FIFTH AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION OF
PAPA MURPHY’S HOLDINGS, INC.
Papa Murphy’s Holdings, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “
DGCL
”), hereby certifies as follows:
1. The name of the corporation is Papa Murphy’s Holdings, Inc., which is the name under which the corporation was originally incorporated. The date of the filing of its original certificate of incorporation with the Secretary of State of the State of Delaware was March 29, 2010.
2. This Fifth Amended and Restated Certificate of Incorporation, which restates, integrates and further amends the certificate of incorporation of the corporation as heretofore amended and restated, has been duly adopted by the corporation in accordance with Sections 242 and 245 of the DGCL and has been adopted by the requisite vote of the stockholders of the corporation, acting by written consent in lieu of a meeting in accordance with Section 228 of the DGCL.
3. The date of filing of this Fifth Amended and Restated Certificate of Incorporation is May 7, 2014 (the “
Effective Time
”).
4. The certificate of incorporation is hereby amended and restated in its entirety to read as follows:
ARTICLE I
NAME
The name of the corporation is “Papa Murphy’s Holdings, Inc.” (hereinafter called the “
Corporation
”).
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of the registered office of the Corporation in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, State of Delaware, 19808. The name of the registered agent of the Corporation in the State of Delaware at such address is Corporation Service Company.
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.
ARTICLE IV
CAPITAL STOCK
(A)
Classes of Stock
. The total number of shares of all classes of capital stock that the Corporation is authorized to issue is 215,000,000 shares, which shall be divided into two classes of stock to be designated “
Common Stock
” and “
Preferred Stock
”. The total number of shares of Common Stock that the Corporation is authorized to issue is 200,000,000 shares, par value $0.01 per share. The total number of shares of Preferred Stock that the Corporation is authorized to issue is 15,000,000 shares, par value $0.01 per share. Subject to the rights of the holders of any series of Preferred Stock, the number of authorized shares of either the Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL, and no vote of the holders of either the Common Stock or Preferred Stock voting separately as a class shall be required therefor.
(B)
Common Stock
. The powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions of the Common Stock, are as follows:
1.
Ranking
. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by such rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors of the Corporation (the “
Board
”) upon any issuance of the Preferred Stock of any series.
2.
Voting
. Except as otherwise provided by law or by the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of outstanding shares of Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. Notwithstanding any other provision of this Fifth Amended and Restated Certificate of Incorporation (as the same may be further amended and/or restated from time to time, including the terms of any Preferred Stock Designation (as defined below), this “
Certificate of Incorporation
”) to the contrary, the holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any Preferred Stock Designation) or the DGCL. On each matter on which they are entitled to vote, the holders of the outstanding shares of Common Stock shall be entitled to one (1) vote for each share of Common Stock held by such stockholder.
3.
Dividends
. Subject to the rights of the holders of Preferred Stock, holders of shares of Common Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation when, as and if declared thereon by the Board from time to time out of assets or funds of the Corporation legally available therefor.
4.
Liquidation
. Subject to the rights of the holders of Preferred Stock, holders of shares of Common Stock shall be entitled to receive the assets and funds of the Corporation available for distribution to stockholders in the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary. A liquidation, dissolution or winding up of the affairs of the Corporation, as such terms are used in this
Section (B)(4)
, shall not be deemed to be occasioned by or to include any consolidation or merger of the Corporation with or into any other person or a sale, lease, exchange or conveyance of all or a part of its assets.
(C)
Preferred Stock
.
Shares of Preferred Stock may be issued from time to time in one or more series. The Board is hereby authorized to provide by resolution or resolutions from time to time for the issuance, out of the unissued shares of Preferred Stock, of one or more series of Preferred Stock by filing a certificate pursuant to the DGCL (the “
Preferred Stock Designation
”), setting forth such resolution or resolutions and, with respect to each such series, establishing the number of shares to be included in such series, and fixing the voting powers, full or limited, or no voting power of the shares of such series, and the designation, preferences and relative, participating, optional or other special rights, if any, of the shares of each such series and any qualifications, limitations or restrictions thereof. The powers, designation, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations and restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. The authority of the Board with respect to each series of Preferred Stock shall include, but not be limited to, the determination of the following:
1. the designation of the series, which may be by distinguishing name, number, letter or title;
2. the number of shares of the series, which number the Board may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding);
3. the rights in respect of any dividends (or methods of determining the dividends), if any, payable to the holders of the shares of such series, any conditions upon which such dividends shall be paid, the amounts or rates at which dividends, if any, will be payable on, and the preferences, if any, of shares of such series in respect of dividends, whether such dividends, if any, shall be cumulative or noncumulative and the date or dates upon which such dividends shall be payable;
4. the redemption rights and price or prices, if any, for shares of the series, the form of payment of such price or prices (which may be cash, property or rights, including securities of the Corporation or another corporation or entity) for which, the period or periods within which and the other terms and conditions upon which the shares of such series may be redeemed, in whole or in part, at the option of the Corporation or at the option of the holder or holders thereof or upon the happening of a specified event or events, if any, including the obligation, if any, of the Corporation to purchase or redeem shares of such series pursuant to a sinking fund or otherwise;
5. the amounts payable out of the assets of the Corporation on, and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation;
6. whether the shares of the series shall be convertible into or exchangeable for, shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series or such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made;
7. any restrictions on the issuance of shares of the same series or any other class or series;
8. the voting rights, if any, of the holders of shares of the series generally or upon specified events; and
9. any other powers, preferences and relative, participating, optional or other special rights of each series of Preferred Stock, and any qualifications, limitations or restrictions thereof, all as may be determined from time to time by the Board and stated in the resolution or resolutions providing for the issuance of such series of Preferred Stock.
Without limiting the generality of the foregoing, the resolutions providing for issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law.
ARTICLE V
MANAGEMENT
This
Article V
is inserted for the management of the business and for the conduct of the affairs of the Corporation.
(A)
General Powers
. The business and affairs of the Corporation shall be managed by or under the direction of the Board, except as otherwise provided by law.
(B)
Number of Directors; Election of Directors
. Subject to the rights of holders of any series of Preferred Stock to elect additional directors, the number of the directors of the Corporation shall be fixed from time to time by resolution of the Board. A plurality of the votes cast by stockholders in person or by proxy shall elect such directors to the Board.
(C)
Classification of the Board
. Effective upon the Effective Time, the directors of the Corporation shall be divided into three classes designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board. The Board may assign members of the Board already in office to such classes as
of the Effective Time. The term of office of the initial Class I directors shall expire at the first annual meeting of the stockholders following the Effective Time; the term of office of the initial Class II directors shall expire at the second annual meeting of the stockholders following the Effective Time; and the term of office of the initial Class III directors shall expire at the third annual meeting of the stockholders following the Effective Time. At each annual meeting of stockholders, commencing with the first annual meeting of stockholders following the Effective Time, successors to the class of directors whose term expires at that annual meeting shall be elected to hold office until the third annual meeting next succeeding his or her election and until his or her respective successor shall have been duly elected and qualified. If the number of directors is changed, any increase or decrease shall be apportioned among the classes in such a manner as the Board shall determine so as to maintain the number of directors in each class as nearly equal as possible, but in no case shall a decrease in the number of directors shorten the term of any incumbent director.
(D)
Vacancies
. Subject to the rights of holders of any series of Preferred Stock to elect directors, any newly created directorship that results from an increase in the number of directors or any vacancy on the Board that results from the death, disability, resignation, disqualification or removal of any director or from any other cause shall be filled solely by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. Any director elected to fill a vacancy shall hold office for the remaining term of his or her predecessor.
(E)
Removal
. At any meeting called expressly for that purpose, any director may be removed but only with Cause (defined below) by the affirmative vote of a majority of the remaining members of the Board or the holders of at least sixty-six and two-thirds percent (66⅔%) of the then outstanding voting stock of the Corporation then entitled to vote on the election of directors, voting together as a single class.
“
Cause
” shall be deemed to exist only if: (i) such director has been indicted for or convicted of, has pleaded guilty or
nolo contendere
to, or such director is granted immunity to testify where another has been convicted of, a felony, (ii) such director has willfully failed to perform his duties, has been grossly negligent in the performance of his duties or has engaged in willful or serious misconduct in a matter that is injurious to the Corporation, in each case as determined by a court of competent jurisdiction or by the affirmative vote of at least a majority of the other members of the Board at any regular or special meeting of the Board called for such purpose, (iii) such director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects his ability to perform as a director of the Corporation, or (iv) such director has been found by a court of competent jurisdiction or by the affirmative vote of at least a majority of the other members of the Board at any regular or special meeting of the Board called for such purpose to have breached such director’s duty of loyalty to the Corporation or its stockholders or to have engaged in any transaction with the Corporation from which such director derived an improper personal benefit. No director of the Corporation so removed may be nominated, re-elected or reinstated as a director of the Corporation so long as the cause for removal continues to exist.
(F)
Committees
. Pursuant to the Amended and Restated Bylaws of the Corporation (as the same may be amended and/or restated from time to time, the “
Bylaws
”), the Board may establish one or more committees to which may be delegated any or all of the powers and duties of the Board to the full extent permitted by law.
ARTICLE VI
ELECTION OF DIRECTORS
Unless and except to the extent that the Bylaws shall so require, the election of directors of the Corporation need not be by written ballot.
ARTICLE VII
EXCULPATION AND INDEMNIFICATION OF DIRECTORS
(A)
Limited Liability
. To the fullest extent permitted by the DGCL as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. No repeal or modification of this
Article VII
shall apply to or have any adverse effect on any right or protection of, or any limitation of the liability of, a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
(B)
Right to Indemnification
. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “
Covered Person
”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “
proceeding
”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation, or has or had agreed to become a director or officer of the Corporation, or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a limited liability company, partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in section (D) of this
Article VII
, the Corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board.
(C)
Prepayment of Expenses
. The Corporation shall to the fullest extent not prohibited by applicable law, as the same exists or may hereafter be amended, pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by or on behalf of the Covered Person to repay all amounts advanced if it should be ultimately
determined that the Covered Person is not entitled to be indemnified under this
Article VII
or otherwise.
(D)
Claims
. If a claim for indemnification (following the final disposition of such proceeding) or advancement of expenses under this
Article VII
is not paid in full within thirty (30) days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense (including attorneys’ fees) of prosecuting such claim. In any such proceeding the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.
(E)
Nonexclusivity of Rights
. The rights conferred on any Covered Person by this
Article VII
shall not be exclusive of any other rights which such Covered Person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, the Bylaws, written agreement approved by the Board, vote of stockholders or disinterested directors or otherwise.
(F)
Amendment or Repeal
. Any repeal or modification of the foregoing provisions of this
Article VII
shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such repeal or modification.
(G)
Other Indemnification and Prepayment of Expenses
. This
Article VII
shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.
(H) The Corporation hereby acknowledges that any Covered Persons (the “
LEP Covered Persons
”) that are employees of LEP have, or may in the future have, certain rights to indemnification, advancement of expenses and/or insurance provided by LEP or other persons or entities that, directly or indirectly, (i) are controlled by, (ii) control, or (iii) are under common control with, LEP (collectively, the “
Other Indemnitors
”). The Corporation hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to the LEP Covered Persons are primary and any obligation of the Other Indemnitors to advance expenses or to provide indemnification or to provide insurance for the same expenses or liabilities incurred by the LEP Covered Persons are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by the LEP Covered Persons and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Certificate of Incorporation and the Bylaws (or any other agreement between the Corporation and the LEP Covered Persons), without regard to any rights the LEP Covered Persons may have against the Other Indemnitors (whether pursuant to this Certificate of Incorporation the Bylaws or any other agreement between the Corporation and the LEP Covered Persons, or law), and (iii) that it irrevocably waives, relinquishes and releases the Other Indemnitors from any and all rights and claims against the Other Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. Any insurance coverage provided, obtained or paid for by the Corporation, on the one hand, and any Other Indemnitor, on the other hand, shall be subject to the same primary and secondary
liability hierarchy set forth in this section (H) of this
Article VII
. The Corporation shall use its reasonable best efforts to cause any insurance coverage policy contemplated by this section (H) of this
Article VII
and obtained by the Corporation to contain the same primary and secondary liability hierarchy as set forth in this section (H) of this
Article VII
. The Corporation further agrees that no advancement or payment by the Other Indemnitors on behalf of the LEP Covered Persons with respect to any claim for which the LEP Covered Persons have sought indemnification from the Corporation shall affect the foregoing and the Other Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the LEP Covered Persons against the Corporation. The Corporation and the LEP Covered Persons agree that the Other Indemnitors are express third party beneficiaries of the terms of this section (H) of this
Article VII
.
For purposes of this Certificate of Incorporation, “
LEP
” shall mean, collectively, LEP Papa Murphy’s Holdings, LLC, Lee Equity Partners GP, LLC, a Delaware limited liability company, Lee Equity Partners, LLC, a Delaware limited liability company, funds managed or advised by Lee Equity Partners, LLC, Lee Equity Partners Fund, L.P., a Delaware limited partnership, Lee Equity Strategic Partners Fund, L.P., a Delaware limited partnership, and Lee Equity Strategic Partners Fund (Offshore), L.P., a Cayman Islands exempted limited partnership and each of their respective affiliates (within the meaning of Section 12b-2 under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”).
ARTICLE VIII
STOCKHOLDER ACTION
(A) Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders; provided, however, that any action required or permitted to be taken by the holders of Preferred Stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote, to the extent expressly so provided by the applicable Preferred Stock Designation.
(B) Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock, special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time only (1) by or at the direction of the Board or (2) by the Secretary of the Corporation upon the written request of LEP or any person that acquires (other than through a registered public offering or through a broker’s transaction executed on any securities exchange or other over-the-counter market) from LEP ten percent (10%) or more of the issued and outstanding Common Stock, as applicable,
provided
that LEP or such person that acquires (other than through a registered public offering or through a broker’s transaction executed on any securities exchange or other over-the-counter market) from LEP ten percent (10%) or more of the issued and outstanding Common Stock is a holder of ten percent (10%) or more of the issued and outstanding Common Stock (other than through a registered public offering or through a broker’s transaction executed on any securities exchange or other over-the-counter market). Except as provided in the preceding sentence, special meetings of the stockholders of the Corporation may not be called by any person or persons.
(C) Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders before a meeting of stockholders shall be given in the manner provided by the Bylaws.
ARTICLE IX
SECTION 203 OF THE DGCL
(A) The Corporation shall not be governed by Section 203 of the DGCL.
(B) Notwithstanding the foregoing, the Corporation shall not engage in any business combination (as defined below), at any point in time at which the Corporation's Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, with any interested stockholder (as defined below) for a period of three (3) years following the time that such stockholder became an interested stockholder, unless:
(1) prior to such time, the Board approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; or
(2) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least eighty-five percent (85%) of the voting stock (as defined below) of the Corporation 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 (1) persons who are directors and also officers and (2) 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
(3) at or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least sixty-six and two-thirds percent (66⅔%) of the outstanding voting stock of the Corporation which is not owned by the interested stockholder.
(C) For purposes of this
Article IX
, references to:
(1) “
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.
(2) “
associate
” when used to indicate a relationship with any person, means: (1) 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 twenty percent (20%) or more of any class of voting stock; (2) any trust or other estate in which such person has at least a twenty percent (20%) beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (3) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person.
(3) “
business combination
” when used in reference to the Corporation and any interested stockholder of the Corporation, means:
(i) any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (i) with the interested stockholder, or (ii) 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 the first paragraph of this
Article IX
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 ten percent (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: (a) pursuant to the exercise, exchange or conversion of the securities exercisable for, exchangeable for or convertible into stock of the Corporation or any subsidiary which securities were outstanding prior to the time that the interested stockholder became such; (b) pursuant to a merger under Section 251(g) of the DGCL; (c) 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 holders of a class or series of stock of the Corporation subsequent to the time the interested stockholder became such; (d) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all holders of said stock; or (e) any issuance or transfer of stock by the Corporation; provided, however, that in no case under items (c)-(e) of this section (C)(3)(iii) of this
Article IX
shall there be an increase in the interested stockholder’s proportionate share of the stock of any class or series of the Corporation or 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 section (C)(3)(i)-(iv) above of this
Article IX
) provided by or through the Corporation or any direct or indirect majority-owned subsidiary.
(4) “
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, by
contract, or otherwise. A person who is the owner of twenty percent (20%) or more of the outstanding voting stock of any 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 IX
, 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.
(5) “
interested stockholder
” means any person (other than the Corporation or any direct or indirect majority-owned subsidiary of the Corporation) that (1) is the owner of fifteen percent (15%) or more of the outstanding voting stock of the Corporation, or (2) is an affiliate or associate of the Corporation and was the owner of fifteen percent (15%) or more of the outstanding voting stock of the Corporation at any time within the three (3) 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; provided, however, that the term “interested stockholder” shall in no case include or be deemed to include, LEP, any LEP Direct Transferee, any LEP Indirect Transferee or any of their respective affiliates or successors or any group, or any member of any such group, to which such persons are a party under Rule 13d-5 of the Exchange Act, or (2) any person whose ownership of share in excess of the fifteen percent (15%) limitation set forth herein is the result of any action taken solely by the Corporation;
provided
that such person specified in this clause (2) 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 voting 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 rights, warrants or options, or otherwise.
(6) “
LEP Direct Transferee
” means any person that acquires (other than through a registered public offering or through a broker’s transaction executed on any securities exchange or other over-the-counter market) directly from LEP or any of its affiliates or successors or a "group", or any member of any such group, of which such persons are a party under Rule 13d-5 of the Exchange Act, beneficial ownership of five percent (5%) or more of the then outstanding voting stock of the Corporation;
provided
that such person was not an “interested stockholder” prior to such acquisition.
(7) “
LEP Indirect Transferee
” means any person that acquires (other than through a registered public offering or through a broker’s transaction executed on any securities exchange or other over-the-counter market) directly from any LEP Direct Transferee or any other LEP Indirect Transferee, beneficial ownership of five percent (5%) or more of the then outstanding voting stock of the Corporation;
provided
that such person was not an “interested stockholder” prior to such acquisition.
(8) “
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 (a) 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, 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 (b) 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 ten (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 item (b) of section (C)(8)(ii) above of this
Article IX
), or disposing of such stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.
(9) “
person
” means any individual, corporation, partnership, or unincorporated association or other entity.
(10) “
stock
” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.
(11) “
voting stock
” means stock of any class or series entitled to vote generally in the election of directors.
ARTICLE X
SEVERABILITY
If any provision or provisions (or any part thereof) of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Certificate 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 (ii) to the fullest extent possible, the provisions of this Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this 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 or for the benefit of the Corporation to the fullest extent permitted by law.
ARTICLE XI
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and any other provisions authorized by the DGCL may be added or inserted, in the manner now or hereafter prescribed by
law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this
Article XI
. Subject to applicable law, and subject to the rights of the holders of any series of Preferred Stock pursuant to any Preferred Stock Designation, the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon shall be required to amend, alter, change or repeal any provision of this Certificate of Incorporation, or to adopt any new provision of this Certificate of Incorporation
provided
,
however
, notwithstanding anything to the contrary contained herein,
Article V
(Management),
Article VI
(Election of Directors),
Article VII
(Exculpation and Indemnification of Directors),
Article VIII
(Stockholder Action),
Article IX
(Section 203 of the DGCL)
Article X
(Severability)
Article XII
(Amendment of Bylaws),
Article XIII
(Forum),
Article XIV
(Corporate Opportunities) and this
Article XI
(Amendment of Certificate of Incorporation) may not be amended, modified or repealed (or any provision adopted inconsistent with such provisions) by the stockholders without the affirmative vote of the holders of at least sixty-six and two-thirds percent (66⅔%) of the voting power of the Corporation’s then outstanding shares of stock entitled to vote thereon, voting together as a single class at any annual or special meeting of the stockholders in which notice of such amendment, modification, repeal or adoption is contained.
ARTICLE XII
AMENDMENT OF BYLAWS
In furtherance and not in limitation of the powers conferred upon it by law, the Board is expressly authorized and empowered to adopt, amend and repeal the Bylaws by the affirmative vote of a majority of the total number of directors present at a regular or special meeting of the Board at which there is a quorum or by unanimous written consent. The Bylaws may also be amended, altered or repealed and new Bylaws may be adopted by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of the Corporation’s then outstanding shares entitled to vote generally in the election of directors, voting together as a single class.
ARTICLE XIII
FORUM
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Corporation, (2) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or employee of the Corporation to the Corporation or the Corporation’s stockholders, (3) any action asserting a claim arising pursuant to any provision of the DGCL, or (4) any action asserting a claim governed by the internal affairs doctrine. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this
Article XIII
.
ARTICLE XIV
CORPORATE OPPORTUNITIES
To the fullest extent permitted by Section 122(17) of the DGCL and except as may be otherwise expressly agreed in writing by the Corporation and LEP, the Corporation, on behalf of itself and its subsidiaries, renounces any interest or expectancy of the Corporation and its subsidiaries in, or in being offered an opportunity to participate in, business opportunities, which are from time to time presented to LEP or any of its managers, officers, directors, agents, stockholders, members, partners, affiliates and subsidiaries (other than the Corporation and its subsidiaries), even if the opportunity is one that the Corporation or its subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and no such person or entity shall be liable to the Corporation or any of its subsidiaries for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such person or entity pursues or acquires such business opportunity, directs such business opportunity to another person or entity or fails to present such business opportunity, or information regarding such business opportunity, to the Corporation or its subsidiaries unless, in the case of any such person who is a director or officer of the Corporation, such business opportunity is expressly offered to such director or officer in writing solely in his or her capacity as a director or officer of the Corporation. Any person or entity purchasing or otherwise acquiring any interest in any shares of stock of the Corporation shall be deemed to have notice of and consented to the provisions of this
Article XIV
. Neither the alteration, amendment, addition to or repeal of this
Article XIV
, nor the adoption of any provision of this Certificate of Incorporation (including any certificate of designations relating to any series or class of Preferred Stock) inconsistent with this
Article XIV
, shall eliminate or reduce the effect of this
Article XIV
in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this
Article XIV
, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, this Fifth Amended and Restated Certificate of Incorporation has been executed this 7th day of May, 2014.
PAPA MURPHY’S HOLDINGS, INC.
By:
/s/ Ken Calwell
_______________________
Name: Ken Calwell
Title: Chief Executive Officer and President
AMENDED AND RESTATED
BYLAWS
OF
PAPA MURPHY’S HOLDINGS, INC.
ARTICLE I
STOCKHOLDERS
1.1
Place of Meetings
. All meetings of stockholders shall be held at such place, if any, as may be designated from time to time by the Board of Directors (the “
Board
”) of Papa Murphy’s Holdings, Inc. (the “
Corporation
”), the Chairman of the Board or the Chief Executive Officer or, if not so designated, at the principal office of the Corporation. The Board may, in its sole discretion, determine that a meeting shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a) of the General Corporation Law of the State of Delaware (the “
DGCL
”).
1.2
Annual Meeting
. The annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held on a date and at a time designated by the Board (which date shall not be a legal holiday in the place, if any, where the meeting is to be held). The Board may postpone, reschedule or cancel any previously scheduled annual meeting of stockholders.
1.3
Special Meetings
. Special meetings of stockholders for any purpose or purposes may be called as (and only as) provided in the Certificate of Incorporation. The Board may postpone, reschedule or cancel any previously scheduled special meeting of stockholders, other than one called at the request of LEP Papa Murphy’s Holdings, LLC (“
LEP
”), or any person that acquires (other than through a registered public offering or through a broker’s transaction executed on any securities exchange or over-the-counter market) from LEP ten percent (10%) or more of the issued and outstanding Common Stock, as applicable. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.
1.4
Notice of Meetings
. Except as otherwise provided by the DGCL, notice of each meeting of stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting. Without limiting the manner by which notice otherwise may be given to stockholders, any notice
shall be effective if given by a form of electronic transmission consented to (in a manner consistent with the DGCL) by the stockholder to whom the notice is given. The notices of all meetings shall state the place, if any, date and time of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting). The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If notice is given by mail, such notice shall be deemed given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. If notice is given by electronic transmission, such notice shall be deemed given at the time specified in Section 232 of the DGCL.
1.5
Voting List
. The Secretary shall prepare, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (
provided
,
however
, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting: (a) on a reasonably accessible electronic network,
provided
that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, then the list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise provided by law, the list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.
1.6
Quorum
. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the holders of a majority in voting power of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote at the meeting, present in person, present by means of remote communication in a manner, if any, authorized by the Board in its sole discretion, or represented by proxy, shall constitute a quorum for the transaction of business;
provided
,
however
, that where a separate vote by a class or classes or series of capital stock is required by law or the Certificate of Incorporation, the holders of a majority in voting power of the shares of such class or classes or series of the capital stock of the Corporation issued and outstanding and entitled to vote on such matter, present in person, present by means of remote communication in a manner, if any, authorized by the Board in its sole discretion, or represented by proxy, shall constitute a quorum entitled to take action with respect to the vote on such matter. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.
1.7
Adjournments
. Any meeting of stockholders, annual or special, may be adjourned from time to time to any other time and to any other place at which a meeting of stockholders may be held under these Bylaws by the chairman of the meeting or, if directed to be voted on by the chairman of the meeting, by the stockholders present or represented at the meeting and entitled to vote thereon, although less than a quorum. If the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting.
1.8
Proxies
. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person (including by means of remote communication in a manner, if any, authorized by the Board in its sole discretion by which stockholders may be deemed to be present in person and vote at such meeting) or may authorize another person or persons to vote
for such stockholder by a proxy executed or transmitted in a manner permitted by applicable law. No such proxy shall be voted upon after three (3) years from the date of its execution, unless the proxy expressly provides for a longer period.
1.9
Action at Meeting
. When a quorum is present at any meeting, any matter to be voted upon by the stockholders at such meeting shall, except as set forth in Section 2.2, be decided by the vote of the holders of shares of stock having a majority in voting power of the votes cast by the holders of all of the shares of stock present or represented at the meeting and voting affirmatively or negatively on such matter (or if there are two (2) or more classes or series of stock entitled to vote as separate classes, then in the case of each such class or series, the holders of shares of stock having a majority in voting power of the votes cast by the holders of all of the shares of stock of that class or series present or represented at the meeting and voting affirmatively or negatively on such matter), except when a different vote is required by applicable law, regulation applicable to the Corporation or its securities, the rules or regulations of any stock exchange applicable to the Corporation, the Certificate of Incorporation or these Bylaws. Voting at meetings of stockholders need not be by written ballot.
1.10
Notice of Stockholder Business and Nominations.
(A)
Annual Meetings of Stockholders
.
(1)
Nominations of persons for election to the Board and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (b) by or at the direction of the Board or any committee thereof or (c) by any stockholder of the Corporation who was a stockholder of record of the Corporation at the time the notice provided for in this Section 1.10 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 1.10. For the avoidance of doubt, the procedures set forth in this Section 1.10 shall be the exclusive means for a stockholder to make nominations or submit proposals for other business (other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”) or any successor rule thereto and included in the
Corporation’s proxy statement that has been prepared to solicit proxies for such annual meeting) for an annual meeting of stockholders.
(2)
For any nominations or any other business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and any such proposed business (other than the nominations of persons for election to the Board) must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90
th
) day, nor earlier than the close of business on the one hundred and twentieth (120th) day, prior to the first anniversary of the preceding year’s annual meeting (provided, however, that (a) in the case of the annual meeting of stockholders of the Corporation to be held in 2015, or (b) in the event that the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90
th
) day prior to such annual meeting and the tenth (10
th
) day following the day on which public announcement of the date of such annual meeting is first made by the Corporation). In no event shall the adjournment or postponement of an annual meeting (or any public announcement thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. To be in proper form, such stockholder’s notice (whether given pursuant to this paragraph (A)(2) of Section 1.10 or paragraph (B) of Section 1.10) to the Secretary of the Corporation shall set forth:
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(a)
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as to each person, if any, whom the stockholder proposes to nominate for election or reelection as a director to the Board
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(i)
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all information relating to such person that is required to be disclosed, whether in a proxy statement, other filings required to be made in connection with solicitations of proxies for election of directors in a contested election contest, or as otherwise required, in each case pursuant to
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and in accordance with Section 14(a) of the Exchange Act, and the rules and regulations promulgated thereunder;
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(ii)
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such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary of the Corporation upon written request); such person’s written representation and agreement (in the form provided by the Secretary of the Corporation upon written request), (A) that such person is not and will not become party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “
Voting Commitment
”) that has not been disclosed to the Corporation or any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (B) that such person is not and will not become a party to any agreement, arrangement, or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement, or indemnification in connection with service or action as a director that has not been disclosed to the Corporation, and (C) that, in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, such
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person would, if elected as a director, comply with all of the Corporation’s corporate governance, ethics, conflict of interest, confidentiality and stock ownership and trading policies and guidelines applicable generally to the Corporation’s directors and, if elected as a director of the Corporation, such person currently would be in compliance with any such policies and guidelines that have been publicly disclosed;
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(iii)
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a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three (3) years, and any other material relationships, between or among the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, and their respective affiliates and associates, or any other person or persons (including their names) acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates or associates, or any other person or persons (including their names) acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant;
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(iv)
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any information that such person would be required to disclose pursuant to clauses (ii) – (ix) of clause (c) of this
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paragraph (A)(2) of Section 1.10 if such person were a stockholder purporting to make a nomination or propose business pursuant thereto; and
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(v)
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an undertaking to notify the Corporation in writing of any change in the information called for by clauses (i) – (iv) as of the record date for notice of such meeting, by notice received by the Secretary of the Corporation at the principal executive offices of the Corporation not later than the tenth (10th) day following such record date;
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(b)
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as to any other business that the stockholder proposes to bring before the meeting,
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(i)
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a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the complete text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend any Corporation document, the language of the proposed amendment), the reasons for conducting such business at the annual meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and
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(ii)
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a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and their respective affiliate and associates, and any other person or persons (including their names) acting in concert therewith in connection with the proposal of such business by such stockholder; and
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(c)
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as to the stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination or proposal for other business is made, any of their respective affiliates or associates (including, if such stockholder or beneficial owner is an entity, as to each director, executive, managing member or control person of such entity), and any others acting in concert with any of the following:
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(i)
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the name and address of such stockholder, as they appear on the Corporation’s books, of such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing;
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(ii)
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the class or series and number of shares of capital stock of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder, such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing;
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(iii)
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a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among such stockholder and/or such beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, including, in the case of a nomination, the nominee;
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(iv)
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a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of capital stock of the Corporation or with a value derived in whole or in part
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from the value of any class or series of capital stock of the Corporation, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, such stockholder and such beneficial owners, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, whether or not such instrument or right shall be subject to settlement in underlying shares of capital stock of the Corporation (a “
Derivative Instrument
”);
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(v)
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a description of any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder and such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, has the right to vote any shares of any security of the Corporation;
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(vi)
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any short interest of such stockholder and such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, in any security of the Corporation (for purposes of these Bylaws, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security);
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(vii)
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any rights to dividends on the shares of the Corporation owned beneficially by such stockholder and such beneficial owner, if any, any of their respective affiliates or associates,
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and any others acting in concert with any of the foregoing, that are separated or separable from the underlying shares of capital stock of the Corporation;
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(viii)
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any proportionate interest in shares of capital stock of the Corporation or Derivative Instruments, held, directly or indirectly, by a general or limited partnership or similar entity in which such stockholder or such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, is the manager, managing member or directly or indirectly beneficially owns an interest in the manager or managing member of a limited liability company or similar entity;
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(ix)
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any performance related fees (other than an asset-based fee) that such stockholder and such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, is entitled to based on any increase or decrease in the value of shares of capital stock of the Corporation or Derivative Instruments, if any;
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(x)
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a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such annual meeting and intends to appear in person or by proxy at the annual meeting to propose such business or nomination;
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(xi)
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a representation whether the stockholder or the beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, intends or is part of a group which intends (a) to deliver a
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proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies or votes from stockholders in support of such proposal or nomination;
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(xii)
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any other information relating to such stockholder and beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, required to be disclosed under the DGCL or in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal of other business and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder; and
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(xiii)
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an undertaking by the stockholder and beneficial owner, if any, to notify the Corporation in writing of any change in the information called for by clauses (i) – (xii) above as of the record date for such meeting, by notice received by the Secretary of the Corporation at the principal executive offices of the Corporation not later than the tenth (10th) day following such record date.
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The Corporation may, as a condition of any such nomination being deemed properly brought before an annual meeting, require any proposed nominee to furnish (i) any information required pursuant to any undertaking delivered pursuant to this paragraph (A)(2) of Section 1.10, and (ii) such other information as the Corporation may require to determine the eligibility of such proposed nominee to serve as a director, or independent director of the Corporation may request. The foregoing notice requirements of this paragraph (A) of this
Section 1.10 shall be deemed satisfied by a stockholder with respect to business (other than any purported nomination) if the stockholder has notified the Corporation of his, her or its intention to present a proposal at an annual meeting in compliance with Rule 14a-8 promulgated under the Exchange Act or any successor rule thereto and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.
(3)
Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 1.10 to the contrary, in the event that the number of directors to be elected to the Board at the annual meeting is increased effective after the time period for which nominations would otherwise be due under paragraph (A)(2) of this Section 1.10 and there is no public announcement by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 1.10 shall also be considered timely, but only with respect to nominees for the additional directorship positions, if it shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the tenth (10
th
) day following the day on which such public announcement is first made by the Corporation.
(B)
Special Meetings of Stockholders
. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the special meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board or any committee thereof or (2) provided that the Board pursuant to Section 1.3 hereof has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (a) is a stockholder of record at the time the notice provided for in this Section 1.10 is delivered to the Secretary of the Corporation and at the time of the special meeting, (b) is entitled to vote at the special meeting and (iii) complies with the notice procedures and conditions set forth in this Section 1.10 (including the information requirements in paragraph (A)(2) of Section 1.10) as to such nomination. For the avoidance of doubt, the foregoing clause (2) of this paragraph (B) of
Section 1.10 shall be the exclusive means for a stockholder to propose nominations of persons for election to the Board at a special meeting of stockholders at which directors are to be elected. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (A)(2) of this Section 1.10 shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120
th
) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90
th
) day prior to such special meeting and the tenth (10
th
) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall the adjournment or postponement of a special meeting as to which notice has been sent to stockholders, or any public announcement with respect thereto, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(C)
General
. (1) Except as otherwise expressly provided in any applicable rule or regulation promulgated under the Exchange Act, only such persons who are nominated in accordance with the procedures set forth in this Section 1.10 shall be eligible to be properly elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.10. Except as otherwise provided by law, the Certificate of Incorporation or the Bylaws, the chairman of the meeting shall have the power and duty (a) to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.10 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made, solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies or votes in support of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as required by clause (A)(2)(c)(xi) of this Section 1.10) and (b) if any proposed nomination or business was not made or proposed in compliance with this Section
1.10, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions of this Section 1.10, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 1.10, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder, to act for such stockholder as proxy at the annual or special meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the annual or special meeting of stockholders.
(2)
For purposes of this Section 1.10, “public announcement” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or other national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.
(3)
Notwithstanding the foregoing provisions of this Section 1.10, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 1.10; provided however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 1.10 (including paragraphs (A)(2) and (B) hereof), and compliance with paragraphs (A)(2) and (B) of this Section 1.10 shall be the exclusive means for a stockholder to make nominations or submit other business (other than, as provided in the penultimate sentence of (A)(2), business other than nominations brought properly under and in compliance with Rule 14a-8 of the Exchange Act or any successor rule thereto, as may be amended from time to time). Nothing in this Section 1.10 shall be deemed to affect any rights (a) of stockholders to request
inclusion of proposals or nominations in the Corporation’s proxy statement pursuant to applicable Rule 14a-8 promulgated under the Exchange Act or (b) of the holders of any series of Preferred Stock to elect directors if and to the extent provided for under any applicable provisions of the Certificate of Incorporation.
(D)
Record Date
. In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided
,
however
, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.
In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which shall not be more than sixty (60) days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining the stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required under the DGCL, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required under the DGCL, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.
1.11
Conduct of Meetings
.
(A)
Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in the Chairman’s absence by the Vice Chairman of the Board, if any, or in the Vice Chairman’s absence by the Chief Executive Officer, or in the Chief Executive Officer’s absence, by the President, or in the President’s absence by a Vice President, or in the absence of all of the foregoing persons by a chairman designated by the Board. The Secretary shall act as secretary of the meeting, but in the Secretary’s absence the chairman of the meeting may appoint any person to act as secretary of the meeting.
(B)
The Board may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the Corporation as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate in its sole discretion regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board, the chairman of any meeting of
stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.
(C)
The chairman of the meeting shall announce at the meeting the date and time of the opening and closing of the polls for each matter voted upon at the meeting. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted unless the Court of Chancery of the State of Delaware shall determine otherwise.
(D)
In advance of any meeting of stockholders, the Board, the Chairman of the Board, the Chief Executive Officer or the President shall appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law. Every vote taken by ballots shall be counted by a duly appointed inspector or duly appointed inspectors.
ARTICLE II
DIRECTORS
2.1
General Powers
. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all of the powers of the Corporation except as otherwise provided by law or the Certificate of Incorporation.
2.2
Number, Election and Qualification
. Subject to the Certificate of Incorporation, the total number of directors constituting the Board shall be such number as may be fixed from time to time by resolution of the Board. At any meeting of stockholders at which directors are to be elected, directors shall be elected by the plurality vote of the votes cast by the holders of shares present or represented at the meeting and entitled to vote thereon. Election of directors need not be by written ballot. Directors need not be stockholders of the Corporation.
2.3
Chairman of the Board; Vice Chairman of the Board
. The Board may appoint from its members a Chairman of the Board and a Vice Chairman of the Board, neither of whom need be an employee or officer of the Corporation. If the Board appoints a Chairman of the Board, such Chairman shall perform such duties and possess such powers as are assigned by the Board and, if the Chairman of the Board is also designated as the Corporation’s Chief Executive Officer, shall have the powers and duties of the Chief Executive Officer prescribed in Section 3.7 of these Bylaws. If the Board appoints a Vice Chairman of the Board, such Vice Chairman shall perform such duties and possess such powers as are assigned by the Board. Unless otherwise provided by the Board, the Chairman of the Board or, in the Chairman’s absence, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board.
2.4
Classification; Terms of Office
. The directors of the Corporation shall be divided into three classes designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board. The Board may assign members of the Board already in office to such classes. The term of office of the initial Class I directors shall expire at the first annual meeting of the stockholders following the Fifth Amended and Restated Certificate of Incorporation becoming effective pursuant to the DGCL (the “
Effective Time
”); the term of office of the initial Class II directors shall expire at the
second annual meeting of the stockholders following the Effective Time; and the term of office of the initial Class III directors shall expire at the third annual meeting of the stockholders following the Effective Time. At each annual meeting of stockholders, commencing with the first annual meeting of stockholders following the Effective Time, successors to the class of directors whose term expires at that annual meeting shall be elected to hold office until the third annual meeting next succeeding his or her election and until his or her respective successor shall have been duly elected and qualified. If the number of directors is changed, any increase or decrease shall be apportioned among the classes in such a manner as the Board of Directors shall determine so as to maintain the number of directors in each class as nearly equal as possible, but in no case shall a decrease in the number of directors shorten the term of any incumbent director.
2.5
Quorum
. A majority of the directors at any time in office shall constitute a quorum of the Board. If at any meeting of the Board there shall be less than a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.
2.6
Action at Meeting
. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, unless a greater number is required by law, by the Certificate of Incorporation or these Bylaws.
2.7
Removal
. Subject to the rights of holders of any series of Preferred Stock, directors of the Corporation may be removed as provided in the Certificate of Incorporation.
2.8
Vacancies
. Subject to the provisions of the Certificate of Incorporation and the rights of holders of any series of Preferred Stock, any newly created directorship that results from an increase in the number of directors or any vacancy on the Board that results from the death, disability, resignation, disqualification or removal of any director or from any other cause shall be filled solely by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. Any director elected to fill a vacancy shall hold office until the next election of the class of directors to which such director has been approved and until its successor is duly elected and qualified.
2.9
Resignation
. Any director may resign by delivering a resignation in writing or by electronic transmission to the Corporation at its principal office or to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event.
2.10
Regular Meetings
. Regular meetings of the Board may be held without notice at such time and place as shall be determined from time to time by the Board;
provided
that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board may be held without notice immediately after and at the same place as the annual meeting of stockholders.
2.11
Special Meetings
. Special meetings of the Board may be called by the Chairman of the Board, by the Chief Executive Officer, or by the affirmative vote of a majority of the directors then in office or by one director in the event that there is only a single director in office.
2.12
Notice of Special Meetings
. Notice of the date, place and time of any special meeting of the Board shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director (a) in person or by telephone at least twenty-four (24) hours in advance of the meeting, (b) by sending written notice by reputable overnight courier, telecopy, facsimile or other means of electronic transmission, or delivering written notice by hand, to such director’s last known business, home or means of electronic transmission address at least twenty-four (24) hours in advance of the meeting, or (c) by sending written notice by first-class mail to such director’s last known business or home address at least seventy-two (72) hours in advance of the meeting. A notice or waiver of notice of a meeting of the Board need not specify the purposes of the meeting.
2.13
Meetings by Conference Communications Equipment
. Directors may participate in meetings of the Board or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.
2.14
Action by Consent
. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent to the action in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee thereof. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
2.15
Committees
. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation with such lawfully delegable powers and duties as the Board thereby confers, to serve at the pleasure of the Board. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board but subject to the DGCL, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each such committee shall keep minutes and make such reports as the Board may from time to time request. Except as the Board may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the committee or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these Bylaws for the Board. Except as otherwise provided in the Certificate of Incorporation, these Bylaws, or the resolution of the Board designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.
2.16
Compensation of Directors
. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board may from
time to time determine. No such payment shall preclude any director from serving the Corporation or any of its parent or subsidiary entities in any other capacity and receiving compensation for such service.
ARTICLE III
OFFICERS
3.1
Titles
. The officers of the Corporation may consist of a Chief Executive Officer, a President, a Chief Financial Officer, a Treasurer and a Secretary and such other officers with such other titles as the Board shall from time to time determine. The Board may appoint such other officers, including one or more Vice Presidents and one or more Assistant Treasurers or Assistant Secretaries, as it may deem appropriate from time to time.
3.2
Election
. The officers of the Corporation shall be elected annually by the Board at its first meeting following the annual meeting of stockholders.
3.3
Qualification
. No officer need be a stockholder. To the extent permitted by the DGCL, any two or more offices may be held by the same person.
3.4
Tenure
. Except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws, each officer shall hold office until such officer’s successor is duly elected and qualified, unless a different term is specified in the resolution electing or appointing such officer, or until such officer’s earlier death, resignation, disqualification or removal.
3.5
Resignation and Removal
. Any officer may resign by delivering a written resignation to the Corporation at its principal office or to the Board, the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event. Any officer may be removed at any time, with or without cause, by the affirmative vote of a majority of the directors then in office.
3.6
Vacancies
. The Board may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled, for such period as it may determine, any offices. Each such successor shall hold office for the unexpired term of such officer’s predecessor and until a
successor is duly elected and qualified, or until such officer’s earlier death, resignation, disqualification or removal.
3.7
Chief Executive Officer
. The Board of Directors shall select a Chief Executive Officer to serve at the pleasure of the Board of Directors. The Chief Executive Officer shall have general charge and supervision of the business of the Corporation subject to the direction of the Board, and shall perform all duties and have all powers that are commonly incident to the office of chief executive or that are delegated to such officer by the Board.
3.8
Vice Presidents
. Each Vice President shall perform such duties and possess such powers as the Board or the Chief Executive Officer may from time to time prescribe. The Board may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board.
3.9
Secretary and Assistant Secretaries
. The Secretary shall perform such duties and shall have such powers as the Board or the Chief Executive Officer may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of the secretary, including without limitation the duty and power to give notices of all meetings of stockholders and special meetings of the Board, to attend all meetings of stockholders and of the Board and keep a record of the proceedings thereof, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.
Any Assistant Secretary shall perform such duties and possess such powers as the Board, the Chief Executive Officer or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board) shall perform the duties and exercise the powers of the Secretary.
The chairman of any meeting of the Board or of stockholders may designate a temporary secretary to keep a record of any meeting.
3.10
Treasurer and Assistant Treasurers
. The Treasurer shall perform such duties and shall have such powers as may from time to time be assigned by the Board or the Chief
Executive Officer. In addition, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and be responsible for all funds and securities of the Corporation, to deposit funds of the Corporation in depositories selected in accordance with these Bylaws, to disburse such funds as ordered by the Board, to make proper accounts of such funds, and to render as required by the Board statements of all such transactions and of the financial condition of the Corporation.
The Assistant Treasurers shall perform such duties and possess such powers as the Board, the Chief Executive Officer or the Treasurer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Treasurer, the Assistant Treasurer (or if there shall be more than one, the Assistant Treasurers in the order determined by the Board) shall perform the duties and exercise the powers of the Treasurer.
3.11
Delegation of Authority
. The Board may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.
ARTICLE IV
CAPITAL STOCK
4.1
Issuance of Stock
. Subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the Corporation or the whole or any part of any shares of the authorized capital stock of the Corporation held in the Corporation’s treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board in such manner, for such lawful consideration and on such terms as the Board may determine.
4.2
Stock Certificates; Uncertificated Shares
. The shares of the Corporation shall be represented by certificates,
provided
that the Board may provide by resolution or resolutions that some or all of any or all classes or series of the Corporation’s stock shall be uncertificated shares. Every holder of stock of the Corporation represented by certificates shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board, representing the number of shares held by such holder registered in certificate form. Each such certificate shall be signed in a manner that complies with Section 158 of the DGCL.
Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, these Bylaws, applicable securities laws or any agreement among any number of stockholders or among such holders and the Corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.
If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of each certificate representing shares of such class or series of stock,
provided
that in lieu of the foregoing requirements there may be set forth on the face or back of each certificate representing shares of such class or series of stock a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the DGCL or, with respect to Section 151 of DGCL, a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
4.3
Transfers
. Shares of stock of the Corporation shall be transferable in the manner prescribed by law, the Certificate of Incorporation and in these Bylaws. Transfers of shares of stock of the Corporation shall be made only on the books of the Corporation or by transfer agents designated to transfer shares of stock of the Corporation. Subject to applicable law, shares of stock represented by certificates shall be transferred only on the books of the Corporation by the surrender to the Corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly
executed, and with such proof of authority or the authenticity of signature as the Corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Certificate of Incorporation or by these Bylaws, the Corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the Corporation in accordance with the requirements of these Bylaws.
4.4
Lost, Stolen or Destroyed Certificates
. The Corporation may issue a new certificate or uncertificated shares in place of any previously issued certificate alleged to have been lost, stolen or destroyed, upon such terms and conditions as the Board may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity and posting of such bond as the Board may require for the protection of the Corporation or any transfer agent or registrar.
ARTICLE V
GENERAL PROVISIONS
5.1
Fiscal Year
. Except as from time to time otherwise designated by the Board, the fiscal year of the Corporation shall begin on the first day of January of each year and end on the Monday nearest to December 31 in each year.
5.2
Corporate Seal
. The corporate seal shall be in such form as shall be approved by the Board.
5.3
Waiver of Notice
. Whenever notice is required to be given by law, by the Certificate of Incorporation or by these Bylaws, a written waiver signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before, at or after the time of the event for which notice is to be given, shall be deemed equivalent to notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in any such waiver. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
5.4
Voting of Securities
. Except as the Board may otherwise designate, the Chief Executive Officer, the President, the Chief Financial Officer or the Treasurer may waive notice, vote, consent, or appoint any person or persons to waive notice, vote or consent, on behalf of the Corporation, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this Corporation (with or without power of substitution), with respect to the securities of any other entity which may be held by this Corporation.
5.5
Evidence of Authority
. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the Corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.
5.6
Certificate of Incorporation
. All references in these Bylaws to the Certificate of Incorporation shall be deemed to refer to the Fifth Amended and Restated Certificate of Incorporation of the Corporation, dated May 7, 2014 as it may be further amended and/or restated and in effect from time to time.
5.7
Severability
. If any provision or provisions (or any part thereof) of these Bylaws shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provision of these Bylaws (including, without limitation, each portion of any paragraph of these Bylaws containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (ii) to the fullest extent possible, the provisions of these Bylaws (including, without limitation, each such portion of any paragraph of these Bylaws containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Corporation to the fullest extent permitted by law.
5.8
Pronouns
. All pronouns used in these Bylaws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.
5.9
Electronic Transmission
. For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
ARTICLE VI
AMENDMENTS
These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the Board or by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) in voting power of the Corporation’s then outstanding shares entitled to vote generally in the election of directors, voting together as a single class;
provided
that
any alteration, amendment or repeal, in whole or in part, of Sections 1.3 or 7.11 hereof shall require the affirmative approval of LEP or any person that acquires (other than through a registered public offering or through a broker’s transaction executed on any securities exchange or over-the-counter market) from LEP ten percent (10%) or more of the issued and outstanding Common Stock, as applicable.
ARTICLE VII
INDEMNIFICATION AND ADVANCEMENT
7.1
Right to Indemnification
. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “
Covered Person
”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “
proceeding
”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation, or has or had agreed to become a director or officer of the Corporation, or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a limited liability company, partnership, joint venture, trust,
enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 7.5, the Corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board.
7.2
Prepayment of Expenses
. The Corporation shall, to the fullest extent not prohibited by applicable law, as the same exists or may hereafter be amended, pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by or on behalf of the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article VII or otherwise.
7.3
Authorization of Indemnification
. Any indemnification under this Article VII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth Section 7.4. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders. Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding set forth in Section 7.1 or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably
incurred by such person in connection therewith, without the necessity of authorization in the specific case.
7.4
Good Faith Defined
. For purposes of any determination under Section 7.3, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action was based on good faith reliance on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term “another enterprise” as used in this Section 7.4 shall mean any other corporation or any partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 7.4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in the DGCL.
7.5
Right of Claimant to Bring Suit
. If a claim for indemnification (following the final disposition of such action, suit or proceeding) or advancement of expenses under this Article VII is not paid in full within thirty (30) days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense (including attorneys’ fees) of prosecuting such proceeding. In any such action the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law. It shall be a defense to any such action brought to enforce a right to indemnification (but not in an action brought to enforce a right to an advancement of expenses) that the claimant has not met the standards of conduct which make it permissible under the DGCL (or other applicable law) for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall
be on the Corporation. Neither a contrary determination in the specific case under Section 7.3 nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the claimant has not met any applicable standard of conduct.
7.6
Nonexclusivity of Indemnification and Advancement of Expenses
. The rights to indemnification and advancement of expenses provided by or granted pursuant to this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, any agreement, or pursuant to any vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that, subject to the last sentence of Section 7.1, indemnification of the persons specified in Section 7.1 shall be made to the fullest extent permitted by law. The provisions of this Article VII shall not be deemed to preclude the indemnification of or advancement of expenses to any person who is not specified in Section 7.1 but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL, or otherwise.
7.7
Insurance
. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VII.
7.8
Certain Definitions
. For purposes of this Article VII, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article VII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article VII, references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VII.
7.9
Survival of Indemnification and Advancement of Expenses
. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
7.10
Contract Rights
. The obligations of the Corporation under this Article VII to indemnify, and advance expenses to, a Covered Person shall be considered a contract between the Corporation and such person, and no modification or repeal of any provision of this Article VII shall affect, to the detriment of such person, such obligations of the Corporation in connection with a claim based on any act or failure to act occurring before such modification or repeal.
7.11
Primary Obligation
. The Corporation hereby acknowledges that any Covered Persons (the “
LEP Covered Persons
”) that are employees of LEP, Lee Equity Partners, LLC or any of their respective affiliates have, or may in the future have, certain rights to indemnification, advancement of expenses and/or insurance provided by LEP or other persons or entities that, directly or indirectly, (i) are controlled by, (ii) control, or (iii) are under common control with,
LEP (collectively, the “
Other Indemnitors
”). The Corporation hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to the LEP Covered Persons are primary and any obligation of the Other Indemnitors to advance expenses or to provide indemnification or to provide insurance for the same expenses or liabilities incurred by the LEP Covered Persons are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by the LEP Covered Persons and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Certificate of Incorporation and the Bylaws (or any other agreement between the Corporation and the LEP Covered Persons), without regard to any rights the LEP Covered Persons may have against the Other Indemnitors (whether pursuant to this Certificate of Incorporation the Bylaws or any other agreement between the Corporation and the LEP Covered Persons, or law), and (iii) that it irrevocably waives, relinquishes and releases the Other Indemnitors from any and all rights and claims against the Other Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. Any insurance coverage provided, obtained or paid for by the Corporation, on the one hand, and any Other Indemnitor, on the other hand, shall be subject to the same primary and secondary liability hierarchy set forth in this Section 7.11. The Corporation shall use its reasonable best efforts to cause any insurance coverage policy contemplated by Section 7.7 hereof and obtained by the Corporation to contain the same primary and secondary liability hierarchy as set forth in this Section 7.11. The Corporation further agrees that no advancement or payment by the Other Indemnitors on behalf of the LEP Covered Persons with respect to any claim for which the LEP Covered Persons have sought indemnification from the Corporation shall affect the foregoing and the Other Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the LEP Covered Persons against the Corporation. The Corporation and the LEP Covered Persons agree that the Other Indemnitors are express third party beneficiaries of the terms of this Section 7.11.
SECOND AMENDED AND RESTATED
STOCKHOLDERS’ AGREEMENT
DATED AS OF
May 1, 2014
AMONG
PAPA MURPHY’S HOLDINGS, INC.
AND
THE STOCKHOLDERS PARTY HERETO
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Page
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ARTICLE 1
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DEFINITIONS
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2
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SECTION 1.01.
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Definitions
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2
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ARTICLE 2
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[INTENTIONALLY OMITTED]
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9
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ARTICLE 3
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RESTRICTIONS ON TRANSFER
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9
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SECTION 3.01.
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General Restrictions on Transfer
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9
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SECTION 3.02.
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Legends
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10
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SECTION 3.03.
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[Intentionally Omitted]
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10
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SECTION 3.04.
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Restrictions on Transfers by Additional Stockholders
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10
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SECTION 3.05.
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Restrictions on Transfers by Lee Equity
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11
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ARTICLE 4
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[INTENTIONALLY OMITTED]
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11
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ARTICLE 5
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REGISTRATION RIGHTS
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11
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SECTION 5.01.
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Demand Registration
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11
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SECTION 5.02.
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Piggyback Registration
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13
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SECTION 5.03.
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Lock-Up Agreements
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15
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SECTION 5.04.
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Registration Procedures
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15
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SECTION 5.05.
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Indemnification by the Company
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19
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SECTION 5.06.
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Indemnification by the Participating Stockholders
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19
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SECTION 5.07.
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Conduct of Indemnification Proceedings
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20
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SECTION 5.08.
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Contribution
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21
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SECTION 5.09.
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Participation in Public Offering
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22
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SECTION 5.10.
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Other Indemnification
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22
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SECTION 5.11.
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Cooperation by the Company
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22
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SECTION 5.12.
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No Transfer of Registration Rights
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22
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SECTION 5.13.
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Restriction on Company Grants of Subsequent Registration Rights
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23
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ARTICLE 6
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CERTAIN COVENANTS AND AGREEMENTS
|
23
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SECTION 6.01.
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[Intentionally Omitted]
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23
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SECTION 6.02.
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Confidentiality
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23
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SECTION 6.03.
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Investment Opportunities and Conflicts of Interest
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24
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SECTION 6.04.
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Conflicting Agreements
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24
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ARTICLE 7
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MISCELLANEOUS
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25
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SECTION 7.01.
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Aggregation of Shares
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25
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SECTION 7.02.
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Binding Effect; Assignability; Benefit
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25
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SECTION 7.03.
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Notices
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25
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SECTION 7.04.
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Waiver; Amendment; Termination
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26
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SECTION 7.05.
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Transfer of All Securities
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27
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SECTION 7.06.
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Fees and Expenses
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27
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SECTION 7.07.
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Governing Law
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27
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SECTION 7.08.
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Jurisdiction
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27
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SECTION 7.09.
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Waiver of Jury Trial
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27
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SECTION 7.10.
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Specific Enforcement; Cumulative Remedies
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28
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SECTION 7.11.
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Entire Agreement
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28
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SECTION 7.12.
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Captions
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28
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SECTION 7.13.
|
Pronouns
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28
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SECTION 7.14.
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Severability
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28
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SECTION 7.15.
|
Counterparts; Effectiveness
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28
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SECTION 7.16.
|
No Impairment
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28
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SECOND AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT
This SECOND AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT (this “
Agreement
”) is made and entered into as of May 1, 2014 and effective immediately prior to the occurrence of the Initial Public Offering (as defined below) by and among:
(i) Papa Murphy’s Holdings, Inc., a Delaware corporation (the “
Company
”);
(ii) LEP Papa Murphy’s Holdings, LLC (“
Lee Equity
”); and
(iii) the Persons named as Additional Stockholders on the signature pages hereto (each, an “
Additional Stockholder
” and collectively, the “
Additional Stockholders
”).
If Lee Equity shall hereafter Transfer any of its Company Securities to any of its Permitted Transferees (as such terms are defined below), the term “Lee Equity” shall mean Lee Equity and such Permitted Transferees, taken together, and any right, obligation or action that may be exercised or taken at the election of Lee Equity may be exercised or taken at the election of Lee Equity and such Permitted Transferees.
If Barclays shall hereafter Transfer any of its Company Securities to any of its Permitted Transferees (as such terms are defined below), the term “
Barclays
” shall mean Barclays and such Permitted Transferees, taken together, and any right, obligation or action that may be exercised or taken at the election of Barclays may be exercised or taken at the election of Barclays and such Permitted Transferees.
If Gleacher shall hereafter Transfer any of its Company Securities to any of its Permitted Transferees (as such terms are defined below), the term “
Gleacher
” shall mean Gleacher and such Permitted Transferees, taken together, and any right, obligation or action that may be exercised or taken at the election of Gleacher may be exercised or taken at the election of Gleacher and such Permitted Transferees.
If any Additional Stockholder shall hereafter Transfer any of its Company Securities to any of its Permitted Transferees, the term “
Additional Stockholder
” as applied to such Additional Stockholder shall mean such Additional Stockholder and its Permitted Transferees, taken together, and any right, obligation or other action that may be exercised or taken at the election of such Additional Stockholder may be exercised or taken at the election of such Additional Stockholder and its Permitted Transferees.
W I T N E S S E T H :
WHEREAS, the Company, Lee Equity, and the Additional Stockholders of the Company have previously entered into that certain Amended and Restated
Stockholders’ Agreement, dated June 11, 2012 (the “
Existing Agreement
”), pursuant to which the parties thereto agreed to set forth certain of their rights, duties and obligations;
WHEREAS, except for
Sections
3.01(a)
,
3.01(c)
,
3.02
, and
3.04
,
3.05
,
Article V
,
Sections
6.02
,
6.03
, and
6.04
and
Article 7
of the Existing Agreement (collectively, the “
Surviving Provisions
”), the Existing Agreement shall terminate upon an Initial Public Offering; and
WHEREAS, pursuant to Section 7.04 of the Existing Agreement, Lee Equity and the Company may amend and restate the Existing Agreement so long as such amendment and restatement will not disproportionately and materially adversely affect the Additional Stockholders differently than Lee Equity; and
WHEREAS, pursuant to Section 7.04 of the Existing Agreement, Lee Equity and the Company, hereby desire to amend and restate the Existing Agreement in order to reflect the Surviving Provisions as hereinafter provided.
NOW, THEREFORE, for good and valuable consideration, the sufficiency and adequacy of which is hereby acknowledged, the parties hereto agree to amend and restate the Existing Agreement as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01.
Definitions
. (a) The following terms, as used herein, have the following meanings:
“
Affiliate
” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person;
provided
that no securityholder of the Company shall be deemed an Affiliate of any other securityholder solely by reason of an investment in the Company. For the purpose of this definition, the term “
control
” (including, with correlative meanings, the terms “
controlling
”, “
controlled by
” and “
under common control with
”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
“
Aggregate Ownership
” means, with respect to any Stockholder or group of Stockholders, the total number of the relevant class of Company Securities owned (without duplication) by such Stockholder or group of Stockholders as of the date of such calculation, calculated on a fully-diluted basis.
“
Barclays
” means Barclays Private Credit Partners Fund L.P. (formerly known as Barclays Structured Principal Investing Fund L.P.).
“
Barclays Fund
” means any investment vehicle, account or fund for which Barclays Private Credit Partners LLC (formerly Barclays Principal Structured Investing LLC) or any of its Affiliates serves as the general partner, managing member, investment manager or advisor.
“
Board
” means the board of directors of the Company.
“
Business Day
” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close.
“
Common Shares
” means shares of Common Stock.
“
Common Stock
” means the Company’s Common Stock, par value $0.01 per share, collectively and any stock into which such Common Stock may thereafter be converted, changed, reclassified or exchanged.
“
Company Securities
” means (i) the Common Stock, (ii) the Preferred Stock, (iii) any other capital stock issued by the Company and (iv) any securities convertible into or exchangeable for, or options, warrants or other rights to acquire, Common Stock, Preferred Stock or any other capital stock issued by the Company.
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“
Existing Stockholders
” means each of the Stockholders as of the date hereof.
“
Gleacher
” means Gleacher Mezzanine Fund II, L.P.
“
Gleacher Fund
” means any investment vehicle, account or fund for which Gleacher, Arrowhead Mezzanine LLC or any of their respective Affiliates serves as the general partner, managing member or investment manager.
“
group of Stockholders
” means a “group” of Stockholders, as such term would be interpreted under Section 13(d) of the Exchange Act.
“
Initial Public Offering
” means the first Public Offering of Common Stock after the date hereof.
“
Institutional Investors
” means each of Lee Equity, Gleacher and Barclays.
“
Lee Equity Fund
” means any investment vehicle, account or fund for which Lee Equity Partners, LLC or any of its Affiliates serves as the general partner, managing member or investment manager.
“
Majority Interest
” means an interest constituting more than fifty percent (50%) of the then outstanding Common Stock held by all Additional Stockholders (other than Lee Equity and any Lee Equity Affiliate and the holders of Restricted Securities).
“
NASD
” means the National Association of Securities Dealers, Inc.
“
Permitted Transferee
” means:
(i)
in the case of Lee Equity, (A) any Lee Equity Fund, (B) any actual or prospective shareholder, member or general or limited partner of Lee Equity (a “
Lee Equity Partner
”), and any corporation, partnership, limited liability company, or other entity that is an Affiliate of any Lee Equity Partner or a Lee Equity Fund (collectively, “
Lee Equity
Affiliates
”), (C) any managing director, general partner, director, limited partner, officer or employee of Lee Equity or any Lee Equity Affiliate, or any spouse, lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of any of the foregoing persons described in this clause (D) (collectively, “
Lee Equity Associates
”) or (E) any trust the beneficiaries of which, or any corporation, limited liability company or partnership the stockholders, members or general or limited partners of which, include only Lee Equity, Lee Equity Affiliates, Lee Equity Associates, their spouses or other lineal descendants;
(ii)
in the case of Barclays, (A) any Barclays Fund, (B) any actual or prospective shareholder, member or general or limited partner of Barclays (a “
Barclays Partner
”), and any corporation, partnership, limited liability company, or other entity that is an Affiliate of any Barclays Partner or a Barclays Fund (collectively, “
Barclays
Affiliates
”), (C) any managing director, general partner, director, limited partner, officer or employee of Barclays or any Barclays Affiliate, or any spouse, lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of any of the foregoing persons described in this clause (D) (collectively, “
Barclays Associates
”), or (E) any trust the beneficiaries of which, or any corporation, limited liability company or partnership the stockholders, members or general or limited partners of which, include only Barclays, Barclays Affiliates, Barclays Associates, their spouses or other lineal descendants.
(iii)
in the case of Gleacher, (A) any Gleacher Fund, (B) any actual or prospective shareholder, member or general or limited partner of Gleacher (a “
Gleacher Partner
”), and any corporation, partnership, limited liability company, or other entity that is an Affiliate of any Gleacher Partner or a Gleacher Fund (collectively, “
Gleacher
Affiliates
”), (C) any managing director, general partner, director, limited partner, officer or employee of Gleacher or any Gleacher Affiliate, or any spouse, lineal descendant, sibling,
parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of any of the foregoing persons described in this clause (D) (collectively, “
Gleacher Associates
”), (E) any trust the beneficiaries of which, or any corporation, limited liability company or partnership the stockholders, members or general or limited partners of which, include only Gleacher, Gleacher Affiliates, Gleacher Associates, their spouses or other lineal descendants or (F) any purchaser of all or any part of the Second Lien Loans; and
(iv)
in the case of any Additional Stockholder (other than Barclays or Gleacher), (A) any entity that is an Affiliate of such Additional Stockholder, (B) any spouse, lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of such Additional Stockholder or, (C) a trust that is for the exclusive benefit of such Additional Stockholder or its Permitted Transferees under clause (B) above.
“
Person
” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“
Piggyback Stockholders
” shall mean (i) in connection with the Initial Public Offering, all Stockholders and (ii) for any subsequent Public Offering, (A) any Stockholder that at the time of determination (x) owns one percent (1%) or more of the outstanding Common Stock, or (y) owns less than one percent (1%) of the outstanding Common Stock and is restricted from Transferring subject to the volume limitations under Rule 144 as a result of being an Affiliate of Lee Equity, or (B) the Institutional Investors.
“
Plan
” means the Company’s 2010 Management Incentive Plan.
“
Preferred Stock
” means the Series A Preferred Stock and the Series B Preferred Stock.
“
Pro Rata Share
” means, for each Rights Party and any proposed issuance of any class of Company Securities with respect to which each such Rights Party shall be entitled to exercise his or her rights, the fraction that results from dividing (A) such Rights Party’s Aggregate Ownership of the class of Company Securities proposed to be issued on a fully-diluted basis (including Common Shares issued or issuable upon exercise of options granted under the Plan to the extent such options are vested) immediately before giving effect to such issuance, by (B) the total number of such underlying class of Company Securities then outstanding and owned by Lee Equity and the Rights Parties (immediately before giving effect to such issuance), calculated on a fully-diluted basis as described in clause (A);
provided
,
however
, that if no shares of the class of Company Securities to be issued in such transaction are outstanding prior to such issuance, then for purposes of determining the Aggregate Ownership of a Rights Party, “Aggregate Ownership” shall
mean the number of total Company Securities held by such Rights Party and all other Stockholders immediately prior to such issuance.
“
Public Offering
” means an underwritten public offering of Company Securities pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form.
“
Public Offering Limitations
” means no Additional Stockholder shall be permitted to exercise its rights to require registration of any Company Securities in a Piggyback Registration under
Section 5.02
hereof with respect to the Initial Public Offering unless Lee Equity is registering its Registrable Securities in the Initial Public Offering.
“
Registrable Securities
” means, at any time, any Company Securities held by any Stockholder until (i) a registration statement covering such Company Securities has been declared effective by the SEC and such Company Securities have been disposed of pursuant to such effective registration statement, (ii) such Company Securities are sold under Rule 144 under the Securities Act or (iii) such Company Securities are otherwise Transferred, the Company has delivered a new certificate or other evidence of ownership for such Company Securities not bearing the legend required pursuant to this Agreement and such Company Securities may be resold without subsequent registration under the Securities Act.
“
Registration Expenses
” means any and all expenses incident to the performance of or compliance with any registration or marketing of securities, including all (i) registration and filing fees, and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system, (ii) fees and expenses of compliance with any securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the securities registered), (iii) expenses in connection with the preparation, printing, mailing and delivery of any registration statements, prospectuses and other documents in connection therewith and any amendments or supplements thereto, (iv) security engraving and printing expenses, (v) internal expenses of the Company (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (vi) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of any comfort letters), (vii) reasonable fees and expenses of any special experts retained by the Company in connection with such registration, (viii) reasonable fees and out-of-pocket expenses of counsel to the Stockholders participating in the offering selected (A) by Lee Equity, in the case of any offering in which Lee Equity participates, or (B) in any other case, by the Stockholders holding the majority of the Registrable Securities to be sold for the account of all Stockholders in the offering, (ix) fees and expenses in connection with any review by the NASD of the underwriting arrangements or other terms of the offering, and all fees and
expenses of any “qualified independent underwriter,” including the fees and expenses of any counsel thereto, (x) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding any underwriting fees, discounts and commissions attributable to the sale of Registrable Securities, (xi) costs of printing and producing any agreements among underwriters, underwriting agreements, any “blue sky” or legal investment memoranda and any selling agreements and other documents in connection with the offering, sale or delivery of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and expenses and the fees and expense of any other agent or trustee appointed in connection with such offering, (xiii) expenses relating to any analyst or investor presentations or any “road shows” undertaken in connection with the registration, marketing or selling of the Registrable Securities and (xiv) fees and expenses payable in connection with any ratings of the Registrable Securities, including expenses relating to any presentations to rating agencies.
“
Relative Percentage
” shall mean the quotient obtained by dividing (A) such Stockholder’s Aggregate Ownership of the applicable class of Company Securities immediately following the Determination Time by (B) such Stockholder’s Aggregate Ownership of the applicable class of Company Securities as of the date hereof.
“
Restricted Securities
” shall mean shares of Common Stock issued pursuant to the Company’s Plan that have either time vesting or performance vesting requirements set forth in the applicable grant agreement or are otherwise subject to forfeiture.
“
Rule 144
” means Rule 144 (or any successor provisions) under the Securities Act.
“
SEC
” means the Securities and Exchange Commission.
“
Second Lien Loans
” means the term loans made under the Second Lien Credit Agreement.
“
Securities Act
” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“
Stockholder
” means each Person (other than the Company) who, at any relevant determination date, shall be a party to or bound by this Agreement (as may be amended from time to time) for so long as such Person shall “beneficially own” (as such term is defined in Rule 13d-3 of the Exchange Act) any Company Securities.
“
Subsidiary
” means, with respect to any specified Person, any other Person in which such specified Person, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least fifty percent (50%) of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
“
Third Party
” means a prospective purchaser of Company Securities in a bona fide arm’s-length transaction from a Stockholder, other than an Affiliate of such Stockholder.
“
Transfer
” means, with respect to any Company Securities, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer such Company Securities or any participation or interest therein, whether directly or indirectly, or agree or commit to do any of the foregoing and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of such Company Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing. For the avoidance of doubt, clauses (i) and (ii) above shall include any Transfer of equity interests in Lee Equity.
(b)
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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Confidential Information
|
6.02(b)
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Damages
|
5.05
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Demand Registration
|
5.01(a)
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Determination Time
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3.04
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Indemnified Party
|
5.07
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Indemnifying Party
|
5.07
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Independent Director
|
2.01
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Inspectors
|
5.04(g)
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Management Stockholder
|
3.04
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Maximum Offering Size
|
5.01(e)
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Other Business
|
6.03
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Piggyback Registration
|
5.02(a)
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Records
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5.04(g)
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Registering Stockholders
|
5.01(a)(ii)
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Replacement Nominee
|
2.03(a)
|
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Requesting Stockholder
|
5.01(a)
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Restricted Period
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3.04
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Rights Party(ies)
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4.04(a)
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(c)
Other Definitional and Interpretive Matters
. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:
Calculation of Time Period
. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded.
If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.
Dollars
. Any reference in this Agreement to $ shall mean U.S. dollars.
Exhibits/Schedules
. The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits, Annexes and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule, Annex or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement.
Gender and Number
. Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.
Headings
. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement. All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.
Herein
. The words such as “
herein
,” “
hereinafter
,” “
hereof
,” and “
hereunder
” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.
ARTICLE 2
[Intentionally Omitted]
ARTICLE 3
RESTRICTIONS ON TRANSFER
SECTION 3.01.
General Restrictions on Transfer
. (a) Each Stockholder understands and agrees that the Company Securities held by it on the date hereof have not been and will not be registered under the Securities Act and are restricted securities under the Securities Act and the rules and regulations promulgated thereunder. Each Stockholder agrees that it shall not Transfer any Company Securities (or solicit any offers in respect of any Transfer of any Company Securities), except in compliance with the Securities Act, any other applicable securities or “blue sky” laws and any restrictions on Transfer contained in this Agreement. Prior to an Initial Public Offering, no Stockholder shall Transfer any Company Securities to any Person if such Transfer would result in adverse regulatory consequences to the Company, including, without limitation, obligations of the Company to file periodic reports with the SEC under the Exchange Act.
(b)
[Intentionally Omitted]
(c)
Any attempt to Transfer any Company Securities not in compliance with this Agreement shall be null and void, and the Company shall not, and shall cause any transfer agent not to, give any effect in the Company’s stock records to such attempted Transfer.
SECTION 3.02.
Legends
. (a) In addition to any other legend that may be required, each certificate for Company Securities issued to any Stockholder shall bear a legend in substantially the following form:
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY FOREIGN OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT DATED AS OF JUNE 11, 2012 (AS MAY BE AMENDED FROM TIME TO TIME), COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM PAPA MURPHY’S HOLDINGS, INC. OR ANY SUCCESSOR THERETO.”
(b)
If any Company Securities shall cease to be Registrable Securities under clause (i) of the definition thereof, the Company, upon the written request of the holder thereof, shall issue to such holder a new certificate evidencing such Company Securities without the first sentence of the legend required by
Section 3.02(a)
endorsed thereon. If any Company Securities are sold under clause (ii) or clause (iii) of the definition of Registrable Securities, the Company may request that the holder provide an opinion of legal counsel reasonably acceptable to the Company stating that such Company Securities are freely transferable under the Securities Act, and if it requests and receives such opinion, the Company shall issue to such holder a new certificate evidencing such Company Securities without the first sentence of the legend required by
Section 3.02(a)
endorsed thereon. If any Company Securities cease to be subject to any and all restrictions on Transfer and all other obligations set forth in this Agreement, the Company, upon the written request of the holder thereof, shall issue to such holder a new certificate evidencing such Company Securities without the second sentence of the legend required by
Section 3.02(a)
endorsed thereon.
SECTION 3.03.
[Intentionally Omitted]
SECTION 3.04.
Restrictions on Transfers by Additional Stockholders
. Until the second anniversary of the consummation of the Initial Public Offering (the “
Restricted Period
”), no Additional Stockholder who is employed by the Company or any of its Subsidiaries (each, a “
Management Stockholder
”) may Transfer any of their Company Securities, except (A) in a Transfer of Company Securities in a repurchase of such Company Securities by the Company or (B) in connection with or following the consummation of an Initial Public Offering;
provided
, that with respect to clause (B) (unless otherwise agreed between Lee Equity or any of its Affiliates and a
Management Stockholder), the Additional Stockholders (X) with respect to the Initial Public Offering, shall not be permitted to exercise their rights to require registration of any Company Securities in a Piggyback Registration under
Section 5.02
hereof unless Lee Equity is registering its Company Securities in the Initial Public Offering, (Y) shall only be permitted to Transfer Company Securities simultaneous with or subsequent to a Transfer of Company Securities by Lee Equity, subject to
Section 5.03
, and (Z) except as set forth below, shall only be permitted to Transfer the number of shares of a given class of Company Securities such that the Transfer would result in the Relative Percentage of such class of Company Securities of such Management Stockholder immediately following the effective time of such Transfer (the “
Determination Time
”) to be equal to or greater than the Relative Percentage of Lee Equity immediately following the Determination Time. Any Transfers pursuant to the foregoing must be in compliance with the Securities Act, any other applicable securities or “blue sky” laws, any restrictions contained in the terms and conditions for such Company Securities, and any agreement or instrument pursuant to which such Company Securities have been issued;
provided, however
, if any Transfer of Company Securities by a Management Stockholder after the Restricted Period and prior to the second anniversary of the Initial Public Offering would have violated clause (Z) above had such Transfer been made during the Restricted Period, then such Management Stockholder shall cease to have the Piggyback Registration rights otherwise available to such Management Stockholder pursuant to
Section 5.02
hereof.
Following the Initial Public Offering, any Management Stockholder wishing to Transfer Company Securities pursuant to this
Section 3.04
shall be entitled, prior to such Transfer, to obtain and rely upon, a statement from the Company of the number of Company Securities that such Management Stockholder may Transfer without violation of clause (Z) of this
Section 3.04
.
SECTION 3.05.
Restrictions on Transfers by Lee Equity
. After the Initial Public Offering, subject to
Section 5.03
, there shall be no restrictions on Lee Equity’s ability to Transfer any Company Securities;
provided
, that, any Transfer is in compliance with the Securities Act, any other applicable securities or “blue sky” laws, any restrictions contained in the terms and conditions for such Company Securities, and any agreement or instrument pursuant to which such Company Securities have been issued.
ARTICLE 4
[Intentionally Omitted]
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01.
Demand Registration
. (a) If the Company shall receive a written request from Lee Equity (the “
Requesting Stockholder
”) that the Company effect the registration under the Securities Act of all or any portion of the Requesting Stockholder’s Registrable Securities, and specifying the intended method of disposition thereof, then the Company shall promptly give notice of such requested
registration (each such request shall be referred to herein as a “
Demand Registration
”) at least
fifteen (15) Business Days
prior to the anticipated filing date of the registration statement relating to such Demand Registration to the Additional Stockholders and thereupon shall use its best efforts to effect, as expeditiously as possible, the registration under the Securities Act of:
(i)
all Registrable Securities for which the Requesting Stockholder and the other holders have has requested registration under this
Section 5.01
, and
(ii)
subject to the restrictions set forth in
Sections 5.01(e)
and
5.02
, all other Registrable Securities of the same class as those requested to be registered by the Requesting Stockholder that any Stockholders with rights to request registration under
Section 5.02
(all such Stockholders, together with the Requesting Stockholder, the “
Registering Stockholders
”) have requested the Company to register by request received by the Company within
ten (10) Business Days
after such Stockholders receive the Company’s notice of the Demand Registration, all to the extent necessary to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered;
provided
that, subject to
Section 5.01(d)
hereof, the Company shall not be obligated to effect (x) more than ten (10) Demand Registrations, (y) more than one Demand Registration during any four-month period, or (z) any Demand Registration unless the aggregate gross proceeds expected to be received from the sale of the Registrable Securities requested to be included by all Registering Stockholders in such Demand Registration are at least (A) $50 million if such Demand Registration would constitute the Initial Public Offering, or (B) $10 million in any Demand Registration other than the Initial Public Offering.
(b)
Promptly after the expiration of the t
en (10) Business Day
period referred to in
Section 5.01(a)(ii)
hereof, the Company will notify all Registering Stockholders of the identities of the other Registering Stockholders and the number of shares of Registrable Securities requested to be included therein. At any time prior to the effective date of the registration statement relating to such registration, the Requesting Stockholder may revoke such request, without liability to any of the other Registering Stockholders, by providing a notice to the Company revoking such request.
(c)
The Company shall be liable for and pay all Registration Expenses in connection with each Demand Registration, regardless of whether such Registration is effected.
(d)
A Demand Registration shall not be deemed to have occurred:
(i)
unless the registration statement relating thereto (A) has become effective under the Securities Act and (B) has remained effective for
a period of at least 120 days (or such shorter period in which all Registrable Securities of the Registering Stockholders included in such registration have actually been sold thereunder),
provided
that such registration statement shall not be considered a Demand Registration if, after such registration statement becomes effective, (1) such registration statement is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court and (2) less than seventy-five percent (75%) of the Registrable Securities included in such registration statement have been sold thereunder; or
(ii)
if the Maximum Offering Size (as defined below) is reduced in accordance with
Section 5.01(e)
such that less than fifty percent (50%) of the Registrable Securities of the Requesting Stockholder sought to be included in such registration are included.
(e)
If a Demand Registration involves a Public Offering and the managing underwriter advises the Company and the Requesting Stockholder that, in its view, the number of Company Securities that the Registering Stockholder and the Company propose to include in such registration exceeds the largest number of shares that can be sold without having an adverse effect on such offering, including the price at which such shares can be sold (the “
Maximum Offering Size
”), the Company shall include in such registration, in the priority listed below, up to the Maximum Offering Size:
(i)
first, all Registrable Securities requested to be registered by the Registering Stockholders (allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such entities on the basis of the relative number of Registrable Securities so requested to be included in such registration by each); and
(ii)
second, all Registrable Securities proposed to be registered by the Company.
SECTION 5.02.
Piggyback Registration
. (1) If the Company proposes to register any Company Securities under the Securities Act (whether for itself or in connection with a sale of securities by a Stockholder, but other than a registration on Form S-8 or S-4, or any successor or similar forms, relating to Common Shares issuable upon exercise of employee stock options or in connection with any employee benefit or similar plan of the Company or in connection with a direct or indirect acquisition by the Company of another Person), the Company shall each such time give prompt written notice at least
ten (10) Business Days
prior to the anticipated filing date of the registration statement relating to such registration to each Piggyback Stockholder, which notice shall set forth such Piggyback Stockholder’s rights under this
Section 5.02
and shall offer such Piggyback Stockholder the opportunity to include in such registration statement the number of Registrable Securities of the same class or series as those proposed to be registered as each such Piggyback Stockholder may request (a “
Piggyback Registration
”), subject to the
provisions of
Section 5.02(b)
and the Public Offering Limitations. Upon the request of any such Piggyback Stockholder made within five (5) Business Days after the receipt of notice from the Company (which request shall specify the number of Registrable Securities intended to be registered by such Piggyback Stockholder), the Company shall use its best efforts to effect the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by all such Piggyback Stockholders, to the extent requisite to permit the disposition of the Registrable Securities so to be registered,
provided
that (i) if such registration involves a Public Offering, all such Piggyback Stockholders requesting to be included in the Company’s registration must sell their Registrable Securities to the underwriters selected as provided in
Section 5.04(f)(i)
on the same terms and conditions as apply to the Company or any other selling stockholders, and (ii) if, at any time after giving notice of its intention to register any Company Securities pursuant to this
Section 5.02(a)
and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company shall give notice to all such Piggyback Stockholders and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration. No registration effected under this
Section 5.02
shall relieve the Company of its obligations to effect a Demand Registration to the extent required by
Section 5.01
. The Company shall be liable for and pay all Registration Expenses in connection with each Piggyback Registration.
(a)
If a Piggyback Registration involves a Public Offering (other than any Demand Registration, in which case the provisions with respect to priority of inclusion in such offering set forth in
Section 5.01(e)
shall apply) and the managing underwriter advises the Company that, in its view, the number of Company Securities that the Company and such selling Piggyback Stockholders propose to include in such registration exceeds the Maximum Offering Size, the Company shall include in such registration, in the following priority, up to the Maximum Offering Size:
(i)
with respect to a Public Offering by the Company for its own account:
1.
first, such number of Registrable Securities proposed to be registered for the account of the Company, if any, as would not cause the offering to exceed the Maximum Offering Size, and
2.
second, all Registrable Securities requested to be included in such registration by any Registering Stockholders (allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such Stockholders based on their relative number of Registrable Securities requested to be included in the Piggyback Registration.
(ii)
With respect to a Public Offering by the Company for the account of selling stockholders:
1.
first, all Registrable Securities requested to be included in such registration by any Registering Stockholders (allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such Stockholders based on their relative number of Registrable Securities requested to be included in the Piggyback Registration; and
2.
second, all Registrable Securities proposed to be registered for the account of the Company.
SECTION 5.03.
Lock-Up Agreements
. In connection with each underwritten Public Offering, if requested by the managing underwriter, the Company and the Stockholders agree (and the Company agrees, in connection with any underwritten Public Offering, to use its commercially reasonable efforts to cause its Affiliates to agree) not to effect any public sale or private offer or distribution, including any sale pursuant to Rule 144 of any Registrable Securities during the ten (10) days prior to the consummation of such Public Offering and during such time period after the consummation of such Public Offering, not to exceed 90 days (180 days in the case of the Initial Public Offering);
provided, however
, that no Additional Stockholder will be required to agree to any restrictions that are more restrictive than those applicable to Lee Equity and its Affiliates and if Lee Equity and/or its Affiliates are released from any such restrictions, the Additional Stockholders shall be released to the same extent;
provided further
, however, that the restrictions described in this
Section 5.03
shall not apply to (i) any Company Securities or other securities of the Company acquired in the Initial Public Offering, in any Public Offering or in any open market transaction following the Initial Public Offering and (ii) any Additional Stockholder that ceases to have Piggyback Registration Rights.
SECTION 5.04.
Registration Procedures
. Whenever any Stockholders request that any Registrable Securities be registered pursuant to
Section 5.01
or
5.02
hereof, subject to the provisions of such Sections, the Company shall use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof as quickly as practicable, and, in connection with any such request:
(a)
The Company shall as expeditiously as possible prepare and file with the SEC a registration statement on any form for which the Company then qualifies or that counsel for the Company shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its best efforts to cause such filed registration statement to become and remain effective for a period of not less than 180 days, or in the case of a shelf registration statement, one (1) year (or such shorter period in which all of the Registrable Securities of the Registering Stockholders included in such registration statement shall have actually been sold thereunder).
(b)
Prior to filing a registration statement or prospectus or any amendment or supplement thereto, the Company shall, if requested, furnish to each participating Stockholder and each underwriter, if any, of the Registrable Securities covered by such registration statement, copies of such registration statement as proposed to be filed, and thereafter the Company shall furnish to such Stockholder and underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 or Rule 430A under the Securities Act and such other documents as such Stockholder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Stockholder.
(c)
After the filing of the registration statement, the Company shall (i) cause the related prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act, (ii) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement during the applicable period in accordance with the intended methods of disposition by the Registering Stockholders thereof set forth in such registration statement or supplement to such prospectus and (iii) promptly notify each Registering Stockholder holding Registrable Securities covered by such registration statement of any stop order issued or threatened by the SEC or any state securities commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.
(d)
The Company shall use its best efforts to (i) register or qualify the Registrable Securities covered by such registration statement under such other securities or “blue sky” laws of such jurisdictions in the United States as any Registering Stockholder holding such Registrable Securities reasonably (in light of such Stockholder’s intended plan of distribution) requests and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable such Stockholder to consummate the disposition of the Registrable Securities owned by such Stockholder;
provided
that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this
Section 5.04(d)
, (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.
(e)
The Company shall immediately notify each Registering Stockholder holding such Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein not misleading and promptly prepare and make available to each such Stockholder and file with the SEC any such supplement or amendment.
(f)
(i) Lee Equity shall have the right, in its sole discretion, to select the underwriter or underwriters in connection with any Public Offering resulting from a Demand Registration and (ii) the Company shall select an underwriter or underwriters in connection with any other Public Offering. In connection with any Public Offering, the Company shall enter into customary agreements (including an underwriting agreement in customary form) and take all such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with the NASD.
(g)
Upon execution of confidentiality agreements in form and substance reasonably satisfactory to the Company, the Company shall make available for inspection by any Registering Stockholder and any underwriter participating in any disposition pursuant to a registration statement being filed by the Company pursuant to this
Section 5.04
and any attorney, accountant or other professional retained by any such Stockholder or underwriter (collectively, the “
Inspectors
”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “
Records
”) as shall be reasonably necessary or desirable to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such registration statement. Records that the Company determines, in good faith, to be confidential and that it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each Registering Stockholder agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it or its Affiliates as the basis for any market transactions in the Company Securities unless and until such information is made generally available to the public. Each Registering Stockholder further agrees that, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, it shall give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.
(h)
The Company shall furnish to each Registering Stockholder and to each such underwriter, if any, a signed counterpart, addressed to such Stockholder or underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’s independent public accountants, each in customary form and covering such matters of the kind customarily covered by opinions or comfort letters, as the case may be, as a majority of such Stockholders or the managing underwriter therefor reasonably requests.
(i)
The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earning statement or such other document that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
(j)
The Company may require each such Registering Stockholder promptly to furnish in writing to the Company such information regarding the distribution of the Registrable Securities as the Company may from time to time request and such other information as may be legally required in connection with such registration.
(k)
Each such Registering Stockholder agrees that, upon receipt of any written notice from the Company of the occurrence of any event requiring the preparation of a supplement or amendment of a prospectus relating to the Registrable Securities covered by a registration statement that is required to be delivered under the Securities Act so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or to make the statements therein not misleading, such Stockholder shall forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Stockholder’s receipt of the copies of a supplemented or amended prospectus, and, if so directed by the Company, such Stockholder shall deliver to the Company all copies, other than any permanent file copies then in such Stockholder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. If the Company shall give such notice, the Company shall extend the period during which such registration statement shall be maintained effective (including the period referred to in
Section 5.04(a)
hereof) by the number of days during the period from and including the date of the giving of notice pursuant to
Section 5.04(e)
hereof to the date when the Company shall make available to such Stockholder a prospectus supplemented or amended to conform with the requirements of
Section 5.04(e)
hereof.
(l)
The Company shall use its reasonable efforts to list all Registrable Securities covered by such registration statement on any securities exchange or quotation system on which any of the Registrable Securities are then listed or traded and to maintain such listing so long as any such Registrable Securities remain outstanding.
(m)
The Company shall have appropriate officers of the Company (i) prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, (ii) take other actions to obtain ratings for any Registrable Securities and (iii) otherwise use their reasonable efforts to cooperate as requested by the underwriters in the offering, marketing or selling of the Registrable Securities.
SECTION 5.05.
Indemnification by the Company
. The Company agrees to indemnify and hold harmless each Registering Stockholder holding Registrable Securities covered by a registration statement, its officers, directors, employees, managers, members, partners and agents, and each Person, if any, who controls any such Persons
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses) (“
Damages
”) caused by or relating to any untrue statement or alleged untrue statement of a material fact contained in any registration statement, prospectus or free writing prospectus relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such Damages are caused by or related to any such untrue statement or omission or alleged untrue statement or omission so made based upon information furnished in writing to the Company by such Stockholder or on such Stockholder’s behalf expressly for use therein,
provided
that, with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus, or in any prospectus, as the case may be, the indemnity agreement contained in this paragraph shall not apply to the extent that any Damages result from the fact that a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) was not sent or given to the Person asserting any such Damages at or prior to the written confirmation of the sale of the Registrable Securities concerned to such Person if it is determined that the Company has provided such prospectus to such Stockholder and it was the responsibility of such Stockholder to provide such Person with a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) and such current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) would have cured the defect giving rise to such Damages. The Company also agrees to indemnify any underwriters of the Registrable Securities, their officers and directors and each Person who controls such underwriters within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Stockholders provided in this
Section 5.05
.
SECTION 5.06.
Indemnification by the Participating Stockholders
. Each Registering Stockholder holding Registrable Securities included in any registration statement agrees, severally but not jointly, to indemnify and hold harmless the Company, its officers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Stockholder, but only (i) with respect to information furnished in writing to the Company by such Stockholder or on such Stockholder’s behalf expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus or (ii) to the extent that any Damages result from the fact that a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) was not sent or given to the Person asserting any such Damages at or prior to the written confirmation of the sale of the Registrable Securities concerned to such Person if it is determined that it was the responsibility of such Stockholder to provide such Person with a current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) and such current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) was available to such Stockholder and would have cured the defect giving rise to such Damages. Each such Stockholder also agrees to indemnify and hold harmless underwriters of the Registrable Securities, their officers and directors and each Person who controls such underwriters within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Company provided in this
Section 5.06
. As a condition to including Registrable Securities in any registration statement filed in accordance with Article 5 hereof, the Company may require that it shall have received an undertaking reasonably satisfactory to it from any underwriter to indemnify and hold it harmless to the extent customarily provided by underwriters with respect to similar securities. No Registering Stockholder shall be liable under this
Section 5.06
for any Damages in excess of the net proceeds realized by such Stockholder in the sale of Registrable Securities of such Stockholder to which such Damages relate.
SECTION 5.07.
Conduct of Indemnification Proceedings
. If any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to this Article 5, such Person (an “
Indemnified Party
”) shall promptly notify the Person against whom such indemnity may be sought (the “
Indemnifying Party
”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses, provided that the failure of any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) in the reasonable judgment of such Indemnified Party representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that, in connection with any proceeding or related proceedings in the same jurisdiction, the Indemnifying Party shall not be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by the Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any Damages (to the extent stated above) by reason of such settlement or judgment. Without the prior written consent of the Indemnified Party, no Indemnifying Party shall effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.
SECTION 5.08.
Contribution
. If the indemnification provided for in this Article 5 is unavailable to the Indemnified Parties in respect of any Damages, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Damages (i) as between the Company and the Registering Stockholders holding Registrable Securities covered by a registration statement on the one hand and the underwriters on the other, in such proportion as is appropriate to reflect the relative benefits received by the Company and such Stockholders on the one hand and the underwriters on the other, from the offering of the Registrable Securities, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the Company and such Stockholders on the one hand and of such underwriters on the other in connection with the statements or omissions that resulted in such Damages, as well as any other relevant equitable considerations and (ii) as between the Company on the one hand and each such Stockholder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each such Stockholder in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative benefits received by the Company and such Stockholders on the one hand and such underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company and such Stockholders bear to the total underwriting discounts and commissions received by such underwriters, in each case as set forth in the table on the cover page of the prospectus. The relative fault of the Company and such Stockholders on the one hand and of such underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and such Stockholders or by such underwriters. The relative fault of the Company on the one hand and of each such Stockholder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Registering Stockholders agree that it would not be just and equitable if contribution pursuant to this
Section 5.08
were determined by pro rata allocation (even if the underwriters were treated as one entity for such purpose) or by any other method of allocation that 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 Damages 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 5.08
, no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any Damages that such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no Registering Stockholder shall be required to contribute any amount in excess of the amount by which the net proceeds realized by such Stockholder in the sale of Registrable Securities of such Stockholder to which such Damages relate exceeds the amount of any Damages that such Stockholder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Each Registering Stockholder’s obligation to contribute pursuant to this
Section 5.08
is several in the proportion that the proceeds of the offering received by such Stockholder bears to the total proceeds of the offering received by all such Registering Stockholders and not joint.
SECTION 5.09.
Participation in Public Offering
. No Stockholder will be permitted to require registration of any Registrable Securities in any Public Offering hereunder unless such Stockholder (a) agrees to sell such Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and the provisions of this Agreement in respect of registration rights.
SECTION 5.10.
Other Indemnification
. Indemnification similar to that specified herein (with appropriate modifications) shall be given by the Company and each Stockholder participating therein with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.
SECTION 5.11.
Cooperation by the Company
. If any Stockholder shall transfer any Registrable Securities pursuant to Rule 144, the Company shall cooperate, to the extent commercially reasonable, with such Stockholder and shall provide to such Stockholder such information as such Stockholder shall reasonably request.
SECTION 5.12.
No Transfer of Registration Rights
. None of the rights of Stockholders under this Article 5 shall be assignable by any Stockholder to any Person acquiring Securities in any Public Offering or pursuant to Rule 144 but are assignable to other Persons to whom Company Securities are Transferred in compliance with this Agreement.
SECTION 5.13.
Restriction on Further Registration Rights
.
The Company shall not enter into any new agreement with Lee Equity (or any of its Affiliates)
under which its grants additional or supplemental registration rights in respect of the Company Securities unless such rights are afforded to each of the Additional Stockholders in a manner that is consistent with the rights of the Additional Stockholders set forth in this Article 5.
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
SECTION 6.01.
[Intentionally Omitted]
SECTION 6.02.
Confidentiality
.
(a)
Each Additional Stockholder agrees that Confidential Information (as defined below) furnished and to be furnished to him or her was and shall be made available in connection with such Additional Stockholder’s investment in the Company. Such Additional Stockholder acknowledges that the Confidential Information which such Additional Stockholder has obtained or will obtain is the property of the Company and its Subsidiaries. Each Additional Stockholder agrees that he or she will not disclose any Confidential Information to any other Person (other than its counsel, auditors, investors, members, affiliates, agents, partners and representatives so long as such Persons are made aware of the confidential nature of the Confidential Information and agree to keep it confidential), except that Confidential Information may be disclosed: (i) to the extent required by applicable law, rule or regulation;
provided
that such Additional Stockholder gives the Company prompt notice of such requests, to the extent practicable, so that the Company may seek an appropriate protective order or similar relief (and the Additional Stockholder shall cooperate with such efforts by the Company, and shall in any event make only the minimum disclosure required by such law, rule or regulation), (ii) if the prior written consent of the Board shall have been obtained or (iii) by Additional Stockholders, on a confidential basis, to current and prospective limited partners or members or lenders in connection with a loan or prospective loan to such Additional Stockholder, and in each case to their respective legal counsel, auditors, agents and representatives.
(b)
“
Confidential Information
” shall mean any information relating to the business or affairs of the Company or any of its Subsidiaries, including, but not limited to, information relating to financial statements, customer identities, potential customers, potential acquisitions, employees, sales representatives, suppliers, servicing methods, equipment programs, strategies and information, analyses, profit margins or other proprietary information used by the Company or any of its Affiliates;
provided, however
, that Confidential Information does not include any information which is in the public domain or becomes known in the industry through no wrongful act on the part of such Additional Stockholder or is or was available to such Additional Stockholder on a non-confidential basis prior to its disclosure to such Additional Stockholder or was independently acquired or developed by such Additional Stockholder without violating any of its obligations under this Agreement.
SECTION 6.03.
Investment Opportunities and Conflicts of Interest
.
The parties hereto expressly acknowledge and agree that (i) Lee Equity, Gleacher, and Barclays and their Affiliates are permitted to have, and may presently or in the future have, investments or other business relationships, ventures, agreements or arrangements with entities engaged in the same business as the Company and its Subsidiaries other than through the Company and its Subsidiaries (an “
Other Business
”), (ii) Lee Equity, Gleacher, and Barclays and their Affiliates have or may develop a strategic relationship with businesses that are or may be competitive with the Company and its Subsidiaries, (iii) none of Lee Equity, Gleacher, and Barclays and their Affiliates will be prohibited by virtue of their investment in the Company or any of its Subsidiaries from pursuing and engaging in any such activities, (iv) none of Lee Equity, Gleacher, and Barclays and their Affiliates will be obligated to inform the Company or any Additional Stockholder of any such opportunity, relationship or investment, (v) the Additional Stockholders will not acquire, be provided with an option or opportunity to acquire or be entitled to any interest or participation in any Other Business as a result of the participation therein of any of Lee Equity, Gleacher, and Barclays and their Affiliates. The Stockholders expressly authorize and consent to the involvement of Lee Equity, Gleacher, and Barclays and their Affiliates in any Other Business and expressly waive, to the fullest extent permitted by applicable law, any rights to assert any claim that such involvement breaches any duty owed to any Additional Stockholder or to assert that such involvement constitutes a conflict of interest by such Persons with respect to any Stockholder and (vi) nothing contained herein shall limit, prohibit or restrict any designee of Lee Equity, Gleacher, and Barclays or any of their Affiliates from serving on the board of directors or other governing body or committee of any Other Business.
SECTION 6.04.
Conflicting Agreements
. Each Stockholder represents and agrees that it shall not (a) grant any proxy or enter into or agree to be bound by any voting trust or agreement with respect to the Company Securities, except as expressly contemplated by this Agreement, (b) enter into any agreement or arrangement of any kind with any Person with respect to its Company Securities inconsistent with the provisions of this Agreement or for the purpose or with the effect of denying or reducing the rights of any Additional Stockholder under this Agreement, including agreements or arrangements with respect to the Transfer or voting of its Company Securities or (c) act, for any reason, as a member of a group or in concert with any other Person in connection with the Transfer or voting of its Company Securities in any manner that is inconsistent with the provisions of this Agreement.
ARTICLE 7
MISCELLANEOUS
SECTION 7.01.
Aggregation of Shares
. All Company Securities held by a Stockholder and its Affiliates shall be aggregated together for purposes of determining the availability of any rights under this Agreement. All shares of Preferred Stock shall be treated as a single class for all purposes under this Agreement (including, without limitation, any determination of Pro Rata Share hereunder).
SECTION 7.02.
Binding Effect; Assignability; Benefit
.
(a)
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and permitted assigns. Any Stockholder that ceases to own beneficially any Company Securities shall cease to be bound by the terms hereof (other than (i) the provisions of
Sections 5.05
,
5.06
,
5.07
,
5.08
and
5.10
applicable to such Stockholder with respect to any offering of Registrable Securities completed before the date such Stockholder ceased to own any Company Securities, (ii)
Sections
6.02
,
6.03
, and
6.04
and (iii)
Article 7
).
(b)
Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
SECTION 7.03.
Notices
. All notices, requests and other communications to any party shall be in writing and shall be delivered in person, mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission,
If to the Company, to:
Papa Murphy’s Holdings, Inc.
c/o Lee Equity Partners, LLC
650 Madison Avenue, 21st Floor
New York, New York 10022
Attention: Yoo Jin Kim
Facsimile: (646)781-3700
If to Lee Equity, to:
Lee Equity Partners, LLC
650 Madison Avenue, 21st Floor
New York, New York 10022
Attention: Yoo Jin Kim
Facsimile: (646)781-3700
In each case with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue, 31st Floor
New York, New York 10153
Attention: Douglas P. Warner, Esq.
Facsimile: (212) 310-8007
If to an Additional Stockholder, to the address set forth below the name of such Additional Stockholder on
Schedule A
hereto;
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other parties hereto. Notice shall be sent by United States Mail, first class postage prepaid, return receipt requested, by Federal Express or other nationally recognized overnight parcel delivery service for next day delivery; or by hand delivery with a receipt confirmation requested. Notice given in accordance with this paragraph shall be presumed to have been delivered and received three (3) days after mailing if sent by United States Mail, first class, one day after mailing if sent for next day deliver by Federal Express or equivalent; and on the day of delivery if hand delivered. Notice may also be given by fax or electronic mail, but such notice will not be effective unless the notice provider obtains a confirmation of receipt of the fax or electronic mail signed by the notice recipient.
Any Person that hereafter becomes a Stockholder shall provide its address and fax number to the Company, which shall promptly provide such information to each Additional Stockholder.
SECTION 7.04.
Waiver; Amendment
.
(a)
No provision of this Agreement may be waived except by an instrument in writing executed by the party against whom the waiver is to be effective. No provision of this Agreement may be amended or otherwise modified except by an instrument in writing executed by (1) the Company; (2) Lee Equity and (3) (A) if any such amendment will disproportionately and materially adversely affect the Additional Stockholders differently than Lee Equity, the consent of the Majority Interest at the time of such proposed amendment or modification will be required, (B) if any such amendment will disproportionately and materially adversely affect any Additional Stockholder differently than any Additional Stockholder, the consent of such Additional Stockholder that is disproportionately and materially adversely affected by such amendment will be required or (C) if any such amendment will disproportionately and materially adversely affect the holders of the Series B Preferred Stock differently from the holders of the Series A Preferred Stock, the consent of the holders of a majority of the outstanding shares of Series B Preferred Stock at the time of such proposed amendment or modification will be required;
provided
,
however
, that any amendment or other modification to Article 3, Article 5, Section 6.02 and/or this Section 7.04 (including any amendment or other modification to any related defined terms used in such Sections) that adversely affects any Institutional Investor shall require the prior written consent of such Institutional Investor.
(b)
Notwithstanding the foregoing, any Person may become a party to this Agreement as an “Additional Stockholder” upon execution and delivery to the Company of a Joinder Agreement and any other documentation reasonably requested by the Company.
SECTION 7.05.
Transfer of All Securities
. Upon the permitted Transfer by any Stockholder, executor or other entity of all Company Securities owned or held by him, her or it and, upon payment of any consideration to which such Stockholder is entitled, such
Stockholder shall have no further rights or privileges under this Agreement or otherwise be entitled to the benefits hereof. However, such Transfer shall not relieve a Stockholder, his or her executor or his, her or its successors or assigns from liability hereunder in the event of a breach by any such Stockholder of his, her or its duties hereunder prior to such Transfer.
SECTION 7.06.
Fees and Expenses.
Each party shall pay its own costs and expenses incurred in connection with the preparation and execution of this Agreement, or any amendment or waiver hereof, and the transactions contemplated hereby and all matters related hereto.
SECTION 7.07.
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 laws rules of such state.
SECTION 7.08.
Jurisdiction
. The parties hereby 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 in contract, tort or otherwise, shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any case of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, 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 which is brought in any such court has been brought in an inconvenient form. 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 7.03
shall be deemed effective service of process on such party.
SECTION 7.09.
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 7.10.
Specific Enforcement; Cumulative Remedies
. The parties hereto acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party, in addition to any other rights and remedies which the parties may have hereunder or at law or in equity, may, in his or its sole discretion, apply to a court of competent jurisdiction for specific performance or injunction or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief. All rights, powers and
remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such rights, powers or remedies by such party.
SECTION 7.11.
Entire Agreement
. This Agreement and any exhibits and other documents referred to herein constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous agreements and understandings, both oral and written, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
SECTION 7.12.
Captions
. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.
SECTION 7.13.
Pronouns
. Any masculine personal pronoun shall be considered to mean the corresponding feminine or neuter personal pronoun, and vice versa, as the context requires.
SECTION 7.14.
Severability
. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other 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. 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 so that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
SECTION 7.15.
Counterparts; Effectiveness
. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 7.16.
No Impairment
. Notwithstanding anything herein to the contrary, nothing contained in this Agreement shall affect, limit or impair the rights and remedies of Gleacher or any of Gleacher’s Affiliates or any other lender in its capacity as a lender to the Company or any of its Subsidiaries under the Second Lien Credit Agreement or pursuant to any agreement under which the Company or any of its Subsidiaries has borrowed money.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
PAPA MURPHY’S HOLDINGS, INC.
By:
/s/ Ken Calwell
____________________
Name: Ken Calwell
Title: Chief Executive Officer and President
[SIGNATURE PAGE TO PAPA MURPHY’S HOLDINGS, INC. SECOND AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT]
LEP PAPA MURPHY’S HOLDINGS, LLC
By:
/s/ Joseph B. Rotberg
_________________
Name: Joseph B. Rotberg
Title: Chief Financial Officer
[SIGNATURE PAGE TO PAPA MURPHY’S HOLDINGS, INC. SECOND AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT]
STOCKHOLDER’S AGREEMENT
DATED AS OF
May 7, 2014
AMONG
PAPA MURPHY’S HOLDINGS, INC.
AND
LEP PAPA MURPHY’S HOLDINGS, LLC
THIS STOCKHOLDER’S AGREEMENT (this “
Agreement
”)
dated as of May 7, 2014 among:
(i) Papa Murphy’s Holdings Inc., a Delaware corporation (the “
Company
”); and
(ii) LEP Papa Murphy’s Holdings, LLC (collectively, with its permitted assignees as contemplated by
Section 4.01(b)
, “
Lee Equity
”).
W I T N E S S E T H :
WHEREAS, in connection with underwritten initial public offering of Common Stock of the Company (the “
Initial Public Offering
”), it is the intention of the parties hereto to enter into this Agreement to govern Lee Equity’s rights with respect to the Company.
NOW, THEREFORE, for good and valuable consideration the sufficiency and adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01.
Definitions
.
(a)
The following terms, as used herein, have the following meanings:
“
Affiliate
” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person;
provided
that no securityholder of the Company shall be deemed an Affiliate of any other securityholder solely by reason of an investment in the Company. For the purpose of this definition, the term “
control
” (including, with correlative meanings, the terms “
controlling
”, “
controlled by
” and “
under common control with
”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
“
Board
” means the board of directors of the Company.
“
Business Day
” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close.
“
Change in Control
” means any transaction whereby (i) any Person or Persons or “group” (other than Lee Equity and its Affiliates) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, in one or a series of transactions, of more than 50% of the total voting power
or economic interest of the Company (or any entity which controls the Company or which is a successor to all or substantially all of the assets of the Company), including by way of issuance, merger, consolidation, tender or exchange offer or otherwise, or (ii) all or substantially all of the consolidated assets of the Company and its Subsidiaries are sold to any Person or Persons or “group” (other than Lee Equity and its Affiliates). For the avoidance of doubt, neither the Initial Public Offering nor any secondary public offering shall be deemed a Change in Control.
“
Charter
” means the Fifth Amended and Restated Certificate of Incorporation of the Company, as the same may be amended from time to time.
“
Common Stock
” means the Company’s common stock, par value $0.01 per share, and any stock into which such Common Stock may thereafter be converted, changed, reclassified or exchanged.
“
Company Securities
” means (i) the Common Stock, (ii) any preferred stock, (iii) any other common stock issued by the Company and (iv) any securities convertible into or exchangeable for, or options, warrants or other rights to acquire, Common Stock or any other common stock issued by the Company.
“
Credit Agreement”
means that certain Credit Agreement, dated as of October 25, 2013, by and among PMI Holdings Inc. as borrower and the lender parties thereto, as in effect as of the date hereof (and without giving effect to any future modification, amendment or supplement thereof).
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended.
“
Lee Equity Nominees
” means the members of the Board designated by Lee Equity.
“
Leverage Ratio
” has the meaning ascribed to such term in the Credit Agreement.
“
Person
” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“
Securities Act
” means the Securities Act of 1933, as amended.
“
Stockholder
” means each Person (other than the Company) who, at any relevant determination date, shall be a party to or bound by this Agreement (as may be amended from time to time) so long as such Person shall “beneficially own” (as such term is defined in Rule 13d-3 of the Exchange Act) any Company Securities.
“
Subsidiary
” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.
“
Transfer
” means, with respect to any Company Securities, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer such Company Securities or any participation or interest therein, whether directly or indirectly, or agree or commit to do any of the foregoing and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of such Company Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.
(b)
Other Definitional and Interpretive Matters
. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:
Headings
. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement. All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.
Herein
. The words such as “
herein
,” “
hereinafter
,” “
hereof
,” and “
hereunder
” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.
Including
. Wherever the word “
include,
” “
includes
,” or “
including
” is used in this Agreement, it shall be deemed to be followed by the words “
without limitation
”.
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.01.
Board of Directors; Board Nominees; Committees
.
(a)
Concurrently with the Initial Public Offering, the Board shall consist of seven (7) directors comprised of the following: (i) the Lee Equity Nominees shall be Benjamin Hochberg, Yoo Jin Kim, Thomas H. Lee, and Achi Yaffe (ii) the independent director shall be John Shafer and (iii) the final two (2) directors shall be Ken Calwell and John Barr. The Chairman of the Board shall be John Barr. No later than the first anniversary of the Initial Public Offering, the Board shall be increased in size to nine (9) directors and shall be comprised of the following: (i) the Lee Equity Nominees, (ii)
the independent directors shall be John Shafer and four (4) other independent directors, and (iii) the final two directors shall be Ken Calwell and John Barr.
(b)
From and after the first anniversary of the Initial Public Offering, so long as Lee Equity owns: (i) 20% or more of the issued and outstanding Common Stock of the Company (excluding any subsequent acquisition of Common Stock, other than Common Stock acquired from the Company in a privately negotiated transaction), Lee Equity shall be entitled to designate to the Board at least two (2) of the Board’s nine (9) directors or (ii) less than 20%, but at least 10% of the issued and outstanding Common Stock of the Company (excluding any subsequent acquisition of Common Stock, other than Common Stock acquired from the Company in a privately negotiated transaction), Lee Equity shall be entitled to designate to the Board at least one (1) of the Board’s nine (9) directors.
(c)
The Company agrees to cause each individual designated pursuant to this
Section 2.01
or
Section 2.02
to be nominated to serve as a director on the Board, or as Chairman of the Board, and to take all other necessary actions (including calling a special meeting of the Board and/or stockholders or expanding the size of the Board) to ensure that the composition of the Board is as set forth in this
Section 2.01
and to otherwise implement the provisions of this
Section 2.01
and
Section 2.02
. For the avoidance of doubt, the Company agrees to expand the size of the Board to ensure that that the composition of the Board is as set forth in
Sections 2.01(a)
and
2.01(b)
.
SECTION 2.02.
Vacancies
. If, as a result of death, disability, retirement, resignation, removal or otherwise, there shall exist or occur any vacancy of a Lee Equity Nominee on the Board, Lee Equity may designate another individual (the “
Replacement Nominee
”) to fill such vacancy and serve as a director on the Board.
SECTION 2.03.
Reimbursement of Director Expenses
. The Company shall reimburse all reasonable and documented out-of-pocket expenses incurred by the Lee Equity Nominees in connection with traveling by first or business class on a commercial air carrier to and from and attending meetings of the Board and while conducting business at the request of the Company.
SECTION 2.04.
Corporate Opportunities
. In furtherance of, and without limiting what is set forth in the Charter, except as may be otherwise expressly agreed in writing by the Company and Lee Equity and its Affiliates, the Company, on behalf of itself and its subsidiaries, renounces any interest or expectancy of the Company and its subsidiaries in, or in being offered an opportunity to participate in, business opportunities, which are from time to time presented to Lee Equity or any of its managers, officers, directors, agents, stockholders, members, partners, Affiliates and subsidiaries (other than the Company and its Subsidiaries), even if the opportunity is one that the Company or its Subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and no such person or
entity shall be liable to the Company or any of its Subsidiaries for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such person or entity pursues or acquires such business opportunity, directs such business opportunity to another person or entity or fails to present such business opportunity, or information regarding such business opportunity, to the Company or its Subsidiaries unless, in the case of any such person who is a director or officer of the Company, such business opportunity is expressly offered to such director or officer in writing solely in his or her capacity as a director or officer of the Company. The alteration, amendment, addition to or repeal of this
Section 2.04
, shall not eliminate or reduce the effect of this
Section 2.04
in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this
Section 2.04
, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption.
SECTION 2.05.
Approvals
. For so long as Lee Equity and its Affiliates own 25% or more of the issued and outstanding Common Stock of the Company (excluding any subsequent acquisition of Common Stock, other than Common Stock acquired from the Company in a privately negotiated transaction), the Company and its Subsidiaries shall not take any of the following actions without the prior written consent of Lee Equity:
(a)
issue Company Securities or equity securities of any of the Company’s Subsidiaries other than the granting of options or shares of Common Stock to members of the Company’s management or the issuance of shares of Common Stock in connection with the exercise of such options;
(b)
declare or pay any non-pro rata dividends or other non-pro rata distributions in respect of the Company Securities;
(c)
incur any indebtedness for borrowed money (other than indebtedness incurred under that certain existing revolver of up to $10,000,000 under the Credit Agreement or in connection with the refinancing of the Company’s existing indebtedness) that would cause the Leverage Ratio to exceed 4.5x at the time of such incurrence;
(d)
effect any merger, recapitalization, issuance of Company Securities or other adjustment in voting rights, in one or any series of related transactions, if such event would result in a Change in Control of the Company;
(e)
adopt a new equity-based incentive plan, make any increase to the maximum number of shares of Common Stock available to participants in the Company’s existing equity-based incentive plans or materially change the vesting schedule, or terminate any of the Company’s existing equity-based incentive plans;
(f)
make any material investment in, or acquire or dispose of, any material assets or entity (other than investments in wholly-owned subsidiaries), in each
case in excess of $25,000,000, or enter into any material joint ventures, partnerships or similar arrangements;
(g)
hire or terminate the employment of the Chief Executive Officer of the Company (the “
CEO
”);
(h)
materially increase the salary of the CEO (other than increases for standard cost of living adjustments) or make any material change to the bonus structure applicable to the CEO as is in effect as of the date hereof;
(i)
amend the Charter or bylaws of the Company in any manner adverse to Lee Equity;
(j)
materially change the Company’s business of being the owner and/or franchisor of stores and restaurants that sell or serve pizza and other food items; or
(k)
change the number of directors of the Company.
ARTICLE 3
CONFIDENTIAL INFORMATION
SECTION 3.01.
Confidentiality
.
(a)
The Company acknowledges and agrees that (i) Lee Equity may disclose Confidential Information to its Affiliates, representatives and advisors, (ii) any Lee Equity Nominee may disclose Confidential Information to Lee Equity and its Affiliates, representatives and advisors, (iii) Lee Equity and its Affiliates may disclose Confidential Information if requested or required by law, judicial or governmental order, deposition, interrogatory, subpoena, civil investigation, demand, discovery request or similar process (
provided
that if such disclosure is requested rather than required under applicable law, Lee Equity shall, to the extent permitted by applicable law, promptly notify the Company prior to any such disclosure to the extent practicable and cooperate with the Company, at the Company’s sole cost and expense, in any attempts it may make to obtain a protective order or other appropriate assurance that confidential treatment will be afforded the Confidential Information) and (iv) for so long as Lee Equity own 10% or more of the issued and outstanding Common Stock of the Company (excluding any subsequent acquisition of Common Stock, other than Common Stock acquired from the Company in a privately negotiated transaction), Lee Equity and its Affiliates (a) will be granted access to customary non-public information of the Company and members of the Company’s management team as reasonably requested by Lee Equity and (b) may disclose Confidential Information to any potential purchaser of the Company that executes a customary confidentiality agreement that includes a prohibition on trading on material non-public information (and Lee Equity shall provide the Company with prompt
written notice after execution thereof). Except as set forth in this
Section 3.01
, Lee Equity will not disclose Confidential Information to any third party.
(b)
“
Confidential Information
” shall mean any confidential or proprietary information relating to the business or affairs of the Company or any of its Affiliates, including, but not limited to, information relating to financial statements, customer identities, potential customers, employees, sales representatives, suppliers, servicing methods, equipment programs, strategies and information, analyses, profit margins or other proprietary information used by the Company or any of its Affiliates;
provided
,
however
, that Confidential Information does not include any information which is in the public domain or becomes known in the industry through no wrongful act on the part of Lee Equity;
provided
that Confidential Information shall not include information that (i) is or becomes generally known to the public other than as a result of a disclosure by Lee Equity in violation of this Agreement, (ii) is or was available to Lee Equity on a non-confidential basis prior to its disclosure to Lee Equity, or (iii) was or becomes available to Lee Equity on a non-confidential basis from a source other than the Company or a Board member, which source is or was (at the time of receipt of the relevant information) not bound by a confidentiality agreement with the Company or another person.
ARTICLE 4
MISCELLANEOUS
SECTION 4.01.
Binding Effect; Assignability; Benefit
.
(a)
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and permitted assigns.
(b)
Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party hereto pursuant to any Transfer of Company Securities or otherwise;
provided
,
however
, that in connection with any Transfer of Company Securities by Lee Equity (i) to any of its Affiliates or (ii) of 10% or more of the issued and outstanding Common Stock of the Company in a privately negotiated transaction (a “
Third Party Transfer
”), in each case Lee Equity may assign all or any portion of its rights as set forth in
Article 2
and
Article 3
to any such transferee who agrees to be bound by this Agreement;
provided
,
further
,
however
, that in the case of a Third Party Transfer, the requisite ownership thresholds set forth in this Agreement shall apply to such third party transferee based on the number of shares of Common Stock of the Company received by such third party transferee from Lee Equity in such Third Party Transfer (and excluding any prior or subsequent acquisitions of Common Stock by such transferee via an open market transaction). Lee Equity shall provide the Company with prompt written notice following a Third Party Transfer. Except for
Section 2.04
and
Section 4.12
, nothing in this Agreement, expressed
or implied, is intended to confer on any Person other than the parties hereto, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
SECTION 4.02.
Notices
. All notices, requests and other communications to any party shall be in writing and shall be delivered in person, mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission,
If to the Company, to:
Papa Murphy’s Holdings, Inc.
8000 NE Parkway Drive, Suite 350
Vancouver, WA 98662
Attention: Victoria Blackwell
Fax: (360) 397-6665
If to Lee Equity, to:
Lee Equity Partners, LLC
650 Madison Avenue, 21st Floor
New York, New York 10022
Attention: Yoo Jin Kim
Fax: (646) 781-3700
In each case with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Douglas P. Warner, Esq.
Fax: (212) 310-8007
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other parties hereto. All 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. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one (1) Business Day, or by personal delivery, whether courier or otherwise, made within two (2) Business Days after the date of such facsimile transmissions.
Any Person that hereafter becomes a Stockholder shall provide its address and fax number to the Company, which shall promptly provide such information to each other Stockholder.
SECTION 4.03.
Waiver; Amendment; Termination
.
(l)
No provision of this Agreement may be waived except by an instrument in writing executed by the party against whom the waiver is to be effective. No provision of this Agreement may be amended or otherwise modified except by an instrument in writing executed by the Company and Lee Equity.
(m)
This Agreement shall terminate upon, (i) the written request of Lee Equity or (ii) such time as Lee Equity or its Affiliates or any transferee of Lee Equity or its Affiliates who agrees to be bound by this Agreement pursuant to
Section 4.01(b)
owns less than 10% in the aggregate of the issued and outstanding Common Stock of the Company.
SECTION 4.04.
Fees and Expenses
. The Company shall pay the costs and expenses incurred in connection with (i) the preparation, negotiation and execution of this Agreement and (ii) Lee Equity’s enforcement of its rights and remedies set forth in this Agreement.
SECTION 4.05.
Governing Law
. This Agreement, and all claims or causes of action (whether at law, in equity, in contract, in tort or otherwise) based upon, arising out of, related to or otherwise in connection with this Agreement or the transactions contemplated hereby, shall be exclusively governed by, and construed in accordance with, the internal laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of laws of another jurisdiction (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement).
SECTION 4.06.
Jurisdiction
. The parties hereby agree that any suit, action or proceeding (whether at law, in equity, in contract, in tort or otherwise) 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 (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement) shall be exclusively brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any case of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the exclusive 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 which is 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 4.07.
Waiver of Jury Trial
. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER AT LAW, IN EQUITY, IN CONTRACT, IN TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 4.08.
Specific Enforcement; Cumulative Remedies
. The parties hereto acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party, in addition to any other rights and remedies which the parties may have hereunder or at law or in equity, may, in his or its sole discretion, apply to a court of competent jurisdiction for specific performance or injunction or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such rights, powers or remedies by such party.
SECTION 4.09.
Entire Agreement
. This Agreement and any exhibits and other documents referred to herein constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous agreements and understandings, both oral and written, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
SECTION 4.10.
Severability
. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other 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. 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 so that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
SECTION 4.11.
Counterparts; Effectiveness
. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 4.12.
No Recourse
. Notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that the entity comprising Lee Equity is a limited liability company, each party to this Agreement covenants, agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any of Lee Equity’s current or future directors, officers, employees, general or limited partners, members, managers or trustees, or any partner, member, manager or trustee, as such, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any of Lee Equity’s current or future officers, agents, employees, directors, managers, members, or any Affiliates or assignees thereof, as such, for any obligation of Lee Equity under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation (in each case, except in the case of any such Person trading on material non-public Confidential Information in violation of
Section 3.01
and applicable law).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
PAPA MURPHY’S HOLDINGS, INC.
By:
/s/ Ken Calwell
______________________
Name: Ken Calwell
Title: Chief Executive Officer and President
LEP PAPA MURPHY’S HOLDINGS, LLC
By:
/s/ Joseph B. Rotberg
_________________
Name: Joseph B. Rotberg
Title: Chief Financial Officer
[SIGNATURE PAGE TO STOCKHOLDER’S AGREEMENT]
