.3 |
Allocation of Insurance Proceeds; Cooperation |
32 | ||||
6.4 |
Reimbursement of Expenses |
32 | ||||
6.5 |
No Reduction of Coverage |
33 | ||||
6.6 |
Shared Insurance Policies Other Than D&O, Fiduciary, and Employment Practices Liability |
33 | ||||
6.7 |
D&O, Fiduciary, and Employment Practices Liability |
33 | ||||
ARTICLE VII |
EXCHANGE OF INFORMATION; CONFIDENTIALITY |
33 | ||||
7.1 |
Agreement for Exchange of Information |
33 |
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7.2 |
Ownership of Information |
34 | ||||
7.3 |
Compensation for Providing Information |
34 | ||||
7.4 |
Record Retention |
34 | ||||
7.5 |
Limitations of Liability |
34 | ||||
7.6 |
Other Agreements Providing for Exchange of Information |
34 | ||||
7.7 |
Production of Witnesses; Records; Cooperation |
35 | ||||
7.8 |
Privileged Matters |
35 | ||||
7.9 |
Confidentiality |
37 | ||||
7.10 |
Protective Arrangements |
39 | ||||
ARTICLE VIII |
FURTHER ASSURANCES AND ADDITIONAL COVENANTS |
39 | ||||
8.1 |
Further Assurances |
39 | ||||
8.2 |
Performance |
40 | ||||
8.3 |
Order of Precedence |
40 | ||||
8.4 |
Registration of Retained Stock for Delivery by Parent Under Parents Long-Term Incentive Plans |
40 | ||||
8.5 |
Non-Solicitation of Employees |
41 | ||||
ARTICLE IX |
TERMINATION |
42 | ||||
9.1 |
Termination |
42 | ||||
ARTICLE X |
MISCELLANEOUS |
42 | ||||
10.1 |
Construction |
42 | ||||
10.2 |
Conflicts with Other Ancillary Agreements |
43 | ||||
10.3 |
Limitation of Liability |
43 | ||||
10.4 |
Assignment |
43 | ||||
10.5 |
Entire Agreement |
43 | ||||
10.6 |
Notices |
44 | ||||
10.7 |
Governing Law |
44 | ||||
10.8 |
Third-Party Beneficiaries |
44 | ||||
10.9 |
Severability |
44 | ||||
10.10 |
Amendment |
45 | ||||
10.11 |
Guarantees |
45 | ||||
10.12 |
Counterparts |
45 | ||||
10.13 |
Authority |
45 | ||||
10.14 |
Binding Effect |
45 | ||||
10.15 |
Waiver |
45 | ||||
10.16 |
Force Majeure |
46 | ||||
10.17 |
Publicity |
46 | ||||
10.18 |
Expenses |
46 | ||||
10.19 |
Headings |
46 | ||||
10.20 |
Survival of Covenants |
46 | ||||
10.21 |
Specific Performance |
46 | ||||
10.22 |
Mutual Drafting |
47 | ||||
10.23 |
Effect if Distribution Does Not Occur |
47 |
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SEPARATION AND DISTRIBUTION AGREEMENT
THIS SEPARATION AND DISTRIBUTION AGREEMENT (this Agreement ) is entered into as of November 12, 2014, by and between Cash America International, Inc. , a Texas corporation ( Parent ), and Enova International, Inc. , a Delaware corporation and wholly-owned subsidiary of Parent ( Enova and, together with Parent, the parties ). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in Article I hereof.
RECITALS
WHEREAS , Parent is the holder of all of the stock in Enova;
WHEREAS , Parent has determined that for corporate non-tax business purposes it is in the best interests of Parent and Enova to separate Enova from Parent;
WHEREAS , contemporaneously with the execution and delivery of this Agreement, the parties hereto are entering into the other Ancillary Agreements (as defined below);
WHEREAS , Parent currently intends that, on the Distribution Date (as defined below), Parent shall distribute to holders of shares of Parent Common Stock (as defined below), through a spin-off, 80 percent of the outstanding shares of Enova Common Stock, as more fully described in this Agreement and the Ancillary Agreements (the Distribution );
WHEREAS , the Distribution and certain related transactions, taken together, are intended to qualify as a reorganization under Sections 355 and 368 of the Internal Revenue Code of 1986, as amended (the Code ) for U.S. federal income tax purposes;
WHEREAS , immediately following the Distribution, Parent will own 20 percent of the issued and outstanding shares of Enova Common Stock; and
WHEREAS , it is appropriate and desirable to set forth the principal corporate transactions required to effect the Distribution and certain other agreements that will govern certain matters relating to the separation of Enova from Parent and the Distribution and the relationship of Parent, Enova and their respective Subsidiaries (as defined below), following the Distribution.
NOW THEREFORE , in consideration of the mutual promises 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 as follows:
AGREEMENT
ARTICLE I
DEFINITIONS
The following terms used in this Agreement are defined as set forth below or in the sections indicated, as applicable:
AAA Commercial Arbitration Rules shall have the meaning set forth in Section 4.3(a) .
Action means any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding, or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, provincial, territorial, local, foreign, or international Governmental Authority or any arbitration or mediation tribunal.
Affiliate means, when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition, control (including with correlative meanings, controlled by and under common control with ), when used with respect to any specified Person, 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 or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise. It is expressly agreed that, from and after the Distribution Date and for purposes of this Agreement and the Ancillary Agreements, no member of the Enova Group shall be deemed to be an Affiliate of any member of the Parent Group, and no member of the Parent Group shall be deemed to be an Affiliate of any member of the Enova Group. To that effect, it is the intention of the parties that no member of the Parent Group shall be deemed to control any member of the Enova Group and each member of the Parent Group hereby disclaims the power to direct or cause the direction of the management and policies of the Enova Group, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise.
Agreement has the meaning given such term in the Preamble.
Ancillary Agreements has the meaning set forth in Section 2.1 .
Approvals or Notifications means any consents, waivers, approvals, permits or authorizations to be obtained from, notices, registrations or reports to be submitted to, or other filings to be made with, any third Person, including any Governmental Authority.
Business Day means a day other than a Saturday, a Sunday, or a day on which banking institutions located in the State of Texas or the State of Illinois are authorized or obligated by Law to close.
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CERCLA has the meaning given such term in the definition of Environmental Law below.
Claims Administration means the processing of claims made under the Insurance Policies, including the reporting of claims to the insurance carrier, management, and defense of claims and providing for appropriate releases upon settlement or final adjudication of claims.
Claims Handling Agreement means any third party administrator or claims handling agreement of any kind or nature to which any member of either Group is directly or indirectly a party, in effect as of the date hereof, related to the handling of Insured Enova Claims.
Code has the meaning given such term in the Recitals.
Contract means any contract, agreement, lease, license, letter of intent, order, instrument, or other commitment that is binding on any Person or any part of its property under applicable Law.
Corporate Action means any Action, whether filed before, on or after the Distribution Date, to the extent it asserts violations of any federal, state, local, foreign or international securities Law, securities class action or shareholder derivative claim.
Credit Rating means on any date, the rating that has been most recently announced by any Rating Agency for any class of senior, unsecured, non-convertible publicly held long-term debt of a Person.
Credit Underwriting Services Agreement means the Credit Underwriting Services Agreement, dated as of the date hereof, between Parent and Enova.
Custodial Party means the party that maintains the Records Facility where Stored Records are held.
Demand Registration has the meaning set forth in Section 8.4(d) .
Dispute has the meaning set forth in Section 4.1(a) .
Distribution has the meaning given such term in the Recitals.
Distribution Date means the date of the consummation of the Distribution, which shall be determined by Parent in its sole and absolute discretion.
Distribution Agent means Computershare Trust Company, N.A.
Effectiveness Period has the meaning set forth in Section 8.4(a) .
Enova has the meaning given such term in the Preamble.
Enova Board means the board of directors of Enova.
Enova Business means the business and operations conducted by Enova and the members of the Enova Group (whether conducted independently or in association with one or more third parties through a partnership, joint venture, or other mutual enterprise), prior to, on, or after the Distribution Date.
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Enova Certificate of Incorporation shall have the meaning set forth in Section 3.1(g) .
Enova Common Stock means the common stock, par value $0.00001 per share, of Enova.
Enova Credit Facility means the $75 million bank credit facility among Enova, Jefferies Finance LLC, as administrative agent, and Jefferies Group LLC, as lender.
Enova Debt Obligations means all Indebtedness of Enova or any other member of the Enova Group.
Enova Environmental Liabilities means all Liabilities arising under or relating to any Environmental Law to the extent, as between the Parent Group and the Enova Group, such Liabilities relate to, arise out of, or result from (a) the ownership, operation, or conduct of the Enova Business at any time prior to, on, or after the Distribution Date except for those Liabilities included in the definition of Parent Environmental Liabilities , or (b) any properties or assets owned, leased, used, or held for use in connection with any terminated, divested, or discontinued business or other activities which, at the time of such termination, divestiture, or discontinuation, related to the Enova Business as then conducted. It is understood that, consistent with the foregoing, Enova Environmental Liabilities shall include all Liabilities arising under or relating to any Environmental Law attributable to (a) any investigation or remediation activities pertaining to environmental matters and involving any property held, owned, leased, used or occupied by the Enova Group; and (b) the transportation, treatment, storage, or disposal of waste generated by the operations of members of the Enova Group, including liability under CERCLA or a comparable law allocated by the applicable Governmental Authority or potentially responsible party liability allocation group, as appropriate, to members of the Enova Group.
Enova Group means Enova, each current and former subsidiary of Enova, and each Person that becomes a subsidiary of Enova after the Distribution Date.
Enova Indemnitees has the meaning assigned to that term in Section 5.3 .
Enova Liabilities means (without duplication):
(a) any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement to be assumed by Enova or any other member of the Enova Group, and all agreements, obligations, and Liabilities of any member of the Enova Group under the Ancillary Agreements;
(b) all Liabilities primarily relating to, arising out of, or resulting from the operation of the Enova Business, as conducted at any time prior to, on, or after the Distribution Date including:
(i) any Liability relating to, arising out of, or resulting from any act or failure to act by any director, officer, employee, agent, or representative of Enova (whether or not such act or failure to act is or was within such Persons authority);
4
(ii) any Enova Environmental Liabilities;
(iii) the Enova Debt Obligations; and
(iv) any Liability arising under or relating to a claim made against Enova by an Enova stockholder in its capacity as such (other than Parent) other than a claim for which Parent and the Parent Group have agreed to indemnify Enova and the Enova Group pursuant to Section 5.3(d) hereof;
Notwithstanding the foregoing, the Enova Liabilities shall not include the Parent Liabilities.
Environmental Law means any and all Laws or determinations of any Governmental Authority (including common or civil, as applicable, law duties established by courts) pertaining to pollution or the protection of the environment, natural resources, or plant or animal species or the remediation of contamination, including Laws relating to emissions, discharges, releases, or threatened releases of pollutants, contaminants, or chemical, industrial, hazardous, radioactive, or toxic materials or wastes into ambient or indoor air, surface water, ground water, or lands or otherwise relating to the treatment, storage, disposal, transportation, or release into the environment of pollutants, contaminants, or chemical, industrial, hazardous, radioactive, or toxic materials or wastes, in any jurisdiction, federal, state, provincial, territorial, municipal, local, or foreign, in which the Parent Business or Enova Business is or has operated; including, the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. ( CERCLA ), the Superfund Amendments Reauthorization Act, 42 U.S.C. Section 11001 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., and the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., other similar Laws or decrees in non-U.S. jurisdictions, and all other environmental conservation and protection Laws otherwise applicable to the Parent Business or Enova Business, whether federal, state, provincial, territorial, municipal, local, or foreign, and the regulations promulgated thereto, as each has been and may be amended and supplemented from time to time, provided, however, that Environmental Laws shall not include Laws pertaining primarily to workplace safety, such as, without limitation, the Occupational Safety and Health Act 29 U.S.C. 651 et seq., except to the extent such Laws govern environmental conditions, including the management of asbestos-containing materials, or employee exposure or potential exposure to pollutants, contaminants, or chemical, industrial, hazardous, radioactive, or toxic materials or wastes.
Exchange Act means the Securities Exchange Act of 1934, as amended, or any successor statute.
Force Majeure means, with respect to a party, an event beyond the control of such party (or any Person acting on its behalf), which by its nature could not reasonably have been
5
foreseen by such party (or such Person) or, if it could reasonably have been foreseen, was unavoidable, and includes acts of God, storms, floods, riots, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) or armed hostilities, other national or international calamities or acts of terrorism or failures of energy sources or distribution or transportation facilities. Notwithstanding the foregoing, the receipt by a party of an unsolicited takeover offer or other acquisition proposal, even if unforeseen or unavoidable, and such partys response thereto, shall not be deemed an event of Force Majeure.
Form 10 shall have the meaning set forth in Section 3.3(b) .
GAAP means United States generally accepted accounting principles consistently applied.
Governmental Approvals means any notices, reports, or other filings to be made with, or any consents, registrations, approvals, licenses, permits, or authorizations to be obtained from, any Governmental Authority.
Governmental Authority means any nation or government, any state, province, territory, city, municipal entity, or other political subdivision thereof, and any governmental, executive, legislative, judicial, administrative, or regulatory agency, branch, division, department, authority, instrumentality, commission, board, bureau, or similar body, whether federal, state, provincial, territorial, municipal, local, or foreign.
Group means either the Parent Group or the Enova Group, as the context requires.
Indebtedness of any Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services, (f) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, or other encumbrance on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all guarantees by such Person of indebtedness of others, (h) all capital lease obligations of such Person, and (i) all securities or other similar instruments convertible or exchangeable into any of the foregoing, but excluding daily cash overdrafts associated with routine cash operations.
Indemnifying Party has the meaning set forth in Section 5.4(a) .
Indemnitee has the meaning set forth in Section 5.4(a) .
Indemnity Payment has the meaning set forth in Section 5.4(a) .
Information means information, whether or not patentable or copyrightable, in written, oral, electronic, or other tangible or intangible forms, stored in any medium, including studies,
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reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, reserves, employee, or business information or data.
Information Statement shall have the meaning set forth in Section 3.3(b) .
Initial Notice shall have the meaning set forth in Section 4.2 .
Initial Registration Statement shall have the meaning set forth in Section 8.4(a) .
Insurance Administration means with respect to each Insurance Policy, (a) the accounting for retrospectively-rated premiums, defense costs, indemnity payments, deductibles, and retentions as appropriate under the terms and conditions of such Insurance Policies, (b) the reporting to excess insurance carriers of any losses or claims which may cause the per-occurrence or aggregate limits of such Insurance Policy to be exceeded, and (c) the distribution of Insurance Proceeds as contemplated by this Agreement.
Insurance Policy means insurance policies and insurance contracts of any kind that as of the effective date of this Agreement are or have been owned or maintained by, or provide a benefit in favor of, any member of either Group or any of its predecessors, including primary, umbrella, and excess comprehensive general liability policies, automobile insurance policies, employment practices insurance policies, business travel accident insurance policies, workers compensation insurance policies, property, casualty, and business interruption insurance policies, fiduciary insurance policies, and directors and officers liability insurance policies (including any such policy for directors and officers liability that has been purchased to provide occurrence coverage for both continuing and former directors, officers, and employees for claims arising from or relating to events, occurrences, or other matters prior to such date that the Form 10 is declared effective by the SEC).
Insurance Proceeds means those monies (a) received by an insured from an insurance carrier, or (b) paid by an insurance carrier on behalf of the insured; in any such case net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments) and net of any costs or expenses (including allocated costs of in-house counsel and other personnel) incurred in the collection thereof.
Insured Claims means any claim with respect to those Losses that, individually or in the aggregate, are covered within the terms and conditions of any of the Insurance Policies, whether or not subject to deductibles, coinsurance, uncollectibility, or retrospectively-rated premium adjustments, but only to the extent that such Losses are within applicable Insurance Policy limits, including aggregates.
Insured Enova Claims means any claim with respect to any Loss, damage, or injury that occurred prior to the Distribution Date that is against any member of the Enova Group or
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any director, officer, or employee of any member of the Enova Group; provided , that in the case of any such claim or any claims identified in (a) through (c) below, such Loss, damage, or injury (including costs of defense and reasonable attorneys fees) is or may be insured under one or more of the Insurance Policies. Insured Enova Claims include (a) claims for property or casualty damage or any other Loss with respect to assets of any member of the Enova Group, (b) claims against any member of the Enova Group whether or not the Enova Group has or has assumed liability for such claims under any Ancillary Agreement, and (c) claims against any member of the Parent Group to the extent any member of the Enova Group has liability for such claims under any Ancillary Agreement.
Law means any national, supranational, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty (including any income tax treaty), license, permit, authorization, approval, consent, decree, injunction, binding judicial or administrative interpretation or other requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.
Liabilities means any and all debts, guarantees, assurances, commitments, liabilities, responsibilities, Losses, remediation, deficiencies, reimbursement obligations in respect of letters of credit, damages, fines, penalties, settlements, sanctions, costs, expenses, interest and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, accrued or not accrued, asserted or unasserted, liquidated or unliquidated, foreseen or unforeseen, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any Law, claim (including any Third-Party Claim), demand, Action, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority or arbitration tribunal, and those arising under any contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment or undertaking, or any fines, damages or equitable relief that is imposed, in each case, including all costs and expenses relating thereto.
Losses means actual losses (including any diminution in value), costs, damages, fines, penalties and expenses (including legal and accounting fees and expenses and costs of investigation and litigation), whether or not involving a Third-Party Claim.
Marketing and Customer Referral Agreement means the Marketing and Customer Referral Agreement, dated as of the date hereof, between Parent and Enova.
Non-Custodial Party means the party that owns Stored Records held in the other partys Records Facility.
NYSE means the New York Stock Exchange, Inc.
Parent has the meaning given such term in the Preamble.
Parent Board means the board of directors of Parent.
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Parent Business means any business of Parent and any member of the Parent Group (whether conducted independently or in association with one or more third parties through a partnership, joint venture, or other mutual enterprise), other than the Enova Business.
Parent Common Stock means the common stock, par value $0.10 per share, of Parent.
Parent Environmental Liabilities means all Liabilities arising under or relating to Environmental Law to the extent, as between the Parent Group and the Enova Group, such Liabilities relate solely to, arise out of or result from: (a) the ownership, operation, or conduct of the Parent Business at any time prior to, on, or after the Distribution Date or (b) any properties or assets owned, leased, used, or held for use in connection with any terminated, divested, or discontinued business or other activities which, at the time of such termination, divestiture, or discontinuation, related to the Parent Business as then conducted. It is understood that, consistent with the foregoing, Parent Environmental Liabilities shall include all Liabilities arising under or relating to Environmental Law attributable to (a) any investigation or remediation activities pertaining to environmental matters and involving any property held, owned, leased, used or occupied by the Parent Group and (b) the transportation, treatment, storage, or disposal of waste generated by the operations of members of the Parent Group, including liability under CERCLA or a comparable law allocated by the applicable Governmental Authority or potentially responsible party liability allocation group, as appropriate, to members of the Parent Group.
Parent Group means Parent, each current and former subsidiary of Parent (other than any member of the Enova Group), and each Person that becomes a subsidiary of Parent after the Distribution Date.
Parent Indemnitees has the meaning set forth in Section 5.2 .
Parent Liabilities means (a) any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement as Liabilities to be retained or assumed by Parent or any other member of the Parent Group, (b) all agreements, obligations, and Liabilities of any member of the Parent Group under this Agreement or any Ancillary Agreement, (c) any liability arising under or relating to a claim made against Parent by a Parent shareholder in its capacity as such, and (d) any Liability of any member of the Parent Group other than the Enova Liabilities.
parties has the meaning given such term in the Preamble.
Person means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, and a Governmental Authority.
Privileged Information means any information, in written, oral, electronic or other tangible or intangible forms, including any communications by or to attorneys (including attorney-client privileged communications), memoranda and other materials prepared by attorneys or under their direction (including attorney work product), as to which a party or its respective Subsidiaries would be entitled to assert or have a privilege, including the attorney-client and attorney work product privileges.
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Prospectus means the prospectus included in any Registration Statement, all amendments and supplements to such prospectus, including post-effective amendments, and all other material incorporated by reference in such prospectus.
Rating Agency means Moodys Investors Service, Inc., Standard & Poors, a division of The McGraw-Hill Companies, Inc., Fitch, Inc., any of their successors, or any nationally recognized statistical rating organization registered with the SEC.
reasonable best efforts means a Persons good faith best efforts to achieve such goal as soon as reasonably practicable and consistent with reasonable commercial practice and without payment of any assignment, consent, or similar fee requested by any Person or the incurrence of unreasonable expense or hardship, and/or the requirement to engage in litigation.
Record Date shall mean the close of business on [ , 2014] or the close of business on another date if determined by the Parent Board as the record date for determining holders of shares of Parent Common Stock entitled to receive Enova Common Stock pursuant to the Distribution.
Record Holders means the holders of record of Parent Common Stock as of the Record Date.
Records Facility shall have the meaning set forth in Section 7.4(a) .
Registrable Securities shall have the meaning set forth in Section 8.4 (a) .
Registration Statement means any registration statement of Enova (including the Initial Registration Statement and each Subsequent Registration Statement) filed with, or to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, including the related Prospectus, amendments and supplements to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference into such registration statement. For the avoidance of doubt, it is acknowledged and agreed that such Registration Statement may be on any form that shall be applicable, including Form S-1, Form S-3 or Form S-4 and may be a Shelf Registration Statement.
Regulation S-K means Regulation S-K of the General Rules and Regulations promulgated by the SEC pursuant to the Securities Act.
Representatives means, with respect to any Person, any of such Persons directors, officers, employees, agents, consultants, advisors, accountants, attorneys or other representatives.
Response shall have the meaning set forth in Section 4.2 .
Retained Stock means the Enova Common Stock retained by Parent immediately following the Distribution.
SEC means the United States Securities and Exchange Commission.
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Securities Act means the Securities Act of 1933, as amended, or any successor statute.
Senior Notes means the $500.0 million in aggregate principal amount of 9.75% Senior Notes Due 2021 issued by Enova, and approved by Parent, in reliance on Rule 144A promulgated under the Securities Act pursuant to an Indenture, dated May 30, 2014, between Enova and U.S. Bank National Association, as trustee.
Shelf Registration Statement means a Registration Statement of Enova for an offering of the Retained Stock to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (or similar provisions then in effect).
Stockholders and Registration Rights Agreement means the Stockholders and Registration Rights Agreement, dated as of the date hereof, by and between Parent and Enova.
Stored Records means Tangible Information held in a Records Facility maintained or arranged for by a party hereto other than the party that owns such Tangible Information.
Subsequent Registration Statement shall have the meaning set forth in Section 8.4(b) .
Subsidiary or subsidiary means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities of such Person, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.
Tangible Information means Information that is contained in written, electronic or other tangible forms.
Tax Matters Agreement means the Tax Matters Agreement, dated as of the date hereof, between Parent and Enova.
Taxes has the meaning set forth in the Tax Matters Agreement.
Third Party shall have the meaning set forth in Section 5.5(a) .
Third-Party Claim shall have the meaning set forth in Section 5.5(a) .
Transition Services Agreement means the Transition Services Agreement, dated as of the date hereof, between Parent and Enova.
ARTICLE II
RELATED TRANSACTIONS
2.1 Ancillary Agreements . On or prior to the Distribution Date, Parent and Enova shall execute and deliver (or shall cause the appropriate members of their respective Groups to execute and deliver, as applicable) the agreements between them designated as follows:
(a) the Transition Services Agreement;
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(b) the Tax Matters Agreement;
(c) the Stockholders and Registration Rights Agreement;
(d) the Credit Underwriting Services Agreement;
(e) the Marketing and Customer Referral Agreement; and
(f) such other agreements, documents or instruments as the parties may agree are necessary or desirable and which specifically state that they are Ancillary Agreements within the meaning of this Agreement.
The agreements described and set forth in this Section 2.1 shall be collectively, and together with this Agreement, referred to as the Ancillary Agreements .
ARTICLE III
THE DISTRIBUTION AND RELATED ACTIONS
3.1 Actions Prior to the Distribution Date . Prior to the Distribution Date and subject to the terms and conditions set forth herein, the parties shall take, or cause to be taken, the following actions in connection with the Distribution:
(a) Notice to NYSE . Parent shall, to the extent possible, give the NYSE not less than ten (10) days advance notice of the Record Date in compliance with Rule 10b-17 under the Exchange Act.
(b) Securities Law Matters . Enova shall file any amendments or supplements to the Form 10 as may be necessary or advisable in order to cause the Form 10 to become and remain effective as required by the SEC or federal, state or other applicable securities Laws. Parent and Enova shall cooperate in preparing, filing with the SEC and causing to become effective registration statements or amendments thereof which are required to reflect the establishment of, or amendments to, any employee benefit and other plans necessary or advisable in connection with the transactions contemplated by this Agreement and the Ancillary Agreements. Parent and Enova shall take all such action as may be necessary or advisable under the securities or blue sky Laws of the United States (and any comparable Laws under any non-U.S. jurisdiction) in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.
(c) Mailing of Information Statement . Parent shall, as soon as is reasonably practicable after the Form 10 is declared effective under the Exchange Act and the Parent Board has approved the Distribution, cause the Information Statement to be mailed to the Record Holders.
(d) The Distribution Agent . Parent shall enter into a distribution agent agreement with the Distribution Agent or otherwise provide instructions to the Distribution Agent regarding the Distribution.
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(e) NYSE Listing . Enova shall prepare, file, and use its reasonable best efforts to have approved, an application for listing of the Enova Common Stock distributed in the Distribution on the NYSE, subject only to official notice of issuance and filing of customary final documentation.
(f) Stock-Based Employee Benefit Plans . At or prior to the Distribution Date, Parent and Enova shall take all actions as may be necessary to approve the stock-based employee benefit plans of Enova in order to satisfy the requirements of Rule 16b-3 under the Exchange Act and the applicable rules and regulations of the NYSE.
(g) Certificate of Incorporation . Parent and Enova shall take all necessary action that may be required to provide for the adoption by Enova of the Amended and Restated Certificate of Incorporation of Enova (the Enova Certificate of Incorporation ) and the Amended and Restated Bylaws of Enova, each in such form as may be reasonably determined by Parent and Enova, and Enova shall file the Enova Certificate of Incorporation with the Secretary of State of the State of Delaware.
(h) Satisfying Conditions to Distribution . Parent and Enova shall cooperate to cause the conditions to the Distribution set forth in Section 3.3 to be satisfied and to effect the Distribution at the Distribution Date.
3.2 Cooperation for Distribution . Enova shall, at Parents direction, promptly take any and all actions necessary or desirable to facilitate the separation and Distribution as contemplated by the Form 10 or Information Statement. Notwithstanding anything to the contrary contained herein, as between Parent and Enova, Parent may in its sole discretion choose to terminate, abandon, or amend any aspect of the Distribution at any time prior to the Distribution Date, and Enova promptly shall take all actions directed by Parent in that regard.
3.3 Conditions Precedent to Consummation of the Distribution . In no event shall the Distribution occur unless each of the conditions set forth below shall have been satisfied (or waived by Parent, in whole or in part, in its sole and absolute discretion). The conditions set forth below are for the sole benefit of Parent and shall not give rise to or create any duty on the part of Parent or the Parent Board to waive or not waive any such condition.
(a) Board Approval . The Parent Board shall have authorized and approved the separation and not withdrawn such authorization and approval, and shall have declared the Distribution.
(b) Effectiveness of Form 10; Mailing of Information Statement . A Registration Statement on Form 10 registering the Enova Common Stock (the Form 10 ) shall be effective under the Exchange Act, with no stop order in effect with respect thereto, and the Information Statement included therein (the Information Statement ) shall have been mailed to Parents stockholders as of the Record Date.
(c) Private Letter Ruling . Parent shall have received a private letter ruling from the Internal Revenue Service by Parent in form and substance satisfactory to Parent in its sole discretion to the effect that the retention by Parent of up to 20% of the Enova Common Stock will not be in pursuant to a plan having as one of its principal purposes
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the avoidance of U.S. federal income tax within the meaning of Section 355(a)(1)(D)(ii) of the Code and such private letter ruling shall not have been revoked or modified in any material respect.
(d) Opinion of Special Tax Counsel . The Parent Board shall have received an opinion of its special tax counsel at Hunton & Williams LLP in a form satisfactory to Parent that the Distribution will qualify as a transaction that is tax-free for U.S. federal income tax purposes under Section 355(a) of the Code, and such opinion shall not have been revoked or modified in any material respect.
(e) Solvency Opinion . The Parent Board shall have received an opinion from an independent financial advisor to the Parent Board confirming the solvency and financial viability of Parent before the Distribution and each of Parent and Enova after the Distribution that is in form and substance acceptable to the Parent Board in its sole discretion.
(f) Securities Laws . All actions and filings necessary or appropriate under applicable federal, state or foreign securities or blue sky Laws and the rules and regulations thereunder shall have been taken and, where applicable, become effective or been accepted.
(g) Listing on NYSE . The Enova Common Stock to be delivered in the Distribution shall have been approved for listing on NYSE, subject only to official notice of issuance and filing of customary final documentation.
(h) Execution of Ancillary Agreements . Each of the other Ancillary Agreements shall have been duly executed and delivered by the parties thereto.
(i) No Order or Injunction . No order, injunction or decree issued by any Governmental Authority of competent jurisdiction or other legal restraint or prohibition preventing consummation of the Distribution or the transactions related thereto shall be in effect, and no other event outside the control of Parent shall have occurred or failed to occur that prevents the consummation of the Distribution or the transactions related thereto.
(j) Governmental Approvals . All Governmental Approvals necessary to consummate the Distribution shall have been obtained and be in full force and effect.
(k) Licenses and Filings . All licenses and filings necessary to be obtained or made by Enova have been obtained or made.
(l) Enova Board . Parent and Enova shall have taken all necessary action to cause the Enova Board to consist of the individuals identified in the Information Statement as directors of Enova as of immediately following the Distribution Date.
(m) No Circumstances Making Distribution Inadvisable . No events or developments shall have occurred or exist that, in the judgment of the Parent Board, in its sole and absolute discretion, make it inadvisable to effect the Distribution or the other
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transactions contemplated hereby, or would result in the Distribution or the other transactions contemplated hereby not being in the best interest of Parent or its shareholders.
3.4 Sole Discretion . The foregoing conditions are for the sole benefit of Parent and shall not give rise to or create any duty on the part of Enova or the Enova Board to waive or not waive such conditions or in any way limit Parents right to terminate this Agreement as set forth in Article IX or alter the consequences of any such termination from those specified in such Article. Any determination made by the Parent Board prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in Section 3.3 shall be conclusive.
3.5 The Distribution .
(a) Delivery of Enova Common Stock . On or prior to the Distribution Date, Parent shall deliver to the Distribution Agent, for the benefit of Record Holders, book-entry transfer authorizations for such number of the issued and outstanding shares of Enova Common Stock necessary to effect the Distribution.
(b) Distribution Date . The Distribution Date shall be 11:59 p.m. Eastern Time, or such other time as Parent may determine, on such date as Parent may determine.
(c) Distribution of Shares and Cash . Parent shall instruct the Distribution Agent to distribute, as soon as practicable following the Distribution Date, to each Record Holder the following: (i) [ ] shares of Enova Common Stock for every one (1) share of Parent Common Stock held by such Record Holder as of the Record Date and (ii) cash, if applicable, in lieu of fractional shares obtained in the manner provided in Section 3.5(d) .
(d) No Fractional Shares . No fractional shares shall be distributed or credited to book-entry accounts in connection with the Distribution. As soon as practicable after the Distribution Date, Parent shall direct the Distribution Agent to determine the number of whole shares and fractional shares of Enova Common Stock allocable to each holder of record or beneficial owner of Parent Common Stock as of the Record Date, to aggregate all such fractional shares and to sell the whole shares obtained thereby in open market transactions (with the Distribution Agent, in its sole and absolute discretion, determining when, how and through which broker-dealer and at what price to make such sales), and to cause to be distributed to each such holder or for the benefit of each such beneficial owner, in lieu of any fractional share, such holders or owners ratable share of the proceeds of such sale, after deducting any taxes required to be withheld and after deducting an amount equal to all brokerage charges, commissions and transfer taxes attributed to such sale. Neither Parent nor Enova shall be required to guarantee any minimum sale price for the fractional shares of Enova Common Stock. Neither Parent nor Enova shall be required to pay any interest on the proceeds from the sale of fractional shares.
(e) Beneficial Owners . Solely for purposes of computing fractional share interests pursuant to Section 3.5(d) , the beneficial owner of Parent Common Stock held of record in the name of a nominee in any nominee account shall be treated as the holder of record with respect to such shares.
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(f) Unclaimed Stock or Cash . Any Enova Common Stock or cash in lieu of fractional shares with respect to Enova Common Stock that remains unclaimed by any Record Holder one hundred eighty (180) days after the Distribution Date shall be delivered to Enova. Enova shall hold such Enova Common Stock and cash, if any, in lieu of fractional shares, for the account of such Record Holder, and the parties agree that all obligations to provide such Enova Common Stock and cash, if any, in lieu of fractional share interests shall be obligations of Enova, subject in each case to applicable escheat or other abandoned property Laws, and Parent shall have no Liability with respect thereto.
(g) Transfer Authorizations . Enova agrees to provide all book-entry transfer authorizations for shares of Enova Common Stock that Parent or the Distribution Agent shall require in order to effect the Distribution.
ARTICLE IV
DISPUTE RESOLUTION; ARBITRATION
4.1 General Provisions .
(a) Any dispute, controversy or claim arising out of or relating to this Agreement or the Ancillary Agreements (except as otherwise set forth in any such Ancillary Agreement), or the breach, termination or validity thereof ( Dispute ) which arises between the parties shall be resolved in accordance with the procedures set forth in this Article IV , which shall be the sole and exclusive procedures for the resolution of any such Dispute unless otherwise specified in the applicable Ancillary Agreement or in this Article IV .
(b) THE PARTIES EXPRESSLY WAIVE AND FOREGO ANY RIGHT TO TRIAL BY JURY.
(c) The specific procedures set forth in this Article IV , including the time limits referenced herein, may only be modified by agreement of both of the parties in writing.
(d) All applicable statutes of limitations and defenses based upon the passage of time shall be tolled while the procedures specified in this Article IV are pending. The parties shall take any necessary or appropriate action required to effectuate such tolling.
4.2 Consideration by Senior Executives . If a Dispute is not resolved in the normal course of business at the operational level, the parties shall attempt in good faith to resolve the Dispute by negotiation between executives who hold, at a minimum, the office of Senior Vice President and/or General Counsel. Either party may initiate the executive negotiation process by providing a written notice to the other (the Initial Notice ). Within fifteen (15) days after delivery of the Initial Notice, the receiving party shall submit to the other a written response (the Response ). The Initial Notice and the Response shall include (a) a statement of the Dispute and of each partys position and (b) the names and titles of the executives who may represent
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that party and of any other persons who may accompany the executive. The parties agree that such executives shall have full and complete authority to resolve any Disputes submitted pursuant to this Section 4.2 . Such executives shall meet in person or by teleconference or video conference within thirty (30) days of the date of the Initial Notice to seek a resolution of the Dispute. In the event that the executives are unable to agree to a format for such meeting, the meeting shall be convened in person at Parents executive offices in Fort Worth, Texas.
4.3 Binding Arbitration .
(a) In the event any Dispute is not finally resolved pursuant to Section 4.2 within sixty (60) days from the delivery of the Initial Notice, and unless the parties have mutually agreed to mediate or use some other form of alternative dispute resolution in an attempt to resolve the Dispute, then such Dispute may be submitted to be finally resolved by binding arbitration pursuant to the AAA Commercial Arbitration Rules as then in effect (the AAA Commercial Arbitration Rules ).
(b) Without waiving its rights to any remedy under this Agreement and without first complying with the provisions of Section 4.2 , either party may seek any interim or provisional relief, including injunctive relief and other equitable relief, that is necessary to protect the rights or property of that party either (i) before any Texas federal or state court, (ii) before a special arbitrator, as provided for under the AAA Commercial Arbitration Rules, or (iii) before the arbitral tribunal established hereunder.
(c) Unless otherwise agreed by the parties in writing, any Dispute to be decided in arbitration hereunder shall be decided (i) before a sole independent arbitrator if the amount in dispute, inclusive of all claims and counterclaims, totals less than $5 million; or (ii) by an arbitral tribunal of three (3) arbitrators if (A) the amount in dispute, inclusive of all claims and counterclaims, is equal to or greater than $5 million or (B) either party elects in writing to have such dispute decided by three (3) arbitrators when one of the parties believes, in its sole judgment, the issue could have significant precedential value; however, the party who makes that request shall solely bear the increased costs and expenses associated with a panel of three (3) arbitrators (i.e., the additional costs and expenses associated with the two (2) additional arbitrators).
(d) The panel of three (3) arbitrators shall be chosen as follows: (i) upon the written demand of either party and within fifteen (15) days from the date of receipt of such demand, each party shall name an arbitrator selected by such party in its sole discretion; and (ii) the two (2) party-appointed arbitrators shall thereafter, within thirty (30) days from the date on which the second of the two (2) arbitrators was named, name a third, independent arbitrator who shall act as chairperson of the arbitral tribunal. In the event that either party fails to name an arbitrator within fifteen (15) days from the date of receipt of a written demand to do so, then upon written application by either party, that arbitrator shall be appointed pursuant to the AAA Commercial Arbitration Rules. In the event that the two (2) party-appointed arbitrators fail to appoint the third, independent arbitrator within thirty (30) days from the date on which the second of the two (2) arbitrators was named, then upon written application by either party, the third, independent arbitrator shall be appointed pursuant to AAA Commercial Arbitration
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Rules. If the arbitration shall be before a sole independent arbitrator, then the sole independent arbitrator shall be appointed by agreement of the parties within fifteen (15) days from the date of receipt of written demand of either party. If the parties cannot agree to a sole independent arbitrator, then upon written application by either party, the sole independent arbitrator shall be appointed pursuant to AAA Commercial Arbitration Rules.
(e) The place of arbitration shall be Fort Worth, Texas. Along with the arbitrator(s) appointed, the parties shall agree to a mutually convenient date and time to conduct the arbitration, but in no event shall the final hearing(s) be scheduled more than nine (9) months from submission of the Dispute to arbitration unless the parties agree otherwise in writing.
(f) The arbitral tribunal shall have the right to award, on an interim basis, or include in the final award, any relief that it deems proper in the circumstances, including money damages (with interest on unpaid amounts from the due date), injunctive relief (including specific performance) and attorneys fees and costs; provided that the arbitral tribunal shall not award any relief not specifically requested by the parties and, in any event, shall not award any damages of the types prohibited under Section 10.3 . Upon constitution of the arbitral tribunal following any grant of interim relief by a special arbitrator or court pursuant to Section 4.3(b) , the tribunal may affirm or disaffirm that relief, and the parties shall seek modification or rescission of the order entered by the special arbitrator or court as necessary to accord with the tribunals decision.
(g) Neither party shall be bound by Rule 13 of the Federal Rules of Civil Procedure or any analogous Law or provision in the AAA Commercial Arbitration Rules governing deadlines for compulsory counterclaims; rather, each party shall be free to bring a counterclaim at any time (subject to any applicable statutes of limitation).
(h) So long as either party has a timely claim to assert, the agreement to arbitrate Disputes set forth in this Section 4.3 shall continue in full force and effect subsequent to, and notwithstanding the completion, expiration or termination of, this Agreement.
(i) The interim or final award in an arbitration pursuant to this Article IV shall be conclusive and binding upon the parties, and a party obtaining a final award may enter judgment upon such award in any court of competent jurisdiction.
(j) It is the intent of the parties that the agreement to arbitrate Disputes set forth in this Section 4.3 shall be interpreted and applied broadly such that all reasonable doubts as to arbitrability of a Dispute shall be decided in favor of arbitration.
(k) The parties agree that any Dispute submitted to arbitration shall be governed by, and construed and interpreted in accordance with Texas Law, as provided in Section 10.7 and, except as otherwise provided in this Article IV or mutually agreed to in writing by the parties, the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., shall govern any arbitration between the parties pursuant to this Section 4.3 .
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(l) Subject to Section 4.3(c)(ii)(B) , each party shall bear its own fees, costs and expenses and shall bear an equal share of the costs and expenses of the arbitration, including the fees, costs and expenses of the three (3) arbitrators; provided that the arbitral tribunal may award the prevailing party its reasonable fees and expenses (including attorneys fees), if it deems such an award is proper under the circumstances as described in Section 4.3(f) .
(m) Notwithstanding anything in this Article IV to the contrary, any disputes relating to the interpretation of Article V or requesting injunctive relief or specific performance shall be conducted according to the fast-track arbitration procedures of the AAA Commercial Arbitration Rules then in effect.
(n) Unless otherwise agreed in writing, the parties will continue to provide service and honor all other commitments under this Agreement and each Ancillary Agreement during the course of Dispute resolution pursuant to the provisions of this Article IV with respect to all matters not subject to such Dispute.
ARTICLE V
MUTUAL RELEASES; INDEMNIFICATION
5.1 Mutual Release of Pre-Distribution Date Claims .
(a) Enova Release . Except as provided in Section 5.1(c) , effective as of the Distribution Date, Enova does hereby, for itself and each other member of the Enova Group, their respective Affiliates (other than any member of the Parent Group), successors and assigns, and all Persons who at any time prior to the Distribution Date have been directors, officers, agents or employees of any member of the Enova Group (in each case, in their respective capacities as such), remise, release and forever discharge Parent and the members of the Parent Group, their respective Affiliates (other than any member of the Enova Group), successors and assigns, and all Persons who at any time prior to the Distribution Date have been stockholders, directors, officers, agents or employees of any member of the Parent Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution Date, including in connection with the transactions related to or undertaken in connection with the Distribution and all other activities to implement the Distribution or contemplated hereunder.
(b) Parent Release . Except as provided in Section 5.1(c) , effective as of the Distribution Date, Parent does hereby, for itself and each other member of the Parent Group, their respective Affiliates (other than any member of the Enova Group), successors and assigns, and all Persons who at any time prior to the Distribution Date have been directors, officers, agents or employees of any member of the Parent Group (in each case, in their respective capacities as such), remise, release and forever discharge
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Enova, the respective members of the Enova Group, their respective Affiliates (other than any member of the Parent Group), successors and assigns, and all Persons who at any time prior to the Distribution Date have been stockholders, directors, officers, agents or employees of any member of the Enova Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution Date, including in connection with the transactions related to or undertaken in connection with the Distribution and all other activities to implement the Distribution or contemplated hereunder.
(c) Surviving Liabilities . Nothing contained in Section 5.1(a) or (b) shall impair, limit or otherwise affect, any right or obligation of any Person pursuant to or contemplated by this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings that are specified in, or are contemplated to continue pursuant to, any Ancillary Document. Furthermore, nothing contained in Section 5.1(a) or (b) shall release any Person from:
(i) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement (including any Enova Liability);
(ii) any Liability for the sale, lease, construction or receipt of goods, property or services purchased, obtained or used in the ordinary course of business by a member of one Group from a member of the other Group prior to the Distribution Date;
(iii) any Liability for unpaid amounts for products or services or refunds owing on products or services due on a value-received basis for work done by a member of one Group at the request or on behalf of a member of the other Group prior to the Distribution Date;
(iv) any Liability that the parties may have with respect to indemnification or contribution pursuant to this Agreement for claims brought against the parties by third Persons, which Liability shall be governed by the provisions of this Article V and Article VI and any other applicable provisions of this Agreement or any Ancillary Agreement; or
(v) any Liability the release of which would result in the release of any third Person other than a Person released pursuant to this Section 5.1 .
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In addition, nothing contained in Section 5.1(a) shall release Parent or any member of the Parent Group from honoring its existing obligations to indemnify any director, officer or employee of a member of the Enova Group who was a director, officer or employee of a member of the Parent Group on or prior to the Distribution Date, to the extent that such director, officer or employee becomes a named defendant in any Action with respect to which such director, officer or employee was entitled to such indemnification pursuant to then-existing obligations, it being understood that, if the underlying obligation giving rise to such Action is an Enova Liability, Enova shall indemnify Parent for such Liability (including Parents costs to indemnify the director, officer or employee) in accordance with the provisions set forth in this Article V .
(d) Agreement to Make No Claims . Enova covenants that it shall not make, and shall not permit any member of the Enova Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Parent or any member of the Parent Group, or any other Person released pursuant to Section 5.1(a) , with respect to any Liabilities released pursuant to Section 5.1(a) . Parent covenants that it shall not make, and shall not permit any member of the Parent Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Enova or any member of the Enova Group, or any other Person released pursuant to Section 5.1(b) , with respect to any Liabilities released pursuant to Section 5.1(b) .
(e) Further Evidence of Release . It is the intent of each of Parent and Enova, by virtue of the provisions of this Section 5.1 , to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Distribution Date, between or among Enova or any member of the Enova Group, on the one hand, and Parent or any member of the Parent Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such members on or before the Distribution Date), except as expressly set forth in Section 5.1(c) . At any time, at the request of any other party to this Agreement, each party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions hereof.
(f) Fees and Expenses . Any breach of the provisions of this Section 5.1 by either Parent or Enova shall entitle the other party to recover reasonable fees and expenses of counsel in connection with such breach or any Action resulting from such breach.
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5.2 Indemnification by Enova . Subject to Section 5.4 , Enova shall, and shall cause the other members of the Enova Group to, indemnify, defend and hold harmless Parent, each member of the Parent Group and each of their respective directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the Parent Indemnitees ), from and against any and all Liabilities of the Parent Indemnitees relating to, arising out of or resulting from any of the following items (without duplication):
(a) the Enova Liabilities, including the failure of Enova or any other member of the Enova Group or any other Person to pay, perform, or otherwise promptly discharge any Enova Liabilities in accordance with their respective terms, whether prior to or after the Distribution Date;
(b) the Enova Business;
(c) any Corporate Action or Action relating primarily to the Enova Business from which Enova is unable to cause a Parent Group member to be removed pursuant to Section 5.6(d) ;
(d) any failure by Enova or a member of the Enova Group to use commercially reasonable efforts to obtain the waivers of subrogation contemplated by Section 5.4(c) ;
(e) any breach by Enova or any member of the Enova Group of this Agreement or any of the Ancillary Agreements;
(f) the failure by Enova or any other member of the Enova Group to perform, or the breach by Enova or any other member of the Enova Group of any term of, any Contract made by Enova or any other member of the Enova Group for which Parent has guaranteed the performance of Enova or any other member of the Enova Group, including Parents guarantee of obligations to third-party lenders under Enovas credit service organization and finance brokerage programs, and the obligations of Enova and any other member of the Enova Group under the leases covering leased premises, and all other guarantees of obligations of Enova and any other member of the Enova Group made by Parent or any member of the Parent Group for the benefit of Enova and the Enova Group prior to the Distribution Date, unless the failure or breach by Enova or any member of the Enova Group under the applicable Contract that leads to the enforcement or attempted enforcement of the Parent or a Parent Group members guarantee obligations thereunder results solely from any act or failure to act by Parent or any member of the Parent Group; and
(g) any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in any of the Form 10 (including in any amendments or supplements thereto), the Information Statement (as amended or supplemented if Enova shall have furnished any amendments or supplements thereto), any registration statement relating to the Retained Stock or the Senior Notes or any offering memorandum or other marketing materials, including the offering memorandum dated May 23, 2014 of Enova relating to the Senior Notes, other than any such statement or omission in the Form 10, Information Statement, such registration statements or offering memorandum or other marketing materials to the extent provided in writing by Parent and solely concerning the Parent Group.
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5.3 Indemnification by Parent . Subject to Section 5.4 , Parent shall, and shall cause the other members of the Parent Group to, indemnify, defend and hold harmless Enova, each member of the Enova Group and each of their respective directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the Enova Indemnitees ), from and against any and all Liabilities of the Enova Indemnitees relating to, arising out of or resulting from any of the following items (without duplication):
(a) the Parent Liabilities, including the failure of Parent or any other member of the Parent Group or any other Person to pay, perform, or otherwise promptly discharge any Parent Liabilities, in accordance with their respective terms, whether prior to or after the Distribution Date;
(b) the Parent Business;
(c) any Corporate Action or Action relating primarily to the Parent Business from which Parent is unable to cause an Enova Group member to be removed pursuant to Section 5.6(d) ;
(d) any failure by Parent or a member of the Parent Group to use commercially reasonable efforts to obtain the waivers of subrogation contemplated by Section 5.4(c) ;
(e) any breach by Parent or any member of the Parent Group of this Agreement or any of the Ancillary Agreements;
(f) the failure by Parent or any other member of the Parent Group to perform, or the breach by Parent or any other member of the Parent Group of any term of, any Contract made by Parent or any other member of the Parent Group for which Enova has guaranteed the performance of Parent or any other member of the Parent Group, including Enovas guarantee of Parents obligations under Parents 5.75% senior notes due May 15, 2018, and credit facilities and any other guarantees of obligations of Parent and any other member of the Parent Group made by Enova or any member of the Enova Group for the benefit of Parent and the Parent Group prior to the Distribution Date, unless the failure or breach by Parent or any member of the Parent Group under the applicable Contract that leads to the enforcement or attempted enforcement of Enova or an Enova Group members guarantee obligations thereunder results solely from any act or failure to act by Enova or any member of the Enova Group; and
(g) any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in any of the Form 10 (including in any amendments or supplements thereto), the Information Statement (as amended or supplemented if Enova shall have furnished any amendments or supplements thereto), any registration statement relating to the Retained Stock or the Senior Notes or any offering memorandum or other marketing materials, including the offering memorandum dated May 23, 2014 of Enova relating to the Senior Notes, in each case only to the extent provided in writing by Parent and solely concerning the Parent Group.
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5.4 Indemnification Obligations Net of Insurance Proceeds .
(a) The parties intend that any Liability subject to indemnification or reimbursement pursuant to this Article V or Article VI shall be net of Insurance Proceeds that actually reduce the amount of the Liability. Accordingly, the amount that any party (an Indemnifying Party ) is required to pay to any Person entitled to indemnification hereunder (an Indemnitee ) shall be reduced by any Insurance Proceeds theretofore actually recovered by or on behalf of the Indemnitee in respect of the related Liability. If an Indemnitee receives a payment (an Indemnity Payment ) required by this Agreement from an Indemnifying Party in respect of any Liability and subsequently receives Insurance Proceeds, then the Indemnitee shall pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds had been received, realized or recovered before the Indemnity Payment was made.
(b) An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provisions hereof, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurer or any other Third Party shall be entitled to a windfall (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions hereof) by virtue of the indemnification provisions hereof.
(c) Each of Parent and Enova shall, and shall cause the members of its Group to, when appropriate, use commercially reasonable efforts to obtain waivers of subrogation for each of the insurance policies identified on Schedule 5.4(c) . Each of Parent and Enova hereby waives, for itself and each member of its Group, its rights to recover against the other party in subrogation or as subrogee for a third Person.
(d) For all claims as to which indemnification is provided under Section 5.2 or 5.3 other than Third-Party Claims (as to which Section 5.5 shall apply), the reasonable fees and expenses of counsel to the Indemnitee for the enforcement of the indemnity obligations shall be borne by the Indemnifying Party.
5.5 Procedures for Indemnification of Third-Party Claims .
(a) If an Indemnitee shall receive written notice from a Person (including any Governmental Authority) who is not a member of the Parent Group or the Enova Group (a Third Party ) of any claim or of the commencement by any such Person of any Corporate Action or other Action (collectively, a Third-Party Claim ) with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to Section 5.2 or 5.3 , or any other Section of this Agreement or, subject to Section 5.14 , any Ancillary Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof within fourteen (14) days of receipt of such
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written notice. Any such notice shall describe the Third-Party Claim in reasonable detail and include copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notwithstanding the foregoing, the failure of an Indemnitee to provide notice in accordance with this Section 5.5(a) shall not relieve an Indemnifying Party of its indemnification obligations under this Agreement, except to the extent to which the Indemnifying Party shall demonstrate that it was materially prejudiced by the Indemnitees failure to provide notice in accordance with this Section 5.5(a) .
(b) An Indemnifying Party may elect to defend (and to seek to settle or compromise), at such Indemnifying Partys own expense and by such Indemnifying Partys own counsel, any Third-Party Claim. Within thirty (30) days after the receipt of notice from an Indemnitee in accordance with Section 5.5(a) (or sooner, if the nature of such Third-Party Claim so requires), the Indemnifying Party shall notify the Indemnitee of its election whether the Indemnifying Party shall assume responsibility for defending such Third-Party Claim. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, but the fees and expenses of such counsel shall be the expense of such Indemnitee except as otherwise expressly set forth herein.
(c) If an Indemnifying Party has elected to assume the defense of a Third-Party Claim, then such Indemnifying Party shall be solely liable for all fees and expenses incurred by it in connection with the defense of such Third-Party Claim and shall not be entitled to seek any indemnification or reimbursement from the Indemnitee for any such fees or expenses incurred during the course of its defense of such Third-Party Claim, regardless of any subsequent decision by the Indemnifying Party to reject or otherwise abandon its assumption of such defense. If an Indemnifying Party elects not to assume responsibility for defending any Third-Party Claim or fails to notify an Indemnitee of its election within thirty (30) days after receipt of a notice from an Indemnitee, and the Indemnitee conducts and controls the defense of such Third-Party Claim, then the Indemnifying Party shall be liable for all reasonable fees and expenses incurred by the Indemnitee in connection with the defense of such Third-Party Claim.
(d) Notwithstanding an election by an Indemnifying Party to defend a Third-Party Claim pursuant to Section 5.5(b) , a Indemnitee may, upon notice to the Indemnifying Party, elect to take over the defense of such Third-Party Claim if (i) in its exercise of reasonable business judgment, the Indemnitee determines that the Indemnifying Party is not defending such Third-Party Claim competently or in good faith, (ii) the Credit Rating of the Indemnifying Party as determined by at least two Rating Agencies is or falls below B as established by Standard & Poors or Fitch, Inc., or B2 as established by Moodys, or the equivalent as established by any other Rating Agency, (iii) the Indemnitee determines in its exercise of reasonable business judgment that there exists a compelling business reason for such Indemnitee to defend such Third-Party Claim (other than as contemplated by the foregoing clause (i)), (iv) the Indemnifying Party makes a general assignment for the benefit of creditors, has filed against it or files a petition in bankruptcy or insolvency or is declared bankrupt or insolvent or declares that it is bankrupt or insolvent, or (v) there occurs a change of control of the Indemnifying Party.
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(e) An Indemnitee that does not conduct and control the defense of any Third-Party Claim, or an Indemnifying Party that has failed to elect to defend any Third-Party Claim as contemplated hereby, nevertheless shall have the right to employ separate counsel (including local counsel as necessary) of its own choosing to monitor and participate in (but not control) the defense of any Third-Party Claim for which it is a potential Indemnitee or Indemnifying Party, but the fees and expenses of such counsel shall be at the expense of such Indemnitee or Indemnifying Party, as the case may be, and the provisions of Section 5.5(c) shall not apply to such fees and expenses. Notwithstanding the foregoing, subject to Section 7.7 , such party shall cooperate with the party entitled to conduct and control the defense of such Third-Party Claim in such defense and make available to the controlling party, at the non-controlling partys expense, all witnesses, information and materials in such partys possession or under such partys control relating thereto as are reasonably required by the controlling party. In addition to the foregoing, if any Indemnitee shall in good faith determine that such Indemnitee and the Indemnifying Party have actual or potential differing defenses or conflicts of interest between them that make joint representation inappropriate, then the Indemnitee shall have the right to employ separate counsel (including local counsel as necessary) and to participate in (but not control) the defense, compromise or settlement thereof, and the Indemnifying Party shall bear the reasonable fees and expenses of such counsel for all Indemnitees.
(f) Neither party may settle or compromise any Third-Party Claim for which either party is seeking to be indemnified hereunder without the prior written consent of the other party, which consent may not be unreasonably withheld, unless such settlement or compromise is solely for monetary damages, does not involve any finding or determination of wrongdoing or violation of Law by the other party and provides for a full, unconditional and irrevocable release of the other party from all Liability in connection with the Third-Party Claim. The parties hereby agree that if a party presents the other party with a written notice containing a proposal to settle or compromise a Third-Party Claim for which either party is seeking to be indemnified hereunder and the party receiving such Proposal does not respond in any manner to the party presenting such proposal within thirty (30) days (or within any such shorter time period that may be required by applicable Law or court order) of receipt of such proposal, then the party receiving such proposal shall be deemed to have consented to the terms of such proposal.
(g) Schedule 5.5(g) identifies certain pending Third-Party Claims with respect to which Liabilities will be allocated and the other actions taken as set forth therein. With respect to the Third-Party Claims identified in Schedule 5.5(g) , in the event of any conflict between the provisions of this Article V and the provisions of Schedule 5.5(g) , the latter shall govern. There shall be no requirement under this Section 5.5 to give notice with respect to any Third-Party Claims that exist as of the Distribution Date.
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(h) The provisions of this Section 5.5 (other than this Section 5.5(h) ) and the provisions of Section 5.6 shall not apply to Taxes (Taxes being governed by the Tax Matters Agreement).
(i) The Indemnifying Party shall establish a procedure reasonably acceptable to the Indemnitee to keep the Indemnitee reasonably informed of the progress of the Third-Party Claim and to notify the Indemnitee when any such Third-Party Claim is closed, regardless of whether such Third-Party Claim was resolved by settlement, verdict, dismissal or otherwise.
5.6 Additional Matters .
(a) Indemnification payments in respect of any Liabilities for which an Indemnitee is entitled to indemnification under this Article V shall be paid by the Indemnifying Party to the Indemnitee as such Liabilities are incurred upon demand by the Indemnitee, including reasonably satisfactory documentation setting forth the basis for the amount of such indemnification payment, including documentation with respect to calculations made and consideration of any Insurance Proceeds that actually reduce the amount of such Liabilities. THE INDEMNITY AGREEMENTS CONTAINED IN THIS ARTICLE V SHALL REMAIN OPERATIVE AND IN FULL FORCE AND EFFECT, REGARDLESS OF (I) ANY INVESTIGATION MADE BY OR ON BEHALF OF ANY INDEMNITEE, (II) THE KNOWLEDGE BY THE INDEMNITEE OF LIABILITIES FOR WHICH IT MIGHT BE ENTITLED TO INDEMNIFICATION HEREUNDER AND (III) ANY TERMINATION OF THIS AGREEMENT.
(b) Any claim on account of a Liability that does not result from a Third-Party Claim shall be asserted by written notice given by the Indemnitee to the Indemnifying Party. Such Indemnifying Party shall have a period of thirty (30) days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such thirty (30)-day period, such Indemnifying Party shall be deemed to have refused to accept responsibility to make payment. If such Indemnifying Party does not respond within such thirty (30)-day period or rejects such claim in whole or in part, such Indemnitee shall be free to pursue such remedies as may be available to such party as contemplated by this Agreement and the Ancillary Agreements.
(c) In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.
(d) In the event of an Action for which indemnification is sought pursuant to Section 5.2 or 5.3 and in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying Party shall so request, the parties shall use commercially reasonable efforts to substitute the Indemnifying Party for the named defendant.
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(e) In the event that Enova or Parent establishes a risk accrual in an amount of at least $500 thousand with respect to any Third-Party Claim for which such party has indemnified the other party pursuant to Section 5.2 or 5.3 , as applicable, it shall notify the other party of the existence and amount of such risk accrual (i.e., when the accrual is recorded in the financial statements as an accrual for a potential liability), subject to the parties entering into an appropriate agreement with respect to the confidentiality and/or privilege thereof.
(f) An Indemnitee shall take all reasonable steps to mitigate damages in respect of any claim for which it seeks indemnification hereunder, and shall use reasonable efforts to avoid any costs or expenses associated with such claim and, if such costs and expenses cannot be avoided, to minimize the amount thereof; provided, however, that an Indemnitee shall have no obligation to make a claim for recovery against any of its insurers with respect to any Losses for which it is seeking indemnification.
(g) THE RELEASES AND INDEMNIFICATION OBLIGATIONS OF THE PARTIES IN THIS AGREEMENT ARE EXPRESSLY INTENDED, AND SHALL OPERATE AND BE CONSTRUED, TO APPLY EVEN WHERE THE LOSSES OR LIABILITIES FOR WHICH THE RELEASE AND/OR INDEMNITY ARE GIVEN ARE CAUSED, IN WHOLE OR IN PART, BY THE SOLE, JOINT, JOINT AND SEVERAL, CONCURRENT, CONTRIBUTORY, ACTIVE OR PASSIVE NEGLIGENCE OR THE STRICT LIABILITY OR FAULT OF THE PARTY BEING RELEASED OR INDEMNIFIED.
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5.7 Remedies Cumulative . The remedies provided in this Article V shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party; provided, however, if a party has recovered any Losses from the other party pursuant to any provision of this Agreement or any Ancillary Agreement or otherwise, it shall not be entitled to recover the same Losses pursuant to any other provision of this Agreement or any Ancillary Agreement or otherwise.
5.8 Survival of Indemnities . The rights and obligations of each of Parent and Enova and their respective Indemnitees under this Article V shall survive (a) the sale or other transfer by any party of any assets or businesses or the assignment by it of any Liabilities, and (b) any merger, consolidation business combination, sale of all or substantially all of the assets, restructuring, recapitalization, reorganization or similar transaction involving either party or any of its respective Subsidiaries.
5.9 Guarantees and Other Obligations .
(a) On or prior to the Distribution Date or as soon as practicable thereafter, Enova shall (with the reasonable cooperation of the applicable member(s) of the Parent Group) use its commercially reasonable efforts to have any member(s) of the Parent Group removed as guarantor of or obligor for any Enova Liability to the extent that they relate to Enova Liabilities, including in respect of those guarantees and other obligations set forth on Schedule 5.9(a) .
(b) On or prior to the Distribution Date, to the extent required to obtain a release from a guarantee or other obligation of any member of the Parent Group, Enova shall execute a substitute document in the form of any such existing guarantee or such other form as is agreed to by the relevant parties to such guarantee agreement or other obligation, except to the extent that such existing guarantee contains representations, covenants or other terms or provisions either (i) with which Enova would be reasonably unable to comply or (ii) which would be reasonably expected to be breached.
(c) If the parties are unable to obtain, or to cause to be obtained, any such required removal as set forth in clauses (a) and (b) of this Section 5.9 , (i) Enova shall, and shall cause the other members of the Enova Group to, indemnify, defend and hold harmless each of the Parent Indemnitees for any Liability arising from or relating to such guarantee or other obligation, as applicable, and shall, as agent or subcontractor for the applicable Parent Group guarantor or obligor, pay, perform and discharge fully all of the obligations or other Liabilities of such guarantor or obligor thereunder, and (ii) Enova shall not, and shall cause the other members of the Enova Group not to, agree to renew or extend the term of, increase any obligations under, or transfer to a third Person, any guarantee, lease, contract or other obligation for which a member of the Parent Group is or may be liable unless all obligations of the members of the Parent Group with respect thereto are thereupon terminated by documentation satisfactory in form and substance to Parent in its sole and absolute discretion.
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5.10 Right of Contribution .
(a) Contribution . If any right of indemnification contained in this Article V is held unenforceable or is unavailable for any reason, or is insufficient to hold harmless an Indemnitee in respect of any Liability for which such Indemnitee is entitled to indemnification hereunder, then the Indemnifying Party shall contribute to the amounts paid or payable by the Indemnitees as a result of such Liability (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and its Subsidiaries, on the one hand, and the Indemnitees entitled to contribution, on the other hand, as well as any other relevant equitable considerations.
(b) Allocation of Relative Fault . Solely for purposes of determining relative fault pursuant to this Section 5.10 : (i) any fault associated with the business conducted with the Enova Business or Enova Liabilities (except for the gross negligence or intentional misconduct of Parent or a Parent Subsidiary) or with the ownership, operation or activities of the Enova Business prior to the Distribution Date, shall be deemed to be the fault of Enova and the Enova Subsidiaries, and no such fault shall be deemed to be the fault of Parent or a Parent Subsidiary; and (ii) any fault associated with the business conducted with the Parent Business (except for the gross negligence or intentional misconduct of Enova or an Enova Subsidiary) or with the ownership, operation or activities of the Parent Business prior to the Distribution Date, shall be deemed to be the fault of Parent and the Parent Subsidiaries, and no such fault shall be deemed to be the fault of Enova or an Enova Subsidiary.
(c) Contribution Procedures . The provisions of Sections 5.5 and 5.6 shall govern any contribution claims.
5.11 No Impact on Third Parties . For the avoidance of doubt, except as expressly set forth in this Agreement, the indemnifications provided for in this Article V are made only for purposes of allocating responsibility for Liabilities between the Parent Group, on the one hand, and the Enova Group, on the other hand, and are not intended to, and shall not, affect any obligations to, or give rise to any rights of, any third parties.
5.12 No Cross-Claims or Third-Party Claims . Each of Enova and Parent agrees that it shall not, and shall not permit the members of its respective Group to, in connection with any Third-Party Claim, assert as a counterclaim or third-party claim against any member of the Parent Group or Enova Group, respectively, any claim (whether sounding in contract, tort or otherwise) that arises out of or relates to this Agreement, any breach or alleged breach hereof, the transactions contemplated hereby (including all actions taken in furtherance of the transactions contemplated hereby on or prior to the date hereof), or the construction, interpretation, enforceability or validity hereof, which in each such case shall be asserted only as contemplated by Article IV .
5.13 Severability . If any indemnification provided for in this Article V is determined by a Texas federal or state court to be invalid, void or unenforceable, the liability shall be apportioned between the Indemnitee and the Indemnifying Party as determined in a separate proceeding in accordance with Article IV .
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5.14 Ancillary Agreements . Notwithstanding anything in this Agreement to the contrary, to the extent (a) any Ancillary Agreement contains any indemnification obligation or contribution obligation relating to any Enova Liability contributed, assumed, retained, transferred, delivered, conveyed or governed pursuant to such Ancillary Agreement, the indemnification obligations and contribution obligations contained herein shall not apply to such Enova Liability and instead the indemnification obligations and/or contribution obligations set forth in such Ancillary Agreement shall govern with regard to such Enova Liability, and (b) the Stockholders and Registration Rights Agreement contains any indemnification obligation or contribution obligation relating to any Liabilities of the Parent Indemnitees or Enova Indemnitees relating to, arising out of or resulting from information contained in any registration statement (other than the Form 10 (including any amendments or supplements thereto) and the Information Statement (as amended or supplemented if Enova shall have furnished any amendments or supplements thereto), to which this Section 5.14 shall not apply), the indemnification obligations and contribution obligations contained herein shall not apply to such Liabilities and instead the indemnification obligations and/or contribution obligations set forth in the Stockholders and Registration Rights Agreement shall govern with regard to such Liabilities.
ARTICLE VI
INSURANCE
6.1 Insurance Policies and Rights .
(a) To the extent permitted under the terms of any applicable Insurance Policy, without limiting the availability of subrogation rights as an Indemnifying Party under Section 5.6(c) , the assets of Enova shall include any and all rights of an insured party, including rights of indemnity and the right to be defended by or at the expense of the insurer, and to receive Insurance Proceeds with respect to all Insured Enova Claims under any Insurance Policies. The Enova Group shall be solely responsible for any and all premiums, deductibles, self-insured retentions, retrospective premiums, claims handling, and other charges owed under the Insurance Policies with respect to the coverage provided for Insured Enova Claims.
(b) To the extent permitted under the terms of any applicable Insurance Policy, without limiting the availability of subrogation rights as an Indemnifying Party under Section 5.6(c) , the assets of Parent shall include any and all rights of an insured party, including rights of indemnity and the right to be defended by or at the expense of the insurer, and to receive Insurance Proceeds under any Insurance Policies other than the rights under any Insurance Policies which are solely assets of Enova. The Parent Group shall be solely responsible for any and all premiums, deductibles, self-insured retentions, retrospective premiums, claims handling, and other charges owed under the Insurance Policies with respect to the coverage provided for Insured Claims other than Insured Enova Claims.
(c) Nothing in this Agreement is intended to relieve any insurer of any Liability under any Insurance Policy.
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6.2 Administration and Reserves . Consistent with the provisions of Article V , from and after the Distribution Date:
(a) Parent shall be responsible for (i) Insurance Administration of the Insurance Policies with respect to any liabilities of any member of the Parent Group, any assets of the Parent Group or any claims as to which the Parent Group has retained rights of reimbursement or subrogation pursuant to this Agreement or any Ancillary Agreement; and (ii) Claims Administration with respect to any liabilities of any member of the Parent Group, any assets of the Parent Group, or any claims as to which the Parent Group has retained rights of reimbursement or subrogation pursuant to this Agreement or any Ancillary Agreement. It is understood that the retention of the Insurance Policies by Parent is in no way intended to limit, inhibit, or preclude any right to insurance coverage for any Insured Claim or any other rights under the Insurance Policies, including claims of Enova and any of its operations, subsidiaries, and affiliates for insurance coverage, reimbursement, subrogation, or otherwise.
(b) Enova shall be responsible for (i) Insurance Administration of the Insurance Policies which insure the Enova Group only and (ii) Claims Administration with respect claims made under the Insurance Policies which insure the Enova Group only, or any claims as to which the Enova Group has rights of reimbursement or subrogation pursuant to this Agreement or any Ancillary Agreement.
(c) The parties shall cooperate with regards to Insurance Administration, and shall share all relevant information concerning such matters so that both the Enova Group and the Parent Group are aware on a continuing basis of remaining aggregate limits of coverage, deductible payments, retrospective premium payments, and other material matters relevant to continued dealings with insurers providing coverage for Liabilities of both Groups.
(d) Nothing in this Agreement shall be construed or deemed to affect in any way the right of Parent to obtain and administer future insurance policies or to enter into future indemnification agreements with third parties on whatever terms it believes to be advisable, including the entry into insurance policies covering Parent and its Subsidiaries.
(e) Nothing in this Agreement shall be construed or deemed to affect in any way the right of Enova to obtain and administer future insurance policies or to enter into future indemnification agreements with third parties on whatever terms it believes to be advisable, including the entry into insurance policies covering Enova and its Subsidiaries.
6.3 Allocation of Insurance Proceeds; Cooperation . Except as otherwise provided in Section 5.4 , the parties shall use reasonable best efforts to ensure that Insurance Proceeds received with respect to claims, costs, and expenses under the Insurance Policies shall be paid to Parent with respect to Parent Liabilities and to Enova with respect to the Enova Liabilities.
6.4 Reimbursement of Expenses . Enova shall reimburse the relevant insurer or the relevant third party administrator or Parent, as appropriate, to the extent required under any Insurance Policy or Claims Handling Agreement for any services performed after the
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Distribution Date with respect to any and all Insured Enova Claims which are not Parent Liabilities which are paid, settled, adjusted, defended, and/or otherwise handled by such insurer or third party administrator pursuant to the terms and conditions of such Insurance Policy or Claims Handling Agreement.
6.5 No Reduction of Coverage . Except for reduction in coverage resulting from submission and payment of claims, no party shall take any action to eliminate or reduce coverage available to the other parties under any Insurance Policy or Claims Handling Agreement for any claims without the prior written consent of the other parties (which shall not be unreasonably withheld or delayed); provided , however , that nothing herein shall affect a partys right to amend the terms of a Claims Handling Agreement or Insurance Policy on renewal or otherwise; and provided , that no member of the Parent Group shall have any Liability to any member of the Enova Group if any Insurance Policy is terminated or otherwise ceases to be in effect for any reason, is unavailable, or is inadequate to cover any Liability of the Enova Group for any reason.
6.6 Shared Insurance Policies Other Than D&O, Fiduciary, and Employment Practices Liability . Effective on the Distribution Date, Parent will take the necessary action to terminate the Enova Groups coverage with respect to occurrences on or after the Distribution Date under the shared Insurance Policies excluding any directors and officers, fiduciary, and employment practices liability policies. Any resulting return of premium or credit will be allocated between the Parent Group and the Enova Group in proportion to their respective contributions to the payment of such premium. Each of the Parent Group and the Enova Group shall be responsible for obtaining its own replacement policies (if so desired) for occurrences on or after the Distribution Date.
6.7 D&O, Fiduciary, and Employment Practices Liability . Each of the Parent Group and the Enova Group shall obtain its own directors and officers, fiduciary, and employment practices liability policies for acts or omissions occurring on or after the Distribution Date.
ARTICLE VII
EXCHANGE OF INFORMATION; CONFIDENTIALITY
7.1 Agreement for Exchange of Information . Except as otherwise provided in any Ancillary Agreement, each of Parent and Enova, on behalf of itself and the members of its respective Group, shall use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the other party, at any time before or after the Distribution Date, as soon as reasonably practicable after written request therefor, any Information (or a copy thereof) in the possession or under the control of either party or any of its Subsidiaries to the extent that: (i) such Information relates to the Enova Business or any Enova Liability, if Enova is the requesting party, or to the Parent Business or any Parent Liability, if Parent is the requesting party; (ii) such Information is required by the requesting party to comply with its obligations under this Agreement or any Ancillary Agreement; or (iii) such Information is required by the requesting party to comply with any obligation imposed by any Governmental Authority; provided, however, that, in the event that the party to whom the request has been made determines that any such provision of Information could be commercially detrimental, violate any Law or agreement or waive any attorney-client privilege, then the parties shall use commercially reasonable efforts to permit compliance with such obligations to the extent and in
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a manner that avoids any harm or consequence. The party providing Information pursuant to this Section 7.1 shall only be obligated to provide such Information in the form, condition and format in which it then exists and in no event shall such party be required to perform any improvement, modification, conversion, updating or reformatting of any such Information, and nothing in this Section 7.1 shall expand the obligations of the parties under Section 7.4 .
7.2 Ownership of Information . Any Information owned by one Group that is provided to a requesting party pursuant to Section 7.1 or 7.7 shall remain the property of the providing party. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such Information.
7.3 Compensation for Providing Information . The party requesting Information agrees to reimburse the other party for the reasonable costs, if any, of creating, gathering and copying such Information or otherwise complying with the request with respect to such Information. Except as may be otherwise specifically provided elsewhere in this Agreement or in any other agreement between the parties, such costs shall be computed in accordance with the providing partys standard methodology and procedures.
7.4 Record Retention .
(a) The parties agree and acknowledge that it is not practicable to separate all Tangible Information belonging to the parties, and that following the Distribution Date, each party will have some of the Tangible Information of the other party stored at its facilities or at Third Party records storage locations arranged for by such party (each, a Records Facility ).
(b) Each party shall use commercially reasonable efforts: (i) to maintain the Stored Records as to which it is the Custodial Party in accordance with its regular records retention policies and procedures and the terms of this Section 7.4 ; and (ii) to comply with the requirements of any litigation hold that relates to Stored Records as to which it is the Custodial Party that relates to (x) any Action that is pending as of the Distribution Date or (y) any Action that arises or becomes threatened or reasonably anticipated after the Distribution Date as to which the Custodial Party has received a written notice of the applicable litigation hold from the Non-Custodial Party.
7.5 Limitations of Liability . No party shall have any liability to any other party in the event that any Information exchanged or provided pursuant to this Agreement is found to be inaccurate in the absence of willful misconduct by the party providing such Information. No party shall have any liability to any other party if any Information (other than Information that is subject to a litigation hold) is destroyed after commercially reasonable efforts by such party to comply with the provisions of Section 7.4 .
7.6 Other Agreements Providing for Exchange of Information .
(a) The rights and obligations granted under this Article VII are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange, retention or confidential treatment of Information set forth herein or any Ancillary Agreement.
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(b) Either party that receives, pursuant to a request for Information in accordance with this Article VII , Tangible Information that is not relevant to its request shall (i) return it to the providing party or, at the providing partys request, destroy such Tangible Information and (ii) deliver to the providing party a certificate certifying that such Tangible Information was returned or destroyed, as the case may be, which certificate shall be signed by an authorized Representative of the requesting party.
(c) When any Tangible Information provided by one party to the other party (other than Tangible Information provided pursuant to Section 7.4 ) is no longer needed for the purposes contemplated by this Agreement or any Ancillary Agreement or is no longer required to be retained by applicable Law, the receiving party shall promptly, after request of the other party, either return to the other party all Tangible Information in the form in which it was originally provided (including all copies thereof and all notes, extracts or summaries based thereon) or, if the providing party has requested that the other party destroy such Tangible Information, certify to the other party that it has destroyed such Tangible Information (and such copies thereof and such notes, extracts or summaries based thereon); provided, that this obligation to return or destroy such Tangible Information shall not apply to any Tangible Information solely related to the receiving partys business, assets, Liabilities, operations or activities; further, provided, no Tangible Information subject to a litigation hold shall be destroyed when and until such hold is removed.
7.7 Production of Witnesses; Records; Cooperation . Without limiting any other provision of this Agreement, the parties agree to consult and cooperate to the extent reasonably necessary with respect to any Actions. In furtherance of such undertaking, the parties shall enter into a mutually acceptable joint defense agreement so as to maintain to the extent practicable any applicable attorney-client privilege or work product immunity of any member of any Group.
7.8 Privileged Matters .
(a) The parties recognize that legal and other professional services that have been and shall be provided prior to the Distribution Date have been and shall be rendered for the collective benefit of the parties and their respective Subsidiaries, and that each party and its respective Subsidiaries should be deemed to be the client with respect to such services for the purposes of asserting all privileges and immunities that may be asserted under applicable Law in connection therewith.
(b) The parties agree as follows: (i) Parent shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the Parent Business, whether or not the Privileged Information is in the possession or under the control of a member of the Parent Group or the Enova Group. Parent shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to any Parent Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of a member of the Parent Group or the Enova Group; and (ii) Enova shall be entitled, in perpetuity, to control the assertion or
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waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the Enova Business, whether or not the Privileged Information is in the possession or under the control of a member of the Parent Group or the Enova Group. Enova shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to any Enova Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of a member of the Parent Group or the Enova Group.
(c) Subject to Sections 7.8(d) and 7.8(e) , the parties agree that they shall have a shared privilege or immunity with respect to all privileges not allocated pursuant to Section 7.8(b) and all privileges and immunities relating to any Actions or other matters that involve both parties (or one or more of their respective Subsidiaries) and in respect of which both parties have Liabilities under this Agreement, and that no such shared privilege or immunity may be waived by either party without the consent of the other party.
(d) If any dispute arises between Parent and Enova, or any of their respective Subsidiaries, regarding whether a privilege or immunity should be waived to protect or advance the interests of either party and/or their respective Subsidiaries, each party agrees that it shall: (i) negotiate with the other party in good faith; (ii) endeavor to minimize any prejudice to the rights of the other party; and (iii) not unreasonably withhold consent to any request for waiver by the other party. Further, each party specifically agrees that it shall not withhold its consent to the waiver of a privilege or immunity for any purpose except to protect its own legitimate interests.
(e) Upon receipt by Enova or by any of the Enova Subsidiaries of any subpoena, discovery or other request that may reasonably be expected to result in the production or disclosure of Information subject to a shared privilege or immunity or as to which Parent or any of the Parent Subsidiaries has the sole right hereunder to assert a privilege or immunity, or if Enova obtains knowledge that any of its, or an Enova Subsidiarys, current or former directors, officers, agents or employees have received any subpoena, discovery or other requests that may reasonably be expected to result in the production or disclosure of such Privileged Information, Enova shall promptly provide written notice to Parent of the existence of the request (which notice shall be delivered to Parent no later than five (5) business days following the receipt of any such subpoena, discovery or other request) and shall provide Parent a reasonable opportunity to review the Information and to assert any rights it or they may have, including under this Section 7.8 or otherwise, to prevent the production or disclosure of such Privileged Information.
(f) Upon receipt by Parent or by any of the Parent Subsidiaries of any subpoena, discovery or other request that may reasonably be expected to result in the production or disclosure of Information subject to a shared privilege or immunity or as to which Enova or any of the Enova Subsidiaries has the sole right hereunder to assert a privilege or immunity, or if Parent obtains knowledge that any of its, or a Parent Subsidiarys, current or former directors, officers, agents or employees have received any subpoena, discovery or other requests that may reasonably be expected to result in the
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production or disclosure of such Privileged Information, Parent shall promptly provide written notice to Enova of the existence of the request (which notice shall be delivered to Enova no later than five (5) business days following the receipt of any such subpoena, discovery or other request) and shall provide Enova a reasonable opportunity to review the Information and to assert any rights it or they may have, including under this Section 7.8 or otherwise, to prevent the production or disclosure of such Privileged Information.
(g) Any furnishing of, or access to, Information pursuant to this Agreement is made in reliance on the agreement of the parties set forth in this Section 7.8 and in Section 7.9 to maintain the confidentiality of Privileged Information and to assert and maintain all applicable privileges and immunities. The parties further agree that: (i) the exchange by one party to the other party of any Privileged Information that should not have been transferred pursuant to the terms of this Article VII shall not be deemed to constitute a waiver of any privilege or immunity that has been or may be asserted under this Agreement or otherwise with respect to such Privileged Information; and (ii) the party receiving such Privileged Information shall promptly return such Privileged Information to the party who has the right to assert the privilege or immunity.
(h) In furtherance of, and without limitation to, the parties agreement under this Section 7.8 , Parent and Enova shall, and shall cause their applicable Subsidiaries to, use reasonable efforts to maintain their respective separate and joint privileges and immunities, including by executing joint defense and/or common interest agreements where necessary or useful for this purpose.
7.9 Confidentiality .
(a) Confidentiality . From and after the Distribution Date, subject to Section 7.10 and except as contemplated by or otherwise provided in this Agreement or any Ancillary Agreement, Parent, on behalf of itself and each of the Parent Subsidiaries, and Enova, on behalf of itself and each of the Enova Subsidiaries, agrees to hold, and to cause its respective Representatives to hold, in strict confidence, with at least the same degree of care that applies to Parents confidential and proprietary information pursuant to policies in effect as of the Distribution Date, all confidential and proprietary Information concerning the other party (or its business) and the other partys Subsidiaries (or their respective businesses) that is either in its possession (including confidential and proprietary Information in its possession prior to the Distribution Date) or furnished by the other party or the other partys Subsidiaries or their respective Representatives at any time pursuant to this Agreement or any Ancillary Agreement, and shall not use any such confidential and proprietary Information other than for such purposes as may be expressly permitted hereunder or thereunder, except, in each case, to the extent that such confidential and proprietary Information has been: (i) in the public domain or generally available to the public, other than as a result of a disclosure by such party or any of its Subsidiaries or any of their respective Representatives in violation of this Agreement; (ii) later lawfully acquired from other sources by such party or any of its Subsidiaries, which sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such confidential and proprietary Information; or (iii) independently developed or generated without reference
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to or use of the respective proprietary or confidential Information of the other party or any of its Subsidiaries. If any confidential and proprietary Information of one party or any of its Subsidiaries is disclosed to another party or any of its Subsidiaries in connection with providing services to such first party or any of its Subsidiaries under this Agreement or any Ancillary Agreement, then such disclosed confidential and proprietary Information shall be used only as required to perform such services.
(b) No Release; Return or Destruction . Each party agrees not to release or disclose, or permit to be released or disclosed, any confidential or proprietary Information of the other party addressed in Section 7.9(a) to any other Person, except its Representatives who need to know such Information in their capacities as such, and except in compliance with Section 7.10 . Without limiting the foregoing, when any Information furnished by the disclosing party after the Distribution Date pursuant to this Agreement or any Ancillary Agreement is no longer needed for the purposes contemplated by this Agreement or any Ancillary Agreement, the other party shall, at its option, promptly after receiving a written notice from the disclosing party, either return to the disclosing party all such Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or certify to the disclosing party that it has destroyed such Information (and such copies thereof and such notes, extracts or summaries based thereon); provided, however, that a party shall not be required to destroy or return any such Information to the extent that (i) the party is required to retain the Information in order to comply with any applicable Law, (ii) the Information has been backed up electronically pursuant to the partys standard document retention policies and will be managed and ultimately destroyed consistent with such policies, (iii) it is kept in the partys legal files for purposes of resolving any dispute that may arise under this Agreement or any Ancillary Agreement or (iv) such Information is subject to a litigation hold.
(c) Third-Party Information; Privacy or Data Protection Laws . Each party acknowledges that it and its respective Subsidiaries may presently have and, following the Distribution Date, may gain access to or possession of confidential or proprietary Information of, or personal Information relating to, Third Parties: (i) that was received under confidentiality or non-disclosure agreements entered into between such Third Parties, on the one hand, and the other party or the other partys Subsidiaries, on the other hand, prior to the Distribution Date; or (ii) that, as between the two parties, was originally collected by the other party or the other partys Subsidiaries and that may be subject to and protected by privacy, data protection or other applicable Laws. As may be provided in more detail in an applicable Ancillary Agreement, each party agrees that it shall hold, protect and use, and shall cause its Subsidiaries and its and their respective Representatives to hold, protect and use, in strict confidence the confidential and proprietary Information of, or personal Information relating to, Third Parties in accordance with privacy, data protection or other applicable Laws and the terms of any agreements that were either entered into before the Distribution Date or affirmative commitments or representations that were made before the Distribution Date by, between or among the other party or the other partys Subsidiaries, on the one hand, and such Third Parties, on the other hand.
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7.10 Protective Arrangements . In the event that either party or any of its Subsidiaries is requested or required (by oral question, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) by any Governmental Authority or pursuant to applicable Law or the rules of any stock exchange on which the shares of the party or any member of its Group are traded to disclose or provide any confidential or proprietary Information of the other party, that is subject to the confidentiality provisions hereof, such party shall provide the other party with written notice of such request or demand as promptly as practicable under the circumstances so that such other party shall have an opportunity to seek an appropriate protective order, at such other partys own cost and expense. In the event that such other party fails to receive such appropriate protective order in a timely manner and the party receiving the request or demand reasonably determines that its failure to disclose or provide such Information shall actually prejudice the party receiving the request or demand, then the party that received such request or demand may thereafter disclose or provide Information to the extent required by such Law (as so advised by counsel) or by lawful process or such Governmental Authority. Notwithstanding the foregoing, Parent will not be required to notify Enova or seek its consent in connection with disclosures required by the SEC or the NYSE or in connection with Parents annual, quarterly and periodic reporting obligations.
ARTICLE VIII
FURTHER ASSURANCES AND ADDITIONAL COVENANTS
8.1 Further Assurances .
(a) In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties hereto shall use its commercially reasonable efforts, prior to, on and after the Distribution Date, to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable on its part under applicable Laws, regulations and agreements, to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.
(b) Without limiting the foregoing, prior to, on and after the Distribution Date, each party hereto shall cooperate with each other party hereto, and without any further consideration, but at the expense of the requesting party, to execute and deliver, or use its commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain or make any Approvals or Notifications of, any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument (including any Third-Party consents or Governmental Approvals), and to take all such other actions as such party may reasonably be requested to take by any other party hereto from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the other transactions contemplated hereby and thereby.
(c) On or prior to the Distribution Date, Parent and Enova in their respective capacities as direct and indirect stockholders of their respective Subsidiaries, shall each ratify any actions that are reasonably necessary or desirable to be taken by any Subsidiary of Parent or Subsidiary of Enova, as the case may be, to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements.
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8.2 Performance . Parent shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the Parent Group. Enova shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the Enova Group. Each party (including its permitted successors and assigns) further agrees that it shall (a) give timely notice of the terms, conditions and continuing obligations contained in this Section 8.2 to all of the other members of its Group, and (b) cause all of the other members of its Group not to take, or omit to take, any action which action or omission would violate or cause such party to violate this Agreement or any Ancillary Agreement.
8.3 Order of Precedence . Notwithstanding anything to the contrary in this Agreement or any Ancillary Agreement, in the case of any conflict between the provisions of this Agreement and the provisions of any Ancillary Agreement, the provisions of this Agreement shall prevail; provided, however, that in relation to any matters concerning Taxes, the Tax Matters Agreement shall prevail over this Agreement and any other Ancillary Agreement.
8.4 Registration of Retained Stock, including Retained Stock held for Delivery by Parent Under Parents Long-Term Incentive Plans.
(a) Initial Shelf Registration Statement . Enova shall (i) prepare and file with the SEC a Registration Statement (the Initial Registration Statement ) for an offering to be made on a continuous basis pursuant to Rule 415 of the Securities Act no later than five (5) Business Days following the Distribution Date, or such earlier date as requested by Parent, to register the Retained Stock (the Registrable Securities ) to be offered by Parent, including, without limitation, the shares of Retained Stock to be distributed by Parent for delivery under Parents long-term incentive plans and equity-based compensation plans, (ii) use its reasonable best efforts to cause such Initial Registration Statement to be declared effective as soon as practicable after such filing under the Securities Act, (iii) not permit any securities other than the Registrable Securities to be included in the Initial Registration Statement or any Subsequent Registration Statement (as defined below) relating to the Registrable Securities, and (iv) use its reasonable best efforts to keep the Initial Registration Statement and any Subsequent Registration Statement relating to the Registrable Securities continuously effective under the Securities Act (the Effectiveness Period ) until the date that all Registrable Securities have been distributed. The Initial Registration Statement shall be a Shelf Registration Statement on Form S-1 or another appropriate form permitting registration of the Registrable Securities under the Securities Act for resale or distribution as set forth in the Plan of Distribution section of the Initial Registration Statement as is furnished by Parent to Enova; provided , however , Enova shall prepare and file with the SEC a new Registration Statement with the SEC on Form S-3 to register an offering of the Registrable Securities to be made on a continuous basis pursuant to Rule 415 of the Securities Act, promptly after Enova becomes eligible to use Form S-3 (or similar provisions then effect) of the Securities Act.
(b) Subsequent Shelf Registrations . If the Initial Registration Statement or any Subsequent Registration Statement (as defined below) relating to the Registrable Securities ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the distribution of all of the Registrable Securities registered thereunder), Enova shall use its reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within 30 days of such cessation of effectiveness amend such Registration Statement in a manner to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional shelf Registration Statement (a Subsequent Registration Statement ) pursuant to Rule 415 covering all of the Registrable Securities. If a Subsequent Registration Statement is filed, Enova shall use its commercially reasonable efforts to cause the Subsequent Registration Statement to be declared effective as soon as practical after such filing and to keep such Subsequent Registration Statement continuously effective for the remainder of the Effectiveness Period.
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(c) Supplements and Amendments . Enova shall promptly prepare and file with the SEC such amendments and post-effective amendments to any Shelf Registration Statement and supplements to the Prospectus contained therein as may be reasonably requested by Parent or if required by the rules, regulations or instructions applicable to the registration form used for such Registration Statement, if required by the Securities Act. Without limitation on the generality of the foregoing, so long as any Shelf Registration Statement is on Form S-1, Enova shall promptly prepare and file with the SEC amendments and post-effective amendments to such Registration Statement so that the prospectus meets the requirements of Section 10(3) of the Securities Act, including such amendments and post-effective amendments as is required to update the financial statements to comply with the requirements of the Securities Act and Regulation S-X thereunder. In furtherance thereof, Enova agrees promptly following the filing by Enova of each Annual Report on Form 10-K with the SEC, commencing with the Annual Report on Form 10-K for its fiscal year ending December 31, 2014, it shall file a post-effective amendment to the Shelf Registration Statement to update and supplement the information contained in the Shelf Registration Statement to include the information contained in its Annual Report on Form 10-K for the most recently completed fiscal year.
(d) Compliance with the Stockholders and Registration Rights Agreement . The provisions of this Section 8.4 shall be deemed to constitute an exercise of a request that Enova file a Shelf Registration Statement with the SEC pursuant to Section 2.01 of the Stockholders and Registration Rights Agreement (therein referred to as a Demand Registration ), and as such, Enova shall fully comply with the registration procedures and other obligations set forth in the Stockholders and Registration Rights Agreement in respect of such Demand Registration.
(e) Rights are In Addition to Rights under the Stockholders and Registration Rights Agreement . The rights of Parent, and the obligations of Enova, to require the registration of the Registrable Securities under the Securities Act in accordance with this Section 8.4 are in addition to the rights and obligations set forth in the Stockholders and Registration Rights Agreement and are not in substitution therefor. As a consequence, nothing in this Section 8.4 shall limit or affect the rights of Parent under the Stockholders and Registration Rights Agreement, including, without limitation, the rights of Parent to require the registration of shares of the Retained Stock under the Securities Act in accordance with the provisions of the Stockholders and Registration Rights Agreement, nor shall this Section 8.4 relieve Enova of any of its obligations under the terms of the Stockholders and Registration Rights Agreement.
8.5 Non-Solicitation of Employees .
(a) Parent No Hire . For a period of two years from the Distribution Date, Parent agrees not to, without Enovas consent, (i) solicit, recruit, or hire any employees, or officers of the Enova Group who have worked for the Enova Business immediately prior to the Distribution Date and who are employed full-time by Enova or a member of the Enova Group immediately after the Distribution Date or (ii) solicit or encourage any then current employee of the Enova Group who is working full-time for the Enova Business to leave the employment of Enova or a member of the Enova Group. Nothing in this Section 8.5 shall prevent or restrict Parent or any member of the Parent Group from employing any individual who responds to a general solicitation for employment made by or on behalf of Parent or any member of the Parent Group that is not specifically
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directed at employees or officers of Enova who have worked in the Enova Business or any individual who, after the Distribution Date, initiates contact with Parent or any member of the Parent Group for purposes of seeking employment.
(b) Enova No Hire . For a period of two years from the Distribution Date, Enova agrees not to, without Parents consent, (i) solicit, recruit, or hire any employees, or officers of the Parent Group who is working for the Parent Business immediately prior to the Distribution Date and who are employed full-time by Parent or a member of the Parent Group immediately after the Distribution Date or (ii) solicit or encourage any then current employee of the Parent Group who has worked full-time for the Parent Business to leave the employment of Parent or a member of the Parent Group. Nothing in this Section 8.5 shall prevent or restrict Enova or any member of the Enova Group from employing any individual who responds to a general solicitation for employment made by or on behalf of Enova or any member of the Enova Group that is not specifically directed at employees or officers of Parent who have worked in the Parent Business or any individual who, after the Distribution Date, initiates contact with Enova or any member of the Enova Group for purposes of seeking employment.
ARTICLE IX
TERMINATION
9.1 Termination . This Agreement and any Ancillary Agreement may be terminated and the terms and conditions of the Distribution may be amended, modified or abandoned at any time prior to the Distribution Date by and in the sole and absolute discretion of the Parent Board without the approval of any Person, including Enova. In the event that this Agreement is terminated, this Agreement and each Ancillary Agreement shall become null and void and no party, nor any partys directors, officers or employees, shall have any liability of any kind to any Person by reason of this Agreement or any Ancillary Agreement. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by each of the parties to this Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Construction . In this Agreement and any Ancillary Agreement, (a) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires; (b) the terms hereof, herein, herewith and words of similar import, and the terms Agreement and Ancillary Agreement shall, unless otherwise stated, be construed to refer to this Agreement or the applicable Ancillary Agreement as a whole (including all of the Schedules, Exhibits and Appendices hereto and thereto) and not to any particular provision of this Agreement or such Ancillary Agreement; (c) Article, Section, Exhibit, Schedule and Appendix references are to the Articles, Sections, Exhibits, Schedules and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified; (d) the word including and words of similar import when used in this Agreement (or the applicable Ancillary Agreement) means including, without limitation; (e) the word or shall not be exclusive; (f) unless expressly stated to the contrary in this Agreement or in any Ancillary Agreement, all references to the date hereof, the date of this
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Agreement and hereupon and words of similar import shall all be references to the date first stated in the preamble to this Agreement, regardless of any amendment or restatement hereof; (g) unless otherwise provided, all references to $ or dollars are to United States dollars; and (h) references to the performance, discharge or fulfillment of any Liability in accordance with its terms shall have meaning only to the extent such Liability has terms, and if the Liability does not have terms, the reference shall mean performance, discharge or fulfillment of such Liability.
10.2 Conflicts with Other Ancillary Agreements . To the extent any portion of this Agreement conflicts, or is inconsistent, with any other Ancillary Agreement, this Agreement shall control; provided , however , that if there are any conflicting or inconsistent provisions in the Tax Matters Agreement, the Tax Matters Agreement shall control.
10.3 Limitation of Liability . NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ANY ANCILLARY AGREEMENT, IN NO EVENT SHALL ANY MEMBER OF THE PARENT GROUP OR THE ENOVA GROUP OR THEIR RESPECTIVE DIRECTORS, OFFICERS, AND EMPLOYEES BE LIABLE TO ANY OTHER MEMBER OF THE PARENT GROUP OR THE ENOVA GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL, OR PUNITIVE DAMAGES, OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED , HOWEVER , THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTYS INDEMNIFICATION OBLIGATIONS FOR LIABILITIES TO THIRD PARTIES AS SET FORTH IN THIS AGREEMENT OR ANY OTHER ANCILLARY AGREEMENT.
10.4 Assignment . Except as set forth in any Ancillary Agreement, this Agreement and each Ancillary Agreement shall be binding upon and inure to the benefit of the parties hereto and thereto, respectively, and their respective successors and permitted assigns; provided , however , that no party hereto or thereto may assign its respective rights or delegate its respective obligations under this Agreement or any Ancillary Agreement without the express prior written consent of the other parties hereto or thereto and provided, further , that Parent may assign its rights and delegate its obligations under this Agreement or any Ancillary Agreement to any of its Affiliates or in connection with a change of control of Parent or a sale or disposition of any of the assets or Liabilities or lines of business of Parent, provided, that no such assignment or delegation shall release Parent from any Liability or obligation under this Agreement or any Ancillary Agreement.
10.5 Entire Agreement . This Agreement and the other Ancillary Agreements, and the exhibits and schedules referenced or attached hereto or thereto, constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede (a) all prior oral or written proposals or agreements, (b) all contemporaneous oral proposals or agreements, and (c) all previous negotiations and all other communications or understandings between the parties, in each case with respect to the subject matter hereof and thereof.
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10.6 Notices . Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon receipt, if delivered by hand, generally accepted means of electronic transmission, any nationally recognized overnight courier service or mail (with postage prepaid), to the following addresses:
(a) | If to Enova to: |
Enova International, Inc.
200 West Jackson Blvd.
Chicago, Illinois 60606
Attn: General Counsel
E-mail: lyoung@enova.com
(b) | If to Parent, to: |
Cash America International, Inc.
1600 West 7 th Street
Fort Worth, Texas 76102
Attn: General Counsel
E-mail: clinscott@casham.com
or to such other addresses or e-mail address as may be specified by like notice to the other party.
10.7 Governing Law . This Agreement and, unless expressly provided therein, each Ancillary Agreement (and any claims or disputes arising out of or related hereto or thereto or to the transactions contemplated hereby and thereby or to the inducement of any party to enter herein and therein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of Texas, irrespective of the choice of laws principles of the State of Texas, including all matters of validity, construction, effect, enforceability, performance and remedies.
10.8 Third-Party Beneficiaries . Except for the release and indemnification and contribution rights under this Agreement or any Ancillary Agreement of any Parent Indemnitee or Enova Indemnitee in their respective capacities as such, (a) the provisions of this Agreement and each Ancillary Agreement are solely for the benefit of the parties and are not intended to confer upon any Person except the parties any rights or remedies hereunder or thereunder; and (b) there are no third-party beneficiaries of this Agreement or any Ancillary Agreement and neither this Agreement nor any Ancillary Agreement shall provide any third Person with any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement or any Ancillary Agreement.
10.9 Severability . If any provision of this Agreement or any Ancillary Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable provision to effect the original intent of the parties.
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10.10 Amendment . No provisions of this Agreement or any Ancillary Agreement shall be deemed amended, supplemented or modified by any party, unless such amendment, supplement or modification is in writing and signed by the authorized representative of the party against whom such amendment, supplement or modification is sought to be enforced.
10.11 Guarantees . Parent will cause to be performed and hereby guarantees the performance of any and all actions of each of the members of the Parent Group to the extent such actions are necessary or appropriate to effectuate the provisions of this Agreement and any Ancillary Agreement. Enova will cause to be performed and hereby guarantee the performance of any and all actions of each of the members of the Enova Group to the extent such actions are necessary or appropriate to effectuate the provisions of this Agreement and any Ancillary Agreement.
10.12 Counterparts . This Agreement and each Ancillary Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. Any signature on this Agreement or any other document executed in connection herewith may be an electronically delivered signature and all parties agree that any signature delivered electronically shall be treated as an original signature to any such document.
10.13 Authority . Each party represents to the other parties that (a) it has the corporate power and authority to execute, deliver, and perform this Agreement and each Ancillary Agreement, (b) the execution, delivery, and performance of this Agreement and each Ancillary Agreement by it have been duly authorized by all necessary corporate or other actions, (c) it has duly and validly executed and delivered this Agreement and each Ancillary Agreement, and (d) this Agreement and each Ancillary Agreement is its legal, valid, and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors rights generally and general equity principles.
10.14 Binding Effect . This Agreement and each other Ancillary Agreement binds and benefits the parties and their respective successors and permitted assigns.
10.15 Waiver . A provision of this Agreement or any other Ancillary Agreement may be waived only by a writing signed by the party intended to be bound by the waiver. A party is not prevented from enforcing any right, remedy, or condition in the partys favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a partys rights and remedies in this Agreement or any other Ancillary Agreement is not intended to be exclusive, and a partys rights and remedies are intended to be cumulative to the extent permitted by Law and include any rights and remedies authorized in Law or in equity.
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10.16 Force Majeure . Neither party shall be deemed in default of this Agreement or the Tax Matters Agreement for failure to fulfill any obligation, other than a delay or failure to make a payment, so long as and to the extent to which any delay or failure in the fulfillment of such obligations is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance shall be extended for a period equal to the time lost by reason of the delay. A party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide written notice to the other party of the nature and extent of any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement or the Tax Matters Agreement, as applicable, as soon as reasonably practicable.
10.17 Publicity . From and after the Distribution Date, Enova and Parent shall consult with each other before issuing, and give each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement and the Ancillary Agreements, and shall not issue any such press release or make any public statement prior to such consultation, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange or national securities quotation system.
10.18 Expenses . Except as expressly set forth in this Agreement (including Section 8.1(b) ) or in any Ancillary Agreement, all fees, costs and expenses incurred in connection with the preparation, execution, delivery and implementation of this Agreement and any Ancillary Agreement, and with the consummation of the transactions contemplated hereby and thereby, shall be borne by the party incurring such fees, costs or expenses.
10.19 Headings . The article, section and paragraph headings contained in this Agreement and in the Ancillary Agreements are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement or any Ancillary Agreement.
10.20 Survival of Covenants . Except as expressly set forth in any Ancillary Agreement, the covenants, representations and warranties contained in this Agreement and each Ancillary Agreement, and liability for the breach of any obligations contained herein or therein, shall survive the Distribution and shall remain in full force and effect.
10.21 Specific Performance . Subject to the provisions of Article IV , in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any Ancillary Agreement, the party or parties who are, or are to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief (on an interim or permanent basis) in respect of its or their rights under this Agreement or such Ancillary Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the parties to this Agreement.
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10.22 Mutual Drafting . This Agreement and the Ancillary Agreements shall be deemed to be the joint work product of the parties, and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.
10.23 Effect if Distribution Does Not Occur . If the Distribution does not occur, then all actions and events that are, under this Agreement or any Ancillary Agreement, to be taken or occur effective as of the Distribution Date, or otherwise in connection with the Distribution, will not be taken or occur, except to the extent specifically agreed otherwise by the parties hereto.
[Signature page follows]
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WHEREFORE, the parties have signed this Agreement effective as of the date first set forth above.
CASH AMERICA INTERNATIONAL, INC. | ||
By: |
/s/ Thomas A. Bessant, Jr. |
|
Name: |
Thomas A. Bessant, Jr. |
|
Title: |
Executive Vice President and Chief Financial Officer |
|
ENOVA INTERNATIONAL, INC. | ||
By: |
/s/ David A. Fisher |
|
Name: |
David A. Fisher |
|
Title: |
Chief Executive Officer and President |
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Schedule 5.4(c)
None
Schedule 5.5(g)
None
Schedule 5.9(a)
Lease between CNU Online Holdings, LLC, successor-in-interest to The Check Giant, LLC, and 200 West Jackson-VEF VI, LLC, successor-in-interest to 200 West Jackson Owner LLC, dated April 27, 2006, as amended
Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ENOVA INTERNATIONAL, INC.
Enova International, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: The name of the corporation is Enova International, Inc. (the Corporation ) and that the original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on September 7, 2011, and that a Certificate of Amendment to the original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on September 12, 2011.
SECOND: This Amended and Restated Certificate of Incorporation has been duly adopted by the Board of Directors of the Corporation on October 14, 2014, in accordance with Sections 141(f), 242, and 245 of the General Corporation Law of the State of Delaware, and by the stockholder of the Corporation in accordance with Sections 228, 242, and 245 of the General Corporation Law of the State of Delaware, and amends and supersedes in its entirety the Certificate of Incorporation, as amended, of the Corporation.
THIRD: The Certificate of Incorporation, as amended, of the Corporation is hereby amended and restated in its entirety to read as follows:
ARTICLE I
NAME
The name of the corporation is Enova International, Inc. (the Corporation ).
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of the Corporations registered office in the State of Delaware is 1675 South State Street, Suite B, Dover, County of Kent, Delaware 19901. The name of its registered agent at such address is Capitol Services, Inc.
ARTICLE III
PURPOSE AND POWERS
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended ( Delaware Law ).
ARTICLE IV
CAPITAL STOCK
(A) Authorized Shares .
(1) Classes of Stock. The total number of shares of stock that the Corporation shall have authority to issue is 275,000,000 shares, consisting of 250,000,000 shares of common stock, par value $0.00001 per share ( Common Stock ), and 25,000,000 shares of preferred stock, par value $0.00001 per share ( Preferred Stock ).
(2) Preferred Stock. The Preferred Stock may be issued from time to time and in one or more classes or series. The Board of Directors is hereby empowered, without any action or vote by the Corporations stockholders, to authorize by resolution or resolutions, and by filing of a Certificate of Designations pursuant to the requirements of Delaware Law, from time to time the issuance of one or more classes or series of Preferred Stock and to fix the designations, powers, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, with respect to each such class or series of Preferred Stock and the number of shares constituting each such class or series, and to increase or decrease the number of shares of any such class or series to the extent permitted by Delaware Law. In the event that the number of shares of any class or series of Preferred Stock shall be so decreased, the shares constituting such decrease shall resume the status which such shares had prior to the adoption of the resolution originally fixing the number of shares of such class or series of Preferred Stock, subject to the requirements of Delaware Law.
(B) Voting Rights. Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; provided, however, that, except as otherwise required by Delaware Law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any Certificate of Designations relating to any class or series of Preferred Stock) that relates solely to the terms of one or more outstanding class or series of Preferred Stock if the holders of such affected class or series are entitled, either separately or together with the holders of one or more other such class or series of Preferred Stock, to vote thereon pursuant to this Certificate of Incorporation (including any Certificate of Designations relating to any class or series of Preferred Stock) or pursuant to Delaware Law.
ARTICLE V
BYLAWS
In furtherance and not in limitation of the powers conferred by statute, the Board of Directors shall have the power to adopt, amend or repeal the bylaws of the Corporation, without any action on the part of the stockholders. The stockholders may adopt, amend or repeal the bylaws of the Corporation only with the affirmative vote of the holders of not less than eighty percent (80%) of the total voting power of all outstanding securities of the Corporation then entitled to vote generally in the election of directors, voting together as a single class.
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ARTICLE VI
BOARD OF DIRECTORS
(A) Power of the Board of Directors . The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
(B) Number of Directors . The number of directors which shall constitute the entire Board of Directors shall be fixed exclusively by resolution adopted from time to time by the affirmative vote of a majority of the Board of Directors.
(C) Voting . There shall be no cumulative voting in the election of directors. Election of directors need not be by written ballot unless the bylaws of the Corporation so provide.
(D) Vacancies . Vacancies on the Board of Directors resulting from death, resignation, removal or otherwise and newly created directorships resulting from any increase in the number of directors shall, except as otherwise provided by Delaware Law or any Certificate of Designations, be filled solely by a majority of the directors then in office (although less than a quorum) or by the sole remaining director.
(E) Preferred Stock Directors . Notwithstanding anything else contained herein, whenever the holders of one or more classes or series of Preferred Stock shall have the right, voting separately as a class or series, to elect directors, the election, term of office, filling of vacancies, removal and other features of such directorships shall be governed by the terms of the resolution or resolutions adopted by the Board of Directors pursuant to Article IV applicable thereto and by the applicable Certificate of Designations, and such directors so elected shall not be subject to the provisions of this Article VI unless otherwise provided therein.
ARTICLE VII
EXISTENCE
The Corporation shall have perpetual existence.
ARTICLE VIII
LIMITATION ON LIABILITY AND INDEMNIFICATION
(A) Elimination of Liability . A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by Delaware Law.
(B) Right to Indemnification .
1. Each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person 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 or officer of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the Corporation to
3
the fullest extent permitted by Delaware Law. The right to indemnification conferred in this Article VIII shall also include the right to be paid by the Corporation all of the costs, fees and the expenses incurred in connection with any such action, suit or proceeding in advance of its final disposition to the fullest extent permitted by Delaware Law. The termination of any such 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 such person is not entitled to indemnification hereunder. To the fullest extent permitted by Delaware Law, any present or former director or officer of the Corporation who brings a claim against the Corporation to enforce such persons rights under this Article VIII shall be entitled to the advancement of expenses and, to the extent successful, indemnification by the Corporation in connection with the prosecution of such claim. The right to indemnification and advancement conferred in this Article VIII shall be a contract right.
2. The Corporation may, by action of its Board of Directors, provide indemnification to such of the employees and agents of the Corporation to such extent and to such effect as the Board of Directors shall determine to be appropriate and authorized by Delaware Law.
(C) Insurance . The Corporation shall have the 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 expense, liability or loss incurred by such person in any such capacity or arising out of such persons status as such, whether or not the Corporation would have the power to indemnify such person against such liability under Delaware Law.
(D) Nonexclusivity of Rights . The rights and authority conferred in this Article VIII shall not be exclusive of any other right to advancement or indemnification that any person may otherwise have or hereafter acquire.
(E) Preservation of Rights . Neither the amendment nor repeal of this Article VIII, nor the adoption of any provision of this Certificate of Incorporation or the bylaws of the Corporation, nor, to the fullest extent permitted by Delaware Law, any modification of law, shall adversely affect any right or protection of any person granted pursuant hereto existing at, or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption or modification (regardless of when any proceeding (or part thereof) relating to such event, act or omission arises or is first threatened, commenced or completed). The rights conferred in this Article VIII still continue as to any person who has ceased to be a director or officer of the Corporation.
ARTICLE IX
MEETINGS OF STOCKHOLDERS
(A) Annual Meetings . The annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting shall be held at such place, on such date, and at such time as the Board of Directors shall fix.
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(B) Special Meetings . Special meetings of the stockholders may be called by a majority of the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President or the Secretary of the Corporation and may not be called by any other person.
(C) No Actions by Written Consent . Subject to the rights of the holders of any class or series of Preferred Stock then outstanding, as may be set forth in the Certificate of Designations relating to such Preferred Stock, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken only upon the vote of stockholders at an annual or special meeting duly noticed and called in accordance with Delaware Law and this Article IX and may not be taken by written consent of stockholders without a meeting.
ARTICLE X
FORUM SELECTION
Unless the Corporation consents in writing to the selection of a different forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of the Corporation; (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporations stockholders; (iii) any action asserting a claim arising pursuant to any provision of Delaware Law, this Certificate of Incorporation or the bylaws of the Corporation (as the same may be amended from time to time); or (iv) any action asserting a claim governed by the internal affairs doctrine, except as to each of (i) through (iv) above, for any claim (A) 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), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction; provided , that , if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of jurisdiction, such action may be brought in another state court sitting in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware. If any provision or provisions of this Article X 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 this Article X (including, without limitation, each portion of any sentence of this Article X 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 X.
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ARTICLE XI
CERTAIN CONTRACTS AND TRANSACTIONS
No contract or other transaction between the Corporation and any other corporation shall be affected or invalidated by the fact that one or more of the directors of the Corporation is or are interested in, or is a director or officer of, or are directors or officers of, such other corporation, and no contract or other transaction between the Corporation and any other person or firm shall be affected or invalidated by the fact that one or more of the directors of the Corporation is a party to, or are parties to, or interested in, such contract or transaction; provided , that in each such case the nature and extent of the interest of such director in the contract or other transaction and the fact that such director is a director or officer of such other corporation is known to the Board of Directors or is disclosed at the meeting of the Board of Directors or a committee thereof at which the contract or other transaction is authorized.
ARTICLE XII
AMENDMENTS
The Corporation reserves the right to amend this Certificate of Incorporation in any manner permitted by Delaware Law and all rights and powers conferred upon stockholders herein are granted subject to this reservation. Notwithstanding the foregoing, the provisions set forth in Articles IV(B), V, VI, VIII, IX, X and this Article XII may not be repealed or amended in any respect, and no other provision may be adopted, amended or repealed which would be inconsistent with or have the effect of modifying or permitting the circumvention of the provisions set forth in Articles IV(B), V, VI, VIII, IX, X and this Article XII, unless such action is approved by the affirmative vote of the holders of not less than eighty percent (80%) of the total voting power of all outstanding shares of capital stock of the Corporation then entitled to vote generally in the election of directors, voting together as a single class.
FOURTH : This Amended and Restated Certificate of Incorporation shall become effective at 12:01 a.m. Eastern time on November 13, 2014.
IN WITNESS WHEREOF, the undersigned has set forth her hand this 12th day of November, 2014.
By: |
/s/ Lisa M. Young |
|
Lisa M. Young, Vice PresidentGeneral Counsel and Secretary |
6
Exhibit 3.2
AMENDED AND RESTATED BYLAWS
ENOVA INTERNATIONAL, INC.
ARTICLE 1
OFFICES
Section 1.1. Registered Office . The registered office of Enova International, Inc. (the Corporation ) in the State of Delaware shall be at 1675 South State Street, Suite B, Dover, County of Kent, Delaware 19901, and the registered agent in charge thereof shall be Capitol Services, Inc. The registered office and/or registered agent of the Corporation may be changed from time to time by action of the Board of Directors of the Corporation (the Board of Directors ).
Section 1.2. Other Offices . The Corporation may also have an office or offices, and keep the books and records of the Corporation, except as may otherwise be required by law, at such other place or places, either within or without the State of Delaware, as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE 2
MEETINGS OF STOCKHOLDERS
Section 2.1. Annual Meetings . An annual meeting of stockholders shall be held for the election of directors and to transact such other business as may properly be brought before the meeting. Each annual meeting of stockholders shall be held at such place, either within or without the State of Delaware, on such date and at such time as determined from time to time by the Board of Directors (or the Chairman in the absence of a designation by the Board of Directors). The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place and instead shall be held solely by means of remote communication as authorized by the General Corporation Law of the State of Delaware ( Delaware Law ). Any previously scheduled meeting of stockholders may be postponed, rescheduled or canceled by action of the Board of Directors. The annual meeting of stockholders shall be held as closely as practicable to the same month of each year so as to ensure that the terms of office of directors shall approximate a complete year in length.
Section 2.2. Special Meetings . Except as otherwise required by law or the terms of any one or more series of preferred stock, special meetings of the stockholders may be called by a majority of the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President or the Secretary of the Corporation and may not be called by any other person.
Section 2.3. Notice .
(a) Timing . Whenever stockholders are required or permitted to take action at a meeting, written notice of each annual and special meeting of stockholders stating the date, time and place of the meeting, the means of remote communication, if any, by which stockholders
2
may be deemed to be present at the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder of record entitled to vote thereat not less than ten (10) nor more than sixty (60) days before the date of the meeting, except as otherwise provided herein or required by Delaware Law. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
(b) Form of Notice . All such notices shall be delivered in writing or by a form of electronic transmission in accordance with these Bylaws and Delaware Law. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the Corporation. If given by facsimile telecommunication, such notice shall be deemed to be delivered when directed to a number at which the stockholder has consented to receive notice by facsimile. If given by electronic transmission, such notice shall be deemed to be delivered: (i) by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (ii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (x) such posting and (y) the giving of such separate notice by United States mail or facsimile transmission; and (iii) if by any other form of electronic transmission, when directed to the stockholder if receipt thereof has been consented to by the stockholders. An affidavit of the secretary or an assistant secretary of the Corporation, the transfer agent of the Corporation or any other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
(c) Waiver of Notice . Whenever notice is required to be given under any provisions of Delaware Law, the Certificate of Incorporation of the Corporation, as amended and restated (the Certificate of Incorporation ), or these Bylaws, a written waiver thereof, signed by the stockholder entitled to notice, or a waiver by electronic transmission by the stockholder entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any meeting of the stockholders of the Corporation need be specified in any waiver of notice of such meeting. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends 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.
Section 2.4. Quorum . Except as otherwise provided by law, by the Certificate of Incorporation of the Corporation, by the rules of any stock exchange or national securities market on which the Corporations securities are listed or these Bylaws, the holders of a majority of the 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. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the Chairman of the Board of Directors 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 notified. If the adjournment is for more than thirty 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 of record entitled to vote at the meeting. When a separate vote by a class or series (if the Corporations shares shall then have outstanding shares of more than one
class or series voting as a class or series), the holders of a majority of the voting power of such class or series shall constitute a quorum as to such class or series with respect to such transaction or business.
Section 2.5. Voting .
(a) General . Unless otherwise provided in the Certificate of Incorporation and subject to Delaware Law and the rules of any stock exchange or national securities market on which the Corporations stock is listed, each stockholder shall be entitled to one vote for each outstanding share of capital stock of the Corporation held by such stockholder. Any share of capital stock of the Corporation held by the Corporation shall have no voting rights other than shares held in a fiduciary capacity. Except as otherwise provided by Delaware Law, the Certificate of Incorporation or these Bylaws in all matters other than the election of directors and when a quorum is present, the affirmative vote of the majority of the shares of capital stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders.
(b) Required Vote for Directors . Subject to the rights of the holders of any class or series of preferred stock to elect additional directors under specific circumstances as set forth in the Certificate of Incorporation or certificate of designation relating to any such class or series of preferred stock, each director to be elected by stockholders shall be elected by the vote of the majority of the votes cast at any meeting for the election of directors at which a quorum is present. For purposes of this Section 2.5, a majority of votes cast shall mean that the number of shares voted for a directors election exceeds 50% of the number of votes cast with respect to that directors election. Votes cast shall include votes to withhold authority in each case and exclude abstentions with respect to that directors election. Notwithstanding the foregoing, in the event of a contested election of directors, directors shall be elected by the vote of a plurality of the votes cast at any meeting for the election of directors at which a quorum is present. For purposes of these Bylaws, a contested election shall mean any election of directors in which the number of candidates for election as directors exceeds the number of directors to be elected.
(c) Resignation . If a nominee for director who is an incumbent director is not elected by a majority of votes cast in an election of directors that is not contested (as that term is defined in Section 2.5(b)) and no successor has been elected at such meeting, the director shall promptly tender his or her resignation to the Board of Directors after the certification of the election results, subject to the acceptance of the Board of Directors. The Board of Directors will then determine, in accordance with procedures established by the Board of Directors, or a committee designated by the Board of Directors, whether to accept or reject the resignation or take any other action within 90 days from the date of the certification of the election results and will publicly disclose its decision. If such incumbent directors resignation is not accepted by the Board of Directors, such director shall continue to serve until the next annual meeting and until his or her successor is duly elected, or his or her earlier resignation or removal. If a directors resignation is accepted by the Board of Directors pursuant to this Section 2.5(c), or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of Section 3.13 or may decrease the size of the Board of Directors pursuant to the provisions of Section 3.2 of these Bylaws, subject to the rules of any stock exchange or national securities market on which the Corporations stock is listed. If, in any election of directors that is not
contested (as that term is defined in Section 2.5(b)), every director nominee for election to the Board of Directors is not elected by a majority of the votes cast, such directors are not required to submit a resignation in accordance herewith and shall continue to hold office until their successors are elected, which shall be as soon thereafter as convenient at a special meeting of stockholders called in accordance with these Bylaws for such purposes.
(d) Proxies . Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally. At each meeting of the stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary, the inspector of election or a person designated by the secretary or the inspector of election, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular.
Section 2.6. Actions by Written Consent of Stockholders . Except as otherwise expressly provided by the terms of any series of preferred stock permitting the holders of such series of preferred stock to act by written consent, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken only upon the vote of stockholders at an annual or special meeting duly noticed and called in accordance with Delaware Law these Bylaws and the Certificate of Incorporation and may not be taken by written consent of stockholders without a meeting.
Section 2.7. Nomination of Directors . Only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to serve as directors of the Corporation. Nominations of persons for election to the Board of Directors of the Corporation at an annual meeting or special meeting (but only if the election of directors is a matter specified in the notice of meeting given by or at the direction of the Board of Directors or any other proper person calling the special meeting) may be made (a) by or at the direction of the Board of Directors, including any committee appointed by the Board of Directors, or (b) by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 2.7, who shall be entitled to vote for the election of directors at the meeting and who complies with the notice procedures set forth in this Section 2.7. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholders notice relating to nominations to be made at an annual meeting of stockholders shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than seventy (70) days nor more than one hundred (100) days prior to the first anniversary of the preceding years annual meeting of stockholders; provided, however , that in the event that the date of the annual meeting is advanced more than thirty (30) days prior to such anniversary date or delayed more than sixty (60) days after such anniversary date then to be timely such notice must be received by the Corporation on or before the later of (i) seventy (70) days prior to the date of the meeting or (ii) the tenth (10 th ) day following the day on which public announcement of the date of the meeting was made. To be timely, a stockholders notice relating to nominations to be made at a special meeting of stockholders shall be delivered to or mailed and received at the principal
executive offices of the Corporation not less than seventy (70) days nor more than one hundred (100) days prior to the date of such special meeting, or, if the first public announcement of the date of such special meeting is less than eighty (80) days prior to the date of such special meeting, the tenth (10 th ) day following the day on which public announcement of the date of the special meeting was made. In no event shall any adjournment or postponement of an annual meeting or special meeting or the announcement thereof commence a new time period for the giving of a stockholders notice. To be in proper form, such stockholders notice shall set forth:
(a) | as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934 (the Exchange Act) (including such persons written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and |
(b) | as to the stockholder giving the notice: |
(i) | the name and address of such stockholder, as they appear on the Corporations books, and any Stockholder Associated Person (defined below) covered by clause (ii) below; |
(ii) | (A) the class and number of shares or other securities of the Corporation which are held of record or are beneficially owned, directly or indirectly, by such stockholder or by any Stockholder Associated Person and, if applicable, (B) a description of (x) any proxy, contract, arrangement, understanding or relationship pursuant to which the stockholder or any Stockholder Associated Person has a right to vote any securities of the Corporation, and (y) any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholders notice by, or on behalf of, the stockholder or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the stockholder or any Stockholder Associated Person with respect to any securities of the Corporation; and |
(iii) | a representation that the stockholder will promptly notify the Corporation in writing of any change in the information set forth in such notice as of the record date for the meeting and as of eight (8) business days prior to such meeting. |
To be eligible to be a nominee for election or reelection as a director of the Corporation, the person nominated by the stockholder must deliver (in accordance with the time periods prescribed for delivery of notice for an annual or special meeting, as applicable, under this Section 2.7) to the Secretary of the Corporation at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such
person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be in the form provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (i) is not and will not become a party to (A) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a Voting Commitment ) that has not been disclosed to the Corporation or (B) any Voting Commitment that could limit or interfere with such persons ability to comply, if elected as a director of the Corporation, with such persons fiduciary duties under applicable law, (ii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director of the Corporation that has not been disclosed therein, and (iii) in such persons individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with, applicable law and all applicable publicly disclosed corporate governance, conflict of interest, corporate opportunities, confidentiality and stock ownership and trading policies and guidelines of the Corporation.
No person shall be eligible to serve as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.7. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by this Section 2.7, and if the chairman should so determine, the chairman shall so declare to the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 2.7, a stockholder shall also comply with all applicable requirements of the Exchange Act, and the rules and regulations thereunder with respect to the matters set forth in this Section 2.7.
For purposes of these Bylaws, Stockholder Associated Person of any stockholder means (a) any person or entity acting in concert with such stockholder, (b) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder and (c) any person or entity controlling, controlled by or under common control with such Stockholder Associated Person.
For purposes of these Bylaws, public announcement shall be deemed to include a disclosure made in a press release reported by the Dow Jones News Services, Associated Press or a comparable national news service or in a document filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
Section 2.8. Notice of Business . At any meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation who is a stockholder of record at the time of giving of the notice provided for in this Section 2.8, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this Section 2.8. For business to be properly brought before a stockholder meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such business must otherwise be a proper matter for stockholder action. To be timely, a stockholders notice relating to business proposed to be conducted at an annual
meeting of stockholders shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than seventy (70) days nor more than one hundred (100) days prior to the first anniversary of the preceding years annual meeting of stockholders; provided, however , that in the event that the date of the annual meeting is advanced more than thirty (30) days prior to such anniversary date or delayed more than sixty (60) days after such anniversary date then to be timely such notice must be received by the Corporation on or before the later of (i) seventy (70) days prior to the date of the meeting or (ii) the tenth (10 th ) day following the day on which public announcement of the date of the meeting was made. To be timely, a stockholders notice of business proposed to be conducted at a special meeting of stockholders shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than seventy (70) days nor more than one hundred (100) days prior to the date of such special meeting, or, if the first public announcement of the date of such special meeting is less than eighty (80) days prior to the date of such special meeting, the tenth (10 th ) day following the day on which public announcement of the date of the special meeting was made. In no event shall any adjournment or postponement of the meeting or the announcement thereof commence a new time period for the giving of a stockholders notice. To be in proper form, a stockholders notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting:
(a) | a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and the complete text of the proposal or business (including any proposed resolutions); |
(b) | the name and address of the stockholder proposing such business, as they appear on the Corporations books, and any Stockholder Associated Person covered by clauses (c) or (d) below; |
(c) | (i) the class and number of shares or other securities of the Corporation which are held of record or are beneficially owned, directly or indirectly, by such stockholder or by any Stockholder Associated Person and, if applicable, (ii) a description of (x) any proxy, contract, arrangement, understanding or relationship pursuant to which the stockholder or any Stockholder Associated Person has a right to vote any securities of the Corporation, and (y) any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholders notice by, or on behalf of, the stockholder or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the stockholder or any Stockholder Associated Person with respect to any securities of the Corporation; |
(d) | any material interest of the stockholder or any Stockholder Associated Person in such business; and |
(e) | a representation that the stockholder will promptly notify the Corporation in writing of any change in the information set forth in such notice as of the record date for the meeting and as of eight (8) business days prior to such meeting. |
Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at a stockholder meeting except in accordance with the procedures set forth in this Section 2.8 (or, if the election of directors is a matter specified in the notice of the meeting, then as for such matter, only in accordance with the procedures set forth in Section 2.7). The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of the Bylaws, and if the chairman should so determine, the chairman shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 2.8, a stockholder shall also comply with all applicable requirements of the Exchange Act, and the rules and regulations thereunder and those of any stock exchange or national securities market on which the Corporations securities are listed with respect to the matters set forth in this Section 2.8.
Section 2.9. Conduct of Meetings .
(a) Generally . Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in the Chairmans absence or disability by the Chief Executive Officer, or in the Chief Executive Officers absence or disability, by the President, or in the Presidents absence or disability by a Vice President, or in the absence or disability of all of the foregoing persons by a chairman designated by the Board of Directors. The Secretary shall act as secretary of the meeting, but in the Secretarys absence or disability the chairman of the meeting may appoint any person to act as secretary of the meeting.
(b) Rules, Regulations and Procedures . The Board of Directors may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the Corporation as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with any such rules, regulations and procedures as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The chairman of any meeting of stockholders shall have the authority to adjourn or recess any such meeting. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The chairman of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.
(c) Inspectors of Elections . In advance of any meeting of stockholders, the Corporation shall appoint one (1) or more inspectors of election to act at the meeting and make a written report thereof. One (1) or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the chairman of the meeting shall appoint one (1) or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of such inspectors duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspectors ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law. Every vote taken by ballots shall be counted by a duly appointed inspector or duly appointed inspectors.
Section 2.10. List of Stockholders . The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least 10 days before each meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, showing the address of 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 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
ARTICLE 3
DIRECTORS
Section 3.1. General Powers . The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation or these Bylaws directed or required to be exercised or done by the stockholders.
Section 3.2. Number of Directors . Except as otherwise fixed by or pursuant to the provisions of the Certificate of Incorporation relating to the rights of the holders of any class or series of stock having preference over the common stock as to dividends or upon liquidation, the number of directors which shall constitute the entire Board of Directors shall be fixed exclusively by resolution adopted from time to time by the affirmative vote of a majority of the Board of Directors. No directors term shall be shortened by reason of a resolution reducing the number of directors.
Section 3.3. Election Qualification and Term of Office of Directors . Directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the Certificate of Incorporation or these Bylaws, wherein other qualifications for directors may be prescribed. Each director, including a director elected to fill a vacancy, shall hold office until his or her successor is elected and qualified or until his or her earlier death, resignation or removal. Elections of directors need not be by written ballot.
Section 3.4. Regular Meetings . The Board of Directors shall meet for the election of officers and for the transaction of any other business as soon as reasonably practicable after the annual meeting of stockholders. Other regular meetings of the Board of Directors may be held at such times and places as the Board of Directors may from time to time determine. No notice of any such annual or regular meeting of the Board of Directors need be given.
Section 3.5. Special Meetings . Special meetings of the Board of Directors shall be called by the Secretary or any Assistant Secretary at the request of the Chairman of the Board, the Chief Executive Officer, the President or of any two directors. Notice of the time and place of any special meeting of the Board of Directors shall be mailed, postage prepaid, to each director at least 48 hours before the time at which the meeting is to be held, or shall be sent by confirmed facsimile transmission or other form of electronic communication (including e-mail), or be delivered personally or by telephone, at least 24 hours before the time at which such meeting is to be held. Notice of any special meeting need not be given to any director who shall waive notice thereof or shall be deemed to have waived such notice. Neither the business to be transacted at, nor the purpose of, any special meeting needs to be specified in the notice, or any waiver of notice, of any special meeting.
Section 3.6. Quorum, Majority Vote . At all meetings of the Board of Directors, a majority of the entire Board of Directors 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, except as may be otherwise specifically provided by Delaware Law or by the Certificate of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, 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.
Section 3.7. Action Without Meeting . Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board of Directors or committee.
Section 3.8. Telephone and Similar Meetings . Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
Section 3.9. Waiver of Notice and Presumption of Assent . Any member of the Board of Directors or any committee thereof who is present at a meeting shall be conclusively presumed
to have waived notice of such meeting except when such member attends 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. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action.
Section 3.10. Rules and Regulations . The Board of Directors may adopt such rules and regulations not inconsistent with the provisions of law, the Certificate of Incorporation, these Bylaws and the rules of any stock exchange or national securities market on which the Corporations securities are listed for the conduct of its meetings and management of the affairs of the Corporation as the Board of Directors may deem proper.
Section 3.11. Resignations . Subject to Section 2.5(c), any director of the Corporation may at any time resign by giving written notice to the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 3.12. Removal of Directors . Unless otherwise restricted by Delaware Law, by the Certificate of Incorporation or by these Bylaws, any director or the entire Board of Directors may be removed at a meeting of stockholders called for such purpose in accordance with the Certificate of Incorporation, these Bylaws and Delaware Law.
Section 3.13. Vacancies . Vacancies on the Board of Directors resulting from death, resignation, removal or otherwise and newly created directorships resulting from an increase in the number of directors shall be filled solely by a majority of the directors then in office (although less than a quorum) or by the sole remaining director in office. If there are no directors in office, then an election of directors may be held in accordance with Delaware Law. Unless otherwise provided in the Certificate of Incorporation, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned but whose resignation has not become effective, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in the filling of the other vacancies.
Section 3.14. Compensation of Directors . Directors shall receive such compensation for their services as shall be fixed from time to time by resolution of the Board of Directors. Nothing in this Section 3.14 shall be construed to preclude a director from serving the Corporation in any other capacity and receiving compensation therefor.
Section 3.15. Chairman of the Board . The Board of Directors may designate from among its members a Chairman of the Board of Directors, which person may be an Executive Chairman of the Board of Directors (as described in Section 5.5 of these Bylaws). The Chairman of the Board of Directors shall preside at all meetings of stockholders and of the Board of Directors,
and shall advise and counsel the officers of the Corporation and shall have and perform such duties as usually devolve upon his or her role and such other duties as are prescribed by these Bylaws and by the Board of Directors.
ARTICLE 4
EXECUTIVE AND OTHER COMMITTEES
Section 4.1. Executive Committee . The Board of Directors may, by resolution adopted by a majority of the entire Board of Directors, designate annually one (1) or more of its members to constitute members or alternate members of an executive committee, which committee shall, except as otherwise prescribed by Delaware Law, have and may exercise, between meetings of the Board of Directors, all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation.
Section 4.2. Other Committees . The Board of Directors may, by resolution adopted by a majority of the entire Board of Directors, designate from among its members one or more other committees, each of which shall, except as otherwise prescribed by Delaware Law or the rules of any stock exchange or national securities market on which the Corporations securities are listed, have such authority of the Board of Directors as may be specified in the resolution of the Board of Directors designating such committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. A majority of all the members of such committee may determine its action and fix the date, time and place of its meetings, unless the Board of Directors shall otherwise provide. The Board of Directors shall have the power at any time to change the membership of, to increase or decrease the membership of, to fill all vacancies in and to discharge any such committee, or any member thereof, either with or without cause.
Section 4.3. Procedure; Meetings; Quorum . The provisions of these Bylaws which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the Board of Directors shall apply to committees of directors and their members as well, unless otherwise determined by the Board of Directors or required by Delaware Law.
ARTICLE 5
OFFICERS
Section 5.1. General . The officers of the Corporation may consist of an Executive Chairman of the Board of Directors, a Chief Executive Officer, a President, a Chief Financial Officer, one or more Vice Presidents (which may include Executive Vice Presidents and Senior Vice Presidents, and some of whom may have particular authority and responsibilities as designated in their titles by the Board of Directors), a Secretary, a Treasurer and such Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers or other officers as may from time to time be designated by the Board of Directors. One person may hold more than one office, and no officer (other than an Executive Chairman of the Board of Directors) need be a director. These said officers shall have all the usual powers and shall perform all of the usual duties incident to their respective offices and shall, in addition, perform such other duties as shall be assigned to them from time to time by the Board of Directors. In its discretion, the Board of Directors may leave unfilled any office, except that there shall always be either a Chief Executive Officer or a President of the Corporation.
Section 5.2. Compensation . The Board of Directors shall have power to fix the compensation of all officers of the Corporation.
Section 5.3. Election and Term of Office . The officers of the Corporation shall be elected annually by the Board of Directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as convenient. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.
Section 5.4. Resignation and Removal . Any officer may resign by delivering a written resignation to the Corporation at its principal office or to the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event. Any officer elected by the Board of Directors may be removed by the Board of Directors at its discretion, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.
Section 5.5. Executive Chairman . If the Board of Directors designates the Chairman of the Board of Directors as the Executive Chairman of the Board of Directors, the chairman shall be an officer of the Corporation. The Executive Chairman of the Board of Directors: (i) shall provide advice and counsel to the Chief Executive Officer, the President and other members of senior management in areas such as corporate and strategic planning and policy, acquisitions, major capital expenditures and other areas requested by the Board of Directors; (ii) may sign and execute any document, deed, paper, mortgage, bond, stock certificate, contract or other instrument or obligation in the name and on behalf of the Corporation, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by applicable law to be otherwise executed; and (iii) shall, in general, perform all duties as may be prescribed by these Bylaws or assigned to him by the Board of Directors from time to time.
Section 5.6. Chief Executive Officer . Subject to the control of the Board of Directors, the Chief Executive Officer shall be responsible for the general management of the business of the Corporation and shall have supervisory authority over the general policies and business of the Corporation, and may sign and execute any document, deed, paper, mortgage, bond, stock certificate, contract or other instrument or obligation in the name and on behalf of the Corporation, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by applicable law to be otherwise executed, and shall exercise such other powers as the Board of Directors may from time to time direct. In the event that the position of Chairman of the Board of Directors is unfilled, the Chief Executive Officer shall in addition have the authority and responsibilities of the Chairman of the Board of Directors.
Section 5.7. President . The President shall, subject to the powers of supervision and control conferred upon the Chief Executive Officer, have and perform such duties as usually devolve upon the role of the president of a corporation and shall have all necessary powers to discharge
such responsibility including the powers to sign and execute any document, deed, paper, mortgage, bond, stock certificate, contract or other instrument or obligation in the name and on behalf of the Corporation, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by applicable law to be otherwise executed, and such other powers as the Board of Directors may from time to time direct. In the event that the office of Chief Executive Officer is unfilled, the President shall in addition have the authority and responsibilities of the Chief Executive Officer as specified in Section 5.6.
Section 5.8. Chief Financial Officer . The Chief Financial Officer shall perform such duties as are customary for a chief financial officer to perform, including the powers to sign and execute any document, deed, paper, mortgage, bond, stock certificate, contract or other instrument or obligation in the name and on behalf of the Corporation, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by applicable law to be otherwise executed, and shall perform such other duties as from time to time may be assigned to him or her by the Board of Directors, the Chief Executive Officer or the President.
Section 5.9. Executive Vice Presidents; Senior Vice Presidents; Vice Presidents . Each Executive Vice President, Senior Vice President or Vice President shall exercise general supervision and have executive control of such departments of the Corporations business, or perform such other executive duties as shall from time to time be assigned to him by the Board of Directors, the Chief Executive Officer or by the President. The Board of Directors shall have the power to designate particular areas of authority and responsibility of each Executive Vice President, Senior Vice President and Vice President and to indicate such designation in such officers title. Each Executive Vice President and Senior Vice President (without regard to whether his or her title specifies particular areas of authority and responsibility) and each Vice President whose title does not designate specific areas of authority and responsibility shall be vested with powers to sign and execute any document, deed, paper, mortgage, bond, stock certificate, contract or other instrument or obligation in the name and on behalf of the Corporation, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed. In the case of each Vice President whose title indicates one or more specific areas of authority and responsibility, such Vice Presidents authority and responsibilities shall be limited to the area or areas designated in such Vice Presidents title as specified by the Board of Directors. In the case of absence or disability of the Chief Executive Officer and the President, each Executive Vice President and Senior Vice President (without regard to whether his or her title specifies particular areas of authority and responsibility) shall be vested will all the powers of the Chief Executive Officer and the President in respect of the powers to sign and execute any document, deed, paper, mortgage, bond, stock certificate, contract or other instrument or obligation in the name and on behalf of the Corporation, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed.
Section 5.10. Secretary . The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the Corporation and of the Board of Directors in a book to be kept for that purpose and shall perform
like duties for the standing committees of the Board of Directors. The 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, the Chief Executive Officer or the President, under whose supervision he or she shall be. The Secretary shall have custody of the corporate seal of the Corporation and he or she, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the Secretarys signature or by the signature of such Assistant 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.
Section 5.11. Assistant Secretary . The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of the Secretarys inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
Section 5.12. 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. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer, the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions of the 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.
Section 5.13. Assistant Treasurer . The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the Treasurers inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
ARTICLE 6
INDEMNIFICATION
Section 6.1. Power to Indemnify in Actions, Suits or Proceedings Other than Those by or in the Right of the Corporation . The Corporation shall, to the fullest extent permitted by Delaware Law, indemnify and hold harmless 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 such 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, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys fees, costs and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person 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 such persons 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 such person 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 such persons conduct was unlawful.
Section 6.2. Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation . The Corporation shall, to the fullest extent permitted by Delaware Law, indemnify and hold harmless 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 by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such 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, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against all expenses (including attorneys fees, costs and expenses) actually and reasonably incurred by such person in connection with the defense or settlement of such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; 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, suit or proceeding 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 indemnify for such expenses which the Court of Chancery or such other court shall deem proper.
Section 6.3. Authorization of Indemnification . Any indemnification under this Article 6 (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 such person has met the applicable standard of conduct set forth in Section 6.1 or Section 6.2, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (iv) by the stockholders. Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, 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 set forth in Section 6.1 or
Section 6.2 or in defense of any claim, issue or matter therein, such person shall be indemnified against all expenses (including attorneys fees, costs and expenses) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.
Section 6.4. Indemnification by a Court . Notwithstanding any contrary determination in the specific case under Section 6.3, and notwithstanding the absence of any determination thereunder, any present or former director or officer of the Corporation may apply to the Court of Chancery in the State of Delaware for indemnification to the extent otherwise permissible under Sections 6.1 and 6.2, as the case may be. The basis of such indemnification by a court shall be a determination by such court that indemnification of the present or former director or officer is proper in the circumstances because such person has met the applicable standards of conduct set forth in Section 6.1 or 6.2, as the case may be. Neither a contrary determination in the specific case under Section 6.3 nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the present or former director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 6.4 shall be given to the Corporation promptly upon the filing of such application. If such application is successful, in whole or in part, the present or former director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application to the fullest extent permitted by Delaware Law.
Section 6.5. Expenses Payable in Advance . All expenses, including without limitation attorneys fees, costs and expenses, incurred by a present or former director or officer of the Corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding to which such person is or was a party or threatened to be made a party by reason of the fact that such 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, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be paid by the Corporation to the fullest extent permitted by Delaware Law 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 person is not entitled to be indemnified by the Corporation as authorized in this Article 6. Without limiting any other provision in this Article 6, to the fullest extent permitted by Delaware Law, any present or former director or officer of the Corporation who brings a claim against the Corporation to enforce such persons rights under this Article 6 shall be entitled to the advancement of expenses and, to the extent successful, indemnification by the Corporation in connection with the prosecution of such claim.
Section 6.6. Indemnification for Expenses as Witness . To the extent that a present or former director or officer of the Corporation is, by reason of being or having been a director or officer, a witness in any action, suit or proceeding to which such person is not a party, such person shall be indemnified by the Corporation against all expenses, including attorneys fees, costs and expenses, actually and reasonably incurred by such person in connection therewith.
Section 6.7. Employees and Agents . The Corporation may, by action of the Board of Directors from time to time, grant rights to indemnification and advancement of expenses to present and former employees and agents of the Corporation with the same scope and effect as the provisions of this Article 6 with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.
Section 6.8. Nonexclusivity of Indemnification and Advancement of Expenses . The indemnification and advancement of expenses provided by or granted pursuant to this Article 6 shall not be deemed exclusive of or limited by any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such persons official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of and advancement of expenses to all present and former directors and officers of the Corporation shall be made by the Corporation to the fullest extent permitted by Delaware Law.
Section 6.9. Insurance . The Corporation may 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, employee benefit plan or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such persons status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under Delaware Law.
Section 6.10. Contract Rights; Survival of Indemnification and Advancement of Expenses . The indemnification and advancement of expenses provided by, or granted pursuant to, this Article 6 shall be considered a contract between the Corporation and such person, be deemed to have vested upon a director or officer taking office and, 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. Each person who is or becomes a director or officer of the Corporation shall be deemed to have served or to have continued to serve in such capacity in reliance upon the indemnification and advancement of expenses provided for in this Article 6. Any repeal, amendment or modification of the foregoing provisions of this Article 6 shall not adversely affect any right or protection hereunder of any present or former director or officer of the Corporation in respect of any act or omission occurring prior to the time of such repeal, amendment or modification.
Section 6.11. Limitation on Indemnification . Notwithstanding anything contained in this Article 6 to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 6.4), the Corporation shall not be obligated to indemnify or advance expenses to any director, officer, employee or agent in connection with an action, suit or proceeding (or part thereof) initiated by such person unless such action, suit or proceeding (or part thereof) was authorized by the Board of Directors.
Section 6.12. Certain Definitions . For purposes of this Article 6, 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, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article 6 with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article 6, references to fines shall include any excise taxes assessed on a person with respect of 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 such person 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 6.
ARTICLE 7
CAPITAL STOCK
Section 7.1. Certificates For Stock; Uncertificated Shares . The shares of the Corporation shall be represented by certificates, provided that the Board of Directors of the Corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Except as otherwise provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of shares represented by certificates of the same class and series shall be identical. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the Corporation by the Chief Executive Officer, President or Vice President, and by the Chief Financial Officer, Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or 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. The Corporation shall not have power to issue a certificate in bearer form.
Section 7.2. Transfers of Stock . Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.
Section 7.3. Authority for Additional Rules Regarding Transfer . The Board of Directors shall have the power and authority to make all such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificated or uncertificated shares of the stock of the Corporation, as well as for the issuance of new certificates in lieu of those which may be lost or destroyed, and may require of any stockholder requesting replacement of lost or destroyed certificates, bond in such amount and in such form as they may deem expedient to indemnify the Corporation, and/or the transfer agents, and/or the registrars of its stock against any claims arising in connection therewith.
Section 7.4. Fixing Date for Determination of Stockholders of Record . In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment or 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, in advance, a record date, which 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. Notwithstanding the forgoing, at the time the Board of Directors fixes a record date to determine the stockholders entitled to notice of any meeting of stockholders, the Board of Directors may fix a record date that is on or before the date of such meeting of stockholders to determine the stockholders entitled to vote at such meeting. A determination of stockholders 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 and, provided further , that if the Board of Directors fixes a new record date for determination of stockholders entitled to vote at the adjourned meeting, then the Board of Directors shall also fix a new record date for stockholders entitled to notice of that adjourned meeting, which date may be the same or an earlier date as that fixed for determination of stockholders entitled to vote thereat.
Section 7.5. Registered Stockholders . The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owners of 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 Delaware.
ARTICLE 8
GENERAL PROVISIONS
Section 8.1. Dividends . Subject to Delaware Law and the Certificate of Incorporation, dividends upon the shares of capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting. Dividends may be paid in cash, in property or in shares of the capital stock. 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 Board of Directors from time to time, in its 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 Board of Directors may think conducive to the interests of the Corporation. The Board of Directors may modify or abolish any such reserves in the manner in which it was created.
Section 8.2. Checks . All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
Section 8.3. Contracts . In addition to the powers otherwise granted to officers pursuant to Article 5 hereof, the Board of Directors may authorize any officer or officers, or any agent or agents, in the name and on behalf of the Corporation to enter into or execute and deliver any and all deeds, bonds, mortgages, contracts and other obligations or instruments, and such authority may be general or confined to specific instances.
Section 8.4. Fiscal Year . The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.
Section 8.5. Seal . The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer.
Section 8.6. Loans . Subject to compliance with applicable law (including the Sarbanes-Oxley Act of 2002), the Corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the Corporation or of its subsidiaries, including any officer or employee who is a director of the Corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the Corporation. Nothing in this section shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the Corporation at common law or under any statute.
Section 8.7. Voting Securities Owned By Corporation . Voting securities in any other corporation held by the Corporation shall be voted by the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer, the Secretary or any Vice President, unless the Board of Directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.
Section 8.8. Section Headings; Gender and Number . Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. The use of any gender in these Bylaws will be deemed to include both genders when appropriate, and the use of the singular number will be deemed to include the plural when appropriate, and vice versa in each instance.
Section 8.9. Inconsistent Provisions . In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the Delaware Law or any other applicable law, the provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.
ARTICLE 9
AMENDMENTS
Section 9.1. Amendments . These Bylaws or any of them may be altered, amended or repealed, or new bylaws may be made, by the stockholders entitled to vote thereon at any annual or special meeting thereof or by the Board of Directors. Unless a higher percentage is required by the Certificate of Incorporation as to any matter that is the subject of these Bylaws, all such amendments by the stockholders must be approved by the affirmative vote of the holders of not less than eighty percent (80%) of the total voting power of all outstanding shares of capital stock of the Corporation then entitled to vote generally in the election of directors, voting together as a single class. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly authorized to make, alter, amend, change, add to or repeal these Bylaws by the affirmative vote of a majority of the total number of directors then in office without any action on the part of the stockholders.
Adopted by the Board of Directors
Effective November 13, 2014
Exhibit 10.1
TAX MATTERS AGREEMENT
BY AND BETWEEN
CASH AMERICA INTERNATIONAL, INC.
AND
ENOVA INTERNATIONAL, INC.
Dated as of November 12, 2014
TABLE OF CONTENTS
Page | ||||||||
SECTION 1. |
DEFINITION OF TERMS | 1 | ||||||
SECTION 2. |
ALLOCATION OF TAX LIABILITIES | 10 | ||||||
Section 2.01 |
General Rule | 10 | ||||||
Section 2.02 |
Allocation of United States Federal Income Tax and Federal Other Tax | 10 | ||||||
Section 2.03 |
Allocation of State Income and State Other Taxes | 11 | ||||||
Section 2.04 |
Allocation of Foreign Taxes | 12 | ||||||
Section 2.05 |
Certain Transaction and Other Taxes | 12 | ||||||
SECTION 3. |
PRORATION OF TAXES FOR STRADDLE PERIODS | 13 | ||||||
SECTION 4. |
PREPARATION AND FILING OF TAX RETURNS | 13 | ||||||
Section 4.01 |
General | 13 | ||||||
Section 4.02 |
Parents Responsibility | 13 | ||||||
Section 4.03 |
Enovas Responsibility | 14 | ||||||
Section 4.04 |
Tax Accounting Practices | 14 | ||||||
Section 4.05 |
Consolidated or Combined Tax Returns | 15 | ||||||
Section 4.06 |
Right to Review Tax Returns | 16 | ||||||
Section 4.07 |
Enova Carrybacks and Claims for Refund | 17 | ||||||
Section 4.08 |
Apportionment of Earnings and Profits and Tax Attributes | 17 | ||||||
SECTION 5. |
TAX PAYMENTS | 17 | ||||||
Section 5.01 |
Payment of Taxes With Respect to Joint Returns (other than a Parent Federal Consolidated Income Tax Return with respect to a Post-Deconsolidation Period) and Certain Returns of Other Taxes | 17 | ||||||
Section 5.02 |
Payment of Separate Company Taxes | 20 | ||||||
Section 5.03 |
Indemnification Payments | 20 | ||||||
SECTION 6. |
TAX BENEFITS | 20 | ||||||
Section 6.01 |
Tax Benefits | 20 | ||||||
Section 6.02 |
Parent and Enova Income Tax Deductions in Respect of Certain Equity Awards and Incentive Compensation | 21 | ||||||
SECTION 7. |
TAX-FREE STATUS | 22 | ||||||
Section 7.01 |
Tax Opinions/Rulings and Representation Letters | 22 | ||||||
Section 7.02 |
Restrictions on Enova | 22 | ||||||
Section 7.03 |
Procedures Regarding Opinions and Rulings | 24 | ||||||
Section 7.04 |
Liability for Tax-Related Losses | 25 | ||||||
Section 7.05 |
Section 336(e) Elections | 27 | ||||||
SECTION 8. |
ASSISTANCE AND COOPERATION | 28 | ||||||
Section 8.01 |
Assistance and Cooperation | 28 | ||||||
Section 8.02 |
Income Tax Return Information | 29 |
i
Section 8.03 |
Reliance by Parent |
29 | ||||||
Section 8.04 |
Reliance by Enova |
29 | ||||||
SECTION 9. |
TAX RECORDS |
30 | ||||||
Section 9.01 |
Retention of Tax Records |
30 | ||||||
Section 9.02 |
Access to Tax Records |
30 | ||||||
SECTION 10. |
TAX CONTESTS | 31 | ||||||
Section 10.01 |
Notice | 31 | ||||||
Section 10.02 |
Control of Tax Contests | 31 | ||||||
SECTION 11. |
EFFECTIVE DATE; TERMINATION OF PRIOR INTERCOMPANY TAX ALLOCATION AGREEMENTS | 33 | ||||||
SECTION 12. |
SURVIVAL OF OBLIGATIONS | 33 | ||||||
SECTION 13. |
TREATMENT OF PAYMENTS; TAX GROSS UP | 34 | ||||||
Section 13.01 |
Treatment of Tax Indemnity and Tax Benefit Payments |
34 | ||||||
Section 13.02 |
Tax Gross Up |
34 | ||||||
Section 13.03 |
Interest Under This Agreement |
34 | ||||||
SECTION 14. |
DISAGREEMENTS | 34 | ||||||
SECTION 15. |
LATE PAYMENTS | 35 | ||||||
SECTION 16. |
EXPENSES | 35 | ||||||
SECTION 17. |
GENERAL PROVISIONS | 36 | ||||||
Section 17.01 |
Addresses and Notices |
36 | ||||||
Section 17.02 |
Binding Effect |
36 | ||||||
Section 17.03 |
Waiver |
36 | ||||||
Section 17.04 |
Severability |
36 | ||||||
Section 17.05 |
Authority |
37 | ||||||
Section 17.06 |
Further Action |
37 | ||||||
Section 17.07 |
Integration |
37 | ||||||
Section 17.08 |
Construction |
37 | ||||||
Section 17.09 |
No Double Recovery |
37 | ||||||
Section 17.10 |
Counterparts |
38 | ||||||
Section 17.11 |
Governing Law |
38 | ||||||
Section 17.12 |
Jurisdiction |
38 | ||||||
Section 17.13 |
Amendment |
38 | ||||||
Section 17.14 |
Enova Subsidiaries |
38 | ||||||
Section 17.15 |
Successors |
38 | ||||||
Section 17.16 |
Injunctions |
38 |
ii
TAX MATTERS AGREEMENT
This TAX MATTERS AGREEMENT (this Agreement ) is entered into as of November 12, 2014 by and between Cash America International, Inc. , a Texas corporation ( Parent ), and Enova International, Inc. , a Delaware corporation and a wholly owned subsidiary of Parent ( Enova ) (Parent and Enova are sometimes referred to together as the Companies and, as the context requires, individually as the Company ).
RECITALS
WHEREAS, the Board of Directors of Parent has determined that it would be appropriate and desirable to completely separate the Enova Business from Parent;
WHEREAS, as of the date hereof, Parent is the common parent of an affiliated group of corporations, including Enova, which has elected to file consolidated Federal income tax returns;
WHEREAS, pursuant to the Separation and Distribution Agreement, Parent and Enova have agreed to separate the Enova Business from Parent by means of, among other actions, the Distribution (as defined below);
WHEREAS, as a result of the Distribution, Enova and its subsidiaries will cease to be members of the affiliated group (as that term is defined in Section 1504 of the Code) of which Parent is the common parent (the Deconsolidation );
WHEREAS, the parties desire to provide for and agree upon the allocation between the parties of liabilities for Taxes arising prior to, as a result of, and subsequent to the Distribution, and to provide for and agree upon other matters relating to Taxes;
NOW THEREFORE, in consideration of the mutual agreements contained herein, the parties hereby agree as follows:
Section 1. Definition of Terms . For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings, and capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Separation and Distribution Agreement:
Accounting Cutoff Date means any date as of the end of which there is a closing of the financial accounting records of Enova.
Active Trade or Business means the active conduct (as defined in Section 355(b)(2) of the Code and the regulations thereunder) by (i) Enova and its separate affiliated group (as defined in Section 355(b)(3)(B) of the Code) of the Enova Business as conducted immediately prior to the Distribution, and (ii) Parent and its separate affiliated group (as defined in Section 355(b)(3)(B) of the Code) of the Parent Business as conducted immediately prior to the Distribution.
Adjustment Request means any formal or informal claim or request filed with any Tax Authority, or with any administrative agency or court, for the adjustment, refund, or credit of Taxes, including (a) any amended Tax return claiming adjustment to the Taxes as reported on the Tax Return or, if applicable, as previously adjusted, (b) any claim for equitable recoupment or other offset, and (c) any claim for refund or credit of Taxes previously paid.
Affiliate means, when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. The term Affiliate shall refer to Affiliates of a Person as determined immediately after the Distribution.
Agreement shall mean this Tax Matters Agreement.
Ancillary Agreements has the meaning set forth in the Separation and Distribution Agreement.
Board Certificate shall have the meaning set forth in Section 7.02(e) of this Agreement.
Business Day means a day other than a Saturday, a Sunday or a day on which banking institutions located in the State of Texas or the State of Illinois are authorized or obligated by Law to close.
Code means the U.S. Internal Revenue Code of 1986, as amended.
Companies and Company shall have the meaning provided in the first sentence of this Agreement.
Controlling Party shall have the meaning set forth in Section 10.02(f) of this Agreement.
Deconsolidation shall have the meaning provided in the Recitals.
Deconsolidation Date means the last date on which Enova qualifies as a member of the affiliated group (as defined in Section 1504 of the Code) of which Parent is the common parent.
DGCL means the Delaware General Corporation Law.
Distribution has the meaning set forth in the Separation and Distribution Agreement.
Distribution Date has the meaning set forth in the Separation and Distribution Agreement.
Enova shall have the meaning provided in the first sentence of this Agreement.
Enova Adjustment means any proposed adjustment by a Tax Authority or claim for refund asserted in a Tax Contest to the extent Enova would be exclusively liable for any resulting Tax under this Agreement or exclusively entitled to receive any resulting Tax Benefit under this Agreement.
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Enova Business has the meaning set forth in the Separation and Distribution Agreement.
Enova Capital Stock means all classes or series of capital stock of Enova, including (i) the Enova Common Stock, (ii) all options, warrants and other rights to acquire such capital stock and (iii) all instruments properly treated as stock in Enova for U.S. federal income tax purposes.
Enova Carryback means any net operating loss, net capital loss, excess tax credit, or other similar Tax item of any member of the Enova Group which may or must be carried from one Tax Period to another prior Tax Period under the Code or other applicable Tax Law.
Enova Common Stock has the meaning set forth in the Separation and Distribution Agreement.
Enova Federal Consolidated Income Tax Return shall mean any United States federal Income Tax Return for the affiliated group (as that term is defined in Section 1504 of the Code) of which Enova is the common parent.
Enova Group means Enova and its Affiliates, as determined immediately after the Distribution.
Enova Pre-Deconsolidation Federal Income Taxes means any Federal Income Taxes with respect to the Enova Business for a Pre-Deconsolidation Period.
Enova Pre-Deconsolidation Foreign Income Taxes means any Foreign Income Taxes with respect to the Enova Business for a Pre-Deconsolidation Period.
Enova Pre-Deconsolidation State Income Taxes means any State Income Taxes with respect to the Enova Business for a Pre-Deconsolidation Period.
Enova Separate Return means any Separate Return of Enova or any member of the Enova Group.
Federal Income Tax means any Tax imposed by Subtitle A of the Code, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Federal Other Tax means any Tax imposed by the federal government of the United States of America other than any Federal Income Taxes, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Fifty-Percent or Greater Interest shall have the meaning ascribed to such term for purposes of Sections 355(d) and (e) of the Code.
Filing Date shall have the meaning set forth in Section 7.04(d) of this Agreement.
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Final Determination means the final resolution of liability for any Income Tax or Other Tax, which resolution may be for a specific issue or adjustment or for a Tax Period, (a) by IRS Form 870 or 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the taxpayer, or by a comparable form under the laws of a State, local, or foreign taxing jurisdiction, except that a Form 870 or 870-AD or comparable form shall not constitute a Final Determination to the extent that it reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund or the right of the Tax Authority to assert a further deficiency in respect of such issue or adjustment or for such Tax Period (as the case may be); (b) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (c) by a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the laws of a State, local, or foreign taxing jurisdiction; (d) by any allowance of a refund or credit in respect of an overpayment of Income Tax or Other Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the jurisdiction imposing such Income Tax or Other Tax; (e) by a final settlement resulting from a treaty-based competent authority determination; or (f) by any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the parties.
Foreign Combined Income Tax means any Foreign Income Tax with respect to any profit and/or loss sharing group, group payment or similar group or fiscal unity that actually includes, by election or otherwise, one or more members of the Parent Group together with one or more members of the Enova Group.
Foreign Income Tax means any Tax imposed by any foreign country or any possession of the United States, or by any political subdivision of any foreign country or United States possession, which is an income tax as defined in Treasury Regulation Section 1.901-2, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Foreign Income Tax Return means any report of Foreign Income Taxes due, any claim for refund of Foreign Income Taxes paid, any information return with respect to Foreign Income Taxes, or any other similar report, statement, declaration, or document required to be filed under the Tax Law of any foreign country or by any political subdivision of a foreign country, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.
Foreign Other Tax means any Tax imposed by any foreign country or any possession of the United States, or by any political subdivision of any foreign country or United States possession, other than any Foreign Income Taxes, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Foreign Tax means any Foreign Income Taxes or Foreign Other Taxes.
Group means the Parent Group or the Enova Group, or both, as the context requires.
High-Level Dispute means any dispute or disagreement (a) relating to liability under Section 7.04 of this Agreement or (b) in which the amount of liability in dispute exceeds $1.0 million.
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Income Tax means any Federal Income Tax, State Income Tax or Foreign Income Tax.
Indemnitee shall have the meaning set forth in Section 13.03 of this Agreement.
Indemnitor shall have the meaning set forth in Section 13.03 of this Agreement.
IRS means the United States Internal Revenue Service.
Joint Adjustment means any proposed adjustment by a Tax Authority or claim for refund asserted in a Tax Contest which is neither an Enova Adjustment nor a Parent Adjustment.
Joint Return shall mean any Return of a member of the Parent Group or the Enova Group that is not a Separate Return.
Non-Controlling Party shall have the meaning set forth in Section 10.02(f) of this Agreement.
Notified Action shall have the meaning set forth in Section 7.03(a) of this Agreement.
Other Tax means any Federal Other Tax, State Other Tax, or Foreign Other Tax.
Parent shall have the meaning provided in the first sentence of this Agreement.
Parent Adjustment means any proposed adjustment by a Tax Authority or claim for refund asserted in a Tax Contest to the extent Parent would be exclusively liable for any resulting Tax under this Agreement or exclusively entitled to receive any resulting Tax Benefit under this Agreement.
Parent Affiliated Group shall have the meaning provided in the definition of Parent Federal Consolidated Income Tax Return.
Parent Business shall have the meaning provided in the Separation and Distribution Agreement.
Parent Federal Consolidated Income Tax Return means any United States federal Income Tax Return for the affiliated group (as that term is defined in Section 1504 of the Code and the regulations thereunder) of which Parent is the common parent (the Parent Affiliated Group ).
Parent Foreign Combined Income Tax Return means a consolidated, combined or unitary or other similar Foreign Income Tax Return or any Foreign Income Tax Return with respect to any profit and/or loss sharing group, group payment or similar group or fiscal unity that actually includes, by election or otherwise, one or more members of the Parent Group together with one or more members of the Enova Group.
Parent Group means Parent and its Affiliates, excluding any entity that is a member of the Enova Group.
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Parent Group Transaction Returns shall have the meaning set forth in Section 4.04(b) of this Agreement.
Parent Separate Return means any Separate Return of Parent or any member of the Parent Group.
Parent State Combined Income Tax Return means a consolidated, combined or unitary State Income Tax Return that actually includes, by election or otherwise, one or more members of the Parent Group together with one or more members of the Enova Group.
Past Practices shall have the meaning set forth in Section 4.04(a) of this Agreement.
Payment Date means (i) with respect to any Parent Federal Consolidated Income Tax Return, the due date for any required installment of estimated taxes determined under Section 6655 of the Code, the due date (determined without regard to extensions) for filing the return determined under Section 6072 of the Code, and the date the return is filed, and (ii) with respect to any other Tax Return, the corresponding dates determined under the applicable Tax Law.
Payor shall have the meaning set forth in Section 5.03(a) of this Agreement.
Person means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof, without regard to whether any entity is treated as disregarded for U.S. federal income tax purposes.
Post-Deconsolidation Period means any Tax Period beginning after the Deconsolidation Date, and, in the case of any Straddle Period, the portion of such Straddle Period beginning the day after the Deconsolidation Date.
Pre-Deconsolidation Period means any Tax Period ending on or before the Deconsolidation Date, and, in the case of any Straddle Period, the portion of such Straddle Period ending on the Deconsolidation Date.
Privilege means any privilege that may be asserted under applicable law, including, any privilege arising under or relating to the attorney-client relationship (including the attorney-client and work product privileges), the accountant-client privilege and any privilege relating to internal evaluation processes.
Proposed Acquisition Transaction means a transaction or series of transactions (or any agreement, understanding or arrangement, within the meaning of Section 355(e) of the Code and Treasury Regulation Section 1.355-7, or any other regulations promulgated thereunder, to enter into a transaction or series of transactions), whether such transaction is supported by Enova management or shareholders, is a hostile acquisition, or otherwise, as a result of which Enova would merge or consolidate with any other Person or as a result of which any Person or any group of Persons would (directly or indirectly) acquire, or have the right to acquire, from Enova and/or one or more holders of outstanding shares of Enova Capital Stock, a number of shares of Enova Capital Stock that would, when combined with any other changes in ownership of Enova Capital Stock pertinent for purposes of Section 355(e) of the Code, comprise 50% or more of
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(A) the value of all outstanding shares of stock of Enova as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series, or
(B) the total combined voting power of all outstanding shares of voting stock of Enova as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series.
Notwithstanding the foregoing, a Proposed Acquisition Transaction shall not include
(A) the adoption by Enova of a shareholder rights plan or
(B) issuances by Enova that satisfy Safe Harbor VIII (relating to acquisitions in connection with a persons performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d).
For purposes of determining whether a transaction constitutes an indirect acquisition, any recapitalization resulting in a shift of voting power or any redemption of shares of stock shall be treated as an indirect acquisition of shares of stock by the non-exchanging shareholders. This definition and the application thereof are intended to monitor compliance with Section 355(e) of the Code and shall be interpreted accordingly. Any clarification of, or change in, the statute or regulations promulgated under Section 355(e) of the Code shall be incorporated in this definition and its interpretation.
Representation Letters means the representation letters and any other materials (including, without limitation, a Ruling Request and any related supplemental submissions to the IRS) delivered or deliverable by Parent and others in connection with the rendering by Tax Advisors, and/or the issuance by the IRS, of the Tax Opinions/Rulings.
Required Party shall have the meaning set forth in Section 5.03(a) of this Agreement.
Responsible Company means, with respect to any Tax Return, the Company having responsibility for preparing and filing such Tax Return under this Agreement.
Retention Date shall have the meaning set forth in Section 9.01 of this Agreement.
Ruling means a private letter ruling (including a supplemental private letter ruling) issued by the IRS to Parent in connection with the Transactions.
Ruling Request means the letter from Parent to the IRS dated May 8, 2014 and filed on May 13, 2014 requesting a ruling regarding certain tax consequences of the Transactions (including all attachments, exhibits, and other materials submitted with such ruling request letter) and any amendment or supplement to such ruling request letter.
Section 336(e) Election has the meaning set forth in Section 7.05.
Senior Executives shall have the meaning set forth in Section 14 of this Agreement.
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Separate Return means (a) in the case of any Tax Return of any member of the Enova Group (including any consolidated, combined or unitary return), any such Tax Return that does not include any member of the Parent Group and (b) in the case of any Tax Return of any member of the Parent Group (including any consolidated, combined or unitary return), any such Tax Return that does not include any member of the Enova Group.
Separation and Distribution Agreement means the Separation and Distribution Agreement, as amended from time to time, by and between Parent and Enova dated [date].
Specified Acquisition Transaction means any transaction or series of transactions that is not a Proposed Acquisition Transaction but would be a Proposed Acquisition Transaction if the percentage reflected in the definition of Proposed Acquisition Transaction were 25% instead of 50%.
Split Parent State Combined Income Tax Return shall have the meaning set forth in Section 4.05(b).
State Income Tax means any Tax imposed by any State of the United States or by any political subdivision of any such State which is imposed on or measured by net income, including state and local franchise or similar Taxes measured by net income, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
State Other Tax means any Tax imposed by any State of the United States or by any political subdivision of any such State other than any State Income Taxes, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
State Tax means any State Income Taxes or State Other Taxes.
Straddle Period means any Tax Period that begins on or before and ends after the Deconsolidation Date.
Tax or Taxes means any income, gross income, gross receipts, profits, capital stock, franchise, gross margin, net margin, withholding, payroll, social security, workers compensation, unemployment, disability, property, ad valorem, stamp, excise, escheat, unrecovered property, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, alternative minimum, estimated or other tax (including any assessment, or other charge in the nature of or in lieu of any tax but excluding, for the avoidance of doubt, any assessment under applicable escheat, abandoned property or unclaimed property laws) imposed by any governmental entity or political subdivision thereof, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Tax Advisor means a United States tax counsel or accountant of recognized national standing.
Tax Advisor Dispute shall have the meaning set forth in Section 14 of this Agreement.
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Tax Attribute or Attribute shall mean a net operating loss, net capital loss, unused investment credit, unused foreign tax credit, excess charitable contribution, general business credit or any other Tax Item that could reduce a Tax.
Tax Authority means, with respect to any Tax, the governmental entity or political subdivision thereof that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such entity or subdivision.
Tax Benefit means any refund, credit, or other reduction in otherwise required Tax payments.
Tax Contest means an audit, review, examination, or any other administrative or judicial proceeding with the purpose or effect of redetermining Taxes (including any administrative or judicial review of any claim for refund).
Tax Contest Committee shall have the meaning provided in Section 10.02(e) of this Agreement.
Tax Control means the definition of control set forth in Section 368(c) of the Code (or in any successor statute or provision), as such definition may be amended from time to time.
Tax-Free Status means (A) the qualification of the Distribution, (a) as a reorganization described in Sections 355 of the Code, (b) as a transaction in which the stock distributed thereby is qualified property for purposes of Sections 355(d), 355(e) and 361(c) of the Code and (c) as a transaction in which Parent, Enova and the shareholders of Parent recognize no income or gain for U.S. federal income tax purposes pursuant to Sections 355, 361 and 1032 of the Code, other than, in the case of Parent and Enova, intercompany items or excess loss accounts taken into account pursuant to the Treasury Regulations promulgated pursuant to Section 1502 of the Code, and (B) the qualification of any other transaction described in the Ruling consistent with the treatment set forth therein.
Tax Item means, with respect to any Income Tax, any item of income, gain, loss, deduction, or credit.
Tax Law means the law of any governmental entity or political subdivision thereof relating to any Tax.
Tax Opinions/Rulings means the opinions of Tax Advisors and/or the rulings by the IRS deliverable to Parent in connection with the Distribution.
Tax Period means, with respect to any Tax, the period for which the Tax is reported as provided under the Code or other applicable Tax Law.
Tax Records means any Tax Returns, Tax Return workpapers, documentation relating to any Tax Contests, and any other books of account or records (whether or not in written, electronic or other tangible or intangible forms and whether or not stored on electronic or any other medium) required to be maintained under the Code or other applicable Tax Laws or under any record retention agreement with any Tax Authority.
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Tax-Related Losses means (i) all federal, state and local Taxes (including interest and penalties thereon) imposed pursuant to any settlement, Final Determination, judgment or otherwise; (ii) all accounting, legal and other professional fees, and court costs incurred in connection with such Taxes; and (iii) all costs, expenses and damages associated with stockholder litigation or controversies and any amount paid by Parent (or any Parent Affiliate) or Enova (or any Enova Affiliate) in respect of the liability of shareholders, whether paid to shareholders or to the IRS or any other Tax Authority, in each case, to the extent resulting from the failure of the Distribution to have Tax-Free Status.
Tax Return or Return means any report of Taxes due, any claim for refund of Taxes paid, any information return with respect to Taxes, or any other similar report, statement, declaration, or document required to be filed under the Code or other Tax Law, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.
Transactions means the Distribution and the other transactions contemplated by the Separation and Distribution Agreement.
Transfer Pricing Adjustment shall mean any proposed or actual allocation by a Tax Authority of any Tax Item between or among any member of the Parent Group and any member of the Enova Group with respect to any Pre-Deconsolidation Period.
Treasury Regulations means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Period.
Unqualified Tax Opinion means an unqualified will opinion of a Tax Advisor, which Tax Advisor is acceptable to Parent, on which Parent may rely to the effect that a transaction will not affect the Tax-Free Status. Any such opinion must assume that the Distribution would have qualified for Tax-Free Status if the transaction in question did not occur.
Section 2. Allocation of Tax Liabilities .
Section 2.01 General Rule .
(a) Parent Liability. Parent shall be liable for, and shall indemnify and hold harmless the Enova Group from and against any liability for, Taxes which are allocated to Parent under this Section 2.
(b) Enova Liability. Enova shall be liable for, and shall indemnify and hold harmless the Parent Group from and against any liability for, Taxes which are allocated to Enova under this Section 2.
Section 2.02 Allocation of United States Federal Income Tax and Federal Other Tax . Except as provided in Section 2.05, Federal Income Tax and Federal Other Tax shall be allocated as follows:
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(a) Allocation of Tax Relating to Parent Federal Consolidated Income Tax Returns. With respect to any Parent Federal Consolidated Income Tax Return, Parent shall be responsible for any and all Federal Income Taxes due or required to be reported on any such Parent Federal Consolidated Income Tax Return (including any increase in such Tax as a result of a Final Determination), provided, however, notwithstanding the foregoing, Enova shall be primarily liable for any Enova Pre-Deconsolidation Federal Income Taxes. Federal Income Taxes with respect to a Pre-Deconsolidation Period shall be allocated between Parent and Enova in accordance with the principles of Treasury Regulation Section 1.1502-76(b) as reasonably interpreted and applied by the Companies.
(b) Allocation of Tax Relating to Federal Separate Income Tax Returns. (i) Parent shall be responsible for any and all Federal Income Taxes due with respect to or required to be reported on any Parent Separate Return (including any increase in such Tax as a result of a Final Determination); and (ii) Enova shall be responsible for any and all Federal Income Taxes due with respect to or required to be reported on any Enova Separate Return (including any increase in such Tax as a result of a Final Determination).
(c) Allocation of Federal Other Tax. Parent shall be responsible for any and all Federal Other Taxes attributable to the Parent Business. Enova shall be responsible for any and all Federal Other Taxes attributable to the Enova Business.
Section 2.03 Allocation of State Income and State Other Taxes . Except as provided in Section 2.05, State Income Tax and State Other Tax shall be allocated as follows:
(a) Allocation of Tax Relating to Parent State Combined Income Tax Returns. Parent shall be responsible for any and all State Income Taxes due with respect to or required to be reported on any Parent State Combined Income Tax Return and any Split Parent State Combined Income Tax Return (including any increase in such Tax as a result of a Final Determination) provided, however, notwithstanding the foregoing, Enova shall be primarily liable for any Enova Pre-Deconsolidation State Income Taxes. State Income Taxes with respect to a Pre-Deconsolidation Period shall be allocated between Parent and Enova in accordance with the principles of Treasury Regulation Section 1.1502-76(b) (or similar state statutes) as reasonably interpreted and applied by the Companies.
(b) Allocation of Tax Relating to Separate Returns. (i) Parent shall be responsible for any and all State Income Taxes due with respect to or required to be reported on any Parent Separate Return (including any increase in such Tax as a result of a Final Determination); and (ii) Enova shall be responsible for any and all State Income Taxes due with respect to or required to be reported on any Enova Separate Return (including any increase in such Tax as a result of a Final Determination).
(c) Allocation of State Other Tax. Parent shall be responsible for any and all State Other Taxes attributable to the Parent Business. Enova shall be responsible for any and all State Other Taxes attributable to the Enova Business.
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Section 2.04 Allocation of Foreign Taxes . Except as provided in Sections 2.05, Foreign Income Tax and Foreign Other Tax shall be allocated as follows:
(a) Allocation of Tax Relating to Parent Foreign Combined Income Tax Returns. With respect to any Parent Foreign Combined Income Tax Return, Parent shall be responsible for any and all Foreign Combined Income Taxes due with respect to or required to be reported on any Parent Foreign Combined Income Tax Return (including any increase in such Tax as a result of a Final Determination) provided, however, notwithstanding the foregoing, Enova shall be liable for any Enova Pre-Deconsolidation Foreign Income Taxes.
(b) Allocation of Tax Relating to Separate Returns. (i) Parent shall be responsible for any and all Foreign Income Taxes due with respect to or required to be reported on any Parent Separate Return (including any increase in such Foreign Income Tax as a result of a Final Determination); and (ii) Enova shall be responsible for any and all Foreign Income Taxes due with respect to or required to be reported on any Enova Separate Return (including any increase in such Foreign Income Tax as a result of a Final Determination).
(c) Allocation of Foreign Other Tax. Parent shall be responsible for any and all Foreign Other Taxes attributable to the Parent Business. Enova shall be responsible for any and all Foreign Other Taxes attributable to the Enova Business.
Section 2.05 Certain Transaction and Other Taxes .
(a) Enova Liability. Enova shall be liable for, and shall indemnify and hold harmless the Parent Group from and against any liability for:
(i) any Tax resulting from a breach by Enova of any covenant in the Separation and Distribution Agreement, this Agreement or any other Ancillary Agreement; and
(ii) any Tax-Related Losses for which Enova is responsible pursuant to Section 7.04 of this Agreement.
(b) Parent Liability. Parent shall be liable for, and shall indemnify and hold harmless the Enova Group from and against any liability for:
(i) Any stamp, sales and use, gross receipts, value-added or other transfer Taxes imposed by any Tax Authority on any member of the Parent Group or any member of the Enova Group (if such member is primarily liable for such Tax) on the transfers made pursuant to the Separation and Distribution Agreement or any Ancillary Agreements in order to effect the Separation and the Distribution;
(ii) any Tax resulting from a breach by Parent of any covenant in the Separation and Distribution Agreement, this Agreement or any other Ancillary Agreement; and
(iii) any Tax-Related Losses for which Parent is responsible pursuant to Section 7.04 of this Agreement.
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Section 3. Proration of Taxes for Straddle Periods .
(a) General Method of Proration. In the case of any Straddle Period, Tax Items shall be apportioned between Pre-Deconsolidation Periods and Post-Deconsolidation Periods in accordance with the principles of Treasury Regulation Section 1.1502-76(b) (or similar state statutes) as reasonably interpreted and applied by the Companies. No election shall be made under Treasury Regulation Section 1.1502-76(b)(2)(ii) (relating to ratable allocation of a years items). If the Deconsolidation Date is not an Accounting Cutoff Date, the provisions of Treasury Regulation Section 1.1502-76(b)(2)(iii) will be applied to ratably allocate the items (other than extraordinary items) for the month which includes the Deconsolidation Date.
(b) Transaction Treated as Extraordinary Item. In determining the apportionment of Tax Items between Pre-Deconsolidation Periods and Post-Deconsolidation Periods, any Tax Items relating to the Transactions shall be treated as extraordinary items described in Treasury Regulation Section 1.1502-76(b)(2)(ii)(C) and shall (to the extent occurring on or prior to the Deconsolidation Date) be allocated to Pre-Deconsolidation Periods, and any Taxes related to such items shall be treated under Treasury Regulation Section 1.1502-76(b)(2)(iv) as relating to such extraordinary item and shall (to the extent occurring on or prior to the Deconsolidation Date) be allocated to Pre-Deconsolidation Periods.
Section 4. Preparation and Filing of Tax Returns .
Section 4.01 General . Except as otherwise provided in this Section 4, Tax Returns shall be prepared and filed when due (including extensions) by the person obligated to file such Tax Returns under the Code or applicable Tax Law. The Companies shall provide, and shall cause their Affiliates to provide, assistance and cooperation to one another in accordance with Section 8 with respect to the preparation and filing of Tax Returns, including providing information required to be provided in Section 8.
Section 4.02 Parents Responsibility . Parent has the exclusive obligation and right to prepare and file, or to cause to be prepared and filed:
(a) Parent Federal Consolidated Income Tax Returns for any Tax Periods ending on, before or after the Deconsolidation Date;
(b) Parent State Combined Income Tax Returns, Parent Foreign Combined Income Tax Returns and any other Joint Returns which Parent reasonably determines are required to be filed (or which Parent chooses to be filed) by the Companies or any of their Affiliates for Tax Periods ending on, before or after the Deconsolidation Date; provided, however, that Parent shall provide written notice to Enova of such determination to file such Parent State Combined Income Tax Returns, Parent Foreign Combined Income Tax Returns or other Joint Returns within 10 business days of Parents making such determination; and
(c) Parent Separate Returns and Enova Separate Returns which Parent reasonably determines are required to be filed by the Companies or any of their Affiliates for Tax Periods ending on, before or after the Deconsolidation Date (limited, in the case of Enova Separate Returns, to such Returns as are required to be filed for Tax Periods ending on or prior to the Deconsolidation Date), provided, however, that Parent shall provide written notice to Enova of such determination that Parent Separate Returns and Enova Separate Returns are required to be filed within 10 business days of such determination.
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(d) Split Parent State Combined Income Tax Returns required to be filed for Tax Periods ending on or prior to the Deconsolidation Date.
(e) To the extent that the date that Parent makes a determination under Section 4.02(b) to file Parent State Combined Income Tax Returns, Parent Foreign Combined Income Tax Returns or other Joint Returns or under Section 4.02(c) to file Parent Separate Returns and Enova Separate Returns and that determination is made less than 60 days prior to the due date for filing such Return, then Parent shall provide written notice to Enova of such determination within 5 business days of such determination.
Section 4.03 Enovas Responsibility . Enova shall prepare and file, or shall cause to be prepared and filed, all Tax Returns required to be filed by or with respect to members of the Enova Group other than those Tax Returns which Parent is required to prepare and file under Section 4.02. The Tax Returns required to be prepared and filed by Enova under this Section 4.03 shall include (a) any Enova Federal Consolidated Income Tax Return for Tax Periods ending after the Deconsolidation Date and (b) Enova Separate Returns required to be filed for Tax Periods ending after the Deconsolidation Date. At Parents request, Enova shall prepare or cause to be prepared the portions of the Tax Returns which Parent is required to prepare and file under Section 4.02 that relate to Enova and/or the Enova Business with respect to any Pre-Deconsolidation Period and timely provide such portions of such Tax Returns to Parent.
Section 4.04 Tax Accounting Practices .
(a) General Rule. Except as provided in Section 4.04(b), any Tax Return that Enova has the obligation and right to prepare and file, or cause to be prepared and filed, under Section 4.03, for any Pre-Deconsolidation Period or any Straddle Period shall be prepared in accordance with past practices, accounting methods, elections or conventions ( Past Practices ) used with respect to the Tax Returns in question (unless there is no reasonable basis, as jointly determined by the parties, for the use of such Past Practices or unless there is no adverse effect to Parent), and to the extent any items are not covered by Past Practices (or in the event that there is no reasonable basis, as jointly determined by the parties, for the use of such Past Practices or there is no adverse effect to Parent), in accordance with reasonable Tax accounting practices selected by Enova. Enova agrees to provide Parent with prior written notice of any change in accounting methods, elections or conventions with respect to any taxable period beginning after the Deconsolidation Date to the extent items reported on such Tax Return might reasonably be expected to affect items reported on any Tax Return for any Pre-Deconsolidation Period or any Straddle Period.
Except as provided in Section 4.04(b), Parent shall prepare any Tax Return which it has the obligation and right to prepare and file, or cause to be prepared and filed, under Section 4.02, in accordance with Past Practice (unless there is no reasonable basis, as jointly determined by the parties, for the use of such Past Practice or unless there is no adverse effect to Enova), and to the extent any items are not covered by Past Practices (or in the event that there is no reasonable basis, as jointly determined by the parties, for the use of such Past Practices or there is no
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adverse effect to Enova), in accordance with reasonable Tax accounting practices selected by Parent, provided that, in the case of Enova Separate Returns prepared and filed pursuant to Section 4.01(c), any such Tax accounting practices selected by Parent shall be reasonably acceptable to Enova and should not reasonably be expected to affect items reported on any Tax Return for any Pre-Deconsolidation Period or any Straddle Period.
(b) Reporting of Transactions. The Tax treatment of the Transactions reported on any Tax Return shall be consistent with the treatment thereof in the Ruling Requests and the Tax Opinions/Rulings. The Tax treatment of the Transactions reported on any Tax Return for which Enova is the Responsible Company shall be consistent with that on any Tax Return filed or to be filed by Parent or any member of the Parent Group or caused or to be caused to be filed by Parent, in each case with respect to periods prior to the Distribution Date or with respect to Straddle Periods ( Parent Group Transaction Returns ), to the extent Parent notifies Enova in writing of such Tax treatment. To the extent there is a Tax treatment relating to the Transactions which is not covered by the Ruling Requests, the Tax Opinions/Rulings or Parent Group Transaction Returns, the Tax treatment to be reported on any Tax Return shall be determined by Parent and the Responsible Company shall not take any position on any Tax Return that is inconsistent with such determination, provided that if (i) there is no reasonable basis, in the opinion of a Tax advisor from a nationally recognized legal, accounting or professional tax services firm, for the Tax treatment determined by Parent, or (ii) such Tax treatment is inconsistent with the Tax treatment contemplated in the Ruling Requests, the Tax Opinions/Rulings and/or the Parent Group Transaction Returns, then such Tax Return shall be submitted for review pursuant to Section 4.06 (a), and any dispute regarding such proper Tax treatment shall be referred for resolution pursuant to Section 14, sufficiently in advance of the filing date of such Tax Return (including extensions) to permit timely filing of the Tax Return.
Section 4.05 Consolidated or Combined Tax Returns .
(a) Enova will elect and join, and will cause its respective Affiliates to elect and join, in filing any Parent State Combined Income Tax Returns, Parent Foreign Combined Income Tax Returns, Split Parent State Combined Income Tax Returns and any Joint Returns that Parent determines are required to be filed or that Parent chooses to file pursuant to Sections 4.02(b) and 4.05(b). With respect to any Enova Separate Returns relating to any Tax Period (or portion thereof) ending on or prior to the Distribution Date, Enova will elect and join, and will cause its respective Affiliates to elect and join, in filing consolidated, unitary, combined, or other similar joint Tax Returns, to the extent each entity is eligible to join in such Tax Returns, if Parent reasonably determines that the filing of such Tax Returns is consistent with past reporting practices, or, in the absence of applicable past practices, will result in the minimization of the net present value of the aggregate Tax to the entities eligible to join in such Tax Returns.
(b) At Parents discretion, Parent may amend any Parent State Combined Income Tax Return or propose in respect of an audit of any Parent State Combined Income Tax Return, or use any other means available, including filing additional Enova Separate Returns, in order to separate such Parent State Combined Income Tax Return into one or more consolidated, unitary or combined state income Tax Returns (each a Split Parent State Combined Income Tax Return ), provided that , if such action would increase the liability of Enova or any other Member of the Enova Group for Taxes for which Enova is responsible under this Agreement,
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then Parent shall either not take such action without the prior consent of Enova (such consent not to be unreasonably withheld, conditioned or delayed) or shall not be permitted to seek indemnity from Enova with respect to such additional Taxes under this Agreement. Subject to the foregoing provision, Enova shall cooperate with Parent in the filing of any additional Enova Separate Returns, including by providing any necessary powers of attorney, signing Tax Returns, amending any Tax Returns that Enova has the obligation and right to prepare and file pursuant to Section 4.03 and complying with its obligations under Section 8 hereof.
Section 4.06 Right to Review Tax Returns .
(a) General. The Responsible Company with respect to any material Tax Return shall make such Tax Return and related workpapers available for review by the other Company, if requested, to the extent (i) such Tax Return relates to Taxes for which the requesting party would reasonably be expected to be liable, (ii) such Tax Return relates to Taxes and the requesting party would reasonably be expected to be liable in whole or in part for any additional Taxes owing as a result of adjustments to the amount of such Taxes reported on such Tax Return, (iii) such Tax Return relates to Taxes for which the requesting party would reasonably be expected to have a claim for Tax Benefits under this Agreement, or (iv) the requesting party reasonably determines that it must inspect such Tax Return to confirm compliance with the terms of this Agreement. The Responsible Company shall use its reasonable best efforts to make such Tax Return available for review as required under this paragraph sufficiently in advance of the due date for filing of such Tax Return to provide the requesting party with a meaningful opportunity to analyze and comment on such Tax Return and shall use its reasonable best efforts to have such Tax Return modified before filing, taking into account the Person responsible for payment of the Tax (if any) reported on such Tax Return and whether the amount of Tax liability with respect to such Tax Return is material. The Companies shall attempt in good faith to resolve any issues arising out of the review of such Tax Return. For purposes of this Section 4.06(a), a Tax Return is material if it could reasonably be expected to reflect (A) Tax liability equal to or in excess of $500,000, (B) a credit or credits equal to or in excess of $500,000 or (C) a loss or losses equal to or in excess of $1.5 million. Notwithstanding anything to the contrary in this Agreement, Parent shall not be required to provide Enova with any Parent Federal Consolidated Income Tax Returns, Parent State Combined Income Tax Returns, Parent Foreign Combined Income Tax Returns or Parent Separate Returns, or any workpapers related to such Tax Returns, except for workpapers that relate solely to one or more members of the Enova Group and are necessary for Enova to fulfill its responsibilities under Section 4.03.
(b) Execution of Returns Prepared by Other Party. In the case of any Tax Return which is required to be prepared and filed by one Company under this Agreement and which is required by law to be signed by the other Company (or by its authorized representative), the Company which is legally required to sign such Tax Return shall not be required to sign such Tax Return under this Agreement if there is no reasonable basis, in the opinion of a Tax advisor from a nationally recognized legal, accounting or professional tax services firm, for the Tax treatment of any item reported on the Tax Return or the Tax treatment of any item reported on the Tax Return should, in the opinion of a Tax Advisor from a nationally recognized legal, accounting or professional tax services firm, subject the other Company (or its authorized representatives) to material penalties.
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Section 4.07 Enova Carrybacks and Claims for Refund . Enova hereby agrees that, unless Parent consents in writing, (i) no Adjustment Request with respect to any Joint Return (or any Return of Other Taxes described in clause (II) of Section 5.01) shall be filed, and (ii) any available elections to waive the right to claim in any Pre-Deconsolidation Period with respect to any Joint Return (or any Return of Other Taxes described in clause (II) of Section 5.01) any Enova Carryback arising in a Post-Deconsolidation Period shall be made, and no affirmative election shall be made to claim any such Enova Carryback; provided, however, that the parties agree that any such Adjustment Request shall be made with respect to any Enova Carryback related to U.S. federal or State Taxes, upon the reasonable request of Enova, if such Enova Carryback is necessary to prevent the loss of the federal and/or State Tax Benefit of such Enova Carryback (including, but not limited to, an Adjustment Request with respect to an Enova Carryback of a federal or State capital loss arising in a Post-Deconsolidation Period to a Pre-Deconsolidation Period) and such Adjustment Request, based on Parents sole, reasonable determination, will cause no Tax detriment to Parent, the Parent Group or any member of the Parent Group. Any Adjustment Request which Parent consents to make under this Section 4.07 shall be prepared and filed by the Responsible Company for the Tax Return to be adjusted.
Section 4.08 Apportionment of Earnings and Profits and Tax Attributes . Parent shall in good faith advise Enova in writing of the portion, if any, of any earnings and profits, Tax Attribute, overall foreign loss or other consolidated, combined or unitary attribute which Parent determines shall be allocated or apportioned to the Enova Group under applicable law. Enova and all members of the Enova Group shall prepare all Tax Returns in accordance with such written notice. In the event that any temporary or final amendments to Treasury Regulations are promulgated after the date of this Agreement that provide for any election to apply such regulations retroactively, then any such election shall be made only to the extent that Parent and Enova both agree to make such election. As soon as practicable after receipt of a written request from Enova, Parent shall provide copies of any studies, reports, and workpapers supporting the earnings and profits and other Tax Attributes allocable to Enova. Any dispute regarding the apportionment of such earnings and profits or any Tax Attribute shall be resolved pursuant to the provisions of Section 14 of this Agreement. All Tax Returns that are required to be filed under this Agreement after such resolution shall be filed in accordance with such resolution. In the event of a subsequent adjustment to the earnings and profits or any Tax Attributes determined by Parent, Parent shall promptly notify Enova in writing of such adjustment. For the absence of doubt, Parent shall not be liable to Enova or any member of the Enova Group for any failure of any determination under this Section 4.08 to be accurate under applicable law.
Section 5. Tax Payments .
Section 5.01 Payment of Taxes With Respect to Joint Returns (other than a Parent Federal Consolidated Income Tax Return with respect to a Post-Deconsolidation Period) and Certain Returns of Other Taxes . In the case of (I) any Joint Return (including any Parent Federal Consolidated Income Tax Return, any Parent State Combined Income Tax Return, and any Parent Foreign Combined Income Tax Return but excluding any Parent Federal Consolidated Tax Return with respect to a Post-Deconsolidation Period) and (II) any Return of Other Taxes reflecting both Taxes for which Parent is responsible under Section 2 and Taxes for which Enova is responsible under Section 2:
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(a) Computation and Payment of Tax Due. The Responsible Company shall compute the amount of Tax required to be paid to the applicable Tax Authority (taking into account the requirements of Section 4.04 relating to consistent accounting practices, as applicable) with respect to such Tax Return on such Payment Date. The Responsible Company shall pay such amount to such Tax Authority on or before such Payment Date (and provide notice and proof of payment to the other Company).
(b) Computation and Payment of Estimated and True-up Tax Payments.
(i) | Estimated Tax Payments. |
(A) Computation and Payment of Estimated Federal Income Taxes Due for a Pre-Deconsolidation Tax Period. Not later than five (5) business days prior to the estimated tax installment date (as prescribed in Section 6655(c) of the Code) following the date hereof for a Parent Federal Consolidated Income Tax Return with respect to a Pre-Deconsolidation Tax Period, Parent shall determine under Section 6655 of the Code the estimated amount of the Parents estimated federal income tax installment payment that is properly allocable to the Enova Group for the Pre-Deconsolidation Tax Period. Parent shall provide Enova with a copy of this calculation at least five (5) business days prior to the estimated tax installment date determined above. Enova shall then pay to Parent, not later than such estimated tax installment date, the amount thus determined.
(B) Computation and Payment of Estimated Non-Federal Combined Taxes for a Pre-Deconsolidation Tax Period. Not later than five (5) business days prior to any estimated tax installment date (as prescribed by applicable Tax law) following the date hereof with respect to a Parent-State Combined Income Tax Return and any Parent Foreign Combined Income Tax Return with respect to a Pre-Deconsolidation Tax Period, Parent shall determine the estimated amount of the related installment tax payment that is properly allocable to the Enova Group for that Pre-Deconsolidation Tax Period. Parent shall provide Enova with a copy of this calculation at least five (5) business days prior to the estimated tax installment date determined above. Enova shall then pay to Parent, not later than such estimated tax installment date, the amount thus determined.
(ii) | True-up Tax Payments for Pre-Deconsolidation Tax Periods. |
(A) Federal Income Taxes. Not later than thirty (30) business days after the filing of a Parent Federal Consolidated Income Tax Return with respect to a Pre-Deconsolidation Tax Period, Parent shall deliver to Enova a pro forma Enova Group consolidated
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return or other comparable schedule reflecting the Enova Groups federal income tax liability for such Pre-Deconsolidation Tax Period and Enovas estimated tax payments made either prior to the Distribution or under Section 5(b)(i) above with respect to such Pre-Deconsolidation Tax Period. Not later than five (5) business days following the delivery of such pro forma Enova Group consolidated return or other schedule, Enova shall pay to Parent, or Parent shall pay to Enova, as appropriate, an amount equal to the difference, if any, between the Enova Group federal income tax liability for such taxable period and the aggregate amount paid by Enova with respect to such taxable period prior to the Distribution and under Section 5(b)(i) above.
(B) Non-Federal Combined Taxes. Not later than thirty (30) business days after the filing of a Parent-State Combined Return or a Parent Foreign Combined Return with respect to a Pre-Deconsolidation Tax Period, Parent shall deliver to Enova a pro forma Parent-Enova Group combined state return, combined foreign return or other comparable schedule reflecting the Enova Groups state or foreign income tax liability for such Pre-Deconsolidation Tax Period and Enovas estimated tax payments made either prior to the Distribution or under Section 5(b)(ii) above with respect to such Pre-Deconsolidation Tax Period. Not later than five (5) business days following the delivery of such pro forma Parent-Enova Group combined state return, combined foreign return or other schedule, Enova shall pay to Parent, or Parent shall pay to Enova, as appropriate, an amount equal to the difference, if any, between the Enova Group combined state or foreign tax liability for such taxable period and the aggregate amount paid by Enova with respect to such taxable period prior to the Distribution and under Section 5(b)(ii) above.
(c) Payment of Other Taxes computed on a consolidated, combined, or unitary basis. To the extent that there are any Taxes with respect to a Pre-Deconsolidation Tax Period that are computed on a combined, consolidated or unitary basis where such group includes at least one member of both the Parent Group and the Enova Group and the payment of such Taxes is not included under Section 5.01(b) above, then: (i) if a member of Parent Group is the party primarily responsible for the payment of such Tax, then Parent shall provide Enova with a calculation of the amount of such Tax properly allocable to the Enova Group and Enova shall pay Parent the amount of the Enova Groups allocable portion of such Tax within five (5) business days of the receipt of such calculation; and (ii) if a member of Enova Group is the party primarily responsible for the payment of such Tax, then Enova shall provide Parent with a calculation of the amount of such Tax properly allocable to the Parent Group and Parent shall pay Enova the amount of the Parent Groups allocable portion of such Tax within five (5) business days of the receipt of such calculation.
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(d) Adjustments Resulting in Underpayments. In the case of any adjustment pursuant to a Final Determination with respect to any such Tax Return, the Responsible Company shall pay to the applicable Tax Authority when due any additional Tax due with respect to such Tax Return required to be paid as a result of such adjustment pursuant to a Final Determination. The Responsible Company shall compute the amount attributable to the Enova Group in accordance with Section 2 and Enova shall pay to Parent any amount due Parent (or Parent shall pay Enova any amount due Enova) under Section 2 within 30 days from the later of (i) the date the additional Tax was paid by the Responsible Company or (ii) the date of receipt of a written notice and demand from the Responsible Company for payment of the amount due, accompanied by evidence of payment and a statement detailing the Taxes paid and describing in reasonable detail the particulars relating thereto. Any payments required under this Section 5.01(d) shall include interest computed in accordance with Section 15.
Section 5.02 Payment of Separate Company Taxes . Each Company shall pay, or shall cause to be paid, to the applicable Tax Authority when due all Taxes owed by such Company or a member of such Companys Group with respect to a Separate Return of Income Taxes and with respect to a Separate Return of Other Taxes (provided that Separate Returns of Other Taxes described in clause (II) of Section 5.01 shall be governed by Section 5.01).
Section 5.03 Indemnification Payments .
(a) If any Company (the Payor ) is required under applicable Tax Law to pay to a Tax Authority a Tax that another Company (the Required Party ) is liable for under this Agreement, the Required Party shall pay the Payor the amount of such Tax (and any other amount required to be paid by the Required Party to the Payor pursuant to this Agreement in connection with such payment) no later than 5 days prior to the due date for payment of such amount by the Payor to the applicable Tax Authority (including any applicable extensions).
(b) All indemnification payments under this Agreement shall be made by Parent directly to Enova and by Enova directly to Parent; provided, however, that if the Companies mutually agree with respect to any such indemnification payment, any member of the Parent Group, on the one hand, may make such indemnification payment to any member of the Enova Group, on the other hand, and vice versa.
Section 6. Tax Benefits .
Section 6.01 Tax Benefits .
(a) Except as set forth below, Parent shall be entitled to any refund (and any interest thereon received from the applicable Tax Authority) of Income Taxes and Other Taxes for which Parent is liable hereunder, Enova shall be entitled to any refund (and any interest thereon received from the applicable Tax Authority) of Income Taxes and Other Taxes for which Enova is liable hereunder and a Company receiving a refund to which another Company is entitled hereunder shall pay over such refund to such other Company within 30 days after such refund is received (together with interest computed in accordance with Section 15).
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(b) If a member of the Enova Group actually realizes in cash any Tax Benefit as a result of an adjustment pursuant to a Final Determination to any Taxes for which a member of the Parent Group is liable hereunder (or to any Tax Attribute of a member of the Parent Group) and such Tax Benefit would not have arisen but for such adjustment (determined on a with and without basis), or if a member of the Parent Group actually realizes in cash any Tax Benefit as a result of an adjustment pursuant to a Final Determination to any Taxes for which a member of the Enova Group is liable hereunder (or to any Tax Attribute of a member of the Enova Group) and such Tax Benefit would not have arisen but for such adjustment (determined on a with and without basis), Enova or Parent, as the case may be, shall make a payment to either Parent or Enova, as appropriate, within 30 days following such actual realization of the Tax Benefit, in an amount equal to such Tax Benefit actually realized in cash (including any Tax Benefit actually realized as a result of the payment), plus interest on such amount computed in accordance with Section 15 based on the number of days from the date of such actual realization of the Tax Benefit to the date of payment of such amount under this Section 6.01(b).
(c) No later than 30 days after a Tax Benefit described in Section 6.01(b) is actually realized in cash by a member of the Parent Group or a member of the Enova Group, Parent (if a member of the Parent Group actually realizes such Tax Benefit) or Enova (if a member of the Enova Group actually realizes such Tax Benefit) shall provide the other Company with a written calculation of the amount payable to such other Company by Parent or Enova pursuant to this Section 6. In the event that Parent or Enova disagrees with any such calculation described in this Section 6.01(c), Parent or Enova shall so notify the other Company in writing within 30 days of receiving the written calculation set forth above in this Section 6.01(c). Parent and Enova shall endeavor in good faith to resolve such disagreement, and, failing that, the amount payable under this Section 6 shall be determined in accordance with the disagreement resolution provisions of Section 14 as promptly as practicable.
(d) Enova shall be entitled to any refund that is attributable to, and would not have arisen but for, an Enova Carryback pursuant to the proviso set forth in Section 4.07. Any such payment of such refund made by Parent to Enova pursuant to this Section 6.01(d) shall be recalculated in light of any Final Determination (or any other facts that may arise or come to light after such payment is made, such as a carryback of a Parent Group Tax Attribute to a Tax Period in respect of which such refund is received) that would affect the amount to which Enova is entitled, and an appropriate adjusting payment shall be made by Enova to Parent such that the aggregate amounts paid pursuant to this Section 6.01(d) equals such recalculated amount (with interest computed in accordance with Section 15).
Section 6.02 Parent and Enova Income Tax Deductions in Respect of Certain Equity Awards and Incentive Compensation . Solely the member of the Group for which the relevant individual is currently employed or, if such individual is not currently employed by a member of the Group, was most recently employed at the time of the vesting, exercise, disqualifying disposition, payment or other relevant taxable event, as appropriate, in respect of equity awards and other incentive compensation issued to such individual, shall be entitled to claim any Income Tax deduction in respect of such equity awards and other incentive compensation on its respective Tax Return associated with such event.
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Section 7. Tax-Free Status .
Section 7.01 Tax Opinions/Rulings and Representation Letters .
(a) Each of Enova and Parent hereby represents and agrees that (A) it has, in the case submitted prior to the date hereof, read or, in the case not submitted as of the date hereof, will read the Representation Letters prior to the date submitted and (B) subject to any qualifications therein, all information contained in such Representation Letters that concerns or relates to such Company or any member of its Group is and will be true, correct and complete.
(b) To the extent that any Tax Opinions/Rulings or Representation Letters have not yet been obtained or submitted as of the date hereof, Enova and Parent shall use their commercially reasonable best efforts and shall cooperate in good faith to finalize the Representation Letters for the Distribution as soon as possible hereafter and to cause the same to be submitted to the Tax Advisors, the IRS or such other governmental authorities as Parent shall deem necessary or desirable and shall take such other commercially reasonable actions as may be necessary or desirable to obtain the Tax Opinions/Rulings in order to confirm the Tax-Free Status.
Section 7.02 Restrictions on Enova .
(a) Enova agrees that it will not take or fail to take, or permit any Enova Affiliate to take or fail to take, any action where such action or failure to act would be inconsistent with or cause to be untrue any material, information, covenant or representation in any Representation Letters or Tax Opinions/Rulings. Enova agrees that it will not take or fail to take, or permit any Enova Affiliate, to take or fail to take, any action which prevents or could reasonably be expected to prevent (A) the Tax-Free Status, or (B) any transaction contemplated by the Separation and Distribution Agreement which is intended by the parties to be tax-free from so qualifying, including, in the case of Enova, issuing any Enova Capital Stock that would prevent the Distribution from qualifying as a tax-free distribution within the meaning of Section 355 of the Code.
(b) Pre-Distribution Period. During the period from the date hereof until the completion of the Distribution, Enova shall not take any action (including the issuance of Enova Capital Stock) or permit any Enova Affiliate directly or indirectly controlled by Enova, as the case may be, to take any action if, as a result of taking such action, Enova could have a number of shares of Enova Capital Stock (computed on a fully diluted basis or otherwise) issued and outstanding, including by way of the exercise of stock options (whether or not such stock options are currently exercisable) or the issuance of restricted stock, that could cause Parent to cease to have Tax Control of Enova.
(c) Enova agrees that, from the date hereof until the first day after the two-year anniversary of the Distribution Date, it will (i) maintain its status as a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code and (ii) not engage in any transaction that would result in it ceasing to be a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code, in each case, taking into account Section 355(b)(3) of the Code.
(d) Enova agrees that, from the date hereof until the first day after the two-year anniversary of the Distribution Date, it will not
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(i) enter into any Proposed Acquisition Transaction or, to the extent Enova has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur (whether by (a) redeeming rights under a shareholder rights plan, (b) finding a tender offer to be a permitted offer under any such plan or otherwise causing any such plan to be inapplicable or neutralized with respect to any Proposed Acquisition Transaction, or (c) approving any Proposed Acquisition Transaction, whether for purposes of Section 203 of the DGCL or any similar corporate statute, any fair price or other provision of Enovas charter or bylaws or otherwise),
(ii) merge or consolidate with any other Person or liquidate or partially liquidate,
(iii) in a single transaction or series of transactions sell or transfer (other than sales or transfers of inventory in the ordinary course of business) 25% or more of the gross assets of the Active Trade or Business or 25% or more of the consolidated gross assets of Enova and its Affiliates (such percentages to be measured based on fair market value as of the Distribution Date),
(iv) redeem or otherwise repurchase (directly or through a Enova Affiliate) any Enova stock, or rights to acquire stock, except to the extent such repurchases satisfy Section 4.05 (l)(b) of Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by Revenue Procedure 2003-48),
(v) amend its certificate of incorporation (or other organizational documents), or take any other action, whether through a stockholder vote or otherwise, affecting the voting rights of Enova Capital Stock (including, without limitation, through the conversion of one class of Enova Capital Stock into another class of Enova Capital Stock) or
(vi) take or fail to take any other action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation made in the Representation Letters or the Tax Opinions/Rulings) which in the aggregate (and taking into account any other transactions described in this subparagraph (d)) would be reasonably likely to have the effect of causing or permitting one or more persons (whether or not acting in concert) to acquire directly or indirectly stock representing a Fifty-Percent or Greater Interest in Enova or otherwise jeopardize the Tax-Free Status, unless prior to taking any such action set forth in the foregoing clauses (i) through (vi):
(A) Enova shall have requested that Parent obtain a Ruling in accordance with Section 7.03(b) and (d) of this Agreement to the effect that such transaction will not affect the Tax-Free Status and Parent shall have received such a Ruling in form and substance satisfactory to Parent in its sole and absolute discretion, which discretion shall be exercised in good faith solely to preserve the Tax-Free Status (and in determining whether a Ruling is satisfactory, Parent may consider, among other factors, the appropriateness of any underlying assumptions and managements representations made in connection with such Ruling); or
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(B) Enova shall provide Parent with an Unqualified Tax Opinion in form and substance satisfactory to Parent in its sole and absolute discretion, which discretion shall be exercised in good faith solely to preserve the Tax-Free Status (and in determining whether an opinion is satisfactory, Parent may consider, among other factors, the appropriateness of any underlying assumptions and managements representations if used as a basis for the opinion and Parent may determine that no opinion would be acceptable to Parent); or
(C) Parent shall have waived the requirement to obtain such Ruling or Unqualified Tax Opinion.
(e) Certain Issuances of Enova Capital Stock. If Enova proposes to enter into any Specified Acquisition Transaction or, to the extent Enova has the right to prohibit any Specified Acquisition Transaction, proposes to permit any Specified Acquisition Transaction to occur, in each case, during the period from the date hereof until the first day after the two-year anniversary of the Distribution Date, Enova shall provide Parent, no later than ten days following the signing of any written agreement with respect to the Specified Acquisition Transaction, with a written description of such transaction (including the type and amount of Enova Capital Stock to be issued in such transaction) and a certificate of the Board of Directors of Enova to the effect that the Specified Acquisition Transaction is not a Proposed Acquisition Transaction or any other transaction to which the requirements of Section 7.02(d) apply (a Board Certificate ).
(f) Distributions by Foreign Enova Subsidiaries . Until January 1st of the calendar year immediately following the calendar year in which the Distribution occurs, Enova shall neither cause nor permit any foreign subsidiary of Enova to enter into any transaction or take any action that would be considered under the Code to constitute the declaration or payment of a dividend (including pursuant to Section 304 of the Code) without obtaining the prior written consent of Parent (such prior written consent not to be unreasonably withheld).
(g) Internal Restructurings. Enova agrees that, from the date hereof until the first day after the two-year anniversary of the Distribution Date, it will not undertake any internal restructuring of the Enova Group (including, without limitation, any merger, therein) that might reasonably impact the Tax-Free Status of the Distribution without the prior written consent of Parent, which consent shall not be unreasonably delayed, conditioned or withheld.
Section 7.03 Procedures Regarding Opinions and Rulings .
(a) If Enova notifies Parent that it desires to take one of the actions described in clauses (i) through (vi) of Section 7.02(d) (a Notified Action ) , Parent and Enova shall reasonably cooperate to attempt to obtain the Ruling or Unqualified Tax Opinion referred to in Section 7.02(d), unless Parent shall have waived the requirement to obtain such Ruling or Unqualified Tax Opinion.
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(b) Rulings or Unqualified Tax Opinions at Enovas Request . Parent agrees that at the reasonable request of Enova pursuant to Section 7.02(d), Parent shall cooperate with Enova and use its reasonable best efforts to seek to obtain, as expeditiously as possible, a Ruling from the IRS or an Unqualified Tax Opinion for the purpose of permitting Enova to take the Notified Action. Further, in no event shall Parent be required to file any Ruling Request under this Section 7.03 (b) unless Enova represents that (A) it has read the Ruling Request, and (B) all information and representations, if any, relating to any member of the Enova Group, contained in the Ruling Request documents are (subject to any qualifications therein) true, correct and complete. Enova shall reimburse Parent for all reasonable costs and expenses incurred by the Parent Group in obtaining a Ruling or Unqualified Tax Opinion requested by Enova within ten Business Days after receiving an invoice from Parent therefor.
(c) Rulings or Unqualified Tax Opinions at Parents Request. Parent shall have the right to obtain a Ruling or an Unqualified Tax Opinion at any time in its sole and absolute discretion. If Parent determines to obtain a Ruling or an Unqualified Tax Opinion, Enova shall (and shall cause each Affiliate of Enova to) cooperate with Parent and take any and all actions reasonably requested by Parent in connection with obtaining the Ruling or Unqualified Tax Opinion (including, without limitation, by making any representation or covenant or providing any materials or information requested by the IRS or Tax Advisor; provided that Enova shall not be required to make (or cause any Affiliate of Enova to make) any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control). Parent shall reimburse Enova for all reasonable costs and expenses incurred by the Enova Group in obtaining a Ruling or an Unqualified Tax Opinion requested by Parent within 10 business days after receiving an invoice from Enova therefor.
(d) Enova hereby agrees that Parent shall have sole and exclusive control over the process of obtaining any Ruling, and that only Parent shall apply for a Ruling. In connection with obtaining a Ruling pursuant to Section 7.03(b), (A) Parent shall keep Enova informed in a timely manner of all material actions taken or proposed to be taken by Parent in connection therewith; (B) Parent shall (1) reasonably in advance of the submission of any Ruling Request documents provide Enova with a draft copy thereof (2) reasonably consider Enovas comments on such draft copy, and (3) provide Enova with a final copy; and (C) Parent shall provide Enova with notice reasonably in advance of, and Enova shall have the right to attend, any formally scheduled meetings with the IRS (subject to the approval of the IRS) that relate to such Ruling. Neither Enova nor any Enova Affiliate directly or indirectly controlled by Enova shall seek any guidance from the IRS or any other Tax Authority (whether written, verbal or otherwise) at any time concerning the Distribution (including the impact of any transaction on the Distribution).
Section 7.04 Liability for Tax-Related Losses .
(a) Notwithstanding anything in this Agreement or the Separation and Distribution Agreement to the contrary, subject to Section 7.04(c), Enova shall be responsible for, and shall indemnify and hold harmless Parent and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of any Tax-Related Losses that are attributable to or result from any one or more of the following: (A) the acquisition (other than pursuant to the Distribution) of all or a portion of Enovas stock and/or its or its subsidiaries assets by any means whatsoever by any Person, (B) any negotiations,
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understandings, agreements or arrangements by Enova with respect to transactions or events (including, without limitation, stock issuances, pursuant to the exercise of stock options or otherwise, option grants, capital contributions or acquisitions, or a series of such transactions or events) that cause the Distribution to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly stock of Enova representing a Fifty-Percent or Greater Interest therein, (C) any action or failure to act by Enova after the Distribution (including, without limitation, any amendment to Enovas certificate of incorporation (or other organizational documents), whether through a stockholder vote or otherwise) affecting the voting rights of Enova stock (including, without limitation, through the conversion of one class of Enova Capital Stock into another class of Enova Capital Stock), (D) any act or failure to act by Enova or any Enova Affiliate described in Section 7.02 (regardless whether such act or failure to act is covered by a Ruling, Unqualified Tax Opinion or waiver described in clause (A), (B) or (C) of Section 7.02(d), a Board Certificate described in Section 7.02(e) or a consent described in Section 7.02(f) or (g)) or (E) any breach by Enova of its agreement and representation set forth in Section 7.01(a).
(b) Notwithstanding anything in this Agreement or the Separation and Distribution Agreement to the contrary, subject to Section 7.04(c), Parent shall be responsible for, and shall indemnify and hold harmless Enova and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of any Tax-Related Losses that are attributable to, or result from any one or more of the following: (A) the acquisition (other than pursuant to the Distribution) of all or a portion of Parents stock and/or its assets by any means whatsoever by any Person, (B) any negotiations, agreements or arrangements by Parent with respect to transactions or events (including, without limitation, stock issuances, pursuant to the exercise of stock options or otherwise, option grants, capital contributions or acquisitions, or a series of such transactions or events) that cause the Distribution to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly stock of Parent representing a Fifty-Percent or Greater Interest therein, or (C) any breach by Parent of its agreement and representation set forth in Section 7.01(a).
(c) Tax-Related Losses
(i) To the extent that any Tax-Related Loss is subject to indemnity under both Sections 7.04(a) and (b), responsibility for such Tax-Related Loss shall be shared by Parent and Enova according to relative fault.
(ii) Notwithstanding anything in Section 7.04(b) or (c)(i) or any other provision of this Agreement or the Separation and Distribution Agreement to the contrary with respect to (I) any Tax-Related Loss resulting from Section 355(e) of the Code (other than as a result of an acquisition of a Fifty-Percent or Greater Interest in Parent) and (II) any other Tax-Related Loss resulting (for the absence of doubt, in whole or in part) from an acquisition after the Distribution of any stock or assets of Enova (or any Enova Affiliate) by any means whatsoever by any Person or any action or failure to act by Enova affecting the voting rights of Enova stock, Enova shall be responsible for, and shall indemnify and hold harmless Parent and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of such Tax-Related Loss.
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(iii) Notwithstanding anything in Section 7.04(a) or (c)(i) or any other provision of this Agreement or the Separation and Distribution Agreement to the contrary, with respect to (I) any Tax-Related Loss resulting from Section 355(e) of the Code (other than as a result of an acquisition of a Fifty-Percent or Greater Interest in Enova) and (II) any other Tax-Related Loss resulting (for the absence of doubt, in whole or in part) from an acquisition after the Distribution of any stock or assets of Parent (or any Parent Affiliate) by any means whatsoever by any Person, Parent shall be responsible for, and shall indemnify and hold harmless Enova and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of such Tax-Related Loss.
(d) Enova shall pay Parent the amount of any Tax-Related Losses for which Enova is responsible under this Section 7.04: (A) in the case of Tax-Related Losses described in clause (i) of the definition of Tax-Related Losses no later than two Business Days prior to the date Parent files, or causes to be filed, the applicable Tax Return for the year of the Distribution (the Filing Date ), provided that Parent delivers timely notice to Enova of the amount of such Tax-Related Losses then due and owing by Enova (provided that if such Tax-Related Losses arise pursuant to a Final Determination described in clause (a), (b) or (c) of the definition of Final Determination, then Enova shall pay Parent no later than two Business Days after the date of such Final Determination with interest calculated in accordance with Section 15) and (B) in the case of Tax-Related Losses described in clause (ii) or (iii) of the definition of Tax-Related Losses, no later than two Business Days after the date Parent delivers Enova with notice that is has paid such Tax-Related Losses and the amount of such Tax-Related Losses then due and owing by Enova. Parent shall pay Enova the amount of any Tax-Related Losses (described in clause (ii) or (iii) of the definition of Tax-Related Loss) for which Parent is responsible under this Section 7.04 no later than two Business Days after the date Enova pays such Tax-Related Losses.
(e) For purposes of calculating the amount and timing of any Tax-Related Loss for which Enova is responsible under this Section 7.04, Tax-Related Losses shall be calculated by assuming that Parent, the Parent Affiliated Group and each member of the Parent Group (I) pay Tax at the highest marginal corporate Tax rates in effect in each relevant taxable year and (II) have no Tax Attributes in any relevant taxable year.
(f) For purposes of calculating the amount and timing of any Tax-Related Loss for which Parent is responsible under this Section 7.04, Tax-Related Losses shall be calculated by assuming that Enova, and each member of the Enova Group (I) pay Tax at the highest marginal corporate Tax rates in effect in each relevant taxable year and (II) have no Tax Attributes in any relevant taxable year.
Section 7.05 Section 336(e) Elections . Pursuant to Treasury Regulation Sections 1.336-2(h)(1)(i) and 1.336-2(j), Parent and Enova agree that Parent shall make a timely protective election under Section 336(e) of the Code and the Treasury Regulations issued thereunder for Enova and each Affiliate of Enova that is a domestic corporation for United States federal income Tax purposes with respect to the Distribution (a Section 336(e) Election). It is intended that a Section 336(e) Election will have no effect unless the Distribution is a qualified stock disposition, as defined in Treasury Regulation Section 1.336(e)-1(b)(6), either because (a)
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the Distribution is not a transaction described in Treasury Regulations section 1.336-1(b)(5)(i)(B) or (b) Treasury Regulation Section 1.336-1(b)(5)(ii) applies to the Distribution. If and to the extent that there is a violation of the Tax-Free Status of the Distribution, and the resulting Taxes (including any Taxes attributable to the Section 336(e) Election) are treated as Taxes of Enova (rather than Taxes of Parent) pursuant to this Agreement, then, to that extent, Parent shall be entitled to quarterly payments from Enova equal to the actual Tax savings arising from the step-up in Tax basis resulting from the Section 336(e) Election, determined using a with and without methodology (treating any deductions or amortization attributable to the step-up in tax basis resulting from the Section 336(e) Election as the last items claimed for any taxable year, including after the utilization of any available net operating loss carryforwards), and less a reasonable charge for administrative expenses necessary to secure the Tax savings, provided, however, that that any payments to Parent by Enova under this Section 7.05 shall be treated as payments by Enova in partial satisfaction of its indemnity obligation to Parent under Section 7.04(a) and that Parent and its Affiliated shall only be permitted to recover once hundred percent (100%) of any Tax-Related Losses under Section 7.04(a) (including any payments made by Enova under this Section 7.05).
Section 8. Assistance and Cooperation .
Section 8.01 Assistance and Cooperation .
(a) The Companies shall cooperate (and cause their respective Affiliates to cooperate) with each other and with each others agents, including accounting firms and legal counsel, in connection with Tax matters relating to the Companies and their Affiliates including (i) preparation and filing of Tax Returns, (ii) determining the liability for and amount of any Taxes due (including estimated Taxes) or the right to and amount of any refund of Taxes, (iii) examinations of Tax Returns, and (iv) any administrative or judicial proceeding in respect of Taxes assessed or proposed to be assessed. Such cooperation shall include making all information and documents in their possession relating to the other Company and its Affiliates available to such other Company as provided in Section 9. Each of the Companies shall also make available to the other, as reasonably requested and available, personnel (including officers, directors, employees and agents of the Companies or their respective Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to Taxes. In the event that a member of the Parent Group, on the one hand, or a member of the Enova Group, on the other hand, suffers a Tax detriment as a result of a Transfer Pricing Adjustment, the Companies shall cooperate pursuant to this Section 8 to seek any competent authority relief that may be available with respect to such Transfer Pricing Adjustment.
(b) Any information or documents provided under this Section 8 shall be kept confidential by the Company receiving the information or documents, except as may otherwise be necessary in connection with the filing of Tax Returns or in connection with any administrative or judicial proceedings relating to Taxes. Notwithstanding any provision of this Agreement or any other agreement, (i) neither Parent nor any Parent Affiliate shall be required to
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provide Enova or any Enova Affiliate or any other Person access to or copies of any information or procedures (including the proceedings of any Tax Contest) other than information or procedures that relate solely to Enova, the business or assets of Enova or any Enova Affiliate and (ii) in no event shall Parent or any Parent Affiliate be required to provide Enova, any Enova Affiliate or any other Person access to or copies of any information if such action could reasonably be expected to result in the waiver of any Privilege. In addition, in the event that Parent determines that the provision of any information to Enova or any Enova Affiliate could be commercially detrimental, violate any law or agreement or waive any Privilege, the parties shall use reasonable best efforts to permit compliance with its obligations under this Section 8 in a manner that avoids any such harm or consequence. If Enova determines that the provision of any information to Parent or any Parent Affiliate could be commercially detrimental, violate any law or agreement or waive any Privilege, the parties shall use reasonable best efforts to avoid any such harm or consequences.
Section 8.02 Income Tax Return Information .
(a) Enova and Parent acknowledge that time is of the essence in relation to any request for information, assistance or cooperation made by Parent or Enova pursuant to Section 8.01 or this Section 8.02. Enova and Parent acknowledge that failure to conform to the deadlines set forth herein or reasonable deadlines otherwise set by Parent or Enova could cause irreparable harm.
(b) Each Company shall provide to the other Company information and documents relating to its Group required by the other Company to prepare Tax Returns. Any information or documents the Responsible Company requires to prepare such Tax Returns shall be provided in such form as the Responsible Company reasonably requests and, to the extent practicable, in sufficient time for the Responsible Company to file such Tax Returns on a timely basis.
Section 8.03 Reliance by Parent . If any member of the Enova Group supplies information to a member of the Parent Group in connection with a Tax liability and an officer of a member of the Parent Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the Parent Group identifying the information being so relied upon, the chief financial officer of Enova (or any officer of Enova as designated by the chief financial officer of Enova) shall certify in writing that to his or her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete. Enova agrees to indemnify and hold harmless each member of the Parent Group and its directors, officers and employees from and against any fine, penalty, or other cost or expense of any kind attributable to a member of the Enova Group having supplied, pursuant to this Section 8, a member of the Parent Group with inaccurate or incomplete information in connection with a Tax liability.
Section 8.04 Reliance by Enova . If any member of the Parent Group supplies information to a member of the Enova Group in connection with a Tax liability and an officer of a member of the Enova Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the Enova Group identifying the information being so relied upon, the chief financial officer of
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Parent (or any officer of Parent as designated by the chief financial officer of Parent) shall certify in writing that to his or her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete. Parent agrees to indemnify and hold harmless each member of the Enova Group and its directors, officers and employees from and against any fine, penalty, or other cost or expense of any kind attributable to a member of the Parent Group having supplied, pursuant to this Section 8, a member of the Enova Group with inaccurate or incomplete information in connection with a Tax liability.
Section 9. Tax Records .
Section 9.01 Retention of Tax Records . Each Company shall preserve and keep all Tax Records exclusively relating to the assets and activities of its Group for Pre-Deconsolidation Periods, and Parent shall preserve and keep all other Tax Records relating to Taxes of the Groups for Pre-Deconsolidation Tax Periods, for so long as the contents thereof may become material in the administration of any matter under the Code or other applicable Tax Law, but in any event until the later of (i) the expiration of any applicable statutes of limitations, or (ii) seven years after the Deconsolidation Date (such later date, the Retention Date ). After the Retention Date, each Company may dispose of such Tax Records provided that the other Company has not requested in writing within 30 days following the Retention Date the opportunity to copy or remove all or any part of such Tax Records. Upon such written request, the requesting Company shall have the opportunity, at its cost and expense, to copy or remove, within 30 days of such request, all or any part of such Tax Records and the other Company may dispose of such Tax Records following such 30 day period. If, prior to the Retention Date, a Company reasonably determines that any Tax Records which it would otherwise be required to preserve and keep under this Section 9 are no longer material in the administration of any matter under the Code or other applicable Tax Law and the other Company agrees in writing, then such first Company may dispose of such Tax Records upon 90 days prior written notice to the other Company. Any notice of an intent to dispose given pursuant to this Section 9.01 shall include a list of the Tax Records to be disposed of describing in reasonable detail each file, book, or other record accumulation being disposed. The notified Company shall have the opportunity, at its cost and expense, to copy or remove, within such 90-day period, all or any part of such Tax Records. If, at any time prior to the Retention Date, Enova determines to decommission or otherwise discontinue any computer program or information technology system used to access or store any Tax Records, then Enova may decommission or discontinue such program or system upon 90 days prior written notice to Parent and Parent shall have the opportunity, at its cost and expense, to copy, within such 90-day period, all or any part of the underlying data relating to the Tax Records accessed by or stored on such program or system.
Section 9.02 Access to Tax Records . The Companies and their respective Affiliates shall make available to each other for inspection and copying during normal business hours upon reasonable notice all Tax Records (and, for the avoidance of doubt, any pertinent underlying data accessed or stored on any computer program or information technology system) in their possession and shall permit the other Company and its Affiliates, authorized agents and representatives and any representative of a Taxing Authority or other Tax auditor access during normal business hours upon reasonable notice to any computer program or information technology system used to access or store any Tax Records, in each case to the extent reasonably required by the other Company in connection with the preparation of Tax Returns or financial
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accounting statements, audits, litigation, or the resolution of items under this Agreement, and in all events subject to such reasonable requirements as the providing partys information technology department may impose to ensure compliance with such partys data protection policies.
Section 10. Tax Contests .
Section 10.01 Notice . Each of the Companies shall provide prompt notice to the other Company of any written communication from a Tax Authority regarding any pending or threatened Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware related to Taxes for Tax Periods for which it is indemnified by the other Company hereunder. Such notice shall attach copies of the pertinent portion of any written communication from a Tax Authority and contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect of any such matters. If an indemnified party has knowledge of an asserted Tax liability with respect to a matter for which it is to be indemnified hereunder and such party fails to give the indemnifying party prompt notice of such asserted Tax liability and the indemnifying party is entitled under this Agreement to contest the asserted Tax liability, then (i) if the indemnifying party is precluded from contesting the asserted Tax liability in any forum as a result of the failure to give prompt notice, the indemnifying party shall have no obligation to indemnify the indemnified party for any Taxes arising out of such asserted Tax liability, and (ii) if the indemnifying party is not precluded from contesting the asserted Tax liability in any forum, but such failure to give prompt notice results in a material monetary detriment to the indemnifying party, then any amount which the indemnifying party is otherwise required to pay the indemnified party pursuant to this Agreement shall be reduced by the amount of such detriment.
Section 10.02 Control of Tax Contests .
(a) Separate Company Taxes . In the case of any Tax Contest with respect to any Separate Return (other than a Separate Return of Other Taxes described in clause (II) of Section 5.01), the Company having liability for the Tax shall have exclusive control over the Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Sections 10.02(f) and (g) below.
(b) Parent Federal Consolidated Income Tax Return. In the case of any Tax Contest with respect to any Parent Federal Consolidated Income Tax Return, Parent shall have exclusive control over the Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Sections 10.02(f) and (g) below.
(c) Parent State Combined Income Tax Return . In the case of any Tax Contest with respect to any Parent State Combined Income Tax Return, Parent shall have exclusive control over the Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Sections 10.02(f) and (g) below.
(d) Parent Foreign Combined Income Tax Return . In the case of any Tax Contest with respect to any Parent Foreign Combined Income Tax Return, Parent shall have exclusive control over the Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Sections 10.02(f) and (g) below.
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(e) Joint Returns and Certain Other Returns. In the case of any Tax Contest with respect to (I) any Joint Return (other than any Parent Federal Consolidated Income Tax Return, any Parent State Combined Income Tax Return or any Parent Foreign Combined Income Tax Return) or (II) any Return of Other Taxes described in clause (II) of Section 5.01, (i) Parent shall control the defense or prosecution of the portion of the Tax Contest directly and exclusively related to any Parent Adjustment, including settlement of any such Parent Adjustment and (ii) Enova shall control the defense or prosecution of the portion of the Tax Contest directly and exclusively related to any Enova Adjustment, including settlement of any such Enova Adjustment, and (iii) the Tax Contest Committee shall control the defense or prosecution of Joint Adjustments and any and all administrative matters not directly and exclusively related to any Parent Adjustment or Enova Adjustment. The Tax Contest Committee shall be comprised of two persons, one person selected by Parent (as designated in writing to Enova) and one person selected by Enova (as designated in writing to Parent). Each person serving on the Tax Contest Committee shall continue to serve unless and until he or she is replaced by the party designating such person. Any and all matters to be decided by the Tax Contest Committee shall require the unanimous approval of both persons serving on the committee. In the event the Tax Contest Committee shall be deadlocked on any matter, the provisions of Section 14 of this Agreement shall apply.
(f) Settlement Rights. The Controlling Party shall have the sole right to contest, litigate, compromise and settle any Tax Contest without obtaining the prior consent of the Non-Controlling Party. Unless waived by the parties in writing, in connection with any potential adjustment in a Tax Contest as a result of which adjustment the Non-Controlling Party may reasonably be expected to become liable to make any indemnification payment (or any payment under Section 6) to the Controlling Party under this Agreement: (i) the Controlling Party shall keep the Non-Controlling Party informed in a timely manner of all actions taken or proposed to be taken by the Controlling Party with respect to such potential adjustment in such Tax Contest; (ii) the Controlling Party shall provide the Non-Controlling Party copies of any written materials relating to such potential adjustment in such Tax Contest received from any Tax Authority; (iii) the Controlling Party shall timely provide the Non-Controlling Party with copies of any correspondence or filings submitted to any Tax Authority or judicial authority in connection with such potential adjustment in such Tax Contest; (iv) the Controlling Party shall consult with the Non-Controlling Party and offer the Non-Controlling Party a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such potential adjustment in such Tax Contest; and (v) the Controlling Party shall defend such Tax Contest diligently and in good faith. The failure of the Controlling Party to take any action specified in the preceding sentence with respect to the Non-Controlling Party shall not relieve the Non-Controlling Party of any liability and/or obligation which it may have to the Controlling Party under this Agreement except to the extent that the Non-Controlling Party was actually harmed by such failure, and in no event shall such failure relieve the Non-Controlling Party from any other liability or obligation which it may have to the Controlling Party. In the case of any Tax Contest described in Section 10.02(a), (b), (c) or (d), Controlling Party means the Company entitled to control the Tax Contest under such Section and Non-Controlling Party means the other Company. In the case of any Tax Contest described in Section 10.02(i), Controlling Party means Parent and Non-Controlling Party means Enova.
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(g) Tax Contest Participation. Unless waived by the parties in writing, the Controlling Party shall provide the Non-Controlling Party with written notice reasonably in advance of, and the Non-Controlling Party shall have the right to attend, any formally scheduled meetings with Tax Authorities or hearings or proceedings before any judicial authorities in connection with any potential adjustment in a Tax Contest pursuant to which the Non-Controlling Party may reasonably be expected to become liable to make any indemnification payment (or any payment under Section 6) to the Controlling Party under this Agreement. The failure of the Controlling Party to provide any notice specified in this Section 10.02(g) to the Non-Controlling Party shall not relieve the Non-Controlling Party of any liability and/or obligation which it may have to the Controlling Party under this Agreement except to the extent that the Non-Controlling Party was actually harmed by such failure, and in no event shall such failure relieve the Non-Controlling Party from any other liability or obligation which it may have to the Controlling Party.
(h) Power of Attorney . Each member of the Enova Group shall execute and deliver to Parent (or such member of the Parent Group as Parent shall designate) any power of attorney or other similar document reasonably requested by Parent (or such designee) in connection with any Tax Contest (as to which Parent is the Controlling Party) described in this Section 10. Each member of the Parent Group shall execute and deliver to Enova (or such member of the Enova Group as Enova shall designate) any power of attorney or other similar document requested by Enova (or such designee) in connection with any Tax Contest (as to which Enova is the Controlling Party) described in this Section 10.
Section 11. Effective Date; Termination of Prior Intercompany Tax Allocation Agreements . This Agreement shall be effective as of the date hereof. As of the date hereof (i) all prior intercompany Tax allocation agreements or arrangements shall be terminated, and (ii) amounts due under such agreements as of the date hereof shall be settled as of the date hereof. Upon such termination and settlement, no further payments by or to Parent or by or to Enova, with respect to such agreements shall be made, and all other rights and obligations resulting from such agreements between the Companies and their Affiliates shall cease at such time. Any payments pursuant to such agreements shall be disregarded for purposes of computing amounts due under this Agreement; provided that to the extent appropriate, as determined by Parent, payments made pursuant to such agreements shall be credited to Enova or Parent, respectively, in computing their respective obligations pursuant to this Agreement, in the event that such payments relate to a Tax liability that is the subject matter of this Agreement for a Tax Period that is the subject matter of this Agreement.
Section 12. Survival of Obligations . The representations, warranties, covenants and agreements set forth in this Agreement shall be unconditional and absolute and shall remain in effect without limitation as to time.
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Section 13. Treatment of Payments; Tax Gross Up .
Section 13.01 Treatment of Tax Indemnity and Tax Benefit Payments . In the absence of any change in Tax treatment under the Code or other applicable Tax Law,
(a) any Tax indemnity payments made by a Company under Section 5 shall be reported for Tax purposes by the payor and the recipient as distributions or capital contributions, as appropriate, occurring immediately before the Deconsolidation (but only to the extent the payment does not relate to a Tax allocated to the payor in accordance with Section 1552 of the Code or the regulations thereunder or Treasury Regulation Section 1.1502-33(d) (or under corresponding principles of other applicable Tax Laws)) or as payments of an assumed or retained liability, and
(b) any Tax Benefit payments made by a Company under Section 6, shall be reported for Tax purposes by the payor and the recipient as distributions or capital contributions, as appropriate, occurring immediately before the Deconsolidation (but only to the extent the payment does not relate to a Tax allocated to the payor in accordance with Section 1552 of the Code or the regulations thereunder or Treasury Regulation Section 1.1502-33(d) (or under corresponding principles of other applicable Tax Laws)) or as payments of an assumed or retained liability.
Section 13.02 Tax Gross Up . If notwithstanding the manner in which Tax indemnity payments and Tax Benefit payments were reported, there is an adjustment to the Tax liability of a Company as a result of its receipt of a payment pursuant to this Agreement, such payment shall be appropriately adjusted so that the amount of such payment, reduced by the amount of all Income Taxes payable with respect to the receipt thereof (but taking into account all correlative Tax Benefits resulting from the payment of such Income Taxes), shall equal the amount of the payment which the Company receiving such payment would otherwise be entitled to receive pursuant to this Agreement.
Section 13.03 Interest Under This Agreement . Anything herein to the contrary notwithstanding, to the extent one Company ( Indemnitor ) makes a payment of interest to another Company ( Indemnitee ) under this Agreement with respect to the period from the date that the Indemnitee made a payment of Tax to a Tax Authority to the date that the Indemnitor reimbursed the Indemnitee for such Tax payment, the interest payment shall be treated as interest expense to the Indemnitor (deductible to the extent provided by law) and as interest income by the Indemnitee (includible in income to the extent provided by law). The amount of the payment shall not be adjusted under Section 2.02 to take into account any associated Tax Benefit to the Indemnitor or increase in Tax to the Indemnitee.
Section 14. Disagreements . The Companies mutually desire that friendly collaboration will continue between them. Accordingly, they will try, and they will cause their respective Group members to try, to resolve in an amicable manner all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement, including any amendments hereto. In furtherance thereof, in the event of any dispute or disagreement (other than a High-Level Dispute) (a Tax Advisor Dispute ) between any member of the Parent Group and any member of the Enova Group as to the interpretation of any
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provision of this Agreement or the performance of obligations hereunder, the Tax departments of the Companies shall negotiate in good faith to resolve the Tax Advisor Dispute. If such good faith negotiations do not resolve the Tax Advisor Dispute, then the matter, upon written request of either Company, will be referred for resolution to executives who hold, at a minimum, the office of Senior Vice President and/or General Counsel (the Senior Executives ), which executives will make a good faith effort to resolve the Tax Advisor Dispute pursuant to the procedures set forth in Section 4.2 of the Separation and Distribution Agreement. If the Senior Executives do not agree to a resolution of a Tax Advisor Dispute within thirty (30) days after the reference of the Tax Advisor Dispute to it, then the matter will be referred to a Tax Advisor acceptable to each of the Companies. The Tax Advisor may, in its discretion, obtain the services of any third-party appraiser, accounting firm or consultant that the Tax Advisor deems necessary to assist it in resolving such disagreement. The Tax Advisor shall furnish written notice to the Companies of its resolution of any such Tax Advisor Dispute as soon as practical, but in any event no later than 45 days after its acceptance of the matter for resolution. Any such resolution by the Tax Advisor will be conclusive and binding on the Companies. Following receipt of the Tax Advisors written notice to the Companies of its resolution of the Tax Advisor Dispute, the Companies shall each take or cause to be taken any action necessary to implement such resolution of the Tax Advisor. In accordance with Section 16, each Company shall pay its own fees and expenses (including the fees and expenses of its representatives) incurred in connection with the referral of the matter to the Tax Advisor. All fees and expenses of the Tax Advisor in connection with such referral shall be shared equally by the Companies. Any High-Level Dispute shall be resolved pursuant to the procedures set forth in Section 4.2 of the Separation and Distribution Agreement. Nothing in this Section 14 will prevent either Company from seeking injunctive relief if any delay resulting from the efforts to resolve the Tax Advisor Dispute through the Senior Executives and the Tax Advisor (or any delay resulting from the efforts to resolve any High-Level Dispute through the procedures set forth in Section 4.2 of the Separation and Distribution Agreement) could result in serious and irreparable injury to either Company. Notwithstanding anything to the contrary in this Agreement, the Separation and Distribution Agreement or any Ancillary Agreement, Parent and Enova are the only members of their respective Group entitled to commence a dispute resolution procedure under this Agreement, and each of Parent and Enova will cause its respective Group members not to commence any dispute resolution procedure other than through such party as provided in this Section 14.
Section 15. Late Payments . Payments pursuant to this Agreement that are not made within the period prescribed in this Agreement (the Payment Period) and that are not otherwise setoff against amounts owed by one party to the other party will bear interest for the period from and including the date immediately following the last date of the Payment Period through and including the date of payment at a per annum rate equal to the applicable rate for large corporate underpayments set forth in Section 6621(c) of the Code. Such interest will be payable at the same time as the payment to which it relates and will be calculated on the basis of a year of 365 days and the actual number of days for which due.
Section 16. Expenses . Except as otherwise provided in this Agreement, each party and its Affiliates shall bear their own expenses incurred in connection with preparation of Tax Returns, Tax Contests, and other matters related to Taxes under the provisions of this Agreement.
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Section 17. General Provisions .
Section 17.01 Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon receipt, if delivered by hand, generally accepted means of electronic transmission, any nationally recognized overnight courier service or mail (with postage prepaid), to the following addresses:
(a) | If to Enova to: |
Enova International, Inc.
200 West Jackson Blvd.
Chicago, Illinois 60606
Attn: General Counsel
E-mail: lyoung@enova.com
(b) | If to Parent, to: |
Cash America International, Inc.
1600 West 7 th Street
Fort Worth, Texas 76102
Attn: General Counsel
E-mail: clinscott@casham.com
or to such other addresses or e-mail address as may be specified by like notice to the other party.
A party may change the address for receiving notices under this Agreement by providing written notice of the change of address to the other parties.
Section 17.02 Binding Effect . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns.
Section 17.03 Waiver . The parties may waive a provision of this Agreement only by a writing signed by the party intended to be bound by the waiver. A party is not prevented from enforcing any right, remedy or condition in the partys favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a partys rights and remedies in this Agreement is not intended to be exclusive, and a partys rights and remedies are intended to be cumulative to the extent permitted by law and include any rights and remedies authorized in law or in equity.
Section 17.04 Severability . If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such
36
provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable provision to effect the original intent of the parties.
Section 17.05 Authority . Each of the parties represents to the other that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate or other action, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors rights generally and general equity principles.
Section 17.06 Further Action . The parties shall execute and deliver all documents, provide all information, and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement, including the execution and delivery to the other parties and their Affiliates and representatives of such powers of attorney or other authorizing documentation as is reasonably necessary or appropriate in connection with Tax Contests (or portions thereof) under the control of such other parties in accordance with Section 10.
Section 17.07 Integration . This Agreement, together with each of the exhibits and schedules appended hereto, constitutes the final agreement between the parties, and is the complete and exclusive statement of the parties agreement on the matters contained herein. All prior and contemporaneous negotiations and agreements between the parties with respect to the matters contained herein are superseded by this Agreement, as applicable. In the event of any inconsistency between this Agreement and the Separation and Distribution Agreement, or any other agreements relating to the transactions contemplated by the Separation and Distribution Agreement, with respect to matters addressed herein, the provisions of this Agreement shall control.
Section 17.08 Construction . The language in all parts of this Agreement shall in all cases be construed according to its fair meaning and shall not be strictly construed for or against any party. The captions, titles and headings included in this Agreement are for convenience only, and do not affect this Agreements construction or interpretation. Unless otherwise indicated, all Section references in this Agreement are to sections of this Agreement.
Section 17.09 No Double Recovery . No provision of this Agreement shall be construed to provide an indemnity or other recovery for any costs, damages, or other amounts for which the damaged party has been fully compensated under any other provision of this Agreement or under any other agreement or action at law or equity. Unless expressly required in this Agreement, a party shall not be required to exhaust all remedies available under other agreements or at law or equity before recovering under the remedies provided in this Agreement.
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Section 17.10 Counterparts . This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. Any signature on this Agreement may be an electronically delivered signature and all parties agree that any signature delivered electronically shall be treated as an original signature to any such document.
Section 17.11 Governing Law . The internal laws of the State of Texas (without reference to its principles of conflicts of law) govern the construction, interpretation and other matters arising out of or in connection with this Agreement and each of the exhibits and schedules hereto and thereto (whether arising in contract, tort, equity or otherwise).
Section 17.12 Jurisdiction . If any dispute arises out of or in connection with this Agreement, except as expressly contemplated by another provision of this Agreement, the parties irrevocably (and the parties will cause each other member of their respective Group to irrevocably) (a) consent and submit to the exclusive jurisdiction of federal and state courts located in Fort Worth, Texas, (b) waive any objection to that choice of forum based on venue or to the effect that the forum is not convenient, and (c) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL OR ADJUDICATION BY JURY.
Section 17.13 Amendment . Except as otherwise expressly provided herein with respect to the Schedules hereto, the parties may amend this Agreement only by a written agreement signed by each party to be bound by the amendment and that identifies itself as an amendment to this Agreement.
Section 17.14 Enova Subsidiaries . If, at any time, Enova acquires or creates one or more subsidiaries that are includable in the Enova Group, they shall be subject to this Agreement and all references to the Enova Group herein shall thereafter include a reference to such subsidiaries.
Section 17.15 Successors . This Agreement shall be binding on and inure to the benefit of any successor by merger, acquisition of assets, or otherwise, to any of the parties hereto (including but not limited to any successor of Parent or Enova succeeding to the Tax Attributes of either under Section 381 of the Code), to the same extent as if such successor had been an original party to this Agreement.
Section 17.16 Injunctions . The parties acknowledge that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. The parties hereto shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at law or in equity.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each party has caused this Agreement to be executed on its behalf by a duly authorized officer on the date first set forth above.
CASH AMERICA INTERNATIONAL, INC. | ENOVA INTERNATIONAL, INC. | |||||||
By: |
/s/ Thomas A. Bessant, Jr. |
By: |
/s/ David A. Fisher |
|||||
Name: |
Thomas A. Bessant, Jr. |
Name: |
David A. Fisher |
|||||
Title: |
Executive Vice President and Chief Financial Officer |
Title: |
Chief Executive Officer and President |
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Exhibit 10.2
TRANSITION SERVICES AGREEMENT
BY AND BETWEEN
CASH AMERICA INTERNATIONAL, INC.
AND
ENOVA INTERNATIONAL, INC.
Dated as of November 12, 2014
TABLE OF CONTENTS
ARTICLE I | DEFINITIONS | 1 | ||
ARTICLE II | SERVICES | 2 | ||
2.1 |
Services | 2 | ||
2.2 |
Service Coordinators | 3 | ||
2.3 |
Additional Services | 3 | ||
2.4 |
Third Party Services | 3 | ||
2.5 |
Standard of Performance; Limitation of Liability | 4 | ||
2.6 |
Service Boundaries and Scope | 4 | ||
2.7 |
Cooperation | 5 | ||
2.8 |
Transitional Nature of Services; Changes | 5 | ||
ARTICLE III | SERVICE CHARGES | 5 | ||
3.1 |
Service Fee | 5 | ||
3.2 |
Performance under Ancillary Agreements | 5 | ||
ARTICLE IV | PAYMENT | 5 | ||
4.1 |
Payment | 5 | ||
4.2 |
Payment Disputes | 6 | ||
4.3 |
Error Correction | 6 | ||
4.4 |
Taxes | 6 | ||
4.5 |
Records; Audits | 7 | ||
ARTICLE V | TERM | 7 | ||
ARTICLE VI | DISCONTINUATION OF SERVICES | 7 | ||
6.1 |
Discontinuation of Services | 7 | ||
6.2 |
Procedures Upon Discontinuation or Termination of Services | 7 | ||
ARTICLE VII | DEFAULT | 8 | ||
ARTICLE VIII | INDEMNIFICATION | 8 | ||
8.1 |
Personal Injury | 8 | ||
8.2 |
Property Damage | 8 | ||
8.3 |
Waiver of Consequential Damages | 9 | ||
8.4 |
Services Received | 9 | ||
ARTICLE IX | CONFIDENTIALITY | 10 | ||
ARTICLE X | FORCE MAJEURE | 10 | ||
10.1 |
Performance Excused | 10 | ||
10.2 |
Notice | 10 | ||
10.3 |
Cooperation | 10 | ||
10.4 |
No Liability | 10 |
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ARTICLE XI |
MISCELLANEOUS | 11 | ||
11.1 |
Construction | 11 | ||
11.2 |
Assignment | 11 | ||
11.3 |
Entire Agreement | 11 | ||
11.4 |
Notices | 11 | ||
11.5 |
Governing Law | 12 | ||
11.6 |
Severability | 12 | ||
11.7 |
Amendment | 12 | ||
11.8 |
Counterparts | 12 | ||
11.9 |
Authority | 13 | ||
11.10 |
Binding Effect | 13 | ||
11.11 |
Waiver | 13 | ||
11.12 |
Arbitration | 13 | ||
11.13 |
Relationship of Parties | 13 | ||
11.14 |
Further Assurances | 13 | ||
11.15 |
Survival | 13 |
Schedule 1 - Services
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TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this Agreement ) is entered into as of November 12, 2014, between Cash America International, Inc. , a Texas corporation ( Parent ), and Enova International, Inc. , a Delaware corporation ( Enova ).
RECITALS
WHEREAS , Parent is the holder of all of the equity interests in Enova;
WHEREAS , Parent has determined that for corporate non-tax business purposes it is in the best interests of Parent and Enova to separate Enova from Parent;
WHEREAS , contemporaneously with the execution and delivery of this Agreement, Parent and Enova have entered into a Separation and Distribution Agreement, dated as of the date hereof (the Separation and Distribution Agreement ), and the other Ancillary Agreements (as defined in the Separation and Distribution Agreement);
WHEREAS , Parent currently intends that, on the Distribution Date (as defined in the Separation and Distribution Agreement), Parent shall distribute to holders of shares of Parent Common Stock (as defined in the Separation and Distribution Agreement), through a spin-off, 80 percent of the outstanding shares of Enova Common Stock (as defined in the Separation and Distribution Agreement) (the Distribution );
WHEREAS , immediately following the Distribution, Parent will own 20 percent of the issued and outstanding shares of Enova Common Stock;
WHEREAS, in order to ensure an orderly transition under the Separation and Distribution Agreement, Parent intends to provide to Enova certain services described herein for a transitional period.
AGREEMENT
NOW, THEREFORE , in consideration of the foregoing and the mutual covenants and agreements set forth below, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
The following terms used in this Agreement are defined as set forth below or in the sections indicated, as applicable. Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article I of the Separation and Distribution Agreement.
Additional Services has the meaning given such term in Section 2.3 .
An Affiliate of any Person means another Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such
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Person. For this purpose, control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the Person controlled, whether through ownership of voting securities, by contract or otherwise. Notwithstanding anything herein to the contrary, no member of the Enova Group (as defined in the Separation and Distribution Agreement) shall be deemed to be an Affiliate of any member of the Parent Group (as defined in the Separation and Distribution Agreement), and no member of the Parent Group shall be deemed to be an Affiliate of any member of the Enova Group.
Agreement has the meaning given such term in the Preamble.
Distribution has the meaning given such term in the Preamble.
Distribution Date means the date of the consummation of the Distribution, which shall be determined by Parent in its sole and absolute discretion.
Enova has the meaning given such term in the Preamble.
Enova Entities means Enova and its Subsidiaries.
Force Majeure Event has the meaning set forth in Section 10.1 .
Invoice has the meaning given such term in Section 4.1 .
Parent has the meaning given such term in the Preamble.
Separation and Distribution Agreement has the meaning given such term in the Recitals.
Service Coordinator has the meaning given such term in Section 2.2 .
Service Fee has the meaning given such term in Section 3.1 .
Services has the meaning given such term in Section 2.1(a) .
Subsidiary means an Affiliate controlled by a Person directly, or indirectly through one or more intermediaries.
Tax has the meaning given such term in Section 4.4 .
Third Party Service Provider means any agent, consultant, temporary employee, independent contractor or subcontractor engaged by Parent to perform any Service hereunder.
ARTICLE II
SERVICES
2.1 Services .
(a) Subject to the terms and conditions of this Agreement, Parent, directly or acting through its Affiliates and/or its or its Affiliates respective employees or Third
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Party Service Providers, agrees to provide or cause to be provided to the Enova Entities the services set forth in Schedule 1 hereto (together with any Additional Services provided pursuant to Section 2.3 are collectively referred to herein as the Services ).
(b) At all times during the performance of the Services, all Persons performing such Services (including Third Party Service Providers) shall be construed as being independent from the Enova Entities and such Persons shall not be considered or deemed to be an employee of any of the Enova Entities nor entitled to any employee benefits from any of the Enova Entities as a result of this Agreement. Enova acknowledges and agrees that, except as may be expressly set forth herein as a Service (including such agreed Additional Services to be provided pursuant to Section 2.3 below) or otherwise expressly set forth in the Separation and Distribution Agreement, any other Ancillary Agreement, or other binding definitive agreement, Parent shall not be obligated to provide, or cause to be provided, any service or goods to any of the Enova Entities.
(c) Parent shall not be required to perform Services hereunder that conflict with or violate any applicable law, contract, license, authorization, certification, or permit by which it is bound.
2.2 Service Coordinators . Parent and Enova each agree to appoint one of their respective employees who will have overall responsibility for managing and coordinating the delivery of Services, including making available the services of appropriately qualified employees and resources to enable the provision of the Services (each, a Service Coordinator ). The Service Coordinators will consult and coordinate with each other regarding the provision of Services.
2.3 Additional Services . From time to time during the term of this Agreement, Enova may request additional Services from Parent by providing written notice. Upon the mutual written agreement as to the nature, cost, duration, and scope of such additional Services, Parent and Enova shall supplement in writing this Agreement and Schedule 1 hereto to include such additional Services (such agreed services, the Additional Services ).
2.4 Third Party Services . Parent shall have the right to subcontract with one or more Third Party Service Providers to provide all or part of any Services hereunder so long as such subcontracting is consistent with past practices and the practice applied by Parent generally from time to time within its own organization. If subcontracting for a Service is not consistent with past practices and the practice applied by Parent generally from time to time within its own organization, then Parent shall give Enova written notice of its intent to subcontract such Service and Enova shall have five (5) days to notify Parent in writing as to whether Enova, in its sole discretion, agrees to permit such subcontracting or whether to cancel such Service in accordance with Article VI hereof and any failure of Enova to provide such written notice within such five (5) day period shall be deemed to be Enovas agreement to permit such subcontracting. If Parent engages a Third Party Service Provider to perform any Services hereunder as permitted by this Agreement, Parent shall be responsible for any failure of such Third Party Service Provider to perform any such Service hereunder to the same extent as if Parent was performing such Service itself.
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2.5 Standard of Performance; Limitation of Liability .
(a) The Services to be provided hereunder shall be performed with the same general degree of care, at the same general level, and at the same general degree of accuracy and responsiveness, as when performed within the Parent organization prior to the date of this Agreement. It is understood and agreed that Parent is not a professional provider of the types of services included in the Services and that Parent personnel performing such Services have other responsibilities, and will not be dedicated full-time to performing the Services.
(b) In the event Parent fails to provide, or cause to be provided, the Services in accordance herewith, the sole and exclusive remedy of Enova shall be to, at Enovas sole discretion, within ten (10) days from the date that Parent first fails to provide such Service, send written notice of such failure to Parent indicating that Parent should either (i) reperform the Service, or (ii) discontinue such Service; provided , that in the event Parent defaults in the manner described in Article VII, Enova shall have the further rights set forth in Article VII.
(c) EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 2.5 , NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, IMPLIED, OR EXPRESSED, ARE MADE BY PARENT OR ANY AFFILIATE OF PARENT WITH RESPECT TO THE SERVICES UNDER THIS AGREEMENT AND ALL SUCH REPRESENTATIONS OR WARRANTIES ARE HEREBY WAIVED AND DISCLAIMED. ENOVA HEREBY EXPRESSLY WAIVES ANY RIGHT ENOVA OR ANY OF THE ENOVA ENTITIES MAY OTHERWISE HAVE FOR ANY LOSSES, TO ENFORCE SPECIFIC PERFORMANCE, OR TO PURSUE ANY OTHER REMEDY AVAILABLE IN CONTRACT, AT LAW, OR IN EQUITY IN THE EVENT OF ANY NON-PERFORMANCE, INADEQUATE PERFORMANCE, FAULTY PERFORMANCE, OR OTHER FAILURE OR BREACH BY PARENT OR ANY AFFILIATE OF PARENT UNDER OR RELATING TO THIS AGREEMENT, NOTWITHSTANDING THE NEGLIGENCE (WHETHER SOLE, JOINT, OR CONCURRENT, OR ACTIVE OR PASSIVE) OF PARENT, ANY AFFILIATE OF PARENT, OR ANY THIRD PARTY SERVICE PROVIDER AND WHETHER DAMAGES ARE ASSERTED IN CONTRACT OR TORT, UNDER FEDERAL, STATE, OR NON-U.S. LAWS OR OTHER STATUTE OR OTHERWISE; PROVIDED , HOWEVER , THAT THE FOREGOING WAIVER SHALL NOT EXTEND TO COVER, AND PARENT SHALL BE RESPONSIBLE FOR, SUCH LOSSES CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF PARENT, ANY AFFILIATE OF PARENT, OR ANY THIRD PARTY SERVICE PROVIDER. IN NO EVENT WILL PARENTS LIABILITY UNDER THIS AGREEMENT EXCEED AN AMOUNT EQUAL TO THE AGGREGATE SERVICE FEES ACTUALLY PAID BY ENOVA.
2.6 Service Boundaries and Scope . Except as provided in Schedule 1 , (a) Parent shall be required to provide, or cause to be provided, the Services only at the locations such Services are being provided by Parent for any of the Enova Entities immediately prior to the Distribution Date, and (b) the Services shall be available only for purposes of conducting the business of the Enova Entities substantially in the manner it was conducted immediately prior to the Distribution Date. Except as provided in Schedule 1 , in providing, or causing to be provided, the Services, Parent shall not be obligated to (a) maintain the employment of any specific employee or hire
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additional employees, (b) purchase, lease, or license any additional equipment (including, without limitation, computer equipment, software, furniture, furnishings, fixtures, machinery, vehicles, tools, and other tangible personal property) that it would not acquire in the ordinary course of business, (c) make modifications to its existing systems, (d) pay any costs related to the transfer or conversion of data of any of the Enova Entities, or (e) be directed by Enova with respect to the allocation or selection of the Parent employees used to provide the Services.
2.7 Cooperation . Parent and Enova shall cooperate with one another and shall provide such further assistance as the other party may reasonably request in connection with the provision of Services hereunder.
2.8 Transitional Nature of Services; Changes . The parties acknowledge the transitional nature of the Services and that Parent may make changes from time to time in the manner of performing the Services if Parent (a) is making similar changes in performing similar services for Parent and its Subsidiaries and (b) furnishes to Enova prompt notice respecting such changes.
ARTICLE III
SERVICE CHARGES
3.1 Service Fee . In consideration for the provision of the Services, Enova shall pay to Parent a monthly fee of $ [ ] (the Service Fee ) and shall reimburse Parent for all reasonable, direct or indirect, out-of-pocket costs that are incurred to provide any Service, including any expenses incurred pursuant to Sections 2.4 that are not invoiced directly to Enova, but excluding personnel and general overhead costs incurred by the Parent Group; provided, however, to the extent it is not consistent with past practices prior to the date hereof for Enova to reimburse Parent for the costs of Services provided by Third Party Service Providers, then Enova shall have no obligation to reimburse Parent for any such out-of-pocket costs incurred by Parent in connection with the use of such Third Party Service Provider to perform Services hereunder unless Parent receives Enovas consent to such reimbursement prior to engaging such Third Party Service Provider to perform the applicable Service.
3.2 Performance under Other Agreements . Notwithstanding anything to the contrary contained herein, Enova shall not be charged under this Agreement for any services that are specifically required to be performed under the Separation and Distribution Agreement or any other Ancillary Agreement and any such other services shall be performed and charged for in accordance with the terms of the applicable Ancillary Agreement.
ARTICLE IV
PAYMENT
4.1 Payment .
(a) Unless otherwise agreed by the mutual agreement of the Service Coordinators, Parent shall deliver to Enova, on or before the 15 th day of each month, addressed to the attention of the Enova Chief Financial Officer or such other person as Enova may designate in writing, an invoice setting forth in reasonable detail for the immediately preceding month (i) the Service Fee, (ii) the basis for the calculation of the
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out-of-pocket costs, and (iii) such additional information as Enova may reasonably request (the Invoice ). Absent manifest error in calculations contained in an Invoice (or if there is manifest error, Enova will correct such error show such recalculation and deliver written notice thereof to Parent within sixty (60) days following Enovas receipt of the Invoice), Enova shall wire transfer or ACH to the account of Parent, within thirty (30) days after the date of the Invoice, the invoiced amount, in U.S. dollars, in full in accordance with written wiring instructions previously provided by Parent. Adjustment credits or debits shall be shown on, and settled concurrently with, the Invoice next succeeding the Invoice for which the adjustment is made. In addition, the parties may also process or settle any payments owed under this Agreement directly through electronic transfers between the parties designated bank accounts.
(b) Any preexisting obligation to make payment for Services provided hereunder shall survive the termination of this Agreement.
4.2 Payment Disputes . Enova may object to any amounts for any Service at any time before, at the time of, or after payment is made, provided such objection is made in writing to Parent within 60 days following the date of the disputed Invoice. Enova must timely pay all amounts in the invoice not subject to dispute within the thirty (30) day period described in Section 4.1 above; and Enova may withhold payment of the disputed items pending resolution of the dispute. Payment of any amount shall not constitute approval thereof. The Service Coordinators shall meet as expeditiously as possible to resolve any dispute. Any dispute that is not resolved by the Service Coordinators within 60 days after Enova notifies Parent of the dispute in writing shall be resolved in accordance with the dispute resolution and arbitration procedures set forth in Article IV of the Separation and Distribution Agreement. Neither party shall have a right of set-off against the other party for billed amounts hereunder. Upon written request, Parent will provide to Enova reasonable detail and support documentation to permit Enova to verify the accuracy of an Invoice.
4.3 Error Correction . Parent shall make adjustments to charges as required to reflect the discovery of errors or omissions in charges. Services under this Agreement and charges therefor shall be subject to audit in accordance with Section 4.5 hereof.
4.4 Taxes . Any transfer taxes, excises, fees, or other charges (including, without limitation, value added, sales, use, or receipts taxes, but not including a tax on or measured by the income, net or gross revenues, business activity, or capital of Parent), or any increase therein, now or hereafter imposed directly or indirectly by law upon any fees paid hereunder for Services, which Parent is required to pay or incur in connection with the provision of Services hereunder ( Tax ), shall be passed on to Enova as an explicit surcharge and shall be paid by Enova in addition to any Service Fee payment, whether included in the applicable Service Fee payment, or added retroactively. If Enova submits to Parent a timely and valid resale or other exemption certificate acceptable to Parent and sufficient to support the exemption from Tax, then such Tax will not be added to the Service Fee payable pursuant to Article III ; provided , however , if Parent is ever required to pay such Tax, Enova will promptly reimburse Parent for such Tax, including any interest, penalties, and attorneys fees related thereto. The parties will cooperate to minimize the imposition of any Taxes.
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4.5 Records; Audits .
(a) Parent shall maintain true and correct records of all receipts, invoices, reports, and such other documents relating to the Services rendered hereunder in accordance with its standard accounting practices and procedures, consistently applied. Without limiting the generality of the foregoing, Parents accounting records shall be maintained in sufficient detail to enable an auditor to verify the accuracy, completeness, and appropriateness of the charges for the Services hereunder. Parent shall retain such accounting records and make them available to Enovas auditors for a period of not less than six years from the close of each fiscal year of Parent; provided , however , that Parent may, at its option, transfer such accounting records to Enova upon termination of this Agreement.
(b) Upon written request, Enova and its duly authorized representatives shall have access during customary business hours to the accounting records and other documents maintained by Parent that relate to this Agreement and shall have the right to audit such records; provided , however , that the same period cannot be re-audited. Any dispute arising out of an audit that is not resolved by the mutual agreement of the Service Coordinators shall be resolved in accordance with the dispute resolution and arbitration procedures set forth in Article IV of the Separation and Distribution Agreement.
ARTICLE V
TERM
Enova shall undertake to provide to itself and its Subsidiaries, and to terminate as soon as reasonably practicable in accordance with Article VI , the Services provided to the Enova Entities hereunder. Except as otherwise expressly agreed or unless sooner terminated, this Agreement shall continue in full force and effect between the parties until the one-year anniversary date of Distribution Date.
ARTICLE VI
DISCONTINUATION OF SERVICES
6.1 Discontinuation of Services . After the date hereof, Enova may, without cause and in accordance with the terms and conditions hereunder, request the discontinuation or partial discontinuation of one or more specific Services or all of the Services provided thereunder by giving Parent at least 30 days prior written notice; provided , however , that (a) Enova shall be liable to Parent for all costs and expenses Parent remains obligated to pay in connection with, and attributable to, the provision of the discontinued Service or Services and (b) Parent shall use reasonable best efforts to minimize all such costs and expenses. In such case, by mutual agreement, the parties may agree to a corresponding reduction in consideration payable therefor pursuant to Article III . The parties shall cooperate as reasonably required to effectuate an orderly and systematic transfer to the Enova Entities of all of the duties and obligations previously performed by Parent under this Agreement.
6.2 Procedures Upon Discontinuation or Termination of Services . Upon the discontinuation or termination of a Service hereunder, this Agreement shall be of no further force
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and effect with respect to such Service, except as to obligations accrued prior to the date of discontinuation or termination; provided, however , that Article I , Article VIII , and Article IX of this Agreement shall survive such discontinuation or termination. Each party shall, within 60 days after discontinuation or termination of a Service, to the extent reasonably practicable, deliver to the other party all property in its possession, including, but not limited to, (a) originals of all books, records, contracts, receipts for deposits, and all other papers or documents in its possession which pertain exclusively to the business of the other party and relate to such Service, and (b) copies of books, records, contracts, receipts for deposits, and all other papers or documents maintained by the other party and which pertain in part to the business of the other party and relate to such Service; provided , that a party may retain archival copies of material provided to the other party pursuant to this Section 6.2 .
ARTICLE VII
DEFAULT
In the event of a (a) failure of Enova to pay for Services in accordance with the terms of this Agreement, (b) failure of Parent to perform, or cause to be performed, the Services in accordance with the terms of this Agreement, which failure results or could reasonably result in a material adverse impact on the business, operations, or financial results of the Enova Entities taken as a whole, or (c) default by any party, in any material respect, in the due performance or observance by it of any of the other terms, covenants, or agreements contained in this Agreement, then the non-defaulting party shall have the right, at its sole discretion, to immediately terminate this Agreement if the defaulting party has (i) failed to cure the default within 30 days of receipt of the written notice of such default or (ii) if such default is not reasonably susceptible to cure within a 30-day period, failed to take action within 30 days of receipt of the written notice of default reasonably designed to cure such default as soon as is reasonably practicable. Enovas right to terminate this Agreement set forth in (b) and (c) above and the rights set forth in Section 2.5 shall constitute Enovas sole and exclusive rights and remedies for a breach by Parent hereunder (including, without limitation, any breach caused by an Affiliate of Parent or other third party providing a Service hereunder).
ARTICLE VIII
INDEMNIFICATION
8.1 Personal Injury . Each party (as an indemnifying party) shall assume all liability for and shall release, defend, indemnify, and hold the other party, its affiliates, and their respective employees, officers, directors, members, managers, partners, Third Party Service Providers and agents (all as indemnified parties) free and harmless from and against all losses in connection herewith in respect of injury to or death or sickness of any employee, Third Party Service Provider, agent, or representative of the indemnifying party, its affiliates or their contractors or subcontractors, howsoever arising and whether or not caused by the negligence (whether sole, joint, or concurrent, or active or passive) of the indemnified parties, except to the extent such loss is caused by the gross negligence or willful misconduct of an indemnified party.
8.2 Property Damage . Each party (as an indemnifying party) shall assume all liability for and shall release, defend, indemnify, and hold the other party, its affiliates, and their respective employees, officers, directors, members, managers, partners, Third Party Service
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Providers and agents (all as indemnified parties) harmless from and against all losses in connection herewith in respect of loss of or damage to such indemnifying partys property or property of its affiliates, their contractors or subcontractors or their respective employees, agents, or representatives, howsoever arising and whether or not caused by the negligence (whether sole, joint, or concurrent, or active or passive) of the indemnified parties, except to the extent such loss is caused by the gross negligence or willful misconduct of an indemnified party.
8.3 Waiver of Consequential Damages . NEITHER PARTY SHALL BE LIABLE UNDER THIS AGREEMENT FOR ANY CONSEQUENTIAL, SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES UNDER ANY THEORY, ARISING OUT OF ACTIVITIES OR OBLIGATIONS UNDER OR RELATED TO THIS AGREEMENT, REGARDLESS OF THE ACTS, OMISSIONS, NEGLIGENCE, OR FAULT OF ANY PERSON.
8.4 Services Received . Enova hereby acknowledges and agrees that:
(a) the Services to be provided hereunder are subject to and limited by the provisions of Section 2.5 , Article VII , and the other provisions hereof, including, without limitation, the limitation of remedies available to Enova which restricts available remedies resulting from a Service not provided in accordance with the terms hereof to either non-payment or reperformance of such defective Service and, in certain limited circumstances, the right to terminate this Agreement;
(b) the Services are being provided solely to facilitate the transition of Enova to a separate company as a result of the Distribution, and Parent and its Affiliates do not provide any such Services to non-Affiliates;
(c) it is not the intent of Parent to render, nor of the Enova Entities to receive from Parent, professional advice or opinions, whether with regard to risk management, government relations, investor relations, internal audit, payroll, legal, finance, accounting, tax, human resources, information systems, employment, or other business and financial matters, or technical advice, whether with regard to information systems or other matters; Enova shall not rely on, or construe, any Service rendered by or on behalf of Parent as such professional advice or opinions or technical advice; and Enova shall seek all third party professional advice and opinions or technical advice as it may desire or need, and in any event Enova shall be responsible for and assume all risks associated with the Services, except to the limited extent set forth in Section 2.5 and Article VII ;
(d) with respect to any software or documentation within the Services, Enova shall use such software and documentation internally and for their intended purpose only, shall not distribute, publish, transfer, sublicense, or in any manner make such software or documentation available to other organizations or persons, and shall not act as a service bureau or consultant in connection with such software; and
(e) a material inducement to Parents agreement to provide the Services is the limitation of liability set forth herein and the release.
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ACCORDINGLY, EXCEPT WITH REGARD TO THE LIMITED REMEDIES EXPRESSLY SET FORTH HEREIN AND THE INDEMNITIES SET FORTH IN SECTION 8.1 AND SECTION 8.2 HEREOF, ENOVA SHALL ASSUME ALL LIABILITY FOR AND SHALL FURTHER RELEASE, DEFEND, INDEMNIFY, AND HOLD PARENT, ANY AFFILIATE OF PARENT, AND THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, MEMBERS, MANAGERS, THIRD PARTY SERVICE PROVIDERS, PARTNERS, AND AGENTS (ALL AS INDEMNIFIED PARTIES), FREE AND HARMLESS FROM AND AGAINST ALL LOSSES RESULTING FROM, ARISING UNDER OR RELATED TO THE SERVICES, HOWSOEVER ARISING AND WHETHER OR NOT CAUSED BY THE NEGLIGENCE OF PARENT, ANY AFFILIATE OF PARENT, OR ANY THIRD PARTY SERVICE PROVIDER, OTHER THAN THOSE LOSSES CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF PARENT, ANY AFFILIATE OF PARENT, OR ANY THIRD PARTY SERVICE PROVIDER.
ARTICLE IX
CONFIDENTIALITY
Enova and Parent each acknowledge and agree that the terms of Article VII of the Separation and Distribution Agreement shall apply to information, documents, plans, and other data made available or disclosed by one party to the other in connection with this Agreement.
ARTICLE X
FORCE MAJEURE
10.1 Performance Excused . Continued performance of a Service may be suspended immediately to the extent caused by any event or condition beyond the reasonable control of the party suspending such performance including acts of God, fire, labor or trade disturbance, war (declared or undeclared), terrorism, civil commotion or civil unrest, riots, sabotage, compliance in good faith with any Law, unavailability of materials, unusually bad weather, interference by civil or military authorities or other event or condition whether similar or dissimilar to the foregoing (a Force Majeure Event ).
10.2 Notice . The party claiming suspension due to a Force Majeure Event will give prompt notice to the other of the occurrence of the Force Majeure Event giving rise to the suspension and of its nature and anticipated duration.
10.3 Cooperation . Upon the occurrence of a Force Majeure Event, the parties shall cooperate with each other to find alternative means and methods for the provision of the suspended Service.
10.4 No Liability . Without limiting the generality of Section 2.5 , neither party shall be under any liability for failure to fulfill any obligation under this Agreement so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered, or delayed as a consequence of circumstances of Force Majeure.
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ARTICLE XI
MISCELLANEOUS
11.1 Construction . The parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party because of the authorship of any provision of this Agreement. Any reference to any federal, state, provincial, territorial, local, or foreign law shall be deemed also to refer to such law as amended and all rules and regulations promulgated thereunder, unless the context requires otherwise. Any reference to any contract or agreement (including schedules, exhibits and other attachments thereto), including this Agreement, shall be deemed also to refer to such contract or agreement as amended, restated, or otherwise modified, unless the context requires otherwise. The words include, includes, and including shall be deemed to be followed by without limitation. Pronouns in masculine, feminine, and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context requires otherwise. The words this Agreement, herein, hereof, hereby, hereunder, and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. Where this Agreement states that a party will or shall perform in some manner or otherwise act or omit to act, it means that such party is legally obligated to do so in accordance with this Agreement. The captions, titles, and headings included in this Agreement are for convenience only and do not affect this Agreements construction or interpretation. Any reference to an Article, Section, or Schedule in this Agreement shall refer to an Article or Section of, or Schedule to, this Agreement, unless the context otherwise requires. This Agreement is for the sole benefit of the parties (and, solely for purposes of Article VIII , the indemnified parties) and does not, and is not intended to, confer any rights or remedies in favor of any Person (including any employee, director, shareholder or Third Party Service Provider of Parent or any employee, director or shareholder of Enova) other than the parties.
11.2 Assignment . Except as set forth herein, neither party shall assign, transfer, or otherwise alienate any or all of its rights or interest under this Agreement without the express prior written consent of the other party, which consent may be granted or withheld in such other partys sole discretion; provided , however , that the foregoing shall in no way restrict the performance of a Service by an Affiliate of Parent or a Third Party Service Provider as otherwise allowed hereunder.
11.3 Entire Agreement . This Agreement, and the exhibits and schedules referenced or attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and thereof and supersedes (a) all prior oral or written proposals or agreements, (b) all contemporaneous oral proposals or agreements, and (c) all previous negotiations and all other communications or understandings between the parties, in each case with respect to the subject matter hereof and thereof. To the extent any portion of this Agreement conflicts with any other Ancillary Agreement or the Separation and Distribution Agreement, such other Ancillary Agremeent or the Separation and Distribution Agreement, as the case may be, shall control.
11.4 Notices . Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon receipt, if delivered by hand,
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generally accepted means of electronic transmission, any nationally recognized overnight courier service or mail (with postage prepaid), to the following addresses:
(a) | If to Enova to : | |
Enova International, Inc. | ||
200 W. Jackson Blvd., Suite 2400 | ||
Chicago, IL 60606 | ||
Attention: General Counsel | ||
E-mail: lyoung@enova.com | ||
(b) | If to Parent, to : | |
Cash America International, Inc. | ||
1600 W. 7 th Street | ||
Fort Worth, TX 76102 | ||
Attention: General Counsel | ||
E-mail: clinscott@casham.com |
or to such other addresses or telecopy numbers as may be specified by like notice to the other party.
11.5 Governing Law . This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Texas, irrespective of the choice of laws principles of the State of Texas, including all matters of validity, construction, effect, enforceability, performance and remedies.
11.6 Severability . If any provision of this Agreement or the application thereof is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable provision to effect the original intent of the parties.
11.7 Amendment . No provisions of this Agreement shall be deemed amended, supplemented or modified by any party, unless such amendment, supplement or modification is in writing and signed by the authorized representative of the party against whom such amendment, supplement or modification is sought to be enforced.
11.8 Counterparts . This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. Any signature on this Agreement may be an electronically delivered signature and all parties agree that any signature delivered electronically shall be treated as an original signature to any such document.
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11.9 Authority . Each party represents to the other party that (a) it has the corporate power and authority to execute, deliver, and perform this Agreement, (b) the execution, delivery, and performance of this Agreement by it have been duly authorized by all necessary corporate or other actions, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is its legal, valid, and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors rights generally and general equity principles.
11.10 Binding Effect . This Agreement binds and benefits the parties and their respective successors and permitted assigns. Other than those Persons entitled to indemnity under Article VIII , there are no third party beneficiaries having rights under or with respect to this Agreement.
11.11 Waiver . A provision of this Agreement may be waived only by a writing signed by the party intended to be bound by the waiver. A party is not prevented from enforcing any right, remedy, or condition in the partys favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a partys rights and remedies in this Agreement is not intended to be exclusive, and a partys rights and remedies are intended to be cumulative to the extent permitted by Law and include any rights and remedies authorized in Law or in equity.
11.12 Arbitration . All disputes and controversies which may arise out of or in connection with this Agreement and are not resolved through good faith negotiation shall be settled in accordance with the provisions of Article IV of the Separation and Distribution Agreement.
11.13 Relationship of Parties . This Agreement does not create a fiduciary relationship, partnership, joint venture, or relationship of trust or agency between the parties.
11.14 Further Assurances . From time to time, each party agrees to execute and deliver such additional documents, and will provide such additional information and assistance as any party may reasonably require to carry out the terms of this Agreement.
11.15 Survival . The parties agree that Articles I , VIII, and IX will survive the termination of this Agreement and that any such termination shall not affect any obligation for the payment of Services rendered prior to termination.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties have signed this Transition Services Agreement effective as of the date first set forth above.
CASH AMERICA INTERNATIONAL, INC. | ENOVA INTERNATIONAL, INC. | |||||||
By: |
/s/ Thomas A. Bessant, Jr. |
By: |
/s/ David A. Fisher |
|||||
Name: |
Thomas A. Bessant, Jr. |
Name: |
David A. Fisher |
|||||
Title: |
Executive Vice President and Chief Financial Officer |
Title: |
Chief Executive Officer and President |
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SCHEDULE 1
SERVICES
1. | Lawson (Infor) Software support: |
a. | Maintain existing GL accounts, cost centers, companies, legal entities, attribute lists, GL uploads, and Lawson reports. |
b. | Create new GL accounts, cost centers, companies, legal entities, attribute lists, GL uploads, and Lawson reports from time to time as reasonably required in the normal course of business, and consistent with past practices. This service explicitly excludes the creation of new GL accounts, cost centers, companies, legal entities, attribute lists, GL uploads, and Lawson reports due to acquisitions, reorganizations, new businesses and similar transactions or projects which if reasonably requested by Enova will be agreed to by Parent and treated as Additional Services as defined by section 2.3 of this agreement. |
c. | Support Facility Master and any feeds into Lawson |
d. | Manage and support existing FTP site used for GL imports and payroll uploads |
e. | Open and close monthly periods |
f. | Provide access to all historical information for Enova related companies. |
2. | ImageNow Software: |
a. | Support existing JE, Reconciliation, Treasury, Australia (Trust) and AP workflows and process queues |
b. | Provide access to all historical invoices, journal entries and reconciliations for Enova. |
3. | Hyperion Software |
a. | Maintain Enova FinPL cube |
b. | Manage feeds from Lawson to Hyperion |
c. | Rebuild cubes as reasonably requested |
4. | Ubiquiti Software- Provide historical fixed asset and HR images and records. |
5. | Treasura Software- Provide access to the application |
6. | Treasury support activities: |
a. | Provide use and access to the Wells Fargo procurement card system via CAIs license in the ordinary course of business until the earlier of: February 15, 2015 or date Enova has transitioned to a separate Pcard program. CAT program administrators will forward Enova related communications to the Enova program administrator on a timely basis. |
7. | Accounts Payable function activities |
a. | Maintain existing vendors, and create new vendors from time to time as reasonably required in the normal course of business, and consistent with past practices. This service explicitly excludes the creation of new vendors due to acquisitions, reorganizations, new businesses and similar transactions or projects which if reasonably requested by Enova will be agreed to by Parent and treated as Additional Services as defined by section 2.3 of this agreement. . |
b. | Process up to 1,200 invoices per month for payment. |
c. | Close AP application monthly |
d. | Prepare 2014 1099s for Enova |
e. | Process escheatment of checks for Enova |
8. | Fixed Assets, Prepaids, Lease Management Software modules- |
SCHEDULE 1
SERVICES
a. | Close modules monthly |
b. | Process queries from Fixed Asset Cube, as necessary |
c. | Support all depreciation books within Lawson, such as Internal, Tax, and State |
9. | AIRS Software access |
a. | Access to query data from ImageNow for Chicago Personal Property Transaction Tax |
b. | Access to query data for tax account reconciliations |
10. | Compensation and Benefits |
a. | Provide technical support and review services of no more than 1 hour to be completed by January 15, 2015 to Enova People Resources so Enova may calculate 2014 SERP contributions. |
11. | Technical Connections |
a. | Existing VPN allowing companies to exchange files |
b. | Enova employees will continue to reset their CashAm passwords by using passwords.enova.com |
In order to provide the foregoing Services or provide Enova with access to certain systems, it may be necessary to obtain additional software licenses or use rights. The cost of any such licenses or use rights incurred by Parent will be reimbursed by Enova pursuant to Section 3.1. Parent is entering into modifications to its existing licenses to allow Enova continued software system access with the following vendors: lnfor (Lawson), Perceptive (ImageNow), Oracle (Hyperion, Essbase), MHC, and Wall Street Systems (Treasura). Services do not include 3 rd party professional services expenses, which may be required to facilitate any conversion of historical images, financial records and personnel data to Enova systems, which, if necessary will be paid by Enova.
Exhibit 10.3
STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
CASH AMERICA INTERNATIONAL, INC.
AND
ENOVA INTERNATIONAL, INC.
Dated as of November 12, 2014
TABLE OF CONTENTS
Page | ||||||
ARTICLE 1 Definitions |
1 | |||||
Section 1.01. |
Definitions |
1 | ||||
Section 1.02. |
Interpretation |
6 | ||||
ARTICLE 2 Registration Rights |
7 | |||||
Section 2.01. |
Registration |
7 | ||||
Section 2.02. |
Piggyback Registrations |
10 | ||||
Section 2.03. |
Registration Procedures |
12 | ||||
Section 2.04. |
Underwritten Offerings or Exchange Offers |
18 | ||||
Section 2.05. |
Registration Rights Agreement with Participating Banks |
19 | ||||
Section 2.06. |
Registration Expenses Paid by Enova |
19 | ||||
Section 2.07. |
Indemnification |
19 | ||||
Section 2.08. |
Reporting Requirements; Rule 144 |
22 | ||||
Section 2.09. |
Registration Rights Covenant |
22 | ||||
ARTICLE 3 Voting Restrictions |
22 | |||||
Section 3.01. |
Voting of Enova Common Stock |
22 | ||||
ARTICLE 4 Miscellaneous |
23 | |||||
Section 4.01. |
Term |
23 | ||||
Section 4.02. |
Counterparts; Entire Agreement; Corporate Power |
23 | ||||
Section 4.03. |
Disputes |
24 | ||||
Section 4.04. |
Amendment |
24 | ||||
Section 4.05. |
Waiver of Default |
25 | ||||
Section 4.06. |
Successors, Assigns and Transferees |
25 | ||||
Section 4.07. |
Further Assurances |
26 | ||||
Section 4.08. |
Performance |
26 | ||||
Section 4.09. |
Notices |
26 | ||||
Section 4.10. |
Severability |
26 | ||||
Section 4.11. |
No Reliance on Other Party |
27 | ||||
Section 4.12. |
Registrations, Exchanges, etc. |
27 | ||||
Section 4.13. |
Mutual Drafting |
27 |
Exhibit A | Form of Agreement to be Bound |
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STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT
This Stockholders and Registration Rights Agreement (this Agreement ) is made as of November 12, 2014 by and between Cash America International, Inc., a Texas corporation ( Cash America ), and Enova International, Inc., a Delaware corporation and wholly owned subsidiary of Cash America ( Enova ). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Section 1.01 .
RECITALS
A. Pursuant to the Separation and Distribution Agreement, dated as of [ ] (the Separation and Distribution Agreement ), by and between Cash America and Enova, Cash America will distribute 80% of the outstanding shares of common stock, par value $0.00001 per share, of Enova (the Common Stock ) to Cash Americas shareholders (the Distribution ).
B. Cash America may Sell those shares of Common Stock that are not distributed in the Distribution (such shares not distributed in the Distribution, the Retained Shares ) through one or more transactions, including pursuant to one or more transactions registered under the Securities Act.
C. Enova desires to grant to the Cash America Group the Registration Rights for the Retained Shares and other Registrable Securities, subject to the terms and conditions of this Agreement.
D. Cash America desires to grant Enova a proxy to vote the Retained Shares in proportion to the votes cast by Enovas other stockholders, subject to the terms and conditions of this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual promises 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 hereby agree as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions .
As used in this Agreement, the following terms shall have the following meanings:
Affiliate means, when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. As used in this definition, the term control (including with correlative meanings, controlled by and under common control with ), when used with respect to any specified Person, 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 or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise. It is expressly agreed that, from and after the Distribution Date, no member of the Enova Group shall be deemed to be an Affiliate of any member of the Cash America Group, and no member of the Cash America Group shall be deemed to be an Affiliate of any member of the Enova Group. To that effect, it is the intention of the parties that no member of the Cash America Group shall be deemed to control any member of the Enova Group and each member of the Cash America Group hereby disclaims the power to direct or cause the direction of the management and policies of the Enova Group, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise.
Agreement has the meaning set forth in the preamble.
Ancillary Filings has the meaning set forth in Section 2.03(a)(i) .
Blackout Notice has the meaning set forth in Section 2.01(d) .
Blackout Period has the meaning set forth in Section 2.01(d) .
Board means the board of directors of Enova.
Business Day means any day that is not a Saturday, Sunday or other day on which banking institutions doing business in New York, New York are authorized or obligated by law or required by executive order to be closed.
Cash America has the meaning set forth in the preamble and shall include Cash Americas successors by merger, acquisition, reorganization or otherwise.
Cash America Group means Cash America, each Subsidiary of Cash America after the Distribution Date and each Affiliate of Cash America after the Distribution Date (in each case other than any member of the Enova Group).
Common Stock has the meaning set forth in the recitals.
Debt means any indebtedness of any member of the Cash America Group, including debt securities, notes, credit facilities, credit agreements and other debt instruments, including, in each case, any amounts due thereunder.
Debt Exchanges means one or more Public Debt Exchanges or Private Debt Exchanges.
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Demand Registration has the meaning set forth in Section 2.01(a) .
Disadvantageous Condition has the meaning set forth in Section 2.01(d) .
Dispute has the meaning set forth in Section 4.03(a) .
Distribution has the meaning set forth in the recitals.
Distribution Date means the date and time at which the Distribution occurs.
Enova has the meaning set forth in the preamble and shall include Enovas successors by merger, acquisition, reorganization or otherwise.
Enova Group means Enova, each Subsidiary of Enova after the Distribution Date and each Affiliate of Enova after the Distribution Date.
Enova Public Sale has the meaning set forth in Section 2.02(a) .
Exchange Act means the U.S. Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.
Exchange Offer means an exchange offer of Registrable Securities for outstanding securities of a Holder.
Governmental Authority means any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, government and any executive official thereof.
Holder means any member of the Cash America Group, so long as such Person holds any Registrable Securities, and any Permitted Transferee, so long as such Person holds any Registrable Securities.
Indemnifying Party has the meaning set forth in Section 2.07(c) .
Indemnitee has the meaning set forth in Section 2.07(c) .
Initiating Holder has the meaning set forth in Section 2.01(a) .
Loss and Losses have the meaning set forth in Section 2.07(a) .
Offering Confidential Information means, with respect to a Piggyback Registration, (i) Enovas plan to file the relevant Registration Statement and engage in the offering so registered, (ii) any information regarding the offering being registered (including the potential timing, price, number of shares, underwriters or other counterparties, selling stockholders or plan of distribution) and (iii) any other information (including information contained in draft supplements or amendments to offering materials) provided to any Holders by Enova (or by third parties) in connection with a Piggyback Registration; provided , that Offering Confidential Information shall not include information that (x) was or becomes generally available to the public (including as a result of the filing of the relevant Registration Statement) other than as a result of a disclosure by any Holder, (y) was or becomes available to any Holder from a source not bound by any confidentiality agreement with Enova or (z) was otherwise in such Holders possession prior to it being furnished to such Holder by Enova or on Enovas behalf.
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Other Holders has the meaning set forth in Section 2.01(f) .
Participating Banks means such investment banks that engage in any Debt Exchange with one or more members of the Cash America Group.
Permitted Transferee means any Transferee and any Subsequent Transferee.
Person means an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.
Piggyback Registration has the meaning set forth in Section 2.02(a) .
Private Debt Exchange means a private exchange pursuant to which one or more members of the Cash America Group shall Sell some or all of their Registrable Securities to one or more Participating Banks in exchange for the satisfaction of Debt, in a transaction or transactions not required to be registered under the Securities Act.
Prospectus means the prospectus included in any Registration Statement, all amendments and supplements to such prospectus, including post-effective amendments, and all other material incorporated by reference in such prospectus.
Public Debt Exchange means a public exchange pursuant to which one or more members of the Cash America Group shall Sell some or all of their Registrable Securities to one or more Participating Banks in exchange for the satisfaction of Debt, in a transaction or transactions registered under the Securities Act.
Registrable Securities means the Retained Shares and any shares of Common Stock or other securities issued with respect to, in exchange for, or in replacement of such Retained Shares; provided , that the term Registrable Securities excludes any security (i) the offering and Sale of which has been effectively registered under the Securities Act and which has been Sold in accordance with a Registration Statement, (ii) that has been Sold by a Holder in a transaction or transactions exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof (including transactions pursuant to Rule 144) such that the further Sale of such securities by the transferee or assignee is not restricted under the Securities Act or (iii) that has been Sold by a Holder in a transaction in which such Holders rights under this Agreement are not, or cannot be, assigned.
Registration means a registration with the SEC of the offer and Sale to the public of any Registrable Securities under a Registration Statement. The terms Register and Registering shall have correlative meanings.
Registration Expenses means all expenses incident to the Enova Groups performance of or compliance with this Agreement, including all (i) registration, qualification and filing fees, (ii)
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fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications within the United States of any Registrable Securities being registered), (iii) printing expenses, messenger, telephone and delivery expenses, (iv) internal expenses of Enova Group (including all salaries and expenses of employees of members of Enova Group performing legal or accounting duties), (v) fees and disbursements of counsel for Enova and customary fees and expenses for independent certified public accountants retained by the Enova Group (including the expenses of any comfort letters or costs associated with the delivery by Enova Group members independent certified public accountants of comfort letters customarily requested by underwriters) and (vi) fees and expenses of listing any Registrable Securities on any securities exchange on which the shares of Common Stock are then listed and Financial Industry Regulatory Authority registration and filing fees; but excluding any fees or disbursements of any Holder, all expenses incurred in connection with the printing, mailing and delivering of copies of any Registration Statement, any Prospectus, any other offering documents and any amendments and supplements thereto to any underwriters and dealers; any underwriting discounts, fees or commissions attributable to the offer and Sale of any Registrable Securities, any fees and expenses of the underwriters or dealer managers, the cost of preparing, printing or producing any agreements among underwriters, underwriting agreements and blue sky or legal investment memoranda, any selling agreements and any other similar documents in connection with the offering, Sale, distribution or delivery of the Registrable Securities or other shares of Common Stock to be Sold, including any fees of counsel for any underwriters in connection with the qualification of the Registrable Securities or other shares of Common Stock to be Sold for offering and Sale or distribution under state securities laws, any stock transfer taxes, out-of-pocket costs and expenses relating to any investor presentations on any road show presentations undertaken in connection with marketing of the Registrable Securities and any fees and expenses of any counsel to the Holder or the underwriters or dealer managers.
Registration Period has the meaning set forth in Section 2.01(c) .
Registration Rights means the rights of the Holders to cause Enova to Register Registrable Securities pursuant to Article II .
Registration Statement means any registration statement of Enova filed with, or to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, including the related Prospectus, amendments and supplements to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference into such registration statement. For the avoidance of doubt, it is acknowledged and agreed that such Registration Statement may be on any form that shall be applicable, including Form S-1, Form S-3 or Form S-4 and may be a Shelf Registration Statement.
Retained Shares has the meaning set forth in the recitals.
Sale means the direct or indirect transfer, sale, assignment or other disposition of a security. The terms Sell and Sold shall have correlative meanings.
SEC means the U.S. Securities and Exchange Commission.
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Securities Act means the U.S. Securities Act of 1933, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.
Separation and Distribution Agreement has the meaning set forth in the recitals.
Shelf Registration Statement means a Registration Statement of Enova for an offering of Registrable Securities to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (or similar provisions then in effect).
Subsequent Transferee has the meaning set forth in Section 4.06(b) .
Subsidiary means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (i) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (x) the total combined voting power of all classes of voting securities of such Person, (y) the total combined equity interests or (z) the capital or profit interests, in the case of a partnership, or (ii) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.
Transferee has the meaning set forth in Section 4.06(b) .
Underwritten Offering means a Registration in which Registrable Securities are Sold to an underwriter or underwriters on a firm commitment basis for reoffering to the public.
Section 1.02. Interpretation .
In this Agreement, unless the context clearly indicates otherwise:
(a) words used in the singular include the plural, and words used in the plural include the singular;
(b) references to any Person include such Persons successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and a reference to such Persons Affiliates or Subsidiaries shall be deemed to mean such Persons Affiliates or Subsidiaries, as applicable, following the Distribution Date;
(c) any reference to any gender includes the other gender and the neuter;
(d) the words include, includes and including shall be deemed to be followed by the words without limitation;
(e) the words shall and will are used interchangeably and have the same meaning;
(f) the word or shall have the inclusive meaning represented by the phrase and/or;
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(g) any reference to any Article, Section, Exhibit or Schedule means such Article or Section of, or such Exhibit or Schedule to, this Agreement, as the case may be, and references in any Section or definition to any clause means such clause of such Section or definition;
(h) the words herein, hereunder, hereof, hereto and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision of this Agreement;
(i) any reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement;
(j) any reference to any law (including statutes and ordinances) means such law (including all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability;
(k) relative to the determination of any period of time, from means from and including, to means to but excluding and through means through and including;
(l) the table of contents and titles to Articles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement;
(m) any portion of this Agreement obligating a party to take any action or refrain from taking any action, as the case may be, shall mean that such party shall also be obligated to cause its relevant Subsidiaries to take such action or refrain from taking such action, as the case may be;
(n) the language of this Agreement shall be deemed to be the language the parties hereto have chosen to express their mutual intent, and no rule of strict construction shall be applied against any party; and
(o) except as otherwise indicated, all periods of time referred to herein shall include all Saturdays, Sundays and holidays; provided , however , that if the date to perform the act or give any notice with respect to this Agreement shall fall on a day other than a Business Day, such act or notice may be performed or given timely if performed or given on the next succeeding Business Day.
ARTICLE 2
Registration Rights
Section 2.01. Registration .
(a) Prior to the fifth anniversary of the Distribution Date, any Holder(s) of 10% or more of the then outstanding Registrable Securities (and any Holders acting together
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which collectively hold 10% or more of the then outstanding Registrable Securities) (collectively, the Initiating Holder ; provided , that the 10% ownership threshold shall not apply to any Holder that is a member of the Cash America Group) shall have the right to request that Enova file a Registration Statement with the SEC on the appropriate registration form for all or part of the Registrable Securities held by such Initiating Holder, by delivering a written request thereof to Enova specifying the number of shares of Registrable Securities such Initiating Holder wishes to register (a Demand Registration ). Enova shall (i) within five days of the receipt of a Demand Registration, give written notice of such Demand Registration to all Holders of Registrable Securities, (ii) use its reasonable best efforts to prepare and file the Registration Statement as expeditiously as possible but in any event within 30 days of such request, and (iii) use its best efforts to cause the Registration Statement to become effective in respect of each Demand Registration in accordance with the intended method of distribution set forth in the written request delivered by the Initiating Holder. Enova shall include in such Registration all Registrable Securities with respect to which Enova receives, within the 10 days immediately following the receipt by the Holder(s) of such notice from Enova, a request for inclusion in the Registration from the Holder(s) thereof. Each such request from a Holder of Registrable Securities for inclusion in the Registration shall also specify the aggregate amount of Registrable Securities proposed to be Registered. The Initiating Holder may request that the Registration Statement be on any appropriate form, including Form S-4 in the case of an Exchange Offer or a Shelf Registration Statement, and Enova shall effect the Registration on the form so requested.
(b) The Holder(s) may collectively make a total of three Demand Registration requests pursuant to Section 2.01(a) (including any exercise of rights to Demand Registration transferred pursuant to Section 4.06 and including any exercise of rights to Demand Registration made pursuant to any registration rights agreement entered into pursuant to Section 2.05 ); provided that the Holder(s) may not make more than two Demand Registration requests in any 365-day period; further provided , that the Demand Registration requested pursuant to the Separation and Distribution Agreement shall be disregarded for purposes of this sentence and, as such, shall not count against either the total of three Demand Registration Statements that may be requested pursuant to Section 2.01(a) or against the limitation on two Demand Registration requests in any 365-day period. In addition, and notwithstanding anything to the contrary, the Cash America Group shall be permitted on a one-time basis to engage in up to three related Private Debt Exchanges within any six-month period during the first eighteen months following the date hereof, and each Demand Registration request made by the Participating Banks in such Private Debt Exchanges pursuant to one or more registration rights agreements with Enova pursuant to Section 2.05 shall collectively count only as one Demand Registration request for purposes of the limitation on the number of Demand Registration requests set forth in the first sentence of this Section 2.01(b) (it being understood that the Cash America Group shall be permitted to engage in additional Private Debt Exchanges outside such six-month period, but each Demand Registration request by the Participating Banks for such Private Debt Exchange pursuant to its registration rights agreement with Enova pursuant to Section 2.05 shall count as an additional Demand Registration request for purposes of the limitation on the number of Demand Registration requests set forth in the first sentence of this Section 2.01(b) ).
(c) Enova shall be deemed to have effected a Registration for purposes of this Section 2.01 if the Registration Statement is declared effective by the SEC or becomes effective upon filing with the SEC and remains effective until the earlier of (i) the date when all Registrable Securities thereunder have been Sold and (ii) 60 days from the effective date of the Registration Statement (or, in the case of a Shelf Registration Statement filed to satisfy a request for a Demand Registration, from the date the Shelf Registration Statement is declared effective with the SEC or becomes effective upon filing with the SEC and remains effective until the date when all of the Registrable Securities thereunder have been sold) (the Registration Period ). No Registration shall be deemed to have
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been effective if the conditions to closing specified in the underwriting agreement or dealer manager agreement, if any, entered into in connection with such Registration are not satisfied by reason of a wrongful act, misrepresentation or breach of such applicable underwriting agreement or dealer manager agreement by any member of the Enova Group. If during the Registration Period, such Registration is interfered with by any stop order, injunction or other order or requirement of the SEC or other Governmental Authority or the need to update or supplement the Registration Statement, the Registration Period shall be extended on a day-for-day basis for any period in which the Holder(s) is unable to complete an offering as a result of such stop order, injunction or other order or requirement of the SEC or other Governmental Authority.
(d) With respect to any Registration Statement, whether filed or to be filed pursuant to this Agreement, if Enova shall reasonably determine, upon the advice of legal counsel, that maintaining the effectiveness of such Registration Statement or filing an amendment or supplement thereto (or, if no Registration Statement has yet been filed, filing such a Registration Statement) would (i) require the public disclosure of material nonpublic information concerning any transaction or negotiations involving Enova or any of its consolidated Subsidiaries that would materially interfere with such transaction or negotiations or (ii) require the public disclosure of material nonpublic information concerning Enova at a time when its directors and executive officers are restricted from trading in Enovas securities (a Disadvantageous Condition ), Enova may, for the shortest period reasonably practicable, and in any event for not more than 30 consecutive calendar days (a Blackout Period ), notify the Holders whose offers and Sales of Registrable Securities are covered (or to be covered) by such Registration Statement (a Blackout Notice ) that such Registration Statement is unavailable for use (or will not be filed as requested). Upon the receipt of any such Blackout Notice, the Holders shall forthwith discontinue use of the Prospectus contained in any effective Registration Statement; provided , that, if at the time of receipt of such Blackout Notice any Holder shall have Sold its Registrable Securities (or have signed a firm commitment underwriting agreement with respect to the purchase of such shares) and the Disadvantageous Condition is not of a nature that would require a post-effective amendment to the Registration Statement, then Enova shall use its commercially reasonable efforts to take such action as to eliminate any restriction imposed by federal securities laws on the timely delivery of such Registrable Securities. When any Disadvantageous Condition as to which a Blackout Notice has been previously delivered shall cease to exist, Enova shall as promptly as reasonably practicable notify the Holders and take such actions in respect of such Registration Statement as are otherwise required by this Agreement. The effectiveness period for any Demand Registration for which Enova has given notice of a Blackout Period shall be increased by the length of time of such Blackout Period. Enova shall not impose, in any 365-day period, Blackout Periods lasting, in the aggregate, in excess of 60 calendar days. If Enova declares a Blackout Period with respect to a Demand Registration for a Registration Statement that has not yet been declared effective, (i) the Holders may by notice to Enova withdraw the related Demand Registration request without such Demand Registration request counting against the number of Demand Registration requests permitted to be made under Section 2.01(b) and (ii) the Holders shall not be responsible for any of Enovas related Registration Expenses.
(e) If the Initiating Holder so indicates at the time of its request pursuant to Section 2.01(a) , such offering of Registrable Securities shall be in the form of an Underwritten Offering or an Exchange Offer, and Enova shall include such information in the written notice to
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the Holders required under Section 2.01(a) . In the event that the Initiating Holder intends to Sell the Registrable Securities by means of an Underwritten Offering or Exchange Offer, the right of any Holder to include Registrable Securities in such registration shall be conditioned upon such Holders participation in such Underwritten Offering or Exchange Offer and the inclusion of such Holders Registrable Securities in the Underwritten Offering or the Exchange Offer to the extent provided herein. The Holders of a majority of the outstanding Registrable Securities being included in any Underwritten Offering or Exchange Offer shall select the underwriter(s) in the case of an Underwritten Offering or the dealer manager(s) in the case of an Exchange Offer, provided that such underwriter(s) or dealer manager(s) are reasonably acceptable to Enova. Enova shall be entitled to designate counsel for such underwriter(s) or dealer manager(s) (subject to their approval), provided that such designated underwriters counsel shall be a firm of national reputation representing underwriters or dealer managers in capital markets transactions.
(f) If the managing underwriter or underwriters of a proposed Underwritten Offering of Registrable Securities included in a Registration pursuant to this Section 2.01 inform(s) in writing the Holders participating in such Registration that, in its or their opinion, the number of securities requested to be included in such Registration exceeds the number that can be Sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the number of Registrable Securities to be included in such Registration shall be reduced to the maximum number recommended by the managing underwriter or underwriter and allocated pro rata among the Holders, including the Initiating Holder, in proportion to the number of Registrable Securities each Holder has requested to be included in such Registration; provided , that the Initiating Holder may notify Enova in writing that the Registration Statement shall be abandoned or withdrawn, in which event Enova shall abandon or withdraw such Registration Statement. In the event the Initiating Holder notifies Enova that such Registration Statement shall be abandoned or withdrawn, such Holder shall not be deemed to have requested a Demand Registration pursuant to Section 2.01(a) , and Enova shall not be deemed to have effected a Demand Registration pursuant to Section 2.01(b) . If the amount of Registrable Securities to be underwritten has not been limited in accordance with the first sentence of this Section 2.01(f) , Enova and the holders of Common Stock or, if the Registrable Securities include securities other than Common Stock, the holders of securities of the same class of those securities included in the Registrable Securities, in each case, other than the Holders ( Other Holders ), may include such securities for their own account or for the account of Other Holders in such Registration if the underwriter(s) so agree and to the extent that, in the opinion of such underwriter(s), the inclusion of such additional amount will not adversely affect the offering of the Registrable Securities included in such Registration.
Section 2.02. Piggyback Registrations .
(a) Prior to the earlier to occur of the fifth anniversary of the Distribution Date or the date on which the Registrable Securities then held by the Holder(s) represents less than 1% of Enovas then-issued and outstanding Common Stock (or, if the Registrable Securities include securities other than Common Stock, less than 1% of Enovas then-issued and outstanding securities of the same class as the securities included in the Registrable Securities), if Enova proposes to file a Registration Statement (other than a Shelf Registration Statement) or a Prospectus supplement filed pursuant to a Shelf Registration Statement under the Securities Act with respect
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to any offering of such securities for its own account and/or for the account of any Other Holders (other than (i) a Registration under Section 2.01 , (ii) a Registration pursuant to a Registration Statement on Form S-8 or Form S-4 or similar form that relates to a transaction subject to Rule 145 under the Securities Act, (iii) in connection with any dividend reinvestment or similar plan, (iv) for the sole purpose of offering securities to another entity or its security holders in connection with the acquisition of assets or securities of such entity or any similar transaction or (v) a Registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered) (an Enova Public Sale ), then, as soon as practicable, but in any event not less than 15 days prior to the proposed date of filing such Registration Statement, Enova shall give written notice of such proposed filing to each Holder, and such notice shall offer such Holders the opportunity to Register under such Registration Statement such number of Registrable Securities as each such Holder may request in writing (a Piggyback Registration ). Subject to Section 2.02(b) and Section 2.02(c) , Enova shall use its commercially reasonable efforts to include in a Registration Statement with respect to an Enova Public Sale all Registrable Securities that are requested to be included therein within five Business Days after the receipt of any such notice; provided , however , that if, at any time after giving written notice of its intention to Register any securities and prior to the effective date of the Registration Statement filed in connection with such Registration, Enova shall determine for any reason not to Register or to delay Registration of the Enova Public Sale, Enova may, at its election, give written notice of such determination to each such Holder and, thereupon, (x) in the case of a determination not to Register, shall be relieved of its obligation to Register any Registrable Securities in connection with such Registration, without prejudice, however, to the rights of any Holder to request that such Registration be effected as a Demand Registration under Section 2.01 and (y) in the case of a determination to delay Registration, shall be permitted to delay Registering any Registrable Securities for the same period as the delay in Registering such other shares of Common Stock in the Enova Public Sale. No Registration effected under this Section 2.02 shall relieve Enova of its obligation to effect any Demand Registration under Section 2.01 .
(b) In the case of any Underwritten Offering, each Holder shall have the right to withdraw such Holders request for inclusion of its Registrable Securities in such Underwritten Offering pursuant to Section 2.02(a) at any time prior to the execution of an underwriting agreement with respect thereto by giving written notice to Enova of such Holders request to withdraw and, subject to the preceding clause, each Holder shall be permitted to withdraw all or part of such Holders Registrable Securities from a Piggyback Registration at any time prior to the effective date thereof.
(c) If the managing underwriter or underwriters of any proposed Underwritten Offering of a class of Registrable Securities included in a Piggyback Registration informs Enova and each Holder in writing that, in its or their opinion, the number of securities of such class that such Holder and any other Persons intend to include in such offering exceeds the number that can be Sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the securities to be included in such Registration shall be (i) first, all securities of Enova and any other Persons (other than Enovas executive officers and directors) for whom Enova is effecting the Registration, as the case may be, proposes to Sell, (ii) second, the number, if any, of Registrable Securities of such class that, in the opinion of such managing underwriter or underwriters, can be
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Sold without having such adverse effect, with such number to be allocated pro rata among the Holders that have requested to participate in such Registration based on the relative number of Registrable Securities of such class requested by such Holder to be included in such Sale, (iii) third, the number of securities of executive officers and directors of Enova for whom Enova is effecting the Registration, as the case may be, with such number to be allocated pro rata among the executive officers and directors and (iv) fourth, any other securities eligible for inclusion in such Registration, allocated among the holders of such securities in such proportion as Enova and those holders may agree.
(d) After a Holder has been notified of its opportunity to include Registrable Securities in a Piggyback Registration, such Holder (i) shall treat the Offering Confidential Information as confidential information, (ii) shall not use any Offering Confidential Information for any purpose other than to evaluate whether to include its Registrable Securities (or other shares of Common Stock) in such Piggyback Registration and (iii) shall not disclose any Offering Confidential Information to any Person other than such of its agents, employees, advisors and counsel as have a need to know such Offering Confidential Information, and to cause such agents, employees, advisors and counsel to comply with the requirements of this Section 2.02(d) ; provided , that any such Holder may disclose Offering Confidential Information if such disclosure is required by legal process, but such Holder shall cooperate with Enova to limit the extent of such disclosure through protective order or otherwise, and to seek confidential treatment of the Offering Confidential Information.
Section 2.03. Registration Procedures .
(a) In connection with Enovas Registration obligations under Section 2.01 and Section 2.02 , Enova shall use its best efforts to effect such Registration to permit the offer and Sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as reasonably practicable, and in connection therewith, Enova shall, and shall cause the members of the Enova Group to:
(i) prepare and file the required Registration Statement, including all exhibits and financial statements and, in the case of an Exchange Offer, any document required under Rule 425 or Rule 165 with respect to such Exchange Offer (collectively, the Ancillary Filings ) required under the Securities Act to be filed therewith, and before filing with the SEC a Registration Statement or Prospectus, or any amendments or supplements thereto, (A) furnish to the underwriters or dealer managers, if any, and to the Holders, copies of all documents prepared to be filed, which documents shall be subject to the review and comment of such underwriters or dealer managers and such Holders and their respective counsel, and provide such underwriters or dealers managers, if any, and such Holders and their respective counsel reasonable time to review and comment thereon and (B) not file with the SEC any Registration Statement or Prospectus or amendments or supplements thereto or any Ancillary Filing to which the Holders or the underwriters or dealer managers, if any, shall reasonably object;
(ii) prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and supplements to the Prospectus and any Ancillary Filing as may be reasonably requested by the participating Holders;
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(iii) promptly notify the participating Holders and the managing underwriters or dealer managers, if any, and, if requested, confirm such advice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by any member of the Enova Group (A) when the applicable Registration Statement or any amendment thereto has been filed or becomes effective, the applicable Prospectus or any amendment or supplement to such Prospectus has been filed, or any Ancillary Filing has been filed, (B) of any comments (written or oral) by the SEC or any request (written or oral) by the SEC or any other Governmental Authority for amendments or supplements to such Registration Statement, such Prospectus or any Ancillary Filing, or for any additional information, (C) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement, any order preventing or suspending the use of any preliminary or final Prospectus or any Ancillary Filing, or the initiation or threatening of any proceedings for such purposes, (D) if, at any time, the representations and warranties (written or oral) in any applicable underwriting agreement or dealer manager agreement cease to be true and correct in all material respects and (E) of the receipt by any member of the Enova Group of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or Sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;
(iv) (A) promptly notify each participating Holder and the managing underwriter(s) or dealer manager(s), if any, when Enova becomes aware of the occurrence of any event as a result of which the applicable Registration Statement, the Prospectus included in such Registration Statement (as then in effect) or any Ancillary Filing contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such Prospectus and any preliminary Prospectus, in light of the circumstances under which they were made) not misleading, or if for any other reason it shall be necessary during such time period to amend or supplement such Registration Statement, Prospectus or any Ancillary Filing in order to comply with the Securities Act, and (B) in either case, as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to each participating Holder and the underwriter(s) or dealer manager (s), if any, an amendment or supplement to such Registration Statement, Prospectus or Ancillary Filing that will correct such statement or omission or effect such compliance;
(v) use its reasonable best efforts to prevent or obtain the withdrawal of any stop order or other order suspending the use of any preliminary or final Prospectus;
(vi) promptly (A) incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriter(s) or dealer
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manager(s), if any, and the Holders agree should be included therein relating to the plan of distribution with respect to such Registrable Securities and (B) make all required filings of such Prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;
(vii) furnish to each participating Holder and each underwriter or dealer manager, if any, without charge, as many conformed copies as such Holder or underwriter or dealer manager may reasonably request of the applicable Registration Statement and any amendment or post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);
(viii) deliver to each participating Holder and each underwriter or dealer manager, if any, without charge, as many copies of the applicable Prospectus (including each preliminary Prospectus) and any amendment or supplement thereto as such Holder or underwriter or dealer manager may reasonably request (it being understood that Enova consents to the use of such Prospectus or any amendment or supplement thereto by each participating Holder and the underwriter(s) or dealer manager(s), if any, in connection with the offering and Sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto) and such other documents as such participating Holder or underwriter or dealer manager may reasonably request in order to facilitate the Sale of the Registrable Securities by such Holder or underwriter or dealer manager;
(ix) on or prior to the date on which the applicable Registration Statement is declared effective or becomes effective, use its reasonable best efforts to register or qualify, and cooperate with each participating Holder, the managing underwriter(s) or dealer manager(s), if any, and their respective counsel, in connection with the registration or qualification of, such Registrable Securities for offer and Sale under the securities or blue sky laws of each state and other jurisdiction of the United States as any participating Holder or managing underwriter (s) or dealer manager(s), if any, or their respective counsel reasonably request, and in any foreign jurisdiction mutually agreeable to Enova and the participating Holders, and do any and all other acts or things reasonably necessary or advisable to keep such registration or qualification in effect for so long as such Registration Statement remains in effect and so as to permit the continuance of offers and Sales and dealings in such jurisdictions for so long as may be necessary to complete the distribution of the Registrable Securities covered by the Registration Statement; provided that Enova will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, to take any action which would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject or conform its capitalization or the composition of its assets at the time to the securities or blue sky laws of any such jurisdiction;
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(x) in connection with any Sale of Registrable Securities that will result in such securities no longer being Registrable Securities, cooperate with each participating Holder and the managing underwriter(s) or dealer manager(s), if any, to (A) facilitate the timely preparation and delivery of certificates representing Registrable Securities to be Sold and not bearing any restrictive Securities Act legends and (B) register such Registrable Securities in such denominations and such names as such participating Holder or the underwriter(s) or dealer manager(s), if any, may request at least two Business Days prior to such Sale of Registrable Securities; provided that Enova may satisfy its obligations hereunder without issuing physical stock certificates through the use of the Depository Trust Company s Direct Registration System;
(xi) cooperate and assist in any filings required to be made with the Financial Industry Regulatory Authority and each securities exchange, if any, on which any of Enovas securities are then listed or quoted and on each inter-dealer quotation system on which any of Enovas securities are then quoted, and in the performance of any due diligence investigation by any underwriter or dealer manager (including any qualified independent underwriter) that is required to be retained in accordance with the rules and regulations of each such exchange, and use its reasonable best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other Governmental Authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s) or dealer manager(s), if any, to consummate the Sale of such Registrable Securities;
(xii) not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities and provide the applicable transfer agent with printed certificates for the Registrable Securities which are in a form eligible for deposit with the Depository Trust Company; provided , that Enova may satisfy its obligations hereunder without issuing physical stock certificates through the use of the Depository Trust Companys Direct Registration System;
(xiii) obtain for delivery to and addressed to each participating Holder and to the underwriter(s) or dealer manager(s), if any, opinions from the general counsel for Enova, in each case dated the effective date of the Registration Statement or, in the event of an Underwritten Offering, the date of the closing under the underwriting agreement or, in the event of an Exchange Offer, the date of the closing under the dealer manager agreement or similar agreement or otherwise, and in each such case in customary form and content for the type of Underwritten Offering or Exchange Offer, as applicable;
(xiv) in the case of an Underwritten Offering or Exchange Offer, obtain for delivery to and addressed to Enova and the managing underwriter(s) or dealer manager(s), if any, and, to the extent requested, each participating Holder, a cold comfort letter from Enovas independent registered public accounting firm in customary form and content for the type of Underwritten Offering or Exchange
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Offer, dated the date of execution of the underwriting agreement or dealer manager agreement or, if none, the date of commencement of the Exchange Offer, and brought down to the closing, whether under the underwriting agreement or dealer manager agreement, if applicable, or otherwise;
(xv) in the case of an Exchange Offer that does not involve a dealer manager, provide to each participating Holder such customary written representations and warranties or other covenants or agreements as may be requested by any participating Holder comparable to those that would be included in an underwriting or dealer manager agreement;
(xvi) use its reasonable best efforts to comply with all applicable rules and regulations of the SEC and make generally available to its security holders, as soon as reasonably practicable, but in any event no later than 90 days, after the end of the 12-month period beginning with the first day of Enovas first quarter commencing after the effective date of the applicable Registration Statement, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and covering the period of at least 12 months, but not more than 18 months, beginning with the first month after the effective date of the Registration Statement;
(xvii) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement;
(xviii) cause all Registrable Securities covered by the applicable Registration Statement to be listed on each securities exchange on which any of Enovas securities are then listed or quoted and on each interdealer quotation system on which any of Enovas securities are then quoted;
(xix) provide (A) each Holder participating in the Registration, (B) the underwriters (which term, for purposes of this Agreement, shall include any Person deemed to be an underwriter within the meaning of Section 2(11) of the Securities Act), if any, of the Registrable Securities to be registered, (C) the Sale or placement agent therefor, if any, (D) the dealer manager therefor, if any, (E) counsel for such Holder, underwriters, agent, or dealer manager and (F) any attorney, accountant or other agent or representative retained by such Holder or any such underwriter or dealer manager, as selected by such Holder, in each case, the opportunity to participate in the preparation of such Registration Statement, each Prospectus included therein or filed with the SEC, and each amendment or supplement thereto; and for a reasonable period prior to the filing of such Registration Statement, upon execution of a customary confidentiality agreement, make available for inspection upon reasonable notice at reasonable times and for reasonable periods, by the parties referred to in clauses (A) through (F) above, all pertinent financial and other records, pertinent corporate and other documents and properties of the Enova Group that are available to Enova, and cause all of the
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Enova Groups officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available at reasonable times and for reasonable periods to discuss the business of Enova and to supply all information available to Enova reasonably requested by any such Person in connection with such Registration Statement as shall be necessary to enable them to exercise their due diligence or other responsibility, subject to the foregoing; provided , that in no event shall any member of the Enova Group be required to make available any information which the Board determines in good faith to be competitively sensitive or confidential. The recipients of such information shall coordinate with one another so that the inspection permitted hereunder will not unnecessarily interfere with the Enova Groups conduct of business. Each Holder agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of Enova or its Affiliates unless and until such information is made generally available to the public by Enova or such Affiliate or for any reason not related to the Registration of Registrable Securities;
(xx) cause the senior officers of Enova to participate at reasonable times and for reasonable periods in the customary road show presentations that may be reasonably requested by the managing underwriter(s) or dealer manager(s), if any, and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto;
(xxi) comply with all requirements of the Securities Act, Exchange Act and other applicable laws, rules and regulations, as well as all applicable stock exchange rules; and
(xxii) take all other customary steps reasonably necessary or advisable to effect the Registration and distribution of the Registrable Securities contemplated hereby.
(b) As a condition precedent to any Registration hereunder, Enova may require each Holder as to which any Registration is being effected to furnish to Enova such information regarding the distribution of such securities and such other information relating to such Holder, its ownership of Registrable Securities and other matters as Enova may from time to time reasonably request in writing. Each such Holder agrees to furnish such information to Enova and to cooperate with Enova as reasonably necessary to enable Enova to comply with the provisions of this Agreement.
(c) Each Holder shall, as promptly as reasonably practicable, notify Enova at any time when a Prospectus is required to be delivered (or deemed delivered) under the Securities Act, of the occurrence of an event, of which such Holder has knowledge, relating to such Holder or its Sale of Registrable Securities thereunder requiring the preparation of a supplement or amendment to such Prospectus so that, as thereafter delivered (or deemed delivered) to the purchasers of such Registrable Securities, such Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading.
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(d) Cash America agrees (on behalf of itself and each member of the Cash America Group), and any other Holder agrees by acquisition of such Registrable Securities, that, upon receipt of any written notice from Enova of the occurrence of any event of the kind described in Section 2.03(a)(iv) , such Holder will forthwith discontinue Sale of Registrable Securities pursuant to such Registration Statement until such Holders receipt of the copies of the supplemented or amended Prospectus contemplated by Section 2.03(a)(iv) , or until such Holder is advised in writing by Enova that the use of the Prospectus may be resumed, and if so directed by Enova, such Holder will deliver to Enova, at Enovas expense, all copies of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event Enova shall give any such notice, the period during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice through the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended Prospectus contemplated by Section 2.03 (a)(iv) or is advised in writing by Enova that the use of the Prospectus may be resumed.
Section 2.04. Underwritten Offerings or Exchange Offers .
(a) If requested by the managing underwriter(s) for any Underwritten Offering or dealer manager(s) for any Exchange Offer that is requested by Holders pursuant to a Demand Registration under Section 2.01 , Enova shall enter into an underwriting agreement or dealer manager agreement, as applicable, with such underwriter(s) or dealer manager(s) for such offering, such agreement to be reasonably satisfactory in substance and form to Enova and the underwriter(s) or dealer manager(s) and, if any member of the Cash America Group is a participating Holder, to such member of the Cash America Group. Such agreement shall contain such representations and warranties by Enova and such other terms as are generally prevailing in agreements of that type. Each Holder with Registrable Securities to be included in any Underwritten Offering or Exchange Offer by such underwriter(s) or dealer manager(s) shall enter into such underwriting agreement or dealer manager agreement at the request of Enova, which agreement shall contain such reasonable representations and warranties by the Holder and such other reasonable terms as are generally prevailing in agreements of that type.
(b) In the event of an Enova Public Sale involving an offering of Common Stock or other equity securities of Enova in an Underwritten Offering (whether in a Demand Registration or a Piggyback Registration, whether or not the Holders participate therein), the Holders hereby agree, and, in the event of an Enova Public Sale of Common Stock or other equity securities of Enova in an Underwritten Offering or an Exchange Offer, Enova shall agree, and it shall cause its executive officers and directors to agree, if requested by the managing underwriter or underwriters in such Underwritten Offering or by the Holder or the dealer manager or dealer managers, in an Exchange Offer, not to effect any Sale or distribution (including any offer to Sell, contract to Sell, short Sale or any option to purchase) of any securities (except, in each case, as part of the applicable Registration, if permitted hereunder) that are of the same type as those being Registered in connection with such public offering and Sale, or any securities convertible into or exchangeable or exercisable for such securities, during
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the period beginning five days before, and ending 90 days (or such lesser period as may be permitted by Enova or the participating Holder(s), as applicable, or such managing underwriter or underwriters or dealer manager or managers) after, the effective date of the Registration Statement filed in connection with such Registration (or, if later, the date of the Prospectus), to the extent timely notified in writing by such selling Person or the managing underwriter or underwriters or dealer manager or dealer managers. The participating Holders and Enova , as applicable, also agree to execute an agreement evidencing the restrictions in this Section 2.04(b) in customary form, which form is reasonably satisfactory to Enova or the participating Holder(s), as applicable, and the underwriter(s) or dealer manager(s), as applicable; provided that such restrictions may be included in the underwriting agreement or dealer manager agreement, if applicable. Enova may impose stop-transfer instructions with respect to the securities subject to the foregoing restriction until the end of the required stand-off period described in the first sentence of this Section 2.04(b) .
(c) No Holder may participate in any Underwritten Offering or Exchange Offer hereunder unless such Holder (i) agrees to Sell such Holders securities on the basis provided in any underwriting arrangements or dealer manager agreements approved by Enova or other Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, dealer manager agreements and other documents reasonably required under the terms of such underwriting arrangements or dealer manager agreements or this Agreement.
Section 2.05. Registration Rights Agreement with Participating Banks .
If one or more members of the Cash America Group decides to engage in a Private Debt Exchange with one or more Participating Banks, Enova shall enter into a registration rights agreement with the Participating Banks in connection with such Private Debt Exchange on terms and conditions consistent with this Agreement (other than the voting provisions contained in Article III hereof) and reasonably satisfactory to Enova and the Cash America Group.
Section 2.06. Registration Expenses Paid by Enova .
In the case of any Registration of Registrable Securities required pursuant to this Agreement, Enova shall pay all Registration Expenses regardless of whether the Registration Statement becomes effective; provided , however , that Enova shall not be required to pay for any expenses of any Registration begun pursuant to Section 2.01 if the Demand Registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be Registered (in which case all participating Holders shall bear such expenses), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one Demand Registration to which they have the right during the period in question pursuant to Section 2.01(b) .
Section 2.07. Indemnification .
(a) Enova agrees to indemnify and hold harmless, to the full extent permitted by law, each Holder whose shares are included in a Registration Statement, such Holders Affiliates and their respective officers, directors, agents, advisors, employees and each Person, if any, who controls (within the meaning of the Securities Act or the Exchange Act) such Holder, from and against any and all losses, claims, damages, liabilities (or actions or proceedings in
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respect thereof, whether or not such indemnified party is a party thereto) and expenses, joint or several (including reasonable costs of investigation and legal expenses) (each, a Loss and collectively Losses ) arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which the offering and Sale of such Registrable Securities was Registered under the Securities Act (including any final or preliminary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein), or any such statement made in any free writing prospectus (as defined in Rule 405 under the Securities Act) that Enova has filed or is required to file pursuant to Rule 433 (d) of the Securities Act or any Ancillary Filing, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, preliminary Prospectus or free writing prospectus, in light of the circumstances under which they were made) not misleading; provided , that with respect to any untrue statement or omission or alleged untrue statement or omission made in any Prospectus, the indemnity agreement contained in this paragraph shall not apply to the extent that any such liability results from or arises out of (A) the fact that a current copy of the Prospectus was not sent or given to the Person asserting any such liability at or prior to the written confirmation of the Sale of the Registrable Securities concerned to such Person if it is determined by a court of competent jurisdiction in a final and non-appealable judgment that Enova has provided such Prospectus and it was the responsibility of such Holder or its agents to provide such Person with a current copy of the Prospectus and such current copy of the Prospectus would have cured the defect giving rise to such liability, (B) the use of any Prospectus by or on behalf of any Holder after Enova has notified such Person (x) that such Prospectus contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (y) that a stop order has been issued by the SEC with respect to a Registration Statement or (z) that a Disadvantageous Condition exists, or (C) information furnished in writing by such Holder or on such Holder s behalf, in either case expressly for use in such Registration Statement, Prospectus relating to such Holder s Registrable Securities. This indemnity shall be in addition to any liability Enova may otherwise have, including under the Separation and Distribution Agreement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder or any indemnified party and shall survive the Sale of such securities by such Holder.
(b) Each participating Holder whose Registrable Securities are included in a Registration Statement agrees (severally and not jointly) to indemnify and hold harmless, to the full extent permitted by law, Enova, its directors, officers, agents, advisors, employees and each Person, if any, who controls (within the meaning of the Securities Act and the Exchange Act) Enova from and against any and all Losses (i) arising out of or based upon information furnished in writing by such Holder or on such Holder s behalf, in either case expressly for use in a Registration Statement or Prospectus relating to such Holder s Registrable Securities or (ii) resulting from (A) the fact that a current copy of the Prospectus was not sent or given to the Person asserting any such liability at or prior to the written confirmation of the Sale of the Registrable Securities concerned to such Person if it is determined by a court of competent jurisdiction in a final and non-appealable judgment that it was the responsibility of such Holder or its agent to provide such Person with a current copy of the Prospectus and such current copy of the Prospectus would have cured the defect giving rise to such liability, or (B) the use of any Prospectus by or on behalf of any Holder after Enova has notified such Person (x) that such
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Prospectus contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (y) that a stop order has been issued by the SEC with respect to a Registration Statement or (z) that a Disadvantageous Condition exists. This indemnity shall be in addition to any liability the participating Holder may otherwise have, including under the Separation and Distribution Agreement. In no event shall the liability of any participating Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder under the Sale of the Registrable Securities giving rise to such indemnification obligation. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of Enova or any indemnified party.
(c) Any claim or action with respect to which a party (an Indemnifying Party ) may be obligated to provide indemnification to any Person entitled to indemnification hereunder (an Indemnitee ) shall be subject to the procedures for indemnification set forth in Section 5.5 of the Separation and Distribution Agreement.
(d) If for any reason the indemnification provided for in Section 2.07(a) or Section 2.07(b) is unavailable to an Indemnitee or insufficient to hold it harmless as contemplated by Section 2.07(a) or Section 2.07(b) , then the Indemnifying Party shall contribute to the amount paid or payable by the Indemnitee as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and the Indemnitee on the other hand. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or the Indemnitee and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. For the avoidance of doubt, the establishment of such relative fault, and any disagreements or disputes relating thereto, shall be subject to Section 4.03 . Notwithstanding anything in this Section 2.07(d) to the contrary, no Indemnifying Party (other than Enova) shall be required pursuant to this Section 2.07(d) to contribute any amount in excess of the amount by which the net proceeds received by such Indemnifying Party from the Sale of Registrable Securities in the offering to which the Losses of the Indemnitees relate (before deducting expenses, if any) exceeds the amount of any damages which such Indemnifying Party has otherwise been required to pay by reason of such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.07(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 2.07(d) . No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The amount paid or payable by an Indemnitee hereunder shall be deemed to include, for purposes of this Section 2.07(d) , any legal or other expenses reasonably incurred by such Indemnitee in connection with investigating, preparing to defend or defending against or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense, liability, action, investigation or proceeding. If indemnification is available under this Section 2.07 , the Indemnifying Parties shall indemnify each Indemnitee to the full extent provided in Section 2.07(a) and Section 2.07(b) without regard to the relative fault of said Indemnifying Parties or Indemnitee. Any Holders obligations to contribute pursuant to this Section 2.07(d) are several and not joint.
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Section 2.08. Reporting Requirements; Rule 144 .
Until the earlier of (a) the expiration or termination of this Agreement in accordance with its terms and (b) the date upon which the Cash America Group ceases to own any Registrable Securities, Enova shall use its commercially reasonable efforts to be and remain in compliance with the periodic filing requirements imposed under the SEC s rules and regulations, including the Exchange Act, and any other applicable laws or rules, and thereafter shall timely file such information, documents and reports as the SEC may require or prescribe under Sections 13, 14 and 15(d), as applicable, of the Exchange Act so that Enova will qualify for registration on Form S-3 and to enable the Cash America Group to Sell Registrable Securities without registration under the Securities Act consistent with the exemptions from registration under the Securities Act provided by (i) Rule 144 or Regulation S under the Securities Act, as amended from time to time, or (ii) any similar SEC rule or regulation then in effect. From and after the date hereof through the earlier of the expiration or termination of this Agreement in accordance with its terms and the date upon which the Cash America Group ceases to own any Registrable Securities, Enova shall forthwith upon request furnish any Holder (x) a written statement by Enova as to whether it has complied with such requirements and, if not, the specifics thereof, (y) a copy of the most recent annual or quarterly report of Enova and (z) such other reports and documents filed by Enova with the SEC as such Holder may reasonably request in availing itself of an exemption for the offering and Sale of Registrable Securities without registration under the Securities Act.
Section 2.09. Registration Rights Covenant .
Enova covenants that it will not, and it will cause the members of the Enova Group not to, grant any right of registration under the Securities Act relating to any of its shares of Common Stock or other securities to any Person other than pursuant to this Agreement, unless the rights so granted to another Person do not limit or restrict the right of the Holder(s) hereunder.
ARTICLE 3
Voting Restrictions
Section 3.01. Voting of Enova Common Stock .
(a) From the date of this Agreement and until the date that the Cash America Group ceases to own any Retained Shares, Cash America shall, and shall cause each member of the Cash America Group to (in each case, to the extent that they own any Retained Shares), be present, in person or by proxy, at each and every Enova stockholder meeting, and otherwise to cause all Retained Shares owned by them to be counted as present for purposes of establishing a quorum at any such meeting, and to vote or consent on any matter (including waivers of contractual or statutory rights), or cause to be voted or consented on any such matter, all such Retained Shares in proportion to the votes actually cast by the other holders of Common Stock on such matter (i.e. not considering abstentions or failure to vote).
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(b) From the date of this Agreement and until the date that the Cash America Group ceases to own any Retained Shares, Cash America hereby grants, and shall cause each member of the Cash America Group (in each case, to the extent that they own any Retained Shares) to grant, an irrevocable proxy, which shall be deemed coupled with an interest sufficient in law to support an irrevocable proxy to Enova or its designees, to vote, with respect to any matter (including waivers of contractual or statutory rights), all Retained Shares owned by them, in proportion to the votes cast by the other holders of Common Stock on such matter; provided , that (i) such proxy shall automatically be revoked as to a particular Retained Share upon any Sale of such Retained Share from a member of the Cash America Group to a Person other than a member of the Cash America Group and (ii) nothing in this Section 3.01(b) shall limit or prohibit any such Sale. The proxy contemplated by this Section 3.01(b) shall be deemed to be solely for the purpose of enforcing the voting agreement set forth in Section 3.01(a) and shall not be deemed to have created a shared voting interest within the meaning of Section 13 of the Exchange Act between any member of the Cash America Group and Enova or its designees.
(c) Cash America acknowledges and agrees (on behalf of itself and each member of the Cash America Group) that Enova will be irreparably damaged in the event any of the provisions of this Article III are not performed by Cash America in accordance with their terms or are otherwise breached. Accordingly, it is agreed that Enova shall be entitled to an injunction to prevent breaches of this Article III and to specific enforcement of the provisions of this Article III in any action instituted in any court of the United States or any state having subject matter jurisdiction over such action.
ARTICLE 4
Miscellaneous
Section 4.01. Term .
This Agreement shall terminate upon the earlier of (a) five years after the Distribution Date, (b) the time at which all Registrable Securities are held by Persons other than Holders and (c) the time at which all Registrable Securities have been Sold in accordance with one or more Registration Statements; provided , that the provisions of Section 2.06 and Section 2.07 and this Article IV shall survive any such termination.
Section 4.02. Counterparts; Entire Agreement; Corporate Power .
(a) This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. Any signature on this Agreement or any other document executed in connection herewith may be an electronically delivered signature and all parties agree that any signature delivered electronically shall be treated as an original signature to any such document.
(b) This Agreement and the exhibit hereto contain the entire agreement between the parties with respect to the subject matter hereof, supersedes all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the parties with respect to such subject matter other than those set forth or referred to herein.
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(c) Cash America represents on behalf of itself and each other member of the Cash America Group, and Enova represents on behalf of itself and each other member of the Enova Group, as follows: (i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby, and (ii) this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms hereof.
Section 4.03. Disputes.
(a) Any dispute, controversy or claim arising out of or relating to this Agreement, including the validity, interpretation, breach or termination hereof (a Dispute ), shall be resolved in accordance with the procedures set forth in Article IV of the Separation and Distribution Agreement, which shall be the sole and exclusive procedures for the resolution of any such Dispute unless otherwise specified in this Agreement or in Article IV of the Separation and Distribution Agreement.
(b) This Agreement (and any claims or disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware, irrespective of the choice of laws principles of the State of Delaware, including all matters of validity, construction, effect, enforceability, performance and remedies.
(c) THE PARTIES EXPRESSLY WAIVE AND FOREGO ANY RIGHT TO TRIAL BY JURY.
Section 4.04. Amendment .
No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of Enova, if such waiver, amendment, supplement or modification is sought to be enforced against Enova, or the Holders of a majority of the Registrable Securities, if such waiver, amendment, supplement or modification is sought to be enforced against a Holder.
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Section 4.05. Waiver of Default .
Waiver by any party of any default by the other party of any provision of this Agreement shall not be deemed a waiver by the waiving party of any subsequent or other default, nor shall it prejudice the rights of such party. No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.
Section 4.06. Successors, Assigns and Transferees .
(a) This Agreement and all provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Enova may assign this Agreement to any member of the Enova Group or at any time in connection with a sale or acquisition of Enova, whether by merger, consolidation, sale of all or substantially all of Enovas assets, or similar transaction, without the consent of the Holders; provided , that the successor or acquiring Person agrees in writing to assume all of Enovas rights and obligations under this Agreement. Cash America may assign this Agreement to any member of the Cash America Group or at any time in connection with a sale or acquisition of Cash America, whether by merger, consolidation, sale of all or substantially all of Cash Americas assets, or similar transaction, without the consent of Enova.
(b) In connection with the Sale of Registrable Securities, Cash America may assign its Registration-related rights and obligations under this Agreement relating to such Registrable Securities to the following transferees in such Sale: (i) a member of the Cash America Group to which Registrable Securities are Sold, (ii) one or more Participating Banks to which Registrable Securities are Sold, (iii) any transferee to which Registrable Securities are Sold, if Enova provides prior written consent to the transfer of such Registration-related rights and obligations along with the Sale of Registrable Securities or (iv) any other transferee to which Registrable Securities are Sold, unless such Sale consists of Registrable Securities representing less than 1% of Enovas then-issued and outstanding securities of the same class as the Registrable Securities and such Registrable Securities are eligible for Sale pursuant to an exemption from the registration and prospectus delivery requirements of the Securities Act under Section 4 (a) thereof (including transactions pursuant to Rule 144); provided , that in the case of clauses (i), (ii), (iii) or (iv), (x) Enova is given written notice prior to or at the time of such Sale stating the name and address of the transferee and identifying the securities with respect to which the Registration-related rights and obligations are being Sold and (y) the transferee executes a counterpart in the form attached hereto as Exhibit A and delivers the same to Enova (any such transferee in such Sale, a Transferee ). In connection with the Sale of Registrable Securities, a Transferee or Subsequent Transferee may assign its Registration-related rights and obligations under this Agreement relating to such Registrable Securities to the following subsequent transferees: (A) an Affiliate of such Transferee to which Registrable Securities are Sold, (B) any subsequent transferee to which Registrable Securities are Sold, if Enova provides prior written consent to the transfer of such Registration-related rights and obligations along with the Sale of Registrable Securities or (C) any other subsequent transferee to which Registrable Securities are Sold, unless such Sale consists of Registrable Securities representing less than 1% of Enova s then-issued and outstanding securities of the same class as the Registrable Securities and such
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Registrable Securities are eligible for Sale pursuant to an exemption from the registration and prospectus delivery requirements of the Securities Act under Section 4 (a) thereof (including transactions pursuant to Rule 144); provided , that in the case of clauses (A), (B) or (C), (x) Enova is given written notice prior to or at the time of such Sale stating the name and address of the subsequent transferee and identifying the securities with respect to which the Registration-related rights and obligations are being assigned and (y) the subsequent transferee executes a counterpart in the form attached hereto as Exhibit A and delivers the same to Enova (any such subsequent transferee, a Subsequent Transferee ).
Section 4.07. Further Assurances .
In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties hereto shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable on its part under applicable laws, regulations and agreements, to consummate and make effective the transactions contemplated by this Agreement.
Section 4.08. Performance .
Cash America shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by any member of the Cash America Group. Enova shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by any member of the Enova Group. Each party (including its permitted successors and assigns) further agrees that it shall (a) give timely notice of the terms, conditions and continuing obligations contained in this Section 4.08 to all of the other members of its Group and (b) cause all of the other members of its Group not to take, or omit to take, any action which action or omission would violate or cause such party to violate this Agreement.
Section 4.09. Notices .
Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon receipt, if delivered by hand, generally accepted means of electronic transmission, any nationally recognized overnight courier service or mail (with postage prepaid), to the following addresses:
(a) | If to Enova, to: |
Enova International, Inc.
200 West Jackson Blvd.
Chicago, Illinois 60606
Attn: General Counsel
E-mail: lyoung@enova.com
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(b) | If to Cash America, to: |
Cash America International, Inc.
1600 West 7 th Street
Fort Worth, Texas 76102
Attn: General Counsel
E-mail: clinscott@casham.com
Any party may, by notice to the other party, change the address and contact person to which any such notices are to be given.
Section 4.10. Severability .
If any provision of this Agreement or the application hereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the parties.
Section 4.11. No Reliance on Other Party .
The parties hereto represent to each other that this Agreement is entered into with full consideration of any and all rights which the parties hereto may have. The parties hereto have relied upon their own knowledge and judgment and have conducted such investigations they and their in-house counsel have deemed appropriate regarding this Agreement and their rights in connection with this Agreement. The parties hereto are not relying upon any representations or statements made by any other party, or any such other party s employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement. The parties hereto are not relying upon a legal duty, if one exists, on the part of any other party (or any such other party s employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or its preparation, it being expressly understood that no party hereto shall ever assert any failure to disclose information on the part of any other party as a ground for challenging this Agreement or any provision hereof.
Section 4.12. Registrations, Exchanges, etc .
Notwithstanding anything to the contrary that may be contained in this Agreement, the provisions of this Agreement shall apply to the full extent set forth herein with respect to (a) any shares of Common Stock, now or hereafter authorized to be issued, (b) any and all securities of Enova into which the shares of Common Stock are converted, exchanged or substituted in any recapitalization or other capital reorganization by Enova and (c) any and all securities of any kind whatsoever of Enova or any successor or permitted assign of Enova (whether by merger, consolidation, sale of assets or otherwise) which may be issued on or after the date hereof in respect of, in conversion of, in exchange for or in substitution of, the shares of Common Stock,
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and shall be appropriately adjusted for any stock dividends, or other distributions, stock splits or reverse stock splits, combinations, recapitalizations, mergers, consolidations, exchange offers or other reorganizations occurring after the date hereof.
Section 4.13. Mutual Drafting .
This Agreement shall be deemed to be the joint work product of the parties, and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.
[The remainder of this page has been left blank intentionally.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their authorized representatives as of the date first above written.
CASH AMERICA INTERNATIONAL, INC. | ||
By: |
/s/ Thomas A. Bessant, Jr. |
|
Name: Thomas A. Bessant, Jr. | ||
Title: Executive Vice President and Chief Financial Officer |
ENOVA INTERNATIONAL, INC. | ||
By: |
/s/ David A. Fisher |
|
Name: David A. Fisher | ||
Title: Chief Executive Officer and President |
[Signature Page to Stockholder s and Registration Rights Agreement]
Exhibit A
Form of
Agreement to be Bound
THIS INSTRUMENT forms part of the Stockholder s and Registration Rights Agreement (the Agreement ), dated as of [ ], by and between Cash America International, Inc., a Texas corporation ( Cash America ), and Enova International, Inc., a Delaware corporation. The undersigned hereby acknowledges having received a copy of the Agreement and having read the Agreement in its entirety, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, hereby agrees that the terms and conditions of the Agreement binding upon and inuring to the benefit of Cash America shall be binding upon and inure to the benefit of the undersigned and its successors and permitted assigns as if it were an original party to the Agreement.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this day of , 20 .
|
(Signature of transferee) |
|
Print name |
A-1
Exhibit 10.4
SOFTWARE LEASE AND MAINTENANCE AGREEMENT
This Software Lease and Maintenance Agreement ( the Agreement ) is executed and entered into to be effective as of this 12 th day of November, 2014 ( the Effective Date ), by and between Enova International, Inc. , a Delaware corporation, having its principal place of business at 200 W. Jackson Blvd., Suite 500, Chicago, IL 60606, and its subsidiaries (collectively, Enova ), and Cash America International, Inc. , a Texas corporation, having its principal place of business at 1600 West 7 th Street, Fort Worth, Texas 76102, and its subsidiaries (collectively, Cash America ). Enova and Cash America may each be referred to as a Party and may be collectively referred to as the Parties . The Parties agree as follows:
RECITALS
WHEREAS, Enova has developed a credit decisioning and credit underwriting model (as more particularly described in Section 2(b) ) using proprietary loan performance and profitability data for the purpose of evaluating applications for consumer credit, which also includes a proprietary credit amount model that provides an amount of approved credit for a credit application (collectively referred to as the Credit Underwriting Model );
WHEREAS, Cash America and its subsidiaries and affiliates act as direct lenders and credit services organizations for consumer loans throughout the United States, which include small-dollar consumer loans and unsecured installment loans (collectively referred to as the Loans );
WHEREAS, Cash America desires to lease or license from Enova the right to use the Credit Underwriting Model and the Enova Platform (as defined in Section 3(b)) for the purpose of utilizing the Credit Underwriting Model in its Loan application process;
WHEREAS, Enova desires to grant Cash America a limited lease or license to use the Credit Underwriting Model and the Enova Platform in order for Cash America to utilize the Credit Underwriting Model in its Loan application process; and
WHEREAS, the Parties desire to enter into this Agreement for the purpose of setting forth the terms, conditions, and agreements between them relating to the licenses granted pursuant to this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth below, the Parties hereby agree as follows:
1. | DEFINITIONS |
The following definitions apply herein:
(a) Acquired Enova Software means Software acquired by Enova after the commencement of this Agreement as the result of an acquisition by Enova of either a third party, or the technology of a third party.
(b) Design Elements means library elements, libraries, symbols, simulation or behavioral models, circuit and logic elements and any Updates thereto included with, and used in conjunction with, Software.
(c) Designated Equipment means the two (2) dedicated servers identified by serial number, or host I.D., on which the Licensed Materials are stored. The Designated Equipment shall be of a manufacture, make and model, and have the configuration, capacity, operating software version level and pre-requisite and co-requisite applications, prescribed in the documentation as necessary or desirable for the operation of the Software.
(d) Documentation means the user manuals and other written materials that describe the Software, its operation and matters related to its Use, which Enova will prepare and make available to Cash America for use with the Software and any Updated, improved or modified version(s) of such materials, whether provided in published written material, on magnetic media or communicated by electronic means.
(e) Initial Configuration means the specific group of Licensed Materials that represents the Licensed Materials available for Use by Cash America on the Effective Date.
(f) Licensed Materials means the Software, the Enova Platform, and any associated Documentation licensed to Cash America pursuant to this Agreement.
(g) Maintenance Service(s) shall mean the services which Enova makes available to Cash America related to the Licensed Materials as are more particularly described in Section 9 (Technical Support) herein.
(h) Material Adverse Effect means a material adverse effect on (i) the properties, business, prospects, operations, earnings, assets, liabilities or condition (financial or otherwise) of the Party in question, taken as a whole, (ii) the ability of the Party in question to perform its obligations in all material respects herein, or (iii) the validity or enforceability of this Agreement.
(i) Software means the Credit Underwriting Model, and any applications programming code or executable computer program(s) and any Updates thereto.
(j) Term of Use means that period of time Cash America has Use of the Licensed Materials pursuant to this Agreement.
(k) Update means a Software modification released by Enova. Updates may include revisions to the Documentation. Updates do not include any Acquired Enova Software, upgrades or new technology.
(l) Use means copying all or any portion of Software and/or Design Elements into the Designated Equipment or transmitting it to the Designated Equipment for: (i) executing or processing instructions contained in the Software, (ii) using, executing or modifying any of the Design Elements, or (iii) loading data into or displaying, viewing or extracting output results from or otherwise operating any portion of the Software or Design Elements, solely for the purpose of Cash Americas internal design and manufacture of electronic circuits and systems. For the avoidance of doubt, copying or transferring the Software to any equipment or receptacle other than the Designated Equipment is strictly prohibited.
2. | SCOPE AND BACKGROUND; DESCRIPTION OF CREDIT MODEL |
(a) Under this Agreement, Cash America will: (i) acquire a license to Use the Licensed Materials and related Documentation, and (ii) obtain Maintenance Services for the Licensed Materials pursuant to the provisions of this Agreement. The Parties agree that the relationship established by this Agreement is non-exclusive.
(b) The Credit Underwriting Model is a proprietary credit decisioning and credit underwriting model developed by Enova for consumer Loan applicants. The Credit Underwriting Model is a consumer credit underwriting model that will utilize consumer information provided solely by Cash America (including information Cash America obtains from third-party providers) to assist Cash America in its analysis and approval of consumer Loan applicants. The Credit Underwriting Model also utilizes the consumer information
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and the underwriting analysis to calculate a maximum Loan amount for the consumer Loan requested. The Credit Underwriting Model also contains a collection of certain proprietary, consumer variables that are utilized to predict consumer credit performance by an applicant. These consumer variables are derived using segmentation and/or a combination of different consumer attributes. These consumer variables are selected for the Credit Underwriting Model based on the predictability power of each such attribute in relation to the Cash America customer data as a whole. Upon processing a consumer credit application with the Enova Platform (as defined in Section 3(b)), the Credit Underwriting Model will provide Cash America with the following information relating to the applicant:
(i) | a unique customer application/loan-tracking number, which is to be generated by the Credit Underwriting Model; |
(ii) | an applicant credit ranking, using a unique ranking criteria; |
(iii) | a notation of whether the applicant is approved or declined credit based on the credit criteria established by Cash America, and |
(iv) | an amount of approved credit for a credit applicant. |
The Enova Platform shall provide all of the information in Section 2(b)(i) (iv) to Cash America within 90 seconds of the submission of the consumer credit inquiry.
3. | GRANT OF LICENSE; LIMITATIONS AND RESTRICTIONS |
(a) Credit Underwriting Model License . Subject to Cash Americas timely payment of the License Fees and the Maintenance Fees as set forth in Section 4 and subject to the limitations set forth in this Agreement, Enova, either directly or by and through one of its affiliates, hereby grants Cash America, for the term of this Agreement, a restrictive, non-transferable, non-exclusive, license to: (i) Use the Credit Underwriting Model on the Designated Equipment; and (ii) Use the Documentation as is reasonably necessary for Cash Americas licensed Use of the Licensed Materials. All rights not expressly granted to Cash America pursuant to this Agreement are reserved by Enova.
(b) Enova Platform License . Subject to Cash Americas timely payment of the License Fees and the Maintenance Fees as set forth in Section 4 and subject to the limitations set forth in this Agreement, Enova, either directly or by and through one of its affiliates, hereby grants to Cash America, for the term of this Agreement, a restrictive, nonexclusive and nontransferable license under which Cash America may use the Enova Platform solely in connection with Use and implementation of the Credit Underwriting Model. Enova has developed a proprietary software platform that implements the Credit Underwriting Model, which includes computer system architecture and specifications, operating systems, programming languages, programming code, compiled software, software architecture and specifications, software design and development plans and materials, methodologies, processes, and interfaces (run-time system libraries, graphical user interfaces and application programming interfaces) (collectively, the Enova Platform ).
(c) Limitations . All rights, title and interest in the Licensed Materials shall remain the exclusive property of Enova and/or its licensors. The Licensed Materials are the confidential and proprietary property of Enova or third parties from whom Enova has obtained the appropriate rights. Cash America shall not Use or copy the Licensed Materials except as expressly permitted herein. Cash America may only Use those Licensed Materials as specified in this Agreement. Cash America shall not modify, disassemble, decompile, reverse engineer or reverse translate or create derivative works from the Licensed Materials or otherwise attempt to derive the source code, or let any third party do so. No right or license is granted or implied under any of Enova, or its licensors, patents, copyrights, trademarks, trade names, service marks or other intellectual property rights to Use the Licensed Materials or to authorize others to Use the Licensed Materials beyond the rights and restrictions set forth in this Agreement. By the way of example and not limitation, Cash America shall neither use the Software or any Design Elements or output of any Software or Design Elements for benchmarking purposes (which means any form of competitive analysis of the Licensed Materials versus competitive tool products), nor permit any third party to do so.
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(d) Restrictions . Cash America shall not let the Licensed Materials be accessed or used by third parties or anyone other than Cash Americas employees whose duties require such access or use. Notwithstanding the foregoing, Cash Americas authorized consultants and subcontractors (excluding any direct competitors of Enova and any provider of services similar to or competitive with those provided under this Agreement) may Use the Licensed Materials where such Use is incidental to their performing services on Cash Americas behalf, and Cash America may allow authorized auditors, compliance consultants, and regulators to access the Licensed Materials in order to determine compliance with all applicable federal and state laws, rules, and regulations. Such Use by authorized consultants and subcontractors must be consistent with the license granted to Cash America hereunder and Cash America must first require such authorized consultants and subcontractors, except for federal and state regulators, to sign written agreements obligating them to observe the same restrictions concerning the Licensed Materials as are contained in this Agreement.
(e) Use and Functioning of Credit Underwriting Model . Cash America may provide Enova with certain information and guidance relating to the Loans that will be processed through the Credit Underwriting Model and the Enova Platform, including loan limits and certain underwriting criteria that may be required by Cash Americas business rules or required by law. Cash America has the right to request modifications to the Software on a quarterly basis in order to reflect Cash Americas underwriting guidelines for its consumer Loans, which modifications will be made by Enova within 20 business days of Enovas receipt of such request, unless Enova notifies Cash America that such request will take a longer period of time to implement. Cash America acknowledges that certain modifications, including without limitation models with new variables or new credit report providers, may take up to two months to implement. In addition, if any regulatory agency requires Cash America to consider or analyze certain information as a part of its loan underwriting, Cash America shall provide notice of such regulatory requirements to Enova, and Enova agrees to incorporate such regulatory requirements into the Credit Underwriting Model within the time period required by the regulatory agency, but in no case longer than 20 business days from Enovas receipt of notice of such requirement. Enova agrees to provide notice that such change has been implemented and the date such change will be utilized in the Credit Underwriting Model. Enova agrees to also provide reasonable evidence to Cash America in order to satisfy the regulatory agency that the regulatory requirements were actually added to the underwriting analysis.
(f) Third-Party Data Providers . The Parties agree that consumer credit data will be pulled for all new Loan applicants processed through the Credit Underwriting Model, unless otherwise agreed to by the Parties. Cash America shall be responsible for establishing and maintaining any relationships with third-party data providers (such as vendors like TeleTrack, Inc., Clarity Services, Inc., etc.) that may be desired by Cash America in functioning with the Credit Underwriting Model. Cash America shall be responsible for maintaining a contractual relationship with such vendors, and Cash America shall also be responsible for any fees associated with such data providers. To the extent Enova processes any information obtained from third-party data providers pursuant to its obligations under this Agreement, Enova will do so as Cash Americas agent or service provider.
(g) Ownership and Control of Licensed Materials . The Parties acknowledge and agree that the Credit Underwriting Model and the Enova Platform is owned and controlled by Enova.
(h) Ownership and Control of Consumer Information . The Parties acknowledge and agree that any information processed through the Credit Underwriting Model by Cash America from a consumer credit application or any data related to such customer credit application, whether individually or collectively, is owned by Cash America. The Parties acknowledge and agree that Enova will not store any such data and will not have access to any such data related to any consumer Loan application, Loan underwriting results, Loan approval amounts, data received from a third-party data provider, or any other information directly or indirectly related to the consumer information processed through the Credit Underwriting Model to use for its own purposes, but the access will only be for the purposes of conducting its obligations under this Agreement.
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(i) Records; Audit . Cash America shall keep full, clear and accurate records to confirm its authorized Use of the Licensed Materials hereunder. Enova shall have the right to audit such records during regular business hours to confirm Cash Americas compliance with its obligations hereunder. Cash America shall promptly correct any deficiencies discovered by such audit. Enova acknowledges and agrees that Cash America and its authorized representatives shall have the right to inspect, audit, examine, and make copies of, or extracts from, all books and records (in whatever form they may be kept, whether written, electronic, or other) relating to or pertaining to this Agreement kept by or under the control of Enova, its employees, agents, assigns, successors, and subcontractors. Enova shall, at all times during the term of this Agreement and for a period of five years after the completion of this Agreement, maintain such records, together with such supporting or underlying documents and materials. Enova shall, upon reasonable notice, whether during or after termination of this Agreement, make all of its facilities and books and records available for inspection and audit by Cash America and its authorized representatives. Upon Cash Americas reasonable request, Enova agrees that it will promptly provide Cash America with a copy of all relevant policies, procedures, handbooks, training materials, compliance manuals, operational reports, and the like, including any and all amendments thereto, that were effective or used during the term of this Agreement.
4. | FEES; SETUP COSTS; TAXES; HOSTING OF SERVERS |
(a) License Fees . In consideration for the Licensed Materials provided by Enova pursuant to this Agreement, Cash America agrees to pay Enova a monthly license fee ( License Fees ), which shall be calculated as follows:
(i) | $1.00 per Loan application up to 100,000 Loan applications per calendar month; and |
(ii) | $0.50 per Loan application for any Loan applications in excess of 100,000 Loan applications per calendar month; |
provided, however, that if fewer than 40,000 applications are submitted for processing in a given month, Cash America will pay a License Fee of $40,000.
(b) Maintenance Fees . In consideration for the Maintenance Services provided by Enova, as set forth in Section 9(a), Cash America agrees to pay Enova an annual maintenance fee ( Maintenance Fee ) of $50,000.00. For any Term or portion of a Term that is not a full year, the Maintenance Fees shall be prorated for such time periods.
(c) Payment of Fees . Cash America shall pay the monthly License Fees by the 15 th day of the calendar month following the month for which the License Fees relate. Cash America shall pay the annual Maintenance Fee on the Effective Date and each anniversary of the Effective Date during each calendar year of the Term. Past due amounts shall be subject to a monthly service charge of one and one-half percent per month of the unpaid balance or the maximum rate allowable by law. In addition to all other sums payable hereunder, Cash America shall pay all reasonable out-of-pocket expenses incurred by Enova, including fees and disbursements of counsel, in connection with collection and other enforcement proceedings resulting therefrom or in connection therewith.
(d) Setup Costs . The Parties acknowledge that there will be certain setup costs required in order to establish the necessary connections for Cash America to have the ability to access and communicate with the Credit Underwriting Model. Cash America agrees to pay an amount up to $250,000.00 in costs and expenditures related to setting up the Credit Underwriting Model pursuant to this Agreement. The Parties agree
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to work together in an effort to eliminate or minimize the initial setup costs, but Enova shall have the right to charge Cash America for its actual costs associated with the initial setup, subject to the $250,000.00 limit described above.
(e) Taxes . All amounts set forth herein are exclusive of any and all taxes, including, but not limited to, VAT, withholding, local taxes and other governmental levies or charges, and Cash America shall pay and be responsible for any and all such taxes. Cash America further agrees that if a state agency determines that sales or use tax should have been collected and remitted on the Agreement, Enova may invoice and collect from Cash America any sales or use tax, plus any applicable interest and penalties, which it is required to remit to the state as a result of that determination.
(f) Hosting of Servers . The Parties agree that two (2) physical servers will be needed to host the Credit Underwriting Model (the Servers ), which will be purchased at the sole cost and expense of Cash America and shall at all times be the property of Cash America. The Parties agree that the Servers will be hosted by Enova at its third-party hosting facility in Oakbrook, Illinois, or such other secure hosting facility as Enova may select in its reasonable discretion. The Parties also agree that both of the Servers will be active in hosting the Credit Underwriting Model and will meet the following specifications:
(i) | Servers will only be used for hosting the Credit Underwriting Model; |
(ii) | Servers will utilize Enovas VMware (virtualization software) licenses; |
(iii) | Servers will host only virtual servers to be used for this application; |
(iv) | The Credit Underwriting Model hosted on the Servers will have its own VLAN on the network, with appropriate security restrictions; and |
(v) | Data from the Servers will traverse the same network infrastructure as Enova utilizes for its other applications (i.e., router, firewalls, load balancers, etc.) and will be stored on Enovas Storage Area Network with other Enova data, provided, however, that the data will be on its own VLAN and will only be made available for processing on the Servers. |
5. | TERM AND TERMINATION |
(a) This Agreement will commence as of the Effective Date and will continue in effect until the earlier of December 31, 2017 (the Term ), or the date the Parties terminate this Agreement by mutual written agreement, or as otherwise provided in this Agreement. Unless terminated by the Parties, this Agreement will automatically renew for consecutive one-year terms ( Renewal Terms ), provided however that either Party may prevent the renewal of the term of the Agreement on written notice to the other Party at least 180 days prior to the end of the then-current term.
(b) Either Party shall have the right to terminate this Agreement upon the occurrence of one or more of the following events:
(i) | material failure by the other Party to observe or perform that Partys obligations to the other Party or to comply with any provision of this Agreement, so long as the failure or nonperformance is not due to the actions of the terminating Party; |
(ii) | in the event any representation, warranty, statement or certificate furnished to either Party by the other Party in connection with this Agreement is materially false, misleading, or inaccurate as of the date made or delivered and the same results in a Material Adverse Effect on or for the terminating Party; |
(iii) | in the event that it is later determined by a regulatory agency or by Enova, in its reasonable discretion (including without limitation upon the advice of counsel), that Enova is deemed to be a consumer reporting agency as a direct result of the existence of this Agreement and the relationship of the Parties hereunder. |
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The Agreement may be terminated pursuant to Section 5(b)(i) or (ii) above only if the default continues for a period of thirty (30) days after the defaulting Party receives written notice from the other Party specifying the default in the case of a non-monetary default, or ten (10) days after the defaulting Party receives written notice from the other Party specifying the default in the case of a failure to pay any amount when due hereunder. The Agreement may be terminated pursuant to Section 5(b)(iii) immediately, unless otherwise agreed by the Parties.
(c) Cash America shall have the right to terminate this Agreement if Cash Americas Use of the Software falls below 40,000 applications processed through the Credit Underwriting Model per month for any rolling three-month period. The Agreement may be terminated pursuant to this Section 5(c) upon Cash Americas written notice of termination, and the effective date of the termination shall be no less than 60 days from the date of the notice of termination pursuant to this provision.
In the event that this Agreement is terminated, Cash America will promptly return to Enova or destroy (with certification of such destruction if requested) all of the Licensed Materials and any copies or derivations thereof. Within thirty (30) days after such expiration or termination, Cash America shall make prompt payment in full to Enova for all amounts then due plus the unpaid balance of the License Fees through the month that the termination becomes effective.
6. | REPRESENTATIONS AND WARRANTIES |
(a) Representations and Warranties of Enova.
(i) | Enova represents and warrants to Cash America that it has the full power and authority to execute and deliver this Agreement, to perform all of its obligations under this Agreement and any other agreement which must be executed related to this Agreement. |
(ii) | Enova represents and warrants to Cash America that it is in good standing in the state, territory or other jurisdiction where incorporated, formed or organized. |
(iii) | Enova represents and warrants to Cash America that it is in compliance with all applicable federal and state laws, rules, regulations, orders, judgments, and decrees, including, but not limited to, the Gramm-Leach-Bliley Act, and the Equal Credit Opportunity Act (including Regulation B promulgated thereunder), except for non-compliance that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on or for Enova. |
(iv) | Enova represents and warrants to Cash America that it has all licenses, permits, consents and approvals required to be obtained by it from any regulatory agency exercising its authority over Enova in order for it to lawfully conduct its business, to perform its obligations hereunder and to receive the rights and benefits available to it hereunder, and it shall immediately remedy the suspension, termination or other loss of such licenses, permits, consents or approvals. |
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(b) Representations and Warranties of Cash America.
(i) | Cash America represents and warrants to Enova that it has the full power and authority to execute and deliver this Agreement, to perform all of its obligations under this Agreement and any other agreement which must be executed related to this Agreement. |
(ii) | Cash America represents and warrants to Enova that it is in good standing in the state, territory or other jurisdiction where incorporated, formed or organized. |
(iii) | Cash America represents and warrants to Enova that it is in compliance with all applicable federal and state laws, rules, regulations, orders, judgments, and decrees, including, but not limited to, the Fair Credit Reporting Act (FCRA), the Gramm-Leach-Bliley Act, and the Equal Credit Opportunity Act (including Regulation B promulgated thereunder), except for non-compliance that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on or for Cash America. |
(v) | Cash America represents and warrants to Enova that it has all licenses, permits, consents and approvals required to be obtained by it from any regulatory agency exercising its authority over Cash America in order for it to lawfully conduct its business, to perform its obligations hereunder and to receive the rights and benefits available to it hereunder, and it shall immediately remedy the suspension, termination or other loss of such licenses, permits, consents or approvals. |
7. | CONFIDENTIALITY . |
(a) In performing their respective obligations pursuant to this Agreement, each Party may have access to and receive disclosure of certain confidential information about the other Party or Parties, including, without limitation, the names, addresses and all other information related to a Partys applicants, customers or members (including, without limitation, any non-public personally identifiable information of such persons), marketing plans and objectives, research and test results, customer Loan performance, pricing policies and practices, computer software (including programs, source code, record layouts, and report formats), know-how, processes and methods, and other information which is confidential and the property of the Party disclosing the information ( Confidential Information ). Confidential Information of a Party hereto shall not include information in the public domain or information that is independently developed by the other Party hereto without reference to the original Partys Confidential Information. Each Party agrees that it shall use the Confidential Information of the other party only in the performance of its respective obligations under this Agreement. Each Party shall receive the Confidential Information of the other party in confidence and shall not disclose such Confidential Information to any third party, except as may be permitted hereunder, or as may be necessary to perform its obligations hereunder so long as the Party desiring to disclose the other Partys Confidential Information notifies such other Party of its intent to do so and gives such other Party a reasonable opportunity to object to such disclosure. In the event that either Party (the Restricted Party ) is requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information of the other Party, such Party will provide the other Party with prompt notice of such request(s) so that the other Party may seek an appropriate protective order or other appropriate remedy and/or waive the Restricted Partys compliance with the provisions of this Agreement. In the event that the other Party does not seek such a protective order or other remedy, or such protective order or other remedy is not obtained, or the other Party grants a waiver hereunder, the Restricted Party may furnish that portion (and only that portion) of the Confidential Information which the Restricted Party is legally compelled to disclose and will exercise such efforts to obtain reasonable assurance that confidential treatment will be accorded any Confidential Information so furnished as a Restricted Party would exercise in assuring the confidentiality of any of its own confidential information, but no less than commercially reasonable
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efforts. Upon request or upon any expiration or termination of this Agreement, each Party hereto shall return to the disclosing Party or destroy (as the latter may instruct) all of the latters Confidential Information in the formers possession which is in any written or other recorded form, including data stored in any computer medium.
(b) Except for the limited rights and licenses expressly granted hereunder, no other license is granted (by implication, estoppel or otherwise), no other use is permitted and Enova shall retain all rights, title and interests (including all patent rights, copyright rights, trade secret rights and all other intellectual property and proprietary rights) in and to the Software and Documentation. Cash America agrees not to take any action inconsistent with such ownership.
(c) At a minimum, Enovas safeguards for the protection of Cash Americas Confidential Information that relates to customer information shall include: (i) limiting access of confidential customer information to authorized employees; (ii) securing business facilities, data centers, paper files, servers, back-up systems and computing equipment, including, but not limited to, all mobile devices and other equipment with information storage capability; (iii) implementing network, device application, database and platform security; (iv) securing information transmission, storage and disposal; (v) implementing authentication and access controls within media, applications, operating systems and equipment; (vi) strictly segregating confidential customer information from all other information of Enova or from any of Enovas customers so that confidential customer information is not commingled with any other types of information; (ix) implementing appropriate personnel security and integrity procedures and practices, including, but not limited to, conducting background checks consistent with applicable law; and (x) providing appropriate privacy and information security training to Enovas employees. Cash Americas Confidential Information relating to customer information shall only be used by Enova to enhance the Credit Underwriting Model, and Enova shall not use such information for any other purposes, including enhancement of other underwriting models developed by Enova.
8. | SERVICE AVAILABILITY AND SERVICE AVAILABILITY CREDITS |
(a) Service Availability Requirements . Enova shall make the Licensed Materials and the Credit Underwriting Model Available, as measured over the total number of Prime Shift (as defined below) hours in each calendar month during the Term and any additional periods during which Enova does or is required to provide any of the Licensed Materials to Cash America (each such calendar month, a Service Period), at least ninety-nine and nine tenths percent (99.9%) of the time, excluding only the time the Licensed Materials are not Available solely as a result of one or more of the Exceptions (the Availability Requirement ). For purposes of this Agreement, the term Available means the Licensed Materials are available and operable for access and use by Cash America and its authorized users in full conformity with any services specifications agreed to by the Parties.
(b) Exceptions . No period of degradation or inoperability of the Credit Underwriting Model will be included in calculating Availability to the extent that such downtime or degradation is due to any of the following (the Exceptions ):
(i) | Cash Americas misuse of the Credit Underwriting Model; |
(ii) | Failures of Cash Americas Internet connectivity; |
(iii) | Internet or other network traffic problems other than problems arising in or from networks actually or required to be provided or controlled by Enova or its service providers; |
(iv) | Time-outs, other outages or any performance failure by a third party provider; |
(v) | Cash Americas failure to meet any minimum hardware or software requirements set forth in the specifications agreed to by the Parties; or |
(vi) | Scheduled Downtime as set forth in Section 8(c). |
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(c) Scheduled Downtime . Enova shall notify Cash America at least twenty-four (24) hours in advance of all scheduled outages of the Licensed Materials in whole or in part ( Scheduled Downtime ). All such scheduled outages shall: (a) last no longer than five (5) hours; (b) be scheduled between the hours of 11:00 p.m. and 7:00 a.m., CST; and (c) occur no more frequently than twice per week without prior approval from the Cash America.
(d) Service Availability Reports . Within fifteen (15) days after the end of each Service Period, Enova shall provide to Cash America a report describing the Availability and other performance of the Licensed Materials during the previous calendar month and the calendar year-to-date as compared to prior Service Periods. The report shall be in electronic or such other form as Cash America may approve in writing and shall include, at a minimum: (a) the actual performance of the Licensed Materials relative to the Availability Requirement and specifications; and (b) if Licensed Materials performance has failed in any respect to meet or exceed the Availability Requirement or specifications during the reporting period, a description in sufficient detail to inform Cash America of the cause of such failure and the corrective actions the Enova has taken and will take to ensure that the Availability Requirement and specifications are fully met.
(e) Remedies for Service Availability Failures . If the actual Availability of the Licensed Materials is less than the Availability Requirement for any Service Period, such failure shall constitute a Service Error for which Enova shall issue to Cash America a credit of 15% of the annual Maintenance Fee (as defined below) for each Service Period where the actual Availability is less than the Availability Requirement ( Service Availability Credits ), in an amount not to exceed the annual Maintenance Fee during any particular 12-month period. Any Service Availability Credits due under this Section 8 will be applied to any future Maintenance Fees, or, if the future Maintenance Fees are not sufficient to satisfy the Service Availability Credits, then Enova shall pay Cash America such amounts owed within 30 days of the determination of such credits.
9. | SOFTWARE MAINTENANCE & TECHNICAL SUPPORT |
(a) Maintenance Services . Subject to the terms and conditions of this Agreement, and Cash Americas timely payment of the Maintenance Fees, Enova agrees to use commercially reasonable efforts to perform, or have provided, during the Term of this Agreement, the following software maintenance and technical assistance with respect to the Licensed Materials (the Maintenance Services ):
(i) Maintenance of Licensed Materials and Servers . Enova agrees to provide reasonable and necessary maintenance for the Licensed Materials and the Servers in order to ensure Cash Americas continuous access to the Licensed Materials for use in its business operations. Enova shall continuously monitor and manage the Licensed Materials and the Servers to optimize the availability of the Credit Underwriting Model to meet or exceed the Availability Requirement (as defined in Section 8(a)). Such monitoring and management shall include:
A. | Proactively monitoring on a twenty-four (24) hour by seven (7) day basis all Licensed Materials functions, Servers, firewall and other components of Licensed Materials security; |
B. | If such monitoring identifies, or Enova otherwise becomes aware of, any circumstance that is reasonably likely to threaten the Availability of the Licensed Materials, taking all necessary and reasonable remedial measures to promptly eliminate such threat and ensure full Availability; |
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C. | If Enova receives knowledge that the Licensed Materials or any Licensed Materials function or component is not Available (including by written notice from Cash America pursuant to the procedures set forth herein): |
1. | confirming (or disconfirming) the outage by a direct check of the associated facility or facilities; |
2. | if Enovas facility check in accordance with clause (1) above confirms a Licensed Materials outage in whole or in part: (A) notifying Cash America in writing pursuant to the procedures set forth herein or in the applicable service order that an outage has occurred, providing such details as may be available and time of outage; and (B) working all problems causing and caused by the outage until they are resolved as Critical Service Errors, or, if determined to be an Internet provider problem, open a trouble ticket with the Internet provider. Critical Service Errors shall be defined as issues affecting the entire system or the system is down or operating in a materially degraded state; and |
3. | notifying Cash America that Enova has fully corrected the outage and any related problems, along with any pertinent findings or action taken to close the trouble ticket. |
(ii) Technical Support . Enova agrees to make technical assistance available to Cash America between 7:00 a.m. and 11:00 p.m., CST (the Prime Shift ), Monday through Friday, excluding Enovas holidays. In addition to technical assistance during the Prime Shift, Enova shall also provide limited on-call technical assistance to Cash America in order to address unavailability of the Credit Underwriting Model to Cash America store locations during Cash Americas normal business hours on weekends and holidays.
(b) Issue Resolution Assistance . Enova will acknowledge receipt of Cash Americas service request (a SR ) in a timely manner, and will respond with an estimated time required to resolve the SR based on the nature of the SR. Cash Americas SR shall include a detailed description of the nature of the issue, the conditions under which it occurs and other relevant data sufficient to enable Enova to reproduce a reported error in order to verify its existence and diagnose its cause. Upon completion of diagnosis of the issue, Enova will provide Cash America with appropriate assistance in accordance with Enovas standard commercial practices, including furnishing Cash America with an avoidance procedure, bypass, work-around, patch or hot-fix (i.e., a Cash America specific release for a production stopping problem with no work-around) to correct or alleviate the condition reported. The Parties agree that if Enova fails to respond to any SR within the corresponding response time, Cash America shall be due a credit in an amount equal to 1% of the Maintenance Fees ( Response Resolution Credits ). Any Response Resolution Credits due under this Section 9(f) will be applied to any future Maintenance Fees, or, if the future Maintenance Fees are not sufficient to satisfy these credits, then Enova shall pay Cash America such amounts owed within 30 days of the determination of such credits.
(i) Updates . Enova agrees to provide Cash America, on an up to quarterly basis, with all Updates, bug fixes (to the extent deemed reasonably necessary by Enova in its reasonable discretion), enhancements, new releases, new versions, and other improvements to the core functionality of the Licensed Materials. Enova will also provide instructions and/or Documentation that Enova considers reasonably necessary to assist in a smooth transition for Use of an Update. The Parties acknowledge and agree that any Updates to the Licensed Materials will automatically be licensed to Cash America under this Agreement.
(ii) Communication . Enova will provide Cash America access to Enova support staff for the Licensed Materials, any changes to the analytics relating to the Credit Underwriting Model, and Updates. The Parties shall also meet quarterly to review the Credit Underwriting Model and to examine the effectiveness of the model and to determine if any changes to the model are desired.
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(c) Cash Americas Responsibilities . Cash America agrees to promptly notify Enova regarding any material problems with the Licensed Materials. If requested by Enova, Cash America must provide Enova with access to any equipment that interfaces with the Licensed Material, subject to Cash Americas security and safety procedures and provide Enova with reasonable work space and other normal and customary facilities. Cash America also agrees to provide Enova with reasonable assistance as requested if Maintenance Services are performed on site at Cash Americas facility and ensure that a Cash America employee is present. Cash America also agrees to provide the same standard of care for the Licensed Materials that Cash America applies to its own products or data of like value to its business.
(d) Maintenance Personnel . Enova agrees that it will provide reasonable and necessary training on applicable federal and state laws and regulations to any of its relevant employees that perform Maintenance Services on behalf of Cash America. During the term of this Agreement, Enova, and any of its authorized employees and agents, shall strictly abide by Enovas obligations under this Agreement, and shall also follow a standard of conduct equal to or greater than that set forth in Cash Americas Code of Business Conduct and Ethics , a copy of which has been provided to Enova. Enova further agrees that it shall maintain a disciplinary process to address any unauthorized access, use, or disclosure of confidential customer information by any of Enovas officers, partners, principals, employees, agents or contractors
10. | Covenants of the Parties . Each Party covenants with the other Party as follows: |
(a) Each Party agrees that any litigation or court proceedings filed against any Party relating to the Credit Underwriting Model or this Agreement will be immediately reported to the other Party. Such report shall include a copy of the court papers or proceedings and the name and address of the Partys counsel handling the matter.
(b) Each Party agrees that, to the extent permitted by law, any communication or document received from a regulatory authority relating to the Credit Underwriting Model or this Agreement will be immediately reported to the other Party. Such notice shall include a copy of the communication or document and the name and address of the counsel, if any, handling the matter. Notwithstanding the foregoing, if either Party is precluded from providing such notice based on a written order by an investigating governmental authority or otherwise prohibited by law, the Party shall be excused from this notice requirement without being in breach of this Agreement.
(c) Each Party agrees to maintain any and all licenses and registrations that is or may be required by any federal, state, or local regulatory agency with authority over any Party.
(d) Each Party agrees that it will comply with all applicable federal and state laws, rules, regulations, orders, judgments, and decrees of any state or federal regulatory agency exercising its authority over the Parties as related to this Agreement, including, but not limited to, the Gramm-Leach-Bliley Act, and the Equal Credit Opportunity Act (including Regulation B promulgated thereunder), except if non-compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(e) Enova agrees to provide the Licensed Materials in compliance with all federal and state nondiscrimination laws, rules, and regulations applicable to the performance by Enova of its obligations hereunder, including, but not limited to, the requirements of the Equal Credit Opportunity Act and its implementing Regulation B. In addition, Enova agrees to conduct annual discrimination testing of the Credit
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Underwriting Model, and this testing shall be designed to ensure that the Credit Underwriting Model is not in violation of any applicable law or regulation and that there is no pattern or practice of discrimination against applicants seeking consumer credit resulting from factors used in the Credit Underwriting Model. Enova shall provide to Cash America a certificate of compliance or other such evidence of the Credit Underwriting Models compliance with such discrimination laws, and Enova shall provide such evidence of compliance to Cash America on an annual basis, within 10 days after Enova receives such compliance results.
(f) Enova agrees to provide analytics reports, containing such content as may be mutually agreed upon by the Parties, relating to the Credit Underwriting Model as may be requested by Cash America.
(g) Enova agrees not to change the decision process or any other feature of the Credit Underwriting Model without prior, written consent of Cash America.
(h) Enova agrees to process application data received from Cash America through the Credit Underwriting Model in the manner in which Enova processes its own data through its own similar credit underwriting model.
(i) Enova agrees to minimize any interruption of the Underwriting Services and provide Cash America with reasonable advance notice of any planned or foreseen interruption to the Underwriting Services.
11. | ACKNOWLEDGEMENT. |
Cash America acknowledges that Enova is not, and may never be, a credit reporting agency and that it does not hold itself out to be a credit reporting agency. If Enova is ultimately determined to be a credit reporting agency as a result of the Software or services being provided by Enova hereunder, either Party may terminate this Agreement pursuant to Section 5(b)(3) and, notwithstanding anything herein to the contrary, neither Party shall be liable to the other party and each Party shall be solely responsible for any costs or changes related to this Agreement that may arise as a result of such determination.
12. | PROPRIETARY RIGHTS INDEMNITY |
Enova will defend at its own expense, or its option reimburse Cash America for reasonable costs of defense, in connection with any legal action brought against Cash America to the extent that it is based on a claim or allegation that any Software infringes a U.S. patent or copyright of any third party, and Enova will pay any costs and damages finally awarded against Cash America in any such action that are attributable to any such claim or incurred by Cash America through settlement thereof, but shall not be responsible for any compromise made or expense incurred without its consent. However, such defense and payments are subject to the condition that Cash America gives Enova prompt written notice of such claim, allows Enova to direct the defense and settlement of the claim, and cooperates with Enova as necessary for defense and settlement of the claim. Should any Licensed Materials, or the operation thereof, become or in Enovas opinion be likely to become, the subject of such claim, Enova may, at Enovas option and expense, procure for Cash America the right to continue using the Licensed Materials, replace or modify the Licensed Materials so that they become non-infringing, or terminate the license granted hereunder for such Licensed Materials and refund to Cash America the Maintenance Fees (less a reasonable charge for the period during which Cash America has had use of the Maintenance Services). Enova will have no liability for any infringement claim to the extent it; (i) is based on modification of Licensed Materials other than by Enova, with or without authorization; or (ii) results from failure of Cash America to Use an Updated version of the Licensed Materials; or (iii) is based on the combination or Use of Licensed Materials with any other software, program or device not provided by Enova if such infringement would not have arisen but for such use or combination; or (iv) results from compliance by Enova with designs, plans or specifications furnished by Cash America, or (v) is based on any products, devices, software or applications designed or developed through Use of the Licensed Materials. THE FOREGOING STATES ENOVAS ENTIRE LIABILITY AND CASH AMERICAS EXCLUSIVE REMEDY FOR PROPRIETARY RIGHTS INFRINGEMENTS.
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13. | DISCLAIMER OF WARRANTY |
Due to the proprietary nature of the Credit Underwriting Model or the Enova Platform, the Parties acknowledge and agree that Enova does not warrant the appropriateness or effectiveness of the Credit Underwriting Model or the Enova Platform with respect to evaluating applications for the Loans. OTHER THAN THE COVENANTS EXPRESSLY MADE IN THIS AGREEMENT, ENOVA DOES NOT WARRANT THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE CREDIT UNDERWRITING MODEL OR THE ENOVA PLATFORM IN ANY MANNER.
14. | LIMITATION OF LIABILITY |
UNDER NO CIRCUMSTANCES SHALL EITHER PARTY HEREUNDER BE LIABLE TO THE OTHER FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL OR INCIDENTAL DAMAGES, INCLUDING LOST SALES OR PROFITS, IN CONNECTION WITH THIS AGREEMENT, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE MAXIMUM TOTAL LIABILITY OF ENOVA TO CASH AMERICA (INCLUDING WITHOUT LIMITATION ENOVAS INDEMNIFICATION OBLIGATIONS TO CASH AMERICA UNDER SECTION 15, REGARDLESS OF THE FORM OF THE ACTION OR THE THEORY OF RECOVERY, SHALL BE LIMITED TO $1,000,000. IN ADDITION, THE MAXIMUM TOTAL LIABILITY OF CASH AMERICA TO ENOVA, REGARDLESS OF THE FORM OF THE ACTION OR THE THEORY OF RECOVERY, SHALL BE LIMITED TO $1,000,000.
15. | INDEMNIFICATION. |
(a) Indemnification by Enova . Enova agrees to indemnify, defend and hold Cash America and its partners, officers, directors, shareholders, employees and affiliates harmless from and against any and all claims, proceedings, demands, liabilities, losses, penalties, fines, judgments, damages or expenses (including, without limitation, legal fees, court costs, accounting fees and class action costs) (collectively, Claims ) brought against any of them (collectively, Cash America Claims ) as a result of: (i) any misrepresentation, breach of representation or warranty, or failure to fulfill a covenant of this Agreement on the part of Enova, excluding instances where Enova was acting under the direction of Cash America; or (ii) any Claims brought by any third party against Cash America resulting from any allegation or claim that the Credit Underwriting Model, the Enova Platform or any of the Underwriting Services infringes upon any United States patent or any copyright or misappropriates trade secret rights of a third party; provided that Cash America gives Enova prompt notice of any such Cash America Claim. Enova has sole control of the defense and all related settlement negotiations with respect to any such Cash America Claim; provided further, however, that Cash America, at Enovas reasonable expense, shall provide Enova with reasonable and prompt assistance and information in connection with such defense. Settlement of a Cash America Claim by Cash America without Enovas prior written consent shall release Enova from the indemnity as to the Cash America Claim so settled. Enovas indemnity obligations under this Section 15(a) shall not apply to the extent the Cash America Claim arises out of or is connected with Cash Americas negligence or intentional misconduct. Enova shall not have the right to consent to entry of any judgment or enter into any settlement of any third party Cash America Claim without the consent of Cash America if the effect thereof is to permit any injunction, declaratory judgment, other order, or other monetary or nonmonetary relief to be entered, directly or indirectly, against Cash America.
(b) Indemnification by Cash America . Cash America agrees to indemnify, defend and hold Enova and its partners, officers, directors, shareholders, employees and affiliates harmless from and against any and all Claims brought against any of them (collectively, Enova Claims ) as a result of: any misrepresentation, breach
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of representation or warranty, or failure to fulfill a covenant of this Agreement on the part of Cash America, excluding instances where Cash America was acting under the direction of Enova; provided that Enova gives Cash America prompt notice of any such Enova Claim. Cash America has sole control of the defense and all related settlement negotiations with respect to any such Enova Claim; provided further, however, that Enova, at Cash Americas reasonable expense, shall provide Cash America with reasonable and prompt assistance and information in connection with such defense. Settlement of an Enova Claim by Enova without Cash Americas prior written consent shall release Cash America from the indemnity as to the Enova Claim so settled. Cash Americas indemnity obligations under this Section 15(b) shall not apply to the extent the Enova Claim arises out of or is connected with Enovas negligence or intentional misconduct. Cash America shall not have the right to consent to entry of any judgment or enter into any settlement of any third party Enova Claim without the consent of Enova if the effect thereof is to permit any injunction, declaratory judgment, other order, or other monetary or nonmonetary relief to be entered, directly or indirectly, against Enova.
16. | GENERAL PROVISIONS |
(a) Notices . All notices, requests, and approvals required or permitted by this Agreement shall be in writing and addressed/directed to the other Party at the address/facsimile number below or at such other address of which the notifying Party hereafter receives notice in conformity with this Section 16. All such notices, requests, and approvals shall be deemed given upon the earlier of facsimile transmission or actual receipt thereof:
To ENOVA: |
Enova International, Inc. 200 W. Jackson Blvd., Suite 2400 Chicago, IL 60606 Fax No.: (312) 212-1657 Attention: General Counsel |
|
To CASH AMERICA: |
Cash America International, Inc. 1600 W. 7 th Street, 9 th Floor Fort Worth, TX 76102 Fax No.: (817) 570-1647 Attention: General Counsel |
(b) Assignment .
(i) Cash America may not delegate, assign or transfer this Agreement, or any of its rights and obligations under this Agreement, and any attempt to do so shall be void. Cash America agrees that this Agreement binds Cash America and each of its subsidiaries, affiliates, employees, agents, representatives and persons associated with any of them. Without limitation of the foregoing, an assignment, delegation or transfer shall include, but not be limited to a sale of substantially all of the assets of Cash America, a merger, a re-organization, or change in control of fifty percent (50%) or more of the equity of Cash America (a Change in Control ). No transfer, delegation or assignment (including, without limitation, an assignment by operation of law) of this Agreement may be made without the prior, written consent of Enova. Such prior, written consent by Enova may be withheld at Enovas sole discretion. As used in this Agreement, assignment shall not include, and no consent shall be required, (1) if Cash America raises additional capital through sale of equity or debt instruments, provided that the additional equity issued does not result in a Change in Control, (2) if Cash America changes its state of incorporation, or (3) if Cash America reorganizes its corporate structure without a change in its equity structure.
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(ii) Enova may not delegate, assign or transfer this Agreement, or any of its rights and obligations under this Agreement, and any attempt to do so shall be void. Enova agrees that this Agreement binds Enova and each of its subsidiaries, affiliates, employees, agents, representatives and persons associated with any of them. Without limitation of the foregoing, an assignment, delegation or transfer shall include, but not be limited to a sale of substantially all of the assets of Enova, a merger, a re-organization, or Change in Control of Enova. No transfer, delegation or assignment (including, without limitation, an assignment by operation of law) of this Agreement may be made without the prior, written consent of Cash America. Such prior, written consent by Cash America may be withheld at Cash Americas sole discretion. As used in this Agreement, assignment shall not include, and no consent shall be required, (1) if Enova raises additional capital through sale of equity or debt instruments, provided that the additional equity issued does not result in a Change in Control, (2) if Enova changes its state of incorporation, (3) if Enova reorganizes its corporate structure without a change in its equity structure, or (4) relating to the spin-off of Enova from Cash America or any future disposition of any Enova shares held by Cash America following the spin-off.
(c) Amendments . This Agreement may be amended or modified only by a writing signed by duly authorized representatives of each Party and dated subsequent to the date hereof.
(d) Force Majeure . Performance under this Agreement by either party may be suspended immediately to the extent caused by any event or condition beyond the reasonable control of the party suspending such performance including acts of God, fire, labor or trade disturbance, war (declared or undeclared), terrorism, civil commotion or civil unrest, riots, sabotage, compliance in good faith with any Law, unavailability of materials, unusually bad weather, interference by civil or military authorities or any other event or condition whether similar or dissimilar to the foregoing (a Force Majeure Event ). The Party claiming suspension due to a Force Majeure Event will give prompt notice to the other of the occurrence of the Force Majeure Event giving rise to the suspension and of its nature and anticipated duration. Upon the occurrence of a Force Majeure Event, the Parties shall cooperate with each other to find alternative means and methods for the provision of the suspended service or act.
(e) Waiver and Severability . Failure by either party to enforce at any time any provision of this Agreement, or to exercise any election of options provide herein, shall not constitute a waiver of such provision or option, nor affect the validity of this Agreement or any part thereof, or the right of the waiving party to thereafter enforce each and every such provisions. If any provision of this Agreement is held invalid or unenforceable, the remainder of the Agreement shall continue in full force and effect.
(f) Governing Law . The procedural and substantive laws of the State of Illinois, without regard to its conflicts of laws principles, will govern this Agreement. Any action brought to enforce this Agreement or its terms shall be brought within the state or federal courts of Cook County, Illinois.
(g) Entire Agreement . This Agreement and the exhibits and schedules referenced or attached hereto or thereto, constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede (a) all prior oral or written proposals or agreements, (b) all contemporaneous oral proposals or agreements, and (c) all previous negotiations and all other communications or understandings between the parties, in each case with respect to the subject matter hereof and thereof.
[signatures on the following page]
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IN WITNESS WHEREOF, the undersigned have caused their authorized representatives to execute this Agreement as of the Effective Date.
ENOVA INTERNATIONAL, INC. | ||
By: |
/s/ David A. Fisher |
|
Name: |
David A. Fisher |
|
Title: |
Chief Executive Officer and President |
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CASH AMERICA INTERNATIONAL, INC. | ||
By: |
/s/ Thomas A. Bessant, Jr. |
|
Name: |
Thomas A. Bessant, Jr. |
|
Title: |
Executive Vice President and Chief Financial Officer |
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Exhibit 14.1
ENOVA INTERNATIONAL, INC.
Code of Business Conduct and Ethics
Introduction |
2 | |||
Excelling For Our Shareholders, Customers & Business Partners |
2 | |||
For Our Shareholders: |
3 | |||
For Our Customers: |
5 | |||
For Our Business Partners: |
6 | |||
Top Talent and Teamwork: |
6 | |||
Excelling with Integrity by Avoiding Conflicts of Interest |
7 | |||
Remaining an Entrepreneur while Remaining True to Enova |
7 | |||
Accountable to Our Communities: |
9 | |||
Reporting Concerns and Participating in Investigations: |
10 | |||
Enforcement |
11 |
Introduction
This Code of Business Conduct and Ethics (the Code) applies to Enova International, Inc. and its subsidiaries and affiliates (together referred to as the Company, Enova, we, us, or our), our Associates including our officers (our Officers), each member of Enovas Board of Directors (each, a Director), and all of our agents and contractors. Any waiver of the application of this Code must be approved by our Board of Directors or its designated committee and must be disclosed to the extent required by law or regulation.
We refer to employees, including our Officers, as Associates, as we believe every employee is associated with, and critical to, our success. Associates will see that our Code is very closely aligned with our Values, which serve as the foundation for how we think, reason, act and interact with each other, our customers, shareholders, vendors and other stakeholders. These Values, which are the keys to our success are:
| Customer First - Our hardworking customers deserve options. We deliver services they want beyond their expectations. |
| Best Answer Wins - Loudness and rank lose. Challenge assumptions and add unique perspective to create the best solution. |
| Accountable for Results - Take ownership. Acknowledge mistakes to learn. Quickly simplify and constantly improve. |
| Top Talent and Teamwork - We hire and develop the best. We work in small, focused teams, allowing diversity of thought but singular purpose. |
| Operate as an Owner - Think big and move fast. Always be willing to roll up your sleeves. Use resources like theyre your own. |
Associates are expected to use sound judgment, live and uphold our Values and avoid situations that might reflect unfavorably upon themselves or Enova. This Code does not create an actual or implied contract between any Associate and Enova or guarantee any particular term or condition of employment. Associates are expected to comply with Enovas compliance and regulatory policies, our Associate handbook, and other workplace rules, all of which supplement this Code. What follows are a set of guidelines and expectations youll notice right away that we did not cover every possible situation that said, we are confident you will use sound judgment and apply the Code to everything you do at Enova. An Associate who does not comply with the standards set forth in this Code may be subject to discipline in light of the nature of the violation, up to and including termination. Nonetheless, if you have a concern, need clarity or are just curious, ASK!
Excelling For Our Shareholders, Customers & Business Partners
Our Mission: We help hardworking people fulfill their financial responsibilities with fast, trustworthy credit.
To accomplish our Mission, we maintain an uncompromising commitment to customer service, Associate advancement, shareholder value and enhancement of our industry. Our commitment is to excellence, and our measure of success is the satisfaction of our customers, shareholders, and business partners.
As we enjoy the success of Enova and recognize its accomplishments, we must never relax our sense of urgency to push forward with new ideas and improved performance. Our goals cannot be achieved by any one individual, but rather by a commitment from our entire team of Top Talent.
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For Our Shareholders:
Operating as Owners, we recognize that our shareholders have invested in our success and expect a fair and reasonable return on their investment. We expect Associates to share a commitment to protect our assets and manage our business in the best interests of our shareholders.
Compliance with Laws
We must abide by the rules and regulations of the Securities and Exchange Commission (SEC), the New York Stock Exchange (NYSE), federal, state, local and foreign laws and regulations applicable to our operations, including but not limited to those pertaining to domestic and foreign consumer financial protection. Following the letter and spirit of laws, rules and regulations is a minimum requirement that we commit to exceed every day.
Records Management
Associates are expected to follow the records retention and destruction policies. It is our policy not to destroy or alter our records or documents (no matter the type of medium or the manner stored) in response to or in anticipation of any legal proceeding or government inquiry or investigation. No person is allowed to alter, destroy, mutilate or conceal a record, document or other object with the intent to impair its availability for use in an official proceeding. Additionally, no person may knowingly alter, cover up, falsify or make a false entry in any record, document or object with the intent to impede or obstruct the investigation or administration of any matter.
Disclosure Controls and Procedures
We are committed to promoting the full, fair, accurate, timely and understandable disclosure in reports and documents that we file with the SEC and otherwise communicate to the public.
Full and Fair Disclosure
Any disclosure of Enovas material nonpublic information must be made in accordance with Enovas Corporate Disclosure/Regulation FD Policy.
Prohibition on Improper Influence on Conduct of Audits
It is prohibited for any Officer or Director, or any person acting under their direction, to attempt to coerce, manipulate, mislead, or fraudulently influence the independent auditors selected to audit or review our financial statements.
Values Check
| Do not enter any false or artificial information in our records or reporting systems |
| Do not destroy or alter our records or documents (no matter the type of medium or the manner stored) in response to or in anticipation of any legal proceeding or government inquiry or investigation |
| Support the effectiveness of our disclosure controls and procedures |
| Keep all material nonpublic information about Enova strictly confidential unless and until Enova makes an authorized press release or other authorized public communication or filing |
| Cooperate with and provide Enovas independent auditor accurate, timely and truthful information |
Information to the Public
We will provide timely public dissemination of material information about our business through authorized Associates. Communications or online activities by Associates must comply with Enovas Acceptable Use and Social Media policies. Requests from the media, analysts or shareholders about Enovas performance or financial situation must be forwarded for review by our Chief Executive Officer, Chief Financial Officer, General Counsel or our Investor, Government or Public Relations Associates having responsibility for these matters. All disclosure of Enova information must be made in accordance with Enovas Corporate Disclosure/Regulation FD Policy.
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Values Check
| Generally, Associates are not authorized to discuss Enovas financial, business, legal or other information with the press or on any internet/intranet site or other discussion board, chat room, social media site or similar forum |
| Rule of thumb : If you arent sure whether you are authorized to discuss company business externally, you probably arent. When in doubt, ask your manager. |
Insider Trading and Confidential Information Policy
Associates may come into possession of material nonpublic information concerning Enova or third parties with whom Enova does business. Information is material if there is a substantial likelihood that a reasonable investor would consider it important in making a decision whether to trade in a security, or if the information (if made public) likely would affect the market price of the security. Generally, trading in a companys securities (including options and other derivatives) while in possession of material non-public information about the company is insider trading and is a violation of the law. It is equally wrong to disclose information to others who then trade on that information. That is known as tipping, and is just as illegal as if you had made the trades yourself.
All Associates are expected to respect and maintain the confidentiality of information entrusted to them by the Enova except when authorized or otherwise legally obligated to disclose it. Enovas Confidentiality and Non-Disclosure Agreement provides definitions of confidential information, details of restrictions of use and other important details.
Values Check
| Consult Enovas Insider Trading Policy on Enovas Intranet prior to trading in Enovas securities. Enovas Insider Trading Policy provides definitions, restrictions and other important details. |
| Dont trade on material non-public information |
| Dont disclose or tip any material nonpublic information to family, friends or others outside of Enova |
| Dont transmit or post (in or by any medium) any inside information about Enova, its subsidiaries, customers or business partners without prior authorization |
Protecting Enovas Assets and Intellectual Property
Every Associate is personally responsible to use our assets efficiently and only for lawful, business related purposes approved by management. Associates should help us protect our assets from misuse, theft, damage or other loss. Every day, Associates will use Enovas intellectual property in the course of work, or other proprietary and/or non-public information that we consider to be protected trade secrets. These valuable assets separate us from the competition and enable us to continue to provide superior products and services to customers. Associates must help Enova maintain the value of its intellectual property by using care to keep our trade secrets and other nonpublic information confidential.
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Values Check
| Enovas assets are for Associates (and in limited instances, contractors or vendors) use only and only for legitimate business purposes |
| Consult Enovas Acceptable Use Policy in the Associate Handbook for guidance on use of assets |
| Take steps to limit access to our intellectual property and other non-public information to those Associates who are authorized to use that information in the course of his/her job |
| If you dont know if you should share proprietary information with someone, ask your manager |
| Downloading, emailing copies of, or otherwise distributing or using nonpublic information outside the scope of your employment is not protecting Enovas intellectual property |
For Our Customers:
Our Mission is to help hardworking people fulfill their financial responsibilities with fast, trustworthy credit. Our customers are hard-working, honest people who have been underserved by other financial institutions. We respect the dignity of our customers and work to meet their needs and exceed their expectations, and we do so ethically, honestly, in compliance with applicable laws and standards as well as with integrity and excellence.
Values Check
| Our marketing and advertising must be truthful, non-deceptive, fair, and backed up by accurate data |
| We do not take advantage of our customers through manipulation, concealment, abuse of privileged information, misrepresentation, or any other unfair dealing practice |
Protecting Information about Others
As we work, many of us will have access to our customers, Associates, applicants and business partners sensitive, personal and confidential information. Associates are committed to protecting that information.
Commitment to Quality
Without customers, there is no Enova. Our long-term reputation and business viability depend upon our continued maintenance of high quality in the products and services we provide so we are committed to providing our customers with honest, confidential, high quality and friendly services.
Values Check
| Conduct yourself as an ambassador of Enova, even if your job is not customer-facing |
| Be honest, confidential, and friendly when interacting with customers, business partners and vendors |
| Enova provides services to any customer or potential customer without regard to any classification protected by the laws in the areas in which we do business |
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For Our Business Partners:
We will negotiate hard to obtain the best possible value for the goods and services we require, and we will do so fairly and without deception. In addition, we conduct appropriate due diligence when selecting vendors to ensure that we do not do business with or retain the services of any vendor we know violates our Code and/or any applicable laws, or who have reputations that could harm our business. Also, we dont retain the services of others to do things that Enova would not do directly because it would violate the law or this Code.
Top Talent and Teamwork:
We recognize that Enovas continued ability to deliver world class customer service depends upon the great results of Enovas Top Talent. We value a wide range of differences and perspectives, as those allow us to arrive at the Best Answer. With that in mind, Enova proudly offers a culturally rich, collaborative and entrepreneurial environment.
Respecting Each Other
Enova is committed to providing a workplace free from harassment and/or discrimination and believes harassment, discrimination and/or retaliation in any form undermines the integrity of the employment relationship. Enova prohibits discrimination, harassment and retaliation of any kind. Any harassing, discriminating or retaliatory behavior, whether committed by management, non-management staff or third parties (such as vendors, suppliers, or customers), is prohibited. This applies to harassment, discrimination and/or retaliation that violates any applicable law and also prohibits conduct that may not necessarily be illegal but may be determined to be inconsistent with Enovas policies and Values.
Values Check
| Treat every Associate with fairness, dignity and respect and be aware of how others react to what you say and do |
| Base all employment decisions only on characteristics that advance Enovas interests and Values, by considering: job performance, talents, skills, potential and other business-related factors |
| Become familiar with our policies on equal employment, discrimination and harassment, and retaliation, which are located in our Associate Handbook and on Enovas Intranet |
| Report harassment or other inappropriate conduct when it occurs in accordance with policy |
| Avoid any conduct that can be perceived by others as being based on any protected characteristics |
Developing and Rewarding Top Talent
Enova is committed to the continued training and development of all Associates. Therefore, we provide training to ensure compliance with all federal, state, local and foreign laws and regulations applicable to our operations. This training and development includes but is not limited to domestic and foreign consumer financial protection, laws and regulations, and development courses and opportunities so Associates can effectively carry out their job responsibilities, pursue their careers and achieve professional goals.
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Excelling with Integrity by Avoiding Conflicts of Interest
As a general rule, we must act in Enovas best interests at all times, by applying good judgment and not allowing private interests to interfere, or appear to interfere, with Enovas best interests. We devote many of our waking hours doing something to advance Enovas mission. As a result, it may seem like personal lives are intertwined with professional lives, which can cloud our ability to exercise objectivity when making business decisions. Dont let that happen.
Given that youre here, we know Enovas Values and interests align with yours. But when you dont think they do, a good general guideline to follow when you are required to make any business decision or take any action while working here, is that you must consider the best interests of Enova as a whole, and not the impact on your personal relationships or benefit. If you have any reason to believe you are encountering a conflict of interest ask your manager. We are committed to promoting the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. We will discuss your concerns to guide you to the Best Answer.
Values Check
We realize that your work at Enova is too diverse and complicated for us to account for every possible scenario, but as a general guide:
| Do advance Enovas interests when the opportunity arises |
| Do disclose to us any situation you identify as possibly involving a conflict of interest of you, a fellow associate, or someone with whom we do business |
| If its possible that an action you take will make it difficult to perform your work objectively and effectively, dont take it |
| For more information on how to report your concerns, please refer to the Reporting Concerns Section in this Code |
Remaining an Entrepreneur while Remaining True to Enova
Despite Enovas growth, we remain at our core, entrepreneurial and seek to maintain our start-up roots. Enova recognizes that Associates are talented, creative and often explore ideas not related to Enova. We encourage all Associates to continue to experiment and innovate, while at work and at home. Of course while doing so, Associates must remain true to Enova, which means they cannot take steps to compete with Enova or violate any agreements with us or any of our policies.
Values Check
Exploring new ideas and ventures or outside employment unrelated to Enova is encouraged, provided:
| The work is not competitive with Enovas actual or demonstrably anticipated business |
| The work does not interfere with job responsibilities or performance at Enova |
| The work does not make use of Enovas property, trade secrets, nonpublic information or know-how |
| The work does not violate any agreements with Enova (including intellectual property, confidentiality and non-solicitation agreements) and does not violate any Enova policies (including our Acceptable Use Policy) |
| Associates dont solicit any customers, suppliers or other third party to the detriment of Enova |
| Associates dont solicit any other Associate to leave Enova or violate these guidelines |
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Business Referrals
Avoid personally attempting to give or steer Enovas business transactions to companies in which you, your relative(s) and/or your friend(s) have a financial or other interest, for the purpose of benefiting you, your relative(s) and/or friends. Consult your manager and/or the Legal Department on any questions concerning the application of this policy.
Values Check
Q: My college roommate owns a company that sells a technology that really could help Enova process loans more quickly and more accurately. Am I really not allowed to suggest that Enova should consider purchasing this product?
A: No. We recognize that our personal and professional networks may be valuable resources in identifying the best source of products and services. If you objectively believe your friends product is the best possible solution for Enova, present it to your manager while being fully transparent and disclosing the nature of the relationship. You should not, however, participate in or influence any decision-making that involves whether Enova does business with your friends company.
Personal Investments
Associates must avoid investments in other companies with which Enova does business if these investments could create the fact or appearance of a conflict of interest. Investing in relatively small positions of publicly-traded securities of other companies is generally not prohibited so long as there is not a violation of Enovas Insider Trading Policy.
Corporate Opportunities Belong to Enova
If your position enables you to discover a business or investment opportunity that Enova may have an interest in pursuing, you must not divert that opportunity for your own personal gain or for the benefit of any party outside of Enova.
Outside Board Service
You must obtain prior authorization from Enovas Chief Executive Officer or Chief Compliance Officer for service as a director, general partner, manager, officer or similar position with any privately-held or public business entity or as an appointee to any kind of governmental or quasi-governmental agency or body. Service solely as a director or trustee of nonprofit corporations engaged in charitable activities does not require approval unless that activity could involve improper conflicts of interest. This restriction does not apply to our non-employee Board members who disclose their relationships to us.
Gifts, Gratuities and Business Entertainment
Associates should not offer or accept a gift or gratuity of more than nominal value from any party. In addition, Associates may extend or accept invitations to reasonable meals, public events and similar business activities incurred for bona fide business purposes assuming the costs are not disproportionate to the business purpose and otherwise do not create the fact or appearance of a conflict of interest.
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Values Check
| Dont ask for or accept anything from a third party if it could leave someone with the impression that the item or service could impact your judgment |
| If youre worried that you might offend someone or jeopardize a business relationship by turning down a gift, ask for guidance from your manager, an Officer or the Legal Department |
| Avoid sponsoring or accepting invitations to highly expensive events funded with corporate funds or personal celebrations (e.g., a birthday party) with costs paid with corporate funds, at which the business purpose may appear incidental |
| Dont attend entertainment events that may appear contrary to professional standards of conduct |
| Dont invite Government officials to entertainment events without first receiving approval from the Chief Compliance Officer or the Legal Department |
| Ask before you offer, give, accept or decline a gift or gratuity |
Accountable to Our Communities:
Fair Lending and Lending Nondiscrimination Statement
Enova is committed to treat all applicants and borrowers consistently and in compliance with fair lending laws throughout the loan process, from application to satisfaction, including all areas of collections. No Associate shall, through any means, discriminate against anyone based on any classification protected by federal, state or local law, the fact that all or part of the customers income is derived from public assistance programs, disability, family status, or the fact that the customer has exercised their rights under the Federal Consumer Credit Protection Act.
Money Laundering Prevention
Enova is committed to complying with all laws against money laundering that prohibit businesses from accepting or processing proceeds of criminal activities. All Associates must adhere to Enovas established Bank Secrecy Act/Anti-Money Laundering Compliance Program. Associates responsible for documenting customer transactions should use due care and follow proper procedures for documentation.
Prohibited Corrupt Practices
Enova maintains policies that require compliance with the United States Foreign Corrupt Practices Act, the UK Bribery Act and other anti-corruption laws that apply wherever we do business. Enovas Associates and agents must not directly or indirectly offer or make a corrupt payment to any domestic or foreign government official, political party or candidate, or employee of any enterprise owned or controlled by a government agency, for the purpose of influencing any official act or inaction, or obtaining, retaining or directing business. Associates must not engage in any form of fraud, including but not limited to embezzlement, theft, hiding or misuse of Enovas assets, or falsification of its records.
Political Contributions/Lobbying Activity
No Associate may contribute in Enovas name or on its behalf, any cash, services or property of any kind for or in support of any political candidate, committee, initiative, or activity, without first gaining written approval from Enovas Chief Executive Officer or the Legal Department. In addition no lobbying efforts or contracts shall be undertaken in Enovas name or on its behalf without the prior approval of the Legal Department or Chief Compliance Officer.
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Prohibited Loans to Officers and Directors
Enova must not, directly or indirectly, extend or maintain credit, arrange for the extension of credit, or renew an extension of credit, in the form of a personal loan to or for any Enova Director or Officer and must not guarantee an obligation of any Director or Officer, except as may be permitted under the Sarbanes-Oxley Act of 2002.
Intellectual Property Laws
Enova requires all Associates to conduct our business and use our business systems and facilities in ways that avoid any violations of copyright, trademark, service mark, patent, trade secret or other intellectual property rights held by third parties.
Community Involvement/ Political Contributions
We encourage all Associates to engage in community, charity and political activities and causes of their choosing, so long as these activities do not interfere with their duties to Enova. No Associate may represent that the Associates views or activities represent those of Enova. Associates must comply with the Solicitation, Distribution and Access Rules set forth in the Associate Handbook.
Values Check
| If youre not sure whether something youre doing (or plan to do) is legally compliant, consult the Legal Department or the Chief Compliance Officer |
| Understand and seek training on the applicable laws and regulations that impact Enova |
| Engage in activities that maintains or enhance Enovas standing in the communities we serve |
| Avoid any transaction or activity that even if well-intentioned, could appear to be improper |
Reporting Concerns and Participating in Investigations:
All Associates are expected to report any indications of illegal or improper conduct. Here are a few things you should know:
| Good faith expressions of concerns are protected: to ensure the Best Answer Wins, we encourage Associates to report any good faith concerns of suspected violations of this Code. |
| Report concerns promptly: the sooner we hear about them the sooner we can investigate, act, and resolve. |
| Your assistance with investigations is protected: We will not and cannot retaliate against Associates for assisting with an internal investigation (conducted by us or a third party retained by us) or an investigation conducted by any federal/state agency, or even a member of Congress or its committees. |
| Your candor and full cooperation is expected and required: Associates must fully cooperate with requests from the Enovas auditors, regulators, internal or external investigators and legal counsel made in connection with any internal or external audit, regulatory exam, internal or government investigation or inspection, legal proceeding or any other similar internal or external process. Full cooperation means responding to requests to the best of your knowledge and as completely, truthfully, clearly and candidly as possible. |
| Dont submit false reports : If an Associate communicates a concern of illegal or unethical conduct known to be false, he/she is not in alignment with this Code or Enovas Values. |
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Values Check - Best Answer Wins seek guidance first, dont ask for forgiveness later
When a difficult situation is encountered and believed to involve a breach of this Code, Associates should reach out for help. Enova and this Code provide direction to guide you to a specific Associate or Department, but as a general guideline:
| Consult with your immediate manager |
| Speak with your one over one manager, or the executive of your group |
| Contact People Resources, the Legal Department, or the Chief Compliance Officer |
| If you prefer to remain anonymous, contact our third party hotline (or the AlertLine) via telephone at . |
Enforcement
Role of the Chief Compliance Officer and Audit Committee
Enova has a Chief Compliance Officer who reports directly to the Boards Audit Committee. The principal responsibilities of the Chief Compliance Officer are to oversee our compliance program, investigate reports of possible violations, and provide periodic reports and evaluations of the effectiveness of this program to the Audit Committee. As necessary or appropriate, the Chief Compliance Officer may delegate such duties to a member of the Legal Department or a member of the Compliance Department. All reports made to our third party hotline, or the AlertLine, that are determined to relate to accounting/auditing practices, internal controls, mail or wire fraud, bribery, kickbacks, embezzlement, or Federal or State Securities Laws are directed to the Chief Compliance Officer.
While it is not practical to specify in advance detailed consequences for every possible Code violation, it is the policy of the Audit Committee that all Associates adhere to this Code. Enforcement actions will be implemented for violations which the Audit Committee determines to have occurred. Enforcement consequences may vary depending on the nature, severity and willful nature of the violation.
ADOPTED BY THE BOARD OF DIRECTORS OF
ENOVA INTERNATIONAL, INC.
ON November 13, 2014
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Exhibit 99.1
Enova International, Inc.
Board of Directors
Corporate Governance Guidelines
Corporate Governance Philosophy
Enova International, Inc. (the Company) is committed to maintaining effective corporate governance guidelines designed to ensure that the Board of Directors of the Company (the Board) is actively engaged in the proper performance of its oversight function.
Role and Composition of the Board
1. Role of the Board. The members of the Board (the Directors) are elected by the stockholders, in accordance with the terms of the Companys Certificate of Incorporation and Bylaws. It is the ultimate decision-making body of the Company except with respect to those matters reserved to the stockholders. It elects the senior management team, which is charged with the conduct of the Companys business. Having elected the senior management team, the Board acts as an advisor and counselor to senior management and ultimately monitors its performance, the effectiveness of its policies and decisions, and the execution of its strategies. The Board may delegate the oversight and management of certain areas of risk to the Company to its committees, but the entire Board shall generally oversee such risks and be regularly informed through committee reports and management presentations about such risks.
2. Election of Directors. All Directors will stand for election at the annual meeting of stockholders. In any non-contested election of Directors, any Director nominee who is an incumbent Director and is not elected by a majority of the votes cast shall promptly tender his or her resignation to the Board after the certification of the election results, subject to acceptance by the Board, and shall continue to serve on the Board until his or her resignation is accepted, until his or her successor shall have been duly appointed and qualified, until his or her death, until his or her removal as hereinafter provided, or until he or she shall tender a resignation that is not subject to acceptance by the Board. Within 60 days after certification of the election results, the Nominating and Corporate Governance Committee will act to determine whether to recommend that the Board accept or reject the Directors resignation and will submit such recommendation for consideration by the Board, and the Board will promptly, and in any event within 90 days after certification of the election results, determine whether to accept or reject the Nominating and Corporate Governance Committees recommendation. The Nominating and Corporate Governance Committee and the Board may consider any factors they deem relevant in considering whether to accept or reject the Directors resignation, and the nominee in question shall not participate in the deliberations regarding the Nominating and Corporate Governance Committees recommendation or the Boards determination. If more than one member of the Nominating and Corporate Governance Committee fails to receive the required vote in favor of his or her election in the same election, then the Nominating and Corporate Governance Committee shall not make the above-described recommendation to the Board; instead the Directors who did receive the required vote in favor of their election in such election shall, within 90 days after certification of the election results, act to determine whether to accept the Directors resignations. If a resignation is rejected, the Board may impose conditions on the Directors continued membership, recommend a plan to address the underlying reasons for the votes against the Director, or take some other action the Board deems appropriate and in the best interests of the Company under the circumstances. If the resignation is accepted, the Board may fill the resulting vacancy pursuant to the provisions of ARTICLE II, Section 1, of the Companys Bylaws. The Board will promptly disclose its decision and, if applicable, the reasons for rejecting any tendered resignation, on Form 8-K filed with the Securities and Exchange Commission. If, in any non-contested election of Directors in which the whole slate of Director nominees includes incumbent Directors who are not elected by a majority of the votes cast, such Directors are not required to submit a resignation in accordance herewith and shall continue to hold office until their respective successors are elected, which shall be as soon thereafter as convenient at a special meeting of stockholders called for such purposes.
3. Chairman and CEO. The positions of Chairman (Chairman) and the Chief Executive Officer (the CEO) may be held by the same person or by two separate persons, as the Board determines from time to time. If the positions of Chairman and CEO are not held by the same person, the Chairman may be an executive position of the Company.
4. Presiding Outside Director. The full Board shall appoint an independent Director to serve as the presiding outside Director. In the absence of a specific Board appointment, the Chair of the Nominating and Corporate Governance Committee shall serve as the presiding outside Director. In the event the position of the Chairman becomes vacant by reason of resignation, retirement or for any other reason, the presiding outside Director shall serve as Chairman until such time as a new Chairman is elected.
5. Independence of Directors. It is the policy of the Company that (i) a majority of the Directors satisfy the independence requirements set forth in the New York Stock Exchanges Listing Standards, as amended from time to time and (ii) the members of the Audit Committee, Management Development and Compensation Committee and the Nominating and Corporate Governance Committees satisfy the applicable independence requirements of the New York Stock Exchanges Listing Standards.
6. Size of the Board. The Bylaws and Certificate of Incorporation of the Company provide that the Board shall consist of such number of Directors as the Board may determine to be appropriate from time to time. It is the policy of the Company that the number of Directors shall not exceed a number that can function efficiently as a body. The Nominating and Corporate Governance Committee, in consultation with the Chairman and the CEO, considers and makes recommendations to the Board concerning the appropriate size and needs of the Board.
7. Selection of New Directors. The full Board is responsible for selecting persons to fill vacancies on the Board and recommending candidates for election by the stockholders. The Board has delegated the process of considering candidates to the Nominating and Corporate Governance Committee, whether such candidates would fill new positions created by expansion or vacancies that occur by resignation, retirement, death or for any other reason. Candidates for election or appointment to the Board shall be selected for their character, judgment, business experience and acumen. Financial expertise, independence and familiarity with national and international issues affecting business are among the relevant criteria. In assessing potential new Directors, the Nominating and Corporate Governance Committee considers individuals from various disciplines and diverse backgrounds. Upon the recommendation of the Nominating and Corporate Governance Committee, the Board may establish additional qualifications and criteria for Board membership from time to time. The Nominating and Corporate Governance Committee is also responsible for evaluating on an ongoing basis all Directors and Director candidates based on such criteria and for seeking to assure that specific talents, skills and other characteristics that are needed to increase the Boards effectiveness are possessed by an appropriate combination of Directors.
8. Director Change in Occupation or Business Association. The Board does not believe that a Director who retires or changes the job he or she held when they became a member of the Board should necessarily leave the Board. Promptly following such event, the Director must notify the Nominating and Corporate Governance Committee, which shall review the continued appropriateness of the affected Director remaining on the Board under the circumstances. The affected Director is expected to act in accordance with the Nominating and Corporate Governance Committees recommendation following such review.
9. Compensation of Directors. It is the policy of the Company that the Directors be fairly compensated for their work required in an organization of the Companys size and scope, that their compensation should align their interests with the long-term interests of the Companys stockholders, and that the structure of their compensation should be simple, transparent and easy for stockholders to understand. The Nominating and Corporate Governance Committee annually reviews the compensation of Directors, and it advises the Board on possible changes in Director compensation.
10. Stock Ownership by Directors. Each Director is expected to own stock in the Company in accordance with the Companys Stock Ownership Guidelines for Executives and Board Members.
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11. Relationship of Board and Committees. It is the general policy of the Company that all major decisions be considered by the Board as a whole. As a consequence, the committee structure of the Board is limited to those committees considered to be basic to, or required by law or by New York Stock Exchange rules for, the operation of a publicly owned company. Currently these committees are the Audit Committee, Management Development and Compensation Committee and Nominating and Corporate Governance Committee. The members and chairs of these committees are recommended to the Board by the Nominating and Corporate Governance Committee in consultation with the Chairman and CEO. The Audit Committee, Management Development and Compensation Committee and Nominating and Corporate Governance Committee are made up of only independent Directors. The membership of these three committees is rotated from time to time with a view toward balancing the benefits derived from continuity against the benefits derived from the diversity of experience and viewpoints of the various Directors. The Board may also appoint such other committees to carry out such matters as may be delegated to it by the Board, consistent with the provisions of this policy and applicable law. If and when the Board appoints any such additional committee, the Board shall, by resolution or otherwise, clearly define in writing the responsibilities of such committee.
12. Orientation and Continuing Education of Directors. The Company is to facilitate the continuing education of all Directors and is to have a full orientation for new Directors that includes extensive materials, meetings with key management and visits to Company facilities. Incumbent Directors may also participate in the orientation program. The Company will also periodically provide opportunities for Directors to visit the Companys principal executive offices in order to provide greater understanding of the Companys business and operations
13. Chairs of Executive Sessions. It is the policy of the Company that the presiding outside Director will chair executive sessions of the outside Directors, and that the chairs of the Audit, Management Development and Compensation and Nominating and Corporate Governance Committees of the Board shall each lead the discussions at meetings or executive sessions of the outside Directors when the principal item is within the scope of the authority of his or her committee.
14. Succession Planning. In addition to its other responsibilities, the Board also determines the policies and principles for selection of the CEO and the Chairman and for succession to these positions in the event of an emergency, retirement or departure. To assist the Board, the CEO annually provides the Board with an assessment of senior managers and of their potential to succeed him or her. He or she also provides the Board with an assessment of persons considered potential successors to certain senior management positions.
15. Responsibility for CEO Compensation and Evaluation. The Management Development and Compensation Committee is responsible for setting annual and long-term performance goals for the CEO and other named executive officers and for evaluating his or her performance against such goals. The Committee meets annually with the CEO to receive his or her recommendations concerning such goals. Both the goals and the evaluation are then submitted for consideration by the outside Directors of the Board at a meeting or executive session of that group. The Management Development and Compensation Committee then meets with the CEO to evaluate his or her performance against such goals.
16. Communications with Stakeholders. The CEO is responsible for establishing effective communications with the Companys stakeholder groups, i.e. , stockholders, customers, company associates, communities, suppliers, creditors, governments and corporate partners. It is the policy of the Company that management speaks for the Company. This policy does not preclude an outside Director from meeting with stockholders, provided that the Board has furnished its prior authorization of such meeting. However, it is suggested that any such meetings be held with management present.
17. Service on Other Boards. The Board recognizes that its members benefit from service on the boards of other companies and it encourages such service. However, the Board also believes it is critical that Directors have the opportunity to dedicate sufficient time to their service on the Companys Board. Directors should advise the Chairman and the Chair of the Nominating and Corporate Governance Committee in advance of accepting an invitation to serve on the board of directors (or similar body) of any other publicly traded company
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(including any committee thereof). Additionally, the CEO should advise the Chairman and the Chair of the Nominating and Corporate Governance Committee in advance of accepting membership on the board of directors (or other similar body) of any other publicly traded company.
18. Term Limits. Directors are nominated by the Board upon the recommendation of the Nominating and Corporate Governance Committee for election by the stockholders at each annual meeting and certain special meetings of the stockholders. The Board does not believe it should establish term limits for its Directors. While term limits could help ensure that there are new ideas and viewpoints available to the Board, they have the disadvantage of losing the contribution of Directors who have been able to develop, over a period of time, increasing insight into the Company and its operations and, therefore, are able to provide an increasing contribution to the Board as a whole. The Nominating and Corporate Governance Committee periodically reviews and makes recommendations to the Board regarding term limits.
19. Retirement Policy. The Board does not believe that age alone should determine whether an individual should serve as a Director and therefore does not believe that a mandatory retirement age for Directors is appropriate or necessary. The Nominating and Corporate Governance Committee periodically reviews and makes recommendations to the Board regarding the Companys retirement policy for Directors.
Functioning of the Board
1. Frequency and Agenda of Board Meetings. Board meetings are scheduled in advance and held not less than quarterly. The Board holds special meetings as required. Directors are expected to attend Board meetings, meetings of committees on which they serve and the Companys annual meeting of stockholders or any special meeting of stockholders. Agenda items for regularly scheduled Board meetings shall be reviewed with the presiding outside Director prior to the meeting with the understanding that the presiding outside Director can request changes to the agenda that are pertinent to the advisory and monitoring functions of the Board. Agenda items for regularly scheduled committee meetings are reviewed with the chair of that committee in advance of the meeting with the understanding that the applicable committee chair can request changes to the agenda that are pertinent to the advisory and monitoring functions of the applicable committee. Any member of the Board may request that an item be included on an agenda.
2. Board Meeting Materials. Board materials related to agenda items are provided to Directors sufficiently in advance of Board meetings where necessary to allow the Directors to prepare for discussion of the items at the meeting. Directors are expected to devote the time necessary to appropriately discharge their responsibilities and to rigorously prepare for and attend and participate in Board meetings and the meetings of the Board committees on which they serve.
3. Attendance at Board Meetings by Management. At the invitation of the Board, members of senior management recommended by the CEO attend Board meetings or portions thereof for the purpose of participating in discussions. In addition, Directors have free access to all other members of management and employees of the Company and, as necessary and appropriate, Directors may consult with independent legal, financial, accounting or other advisors to assist in their duties to the Company and its stockholders.
4. Executive Sessions of Independent Directors. Executive sessions or meetings of independent Directors are held at least in conjunction with each regularly scheduled Board meeting to discuss such matters as the independent Directors deem worthy of discussion. In addition to such executive sessions, the Board may also hold regular executive sessions of outside Directors without management present. The presiding outside Director shall serve as the presiding Director at such meetings and shall perform such other functions as the Board may direct, including serving in a liaison capacity between the Board as a whole and the senior management of the Company. If there is no presiding outside Director then designated or if the presiding outside Director is not available, the Board shall select another outside Director to serve as the presiding outside Director until such time as the presiding outside Director becomes available or is elected, as the case may be. Additional executive sessions or meetings of outside Directors may be held from time to time as required. Executive sessions or meetings are held from time to time with the CEO for a general discussion of relevant subjects.
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5. Board Self Evaluation. With the assistance and oversight of the Nominating and Corporate Governance Committee, the Board shall conduct an annual performance self-evaluation.
Functioning of Committees
1. Membership of Standing Committees. The Directors who are members of the Audit, Management Development and Compensation and Nominating and Corporate Governance Committees shall satisfy the independence requirements set forth in the New York Stock Exchanges Listing Standards, as amended from time to time, including any specific independence requirements for each committee.
2. Frequency and Agenda of Committee Meetings. Generally, the frequency, length and agenda of meetings of each of the committees are determined by the chair of such committee in consultation with the CEO. Materials related to agenda items are provided to the committee members sufficiently in advance of the meeting when possible to allow the members to prepare for discussion of the items at the meeting.
3. Committee Responsibilities. The responsibilities of each of the committees are determined by the Board from time to time and shall be set forth in charters for each such committee. Committee charters are to be reviewed and updated by the applicable committee and approved by the Board, in each case no less than annually.
4. Committee Self Evaluation. Each committee is responsible for preparing an annual performance self-evaluation.
Periodic Review
These principles are in addition to, and are not intended to change or interpret, any applicable requirements of the Securities and Exchange Commission, the New York Stock Exchange (or any other exchange or national securities market where the securities of the Company may be traded), any federal or state law or regulation, including the corporate laws of the State of Delaware, or the Companys Certificate of Incorporation or Bylaws or any committee charter approved by the Board. These principles are reviewed and subject to modification from time to time as the Board may deem appropriate or as may be required by applicable laws and regulations.
AS ADOPTED BY THE BOARD OF DIRECTORS OF
ENOVA INTERNATIONAL, INC.
On November 13, 2014
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