Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
EVO PAYMENTS, INC.
EVO Payments, Inc., a Delaware corporation (the “
Corporation
”), hereby certifies as follows:
1. The original Certificate of Incorporation of the Corporation was filed with the Office of the Secretary of State of the State of Delaware on April 20, 2017 (the “
Certificate of Incorporation
”). The name of the Corporation is EVO Payments, Inc.
2. The Corporation is filing this Amended and Restated Certificate of Incorporation of the Corporation (the “
Amended and Restated Certificate of Incorporation
”), which amends and restates the Certificate of Incorporation in its entirety. The full text of the Amended and Restated Certificate of Incorporation is set forth on
Exhibit A
attached hereto.
3. The Amended and Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Corporation on May 22, 2018 and duly approved by the sole stockholder of the Corporation in accordance with the provisions of Sections 242, 245 and 228 of the General Corporation Law of the State of Delaware on May 22, 2018.
4. The Amended and Restated Certificate of Incorporation shall become effective upon filing with the Secretary of State of the State of Delaware.
[
Signature Page Follows
]
IN WITNESS WHEREOF, the Corporation has caused the Amended and Restated Certificate of Incorporation to be executed as of May 24, 2018.
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EVO Payments, Inc.
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By:
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/s/ Steven J. de Groot
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Name:
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Steven J. de Groot
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Title:
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Executive Vice President,
General Counsel and Secretary
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Exhibit
A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
EVO PAYMENTS, INC.
ARTICLE I
The name of the corporation is EVO Payments, Inc. (the “
Corporation
”).
ARTICLE II
The address of the Corporation’s initial registered office in the State of Delaware is 1209 Orange Street, in the city of Wilmington, County of New Castle, 19801. The name of the Corporation’s initial registered agent at such address is The Corporation Trust Company.
ARTICLE III
The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended or any successor statute (the “
DGCL
”), and the Corporation shall have all powers necessary to engage in such acts or activities, including, but not limited to, the powers enumerated in the DGCL or any amendment thereto.
ARTICLE IV
Section 4.01.
Authorized Stock
. The capital stock that the Corporation has authority to issue consists of the following:
(a) 200,000,000 shares of Class A common stock, par value $0.0001 per share (“
Class A Common Stock
”);
(b) 40,000,000 shares of Class B
common
stock,
par value $0.0001 per share
(“
Class B Common Stock
”);
(c) 4,000,000 shares of Class C
common
stock,
par value $0.0001 per share
(“
Class C Common Stock
”);
(d) 32,000,000 shares of Class D
common
stock,
par value $0.0001 per share
(“
Class D Common Stock
” and, together with the Class A Common Stock, Class B Common Stock and Class C Common Stock, the “
Common Stock
”); and
(e) 10,000,000 shares of preferred
stock
,
par value $0.0001 per share
(“
Preferred Stock
”).
The number of authorized shares of Class A Common Stock and Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Corporation’s capital stock entitled to vote thereon, irrespective of the provisions of Section 242(b)(2) of the DGCL. The number of authorized shares of Class B Common Stock, Class C Common Stock or Class D Common Stock may be decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Corporation’s capital stock entitled to vote thereon, irrespective of the provisions of Section 242(b)(2) of the DGCL.
Section 4.02.
Common Stock
.
(a)
Voting Rights
.
(i) Each holder of Class A Common Stock, as such, shall be entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters submitted to a vote of the holders of Class A Common Stock, whether voting separately as a class or otherwise.
(ii) Except as set forth in Section 4.02(a)(iii), each holder of Class B Common Stock, as such, shall be entitled to a number of votes for each share of Class B Common Stock held of record by such holder on all matters submitted to a vote of the holders of Class B Common Stock when voting with other classes of the Corporation’s capital stock equal to the following:
where:
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c
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=
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N
A
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=
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the aggregate number of shares of Class A Common Stock entitled to vote on such matter,
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N
C
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=
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the aggregate number of votes entitled to be cast on such matter by holders of Class C Common Stock, as calculated pursuant to Section 4.02(a)(iv),
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N
D
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=
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the aggregate number of shares of Class D Common Stock entitled to vote on such matter,
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N
pref
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=
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the aggregate number of votes entitled to be cast on such matter by holders of all classes or series of Preferred Stock, and
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Sh
B
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=
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the aggregate number of shares of Class B Common Stock entitled to vote on such matter.
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(iii) Each holder of Class B Common Stock, as such, shall be entitled to one vote for each share of Class B Common Stock held of record by such holder on all matters submitted to a vote of the holders of Class B Common Stock voting as a separate class distinct from all other classes or series of the Corporation’s capital stock.
(iv) Except as set forth in Section 4.02(a)(v), each holder of Class C Common Stock, as such, shall be entitled to a number of votes for each share of Class C Common Stock held of record by such holder on all matters submitted to a vote of the holder of Class C Common Stock when voting with other classes of the Corporation’s capital stock equal to the lesser of (1) 3.5 and (2) the following:
where:
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c
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=
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N
A
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=
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the aggregate number of shares of Class A Common Stock entitled to vote on such matter,
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N
D
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=
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the aggregate number of shares of Class D Common Stock entitled to vote on such matter,
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N
pref
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=
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the aggregate number of votes entitled to be cast on such matter by holders of all classes or series of Preferred Stock,
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R
A
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=
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the aggregate number of shares of Class A Common Stock that are subject to vesting or forfeiture and beneficially owned by any director or employee of the Corporation and entitled to vote on such matter, and
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Sh
c
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=
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the aggregate number of shares of Class C Common Stock entitled to vote on such matter.
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(v) Each holder of Class C Common Stock, as such, shall be entitled to one vote for each share of Class C Common Stock held of record by such holder on all matters submitted to a vote of the holders of Class C Common Stock voting as a separate class distinct from all other classes or series of the Corporation’s capital stock.
(vi) Each holder of Class D Common Stock, as such, shall be entitled to one vote for each share of Class D Common Stock held of record by such holder on all matters submitted to a vote of the holders of Class D Common Stock, whether voting separately as a class or otherwise.
(vii) Except as otherwise provided by this Amended and Restated Certificate of Incorporation (as the same may be further amended or restated from time to time, this “
Amended and Restated Certificate of Incorporation
”) or by applicable law, and subject to the rights of holders of any series of Preferred Stock then outstanding,
holders of Common Stock shall vote together as a single class (or, if any holders of shares of any other class or series of the Corporation’s capital stock are entitled to vote on such matter (including, without limitation, any class or series of Preferred Stock), as a single class with such holders of capital stock) on all matters submitted to a vote of the stockholders of the Corporation. No class of Common Stock shall be entitled to cumulative voting in the election of directors.
(b)
Dividends.
Subject to the DGCL and the rights of any then outstanding Preferred Stock, d
ividends may be declared and paid on the Class A Common Stock out of assets or funds lawfully available therefor as and when determined by the Board of Directors of the Corporation (the “
Board of Directors
”). Except as otherwise provided by the DGCL or this Amended and Restated Certificate of Incorporation, the holders of record of Class A Common Stock shall share ratably, on a per share basis, in all dividends, whether payable in cash, stock or otherwise. Dividends, whether payable in cash, stock or otherwise, shall not be declared or paid on the Class B Common Stock, Class C Common Stock or Class D Common Stock.
(c)
Liquidation.
Upon any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, holders of Class A Common Stock will be entitled to receive all assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares of Class A Common Stock held of record by them, subject to any preferential rights of any then outstanding Preferred Stock. Holders of shares of Class B Common Stock, Class C Common Stock or Class D Common Stock, as such, shall not be entitled to receive any assets of the Corporation in the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary. A merger or consolidation of the Corporation with or into any other entity, or a sale or conveyance of all or any part of the assets of the Corporation, shall not be deemed to be a voluntary or involuntary liquidation or dissolution or winding up of the Corporation for purposes of this Section 4.02(c) unless such merger, consolidation, sale or conveyance in fact results in the liquidation, dissolution or winding up of the Corporation.
(d)
Preemptive Rights.
No stockholder of the Corporation shall have any preemptive right to purchase, subscribe for or otherwise acquire shares of any class or series of capital stock issued by the Corporation, or any options, rights or warrants to purchase any shares of any class or series of capital stock issued by the Corporation, or any other securities of the Corporation convertible into, exchangeable or exercisable for, or carrying an option to purchase shares of any class or series of capital stock issued by the Corporation. The Board of Directors may authorize the issuance of shares of stock of any class or series of capital stock issued by the Corporation, or options, rights or warrants to purchase shares of any class or series of capital stock issued by the Corporation, or any securities convertible into, exchangeable or exercisable for, or carrying an option to purchase shares of any class or series of capital stock issued by the Corporation, in each case without offering such securities, either in whole or in part, to any stockholder of the Corporation.
(e)
Transfer Restrictions; Ownership of Common Stock
.
(i) Shares of Class B Common Stock shall be issued only to, and registered only in the name of, Blueapple, Inc., a Delaware corporation (“
Blueapple
”),
and any transferee in a transfer permitted under the Amended and Restated Limited Liability Company Agreement, dated as of May 22, 2018, of EVO Investco, LLC, as the same may be further amended and restated from time to time (the “
EVO Investco LLC Agreement
” and such transferee, a “
Permitted Transferee
”).
(ii) Shares of Class C Common Stock shall be issued only to, and registered only in the name of those persons listed as a holder of “Class C Original Units” on Schedule I to the EVO Investco LLC Agreement and their Permitted Transferees.
(iii) Following its issuance by the Corporation, no holder of Class B Common Stock, Class C Common Stock or Class D Common Stock may transfer beneficial or record ownership of, or any right or other interest in, any share of such class of Common Stock by any means, other than to a Permitted Transferee in connection with the simultaneous transfer to such Permitted Transferee of an equal number of such holder’s Common Units (as defined below) in compliance with the EVO Investco LLC Agreement. Any purported transfer of any share of Class B Common Stock, Class C Common Stock or Class D Common Stock, or any interest or right therein, other than as permitted by this Section 4.02(e)(iii) shall be null and void
ab initio
and shall not be recognized by the Corporation or the transfer agent for the Class B Common Stock, Class C Common Stock or Class D Common Stock, as applicable, and the purported transferee or purported owner in any such purported transfer shall acquire no rights to any share of Class B Common Stock, Class C Common Stock or Class D Common Stock purportedly held in violation of these restrictions. For purposes of this Amended and Restated Certificate of Incorporation, “
Common Unit
” means a membership interest in EVO Investco, LLC authorized and issued under the EVO Investco LLC Agreement and constituting a “Common Unit” as defined in the EVO Investco LLC Agreement.
(iv) The Corporation shall, to the fullest extent permitted by law, undertake all necessary and appropriate action to ensure that the number of shares of Class B Common Stock, Class C Common Stock and Class D Common Stock held of record at any time by any holder thereof shall be equal to the aggregate number of Common Units held of record by such holder.
(v) As a condition to the registration of the transfer of beneficial or record ownership of, or any right or other interest in, any share of Class B Common Stock, Class C Common Stock and Class D Common Stock, the proposed transferee and the transferor of such shares shall provide an affidavit containing such information, to the extent reasonably available and legally permissible, as the Corporation may reasonably request from time to time in order to determine compliance with Section 4.02(e)(iii). The Board of Directors may, to the extent permitted by law, from time to time establish (and may thereafter amend or rescind) procedures not inconsistent with the provisions of this Section 4.02 for determining whether any transfer or acquisition of shares of Class B Common Stock, Class C Common Stock or Class D Common Stock would violate the restrictions contained in this Section 4.02 and for the orderly application, administration and implementation of the provisions of this Section 4.02. Any such procedures shall be kept on file with the Secretary of the Corporation and with the transfer agent for the Class B Common Stock, Class C Common Stock or Class D Common Stock, as applicable, and
shall be made available for inspection by any prospective transferee and, upon written request, shall be mailed to holders of shares of Class B Common Stock, Class C Common Stock or Class D Common Stock.
(vi) Upon a determination by the Board of Directors that anyone has attempted or may attempt to transfer or to acquire shares of Class B Common Stock, Class C Common Stock and Class D Common Stock in violation of this Section 4.02(e) (including, without limitation, any procedures established pursuant to Section 4.02(e)(v)), the Board of Directors may take such action as it deems advisable to refuse to give effect to such transfer or acquisition on the books and records of the Corporation, including without limitation, to cause the transfer agent for the Class B Common Stock, Class C Common Stock or Class D Common Stock, as applicable, to not record the purported transferee as the record holder of such shares of Class B Common Stock, Class C Common Stock or Class D Common Stock, as applicable, and to institute proceedings to enjoin or rescind any such transfer or acquisition.
(vii) All certificates or book entries representing shares of Class B Common Stock, Class C Common Stock or Class D Common Stock shall bear a legend substantially in the following form (or in such other form as the Board of Directors may determine):
“THE SECURITIES REPRESENTED BY THIS [CERTIFICATE][BOOK ENTRY] ARE SUBJECT TO THE RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER) SET FORTH IN THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE CORPORATION (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION AND SHALL BE PROVIDED FREE OF CHARGE TO ANY STOCKHOLDER MAKING A REQUEST THEREFOR).”
(f)
Surrender, Cancellation and Extinguishment of Common Stock
.
(i) Notwithstanding anything to the contrary in this Amended and Restated Certificate of Incorporation, any holder of Class B Common Stock, Class C Common Stock or Class D Common Stock may surrender such shares of Common Stock to the Corporation at any time without the payment of any consideration by the Corporation for such shares.
(ii) Each share of Class B Common Stock shall be automatically and immediately cancelled for no consideration and shall no longer be issued or outstanding, without any further action on the part of the Corporation or any holder of Class B Common Stock, upon the earliest to occur of the following:
(1) any point in time in which Blueapple and its Permitted Transferees hold of record an aggregate of less than 3% of all Common Units issued and outstanding as of such time; and
(2) May 25, 2021.
(iii) Following the surrender to the Corporation or cancellation of any shares of Class B Common Stock, Class C Common Stock or Class D Common Stock, as applicable, the Corporation shall take all actions necessary to retire and cancel such shares of Common Stock, and such shares of Common Stock shall not be re-issued by the Corporation following such retirement and cancellation.
(g)
Automatic Conversion of the Class C Common Stock.
(i) Each share of Class C Common Stock shall automatically convert into one share of Class D Common Stock, without any further action on the part of the Corporation or any holder of Class C Common Stock and without any obligation on the part of the Corporation to notify such holder of Class C Common Stock, upon the earliest to occur of the following:
(1) the date on which the Original Class C Holder to whom such share of Class C Common Stock was initially issued by the Corporation is no longer employed by the Corporation or any of its subsidiaries; and
(2) May 25, 2021.
The Corporation shall not re-issue any shares of Class C Common Stock converted into Class D Common Stock pursuant to this Section 4.02(g)(i).
(ii) The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class D Common Stock, solely for the purpose of effecting the conversion of the Class C Common Stock, a number of shares of Class D Common Stock as shall from time to time be sufficient to effect the conversion of Class C Common Stock in accordance with Section 4.02(g)(i). If at any time the number of authorized but unissued shares of Class D Common Stock is not sufficient to effect the conversion of all then outstanding shares of Class C Common Stock, the Corporation shall take such action as may be necessary to increase its authorized but unissued Class D Common Stock to such number as shall be sufficient for such purpose.
(iii) Other than as explicitly set forth in Section 4.02(g)(i), no share of Common Stock shall be convertible into, or exchangeable or exercisable for, any shares of any class or series of capital stock issued by the Corporation, whether now or hereafter authorized.
(h)
No Fractional Shares
. The Corporation shall not be authorized to issue fractional shares of any class or series of the Corporation’s capital stock.
Section 4.03.
Preferred Stock
. The Board of Directors is authorized, subject to any limitations prescribed by applicable law, to provide for the issuance of shares of Preferred Stock in one or more classes or series, and by filing a certificate pursuant to the DGCL (such certificate being hereinafter referred to as a “
Preferred Stock Designation
”), to establish from time to time the number of shares to be included in each such class or series and to fix the powers, designations, preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including, without limitation, dividend rights, dividend rates, conversion rights, exchange rights, voting rights, rights and terms of redemption (including sinking and purchase fund provisions), the redemption price or prices, restrictions on the issuance of shares of such class or series, the dissolution preferences and the rights in respect to any distribution of assets of any wholly unissued class or series of Preferred Stock, and the designation thereof, or any of them and to increase or decrease the number of shares of any class or series so created (except where otherwise provided in the Preferred Stock Designation), subsequent to the issue of that class or series but not below the number of shares of such class or series then outstanding. In case the number of shares of any class or series of Preferred Stock shall be so decreased, the shares constituting such decrease shall resume the undesignated status which they had prior to the adoption of the resolution originally fixing the number of shares of such class or series. There shall be no limitation or restriction on any variation between any of the different classes or series of Preferred Stock as to the designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof; and the several classes or series of Preferred Stock may vary in any and all respects as fixed and determined by the resolution or resolutions of the Board of Directors or by a committee of the Board of Directors providing for the issuance of the various classes or series of Preferred Stock.
ARTICLE V
Section 5.01.
Election of Director by Written Ballot
. Election of directors need not be by written ballot unless provided otherwise in the Corporation’s bylaws (as the same may be amended or restated from time to time, the “
Bylaws
”).
Section 5.02.
Number of Directors
. The number of directors constituting the Board of Directors shall be not fewer than seven and not more than fifteen, each of whom shall be a natural person. The initial number of directors shall be seven and, except as otherwise set forth in that certain Director Nomination Agreement, dated on or about May 22, 2018 (as amended or supplemented, the “
Nomination Agreement
”), by and among the Corporation and funds affiliated with Madison Dearborn Partners, LLC (“
MDP
”), to the extent in effect, and subject to the special rights of the holders of any class or series of Preferred Stock to elect directors, any change in the number of directors shall be made from time to time exclusively pursuant to a resolution adopted by the Board of Directors.
Section 5.03.
Staggered Board
(a) Subject to the special rights of the holders of any class or series of Preferred Stock to elect directors, the Board of Directors shall be divided into three groups: Group I; Group II; and Group III. The allocation of directors among the three groups (including the allocation of each director already in office as of the effectiveness of this Amended and Restated Certificate of Incorporation and each director elected or appointed as the result of any increase or decrease in the number of directors on the Board of Directors) shall be determined by a resolution of the Board of Directors, and to the extent in effect, in accordance with the Nomination Agreement. The initial Group I Directors shall serve for a term expiring at the annual meeting of stockholders of the Corporation held in 2019; the initial Group II Directors shall serve for a term expiring at the annual meeting of stockholders of the Corporation held in
2020; and the initial Group III Directors shall serve for a term expiring at the annual meeting of stockholders of the Corporation held in 2021. Each director in each group shall hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. At each annual meeting of stockholders of the Corporation beginning with the annual meeting of stockholders of the Corporation held in 2019, the directors (or successors thereof) of the group whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders of the Corporation to be held in the third year following the year of their election, with each director in each such group to hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal.
(b) Any director elected by a separate voting class consisting solely of the holders of one or more classes or series of Preferred Stock shall be allocated among the three groups as determined by resolution of the Board of Directors.
Section 5.04.
Vacancies and Newly Created Directorships
. Except as otherwise set forth in the Nomination Agreement, to the extent in effect, any vacancy or newly-created directorship shall be filled exclusively by vote of a majority of the directors then in office. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. A director selected to fill a vacancy shall continue to hold office for the unexpired term of his or her predecessor in office. A director selected to fill a position resulting from an increase in the number of directors shall hold office until the next annual meeting of stockholders of the Corporation held for the election of directors of the Corporation for the group for which such director shall have been selected, subject to the election and qualification of his or her successor and to his or her earlier death, resignation or removal.
Section 5.05.
Removal
. Directors may be removed only for cause and only by the affirmative vote of at least 66 ⅔% of votes entitled to be cast by holders of Common Stock, voting together as a single class.
ARTICLE VI
Section 6.01.
No Action by Written Consent
. No action required or permitted to be taken by the holders of any class or series of the Corporation’s capital stock may be taken by one or more written consents in lieu of a meeting.
Section 6.02.
Annual Meeting of Stockholders
. The annual meeting of stockholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held at such date, time and place, if any, as shall be determined by resolution of the Board of Directors in its sole and absolute discretion.
Section 6.03.
Special Meetings of Stockholders
. Subject to any special rights of the holders of any class or series of Preferred Stock and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only (i) by or at the direction of the Board of Directors, acting pursuant to a resolution adopted by the affirmative vote of the majority of the total number of directors then in office, or (ii) by the chairperson of the Board of Directors. Any business transacted at any special meeting of stockholders of the Corporation shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.
ARTICLE VII
No director shall have any personal liability to the Corporation or to its stockholders for monetary damages for breach of fiduciary duty as a director by reason of any act or omission occurring subsequent to the date when this provision becomes effective, except that this provision shall not eliminate or limit the liability of a director (a) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) for liabilities of a director imposed by Section 174 of the DGCL or (d) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended. Any repeal or modification of this provision shall not adversely affect any right or protection of a director of the Corporation with respect to any act or omission occurring prior to the repeal or modification of this provision.
To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which applicable law permits the Corporation to provide indemnification and advancement of expenses) through provisions of the Bylaws, agreements with such persons, vote of stockholders or disinterested directors, or otherwise. Any repeal or modification of this provision shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.
ARTICLE VIII
Section 8.01.
Opt Out of DGCL 203
. The Corporation shall not be governed by Section 203 of the DGCL.
Section 8.02.
Limitations on Business Combinations
. Notwithstanding the foregoing, the Corporation shall not engage in any Business Combination, at any point in time at which the Class A Common Stock is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), with any Interested Stockholder for a period of three years following the time that such stockholder became an Interested Stockholder, unless:
(a) prior to such time, the Board of Directors approved either the Business Combination or the transaction which resulted in the stockholder becoming an Interested Stockholder;
(b) upon consummation of the transaction that resulted in the stockholder becoming an Interested Stockholder, the Interested Stockholder Owned at least 85% of the Voting Stock outstanding at the time the transaction commenced, excluding for purposes of determining the Voting Stock outstanding (but not the outstanding Voting Stock Owned by the Interested Stockholder) those shares Owned by (i) Persons who are directors and also officers of the Corporation and (ii) employee stock plans in which employee participants do not have the
right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
(c) at or subsequent to that time, the Business Combination is approved (i) by the Board of Directors and (i) by the affirmative vote of at 66 ⅔% of the outstanding Voting Stock that is not Owned by the Interested Stockholder at an annual or special meeting of stockholders of the Corporation.
Section 8.03.
Certain Definitions
. Solely for purposes of this Article VIII, the following terms shall have the meanings assigned below:
(a) “
Affiliate
” means a Person that directly, or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, another Person.
(b) “
Associate
,” when used to indicate a relationship with any Person, means: (i) any corporation, partnership, unincorporated association or other entity of which such Person is a director, officer or partner or is, directly or indirectly, the Owner of 20% or more of any class of Voting Stock; (ii) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same residence as such Person.
(c) “
Business Combination
” means:
(i) any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (1) with the Interested Stockholder, or (2) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Stockholder and as a result of such merger or consolidation Section 8.02 is not applicable to the surviving entity;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the Interested Stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation, which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding Stock of the Corporation;
(iii) any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any Stock of the Corporation or of such subsidiary to the Interested Stockholder, except: (1) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into Stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the Interested Stockholder became such; (2) pursuant to a merger under Section 251(g) or Section 253 of the DGCL; (3) pursuant to a dividend or distribution paid or made, or the exercise, exchange or
conversion of securities exercisable for, exchangeable for or convertible into Stock of the Corporation or any such subsidiary which security is distributed, pro rata to all stockholders of a class or series of Stock of the Corporation subsequent to the time the Interested Stockholder became such; (4) pursuant to an exchange offer by the Corporation to purchase Stock made on the same terms to all stockholders of said stock; or (5) any issuance or transfer of stock by the Corporation;
provided
that in no case under clauses (3) through (5) above shall there be an increase in the Interested Stockholder’s proportionate share of the Stock of any class or series of the Corporation or of the Voting Stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments);
(iv) any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the Stock of any class or series, or securities convertible into the Stock of any class or series, of the Corporation or of any such subsidiary which is Owned by the Interested Stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of Stock not caused, directly or indirectly, by the Interested Stockholder; or
(v) any receipt by the Interested Stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (i) through (iv) above) provided by or through the Corporation or any direct or indirect majority-owned subsidiary.
(d) “
Control
,” including the terms “
Controlling
,” “
Controlled by
” and “
under common Control with
,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Stock of such Person, by contract, or otherwise. A Person who is the Owner of 20% or more of the voting power of the outstanding Voting Stock of a corporation, partnership, unincorporated association or other entity shall be presumed to have Control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of Control shall not apply where such Person holds Voting Stock, in good faith and not for the purpose of circumventing this Article VIII, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have Control of such entity.
(e) “
Interested Stockholder
” means any Person (other than the Corporation and its subsidiaries) that (i) is the Owner of 15% or more of the Voting Stock of the Corporation, or (ii) is an Affiliate or Associate of the Corporation and was the Owner of 15% or more of the Voting Stock of the Corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such Person is an Interested Stockholder; and the Affiliates and Associates of such Person; but “Interested Stockholder” shall not include any Person whose ownership of shares in excess of the 15% limitation set forth herein is the result of any action taken solely by the Corporation;
provided
that such Person shall be an Interested Stockholder if thereafter such Person acquires additional shares of Voting Stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by
such Person. For the purpose of determining whether a Person is an Interested Stockholder, the Voting Stock of the Corporation deemed to be outstanding shall include Stock deemed to be Owned by the Person through application of the definition of “owner” below but shall not include any other unissued Stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion or exchange rights, warrants or options, or otherwise. Notwithstanding anything in this Section 8.03(e) to the contrary, none of Blueapple, MDP or any of their respective Permitted Transferees to whom Blueapple or MDP transfer 15% or more of the Voting Stock of the Corporation, or any of their respective Affiliates or Associates and any of their respective Permitted Transferees, shall be considered an Interested Stockholder for purposes of this Article VIII.
(f) “
Owner
,” including the terms “
Own
” and “
Owned
,” when used with respect to any Stock, means a Person that individually or with or through any of its Affiliates or Associates:
(i) beneficially owns such Stock, directly or indirectly; or
(ii) has (1) the right to acquire such Stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise;
provided
, however, that a Person shall not be deemed the Owner of Stock tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered Stock is accepted for purchase or exchange; or (2) the right to vote such Stock pursuant to any agreement, arrangement or understanding;
provided
, however, that a Person shall not be deemed the Owner of any Stock because of such Person’s right to vote such Stock if the agreement, arrangement or understanding to vote such Stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to 10 or more Persons; or
(iii) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in Section 8.03(f)(ii)(2) above), or disposing of such Stock with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, such stock.
(g) “
Person
” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.
(h) “
Stock
” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.
(i)
“
Voting Stock
” means Stock of the Corporation of any class or series entitled to vote generally in the election of directors. Every reference to a percentage of Voting Stock shall refer to such percentage of the votes of such Voting Stock.
ARTICLE IX
Section 9.01.
Certain Definitions
. Solely for purposes of this Article IX, the following terms shall have the meanings assigned below:
(a) “
Agent
” has the meaning set forth in Section 9.05.
(b) “
Business Day
” shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.
(c) “
Code
” means the Internal Revenue Code of 1986, as it may be amended from time to time.
(d) “
Corporation Securities
” means (i) shares of Common Stock, (ii) shares of Preferred Stock (other than nonvoting preferred stock described in Section 1563(c)(1)(A) of the Code), and (iii) any option (within the meaning of Section 1563(e)(1) of the Code and Treasury Regulations §1.1563-3(b)(1)) to acquire any Corporation Securities described in clause (i) or (ii) above.
(e) “
Excess Securities
” has the meaning given such term in Section 9.04(a).
(f) “
Expiration Date
” means the date upon which the Board of Directors determines by resolution that this Article IX is no longer necessary for the preservation or realization of Tax Benefits.
(g) “
Operating Company
” means EVO Investco, LLC, a Delaware limited liability company.
(h) “
Percentage Stock Ownership
” means, with respect to any Person, the percentage stock ownership interest of such Person in the Corporation for purposes of Section 1563 of the Code and the Treasury Regulations promulgated thereunder, determined separately with respect to the voting power of the stock of the Corporation and the value of stock of the Corporation, in each case taking into account any applicable constructive ownership rules under Section 1563(e) of the Code and Treasury Regulations §1.1563-3.
(i) “
Person
” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.
(j) “
Prohibited Distributions
” means any and all dividends or other distributions paid by the Corporation with respect to any Excess Securities received by a Purported Transferee.
(k) “
Prohibited Transfer
” means any Transfer or purported Transfer of Corporation Securities to the extent that such Transfer is prohibited or void under this Article IX.
(l) “
Proposed Transaction
” has the meaning set forth in Section 9.03(b).
(m) “
Purported Transferee
” has the meaning set forth in Section 9.04(a).
(n) “
Request
” has the meaning set forth in Section 9.03(b).
(o) “
Requesting Person
” has the meaning set forth in Section 9.03(b).
(p) “
Stock Ownership Threshold Percentage
” means 15.90%.
(q) “
Tax Benefits
” means tax benefits potentially available to the Corporation for U.S. federal, state and local income tax purposes as a result of any increase in the inside basis of the assets of the Operating Company (arising out of an election by the Operating Company under Section 754 of the Code).
(r) “
Transfer
” means, any direct or indirect sale, transfer, assignment, conveyance, pledge or other disposition or other action taken by a Person that alters the Percentage Stock Ownership of any Person.
(s) “
Transferee
” means, with respect to any Transfer, any Person to whom Corporation Securities are, or are proposed to be, Transferred.
(t) “
Transferor
” means, with respect to any Transfer, any Person by or from whom Corporation Securities are, or are proposed to be, Transferred.
(u) “
Treasury Regulations
” means the regulations, including temporary regulations or any successor regulations promulgated under the Code, as amended from time to time.
(v) “
Sixteen Percent Transaction
” has the meaning set forth in Section 9.02.
Section 9.02.
Transfer and Ownership Restrictions
. In order to preserve the ability of the Corporation to realize certain Tax Benefits, any attempted Transfer of Corporation Securities prior to the Expiration Date and any attempted Transfer of Corporation Securities pursuant to an agreement entered into prior to the Expiration Date shall be prohibited and void
ab initio
to the extent that, as a result of such Transfer (or any series of Transfers of which such Transfer is a part), the aggregate Percentage Stock Ownership of Blueapple, by vote or value, would exceed the Stock Ownership Threshold Percentage (any such Transfer, a “
Sixteen Percent Transaction
”).
Section 9.03.
Exceptions; Waiver of Transfer and Ownership Restrictions
.
(a) Any Transfer of Corporation Securities that would otherwise be prohibited pursuant to Section 9.02 shall nonetheless be permitted if prior to such Transfer being consummated (or, in the case of an involuntary Transfer, as soon as practicable after the transaction is consummated), the Board of Directors authorizes the Transfer in accordance with Section 9.03(b) or Section 9.03(c) (which authorization may relate to a Transfer or series of identified Transfers).
(b) The restrictions set forth in Section 9.02 shall not apply to a proposed Transfer that is a Sixteen Percent Transaction if the Transferor or the Transferee obtains the
authorization of the Board of Directors in the manner described below. In connection therewith, and to provide for effective implementation of this Section 9.03(b), any Person who desires to effect a Sixteen Percent Transaction (a “
Requesting Person
”) shall, prior to the date of such transaction for which the Requesting Person seeks authorization (the “
Proposed Transaction
”), request in writing (a “
Request
”) that the Board of Directors review the Proposed Transaction and authorize or not authorize the Proposed Transaction in accordance with this Section 9.03(b). A Request shall be mailed or delivered to the Secretary of the Corporation at the Corporation’s principal place of business. Such Request shall be deemed to have been received by the Corporation when actually received by the Corporation. A Request shall include: (i) the name, address and telephone number of the Requesting Person; (ii) the number and Percentage Stock Ownership of Corporation Securities then beneficially owned by the Requesting Person; (iii) a reasonably detailed description of the Proposed Transaction or Proposed Transactions for which the Requesting Person seeks authorization; and (iv) a request that the Board of Directors authorize the Proposed Transaction pursuant to this Section 9.03(b). The Board of Directors shall, in good faith, endeavor to respond to each Request within 20 Business Days of receiving such Request. The Board of Directors may authorize a Proposed Transaction if it determines that the Proposed Transaction would not jeopardize the Corporation’s ability to realize Tax Benefits. Any determination by the Board of Directors not to authorize a Proposed Transaction shall cause such Proposed Transaction to be deemed a Prohibited Transfer. The Board of Directors may impose any conditions and restrictions that it deems reasonable and appropriate in connection with authorizing any Proposed Transaction. In addition, the Board of Directors may require an affidavit or representations from such Requesting Person or opinions of counsel to be rendered by counsel selected by the Requesting Person (and reasonably acceptable to the Board of Directors), in each case, as to such matters as the Board of Directors may reasonably determine with respect to preserving the Corporation’s ability to realize Tax Benefits. Any Requesting Person who makes a Request to the Board of Directors shall reimburse the Corporation, within 30 days of demand therefor, for all reasonable out-of-pocket costs and expenses incurred by the Corporation with respect to any Proposed Transaction, including, without limitation, the Corporation’s reasonable costs and expenses incurred in determining whether to authorize the Proposed Transaction, which costs may include, but are not limited to, any expenses of counsel and/or tax advisors engaged by the Board of Directors to advise the Board of Directors or deliver an opinion thereto. Any authorization of the Board of Directors hereunder may be given prospectively or retroactively.
(c) Notwithstanding the foregoing, the Board of Directors may determine that the restrictions set forth in Section 9.02 shall not apply to any particular transaction or transactions, whether or not a request has been made to the Board of Directors, including a Request pursuant to Section 9.03(b), subject to any conditions that it deems reasonable and appropriate in connection therewith. Any determination of the Board of Directors hereunder may be made prospectively or retroactively.
(d) The Board of Directors, to the fullest extent permitted by law, may exercise the authority granted by this Article IX through duly authorized officers or agents of the Corporation. Nothing in this Section 9.03 shall be construed to limit or restrict the Board of Directors in the exercise of its fiduciary duties under applicable law.
Section 9.04.
Excess Securities
.
(a) No employee or agent of the Corporation shall record any Prohibited Transfer, and the purported Transferee of such a Prohibited Transfer (the “
Purported Transferee
”) shall not be recognized as a stockholder of the Corporation for any purpose whatsoever in respect of the Corporation Securities which are the subject of the Prohibited Transfer (the “
Excess Securities
”). Until the Excess Securities are acquired by another Person in a Transfer that is not a Prohibited Transfer, the Purported Transferee shall not be entitled to any rights of stockholders of the Corporation with respect to such Excess Securities, including, without limitation, the right to vote such Excess Securities and to receive dividends or distributions, whether liquidating or otherwise, in respect thereof, if any, and the Excess Securities shall be deemed to remain with the Transferor unless and until the Excess Securities are transferred to the Agent pursuant to Section 9.05 or until an authorization is obtained under Section 9.03. After the Excess Securities have been acquired in a Transfer that is not a Prohibited Transfer, the Corporation Securities shall cease to be Excess Securities. For this purpose, any Transfer of Excess Securities not in accordance with the provisions of this Section 9.04 or Section 9.05 shall also be a Prohibited Transfer.
(b) The Corporation may make such arrangements or issue such instructions to its stock transfer agent as may be determined by the Board of Directors to be necessary or advisable to implement this Article IX, including, without limitation, authorizing, in accordance with Section 9.09, such transfer agent to require an affidavit from a Purported Transferee regarding such Person’s actual and constructive ownership of stock and other evidence that a Transfer will not be prohibited by this Article IX as a condition to registering any Transfer.
Section 9.05.
Transfer to Agent
. If the Board of Directors determines that a Transfer of Corporation Securities constitutes a Prohibited Transfer then, upon written demand by the Corporation sent within 30 days of the date on which the Board of Directors determines that the attempted Transfer constitutes a Prohibited Transfer, the Purported Transferee shall transfer or cause to be transferred any certificate or other evidence of ownership of the Excess Securities within the Purported Transferee’s possession or Control, together with any Prohibited Distributions, to an agent designated by the Board of Directors (the “
Agent
”). The Agent shall thereupon sell to a buyer or buyers, which may include the Corporation, the Excess Securities transferred to it in one or more arm’s-length transactions (on the public securities market on which such Excess Securities are traded, if possible, or otherwise privately);
provided
, however, that any such sale must not constitute a Prohibited Transfer and provided, further, that the Agent shall effect such sale or sales in an orderly fashion and shall not be required to effect any such sale within any specific time frame if, in the Agent’s discretion, such sale or sales would disrupt the market for the Corporation Securities, would otherwise adversely affect the value of the Corporation Securities or would be in violation of applicable securities laws. If the Purported Transferee has resold the Excess Securities before receiving the Corporation’s demand to surrender Excess Securities to the Agent, the Purported Transferee shall be deemed to have sold the Excess Securities for the Agent, and shall be required to transfer to the Agent any Prohibited Distributions and proceeds of such sale, except to the extent that the Corporation grants written permission to the Purported Transferee to retain a portion of such sales proceeds not exceeding the amount that the Purported Transferee would have received from the Agent pursuant to Section 9.06 if the Agent rather than the Purported Transferee had resold the Excess Securities.
Section 9.06.
Application of Proceeds and Prohibited Distributions
. The Agent shall apply any proceeds of a sale by it of Excess Securities and, if the Purported Transferee has previously resold the Excess Securities, any amounts received by the Agent from a Purported Transferee, together, in either case, with any Prohibited Distributions, as follows: (a) first, such amounts shall be paid to the Agent to the extent necessary to cover its costs and expenses incurred in connection with its duties hereunder; (b) second, any remaining amounts shall be paid to the Purported Transferee, up to the amount paid by the Purported Transferee for the Excess Securities (or the fair market value at the time of the Transfer, in the event the purported Transfer of the Excess Securities was, in whole or in part, a gift, inheritance or similar Transfer, such fair market value to be calculated on the basis of the closing market price for the Corporation Securities on the principal U.S. stock exchange on which the Corporation Securities are listed or admitted for trading on the day before the Prohibited Transfer;
provided
, however, that (1) if the Corporation Securities are not listed or admitted for trading on any U.S. stock exchange but are traded in the over-the-counter market, such fair market value shall be calculated based upon the difference between the highest bid and lowest asked prices, as such prices are reported by Nasdaq or any successor system on the day before the Prohibited Transfer or, if not so reported, on the last preceding day for which such quotations exist, or (2) if the Corporation Securities are neither listed nor admitted to trading on any U.S. stock exchange and are not traded in the over-the-counter market, then such fair market value shall be determined in good faith by the Board of Directors); and (c) third, any remaining amounts shall be paid to the Transferor that was party to the subject Prohibited Transfer, or, if the Transferor that was party to the subject Prohibited Transfer cannot be readily identified, to one or more organizations qualifying under Section 501(c)(3) of the Code (or any comparable successor provision) selected by the Board of Directors. The Purported Transferee of Excess Securities shall have no claim, cause of action or any other recourse whatsoever against any Transferor of Excess Securities. The Purported Transferee’s sole right with respect to such shares shall be limited to the amount payable to the Purported Transferee pursuant to this Section 9.06. In no event shall the proceeds of any sale of Excess Securities pursuant to this Section 9.06 inure to the benefit of the Corporation or the Agent, except to the extent used to cover costs and expenses incurred by the Agent in performing its duties hereunder.
Section 9.07.
Modification of Remedies for Certain Indirect Transfers
. In the event of any Transfer of securities that does not involve a direct Transfer of Corporation Securities (for example, a transfer of an equity interest in an entity that owns Corporation Securities) but which would cause the aggregate Percentage Stock Ownership of Blueapple, by vote or value, to exceed the Stock Ownership Threshold Percentage, the application of Section 9.05 and Section 9.06 shall be modified as described in this Section 9.07. In such case, the transferee of such securities shall be considered a Purported Transferee and shall be deemed to have disposed of and shall be required to dispose of such securities to the extent necessary such that, following such disposition, the aggregate Percentage Stock Ownership of Blueapple, by vote and value, is less than the Stock Ownership Threshold Percentage. Such disposition shall be deemed to occur simultaneously with the Transfer giving rise to the application of this provision, and such number of securities that are deemed to be disposed of shall be considered Excess Securities and shall be disposed of through the Agent as provided in Sections 9.05 and 9.06, except that the maximum aggregate amount payable under Section 9.06 in respect of such Excess Securities, in connection with such disposition, shall be the fair market value of such Excess Securities at the time of the purported Transfer. All expenses incurred by the Agent in disposing of such Excess
Securities shall be paid out of the sales proceeds from such Excess Securities. The purpose of this Section 9.07 is to extend the restrictions in Sections 9.02 and 9.05 to indirect Transfers of Corporation Securities that would cause the aggregate Percentage Stock Ownership of Blueapple, by vote or value, to exceed the Stock Ownership Threshold Percentage, and this Section 9.07, along with the other provisions of this Article IX, shall be interpreted to produce the same results, with differences as the context requires, as a direct Transfer of Corporation Securities.
Section 9.08.
Legal Proceedings; Prompt Enforcement
. If the Purported Transferee fails to surrender the Excess Securities or the proceeds of a sale thereof, in either case, with any Prohibited Distributions, to the Agent within 30 days from the date on which the Corporation makes a written demand pursuant to Section 9.05 (whether or not made within the time specified in Section 9.05), then the Corporation may take any actions it deems necessary to enforce the provisions hereof, including the institution of legal proceedings to compel the surrender. Nothing in this Section 9.08 shall (a) be deemed inconsistent with any Transfer of the Excess Securities provided in this Article IX being void
ab initio
, (b) preclude the Corporation in its discretion from immediately bringing legal proceedings without a prior demand or (c) cause any failure of the Corporation to act within the time periods set forth in Section 9.05 to constitute a waiver or loss of any right of the Corporation under this Article IX. The Board of Directors may authorize such additional actions as it deems advisable to give effect to the provisions of this Article IX.
Section 9.09.
Obligation to Provide Information
. As a condition to the registration of the Transfer of any Corporation Securities, any Person who is a beneficial, legal or record holder of Corporation Securities, and any proposed Transferee and any Person Controlling, Controlled by or under common Control with (as such terms are defined in Section 8.03) the proposed Transferee, shall provide an affidavit containing such information, to the extent reasonably available and legally permissible, as the Corporation may reasonably request from time to time in order to determine compliance with this Article IX.
Section 9.10. Authority of Board of Directors.
(a) The Board of Directors shall have the power to determine all matters necessary for assessing compliance with this Article IX, including, without limitation, (i) whether a Transfer is a Sixteen Percent Transaction or a Prohibited Transfer, (ii) the Percentage Stock Ownership of any Person, (iii) whether an instrument constitutes a Corporation Security, (iv) the amount (or fair market value) due to a Purported Transferee pursuant to Section 9.06, and (v) any other matters which the Board of Directors determines to be relevant; and the good faith determination of the Board of Directors on such matters shall be conclusive and binding for all the purposes of this Article IX. In addition, the Board of Directors may, to the extent permitted by law, from time to time establish, modify, amend or rescind Bylaws and procedures of the Corporation not inconsistent with the provisions of this Article IX for purposes of determining whether any Transfer of Corporation Securities would jeopardize the Corporation’s ability to realize Tax Benefits and for the orderly application, administration and implementation of this Article IX.
(b) Nothing contained in this Article IX shall limit the authority of the Board of Directors to take such other action to the extent permitted by law as it deems necessary or
advisable to protect the Corporation and its stockholders in preserving the ability to realize Tax Benefits.
(c) In the case of an ambiguity in the application of any of the provisions of this Article IX, including any definition used herein, the Board of Directors shall have the power to determine the application of such provisions with respect to any situation based on its reasonable belief, understanding or knowledge of the circumstances. In the event this Article IX requires an action by the Board of Directors but fails to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of this Article IX. All such actions, calculations, interpretations and determinations that are done or made by the Board of Directors in good faith shall be conclusive and binding on the Corporation, the Agent, and all other parties for all other purposes of this Article IX. The Board of Directors may delegate all or any portion of its duties and powers under this Article IX to a committee of the Board of Directors as it deems necessary or advisable and, to the fullest extent permitted by law, may exercise the authority granted by this Article IX through duly authorized officers or agents of the Corporation. Nothing in this Article IX shall be construed to limit or restrict the Board of Directors in the exercise of its fiduciary duties under applicable law.
Section 9.11.
Reliance
. To the fullest extent permitted by law, the Corporation and the members of the Board of Directors shall be fully protected in relying in good faith upon the opinions, reports or statements of the Corporation’s officer’s, employees, legal counsel, independent auditors, transfer agent, investment bankers and agents in making the determinations and findings contemplated by this Article IX, and the members of the Board of Directors shall not be responsible for any good faith errors made in connection therewith. For purposes of determining the existence and identity of, and the amount of any Corporation Securities owned by, any Person, the Corporation is entitled to rely on the existence and absence of filings of Schedule 13D or 13G under the Exchange Act (or similar filings), as of any date, subject to its actual knowledge of the ownership of Corporation Securities.
Section 9.12.
Benefits of This Article IX
. Nothing in this Article IX shall be construed to give to any Person other than the Corporation or the Agent any legal or equitable right, remedy or claim under this Article IX. This Article IX shall be for the sole and exclusive benefit of the Corporation and the Agent.
Section 9.13.
Severability
. If any provision of this Article IX or the application of any such provision to any Person or under any circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Article IX.
Section 9.14.
Waiver
. With regard to any power, remedy or right provided herein or otherwise available to the Corporation or the Agent under this Article IX, (a) no waiver will be effective unless expressly contained in a writing signed by the waiving party, and (b) no alteration, modification or impairment will be implied by reason of any previous waiver, extension of time, delay or omission in exercise, or other indulgence.
ARTICLE X
Section 10.01.
Corporate Opportunity.
(a) To the fullest extent permitted by the laws of the State of Delaware, (a) the Corporation hereby renounces all interest and expectancy that it otherwise would be entitled to have in, and all rights to be offered an opportunity to participate in, any business opportunity that from time to time may be presented to (i) any director, (ii) any stockholder, officer or agent of the Corporation, or (iii) any Affiliate (as defined in Section 8.03 herein) of any person or entity identified in the preceding clause (i) or (ii); (b) no stockholder and no director, in each case, that is not an employee of the Corporation or its subsidiaries, will have any duty to refrain from (i) engaging in a corporate opportunity in the same or similar lines of business in which the Corporation or its subsidiaries from time to time is engaged or proposes to engage or (ii) otherwise competing, directly or indirectly, with the Corporation or any of its subsidiaries; and (c) if any stockholder or any director, in each case, that is not an employee of the Corporation or its subsidiaries, acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity both for such stockholder or such director or any of their respective Affiliates (as defined in Section 8.03 herein), on the one hand, and for the Corporation or its subsidiaries, on the other hand, such stockholder or director shall have no duty to communicate or offer such transaction or business opportunity to the Corporation or its subsidiaries and such stockholder or director may take any and all such transactions or opportunities for itself or offer such transactions or opportunities to any other person or entity. The preceding sentence of this Article X shall not apply to any potential transaction or business opportunity that is expressly offered to a director or employee of the Corporation or its subsidiaries, solely in his or her capacity as a director or employee of the Corporation or its subsidiaries.
(b) To the fullest extent permitted by the laws of the State of Delaware, no potential transaction or business opportunity may be deemed to be a corporate opportunity of the Corporation or its subsidiaries unless (a) the Corporation or its subsidiaries would be permitted to undertake such transaction or opportunity in accordance with this Amended and Restated Certificate of Incorporation, (b) the Corporation or its subsidiaries at such time have sufficient financial resources and are legally able to undertake such transaction or opportunity, (c) the Corporation or its subsidiaries have an interest or expectancy in such transaction or opportunity, and (d) such transaction or opportunity would be in the same or similar line of business in which the Corporation or its subsidiaries are then engaged or a line of business that is reasonably related to, or a reasonable extension of, such line of business.
Section 10.02.
Liability
. No stockholder and no director will be liable to the Corporation or its subsidiaries or stockholders for breach of any duty (contractual or otherwise) solely by reason of any activities or omissions of the types referred to in this Article X, except to the extent such actions or omissions are in breach of this Article X.
ARTICLE XI
Section 11.01.
Exclusive Jurisdiction
. Unless the Corporation, as authorized by the Board of Directors, consents in writing to the selection of one or more alternative forums, the
Court of Chancery of the State of Delaware shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim against the Corporation arising pursuant to any provision of the DGCL or this Amended and Restated Certificate of Incorporation or the Bylaws or (d) any action asserting a claim against the Corporation governed by the internal affairs doctrine, in each such case subject to said Court of Chancery determining that it has personal jurisdiction over the indispensable parties named as defendants therein, and if it has determined that it does not, subject to such indispensable party consenting to the personal jurisdiction of the Court of Chancery within ten days following such determination. Any person or entity purchasing or otherwise acquiring any interest in the shares of the Corporation’s capital stock shall be deemed to have notice of and consented to the provisions of this Article XI.
ARTICLE XII
Section 12.01.
Amendments
. The Corporation reserves the right to alter, amend, repeal or adopt any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by the DGCL, and all rights conferred upon stockholders herein are granted subject to this reservation. Notwithstanding anything to the contrary contained in this Certificate of Incorporation, (a) regardless whether a lesser percentage may be permitted from time to time by applicable law, no provision of Section 5.02, Section 5.03, Section 5.04, Section 5.05, Section 6.01, Section 6.03, Article VII, Article VIII, Article IX, Article X, Article XI and this Article XII may be altered, amended or repealed in any respect, nor may any provision inconsistent therewith (including any provision in the Bylaws) be adopted, unless, in addition to any other vote required by this Amended and Restated Certificate of Incorporation or otherwise required by law, approved by the affirmative vote of the holders of at least 66 ⅔% of the Common Stock, voting together as a single class, (b) so long as any shares of Class B Common Stock remain outstanding, the Corporation may not amend, alter or repeal any provision of this Amended and Restated Certificate of Incorporation, or adopt one or more additional provisions whether by merger, consolidation or otherwise, in a manner which would materially and adversely affect any right, preference or privilege of the Class B Common Stock in a manner different than other holders of Common Stock without the affirmative vote of a majority of the votes entitled to be cast by holders of Class B Common Stock, voting as a separate class distinct from all other classes and series of the Corporation’s capital stock, (c) so long as any shares of Class C Common Stock remain outstanding, the Corporation may not amend, alter or repeal any provision of this Amended and Restated Certificate of Incorporation, or adopt one or more additional provisions whether by merger, consolidation or otherwise, in a manner which would materially and adversely affect any right, preference or privilege of the Class C Common Stock in a manner different than other holders of Common Stock without the affirmative vote of a majority of the votes entitled to be cast by holders of Class C Common Stock, voting as a separate class distinct from all other classes and series of the Corporation’s capital stock, and (d) so long as any shares of Class D Common Stock remain outstanding, the Corporation may not amend, alter or repeal any provision of this Amended and Restated Certificate of Incorporation, or adopt one or more additional provisions whether by merger, consolidation or otherwise, in a manner which would materially and adversely affect any right, preference or privilege of the Class D Common Stock in a manner different than other holders of
Common Stock without the affirmative vote of a majority of the votes entitled to be cast by holders of Class D Common Stock, voting as a separate class distinct from all other classes and series of the Corporation’s capital stock.
Section 12.02.
Severability
. If any provision or provisions of this Amended and Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (a) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (b) the provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law.
Exhibit 10.1
Execution Version
TAX RECEIVABLE AGREEMENT
by and among
EVO PAYMENTS, INC.
EVO INVESTCO, LLC
THE MEMBERS OF EVO INVESTCO, LLC
FROM TIME TO TIME PARTY HERETO
Dated as of May 25, 2018
CONTENTS
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Page
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Article I DEFINITIONS
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5
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Section 1.1
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Definitions
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5
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Section 1.2
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Rules of Construction
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14
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Article II DETERMINATION OF REALIZED TAX BENEFIT
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15
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Section 2.1
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Basis Adjustments; Operating Company 754 Election
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15
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Section 2.2
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Basis Schedules
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15
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Section 2.3
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Tax Benefit Schedules
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16
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Section 2.4
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Procedures; Amendments
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16
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Article III TAX BENEFIT PAYMENTS
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18
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Section 3.1
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Timing and Amount of Tax Benefit Payments
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18
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Section 3.2
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No Duplicative Payments
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20
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Section 3.3
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Pro-Ration of Payments as Between the TRA Payment Recipients
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21
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Section 3.4
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Change Notice
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21
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Article IV TERMINATION
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22
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Section 4.1
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Early Termination of Agreement; Breach of Agreement
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22
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Section 4.2
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Early Termination Notice
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23
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Section 4.3
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Payment Upon Early Termination
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24
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Article V SUBORDINATION AND LATE PAYMENTS
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24
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Section 5.1
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Subordination
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24
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Section 5.2
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Late Payments by the Corporation
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25
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Article VI TAX MATTERS; CONSISTENCY; COOPERATION
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25
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Section 6.1
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Participation in the Corporation’s and Operating
Company’s Tax Matters
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25
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Section 6.2
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Consistency
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25
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Section 6.3
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Cooperation
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26
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Article VII MISCELLANEOUS
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26
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Section 7.1
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Notices
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26
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Section 7.2
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Counterparts
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27
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Section 7.3
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Entire Agreement: No Third Party Beneficiaries
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27
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Section 7.4
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Governing Law
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27
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Section 7.5
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Severability
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27
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Section 7.6
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Assignments; Amendments; Successors; No Waiver
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28
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Section 7.7
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Titles and Subtitles
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29
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Section 7.8
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Resolution of Disputes
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29
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Section 7.9
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Reconciliation
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30
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Section 7.10
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Withholding
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31
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Section 7.11
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Admission of the Corporation into a Consolidated Group
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31
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Section 7.12
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Confidentiality
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31
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Section 7.13
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Change in Law
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32
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Section 7.14
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Interest Rate Limitation
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32
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Section 7.15
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Independent Nature of Rights and Obligations
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33
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Exhibits
Exhibit A
— Form of Joinder Agreement
TAX RECEIVABLE AGREEMENT
This TAX RECEIVABLE AGREEMENT (this “
Agreement
”), dated as of May 25, 2018, is hereby entered into by and among EVO Payments, Inc., a Delaware corporation (the “
Corporation
”), EVO Investco LLC, a Delaware limited liability company (the “
Operating Company
”), Madison Dearborn Capital Partners VI-C, L.P., a Delaware limited partnership (the “
Original Call Option Holder
”) and each of the Members from time to time party hereto. Capitalized terms used but not otherwise defined herein have the respective meanings set forth in
Section 1.1
.
RECITALS
WHEREAS, Operating Company is treated as a partnership for U.S. federal income tax purposes;
WHEREAS, each of the members of Operating Company as of the date hereof other than the Corporation (such members, together with each other Person who becomes a party hereto by satisfying the Joinder Requirement, the “
Members
”) owns common limited liability company interests in Operating Company (the “
Common Units
”);
WHEREAS, the Corporation is the manager of Operating Company and will be a registered holder of Common Units;
WHEREAS, on the date hereof, the Corporation issued shares of its Class A common stock, par value $0.0001 per share (the “
Class A Common Stock
”), to certain purchasers in an initial public offering of its Class A Common Stock (the “
IPO
”);
WHEREAS, on the date hereof, the Corporation purchased Common Units directly from the Operating Company using the net proceeds received from the IPO;
WHEREAS, after the date hereof, pursuant to Article XI of the LLC Agreement and the Exchange Agreement, each Member (other than the Corporation) has the right to have the Corporation directly or indirectly purchase (a “
Purchase
”) for cash or shares of Class A Common Stock, as the case may be, its Common Units and the Call Option Holder has the right to have the Corporation purchase (also a “
Purchase
”) for cash or shares of Class A Common Stock, as the case may be, all or a portion of the Call Option (which the Corporation must exercise in order to purchase the Common Units held by the Call Option Issuer);
WHEREAS, except as otherwise provided by the LLC Agreement or the Exchange Agreement, the Corporation, as the manager of Operating Company, in its sole discretion can determine whether to request to complete a Purchase or instead to cause the Operating Company to directly or indirectly redeem for cash a Member's Common Units, which may only be consummated as a redemption if such Member consents in its sole discretion to such redemption (a “
Redemption
”);
WHEREAS, Operating Company and any direct or indirect subsidiary (owned through a chain of pass-through entities) of Operating Company that is treated as a partnership for U.S. federal income tax purposes (together with Operating Company and any direct or indirect
subsidiary (owned through a chain of pass-through entities) of Operating Company that is treated as a disregarded entity for U.S. federal income tax purposes, the “
Operating Company Group
”) will have in effect an election under Section 754 of the Code as provided under
Section 2.1(b)
for the Taxable Year in which any Exchange occurs, which election will result in an adjustment to the Corporation’s share of the tax basis of the assets owned by the Operating Company Group as of the date of the Exchange, with a consequent result on the taxable income subsequently derived therefrom; and
WHEREAS, the parties to this Agreement desire to provide for certain payments and make certain arrangements with respect to any tax benefits to be derived by the Corporation as the result of Exchanges and making payments under this Agreement, and to ease administrative burdens, an assumed tax rate shall be used to approximate the Corporation’s state and local liabilities for Covered Taxes without regard to such tax benefits for each Taxable Year.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1
Definitions
. As used in this Agreement, the terms set forth in this
Article I
shall have the following meanings (such meanings to be equally applicable to both (i) the singular and plural and (ii) the active and passive forms of the terms defined).
“
Actual Interest Amount
” is defined in
Section 3.1(b)(vii)
.
“
Actual Tax Liability
” means, with respect to any Taxable Year, the liability for Covered Taxes of the Corporation (a) appearing on Tax Returns of the Corporation for such Taxable Year and (b) if applicable, determined in accordance with a Determination (including interest imposed in respect thereof under applicable law).
“
Advisory Firm
” means an accounting firm that is nationally recognized as being expert in Covered Tax matters, selected by the Corporation.
“
Affiliate
” means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person.
“
Agreed Rate
” means LIBOR plus 100 basis points.
“
Agreement
” is defined in the preamble.
“
Amended Schedule
” is defined in
Section 2.4(b)
.
“
Attributable
” is defined in
Section 3.1(b)(i)
.
“
Audit Committee
” means the audit committee of the Board.
“
Basis Adjustment
” means the increase or decrease to, or the Corporation’s share of, the tax basis of the Reference Assets (i) under Section 734(b), 743(b), 754 and 755 of the Code and, in each case, the comparable sections of U.S. state and local tax law (in situations where, following an Exchange, Operating Company remains in existence as an entity for tax purposes) and (ii) under Sections 732 and 1012 of the Code and, in each case, the comparable sections of U.S. state and local tax law (in situations where, as a result of one or more Exchanges, Operating Company becomes an entity that is disregarded as separate from its owner for tax purposes), in each case, as a result of any Exchange and any payments made under this Agreement. Notwithstanding any other provision of this Agreement, the amount of any Basis Adjustment resulting from an Exchange of one or more Common Units shall be determined without regard to any Pre-Exchange Transfer of such Common Units and as if any such Pre-Exchange Transfer had not occurred. For the avoidance of doubt, if the Corporation purchases and exercises all or a portion of the Call Option, the Basis Adjustment with respect to the Common Units acquired by the Corporation in such transactions shall be determined by reference to the Call Option Consideration.
“
Basis Schedule
” is defined in
Section 2.2
.
“
Beneficial Owner
” means, with respect to any security, a Person who acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act).
“
Blueapple
” means Blueapple, Inc., a Delaware corporation.
“
Board
” means the Board of Directors of the Corporation.
“
Business Day
” shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.
“
Call Option
” means the call option that provides the Call Option Holder the right to directly or indirectly purchase, from MDCP VI-C Cardservices Blocker Corp., the Call Option Paired Interests then held by MDCP VI-C Cardservices Blocker Corp.
“
Call Option Consideration
” means the aggregate amount of cash or the Common Unit Purchase Price or Common Unit Redemption Price (in each case, as defined in the LLC Agreement), as applicable with respect to the relevant transaction, of the Class A Common stock paid to purchase the Call Option from the Call Option Holder and paid to the Call Option Issuer to exercise the Call Option.
“
Call Option Holder
” means the holder of the Call Option, which is currently the Original Call Option Holder.
“
Call Option Issuer
” means MDCP VI-C Cardservices Blocker Corp., or any successor to the rights and obligations of MDCP VI-C Cardservices Blocker Corp. under the Call Option.
“
Call Option Paired Interest
” means one Common Unit together with one share of Class D Common Stock that is subject to the Call Option.
“
Change of Control
” means the occurrence of any of the following events:
(1) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (other than an underwriter temporarily holding securities pursuant to an offering of such securities, or any entity directly or indirectly owned by the shareholders of the Corporation in substantially the same proportions as their ownership of the Corporation) which becomes a Beneficial Owner, directly or indirectly, of securities of the Corporation which, together with securities already held by such Person, represents 50% or more of the combined voting power of the Corporation’s then outstanding securities;
(2) the shareholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Corporation of all or substantially all of the Corporation’s assets (including the assets of, or membership interests in, Operating Company);
(3) there is consummated a merger or consolidation of the Corporation or Operating Company with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (x) the Board of the Corporation immediately prior to the merger or consolidation does not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (y) all of the Persons who were the respective Beneficial Owners of the voting securities of the Corporation immediately prior to such merger or consolidation do not constitute Beneficial Owners, directly or indirectly, of more than 50% of the combined voting power of the then outstanding voting securities of the Person resulting from such merger or consolidation;
(4) the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who were directors of the Corporation on the date of the closing date of the IPO and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including a consent solicitation, relating to the election of directors of the Corporation) whose appointment or election by the Board or nomination for election by the Corporation’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors of the Corporation on the date of the consummation of the IPO or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause 4; or
(5) a “change of control” or similar defined term in any agreement governing indebtedness of Operating Company or any of its Subsidiaries with aggregate principal amount or aggregate commitments outstanding in excess of $25,000,000.
Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the Class A Common Stock, Class B common stock, Class C common stock and Class D common stock of the Corporation immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in and voting control over, and own substantially all of the shares of, an entity which owns all or substantially all of the assets of the Corporation immediately following such transaction or series of transactions.
“
Change Notice
” is defined in Section 3.4(a) of this Agreement.
"
Class A Common Stock
" is defined in the recitals to this Agreement.
“
Code
” means the Internal Revenue Code of 1986.
“
Common Units
” is defined in the recitals to this Agreement.
“
Control
” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“
Corporation
” is defined in the preamble to this Agreement.
“
Corporation Letter
” means a letter prepared by the Corporation in connection with the performance of its obligations under this Agreement, which states that the relevant Schedules, notices or other information to be provided by the Corporation to the TRA Payment Recipients, along with all supporting schedules and work papers, were prepared in a manner that is consistent with the terms of this Agreement and, to the extent not expressly provided in this Agreement, on a reasonable basis in light of the facts and law in existence on the date such Schedules, notices or other information were delivered by the Corporation to the TRA Payment Recipients.
“
Covered Taxes
” means any and all U.S. federal, state and local taxes, assessments or similar charges that are based on or measured with respect to net income or profits, whether as an exclusive or an alternative basis (including for the avoidance of doubt, franchise taxes), and any interest imposed in respect thereof under applicable law.
“
Cumulative Net Realized Tax Benefit
” is defined in
Section 3.1(b)(iii)
.
“
Default Rate
” means LIBOR plus 500 basis points.
“
Default Rate Interest
” is defined in
Section 3.1(b)(ix)
.
“
Determination
” shall have the meaning ascribed to such term in Section 1313(a) of the Code or similar provision of U.S. state and local tax law, as applicable, or any other event (including the execution of IRS Form 870-AD) that finally and conclusively establishes the amount of any liability for tax.
“
Dispute
” is defined in
Section 7.8(a)
.
“
Early Termination Effective Date
” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.
“
Early Termination Notice
” is defined in
Section 4.2
.
“
Early Termination Payment
” is defined in
Section 4.3(b)
.
“
Early Termination Rate
” means the lesser of (x) the Agreed Rate or (y) 6.5%.
“
Early Termination Reference Date
” is defined in
Section 4.2
.
“
Early Termination Schedule
” is defined in
Section 4.2
.
“
Exchange
” means any (i) Purchase, (ii) Redemption or (iii) transaction using proceeds of the IPO or of EVO Payments Inc., including a purchase and exercise of all or any portion of the Call Option, or distribution by Operating Company, or (iv) Exchange as defined in the Exchange Agreement, in each case that results in an adjustment under Section 734(b) or Section 743(b) of the Code with respect to the Operating Company Group.
“
Exchange Act
” means the Securities and Exchange Act of 1934.
“
Exchange Agreement
” means the Exchange Agreement dated on or about of the date hereof, by and among the Operating Company, the Corporation and the “Holders” as defined therein.
“
Exchange Date
” means the date of any Exchange.
“
Expert
” is defined in
Section 7.9
of this Agreement.
“
Extension Rate Interest
” is defined in
Section 3.1(b)(viii)
.
“
Final Payment Date
” means any date on which a payment is required to be made pursuant to this Agreement. For the avoidance of doubt, the Final Payment Date in respect of a Tax Benefit Payment is determined pursuant to
Section 3.1(a)
.
“
GAAP
” means generally accepted accounting principles in the United States, as in effect from time to time; provided, however, that if the Corporation notifies the TRA Payment Recipients that the Corporation requests an amendment to any provision hereof to eliminate the effect of any change in GAAP or in the application thereof occurring after the date of this Agreement (including through the adoption of International Financial Reporting Standards and applicable accounting requirements set by the International Accounting Standards Board or any successor thereto, “IFRS”) on the operation of such provision (or if the TRA Payment Recipients notify the Corporation that they request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof (including through the adoption of IFRS), then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
“
Hypothetical Federal Tax Liability
” means, with respect to any Taxable Year, the hypothetical liability of the Corporation that would arise in respect of U.S. federal Covered Taxes, using the same methods, elections, conventions and similar practices used on the actual relevant U.S. federal Tax Returns of the Corporation but (i) calculating depreciation, amortization, or other similar deductions, or otherwise calculating any items of income, gain, or loss, using the Non-Adjusted Tax Basis as reflected on the Basis Schedule, including amendments thereto for such Taxable Year, (ii) excluding any deduction attributable to Imputed Interest for such Taxable Year and (iii) deducting actual state, local and foreign tax liabilities for such Taxable Year for purposes of determining U.S. federal taxable income, to the extent deductible. For the avoidance of doubt, the Hypothetical Federal Tax Liability shall be determined without taking into account the carryover or carryback of any tax item (or portions thereof) that is attributable to any of the items described in clauses (i), (ii) and (iii) of the previous sentence.
“
Hypothetical Other Tax Liability
” means, with respect to any Taxable Year, U.S. federal taxable income determined in connection with calculating the Hypothetical Federal Tax Liability for such Taxable Year, plus the amount used for purposes of clause (iii) of the definition of “Hypothetical Federal Tax Liability” with respect to such Taxable Year, the sum of which is multiplied by 2.95%.
“
Hypothetical Tax Liability
” means, with respect to any Taxable Year, the Hypothetical Federal Tax Liability for such Taxable Year, plus the Hypothetical Other Tax Liability for such Taxable Year.
“
Imputed Interest
” is defined in
Section 3.1(b)(vi)
.
“
Independent Directors
” means the members of the Board who are “independent” under the standards set forth in Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as amended, and the corresponding rules of the applicable exchange on which the Class A Common Stock is traded or quoted.
“
IPO
” is defined in the recitals to this Agreement.
“
IRS
” means the U.S. Internal Revenue Service.
“
Joinder
” means a joinder to this Agreement, in form and substance substantially similar to
Exhibit A
to this Agreement.
“
Joinder Requirement
” is defined in
Section 7.6(a)
.
“
LIBOR
” means during any period, a rate per annum equal to the ICE LIBOR rate for a period of one month (“
ICE LIBOR
”), as published on the applicable Bloomberg screen page (or such other commercially available source providing quotations of ICE LIBOR as may be designated by the Corporation from time to time) at approximately 11:00 a.m., London time, two
(2) Business Days prior to the commencement of such period, for dollar deposits (for delivery on the first day of such period) with a term equivalent to such period.
“
LLC Agreement
” means that certain Second Amended and Restated Limited Liability Agreement of EVO Investco, LLC, dated as of the date hereof.
“
Market Value
” means the Common Unit Redemption Price, as defined in the LLC Agreement.
“
MDP
” means, collectively, the TRA Payment Recipients controlled by Madison Dearborn Partners, LLC.
“
Member Advisory Firm
” means an accounting or law firm that is nationally recognized as being expert in Covered Tax matters, selected by the applicable TRA Payment Recipient; provided that such accounting or law firm shall be different from the accounting firm serving as the Advisory Firm.
“
Members
” is defined in the recitals to this Agreement.
“
Net Tax Benefit
” is defined in
Section 3.1(b)(ii)
.
“
Non-Adjusted Tax Basis
” means, with respect to any Reference Asset at any time, the tax basis that such asset would have had at such time if no Basis Adjustments had been made.
“
Objection Notice
” is defined in
Section 2.4(a)(i)
.
“
Operating Company
” is defined in the preamble.
“
Operating Company Group
” is defined in the recitals.
“
Original Call Option Holder
” is defined in the recitals.
“
Parties
” means the parties named on the signature pages to this Agreement and each additional party that satisfies the Joinder Requirement, in each case with their respective successors and assigns.
“
Person
” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.
“
Pre-Exchange Transfer
” means any transfer of one or more Common Units or the Call Option (including upon the death of a Member or upon the issuance of Common Units resulting from the exercise of an option to acquire such Common Units) (i) that occurs prior to an Exchange of such Common Units and (ii) to which Section 743(b) of the Code applies.
“
Purchase
” has the meaning in the recitals.
“
Realized Tax Benefit
” is defined in
Section 3.1(b)(iv)
.
“
Realized Tax Detriment
” is defined in
Section 3.1(b)(v)
.
“
Reconciliation Dispute
” is defined in
Section 7.9
.
“
Reconciliation Procedures
” is defined in
Section 2.4(a)
.
“
Redemption
” has the meaning in the recitals.
“
Reference Asset
” means any asset of Operating Company or any of its successors or assigns, and whether held directly by Operating Company or indirectly by Operating Company through a member of the Operating Company Group, at the time of an Exchange. A Reference Asset also includes any asset the tax basis of which is determined, in whole or in part, by reference to the tax basis of an asset that is described in the preceding sentence, including “substituted basis property” within the meaning of Section 7701(a)(42) of the Code.
“
Schedule
” means any of the following: (i) a Basis Schedule, (ii) a Tax Benefit Schedule, or (iii) the Early Termination Schedule, and, in each case, any amendments thereto.
“
Senior Obligations
” is defined in
Section 5.1
.
“
Subsidiary
” means, with respect to any Person and as of any determination date, any other Person as to which such first Person (i) owns, directly or indirectly, or otherwise controls, more than 50% of the voting power or other similar interests of such other Person or (ii) is the sole general partner interest, or managing member or similar interest, of such Person.
“
Subsidiary Stock
” means any stock or other equity interest in an entity held by the Corporation that is treated as a corporation for U.S. federal income tax purposes.
“
Tax Benefit Payment
” is defined in
Section 3.1(b)
.
“
Tax Benefit Schedule
” is defined in
Section 2.3(a)
.
“
Tax Return
” means any return, declaration, report or similar statement required to be filed with respect to taxes (including any attached schedules), including any information return, claim for refund, amended return and declaration of estimated tax.
“
Taxable Year
” means a taxable year of the Corporation as defined in Section 441(b) of the Code or comparable section of U.S. state or local tax law, as applicable (and, therefore, for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is made), ending on or after the closing date of the IPO.
“
Taxing Authority
” shall mean any national, federal, state, county, municipal, or local government, or any subdivision, agency, commission or authority thereof, or any quasi-governmental body, or any other authority of any kind, exercising regulatory or other authority in relation to tax matters.
“
Termination Objection Notice
” is defined in
Section 4.2
.
“
TRA Payment Recipient
” means each Member and the Call Option Holder and any permitted transferee of the foregoing.
“
Treasury Regulations
” means the final, temporary, and (to the extent they can be relied upon) proposed regulations under the Code, as promulgated from time to time (including corresponding provisions and succeeding provisions) as in effect for the relevant taxable period.
“
U.S.
” means the United States of America.
“
Valuation Assumptions
” shall mean, as of an Early Termination Effective Date, the assumptions that:
(1) in each Taxable Year ending on or after such Early Termination Effective Date, the Corporation will have taxable income sufficient to fully use the deductions arising from the Basis Adjustments and the Imputed Interest during such Taxable Year or future Taxable Years (including, for the avoidance of doubt, Basis Adjustments and Imputed Interest that would result from future Tax Benefit Payments that would be paid in accordance with the Valuation Assumptions) in which such deductions would become available;
(2) the U.S. federal income tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code and other law as in effect on the Early Termination Effective Date, except to the extent any changes to such tax rates for such Taxable Year have already been enacted into law;
(3) all taxable income of the Corporation will be subject to the then-current maximum applicable tax rates for each Covered Tax throughout the relevant period;
(4) any loss carryovers or carrybacks generated by any Basis Adjustment or Imputed Interest (including such Basis Adjustment and Imputed Interest generated as a result of payments under this Agreement) and available as of the date of the Early Termination Schedule will be used by the Corporation ratably in (i) the Taxable Year of the Early Termination Effective Date and each of the succeeding four Taxable Years or (ii) in each of the Taxable Years from the date of the Early Termination Schedule through the scheduled expiration date of such loss carryovers or carrybacks, whichever comprises the shorter period;
(5) any non-amortizable assets (other than Subsidiary Stock) will have been or will be disposed of, as the case may be, on the earlier of (i) the fifteenth anniversary of the applicable Basis Adjustment and (ii) the Early Termination Effective Date;
(6) any Subsidiary Stock will be deemed never to be disposed of except if disposed of in a Change of Control;
(7) if, on the Early Termination Effective Date, any Member has Common Units that have not been Exchanged, then such Common Units shall be deemed to be Exchanged or, in the case of Common Units subject to the Call Option, the Call Option shall be deemed to have been purchased and exercised by the Corporation, and such TRA
Payment Recipient shall be deemed to receive the amount of cash such TRA Payment Recipient would have been entitled to pursuant to
Section 4.3(a)
had such Common Units actually been Exchanged on the Early Termination Effective Date or such Call Option actually been sold and exercised and
(8) any payment obligations pursuant to this Agreement will be satisfied on the date that any Tax Return to which such payment obligation relates is required to be filed excluding any extensions.
Section 1.2
Rules of Construction
. Unless otherwise specified herein:
(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
(b) For purposes of interpretation of this Agreement:
(i) The words “herein,” “hereto,” “hereof’ and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision thereof.
(ii) References in this Agreement to a Schedule, Article, Section, clause or sub-clause refer to the appropriate Schedule to, or Article, Section, clause or subclause in, this Agreement.
(iii) References in this Agreement to dollars or “$” refer to the lawful currency of the United States of America.
(iv) The term “including” is by way of example and not limitation.
(v) The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.
(c) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”
(d) Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Agreement.
(e) Unless otherwise expressly provided herein, (a) references to organization documents (including the LLC Agreement), agreements (including this Agreement and the Exchange Agreement) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are permitted hereby; and (b) references to any law (including the Code and the Treasury Regulations) shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such law and shall include all rules and
regulations promulgated under such law, as such rules and regulations may be consolidated, amended, replaced, supplemented or interpreted.
ARTICLE II
DETERMINATION OF REALIZED TAX BENEFIT
Section 2.1
Basis Adjustments; Operating Company 754 Election
.
(a)
Basis Adjustments
. The Parties acknowledge and agree that (A) each Redemption using cash contributed by the Corporation to Operating Company shall be treated as a direct purchase of Common Units by the Corporation from the applicable Member (and thus as an Exchange) pursuant to Section 707(a)(2)(B) of the Code to the extent allowed by law and (B) each Exchange will give rise to Basis Adjustments. In connection with any Exchange, the Parties acknowledge and agree that pursuant to applicable law the Corporation’s share of the basis in the Reference Assets shall be increased (or decreased) by the excess (or deficiency), if any, of (A) the sum of (x) the Market Value of the Class A Common Stock or the cash transferred to a Member pursuant to an Exchange as payment for the Common Units or, in the case of an Exchange involving all or a portion of the Call Option, the Call Option Consideration, (y) the amount of payments made pursuant to this Agreement with respect to such Exchange and (z) the amount of liabilities allocated to the Common Units acquired pursuant to the Exchange, over (B) the Corporation’s proportionate share of the basis of the Reference Assets immediately after the Exchange attributable to the Common Units exchanged, determined as if each member of the Operating Company Group (including, for the avoidance of doubt, Operating Company) remains in existence as an entity for tax purposes and no member of the Operating Company Group (including, for the avoidance of doubt, Operating Company) made the election provided by Section 754 of the Code. For the avoidance of doubt, payments made under this Agreement shall not be treated as resulting in a Basis Adjustment to the extent such payments are treated as Imputed Interest or are Actual Interest Amounts. Further, the Parties intend that Basis Adjustments be calculated in accordance with Treasury Regulations Section 1.743-1. Any Exchange that does not result in an adjustment or adjustments under Section 743(b) of the Code, but instead results in an adjustment or adjustments pursuant to Section 734(b) of the Code, shall give rise to Basis Adjustments to the extent of adjustments to the Corporation’s share of the common basis of the assets of the Operating Company Group.
(b)
Operating Company Section 754 Election
. In its capacity as the manager of Operating Company, the Corporation will ensure that, on and after the date hereof and continuing throughout the term of this Agreement, Operating Company and each of its direct and indirect Subsidiaries that is treated as a partnership for U.S. federal income tax purposes will have in effect an election under Section 754 of the Code (and under any similar provisions of applicable U.S. state or local law) for each Taxable Year.
Section 2.2
Basis Schedules
. Within ninety (90) calendar days after the filing of the U.S. federal income Tax Return of the Corporation for each relevant Taxable Year, the Corporation shall deliver to the TRA Payment Recipients a schedule (the “
Basis Schedule
”) that shows, in reasonable detail as necessary in order to understand the calculations performed under this Agreement: (a) the Non-Adjusted Tax Basis of the Reference Assets as of each applicable Exchange Date; (b) the Basis Adjustments with respect to the Reference Assets as a result of the
relevant Exchanges effected in such Taxable Year, calculated (I) in the aggregate (including, for the avoidance of doubt, Exchanges by all TRA Payment Recipients) and (II) solely with respect to Exchanges by the applicable TRA Payment Recipient; (c) the period (or periods) over which the Reference Assets are amortizable and/or depreciable; and (d) the period (or periods) over which each Basis Adjustment is amortizable and/or depreciable. The Basis Schedule will become final and binding on the Parties pursuant to the procedures set forth in
Section 2.4(a)
and may be amended by the Parties pursuant to the procedures set forth in
Section 2.4(b)
.
Section 2.3
Tax Benefit Schedules
.
(a)
Tax Benefit Schedule
. Within ninety (90) calendar days after the filing of the U.S. federal income Tax Return of the Corporation for any Taxable Year in which there is a Realized Tax Benefit or Realized Tax Detriment, the Corporation shall provide to the TRA Payment Recipients a schedule showing, in reasonable detail, the calculation of the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year (a “
Tax Benefit Schedule
”). The Tax Benefit Schedule will become final and binding on the Parties pursuant to the procedures set forth in
Section 2.4(a)
, and may be amended by the Parties pursuant to the procedures set forth in
Section 2.4(b)
.
(b)
Applicable Principles
. Subject to the provisions of this Agreement, the Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the Actual Tax Liability of the Corporation for such Taxable Year attributable to the Basis Adjustments and Imputed Interest, as determined using a “with and without” methodology described in
Section 2.4(a)
. Carryovers or carrybacks of any tax item attributable to any Basis Adjustment or Imputed Interest shall be considered to be subject to the rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any tax item includes a portion that is attributable to a Basis Adjustment or Imputed Interest (a “
TRA Portion
”) and another portion that is not (a “
Non-TRA Portion
”), such portions shall be considered to be used in accordance with the “with and without” methodology so that: (i) the amount of any Non-TRA Portion is deemed utilized first, followed by the amount of any TRA Portion (with the TRA Portion being applied on a proportionate basis consistent with the provisions of
Section 3.3(a)
); and (ii) in the case of a carryback of a Non-TRA Portion, such carryback shall not affect the original “with and without” calculation made in the prior Taxable Year. The Parties agree that, subject to the second to last sentence of
Section 2.1(a)
, all Tax Benefit Payments attributable to an Exchange (other than any portion treated as Imputed Interest) will be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments for the Corporation beginning in the Taxable Year of payment, and as a result, such additional Basis Adjustments will be incorporated into such Taxable Year continuing for future Taxable Years until any incremental Basis Adjustment benefits with respect to a Tax Benefit Payment equals an immaterial amount.
Section 2.4
Procedures; Amendments
.
(a)
Procedures
. Each time the Corporation delivers an applicable Schedule to the TRA Payment Recipients under this Agreement, including any Amended Schedule delivered pursuant to
Section 2.4(b)
, but excluding any Early Termination Schedule or amended Early
Termination Schedule delivered pursuant to the procedures set forth in
Section 4.2
, the Corporation shall also: (x) deliver supporting schedules and work papers and a copy of the Corporation’s Tax Returns for such Taxable Year, as determined by the Corporation or as reasonably requested by any TRA Payment Recipient, that provide a reasonable level of detail regarding the data and calculations that were relevant for purposes of preparing the Schedule; (y) deliver a Corporation Letter supporting such Schedule; and (z) allow the TRA Payment Recipients and their advisors to have reasonable access to the appropriate representatives, as determined by the Corporation or as reasonably requested by the TRA Payment Recipients, at the Corporation and the Advisory Firm in connection with a review of such Schedule. Without limiting the generality of the preceding sentence, the Corporation shall ensure that any Tax Benefit Schedule that is delivered to the TRA Payment Recipients, along with any supporting schedules and work papers, provides a reasonably detailed presentation of the calculation of the Actual Tax Liability of the Corporation for the relevant Taxable Year (the “with” calculation) and the Hypothetical Tax Liability of the Corporation for such Taxable Year (the “without” calculation), and identifies any material assumptions or operating procedures or principles that were used for purposes of such calculations. An applicable Schedule or amendment thereto shall become final and binding on the Parties thirty (30) calendar days from the date on which the TRA Payment Recipients first received the applicable Schedule or amendment thereto unless:
(i) a TRA Payment Recipient within thirty (30) calendar days after receiving the applicable Schedule or amendment thereto, provides the Corporation with (A) written notice of a material objection to such Schedule that is made in good faith and that sets forth in reasonable detail such TRA Payment Recipient’s material objection (an “
Objection Notice
”) and (B) a letter from a Member Advisory Firm in support of such Objection Notice; or
(ii) each TRA Payment Recipient provides a written waiver of its right to deliver an Objection Notice within the time period described in clause (i) above, in which case such Schedule or amendment thereto becomes binding on the date the waiver from all TRA Payment Recipients is received by the Corporation.
In the event that a TRA Payment Recipient timely delivers an Objection Notice pursuant to clause (i) above, and if the Parties, for any reason, are unable to successfully resolve the issues raised in the Objection Notice within thirty (30) calendar days after receipt by the Corporation of the Objection Notice, the Corporation and the TRA Payment Recipient shall employ the reconciliation procedures as described in
Section 7.9
(the “
Reconciliation Procedures
”). For the avoidance of doubt, and notwithstanding anything to the contrary herein, the expense of preparing and obtaining the letter from a Member Advisory Firm referenced in clause (i) above shall be borne solely by the relevant TRA Payment Recipient and the Corporation shall have no liability with respect to such letter or any of the expenses associated with its preparation and delivery.
(b)
Amended Schedule
. The applicable Schedule for any Taxable Year may be amended from time to time by the Corporation: (i) in connection with a Determination affecting such Schedule; (ii) to correct inaccuracies in the Schedule identified as a result of the receipt of additional factual information relating to a Taxable Year after the date the Schedule was originally provided to the TRA Payment Recipient; (iii) to comply with an Expert’s
determination under the Reconciliation Procedures applicable to this Agreement; (iv) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to a carryback or carryforward of a loss or other Tax item to such Taxable Year; (v) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year; or (vi) to adjust a Basis Schedule to take into account any Tax Benefit Payments made pursuant to this Agreement (any such Schedule, an “
Amended Schedule
”).
ARTICLE III
TAX BENEFIT PAYMENTS
Section 3.1
Timing and Amount of Tax Benefit Payments
.
(a)
Timing of Payments
. Subject to the other provisions of this Article III, within five (5) Business Days following the date on which each Tax Benefit Schedule that is required to be delivered by the Corporation to the TRA Payment Recipients pursuant to
Section 2.3(a)
becomes final in accordance with
Section 2.4(a)
(such date, the “
Final Payment Date
” in respect of any Tax Benefit Payment), the Corporation shall pay to each relevant TRA Payment Recipient the Tax Benefit Payment as determined pursuant to
Section 3.1(b)
. Each such Tax Benefit Payment shall be made by wire transfer of immediately available funds to the bank account previously designated by such TRA Payment Recipients or as otherwise agreed by the Corporation and such TRA Payment Recipients. For the avoidance of doubt, the TRA Payment Recipients shall not be required under any circumstances to return any portion of any Tax Benefit Payment previously paid by the Corporation to the TRA Payment Recipients (including any portion of any Early Termination Payment).
(b)
Amount of Payments
. For purposes of this Agreement, a “
Tax Benefit Payment
” with respect to any TRA Payment Recipient means an amount, not less than zero, equal to the sum of: (i) the Net Tax Benefit that is Attributable to such TRA Payment Recipient and (ii) the Actual Interest Amount.
(i)
Attributable
. A Net Tax Benefit is “
Attributable
” to a TRA Payment Recipient to the extent that it is derived from any Basis Adjustment or Imputed Interest that is attributable to an Exchange undertaken by or with respect to such TRA Payment Recipient.
(ii)
Net Tax Benefit
. The “
Net Tax Benefit
” for a Taxable Year equals the amount of the excess, if any, of (x) 85% of the Cumulative Net Realized Tax Benefit Attributable to such TRA Payment Recipient as of the end of such Taxable Year over (y) the aggregate amount of all Tax Benefit Payments previously made to such TRA Payment Recipient under this
Section 3.1
. For the avoidance of doubt, if the Cumulative Net Realized Tax Benefit as of the end of any Taxable Year is less than the aggregate amount of all Tax Benefit Payments previously made to a TRA Payment Recipient, such TRA Payment Recipient shall not be required to return any portion of any Tax Benefit Payment previously made by the Corporation to such TRA Payment Recipient.
(iii)
Cumulative Net Realized Tax Benefit
. The “
Cumulative Net Realized Tax Benefit
” for a Taxable Year equals the cumulative amount of Realized Tax Benefits for all Taxable Years of the Corporation, up to and including such Taxable Year, net of the cumulative amount of Realized Tax Detriments for the same period. The Realized Tax Benefit and Realized Tax Detriment for each Taxable Year shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination.
(iv)
Realized Tax Benefit
. The “
Realized Tax Benefit
” for a Taxable Year equals the excess, if any, of the Hypothetical Tax Liability over the Actual Tax Liability for such Taxable Year. If all or a portion of the Actual Tax Liability for such Taxable Year arises as a result of an audit or similar proceeding by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination.
(v)
Realized Tax Detriment
. The “
Realized Tax Detriment
” for a Taxable Year equals the excess, if any, of the Actual Tax Liability over the Hypothetical Tax Liability for such Taxable Year. If all or a portion of the Actual Tax Liability for such Taxable Year arises as a result of an audit or similar proceeding by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination.
(vi)
Imputed Interest
. The principles of Sections 1272, 1274, or 483 of the Code, as applicable, and the principles of any similar provision of U.S. state and local law, will apply to cause a portion of any Net Tax Benefit payable by the Corporation to a TRA Payment Recipient under this Agreement to be treated as imputed interest (“
Imputed Interest
”). For the avoidance of doubt, the deduction for the amount of Imputed Interest as determined with respect to any Net Tax Benefit payable by the Corporation to a TRA Payment Recipient shall be excluded in determining the Hypothetical Tax Liability of the Corporation for purposes of calculating Realized Tax Benefits and Realized Tax Detriments pursuant to this Agreement.
(vii)
Actual Interest Amount
. The “
Actual Interest Amount
” calculated in respect of the Net Tax Benefit for a Taxable Year will equal the amount of any Extension Rate Interest and the amount of any Default Rate Interest.
(viii)
Extension Rate Interest
. The amount of “
Extension Rate Interest
” calculated in respect of the Net Tax Benefit (including previously accrued Imputed Interest) for a Taxable Year will equal interest calculated at the Agreed Rate from the due date (without extensions) for filing the U.S. federal income Tax Return of the Corporation for such Taxable Year until the date on which the Corporation makes a timely Tax Benefit Payment to the TRA Payment Recipient on or before the Final Payment Date as determined pursuant to
Section 3.1(a)
. For the avoidance of doubt, the amount of any Extension Rate Interest as determined with respect to any Net Tax Benefit payable by the Corporation to a TRA Payment Recipient shall be included in the Hypothetical Tax Liability of the Corporation for purposes of calculating Realized Tax Benefits and Realized Tax Detriments pursuant to this Agreement.
(ix)
Default Rate Interest
. In the event that the Corporation does not make timely payment of all or any portion of a Tax Benefit Payment to a TRA Payment Recipient on or before the Final Payment Date as determined pursuant to
Section 3.1(a)
, the amount of “
Default Rate Interest
” calculated in respect of the Net Tax Benefit (including previously accrued Imputed Interest and Extension Rate Interest) for a Taxable Year will equal interest calculated at the Default Rate from the Final Payment Date for a Tax Benefit Payment as determined pursuant to
Section 3.1(a)
until the date on which the Corporation makes such Tax Benefit Payment to such TRA Payment Recipient. For the avoidance of doubt, the amount of any Default Rate Interest as determined with respect to any Net Tax Benefit payable by the Corporation to a TRA Payment Recipient shall be included in the Hypothetical Tax Liability of the Corporation for purposes of calculating Realized Tax Benefits and Realized Tax Detriments pursuant to this Agreement.
(x) The Corporation and the TRA Payment Recipients hereby acknowledge and agree that, as of the date of the Agreement and as of the date of any future Exchange that may be subject to this Agreement, the aggregate value of the Tax Benefit Payments cannot be reasonably ascertained for U.S. federal income or other applicable tax purposes. Notwithstanding anything herein to the contrary, unless otherwise specified by a party entitled to benefits under this Section 3.1 in the Exchange Notice for any Exchange that occurs pursuant to the Exchange Agreement or any direct or indirect redemption that occurs pursuant to the LLC Agreement (or otherwise specified in writing by such a party with respect to an Exchange or redemption), the aggregate Tax Benefit Payments in respect of such Exchange (other than amounts accounted for as interest under the Code) and therefore the stated maximum selling price, with respect to any Exchange by such TRA Payment Recipient shall not exceed fifty percent (50%) of the fair market value of the consideration received in such Exchange (whether as a cash payment, as shares of Class A Common Stock, or as other consideration).
(c)
Interest
. The provisions of
Section 3.1(b)
are intended to operate so that interest will effectively accrue in respect of the Net Tax Benefit for any Taxable Year as follows:
(i) first, in an amount equal to the Imputed Interest under the Code (from the relevant Exchange Date until the due date (without extensions) for filing the U.S. federal income Tax Return of the Corporation for such Taxable Year) and through the date on which the Corporation makes the relevant Tax Benefit Payment to a TRA Payment Recipient;
(ii) second, at the Agreed Rate in respect of any Extension Rate Interest (from the due date (without extensions) for filing the U.S. federal income Tax Return of the Corporation for such Taxable Year until the Final Payment Date for a Tax Benefit Payment as determined pursuant to
Section 3.1(a)
); and
(iii) third, at the Default Rate in respect of any Default Rate Interest (from the Final Payment Date for a Tax Benefit Payment as determined pursuant to
Section 3.1(a)
until the date on which the Corporation makes the relevant Tax Benefit Payment to a TRA Payment Recipient).
Section 3.2
No Duplicative Payments
. It is intended that the provisions of this Agreement will not result in the duplicative payment of any amount (including interest) that may be required under this Agreement, and the provisions of this Agreement shall be consistently interpreted and applied in accordance with that intent. For purposes of this Agreement, and also for the avoidance of doubt, no Tax Benefit Payment shall be calculated or made in respect of any estimated tax payments, including any estimated U.S. federal income tax payments.
Section 3.3
Pro-Ration of Payments as Between the TRA Payment Recipients
.
(a)
Insufficient Taxable Income
. Notwithstanding anything in
Section 3.1(b)
to the contrary, if the aggregate potential Covered Tax benefit of the Corporation as calculated with respect to the Basis Adjustments and Imputed Interest (in each case, without regard to the Taxable Year of origination) is limited in a particular Taxable Year because the Corporation does not have sufficient actual taxable income, then the available Covered Tax benefit for the Corporation shall be allocated among the TRA Payment Recipients in proportion to the respective Tax Benefit Payment that would have been payable if the Corporation had in fact had sufficient taxable income so that there had been no such limitation. As an illustration of the intended operation of this
Section 3.3(a)
, if the Corporation had $200 of aggregate potential Covered Tax benefits with respect to the Basis Adjustments and Imputed Interest in a particular Taxable Year (with $50 of such Covered Tax benefits being attributable to TRA Payment Recipient 1 and $150 of such Covered Tax benefits being attributable to TRA Payment Recipient 2), such that TRA Payment Recipient 1 would have potentially been entitled to a Tax Benefit Payment of $42.50 and TRA Payment Recipient 2 would have been entitled to a Tax Benefit Payment of $127.50 if the Corporation had $200 of tax liability for the year, and if at the same time the Corporation only had $100 of actual tax liability in such Taxable Year, then $25 of the aggregate $100 actual Covered Tax benefit for the Corporation for such Taxable Year would be allocated to TRA Payment Recipient 1 and $75 of the aggregate $100 actual Covered Tax benefit for the Corporation would be allocated to TRA Payment Recipient 2, such that TRA Payment Recipient 1 would receive a Tax Benefit Payment of $21.25 and TRA Payment Recipient 2 would receive a Tax Benefit Payment of $63.75.
(b)
Late Payments
. If for any reason the Corporation is not able to timely and fully satisfy its payment obligations under this Agreement in respect of a particular Taxable Year, then Default Rate Interest will begin to accrue pursuant to
Section 5.2
and the Corporation and other Parties agree that (i) the Corporation shall pay the Tax Benefit Payments due in respect of such Taxable Year to each TRA Payment Recipient pro rata and (ii) no Tax Benefit Payment shall be made in respect of any Taxable Year until all Tax Benefit Payments to all TRA Payment Recipients in respect of all prior Taxable Years have been made in full.
Section 3.4
Change Notice.
If any Party, or any Affiliate or Subsidiary of any Party, receives a 30-day letter, a final audit report, a statutory notice of deficiency, or similar written notice from any Taxing Authority relating to the amount of the Net Tax Benefit calculated for purposes of this Agreement, or relating to any other material tax matter that is relevant to the terms of this Agreement and the calculation of the Tax Benefit Payments that may be payable by the Corporation to the TRA Payment Recipients (a “
Change Notice
”), prompt written notification and a copy of the relevant Change Notice shall be delivered by the Party (or its Affiliate or Subsidiary) that received such Change Notice to each other Party.
ARTICLE IV
TERMINATION
Section 4.1
Early Termination of Agreement; Breach of Agreement;
(a)
Corporation’s Early Termination Right
.
(a) With the written approval of (i) a majority of the Independent Directors, (ii) MDP and (iii) Blueapple, the Corporation may completely terminate this Agreement, as and to the extent provided herein, with respect to all amounts payable to the TRA Payment Recipients pursuant to this Agreement by paying to the TRA Payment Recipients the Early Termination Payment;
provided
that Early Termination Payments may be made pursuant to this
Section 4.1(a)
only if made to all TRA Payment Recipients that are entitled to such a payment simultaneously, and
provided further
, that the Corporation may withdraw any notice to execute its termination rights under this
Section 4.1(a)
prior to the time at which any Early Termination Payment has been paid. Upon the Corporation’s payment of the Early Termination Payment, the Corporation shall not have any further payment obligations under this Agreement, other than with respect to any: (i) prior Tax Benefit Payments that are due and payable under this Agreement but that still remain unpaid as of the date of the Early Termination Notice; and (ii) current Tax Benefit Payment due for the Taxable Year ending on or including the date of the Early Termination Notice (except to the extent that the amount described in clause (ii) is included in the calculation of the Early Termination Payment). If an Exchange subsequently occurs with respect to Common Units for which the Corporation has exercised its termination rights under this
Section 4.1(a)
, the Corporation shall have no obligations under this Agreement with respect to such Exchange.
(b)
Acceleration Upon Change of Control
. In the event of a Change of Control, all obligations hereunder shall be accelerated and such obligations shall be calculated pursuant to this
Article IV
as if an Early Termination Notice had been delivered on the date of the Change of Control and utilizing the Valuation Assumptions by substituting the phrase “the date of a Change of Control” in each place where the phrase “Early Termination Effective Date” appears. Such obligations shall include, but not be limited to, (i) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the date of the Change of Control, (ii) any Tax Benefit Payments agreed to by the Corporation and the TRA Payment Recipients as due and payable but unpaid as of the Early Termination Notice and (iii) any Tax Benefit Payments due for any Taxable Year ending prior to, with or including the date of a Change of Control (except to the extent that any amounts described in clauses (ii) or (iii) are included in the Early Termination Payment). For the avoidance of doubt,
Sections 4.2
and
4.3
shall apply to a Change of Control,
mutadis mutandi
.
(c)
Acceleration Upon Breach of Agreement
. In the event that the Corporation materially breaches any of its material obligations under this Agreement, whether as a result of failure to make any payment when due, failure to honor any other material obligation required hereunder, or by operation of law as a result of the rejection of this Agreement in a case commenced under the Bankruptcy Code or otherwise, then all obligations hereunder shall be accelerated and become immediately due and payable upon notice of acceleration from such TRA Payment Recipient (provided that in the case of any proceeding under the Bankruptcy Code
or other insolvency statute, such acceleration shall be automatic without any such notice), and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such notice of acceleration (or, in the case of any proceeding under the Bankruptcy Code or other insolvency statute, on the date of such breach) and shall include, but not be limited to: (i) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the date of such acceleration; (ii) any prior Tax Benefit Payments that are due and payable under this Agreement but that still remain unpaid as of the date of such acceleration; and (iii) any current Tax Benefit Payment due for the Taxable Year ending with or including the date of such acceleration. Notwithstanding the foregoing, in the event that the Corporation breaches this Agreement and such breach is not a material breach of a material obligation, a TRA Payment Recipient shall still be entitled to enforce all of its rights otherwise available under this Agreement, including potentially seeking an acceleration of amounts payable under this Agreement. For purposes of this
Section 4.1(c)
, and subject to the following sentence, the Parties agree that the failure to make any payment due pursuant to this Agreement within thirty (30) days of the relevant Final Payment Date shall be deemed to be a material breach of a material obligation under this Agreement for all purposes of this Agreement, and that it will not be considered to be a material breach of a material obligation under this Agreement to make a payment due pursuant to this Agreement within thirty (30) days of the relevant Final Payment Date. Notwithstanding anything in this Agreement to the contrary, it shall not be a material breach of a material obligation of this Agreement if the Corporation fails to make any Tax Benefit Payment within thirty (30) days of the relevant Final Payment Date to the extent that the Corporation has insufficient funds, and cannot obtain sufficient funds by taking commercially reasonable actions to do so, to make such payment;
provided
that the interest provisions of
Section 5.2
shall apply to such late payment (unless the Corporation does not have sufficient funds to make such payment as a result of any limitation imposed by any Senior Obligations, in which case
Section 5.2
shall apply, but the Default Rate shall be replaced by the Agreed Rate). For the avoidance of doubt, a Reconciliation Dispute would not constitute a breach of this Agreement.
Section 4.2
Early Termination Notice
. If the Corporation chooses to exercise its right of early termination under
Section 4.1
above, the Corporation shall deliver to the TRA Payment Recipients a notice of the Corporation’s decision to exercise such right (an “
Early Termination Notice
”) and a schedule (the “
Early Termination Schedule
”) showing in reasonable detail the calculation of the Early Termination Payment. The Corporation shall also (x) deliver supporting schedules and work papers, as determined by the Corporation or as reasonably requested by a TRA Payment Recipient, that provide a reasonable level of detail regarding the data and calculations that were relevant for purposes of preparing the Early Termination Schedule; (y) deliver a Corporation Letter supporting such Early Termination Schedule; and (z) allow the TRA Payment Recipients and their advisors to have reasonable access to the appropriate representatives, as determined by the Corporation or as reasonably requested by the TRA Payment Recipients, at the Corporation and the Advisory Firm in connection with a review of such Early Termination Schedule. The Early Termination Schedule shall become final and binding on each Party thirty (30) calendar days from the first date on which all the TRA Payment Recipients received such Early Termination Schedule unless:
(i) a TRA Payment Recipient within thirty (30) calendar days after receiving the Early Termination Schedule, provides the Corporation with (A) written notice of a
material objection to such Early Termination Schedule made in good faith and setting forth in reasonable detail such TRA Payment Recipient’s material objection (a “
Termination Objection Notice
”) and (B) a letter from a Member Advisory Firm in support of such Termination Objection Notice; or
(ii) each TRA Payment Recipient provides a written waiver of such right of a Termination Objection Notice within the period described in clause (i) above, in which case such Early Termination Schedule becomes binding on the date the waiver from all TRA Payment Recipients is received by the Corporation.
In the event that a TRA Payment Recipient timely delivers a Termination Objection Notice pursuant to clause (i) above, and if the Parties, for any reason, are unable to successfully resolve the issues raised in the Termination Objection Notice within thirty (30) calendar days after receipt by the Corporation of the Termination Objection Notice, the Corporation and such TRA Payment Recipient shall employ the Reconciliation Procedures. For the avoidance of doubt, and notwithstanding anything to the contrary herein, the expense of preparing and obtaining the letter from a Member Advisory Firm referenced in clause (i) above shall be borne solely by such TRA Payment Recipient and the Corporation shall have no liability with respect to such letter or any of the expenses associated with its preparation and delivery. The date on which the Early Termination Schedule becomes final in accordance with this
Section 4.2
shall be the “
Early Termination Reference Date
.”
Section 4.3
Payment Upon Early Termination
.
(a)
Timing of Payment
. Within five (5) Business Days after the Early Termination Reference Date, the Corporation shall pay to each TRA Payment Recipient an amount equal to the Early Termination Payment for such TRA Payment Recipient. Such Early Termination Payment shall be made by the Corporation by wire transfer of immediately available funds to a bank account or accounts designated by the TRA Payment Recipients or as otherwise agreed by the Corporation and the TRA Payment Recipients.
(b)
Amount of Payment
. The “
Early Termination Payment
” payable to a TRA Payment Recipient pursuant to
Section 4.3(a)
shall equal the present value, discounted at the Early Termination Rate as determined as of the Early Termination Reference Date, of all Tax Benefit Payments that would be required to be paid by the Corporation to such TRA Payment Recipient, whether payable with respect to Common Units that were Exchanged prior to the Early Termination Effective Date or on or after the Early Termination Effective Date, beginning from the Early Termination Effective Date and using the Valuation Assumptions. For the avoidance of doubt, an Early Termination Payment shall be made to each TRA Payment Recipient, regardless of whether such TRA Payment Recipient has Exchanged all of its Common Units or Call Option interests as of the Early Termination Effective Date.
ARTICLE V
SUBORDINATION AND LATE PAYMENTS
Section 5.1
Subordination
. Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment or Early Termination Payment required to be made by the Corporation to the TRA Payment Recipients under this Agreement shall rank subordinate and junior in right of payment to any principal, interest, or other amounts due and payable in respect of any obligations owed in respect of secured indebtedness for borrowed money of the Corporation and its Subsidiaries (“
Senior Obligations
”) and shall rank
pari passu
in right of payment with all current or future unsecured obligations of the Corporation that are not Senior Obligations. To the extent that any payment under this Agreement is not permitted to be made at the time payment is due as a result of this
Section 5.1
and the terms of the agreements governing Senior Obligations, such payment obligation nevertheless shall accrue for the benefit of the TRA Payment Recipients and the Corporation shall make such payments at the first opportunity that such payments are permitted to be made in accordance with the terms of the Senior Obligations.
Section 5.2
Late Payments by the Corporation
. The amount of all or any portion of any Tax Benefit Payment or Early Termination Payment not made to the TRA Payment Recipients when due under the terms of this Agreement, whether as a result of
Section 5.1
and the terms of the Senior Obligations or otherwise, shall be payable together with Default Rate Interest, which shall accrue beginning on the Final Payment Date and be computed as provided in
Section 3.1(b)(ix)
.
ARTICLE VI
TAX MATTERS; CONSISTENCY; COOPERATION
Section 6.1
Participation in the Corporation’s and Operating Company’s Tax Matters
. Except as otherwise provided herein, and except as provided in Article IX of the LLC Agreement, the Corporation shall have full responsibility for, and sole discretion over, all tax matters concerning the Corporation and Operating Company, including the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to taxes. Notwithstanding the foregoing, the Corporation shall notify the TRA Payment Recipients of, and keep them reasonably informed with respect to, the portion of any tax audit of the Corporation or Operating Company, or any of Operating Company’s Subsidiaries, the outcome of which could materially affect the Tax Benefit Payments payable to such TRA Payment Recipients under this Agreement, and any TRA Payment Recipient holding directly and/or indirectly at least ten percent (10%) of the outstanding Common Units (a “
10% Member
”) shall have the right to participate in and to monitor at such TRA Payment Recipient’s own expense (but, for the avoidance of doubt, not to control) any such portion of any such tax audit; provided that the Corporation shall not settle or fail to contest any issue pertaining to Covered Taxes that is reasonably expected to materially affect the Tax Benefit Payments payable to the TRA Payment Recipients under this Agreement without the consent of each 10% Member, such consent not to be unreasonably withheld, conditioned or delayed.
Section 6.2
Consistency
. All calculations and determinations made hereunder, including any Basis Adjustments, the Schedules, and the determination of any Realized Tax Benefits or Realized Tax Detriments, shall be made in accordance with the elections,
methodologies or positions taken by the Corporation and Operating Company on their respective Tax Returns. Each Member shall prepare its Tax Returns in a manner that is consistent with the terms of this Agreement, and any related calculations or determinations that are made hereunder, including the terms of
Section 2.1
and the Schedules provided to the Members under this Agreement. In the event that an Advisory Firm is replaced with another Advisory Firm acceptable to the Audit Committee, such replacement Advisory Firm shall perform its services under this Agreement using procedures and methodologies consistent with the previous Advisory Firm, unless otherwise required by law or unless the Corporation and all of the Members agree to the use of other procedures and methodologies.
Section 6.3
Cooperation
.
(a) Each TRA Payment Recipient shall (i) furnish to the Corporation in a timely manner such information, documents and other materials as the Corporation may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority, (ii) make itself available to the Corporation and its representatives to provide explanations of documents and materials and such other information as the Corporation or its representatives may reasonably request in connection with any of the matters described in clause (i) above, and (iii) reasonably cooperate in connection with any such matter. The Corporation shall reimburse the TRA Payment Recipients for any reasonable and documented out-of-pocket costs and expenses incurred pursuant to this
Section 6.3(a)
.
(b) The Corporation shall furnish to the TRA Payment Recipients such information, documents and other materials as a TRA Payment Recipient may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, including with respect to any Change Notice or any related determination described in
Section 3.4
.
ARTICLE VII
MISCELLANEOUS
Section 7.1
Notices
. All notices, requests, consents and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by courier service, by fax, by electronic mail (delivery receipt requested) or by certified or registered mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this
Section 7.1
). All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:
If to the Corporation, to:
EVO Payments, Inc.
Ten Glenlake Parkway, South Tower, Suite 950
Atlanta, Georgia 30328
Attn: Kevin M. Hodges, Chief Financial Officer
T: (516) 479-9000
E-mail: kevin.hodges@evopayments.com
with copies to (which shall not constitute notice to the Corporation) to:
Keith M. Townsend
King & Spalding LLP
1180 Peachtree Street, N.E.
Atlanta, Georgia 30309
T: (404) 572-4600
E-mail: ktownsend@kslaw.com
If to a TRA Payment Recipient, at such address as indicated by the Operating Company’s records, with a copy (which shall not constitute notice to the TRA Payment Recipient) to such counsel or other representative(s) as may be designated by such TRA Payment Recipient in a notice to other TRA Payment Recipients, properly delivered pursuant to this
Section 7.1
.
Any Party may change its address, fax number or e-mail address by giving each of the other Parties written notice thereof in the manner set forth above.
Section 7.2
Counterparts
. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
Section 7.3
Entire Agreement: No Third Party Beneficiaries
. This Agreement and the other agreements referenced herein constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof. This Agreement shall be binding upon and inure solely to the benefit of each Party hereto and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 7.4
Governing Law
. This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware, without regard to the conflicts of laws principles thereof that would mandate the application of the laws of another jurisdiction.
Section 7.5
Severability
. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
Section 7.6
Assignments; Amendments; Successors; No Waiver
.
(a)
Assignment
. Each TRA Payment Recipient may assign, sell, pledge, or otherwise alienate or transfer any interest in this Agreement, including the right to receive any Tax Benefit Payments under this Agreement, in whole or in part, to any Person so long as such Person has executed and delivered, or in connection with such transfer, executes and delivers, a Joinder agreement to succeed to the applicable portion of such TRA Payment Recipient’s interest in this Agreement and to become a Party for all purposes of this Agreement, except as otherwise provided in such Joinder (the “
Joinder Requirement
”); provided that MDP’s and Blueapple’s approval and consent rights described in this Agreement shall not be transferrable or assignable to any Person (other than a partner, shareholder, member or Affiliate (as defined in the LLC Agreement) of such Person (which may include special purpose investment vehicles wholly owned by one or more Affiliated investment funds but shall not include portfolio companies) without the prior written consent of the Corporation (and any purported transfer or assignment without such consent shall be null and void). For the avoidance of doubt, if a Member transfers Common Units or Call Option in accordance with the terms of the LLC Agreement but does not assign to the transferee of such Common Units or Call Option, as applicable, its rights under this Agreement with respect to such transferred Common Units or Call Option, as applicable, such TRA Payment Recipient shall continue to be entitled to receive the Tax Benefit Payments arising in respect of a subsequent Exchange of such Common Units. The Corporation may not assign any of its rights or obligations under this Agreement to any Person without unanimous consent of all Parties hereto (and any purported assignment without such consent shall be null and void).
(b)
Amendments
. No provision of this Agreement may be amended unless such amendment is approved in writing by (x) the Corporation and (y) TRA Payment Recipients (including, in all circumstances, MDP and Blueapple) who would be entitled to receive more than fifty percent (50%) of the aggregate amount of the Early Termination Payments payable to all TRA Payment Recipients hereunder if the Corporation had exercised its termination rights under
Section 4.1(a)
on the date of the most recent Exchange prior to such amendment (excluding, for purposes of this sentence, all payments made to any TRA Payment Recipient pursuant to this Agreement since the date of such most recent Exchange);
provided
that amendment of the definition of Change of Control will also require the written approval of a majority of the Independent Directors. No provision of this Agreement may be waived unless such waiver is in writing and signed by the Party against whom the waiver is to be effective.
(c)
Successors
. All of the terms and provisions of this Agreement shall be binding upon, and shall inure to the benefit of and be enforceable by, the Parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.
(d)
Waiver
. No failure by any Party to insist upon the strict performance of any covenant, duty, agreement, or condition of this Agreement, or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or any other covenant, duty, agreement, or condition.
Section 7.7
Titles and Subtitles
. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
Section 7.8
Resolution of Disputes
.
(a) Except for Reconciliation Disputes subject to
Section 7.9
, any and all disputes which cannot be settled after substantial good-faith negotiation, including any ancillary claims of any Party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision) (each a “
Dispute
”) shall be finally resolved by arbitration in accordance with the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration by a panel of three arbitrators, of which the Corporation shall designate one arbitrator and the TRA Payment Recipients party to such Dispute shall designate one arbitrator in accordance with the “screened” appointment procedure provided in Resolution Rule 5.4. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of the arbitration shall be Atlanta, Georgia.
(b) Notwithstanding the provisions of paragraph (a), any Party may bring an action or special proceeding in any court of competent jurisdiction for the purpose of compelling another Party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Party (i) expressly consents to the application of paragraph (c) of this
Section 7.8
to any such action or proceeding, and (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate. For the avoidance of doubt, this
Section 7.8
shall not apply to Reconciliation Disputes to be settled in accordance with the procedures set forth in
Section 7.9
.
(c) Each Party hereby irrevocably and unconditionally consents to submit to the sole and exclusive jurisdiction of the Court of Chancery in the State of Delaware (the “
Delaware Chancery Court
”) for any litigation (whether based on contract, tort or otherwise), directly or indirectly, arising out of or relating to this Agreement, or the negotiation, validity or performance of this Agreement, or the actions contemplated hereby (and agrees not to commence any litigation relating thereto except in such court), waives any objection to the laying of venue of any such litigation in the Delaware Chancery Court and agrees not to plead or claim in the Delaware Chancery Court that such litigation brought therein has been brought in an inconvenient forum. Each Party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(d) Each Party irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in
Section 7.8(c)
. Each Party irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any such suit, action or proceeding in any such court.
(e) Each Party irrevocably consents to service of process by means of notice in the manner provided for in
Section 7.1
(other than by facsimile). Nothing in this Agreement shall affect the right of any Party to serve process in any manner permitted by law.
(f) WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
(g) Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of
Section 7.9
, or a Dispute within the meaning of this
Section 7.8
, shall be decided and resolved as a Dispute subject to the procedures set forth in this
Section 7.8
.
Section 7.9
Reconciliation
. In the event that the Corporation and any TRA Payment Recipient are unable to resolve a disagreement with respect to a Schedule (other than an Early Termination Schedule) prepared pursuant to
Section 2.4
, or with respect to an Early Termination Schedule prepared pursuant to
Section 4.2
, within the relevant time period designated in this Agreement (a “
Reconciliation Dispute
”), the Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the “
Expert
”) in the particular area of disagreement mutually acceptable to both Parties. The Expert shall be a partner or principal in a nationally recognized accounting firm, and unless the Corporation and such TRA Payment Recipient agree otherwise, the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with the Corporation or such TRA Payment Recipient or other actual or potential conflict of interest. If the Parties are unable to agree on an Expert within fifteen (15) calendar days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, the selection of an Expert shall be treated as a Dispute subject to
Section 7.8
and an arbitration panel shall pick an Expert from a nationally recognized accounting firm that does not have any material relationship with the Corporation or such TRA Payment Recipient or other actual or potential conflict of interest. The Expert shall resolve any matter relating to the Basis Schedule or an amendment thereto, or the Early Termination Schedule or an amendment thereto within thirty (30) calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within fifteen (15) calendar days or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding sentence, if the matter is not resolved before any payment that is the subject of a disagreement would be due (in the absence of such disagreement) or any Tax Return reflecting the subject of a disagreement is due, the undisputed amount shall be paid on the date prescribed by this Agreement and such Tax Return may be filed as prepared by the Corporation, subject to adjustment or amendment upon resolution. The costs and expenses relating to the engagement of such Expert or amending any Tax Return shall be borne by the
Corporation except as provided in the next sentence. The Corporation and the TRA Payment Recipients shall bear their own costs and expenses of such proceeding, unless (i) the Expert adopts the TRA Payment Recipient’s position, in which case the Corporation shall reimburse the TRA Payment Recipient for any reasonable and documented out-of-pocket costs and expenses in such proceeding, or (ii) the Expert adopts the Corporation’s position, in which case the TRA Payment Recipient shall reimburse the Corporation for any reasonable and documented out-of-pocket costs and expenses in such proceeding. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this
Section 7.9
shall be binding on the Corporation and the TRA Payment Recipients and may be entered and enforced in any court having competent jurisdiction.
Section 7.10
Withholding
. The Corporation shall be entitled to deduct and withhold from any payment that is payable to any TRA Payment Recipient pursuant to this Agreement such amounts as the Corporation is required to deduct and withhold with respect to the making of such payment under the Code or any provision of U.S. state, local or foreign tax law. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority by the Corporation, such withheld amounts shall be treated for all purposes of this Agreement as having been paid by the Corporation to the relevant TRA Payment Recipient. Each TRA Payment Recipient shall promptly provide the Corporation with any applicable tax forms and certifications reasonably requested by the Corporation in connection with determining whether any such deductions and withholdings are required under the Code or any provision of U.S. state, local or foreign tax law.
Section 7.11
Admission of the Corporation into a Consolidated Group
: Transfers of Assets.
(a) If the Corporation is or becomes a member of an affiliated or consolidated group of corporations that files a consolidated income Tax Return pursuant to Section 1501 or other applicable Sections of the Code governing affiliated or consolidated groups, or any corresponding provisions of U.S. state or local law, then: (i) the provisions of this Agreement shall be applied with respect to the group as a whole; and (ii) Tax Benefit Payments, Early Termination Payments, and other applicable items hereunder shall be computed with reference to the consolidated taxable income of the group as a whole.
(b) If Operating Company or any entity that is obligated to make a Tax Benefit Payment or Early Termination Payment hereunder transfers one or more assets to a corporation (or a Person classified as a corporation for U.S. income tax purposes) with which such entity does not file a consolidated Tax Return pursuant to Section 1501 of the Code, such entity, for purposes of calculating the amount of any Tax Benefit Payment or Early Termination Payment due hereunder, shall be treated as having disposed of such asset in a fully taxable transaction on the date of such contribution. The consideration deemed to be received by such entity shall be equal to the fair market value of the contributed asset. For purposes of this
Section 7.11
, a transfer of a partnership interest shall be treated as a transfer of the transferring partner’s share of each of the assets and liabilities of that partnership.
Section 7.12
Confidentiality
. Each TRA Payment Recipient and its assignees acknowledges and agrees that the information of the Corporation is confidential and, except in
the course of performing any duties as necessary for the Corporation and its Affiliates, as required by law or legal process or to enforce the terms of this Agreement, such Person shall keep and retain in the strictest confidence and not disclose to any Person any confidential matters, acquired pursuant to this Agreement, of the Corporation and its Affiliates and successors, learned by any TRA Payment Recipient heretofore or hereafter. This
Section 7.12
shall not apply to (i) any information that has been made publicly available by the Corporation or any of its Affiliates, becomes public knowledge (except as a result of an act of any TRA Payment Recipient in violation of this Agreement) or is generally known to the business community, (ii) the disclosure of information to the extent necessary for a TRA Payment Recipient to prosecute or defend claims arising under or relating to this Agreement, and (iii) the disclosure of information to the extent necessary for a TRA Payment Recipient to prepare and file its Tax Returns, to respond to any inquiries regarding the same from any Taxing Authority or to prosecute or defend any action, proceeding or audit by any Taxing Authority with respect to such Tax Returns. Notwithstanding anything to the contrary herein, the TRA Payment Recipients and each of their assignees (and each employee, representative or other agent of the TRA Payment Recipients or their assignees, as applicable) may disclose at their discretion to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the Corporation, the TRA Payment Recipients and any of their transactions, and all materials of any kind (including tax opinions or other tax analyses) that are provided to the TRA Payment Recipients relating to such tax treatment and tax structure. If a TRA Payment Recipient or an assignee commits a breach, or threatens to commit a breach, of any of the provisions of this
Section 7.12
, the Corporation shall have the right and remedy to have the provisions of this
Section 7.12
specifically enforced by injunctive relief or otherwise by any court of competent jurisdiction without the need to post any bond or other security, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to the Corporation or any of its Subsidiaries and that money damages alone shall not provide an adequate remedy to such Persons. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available at law or in equity.
Section 7.13
Change in Law
. Notwithstanding anything herein to the contrary, if, in connection with an actual or proposed change in law, a TRA Payment Recipient reasonably believes that the existence of this Agreement could cause income (other than income arising from receipt of a payment under this Agreement) recognized by such TRA Payment Recipient (or direct or indirect equity holders in such TRA Payment Recipient) in connection with any Exchange to be treated as ordinary income rather than capital gain (or otherwise taxed at ordinary income rates) for U.S. federal income tax purposes or would have other material adverse tax consequences to such TRA Payment Recipient or any direct or indirect owner of such TRA Payment Recipient, then at the written election of such TRA Payment Recipient in its sole discretion (in an instrument signed by such TRA Payment Recipient and delivered to the Corporation) and to the extent specified therein by such TRA Payment Recipient, this Agreement shall cease to have further effect and shall not apply to an Exchange occurring after a date specified by such TRA Payment Recipient, or may be amended by in a manner reasonably determined by such TRA Payment Recipient, provided that such amendment shall not result in an increase in any payments owed by the Corporation under this Agreement at any time as compared to the amounts and times of payments that would have been due in the absence of such amendment.
Section 7.14
Interest Rate Limitation
. Notwithstanding anything to the contrary contained herein, the interest paid or agreed to be paid hereunder with respect to amounts due to any TRA Payment Recipient hereunder shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “
Maximum Rate
”). If any TRA Payment Recipient shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the Tax Benefit Payment or Early Termination Payment, as applicable (but in each case exclusive of any component thereof comprising interest) or, if it exceeds such unpaid non-interest amount, refunded to the Corporation. In determining whether the interest contracted for, charged, or received by any Member exceeds the Maximum Rate, such TRA Payment Recipient may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the payment obligations owed by the Corporation to such TRA Payment Recipient hereunder. Notwithstanding the foregoing, it is the intention of the Parties to conform strictly to any applicable usury laws.
Section 7.15
Independent Nature of Rights and Obligations
. The rights and obligations of each TRA Payment Recipient hereunder are several and not joint with the rights and obligations of any other Person. A TRA Payment Recipient shall not be responsible in any way for the performance of the obligations of any other Person hereunder, nor shall a TRA Payment Recipient have the right to enforce the rights or obligations of any other Person hereunder (other than the Corporation). The obligations of a TRA Payment Recipient hereunder are solely for the benefit of, and shall be enforceable solely by, the Corporation. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any TRA Payment Recipient pursuant hereto or thereto, shall be deemed to constitute the TRA Payment Recipients acting as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the TRA Payment Recipients are in any way acting in concert or as a group with respect to such rights or obligations or the transactions contemplated hereby, and the Corporation acknowledges that the TRA Payment Recipients are not acting in concert or as a group and will not assert any such claim with respect to such rights or obligations or the transactions contemplated hereby.
[Signature Page Follows This Page]
IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Agreement as of the date first written above.
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CORPORATION:
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EVO PAYMENTS, INC.
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By:
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/s/ Steven J. de Groot
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Name: Steven J. de Groot
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Title: Executive Vice President and General Counsel
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By:
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/s/ Kevin M. Hodges
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Name: Kevin M. Hodges
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Title: Chief Financial Officer
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OPERATING COMPANY:
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EVO INVESTCO, LLC
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By:
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/s/ Steven J. de Groot
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Name: Steven J. de Groot
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Title: Executive Vice President and General Counsel
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By:
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/s/ Kevin M. Hodges
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Name: Kevin M. Hodges
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Title: Chief Financial Officer
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[Signature Page – Tax Receivable Agreement]
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TRA PAYMENT RECIPIENTS:
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MADISON DEARBORN CAPITAL PARTNERS VI-B, L.P.
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By: Madison Dearborn Partners VI-B, L.P.
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Its: General Partner
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By: Madison Dearborn Partners, LLC
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Its: General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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MADISON DEARBORN CAPITAL PARTNERS VI EXECUTIVE-B, L.P.
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By: Madison Dearborn Partners VI-B, L.P.
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Its: General Partner
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By: Madison Dearborn Partners, LLC
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Its: General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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MDCP VI-C CARDSERVICES SPLITTER, L.P.
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By: Madison Dearborn Partners VI-B, L.P.
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Its: General Partner
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By: Madison Dearborn Partners, LLC
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Its: General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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[Signature Page – Tax Receivable Agreement]
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MDCP CARDSERVICES, LLC
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By: Madison Dearborn Capital Partners VI-B, L.P.
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Its: Controlling Member
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By: Madison Dearborn Partners VI-B, L.P.
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Its: General Partner
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By: Madison Dearborn Partners, LLC
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Its: General Partner
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By:
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/
s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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MADISON DEARBORN CAPITAL PARTNERS VI-C, L.P.
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By: Madison Dearborn Partners VI-A&C, L.P.
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Its: General Partner
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By: Madison Dearborn Partners, LLC
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Its: General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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[Signature Page – Tax Receivable Agreement]
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BLUEAPPLE, INC.
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By:
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/s/ Ray Sidhom
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Name: Ray Sidhom
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Its: Chief Executive Officer and President
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/s/ James G. Kelly
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James G. Kelly
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James G. Kelly Grantor Trust Dated January 12, 2012
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By:
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/s/ John Kelly
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Name: John Kelly
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Its: Trustee
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/s/ Michael L. Reidenbach
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Michael L. Reidenbach
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/s/ Brendan Tansill
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Brendan Tansill
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/s/ Steven J. de Groot
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Steven J. de Groot
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/s/ Kevin Hodges
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Kevin Hodges
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/s/ David Goldman
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David Goldman
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/s/ Jeff Rosenblatt
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Jeff Rosenblatt
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[Signature Page – Tax Receivable Agreement]
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/s/ Kevin Lambrix
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Kevin Lambrix
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/s/ James Raftice
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James Raftice
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/s/ Peter Cohen
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Peter Cohen
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/s/ Alon Kindler
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Alon Kindler
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/s/ Blake Pyle
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Blake Pyle
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/s/ Greg Robertson
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Greg Robertson
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/s/ Mark Harrelson
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Mark Harrelson
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/s/ John Crouch
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John Crouch
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/s/ Ayman Ibrahaim
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Ayman Ibrahaim
|
[Signature Page – Tax Receivable Agreement]
Exhibit A
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of , 20____ (this “
Joinder
”), is delivered pursuant to that certain Tax Receivable Agreement, dated as of May 25, 2018 (as amended, restated, supplemented or otherwise modified from time to time, the “
Tax Receivable Agreement
”) by and among EVO Payments, Inc., a Delaware corporation (the “
Corporation
”), EVO Investco, LLC, a Delaware limited liability company (“
Operating Company
”), and each of the Members from time to time party thereto. Capitalized terms used but not otherwise defined herein have the respective meanings set forth in the Tax Receivable Agreement.
1.
Assignment of the Tax Receivable Agreement
. The undersigned hereby represents and warrants to the Corporation that, as of the date hereof, the undersigned has been assigned an interest in the Tax Receivable Agreement by [
insert information regarding assignor
].
2.
Joinder to the Tax Receivable Agreement
. Upon the execution of this Joinder by the undersigned and delivery hereof to the Corporation, the undersigned hereby is and hereafter will be a treated as a Member as such term is defined in the Tax Receivable Agreement and will be a Party thereto, with all the rights, privileges and responsibilities of a Member thereunder. The undersigned hereby agrees that it shall comply with and be fully bound by the terms of the Tax Receivable Agreement as if it had been a signatory thereto as of the date thereof.
3.
Incorporation by Reference
. All terms and conditions of the Tax Receivable Agreement are hereby incorporated by reference in this Joinder as if set forth herein in full.
4.
Address
. All notices under the Tax Receivable Agreement to the undersigned shall be direct to:
[Name]
[Address]
[City, State, Zip Code]
Attn:
Facsimile:
E-mail:
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Joinder as of the day and year first above written.
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[NAME OF NEW PARTY]
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By:
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Name:
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Title:
|
|
Acknowledged and agreed
as of the date first set forth above:
|
EVO Payments, Inc.
|
|
|
|
|
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|
By:
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Name:
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Title:
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Exhibit 10.2
Execution Version
EVO INVESTCO, LLC
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
Dated as of May 22, 2018
THE COMPANY INTERESTS REPRESENTED BY THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH COMPANY INTERESTS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.
TABLE OF CONTENTS
|
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Page
|
|
ARTICLE I DEFINITIONS
|
2
|
|
|
|
|
ARTICLE II ORGANIZATIONAL MATTERS
|
12
|
|
Section 2.01.
|
Formation of Company
|
12
|
|
Section 2.02.
|
Second Amended and Restated LLC Agreement
|
12
|
|
Section 2.03.
|
Name
|
12
|
|
Section 2.04.
|
Purpose
|
12
|
|
Section 2.05.
|
Principal Office; Registered Office
|
12
|
|
Section 2.06.
|
Term
|
12
|
|
Section 2.07.
|
No State-Law Partnership
|
12
|
|
|
|
|
|
ARTICLE III MEMBERS; UNITS; CAPITALIZATION
|
13
|
|
Section 3.01.
|
Members.
|
13
|
|
Section 3.02.
|
Units
|
13
|
|
Section 3.03.
|
Recapitalization; the Corporation’s Capital Contribution; the Corporation’s
Purchase of Common Units; Member Distribution.
|
14
|
|
Section 3.04.
|
Authorization and Issuance of Additional Units.
|
14
|
|
Section 3.05.
|
Purchase or Redemption of Shares of Class A Common Stock
|
15
|
|
Section 3.06.
|
Certificates Representing Units; Lost, Stolen or Destroyed Certificates;
Registration and Transfer of Units.
|
15
|
|
Section 3.07.
|
Negative Capital Accounts
|
16
|
|
Section 3.08.
|
No Withdrawal
|
16
|
|
Section 3.09.
|
Loans From Members
|
16
|
|
Section 3.10.
|
Corporate Stock Option Plans and Equity Plans.
|
16
|
|
Section 3.11.
|
Dividend Reinvestment Plan, Cash Option Purchase Plan, Stock Incentive
Plan or Other Plan
|
18
|
|
|
|
|
|
ARTICLE IV DISTRIBUTIONS
|
19
|
|
Section 4.01.
|
Distributions.
|
19
|
|
Section 4.02.
|
Restricted Distributions
|
20
|
|
Section 4.03.
|
Pre-IPO Tax Distribution
|
20
|
|
|
|
|
|
ARTICLE V CAPITAL ACCOUNTS; ALLOCATIONS; TAX MATTERS
|
20
|
|
Section 5.01.
|
Capital Accounts.
|
20
|
|
Section 5.02.
|
Allocations
|
21
|
|
Section 5.03.
|
Regulatory Allocations.
|
21
|
|
Section 5.04.
|
Final Allocations
|
22
|
|
Section 5.05.
|
Tax Allocations.
|
23
|
|
Section 5.06.
|
Indemnification and Reimbursement for Payments on Behalf of a Member
|
23
|
|
|
|
|
|
ARTICLE VI MANAGEMENT
|
24
|
|
Section 6.01.
|
Authority of Manager.
|
24
|
|
Section 6.02.
|
Actions of the Manager
|
24
|
|
Section 6.03.
|
Resignation; No Removal
|
24
|
|
Section 6.04.
|
Vacancies
|
25
|
|
Section 6.05.
|
Transactions Between Company and Manager
|
25
|
|
Section 6.06.
|
Reimbursement for Expenses
|
25
|
|
|
|
|
|
Section 6.07.
|
Delegation of Authority
|
25
|
|
Section 6.08.
|
Limitation of Liability of Manager.
|
25
|
|
Section 6.09.
|
Investment Company Act
|
26
|
|
Section 6.10.
|
Outside Activities of the Manager
|
26
|
|
|
|
|
|
ARTICLE VII RIGHTS AND OBLIGATIONS OF MEMBERS
|
27
|
|
Section 7.01.
|
Limitation of Liability and Duties of Members.
|
27
|
|
Section 7.02.
|
Lack of Authority
|
27
|
|
Section 7.03.
|
No Right of Partition
|
27
|
|
Section 7.04.
|
Indemnification.
|
28
|
|
Section 7.05.
|
Members Right to Act
|
29
|
|
Section 7.06.
|
Inspection Rights
|
29
|
|
|
|
|
|
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS, AFFIRMATIVE COVENANTS
|
29
|
|
Section 8.01.
|
Records and Accounting
|
29
|
|
Section 8.02.
|
Fiscal Year
|
29
|
|
Section 8.03.
|
Reports
|
29
|
|
|
|
|
|
ARTICLE IX TAX MATTERS
|
29
|
|
Section 9.01.
|
Preparation of Tax Returns
|
29
|
|
Section 9.02.
|
Tax Elections
|
30
|
|
Section 9.03.
|
Tax Controversies
|
30
|
|
|
|
|
|
ARTICLE X RESTRICTIONS ON TRANSFER OF UNITS; PREEMPTIVE RIGHTS
|
30
|
|
Section 10.01.
|
Transfers by Members
|
30
|
|
Section 10.02.
|
Permitted Transfers
|
31
|
|
Section 10.03.
|
Restricted Units Legend
|
31
|
|
Section 10.04.
|
Transfer
|
32
|
|
Section 10.05.
|
Assignee’s Rights.
|
32
|
|
Section 10.06.
|
Assignor’s Rights and Obligations
|
32
|
|
Section 10.07.
|
Overriding Provisions.
|
33
|
|
Section 10.08.
|
Spousal Consent
|
33
|
|
Section 10.09.
|
Drag-Along Rights.
|
34
|
|
|
|
|
|
ARTICLE XI SALE AND EXCHANGE RIGHTS
|
35
|
|
Section 11.01.
|
Blueapple Sale Rights.
|
35
|
|
Section 11.02.
|
Exchange Rights of the Other Holders
|
35
|
|
Section 11.03.
|
Redemption of Common Units In Lieu of Sale or Exchange.
|
36
|
|
Section 11.04.
|
Blueapple Piggyback Rights
|
38
|
|
Section 11.05.
|
Treatment of Distributions in Connection with Sale and Redemption
|
38
|
|
Section 11.06.
|
Conditions to Blueapple Rights; Cooperation; Reclassification.
|
38
|
|
Section 11.07.
|
Reservation of Shares of Class A Common Stock
|
39
|
|
Section 11.08.
|
Effect of Exercise of Sale, Exchange or Redemption
|
39
|
|
Section 11.09.
|
Tax Treatment of Sale or Redemption
|
39
|
|
|
|
|
|
ARTICLE XII ADMISSION OF MEMBERS
|
39
|
|
Section 12.01.
|
Substituted Members
|
39
|
|
Section 12.02.
|
Additional Members
|
40
|
|
|
|
|
|
ARTICLE XIII WITHDRAWAL AND RESIGNATION; TERMINATION OF RIGHTS
|
40
|
|
Section 13.01.
|
Withdrawal and Resignation of Members
|
40
|
|
|
|
|
|
ARTICLE XIV DISSOLUTION AND LIQUIDATION
|
40
|
|
Section 14.01.
|
Dissolution
|
40
|
|
Section 14.02.
|
Liquidation and Termination
|
40
|
|
Section 14.03.
|
Deferment; Distribution in Kind
|
41
|
|
Section 14.04.
|
Cancellation of Certificate
|
41
|
|
Section 14.05.
|
Reasonable Time for Winding Up
|
42
|
|
Section 14.06.
|
Return of Capital
|
42
|
|
|
|
|
|
ARTICLE XV VALUATION
|
42
|
|
Section 15.01.
|
Determination
|
42
|
|
Section 15.02.
|
Dispute Resolution
|
42
|
|
|
|
|
|
ARTICLE XVI GENERAL PROVISIONS
|
42
|
|
Section 16.01.
|
Power of Attorney.
|
42
|
|
Section 16.02.
|
Confidentiality
|
43
|
|
Section 16.03.
|
Amendments
|
44
|
|
Section 16.04.
|
Title to Company Assets
|
44
|
|
Section 16.05.
|
Addresses and Notices
|
44
|
|
Section 16.06.
|
Binding Effect; Intended Beneficiaries
|
45
|
|
Section 16.07.
|
Creditors
|
45
|
|
Section 16.08.
|
Waiver
|
45
|
|
Section 16.09.
|
Counterparts
|
45
|
|
Section 16.10.
|
Applicable Law
|
45
|
|
Section 16.11.
|
Severability
|
46
|
|
Section 16.12.
|
Further Action
|
46
|
|
Section 16.13.
|
Delivery by Electronic Transmission
|
46
|
|
Section 16.14.
|
Right of Offset
|
46
|
|
Section 16.15.
|
Effectiveness
|
46
|
|
Section 16.16.
|
Entire Agreement
|
46
|
|
Section 16.17.
|
Remedies
|
47
|
|
Section 16.18.
|
Descriptive Headings; Interpretation
|
47
|
Schedules
Schedule 1 — Schedule of Continuing LLC Owners
Schedule 2 — Schedule of Members
Exhibits
Exhibit A — Form of Joinder Agreement
Exhibit B — Form of Spousal Consent
EVO INVESTCO, LLC
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “
Agreement
”), dated as of May 22, 2018, is entered into by and among EVO Investco, LLC, a Delaware limited liability company (the “
Company
”), and its Members.
WHEREAS, the Company initially was formed as a limited liability company pursuant to and in accordance with the Delaware Act by the filing of the Certificate with the Secretary of State of the State of Delaware pursuant to Section 18-201 of the Delaware Act on November 26, 2012 (the “
Formation Date”
);
WHEREAS, following the filing of the Certificate, the Company entered into that certain Limited Liability Company Agreement of the Company, dated as of the Formation Date, which was subsequently amended and restated as the Amended and Restated Limited Liability Company Agreement, dated as of December 27, 2012, as amended on January 30, 2017 (such agreement, together with all schedules, exhibits and annexes thereto, and as amended, the “
First Amended and Restated LLC Agreement
”);
WHEREAS, prior to the Effective Time, certain Persons controlled by Madison Dearborn Partners, LLC (“
MDP
”) shall engage in a series of transactions with MDCP VI-C Cardservices II Blocker Corp. (“
MDP Blocker Sub
”), pursuant to which MDP Blocker Sub shall own only Company Interests; thereafter, MDP Blocker Sub shall merge with and into a wholly-owned subsidiary of the Corporation, with MDP Blocker Sub surviving and, immediately thereafter MDP Blocker Sub shall merge with and into the Corporation with the corporation surviving, and the stockholder of MDP Blocker Sub will receive Class A Common Stock in exchange for all its equity interests in MDP Blocker Sub (the “
MDP Blocker Sub Merger
”);
WHEREAS, the Company desires to have EVO Payments, Inc., a Delaware corporation (the “
Corporation
”), effect an initial public offering (the “
IPO
”) of shares of its Class A Common Stock and in connection therewith, to amend and restate the First Amended and Restated LLC Agreement to reflect (a) the conversion of the Original Units into Common Units, as set forth herein (the “
Recapitalization
”), (b) the addition of the Corporation as a Member in the Company and its designation as sole Manager of the Company, and (c) the rights and obligations of the Members of the Company that are enumerated and agreed upon in the terms of this Agreement, in each case, effective as of the Effective Time, at which time the First Amended and Restated LLC Agreement shall be superseded entirely by this Agreement;
WHEREAS, exclusive of the Over-Allotment Option, the Corporation will sell shares of its Class A Common Stock to public investors in the IPO and will use the net proceeds received from the IPO (the “
IPO Net Proceeds
”) to purchase newly issued Common Units from the Company pursuant to that certain IPO Common Unit Purchase Agreement;
WHEREAS, the Corporation will issue additional shares of Class A Common Stock in connection with the IPO as a result of the exercise (if any) by the underwriters of their over-allotment option (the “
Over-Allotment Option
”), and the resulting additional net proceeds will be used by the Corporation to purchase newly issued Common Units from the Company pursuant to the IPO Common Unit Purchase Agreement;
WHEREAS, the Continuing LLC Owners and the Corporation will be the members of the Company as of the Effective Time, after giving effect to the Recapitalization and the MDP Blocker Sub Merger;
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Members, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
The following definitions shall be applied to the terms used in this Agreement for all purposes, unless otherwise clearly indicated to the contrary.
“
Additional Member
” has the meaning set forth in
Section 12.02
.
“
Adjusted Capital Account Deficit
” means with respect to the Capital Account of any Member as of the end of any Allocation Period, the amount by which the balance in such Capital Account is less than zero. For this purpose, such Member’s Capital Account balance shall be (i) reduced for any items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6), and (ii) increased for any amount such Member is obligated to contribute or is treated as being obligated to contribute to the Company pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (relating to partner liabilities to a partnership) or 1.704-2(g)(1) and 1.704-2(i) (relating to minimum gain).
“
Admission Date
” has the meaning set forth in
Section 10.06
.
“
Affiliate
” (and, with a correlative meaning, “
Affiliated
”) means, with respect to a specified Person, each other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified. As used in this definition, “control” (including with correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of voting securities or by contract or other agreement).
“
Agreement
” has the meaning set forth in the Preamble.
“Allocation Period”
means the Taxable Year, or any portion thereof, for which the Company is required to allocate Profits, Losses, and other items of Company income, gain, loss or deduction.
“
Appraisers
” has the meaning set forth in
Section 15.02
.
“
Assignee
” means a Person to whom a Company Interest has been transferred but who has not become a Member pursuant to
Article XII
.
“
Assumed Tax Liability
” means, with respect to a Member, an amount equal to the Distribution Tax Rate multiplied by the estimated or actual taxable income of the Company, as determined for U.S. federal income tax purposes, allocated to such Member pursuant to
Section 5.05
for the period to which the Assumed Tax Liability relates, as determined for U.S. federal income tax purposes to the extent not previously taken into account in determining the Assumed Tax Liability of such Member, as reasonably determined by the Manager but without regard to any increases to the tax basis of the Company’s property pursuant to Section 734(b);
provided
that, in the case of the Corporation, such Assumed Tax Liability (i) shall be computed without regard to any increases to the tax basis of the Company’s property pursuant to Section 743(b) of the Code and (ii) shall in no event be less than an amount that will enable the Corporation to meet its tax obligations, and its obligations pursuant to the Tax Receivable Agreement, for the relevant taxable year.
“
Base Rate
” means, on any date, a variable rate per annum equal to the rate of interest most recently published by The Wall Street Journal as the “prime rate” at large U.S. money center banks.
“
Blueapple
”
means Blueapple, Inc., a Delaware corporation, and its Permitted Transferees.
“
Blueapple Sold Units
” means, with respect to any exercise by Blueapple of its Sale Right or Piggyback Sale Right, the Common Units sold by Blueapple to the Corporation pursuant to such exercise.
“
Book Value
”
means, with respect to any asset, the asset’s adjusted basis for U.S. federal income tax purposes, except that (i) the initial Book Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset at the time of contribution, as reasonably and in good faith determined by the Manager; (ii) the Book Value of any asset of the Company distributed to any Member shall be adjusted to equal the gross fair market value of such property on the date of distribution as determined by the Manager; and (iii) Book Values of assets of the Company shall be increased (or decreased) to the extent the Manager determines reasonably and in good faith that such adjustment is necessary or appropriate to comply with the requirements of Treasury Regulations Section 1.704-1(b)(2)(iv). The Manager shall in good faith use such method as it deems reasonable and appropriate to allocate the aggregate of the Book Value of assets contributed in a single or integrated transaction among each separate property on a basis proportional to their fair market value.
“
Business Day
” means any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by Law or executive order to close.
“
Call Option
” has the meaning set forth in the Exchange Agreement.
“
Call Option Holder
” has the meaning set forth in the Exchange Agreement.
“
Call Option Issuer
” has the meaning set forth in the Exchange Agreement.
“
Call Option Paired Interest
” has the meaning set forth in the Exchange Agreement.
“
Call Option Redemption Sale
” has the meaning set forth in
Section 11.03(f)
.
“
Capital Account
” means the capital account maintained for a Member in accordance with
Section 5.01
.
“
Capital Contribution
” means, with respect to any Member, the amount of any cash, cash equivalents, promissory obligations or the Fair Market Value of other property that such Member contributes (or is deemed to contribute) to the Company pursuant to
Article III
.
“
Certificate
” means the Company’s Certificate of Formation as filed with the Secretary of State of Delaware.
“
Class A Common Stock
” means the Class A Common Stock, par value $0.0001 per share, of the Corporation.
“
Class B Common Stock
” means the Class B Common Stock, par value $0.0001 per share, of the Corporation.
“
Class C Common Stock
” means the Class C Common Stock, par value $0.0001 per share, of the Corporation.
“
Class D Common Stock
” means the Class D Common Stock, par value $0.0001 per share, of the Corporation.
“
Code
” means the Internal Revenue Code of 1986.
“
Common Unit
” means a Unit representing a fractional part of the Company Interests of the Members and having the rights and obligations specified with respect to the Common Units in this Agreement.
“
Common Unit Redemption Price
” means the arithmetic average of the volume weighted average prices for a share of Class A Common Stock on the Stock Exchange, as reported by Bloomberg, L.P., or its successor, for each of the ten (10) consecutive Trading Days ending on and including the last Trading Day immediately prior to the Redemption Date, subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the Class A Common Stock. If the Class A Common Stock no longer trades on a Stock Exchange (or if the volume weighted average price for a share of Class A Common Stock is not reported by Bloomberg, L.P. or any successor), then a majority of the Disinterested Directors shall determine the Common Unit Redemption Price in good faith.
“
Common Unit Purchase Price
” means the net price per share for a share of Class A Common Stock sold in an Underwritten Offering conducted in response to an Exchange Notice, a Sale Notice or Piggyback Sale Right, after deducting underwriting discounts and commissions.
“
Company
” has the meaning set forth in the Preamble.
“
Company Interest
” means the interest of a Member in Profits, Losses and Distributions.
“
Confidential Information
” has the meaning set forth in
Section 16.02
.
“
Continuing LLC Owners
” means the Members listed on
Schedule 1
and their respective Permitted Transferees.
“
Corporate Board
” means the Board of Directors of the Corporation.
“
Corporate Incentive Award Plan
” means the EVO Payments, Inc. 2018 Omnibus Incentive Compensation Plan.
“
Corporation
” has the meaning set forth in the Recitals.
“
Credit Agreements
” means that certain First Lien Credit Agreement, dated as of December 22, 2016, among EVO Payments International, LLC, as borrower, and the other parties thereto, and that certain Second Lien Credit Agreement, dated as of December 22, 2016, among EVO Payments International, LLC, as borrower, and the other parties thereto, in each case including all exhibits, schedules and attachments thereto as the same may be amended, restated, supplemented or otherwise modified from time to time and including any one or more refinancings or replacements thereof, in whole or in part, with any other debt facility or debt obligation.
“
Delaware Act
” means the Delaware Limited Liability Company Act, 6 Del. L. §18-101,
et seq
.
“
Demand Registration
” has the meaning set forth in the Registration Rights Agreement.
“
Disposition Event
” means any merger, consolidation or other business combination of the Corporation, whether effectuated through one transaction or series of related transactions (including a tender offer followed by a merger in which holders of Class A Common Stock receive the same consideration per share paid in the tender offer), unless, following such transaction, all or substantially all of the holders of the voting power of all outstanding classes of Common Stock and any series of preferred stock issued by the Corporation that are generally entitled to vote in the election of directors prior to such transaction or series of transactions, continue to hold a majority of the voting power of the surviving entity (or its parent) resulting from such transaction or series of transactions in substantially the same proportions as immediately prior to such transaction or series of transactions.
“
Disinterested Director
” means, with respect to any Sale Notice or Exchange Notice, any Independent Director who is not an Affiliate of the Person delivering such Sale Notice or Exchange Notice, as applicable, and who has no direct or indirect financial interest or any other material interest in the Common Units that are the subject of such Sale Notice or Exchange Notice, as applicable.
“
Distributable Cash
” means, as of any relevant date on which a determination is being made by the Manager regarding a potential distribution pursuant to
Section 4.01(a)
, the amount of cash that could be distributed by the Company for such purposes in accordance with the Credit Agreement (and without otherwise violating any applicable provisions of the Credit Agreement).
“
Distribution
” (and, with a correlative meaning, “
Distribute
”) means each distribution made by the Company to a Member with respect to such Member’s Units, whether in cash, property or securities of the Company and whether by liquidating distribution or otherwise;
provided, however
, that none of the following shall be a Distribution: (i) any recapitalization that does not result in the distribution of cash or property to Members or any exchange of securities of the Company, and any subdivision (by Unit split or otherwise) or any combination (by reverse Unit split or otherwise) of any outstanding Units or (ii) any other payment made by the Company to a Member that is not properly treated as a “distribution” for purposes of Sections 731, 732, or 733 or other applicable provisions of the Code.
“
Distribution Tax Rate
” means a rate equal to the highest effective marginal combined federal, state and local income tax rate for a Fiscal Year applicable to corporate or individual taxpayers that may potentially apply to any Member for such Fiscal Year, if any, taking into account the character of the relevant tax items (
e.g.
, ordinary or capital) and the deductibility of state and local taxes for federal tax purposes, if any, as reasonably determined by the Manager.
“
Effective Time
” has the meaning set forth in
Section 16.15
.
“
Equity Plan
” means any stock or equity purchase plan, restricted stock or equity plan or other similar equity compensation plan now or hereafter adopted by the Company or the Corporation, including the Corporate Incentive Award Plan.
“
Equity Securities
” means (i) Units or other equity interests in the Company or any Subsidiary of the Company (including other classes or groups thereof having such relative rights, powers and duties as may from time to time be established by the Manager pursuant to the provisions of this Agreement, including rights, powers and/or duties senior to existing classes and groups of Units and other equity interests in the Company or any Subsidiary of the Company), (ii) obligations, evidences of indebtedness or other securities or interests convertible into or exchangeable for Units or other equity interests in the Company or any Subsidiary of the Company, and (iii) warrants, options or other rights to purchase or otherwise acquire Units or other equity interests in the Company or any Subsidiary of the Company.
“
Estimated Assumed Tax Liability
” means, with respect to a Member, an amount equal to the Distribution Tax Rate multiplied by the estimated taxable income of the Company, as determined under federal income tax principles, that would be allocated to such Member pursuant to
Section 5.05
for the Taxable Year to which such Estimated Assumed Tax Liability relates, as if such Taxable Year had ended on the last day of the quarter to which such Estimated Assumed Tax Liability relates under
Section 4.01(b)
, taking into account as a reduction Distributions of Estimated Assumed Tax Liability amounts previously made to such Member for such Taxable Year under
Section 4.01(b)
, if any, and determined without regard to any increases to the tax basis of the Company’s property pursuant to Section 734(b).
“
Estimated Assumed Tax Liability Distribution
” has the meaning set forth in
Section 4.01(b)
.
“
Event of Withdrawal
” means the expulsion, bankruptcy or dissolution of a Member or the occurrence of any other event that terminates the continued membership of a Member in the Company. “Event of Withdrawal” shall not include an event that (a) terminates the existence of a Member for income tax purposes (including (i) a change in entity classification of a Member under Treasury Regulations Section 301.7701-3, (ii) a sale of assets by, or liquidation of, a Member pursuant to an election under Code Sections 336 or 338, or (iii) merger, severance, or allocation within a trust or among sub-trusts of a trust that is a Member) but that (b) does not terminate the existence of such Member under applicable state law (or, in the case of a trust that is a Member, does not terminate the trusteeship of the fiduciaries under such trust with respect to all the Company Interests of such trust that is a Member).
“
Exchange Act
” means the U.S. Securities Exchange Act of 1934.
“
Exchange Agreement
” means the Exchange Agreement dated on or about of the date hereof, by and among the Company, the Corporation and the Holders.
“
Exchange Notice
” has the meaning set forth in
Section 11.02
.
“
Fair Market Value
” means, with respect to any asset, its fair market value determined according to
Article XV
.
“
First Amended and Restated LLC Agreement
” has the meaning set forth in the Recitals.
“
Fiscal Year
” means the Company’s annual accounting period established pursuant to
Section 8.02
.
“
Formation Date
” has the meaning set forth in the Recitals.
“
Governmental Entity
” means (i) the United States of America, (ii) any other sovereign nation, (iii) any state, province, district, territory or other political subdivision of clause (i) or (ii) of this definition, including any county, municipal or other local subdivision of the foregoing, or (iv) any entity exercising executive, legislative, judicial, regulatory or administrative functions of government on behalf of clause (i), (ii) or (iii) of this definition.
“
Holder
” has the meaning set forth in the Exchange Agreement.
“
Indemnified Person
” has the meaning set forth in
Section 7.04(a)
.
“
Independent Directors
” means the members of the Corporate Board who are “independent” under the standards set forth in the rules of the Stock Exchange.
“
Investment Company Act
” means the U.S. Investment Company Act of 1940.
“
IPO
” has the meaning set forth in the Recitals.
“
IPO Closing Date
” means the closing date of the IPO, which for the avoidance of doubt means the date on which all IPO Net Proceeds required to be delivered pursuant to the Underwriting Agreement have been delivered to the Corporation in respect of its sale of Class A Common Stock excluding any proceeds from the Over-Allotment Option which may be delivered at a subsequent date following exercise of such option.
“
IPO Common Unit Purchase
” has the meaning set forth in
Section 3.03(b)
.
“
IPO Common Unit Purchase Agreement
” means that certain Common Unit Purchase Agreement, dated as of the date hereof, by and among the Corporation and the Company.
“
IPO Net Proceeds
” has the meaning set forth in the Recitals.
“
Joinder
” means a joinder to this Agreement, in form and substance substantially similar to
Exhibit A
to this Agreement.
“
Law
” means all laws, statutes, ordinances, rules and regulations of the United States, any foreign country and each state, commonwealth, city, county, municipality, regulatory body, agency or other political subdivision thereof.
“
LLC Employee
” means an employee of, or other service provider to, the Company or any Subsidiary, in each case acting in such capacity.
“
Liabilities
” has the meaning set forth in
Section 7.04(a)
.
“
Losses
” means items of Company loss or deduction determined according to
Section 5.01(b)
.
“
Manager
” has the meaning set forth in
Section 6.01
.
“
Market Price
” means, with respect to a share of Class A Common Stock as of a specified date, the last sale price per share of Class A Common Stock, regular way, or if no such sale took place on such day, the average of the closing bid and asked prices per share of Class A Common Stock, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the Stock Exchange or, if the Class A Common Stock is not listed or admitted to trading on the Stock Exchange, as reported on the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Class A Common Stock is listed or admitted to trading or, if the Class A Common Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal other automated quotation system that may then be in use or, if the Class A Common Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Class A Common Stock selected by the Corporate Board or, in the event that no trading price is available for the shares of Class A Common Stock, the fair market value of a share of Class A Common Stock, as determined in good faith by the Corporate Board.
“
Market Disruption Event
” means any of the following events has occurred: (i) any suspension of, or limitation imposed on, trading by the relevant exchange or quotation system during any period or periods aggregating one half-hour or longer and whether by reason of movements in price exceeding limits permitted by the relevant exchange or quotation system or otherwise relating to the Class A Common Stock or in futures or option contracts relating to the Class A Common Stock on the relevant exchange or quotation system, (ii) any event (other than a failure to open or a closure as described below) that disrupts or impairs the ability of market participants during any period or periods aggregating one half-hour or longer in general to effect transactions in, or obtain market values for, the Class A Common Stock on the relevant exchange or quotation system or futures or options contracts relating to the Class A Common Stock on any relevant exchange or quotation system, or (iii) the failure to open of the exchange or quotation system on which futures or options contracts relating to the Class A Common Stock are traded or the closure of such exchange or quotation system prior to its respective scheduled closing time for the regular trading session on such day (without regard to after hours or other trading outside the regular trading session hours) unless such earlier closing time is announced by such exchange or quotation system at least one hour prior to the earlier of the actual closing time for the regular trading session on such day and the submission deadline for orders to be entered into such exchange or quotation system for execution at the actual closing time on such day.
“
Material Subsidiary
” means any direct or indirect Subsidiary of the Company that, as of any date of determination, represents more than (a) 50% of the consolidated net tangible assets of the Company or (b) 50% of the consolidated net income of the Company before interest, taxes, depreciation and amortization (calculated in a manner substantially consistent with the definition of “Consolidated Net Income” and/or “EBITDA” or similar definition(s) appearing therein in the Credit Agreement, including such additional adjustments that are permitted to be made to such measure as described in “Adjusted EBITDA” or a similar definition appearing in the Credit Agreement).
“
MDP
” has the meaning set forth in the Recitals.
“
Member
” means, as of any date of determination, (i) each of the members named on the Schedule of Members and (ii) any Person admitted to the Company as a Substituted Member or Additional Member in accordance with
Article XII
, but in each case only so long as such Person is shown on the Company’s books and records as the owner of one or more Units.
“
MDP Blocker Sub
”
has the meaning set forth in the Recitals.
“
Minimum Gain
” means “partnership minimum gain” determined pursuant to Treasury Regulation Section 1.704-2(d).
“
Net Loss
” means, with respect to an Allocation Period, the excess if any, of Losses for such Allocation Period over Profits for such Allocation Period (excluding Profits and Losses specially allocated pursuant to
Section 5.03
and
Section 5.04
).
“
Net Profit
” means, with respect to an Allocation Period, the excess if any, of Profits for such Allocation Period over Losses for such Allocation Period (excluding Profits and Losses specially allocated pursuant to
Section 5.03
and
Section 5.04
).
“
Officer
” has the meaning set forth in
Section 6.01(b)
.
“
Optionee
” means a Person to whom a stock option is granted under any Stock Option Plan.
“
Original Class A Units
” means the Class A Common Units, as defined in the First Amended and Restated LLC Agreement.
“
Original Class B Units
” means the Class B Common Units, as defined in the First Amended and Restated LLC Agreement.
“
Original Class C Units
” means the Class C Common Units, as defined in the First Amended and Restated LLC Agreement.
“
Original Class D Units
” means the Class D Common Units, as defined in the First Amended and Restated LLC Agreement.
“
Original Class E Units
” means the Class E Common Units, as defined in the First Amended and Restated LLC Agreement.
“
Original Units
” means the Original Class A Units, Original Class B Units, Original Class C Units, Original Class D Units and Original Class E Units.
“
Other Agreements
” has the meaning set forth in
Section 10.04
.
“
Other Continuing LLC Owners
” means all Continuing LLC Owners other than Blueapple.
“
Over-Allotment Option
” has the meaning set forth in the Recitals.
“
Paired Interest
” has the meaning set forth in the Exchange Agreement.
“
Partnership Representative
” has the meaning set forth in
Section 9.03
.
“
Percentage Interest
” means, with respect to a Member at a particular time, such Member’s percentage interest in the Company determined by dividing such Member’s Units by the total Units of all Members at such time. The Percentage Interest of each Member shall be calculated to the 4th decimal place.
“
Permitted Transfer
” has the meaning set forth in
Section 10.02
.
“
Permitted Transferee
” means any Person to whom Common Units are Transferred in a Permitted Transfer pursuant to the terms of this Agreement.
“
Person
” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.
“
Piggyback Registration
” has the meaning set forth in the Registration Rights Agreement.
“
Pro rata
,” “
pro rata portion
,” “
according to their interests
,” “
ratably
,” “
proportionately
,” “
proportional
,” “
in proportion to
,” “
based on the number of Units held
,” “
based upon the percentage of Units held
,” “
based upon the number of Units outstanding
,” and other terms with similar meanings, when used in the context of a number of Units of the Company relative to other Units, means based upon the Percentage Interest of each member, unless the context otherwise requires.
“
Profits
” means items of Company income and gain determined according to
Section 5.01(b)
.
“
Recapitalization
” has the meaning set forth in the Recitals.
“
Redemption Sale
” has the meaning set forth in
Section 11.03(f)
.
“
Registration Rights Agreement
” means the Registration Rights Agreement, dated on or about the date hereof, by and among the Corporation and the other parties thereto, including the Continuing LLC Owners.
“
Regulatory Allocations
” has the meaning set forth in
Section 5.03(f)
.
“
Revised Partnership Audit Provisions
” means Sections 6221 through 6241 of the Code, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder or successor provisions and any similar provision of state or local tax laws.
“
Sale Date
” means the date of the completion of the sale of Common Units to the Corporation by Blueapple pursuant to the exercise of its Sale Right or Piggyback Sale Right.
“
Sale Right
” means the rights of Blueapple pursuant to
Section 11.01
.
“
Schedule of Members
” has the meaning set forth in
Section 3.01(b)
.
“
SEC
” means the U.S. Securities and Exchange Commission.
“
Securities Act
” means the U.S. Securities Act of 1933.
“
Shelf Offering
” has the meaning set forth in the Registration Rights Agreement.
“
Stock Exchange
” means the Nasdaq Stock Market or any other national securities exchange or automated or electronic quotation system on which the Class A Common Stock is then listed or quoted.
“
Stock Option Plan
” means any stock option plan now or hereafter adopted by the Company or by the Corporation, including the Corporate Incentive Award Plan.
“
Subsidiary
” means, with respect to any Person, any corporation, limited liability company, partnership, association or business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of the voting interests thereof are at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, references to a “Subsidiary” of the Company shall be given effect only at such times that the Company has one or more Subsidiaries, and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of the Company.
“
Substituted Member
” means a Person that is admitted as a Member to the Company pursuant to
Section 12.01
.
“
Tax Distribution Date
” has the meaning set forth in
Section 4.01(b)(i)
.
“
Tax Distributions
” has the meaning set forth in
Section 4.01(b)(i)
.
“
Tax Receivable Agreement
” means that certain Tax Receivable Agreement, dated as the date hereof, by and among the Company, the Corporation, the Continuing LLC Owners and Madison Dearborn Capital Partners VI-C, L.P.
“
Taxable Year
” has the meaning set forth in
Section 9.02
.
“
Trading Day
” means any day on which (i) there is no Market Disruption Event and (ii) the Stock Exchange is open for trading, or, if the Class A Common Stock is not listed on a national securities exchange, any Business Day; provided that a Trading Day shall only include those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the then standard closing time for regular trading on the relevant exchange or trading system
“
Transfer
” (and, with a correlative meaning, “
Transferring
”) means any sale, transfer, assignment, pledge, encumbrance or other disposition (whether directly or indirectly, whether with or without consideration and whether voluntarily or involuntarily or by operation of Law) (i) of any interest (legal or beneficial) in any Equity Securities, (ii) of any equity or other interest (legal or beneficial) in any Member if the assets of such Member primarily consist of Units or (iii) intended to avoid the intent of the transfer restrictions set forth herein.
“
Treasury Regulations
” means the income tax regulations promulgated under the Code and any corresponding provisions of succeeding regulations.
“
Underwriting Agreement
” means the Underwriting Agreement, dated as of May 22, 2018, by and among the Corporation, the Company and J.P. Morgan Securities LLC, as representative of the several underwriters.
“Underwritten Offering”
means a registered public offering under the Securities Act of a sale of Class A Common Stock to one or more underwriters for reoffering to the public.
“
Unit
” means a Company Interest of a Member or a permitted Assignee in the Company representing a fractional part of the Company Interests of all Members and Assignees as may be established by the Manager from time to time in accordance with
Section 3.02
;
provided, however
, that any class or group of Units issued shall have the relative rights, powers and duties set forth in this Agreement, and the Company Interest represented by such class or group of Units shall be determined in accordance with such relative rights, powers and duties.
“
Value
” means (i) for any Stock Option Plan, the Market Price for the trading day immediately preceding the date of exercise of a stock option under such Stock Option Plan and (ii) for any Equity Plan other than a Stock Option Plan, the Market Price for the trading day immediately preceding the Vesting Date.
“
Vesting Date
” has the meaning set forth in
Section 3.10(c)(ii)
.
“
Voting Units
” means (a) the Common Units and (b) any other Units other than Units that by their express terms do not entitle the record holder thereof to vote on any matter presented to the Members generally under this Agreement for approval;
provided
that (i) no vote by Voting Units shall have the power to override any action taken by the Manager or to remove or replace the Manager, (ii) the Voting Units have no ability to take part in the conduct or control of the Company’s business and (iii) notwithstanding any vote by Voting Units hereunder, the Manager shall retain exclusive management power over the business and affairs of the Company in accordance with
Section 6.01(a)
.
ARTICLE II
ORGANIZATIONAL MATTERS
Section 2.01.
Formation of Company
. The Company was formed on the Formation Date pursuant to the provisions of the Delaware Act.
Section 2.02.
Second Amended and Restated LLC Agreement
. The Members hereby execute this Agreement for the purpose of establishing the affairs of the Company and the conduct of its business in accordance with the provisions of the Delaware Act. The Members hereby agree that during the term of the Company set forth in
Section 2.06
the rights and obligations of the Members with respect to the Company will be determined in accordance with the terms and conditions of this Agreement and the Delaware Act. On any matter upon which this Agreement is silent, the Delaware Act shall control. No provision of this Agreement shall be in violation of the Delaware Act and to the extent any provision of this Agreement is in violation of the Delaware Act, such provision shall be void and of no effect to the extent of such violation without affecting the validity of the other provisions of this Agreement;
provided, however
, that where the Delaware Act provides that a provision of the Delaware Act shall apply “unless otherwise provided in a written operating agreement” or words of similar effect, the provisions of this Agreement shall in each instance control;
provided, further
, that notwithstanding the foregoing, Section 18-210 of the Delaware Act shall not apply or be incorporated into this Agreement.
Section 2.03.
Name
. The name of the Company shall be “EVO Investco, LLC.” The Manager in its sole discretion may change the name of the Company at any time and from time to time. Notification of any such change shall be given to all of the Members and, to the extent practicable, to all of the holders of any Equity Securities then outstanding. The Company’s business may be conducted under its name and/or any other name or names deemed advisable by the Manager.
Section 2.04.
Purpose
. The primary business and purpose of the Company shall be to engage in such activities as are permitted under the Delaware Act and determined from time to time by the Manager in accordance with the terms and conditions of this Agreement.
Section 2.05.
Principal Office; Registered Office
. The principal office of the Company shall be at Ten Glenlake Parkway, South Tower, Suite 950, Atlanta, GA 30328, or such other place as the Manager may from time to time designate. The address of the registered office of the Company in the State of Delaware shall be c/o Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent for service of process on the Company in the State of Delaware at such registered office shall be Corporation Trust Company. The Manager may from time to time change the Company’s registered agent and registered office in the State of Delaware.
Section 2.06.
Term
. The term of the Company commenced upon the filing of the Certificate in accordance with the Delaware Act and shall continue in existence until termination and dissolution of the Company in accordance with the provisions of
Article XIV
.
Section 2.07.
No State-Law Partnership
. The Members intend that the Company not be a partnership (including a limited partnership) or joint venture, and that no Member be a partner or joint venturer of any other Member by virtue of this Agreement, for any purposes other than as set forth in the last sentence of this
Section 2.07
, and neither this Agreement nor any other document entered into by the Company or any Member relating to the subject matter hereof shall be construed to suggest otherwise. The Members intend that the Company shall be treated as a partnership for U.S. federal and, if applicable, state or local income tax purposes, and that each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment.
ARTICLE III
MEMBERS; UNITS; CAPITALIZATION
Section 3.01.
Members
.
(a)
Each Continuing LLC Member previously was admitted as a Member and shall remain a Member of the Company upon the Effective Time. At the Effective Time and concurrently with the IPO Common Unit Purchase Agreement and the MDP Blocker Sub Merger, the Corporation shall be automatically admitted to the Company as a Member.
(b)
The Company shall maintain a Schedule setting forth: (i) the name and address of each Member; (ii) the aggregate number of outstanding Units and the number and class of Units held by each Member; (iii) the aggregate amount of cash Capital Contributions that has been made by the Members with respect to their Units; and (iv) the Fair Market Value of any property other than cash contributed by the Members with respect to their Units (including, if applicable, a description and the amount of any liability assumed by the Company or to which contributed property is subject) (such schedule, the “
Schedule of Members
”). The applicable Schedule of Members in effect as of the Effective Time is set forth as
Schedule 2
to this Agreement. The Schedule of Members shall be the definitive record of ownership of each Unit of the Company and all relevant information with respect to each Member. The Company shall be entitled to recognize the exclusive right of a Person registered on its records as the owner of Units for all purposes and shall not be bound to recognize any equitable or other claim to or interest in Units on the part of any other Person, whether or not it shall have express or other notice thereof, except as otherwise provided by the Delaware Act.
(c)
No Member shall be required or, except as approved by the Manager pursuant to
Section 6.01
and in accordance with the other provisions of this Agreement, permitted to loan any money or property to the Company or borrow any money or property from the Company. No Member shall be required by this Agreement to (i) make a Capital Contribution in respect of Units (other than upon the acquisition thereof) to the Company after the date hereof or (ii) personally guarantee the obligations of the Company or any other Member.
Section 3.02.
Units
. Company Interests shall be represented by Units, or such other securities of the Company, in each case as the Manager may establish in its discretion in accordance with the terms and subject to the restrictions hereof. As of the Effective Time, the Units will be comprised of a single class of Common Units (with an aggregate of 286,000,000 Common Units being authorized for issuance by the Company). To the extent required pursuant to
Section 3.04(a)
, the Manager may create one or more classes or series of Common Units or preferred Units solely to the extent they are in the aggregate substantially equivalent to a class of common stock of the Corporation or class or series of preferred stock of the Corporation, respectively;
provided
that as long as there are any Members of the Company (other than the Corporation), then no such new class or series of Units may deprive such Members of, or dilute or reduce, the pro rata share of all Company Interests they would have received or to which they would have been entitled if such new class or series of Units had not been created except to the extent (and solely to the extent) the Company actually receives cash in an aggregate amount, or other property with a Fair Market Value in an aggregate amount, equal to the pro rata share allocated to such new class or series of Units and the number thereof issued by the Company. As long as there are any Members of the Company (other than the Corporation), the Company shall only issue and shall only register the transfer of whole numbers of Units of any class or series of Units then authorized (including the Common Units).
Section 3.03.
Recapitalization; the Corporation’s Capital Contribution; the Corporation’s Purchase of Common Units; Member Distribution
.
(a)
(a)
Recapitalization
. In connection with the Recapitalization, as of the Effective Time, all Original Units that were issued and outstanding and held by the Continuing LLC Owners immediately prior to the Effective Time, which are set forth next to each Continuing LLC Member on
Schedule 1
, are hereby converted into the number of Common Units set forth next to each Continuing LLC Member on the Schedule of Members, and such Common Units are hereby issued and outstanding as of the Effective Time and the holders of such Common Units hereby continue as Members.
(b)
The Corporation’s Common Unit Purchase
. Following the Recapitalization, immediately upon the Effective Time, the Corporation will use the IPO Net Proceeds to purchase 13,666,667 Common Units, and will use the net proceeds from the Over-Allotment Option (if and when exercised) to purchase 2,100,000 Common Units, from the Company pursuant to the IPO Common Unit Purchase Agreement (the “
IPO Common Unit Purchase
”). The parties acknowledge and agree that the IPO Common Unit Purchase and all subsequent purchases of Common Units will result in adjustments to Capital Account balances to the extent permitted by Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations.
Section 3.04.
Authorization and Issuance of Additional Units
.
(a)
The Company shall undertake all actions, including an issuance, reclassification, distribution, division or recapitalization, with respect to the Common Units, to maintain at all times a one-to-one ratio between the number of Common Units owned by the Corporation and the number of outstanding shares of Class A Common Stock, disregarding, for purposes of maintaining the one-to-one ratio, (i) shares of Class A Common Stock issued pursuant to the Corporate Incentive Award Plan that have not vested pursuant to the terms of the Corporate Incentive Award Plan or the terms of any award or similar agreement relating thereto, (ii) treasury stock or (iii) preferred stock or other debt or equity securities (including warrants, options or rights) issued by the Corporation that are convertible into or exercisable or exchangeable for Class A Common Stock (except to the extent the net proceeds from such other securities, including any exercise or purchase price payable upon conversion, exercise or exchange thereof, has been contributed by the Corporation to the equity capital of the Company). In the event the Corporation issues, transfers or delivers from treasury stock or repurchases Class A Common Stock in a transaction not contemplated in this Agreement, the Manager shall take all actions such that, after giving effect to all such issuances, transfers, deliveries or repurchases, the number of outstanding Common Units owned by the Corporation will equal on a one-for-one basis the number of outstanding shares of Class A Common Stock. In the event the Corporation issues, transfers or delivers from treasury stock or repurchases or redeems the Corporation’s preferred stock in a transaction not contemplated in this Agreement, the Manager shall have the authority to take all actions such that, after giving effect to all such issuances, transfers, deliveries, repurchases or redemptions, the Corporation holds (in the case of any issuance, transfer or delivery) or ceases to hold (in the case of any purchase or redemption) equity interests in the Company which (in the good faith determination by the Manager) are in the aggregate substantially equivalent to the outstanding preferred stock of the Corporation so issued, transferred, delivered, repurchased or redeemed. The Corporation shall, concurrently with any action taken by the Company pursuant to the requirements of this Section 3.04, contribute the net proceeds (if any) received by the Corporation in respect of the events which gave rise to the Company’s obligation to undertake any action pursuant to the requirements of this Section 3.04 to the equity capital of the Company. The Company shall not undertake any subdivision (by any Common Unit split, Common Unit distribution, reclassification, recapitalization or similar event) or combination (by reverse Common Unit split, reclassification, recapitalization or similar event) of the Common Units that is not accompanied by an identical subdivision or combination of Class A Common
Stock to maintain at all times a one-to-one ratio between the number of Common Units owned by the Corporation and the number of outstanding shares of Class A Common Stock, unless such action is necessary to maintain at all times a one-to-one ratio between the number of Common Units owned by the Corporation and the number of outstanding shares of Class A Common Stock as contemplated by the first sentence of this
Section 3.04(a)
.
(b)
The Company shall undertake all actions, including an issuance, a reclassification, distribution, division or recapitalization, with respect to the Common Units, to maintain at all times a one-to-one ratio between the number of outstanding shares of Class B Common Stock, Class C Common Stock and Class D Common Stock held by any Person and the number of Common Units owned by such Person; provided, however, that the Company shall not be required to take any action to maintain a one-to-one ratio of Common Units to outstanding shares of Class B Common Stock following the cancellation of shares of Class B Common Stock as set forth in Section 4.02(f) of the Corporation’s Amended and Restated Certificate of Incorporation, as it may be amended from time to time. In the event the Corporation repurchases Class B Common Stock, Class C Common Stock or Class D Common Stock in a transaction not contemplated in this Agreement, the Manager shall take all actions such that, after giving effect to all such repurchases, the number of outstanding shares of Class B Common Stock, Class C Common Stock and Class D Common Stock held by any Person will equal on a one-to-one basis the number of Common Units owned by such Person. The Company shall not undertake any subdivision (by any Common Unit split, Common Unit distribution, reclassification, recapitalization or similar event) or combination (by reverse Common Unit split, reclassification, recapitalization or similar event) of the Common Units that is not accompanied by an identical subdivision or combination of Class B Common Stock, Class C Common Stock and Class D Common Stock, in each case to the extent necessary to maintain at all times a one-to-one ratio between the number of outstanding shares of Class B Common Stock, Class C Common Stock and Class D Common Stock held by any Person and the number of Common Units owned by such Person as contemplated by the first sentence of this
Section 3.04(b)
.
(c)
The Company shall only be permitted to issue additional Units or other Equity Securities in the Company to the Persons and on the terms and conditions provided for in
Section 3.02
, this
Section 3.04
,
Section 3.10
and
Section 3.11
. Subject to the foregoing, the Manager may cause the Company to issue additional Common Units authorized under this Agreement at such times and upon such terms as the Manager shall determine and the Manager shall, and is hereby authorized to, promptly amend this Agreement and the Schedule of Members attached hereto as necessary in connection with the issuance of additional Common Units and admission of additional Members under this
Section 3.04
without the requirement of any consent or acknowledgement of any other Member.
Section 3.05.
Purchase or Redemption of Shares of Class A Common Stock
. If, at any time, any shares of Class A Common Stock are purchased or redeemed by the Corporation for cash, then the Manager shall cause the Company, immediately prior to such purchase or redemption of Class A Common Stock, to redeem a corresponding number of Common Units held by the Corporation, at an aggregate redemption price equal to the aggregate purchase or redemption price of the shares of Class A Common Stock being purchased or redeemed by the Corporation (plus any expenses related thereto) and upon such other terms as are the same for the shares of Class A Common Stock being purchased or redeemed by the Corporation.
Section 3.06.
Certificates Representing Units; Lost, Stolen or Destroyed Certificates; Registration and Transfer of Units
.
(a)
Units shall not be certificated unless (1) otherwise determined by the Manger or (2) required pursuant to legal or regulatory requirements applicable to the Member in whose name such Units are registered. If the Manager determines that one or more Units shall be certificated, each such
certificate shall be signed by or in the name of the Company, by the Chief Executive Officer and any other officer designated by the Manager. Such certificate shall be in such form (and shall contain such legends) as the Manager may determine. Any or all of such signatures on any certificate representing one or more Units may be a facsimile, engraved or printed, to the extent permitted by applicable Law. The Manager agrees that it shall not elect to treat any Unit as a “security” within the meaning of Article 8 of the Uniform Commercial Code unless thereafter all Units then outstanding are represented by one or more certificates.
(b)
If Units are certificated, the Manager may direct that a new certificate representing one or more Units be issued in place of any certificate theretofore issued by the Company alleged to have been lost, stolen or destroyed, upon delivery to the Manager of an affidavit of the owner or owners of such certificate, setting forth such allegation. The Manager may require the owner of such lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Company a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate.
(c)
Upon surrender to the Company or the transfer agent of the Company, if any, of a certificate for one or more Units, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, in compliance with the provisions hereof, the Company shall issue a new certificate representing one or more Units to the Person entitled thereto, cancel the old certificate and record the transaction upon its books. Subject to the provisions of this Agreement, the Manager may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, Transfer and registration of Units.
Section 3.07.
Negative Capital Accounts
. No Member shall be required to pay to any other Member or the Company any deficit or negative balance which may exist from time to time in such Member’s Capital Account (including upon and after dissolution of the Company).
Section 3.08.
No Withdrawal
. No Person shall be entitled to withdraw any part of such Person’s Capital Contribution or Capital Account or to receive any Distribution from the Company, except as expressly provided in this Agreement.
Section 3.09.
Loans From Members
. Loans by Members to the Company shall not be considered Capital Contributions. Subject to the provisions of
Section 3.01(c)
, the amount of any such advances shall be a debt of the Company to such Member and shall be payable or collectible in accordance with the terms and conditions upon which such advances are made.
Section 3.10.
Corporate Stock Option Plans and Equity Plans
.
(a)
Options Granted to Persons other than LLC Employees
. If at any time or from time to time, in connection with any Stock Option Plan, a stock option granted over shares of Class A Common Stock to a Person other than an LLC Employee is duly exercised:
(i) The Corporation shall, as soon as practicable after such exercise, make a Capital Contribution to the Company in an amount equal to the exercise price paid to the Corporation by such exercising Person in connection with the exercise of such stock option.
(ii) Notwithstanding the amount of the Capital Contribution actually made pursuant to
Section 3.10(a)(i)
, the Corporation shall be deemed to have contributed to the Company as a Capital Contribution, in lieu of the Capital Contribution actually made and in consideration of additional Common Units, an amount equal to the Value of a share of Class A Common Stock as of the date of such exercise multiplied by the number of shares of Class A Common Stock then being
actually issued by the Corporation in connection with the exercise of such stock option (disregarding for purposes of this
Section 3.10(a)(ii)
any shares withheld for tax withholding or in connection with a cashless exercise). The parties hereto acknowledge and agree that such deemed Capital Contribution will result in a “revaluation of partnership property” and corresponding adjustments to Capital Account balances as described in Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations.
(iii) The Corporation shall receive in exchange for such Capital Contributions (as deemed made under
Section 3.10(a)(ii)
) a corresponding number of Common Units.
(b)
Options Granted to LLC Employees
. If at any time or from time to time, in connection with any Stock Option Plan, a stock option granted over shares of Class A Common Stock to an LLC Employee is duly exercised:
(i) The Corporation shall sell to the Optionee, and the Optionee shall purchase from the Corporation, for a cash price per share equal to the Value of a share of Class A Common Stock at the time of the exercise, the number of shares of Class A Common Stock equal to the quotient of (A) the exercise price payable by the Optionee in connection with the exercise of such stock option divided by (B) the Value of a share of Class A Common Stock at the time of such exercise.
(ii) The Corporation shall sell to the Company (or if the Optionee is an employee of, or other service provider to, a Subsidiary, the Corporation shall sell to such Subsidiary), and the Company (or such Subsidiary, as applicable) shall purchase from the Corporation, a number of shares of Class A Common Stock equal to the excess of (A) the number of shares of Class A Common Stock as to which such stock option is being exercised over (B) the number of shares of Class A Common Stock sold pursuant to
Section 3.10(b)(i)
hereof. The purchase price per share of Class A Common Stock for such sale of shares of Class A Common Stock to the Company (or such Subsidiary) shall be the Value of a share of Class A Common Stock as of the date of exercise of such stock option.
(iii) The Company shall transfer to the Optionee (or if the Optionee is an employee of, or other service provider to, a Subsidiary, the Subsidiary shall transfer to the Optionee) at no additional cost to such LLC Employee and as additional compensation to such LLC Employee, the number of shares of Class A Common Stock described in
Section 3.10(b)(ii)
.
(iv) The Corporation shall, as soon as practicable after such exercise, make a Capital Contribution to the Company in an amount equal to all proceeds received (from whatever source, but excluding any payment by the Corporation in respect of payroll taxes or other withholdings) by the Corporation in connection with the exercise of such stock option. The Corporation shall receive for such Capital Contribution, a number of Common Units equal to the number of shares of Class A Common Stock for which such option was exercised. The parties hereto acknowledge and agree that such Capital Contribution will result in a “revaluation of partnership property” and corresponding adjustments to Capital Account balances as described in Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations.
(c)
Restricted Stock Granted to LLC Employees
. If at any time or from time to time, in connection with any Equity Plan (other than a Stock Option Plan), any shares of Class A Common Stock are issued to an LLC Employee (including any shares of Class A Common Stock that are subject to forfeiture in the event such LLC Employee terminates his or her employment with the Company or any Subsidiary) in consideration for services performed for the Company or any Subsidiary:
(i) The Corporation shall issue such number of shares of Class A Common Stock as are to be issued to such LLC Employee in accordance with the Equity Plan;
(ii) On the date (such date, the “
Vesting Date
”) that the Value of such shares is included in the taxable income of such LLC Employee, the following events will be deemed to have occurred: (A) the Corporation shall be deemed to have sold such shares of Class A Common Stock to the Company (or if such LLC Employee is an employee of, or other service provider to, a Subsidiary, to such Subsidiary) for a purchase price equal to the Value of such shares of Class A Common Stock, (B) the Company (or such Subsidiary) shall be deemed to have delivered such shares of Class A Common Stock to such LLC Employee, (C) the Corporation shall be deemed to have contributed the purchase price for such shares of Class A Common Stock to the Company as a Capital Contribution, and (D) in the case where such LLC Employee is an employee of a Subsidiary, the Company shall be deemed to have contributed such amount to the capital of the Subsidiary; and
(iii) The Company shall issue to the Corporation on the Vesting Date a number of Common Units equal to the number of shares of Class A Common Stock issued under
Section 3.10(c)(i)
(disregarding for purposes of this
Section 3.10(c)(iii)
any shares withheld for tax withholding) in consideration for a Capital Contribution that shall be deemed to have been contributed to the Company by the Corporation in an amount equal to the product of (A) the number of such newly issued Common Units multiplied by (B) the Value of a share of Class A Common Stock.
(d)
Future Stock Incentive Plans
. Nothing in this Agreement shall be construed or applied to preclude or restrain the Corporation from adopting, modifying or terminating stock incentive plans for the benefit of employees, directors or other business associates of the Corporation, the Company or any of their respective Affiliates. The Members acknowledge and agree that, in the event that any such plan is adopted, modified or terminated by the Corporation, amendments to this
Section 3.10
may become necessary or advisable and that any approval or consent to any such amendments requested by the Company shall be deemed granted by the Manager without the requirement of any further consent or acknowledgement of any other Member.
(e)
Anti-dilution adjustments.
For all purposes of this
Section 3.10
, the number of shares of Class A Common Stock and the corresponding number of Common Units shall be determined after giving effect to all anti-dilution or similar adjustments that are applicable, as of the date of exercise or vesting, to the option, warrant, restricted stock or other equity interest that is being exercised or becomes vested under the applicable Stock Option Plan or other Equity Plan and applicable award or grant documentation.
Section 3.11.
Dividend Reinvestment Plan, Cash Option Purchase Plan, Stock Incentive Plan or Other Plan
. Except as may otherwise be provided in this
Article III
, all amounts received or deemed received by the Corporation in respect of any dividend reinvestment plan, cash option purchase plan, stock incentive or other stock or subscription plan or agreement, either (a) shall be utilized by the Corporation to effect open market purchases of shares of Class A Common Stock, or (b) if the Corporation elects instead to issue new shares of Class A Common Stock with respect to such amounts, shall be contributed by the Corporation to the Company in exchange for additional Common Units. Upon such contribution, the Company will issue to the Corporation a number of Common Units equal to the number of new shares of Class A Common Stock so issued.
ARTICLE IV
DISTRIBUTIONS
Section 4.01.
Distributions
.
(a)
Distributable Cash; Other Distributions
. To the extent permitted by applicable Law and hereunder, Distributions to Members may be declared by the Manager out of Distributable Cash or other funds or property legally available therefor in such amounts and on such terms (including the payment dates of such Distributions) as the Manager shall determine using such record date as the Manager may designate; such Distributions shall be made to the Members as of the close of business on such record date on a pro rata basis in accordance with each Member’s Percentage Interest as of the close of business on such record date;
provided, however
, that (i) the Manager shall have the obligation to make Distributions as set forth in
Sections 4.01(b)
and
14.02
and (ii) non-pro rata distributions to the Corporation shall be permitted as set forth in
Section 11.03(f)
. Promptly following the designation of a record date and the declaration of a Distribution pursuant to this
Section 4.01(a)
, the Manager shall give notice to each Member of the record date, the amount and the terms of the Distribution and the payment date thereof. In furtherance of the foregoing, it is intended that the Manager shall, to the extent permitted by applicable Law and hereunder, have the right in its sole discretion to make Distributions to the Members pursuant to this
Section 4.01(a)
in such amounts as shall enable the Corporation to pay dividends or to meet its obligations, including its obligations pursuant to the Tax Receivable Agreement (to the extent such obligations are not otherwise able to be satisfied as a result of Tax Distributions required to be made pursuant to
Section 4.01(b)
).
(b)
Tax Distributions
.
(i) On or about each date that is five (5) Business Days prior to the due date for each quarterly estimated federal income tax payment for an individual calendar year taxpayer (or, if earlier, the due date for the quarterly estimated federal income tax payment for a corporate calendar year taxpayer), the Company shall be required to make a Distribution to each Member of cash in an amount equal to such Member’s Estimated Assumed Tax Liability for the quarter to which such due date relates (each, a “
Estimated Assumed Tax Liability Distribution
”). On or about each date (a “
Tax Distribution Date
”) that is five (5) Business Days prior to each due date for the U.S. federal income tax return of an individual calendar year taxpayer (without regard to extensions) (or, if earlier, the due date for the U.S. federal income tax return of the Corporation, as determined without regard to extensions), the Company shall be required to make a Distribution to each Member of cash in an amount equal to the excess of such Member’s Assumed Tax Liability, if any, for such taxable period over the Distributions (including Estimated Assumed Tax Liability Distributions described herein) previously made to such Member pursuant to this
Section 4.01(b)
with respect to such taxable period (the “
Tax Distributions
”).
(ii) To the extent a Member otherwise would be entitled to receive less than its Percentage Interest of the aggregate Tax Distributions to be paid pursuant to this
Section 4.01(b)
on any given date, the Tax Distributions to such Member shall be increased to ensure that all Distributions made pursuant to this
Section 4.01(b)
are made pro rata in accordance with such Member’s Percentage Interest. If, on a Tax Distribution Date, there are insufficient funds on hand to distribute to the Members the full amount of the Tax Distributions to which such Members are otherwise entitled, Distributions pursuant to this
Section 4.01(b)
shall be made to the Members to the extent of available funds in accordance with their Percentage Interests and the Company shall make future Tax Distributions as soon as funds become available sufficient to pay the remaining portion of the Tax Distributions to which such Members are otherwise entitled.
(iii) In the event of any audit by, or similar event with, a taxing authority that affects the calculation of any Member’s Assumed Tax Liability for any taxable year, or in the event the Company files an amended tax return, each Member’s Assumed Tax Liability with respect to such year shall be recalculated by giving effect to such event (for the avoidance of doubt, taking into account interest or penalties). Any shortfall in the amount of Tax Distributions the Members and former Members received for the relevant taxable years based on such recalculated Assumed Tax Liability promptly shall be distributed to such Members and the successors of such former Members, except, for the avoidance of doubt, to the extent Distributions were made to such Members and former Members pursuant to
Section 4.01(a)
and this
Section 4.01(b)
in the relevant taxable years sufficient to cover such shortfall.
(iv) Notwithstanding the foregoing, Distributions pursuant to this
Section 4.01(b)
, if any, shall be made to a Member only to the extent all previous Distributions to such Member pursuant to
Section 4.01(a)
with respect to the Fiscal Year are less than the Distributions such Member otherwise would have been entitled to receive with respect to such Fiscal Year pursuant to this
Section 4.01(b)
.
(v) Any and all distributions to a Member pursuant to this
Section 4.01(b)
shall be treated as advances of, and therefore shall reduce (without duplication) dollar for dollar, any future distributions to such Member pursuant to
Section 4.01(a)
or
Article XIV
.
Section 4.02.
Restricted Distributions
. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make any Distribution to any Member on account of any Company Interest to the extent such Distribution would render the Company insolvent or violate any applicable Law or the terms of the Credit Agreements.
Section 4.03.
Pre-IPO Tax Distribution
. Notwithstanding the foregoing and anything to the contrary in this Agreement, a final accounting for tax distributions under the First Amended and Restated LLC Agreement in respect of the taxable income of the Company for the portion of the Fiscal Year of the Company that ends on the closing date of the IPO shall be made by the Company following the closing date of the IPO and, based on such final accounting, the Company shall make a tax distribution to the Continuing LLC Owners in accordance with the applicable terms of the First Amended and Restated LLC Agreement to the extent of any shortfall in the amount of tax distributions the Continuing LLC Owners received prior to the closing date of the IPO with respect to taxable income of the Company of such Fiscal Year that will be allocated to the Continuing LLC Owners pursuant to Section 706 of the Code.
ARTICLE V
CAPITAL ACCOUNTS; ALLOCATIONS; TAX MATTERS
Section 5.01.
Capital Accounts
.
(a)
The Company shall maintain a separate Capital Account for each Member according to the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). For this purpose, the Company may (in the discretion of the Manager), upon the occurrence of the events specified in Treasury Regulation Section 1.704-1(b)(2)(iv)(f), increase or decrease the Capital Accounts in accordance with the rules of such Treasury Regulation and Treasury Regulation Section 1.704-1(b)(2)(iv)(g) to reflect a revaluation of Company property.
(b)
For purposes of computing the amount of any item of Company income, gain, loss or deduction to be allocated pursuant to this
Article V
and to be reflected in the Capital Accounts of the Members, the determination, recognition and classification of any such item shall be the same as its
determination, recognition and classification for U.S. federal income tax purposes (including any method of depreciation, cost recovery or amortization used for this purpose);
provided, however
, that:
(i) The computation of all items of income, gain, loss and deduction shall include those items described in Code Section 705(a)(l)(B) or Code Section 705(a)(2)(B) and Treasury Regulation Section 1.704-1(b)(2)(iv)(i), without regard to the fact that such items are not includable in gross income or are not deductible for U.S. federal income tax purposes.
(ii) If the Book Value of any Company property is adjusted pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or Treasury Regulation Section 1.704-1(b)(2)(iv)(f), the amount of such adjustment shall be taken into account as gain or loss from the disposition of such property.
(iii) Items of income, gain, loss or deduction attributable to the disposition of Company property having a Book Value that differs from its adjusted basis for tax purposes shall be computed by reference to the Book Value of such property.
(iv) Items of depreciation, amortization and other cost recovery deductions with respect to Company property having a Book Value that differs from its adjusted basis for tax purposes shall be computed by reference to the property’s Book Value in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g).
(v) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Sections 732(d), 734(b) or 743(b) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis).
Section 5.02.
Allocations
. Except as otherwise provided in
Section 5.03
and
Section 5.04
, Net Profits and Net Losses for any Allocation Period shall be allocated among the Capital Accounts of the Members pro rata in accordance with their respective Percentage Interests.
Section 5.03.
Regulatory Allocations
.
(a)
Losses attributable to partner nonrecourse debt (as defined in Treasury Regulation Section 1.704-2(b)(4)) shall be allocated in the manner required by Treasury Regulation Section 1.704-2(i). If there is a net decrease during an Allocation Period in partner nonrecourse debt minimum gain (as defined in Treasury Regulation Section 1.704-2(i)(3)), Profits for such Allocation Period (and, if necessary, for subsequent Allocation Periods) shall be allocated to the Members in the amounts and of such character as determined according to Treasury Regulation Section 1.704-2(i)(4).
(b)
Nonrecourse deductions (as determined according to Treasury Regulation Section 1.704-2(b)(1)) for any Allocation Period shall be allocated pro rata among the Members in accordance with their Percentage Interests. Except as otherwise provided in
Section 5.03(a)
, if there is a net decrease in the Minimum Gain during any Allocation Period, each Member shall be allocated Profits for such Allocation Period (and, if necessary, for subsequent Allocation Periods) in the amounts and of such character as determined according to Treasury Regulation Section 1.704-2(f). This
Section 5.03(b)
is intended to be a minimum gain chargeback provision that complies with the requirements of Treasury Regulation Section 1.704-2(f), and shall be interpreted in a manner consistent therewith.
(c)
If any Member that unexpectedly receives an adjustment, allocation or Distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6) has an Adjusted Capital Account Deficit as of the end of any Allocation Period, computed after the application of
Sections 5.03(a)
and
5.03(b)
but before the application of any other provision of this
Article V
, then Profits for such Allocation Period shall be allocated to such Member in proportion to, and to the extent of, such Adjusted Capital Account Deficit. This
Section 5.03(c)
is intended to be a qualified income offset provision as described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted in a manner consistent therewith.
(d)
If the allocation of Net Loss to a Member as provided in
Section 5.02
would create or increase an Adjusted Capital Account Deficit, there shall be allocated to such Member only that amount of Loss as will not create or increase an Adjusted Capital Account Deficit. The Net Losses that would, absent the application of the preceding sentence, otherwise be allocated to such Member shall be allocated to the other Members in accordance with their relative Percentage Interests, subject to this
Section 5.03(d)
.
(e)
Profits and Losses described in
Section 5.01(b)(v)
shall be allocated in a manner consistent with the manner that the adjustments to the Capital Accounts are required to be made pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv).
(f)
The allocations set forth in
Section 5.03(a)
through and including
Section 5.03(e)
(the “
Regulatory Allocations
”) are intended to comply with certain requirements of Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations. The Regulatory Allocations may not be consistent with the manner in which the Members intend to allocate Profits and Losses of the Company or make Distributions. Accordingly, notwithstanding the other provisions of this
Article V
, but subject to the Regulatory Allocations, income, gain, deduction and loss shall be reallocated among the Members so as to eliminate the effect of the Regulatory Allocations (taking into consideration any future Regulatory Allocations that are reasonably expected to be made to offset prior Regulatory Allocations) and thereby cause the respective Capital Accounts of the Members to be in the amounts (or as close thereto as possible) they would have been if Profits and Losses (and such other items of income, gain, deduction and loss) had been allocated without reference to the Regulatory Allocations. In general, the Members anticipate that this will be accomplished by specially allocating other Profits and Losses (and such other items of income, gain, deduction and loss) among the Members so that the net amount of the Regulatory Allocations and such special allocations to each such Member is zero. In addition, if in any Allocation Period there is a decrease in partnership minimum gain, or in partner nonrecourse debt minimum gain, and application of the minimum gain chargeback requirements set forth in
Section 5.03(a)
or
Section 5.03(b)
would cause a distortion in the economic arrangement among the Members, the Members may, if they do not expect that the Company will have sufficient other income to correct such distortion, request the Internal Revenue Service to waive either or both of such minimum gain chargeback requirements. If such request is granted, this Agreement shall be applied in such instance as if it did not contain such minimum gain chargeback requirement.
Section 5.04.
Final Allocations
. Notwithstanding any contrary provision in this Agreement except
Section 5.03
, the Manager shall make appropriate adjustments to allocations of Profits and Losses to (or, if necessary, allocate items of gross income, gain, loss or deduction of the Company among) the Members upon the liquidation of the Company (within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations), the transfer of substantially all the Units (whether by sale or exchange or merger) or sale of all or substantially all the assets of the Company, such that, to the maximum extent possible, the Capital Accounts of the Members are proportionate to their Percentage Interests. In each case, such adjustments or allocations shall occur, to the maximum extent possible, in the Allocation Period of the event requiring such adjustments or allocations.
Section 5.05.
Tax Allocations
.
(a)
Except as otherwise provided in the remainder of this
Section 5.05
, the income, gains, losses, deductions and credits of the Company will be allocated, for federal, state and local income tax purposes, among the Members in accordance with the allocation of such income, gains, losses, deductions and credits among the Members for computing their Capital Accounts;
provided
that if any such allocation is not permitted by the Code or other applicable Law, the Company’s subsequent income, gains, losses, deductions and credits will be allocated among the Members so as to reflect as nearly as possible the allocation set forth herein in computing their Capital Accounts.
(b)
Items of Company taxable income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall be allocated among the Members in accordance with Code Section 704(c) so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Book Value using the traditional method, as described in Treasury Regulations Section 1.704-3(b).
(c)
If the Book Value of any Company asset is adjusted pursuant to
Section 5.01(b)
, subsequent allocations of items of taxable income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Book Value in the same manner as under Code Section 704(c) using the traditional method, as described in Treasury Regulations Section 1.704-3(b).
(d)
Allocations of tax credits, tax credit recapture, and any items related thereto shall be allocated to the Members pro rata as determined by the Manager taking into account the principles of Treasury Regulation Section 1.704‑1(b)(4)(ii).
(e)
Each Member’s pro rata share of the Company’s “excess nonrecourse liabilities” within the meaning of Treasury Regulation Section 1.752-3(a)(3) shall be determined under any reasonable method selected by the Manager.
(f)
Allocations pursuant to this
Section 5.05
are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, Distributions or other Company items pursuant to any provision of this Agreement.
Section 5.06.
Indemnification and Reimbursement for Payments on Behalf of a Member
. If the Company is obligated to pay any amount to a Governmental Entity (or otherwise makes a payment to a Governmental Entity) that is specifically attributable to a Member or a Member’s status as such (including federal income taxes as a result of Company obligations pursuant to the Revised Partnership Audit Provisions, federal withholding taxes, state personal property taxes and state unincorporated business taxes, but excluding payments such as payroll taxes, withholding taxes, benefits or professional association fees and the like required to be made or made voluntarily by the Company on behalf of any Member based upon such Member’s status as an employee of the Company), then such Person shall indemnify the Company in full for the entire amount paid (including interest, penalties and related expenses). The Manager may offset Distributions to which a Person is otherwise entitled under this Agreement against such Person’s obligation to indemnify the Company under this
Section 5.06
. A Member’s obligation to indemnify the Company under this
Section 5.06
shall survive the termination, dissolution, liquidation and winding up of the Company, and for purposes of this
Section 5.06
, the Company shall be treated as continuing in existence. The Company may pursue and enforce all rights and remedies it may have against each Member under this
Section 5.06
, including instituting a lawsuit to collect such contribution with interest calculated at a rate per annum equal to the sum of the Base Rate plus 300
basis points (but not in excess of the highest rate per annum permitted by Law). Each Member hereby agrees to furnish to the Company such information and forms as required or reasonably requested in order to comply with any laws and regulations governing withholding of tax or in order to claim any reduced rate of, or exemption from, withholding to which the Member is legally entitled.
ARTICLE VI
MANAGEMENT
Section 6.01.
Authority of Manager
.
(a)
Except for situations in which the approval of any Member(s) is specifically required by this Agreement, (i) all management powers over the business and affairs of the Company shall be exclusively vested in the Corporation, as the sole manager of the Company (the Corporation, in such capacity, the “
Manager
”), and (ii) the Manager shall conduct, direct and exercise full control over all activities of the Company. The Manager shall be the “manager” of the Company for the purposes of the Delaware Act. Except as otherwise expressly provided for herein and subject to the other provisions of this Agreement, the Members hereby consent to the exercise by the Manager of all such powers and rights conferred on the Members by the Delaware Act with respect to the management and control of the Company. Any vacancies in the position of Manager shall be filled in accordance with
Section 6.04
.
(b)
The day-to-day business and operations of the Company shall be overseen and implemented by officers of the Company (each, an “
Officer
” and collectively, the “
Officers
”), subject to the limitations imposed by the Manager. An Officer may, but need not, be a Member. Each Officer shall be appointed by the Manager and shall hold office until his or her successor shall be duly designated and shall qualify or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided. Any one Person may hold more than one office. Subject to the other provisions in this Agreement (including in
Section 6.07
below), the salaries or other compensation, if any, of the Officers of the Company shall be fixed from time to time by the Manager. The authority and responsibility of the Officers shall include, but not be limited to, such duties as the Manager may, from time to time, delegate to them and the carrying out of the Company’s business and affairs on a day-to-day basis. The existing Officers of the Company as of the Effective Time shall remain in their respective positions and shall be deemed to have been appointed by the Manager. All Officers shall be, and shall be deemed to be, officers and employees of the Company. An Officer may also perform one or more roles as an officer of the Manager.
(c)
The Manager shall have the power and authority to effectuate the sale, lease, transfer, exchange or other disposition of any, all or substantially all of the assets of the Company (including the exercise or grant of any conversion, option, privilege or subscription right or any other right available in connection with any assets at any time held by the Company) or the merger, consolidation, reorganization or other combination of the Company with or into another entity.
Section 6.02.
Actions of the Manager
. The Manager may act through any Officer or through any other Person or Persons to whom authority and duties have been delegated pursuant to
Section 6.07
.
Section 6.03.
Resignation; No Removal
. The Manager may resign at any time by giving written notice to the Members. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the Members, and the acceptance of the resignation shall not be necessary to make it effective. For the avoidance of doubt, the Members have no right under this Agreement to remove or replace the Manager.
Section 6.04.
Vacancies
. Vacancies in the position of Manager occurring for any reason shall be filled by the Corporation (or, if the Corporation has ceased to exist without any successor or assign, then by the holders of a majority in interest of the voting capital stock of the Corporation immediately prior to such cessation). For the avoidance of doubt, the Members (other than the Corporation) have no right under this Agreement to fill any vacancy in the position of Manager.
Section 6.05.
Transactions Between Company and Manager
. The Manager may cause the Company to contract and deal with the Manager, or any Affiliate of the Manager,
provided
such contracts and dealings are on terms comparable to and competitive with those available to the Company from others dealing at arm’s length or are approved by the Members and otherwise are permitted by the Credit Agreement. The Members hereby approve each of the contracts or agreements between or among the Manager, the Company and their respective Affiliates entered into on or prior to the date hereof, including the IPO Common Unit Purchase Agreement.
Section 6.06.
Reimbursement for Expenses
. The Manager shall not be compensated for its services as Manager of the Company except as expressly provided in this Agreement. The Members acknowledge and agree that, upon consummation of the IPO, the Manager’s Class A Common Stock will be publicly traded and therefore the Manager will have access to the public capital markets and that such status and the services performed by the Manager will inure to the benefit of the Company and all Members; therefore, the Manager shall be reimbursed by the Company for any reasonable out-of-pocket expenses incurred on behalf of or for the benefit of the Company, including all fees, expenses and costs associated with the IPO and all fees, expenses and costs of being a public company (including public reporting obligations, proxy statements, stockholder meetings, stock exchange fees, transfer agent fees, SEC and FINRA filing fees and offering expenses) and maintaining its corporate existence. To the extent practicable, expenses incurred by the Manager on behalf of or for the benefit of the Company shall be billed directly to and paid by the Company and, if and to the extent any reimbursements to the Manager or any of its Affiliates by the Company pursuant to this
Section 6.06
constitute gross income to such Person (as opposed to the repayment of advances made by such Person on behalf of the Company), such amounts shall be treated as “guaranteed payments” within the meaning of Code Section 707(c) and shall not be treated as distributions for purposes of computing the Members’ Capital Accounts.
Section 6.07.
Delegation of Authority
. The Manager (a) may, from time to time, delegate to one or more Persons such authority and duties as the Manager may deem advisable, and (b) may assign titles (including chief executive officer, chief strategy officer, chief financial officer, chief operating officer, president, vice president, secretary, assistant secretary, treasurer or assistant treasurer) and delegate certain authority and duties to such Persons as the same may be amended, restated or otherwise modified from time to time. Any number of titles may be held by the same individual. The salaries or other compensation, if any, of such agents of the Company shall be fixed from time to time by the Manager, subject to the other provisions in this Agreement.
Section 6.08.
Limitation of Liability of Manager
.
(a)
Except as otherwise provided herein or in an agreement entered into by the Manager or any of the Manager’s Affiliates and the Company, neither the Manager nor any of the Manager’s Affiliates shall be liable to the Company or to any Member that is not the Manager for any act or omission performed or omitted by the Manager in its capacity as the sole manager of the Company pursuant to authority granted to the Manager by this Agreement;
provided, however
, that, except as otherwise provided herein, such limitation of liability shall not apply to the extent the act or omission was attributable to the Manager’s gross negligence, willful misconduct or knowing violation of Law or for any present or future breaches of any representations, warranties or covenants by the Manager or its Affiliates contained herein or in the other agreements with the Company. The Manager may exercise any of the powers granted to it by this
Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents, and shall not be responsible for any misconduct or negligence on the part of any such agent (so long as such agent was selected in good faith and with reasonable care). The Manager shall be entitled to rely upon the advice of legal counsel, independent public accountants and other experts, including financial advisors, and any act of or failure to act by the Manager in good faith reliance on such advice shall in no event subject the Manager to liability to the Company or any Member that is not the Manager.
(b)
Whenever this Agreement or any other agreement contemplated herein provides that the Manager shall act in a manner which is, or provides terms which are, “fair and reasonable” to the Company or any Member that is not the Manager, the Manager shall determine such appropriate action or provide such terms considering, in each case, the relative interests of each party to such agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable United States generally accepted accounting practices or principles.
(c)
Whenever in this Agreement or any other agreement contemplated herein, the Manager is permitted or required to take any action or to make a decision in its “sole discretion” or “discretion,” with “complete discretion” or under a grant of similar authority or latitude, the Manager shall be entitled to consider such interests and factors as it desires, including its own interests, and shall, to the fullest extent permitted by applicable Law, have no duty or obligation to give any consideration to any interest of or factors affecting the Company or other Members.
(d)
Whenever in this Agreement the Manager is permitted or required to take any action or to make a decision in its “good faith” or under another express standard, the Manager shall act under such express standard and, to the extent permitted by applicable Law, shall not be subject to any other or different standards imposed by this Agreement or any other agreement contemplated herein, and, notwithstanding anything contained herein to the contrary, so long as the Manager acts in good faith, the resolution, action or terms so made, taken or provided by the Manager shall not constitute a breach of this Agreement or any other agreement contemplated herein or impose liability upon the Manager or any of the Manager’s Affiliates.
Section 6.09.
Investment Company Act
. The Manager shall use its best efforts to ensure that the Company shall not be subject to registration as an investment company pursuant to the Investment Company Act.
Section 6.10.
Outside Activities of the Manager
. The Manager shall not, directly or indirectly, enter into or conduct any business or operations, other than in connection with (a) the ownership, acquisition and disposition of Common Units, (b) the management of the business and affairs of the Company and its Subsidiaries, (c) the operation of the Manager as a reporting company with a class (or classes) of securities registered under Section 12 of the Exchange Act and listed on a securities exchange, (d) the offering, sale, syndication, private placement or public offering of stock, bonds, securities or other interests, (e) financing or refinancing of any type related to the Company, its Subsidiaries or their assets or activities, and (f) such activities as are incidental to the foregoing;
provided, however
, that, except as otherwise provided herein, the net proceeds of any financing raised by the Manager pursuant to the preceding clauses (d) and (e) shall be made available to the Company, whether as Capital Contributions, loans or otherwise, as appropriate, and,
provided further
, that the Manager may, in its sole and absolute discretion, from time to time hold or acquire assets in its own name or otherwise other than through the Company and its Subsidiaries so long as the Manager takes commercially reasonable measures to ensure that the economic benefits and burdens of such assets are otherwise vested in the Company or one or more of its Subsidiaries, through assignment, mortgage loan or otherwise or, if it is not commercially reasonable to vest such economic interests in the Company or any of its Subsidiaries, the Members shall negotiate in good faith to amend this Agreement to reflect such activities and the direct ownership of assets by the
Manager. Nothing contained herein shall be deemed to prohibit the Manager from executing any guarantee of indebtedness of the Company or its Subsidiaries.
ARTICLE VII
RIGHTS AND OBLIGATIONS OF MEMBERS
Section 7.01.
Limitation of Liability and Duties of Members
.
(a)
Except as specifically provided in this Agreement or in the Delaware Act, no Member (including the Manager) shall be obligated personally for any debt, obligation or liability solely by reason of being a Member or acting as the Manager of the Company. Notwithstanding anything contained herein to the contrary, the failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business and affairs under this Agreement or the Delaware Act shall not be grounds for imposing personal liability on the Members for liabilities of the Company.
(b)
In accordance with the Delaware Act and the laws of the State of Delaware, a Member may, under certain circumstances, be required to return amounts previously distributed to such Member. It is the intent of the Members that no Distribution to any Member pursuant to
Article IV
or
Article XIV
shall be deemed to be a return of money or other property paid or a distribution distributed in violation of the Delaware Act. The making of any such Distribution to a Member shall be deemed to be approved upon by unanimous consent of the Members within the meaning of Section 18-502(b) of the Delaware Act, and, to the fullest extent permitted by Law, any Member receiving any such money or property shall not be required to return any such money or property to the Company or any other Person. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Member is obligated to make any such payment, such obligation shall be the obligation of such Member and not of any other Member.
(c)
Notwithstanding any other provision of this Agreement (subject to
Section 6.08
with respect to the Manager), to the extent that, at law or in equity, any Member (or any Member’s Affiliate or any manager, managing member, general partner, director, officer, employee, agent, fiduciary or trustee of any Member or of any Affiliate of a Member) has duties (including fiduciary duties) to the Company, to the Manager, to another Member, to any Person who acquires an interest in a Company Interest or to any other Person bound by this Agreement, all such duties (including fiduciary duties) are hereby eliminated, to the fullest extent permitted by law, and replaced with the duties or standards expressly set forth herein, if any. The elimination of duties (including fiduciary duties) to the Company, the Manager, each of the Members, each other Person who acquires an interest in a Company Interest and each other Person bound by this Agreement and replacement thereof with the duties or standards expressly set forth herein, if any, are approved by the Company, the Manager, each of the Members, each other Person who acquires an interest in a Company Interest and each other Person bound by this Agreement.
Section 7.02.
Lack of Authority
. No Member, other than the Manager or a duly appointed Officer, in each case in its capacity as such, has the authority or power to act for or on behalf of the Company, to do any act that would be binding on the Company or to make any expenditure on behalf of the Company. The Members hereby consent to the exercise by the Manager of the powers conferred on them by Law and this Agreement.
Section 7.03.
No Right of Partition
. No Member, other than the Manager, shall have the right to seek or obtain partition by court decree or operation of Law of any Company property, or the right to own or use particular or individual assets of the Company.
Section 7.04.
Indemnification
.
(a)
Subject to
Section 5.06
, the Company hereby agrees to indemnify and hold harmless any Person (each an “
Indemnified Person
”) to the fullest extent permitted under the Delaware Act, as the same now exists or may hereafter be amended, substituted or replaced (but, in the case of any such amendment, substitution or replacement only to the extent that such amendment, substitution or replacement permits the Company to provide broader indemnification rights than the Company is providing immediately prior to such amendment), against all loss, liability, claim, damage, judgment, actions, other expenses whatsoever (including attorneys’ fees, judgments, fines, excise taxes or penalties) (the
“
Liabilities
”
) reasonably incurred or suffered by such Person (or one or more of such Person’s Affiliates) by reason of the fact that such Person is or was a Member or is or was serving as the Manager, Officer, employee or other agent of the Company or is or was serving at the request of the Company as a manager, officer, director, principal, member, employee or agent of another corporation, partnership, joint venture, limited liability company, trust or other enterprise;
provided, however
, that no Indemnified Person shall be indemnified for any Liabilities suffered that are attributable to such Indemnified Person’s or its Affiliates’ gross negligence, willful misconduct or knowing violation of Law or for any present or future breaches of any representations, warranties or covenants by such Indemnified Person or its Affiliates contained herein or in the other agreements with the Company. Expenses, including attorneys’ fees, incurred by any such Indemnified Person in defending a proceeding, shall be paid by the Company in advance of the final disposition of such proceeding, including any appeal therefrom, upon receipt of an undertaking by or on behalf of such Indemnified Person to repay such amount if it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified by the Company.
(b)
The right to indemnification and the advancement of expenses conferred in this
Section 7.04
shall not be exclusive of any other right which any Person may have or hereafter acquire under any statute, agreement, bylaw, action by the Manager or otherwise.
(c)
The Company shall maintain directors’ and officers’ liability insurance, or substantially equivalent insurance, at its expense, to protect any Indemnified Person (and the investment funds, if any, they represent) against any expense, liability or loss described in
Section 7.04(a)
whether or not the Company would have the power to indemnify such Indemnified Person against such Liabilities under the provisions of this
Section 7.04
. The Company shall use its commercially reasonable efforts to purchase and maintain property, casualty and liability insurance in types and at levels customary for companies of similar size engaged in similar lines of business, as determined in good faith by the Manager, and the Company shall use its commercially reasonable efforts to purchase directors’ and officers’ liability insurance (including employment practices coverage) with a carrier and in an amount determined necessary or desirable as determined in good faith by the Manager.
(d)
Notwithstanding anything contained herein to the contrary (including in this
Section 7.04
), (i) any indemnity by the Company relating to the matters covered in this
Section 7.04
shall be provided out of and to the extent of Company assets only and no Member (unless such Member otherwise agrees in writing or is found in a final decision by a court of competent jurisdiction to have personal liability on account thereof) shall have personal liability on account thereof or shall be required to make additional Capital Contributions to help satisfy such indemnity of the Company and (ii) the Company agrees that any indemnification and advancement of expenses available to any current or former Indemnified Person from any investment fund that is an Affiliate of the Company who served as a director or manager of the Company or any of its Subsidiaries or as a Member of the Company by virtue of such Person’s service as a member, director, partner or employee of any such investment fund prior to or following the Effective Time (any such Person, a “
Sponsor Person
”) shall be secondary to the indemnification and advancement of expenses to be provided by the Company pursuant to this
Section 7.04
and the Company (A) shall be the primary indemnitor of first resort for such Sponsor Person pursuant to this
Section 7.04
and (B) shall be
fully responsible for the advancement of all expenses and the payment of all damages or liabilities with respect to such Sponsor Person which are addressed by this
Section 7.04
.
(e)
If this
Section 7.04
or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnified Person pursuant to this
Section 7.04
to the fullest extent permitted by any applicable portion of this
Section 7.04
that shall not have been invalidated and to the fullest extent permitted by applicable Law.
Section 7.05.
Members Right to Act
. Other than certain objection and consent rights described herein, the Members shall have no right to vote on any matter related to the Company.
Section 7.06.
Inspection Rights
. Subject to
Section 16.02
, the Company shall permit each Member and each of its designated representatives to examine the books and records of the Company or any of its Subsidiaries at the principal office of the Company or such other location as the Manager shall reasonably approve during reasonable business hours, and make copies and extracts therefrom, for any purpose reasonably related to such Member’s Company Interest;
provided
that Manager has a right to keep confidential from the Members certain information in accordance with Section 18-305 of the Delaware Act.
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS, AFFIRMATIVE COVENANTS
Section 8.01.
Records and Accounting
. The Company shall keep, or cause to be kept, appropriate books and records with respect to the Company’s business, including all books and records necessary to provide any information, lists and copies of documents required to be provided pursuant to
Section 8.03
or pursuant to applicable Laws. All matters concerning (a) the determination of the relative amount of allocations and Distributions among the Members pursuant to
Articles III
and
IV
and (b) accounting procedures and determinations, and other determinations not specifically and expressly provided for by the terms of this Agreement, shall be determined by the Manager, whose determination shall be final and conclusive as to all of the Members absent manifest clerical error.
Section 8.02.
Fiscal Year
. The Fiscal Year of the Company shall end on December 31 of each calendar year or such other date as may be established by the Manager.
Section 8.03.
Reports
. The Company shall deliver or cause to be delivered, within seventy-five (75) days after the end of each Fiscal Year, to each Person who was a Member at any time during such Fiscal Year, all information reasonably necessary for the preparation of such Person’s United States federal and applicable state income tax returns.
ARTICLE IX
TAX MATTERS
Section 9.01.
Preparation of Tax Returns
. The Manager shall arrange for the preparation and timely filing of all tax returns required to be filed by the Company. No later than five (5) days before the due date for quarterly federal estimated income tax payments, the Company shall send to each Person who was a Member at any time during the prior quarter, an estimate of such Member’s state tax apportionment information and allocations
to the Members of taxable income, gains, losses, deductions and credits for the prior quarter, which estimate shall have been reviewed by the Company’s outside tax accountants. In addition, no later than the earlier of (i) March 15 following the end of the prior Fiscal Year, and (ii) thirty (30) Business Days after the issuance of the final financial statement report for a Fiscal Year by the Company’s auditors, the Company shall send to each Person who was a Member at any time during such Fiscal Year, a statement showing such Member’s final state tax apportionment information and allocations to the Members of taxable income, gains, losses, deductions and credits for such Fiscal Year and a completed IRS Schedule K-1. Each Member shall notify the Company upon receipt of any notice of tax examination of the Company by federal, state or local authorities. Subject to the terms and conditions of this Agreement, in its capacity as Partnership Representative, the Corporation shall have the authority to prepare the tax returns of the Company using such permissible methods and elections as it determines in its reasonable discretion, including the use of any permissible method under Section 706 of the Code for purposes of determining the varying Company Interests of its Members (
provided, however
, that, in respect of the IPO Common Unit Purchase, the Company shall use the interim closing method and the calendar day convention pursuant to Treasury Regulation 1.706-4).
Section 9.02.
Tax Elections
. The taxable year of the Company (the
“
Taxable Year
”
) shall be the Fiscal Year set forth in
Section 8.02
or such other accounting period as the Company may be required to utilize as its taxable year pursuant to the Code and the Treasury Regulations. The Company and any eligible Subsidiary shall make an election pursuant to Section 754 of the Code and shall not thereafter revoke such election. Each Member will upon request supply any information reasonably necessary to give proper effect to any such elections. The Company shall not make any election to be an association taxable as a corporation for U.S. federal income tax purposes (including by filing any US Internal Revenue Service Form 8832 that would cause the Company to be taxed as a corporation for U.S. federal income tax purposes).
Section 9.03.
Tax Controversies
. The Corporation is hereby designated the “Partnership Representative” (within the meaning given to such term in Section 6223 of the Code) (the Corporation, in such capacity, the “
Partnership Representative
”) and is authorized and required to represent the Company (at the Company’s expense) in connection with all examinations of the Company’s affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Company funds for professional services reasonably incurred in connection therewith. Each Member agrees to cooperate with the Company and to do or refrain from doing any or all things reasonably requested by the Company with respect to the conduct of such proceedings. The Partnership Representative shall keep all Members fully advised on a current basis of any contacts by or discussions with the tax authorities, and all Members shall have the right to observe and participate through representatives of their own choosing (at their sole expense) in any tax proceedings. From time to time as necessary or appropriate because of amendments to the Code or rules or regulations promulgated thereunder, the Members shall convene and cooperate in good faith to agree upon a procedure or procedures to be followed by the Company and/or the Members in order to minimize the financial burden on the Company of any imputed underpayment under Section 6225 of the Code (or any successor provision), including an election and the furnishing of statements pursuant to Section 6226 of the Code or through the adoption of the procedure established by Section 6225(c) of the Code (or any successor provision). Notwithstanding anything to the contrary in this Agreement, the Partnership Representative shall not settle or otherwise compromise any issue in any such examination, audit or other proceeding without first obtaining any approval required under Section 6.1 of the Tax Receivable Agreement. Nothing herein shall diminish, limit or restrict the rights of any Member under the Revised Partnership Audit Provisions.
ARTICLE X
RESTRICTIONS ON TRANSFER OF UNITS; PREEMPTIVE RIGHTS
Section 10.01.
Transfers by Members
. No holder of Units may Transfer any interest in any Units, except Transfers (i) pursuant to and in accordance with
Section 10.02
or (ii) approved in writing by the Manager. Notwithstanding the foregoing, “Transfer” shall not include an event that terminates the existence of a Member for income tax purposes (including a change in entity classification of a Member under Treasury Regulations Section 301.7701-3, a sale of assets by, or liquidation of, a Member pursuant to an election under Code Sections 336 or 338, or a merger, severance, or allocation within a trust or among
sub-trusts of a trust that is a Member), but that does not terminate the existence of such Member under applicable state law (or, in the case of a trust that is a Member, does not terminate the trusteeship of the fiduciaries under such trust with respect to all the Company Interests of such trust that is a Member);
provided, however
, that this sentence shall not apply for purposes of applying
Section 10.07(b)(iv)
,
Section 10.07(b)(vi)
or
Section 10.07(b)(vii)
.
Section 10.02.
Permitted Transfers
. The restrictions contained in
Section 10.01
shall not apply to any Transfer (each, a “
Permitted Transfer
”) in connection with: (a)(i) a sale or redemption of Common Units in accordance with
Article XI
, (ii) an “Exchange” pursuant to the terms of the Exchange Agreement (as defined therein), (iii) an exercise of the Call Option, (iv) a Transfer by a Member to the Corporation or any of its Subsidiaries or (v) a Transfer pursuant to
Section 10.09
; (b) a Transfer by any Member to such Member’s spouse, any lineal ascendants or descendants or trusts or other entities in which such Member or Member’s spouse, lineal ascendants or descendants are the sole beneficial owners; or (c) a Transfer to a partner, shareholder, member or Affiliate of such Member (which may include special purpose investment vehicles wholly owned by one or more Affiliated investment funds but shall not include portfolio companies);
provided, however
, that (A) the restrictions contained in this Agreement will continue to apply to Units after any Permitted Transfer of such Units, and (B) in the case of the foregoing clauses (b) and (c), the Permitted Transferees of the Units so Transferred shall agree in writing to be bound by the provisions of this Agreement and, the transferor will deliver a written notice to the Company and the Members, which notice will disclose in reasonable detail the identity of the proposed transferee. In the case of a Permitted Transfer of any Common Units, the transferring Member shall be required to transfer an equal number of shares of Class B Common Stock (to the extent then outstanding), Class C Common Stock or Class D Common Stock, as applicable, corresponding to the proportion of such Member’s Common Units that were transferred in the transaction to such Permitted Transferee. All Permitted Transfers are subject to the additional limitations set forth in
Section 10.07(b)
.
Section 10.03.
Restricted Units Legend
. The Units have not been registered under the Securities Act and, therefore, in addition to the other restrictions on Transfer contained in this Agreement, cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is then available. To the extent such Units have been certificated, each certificate evidencing Units and each certificate issued in exchange for or upon the Transfer of any Units (if such securities remain Units as defined herein after such Transfer) shall be stamped or otherwise imprinted with a legend in substantially the following form (or such other form as shall be approved by the Manager):
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF EVO INVESTCO, LLC, AS MAY BE AMENDED AND MODIFIED FROM TIME TO TIME, AND EVO INVESTCO, LLC RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO ANY TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY EVO INVESTCO, LLC TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.”
The Company shall imprint such legend on certificates (if any) evidencing Units.
Section 10.04.
Transfer
. Prior to Transferring any Units (other than pursuant to a Permitted Transfer described in clause (a) of the definition thereof), the Transferring holder of Units shall cause the prospective transferee to be bound by this Agreement as provided in
Section 10.02
and any other agreements executed by the holders of Units and relating to such Units in the aggregate, including the Registration Rights Agreement and the Exchange Agreement if applicable (collectively, the “
Other Agreements
”), and shall cause the prospective transferee to execute and deliver to the Company and the other holders of Units counterparts of this Agreement and any applicable Other Agreements. Any Transfer or attempted Transfer of any Units in violation of any provision of this Agreement (including any indirect Transfers) (a) shall be void, and (b) the Company shall not record such Transfer on its books or treat any purported transferee of such Units as the owner of such securities for any purpose.
Section 10.05.
Assignee’s Rights
.
(a)
The Transfer of a Company Interest in accordance with this Agreement shall be effective as of the date of its assignment (assuming compliance with all of the conditions to such Transfer set forth herein), and such Transfer shall be shown on the books and records of the Company. Profits, Losses and other Company items shall be allocated between the transferor and the Assignee according to Code Section 706, using any permissible method as determined in the reasonable discretion of the Manager (
provided, however
, that, in respect of the IPO Common Unit Purchase, the Company shall use the interim closing method and the calendar day convention pursuant to Treasury Regulation 1.706-4). Distributions made before the effective date of such Transfer shall be paid to the transferor, and Distributions made after such date shall be paid to the Assignee.
(b)
Unless and until an Assignee becomes a Member pursuant to
Article XII
, the Assignee shall not be entitled to any of the rights granted to a Member hereunder or under applicable Law, other than the rights granted specifically to Assignees pursuant to this Agreement;
provided, however
, that, without relieving the transferring Member from any such limitations or obligations as more fully described in
Section 10.06
, such Assignee shall be bound by any limitations and obligations of a Member contained herein that a Member would be bound on account of the Assignee’s Company Interest (including the obligation to make Capital Contributions on account of such Company Interest).
Section 10.06.
Assignor’s Rights and Obligations
. Any Member who shall Transfer any Company Interest in accordance with this Agreement shall cease to be a Member with respect to such Units or other interest and shall no longer have any rights or privileges, or, except as set forth in this
Section 10.06
, duties, liabilities or obligations, of a Member with respect to such Units or other interest (it being understood, however, that the applicable provisions of
Sections 6.08
and
7.04
shall continue to inure to such Person’s benefit), except that unless and until the Assignee (if not already a Member) is admitted as a Substituted Member in accordance with the provisions of
Article XII
(the “
Admission Date
”), (a) such assigning Member shall retain all of the duties, liabilities and obligations of a Member with respect to such Units or other interest, and (b) the Manager may, in its sole discretion, reinstate all or any portion of the rights and privileges of such Member with respect to such Units or other interest for any period of time prior to the Admission Date. Nothing contained herein shall relieve any Member who Transfers any Units or other interest in the Company from any liability of such Member to the Company with respect to such Company Interest that may exist on the Admission Date or that is otherwise specified in the Delaware Act and incorporated into this Agreement or for any liability to the Company or any other Person for any materially false statement made by such Member (in its capacity as such) or for any present or future breaches of any representations, warranties or covenants by such Member (in its capacity as such) contained herein or in the other agreements with the Company.
Section 10.07.
Overriding Provisions
.
(a)
Any Transfer in violation of this
Article X
shall be null and void
ab initio
, and the provisions of
Sections 10.05
and
10.06
shall not apply to any such Transfers. For the avoidance of doubt, any Person to whom a Transfer is made or attempted in violation of this
Article X
shall not become a Member, shall not be entitled to vote on any matters coming before the Members and shall not have any other rights in or with respect to any rights of a Member of the Company. The approval of any Transfer in any one or more instances shall not limit or waive the requirement for such approval in any other or future instance. The Manager shall, and is hereby authorized to, promptly amend this Agreement and the Schedule of Members attached hereto to reflect any Permitted Transfer pursuant to this
Article X
, without the requirement of any consent or acknowledgement of any other Member.
(b)
Notwithstanding anything contained herein to the contrary (including, for the avoidance of doubt, the provisions of
Section 10.01
and
Article XI
and
Article XII
), in no event shall any Member Transfer any Units to the extent such Transfer would:
(i) result in the violation of the Securities Act, or any other applicable federal, state or foreign Law;
(ii) cause an assignment under the Investment Company Act;
(iii) in the reasonable determination of the Manager, be a violation of or a default (or an event that, with notice or the lapse of time or both, would constitute a default) under, or result in an acceleration of any indebtedness under, any promissory note, mortgage, loan agreement, indenture or similar instrument or agreement to which the Company or the Manager is a party;
provided
that (A) the payee or creditor to whom the Company or the Manager owes such obligation is not an Affiliate of the Company or the Manager and (B) such indebtedness, individually or in the aggregate, has an aggregate principal amount then outstanding that is greater than $20,000,000;
(iv) cause the Company to lose its status as a partnership for federal income tax purposes or, without limiting the generality of the foregoing, such Transfer was effected on or through an “established securities market” or a “secondary market or the substantial equivalent thereof,” as such terms are used in Section 1.7704-1 of the Treasury Regulations;
(v) be a Transfer to a Person who is not legally competent or who has not achieved his or her majority under applicable Law (excluding trusts for the benefit of Persons who are not legally competent or who are minors);
(vi) cause the Company to be treated as a “publicly traded partnership” or to be taxed as a corporation pursuant to Section 7704 of the Code or successor provision of the Code; or
(vii) result in the Company having more than one hundred (100) partners, within the meaning of Treasury Regulations Section 1.7704-1(h)(1) (determined pursuant to the rules of Treasury Regulations Section 1.7704-1(h)(3)).
Section 10.08.
Spousal Consent
. In connection with the execution and delivery of this Agreement, any Member who is a natural person will deliver to the Company an executed consent from such Member’s spouse (if any) in the form of
Exhibit B
attached to this Agreement. If, at any time subsequent to the date of this Agreement such Member becomes legally married (whether in the first instance or to a different spouse), such Member shall cause his or her spouse to execute and deliver to
the Company a consent in the form of
Exhibit B
attached to this Agreement. Such Member’s non-delivery to the Company of an executed consent in the form of
Exhibit B
attached to this Agreement at any time shall constitute such Member’s continuing representation and warranty that such Member is not legally married as of such date.
Section 10.09.
Drag-Along Rights
.
(a)
In the event that a Disposition Event is approved by the board of directors of the Corporation or is otherwise effected or to be effected with the consent or approval of the board of directors of the Corporation, Blueapple and its Permitted Transferees agrees to Transfer all of their respective Common Units on the terms and conditions contemplated by this
Section 10.09
, effective and contingent upon the consummation of such Disposition Event, for consideration per Common Unit (before taking into account any rights such Person may have under the Tax Receivable Agreement) equal to the same kind and amount of stock or securities, cash or other property, as the case may be, into which a share of Class A Common Stock is converted or exchanged in the Transaction, and otherwise with respect to such Common Units on the same terms and conditions as apply to the shares of Class A Common Stock in such Disposition Event, with such modifications as are appropriate, as determined in good faith by the Manager, to reflect the fact that Common Units rather than shares of Class A Common Stock will be Transferred. Such Transfer shall be structured in the sole discretion of the Manager and, without limitation to any other structure, the Manager will use its reasonable best efforts expeditiously and in good faith to take all such actions and do all such things as are necessary or desirable to enable and permit Blueapple and its Permitted Transferees to participate in such Disposition Event to the same extent or on an economically equivalent basis as the holders of shares of Class A Common Stock without discrimination;
provided
that, without limiting the generality of this sentence, the Manager will use its reasonable best efforts expeditiously and in good faith to ensure that Blueapple and its Permitted Transferees may participate in each such Disposition Event without being required to have their Common Units and any associated shares of Class B Common Stock redeemed (or, if so required, to ensure that any such redemption shall be effective only upon, and shall be conditional upon, the closing of such disposition Event, or, as applicable, to the extent necessary to exchange the number of Common Units being repurchased).
(b)
The Corporation shall send written notice to Blueapple and its Permitted Transferees at least thirty (30) days prior to the closing of any Disposition Event to which this
Section 10.09
applies informing them of the terms and conditions related to the transfer of their respective Common Units in connection with such Disposition Event. Blueapple and its Permitted Transferees shall be obligated to sell all of their respective Common Units and any associated shares of Class B Common Stock in the Disposition Event contemplated by such notice, on the terms and conditions described in this
Section 10.09
, including by executing any document containing customary representations, warranties and agreements with respect to itself and its ownership of the Common Units or any associated shares of Class B Common Stock, as applicable, as requested by the Manager in connection with such Disposition Event, which representations, warranties, indemnities and agreements shall be substantially the same as those contained in any documentation to be executed by the holders of Class A Common Stock with such modifications as are appropriate, as determined in good faith by the Manager, to reflect the fact that Common Units rather than shares of Class A Common Stock will be transferred.
ARTICLE XI
SALE AND EXCHANGE RIGHTS
Section 11.01.
Blueapple Sale Rights
.
(a)
Subject to the terms and conditions set forth in this
Article XI
, Blueapple may deliver written notice to the Company and the Corporation (a “
Sale Notice
”) specifying (1) the number of Common Units that Blueapple wishes to sell to the Corporation and (2) whether Blueapple consents to the
redemption for cash by the Company of all or any portion of the Common Units specified in such Sale Notice pursuant to
Section 11.03
. Upon receipt of a Sale Notice, the Corporation shall either (i) use its commercially reasonable efforts to pursue an Underwritten Offering of shares of Class A Common Stock in the manner contemplated by, and pursuant to the terms of, the Registration Rights Agreement and, if completed, use the net proceeds from such Underwritten Offering to purchase the number of Common Units specified in the Sale Notice, subject to terms and provisions of the Registration Rights Agreement (including the cut back provisions thereof in the event the Corporation is unable to sell a number of shares of Class A Common Stock sufficient to purchase the requested number of Common Units) or (ii) to the extent the Sale Notice has indicated that Blueapple consents to a redemption for cash by the Company, act in its capacity as Manager to cause the Company to redeem the Common Units specified in the Sale Notice, as provided in, and subject to the terms of,
Section 11.03
. For the avoidance of doubt, in the event the Corporation elects to use commercially reasonable efforts to pursue an Underwritten Offering (as described in clause (i) above but it is not able to sell any or all of the shares of Class A Common Stock necessary to purchase the Common Units specified in the Sale Notice, the Corporation will have no obligations to acquire the Common Units or to cause the Company to offer to redeem the Common Units specified in the Sale Notice.
(b)
Blueapple shall be entitled to deliver no more than four (4) Sale Notices during any twelve (12) month period;
provided
that (i) any Demand Registration by MDP in connection with which the Corporation is able to sell at least 75% of the Common Units offered by the Corporation to satisfy the Sale Notice shall also count as a Sale Notice for purposes of this limitation; and
provided further
that any Sale Notice pursuant to which the Corporation causes the Company to redeem Common Units in accordance with
Section 11.01(a)(ii)
and is not required to use its commercially reasonable efforts to pursue an Underwritten Offering in accordance with
Section 11.01(a)(i)
with respect to any Common Units that are the subject of such Sale Notice shall not constitute a Sale Notice for purposes of this limitation. Any Sale Notice delivered with respect to only part of Blueapple’s Common Units shall be for an aggregate number of Common Units having an anticipated aggregate Common Unit Purchase Price (before deduction of any underwriting discounts or commissions associated with any related Underwritten Offering) of at least $10 million.
(c)
Any Common Units purchased from Blueapple by the Corporation with the net proceeds of an Underwritten Offering as contemplated by
Section 11.01(a)(i)
shall be purchased at a price per Common Unit equal to the Common Unit Purchase Price.
Section 11.02.
Exchange Rights of the Other Holders
. Subject to the terms and conditions set forth in this
Article XI
and the Exchange Agreement, each Holder shall be entitled to cause the Corporation to directly or indirectly exchange or acquire all or part of such Holders’ Paired Interests or Call Option Paired Interests for Class A Common Stock or cash, to the extent provided in this
Article XI
and the Exchange Agreement, by delivering written notice in accordance with the Exchange Agreement (an “
Exchange Notice
”).
Section 11.03.
Redemption of Common Units In Lieu of Sale or Exchange
.
(a)
Upon receipt of a Sale Notice or an Exchange Notice indicating that Blueapple or the Holder, as applicable, consents to a redemption of all or any portion of such Person’s Common Units for cash, instead of purchasing Common Units or exchanging Paired Interests pursuant to
Section 11.01(a)(i)
or
Section 11.02
, respectively, the Corporation may elect, in its sole discretion as determined by a majority vote of the Disinterested Directors, to act in its capacity as Manager to cause the Company to redeem for cash the Common Units subject to such Sale Notice or Exchange Notice as to which Blueapple or such Holder, as applicable, has consented to redemption (a “
Redemption
”). The Corporation shall cause the Company to conduct any Redemption in compliance with the provisions of this
Section 11.03
.
(b)
The Corporation shall give written notice of its decision to elect to cause a Redemption to Blueapple and to all Holders (a “
Redemption Notice
”) within five (5) Business Days following the receipt of a Sale Notice or an Exchange Notice, as applicable, and, upon written request received by the Corporation within two (2) Business Days following its delivery of a Redemption Notice, will directly or indirectly redeem all Common Units requested to be included in the Redemption by Blueapple or by any Holder in accordance with this
Section 11.03
. If the Corporation does not deliver a Redemption Notice to Blueapple and the Holders within such five (5) Business Day period, the Corporation shall be deemed to have elected not to cause a Redemption with respect to the Common Units covered by the applicable Sale Notice or Exchange Notice.
(c)
Under no circumstances will (i) the Company be required to directly or indirectly redeem more Common Units in connection with a Redemption than the number of Common Units for which consent to redeem is given in the initial Sale Notice or Exchange Notice (such number, the “
Maximum Redemption Amount
”) and (ii) Blueapple or any Holder be required to directly or indirectly participate in any Redemption under this
Section 11.03
. In the event that the number of Common Units to be included in such Redemption by Blueapple and all participating Holders exceeds the Maximum Redemption Amount, the Company shall redeem Common Units from Blueapple and each participating Holder pro rata based on the number of Common Units held by such Person, subject to rounding by the Company in its sole discretion to reflect the redemption of a whole number of Common Units from Blueapple and each participating Holder. In the event the number of Common Units redeemed from the Person delivering the Sale Notice or Exchange Notice, as applicable, is less than the total number of Common Units specified in such Sale Notice or Exchange Notice, such Person may revoke its consent to the Redemption of all or any portion of its Common Units, in which case (x) the Corporation may elect, in its sole discretion as determined by a majority vote of the Disinterested Directors, within five (5) Business Days of such revocation to revoke the Corporation’s election to effect a Redemption and cease causing the Company to redeem the Common Units specified in such Sale Notice or Exchange Notice and (y) the Corporation shall be required to comply with its obligation to use commercially reasonable efforts to effect an Underwritten Offering (as described in
Section 11.01(a)(i)
) or comply with its obligations under the Exchange Agreement, as applicable, with regard to any Common Units specified in such Sale Notice or Exchange Notice that are not redeemed pursuant to this
Section 11.03
.
(d)
Subject to any decision to revoke a Redemption in whole or part by Blueapple, any applicable Holder or the Corporation as specified in
Section 11.03(c)
, any Redemption shall be completed within ten (10) Business Days after the date of the applicable Redemption Notice (the date of such completion, the “
Redemption Date
”). On the Redemption Date (to be effective immediately prior to the close of business on the Redemption Date), subject to
Section 11.03(f)
:
(i) Blueapple (if participating in such Redemption) and each Holder participating in the Redemption shall (1) transfer and surrender to the Company, free and clear of all liens and encumbrances, all Common Units held by such Person which are to be redeemed in the Redemption (the “
Redeemed Units
”) and (2) transfer and surrender to the Corporation, free and clear of all liens and encumbrances, one share of Class B Common Stock (to the extent shares of Class B Common Stock remain outstanding), Class C Common Stock or Class D Common Stock, as applicable, for each Common Unit redeemed from such Person;
(ii) subject to the transfer and surrender of the Redeemed Units and the corresponding shares of Class B Common Stock (to the extent shares of Class B Common Stock remain outstanding), Class C Common Stock or Class D Common Stock, as applicable, the Company shall (1) cancel the Redeemed Units, (2) transfer to Blueapple (if participating in such Redemption) and each Holder participating in the Redemption an amount in cash per Redeemed Unit equal to the Common Unit Redemption Price and (3) if the Redeemed Units are certificated, issue to Blueapple
or such Holder, as applicable, a certificate for a number of Common Units equal to the difference (if any) between the number of Common Units evidenced by the certificate surrendered by such Person pursuant to
Section 11.03(d)(i)
and the number of Redeemed Units held by such Person; and
(iii) subject to the transfer and surrender of the Redeemed Units and the corresponding shares of Class B Common Stock (to the extent shares of Class B Common Stock remain outstanding), Class C Common Stock or Class D Common Stock, as applicable, the Corporation shall cancel such shares of Class B Common Stock, Class C Common Stock or Class D Common Stock, as applicable, and, if such shares are certificated, issue a new certificate to Blueapple or such Holder, as applicable, as contemplated by the Corporation’s constituent documents.
(e)
To avoid doubt, neither the Company nor the Corporation shall have any obligation to redeem any Common Units from Blueapple or any Holder unless the Corporation expressly elects to cause a Redemption pursuant to this
Section 11.03
and such election is not subsequently revoked pursuant to
Section 11.03(c)
.
(f)
Notwithstanding anything to the contrary in this
Section 11.03
:
(i) any Holder (other than the Call Option Holder) that is controlled by MDP shall have the right to elect to participate, subject to the other applicable terms and conditions of this
Section 11.03
to the extent not in conflict with this
Section 11.03(f)
, in any Redemption through a sale by such Holder to the Corporation of the number of Common Units that otherwise would be redeemable from such Holder in such Redemption (a “
Redemption Sale
”), and, in the event of such an election, (1) the Company shall make a non-pro rata distribution to the Corporation in cash of an amount equal to the number of Common Units to be purchased by the Corporation in connection with a Redemption Sale multiplied by the Common Unit Redemption Price and (2) the Corporation shall pay the applicable Holder as consideration for the applicable Common Units an amount equal to the amount described in the preceding clause (1); and
(ii) the Call Option Holder, shall have the right to elect to participate, subject to the other applicable terms and conditions of this
Section 11.03
to the extent not in conflict with this
Section 11.03(f)
, in any Redemption through a sale by the Call Option Holder to the Corporation of a portion of the Call Option representing rights to acquire the number of Common Units that otherwise would be redeemable from the Call Option Issuer (who, for the avoidance of doubt, shall not in its capacity as a Holder have the right to directly participate in a Redemption without the express consent of the Call Option Holder) in such Redemption (a “
Call Option Redemption Sale
”) which the Corporation shall exercise immediately thereafter, and, in the event of such an election, (1) the Company shall make a non-pro rata distribution to the Corporation in cash of an amount equal to the number of Common Units subject to the portion of the Call Option to be purchased and exercise by the Corporation in connection with a Call Option Redemption Sale multiplied by the Common Unit Redemption Price and (2) the Corporation shall pay the Call Option Holder as consideration for the applicable portion of the Call Option an amount equal to the amount described in the preceding clause (1) minus the exercise price payable with respect to the applicable portion of the Call Option (which exercise price shall be paid to the Call Option Issuer in connection with the substantially simultaneous exercise of the portion of the Call Option acquired by the Corporation).
Section 11.04.
Blueapple Piggyback Rights
. In addition to the Sale Rights pursuant to
Section 11.01
, and subject to the terms of this
Article XI
, Blueapple may request that the Corporation purchase (the “
Piggyback Sale Right
”) part or all of Blueapple’s Common Units by delivering written notice as
contemplated by the Registration Rights Agreement in connection with any Piggyback Registration conducted pursuant to the Registration Rights Agreement. In connection with any exercise by Blueapple of the Piggyback Sale Right, the Corporation shall use its commercially reasonable best efforts to (a) issue shares of Class A Common Stock as part of such Piggyback Registration and (b) use the proceeds to the Corporation from such Piggyback Registration associated with the exercise of the Piggyback Sale Right to purchase the Common Units specified in the written notice provided by Blueapple, subject to terms and provisions of the Registration Rights Agreement, including the cut back provisions thereof in the event the Corporation is unable to sell a number of shares of Class A Common Stock sufficient to redeem the requested number of Common Units. Any Common Units purchased from Blueapple pursuant to this
Section 11.04
shall be purchased at a price per Common Unit equal to the Common Unit Purchase Price. For the avoidance of doubt, in the event the Corporation is not able to sell any or all of the shares of Class A Common Stock necessary to purchase the Common Units specified in the notice of exercise of the Piggyback Sale Right, the Corporation will have no obligations to acquire the Common Units or to cause the Company to offer to redeem the Common Units specified in such notice.
Section 11.05.
Treatment of Distributions in Connection with Sale and Redemption
. The Common Unit Purchase Price and the Common Unit Redemption Price, as applicable, that Blueapple or any Holder is entitled to receive pursuant to this
Article XI
shall not be adjusted on account of any Distributions previously made with respect to the Common Units redeemed or sold pursuant to this
Article XI
or any dividends previously paid with respect to Class A Common Stock;
provided, however
, that if the Redemption Date or Sale Date occurs subsequent to the record date for any Distribution with respect to the Redeemed Units or Blueapple Sold Units but prior to payment of such Distribution, the registered holder of the Common Units as of the close of business on the record date shall be entitled to receive such Distribution with respect to the Redeemed Units or Blueapple Sold Units, as applicable, on the date that it is made notwithstanding that Blueapple or such Holder transferred and surrendered the Redeemed Units to the Company (or sold the Blueapple Sold Units to the Corporation) prior to such date.
Section 11.06.
Conditions to Blueapple Rights; Cooperation; Reclassification
.
(a)
Delivery by the Corporation or the Company, as applicable, of the Common Unit Purchase Price or the Common Unit Redemption Price to Blueapple is expressly conditioned on (i) Blueapple’s delivery of any Common Units to be sold pursuant to the Sale Right and the Piggyback Sale Right to the Corporation free and clear of all liens and encumbrances, (ii) the consummation by the Corporation of an Underwritten Offering or Piggyback Registration, as applicable, generating sufficient net proceeds to the Corporation associated with Blueapple’s exercise of its Sale Right or Piggyback Sale Right to allow the Corporation to purchase the applicable Common Units, subject to cutback as applicable to Demand Registrations and Piggyback Registrations, as applicable, under the Registration Rights Agreement, (iii) Blueapple’s delivery to the Corporation, concurrently with the purchase of such Common Units, of an equal number of shares of Class B Common Stock (to the extent shares of Class B Common Stock remain outstanding).
(b)
In connection with any exercise of the Sale Right or the Piggyback Sale Right, Blueapple shall furnish to the Company and the Corporation such information relating to such exercise (or any Underwritten Offering undertaken in connection with such exercise) as the Company may from time to time reasonably request in writing. If any registration statement refers to Blueapple by name or otherwise as a holder of any Common Units and if, in Blueapple’s sole and exclusive judgment, Blueapple is or might be deemed to be an underwriter or a controlling person of the Corporation, Blueapple shall have the right to (i) require the insertion therein of language, in form and substances satisfactory to Blueapple and presented to the Corporation in writing, to the effect that the holding by Blueapple of such securities is not to be construed as a recommendation by such holder of the investment quality of the Corporation’s securities covered thereby and that such holding does not imply that such holder will assist in meeting any future
financial requirements of the Corporation or the Company, or (ii) in the event that such reference is not required by the Securities Act or any similar federal statute then in force, require the deletion of the reference to such holder;
provided
that, with respect to this clause (ii), if requested by the Corporation, Blueapple shall furnish to the Corporation an opinion of counsel to such effect, which opinion and counsel shall be reasonably satisfactory to the Corporation.
(c)
Blueapple shall, in connection with any Underwritten Offering undertaken in connection with any exercise of the Sale Right or the Piggyback Sale Right, execute and deliver into such arrangements to facilitate the completion such offering as shall be reasonably requested by the underwriter(s) for such offering, the Company or the Corporation, including one or more underwriting agreements, powers of attorney, custody agreements and indemnities.
(d)
In the event of a reclassification or other similar transaction as a result of which the shares of Class A Common Stock are converted into another security, then Blueapple’s Sale Right and Piggyback Sale Right shall apply with respect to the number of shares or other securities into which each share of Class A Common Stock was converted as part of the reclassification or other similar transaction.
Section 11.07.
Reservation of Shares of Class A Common Stock
. At all times the Corporation shall reserve and keep available out of its authorized but unissued Class A Common Stock such number of shares of Class A Common Stock as shall be sufficient to facilitate the exercise by Blueapple of all of its sale rights pursuant to this
Article XI
and all of the rights of Holders of Paired Interests to exercise their rights pursuant to the Exchange Agreement.
Section 11.08.
Effect of Exercise of Sale, Exchange or Redemption
. This Agreement shall continue notwithstanding the consummation of any sale, exchange or redemption pursuant to this
Article XI
, and all governance or other rights set forth herein shall be exercised by the remaining Members (including any Member participating in such sale, exchange or redemption (to the extent of such Member’s remaining interest in the Company). No sale, exchange or redemption pursuant to this
Article XI
shall relieve any Member of liability for any prior breach of this Agreement.
Section 11.09.
Tax Treatment of Sale or Redemption
. Unless otherwise required by applicable Law, the parties hereto acknowledge and agree that any sale or redemption pursuant to this
Article XI
using cash contributed by the Corporation to the Company shall be treated, for U.S. federal and applicable state and local income tax purposes, as a direct exchange between the Corporation and the applicable Member whose Common Units are sold or redeemed.
ARTICLE XII
ADMISSION OF MEMBERS
Section 12.01.
Substituted Members
. Subject to the provisions of
Article X
hereof, in connection with the Permitted Transfer of a Company Interest hereunder, the transferee shall become a substituted Member (“
Substituted Member
”) on the effective date of such Transfer, which effective date shall not be earlier than the date of compliance with the conditions to such Transfer, and such admission shall be shown on the books and records of the Company.
Section 12.02.
Additional Members
. Subject to the provisions of
Article X
hereof, any Person that is not an Continuing LLC Member may be admitted to the Company as an additional Member (any such Person, an “
Additional Member
”) only upon furnishing to the Manager (a) an executed Joinder and executed counterparts or joinders to any applicable Other Agreements and (b) such other documents or instruments as may be reasonably necessary or appropriate to effect such Person’s admission as a Member (including entering into such documents as the Manager may deem appropriate in its reasonable discretion).
Such admission shall become effective on the date on which the Manager determines in its reasonable discretion that such conditions have been satisfied and when any such admission is shown on the books and records of the Company.
ARTICLE XIII
WITHDRAWAL AND RESIGNATION; TERMINATION OF RIGHTS
Section 13.01.
Withdrawal and Resignation of Members
. No Member shall have the power or right to withdraw or otherwise resign as a Member from the Company prior to the dissolution and winding up of the Company pursuant to
Article XIV
. Any Member, however, that attempts to withdraw or otherwise resign as a Member from the Company without the prior written consent of the Manager upon or following the dissolution and winding up of the Company pursuant to
Article XIV
, but prior to such Member receiving the full amount of Distributions from the Company to which such Member is entitled pursuant to
Article XIV
, shall be liable to the Company for all damages (including all lost profits and special, indirect and consequential damages) directly or indirectly caused by the withdrawal or resignation of such Member. Upon a Transfer of all of a Member’s Units in a Transfer permitted by this Agreement, subject to the provisions of
Section 10.06
, such Member shall cease to be a Member.
ARTICLE XIV
DISSOLUTION AND LIQUIDATION
Section 14.01.
Dissolution
. The Company shall not be dissolved by the admission of Additional Members or Substituted Members or the attempted withdrawal or resignation of a Member. The Company shall dissolve, and its affairs shall be wound up, upon:
(a)
the unanimous decision of the Manager together with the Members that then hold Voting Units to dissolve the Company;
(b)
a dissolution of the Company under Section 18-801(4) of the Delaware Act, unless the Company is continued without dissolutions pursuant thereto; or
(c)
the entry of a decree of judicial dissolution of the Company under Section 18-802 of the Delaware Act.
Except as otherwise set forth in this
Article XIV
, the Company is intended to have perpetual existence. An Event of Withdrawal shall not cause a dissolution of the Company and the Company shall continue in existence subject to the terms and conditions of this Agreement.
Section 14.02.
Liquidation and Termination
. On dissolution of the Company, the Manager shall act as liquidator or may appoint one or more Persons as liquidator. The liquidators shall proceed diligently to wind up the affairs of the Company and make final distributions as provided herein and in the Delaware Act. The costs of liquidation shall be borne as a Company expense. Until final distribution, the liquidators shall continue to operate the Company properties with all of the power and authority of the Manager. The steps to be accomplished by the liquidators are as follows:
(a)
as promptly as possible after dissolution and again after final liquidation, the liquidators shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Company’s assets, liabilities and operations through the last day of the calendar month in which the dissolution occurs or the final liquidation is completed, as applicable;
(b)
the liquidators shall cause the notice described in the Delaware Act to be mailed to each known creditor of and claimant against the Company in the manner described thereunder;
(c)
the liquidators shall pay, satisfy or discharge from Company funds, or otherwise make adequate provision for payment and discharge thereof (including the establishment of a cash fund for contingent liabilities in such amount and for such term as the liquidators may reasonably determine) the following: first, all expenses incurred in liquidation; second, all of the debts, liabilities and obligations of the Company owed to creditors other than the Members and third, all of the debt, liabilities and obligations of the Company owed to Members (other than any payments or distributions owed to such Members in their capacity as Members pursuant to this Agreement); and
(d)
all remaining assets of the Company shall be distributed to the Members in accordance with
Article IV
by the end of the Taxable Year during which the liquidation of the Company occurs (or, if later, by ninety (90) days after the date of the liquidation). The distribution of cash and/or property to the Members in accordance with the provisions of this
Section 14.02
and
Section 14.03
below constitutes a complete return to the Members of their Capital Contributions, a complete distribution to the Members of their interest in the Company and all the Company’s property and constitutes a compromise to which all Members have consented within the meaning of the Delaware Act. To the extent that a Member returns funds to the Company, it has no claim against any other Member for those funds.
Section 14.03.
Deferment; Distribution in Kind
. Notwithstanding the provisions of
Section 14.02
, but subject to the order of priorities set forth therein, if upon dissolution of the Company the liquidators determine that an immediate sale of part or all of the Company’s assets would be impractical or would cause undue loss (or would otherwise not be beneficial) to the Members, the liquidators may, in their sole discretion, defer for a reasonable time the liquidation of any assets except those necessary to satisfy Company liabilities (other than loans to the Company by Members) and reserves. Subject to the order of priorities set forth in
Section 14.02
, the liquidators may, in their sole discretion, distribute to the Members, in lieu of cash, either (a) all or any portion of such remaining Company assets in-kind in accordance with the provisions of
Section 14.02(d)
, (b) as tenants in common and in accordance with the provisions of
Section 14.02(d)
, undivided interests in all or any portion of such Company assets or (c) a combination of the foregoing. Any such Distributions in kind shall be subject to (x) such conditions relating to the disposition and management of such assets as the liquidators deem reasonable and equitable and (y) the terms and conditions of any agreements governing such assets (or the operation thereof or the holders thereof) at such time. Any Company assets distributed in kind will first be written up or down to their Fair Market Value, thus creating Profit or Loss (if any), which shall be allocated in accordance with
Article V
. The liquidators shall determine the Fair Market Value of any property distributed in accordance with the valuation procedures set forth in
Article XV
.
Section 14.04.
Cancellation of Certificate
. On completion of the distribution of Company assets as provided herein, the Company is terminated (and the Company shall not be terminated prior to such time), and the Manager (or such other Person or Persons as the Delaware Act may require or permit) shall file a certificate of cancellation with the Secretary of State of Delaware, cancel any other filings made pursuant to this Agreement that are or should be canceled and take such other actions as may be necessary to terminate the Company. The Company shall be deemed to continue in existence for all purposes of this Agreement until it is terminated pursuant to this
Section 14.04
.
Section 14.05.
Reasonable Time for Winding Up
. A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Company and the liquidation of its assets pursuant to
Sections 14.02
and
14.03
in order to minimize any losses otherwise attendant upon such winding up.
Section 14.06.
Return of Capital
. The liquidators shall not be personally liable for the return of Capital Contributions or any portion thereof to the Members (it being understood that any such return shall be made solely from Company assets).
ARTICLE XV
VALUATION
Section 15.01.
Determination
. “
Fair Market Value
” of a specific Company asset will mean the amount which the Company would receive in an all-cash sale of such asset in an arms-length transaction with a willing unaffiliated third party, with neither party having any compulsion to buy or sell, consummated on the day immediately preceding the date on which the event occurred which necessitated the determination of the Fair Market Value (and after giving effect to any transfer taxes payable in connection with such sale), as such amount is determined by the Manager (or, if pursuant to
Section 14.02
, the liquidators) in its good faith judgment using all factors, information and data it deems to be pertinent.
Section 15.02.
Dispute Resolution
. If any Member or Members dispute the accuracy of any determination of Fair Market Value in accordance with
Section 15.01
, and the Manager and such Member(s) are unable to agree on the determination of the Fair Market Value of any asset of the Company, the Manager and such Member(s) shall each select a nationally recognized investment banking firm experienced in valuing securities of closely-held companies such as the Company in the Company’s industry (the “
Appraisers
”), who shall each determine, or cause to be determined, the Fair Market Value of the asset or the Company (as applicable) in accordance with the provisions of
Section 15.01
. The Appraisers shall be instructed to give written notice of their determination of the Fair Market Value of the asset or the Company (as applicable) within thirty (30) days of their appointment as Appraisers. If Fair Market Value as determined by an Appraiser is higher than Fair Market Value as determined by the other Appraiser by 10% or more, and the Manager and such Member(s) do not otherwise agree on a Fair Market Value, the original Appraisers shall designate a third Appraiser meeting the same criteria used to select the original two and the Fair Market Value determined by such third Appraiser shall be final and binding. If Fair Market Value as determined by an Appraiser is within 10% of the Fair Market Value as determined by the other Appraiser (but not identical), and the Manager and such Member(s) do not otherwise agree on a Fair Market Value, the Manager shall select the Fair Market Value of one of the Appraisers. The fees and expenses of the Appraisers shall be borne by the Company.
ARTICLE XVI
GENERAL PROVISIONS
Section 16.01.
Power of Attorney
.
(a)
Each Member who is an individual hereby constitutes and appoints the Manager (or the liquidator, if applicable) with full power of substitution, as his or her true and lawful agent and attorney-in-fact, with full power and authority in his or her name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (A) this Agreement, all certificates and other instruments and all amendments hereof and thereof which the Manager deems appropriate or necessary to form, qualify, or continue the qualification of, the Company as a limited liability company in the State of Delaware and in all other jurisdictions in which the Company may conduct business or own property; (B) all instruments which the Manager deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms; (C) all conveyances and other instruments or documents which the Manager deems appropriate or necessary to reflect the dissolution and liquidation of the Company pursuant to the terms of this Agreement, including a certificate of cancellation; and (D) all instruments relating to the admission, withdrawal or substitution of any Member pursuant to
Article XII
or
Article XIII
; and
(ii) sign, execute, swear to and acknowledge all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the reasonable judgment of the Manager, to evidence, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Members hereunder or
is consistent with the terms of this Agreement, in the reasonable judgment of the Manager, to effectuate the terms of this Agreement.
(b)
The foregoing power of attorney is irrevocable and coupled with an interest, and shall survive the death, disability, incapacity, dissolution, bankruptcy, insolvency or termination of any Member who is an individual and the transfer of all or any portion of his or her Company Interest and shall extend to such Member’s heirs, successors, assigns and personal representatives.
Section 16.02.
Confidentiality
.
(a)
The Manager and each of the Members agree to hold the Company’s Confidential Information in confidence and may not use such information except in furtherance of the business of the Company or as otherwise authorized separately in writing by the Manager. “
Confidential Information
” as used herein includes ideas, financial product structuring, business strategies, innovations and materials, all aspects of the Company’s business plan, proposed operation and products, corporate structure, board minutes and materials, financial and organizational information, analyses, proposed partners, software code and system and product designs, employees and their identities, equity ownership, the methods and means by which the Company plans to conduct its business, all trade secrets, trademarks, tradenames and all intellectual property associated with the Company’s business. With respect to the Manager and each Member, Confidential Information does not include information or material that: (i) is rightfully in the possession of the Manager or each Member at the time of disclosure by the Company; (ii) before or after it has been disclosed to the Manager or each Member by the Company, becomes part of public knowledge, not as a result of any action or inaction of the Manager or such Member, respectively, in violation of this Agreement; (iii) is approved for release by written authorization of an authorized officer of the Company or the Corporation; (iv) is disclosed to the Manager or such Member or their representatives by a third party not, to the knowledge of the Manager or such Member, respectively, in violation of any obligation of confidentiality owed to the Company with respect to such information; or (v) is or becomes independently developed by the Manager or such Member or their respective representatives without use or reference to the Confidential Information.
(b)
Each of the Members may disclose Confidential Information to its Affiliates, partners, directors, officers, employees, counsel, advisers, consultants, outside contractors and other agents solely to the extent such disclosure is reasonably necessary or appropriate to fulfill such Member’s obligations or to exercise such Member’s rights under this Agreement on the condition that such Persons keep the Confidential Information confidential to the same extent as such disclosing Member is required to keep the Confidential Information confidential;
provided
that the disclosing Member shall remain liable with respect to any breach of this
Section 16.02
by any such, Affiliates, partners, directors, officers, employees, counsel, advisers, consultants, outside contractors and other agents.
(c)
Notwithstanding Section 16.02(a) or Section 16.02(b), each of the Members may disclose Confidential Information (i) to the extent that such party is legally compelled (by oral questions, interrogatories, request for information or documents, subpoena, civil investigative demand or similar process) to disclose any of the Confidential Information, (ii) to any bona fide prospective purchaser of the equity or assets of a Member, or the Common Units held by such Member, or a prospective merger partner of such Member (provided, that (x) such Persons will be informed by such Member of the confidential
nature of such information and shall agree in a writing in favor of and enforceable by the Company to keep such information confidential in accordance with the contents of this Agreement and (y) such Member will be liable for any breaches of this
Section 16.02
by any such Persons), (iii) to the extent that, based on the advice of counsel, disclosure is required by applicable Law or (iv) to the extent necessary to provide required tax statements and related information to its stockholders and direct and indirect equity holders (provided that such Member shall inform the Company of any Confidential Information to be so disclosed at least three business days prior to disclosure).
Section 16.03.
Amendments
. This Agreement may be amended or modified by the Manager. Notwithstanding the foregoing, no amendment or modification (a) to
Section 7.04
or this
Section 16.03
may be made without the prior written consent of the Manager and each of the Members, (b) to any of the terms and conditions of this Agreement which terms and conditions expressly require the approval or action of certain Persons may be made without obtaining the consent of the requisite number or specified percentage of such Persons who are entitled to approve or take action on such matter and (c) to any of the terms and conditions of this Agreement to the extent such amendment or modification adversely affects in any material respect the rights, powers or other benefit hereunder of any Member or imposes any additional material obligation (including any expenses or taxes) on any Member, in either case, without the prior written consent of (i) each of MDP and Blueapple and (ii) each other Member, if any, materially and disproportionality adversely affected by such amendment relative to the Members generally.
Section 16.04.
Title to Company Assets
. Company assets shall be deemed to be owned by the Company as an entity, and no Member, individually or collectively, shall have any ownership interest in such Company assets or any portion thereof. The Company shall hold title to all of its property in the name of the Company and not in the name of any Member. All Company assets shall be recorded as the property of the Company on its books and records, irrespective of the name in which legal title to such Company assets is held. The Company’s credit and assets shall be used solely for the benefit of the Company, and no asset of the Company shall be transferred or encumbered for, or in payment of, any individual obligation of any Member.
Section 16.05.
Addresses and Notices
. Any notice provided for in this Agreement will be in writing and will be either personally delivered, or sent by certified mail, return receipt requested, or sent by reputable overnight courier service (charges prepaid) to the Company at the address set forth below and to any other recipient and to any Member at such address as indicated by the Company’s records, or at such address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder when delivered personally or sent by telecopier (
provided
confirmation of transmission is received), three (3) days after deposit in the U.S. mail and one (1) day after deposit with a reputable overnight courier service. The Company’s address is:
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If to the Corporation
:
EVO Payments, Inc.
Ten Glenlake Parkway, South Tower, Suite 950
Atlanta, GA 30328
Attention: Chief Financial Officer
Email: Kevin.Hodges@evopayments.com
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If to the Company
:
EVO Investco, LLC
Ten Glenlake Parkway, South Tower, Suite 950
Atlanta, GA 30328
Attention: Chief Financial Officer
Email: Kevin.Hodges@evopayments.com
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with a copy to
:
King & Spalding LLP
1180 Peachtree Street, N.E.
Atlanta, GA 30309
Attention: Keith M. Townsend
Zachary L. Cochran
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with a copy to
:
King & Spalding LLP
1180 Peachtree Street, N.E.
Atlanta, GA 30309
Attention: Keith M. Townsend
Zachary L. Cochran
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zcochran@kslaw.com
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zcochran@kslaw.com
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Email: ktownsend@kslaw.com
zcochran@kslaw.com
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Email: ktownsend@kslaw.com
zcochran@kslaw.com
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Section 16.06.
Binding Effect; Intended Beneficiaries
. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.
Section 16.07.
Creditors
. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Company or any of its Affiliates, and no creditor who makes a loan to the Company or any of its Affiliates may have or acquire (except pursuant to the terms of a separate agreement executed by the Company in favor of such creditor) at any time as a result of making the loan any direct or indirect interest in Company Profits, Losses, Distributions, capital or property other than as a secured creditor.
Section 16.08.
Waiver
. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition.
Section 16.09.
Counterparts
. This Agreement may be executed in separate counterparts, each of which will be an original and all of which together shall constitute one and the same agreement binding on all the parties hereto.
Section 16.10.
Applicable Law
. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. Any dispute relating hereto shall be heard first in the Delaware Court of Chancery, and, if applicable, in any state or federal court located in of Delaware in which appeal from the Court of Chancery may validly be taken under the laws of the State of Delaware (each a "
Chosen Court
" and collectively, the "
Chosen Courts
"), and the parties, and any Member or holder of Units pursuant to this Agreement, by acceptance of the rights and benefits thereof, agree to the exclusive jurisdiction and venue of the Chosen Courts. Such Persons further agree that any proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement, the Company Interests, the Units, the Company, the Members, the Manager, or the transactions contemplated hereby or by any matters related to the foregoing (the "
Applicable Matters
") shall be brought exclusively in a Chosen Court, and that any proceeding arising out of this Agreement or any other Applicable Matter shall be deemed to have arisen from a transaction of business in the State of Delaware, and each of the foregoing Persons hereby irrevocably consents to the jurisdiction of such Chosen Courts in any such proceeding and irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that such Person may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such Chosen Court or that any such proceeding brought in any such Chosen Court has been brought in an inconvenient forum. Such Persons further covenant not to bring a proceeding with respect to the Applicable Matters (or that could affect any Applicable Matter) other than in such Chosen Court and not to challenge or enforce in another jurisdiction a judgment of such Chosen Court. Process in any such proceeding may be served on any Person with respect to such Applicable Matters anywhere in the world, whether within or without the jurisdiction of any such Chosen Court. Without limiting the foregoing, each such Person agrees that service of process on such party as provided in
Section 16.05
shall be deemed effective service of process on such Person. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING
RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY. Any Member or any Person purchasing or otherwise acquiring Units shall be deemed to have notice of and consented to the provisions of this Section 16.10.
Section 16.11.
Severability
. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
Section 16.12.
Further Action
. The parties shall execute and deliver all documents, provide all information and take or refrain from taking such actions as may be reasonably necessary or appropriate to achieve the purposes of this Agreement.
Section 16.13.
Delivery by Electronic Transmission
. This Agreement and any signed agreement or instrument entered into in connection with this Agreement or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of an electronic transmission, including by a facsimile machine or via email, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. Promptly upon the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of electronic transmission by a facsimile machine or via email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through such electronic transmission as a defense to the formation of a contract and each such party forever waives any such defense.
Section 16.14.
Right of Offset
. Whenever the Company is to pay any sum (other than pursuant to
Article IV
) to any Member, any amounts that such Member owes to the Company which are not the subject of a good faith dispute may be deducted from that sum before payment. For the avoidance of doubt, the distribution of Units to the Corporation shall not be subject to this
Section 16.14
.
Section 16.15.
Effectiveness
. This Agreement shall be effective immediately prior to the closing of the IPO on the IPO Closing Date (the “
Effective Time
”). The First Amended and Restated LLC Agreement shall govern the rights and obligations of the Continuing LLC Owners in their capacity as holders of Original Units prior to the Effective Time.
Section 16.16.
Entire Agreement
. This Agreement, those documents expressly referred to herein (including the Exchange Agreement, the Registration Rights Agreement and the Tax Receivable Agreement), any indemnity agreements entered into in connection with the First Amended and Restated LLC Agreement with any member of the board of managers at that time and other documents of even date herewith embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. For the avoidance of doubt, the First Amended and Restated LLC Agreement is superseded by this Agreement as of the Effective Time and shall be of no further force and effect thereafter.
Section 16.17.
Remedies
. Each Member shall have all rights and remedies set forth in this Agreement and all rights and remedies which such Person has been granted at any time under any other agreement or contract and all of the rights which such Person has under any Law. Any Person having any
rights under any provision of this Agreement or any other agreements contemplated hereby shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by Law.
Section 16.18.
Descriptive Headings; Interpretation
. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. The words “hereof,” “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Whenever required by the context, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. The use of the word “including” in this Agreement shall be by way of example rather than by limitation. Any statute or laws defined or referred to herein shall include any rules, regulations or forms promulgated thereunder from time to time, and references to such statutes, laws, rules, regulations and forms shall be to such statutes, laws, rules, regulations and forms as they may be from time to time, amended, amended and restated, modified or supplemented, including by succession of comparable statutes, laws, rules, regulations and forms. Reference to any agreement, document or instrument means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof, and shall include all schedules, exhibits and annexes to such agreement, document or instrument. References to the Preamble, Recitals, Articles and Sections are to the Preamble, Recitals, Articles and Sections of this Agreement unless otherwise specified. Wherever required by the context, references to a Fiscal Year shall refer to a portion thereof. The use of the words “or,” “either” and “any” shall not be exclusive. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Wherever a conflict exists between this Agreement and any other agreement, this Agreement shall control but solely to the extent of such conflict.
IN WITNESS WHEREOF, the undersigned have executed this Second Amended and Restated Limited Liability Company Agreement as of the date first written above.
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COMPANY:
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EVO INVESTCO, LLC
, a Delaware limited liability company
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By:
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EVO Payments, Inc., its Manager
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By:
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/s/ Steven J. de Groot
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Name: Steven J. de Groot
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Title: Executive Vice President and General Counsel
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CORPORATION:
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EVO PAYMENTS, INC.
, a Delaware corporation
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By:
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/s/ Steven J. de Groot
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Name: Steven J. de Groot
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Title: Executive Vice President and General Counsel
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[Signature Page – Second Amended and Restated Limited Liability Company Agreement]
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MEMBERS:
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MADISON DEARBORN CAPITAL PARTNERS VI-B, L.P.
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its:
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Managing Director
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MADISON DEARBORN CAPITAL PARTNERS VI
EXECUTIVE-B, L.P.
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its:
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Managing Director
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MDCP VI-C CARDSERVICES SPLITTER, L.P.
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its:
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Managing Director
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[Signature Page – Second Amended and Restated Limited Liability Company Agreement]
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MDCP CARDSERVICES LLC
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By:
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Madison Dearborn Capital Partners VI-B, L.P.
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Its:
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Controlling Member
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its:
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Managing Director
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[Signature Page – Second Amended and Restated Limited Liability Company Agreement]
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BLUEAPPLE, INC.
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By:
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/s/ Ray Sidhom
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Name: Ray Sidhom
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Its: Chief Executive Officer and President
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/s/ James G. Kelly
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James G. Kelly
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James G. Kelly Grantor Trust Dated January 12, 2012
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By:
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/s/ John Kelly
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Name: John Kelly
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Its: Trustee
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/s/ Michael L. Reidenbach
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Michael L. Reidenbach
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/s/ Brendan Tansill
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Brendan Tansill
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/s/ Steven J. de Groot
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Steven J. de Groot
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/s/ Kevin Hodges
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Kevin Hodges
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/s/ David Goldman
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David Goldman
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/s/ Jeff Rosenblatt
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Jeff Rosenblatt
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/s/ Kevin Lambrix
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Kevin Lambrix
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[Signature Page – Second Amended and Restated Limited Liability Company Agreement]
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/s/ James Raftice
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James Raftice
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/s/ Peter Cohen
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Peter Cohen
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/s/ Alon Kindler
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Alon Kindler
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/s/ Blake Pyle
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Blake Pyle
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/s/ Greg Robertson
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Greg Robertson
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/s/ Mark Harrelson
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Mark Harrelson
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|
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/s/ John Crouch
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John Crouch
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/s/ Ayman Ibrahaim
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Ayman Ibrahaim
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[Signature Page – Second Amended and Restated Limited Liability Company Agreement]
SCHEDULE 1
SCHEDULE OF CONTINUING LLC OWNERS
1
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|
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Existing Membership Units
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Continuing LLC Owner
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A
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B
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C
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E
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D-1
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D-2
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Blueapple, Inc. (f/k/a Holdco)
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6,374,245
|
|
|
|
—
|
|
213,038
|
|
—
|
|
—
|
|
Madison Dearborn Capital Partners VI-B, L.P.
|
|
—
|
|
2,904,083
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Madison Dearborn Capital Partners VI Executive-B, L.P.
|
|
—
|
|
29,927
|
|
—
|
|
—
|
|
—
|
|
—
|
|
MDCP VI-C Cardservices Splitter, L.P.
|
|
—
|
|
572,077
|
|
—
|
|
—
|
|
—
|
|
—
|
|
MDCP Cardservices, LLC
|
|
—
|
|
—
|
|
—
|
|
613,811
|
|
—
|
|
—
|
|
James G. Kelly
|
|
—
|
|
—
|
|
—
|
|
4,261
|
|
173,708
|
|
—
|
|
James G. Kelly Grantor Trust Dated January 12, 2012
|
|
—
|
|
—
|
|
101,349
|
|
7,101
|
|
75,402
|
|
13,840
|
|
Jeff Rosenblatt
|
|
—
|
|
—
|
|
164,090
|
|
10,000
|
|
161,183
|
|
—
|
|
Michael L. Reidenbach
|
|
—
|
|
—
|
|
11,667
|
|
10,814
|
|
109,509
|
|
5,000
|
|
Brendan Tansill
|
|
—
|
|
—
|
|
1,061
|
|
5,000
|
|
109,509
|
|
5,000
|
|
Steve de Groot
|
|
—
|
|
—
|
|
1,061
|
|
5,000
|
|
109,509
|
|
5,000
|
|
Kevin Lambrix
|
|
—
|
|
—
|
|
636
|
|
355
|
|
54,111
|
|
—
|
|
Kevin Hodges
|
|
—
|
|
—
|
|
1,061
|
|
1,421
|
|
109,509
|
|
5,000
|
|
James Raftice
|
|
—
|
|
—
|
|
—
|
|
5,722
|
|
64,125
|
|
—
|
|
Peter Cohen
|
|
—
|
|
—
|
|
1,061
|
|
1,645
|
|
17,370
|
|
—
|
|
Alon Kindler
|
|
—
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|
—
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|
636
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|
2,053
|
|
22,370
|
|
—
|
|
Blake Pyle
|
|
—
|
|
—
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12,160
|
|
|
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11,316
|
|
—
|
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Greg Robertson
|
|
—
|
|
—
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25,461
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3,719
|
|
16,212
|
|
—
|
|
Mark Harrelson
|
|
—
|
|
—
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|
23,766
|
|
3,568
|
|
16,212
|
|
—
|
|
John Crouch
|
|
—
|
|
—
|
|
26,650
|
|
3,693
|
|
7,643
|
|
—
|
|
David Goldman
|
|
—
|
|
—
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3,900
|
|
348
|
|
—
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|
—
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Ayman Ibrahim
|
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—
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—
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—
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700
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15,000
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|
—
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|
Total
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6,374,245
|
|
3,506,087
|
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374,559
|
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1,011,931
|
|
1,072,688
|
|
33,840
|
1
Excludes 119,682 Class E units held by MDCP VI-C Cardservices Splitter II, L.P., which will be liquidated in connection with the consummation of the MDP Blocker Sub Merger as described in the Registration Statement on Form S-1 (File No. 333-224434), and therefore, will not be a Continuing LLC Owner.
SCHEDULE 2
SCHEDULE OF MEMBERS AT THE EFFECTIVE TIME
2
|
|
|
|
|
|
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Continuing LLC Owner
|
|
Number of
Common Units
|
|
Percentage
Interest
|
|
|
Blueapple, Inc. (f/k/a Holdco)
|
|
35,913,538
|
|
56.6046
|
%
|
|
Madison Dearborn Capital Partners VI-B, L.P.
|
|
15,832,915
|
|
24.9548
|
%
|
|
Madison Dearborn Capital Partners VI Executive-B, L.P.
|
|
163,161
|
|
0.2572
|
%
|
|
MDCP VI-C Cardservices Splitter, L.P.
|
|
3,118,935
|
|
4.9159
|
%
|
|
MDCP Cardservices, LLC
|
|
3,346,467
|
|
5.2745
|
%
|
|
James G. Kelly
|
|
451,956
|
|
0.7123
|
%
|
|
James G. Kelly Grantor Trust Dated January 12, 2012
|
|
787,662
|
|
1.2415
|
%
|
|
Jeff Rosenblatt
3
|
|
1,346,943
|
|
2.1230
|
%
|
|
Michael L. Reidenbach
|
|
396,563
|
|
0.6250
|
%
|
|
Brendan Tansill
|
|
307,042
|
|
0.4839
|
%
|
|
Steve de Groot
|
|
307,042
|
|
0.4839
|
%
|
|
Kevin Lambrix
|
|
138,953
|
|
0.2190
|
%
|
|
Kevin Hodges
|
|
287,530
|
|
0.4532
|
%
|
|
James Raftice
|
|
189,462
|
|
0.2986
|
%
|
|
Peter Cohen
|
|
57,624
|
|
0.0908
|
%
|
|
Alon Kindler
|
|
69,871
|
|
0.1101
|
%
|
|
Blake Pyle
|
|
94,225
|
|
0.1485
|
%
|
|
Greg Robertson
|
|
199,100
|
|
0.3138
|
%
|
|
Mark Harrelson
|
|
189,036
|
|
0.2979
|
%
|
|
John Crouch
|
|
184,292
|
|
0.2905
|
%
|
|
David Goldman
|
|
23,160
|
|
0.0365
|
%
|
|
Ayman Ibrahim
|
|
40,838
|
|
0.0644
|
%
|
|
Total
|
|
63,446,315
|
|
100.0000
|
%
|
2
The list of members and number of Common Units at the Effective Time excludes the Corporation with respect to Common Units (1) to be held in an amount equal to the number of shares of Class A Common Stock to be received by Madison Dearborn Capital Partners VI-C, L.P. in connection with the MDP Blocker Sub Merger and (2) issued with respect to the conversion of outstanding unit appreciation rights previously issued by the Company as described in the Registration Statement on Form S‑1 (File No. 333-224434).
3
Includes 666,667 Common Units that will be exchanged for shares of Class A Common Stock and sold in the IPO.
Exhibit A
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of____ , 20__ (this “
Joinder
”), is delivered pursuant to that certain Second Amended and Restated Limited Liability Company Agreement, dated as of _______, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “
LLC Agreement
”) by and among EVO Investco, LLC, a Delaware limited liability company (the “
Company
”), EVO Payments, Inc., a Delaware corporation and the sole Manager of the Company (the “
Corporation
”), and each of the Members from time to time party thereto. Capitalized terms used but not otherwise defined herein have the respective meanings set forth in the LLC Agreement.
1.
Joinder to the LLC Agreement
. Upon the execution of this Joinder by the undersigned and delivery hereof to the Corporation, the undersigned hereby is and hereafter will be a Member under the LLC Agreement and a party thereto, with all the rights, privileges and responsibilities of a Member thereunder. The undersigned hereby agrees that it shall comply with and be fully bound by the terms of the LLC Agreement as if it had been a signatory thereto as of the date thereof.
2.
Incorporation by Reference
. All terms and conditions of the LLC Agreement are hereby incorporated by reference in this Joinder as if set forth herein in full.
3.
Address
. All notices under the LLC Agreement to the undersigned shall be direct to:
[Name]
[Address]
[City, State, Zip Code]
Attn:
Facsimile:
E-mail:
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Joinder as of the day and year first above written.
|
|
|
|
|
|
[NAME OF NEW MEMBER]
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
Acknowledged and agreed
|
|
|
|
|
|
As of the date first set forth above:
|
|
|
|
|
|
EVO INVESTCO, LLC
|
|
|
|
|
|
By:
|
EVO Payments, Inc., its Manager
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
Exhibit B
FORM OF SPOUSAL CONSENT
I, being the spouse of a party to the Second Amended and Restated Limited Liability Company Agreement dated May 22, 2018 (the “
LLC Agreement
”) of EVO Investco LLC, a Delaware limited liability company (the “
Company
”) [who is an Employee Member // whose interest in the Company has been transferred to and is held by a trust (the “Trust”) that is now party to the LLC Agreement of the Company], do hereby consent to the provisions of the LLC Agreement and acknowledge and certify that:
1. I have read the LLC Agreement and understand its contents.
2. I am aware that, by the provisions of the LLC Agreement, under certain limited circumstances my spouse agrees to sell to the other Members, or otherwise grants to the other Members an option to purchase, part or all of his or her limited liability company interest in the Company (“
LLC Interest
”), including my community property interest (if any) in such LLC Interest.
3. I am aware that, by the provisions of the LLC Agreement, upon my death or in the event that my spouse and I are divorced, I or my legal representatives may be required to sell my community property interest (if any) in the LLC Interest of my spouse to the Members of the Company if my spouse does not succeed to such community property interest.
4. I hereby consent to the sale of my community property interest (if any) pursuant to the terms and conditions of the LLC Agreement, approve of the provisions of the LLC Agreement and agree that my spouse’s LLC Interest and my interest in it are subject to the provisions of the LLC Agreement. I promise that I will not take action at any time to hinder the operation of the LLC Agreement with respect to my spouse’s LLC Interest and my interest in it, in accordance with the terms of the LLC Agreement.
5. I have been given the opportunity to retain and consult with separate legal counsel with respect to the LLC Agreement and my community property interest (if any) in the LLC Interest of my spouse.
In the case of any inconsistency between this Spousal Consent and the provisions of the LLC Agreement, the provisions of the LLC Agreement shall control.
Witness my signature this [
] day of [
], [
].
|
|
|
|
|
Print Name:
|
|
|
Print Name of Spouse:
|
Exhibit 10.3
Execution Version
EVO PAYMENTS, INC.
REGISTRATION RIGHTS AGREEMENT
Dated as of May 22, 2018
TABLE OF CONTENTS
Page
|
1.
|
DEMAND AND SHELF REGISTRATIONS
|
1
|
|
|
|
|
|
|
|
1.1.
|
Requests for Non-Shelf Registration
|
1
|
|
|
1.2.
|
Demand Notice
|
2
|
|
|
1.3.
|
Short-Form Registrations
|
3
|
|
|
1.4.
|
Shelf Registration Statements
|
3
|
|
|
1.5.
|
Resale Shelf Registration Statement
|
4
|
|
|
1.6.
|
Notices in Connection with Shelf Registration Statement
|
4
|
|
|
1.7.
|
Shelf Take-Downs
|
4
|
|
|
1.8.
|
Priority on Demand Registrations
|
6
|
|
|
1.9.
|
Suspension of Registration.
|
7
|
|
|
1.10.
|
Selection of Underwriters
|
8
|
|
|
1.11.
|
Other Registration Rights
|
8
|
|
|
|
|
|
|
2.
|
PIGGYBACK REGISTRATIONS
|
9
|
|
|
|
|
|
|
|
2.1.
|
Right to Piggyback
|
9
|
|
|
2.2.
|
Priority on Primary Registrations
|
9
|
|
|
2.3.
|
Priority on Secondary Registrations
|
10
|
|
|
2.4.
|
Withdrawal of Piggyback Registration; Expenses
|
10
|
|
|
|
|
|
|
3.
|
REGISTRATION AND COORDINATION GENERALLY
|
10
|
|
|
|
|
|
|
|
3.1.
|
Registration Procedures
|
10
|
|
|
3.2.
|
Obligations of Holders of Registrable Securities
|
14
|
|
|
3.3.
|
Registration Expenses
|
15
|
|
|
3.4.
|
Underwritten Offerings
|
15
|
|
|
3.5.
|
Current Information; Rule 144 Reporting
|
17
|
|
|
3.6.
|
In Kind Distributions
|
17
|
|
|
|
|
|
|
4.
|
INDEMNIFICATION
|
17
|
|
|
|
|
|
|
|
4.1.
|
Indemnification by the Company
|
17
|
|
|
4.2.
|
Indemnification by Holders of Registrable Securities
|
18
|
|
|
4.3.
|
Procedure
|
18
|
|
|
4.4.
|
Entry of Judgment; Settlement
|
19
|
|
|
4.5.
|
Contribution
|
19
|
|
|
4.6.
|
Other Rights
|
20
|
|
|
4.7.
|
Indemnification Payments
|
20
|
|
|
|
|
|
|
5.
|
DEFINITIONS AND RULES OF CONSTRUCTION
|
20
|
|
|
|
|
|
|
|
5.1.
|
Definitions
|
20
|
|
|
5.2.
|
Rules of Construction
|
23
|
|
6.
|
MISCELLANEOUS
|
24
|
|
|
|
|
|
|
|
6.1.
|
No Inconsistent Agreements
|
24
|
|
|
6.2.
|
Adjustments Affecting-Registrable Securities
|
24
|
|
|
6.3.
|
Remedies
|
24
|
|
|
6.4.
|
Amendment and Waiver
|
24
|
|
|
6.5.
|
Successors and Assigns; Transferees
|
24
|
|
|
6.6.
|
Reserved
|
25
|
|
|
6.7.
|
Severability
|
25
|
|
|
6.8.
|
Counterparts
|
25
|
|
|
6.9.
|
Descriptive Headings; No Strict Construction
|
25
|
|
|
6.10.
|
Notices
|
25
|
|
|
6.11.
|
Electronic Delivery
|
27
|
|
|
6.12.
|
Governing Law; Consent to Jurisdiction; WAIVER OF JURY TRIAL
|
27
|
|
|
6.13.
|
Exercise of Rights and Remedies
|
28
|
|
|
6.14.
|
Aggregation of Registrable Securities
|
28
|
|
|
6.15.
|
Independent Nature of Each Holder’s Obligations
|
29
|
|
|
6.16.
|
Dilution
|
29
|
|
|
6.17.
|
Replacement of Prior Agreement; Effectiveness
|
29
|
|
|
6.18.
|
Joinder with Respect to Certain Rights and Obligations
|
29
|
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “
Agreement
”) is made as of May 22, 2018 by and among:
(i) EVO Payments, Inc., a Delaware corporation (together with its successors and permitted assigns, the “
Company
”);
(ii) Each of the Persons identified on
Schedule I
attached hereto (together with their respective transferees, “
MDP
”);
(iii) Each of the Persons identified on
Schedule II
attached hereto (together with their respective transferees, each a “
Management Stockholder
” and together the “
Management Stockholders
”);
(iv) such other Persons, if any, that from time to time become parties hereto (collectively, and together with their respective transferees, MDP and the Management Stockholders, the “
Stockholders
”); and
(v) with respect to
Section 6.18
, Blueapple, Inc., a Delaware corporation (together with its transferees, “
Blueapple
”).
Unless otherwise noted herein, capitalized terms used herein shall have the meanings set forth in
Section 5
.
RECITALS
WHEREAS
, the Company is currently pursuing an initial public offering of its Class A Common Stock, the proceeds of which will be used to purchase newly-issued common units in EVO Investco, LLC; and
WHEREAS
, the Company and certain of the parties hereto are also party to that certain Registration Rights Agreement, dated December 27, 2012 (the “
Prior Registration Rights Agreement
”), which they now desire to replace in its entirety with this Agreement.
NOW, THEREFORE
, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
AGREEMENT
1.
DEMAND AND SHELF REGISTRATIONS
.
1.1.
Requests for Non-Shelf Registration
s. Subject to the terms and conditions of this Agreement, (a) MDP may require the Company (subject to any contractual lock-up agreements then in effect) to register under the Securities Act all or part of its Registrable Securities (including, in the case of delivery of a Call Option Put Notice, Company-Offered Registrable Securities) having an anticipated aggregate offering price of at least $10 million, individually or
in the aggregate with other Registrable Securities, based on the last sales price of the shares of Class A Common Stock as of the trading date prior to the date of notice, and (b) the Company (subject to any contractual lock-up agreements then in effect), acting in response to its receipt of a Sale Notice, with respect to Registrable Securities having an anticipated aggregate offering price of at least $10 million, individually or in the aggregate with other Registrable Securities, based on the last sales price of the shares of Class A Common Stock as of the trading date prior to the date of notice, may initiate registration under the Securities Act of the number of Company-Offered Registrable Securities necessary to permit the Company to purchase Common Units under the LLC Agreement in response to such Sale Notice. Notwithstanding anything contained herein to the contrary, MDP will only be entitled to deliver four (4) requests for Demand Registration within any twelve (12) month period;
provided
that (i) a registration shall not count as a Demand Registration unless and until such Demand Registration becomes effective and MDP is able to register and sell at least 75% of the Registrable Securities offered by it in such Demand Registration and (ii) any Demand Registration initiated by the Company in which MDP sells Registrable Securities shall constitute a Demand Registration requested by MDP for purposes of this limitation.
1.2.
Demand Notice for Non-Shelf Registrations
.
(a) All requests by MDP for Demand Registrations shall be made by giving written notice to the Company (a “
Demand Notice
”). A Call Option Put Notice pursuant to which the Company will be required to use commercially reasonable efforts to offer and sell a number of Company-Offered Registrable Securities shall constitute a Demand Notice for purposes of this Agreement (it being understood that any Call Option Put Notice delivered in connection with a separate Demand Notice shall be deemed to be part of the same, single Demand Notice). Each Demand Notice shall specify the approximate number of Registrable Securities that MDP requests to be registered. As promptly as practicable, and in any event within five (5) Business Days after receipt of a Demand Notice, the Company will give written notice of such request to all other holders of Stockholder-Offered Registrable Securities and to Blueapple (in accordance with Section 11.01(a) of the LLC Agreement) and, subject to
Section 1.8
, will include in such registration (and in all related registrations and qualifications under blue sky laws or in compliance with other registration requirements and in any related underwriting) (i) all Stockholder-Offered Registrable Securities with respect to which the Company has received written requests for inclusion therein from Stockholders within five (5) Business Days after the delivery of the Company’s notice and (ii) such number of Company-Offered Registrable Securities as necessary to permit (a) if applicable, the purchase of the Call Option and payment of the exercise price for the Call Option on the terms provided in the Exchange Agreement and (b) the Company to purchase any Common Units that the Company has received a written request from Blueapple to purchase within five (5) Business Days after the delivery of the Company’s notice.
(b) As promptly as practicable, and in any event within five (5) Business Days after receipt of any Sale Notice in response to which the Company intends to initiate a Demand Registration, the Company will give written notice of such Demand Registration to all holders of Stockholder-Offered Registrable Securities and the Call Option Holder and, subject to
Section 1.8
, will include in such registration (and in all related
registrations and qualifications under blue sky laws or in compliance with other registration requirements and in any related underwriting) (a) all Stockholder-Offered Registrable Securities with respect to which the Company has received written requests for inclusion therein from Stockholders within five (5) Business Days after the delivery of the Company’s notice and (b) a number of Company-Offered Registered Securities necessary to permit the purchase, if applicable, of the portion of the Call Option specified in a Call Option Put Notice and the payment of the exercise price therefor on the terms provided in the Exchange Agreement.
(c) In the event that a Call Option Put Notice is delivered as or as part of a Demand Notice for an underwritten offering, MDP may require (i) all holders of Stockholder-Offered Registrable Securities participating in such Demand Registration pursuant to
Section 1.2(b)
to instead sell their Stockholder-Offered Registrable Securities to be included in such Demand Registration to the Company and (ii) the Company to register such number of shares of Class A Common Stock in a primary offering sufficient to purchase all such Stockholder-Offered Registrable Securities pursuant to
Section 1.2(c)(i)
. In the event that any Demand
Registration for an underwritten offering is conducted as a primary offering pursuant to this
Section 1.2(c)
, the terms of this Agreement shall apply to such offering with each holder of Stockholder-Offered Registrable Securities participating in such Demand Registration being treated to the fullest extent possible as having directly registered the Stockholder-Offered Registrable Securities to be purchased by the Company in such offering for purposes of ascertaining the rights and obligations of such holders, the Call Option Holder and Blueapple under this Agreement.
1.3.
Short-Form Registrations
. Demand Registrations will be registered on Form S-1 or any similar or successor long-form registration statement (“
Long-Form Registration Statement
”) or Form S-3 or any similar or successor short-form registration (“
Short-Form Registration Statements
”) whenever the Company is permitted to use any applicable short-form (unless the managing underwriter(s) of such offering requests that such Demand Registration be on a Long-Form Registration Statement. The Company will use its reasonable best efforts to make Short-Form Registration Statements available for the sale of Registrable Securities.
1.4.
Shelf Registration Statements
. During any time when Short-Form Registration Statements are available for the sale of Registrable Securities, Blueapple or MDP may require the Company to file a Short-Form Registration Statement with the Securities and Exchange Commission in accordance with and pursuant to Rule 415 under the Securities Act (or any successor rule then in effect) (a “
Shelf Registration Statement
”) registering such Registrable Securities with respect to which the Company has received written requests for inclusion therein from MDP or Blueapple, as applicable, and any other Registrable Securities requested to be included pursuant to
Section 1.6
. The Company shall use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Exchange Act as soon as practicable after filing. At the request of MDP, such Shelf Registration Statement (including any Resale Shelf Registration Statement) will refer to the Stockholders in a generic manner as permitted under Rule 430B (in which case, if the Company is required to specify a number of Registrable Securities being registered on such Shelf Registration Statement, the Company shall register a number of Registrable Securities on behalf of each Stockholder in the same proportion
as the Registrable Securities requested to be registered by MDP bear to the number of Registrable Securities beneficially owned by MDP) and, if at the time of such request, the Company is a WKSI, at the request of MDP, such Shelf Registration Statement shall cover an unspecified number of Registrable Securities to be sold by the Stockholders. Once effective, the Company shall cause any Shelf Registration Statement (including the Resale Shelf Registration Statement) to remain continuously effective for a period ending on the earlier of (i) the third anniversary of the date of effectiveness of such Shelf Registration Statement, (ii) the date on which all Registrable Securities included in such registration have been sold or distributed pursuant to such Shelf Registration Statement, (iii) the date as of which all of the Stockholder-Offered Registrable Securities included in such Shelf Registration Statement cease to be Stockholder-Offered Registrable Securities, and (iv) to the extent any Company-Offered Registrable Securities have been registered thereunder with respect to the Company’s obligation in connection with receipt of a Call Option Put Notice, until the expiration of the Call Option.
1.5.
Resale Shelf Registration Statement
. Without limiting the generality of
Section 1.4
, unless MDP instructs the Company otherwise in writing with respect to its Registrable Securities (and, for the Call Option Holder, with respect to the applicable Company-Offered Registrable Securities) or Blueapple instructs the Company otherwise in writing with respect to the registration of Company-Offered Registrable Securities, the Company shall use its reasonable best efforts to cause a Shelf Registration Statement for the sale or distribution of Registrable Securities, including by way of an underwritten offering, block sale or other distribution plan (the “
Resale Shelf Registration Statement
”), to be filed and declared effective under the Securities Act as soon as practicable after such time as the Company is eligible to file a Short Form Registration Statement (subject to the expiration of any lock-up period applicable to the Company and the Stockholders).
1.6.
Notices in Connection with Shelf Registration Statement
. In the event the Company is filing a Shelf Registration Statement pursuant to
Section 1.4
or
Section 1.5
, the Company shall give notice to each Stockholder, the Call Option Holder and Blueapple in the manner and within the time periods set forth in
Section 1.2
and, subject to
Section 1.8
, will include in such Shelf Registration Statement (i) all Stockholder-Offered Registrable Securities with respect to which the Company has received written requests for inclusion therein from Stockholders within five (5) Business Days after the delivery of the Company’s notice and (ii) such number of Company-Offered Registrable Securities as necessary (i) to permit the Company to purchase any Common Units that the Company has received a written request from Blueapple to purchase within five (5) Business Days after the delivery of the Company’s notice and (ii)
if applicable, to permit the Company to purchase all or such portion of the Call Option as requested by the Call Option Holder and to pay the exercise price therefor on the terms provided in the Exchange Agreement
. No notice shall be required to be delivered to Stockholders in connection with a Shelf Registration Statement in which Stockholders are not named in reliance on Rule 430B because all Stockholder-Offered Registrable Securities will be included up to the applicable percentage specified by MDP or in connection with a Shelf Registration Statement registering an indeterminate amount of Class A Common Stock.
1.7.
Shelf Take-Downs
.
(a) At any time that a Shelf Registration Statement (including the Resale Shelf Registration Statement) is effective (subject to any contractual lock-up agreements then in effect), if MDP delivers a notice to the Company (a “
Take-Down Notice
”) stating that it intends to effect an offering from such Shelf Registration Statement (a “
Shelf Offering
”) of all or part of its Registrable Securities included by it on such Shelf Registration Statement, whether such offering is underwritten or non-underwritten, and stating the number of its Registrable Securities to be included in the Shelf Offering, then the Company shall amend or supplement such Shelf Registration Statement, as may be necessary in order to enable such Registrable Securities to be distributed pursuant to the Shelf Offering (taking into account the inclusion of Registrable Securities pursuant to this
Section 1.7
). Promptly upon receipt of a Take-Down Notice (and in no event later than the second Business Day thereafter), the Company shall give written notice of the Take-Down Notice to all other Potential Takedown Participants (including Blueapple in accordance with Section 11.01(a) of the LLC Agreement). No notice shall be required to be delivered to Blueapple or any Stockholder in connection with any Take-Down Notice indicating that MDP intends to engage in a non-unwritten transaction (
e.g.
, a sale to a broker or market maker in a non-underwritten block trade). Any such Take-Down Notice indicating that MDP intends to engage in a non-unwritten transaction (
e.g.
, a sale to a broker or market maker in a non-underwritten block trade) must be (i) received by 5:00 p.m., New York City Time, on the Business Day prior to the date on which such transaction is expected to occur and (ii) executed by MDP within three Business Days after such Take-Down Notice is received by the Company.
(b) At any time that a Shelf Registration Statement (including the Resale Shelf Registration Statement) is effective, after receipt of a Sale Notice or Call Option Put Notice in response to which the Company intends to initiate a Shelf Offering, the Company will give written notice of such Shelf Offering as promptly as practicable to all Potential Takedown Participants and in any event no later than the second Business Day after receipt of the Sale Notice.
(c) Any Potential Takedown Participant wishing to include Registrable Securities with respect to an underwritten Take-Down Offering (whether initiated by the Company or MDP) shall inform the Company as promptly as practicable of the number of Registrable Securities it seeks to have included in such Take-Down Offering, which shall not exceed the number of Registrable Securities registered on behalf of such Potential Takedown Participant in the applicable Shelf Registration Statement. Such notice shall be given by the Stockholder as promptly as practicable, but in no event later than the earlier of (1) 5:00 p.m., New York City time, on the Business Day prior to the date on which a preliminary prospectus or prospectus supplement intended to be used in connection with pre-pricing marketing efforts for such takedown is finalized and (2) the second Business Day after the delivery of the Company’s notice pursuant to
Section 1.7(a)
or
1.7(b)
, as applicable. Subject to
Section 1.8
, the Company shall include in such Shelf Offering (i) all Stockholder-Offered Registrable Securities with respect to which the Company has received written requests for inclusion therein from Potential Takedown Participants within the foregoing time period and (ii) such number of Company-Offered Registrable Securities as necessary to permit the Company to purchase (x) any Common Units that the Company has received a written request from Blueapple
to purchase within the foregoing time period and (y) if applicable, all or such portion of the Call Option as requested by the Call Option Holder and to pay the exercise price therefor on the terms provided in the Exchange Agreement to the extent notice is received within the foregoing time periods.
(d) Any Shelf Offering in connection with which the Company is required to sign an underwriting agreement, the Company’s outside counsel are requested to provide a legal opinion (other than a legal opinion to the Company’s transfer agent), the Company’s independent public accountants are requested to provide a comfort letter or the Company’s executive officers are requested to participate in a “road show” or other material selling efforts shall constitute a Demand Registration for purposes of the limitation contained in
Section 1.1
, whether or not such Shelf Offering is underwritten.
(e) In the event that a Call Option Put Notice is delivered as or as part of a Takedown Notice for an underwritten offering and the Company is able to register a sufficient number of shares of Class A Common Stock under the Shelf Registration Statement to which such Takedown Notice relates, MDP may require (i) all Potential Takedown Participants participating in such Shelf Offering pursuant to
Section 1.7(c)
to sell their Stockholder-Offered Registrable Securities to be included in such Shelf Offering to the Company and (ii) the Company to register such number of shares of Class A Common Stock in a primary offering sufficient to purchase all such Stockholder-Offered Registrable Securities pursuant to
Section 1.7(e)(i)
. In the event that any underwritten Shelf Offering is conducted as a primary offering pursuant to this
Section 1.2(e)
, the terms of this Agreement shall apply to such offering with each Potential Takedown Participant participating in such Shelf Offering being treated to the fullest extent possible as having directly registered the Stockholder-Offered Registrable Securities to be purchased by the Company in such offering for purposes of ascertaining the rights and obligations of such holders, the Call Option Holder and Blueapple under this Agreement.
1.8.
Priority on Demand Registrations
. The Company shall not include in any Demand Registration or Shelf Offering, any securities that are not Registrable Securities without the prior written consent of MDP and Blueapple. If a Demand Registration or Shelf Offering is an underwritten offering and the managing underwriter(s) or broker-dealer(s) advises MDP or the Company, as applicable, that in its opinion the number of Registrable Securities and, if permitted hereunder, other securities requested to be included in such offering exceeds the maximum number of Registrable Securities and other securities, if any, which can be sold therein without adversely affecting the price, timing or distribution of the offering (such maximum number, the “
Maximum Offering Amount
”), then the Company shall include in such registration: (a) first, the Registrable Securities that can be sold without exceeding the Maximum Offering Amount, pro rata based on the number of Registrable Securities held by each Stockholder, the Call Option Holder or by Blueapple, and (b) second, to the extent that the Maximum Offering Amount has not been reached, any other securities requested to be included in such Demand Registration or Shelf Offering that can be sold without exceeding the Maximum Offering Amount;
provided
that if such managing underwriter(s) or broker-dealer(s) provide written notice advising in good faith, based upon the then prevailing market precedent and public investor expectations, that participation in the offering by any Management Stockholder would
materially and adversely affect the marketability of such offering, then Registrable Securities held by one or more Management Stockholders may be excluded (in whole or in part) from such offering, even if such exclusion would not treat such Management Stockholder on a pro rata basis.
1.9.
Suspension of Registration
.
(a) Notwithstanding anything in this
Section 1
to the contrary, subject to the provisions of this
Section 1.9
, the Company shall be permitted, in limited circumstances, to delay the filing of a registration statement pursuant to this Agreement and to suspend the use, from time to time, of the prospectus contained in any registration statement filed pursuant to this Agreement, by providing written notice (a “
Suspension Notice
”) to Blueapple and the Stockholders, for such times as the Company reasonably may determine is necessary and advisable (but in no event for more than an aggregate of one-hundred twenty (120) days (or ninety (90) days if neither Blueapple nor MDP has any Affiliate serving on the Company’s Board of Directors) in any rolling twelve (12) month period or more than seventy-five (75) consecutive days (except in each case as a result of a refusal by the Securities and Exchange Commission to declare any post-effective amendment to any applicable registration statement after the Company has used its reasonable best efforts to cause such post-effective amendment to be declared effective in which case, the Company must terminate the black-out period immediately following the effective date of the post-effective amendment)), if any of the following events (each, a “
Suspension Event
”) shall occur:
(i) a majority of the Board determines in good faith that (A) the offer or sale of any Registrable Shares would materially impede, delay or interfere with any material proposed financing, offer or sale of securities, acquisition, corporate reorganization or other material transaction involving the Company, (B) based on the advice of counsel, the sale of Registrable Securities pursuant to such registration statement would require disclosure of non-public material information not otherwise required to be disclosed under applicable law, and (C) (1) the Company has a bona fide business purpose for preserving the confidentiality of such transaction, or (2) disclosure would have a material adverse effect on the Company or the Company’s ability to consummate such transaction, in each case under circumstances that would make it impractical or inadvisable to cause the registration statement to become effective or to promptly amend or supplement the registration statement on a post-effective basis, as applicable; or
(ii) a majority of the Board determines in good faith, upon the advice of counsel, that it is required by law, rule or regulation to supplement the registration statement or file a post-effective amendment to the registration statement in order to ensure that the prospectus included in the registration statement (A) contains the information required under Section 10(a)(3) of the Securities Act; (B) discloses any facts or events arising after the effective date of the registration statement (or of the most recent post-effective amendment) that, individually or in the aggregate, represents a fundamental change in the information set forth therein; or (C) discloses any material information with
respect to the plan of distribution that was not disclosed in the registration statement or any material change to such information.
Upon the occurrence of any such suspension, the Company shall use its reasonable best efforts to cause the registration statement to become effective or to promptly amend or supplement the registration statement on a post effective basis or to take such action as is necessary to make resumed use of the registration statement as soon as possible.
(b) Any Suspension Notice delivered by the Company shall state generally the basis for the notice and that such suspension shall continue only for so long as the Suspension Event or its effect is continuing. Each Stockholder agrees not to effect any sales of Registrable Shares pursuant to the applicable prospectus and registration statement (or any related filings) at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice. If so directed by the Company, each Stockholder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Stockholder’s possession, of the prospectus covering the Registrable Shares at the time of receipt of the Suspension Notice. Holders may recommence effecting sales of Registrable Shares pursuant to the applicable prospectus and registration statement (or any related filings) following written notice to such effect delivered by the Company (an “
End of Suspension Notice
”). The Company shall deliver an End of Suspension Notice to the Stockholders promptly, but no later than one Business Day, following the conclusion of any Suspension Event and its effect.
(c) Notwithstanding any provision herein to the contrary, if the Company shall give a Suspension Notice with respect to any Shelf Registration Statement, the Company agrees that it shall, to the extent permitted under applicable law, extend the period of time during which such Shelf Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of notice to the holders of the Suspension Notice to and including the date of receipt by the holders of the End of Suspension Notice and provide copies of the supplemented or amended prospectus contemplated in
Section 3.1(f)
.
1.10.
Selection of Underwriters
. Either MDP and the Call Option Holder, on the one hand, or Blueapple, on the other hand, based upon whichever holds the largest number of Registrable Securities (with the Call Option Holder and Blueapple being counted as the holder of the Company-Offered Registrable Securities for this purpose) included in a Demand Registration or Shelf Offering, shall have the right to select the underwriter(s) to administer any underwritten offering in connection with such Demand Registration or Shelf Offering, subject to the Company’s approval which shall not be unreasonably withheld, conditioned or delayed.
1.11.
Other Registration Rights
. The Company represents and warrants that it is not a party to, or otherwise subject to, any other agreement granting registration rights to any other Person with respect to any securities of the Company, other than this Agreement and the LLC Agreement. Except as provided in this Agreement and the LLC Agreement, the Company shall not grant to any Person the right to request the Company to register any equity securities of the
Company, or any securities convertible or exchangeable into or exercisable for such securities, without the written consent of MDP and Blueapple.
2.
PIGGYBACK REGISTRATIONS
.
2.1.
Right to Piggyback
. Whenever the Company proposes to register any of its equity securities under the Securities Act (other than pursuant to a Demand Registration, Sales Notice, Shelf Registration Statement or Shelf Offering, or in connection with registration on Form S-4 or Form S-8 or any successor or similar forms) and the registration form to be used may be used for the registration of Registrable Securities (a “
Piggyback Registration
”), the Company will give prompt written notice to the Stockholders, the Call Option Holder and Blueapple (in accordance with Section 11.04 of the LLC Agreement) of its intention to effect such a registration and, subject to
Sections 2.3
and
2.4
below, will include in such registration (and in all related registrations or qualifications under blue sky laws and in any related underwriting) (a) all Stockholder-Offered Registrable Securities with respect to which the Company has received written requests for inclusion therein from Stockholders within five (5) Business Days after the delivery of the Company’s notice and (b) such number of Company-Offered Registrable Securities as necessary (i) to permit the Company to purchase any Common Units that the Company has received a written request from Blueapple to purchase within five (5) Business Days after the delivery of the Company’s notice and (ii) if applicable, to permit the Company to purchase all or such portion of the Call Option as requested by the Call Option Holder and to pay the exercise price therefor on the terms provided in the Exchange Agreement to the extent requested within five (5) Business Days after the delivery of the Company’s notice. Each such Company notice shall specify the approximate number of Company equity securities to be registered. The Company shall have the right to select the underwriter(s) to administer any underwritten offering in connection with such offerings.
2.2.
Priority on Primary Registrations
. If a Piggyback Registration is an underwritten primary registration on behalf of the Company and the managing underwriter(s) or broker-dealer(s) advises the Company in writing that in its opinion the number of securities requested to be included in such registration exceeds the Maximum Offering Amount, the Company will include in such registration: (a) first, the securities the Company proposes to sell that can be sold without exceeding the Maximum Offering Amount (excluding any Company-Offered Registrable Securities), (b) second, to the extent that the Maximum Offering Amount has not been reached, the Registrable Securities, pro rata based on the number of Registrable Securities owned by each Stockholder and by Blueapple and the Call Option Holder with respect to any Company-Offered Registrable Securities requested to be included in such Piggyback Registration, that can be sold without exceeding the Maximum Offering Amount, and (c) third, to the extent that the Maximum Offering Amount has not been reached, any other securities requested to be included in such registration that can be sold without exceeding the Maximum Offering Amount;
provided
, that if such underwriter(s) or broker-dealer(s) provide written notice advising in good faith, based upon the then prevailing market precedent and public investor expectations, that participation in the offering by any Management Stockholder would materially and adversely affect the marketability of such offering, then Registrable Securities held by one or more Management Stockholders may be excluded (in whole or in part) from such offering, even if such exclusion would not treat such Management Stockholder on a pro rata basis with the other holders of Registrable Securities.
2.3.
Priority on Secondary Registrations
. If a Piggyback Registration is an underwritten secondary registration on behalf of holders of Company securities (other than the holders of Registrable Securities), and the managing underwriter(s) or broker-dealer(s) advises the Company in writing that in its opinion the number of securities requested to be included in such registration exceeds the Maximum Offering Amount, the Company will include in such registration: (a) first, the securities requested to be included therein by the applicable holders requesting registration and the Registrable Securities requested to be included in such registration, pro rata based on the number of other securities and Registrable Securities initially requested to be included in such Piggyback Registration by each Stockholder and by Blueapple or the Call Option Holder with respect to any Company-Offered Registrable Securities requested to be included in such Piggyback Registration, that can be sold without exceeding the Maximum Offering Amount, and (b) second, to the extent that the Maximum Offering Amount has not been reached, all other such securities to be included in such registration that can be sold without exceeding the Maximum Offering Amount;
provided
, that if such underwriter(s) or broker-dealer(s) provide written notice advising in good faith, based upon the then prevailing market precedent and public investor expectations, that participation in the offering by any Management Stockholder would materially and adversely affect the marketability of such offering, then Registrable Securities held by one or more Management Stockholders may be excluded (in whole or in part) from such offering, even if such exclusion would not treat such Management Stockholder on a pro rata basis with the other holders of Registrable Securities.
2.4.
Withdrawal of Piggyback Registration; Expenses
. The Company (whether on its own determination or as the result of a withdrawal by Persons making a demand pursuant to written contractual obligations) may postpone or withdraw any registration statement constituting a Piggyback Registration in its sole discretion at any time prior to the effectiveness of such registration statement. Notwithstanding any such withdrawal, the Company shall pay all Registration Expenses incurred in connection with such Piggyback Registration.
3.
REGISTRATION AND COORDINATION GENERALLY
.
3.1.
Registration Procedures
. Whenever any Registrable Securities are to be registered by the Company pursuant to this Agreement, the Company will use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof, and, pursuant thereto, the Company will as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a registration statement, and all amendments and supplements thereto and related prospectuses, with respect to such Registrable Securities and thereafter use its reasonable best efforts to cause such registration statement to become effective (provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company will furnish to any counsel designated in writing to the Company by any holder of Registrable Securities included in such Registration Statement or prospectus copies of all such documents proposed to be filed, which documents will be subject to review by such counsel);
(b) notify each holder of Registrable Securities, and Blueapple if Company-Offered Registrable Securities are being registered, and confirm the notice in writing, of (i) the issuance by the Securities and Exchange Commission of any stop order suspending the effectiveness of any registration statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the registration statement for offering or sale in any jurisdiction or the initiation of any proceedings for that purpose, (ii) the receipt by the Company or its counsel of any notification with respect to the suspension of the qualification of such Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (iii) the effectiveness of each registration statement or any post-effective amendment to the registration statement filed hereunder or the filing of any supplement to the prospectus;
(c) prepare and file with the Securities and Exchange Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary (i) to keep such registration statement effective (A) until the holders of Registrable Securities and the Company, if Company-Offered Registrable Securities are being registered, have completed the distribution described in the registration statement relating to such distribution or, if such registration statement relates to an underwritten offering, such longer period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer, or (B) in the case of a Shelf Registration Statement, in accordance with
Section 1.4
and
Section 1.9(c)
and (ii) to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;
(d) furnish to each seller of Registrable Securities such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus), each Free Writing Prospectus and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller;
(e) use its reasonable best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable sales in such jurisdictions of such Registrable Securities (
provided
that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (ii) subject itself to taxation in respect of doing business in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);
(f) promptly notify each seller of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the discovery of the happening of any event as a result of which, the prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and, at the request of any such seller, the Company will prepare and furnish to such seller a reasonable number of copies of a supplement or amendment to such prospectus so that, as thereafter delivered to the prospective purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made;
(g) cause all such Registrable Securities to be listed or quoted on each securities exchange on which similar securities issued by the Company are then listed or quoted or, if no Registrable Securities or similar securities are then so listed, use all reasonable best efforts to, either, at the Company’s election, (i) cause all such Registrable Securities to be listed on a national securities exchange or (ii) to arrange for at least two (2) market makers to register as such with respect to such shares with FINRA;
(h) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;
(i) enter into such customary agreements (including underwriting agreements in customary form) and perform the Company’s obligations thereunder and take all such other actions as the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (which might include effecting a stock split, combination of shares, recapitalization or reorganization);
(j) make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate and business documents and properties of the Company, and cause the Company’s officers, directors, employees, agents, representatives and independent accountants to supply all information reasonably requested by any such seller, underwriter; attorney, accountant or agent in connection with such registration statement, and to cooperate and participate as reasonably requested by any such seller in road show presentations, in the preparation of the registration statement, each amendment and supplement thereto, the prospectus included therein, and other activities as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller;
(k) take all reasonable actions to ensure that (i) any prospectus or Free Writing Prospectus utilized in connection with any Demand Registration, Shelf Registration Statement or Piggyback Registration hereunder (A) complies in all material respects with the Securities Act, (B) is filed in accordance with the Securities Act to the extent required thereby and is retained in accordance with the Securities Act to the extent required thereby, and (C) will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (ii) any registration statement filed and effective in connection with any Demand
Registration, Shelf Registration Statement or Piggyback Registration hereunder, when taken together with the related prospectus, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading;
(l) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Securities and Exchange Commission, and make available to its security holders, as soon as reasonably practicable, but not later than sixteen (16) months after the effective date of the registration statement, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and the rules thereunder (including Securities and Exchange Commission Rule 158 under the Securities Act);
(m) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any securities included in such registration statement for sale in any jurisdiction, the Company will use its reasonable best efforts promptly to obtain the withdrawal of such order;
(n) use its reasonable best efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities;
(o) use its reasonable best efforts to make available the executive officers of the Company to participate with the holders of Registrable Securities and any underwriters in any “road shows” or other selling efforts that may be reasonably requested by the holders in connection with the methods of distribution for the Registrable Securities;
(p) in connection with any underwritten offering, obtain one or more comfort letters, dated the date of the execution and the closing under the underwriting agreement and addressed to the underwriters, signed by the Company’s independent public accountants in the then-current customary form and covering such matters of the type customarily covered from time to time by comfort letters;
(q) in connection with any underwritten offering, provide a legal opinion of the Company’s outside counsel, dated the date of the closing under the underwriting agreement and addressed to the underwriter(s), in a form reasonably acceptable to the managing underwriter(s) for such offering;
(r) cooperate with the sellers of Registrable Securities covered by the registration statement and the managing underwriter(s), if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement, and enable such securities to be in
such denominations and registered in such names as the managing underwriter(s), if any, or such holders may request;
(s) notify Designated Sellers’ Counsel of Registrable Securities included in such registration statement and the managing underwriter(s), and confirm the notice in writing (i) of the receipt of any comments from the Securities and Exchange Commission, and (ii) of any request of the Securities and Exchange Commission to amend the registration statement or amend or supplement the prospectus or for additional information;
(t) use its reasonable effort to prevent the issuance of any stop order suspending the effectiveness of the registration statement or of any order preventing or suspending the use of any preliminary prospectus;
(u) if requested by the managing underwriter(s) or any holder of Registrable Securities covered by the registration statement, promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter(s) or such holder reasonably requests to be included therein, including, with respect to the number of Registrable Securities being sold by such holder to such underwriter or agent, the purchase price being paid therefor by such underwriter or agent and with respect to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering; and make all required filings of such prospectus supplement or post-effective amendment as soon as practicable after being notified of the matters incorporated in such prospectus supplement or post-effective amendment;
(v) if the Company files an automatically-effective Shelf Registration Statement covering any Registrable Securities, use its reasonable best efforts to remain a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act)) during the period during which such Shelf Registration Statement is required to remain effective;
(w) if the Company does not pay the filing fee covering the Registrable Securities at the time a Shelf Registration Statement is filed, pay such fee at such time or times as the Registrable Securities are to be sold; and
(x) cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA.
3.2.
Obligations of Holders of Registrable Securities.
The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish the Company such information relating to the sale or registration of such securities regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing. If any registration or comparable statement refers to any holder by name or otherwise as the holder of any securities of the Company and if in such holder’s sole and exclusive judgment, such holder is or might be deemed to be an underwriter or a controlling person of the Company, such holder shall have the right to (i) require the insertion therein of
language, in form and substance satisfactory to such holder and presented to the Company in writing, to the effect that the holding by such holder of such securities is not to be construed as a recommendation by such holder of the investment quality of the Company’s securities covered thereby and that such holding does not imply that such holder will assist in meeting any future financial requirements of the Company, or (ii) in the event that such reference to such holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force, require the deletion of the reference to such holder; provided that with respect to this clause (ii), if requested by the Company, such holder shall furnish to the Company an opinion of counsel to such effect, which opinion and counsel shall be reasonably satisfactory to the Company.
3.3.
Registration Expenses
.
(a) All expenses incident to the Company’s performance of or compliance with this Agreement, including all registration, qualification and filing fees, fees and expenses of compliance with securities or blue sky laws, FINRA fees, printing expenses, messenger and delivery expenses, fees and disbursements of custodians, transfer agents and registrars and fees and expenses of counsel for the Company and all independent certified public accountants, underwriters (excluding discounts and commissions) and other Persons retained by the Company (all such expenses being herein called “
Registration Expenses
”), will be paid by the Company in respect of each Demand Registration, Shelf Registration Statement, Shelf Offering and Piggyback Registration, whether or not it has become effective or a sale is consummated, including that the Company will pay its internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which similar securities issued by the Company are then listed.
(b) In connection with each Demand Registration, Shelf Registration Statement, Shelf Offering and Piggyback Registration, whether or not it has become effective or a sale has been consummated, the Company will pay and reimburse the holders of Registrable Securities covered by such registration for the payment of, the reasonable fees and disbursements of one counsel selected by the holders of a majority of the Registrable Securities included in the applicable registration statement or being offered in connection with any Shelf Offering (such counsel, “
Designated Sellers’ Counsel
”), as well as the reasonable fees and disbursements of each additional counsel retained by a holder of Registrable Securities for the purpose of rendering a legal opinion on behalf of such holder in connection with an underwritten offering or any offering where the underwriter(s) or broker dealer(s) request an opinion covering such holder, and such expenses shall be considered Registration Expenses hereunder.
3.4.
Underwritten Offerings
.
(a) No Person may participate in any registration hereunder which is underwritten unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled
hereunder to approve such arrangements (including, pursuant to the terms of any over-allotment or “green shoe” option requested by the managing underwriter(s), provided that no holder of Registrable Securities will be required to sell more than the number of Registrable Securities that such holder has requested the Company to include in any registration) and (ii) timely completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, custody agreements (if reasonably requested by the managing underwriter) and other documents reasonably required under the terms of such underwriting arrangements;
provided
that no such Person shall be required to undertake any indemnification obligations to the Company that are materially more burdensome than those provided in
Section 4
.
(b) In the case of an underwritten offering initiated in response to a Demand Registration, the price, underwriting discount and other financial terms shall be determined by either MDP and the Call Option Holder, on the one hand, or Blueapple, on the other hand, whichever holds the largest number of Registrable Securities included in the Demand Registration (with Blueapple and the Call Option Holder being counted as the holder of the Company-Offered Registrable Securities for this purpose).
(c) In the case of an underwritten offering, the Company shall use its reasonable best efforts to cause its directors and executive officers to enter into a customary lockup agreement if requested by the underwriters managing the offering providing that such directors and executive officers will not effect any sale, transfer or distribution of Company equity securities, or any securities, options or rights convertible into or exchangeable or exercisable for such securities during a specified period of time, in each case subject to carve-outs and exceptions as acceptable by the underwriters managing the offering; provided that such lockup agreement shall not be more restrictive than the lockup agreement delivered by MDP to the underwriters. In addition, the Company shall enter into a customary lockup agreement if requested by the underwriters managing the offering providing that the Company shall not file any registration statement for a public offering or cause any such registration statement to become effective, or effect any public sale or distribution of its equity securities, or any securities, options or rights convertible into or exchangeable or exercisable for such securities during the foregoing period, in each case subject to carve-outs and exceptions as acceptable by the underwriters managing the offering.
(d) Each Person that is participating in any registration hereunder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in
Section 3.1(f)
above, such Person will forthwith discontinue the disposition of its Registrable Securities pursuant to the registration statement until such Person’s receipt of the copies of a supplemented or amended prospectus as contemplated by such
Section 3.1(f)
. In the event the Company shall give any such notice, the applicable time period mentioned in
Section 3.1(c)
during which a Registration Statement is to remain effective shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to this paragraph to and including the date when each seller of a Registrable Security covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by
Section 3.1(f)
.
3.5.
Current Information; Rule 144 Reporting
. At all times after the Company has filed a registration statement with the Securities and Exchange Commission pursuant to the requirements of either the Securities Act or the Exchange Act, the Company will use its reasonable efforts to timely file all reports required to be filed by it under the Securities Act and the Exchange Act, and will take such further action as any holder of Registrable Securities may reasonably request, all to the extent required to enable such holders to sell Registrable Securities pursuant to Securities Act Rule 144. In furtherance of the foregoing, so long as any party hereto owns any Registrable Securities, the Company will furnish to such Person forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time commencing ninety (90) days after the effective date of the first registration filed by the Company for an offering of the Company’s securities to the general public), the Securities Act and the Exchange Act; a copy of the most recent annual or quarterly report publicly filed by the Company; and such other publicly filed reports and documents as such Person may reasonably request in availing itself of any rule or regulation of the Securities and Exchange Commission allowing such Person to sell any such securities without registration.
3.6.
In Kind Distributions
. If MDP or any of its Affiliates seek to effectuate an in-kind distribution of all or part of its Registrable Securities to its direct or indirect equity holders, the Company shall cooperate with MDP and use its reasonable best efforts to facilitate such in-kind distribution in the manner reasonably requested.
4.
INDEMNIFICATION
.
4.1.
Indemnification by the Company
. The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, each holder of Registrable Securities and, as applicable, its officers, directors, trustees, employees, stockholders, holders of beneficial interests, members, general and limited partners, agents and representatives (collectively, such holder’s “
Indemnitees
”) and each Person who controls such holder (within the meaning of the Securities Act) against any and all losses, claims, actions, damages, liabilities and expenses (including reasonable attorney’s fees and expenses), to which such holder or any such Indemnitee may become subject under the Securities Act or otherwise, insofar as such losses, claims, actions, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of, result from or are based upon (a) any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto, together with any documents incorporated therein by reference or any application or other document or communication (in this
Section 4
, collectively called an “
application
”) executed by or on behalf of the Company or based upon written information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify any securities covered by such registration under the securities laws thereof, (b) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or (c) any violation or alleged violation by the Company of the Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance. In addition, the Company will reimburse such holder and each of its Indemnitees for any legal or any other expenses, including any amounts paid in any settlement effected with the consent of the Company, which consent will not be unreasonably withheld or
delayed, incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding;
provided
,
however
, that the Company shall not be liable in any such case to the extent that any such loss, claim, action, damage, liability or expense (or action or proceeding in respect thereof) arises out of, results from or is based upon an untrue statement or alleged untrue statement, or omission or alleged omission, made in such registration statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, or in any application, in reliance upon, and in conformity with, written information relating to such holder or its Registrable Securities furnished to the Company by such holder expressly for use therein. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) in such form as shall be reasonably acceptable to such underwriters.
4.2.
Indemnification by Holders of Registrable Securities
. In connection with any registration statement in Registrable Securities are being offered, each holder of Registrable Securities being offered will furnish to the Company in writing such information relating to such holder or its Registrable Securities as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the fullest extent permitted by law, will indemnify and hold harmless the Company and its Indemnitees against any losses, claims, damages, liabilities and expenses to which the Company or any such Indemnitee may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, liabilities and expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of, result from or are based upon (a) any untrue or alleged untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or in any application, together with any documents incorporated therein by reference or (b) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, or in any application, in reliance upon and in conformity with written information relating to such holder or its Registrable Securities furnished to the Company by such holder expressly for use therein, and such holder will reimburse the Company and each such Indemnitee for any legal or any other expenses including any amounts paid in any settlement effected with the consent of such holder, which consent will not be unreasonably withheld or delayed, incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding;
provided
,
however
, that the obligation to indemnify will be individual (and not joint and several) to each holder and will be limited to the net amount of proceeds received by such holder from the sale of Registrable Securities pursuant to such registration statement.
4.3.
Procedure
. Any Person entitled to indemnification hereunder will (a) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided, that the failure of any indemnified party to give such notice shall not relieve the indemnifying party of its obligations hereunder, except to the extent that the indemnifying party is actually prejudiced by such failure to give such notice), and (b) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. The indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. In such instance, the conflicted indemnified parties shall have a right to retain separate counsel, at the expense of the indemnifying party.
4.4.
Entry of Judgment; Settlement
. The indemnifying party shall not, except with the approval of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to each indemnified party of a release from all liability in respect to such claim or litigation without any payment or consideration provided by such indemnified party.
4.5.
Contribution
. If the indemnification provided for in this
Section 4
is, other than expressly pursuant to its terms, unavailable to or is insufficient to hold harmless an indemnified party under the provisions above in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (a) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the sellers of Registrable Securities and any other sellers participating in the registration statement on the other hand from the sale of Registrable Securities pursuant to the registered offering of securities as to which indemnity is sought or (b) if the allocation provided by clause (a) above is not permitted by applicable law, in such proportion as is appropriate to reflect the relative benefits referred to in clause (a) above but also the relative fault of the Company on the one hand and of the sellers of Registrable Securities and any other sellers participating in the registration statement on the other hand in connection with the statement or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the sellers of Registrable Securities and any other sellers participating in the registration statement on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) to the Company bear to the total net proceeds from the offering (before deducting expenses) to the sellers of Registrable Securities and any other sellers participating in the registration statement. The relative fault of the Company on the one hand and of the sellers of Registrable Securities and any other sellers participating in the registration statement on the other hand shall be determined by reference to, among other things, whether the untrue or alleged statement or omission to state a material fact relates to information supplied by the Company or by the sellers of Registrable Securities or other sellers participating in the registration statement and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the sellers of Registrable Securities agree that it would not be just and equitable if contribution pursuant to this
Section 4
were determined by pro rata allocation (even if the sellers of Registrable Securities were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 4
, no seller of Registrable Securities shall be required to contribute any amount in excess of the net proceeds received by such seller from the sale of Registrable Securities covered by the registration statement filed pursuant hereto. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
4.6.
Other Rights; Survival
. The indemnification and contribution by any such party provided for under this Agreement shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and will remain in full force and effect regardless of any investigation made or omitted by or on behalf of the indemnified party or any officer, director, employee, agent, each Person who participates as an underwriter in the offering or sale of securities or controlling Person of such indemnified party and will survive the transfer of Registrable Securities and the termination or expiration of this Agreement.
4.7.
Indemnification Payments
. The indemnification required by this
Section 4
shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills or invoices relating thereto are received or liability is incurred, subject to refund if the party receiving such payments is subsequently found not to have been entitled thereto hereunder.
5.
DEFINITIONS AND RULES OF CONSTRUCTION
.
5.1.
Definitions
. Unless otherwise noted herein, the following terms shall have the meanings assigned to them below.
“
Affiliate
” of any particular Person shall mean any other Person controlling, controlled by or under common control with such particular Person, where “
control
” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise. The Company and its Subsidiaries shall not be deemed to be Affiliates of (i) any holder of Registrable Securities or (ii) Blueapple or any of its Affiliates.
“
Board
” shall mean the Board of Directors of the Company.
“
Call Option
” has the meaning set forth in the Exchange Agreement.
“
Call Option Holder
” has the meaning set forth in the Exchange Agreement.
“
Call Option Issuer
” has the meaning set forth in the Exchange Agreement.
“
Call Option Put Notice
” has the meaning set forth in the Exchange Agreement.
“
Class A Common Stock
” shall mean the Class A common stock, par value $0.0001 per share, of the Company, and any stock into which any such Class A common stock shall have been changed, exchanged or converted or any stock resulting from any reclassification of any such Class A common stock.
“
Common Units
” has the meaning set forth in the LLC Agreement.
“
Company-Offered Registrable Securities
” shall mean shares of Class A Common Stock offered and sold by the Company in order to satisfy (i) the Company’s obligations under the LLC Agreement to use commercially reasonable efforts to issue and sell shares of Class A Common Stock in an underwritten offering and to use the proceeds of such offering to purchase Common Units from Blueapple as set forth therein or (ii) the Company’s obligation under the Exchange Agreement to use commercially reasonable efforts to issue and sell shares of Class A Common Stock in an underwritten offering and to use the proceeds of such offering to purchase the Call Option from the Call Option Holder and immediately exercise the Call Option and pay the exercise price to the Call Option Issuer as set forth therein.
“
Demand Registrations
” shall mean any registration effected pursuant to
Section 1.1
.
“
Exchange Act
” shall mean the Securities Exchange Act of 1934.
“
Exchange Agreement
” shall mean the Exchange Agreement, dated as of May 22, 2018. by and among EVO Investco, LLC, the Company, the holders of Common Units and shares of the Company’s Class C Common Stock or Class D Common Stock and the Call Option Holder.
“
Family Member
” shall mean, with respect to a Person who is an individual, (i) such individual’s spouse and descendants (whether natural or adopted) (collectively, for purposes of this definition, “
relatives
”), (ii) such individual’s executor or personal representative, (iii) any trust, the trustee of which is such individual or such individual’s executor or personal representative and which at all times is and remains solely for the benefit of such individual and/or such individual’s relatives, (iv) any corporation, limited partnership, limited liability company or other tax flow-through entity the governing instruments of which provide that such individual or such individual’s executor or personal representative shall have the exclusive, nontransferable power to direct the management and policies of such entity and of which the sole owners of stock, partnership interests, membership interests or any other equity interests are limited to such individual, such individual’s relatives and/or the trusts described in
clause (iii)
above, and (v) any retirement plan for such individual or such individual’s relatives.
“
FINRA
” shall mean the Financial Industry Regulatory Authority, Inc. (or any successor thereto).
“
Free Writing Prospectus
” shall mean a free-writing prospectus, as defined in Rule 405.
“
LLC Agreement
” shall mean the Second Amended and Restated Limited Liability Company Agreement of EVO Investco, LLC, dated May 22, 2018.
“
Person
” shall mean any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.
“
Potential Takedown Participants
” shall mean (i) any Stockholder with Registrable Securities covered by the applicable Shelf Registration Statement or all Stockholders if such Shelf Registration Statement is undesignated, (ii) Blueapple to the extent the applicable Shelf Registration Statement registers Company-Offered Registrable Securities for sale in a primary offering, and (iii) the Call
Option Holder to the extent the applicable Shelf Registration Statement registers Company-Offered Registrable Securities for sale in a primary offering.
“
Registrable Securities
” shall mean Company-Offered Registrable Securities and Stockholder-Offered Registrable Securities.
“
Rule 144
” shall mean Securities and Exchange Commission Rule 144 under the Securities Act.
“
Rule 405
” shall mean Securities and Exchange Commission Rule 405 under the Securities Act.
“
Sale Notice
” has the meaning set forth in the LLC Agreement.
“
Securities Act
” shall mean the Securities Act of 1933.
“
Securities and Exchange Commission
” includes any governmental body or federal agency at the time administering the Securities Act and Exchange Act.
“
Stockholder-Offered Registrable Securities
” shall mean any shares of Class A Common Stock owned by the Stockholders, whether now held or hereafter acquired, including shares of Class A Common Stock issuable or issued upon conversion of or in exchange for other securities issued by the Company or any of its Subsidiaries (including shares of Class A Common Stock issued or issuable pursuant to the Exchange Agreement) or by way of unit or stock dividend or unit or stock split, or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular shares constituting Stockholder-Offered Registrable Securities, such shares will cease to be Stockholder-Offered Registrable Securities upon the earliest of when such shares (i) have been effectively registered under the Securities Act and disposed of or sold in accordance with the registration statement covering them, (ii) have been sold to the public in compliance with Rule 144, (iii) are eligible for sale pursuant to Rule 144 (without regard to the limitations in Rule 144 concerning the manner of sale, volume of sales or publication of current public information by the Company) and the aggregate number of shares of Class A Common Stock beneficially owned by the applicable Stockholder is less than 2% of the aggregate number of shares of Class A Common Stock outstanding and (iv) have been repurchased by the Company or a Subsidiary of the Company, in each case in compliance with this Agreement. For purposes of this Agreement, a Person will be deemed to be a holder of Stockholder-Offered Registrable Securities whenever such Person has the right to acquire directly or indirectly such Stockholder-Offered Registrable Securities (upon conversion or exercise in connection with a transfer of securities or otherwise, but disregarding
any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected.
“
Subsidiary
” shall mean, with respect to the Company, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more of the other Subsidiaries of the Company or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the limited liability company, partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more Subsidiaries of the Company or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control the managing director or general partner of such limited liability company, partnership, association or other business entity.
“
WKSI
” shall mean a “well-known seasoned issuer” as defined under Rule 405.
5.2.
Rules of Construction
. Capitalized terms used in this Agreement that are not defined in
Section 5.1
have the meanings specified elsewhere in this Agreement. Defined terms used in this Agreement in the singular shall import the plural and vice versa. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Articles, Sections, and Schedules shall be deemed to be references to Articles and Sections of, and Schedules to, this Agreement unless the context shall otherwise require. All Schedules attached hereto shall be deemed incorporated herein as if set forth in full herein and, unless otherwise defined therein, all terms used in any Schedule shall have the meaning ascribed to such term in this Agreement. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Any statute or laws defined or referred to herein shall include any rules, regulations or forms promulgated thereunder from time to time, and references to such statutes, laws, rules, regulations and forms shall be to such statutes, laws, rules, regulations and forms as they may be from time to time, amended, amended and restated, modified or supplemented, including by succession of comparable statutes, laws, rules, regulations and forms. Unless otherwise expressly provided herein, any agreement or instrument defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, amended and restated, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and references to all attachments thereto and instruments incorporated therein. Any reference to the number of shares of Class A Common Stock or number of Common Units means such shares of Class A Common Stock or Common Units as appropriately adjusted to give effect to any unit or stock dividend or unit or stock split, share combinations or exchanges, recapitalizations, mergers, consolidation or other reorganization of the Company or its capital structure.
6.
MISCELLANEOUS
.
6.1.
No Inconsistent Agreements
. The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the holders of Registrable Securities in this Agreement.
6.2.
Adjustments Affecting-Registrable Securities
. The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, splits, recapitalizations or similar transactions occurring after the date of this Agreement.
6.3.
Remedies
. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that, in addition to any other rights and remedies at law or in equity existing in its favor, any party shall be entitled to specific performance and/or other injunctive relief from any court of law or equity of competent jurisdiction (without posting any bond or other security) in order to enforce or prevent violation of the provisions of this Agreement.
6.4.
Amendment and Waiver
. This Agreement may be amended, modified, extended, terminated or waived (an “
Amendment
”), and the provisions hereof may be waived, only by an agreement in writing signed by MDP and Blueapple;
provided
that to the extent any such amendment, modification, extension, termination or waiver materially and adversely affects the specific rights of the Stockholders (other than MDP) in a manner differently than MDP and Blueapple, such amendment, modification, extension, termination or waiver shall not be binding on the Stockholders (other than MDP) without the prior written consent of the Stockholders (other than MDP) holding a majority of Stockholder-Offered Registrable Securities, other than any Stockholder-Offered Registrable Securities held by MDP. The admission of new parties pursuant to the terms of
Section 6.5
shall not constitute an amendment of this Agreement for purposes of this
Section 6.4
. In conformity with the foregoing, each such Amendment shall be binding upon each party hereto and each Stockholder subject hereto. In addition, each party hereto and each Stockholder subject hereto may waive any right hereunder, as to itself, by an instrument in writing signed by such party or Stockholder. The failure of any party to enforce any provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. To the extent the Amendment of any Section of this Agreement would require a specific consent pursuant to this
Section 6.4
, any Amendment to the definitions used in such Section as applied to such Section shall also require the same specified consent.
6.5.
Successors and Assigns; Transferees
. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns. Any transferee receiving Registrable Securities or any transferee of Paired Interests (as defined in the Exchange Agreement) shall become a Stockholder, party to this Agreement and subject to the terms and conditions of, and be entitled to enforce, this Agreement to the same extent, and in the same capacity, as the Person that transfers such shares to such transferee;
provided
that (i) such transferee shall not have any rights, and shall not be entitled to enforce, this Agreement unless and until such transferee executes and delivers to the Company a written agreement, in form and substance reasonably satisfactory to the Company, to be bound by the terms and conditions of this Agreement, (ii) a transferee of a Management Stockholder will be deemed to be entitled to enforce this Agreement only to the same extent, and in the same capacity, as such transferring Management Stockholder and (iii) the rights of MDP hereunder may be transferred by MDP in whole or in part.
6.6.
Reserved
.
6.7.
Severability
. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
6.8.
Counterparts
. This Agreement may be executed in separate counterparts (including by means of facsimile or electronic transmission in portable document format (pdf)), each of which shall be an original and all of which taken together shall constitute one and the same Agreement.
6.9.
Descriptive Headings; No Strict Construction
. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. The parties hereto agree that they have participated jointly in the drafting of this Agreement and, therefore, waive the application of any law, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
6.10.
Notices
. Any notices and other communications required or permitted in this Agreement shall be effective if in writing and (a) delivered personally, (b) sent by email, or (c) sent by overnight courier, in each case, addressed as follows:
The Company
:
EVO Investco, LLC
Ten Glenlake Parkway, South Tower, Suite 900
Atlanta, Georgia 30328
Attention: Steven J. de Groot, General Counsel
Email: steve.degroot@evopayments.com
with a copy to (which shall not constitute notice):
King & Spalding LLP
1180 Peachtree Street
Atlanta, Georgia 30309
Attention: Keith M. Townsend
Zachary L. Cochran
Email: ktownsend@kslaw.com
zcochran@kslaw.com
MDP
:
Madison Dearborn Partners, LLC
Three First National Plaza
Suite 4600
Chicago, Illinois 60602
Attention: Vahe A. Dombalagian
Edward M. Magnus
Email: vdombalagian@mdcp.com
emagnus@mdcp.com
with a copy to (which shall not constitute notice):
Kirkland & Ellis LLP
300 North LaSalle St.
Chicago, Illinois 60654
Attention: Jon A. Ballis, P.C.
Neal J. Reenan, P.C.
Carol Anne Huff
Email: jon.ballis@kirkland.com
neal.reenan@kirkand.com
carolanne.huff@kirkland.com
If to Blueapple or any other Stockholder, to it at the address set forth on
Schedule I
attached hereto, or if not set forth thereon, in the records of the Company, and if to a Management Stockholder, with copies (which shall not constitute notice) to:
Ten Glenlake Parkway, South Tower, Suite 900
Atlanta, Georgia 30328
Attention: Steven J. de Groot, General Counsel
Email: steve.degroot@evopayments.com
Notice to the holder of record of any security shall be deemed to be notice to the holder of such security for all purposes hereof.
Unless otherwise specified herein, such notices or other communications shall be deemed effective (x) on the date received, if personally delivered, (y) on the date sent if transmitted by
email (so long as a receipt of such e-mail is acknowledged by non-automated response) and (z) two business days after being sent by overnight courier. Each of the parties hereto shall be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.
6.11.
Electronic Delivery
. This Agreement and any signed agreement or instrument entered into in connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or electronic mail, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or electronic mail to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or electronic mail as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.
6.12.
Governing Law; Consent to Jurisdiction; WAIVER OF JURY TRIAL
.
(a) All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement (and all Schedules and Exhibits hereto) shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware shall control the interpretation and construction of this Agreement (and all Schedules and Exhibits hereto), even though under that jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
(b) The parties hereto agree that jurisdiction and venue in any action brought by any party pursuant to this Agreement shall properly (but not exclusively) lie in the Court of Chancery of the State of Delaware (or, if such court lacks subject matter jurisdiction, in any appropriate state or federal court in the State of Delaware) and any federal or state court located in the State of Delaware from which appeal therefrom validly lies. By execution and delivery of this Agreement, each party irrevocably submits to the jurisdiction of such courts for itself and in respect of its property with respect to such action. The parties irrevocably agree that venue would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action. The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.
(c) AS A SPECIFICALLY BARGAINED INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (WITH EACH PARTY
HAVING HAD OPPORTUNITY TO CONSULT COUNSEL), EACH OF THE PARTIES EXPRESSLY AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING UNDER THIS AGREEMENT OR ANY ACTION OR PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OTHER TRANSACTION DOCUMENT, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR PROCEEDING, AND ANY ACTION OR PROCEEDING UNDER THIS AGREEMENT OR ANY ACTION OR PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OTHER TRANSACTION DOCUMENT SHALL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
6.13.
Exercise of Rights and Remedies
. No delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any such delay, omission nor waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.
6.14.
Aggregation of Registrable Securities; Enforcement of Rights by Blueapple
.
(a) All Registrable Securities held by a Stockholder, its Affiliates and other Person(s) included within the definition of such Stockholder shall be aggregated together for purposes of determining the availability of any rights or incurrence of any obligations under this Agreement. For the avoidance of doubt, the control by any Person of any Registrable Security deemed to be held by a Stockholder confers no right hereunder other than those granted to such Stockholder.
(b) Although Blueapple does not now and will not in connection with any registration pursued pursuant to this Agreement hold any Class A Common Stock, Blueapple shall be treated as the “holder” of any Company-Offered Registrable Securities included in any registration statement to permit the Company to satisfy the Company’s obligations in connection with receipt of a Sale Notice for purposes of determining the availability of any rights or incurrence of any obligations under this Agreement. Blueapple shall be entitled to enforce the terms and provisions of this Agreement, and shall be entitled to indemnification and required to provide indemnification under
Article IV
, as though a “holder” of such Company-Offered Registrable Securities. The rights and obligations of Blueapple shall apply regardless whether treatment of Blueapple as a “holder” of any Registrable Securities is specified in any term or provision of this Agreement.
(c) Although the Call Option Holder does not hold any Class A Common Stock, the Call Option Holder shall be treated as the “holder” of any Company-Offered Registrable Securities included in any registration statement to satisfy the Company’s obligations in connection with receipt of a Call Option Put Notice for purposes of determining the availability of any rights or incurrence of any obligations under this Agreement. The Call Option Holder shall be entitled to enforce the terms and provisions
of this Agreement, and shall be entitled to indemnification and required to provide indemnification under
Article IV
, as though a “holder” of such Company-Offered Registrable Securities. The rights and obligations of the Call Option Holder shall apply regardless whether treatment of the Call Option Holder as a “holder” of any Registrable Securities is specified in any term or provision of this Agreement.
(d) For purposes of this Agreement, any decision to be made or right to be exercised by any group of holders of Registrable Securities shall be made by such Person(s) holding at least a majority of such Registrable Securities as of the date on which such action is to be taken or such right is to be exercised.
6.15.
Independent Nature of Each Holder’s Obligations
. The obligations of each holder of Registrable Securities and Blueapple under this Agreement are several and not joint, and no holder of Registrable Securities or Blueapple shall be responsible in any way for the performance of the obligations of any other holder of Registrable Securities or Blueapple, as applicable, under this Agreement. Nothing contained herein, and no action taken by any holder of Registrable Securities or Blueapple pursuant hereto, shall be deemed to constitute such Holder or Blueapple as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the holders of Registrable Securities and Blueapple are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement.
6.16.
Dilution
. If, from time to time, there is any change in the capital structure of the Company by way of a split, dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue.
6.17.
Replacement of Prior Agreement; Effectiveness
. This Agreement shall replace in its entirety the Prior Registration Rights Agreement as permitted by Section 6.4 of the Prior Registration Rights Agreement. This agreement shall become effective upon consummation of the Company’s initial public offering.
6.18.
Joinder with Respect to Certain Rights and Obligations.
Each of Blueapple and the Call Option Holder acknowledges and agrees that the sale of any Company-Offered Registrable Securities on their respective behalves shall be made on the terms and conditions set forth herein. To the extent applicable (including pursuant to
Section 6.14(b)
and
Section 6.14(c)
), Blueapple and the Call Option Holder, respectively, shall be bound by the terms and provisions hereof as if a party hereto and entitled to enforce the provisions of this Agreement as though they were a holder of such Registrable Securities.
[Signature Pages Follow]
IN WITNESS WHEREOF, the undersigned have caused this Registration Rights Agreement to be executed as of the date first written above.
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EVO PAYMENTS, INC.
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By:
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/s/ Steven J. de Groot
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Name: Steven J. de Groot
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Its: Executive Vice President and General Counsel
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[Signature Page to Registration Rights Agreement]
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MADISON DEARBORN CAPITAL PARTNERS VI-B, L.P.
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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MADISON DEARBORN CAPITAL PARTNERS VI EXECUTIVE-B, L.P.
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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MDCP VI-C CARDSERVICES SPLITTER, L.P.
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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[Signature Page to Registration Rights Agreement]
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MDCP VI-C CARDSERVICES LLC
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By:
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Madison Dearborn Capital Partners VI-B, L.P.
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Its:
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Controlling Member
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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MADISON DEARBORN CAPITAL PARTNERS VI-C, L.P.
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By:
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Madison Dearborn Partners VI-A&C, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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MADISON DEARBORN PARTNERS VI-B, L.P.
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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[Signature Page to Registration Rights Agreement]
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BLUEAPPLE, INC.
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By:
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/s/ Ray Sidhom
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Name: Ray Sidhom
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Its: Chief Executive Officer and President
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/s/ James G. Kelly
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James G. Kelly
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JAMES G. KELLY GRANTOR TRUST DATED JANUARY 12, 2012
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By:
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/s/ John Kelly
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Name: John Kelly
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Its: Trustee
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/s/ Michael L. Reidenbach
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Michael L. Reidenbach
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/s/ Brendan Tansill
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Brendan Tansill
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/s/ Steven J. de Groot
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Steven J. de Groot
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/s/ Kevin Hodges
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Kevin Hodges
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/s/ David Goldman
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David Goldman
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/s/ Jeff Rosenblatt
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Jeff Rosenblatt
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[Signature Page to Registration Rights Agreement]
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/s/ Kevin Lambrix
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Kevin Lambrix
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/s/ James Raftice
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James Raftice
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/s/ Peter Cohen
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Peter Cohen
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/s/ Alon Kindler
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Alon Kindler
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/s/ Blake Pyle
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Blake Pyle
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/s/ Greg Robertson
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Greg Robertson
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/s/ Mark Harrelson
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Mark Harrelson
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/s/ John Crouch
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John Crouch
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/s/ Ayman Ibrahaim
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Ayman Ibrahaim
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[Signature Page to Registration Rights Agreement]
Schedule I
Madison Dearborn Partners VI-B, L.P.
Madison Dearborn Capital Partners VI-B, L.P.
Madison Dearborn Capital Partners VI Executive-B, L.P.
MDCP VI-C Cardservices Splitter, L.P.
MDCP Cardservices LLC
Madison Dearborn Capital Partners VI-C, L.P.
Schedule II
James G. Kelly
James G. Kelly Grantor Trust Dated January 12, 2012
Michael L. Reidenbach
Brendan Tansill
Steven J. de Groot
Kevin Hodges
David Goldman
Jeff Rosenblatt
Kevin Lambrix
James Raftice
Peter Cohen
Alon Kindler
Blake Pyle
Greg Robertson
Mark Harrelson
John Crouch
Ayman Ibrahaim
Exhibit 10.4
Execution Version
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (this “
Agreement
”), dated as of May 22, 2018, and to become effective as of the effectiveness of the LLC Agreement (as defined below), by and among EVO Investco, LLC, a Delaware limited liability company (the “
Company
”), EVO Payments, Inc., a Delaware corporation (“
Pubco
”), the holders of Common Units in the Company and shares of Class C Common Stock or Class D Common Stock of Pubco, and the Call Option Holder, from time to time party hereto (each, a “
Holder
”).
RECITALS
WHEREAS, on or about the date hereof, the Company, Pubco and certain of the Holders entered into the LLC Agreement;
WHEREAS, the parties hereto desire to provide for the exchange of Common Units together with corresponding shares of Class C Common Stock or Class D Common Stock, as applicable, registered in the name of such Holder (which Pubco shall thereafter cancel for no consideration on a one-for-one basis with the number of Common Units being exchanged by such Holder) for shares of Class A Common Stock and the purchase and sale (and substantially simultaneous exercise) of the Call Option in exchange for cash or shares of Class A Common Stock, in each case, on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements made herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01.
Definitions
.
(a) The following terms shall have the following meanings for the purposes of this Agreement:
“
Applicable Law
” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority or Regulatory Agency that is binding upon or applicable to such Person or its assets, as amended unless expressly specified otherwise.
“
Business Day
” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.
“
Call Option
” means the Option Agreement, dated as of December 27, 2012, between MDCP VI-C Cardservices Blocker Corp. and Madison Dearborn Capital Partners
VI-C, L.P., that provides the Call Option Holder the right to directly or indirectly purchase, from the Call Option Issuer, Call Option Paired Interests.
“
Call Option Holder
” means the holder of the Call Option, which is currently Madison Dearborn Capital Partners VI-C, L.P.
“
Call Option Issuer
” means MDCP VI-C Cardservices Blocker Corp., or any successor to the rights and obligations of MDCP VI-C Cardservices Blocker Corp. under the Call Option.
“
Call Option Paired Interest
” means one Common Unit together with one share of Class D Common Stock, both of which are directly or indirectly subject to the Call Option.
“
Class A Common Stock
” means Class A common stock, par value $0.0001 per share, of Pubco.
“
Class C Common Stock
” means Class C common stock, par value $0.0001 per share, of Pubco.
“
Class C Paired Interest
” means one Common Unit together with one share of Class C Common Stock.
“
Class D Common Stock
” means Class D common stock, par value $0.0001 per share, of Pubco.
“
Class D Paired Interest
” means one Common Unit together with one share of Class D Common Stock, but not including any Call Option Paired Interest.
“
Code
” means the Internal Revenue Code of 1986.
“
Common Unit Purchase Price
” has the meaning set forth in the LLC Agreement.
“
Common Unit Redemption Price
” has the meaning set forth in the LLC Agreement.
“
Common Units
” has the meaning set forth in the LLC Agreement.
“
Deliverable Common Stock
” means Class A Common Stock.
“
Disposition Event
” means any merger, consolidation or other business combination of Pubco, whether effectuated through one transaction or series of related transactions (including a tender offer followed by a merger in which holders of Class A Common Stock receive the same consideration per share paid in the tender offer), unless, following such transaction, all or substantially all of the holders of the voting power of all outstanding classes of Common Stock and any series of preferred stock issued by Pubco that are generally entitled to vote in the election of directors prior to such transaction or series of transactions, continue to hold a majority of the voting power of the surviving entity (or its
parent) resulting from such transaction or series of transactions in substantially the same proportions as immediately prior to such transaction or series of transactions.
“
Exchange Act
” means the Securities Exchange Act of 1934.
“
Exchange Date
” means the date two Business Days after receipt of an Exchange Notice by Pubco, unless a later date is otherwise set forth in the applicable Exchange Notice as permitted under
Section 2.02
.
“
Exchange Notice
” means a Paired Interest Exchange Notice or a Call Option Put Notice.
“
Exchange Rate
” means (i) with respect to Class C Paired Interests, the number of shares of Class A Common Stock for which one Class C Paired Interest is entitled to be Exchanged (ii) with respect to Class D Paired Interests, the number of shares of Class A Common Stock for which one Class D Paired Interest is entitled to be Exchanged, or (iii) with respect to Call Option Paired Interests, the number of shares of Class A Common Stock for which one Call Option Paired Interest is entitled to be Exchanged. On the date of this Agreement, the Exchange Rate for the purposes of the Class C Paired Interests, Class D Paired Interests and Call Option Paired Interest shall be one (1), subject to adjustment pursuant to
Section 2.03
of this Agreement.
“
Exchanging Holder
” means a Holder effecting an Exchange pursuant to this Agreement.
“
Governmental Authority
” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.
“
LLC Agreement
” means the Second Amended and Restated Limited Liability Company Agreement of the Company, dated on or about the date hereof, as such agreement may be amended from time to time.
“
Paired Interest
” means one Class C Paired Interest, one Class D Paired Interest, or one Call Option Paired Interest, as applicable.
“
Person
” means any individual, firm, corporation, partnership, limited liability company, trust, estate, business association, organization, joint venture, Governmental Authority or other entity.
“
Pubco Charter
” means the Amended and Restated Certificate of Incorporation of Pubco, as such certificate of incorporation may be amended from time to time.
“
Registration Rights Agreement
” means the Registration Rights Agreement by and among Pubco and the other Persons party thereto, dated on or about the date hereof, as such agreement may be amended from time to time.
“
Regulatory Agency
” means the Securities and Exchange Commission, Financial Industry Regulatory Authority, Inc., the Financial Services Authority, any non-U.S. regulatory agency and any other regulatory authority or body (including any state or provincial securities authority and any self-regulatory organization) with jurisdiction over the Company or any of its Subsidiaries.
“
Securities Act
” means the United States Securities Act of 1933.
“
Securities Exchange
” means the national securities exchange on which the Class A Common Stock is listed.
“
Underwritten Offering
” has the meaning set forth in the LLC Agreement.
(b) Capitalized terms used but not defined herein shall have the meaning ascribed thereto in the LLC Agreement.
(c) Each of the following terms is defined in the Section set forth opposite such term:
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Term
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Section
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Agreement
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Preamble
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Call Option Put Notice
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Section 2.02(b)
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Class A Per Share Consideration
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Section 2.04(a)
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Company
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Preamble
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Exchange
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Section 2.01(a)
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Exchange Agent
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Section 2.02(a)
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Holder
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Preamble
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Paired Interest Exchange Notice
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Section 2.02(a)
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Permitted Transferee
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Section 4.01
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Pubco
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Preamble
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Transaction
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Section 2.04(a)
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Section 1.02.
Other Definitional and Interpretative Provisions
. The words “hereof,” “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to the Preamble, Recitals, Articles and Sections are to the Preamble, Recitals, Articles and Sections of this Agreement unless otherwise specified. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to
any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. Except to the extent otherwise expressly provided herein, all references to any Holder shall be deemed to refer solely to such Person in its capacity as such Holder and not in any other capacity. This Agreement shall be construed without regard to any presumption or other rule requiring construction against the party that drafted and caused this Agreement to be drafted.
ARTICLE II
EXCHANGE
Section 2.01.
Exchange of Paired Interests for Class A Common Stock; Sale and Exercise of Call Option
.
(a) Subject to
Section 2.01(c)
, from and after the execution and delivery of this Agreement, each Holder shall be entitled, from time to time, upon the terms and subject to the conditions hereof, to surrender Paired Interests to Pubco (subject to adjustment as provided in
Section 2.03
) in exchange (such exchange, together with the sale and purchase of all or a portion of the Call Option pursuant to
Section 2.01(b)
, an “
Exchange
”) for the delivery to such Holder of:
(i) with respect to Class C Paired Interests, a number of shares of Class A Common Stock that is equal to the product of the number of Class C Paired Interests surrendered multiplied by the Exchange Rate;
(ii) with respect to Class D Paired Interests, a number of shares of Class A Common Stock that is equal to the product of the number of Class D Paired Interests surrendered multiplied by the Exchange Rate; and
(iii) with respect to Call Option Paired Interests held by the Call Option Issuer, in the event that the Call Option Holder expressly permits in writing for the Exchange to be consummated pursuant to this
Section 2.01(a)(iii)
, a number of shares of Class A Common Stock that is equal to the product of the number of Call Option Paired Interests surrendered multiplied by the Exchange Rate.
(b) Subject to
Section 2.01(c)
, from and after the execution and delivery of this Agreement, the Call Option Holder shall be entitled, from time to time, upon the terms and subject to the conditions hereof, to require Pubco to purchase for cash and immediately thereafter exercise all or a portion of the Call Option;
provided
that (i) unless waived by Pubco, Pubco’s obligation to purchase and exercise the Call Option for cash pursuant to this
Section 2.01(b)
shall be expressly conditioned and contingent on the consummation of a purchase from Pubco by another Person of a number of shares of Class A Common Stock resulting in aggregate net cash proceeds to Pubco equal to or greater than the aggregate amounts to be paid to the Call Option Holder and Call Option Issuer in respect of such purchase and exercise pursuant to
Section 2.02(c)
(
provided
that Pubco shall use its commercially reasonable efforts to cause the consummation of such a transaction, including by pursuing an Underwritten Offering of shares of Class A Common Stock in the manner contemplated by, and pursuant to
the terms of, the Registration Rights Agreement) and (ii) Pubco’s obligation to purchase and exercise the Call Option pursuant to this
Section 2.01(b)
shall be expressly conditioned and contingent on the aggregate purchase price payable by the Company to purchase and exercise the Call Option being equal to or greater than aggregate strike price to be paid to the Call Option Issuer for the relevant portion of the Call Option.
(c) For the avoidance of doubt, a Holder’s right to effect an Exchange as set forth in this
Section 2.01
shall be subject to (i) Pubco’s election to cause the Company to directly or indirectly redeem the Common Units associated with such Paired Interests in accordance with Article XI of the LLC Agreement (or, in the case of Common Units subject to the Call Option, to directly purchase the portion of the Call Option applicable to such Common Units) to the extent the applicable Holder has consented to such redemption (or purchase) and (ii) the absence of any liens or encumbrances on such Class C Paired Interests, Class D Paired Interests or Call Option Paired Interests, as applicable.
Section 2.02.
Procedures for Exchange and Sale of Call Option; Notices and Revocations
.
(a) A Holder may exercise the right to effect an Exchange as set forth in
Section 2.01(a)
by delivering a written notice of exchange in respect of the Paired Interests to be Exchanged substantially in the form of
Exhibit A-1
hereto (the “
Paired Interest Exchange Notice
”), duly executed by such Holder (or, with respect to an exercise as set forth in
Section 2.01(a)(iii)
, duly executed by such Holder and the Call Option Holder), to Pubco at its address set forth in
Section 4.03
during normal business hours, or if any agent for the Exchange is duly appointed and acting (the “
Exchange Agent
”), to the office of the Exchange Agent during normal business hours.
(b) The Call Option Holder may exercise the right to require Pubco to purchase all or a portion of the Call Option as set forth in
Section 2.01(b)
by delivering a written notice substantially in the form of
Exhibit A-2
hereto (the “
Call Option Put Notice
”), duly executed by the Call Option Holder, to Pubco at its address set forth in
Section 4.03
during normal business hours, or if applicable, to the office of the Exchange Agent during normal business hours. Any Call Option Put Notice shall specify the portion of the Call Option, expressed as the number of Call Option Paired Interests subject to such portion of the Call Option, to be purchased, and immediately thereafter exercised, by Pubco.
(c) The aggregate purchase price paid by Pubco to the Call Option Holder for the Call Option pursuant to
Section 2.01(b)
shall be an amount in cash equal to (i) the product of (A) the number of Call Option Paired Interests subject to the portion of the Call Option to be acquired and exercised, (B) the Exchange Rate and (C) (x) the Common Unit Purchase Price (if Pubco is undertaking an Underwritten Offering in connection therewith) or (y) the Common Unit Redemption Price (if Pubco is not undertaking an Underwritten Offering in connection therewith)
minus
(ii) the aggregate strike price pursuant to the Call Option with respect to the number of Call Option Paired Interests subject to the portion of the Call Option to be acquired. The purchase price paid by Pubco to the Call Option Issuer to exercise the Call Option pursuant to
Section 2.01(b)
shall be an amount in cash equal to the aggregate strike price pursuant to the Call Option with respect to the relevant portion of the Call Option to be acquired.
(d) If the Call Option Holder and Call Option Issuer have expressly consented thereto in the Call Option Put Notice, Pubco may pay the amounts set forth in
Section 2.02(c)
to the Call Option Holder and the Call Option Issuer in Deliverable Common Stock rather than cash, in which case:
(i) the purchase price paid by Pubco to the Call Option Holder for the Call Option shall be a number of shares of Deliverable Common Stock that is equal to the quotient (rounded to the nearest whole number) of (I) (A) the product of (x) the number of Call Option Paired Interests subject to the portion of the Call Option to be acquired and exercised, (y) the Exchange Rate and (z) (1) the Common Unit Purchase Price (if Pubco is undertaking an Underwritten Offering in connection therewith) or (2) the Common Unit Redemption Price (if Pubco is not undertaking an Underwritten Offering in connection therewith)
minus
(B) the aggregate exercise price pursuant to the Call Option with respect to the number of Call Option Paired Interests subject to the portion of the Call Option to be acquired
divided by
(II) the Common Unit Purchase Price (if Pubco is undertaking an Underwritten Offering in connection therewith) or the Common Unit Redemption Price (if Pubco is not undertaking an Underwritten Offering in connection therewith); and
(ii) the purchase price paid by Pubco to the Call Option Issuer to exercise the Call Option shall be the number of shares of Class A Common Stock (rounded to the nearest whole number) that has a value equal to the aggregate strike price pursuant to the Call Option with respect to the relevant portion of the Call Option to be acquired calculated using the Common Unit Purchase Price (if Pubco is undertaking an Underwritten Offering in connection therewith) or the Common Unit Redemption Price (if Pubco is not undertaking an Underwritten Offering in connection therewith).
(e) Upon Pubco’s acquisition of any portion of the Call Option, Pubco shall exercise the purchased Call Option immediately thereafter. Upon Pubco’s exercise of the Call Option, the Call Option Issuer shall perform its obligations under the Call Option and take all additional actions necessary to deliver to Pubco the number of Call Option Paired Interests subject to the portion of the Call Option that is acquired and exercised immediately thereafter without also delivering to Pubco any ownership interest in the Subject Partnership (as defined in the Call Option) or any other Person.
(f)
Contingent Exchange Notice and Revocation by Holders
.
(i) A Paired Interest Exchange Notice from a Holder may specify that the Exchange is to be contingent (including as to the timing) upon the consummation of a purchase by another Person (whether in a tender or exchange offer, an underwritten offering or otherwise) of shares of Deliverable Common Stock into which the Paired Interests are exchangeable, and any Exchange Notice may specify that the Exchange is contingent (including as to timing) upon the closing of an announced merger, consolidation or other transaction or event in which the Paired Interests or the Deliverable Common Stock into which the Paired Interests are exchangeable would be exchanged or converted, or become exchangeable for or convertible into, cash or other securities or property.
(ii) Notwithstanding anything herein to the contrary, a Holder may withdraw or amend an Exchange Notice, in whole or in part, prior to the effectiveness of the Exchange, at any time prior to 5:00 p.m. New York City time, on the Business Day immediately preceding the Exchange Date (or any such later time as may be required by Applicable Law) by delivery of a written notice of withdrawal to Pubco or the Exchange Agent, specifying (I) the number of withdrawn Paired Interests or the portion of the Call Option to be withdrawn from purchase, (II) if any, the number of Paired Interests or the portion of the Call Option as to which the Exchange Notice remains in effect and (III) if the Holder so determines, a new Exchange Date or any other new or revised information permitted in the Exchange Notice.
(g) Each Exchange shall be deemed to be effective immediately prior to the close of business on the Exchange Date, and in the case of an Exchange under
Section 2.01(a)
or a sale of the Call Option under
Section 2.01(b)
pursuant to which the Call Option Holder and Call Option Issuer have consented to receive payment in shares of Deliverable Common Stock, the Exchanging Holder (or other Person(s) whose name or names in which the Deliverable Common Stock is to be issued) shall be deemed to be a holder of the Deliverable Common Stock deliverable upon such Exchange from and after that time. As promptly as practicable on or after the Exchange Date with respect to an Exchange under
Section 2.01(a)
or a sale of the Call Option under
Section 2.01(b)
pursuant to which the Call Option Holder and Call Option Issuer have consented to receive payment in shares of Deliverable Common Stock, Pubco shall deliver or cause to be delivered to the Exchanging Holder (or other Person(s) whose name or names in which the Deliverable Common Stock is to be issued) the number of shares of Deliverable Common Stock deliverable upon such Exchange, registered in the name of such Holder (or other Person(s) whose name or names in which the Deliverable Common Stock is to be issued). To the extent the Deliverable Common Stock is settled through the facilities of The Depository Trust Company, Pubco will, subject to
Section 2.02(i)
below, upon the written instruction of an Exchanging Holder, deliver or cause to be delivered the shares of Deliverable Common Stock deliverable to such Holder (or other Person(s) whose name or names in which the Deliverable Common Stock is to be issued), through the facilities of The Depository Trust Company, to the account of the participant of The Depository Trust Company designated by such Holder.
(h) The shares of Deliverable Common Stock issued upon an Exchange or a sale of the Call Option under
Section 2.01(b)
pursuant to which the Call Option Holder has consented to receive payment in shares of Deliverable Common Stock shall bear a legend in substantially the following form:
THE TRANSFER OF THESE SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD OR TRANSFERRED OTHER THAN IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (OR OTHER APPLICABLE LAW), OR AN EXEMPTION THEREFROM.
(i) If (i) any shares of Deliverable Common Stock have been sold pursuant to a registration statement that has been declared effective by the Securities and Exchange Commission, (ii) all of the applicable conditions of Rule 144 are met, or (iii) the legend (or a portion thereof) otherwise ceases to be applicable, Pubco, upon the written request of the Holder thereof shall promptly provide such Holder or its respective transferees, without any expense to such Persons (other than applicable transfer taxes and similar governmental charges, if any) with new certificates (or evidence of book-entry share) for securities of like tenor not bearing the provisions of the legend with respect to which the restriction has terminated. In connection therewith, such Holder shall provide Pubco with such information in its possession as Pubco may reasonably request in connection with the removal of any such legend, including in the case of subparagraph (ii) or (iii) above, if requested by Pubco or any transfer agent for the Deliverable Common Stock, an opinion of Holder’s legal counsel as to the satisfaction of the requirements in this
Section 2.02(i)
.
(j) Pubco shall bear all expenses in connection with the consummation of any Exchange, whether or not any such Exchange is ultimately consummated, including any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any Exchange;
provided
,
however
, that if any shares of Deliverable Common Stock are to be delivered in a name other than that of the Holder that requested the Exchange or the Call Option Holder in the case of a sale of all or a portion of the Call Option (or The Depository Trust Company or its nominee for the account of a participant of The Depository Trust Company that will hold the shares for the account of such Holder), then such Holder and/or the Person in whose name such shares are to be delivered shall pay to Pubco the amount of any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, such Exchange or shall establish to the reasonable satisfaction of Pubco that such tax has been paid or is not payable.
(k) Notwithstanding anything to the contrary in this
Article II
, a Holder shall not be entitled to effect an Exchange, and Pubco and the Company shall have the right to refuse to honor any request to effect an Exchange, at any time or during any period, if Pubco or the Company shall reasonably determine that such Exchange (i) would be prohibited by any Applicable Law (including the unavailability of any requisite registration statement filed under the Securities Act or any exemption from the registration requirements thereunder), provided this
Section 2.02(k)(i)
shall not limit Pubco or the Company’s obligations under
Section 2.07(c)
, or (ii) would not be permitted under another agreement with Pubco, the Company or any of the Company’s subsidiaries, on the one hand, and such Exchanging Holder, on the other hand; provided that the Pubco shall, and shall cause the Company to, take commercially reasonable efforts to alleviate such prohibition, but shall not be obligated to waive any right or claims, or pay any amounts to obtain the alleviation of such prohibition, under any such agreement. Upon such determination, Pubco or the Company (as applicable) shall notify the Holder and, if applicable the Call Option Holder, that has delivered an Exchange Notice of such determination, which such notice shall include an explanation in reasonable detail as to the reason that the Exchange has not been honored.
Section 2.03.
Adjustment
. This Agreement shall apply to the Paired Interests held by the Holders and their Permitted Transferees as of the date hereof, as well as any Paired
Interests hereafter acquired by a Holder and his, her or its Permitted Transferees, and the Call Option held by the Call Option Holder as of the date hereof and its Permitted Transferees.
Section 2.04.
Tender Offers and Other Events with Respect to Pubco
.
(a) In the event that a Disposition Event is approved by the board of directors of Pubco or is otherwise effected or to be effected with the consent or approval of the board of directors of Pubco, the Holders shall be permitted to participate in such Disposition Event by delivery of a Paired Interest Exchange Notice (which Paired Interest Exchange Notice shall be effective immediately prior to the consummation of such Disposition Event (and, for the avoidance of doubt, shall be contingent upon such Disposition Event and not be effective if such Disposition Event is not consummated)). Pubco shall not merge, consolidate, combine or consummate any other transaction in which shares of Class A Common Stock are exchanged or converted into other stock or securities, or the right to receive cash or any other property (a “
Transaction
”) unless in connection with any such Transaction each Holder is entitled to participate by delivery of a Paired Interest Exchange Notice as contemplated in the preceding sentence and receive the same kind and amount of stock or securities, cash or other property, as the case may be, into which a share of Class A Common Stock is converted or exchanged in the Transaction (the “
Class A Per Share Consideration
”) multiplied by the Exchange Rate. For the avoidance of doubt, in no event shall the Holders be entitled to receive in such Transaction aggregate consideration for each Paired Interest that is greater than the Class A Per Share Consideration.
(b) Notwithstanding any other provision of this Agreement, if a Disposition Event is approved by the board of directors of Pubco and the shareholders of Pubco (to the extent such approval is required) and consummated in accordance with Applicable Law, at the request of the Company or Pubco, to the extent that a Holder has not exercised its rights to participate in such transaction pursuant to
Section 2.04(a)
or by exercising its rights pursuant to
Section 2.01
after a reasonable opportunity to do so, each of the Holders shall be required to exchange with Pubco simultaneously with the consummation of such Disposition Event, all of such Holder’s Paired Interests for aggregate consideration for each Paired Interest that is equivalent to the Class A Per Share Consideration in connection with the Disposition Event;
provided
,
however
, that the Call Option Holder shall be permitted to elect (contingent upon such Disposition Event) to sell its Call Option to Pubco or a purchaser and have such option exercised in a manner the same or substantially similar to
Section 2.01(b)
(and the Call Option Issuer and its affiliates shall be permitted reasonable opportunity to effect any transaction required in connection with the sale and exercise of the Call Option in the case of a Disposition Event) and, if the Call Option Holder consents to the delivery of Class A Common Stock rather than cash in connection therewith, the Class A Common Stock shall be valued at an amount equal to the Class A Per Share Consideration;
provided
,
however
, that in the event of a Disposition Event intended to qualify as a reorganization within the meaning of Section 368(a) of the Code or as a transfer described in Section 351(a) or Section 721 of the Code, a Holder shall not be required to exchange Paired Interest pursuant to this Section 2.04(b) unless, as a part of such transaction, the Holders are permitted to exchange their Paired Interest for securities in a transaction that is expected to permit such exchange without current recognition of gain or loss, for U.S. and non-U.S. tax purposes, for the direct and indirect holders of Paired Interests (except to the extent that property other than securities is received in such exchange), based on a “should” or “will” level
opinion from independent tax counsel of recognized standing and expertise (including, at the request of the Call Option Holder, permitting a merger or contribution of the equity of the Call Option Issuer into another corporation in lieu of an exchange of the Call Option Paired Interests).
(c) Pubco shall send written notice to each Holder at least thirty (30) days prior to the closing of any Disposition Event to which this
Section 2.04
applies informing them of such Disposition Event.
Section 2.05.
Interaction with Tax Receivable Agreement
. Notwithstanding any other provision in this Agreement, in any Exchange hereunder (including in connection with a Disposition Event), payments under or in respect of the Tax Receivable Agreement shall not be considered part of the consideration payable in respect of any Paired Interest or share of Class A Common Stock in connection with such Exchange, and nothing herein shall limit or require any Holder to exchange or otherwise forfeit any of a Holder’s rights under or with respect to the Tax Receivable Agreement.
Section 2.06.
Listing of Deliverable Common Stock
. Pubco shall use its reasonable best efforts to cause all Deliverable Common Stock issued upon an exchange of Paired Interests to be listed at the time of such issuance on the Securities Exchange.
Section 2.07.
Deliverable Common Stock to be Issued; Class C Common Stock or Class D Common Stock to be Cancelled
.
(a) Pubco shall at all times reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon an Exchange, the maximum number of shares of Deliverable Common Stock as shall be deliverable upon Exchange of all then-outstanding Paired Interests; provided that nothing contained herein shall be construed to preclude Pubco from satisfying its obligations in respect of an Exchange for which it is permitted to deliver shares of Deliverable Common Stock by delivery of shares of Deliverable Common Stock that are held in the treasury of Pubco or any of its subsidiaries or by delivery of purchased shares of Deliverable Common Stock (which may or may not be held in the treasury of Pubco or any subsidiary thereof). Pubco covenants that all shares of Deliverable Common Stock issued upon an Exchange will, upon issuance thereof, be validly issued, fully paid and non-assessable.
(b) When a Paired Interest has been Exchanged in accordance with this Agreement, (i) the share of Class C Common Stock or Class D Common Stock corresponding to such Paired Interest shall be cancelled by Pubco for no consideration and (ii) the Common Unit corresponding to such Paired Interest shall be deemed transferred from the Exchanging Holder to Pubco and the Company shall cause such transfer to be registered in the books and records of the Company.
(c) Subject to the terms of the Registration Rights Agreement, Pubco covenants and agrees to deliver shares of Deliverable Common Stock, if requested, pursuant to an effective registration statement under the Securities Act with respect to any Exchange to the extent that a registration statement is effective and available for such shares. In the event that any Exchange in accordance with this Agreement is to be effected at a time when any required
registration has not become effective or otherwise is unavailable, upon the request and with the reasonable cooperation of the Holders requesting such Exchange, Pubco and the Company shall use reasonable best efforts promptly to facilitate such Exchange pursuant to an available exemption from such registration requirements.
(d) Pubco agrees that it has taken all or will take such steps as may be required to cause to qualify for exemption under Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and to be exempt for purposes of Section 16(b) under the Exchange Act, any acquisitions from, or dispositions to, Pubco or the Company of equity securities of Pubco (including the Call Option or other derivative securities with respect thereto) or the Company and any securities that may be deemed to be equity securities or derivative securities of Pubco for such purposes that result from the transactions contemplated by this Agreement, by each officer or director of Pubco, including any director by deputization. The authorizing resolutions shall be approved by either Pubco’s board of directors or a committee composed solely of two or more Non-Employee Directors (as defined in Rule 16b-3) of Pubco.
Section 2.08.
Distributions
. No Exchange shall impair the right of the Exchanging Holder to receive any distributions payable on the Common Units so exchanged in respect of a record date that occurs prior to the Exchange Date for such Exchange. No adjustments in respect of dividends or distributions on any Common Unit will be made on the Exchange of any Paired Interest, and if the Exchange Date with respect to a Common Unit occurs after the record date for the payment of a dividend or other distribution on Common Units but before the date of the payment, then the registered Holder of the Common Unit at the close of business on the record date will be entitled to receive the dividend or other distribution payable on the Common Unit on the payment date (without duplication of any distribution to which such Holder may be entitled under Section 4.01(b) of the LLC Agreement in respect of taxes) notwithstanding the Exchange of the Paired Interests or a default in payment of the dividend or distribution due on the Exchange Date. For the avoidance of doubt, no Exchanging Holder shall be entitled to receive, in respect of a single record date, distributions or dividends both on Common Units exchanged by such Holder and on shares of Deliverable Common Stock received by such Holder in such Exchange.
Section 2.09.
Obligations of Call Option Holder
. Neither the Call Option Holder nor the Call Option Issuer shall amend, modify, waive any rights or obligations under or in any way alter the rights and obligations under the Call Option without the prior written consent of Pubco and the Company, which consent shall not be unreasonably withheld, conditioned or delayed.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01.
Representations and Warranties of Pubco and the Company
. Each of Pubco and the Company represents and warrants that (i) it is a corporation or limited liability company duly incorporated or formed and is existing in good standing under the laws of the State of Delaware, (ii) it has all requisite corporate or limited liability company power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and, in the case of Pubco, to issue the Deliverable Common Stock in
accordance with the terms hereof, (iii) the execution and delivery of this Agreement by it and the consummation by it of the transactions contemplated hereby (including in the case of Pubco, the issuance of the Deliverable Common Stock) have been duly authorized by all necessary corporate or limited liability company action on its part and (iv) this Agreement constitutes a legal, valid and binding obligation of it enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.
Section 3.02.
Representations and Warranties of the Holders
. Each Holder, severally and not jointly, represents and warrants that (i) if it is not a natural person, that it is duly incorporated or formed and, the extent such concept exists in its jurisdiction of organization, is in good standing under the laws of such jurisdiction, (ii) it has all requisite legal capacity and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, (iii) if it is not a natural person, the execution and delivery of this Agreement by it of the transactions contemplated hereby have been duly authorized by all necessary corporate or other entity action on the part of such Holder and (iv) this Agreement constitutes a legal, valid and binding obligation of such Holder enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.
ARTICLE IV
MISCELLANEOUS
Section 4.01.
Assignment; Additional Holders
. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by any of the parties hereto without the prior written consent of the other parties, except that (a) the Company and Pubco may assign their respective rights and obligations under this Agreement to any successor of the Company or Pubco, as applicable, and (b) to the extent a Holder validly transfers any or all of such Holder’s Paired Interests (or, if applicable, all or any portion of the Call Option) to another Person in a transaction in accordance with, and not in contravention of, the LLC Agreement or the Pubco Charter, then such transferee (each, a “
Permitted Transferee
”) shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of
Exhibit B
hereto, whereupon such Permitted Transferee shall become a Holder hereunder.
Section 4.02.
Further Assurances
. Each party hereto agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by Applicable Law or as, in the reasonable judgment of Pubco, may be necessary or advisable to carry out the intent and purposes of this Agreement.
Section 4.03.
Notices
. All notices, requests and other communications to any party hereunder shall be in writing (including e-mail transmission, so long as a receipt of such e-mail is acknowledged by non-automated response) and shall be given to the following, or to such other address or contact information as such party may hereafter specify for the purpose by notice to the other parties hereto:
(a) if to Pubco or the Company, to:
EVO Payments, Inc.
Ten Glenlake Parkway
South Tower, Suite 950
Atlanta, Georgia 30328
Attention: Steven J. de Groot
Executive Vice President and General Counsel
E-mail: Steve.deGroot@evopayments.com
with a copy which shall not constitute notice to:
King & Spalding LLP
1180 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: Keith M. Townsend and Zachary L. Cochran
E-mail: ktownsend@kslaw.com and zcochran@kslaw.com
(b) if to any Holder, to the address and other contact information set forth in the records of Pubco or the Company from time to time.
All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. New York City time on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.
Section 4.04.
Binding Effect
. The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and permitted assigns.
Section 4.05.
Jurisdiction
. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in
Section 4.03
shall be deemed effective service of process on such party.
Section 4.06.
WAIVER OF JURY TRIAL
. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 4.07.
Counterparts
. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
Section 4.08.
Entire Agreement
. This Agreement, the LLC Agreement and the Registration Rights Agreement constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.
Section 4.09.
Severability
. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.
Section 4.10.
Amendment
. This Agreement can be amended at any time and from time to time by written instrument signed by the Company, Pubco and the holders of a majority of the Units held by the parties hereto;
provided
that no amendment to this Agreement may adversely modify in any material respect the rights (including the ability to Exchange Paired Interests pursuant to this Agreement) and obligations of any Holders in any materially disproportionate manner to the rights and obligations of any other Holders without the prior written consent of a majority in interest of such disproportionately affected Holders or Holders. In the event that this Agreement is amended, the Company and Pubco shall provide a copy of such amendment to all Holders;
provided
that any such amendment shall be binding on all Holders notwithstanding any failure by the Company and Pubco to provide a copy of any such amendment.
Section 4.11.
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.
Section 4.12.
Tax Treatment and Tax Information
.
(a) This Agreement shall be treated as part of the LLC Agreement as described in Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations promulgated thereunder. Unless otherwise required by the Code and the Treasury Regulations, and except with respect to an Exchange occurring pursuant to the proviso to
Section 2.04(b)
(or the final parenthetical of such section), the parties shall report any
Exchange consummated hereunder as a taxable sale of the Common Units and shares of Class C Common Stock or Class D Common Stock, and the Call Option, as applicable, by a Holder to Pubco, and no party shall take a contrary position on any income tax return or amendment thereof unless an alternate position is permitted under the Code and Treasury Regulations and the Managing Member consents in writing.
(b) The Company and Pubco shall cooperate with the Holders and the Call Option Issuer to (i) timely provide any tax information requested by the Holders and the Call Option Issuer in connection with an Exchange pursuant to this Agreement, (ii) provide any backup reasonably requested to understand such information, and (iii) provide reasonable access to the Company’s and Pubco’s employees and tax professionals to discuss such information. Without limiting the foregoing, the Company and Pubco shall provide the Holders and the Call Option Issuer with the information required to be reported by the Holders and the Call Option Issuer under Treasury Regulations Section 1.751-1(a)(3) and any information needed for the Holders to timely determine any withholding tax obligation incurred in connection with any Exchange hereunder; provided that, in each case, the Company and Pubco shall provide such information for such Holders’ or the Call Option Issuer’s review and comment prior to finalization.
Section 4.13.
Independent Nature of Holders’ Rights and Obligations
. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under hereunder. The decision of each Holder to enter into to this Agreement has been made by such Holder independently of any other Holder. Nothing contained herein, and no action taken by any Holder pursuant hereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby.
[
signature pages follow
]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above.
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PUBCO:
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EVO PAYMENTS, INC.
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By:
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/s/ Steven J. de Groot
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Name: Steven J. de Groot
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Title: Executive Vice President and
General Counsel
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COMPANY:
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EVO INVESTCO, LLC
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By:
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/s/ Steven J. de Groot
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Name: Steven J. de Groot
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Title: Executive Vice President and
General Counsel
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[
Signature Page to Exchange Agreement
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HOLDERS:
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MADISON DEARBORN CAPITAL PARTNERS VI-B, L.P.
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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MADISON DEARBORN CAPITAL PARTNERS VI EXECUTIVE-B, L.P.
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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MDCP VI-C CARDSERVICES SPLITTER, L.P.
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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[
Signature Page to Exchange Agreement
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MDCP CARDSERVICES, LLC
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By:
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Madison Dearborn Capital Partners VI-B, L.P.
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Its:
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Controlling Member
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By:
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Madison Dearborn Partners VI-B, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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MADISON DEARBORN CAPITAL PARTNERS VI-C, L.P.
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By:
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Madison Dearborn Partners VI-A&C, L.P.
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Its:
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General Partner
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By:
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Madison Dearborn Partners, LLC
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Its:
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General Partner
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By:
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/s/ Vahe A. Dombalagian
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Name: Vahe A. Dombalagian
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Its: Managing Director
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[
Signature Page to Exchange Agreement
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/s/ James G. Kelly
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James G. Kelly
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James G. Kelly Grantor Trust Dated January 12, 2012
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By:
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/s/ John Kelly
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Name: John Kelly
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Its: Trustee
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/s/ Michael L. Reidenbach
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Michael L. Reidenbach
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/s/ Brendan Tansill
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Brendan Tansill
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/s/ Steven J. de Groot
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Steven J. de Groot
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/s/ Kevin Hodges
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Kevin Hodges
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/s/ David Goldman
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David Goldman
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/s/ Jeff Rosenblatt
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Jeff Rosenblatt
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/s/ Kevin Lambrix
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Kevin Lambrix
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/s/ James Raftice
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James Raftice
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[
Signature Page to Exchange Agreement
]
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/s/ Peter Cohen
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Peter Cohen
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/s/ Alon Kindler
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Alon Kindler
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/s/ Blake Pyle
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Blake Pyle
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/s/ Greg Robertson
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Greg Robertson
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/s/ Mark Harrelson
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Mark Harrelson
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/s/ John Crouch
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John Crouch
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/s/ Ayman Ibrahaim
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Ayman Ibrahaim
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[
Signature Page to Exchange Agreement
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EXHIBIT A-1
PAIRED INTEREST EXCHANGE NOTICE
EVO Payments, Inc.
EVO Investco, LLC
Ten Glenlake Parkway
South Tower, Suite 950
Atlanta, Georgia 30328
Attention: General Counsel
Reference is hereby made to the Exchange Agreement, dated as of May 22, 2018 (the “
Exchange Agreement
”), by and among EVO Payments, Inc., a Delaware corporation (“
Pubco
”), EVO Investco, LLC, a Delaware limited liability company (the “
Company
”), the holders of Common Units and shares of Class C Common Stock or Class D Common Stock of Pubco, and the Call Option Holder, from time to time party thereto (each, a “
Holder
”). Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.
The undersigned Holder desires to transfer to Pubco the number of shares of Class [C/D] Common Stock plus Common Units (together, the “
Paired Interests
”) in Exchange for shares of Deliverable Common Stock to be issued in its name as set forth below, in accordance with the terms of the Exchange Agreement.
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Legal Name of Holder:
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Address:
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Number of Paired Interests to be Exchanged:
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Exchange Date:
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Holder consents to a redemption by the Company in accordance with Section 11.03 of the LLC Agreement with respect to the Paired Interests specified:
Yes
with respect to an aggregate of ____________ Paired Interests
No
The undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Exchange Notice and to perform the undersigned’s obligations hereunder; (ii) this Exchange Notice has been duly executed and delivered by the undersigned and is the legal, valid and binding obligation of the undersigned enforceable against it in accordance with the terms thereof or hereof, as the case may be, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and the availability
of equitable remedies; (iii) the Paired Interests subject to this Exchange Notice are being transferred to Pubco free and clear of any pledge, lien, security interest, encumbrance, equities or claim; and (iv) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having jurisdiction over the undersigned or the Paired Interests subject to this Exchange Notice is required to be obtained by the undersigned for the transfer of such Paired Interests to Pubco.
The undersigned hereby irrevocably constitutes and appoints any officer of Pubco as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may be necessary to transfer to Pubco the Paired Interests subject to this Exchange Notice and to deliver to the undersigned the shares of Deliverable Common Stock to be delivered in Exchange therefor.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Exchange Notice to be executed and delivered as of the date below.
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[
NAME OF HOLDER
]
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[If applicable: By:
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Its:]
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[If applicable:
CALL OPTION HOLDER
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By:
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Its:]
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Date:
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EXHIBIT A-2
CALL OPTION PUT NOTICE
EVO Payments, Inc.
EVO Investco, LLC
Ten Glenlake Parkway
South Tower, Suite 950
Atlanta, Georgia 30328
Attention: General Counsel
Reference is hereby made to the Exchange Agreement, dated as of May 22, 2018 (the “
Exchange Agreement
”), by and among EVO Payments, Inc., a Delaware corporation (“
Pubco
”), EVO Investco, LLC, a Delaware limited liability company (the “
Company
”), the holders of Common Units and shares of Class C Common Stock or Class D Common Stock of Pubco, and the Call Option Holder, from time to time party thereto (each, a “
Holder
”). Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.
The undersigned Holder desires Pubco to purchase and immediately thereafter exercise a portion of the Call Option providing a right to acquire the number of Call Option Paired Interests set forth below in accordance with the terms of the Exchange Agreement.
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Legal Name of Call Option Holder:
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Address:
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Legal Name of Call Option Issuer:
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Address:
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Number of Call Option Paired Interests subject to the portion of the Call Option to be
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purchased:
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Exchange Date:
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Call Option Holder and Call Option Issuer consent to payment of the purchase price for the Call Option and the exercise price of the Call Option in Deliverable Common Stock pursuant to
Section 2.02(d)
of the Exchange Agreement with respect to the portion of the Call Option providing a right to acquire the number of Call Option Paired Interests specified:
(unless consented to, such payments shall be made by Pubco in cash)
Yes
with respect to an aggregate of ____________ Call Option Paired Interests
No
The undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Exchange Notice and to perform the undersigned’s obligations hereunder; (ii) this Exchange Notice has been duly executed and delivered by the undersigned and is the legal, valid and binding obligation of the undersigned enforceable against it in accordance with the terms thereof or hereof, as the case may be, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and the availability of equitable remedies; (iii) the portion of the Call Option subject to this Exchange Notice and the subject Call Option Paired Interests being transferred to Pubco are free and clear of any pledge, lien, security interest, encumbrance, equities or claim (other than those pursuant to the Call Option); and (iv) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having jurisdiction over the undersigned or the Call Option or Call Option Paired Interests subject to this Exchange Notice is required to be obtained by the undersigned for the transfer to Pubco of the portion of the Call Option subject to this Exchange Notice or the subject Call Option Paired Interests.
The undersigned hereby irrevocably constitutes and appoints any officer of Pubco as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may be necessary to transfer to Pubco the Call Option and the Paired Interests subject to this Exchange Notice and, if applicable, to deliver to the undersigned the shares of Deliverable Common Stock to be delivered in Exchange therefor.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Exchange Notice to be executed and delivered as of the date below.
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CALL OPTION HOLDER
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By:
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Its:
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CALL OPTION ISSUER
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By:
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Its:
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Date:
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EXHIBIT B
JOINDER AGREEMENT
This Joinder Agreement (“
Joinder Agreement
”) is a joinder to the Exchange Agreement, dated as of May 22, 2018 (the “
Agreement
”), among EVO Payments, Inc., a Delaware corporation (“
Pubco
”), EVO Investco, LLC, a Delaware limited liability company (the “
Company
”), and the holders of Common Units and shares of Class C Common Stock or Class D Common Stock of Pubco, and the Call Option Holder, from time to time party thereto (each, a “
Holder
”). Capitalized terms used but not defined in this Joinder Agreement shall have their meanings given to them in the Agreement.
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State. In the event of any conflict between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall control.
The undersigned, having acquired [shares of Class [C/D] Common Stock and Common Units // a portion of the Call Option], hereby joins and enters into the Agreement. By signing and returning this Joinder Agreement to Pubco, the undersigned (i) accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a Holder contained in the Agreement, with all attendant rights, duties and obligations of a Holder thereunder and (ii) makes each of the representations and warranties of a Holder set forth in
Section 3.02
of the Agreement as fully as if such representations and warranties were set forth herein. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder Agreement by Pubco and by the Company, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.
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Name:
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Address for Notices:
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With Copies To:
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IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Joinder Agreement to be executed and delivered as of the date below.