SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 1, 2017

 

 

Air T, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware   001-35476   52-1206400

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

5930 Balsom Ridge Road

Denver, North Carolina 28037

(Address of Principal Executive Offices)

(Zip Code)

(828) 464-8741

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

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

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

  Written communication 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-4c))

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

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 1.01 Entry into a Material Definitive Agreement

On November 3, 2017, a newly-formed, wholly-owned subsidiary of Air T, Inc. (the “Company”) entered into an agreement with Blue Clay Capital Management, LLC (“Blue Clay Capital”), an investment management firm based in Minneapolis, Minnesota, pursuant to which such subsidiary is to acquire the assets of, and assume certain liabilities of, Blue Clay Capital in return for payment to Blue Clay Capital of $1.00, subject to adjustment for Blue Clay Capital’s net working capital as of the closing date. Gary S. Kohler, a director of the Company, is the sole owner of Blue Clay Capital. In connection with such acquisition transaction, a subsidiary of the Company is to replace Blue Clay Capital as the managing general partner of certain investment funds currently managed by Blue Clay Capital, Mr. Kohler is to enter into an employment agreement with such subsidiary to serve as its Chief Investment Officer in return for an annual salary of $50,000 plus variable compensation based on the management and incentive fees to be paid to the subsidiary by certain of these investment funds and eligibility to participate in discretionary annual bonuses and David Woodis, President of Blue Clay Capital, is to enter into an employment agreement with such subsidiary to serve as its Chief Operating Officer and Chief Financial Officer in return for an annual salary of $125,000 plus revenue sharing and eligibility to participate in discretionary annual bonuses. Completion of these transactions is subject to certain conditions, including the consent of limited partners of these investment funds to the extent required by the agreements governing these funds. The Board of Directors of the Company has concluded that Mr. Kohler is no longer independent in light of the transactions contemplated in the Company’s pending acquisition of the assets of Blue Clay Capital. Blue Clay Capital generated a net operating loss of $54,000 for the twelve month ended September 30, 2017.

The above discussion is qualified in its entirety by reference to the Asset Purchase Agreement and related employment agreement for Mr. Kohler and Mr. Woodis, the forms of which are attached hereto as Exhibits 10.1, 10.2 and 10.3, which are incorporated herein by reference.

 

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

On November 1, 2017, the Board of Directors of the Company approved the amendment and restatement of the Company’s by-laws to establish fixed dates by which written notice of nominations for directors or proposed other business must be submitted by stockholders for consideration at the Company’s 2018 annual meeting of stockholders. The Company’s by-laws generally provide for advance notice procedures for stockholders to submit to the Company’s Secretary written notice of nominations for directors or proposed other business to be presented at an annual meeting of stockholders within a time period being not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting. In light of the delay in holding the Company’s 2017 annual meeting of stockholders (which is currently anticipated to be held on December 11, 2017), and the desire of the Board of Directors to hold the Company’s 2018 annual meeting of stockholders in mid-August (consistent with the timing of prior year annual meetings), the amendments to the by-laws provide that, notwithstanding the general provisions establishing the period during which written notice of nominations for directors or proposed other business must be submitted by stockholders, with respect to the Company’s 2018 annual meeting of stockholders such written notice must instead be so delivered not earlier than April 17, 2018 and not later than the close of business on May 17, 2018. The Company’s amended and restated by-laws are filed as Exhibits 3.1 and 3.2 hereto, with the version filed as Exhibit 3.2 being marked to show (by underlining) the amendments so approved by the Company’s Board of Directors.

 

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On November 1, 2017, in light of the anticipated timing of the Company’s 2017 and 2018 annual meetings of stockholders, the Company’s Board of Directors also adopted a resolution establishing March 19, 2018 as the date by which stockholders must submit to the Company’s Corporate Secretary proposals intended to be presented at the Company’s 2018 annual meeting of stockholders that are intended to be included in the Company’s proxy statement and on its proxy card in accordance with Rule 14a-8 of the Securities and Exchange Commission. Such proposals must satisfy the other requirements of such rule to be included in the Company’s proxy statement and on its proxy card for the 2018 annual meeting of stockholders.

 

Item 9.01 Financial Statements and Exhibits

 

Exhibit

  

Description

3.1    Amended and Restated By-Laws of Air T, Inc.
3.2    Amended and Restated By-Laws of Air T, Inc. (marked to show amendments effected on November 1, 2017)
10.1    Asset Purchase Agreement by and among Blue Clay Capital Management, LLC, Gary Kohler and BCCM, Inc. dated November 3, 2017.
10.2    Form of Employment Agreement between Gary Kohler and BCCM, Inc.
10.3    Form of Employment Agreement between David Woodis and BCCM, Inc.

 

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SIGNATURES

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

Date: November 6, 2017

 

AIR T, INC.
By:  

/s/ Candice L. Otey

 

Candice L. Otey, Vice President-Finance,

Chief Financial Officer,

Secretary and Treasurer

 

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Exhibit 3.1

AMENDED AND RESTATED

BY-LAWS

OF

AIR T, INC.

ARTICLE I

OFFICES

Section 1.    The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2.    The corporation may also have offices at such other places both within and 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 II

MEETINGS OF STOCKHOLDERS

Section 1.    Meetings of stockholders for any purpose shall be held at such time and place, within or without the State of Delaware, as shall be fixed by the board of directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.    Annual meetings of stockholders, commencing with the year 1983, shall be held on the twentieth day of June if not a legal holiday, and if a legal holiday, then on the next secular day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.    Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting.

Section 4.    The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten 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.


Section 5.    Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the president and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting.

Section 6.    Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 7.    Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 8.    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 except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, 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.

Section 9.    When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question.

Section 10.    Unless otherwise provided in the certificate of incorporation each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period.

Section 11.    Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken

 

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without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

DIRECTOR NOMINATIONS AND OTHER STOCKHOLDER BUSINESS

Section 12.    (a) Advance Notice of Nominations of Directors . Only persons who are nominated in accordance with the provisions set forth in these by-laws shall be eligible to be elected as directors at an annual or special meeting of stockholders. Nomination for election to the board of directors may be made by the board of directors or a nominating committee appointed by the board of directors. Nomination at an annual meeting of stockholders for election of any person to the board of directors may be made by a stockholder only if such stockholder is a stockholder of record entitled to vote at the meeting and written notice of the intended nomination of such person shall have been delivered by such stockholder to the secretary of the corporation at the principal office of the corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, such written notice must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made and, provided, further, that with respect to the 2018 annual meeting of stockholders of the corporation such written notice must instead be so delivered not earlier than April 17, 2018 and not later than the close of business on May 17, 2018. At a special meeting of stockholders called for the purpose of electing one or more directors, the nomination for election of any person to the board of directors may be made by a stockholder only if such stockholder is a stockholder of record entitled to vote at the meeting and written notice of the intended nomination of such person shall have been delivered by such stockholder to the secretary of the corporation at the principal office of the corporation not less than the tenth day following the day on which public announcement of the date of such meeting is first made. Each such notice for an annual or special meeting shall set forth: (a) the name and address of the stockholder who intends to make the nomination, the beneficial owner, if any, on whose behalf the nomination is to be made and of the person or persons to be nominated; (b) (i) the class and number of shares of stock of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (ii) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the corporation or with a value derived in whole or in part from the value of any class or series of shares of the corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such stockholder or such beneficial owner and any other direct or indirect opportunity of such stockholder or such beneficial owner to profit or share in any profit derived

 

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from any increase or decrease in the value of shares of the corporation, (iii) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or such beneficial owner has a right to vote any shares of any security of the corporation, (iv) any short interest in any security of the corporation directly or indirectly owned beneficially by such stockholder or such beneficial owner (for purposes of this Section 12 a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (v) any rights to dividends on the shares of the corporation owned beneficially by such stockholder or such beneficial owner that are separated or separable from the underlying shares of the corporation, (vi) any proportionate interest in shares of the corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or such beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in such a general partner and (vii) any performance-related fees (other than an asset-based fee) that such stockholder or such beneficial owner is entitled to based on any increase or decrease in the value of shares of the corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholder’s or such beneficial owner’s immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date), and (c) a representation that the stockholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (d) a description of all arrangements or understandings among the stockholder or such beneficial owner and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (e) all other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission if the nominee had been nominated by the board of directors; and (f) the written consent of each nominee to serve as director of the corporation if so elected. If the chairman of the meeting determines that the nomination of any person was not brought before the meeting in a manner prescribed by these by-laws, the chairman of the meeting shall so declare to the meeting and all votes cast for each such person shall be disregarded.

(b) Advance Notice of Other Matters . No other business shall be transacted at an annual meeting of stockholders, except such matters as shall be (a) specified in the notice of meeting given as provided in Section 6 of Article II of these by-laws, (b) otherwise brought before the meeting by or at the direction of the board of directors, or (c) otherwise brought before the meeting by a stockholder of record entitled to vote at the meeting, in compliance with the procedure set forth in this Section 12. For business to be brought before an annual meeting by a stockholder pursuant to clause (c) above, the stockholder must have given timely notice in writing to the secretary of the corporation. To be timely, a stockholder’s written notice must be delivered to the secretary of the corporation at the principal executive office of the corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such

 

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anniversary date, such written notice must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made and, provided, further, that with respect to the 2018 annual meeting of stockholders of the corporation such written notice must instead be so delivered not earlier than April 17, 2018 and not later than the close of business on May 17, 2018. Each such written notice shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) the name and address of the stockholder who proposes to bring the matter before the annual meeting and the beneficial owner, if any, on whose behalf such proposal is to be made; (i) (A) the class and number of shares of stock of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (B) any Derivative Instrument directly or indirectly owned beneficially by such stockholder or such beneficial owner and any other direct or indirect opportunity of such stockholder or such beneficial owner to profit or share in any profit derived from any increase or decrease in the value of shares of the corporation, (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or such beneficial owner has a right to vote any shares of any security of the corporation, (D) any short interest in any security of the corporation directly or indirectly owned beneficially by such stockholder or such beneficial owner, (E) any rights to dividends on the shares of the corporation owned beneficially by such stockholder or such beneficial owner that are separated or separable from the underlying shares of the corporation, (F) any proportionate interest in shares of the corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or such beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in such a general partner and (G) any performance-related fees (other than an asset-based fee) that such stockholder or such beneficial owner is entitled to based on any increase or decrease in the value of shares of the corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholder’s or such beneficial owner’s immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date), (iii) a representation that the stockholder intends to appear in person or by proxy at the meeting to bring the matter before the meeting; (iv) a description of all arrangements or understandings between the stockholder or such beneficial owner and any other person or persons (naming such person or persons) pursuant to which the matter is brought before the annual meeting; (v) a brief description of the matter desired to be brought before the annual meeting and the reasons for bringing such matter before the annual meeting, and (vi) any material interest of such stockholder or such beneficial owner in such matter other than an interest as a stockholder or beneficial owner of shares of capital stock of the corporation. Notwithstanding anything in these by-laws to the contrary, no business shall be brought before an annual meeting except in accordance with the provisions set forth in this Section 12. If the chairman of the annual meeting determines that any business was not properly brought before the meeting in the manner prescribed by these by-laws, the chairman of the meeting shall so declare to the meeting, and to the extent permitted by law, any such business not properly brought before the meeting shall not be transacted.

 

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(c) General . For purposes of this Section 12, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

Notwithstanding the foregoing provisions of this Section 12, a stockholder shall also comply with all applicable requirements of state law and of the Securities Exchange Act of 1934 and the rules and regulations thereunder with respect to the matters set forth in this Section 12. This Section 12 shall be deemed to affect any rights of stockholders to request inclusion of proposed matters for stockholder action at a meeting in the corporation’s proxy statement for such meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, however, stockholders must comply with this Section 12 to properly bring before the meeting the proposed matters.

(d) Conduct of Meeting . At each meeting of stockholders the chairman of the board of directors, or in his or her absence the president, or in their absence, the person designated in writing by the chairman of the board of directors, or if no person is so designated, then a person designated by the board of directors, shall preside as chairman of the meeting; if no person is so designated, then the meeting shall choose a chairman by a majority of all votes cast at a meeting at which a quorum is present. The chairman of the meeting shall have the right and authority to determine and maintain the rules, regulations and procedures for the proper conduct of the meeting, including but not limited to restricting entry to the meeting after it has commenced, maintaining order and the safety of those in attendance, opening and closing the polls for voting, dismissing business not properly submitted, and limiting time allowed for discussion of the business of the meeting. The secretary, or in the absence of the secretary, a person designated by the chairman of the meeting, shall act as secretary of the meeting.

ARTICLE III

DIRECTORS

Section 1.    The number of directors which shall constitute the whole board shall be not less than one nor more than ten. The first board shall consist of one director. Thereafter, within the limits above specified, the number of directors shall be determined by resolution of the board of directors or by the stockholders at the annual meeting. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders.

Section 2.    Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board

 

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(as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship or to replace the directors chosen by the directors then in office.

Section 3.    The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 4.    The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

Section 5.    The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 6.    Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 7. Special meetings of the board may be called by the president on two days’ notice to each director, either personally or by mail or by telegram; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 8.    At all meetings of the board a majority of the 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 statute 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.

 

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Section 9.    Unless otherwise restricted by the certificate of incorporation or these by-

laws, 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 or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 10.    Unless otherwise restricted by the certificate of incorporation or these by-laws, 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.

COMMITTEES OF DIRECTORS

Section 11.    The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, adopting an agreement of merge or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation’s property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the by-laws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. 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.

Section 12.    Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 13.    Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

 

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REMOVAL OF DIRECTORS

Section 14.    Unless otherwise restricted by the certificate of incorporation or by law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors.

CHAIRMAN OF THE BOARD

Section 15.    The board of directors shall designate from its membership a chairman of the board of directors, who shall have such powers and perform such duties as may be prescribed by these by-laws and assigned to him or her by the board of directors.

ARTICLE IV

NOTICES

Section 1.    Whenever, under the provisions of the statutes or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram.

Section 2.    Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

OFFICERS

Section 1.    The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer. The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide.

Section 2.    The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.    The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.

 

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Section 4.    The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.    The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors.

THE PRESIDENT

Section 6.    The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.

Section 7.    He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.    In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.    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 when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be. He shall have custody of the corporate seal of the corporation and he, 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 his 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 signature.

 

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Section 10.    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 his 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.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.    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.

Section 12.    He 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 president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.    If required by the board of directors, he shall give the corporation a bond (which shall be renewed every six years) 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 office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

Section 14.    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 his 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 VI

CERTIFICATE OF STOCK

Section 1.    Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation, certifying the number of shares owned by him in the corporation.

Section 2.    Any of or all the signatures on the certificate may be 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 he were such officer, transfer agent or registrar at the date of issue.

 

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LOST CERTIFICATES

Section 3.    The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in, its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.    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, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitle thereto, cancel the old certificate and record the transaction upon its books.

FIXING RECORD DATE

Section 5.    (a) 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, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than 60 nor less than ten days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.

(b) For the purpose of determining the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than ten (or the maximum number permitted by applicable law) days after the date on which the resolution fixing the record date is adopted by the board of directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent pursuant to Article II, Section 11 of these

 

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by-laws shall, by written notice to the Secretary, request that the board of directors fix a record date, which notice shall include the text of any proposed resolutions. If no record date has been fixed by the board of directors pursuant to this Section 5(b) or otherwise within ten days of receipt of a valid request by a stockholder, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required pursuant to applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation pursuant to Article II, Section 11 of these by-laws; provided, however, that if prior action by the board of directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall in such an event be at the close of business on the day on which the board of directors adopts the resolution taking such prior action.

(c) In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

REGISTERED STOCKHOLDERS

Section 6.    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 owner 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 VII

GENERAL PROVISIONS

DIVIDENDS

Section 1.    Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Section 2.    Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for

 

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equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ANNUAL STATEMENT

Section 3.    The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

CHECKS

Section 4.    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.

FISCAL YEAR

Section 5.    The fiscal year of the corporation shall be fixed by resolution of the board of directors.

SEAL

Section 6.    The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE VIII

INDEMNIFICATION

Section 1.    Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director, officer, or employee of the corporation or is or was serving at the request of the corporation as a director, officer, manager or employee of a subsidiary or other affiliate of the corporation or of another corporation, association, limited liability company, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, manager, employee or agent or in any other capacity while serving as a director, officer, manager, or employee or agent, shall be vested with the contractual right to indemnification and be held harmless by the corporation to the fullest extent authorized by the Delaware General Corporation Law , as the same exists or may hereafter be amended (the “DGCL”), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith if the indemnitee acted in good faith and in a manner

 

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the indemnitee reasonably believed to be in or not opposed to the best interest of the corporation or other entity covered by this Article VIII, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that such indemnitee’s conduct was unlawful; provided, however, that, the corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the board of directors of the corporation.

Section 2.    The right to indemnification conferred in this Article shall include the right to be paid by the corporation the expenses incurred in defending any proceeding for which such right to indemnification is applicable in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that an advancement of expenses incurred by an indemnitee shall be made only upon delivery to the corporation of an undertaking (hereinafter an “Undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise.

Section 3.    The rights to indemnification and to the advancement of expenses conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the corporation’s certificate of incorporation, by-laws, agreement, vote of stockholders or disinterested directors or otherwise.

Section 4.    The corporation may maintain insurance, at its expense, to protect itself and any director, officer, or employee of the corporation or any person serving at the request of the corporation as a director, officer, manager, employee or agent of another corporation, association, limited liability company, partnership, joint venture, trust or other enterprise, against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Section 5.    The corporation may, to the extent authorized from time to time by the board of directors, grant rights to indemnification, and to the advancement of expenses to any agent of the corporation to the fullest extent of the provisions of this Article VIII with respect to the indemnification and advancement of expenses of directors, officers and employees of the Corporation.

Section 6.    The rights to indemnification and to the advancement of expenses conferred in this Article VIII are contract rights. Such rights to indemnification and to advancement of expenses shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any repeal or modification of the provisions of this Article shall not adversely affect any right or protection hereunder of any person in respect of any act, omissions, facts or circumstances occurring prior to the time of such repeal or modification.

 

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ARTICLE IX

AMENDMENTS

Section 1.    These by-laws may be altered, amended or repealed or new by-laws may be adopted by the stockholders or by the board of directors, when such power is conferred upon the board of directors by the certificate of incorporation at any regular meeting of the stockholders or of the board of directors or at any special meeting of the stockholders or of the board of directors if notice of such alteration, amendment, repeal or adoption of new by-laws be contained in the notice of such special meeting. If the power to adopt, amend or repeal by-laws is conferred upon the board of directors by the certificate of incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal by-laws.

ARTICLE X

EMERGENCY PROVISIONS

Section 1.    The provisions of this Article X shall be operative only during a national emergency declared by the President of the United States or the person performing the President’s functions, or in the event of a nuclear, atomic or other attack on the United States or on a locality in which the corporation conducts its principal business or customarily holds meetings of its board of directors or its stockholders, or during the existence of any other catastrophic event or similar emergency, as a result of which a quorum of the board of directors cannot readily be assembled for action. Said provisions in such event shall override all other by-laws of the corporation in conflict with any provisions of this Article X and shall remain operative during such emergency, but thereafter shall be inoperative; provided, that, all actions taken in good faith pursuant to such provisions shall thereafter remain in full force and effect unless and until revoked by action taken pursuant to the provisions of the by-laws other than those contained in this Article X.

Section 2.    All directors who are not available to perform their duties as directors by reason of physical or mental incapacity or for any other reason or who are unwilling to perform their duties or whose whereabouts are unknown shall automatically cease to be directors, with like effect as if such persons had resigned as directors, so long as such unavailability continues.

Section 3.    The authorized number of directors shall be the number of directors remaining after eliminating those who have ceased to be directors pursuant to Section 2 of this Article, or the minimum number required by applicable law, whichever number is greater.

Section 4.    The number of directors necessary to constitute a quorum shall be one-third of the authorized number of directors as specified in Section 3 of this Article, or such other minimum number as, pursuant to the law or lawful decree then in force, it is possible for the by-laws of a corporation to specify.

Section 5.    In the event the number of directors remaining after eliminating those who have ceased to be directors pursuant to Section 2 of this Article is less than the minimum number of authorized directors required by law, then until the appointment of additional directors to make up such required minimum, all the powers and authorities which the board of directors

 

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could by law delegate, including all powers and authorities which the board of directors could delegate to a committee, shall be automatically vested in an emergency committee, and the emergency committee shall thereafter manage the affairs of the corporation pursuant to such powers and authorities and shall have all other powers and authorities as may by law or lawful decree be conferred on any person or body of persons during a period of emergency.

Section 6.    The emergency committee shall consist of all the directors remaining after eliminating those who have ceased to be directors pursuant to Section 2 of this Article, provided that such remaining directors are not less than three in number. In the event such remaining directors are less than three in number, the emergency committee shall consist of three persons, who shall be the remaining director or directors and either one or two officers or employees of the corporation, as the remaining director or directors may in writing designate. If there is no remaining director, the emergency committee shall consist of the three most senior officers of the corporation who are available to serve, and if and to the extent that officers are not available, the most senior employees of the corporation. Seniority shall be determined in accordance with any designation of seniority in the minutes of the proceedings of the board of directors, and in the absence of such designation, shall be determined by rate of remuneration.

Section 7.    The emergency committee, once appointed, shall govern its own procedures and shall have power to increase the number of members thereof beyond the original number, and in the event of a vacancy or vacancies therein, arising at any time, the remaining member or members of the emergency committee shall have the power to fill such vacancy or vacancies. In the event at any time after its appointment all members of the emergency committee shall die or resign or become unavailable to act for any reason whatsoever, a new emergency committee shall be appointed in accordance with the foregoing provisions of this Article X.

Section 8.    Any person who has ceased to be a director pursuant to the provisions of Section 2 of this Article, and who thereafter becomes available to serve as a director, shall automatically be a member of the emergency committee at the time such person becomes available to serve as a director.

Section 9.    The emergency committee shall, as soon after its appointment as is practicable, take all requisite action to secure the election of directors, and upon such election all the powers and authorities of the emergency committee shall cease.

Section 10.    In the event, after the appointment of an emergency committee, a sufficient number of persons who ceased to be directors pursuant to Section 2 of this Article become available to serve as directors, so that if they had not ceased to be directors as aforesaid, there would be sufficient directors to constitute the minimum number of directors required by law, then all such persons shall automatically be deemed to be reappointed as directors and the powers and authorities of the emergency committee shall terminate.

Section 11.    The emergency powers provided in this Article X shall be in addition to any powers provided by applicable law.

 

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Exhibit 3.2

AMENDED AND RESTATED

BY-LAWS

OF

AIR T, INC.

ARTICLE I

OFFICES

Section 1. The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The corporation may also have offices at such other places both within and 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 II

MEETINGS OF STOCKHOLDERS

Section 1.    Meetings of stockholders for any purpose shall be held at such time and place, within or without the State of Delaware, as shall be fixed by the board of directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.    Annual meetings of stockholders, commencing with the year 1983, shall be held on the twentieth day of June if not a legal holiday, and if a legal holiday, then on the next secular day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.    Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting.

Section 4.    The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten 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.


Section 5.    Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the president and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting.

Section 6.    Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 7.    Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 8.    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 except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, 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.

Section 9.    When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question.

Section 10.    Unless otherwise provided in the certificate of incorporation each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period.

Section 11.    Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken

 

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without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

DIRECTOR NOMINATIONS AND OTHER STOCKHOLDER BUSINESS

Section 12.    (a) Advance Notice of Nominations of Directors . Only persons who are nominated in accordance with the provisions set forth in these by-laws shall be eligible to be elected as directors at an annual or special meeting of stockholders. Nomination for election to the board of directors may be made by the board of directors or a nominating committee appointed by the board of directors. Nomination at an annual meeting of stockholders for election of any person to the board of directors may be made by a stockholder only if such stockholder is a stockholder of record entitled to vote at the meeting and written notice of the intended nomination of such person shall have been delivered by such stockholder to the secretary of the corporation at the principal office of the corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, such written notice must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made and, provided, further, that with respect to the 2018 annual meeting of stockholders of the corporation such written notice must instead be so delivered not earlier than April  17, 2018 and not later than the close of business on May  17, 2018 . At a special meeting of stockholders called for the purpose of electing one or more directors, the nomination for election of any person to the board of directors may be made by a stockholder only if such stockholder is a stockholder of record entitled to vote at the meeting and written notice of the intended nomination of such person shall have been delivered by such stockholder to the secretary of the corporation at the principal office of the corporation not less than the tenth day following the day on which public announcement of the date of such meeting is first made. Each such notice for an annual or special meeting shall set forth: (a) the name and address of the stockholder who intends to make the nomination, the beneficial owner, if any, on whose behalf the nomination is to be made and of the person or persons to be nominated; (b) (i) the class and number of shares of stock of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (ii) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the corporation or with a value derived in whole or in part from the value of any class or series of shares of the corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such stockholder or such beneficial owner and any other direct or indirect opportunity of such stockholder or such beneficial owner to profit or share in any profit derived

 

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from any increase or decrease in the value of shares of the corporation, (iii) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or such beneficial owner has a right to vote any shares of any security of the corporation, (iv) any short interest in any security of the corporation directly or indirectly owned beneficially by such stockholder or such beneficial owner (for purposes of this Section 12 a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (v) any rights to dividends on the shares of the corporation owned beneficially by such stockholder or such beneficial owner that are separated or separable from the underlying shares of the corporation, (vi) any proportionate interest in shares of the corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or such beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in such a general partner and (vii) any performance-related fees (other than an asset-based fee) that such stockholder or such beneficial owner is entitled to based on any increase or decrease in the value of shares of the corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholder’s or such beneficial owner’s immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date), and (c) a representation that the stockholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (d) a description of all arrangements or understandings among the stockholder or such beneficial owner and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (e) all other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission if the nominee had been nominated by the board of directors; and (f) the written consent of each nominee to serve as director of the corporation if so elected. If the chairman of the meeting determines that the nomination of any person was not brought before the meeting in a manner prescribed by these by-laws, the chairman of the meeting shall so declare to the meeting and all votes cast for each such person shall be disregarded.

(b) Advance Notice of Other Matters . No other business shall be transacted at an annual meeting of stockholders, except such matters as shall be (a) specified in the notice of meeting given as provided in Section 6 of Article II of these by-laws, (b) otherwise brought before the meeting by or at the direction of the board of directors, or (c) otherwise brought before the meeting by a stockholder of record entitled to vote at the meeting, in compliance with the procedure set forth in this Section 12. For business to be brought before an annual meeting by a stockholder pursuant to clause (c) above, the stockholder must have given timely notice in writing to the secretary of the corporation. To be timely, a stockholder’s written notice must be delivered to the secretary of the corporation at the principal executive office of the corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such

 

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anniversary date, such written notice must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made and, provided, further, that with respect to the 2018 annual meeting of stockholders of the corporation such written notice must instead be so delivered not earlier than April  17, 2018 and not later than the close of business on May  17, 2018 . Each such written notice shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) the name and address of the stockholder who proposes to bring the matter before the annual meeting and the beneficial owner, if any, on whose behalf such proposal is to be made; (i) (A) the class and number of shares of stock of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (B) any Derivative Instrument directly or indirectly owned beneficially by such stockholder or such beneficial owner and any other direct or indirect opportunity of such stockholder or such beneficial owner to profit or share in any profit derived from any increase or decrease in the value of shares of the corporation, (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or such beneficial owner has a right to vote any shares of any security of the corporation, (D) any short interest in any security of the corporation directly or indirectly owned beneficially by such stockholder or such beneficial owner, (E) any rights to dividends on the shares of the corporation owned beneficially by such stockholder or such beneficial owner that are separated or separable from the underlying shares of the corporation, (F) any proportionate interest in shares of the corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or such beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in such a general partner and (G) any performance-related fees (other than an asset-based fee) that such stockholder or such beneficial owner is entitled to based on any increase or decrease in the value of shares of the corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholder’s or such beneficial owner’s immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date), (iii) a representation that the stockholder intends to appear in person or by proxy at the meeting to bring the matter before the meeting; (iv) a description of all arrangements or understandings between the stockholder or such beneficial owner and any other person or persons (naming such person or persons) pursuant to which the matter is brought before the annual meeting; (v) a brief description of the matter desired to be brought before the annual meeting and the reasons for bringing such matter before the annual meeting, and (vi) any material interest of such stockholder or such beneficial owner in such matter other than an interest as a stockholder or beneficial owner of shares of capital stock of the corporation. Notwithstanding anything in these by-laws to the contrary, no business shall be brought before an annual meeting except in accordance with the provisions set forth in this Section 12. If the chairman of the annual meeting determines that any business was not properly brought before the meeting in the manner prescribed by these by-laws, the chairman of the meeting shall so declare to the meeting, and to the extent permitted by law, any such business not properly brought before the meeting shall not be transacted.

 

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(c) General . For purposes of this Section 12, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

Notwithstanding the foregoing provisions of this Section 12, a stockholder shall also comply with all applicable requirements of state law and of the Securities Exchange Act of 1934 and the rules and regulations thereunder with respect to the matters set forth in this Section 12. This Section 12 shall be deemed to affect any rights of stockholders to request inclusion of proposed matters for stockholder action at a meeting in the corporation’s proxy statement for such meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, however, stockholders must comply with this Section 12 to properly bring before the meeting the proposed matters.

(d) Conduct of Meeting . At each meeting of stockholders the chairman of the board of directors, or in his or her absence the president, or in their absence, the person designated in writing by the chairman of the board of directors, or if no person is so designated, then a person designated by the board of directors, shall preside as chairman of the meeting; if no person is so designated, then the meeting shall choose a chairman by a majority of all votes cast at a meeting at which a quorum is present. The chairman of the meeting shall have the right and authority to determine and maintain the rules, regulations and procedures for the proper conduct of the meeting, including but not limited to restricting entry to the meeting after it has commenced, maintaining order and the safety of those in attendance, opening and closing the polls for voting, dismissing business not properly submitted, and limiting time allowed for discussion of the business of the meeting. The secretary, or in the absence of the secretary, a person designated by the chairman of the meeting, shall act as secretary of the meeting.

ARTICLE III

DIRECTORS

Section 1.    The number of directors which shall constitute the whole board shall be not less than one nor more than ten. The first board shall consist of one director. Thereafter, within the limits above specified, the number of directors shall be determined by resolution of the board of directors or by the stockholders at the annual meeting. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders.

Section 2.    Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board

 

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(as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship or to replace the directors chosen by the directors then in office.

Section 3.    The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 4.    The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

Section 5.    The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 6.    Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 7.    Special meetings of the board may be called by the president on two days’ notice to each director, either personally or by mail or by telegram; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 8.    At all meetings of the board a majority of the 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 statute 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.

 

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Section 9.    Unless otherwise restricted by the certificate of incorporation or these by-laws, 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 or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 10.    Unless otherwise restricted by the certificate of incorporation or these by-laws, 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.

COMMITTEES OF DIRECTORS

Section 11.    The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, adopting an agreement of merge or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation’s property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the by-laws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. 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.

Section 12.    Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 13. Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

 

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REMOVAL OF DIRECTORS

Section 14.    Unless otherwise restricted by the certificate of incorporation or by law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors.

CHAIRMAN OF THE BOARD

Section 15.    The board of directors shall designate from its membership a chairman of the board of directors, who shall have such powers and perform such duties as may be prescribed by these by-laws and assigned to him or her by the board of directors.

ARTICLE IV

NOTICES

Section 1.    Whenever, under the provisions of the statutes or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram.

Section 2.    Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

OFFICERS

Section 1.    The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer. The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide.

Section 2.    The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.    The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.

 

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Section 4.    The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.    The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors.

THE PRESIDENT

Section 6.    The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.

Section 7.    He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.    In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.    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 when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be. He shall have custody of the corporate seal of the corporation and he, 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 his 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 signature.

 

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Section 10.    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 his 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.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.    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.

Section 12.    He 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 president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.    If required by the board of directors, he shall give the corporation a bond (which shall be renewed every six years) 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 office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

Section 14.    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 his 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 VI

CERTIFICATE OF STOCK

Section 1.    Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation, certifying the number of shares owned by him in the corporation.

Section 2.    Any of or all the signatures on the certificate may be 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 he were such officer, transfer agent or registrar at the date of issue.

 

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LOST CERTIFICATES

Section 3.    The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in, its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.    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, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitle thereto, cancel the old certificate and record the transaction upon its books.

FIXING RECORD DATE

Section 5.    (a) 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, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than 60 nor less than ten days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.

(b) For the purpose of determining the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than ten (or the maximum number permitted by applicable law) days after the date on which the resolution fixing the record date is adopted by the board of directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent pursuant to Article II, Section 11 of these

 

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by-laws shall, by written notice to the Secretary, request that the board of directors fix a record date, which notice shall include the text of any proposed resolutions. If no record date has been fixed by the board of directors pursuant to this Section 5(b) or otherwise within ten days of receipt of a valid request by a stockholder, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required pursuant to applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation pursuant to Article II, Section 11 of these by-laws; provided, however, that if prior action by the board of directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall in such an event be at the close of business on the day on which the board of directors adopts the resolution taking such prior action.

(c) In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

REGISTERED STOCKHOLDERS

Section 6.    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 owner 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 VII

GENERAL PROVISIONS

DIVIDENDS

Section 1.    Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Section 2.    Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for

 

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equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ANNUAL STATEMENT

Section 3.    The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

CHECKS

Section 4.    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.

FISCAL YEAR

Section 5.    The fiscal year of the corporation shall be fixed by resolution of the board of directors.

SEAL

Section 6.    The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE VIII

INDEMNIFICATION

Section 1.    Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director, officer, or employee of the corporation or is or was serving at the request of the corporation as a director, officer, manager or employee of a subsidiary or other affiliate of the corporation or of another corporation, association, limited liability company, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, manager, employee or agent or in any other capacity while serving as a director, officer, manager, or employee or agent, shall be vested with the contractual right to indemnification and be held harmless by the corporation to the fullest extent authorized by the Delaware General Corporation Law , as the same exists or may hereafter be amended (the “DGCL”), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith if the indemnitee acted in good faith and in a manner

 

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the indemnitee reasonably believed to be in or not opposed to the best interest of the corporation or other entity covered by this Article VIII, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that such indemnitee’s conduct was unlawful; provided, however, that, the corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the board of directors of the corporation.

Section 2.    The right to indemnification conferred in this Article shall include the right to be paid by the corporation the expenses incurred in defending any proceeding for which such right to indemnification is applicable in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that an advancement of expenses incurred by an indemnitee shall be made only upon delivery to the corporation of an undertaking (hereinafter an “Undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise.

Section 3.    The rights to indemnification and to the advancement of expenses conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the corporation’s certificate of incorporation, by-laws, agreement, vote of stockholders or disinterested directors or otherwise.

Section 4.    The corporation may maintain insurance, at its expense, to protect itself and any director, officer, or employee of the corporation or any person serving at the request of the corporation as a director, officer, manager, employee or agent of another corporation, association, limited liability company, partnership, joint venture, trust or other enterprise, against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Section 5.    The corporation may, to the extent authorized from time to time by the board of directors, grant rights to indemnification, and to the advancement of expenses to any agent of the corporation to the fullest extent of the provisions of this Article VIII with respect to the indemnification and advancement of expenses of directors, officers and employees of the Corporation.

Section 6.    The rights to indemnification and to the advancement of expenses conferred in this Article VIII are contract rights. Such rights to indemnification and to advancement of expenses shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any repeal or modification of the provisions of this Article shall not adversely affect any right or protection hereunder of any person in respect of any act, omissions, facts or circumstances occurring prior to the time of such repeal or modification.

 

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ARTICLE IX

AMENDMENTS

Section 1.    These by-laws may be altered, amended or repealed or new by-laws may be adopted by the stockholders or by the board of directors, when such power is conferred upon the board of directors by the certificate of incorporation at any regular meeting of the stockholders or of the board of directors or at any special meeting of the stockholders or of the board of directors if notice of such alteration, amendment, repeal or adoption of new by-laws be contained in the notice of such special meeting. If the power to adopt, amend or repeal by-laws is conferred upon the board of directors by the certificate of incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal by-laws.

ARTICLE X

EMERGENCY PROVISIONS

Section 1.    The provisions of this Article X shall be operative only during a national emergency declared by the President of the United States or the person performing the President’s functions, or in the event of a nuclear, atomic or other attack on the United States or on a locality in which the corporation conducts its principal business or customarily holds meetings of its board of directors or its stockholders, or during the existence of any other catastrophic event or similar emergency, as a result of which a quorum of the board of directors cannot readily be assembled for action. Said provisions in such event shall override all other by-laws of the corporation in conflict with any provisions of this Article X and shall remain operative during such emergency, but thereafter shall be inoperative; provided, that, all actions taken in good faith pursuant to such provisions shall thereafter remain in full force and effect unless and until revoked by action taken pursuant to the provisions of the by-laws other than those contained in this Article X.

Section 2.    All directors who are not available to perform their duties as directors by reason of physical or mental incapacity or for any other reason or who are unwilling to perform their duties or whose whereabouts are unknown shall automatically cease to be directors, with like effect as if such persons had resigned as directors, so long as such unavailability continues.

Section 3.    The authorized number of directors shall be the number of directors remaining after eliminating those who have ceased to be directors pursuant to Section 2 of this Article, or the minimum number required by applicable law, whichever number is greater.

Section 4.    The number of directors necessary to constitute a quorum shall be one-third of the authorized number of directors as specified in Section 3 of this Article, or such other minimum number as, pursuant to the law or lawful decree then in force, it is possible for the by-laws of a corporation to specify.

Section 5.    In the event the number of directors remaining after eliminating those who have ceased to be directors pursuant to Section 2 of this Article is less than the minimum number of authorized directors required by law, then until the appointment of additional directors to make up such required minimum, all the powers and authorities which the board of directors

 

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could by law delegate, including all powers and authorities which the board of directors could delegate to a committee, shall be automatically vested in an emergency committee, and the emergency committee shall thereafter manage the affairs of the corporation pursuant to such powers and authorities and shall have all other powers and authorities as may by law or lawful decree be conferred on any person or body of persons during a period of emergency.

Section 6.    The emergency committee shall consist of all the directors remaining after eliminating those who have ceased to be directors pursuant to Section 2 of this Article, provided that such remaining directors are not less than three in number. In the event such remaining directors are less than three in number, the emergency committee shall consist of three persons, who shall be the remaining director or directors and either one or two officers or employees of the corporation, as the remaining director or directors may in writing designate. If there is no remaining director, the emergency committee shall consist of the three most senior officers of the corporation who are available to serve, and if and to the extent that officers are not available, the most senior employees of the corporation. Seniority shall be determined in accordance with any designation of seniority in the minutes of the proceedings of the board of directors, and in the absence of such designation, shall be determined by rate of remuneration.

Section 7.    The emergency committee, once appointed, shall govern its own procedures and shall have power to increase the number of members thereof beyond the original number, and in the event of a vacancy or vacancies therein, arising at any time, the remaining member or members of the emergency committee shall have the power to fill such vacancy or vacancies. In the event at any time after its appointment all members of the emergency committee shall die or resign or become unavailable to act for any reason whatsoever, a new emergency committee shall be appointed in accordance with the foregoing provisions of this Article X.

Section 8.    Any person who has ceased to be a director pursuant to the provisions of Section 2 of this Article, and who thereafter becomes available to serve as a director, shall automatically be a member of the emergency committee at the time such person becomes available to serve as a director.

Section 9.    The emergency committee shall, as soon after its appointment as is practicable, take all requisite action to secure the election of directors, and upon such election all the powers and authorities of the emergency committee shall cease.

Section 10.    In the event, after the appointment of an emergency committee, a sufficient number of persons who ceased to be directors pursuant to Section 2 of this Article become available to serve as directors, so that if they had not ceased to be directors as aforesaid, there would be sufficient directors to constitute the minimum number of directors required by law, then all such persons shall automatically be deemed to be reappointed as directors and the powers and authorities of the emergency committee shall terminate.

Section 11.    The emergency powers provided in this Article X shall be in addition to any powers provided by applicable law.

 

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Exhibit 10.1

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (“ Agreement ”) is entered into effective this 3rd day of November, 2017, by and among BLUE CLAY CAPITAL MANAGEMENT, LLC, a Delaware limited liability company (“BCCM” or “Seller”), Gary Kohler (“Kohler”), and BCCM, Inc., a Delaware corporation (“ Purchaser ”).

WHEREAS , Seller is engaged in the business of asset management and related investment services. The Seller is the owner of certain assets, including, but not limited to office equipment, computers, software, furniture, intellectual property, contract rights, customer relationships, residual operating cash, leasehold rights, fixtures and miscellaneous other assets used in connection with the operation of its business (collectively the “ Business ”) and Kohler is the owner of 100% of the membership interests and sole member of BCCM.

WHEREAS , the Purchaser desires to purchase, and the Seller desires to sell, substantially all of the assets that are used or useful, or intended to be used, in the operation of the Seller’s Business as referenced in Section 1 of this Agreement.

WHEREAS , the parties hereto wish to make certain representations, covenants, and agreements in connection with the purchase of Seller’s assets, and also to prescribe various conditions to such transaction.

NOW THEREFORE , in consideration of the foregoing and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

S ECTION  1 .      A SSETS P URCHASED . The Seller agrees to sell, transfer, and assign to the Purchaser pursuant to the terms and conditions in this Agreement, all of the Seller’s assets related to its Business as a going concern whether or not carried on the books of Seller, including, but not limited to, the following (collectively referred to as the “ Assets ”):

a.    Any and all transferable rights and interest Seller has or may have in the Business telephone and facsimile numbers, domain names/URLs/worldwide websites, patents, copyrights, patent/copyright applications, other tangible and intangible intellectual property, trade names and logos, and any derivations thereof (“Blue Clay Capital Management,” “Blue Clay Fund” and derivations thereof), including any applicable trade or service marks or registered names used, maintained or registered to Seller. At closing, Seller shall assign to Buyer all transferable right, title and interest Seller may have in the right to do business in such current trade names and take necessary action reasonably requested by Purchaser to ensure the Purchaser’s transfer and use of said intellectual property;

b.    Any and all of Seller’s customer lists, listings and/or business records; leases, assignments, and assignable contracts; customer and vendor information, computer records and accounting data; and except as provided below, all other personal property used in the Business, including software and software licenses and related code, and all transferable permits, warranties, licenses and franchise rights;


c.    Any and all goodwill associated with the Business, including, but not limited to, customer relationships, vendor relationships, licenses, permits and other general intangibles;

d.    Any of Seller’s right, title and interest in and to all personal property, equipment, computer equipment, phones, copy/fax machines, fixtures, furniture, computers, instruments, supplies, office supplies, stationery, and other tangible personal property comprising and utilized in the Business;

e.    Those customer, vendor and related contracts and other leases, transferable customer contracts and other contractual rights, including, but not limited to, license or other agreements to the extent such agreements are assignable, as set forth on Exhibit D attached hereto (the “ Assigned Contracts ”);

f.    Transferable independent contracts and independent contract relationships identified herein, together with all non-compete agreements, non-solicitation agreements and related transferable contract rights and benefits; and advertising listings relating to the Business;

g.    Leasehold rights with respect to that office lease dated November 30, 2016 for the property located at 5000 W. 36 th Street, #115, St. Louis Park, MN 55416 (the “Lease”), including, but not limited to the $4,800.00 security deposit and any improvements to the leased premises;

h.    Rights under the Venture X Membership Agreement with respect to the use of space 9128 Strada Place #10115, Naples, Florida 34108 (the “Florida Membership Agreement”); and

i.    Copies of all papers, records and documents (in paper or electronic format) relating to the Assets, and all technical and descriptive materials relating to the Assets, purchasing and sales records, customer and vendor lists, inventory and Asset documentation, marketing documents, software release orders and related information and materials regarding the Assets.

The Assets referenced in this Section shall be as described more particularly, but not inclusively, on Exhibit A attached hereto, as well as the Bill of Sale and attachments thereto, to be executed by the Seller in substantially the same form as attached hereto as Exhibit B .

S ECTION  2 .      E XCLUDED A SSETS .

a.    Notwithstanding anything in this Agreement to the contrary, excluded from this sale and purchase are any (i) work in process and/or receivables; (ii) all of the Seller’s general partnership and other interests in its funds (the “Funds”), including without limitation Seller’s general partnership interests in Blue Clay Capital Partners CO I LP, Blue Clay Capital Partnership CO II LP, Blue Clay Capital Partners CO III LP, Blue Clay Capital Partners LP, and Blue Clay Capital SMID-CAP LO LP and Seller’s interests in Blue Clay Capital Fund Ltd. and Blue Clay Capital Master Fund Ltd. (and specifically including without limitation the Seller’s “Incentive Allocations” with respect thereto and Seller’s other rights to allocations of income, gain, loss, deductions and credits with respect thereto and distributions therefrom; collectively, “Seller’s GP Interests”); (iii) bad debts; (iv) investment assets; bank and investment accounts; (v) the corporate seals; corporate books and records (except as otherwise provided herein) of Seller; other records related exclusively to the organization, existence or capitalization of the Seller; (vi) any interest the Seller may have in or to any Minnesota Vikings tickets or Minnesota Vikings seat license; and (vii) the Seller’s rights under any contract between the Seller and any third party to which consent to assignment to the Purchaser is required but has not been obtained on the Closing Date.

 

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b.    Between the date of this Agreement and the Closing Date, the parties shall cooperate to amend the documentation with respect to the Funds to convert Seller’s GP Interests into limited partnership interests, with Seller retaining all of the same economic benefits as are now associated with Seller’s GP Interests, and to substitute the Purchaser, or an entity designated by the Purchaser, for the Seller as general partner of the Funds (recognizing that any such amendments with respect to Blue Clay Capital Fund Ltd. and Blue Clay Capital Master Fund Ltd. will differ in form because those two entities are not limited partnerships). In connection with such conversion, the Purchaser or its designated entity shall receive the management fees associated with managing the Funds (notwithstanding Seller’s retention of the other economic benefits associated with Seller’s GP Interests), except that Seller shall retain the Incentive Allocations associated with Seller’s general partnership interest in Blue Clay Capital Partners CO I LP and Blue Clay Capital Partners CO III LP.

S ECTION  3 . N O A SSUMPTION OF L IABILITIES .

3.1     No Assumption of Liabilities . Purchaser only agrees to assume and pay those liabilities, if any, listed and attached hereto on Exhibit C (“ Assumed Liabilities ”). Other than the Assumed Liabilities set forth on Exhibit C, the Purchaser shall not assume, agree to pay, discharge or perform, or incur, as the case may be, any of the following liabilities, among others: (a) liabilities (including principal and interest) arising out of loans and other indebtedness owing to any person or entity, excluding only the Assumed Liabilities; (b) liabilities of the Seller not arising in the ordinary course of its business incurred or accrued prior to the Closing Date, including professional fees related to this transaction and the finalization of accounting records or legal issues related to the winding up of the business, or any tax, estate, legal, or other professional services performed on behalf of the Seller; (c) any liability or obligation owing to current or former employees of the Seller and/or arising out of or in connection with an employee benefit plan or union-related obligations, unless an Assumed Liability herein; (d) any liability for taxes related to any of the Assets for any tax period or portion thereof ending on or before the Closing Date and any obligation for other taxes of the Seller; and (e) any liability for accrued and existing real property or office leases, taxes, or related property expense pre-dating the Closing Date.

3.2     Other Liabilities . With the exception of the Assumed Liabilities referenced above or the Assigned Contracts referenced in Section 3.4 below (if any), Purchaser shall not assume or otherwise be responsible for any liability or obligation of Seller of any nature whatsoever, whether matured or un-matured, liquidated or un-liquidated, fixed or contingent, known or unknown. Seller shall use its best efforts to pay in a timely fashion all expenses of operation and other liabilities, whether absolute or contingent, associated with or related to the Business up to the Closing Date, including all salaries, vacation pay incurred and payable as of the closing date, benefits, pension and union contributions, and required payments or contributions under all employee benefit plans or items of a similar nature, all amounts due creditors, and all other operating expenses. Seller shall indemnify Purchaser, and hold Purchaser harmless, from and against any and all claims, demands, liabilities, costs and expenses, including reasonable attorney fees, incurred or expended by Purchaser as a result of Seller’s failure to pay all the expenses and all other liabilities of the purchased business incurred prior to the Closing Date as provided herein.

 

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3.3     Conditional Obligations . The obligations of the Purchaser under this Section are subject to whatever rights the Purchaser may have under this Agreement or otherwise for breach by the Seller of any representation, warranty, covenant or agreement contained in this Agreement, including but not limited to any right of indemnification provided by this Agreement.

3.4     Assigned Contracts . Subject to the restrictions set forth in this Section 3, Purchaser agrees to the assumption of Seller’s obligations under the Assigned Contracts arising from and after the Closing Date. To the extent that the assignment of the Assigned Contracts shall require the consent of any other party, or in the event any Assigned Contract shall be non-assignable, neither this Agreement nor any action taken pursuant to the provisions of this Agreement shall constitute an assignment or agreement to assign which would constitute a breach thereof; provided, however, in each case, Seller shall use its reasonable efforts to obtain the consent of such other party to the assignment of any such Assigned Contract to the Purchaser at no further cost to Purchaser. If any consent to an Assigned Contract shall not be obtained, Seller shall cooperate with the Purchaser and make commercially reasonable arrangements designed to provide Purchaser with the benefits intended to be assigned to the Purchaser under the relevant Assigned Contract and for Purchaser to perform the obligations of the Seller under such Assigned Contract arising from and after the Closing Date. The Purchaser shall assume obligations under any Assigned Contract only assigned between the parties, and solely to the extent any contractual obligations arise or are required to be performed under the applicable Assigned Contract after the Closing Date.

S ECTION  4 .      P URCHASE P RICE . The purchase price for the Assets shall be One Dollar ($1.00) (“Purchase Price”). The Purchaser shall pay the Purchase Price at Closing. Any Assumed Liabilities to be paid by Purchaser (if any) shall be paid at Purchaser’s discretion after Closing.

S ECTION  5 .      P URCHASE P RICE ADJUSTMENT . The Purchase Price for the Assets shall be paid as follows:

5.1     Net Working Capital Adjustment .

5.1.1 Computation of Net Working Capital Adjustment. It is assumed that BCCM will be cash free and debt free at closing, with an estimated net working capital of zero dollars (“Estimated Net Working Capital”). Within sixty (60) days following the Closing Date, Purchaser will prepare and deliver to Seller its final determination of the Closing Net Working Capital (“Closing NWC Statement”). For purposes of this Agreement, “Closing Net Working Capital” shall be defined as the amount of current assets reflected on Seller’s Balance Sheet as of the Closing Date, less current liabilities and indebtedness as of the Closing Date. The Closing Net Working Capital as set forth in the Closing NWC Statement shall be determined in accordance with generally accepted accounting principles, in all material respects, and applied reasonably consistent with BCCM’s past accounting practice. If the Closing Net Working Capital as set forth on the Closing NWC Statement exceeds the Estimated Net Working Capital, Purchaser will pay to Seller the amount of such difference within thirty (30) days of such calculation, and if the Closing Net Working Capital as set forth on the Closing NWC Statement shows a negative balance as set forth in the Closing NWC Statement, Seller shall pay Purchaser the amount of such difference within thirty (30) days of such calculation. Seller shall have the right to review the Closing NWC Statement and object to Purchaser’s computation of the Closing Net Working Capital pursuant to Section 5.1.2 herein.

 

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5.1.2 Closing Net Working Capital Statement and Review . With respect to the Net Working Capital Adjustment and the Closing NWC Statement, the Parties agree as follows:

a. Within sixty (60) days following the Closing Date,, the Purchaser shall prepare and deliver the Closing NWC Statement to Seller. The Purchaser shall permit Seller and Seller’s independent accountants to review all pertinent financial statements and calculations with respect to the Closing NWC Statement, as applicable, subject to execution by such parties of a confidentiality agreement. Seller and its representatives shall conduct the review at Seller’s sole cost, upon reasonable advance notice, and in a fashion which does not disrupt the Purchaser’s day-to-day business.

b.Unless Seller notifies Purchaser in writing that Seller disagrees with the Closing NWC Statement within thirty (30) days after receipt of such statement (the writing to include Seller’s reasonably-detailed objections and proposed revisions of supporting data), the corresponding Closing NWC Statement and calculations therein shall be deemed final and binding on the parties. If Seller timely provides an objection to the Closing NWC Statement, the Parties shall attempt to resolve the disputed items on an informal basis for a period of thirty (30) days following delivery of Seller’s objection notice. All items other than disputed items shall be deemed agreed, final and binding for purposes of this Section. Any Net Working Capital Adjustment items not resolved by the parties will be resolved by a mutually-agreed, neutral third party independent certified public accounting firm (the “CPA Firm”). Within thirty (30) days after engagement of the CPA Firm, each party shall submit a brief to the CPA Firm (with a copy to the other party) setting forth their position, as well as corresponding reply briefs to each party’s submission within fifteen (15) days following receipt of each party’s initial brief. The CPA Firm shall render its decision resolving dispute within thirty (30) days of submission of the last reply brief. The CPA Firm shall not be entitled to consider any items other than the remaining disputed items set forth in the party’s briefs, shall be instructed to render its decision in accordance with generally accepted accounting principles reasonably consistent with BCCM’s past practice, and shall not render a decision or amount lower than the lowest amount or higher than the highest amount set forth in the parties’ respective briefs. The parties shall pay their own expenses with respect to the dispute process and equally share the cost of the CPA Firm. The decision of the CPA Firm shall be final and binding on the parties.

5.2 General Adjustment . Unless specifically noted herein, the operation of the Seller’s business and related income and expenses up to the close of business on the day before the Closing Date shall be for the account of the Seller and thereafter for the account of the Purchaser, including but not limited to, utilities, telephone charges, personal property taxes, rents, real property taxes, sales tax, wages, vacation pay, payroll taxes, and fringe benefits of employees of the Seller, which shall be prorated between the Seller and the Purchaser as of the close of business on the day before the Closing Date, the proration to be made, insofar as reasonably possible, on the Closing Date. Settlement of any remaining pro-rations shall be made within thirty (30) days following the Closing Date.

5.3 Purchase Price Allocation . The Purchase Price will be allocated to the Assets in the manner required by Section 1060 of the Internal Revenue Code. The parties will negotiate in good faith the values of the Assets and the resulting allocation, it being understood that such determination will be binding only for tax purposes. The parties will not voluntarily take any position inconsistent with the allocations referenced or completed in connection with this Agreement, or any claim with respect to such tax returns.

 

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The parties shall promptly file with the Internal Revenue Service, when due, those requisite allocation or acquisition statements on Form 8594 as required by the Internal Revenue Code, and cooperate with each other in the preparation of such forms, supplements and amendments thereto.

S ECTION  6 .     C LOSING .

6.1     Time and Place . The Closing of the sale and purchase of Assets and transactions contemplated hereby (the “ Closing ”) shall take place at the offices of Seller effective as of December 31, 2017, subject to the satisfaction or waiver of all conditions of the parties to consummate the transactions contemplated hereby, or at such other location, time or date as the Purchaser and the Seller may mutually agree (“ Closing Date ”).

6.2      Obligations of Seller and other Agreements . At the Closing, the Seller shall execute and/or deliver to the Purchaser the following:

6.2.1 One or more bills of sale from the Seller conveying all of the Assets to the Purchaser, in the form as set forth in Exhibit B hereto, including, without limitation, appropriate endorsements and assignments of contracts, permits, or other binding arrangements included with the Assets; specific bills of sale, endorsements, and assignments transferring all intellectual property and trade names.

6.2.2 A copy of the resolutions of the Seller’s respective board of governors/managers and members authorizing the execution, delivery and performance of this Agreement and any other agreement to be entered into by the Seller in connection herewith, and the transactions contemplated hereby.

6.2.3 UCC-3 termination statement and release of security interest in the Assets from Seller’s pertinent lenders and/or credit institution(s) to the extent such institutions possess security interests in any of the Assets purchased herein and any similar releases or documents affecting the Assets.

6.2.4 A payoff letter from Seller’s pertinent lenders and/or credit institutions with respect to any Bank Debt.

6.2.5 All data relating to the Assets simultaneously with such delivery. The Seller agrees to take all actions necessary to put the Purchaser in actual possession and control of the Assets.

6.2.6 The Kohler Employment Agreement attached hereto as Exhibit E (“Kohler Employment Agreement”) and the David Woodis Employment Agreement attached hereto as Exhibit F (“Woodis Employment Agreement”).

6.2.7 Executed consents to assignment of the Assumed Contracts listed on Exhibit D .

6.2.8 Assignment and Assumption Agreement, in form and substance reasonably acceptable to Seller and Purchaser, pursuant to which Seller assigns to Purchaser Seller’s rights with respect to the Assigned Contracts and Purchaser assumes the obligations to be assumed by Purchaser pursuant to this Agreement (the “Assignment and Assumption Agreement”).

 

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6.2.9 Domain Name Assignment assigning the domain names blueclaycapital.com and blueclaycap.com to the Purchaser.

6.2.10 Amendments to the Limited Partnership Agreements for the funds listed on Exhibit G .

6.2.11 Investment Management Agreements between Purchaser and the funds listed on Exhibit H .

6.2.12 A certificate, dated as of the Closing Date and signed by a duly authorized officer or person of the Seller, that each of the conditions set forth in Sections 13.1.1 and 13.1.2 have been satisfied.

6.2.13 Such other assignments, bills of sale, or instruments of conveyance, certificates of officers, and other documents as reasonably may be requested by the Purchaser prior to the Closing to consummate this Agreement and the transactions contemplated hereby.

6.3     Obligations of Purchaser and Other Agreements . At the Closing, the Purchaser shall execute, or cause to be executed, and shall deliver to the Seller the following:

6.3.1 Funds sufficient to satisfy the Purchase Price pursuant to Section 4 herein.

6.3.2 The Kohler Employment Agreement.

6.3.3 The Woodis Employment Agreement.

6.3.4 A certificate, dated as of the Closing Date and signed by a duly authorized officer or person of the Purchaser, that each of the conditions set forth in Section 13.2.1 have been satisfied.

6.3.5 The Assignment and Assumption Agreement.

6.3.6 Such certificates of officers and other documents as reasonably may be requested by the Seller prior to the Closing to consummate this Agreement and the transactions contemplated hereby.

S ECTION  7 .      S ELLER S R EPRESENTATIONS AND W ARRANTIES . The Seller represents and warrants to the Purchaser as follows, except as set forth in Exhibits to this Agreement:

7.1      Existence and Authority . BCCM is now, and on the Closing Date will be, a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, has all requisite power and authority to own its Assets, property and assets and carry on its business and is in good standing in each jurisdiction in which such qualification is required. BCCM has full authority, and Kohler has individual authority, to execute and deliver this Agreement and any other agreement to be executed and delivered in connection herewith, and to carry out the transactions contemplated hereby. This Agreement constitutes a valid and binding Agreement of BCCM and Kohler in accordance with its terms.

7.2      Conflict with Other Agreements, Consents and Approvals . With respect to (i) the certificate of formation or limited liability company agreement of BCCM, (ii) any applicable law, statute, rule or regulation, (iii) any contract to which the Seller is a party or may be bound, or (iv) any judgment, order,

 

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injunction, decree or ruling of any court or governmental authority to which the Seller is a party or subject, the execution and delivery by the Seller of this Agreement and any other agreement to be executed and delivered by the Seller in connection herewith and the consummation of the transactions contemplated hereby will not (a) result in any material violation, conflict or default, or give to others any interest or rights, including rights of termination, cancellation or acceleration, (b) require any authorization, consent, approval, exemption or other action by any court or administrative or governmental body which has not been obtained, or any notice to or filing with any court or administrative or governmental body which has not been given or done, or (c) require the consent of any third party.

7.3      Compliance with Law . The Seller’s use and ownership of the Assets, and the conduct of its Business, wherever located, has been in material compliance with all applicable federal, state, local or other governmental laws or ordinances, the non-compliance with which, or the violation of which, might have a material adverse effect on the Assets, the Business, any Assumed Liabilities or Assigned Contracts or the financial condition, results of operations or anticipated business prospects of the Purchaser, and the Seller has received no claim or notice of violation with respect thereto. The Seller has obtained all material permits, licenses, franchises and other authorizations necessary for the conduct of its Business and ownership of the Assets.

7.4      Financial Statements . Seller, at Seller’s own expense, has or will provide Purchaser with Financial Statements as defined in this section, effective through September 30, 2017, prior to the Closing Date. “Financial Statements” shall be defined as the Seller’s most recent unaudited income statements and balance sheets, updated to the calendar month preceding the Closing Date. The Financial Statements are in accordance with the books and records of the Seller and are true, correct, and complete in all material respects; fairly present financial condition of the Seller at the dates of such Financial Statements and the results of its operations for the periods then ended; and were prepared in accordance with generally accepted accounting principles applied on a basis consistent with prior accounting periods, subject to year-end adjustments (the effect of which will not be materially adverse) and the absence of footnotes. There has been no material adverse change in the financial condition of the Seller or the Business since the date of the Financial Statements.

7.5      Tax and Other Returns and Reports . There are no federal, state, local and foreign tax claims and/or liabilities (including without limitation all income tax, social security, payroll, unemployment compensation, sales and use, excise, privilege, property, ad valorem, franchise, estate, probate, license, and school) which may be asserted by any taxing authority against the Assets, the Business or the Purchaser with respect to this transaction or which will adversely and materially affect the Assets, the Business or this transaction, and no lien or other encumbrance for taxes has or will attach to the Assets.

7.6      Title to Assets and Condition . The Seller holds good and marketable title to the Assets, free and clear of restrictions on or conditions to transfer or assignment, and free and clear of liens, pledges, charges, or encumbrances. The Seller has obtained and will present on the Closing Date, the necessary UCC-3 Termination Statements and/or releases of security interest in the Assets from those financial institutions or entities which retain a security interest in the Assets. The Assets are in good condition and repair, reasonable wear and tear excepted, and usable or salable in the ordinary course of business consistent with past practices. The Assets are not in need of repair or replacement other than as part of routine maintenance in the ordinary

 

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course of business. To the extent transferable, Seller shall transfer to Purchaser all manufacturers and other warranties on the Assets. To the extent that any such warranties are non-transferable, Seller agrees, in good faith, work with Purchaser to the extent possible to make the benefits of such non-transferable warranties available to the Purchaser.

7.7      Intellectual Property Rights . The Seller owns, possesses, or has the right to use all intellectual property rights necessary or required to operate the Business and to own and sell the Assets as presently conducted, or otherwise used by the Seller. (i) To the Seller’s knowledge, no trade name, trademark, service, web site, e-mail site, or telephone number related to the Seller’s business and marketed and sold by the Seller violates any license or infringes upon any intellectual property rights of others, (ii) the Seller or Shareholders have not received any notice that any such trade name, service or web site conflicts with any intellectual property rights of others, and (iii) to the Seller’s knowledge, there is no reasonable basis to believe that any such violation, infringement or conflict may exist.

7.8      Benefit Plans . There are no facts or circumstances which could, directly or indirectly, subject the Purchaser or any of its affiliates, the Business or the Assets to any liability, claim, or lien of any nature with respect to any pension, welfare, retirement, incentive, perquisite, paid time off, vacation, severance or other benefit plan, policy, practice, labor contract or agreement sponsored, maintained or contributed to by the Seller or any affiliate, to which the Seller or any affiliate is a party or with respect to which the Seller or any affiliate could have any liability, except if any liabilities referenced in this section are Assumed Liabilities as referenced herein.

7.9      Non-cancelable Contracts . Except as referenced in Exhibits C and D and Section 7.2 herein, at the time of Closing, there will be no material leases, employment contracts, contracts for services or maintenance, or vendor agreements, supplier/customer contracts or other similar contracts existing or relating to or connected with the operation of the Seller’s business or the Assets that are not terminable or cancelable on ninety (90) days’ notice or less. All accepted and unfulfilled contracts or agreements for the performance of services entered into by the Seller and all outstanding contracts or commitments for the purchase of materials and services were made in bona fide transactions in the ordinary course of business.

7.10      Litigation . There is no claim, litigation, proceeding, or investigation pending or, to the Seller’s knowledge, threatened against the Seller that might result in any claim, attachment or material adverse change in the Business, Assets, or Assigned Contracts being conveyed under this Agreement. Seller is not in default with respect to any material provision or requirement of any insurance policy relating to the Assets and has not failed to give any notice or failed to present any claim thereunder in a timely fashion.

7.11      Continued Course of Business and Lack of Adverse Change . The Seller has during the negotiations relating to this Agreement continued to operate the Business and own the Assets in the usual and ordinary course and in substantial conformity with all applicable laws, ordinances, regulations, rules, or orders, and used its best efforts to preserve its business organization and preserve the continued operation of its business with its customers, suppliers, and others having business relations with the Seller. For the year preceding the Closing Date, there has not been any material adverse change in the Seller’s financial condition, business prospects, operation of the Seller, or casualty or physical condition of the Assets that would have any material adverse effect upon the Assets or Business; provided, however, that the parties

 

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acknowledge (i) the adverse performance of investment funds managed by the Seller, as reflected in materials previously provided by the Seller to the Purchaser, (ii) that such investment funds have suffered, and may in the future suffer, redemptions by investors therein, including $7.5 million previously redeemed by the Seller’s seed investor and an additional $7.5 million expected to be redeemed by such investor on or prior to December 31, 2017, (iii) that such redemptions may occur by reason of the adverse performance of such funds, in response to notice to investors of the transactions contemplated herein, and/or for other or any combination of reasons, (iv) that the Seller’s financial condition, business prospects, operations, Assets and Business may be adversely affected by adverse market performance or the adverse performance of the Seller’s funds, and (v) that none of the matters referenced in clauses (i) through (iv) above, or any effect any or all of such matters may have on the Seller’s financial condition, business prospects, operations, Assets or Business, whether prior or subsequent to the date hereof, shall constitute a material adverse effect on, or material adverse change in, the Seller’s financial condition, business prospects, operations, Assets or Business for purposes of this Agreement.

7.12     Undisclosed Liabilities . Except as otherwise disclosed in this Agreement or as reflected, accrued or reserved against in the Financial Statements provided to the Purchaser prior to the Closing Date, the Seller does not have any material debts, liabilities or obligations of any nature, whether accrued, absolute, direct, indirect, contingent or otherwise, with respect to the Business or the Assets and since the date of the last Financial Statement provided to Purchaser, Seller has not incurred any material debts, liabilities or obligations of any nature with respect to the Business or Assets, except trade payables and expenses incurred in the ordinary course of business. For purposes of this Section only, a material debt, liability or obligation shall mean one in excess of $5,000.00. As of the Closing Date, the Seller has paid off in full all bank loans and other indebtedness for borrowed money.    Purchaser shall not, as a result of this transaction, acquire or be responsible for any liabilities or claims against Seller other than the Assumed Liabilities or the Assigned Contracts, and all liabilities, claims or expenses of any nature whatsoever which relate to a period or periods prior to the Closing Date shall be the responsibility of the Seller.

7.13     Labor Matters .

7.13.1 Seller is and has been in material compliance with all applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, union requirements, employment benefit and retirement plans, and is not engaged in any unfair labor practice.

7.13.2 There are no facts or circumstances which could, directly or indirectly, subject the Purchaser or any of its affiliates to any liability with respect to any current or former employee of the Seller or with respect to any employment practice, policy, agreement or benefit or retirement plan maintained by the Seller.

7.13.3 Upon termination of the employment of any person, neither Purchaser nor any affiliate of Purchaser will by reason of anything done at or prior to the Closing Date, be liable to any such person for “severance pay” or any other payments or obligations.

 

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7.14      Environmental Matters . There are no facts or circumstances which could, directly or indirectly, subject the Purchaser or any of its affiliates, the Business or Assets to any material liability arising out of or related to any pollution to threat to human health or the environment or violation of any Environmental and Occupational Safety and Health Law (as defined herein) that is related in any way to a negligent or improper act of the Seller, including without limitation, any on-site or off-site activities involving environmentally-regulated materials, and that occurred or existed out of conditions or otherwise existed prior to the Closing Date. For purposes of this paragraph, the term Environmental and Occupational Safety and Health Law shall mean any common law or duty, statute, rule, regulation, law, ordinance or code, local or federal, which regulates or imposes liability for standards of conduct concerning any element, compound, pollutant or toxic or hazardous substance, material or waste (or mixture thereof), or relates in any way to emissions or releases into the environment, or conduct affecting such matters, or is otherwise designed to provide safe and healthful working conditions or reduce occupational safety and health standards. The term environmentally regulated materials shall mean any element, compound, pollutant, contaminant, substance, material or waste (or any mixture thereof), designed, listed, referenced or regulated pursuant to any Environmental and Occupational Safety and Health Law.

7.15     Insurance . All of the Assets and Business of Seller of an insurable nature usually insured by companies of similar size and similar businesses are insured by Seller in such amounts and against such losses, casualties or risks as is usual by such companies, required by any law or required by any contract or commitment of Seller. Immediately prior to the Closing Date all such insurance policies were in full force and effect and the premiums due thereon have been timely paid.

7.16     Brokers . The Seller has retained no brokers in connection with the sale of the Assets, the Business or this Agreement. Seller shall be solely liable for any compensation due any broker or similar service provider(s) retained by Seller.

7.17      Full Disclosure . The Seller knows of no material fact that has resulted, or that in the reasonable judgment of the Seller will result, in a material adverse effect on the Business that has not been set forth in this Agreement, subject to the proviso set forth in the last sentence of Section 7.11 above.

S ECTION  8 .      R EPRESENTATIONS OF P URCHASER . The Purchaser represents and warrants to the Seller as follows:

8.1      Corporate Existence and Authority . The Purchaser is now, and on the Closing Date will be, a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder. The Purchaser has full authority to execute and deliver this Agreement and any other agreement to be executed and delivered in connection herewith, and to carry out the transactions contemplated hereby. This Agreement constitutes a valid and binding Agreement of the Purchaser in accordance with its terms.

8.2      Conflict with Other Agreements, Consents and Approvals . With respect to (i) the certificate of incorporation or bylaws of the Purchaser, (ii) any applicable law, statute, rule or regulation, (iii) any contract to which the Purchaser is a party or may be bound, or (iv) any judgment, order, injunction, decree or ruling of any court or governmental authority to which the Purchaser is a party or subject, the execution and

 

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delivery by the Purchaser of this Agreement and any other agreement to be executed and delivered by the Purchaser in connection herewith and the consummation of the transactions contemplated hereby will not (a) result in any violation, conflict or default, or give to others any interest or rights, including rights of termination, cancellation or acceleration, or (b) require any authorization, consent, approval, exemption or other action by any court or administrative or governmental body which has not been obtained, or any notice to or filing with any court or administrative or governmental body which has not been given or done.

S ECTION  9 .      PRE - CLOSING COVENANTS .

9.1     Conduct of Business by the Seller . From the date hereof until the earlier of the Closing or the termination of this Agreement pursuant to Section 14.1 and subject to this Section 9.1, the Seller shall carry on its operations in the ordinary course and in compliance with applicable laws and use their commercially reasonable efforts to keep available the services of the current officers, key employees and consultants of the Business and to preserve the current relationships of the Business with those customers, suppliers and other persons with which the Seller has significant business relations.

S ECTION  10 .      I NDEMNIFICATION , S URVIVAL AND L IMITATIONS .

10.1     Survival of Representations and Warranties . All representations and warranties made in this Agreement shall survive the Closing of this Agreement for a period of the later of (i) twenty-four (24) months from the Closing Date and (ii) thirty (30) days after the completion of the 2018 fiscal year audit (which shall be extended with respect to any pending claims at the time of expiration), except those representations and warranties relating to employment/benefit matters (Section 7.13), and environmental matters (Section 7.14) which shall survive until the expiration of all applicable statutory limitation periods, and except those representations and warranties with respect to the Seller’s authority to transfer (Sections 7.1 and 7.2), tax matters (Section 7.5), title to assets (Section 7.6) and broker’s fees (Section 7.16), which shall survive forever (collectively, the “Fundamental Representations”).

10.2     Seller’s Indemnification .

10.2.1 The Seller agrees to indemnify and hold the Purchaser, its successors and assigns, harmless from and against: (i) Any and all material damages, losses, claims, liabilities, deficiencies and obligations of every kind and description, contingent or otherwise, arising out of or related to the operation of the Seller’s Business or ownership of the Assets prior to the close of business on the day before the Closing Date, (ii) any and all damage or deficiency resulting from any material misrepresentation, breach of warranty or covenant, or non-fulfillment of any agreement on the part of the Seller under this Agreement, and (iii) any and all actions, suits, claims, proceedings, investigation, audits, demands, assessments, fines, judgments, costs and other expenses (including, without limitation, reasonable audit and attorney’s fees) directly incident to any of the foregoing.

10.2.2 If any claim is asserted against the Purchaser that would give rise to a claim by the Purchaser against the Seller for indemnification under the provisions of this Section, then the Purchaser shall promptly give written notice to the Seller concerning such claim, and upon the Purchaser’s request, the Seller shall, at no expense to the Purchaser, defend the claim. Provided, however, Purchaser shall have the option to

 

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undertake and control defense of the claim at Seller’s expense, but in such event (or in the event of Purchaser’s exercise of its rights set forth in the last sentence of this Section 10.2.2), Purchaser shall provide to the Seller such information as the Seller may from time to time reasonably request with respect the claim and Purchaser’s defense thereof, permit the Seller, at the Seller’s sole cost and expense, to participate in the defense of the claim ,and not agree to any settlement or compromise of the claim without the Seller’s prior written consent, which shall not be unreasonably withheld or delayed. Purchaser shall have the right to offset any such indemnity claims or losses against any portion of the Purchase Price withheld by Purchaser or any other amounts owed by Purchaser to Seller pursuant to any other agreement. If the Seller refuses to indemnify and/or defend Purchaser after written notice, Purchaser shall have the right to retain attorneys to represent and/or defend Purchaser, and compromise and settle such claims.

10.3      Purchaser’s Indemnification . The Purchaser agrees to defend, indemnify, and hold harmless the Seller from and against (i) any and all material damages, losses, claims, liabilities, deficiencies and obligations of every kind and description arising out of or related to ownership of the Assets or Business following Closing, except for damages, losses, claims, liabilities, deficiencies or obligations relating to Seller’s breach of the terms of this Agreement; (ii) after the Closing, any Assumed Liability or Assigned Contract, (iii) any and all damage or deficiency resulting from any material misrepresentation, breach of warranty or covenant, or non-fulfillment of any agreement on the part of the Purchaser under this Agreement, and (iv) any and all actions, suits, claims, proceedings, investigation, audits, demands, assessments, fines, judgments, costs and other expenses (including, without limitation, reasonable audit and attorneys fees) directly incident to any of the foregoing.

10.4      Indemnification Limits. With the exception of claims relating to the Fundamental Representations, no claim for indemnity for breaches of Seller’s representation warranties herein may be made by Purchaser unless until the amount of damages, in aggregate, for all claims, exceed $25,000.00. Further, with the exception of claims for breaches of Fundamental Representations, there shall be a limitation on the parties’ respective liability to the other for breaches of any representations or warranty under this Agreement in an amount which shall not exceed $1,000,000.00. Provided, however, none of the limitations herein shall apply with respect to the Fundamental Representations, a party’s fraud, willful misconduct or intentional misrepresentation. Further, none of the limitations herein shall be construed as limiting or impairing the rights and remedies that the parties may have in equity for injunctive relief and/or specific performance relating to this Agreement.

S ECTION  11 .     N ON -C OMPETITION .

11.1     Non-Competition and Exclusivity . In consideration of the foregoing and the mutual promises, covenants, and agreements contained herein, for one (1) year from the date of this Agreement, BCCM and Kohler agree that they will not, either directly or indirectly, alone or as a partner, officer, director, shareholder (except on behalf of Purchaser and except as shareholder of less than five percent of a publicly-held corporation), agent, employee, affiliate, subsidiary, parent corporation, agent or assign of another firm or entity: (a) disrupt, damage, impair, interfere, or engage in competition with the business of the Purchaser (including, but not limited to, interfering with the Business or Purchaser’s relationship with employees, customers, agents, representatives, manufacturers, distributors, or vendors); (b) induce or attempt to induce

 

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by soliciting or assisting anyone else in the solicitation of any of the Purchaser’s or the Business’ employees, former employees, or contractors to leave his or her employment or terminate a contract with the Purchaser or the Business; (c) contact, directly solicit, or engage in competition by contracting with or working with clients or customers of the Purchaser or the Business or former clients of the Seller with whom Seller had contact or conducted business with during operation and ownership of the Business with respect to the sale of goods or services similar to the Business; or (d) operate, work with, contract with, invest in or become employed with or affiliated in any way with a business or industry in competition with the Business or Purchaser’s business. Competition shall be deemed to include, but not limited to, soliciting or accepting orders from clients or customers of the Purchaser for a similar business of Purchaser and the Business, diverting the customer or client business from the Purchaser, disparaging the Purchaser or its employees with a customer or client, or otherwise interfering with the Purchaser’s business with the customer or client, even if the customer or client initiates the contact with Seller. Provided, however, that notwithstanding anything in this Agreement to the contrary, it shall be deemed not to be competition with the Purchaser or a similar business of the Purchaser for purposes of this Agreement (and therefore not a breach of Kohler’s or Seller’s obligations under this Section 11.1) for Kohler or Seller to invest for or manage the investments of any person, fund or other entity if the strategy used therefor is not the same as or similar to any investment strategy used by a fund of the Seller immediately prior to the Closing Date or a fund of the Purchaser between the Closing Date and the termination of Kohler’s employment with the Purchaser (or, for funds commenced by the Purchaser after the date of the termination of Kohler’s employment with the Purchaser, not the same as or similar to any strategy the Purchaser was actively planning to use in a fund to be commenced after such date). The parties agree that any breach of the terms of this non-competition provision will result in damages to the Purchaser, the amount which will be difficult to ascertain, entitling the Purchaser to injunctive relief and recovery of attorney fees and costs; provided, however, that nothing herein shall be construed as prohibiting or in any way limiting Purchaser from pursuing any rights or remedies available under the terms of this Agreement or other applicable law.

11.2     Confidential Information . Seller and Seller’s agents, employees, shareholders, and assigns will not use or disclose any confidential information relating to the Business, the Assets or this Agreement to any person not employed by the Purchaser or not authorized by the Purchaser to receive such confidential information without the prior written consent of the Purchaser; provided, however, that notwithstanding anything in this Agreement to the contrary, BCCM or Kohler may disclose at any time for any purpose any information with respect to the performance of BCCM and/or Kohler as a manager of BCCM’s funds or with respect to the performance of such funds themselves (collectively, “Performance Data”), and Purchaser shall (i) provide to Kohler and BCCM such Performance Data as either of them my from time to time request, and (ii) not disclose to any person or entity any Performance Data that is not accurate in all materials respects or that is misleading. Seller will use reasonable and prudent care to safeguard, protect, and prevent the unauthorized use of and disclosure of confidential information. The obligations contained in this paragraph will survive for as long as the Purchaser considers the information to be confidential. “Confidential Information” means the terms and conditions of this Agreement (except that the Seller and Kohler may disclose to Adam Wright and Brian Durst that substantially all of the Seller’s assets have been transferred to the Purchaser, and which assets have been excluded from such transfer) as well as information that is proprietary to the Purchaser or proprietary to others and entrusted to the Purchaser, and such information being sold by the Seller to the Purchaser, whether or not trade secrets. Confidential Information includes, but

 

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is not limited to, common information relating to the business plans and to business conducted or anticipated to be conducted, as well as price lists, contracts, employment costs, selling costs, delivery costs, marketing information, customer lists, account names, contacts, addresses, and sales activity, suppliers and vendors, project information, marketing information, tax and financial information, intellectual property, employees, banking relationships, mailing lists, and computer programs and print-outs. Any information Purchaser or Seller consider confidential information or that the Purchaser or Kohler treat as confidential information will be presumed to be confidential information, provided that either the Purchaser or Kohler, as applicable, knows, or reasonably should know, that the other party considers or treats such information as confidential. Confidential Information does not include (i) information in the public domain, (ii) information which is obtained by Seller from a third party which does not have a confidentiality obligation with Purchaser, or (iii) information developed or obtained by Seller which is unrelated to the Business.

S ECTION  12 .     E MPLOYMENT AND P OST C LOSING .

12.1     Employment Agreements. Purchaser shall employ Kohler as an at will employee in the position of Chief Investment Officer pursuant to the terms and conditions of the Kohler Employment Agreement. Purchaser shall also offer at will employment to David Woodis as CFO and COO pursuant to the terms and conditions of the Woodis Employment Agreement.

12.2     Cooperation . Each party shall execute all certificates, instruments and other documents, and take all action reasonably required by the other party to effectuate the purposes of this Agreement and to consummate and evidence the completion of the transactions referenced in this Agreement. Seller shall further take all actions necessary or appropriate to put Purchaser in immediate actual possession and operating control of the Business and Assets.

S ECTION  13 .     C ONDITIONS TO O BLIGATION TO C LOSE .

13.1     Condition to the Purchaser’s Obligation to Close. The obligations of the Purchaser to consummate the Closing shall be subject to the fulfillment or waiver by the Purchaser, at or prior to the Closing, of the following conditions:

13.1.1     Accuracy of Warranties and Performance of Covenants . The representations and warranties of the Seller, shall be true and correct in all material respects in each case as if made on and as of the date hereof and the Closing Date, other than (i) representations and warranties that expressly refer only as of a specific date (in which case such representations and warranties will be true and correct in all material respects as of such date), and (ii) representations and warranties that are qualified by materiality, material adverse change or similar qualifiers (in which case such representations and warranties will be true and correct in all respects). The Seller shall have performed in all material respects all of the obligations and complied in all material respects with all of the covenants, agreements and conditions set forth in this Agreement required to be performed or complied with by the Seller on or prior to the Closing;

13.1.2     Material Adverse Change . There shall not have occurred any material adverse change or any events or circumstances which would reasonably be expected to result in a material adverse change (subject to the proviso set forth in the last sentence of Section 7.11 above). No legal proceeding shall be

 

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pending before any governmental entity or threatened in writing by any governmental entity or any third party which could reasonably be expected to adversely affect the right of the Purchaser to own, operate or control the Business or the Assets in any material respect; and

13.1.3     Required Deliveries . The Seller shall have made, or caused to be made, each of the deliveries required by Section 6.2.

13.2     Condition to the Seller’s Obligation to Close . The obligations of the Seller to consummate the Closing, shall be subject to the satisfaction or waiver by the Seller of, at or prior to the Closing, of the following conditions:

13.2.1     Accuracy of Warranties and Performance of Covenants . The representations and warranties of the Purchaser shall be true and correct in all material respects in each case as if made on and as of the date hereof and the Closing Date, other than (i) representations and warranties that expressly refer only as of a specific date (in which case such representations and warranties will be true and correct in all material respects as of such date), and (ii) representations and warranties that are qualified by materiality, material adverse change or similar qualifiers (in which case such representations and warranties will be true and correct in all respects). The Purchaser shall have performed in all material respects all of the obligations and complied in all material respects with all of the covenants, agreements and conditions required to be performed or complied with by the Purchaser on or prior to the Closing; and

13.2.2     Required Deliveries . The Purchaser shall have made, or caused to be made, each of the deliveries required by Section 6.3.

S ECTION  14 .     T ERMINATION .

14.1     Termination .    This Agreement may be terminated at any time prior to the Closing by the Purchaser if the Closing shall not have occurred on or before December 31, 2017. In the event of a termination of this Agreement, this Agreement shall forthwith become void, and there shall be no liability or obligation on the part of the Purchaser to the Seller.

S ECTION  15 .     M ISCELLANEOUS .

15.1     Notices .    All notices, requests, demands, or other communications hereunder shall be in writing and shall be either delivered personally, by messenger service, or mailed by United States mail, certified or registered with return receipt requested, with appropriate postage prepaid to the address herein designated or such other address as may be designated in writing by notice given in the manner provided herein and shall be effective upon personal delivery thereof or forty-eight (48) hours following deposit in the United States mail or with a messenger service, whether or not delivery is accepted.

 

If to Seller :

  Blue Clay Capital Management, LLC   
  5000 West 36 th Street Suite 115   
  Minneapolis, MN 55440   
  Attn: Gary Kohler   
  Email: gkohler@blueclaycapital.com   

 

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Copy to:

  Stinson Leonard Street   
  50 South Sixth Street, Suie 2600   
  Minneapolis, MN 55402   
  Attention: Thomas P. Sanders, Esq.   
  Email: tom.sanders@stinson.com   

If to Purchaser :

  BCCM, Inc.   
  5930 Balsam Ridge Road   
  Denver, NC 28037]   
  ATTN:                        
  Email:                        

Copy to:

  Peter D. Fetzer, Esq.   
  Foley & Lardner LLP   
  777 East Wisconsin Avenue   
  Milwaukee, Wisconsin 53202   
  Tel: (414) 297-5596   
  Fax: (414) 297-4900   
  Email: pfetzer@foley.com   

15.2      Assignability; Binding Effect . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns; provided that the parties hereto shall not have the right to assign this Agreement to any party without the prior written consent of the other party hereto.

15.3     Construction . Wherever possible, each provision of this Agreement and each related document shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or any related document shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement or such related documents.

15.4     Waiver . No failure on the part of either party to exercise, and no delay in exercising any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by any related document or by law.

15.5     Severability . In the event any part of this Agreement is found to be void, the remaining provisions of this Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.

15.6     No Third Party Beneficiaries . This Agreement is a contract solely between the parties hereto, and shall be effective only as between the parties hereto, their successors and permitted assignees. No third party beneficiaries (including, without limitation, employees and customers of Purchaser or Seller) are intended and none shall be inferred, and no party other than Purchaser or Seller and their successors and permitted assignees may assert any right, make any claim, or otherwise attempt to enforce any provision of or under this Agreement.

 

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15.7     Governing Law . This Agreement shall be interpreted, construed, and governed in accordance with the laws of the state of Delaware. Any dispute between the parties relating to this Agreement shall be venued or heard in the state of Delaware.

15.8     Entire Agreement . Except as otherwise specifically provided herein, this Agreement (and the Exhibits and Appendices hereto) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior communications, writings, and other documents with regard thereto. No modification, amendment, or waiver of any provision hereof shall be binding upon any party hereto unless it is in writing and executed by all of the parties hereto or, in the case of a waiver, by the party waiving compliance.

15.9      Incorporation by Reference . All Exhibits hereto are incorporated herein by reference.

15.10     Captions . The division of this Agreement into articles, sections, subsections, and Exhibits is for convenience of reference only and shall not affect the interpretation or construction of this Agreement.

15.11     Counterparts . This Agreement may be executed in two or more counterparts, all of which together shall be deemed one original.

[ REMAINDER OF PAGE LEFT BLANK ]

 

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

 

SELLER:
BLUE CLAY CAPITAL MANAGEMENT, LLC
By:  

/s/ Gary S. Kohler

Name:  

 

Its:  

 

By:  

/s/ Gary S. Kohler

  Gary Kohler, individually
PURCHASER:
BCCM, INC.
By:  

/s/ Nick Swenson

Name:   Nick Swenson
Its:   President

[Signature Page to Asset Purchase Agreement]

Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“ Agreement ”) is entered into effective as of             , 2017, between Gary Kohler (“ Employee ”) and BCCM, Inc., a Delaware corporation (“ Company ”).

WHEREAS , pursuant to an Asset Purchase Agreement between the Company and Blue Clay Capital Management, LLC (“ BCCM ”) dated as of             , 2017 (“ Asset Purchase Agreement ”), the Company purchased the assets of BCCM, an asset management business owned and operated by Employee.

WHEREAS , as part of the Asset Purchase Agreement, the Company desires to hire Employee pursuant to the terms of this Agreement. Employee’s employment with the Company will expose Employee to more Confidential Information and customer/vendor relationships of the Company.

WHEREAS , Employee recognizes that as part of the Asset Purchase Agreement and during the course of employment with the Company, the Company will disclose to such confidential customer and related business information, which is the property and trade secrets of the Company and which enable the Company to compete successfully. Employee recognizes that the Company has a legitimate interest and right in protecting its interest in such information and that in consideration for the Asset Purchase Agreement and Employee’s hiring with the Company, the parties are willing to execute this Agreement.

WHEREAS , Employee acknowledges that this Agreement was provided, discussed and understood prior to execution of this Agreement, and that Employee was given an adequate opportunity to ask questions and seek any legal assistance related to this Agreement.

NOW, THEREFORE , in consideration of the foregoing promises and the mutual promises, covenants, and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.      T ERM AND T ERMINATION .    The employment relationship between the Company and Employee shall remain “at-will,” and either party may terminate Employee’s employment with the Company at any time, for any reason, and with or without notice.

2.      C ONSIDERATION . The consideration for this Agreement, the sufficiency of which is hereby acknowledged, shall be the Employee’s hiring and/or employment with the Company, specifically including, but not limited to, Employee’s compensation, the accompanying benefits of employment, and access to the Company’s business information.


3.      D UTIES . Employee shall be employed with the Company as Chief Investment Officer and provide related services to the Company. While employed by the Company and except for the duties of Employee to BCCM that remain as of the date of this Agreement, Employee shall devote Employee’s full time, skill, and attention during normal business hours to the interests of and the business of the Company (consistent with the Employee’s devotion of the same to Blue Clay Capital Management, LLC prior to the date hereof), and shall perform such duties, if any, as shall be assigned from time to time by the Company and are consistent with Employee’s position as Chief Investment Officer, shall comply to the best of Employee’s abilities with the best interest, policies and directives issued by the Company. Employee shall report to the Board of Directors of the Company. The Company acknowledges that Employee principally performs his services at the Company’s office in Florida, but commonly also provides such services from various office and non-office locations elsewhere and may in his discretion perform such services from such locations as he may from time determine. The Company further acknowledges that Employee is engaged in various non-profit and other activities not in furtherance of the Company’s business, that the Employee may become engaged in other such activities, and nothing in this Agreement or in Employee’s employment by the Company shall prohibit Employee from engaging in any activities that are not competitive with the business of the Company and do not materially interfere with the performance of Employee’s duties on behalf of the Company.

4.      C OMPENSATION .

a.     Annual Compensation . In consideration of Employee’s services, the Company agrees to pay Employee an annual base salary of $50,000.00, as adjusted (increased, but not decreased) from time-to-time, payable in equal installments twice monthly. Except as expressly provided below as to benefits and other matters, Employee agrees to accept such consideration as full compensation for services hereunder. The Company shall have the right to deduct from compensation paid to Employee hereunder any and all of Employee’s social security, federal, state, and local taxes which may be required by law, and any and all amounts that may be owing to the Company by Employee.

b.     Bonus . Employee shall have the opportunity to earn an annual discretionary bonus based upon terms, criteria and conditions established by the Company’s Board in their sole discretion. Employee must be actively employed with the Company through the bonus payout date to receive any annual bonus payout pursuant to this Section. The timing of such payment shall be in the Board’s sole discretion.

c.     Revenue Sharing . Employee shall have the right to earn Company revenue sharing based upon the terms and conditions set forth on Exhibit A hereto. After Employee is no longer employed by the Company, Employee shall be entitled to the revenue sharing listed on Exhibit A or, if Employee and the Company agree on a different revenue sharing as to a particular fund, that other revenue sharing (except that any new investors first investing in funds of the Company after Employee is no longer employed by the Company shall not be treated as clients brought into the funds by

 

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Employee) as follows: (1) 100% of the revenue sharing Employee would have been entitled to receive if he remained employed by the Company calculated for the period between the date Employee ceased to be employed by the Company and the first anniversary of the date Employee ceased to be employed by the Company; (2) 75% of the revenue sharing Employee would have been entitled to receive if he had remained employed by the Company calculated for the period between the first anniversary and second anniversary of the date Employee ceased to be employed by the Company; (3) 50% of the revenue sharing Employee would have been entitled to receive if he had remained employed by the Company calculated for the period between the second anniversary and third anniversary of the date Employee ceased to be employed by the Company; and (4) 25% of the revenue sharing Employee would have been entitled to receive if he had remained employed by the Company calculated for the period between the third anniversary and fourth anniversary of the date Employee ceased to be employed by the Company.

5 .      E MPLOYEE B ENEFITS . Employee shall be entitled during the term of this Agreement to participate in the Company’s benefits programs, if any, and receive paid vacation on the same basis as is generally from time to time applicable to other employees of the Company serving in a capacity similar to that being occupied by Employee and having been employed by Employee for the same period of time; provided, however, that such benefits shall in any event include health insurance on terms reasonably acceptable to Employee. The Company’s benefit plans shall be subject to the establishment and modification by the Company in its sole discretion.

6 .      E MPLOYEE E XPENSES . During the term of employment, the Company shall reimburse Employee for, or pay directly, all reasonable and pre-approved travel, entertainment, and other expenses as are ordinarily incurred by Employee in connection with the performance of services under this Agreement. Reimbursement or payment for such expenses shall be made upon presentation of expense statements and other supporting information as the Company may reasonably request. Recognizing that business-related entertainment is an element of Employee’s duties pursuant to this Agreement, the Company shall pay, as a business expense, the dues and assessments for Employee’s membership at two clubs selected by Employee (up to a maximum of $7,500 per club), and shall reimburse Employee for any business-related entertainment expenses incurred by Employee at such clubs.

7.      C OVENANT N OT T O S OLICIT OR COMPETE . In consideration of the foregoing and the mutual promises, covenants, and agreements contained herein, from the date of this Agreement until one (1) year following Employee’s termination of employment with the Company for any reason, Employee will not, either directly or indirectly, alone or as partner, officer, director, shareholder, agent, employee, affiliate, subsidiary, parent company, agent or assign of another firm or entity:

a.    interfere, or engage in competition with, the business of the Company (whether by way of interfering with the Company’s relationship with employees, customers, agents, representatives, manufacturers, distributors, or vendors);

 

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b.    hire, employ, retain as an independent contractor, induce or attempt to induce by soliciting or assisting anyone else in the solicitation of, any of the Company’s employees, former employees within one year of such former employee’s leaving the employment of the Company, or contractors of the Company to leave their employment or terminate their contract with the Company;

c.    engage in competition with the Company by soliciting or working with clients or customers of the Company or former clients of the Company with whom the Company conducted business during the term of Employee’s employment with respect to the same type of work performed by Employee for the Company; or

d.    engage in competition with the Company by owning, investing in, contracting with, managing or otherwise operating or working with a business similar to that of the Company’s business within the United States.

Provided, however, that notwithstanding anything in this Agreement to the contrary, it shall be deemed not to be competition with the Company for purposes of this Agreement (and therefore not a breach of Employee’s obligations under this Section 7) for Employee to invest for or manage the investments of any person, fund or other entity if the strategy used by Employee therefor is not the same as or similar to any investment strategy used by a fund of the Company as of the date Employee’s employment with the Company terminates (or, for funds commenced by the Company after the date of the termination of Employee’s employment with the Company, not the same as or similar to any strategy the Company was actively planning to use in a fund to be commenced after such date).

8 .      C ONFIDENTIAL I NFORMATION .

a.     Non-disclosure . During employment and at all times thereafter, neither Employee nor Employee’s agents, employees, shareholders, and assigns shall use or disclose any confidential information to any person not employed by the Company or not authorized by the Company to receive such confidential information without the prior written consent of the Company; provided, however, that notwithstanding anything in this Agreement to the contrary, Employee may disclose at any time for any purpose any information with respect to his performance as a manager of any investment funds or with respect to the performance of any investment funds that he managed or supervised the management of, in whole or in part (collectively, “Performance Data”), and the Company shall during and following the term of Employee’s employment by the Company (i) provide to Employee such Performance Data as he may from time to time request, and (ii) not disclose to any person or entity any Performance Data that is not accurate in all materials respects or that is misleading.. The obligations contained in this paragraph will survive indefinitely. “Confidential Information” means information that is proprietary to the Company and shall include, but is not limited to, information relating to the business plans as well as pricing, contracts, employment costs, selling costs, delivery costs, marketing information, customer lists, account names, contacts, addresses, and sales activity, suppliers and vendors, projects, project information, contracts, marketing information, tax and

 

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financial information, intellectual property, employees, banking relationships, mailing lists, and related information. Any information Company, Employee, or the Company consider confidential information or is treated as confidential information will be presumed to be confidential information.

b.     Exceptions . Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of Confidential Information that is made in confidence to federal, state or local government officials or to an attorney solely for the purposes of reporting or investigating a suspected legal violation or that is otherwise disclosed in a complaint or other document filed in a lawsuit or other legal proceeding (if such filing is made under seal). An employee who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the Confidential Information to the attorney of the employee and use the Confidential Information in the court proceeding if the employee files any document containing the trade secret under seal and does not disclose the trade secret, except by court order.

9.      P ROPRIETARY R IGHTS .    Employee agrees that all Work Product created solely or jointly by Employee or Employee’s employees, associates, or subcontractors, arising from employment and/or work performed hereunder, or previously conceived in anticipation of employment with the Company shall be deemed “work made for hire” and shall remain the sole property of the Company. Employee shall execute all such assignments, oaths, declarations, and other documents as may be prepared by the Company to effect the foregoing. “Work Product” shall mean all documentation, creative works, marketing, and customer materials/information, know-how, and information works, marketing, and customer materials/information, and information created on behalf of the Company, in whole or in part, by Employee in creating the Work Product within the scope of Employee’s employment or this Agreement, whether or not copyrightable or otherwise protectable. Exempt from this Agreement shall be an invention for which no equipment, supplies, facility or trade secret information of the company was used and which was developed entirely on the Employee’s time, does not relate to the business of the Company or the Company’s actual or demonstrably anticipated research or development, or which otherwise does not result from any work performed by the Employee for the Company.

10.      E QUITABLE AND L EGAL R IGHTS .

a.     Return upon Termination . Upon termination of Employee’s employment for any reason, Employee shall return to the Company all Confidential Information, Work Product, and other property of the Company that Employee possesses, and shall also deliver to the Company all other documents, electronic data and information relating to any Work Product of Employee. Employee shall be liable to the Company for damages for any such property not returned to the Company.

b.     Restrictive Period . Employee acknowledges that upon a breach of the non-solicitation or non-competition terms in Section 7 herein, the restrictive period referenced therein shall be extended for the duration of such breach.

 

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c.     Equitable Rights . Employee acknowledges that the breach of Sections 7, 8 or 9 herein relating to non-competition/non-solicitation, confidentiality and/or proprietary rights may cause irreparable harm which may not be compensable by monetary damages. Accordingly, in the event of an actual or threatened breach by Employee of Section 7, 8 or 9 of this Agreement, the Company shall be entitled to an injunction restraining Employee from so acting. The Company acknowledges that the breach of Section 8 herein relating to Performance Data may cause irreparable harm which may not be compensable by monetary damages. Accordingly, in the event of an actual or threatened breach by the Company of Section 8 of this Agreement, Employee shall be entitled to an injunction restraining the Company from so acting. The prevailing party in any action to enforce any provision of this Agreement shall be entitled to the recovery of legal fees and costs incurred in enforcing this Agreement; provided that nothing herein shall be construed as prohibiting or in any way limiting either party from pursuing any other legal remedies available under the terms of this Agreement or other applicable laws.

11.      S EVERABILITY AND S URVIVAL . The parties understand that the Company has attempted to limit Employee’s right to compete and/or solicit only to the extent necessary to protect the Company from unfair competition. If any general provision of this Agreement is determined by a court of competent jurisdiction to be illegal or invalid for any reason whatsoever, then such provision shall be severed from this Agreement and shall not affect the validity of the remainder of this Agreement. The terms of this Agreement, most notably Sections 7, 8, 9, 10, and 11-17 herein, shall survive termination of this Agreement.

12.      E NTIRE A GREEMENT . This Agreement and documents referenced therein constitute the entire agreement with respect to the subject matter hereof, supersede all prior agreements, and may not be amended or waived unless in writing executed by all parties.

13.      A SSIGNABILITY . Employee shall not assign any rights or obligations hereunder without the written consent of the Company, with this Agreement binding upon Employee’s permitted successors, heirs and assigns. The Company may transfer or assign its rights and obligations under this Agreement.

14.      G OVERNING L AW . This Agreement and its validity and interpretation shall be governed by the laws of the state of Delaware, with any dispute or claim relating to this Agreement shall be venued or heard in the State of Delaware.

15.      N OTICES . Any notices required or permitted under this Agreement shall be in writing and delivered personally or by registered mail, postage prepaid to the Company or Employee at the address set forth below.

 

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16.      C OUNTERPARTS . This Agreement may be executed in one or more counterparts, all of which together shall be deemed one valid, final and binding Agreement.

 

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IN WITNESS HEREOF , the parties acknowledge that they have read and understand the terms herein and have executed this Agreement as of the day and year first above written.

 

COMPANY:
BCCM, INC.
By:  

 

Its:  

 

Address:  

 

 

 

 

 

EMPLOYEE:

 

 

Gary Kohler
Address:  

 

 

 

 

 

[Signature Page to Employment Agreement – Kohler]


EXHIBIT A

REVENUE SHARING TERMS

Employee shall be entitled to participate in an allocation of certain management fee and incentive fee revenues earned by the Company in the following funds: Blue Clay Capital SMID-Cap LO LP. Such revenue shares, as described below, will be additive to total base compensation.

Blue Clay Capital SMID-Cap LO LP

Employee to receive 60% of management fees on assets of existing clients and on assets of clients Employee brings into the fund (including without limitation Existing Clients of Other Funds). Employee to receive 50% of fees on assets of all clients Company or Air T, Inc. brings into the funds by direct marketing and mailing. The presumption is that all new client assets will be to the benefit of Employee (that is, Employee to receive 60% of the management fees with respect thereto) unless notified by Air T, Inc. or Company as to their originating as a new client at the time or immediately prior to such time the new client first invests in a fund of the Company.

“Existing Clients of Other Funds” means (i) persons or entities invested in funds of Blue Clay Capital Management, LLC immediately prior to the date of this Agreement, (ii) persons or entities brought to any funds of the Company by Employee on or subsequent to the date of this Agreement, and (ii) affiliates of the foregoing, if any such person or entity or affiliate thereof subsequently becomes an investor in Blue Clay Capital SMID-Cap LO LP.

Revenue shares shall be paid within fifteen (15) business days of the Company’s receipt of each payment of a fee or a portion thereof as to which Employee is entitled to a share.

Revenue shares with respect to any new or other funds are to be negotiated in good faith between the parties.

Exhibit 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“ Agreement ”) is entered into effective as of             , 2017, between David Woodis (“ Employee ”) and BCCM, Inc., a Delaware corporation (“ Company ”).

WHEREAS , pursuant to an Asset Purchase Agreement between the Company and Blue Clay Capital Management, LLC (“ BCCM ”) dated as of             , 2017 (“ Asset Purchase Agreement ”), the Company purchased the assets of BCCM, an asset management business that formerly employed Employee.

WHEREAS , as part of the Asset Purchase Agreement, the Company desires to hire Employee pursuant to the terms of this Agreement. Employee’s employment with the Company will expose Employee to more Confidential Information and customer/vendor relationships of the Company.

WHEREAS , Employee recognizes that as part of the Asset Purchase Agreement and during the course of employment with the Company, the Company will disclose to such confidential customer and related business information, which is the property and trade secrets of the Company and which enable the Company to compete successfully. Employee recognizes that the Company has a legitimate interest and right in protecting its interest in such information and that in consideration for the Asset Purchase Agreement and Employee’s hiring with the Company, the parties are willing to execute this Agreement.

WHEREAS , Employee acknowledges that this Agreement was provided, discussed and understood prior to execution of this Agreement, and that Employee was given an adequate opportunity to ask questions and seek any legal assistance related to this Agreement.

NOW, THEREFORE , in consideration of the foregoing promises and the mutual promises, covenants, and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.      T ERM AND T ERMINATION .    The employment relationship between the Company and Employee shall remain “at-will,” and either party may terminate Employee’s employment with the Company at any time, for any reason, and with or without notice.

2.      C ONSIDERATION . The consideration for this Agreement, the sufficiency of which is hereby acknowledged, shall be the Employee’s hiring and/or employment with the Company, specifically including, but not limited to, Employee’s compensation, the accompanying benefits of employment, and access to the Company’s business information.


3.      D UTIES . Employee shall be employed with the Company as Chief Operating Officer and Chief Financial Officer and provide related services to the Company. While employed by the Company, Employee shall devote Employee’s full time, skill, and attention during normal business hours to the interests of and the business of the Company (consistent with the Employee’s devotion of the same to Blue Clay Capital Management, LLC prior to the date hereof), and shall perform such duties, if any, as shall be assigned from time to time by the Company and are consistent with Employee’s position as Chief Operating Officer and Chief Financial Officer, shall comply to the best of Employee’s abilities with the best interest, policies and directives issued by the Company. Employee shall report to the Board of Directors of the Company. The Company acknowledges that Employee is engaged in various non-profit and other activities not in furtherance of the Company’s business, that the Employee may become engaged in other such activities, and nothing in this Agreement or in Employee’s employment by the Company shall prohibit Employee from engaging in any activities that are not competitive with the business of the Company and do not materially interfere with the performance of Employee’s duties on behalf of the Company.

4.      C OMPENSATION .

a.     Annual Compensation . In consideration of Employee’s services, the Company agrees to pay Employee an annual base salary of $125,000.00, as adjusted (increased, but not decreased) from time-to-time, payable in equal installments twice monthly. Except as expressly provided below as to benefits and other matters, Employee agrees to accept such consideration as full compensation for services hereunder. The Company shall have the right to deduct from compensation paid to Employee hereunder any and all of Employee’s social security, federal, state, and local taxes which may be required by law, and any and all amounts that may be owing to the Company by Employee.

b.     Bonus . Employee shall have the opportunity to earn an annual discretionary bonus based upon terms, criteria and conditions established by the Company’s Board in their sole discretion. Employee must be actively employed with the Company through the bonus payout date to receive any annual bonus payout pursuant to this Section. The timing of such payment shall be in the Board’s sole discretion.

c.     Revenue Sharing . Employee shall have the right to earn Company revenue sharing based upon the terms and conditions set forth on Exhibit A hereto. Such revenue sharing shall be paid quarterly. After Employee is no longer employed by the Company, Employee shall be entitled to the revenue sharing listed on Exhibit A as follows: (1) 100% of the revenue sharing Employee would have been entitled to receive if he remained employed by the Company calculated for the period between the date Employee ceased to be employed by the Company and the first anniversary of the date Employee ceased to be employed by the Company; and (2) 50% of the revenue sharing Employee would have been entitled to receive if he had remained employed by the Company calculated for the period between the first anniversary and second anniversary of the date Employee ceased to be employed by the Company.

 

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5 .      E MPLOYEE B ENEFITS . Employee shall be entitled during the term of this Agreement to participate in the Company’s benefits programs, if any, and receive paid vacation on the same basis as is generally from time to time applicable to other employees of the Company serving in a capacity similar to that being occupied by Employee and having been employed by Employee for the same period of time; provided, however, that such benefits shall in any event include health insurance on terms reasonably acceptable to Employee. The Company’s benefit plans shall be subject to the establishment and modification by the Company in its sole discretion.

6 .      E MPLOYEE E XPENSES . During the term of employment, the Company shall reimburse Employee for, or pay directly, all reasonable and pre-approved travel, entertainment, and other expenses as are ordinarily incurred by Employee in connection with the performance of services under this Agreement. Reimbursement or payment for such expenses shall be made upon presentation of expense statements and other supporting information as the Company may reasonably request.

7.      C OVENANT N OT T O S OLICIT OR COMPETE . In consideration of the foregoing and the mutual promises, covenants, and agreements contained herein, from the date of this Agreement until one (1) year following Employee’s termination of employment with the Company for any reason, Employee will not, either directly or indirectly, alone or as partner, officer, director, shareholder, agent, employee, affiliate, subsidiary, parent company, agent or assign of another firm or entity:

a.    interfere, or engage in competition with, the business of the Company (whether by way of interfering with the Company’s relationship with employees, customers, agents, representatives, manufacturers, distributors, or vendors);

b.    hire, employ, retain as an independent contractor, induce or attempt to induce by soliciting or assisting anyone else in the solicitation of, any of the Company’s employees, former employees within one year of such former employee’s leaving the employment of the Company, or contractors of the Company to leave their employment or terminate their contract with the Company;

c.    engage in competition with the Company by soliciting or working with clients or customers of the Company or former clients of the Company with whom the Company conducted business during the term of Employee’s employment with respect to the same type of work performed by Employee for the Company; or

d.    engage in competition with the Company by owning, investing in, contracting with, managing or otherwise operating or working with a business similar to that of the Company’s business within the United States.

 

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8 .      C ONFIDENTIAL I NFORMATION .

a.     Non-disclosure . During employment and at all times thereafter, neither Employee nor Employee’s agents, employees, shareholders, and assigns shall use or disclose any confidential information to any person not employed by the Company or not authorized by the Company to receive such confidential information without the prior written consent of the Company. The obligations contained in this paragraph will survive indefinitely. “Confidential Information” means information that is proprietary to the Company and shall include, but is not limited to, information relating to the business plans as well as pricing, contracts, employment costs, selling costs, delivery costs, marketing information, customer lists, account names, contacts, addresses, and sales activity, suppliers and vendors, projects, project information, contracts, marketing information, tax and financial information, intellectual property, employees, banking relationships, mailing lists, and related information. Any information Company, Employee, or the Company consider confidential information or is treated as confidential information will be presumed to be confidential information.

b.     Exceptions . Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of Confidential Information that is made in confidence to federal, state or local government officials or to an attorney solely for the purposes of reporting or investigating a suspected legal violation or that is otherwise disclosed in a complaint or other document filed in a lawsuit or other legal proceeding (if such filing is made under seal). An employee who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the Confidential Information to the attorney of the employee and use the Confidential Information in the court proceeding if the employee files any document containing the trade secret under seal and does not disclose the trade secret, except by court order.

9.      P ROPRIETARY R IGHTS .    Employee agrees that all Work Product created solely or jointly by Employee or Employee’s employees, associates, or subcontractors, arising from employment and/or work performed hereunder, or previously conceived in anticipation of employment with the Company shall be deemed “work made for hire” and shall remain the sole property of the Company. Employee shall execute all such assignments, oaths, declarations, and other documents as may be prepared by the Company to effect the foregoing. “Work Product” shall mean all documentation, creative works, marketing, and customer materials/information, know-how, and information works, marketing, and customer materials/information, and information created on behalf of the Company, in whole or in part, by Employee in creating the Work Product within the scope of Employee’s employment or this Agreement, whether or not copyrightable or otherwise protectable. Exempt from this Agreement shall be an invention for which no equipment, supplies, facility or trade secret information of the company was used and which was developed entirely on the Employee’s time, does not relate to the business of the Company or the Company’s actual or demonstrably anticipated research or development, or which otherwise does not result from any work performed by the Employee for the Company.

 

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10.      E QUITABLE AND L EGAL R IGHTS .

a.     Return upon Termination . Upon termination of Employee’s employment for any reason, Employee shall return to the Company all Confidential Information, Work Product, and other property of the Company that Employee possesses, and shall also deliver to the Company all other documents, electronic data and information relating to any Work Product of Employee. Employee shall be liable to the Company for damages for any such property not returned to the Company.

b.     Restrictive Period . Employee acknowledges that upon a breach of the non-solicitation or non-competition terms in Section 7 herein, the restrictive period referenced therein shall be extended for the duration of such breach.

c.     Equitable Rights . Employee acknowledges that the breach of Sections 7, 8 or 9 herein relating to non-competition/non-solicitation, confidentiality and/or proprietary rights may cause irreparable harm which may not be compensable by monetary damages. Accordingly, in the event of an actual or threatened breach by Employee of Section 7, 8 or 9 of this Agreement, the Company shall be entitled to an injunction restraining Employee from so acting. The prevailing party shall be entitled to the recovery of legal fees and costs incurred in enforcing this Agreement; provided that nothing herein shall be construed as prohibiting or in any way limiting the Company from pursuing any other legal remedies available under the terms of this Agreement or other applicable laws.

11.      S EVERABILITY AND S URVIVAL . The parties understand that the Company has attempted to limit Employee’s right to compete and/or solicit only to the extent necessary to protect the Company from unfair competition. If any general provision of this Agreement is determined by a court of competent jurisdiction to be illegal or invalid for any reason whatsoever, then such provision shall be severed from this Agreement and shall not affect the validity of the remainder of this Agreement. The terms of this Agreement, most notably Sections 7, 8, 9, 10, and 11-17 herein, shall survive termination of this Agreement.

12.      E NTIRE A GREEMENT . This Agreement and documents referenced therein constitute the entire agreement with respect to the subject matter hereof, supersede all prior agreements, and may not be amended or waived unless in writing executed by all parties.

13.      A SSIGNABILITY . Employee shall not assign any rights or obligations hereunder without the written consent of the Company, with this Agreement binding upon Employee’s permitted successors, heirs and assigns. The Company may transfer or assign its rights and obligations under this Agreement.

14.      G OVERNING L AW . This Agreement and its validity and interpretation shall be governed by the laws of the state of Delaware, with any dispute or claim relating to this Agreement shall be venued or heard in the State of Delaware.

 

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15.      N OTICES . Any notices required or permitted under this Agreement shall be in writing and delivered personally or by registered mail, postage prepaid to the Company or Employee at the address set forth below.

16.      C OUNTERPARTS . This Agreement may be executed in one or more counterparts, all of which together shall be deemed one valid, final and binding Agreement.

 

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IN WITNESS HEREOF , the parties acknowledge that they have read and understand the terms herein and have executed this Agreement as of the day and year first above written.

 

COMPANY:
BCCM, INC.
By:  

 

Its:  

 

Address:  

 

 

 

 

 

EMPLOYEE:

 

 

David Woodis
Address:  

 

 

 

 

 

[Signature Page to Employment Agreement – Woodis]


EXHIBIT A

REVENUE SHARING TERMS

Employee shall be entitled to receive a top-line revenue share, starting at 2.5% of earned revenues of the Company, to be adjusted in the future according to growth of platform revenues of the Company.