Form 8-K indie Semiconductor, For: Jun 10

June 16, 2021 5:30 PM EDT

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United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

Form 8-K

 

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

 

Date of Report (Date of earliest event reported): June 10, 2021

 

  indie Semiconductor, Inc.  
  (Exact Name of Registrant as Specified in its Charter)  

 

Delaware   001-40481   87-0913788
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (I.R.S. Employer
Identification No.)

 

32 Journey, Suite 100

Aliso Viejo, California

  92656
(Address of Principal Executive Offices)   (Zip Code)

  

Registrant’s telephone number, including area code: (949) 608-0854

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on
which registered
Class A Common Stock, par value $0.0001 per share   INDI   The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one share of Class A Common Stock for $11.50 per share   INDIW   The Nasdaq Stock Market LLC

 

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

 

Emerging growth company ☒

 

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

 

 

 

 

 

   

INTRODUCTORY NOTE

 

On June 10, 2021, Thunder Bridge Acquisition II, Ltd. (“Thunder Bridge II”) domesticated into a Delaware corporation and consummated a series of transactions that resulted in the combination (the “Business Combination”) of Thunder Bridge II with Ay Dee Kay, LLC d/b/a indie Semiconductor (“indie LLC”) pursuant to a Master Transactions Agreement, dated December 14, 2020, as amended on May 3, 2021, by and among Thunder Bridge II, Thunder Bridge II Surviving Pubco, Inc. (“Surviving Pubco”), indie LLC, and the other parties named therein, following the approval at the extraordinary general meeting of the shareholders of Thunder Bridge II held on June 9, 2021 (the “Special Meeting”). Unless otherwise defined herein, capitalized terms used in this Current Report on Form 8-K have the same meaning as set forth in the final prospectus and definitive proxy statement (the “Proxy Statement/Prospectus”) filed with the Securities and Exchange Commission (the “SEC”) on May 14, 2021 by Thunder Bridge II and Surviving Pubco.

 

Simultaneous with the Closing of the Transaction, Surviving Pubco also completed its PIPE Financing, issuing and selling $150 million of its Class A common stock in a private placement to the PIPE Investors. Effective upon the Closing of the Transaction, Surviving Pubco changed its name to indie Semiconductor, Inc.

 

Item 1.01. Entry into a Material Definitive Agreement.

 

Master Transactions Agreement

 

As disclosed under the sections titled “Shareholder Proposal 1: The Domestication Proposal” and “Shareholder Proposal 2: The Merger Proposal” of the Proxy Statement/Prospectus, on December 14, 2020, the parties entered into a Master Transactions Agreement, dated effective as of December 14, 2020 (as amended on May 3, 2021, the “MTA”) by and among: (a) Surviving Pubco; (b) Thunder Bridge II; (c) TBII Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of Surviving Pubco (“TBII Merger Sub”); (d) ADK Merger Sub LLC, a Delaware limited liability company and a wholly-owned subsidiary of Surviving Pubco (“ADK Merger Sub”); (e) ADK Service Provider Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of Surviving Pubco (“ADK Service Provider Merger Sub”); (f) ADK Blocker Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of Surviving Pubco (“ADK Blocker Merger Sub,” and collectively with TBII Merger Sub, ADK Merger Sub and ADK Service Provider Merger Sub, the “Merger Subs”); (g) indie LLC; (h) the corporate entities listed in the MTA (the “ADK Blocker Group”); (i) ADK Service Provider Holdco, LLC, a Delaware limited liability company (“ADK Service Provider Holdco”); and (j) solely in his capacity as the indie securityholder representative thereunder, Donald McClymont (the “indie Securityholder Representative”). Accordingly, (a) Surviving Pubco, which had been formed as a Delaware corporation solely for the purpose of facilitating the Transaction, succeeded to Thunder Bridge II as the registrant pursuant to the federal securities laws and changed its name to indie Semiconductor, Inc., and (b) indie LLC will continue its existing business operations as the controlled subsidiary of indie Semiconductor, Inc. (“indie”). Except where context provides otherwise, the term “indie” refers to indie and its consolidated subsidiaries, including indie LLC, and after giving effect to the Transaction.

 

Item 2.01 of this Current Report on Form 8-K discusses the consummation of the Transactions (as defined below) and various other transactions and events contemplated by the MTA, which took place on June 10, 2021 and is incorporated into this Item 1.01 by reference.

 

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Exchange Agreement

 

On the Closing Date, Surviving Pubco entered into the Exchange Agreement with certain indie Equity Holders, which provides for the exchange of such holders’ Post-Merger indie Units into shares of Class A common stock. The material features of the Exchange Agreement are described in the Proxy Statement/Prospectus in the section titled “Shareholder Proposal 2: The Merger Proposal – Related Agreements – Exchange Agreement” and that information is incorporated herein by reference.

 

This summary and the information incorporated herein by reference is qualified in its entirety by reference to the text of the Exchange Agreement, which is included as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by reference

 

Amended Operating Agreement

 

On the Closing Date, the Eighth Amended and Restated Limited Liability Company Agreement of indie LLC (the “Amended Operating Agreement”) was entered into by indie LLC, Surviving Pubco and certain holders of Post-Merger indie Units. The material features of the Amended Operating Agreement are described in the Proxy Statement/Prospectus in the section titled “Shareholder Proposal 2: The Merger Proposal – Related Agreements – Amended Operating Agreement” and that information is incorporated herein by reference.

 

This summary and the information incorporated herein by reference is qualified in its entirety by reference to the text of the Amended Operating Agreement, which is included as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference

 

Tax Receivable Agreement

 

On the Closing Date, Surviving Pubco entered into the Tax Receivable Agreement with certain indie Equity Holders. The material features of the Tax Receivable Agreement are described in the Proxy Statement/Prospectus in the section titled “Shareholder Proposal 2: The Merger Proposal – Related Agreements – Tax Receivable Agreement” and that information is incorporated herein by reference.

 

This summary and the information incorporated herein by reference is qualified in its entirety by reference to the text of the Tax Receivable Agreement, which is included as Exhibit 10.6 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Indemnification Agreements

 

On the Closing Date, Surviving Pubco entered into indemnification agreements, dated as of the Closing Date, with each of indie’s directors and executive officers. Each indemnification agreement provides for indemnification and advancements by indie of certain expenses and costs relating to claims, suits or proceedings arising from his or her service to indie or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.

 

The foregoing description of the indemnification agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnification agreement, a form of which is attached hereto as Exhibit 10.4 and is incorporated herein by reference.

 

Lock-up Agreements

 

On the Closing Date, indie entered into lock-up agreements, dated as of the Closing Date, with certain indie Equity Holders, pursuant to which such indie Equity Holders agreed not to offer, sell, contract to sell, pledge or otherwise dispose of any shares of Class A common stock received as Merger Consideration, including any Earn Out Shares, for a period of six months from the Closing.

 

The foregoing description of the lock-up agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the lock-up agreements, a form of which is attached hereto as Exhibit 10.8 and is incorporated herein by reference.

 

Registration Rights Agreement

 

On the Closing Date, Surviving Pubco entered into a registration rights agreement, dated as of the Closing Date, with the ADK Principal Holders, Tom Schiller, Bison Capital Partners IV, L.P. and GoDubs, Inc. pursuant to which Surviving Pubco has agreed to register for resale under the Securities Act shares of Class A common stock issued to the ADK Principal Holders as Merger Consideration, and to provide the Equity Holders with certain rights relating to the registration of the securities held by them.

 

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The foregoing description of the registration rights agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the registration rights agreement, which is attached hereto as Exhibit 10.7 and is incorporated herein by reference.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

The disclosure set forth in the “Introductory Note” and “Item 1.01 – Entry into a Material Definitive Agreement – Master Transactions Agreement” above is incorporated into this Item 2.01 by reference. Pursuant to the MTA, on June 10, 2021, the Transaction was completed, which consisted of the following:

 

(1) Thunder Bridge II transferred by way of continuation and domesticated from the Cayman Islands as an exempted company to the State of Delaware as a corporation (the “Domestication”);

 

(2) a merger subsidiary of Surviving Pubco merged with and into Thunder Bridge II pursuant to which Thunder Bridge II equity holders received corresponding shares and warrants of Surviving Pubco, with Surviving Pubco continuing as the successor public company to Thunder Bridge II, and Surviving Pubco changed its name to indie Semiconductor, Inc.;

 

(3) a merger subsidiary of Surviving Pubco merged with and into indie LLC, with indie LLC continuing as the surviving limited liability company;

 

(4) certain entities in the ADK Blocker Group merged with and into a merger subsidiary of Surviving Pubco; and

 

(5) a merger subsidiary of Surviving Pubco merged with and into ADK Service Provider Holdco.

 

 The material terms and conditions of the is described under the heading “Shareholder Proposal 2: The Merger Proposal – The MTA” in Proxy Statement/Prospectus, which description is incorporated herein by reference.

 

At the Special Meeting, holders of 9,877,106 Class A ordinary shares of Thunder Bridge II sold in its initial public offering (the “public shares”) exercised their rights to redeem their public shares for cash at a redemption price of approximately $10.13 per share, or an aggregate of approximately $100.1 million.

 

As discussed in the Introductory Note above, in connection with the Transaction, (i) certain indie Equity Holders received 53,234,572 shares of indie Class A common stock (including 1,791,147 shares subject to vesting conditions), (ii) certain indie Phantom Unit holders received the right to receive 1,751,368 shares of indie Class A common stock subject to vesting conditions, (iii) certain indie Equity Holders retained 34,476,883 Post-Merger indie Units (270,907 of which are subject to vesting conditions), and (iv) certain indie Equity Holders received the contingent right to receive Earn-Out Shares. “Earn-Out Shares” means a number of shares of indie Class A common stock or Post-Merger indie Units equal to, or exchangeable for, up to 10,000,000 shares of indie Class A common stock, less shares of Class A common stock reserved for possible issuance to the holders of Phantom Equity Units, subject to the satisfaction of certain stock-price based performance thresholds. Pursuant to the Exchange Agreement, the Post-Merger indie Units are exchangeable from time to time at the option of the holder for shares of Common Stock on a one-for-one basis (subject to customary conversion rate adjustments, including for stock splits, stock dividends and reclassifications and other terms of the Exchange Agreement).

 

Additionally, immediately following the Transaction, (i) indie issued to indie LLC 33,827,371 shares of indie Class V common stock and (ii) indie LLC distributed the number of shares of indie Class V common stock to the ADK Principal Holders equal to the number of vested Post-Merger indie Units held by such holder (the “Class V Holders”). The indie Class V common stock provides no economic rights in indie to the holder thereof; however, each Class V Holder is entitled to vote with the holders of Class A common stock of indie, with each share of Class V common stock entitling the holder to one (1) vote per share of Class V common stock at the time of such vote (subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications).

 

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As a result of the Domestication and the Transaction, holders of Thunder Bridge II Class A ordinary shares automatically received Class A common stock of Surviving Pubco, and holders of Thunder Bridge II warrants automatically received warrants of Surviving Pubco with substantively identical terms. At the Closing of the Transaction, 8,625,000 Class B ordinary shares of Thunder Bridge II owned by the Sponsor, which we refer to as our Founder Shares, automatically converted into 8,625,000 shares of indie Class A common stock, and 8,650,000 Private Placement Warrants held by the Sponsor, each exercisable for one Class A ordinary share of Thunder Bridge II at $11.50 per share, automatically converted into warrants to purchase one share of indie Class A common stock at $11.50 per share with substantively identical terms.

 

indie also issued 1,500,000 warrants to an affiliate of the Sponsor in satisfaction of working capital promissory notes of Thunder Bridge II with aggregate principal amount of $1,500,000, which warrants have substantially identical terms to the Private Placement Warrants (the “Working Capital Warrants”). Also, at the Closing, the Sponsor transferred 3,450,000 of its Founder Shares into an escrow account, which Escrow Shares are subject to release or forfeiture based on the satisfaction of or failure to satisfy, respectively, the same certain stock-price based performance thresholds as the Earn-Out Shares. In addition, as disclosed above, immediately prior to the Closing of the Transaction, Surviving Pubco issued and sold 15,000,000 shares of Class A common stock (the PIPE Shares) to the PIPE Investors for gross proceeds of $150,000,000. Indie has agreed to file a registration statement registering the resale of the PIPE Shares within 30 days of the Closing and to have such registration statement effective as soon as practicable, but in any event within 90 days (or 120 days if the SEC notifies indie that it will review the registration statement).

 

Immediately after giving effect to the Transactions, there were 101,482,466 shares of indie Class A common stock, 33,827,371 shares of Class V common stock and 27,400,000 Warrants (including the Working Capital Warrants) issued and outstanding. Upon the Closing, Thunder Bridge II’s ordinary shares and public warrants ceased trading, and the indie’s shares of Class A common stock and indie’s Public Warrants began trading on the Nasdaq Capital Market under the symbols “INDI” and “INDIW,” respectively. As of the Closing, public stockholders own approximately 18.2% of the outstanding shares of indie Class A common stock and indie Class V common stock (collectively, “Common Stock”), the Sponsor owns approximately 6.4% of the outstanding shares of Common Stock (including the Escrow Shares), indie LLC’s former security holders collectively own approximately 64.3% of the outstanding shares of Common Stock (on an as-exchanged basis) and approximately 11.1% of the outstanding shares of Common Stock are held by the PIPE Investors.

 

As noted above, the per share redemption price of approximately $10.13 for holders of public shares of Thunder Bridge II electing redemption was paid out of Thunder Bridge II’s trust account, which had a balance immediately prior to the Closing of approximately $350 million. Following the payment of redemptions of approximately $100 million and after giving effect to the $150 million PIPE Financing, Thunder Bridge II had approximately $400 million of available cash for disbursement in connection with the Transactions. Of these funds, approximately $65 million was used to pay certain transaction expenses and indie’s long-term debt and related fees, of which, approximately $48 million represents total transaction costs. As a result, approximately $335 million became available to indie upon the consummation of the Transaction.

 

FORM 10 INFORMATION

 

Forward Looking Statements

 

This Current Report on Form 8-K, including the information incorporated herein by reference, contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about the anticipated benefits of the Transaction described herein, and the financial condition, results of operations, earnings outlook and prospects of indie. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

 

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The forward-looking statements are based on the current expectations of the management of indie and its management and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following:

 

indie’s future capital requirements and sources and uses of cash;

 

indie’s ability to obtain funding for its operations and future growth;

 

changes in the market for indie’s products and services;

 

expansion plans and opportunities;

 

the above-average industry growth of product and market areas that indie has targeted;

 

indie’s plan to increase revenue through the introduction of new products within its existing product families as well as in new product categories and families;

 

the cyclical nature of the semiconductor industry;

 

indie’s ability to successfully introduce new technologies and products;

 

the demand for the goods into which indie’s products are incorporated;

 

indie’s ability to accurately estimate demand and obtain supplies from third-party producers;

 

indie’s ability to win competitive bid selection processes;

 

the outcome of any legal proceedings that may be instituted against indie or Thunder Bridge II following completion of the Transaction and transactions contemplated thereby;

 

the inability to maintain the listing of the indie Class A common stock on Nasdaq following the Transaction;

 

the risk that the Transaction disrupts current plans and operations;

 

the ability to recognize the anticipated benefits of the Transaction, which may be affected by, among other things, competition, and the ability of the indie to grow and manage growth profitably;

 

costs related to the Transaction; and

 

other risks and uncertainties indicated in the Proxy Statement/Prospectus, including those set forth under the section entitled “Risk Factors.”

 

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of indie prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

 

All subsequent written and oral forward-looking statements concerning the Transaction or other matters addressed in this Current Report on Form 8-K and attributable to indie or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Current Report on Form 8-K. Except to the extent required by applicable law or regulation, indie undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Current Report on Form 8-K or to reflect the occurrence of unanticipated events.

 

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BUSINESS

 

indie’s business operations after the Transaction are described in the Proxy Statement/Prospectus under the heading “Information About indie,” which is incorporated herein by reference.

 

RISK FACTORS

 

The risks associated with indie’s business are described in the Proxy Statement/Prospectus under the heading “Risk Factors – Risks Related to indie’s Business,” which are incorporated herein by reference.

  

FINANCIAL INFORMATION

 

Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of indie. Reference is further made to the disclosure contained in the Proxy Statement/Prospectus in the sections titled “Selected Historical Financial Data of Thunder Bridge II” and “Selected Historical Consolidated Financial and other Data of indie,” “Selected Unaudited Pro Forma Condensed Combined Financial Data,” “Unaudited Pro Forma Condensed Combined Financial Information,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of indie,” which are incorporated herein by reference.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The disclosure contained under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations of indie” in the Proxy Statement/Prospectus is incorporated herein by reference. In addition, the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the period ended March 31, 2021 is included as Exhibit 99.4 to this Current Report on Form 8-K and is incorporated herein by reference.

 

PROPERTIES

 

The facilities of indie are described in the Proxy Statement/Prospectus in the section titled “Information About Indie—Design Centers and other Facilities,” which is incorporated herein by reference.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information regarding the beneficial ownership of indie’s Common Stock immediately following the consummation of the Transaction on June 10, 2021 by:

   

  each person who is known by indie to be the beneficial owner of more than five percent of its issued and outstanding ordinary shares,

 

  each of indie’s Named Executive Officers and directors; and

 

  all of indie’s executive officers and directors as a group.

 

Beneficial ownership is determined in accordance with Commission rules and includes voting or investment power with respect to securities. Except as indicated by the footnotes below, indie believes, based on the information furnished to it, that the persons and entities named in the table below will have sole voting and investment power with respect to all stock that they beneficially own, subject to applicable community property laws. 

 

Subject to the paragraph above, the percentage ownership of issued shares is based on 101,482,466 shares of indie Class A common stock and 33,827,371 shares of indie Class V common stock issued and outstanding as of June 10, 2021. The table below includes the Escrow Shares, which are issued and outstanding but subject to forfeiture if certain stock price thresholds are not met by indie.

 

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The beneficial ownership information below excludes the shares underlying the Warrants, the Earn-Out Shares and the shares expected to be issued or reserved under the 2021 Equity Incentive Plan.

 

Unless otherwise noted, the business address of each of the following entities or individuals is 32 Journey, Suite 100, Aliso Viejo, California 92656.

 

Name and Address of Beneficial Owner   Shares of
Class A Common Stock
    Shares of
Class V
Common Stock(1)
    % of Total
Voting Power(2)
 
Donald McClymont     633       6,334,349       4.7 %
Ichiro Aoki     633       6,334,349       4.7 %
Thomas Schiller(3)     2,085,01     -       1.5 %
Scott Kee     633       6,334,349       4.7 %
David Aldrich     -       -       -  
Diane Brink     -       -       -  
Peter Kight(4)     1,000,100       -       *  
Karl-Thomas Neumann(5)     417,004       -       *  
Jeffrey Owens     -       -       -  
Sonalee Parekh(6)     10,958       -       *  
William Woodward(7)     514, 305      -       * %
(All Executive Officers and Directors as a Group (13 persons)):     4,029,285       19,003,047       17.0 %
                         
Greater than Five Percent Holders:                        
Anthem/MIC Strategic Partners LP (7)     13,229,944       -       9.8 %
Walden CEL Global Fund I, L.P.(8)     11,074,996       -       8.2 %
Gary Simanson(9)     9,225,000       -       6.8 %
Thunder Bridge Acquisition II, LLC(10)     8,625,000               6.4 %
Bison Capital Partners IV, L.P.(11)     849       8,489,975       6.3 %
Cezanne Investments Ltd
(Embry Converts)(12)
    8,023,072       -       5.9 %

 

* Less than 1%.

 

(1) Holders of Class A common stock will be entitled to one vote for each share of Class A common stock held by them. Certain indie Equity Holders will own Post-Merger indie Units and a corresponding number of shares of Class V common stock and will be entitled to one vote per share Class V common stock. Subject to the terms of the Exchange Agreement, the Post-Merger indie Units are initially exchangeable for shares of Class A common stock on a one-for-one basis from and after the six-month anniversary of the Closing.
(2) Represents percentage of voting power of the holders of Class A common stock and Class V common stock of indie voting together as a single class.
(3) Includes 937,100 shares subject to vesting conditions.
(4) Includes 1,000,000 Class A common shares acquired in the PIPE Financing.
(5) Includes 330,128 shares subject to vesting conditions.
(6) Consists of shares held by Ms. Parekh’s spouse.
(7) Consists of shares issued in the Transaction, which are held of record by Anthem/MIC Strategic Partners LP (“ASP). Anthem Strategic Capital LLC (“ASC”) is the general partner of ASP, and  as such, may be deemed to have the power to vote and dispose of the shares held of record by ASP. William Woodward is the managing member of ASC and may be deemed to have the power to vote and dispose of the shares held of record by ASP.  The address of ASP is 225 Arizona Street, Suite 200, Santa Monica, CA 90401.
(8) Consists of shares issued in the Transaction and held of record by  Walden CEL Global Fund I, L.P. (“Walden”)Walden CEL Global Fund GP (I) LTD is the general partner of Walden Walden and has sole voting and disposition over such shares. The address of Walden is 2550 Hanover Street, Palo Alto.

 

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(9) Interests shown includes 8,625,000 Founder Shares held by the Sponsor, 500,000 shares of Class A common stock acquired by Thunder Bridge Capital LLC in the PIPE Financing and 100,000 shares owned directly by Mr. Gary Simanson according to a Form 4 filed on August 14, 2019. Mr. Simanson may be deemed to beneficially own shares held by the Sponsor by virtue of his control over the Sponsor as its managing member. Mr. Simanson disclaims beneficial ownership of the shares held by the Sponsor other than to the extent of his pecuniary interest in such shares. Pursuant to the Sponsor Letter Agreement, at any time subsequent to the Closing, the Sponsor may liquidate and distribute the shares of Class A common stock (including rights to the Escrow Shares) among its members in accordance with its operating agreement, subject to the escrow. Following this dissolution, Mr. Simanson will have the authority to act on behalf of the Sponsor’s members in respect of all of the Escrow Shares (subject to an escrow agreement, in releasing from escrow or otherwise disposing of the Escrow Shares). While the Escrow Shares are held in escrow, the Sponsor’s members will have full ownership rights to the Escrow Shares, including voting rights, but any earnings or proceeds from the Escrow Shares will be retained in the escrow account, and neither the Sponsor’s members nor Mr. Simanson following the Sponsor dissolution will have the right to transfer the Escrow Shares. Mr. Simanson is deemed to beneficially own shares held by Thunder Bridge Capital LLC by virtue of his control over Thunder Bridge Capital LLC as its managing member.
(10) Interests shown includes 8,625,000 Founder Shares held by the Sponsor. Mr. Simanson may be deemed to beneficially own shares held by the Sponsor by virtue of his control over the Sponsor as its managing member. Mr. Simanson disclaims beneficial ownership of the shares held by the Sponsor other than to the extent of his pecuniary interest in such shares. Pursuant to the Sponsor Letter Agreement, at any time subsequent to the Closing, the Sponsor may liquidate and distribute the shares of Class A common stock (including rights to the Escrow Shares) among its members in accordance with its operating agreement, subject to the escrow. Following this dissolution, Mr. Simanson will have the authority to act on behalf of the Sponsor’s members in respect of all of the Escrow Shares (subject to an escrow agreement, in releasing from escrow or otherwise disposing of the Escrow Shares). While the Escrow Shares are held in escrow, the Sponsor’s members will have full ownership rights to the Escrow Shares, including voting rights, but any earnings or proceeds from the Escrow Shares will be retained in the escrow account, and neither the Sponsor’s members nor Mr. Simanson following the Sponsor dissolution will have the right to transfer the Escrow Shares.
(11) Consists of shares held of record by Bison Capital Partners IV, L.P. (“Bison”).  Peter Macdonald, Douglas Trussler, Andreas Hildebrand, Lou Caballero and Yee-Ping Chu, the managing members of Bison Capital Partners GP LLC, the general partner of Bison Capital Partners IV GP, L.P, the general partner of Bison, share voting and dispositive power over these shares. The address of Bison Capital Partners IV, L.P. is 233 Wilshire Blvd, Suite 425, Santa Monica, CA 90401..
(12) Consists of 8,023,068 shares of Class A common stock to be issued to Cezanne Investments Ltd as consideration for the Transaction. Renato Portella has voting and dispositive power over the shares. The address of Cezanne Investments Ltd (Embry Converts) is Morgan & Morgan Building, Pasea Estate, Road Town, Tortola, The British Virgin Islands.

  

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

The disclosure contained in the Proxy Statement/Prospectus under the heading “Management of the Company Following the Transaction” is incorporated herein by reference.

 

EXECUTIVE COMPENSATION

 

The disclosure contained in the Proxy Statement/Prospectus under the heading “Executive Compensation of indie” is incorporated herein by reference.

 

At the Special Meeting, the shareholders of Thunder Bridge II adopted and approved the indie Semiconductor, Inc. 2021 Omnibus Equity Incentive Plan (the “2021 Equity Incentive Plan”), which became effective upon the Closing. indie reserved for issuance 10,368,750 shares pursuant to the 2021 Equity Incentive Plan. The material features of the Equity Incentive Plan are described in the Proxy Statement/Prospectus under the heading “Shareholder Proposal 3: The Equity Incentive Plan Proposal,” which is incorporated herein by reference. 

 

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This summary and the information incorporated herein by reference is qualified in its entirety by reference to the text of the 2021 Equity Incentive Plan, which is included as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

The certain relationships and related party transactions of indie are described in the Proxy Statement/Prospectus under the heading “Certain Relationships and Related Person Transactions – indie Related Person Transactions” and “Certain Relationships and Related Person Transactions – Post-Business Combination Agreements,” which are incorporated herein by reference. The certain relationships and related party transactions of Thunder Bridge II and Surviving Pubco are described in the Proxy Statement/Prospectus under the heading “Certain Relationships and Related Person Transactions – Thunder Bridge II Related Person Transactions,” which is incorporated herein by reference.

 

The information set forth in the section titled “Registration Rights Agreement” in Item 1.01 of this Current Report on Form 8-K are incorporated herein by reference.

 

LEGAL PROCEEDINGS

 

Reference is made to the disclosure regarding legal proceedings in the section of the Proxy Statement/Prospectus titled “Information About indie – Litigation” and “Information About Thunder Bridge II – Legal Proceedings” and that information is incorporated herein by reference but is updated to reflect the following: On June 15, 2020, the previously disclosed lawsuit captioned Householder v. Thunder Bridge Acquisition II, et al. (Case No. 1:21-cv-01768) was voluntarily dismissed without prejudice. On May 11, 2021, the putative class action complaint in the Supreme Court of the State of New York, captioned Tomczak v. Thunder Bridge Acquisition II, et al. (Case No. 650808/2021) was voluntarily discontinued.

  

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S

COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

indie’s shares of Class A common stock began trading on the Nasdaq Capital Market under the symbol “INDI” and its Public Warrants began trading on the Nasdaq Capital Market under the symbol “INDIW” on June 11, 2021, in lieu of the units, ordinary shares, and warrants of Thunder Bridge II. indie has not paid any cash dividends on its shares of Common Stock to date. It is the present intention of the indie’s board of directors (the “Board”) to retain future earnings for the development, operation and expansion of its business and the Board does not anticipate declaring or paying any cash dividends for the foreseeable future. The payment of dividends is within the discretion of the Board and will be contingent upon indie’s future revenues and earnings, as well as its capital requirements and general financial condition.

 

RECENT SALES OF UNREGISTERED SECURITIES

 

Reference is made to the disclosure set forth under Item 3.02 of this Current Report on Form 8-K concerning the issuance of shares of Common Stock in connection with the Transactions, Working Capital Warrants and the PIPE Financing, which is incorporated herein by reference.

 

DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED

 

A description of indie’s Common Stock, preferred stock and Warrants, is included in the Proxy Statement/Prospectus under the heading “Description of Thunder Bridge II’s and the Company’s Securities Capital Stock of the Company after the Business Combination” is incorporated herein by reference.

 

INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

Information about the indemnification of indie’s directors and executive officers is set forth in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Person Transactions – Indemnification of Directors and Officers,” and “Description of Thunder Bridge II’s and the Company’s Securities – Anti-Takeover Effects of the Certificate of Incorporation, the Bylaws and Certain Provisions of Delaware Law – Limitations on Liability and Indemnification of Officers and Directors,” beginning on page 186 and that information is incorporated herein by reference.

 

The information set forth in the section titled “Indemnification Agreements” in Item 1.01 of this Current Report on Form 8-K is also incorporated herein by reference.

 

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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

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

 

FINANCIAL STATEMENTS AND EXHIBITS

 

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

 

Item 3.02. Unregistered Sales of Equity Securities.

 

PIPE Financing

 

As previously announced, on December 14, 2020, concurrently with the execution of the MTA, Thunder Bridge II entered into Subscription Agreements with the PIPE Investors pursuant to, and on the terms and subject to the conditions of which, the PIPE Investors collectively subscribed for an aggregate of 15,000,000 shares of indie Class A common stock at $10.00 per share for aggregate gross proceeds of $150.0 million (the “PIPE Financing”). The PIPE Financing was consummated substantially concurrently with the Closing of the Transaction. In connection with the PIPE Financing, the placement agents, Morgan Stanley & Co. LLC and Deutsche Bank Securities, Inc., earned placement fees of approximately $4.5 million and $3.0 million, respectively.

 

The shares of indie Class A common stock issued to the PIPE Investors were issued pursuant to and in accordance with the exemption from registration under the Securities Act, under Section 4(a)(2) and/or Regulation D promulgated under the Securities Act.

 

This summary is qualified in its entirety by reference to the text of the Subscription Agreements, which is included as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Working Capital Warrants

 

In full satisfaction of working capital promissory notes issued by Thunder Bridge II for the benefit of an affiliate of Sponsor with aggregate principal amount of $1,500,000, such notes were converted into warrants to purchase 1,500,000 shares of Class A common stock on terms substantially identical to the Private Placement Warrants.

 

Item 3.03. Material Modification to Rights of Security Holders.

 

The shareholders of Thunder Bridge II approved the Amended and Restated Certificate of Incorporation (as defined below) at the Special Meeting. In connection with the Closing, Surviving Pubco adopted the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws (defined below) effective as of the Closing Date. Reference is made to the disclosure described in the Proxy Statement/Prospectus in the section titled “Shareholder Proposal 1: the Domestication Proposal – Comparison of Shareholder Rights under Applicable Corporate Law Before and After the Domestication and Business Combination” and “ – Comparison of Shareholder Rights under the Applicable Organizational Documents Before and After the Domestication,” which is incorporated herein by reference.

 

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The full text of the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws, which are included as Exhibits 3.1 and 3.2 hereto, respectively, to this Current Report on Form 8-K, are incorporated herein by reference.

 

Item 5.01. Changes in Control of Registrant.

 

Reference is made to the disclosure in the Proxy Statement/Prospectus in the section titled “Shareholder Proposal 2: The Merger Proposal,” which is incorporated herein by reference. Further reference is made to the “Introductory Note” and the information contained in Item 2.01 to this Current Report on Form 8-K, which is incorporated herein by reference.

 

Immediately after giving effect to the Transaction, there were 135,309,840 shares of Common Stock outstanding. As of such time, our executive officers and directors and affiliates held or controlled 26.4% of our outstanding shares of Common Stock.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

The information set forth in the Proxy Statement/Prospectus under the heading “Management of the Company Following the Business Combination,” is incorporated by reference herein.

 

On June 10, 2021, in connection with the Transaction, Surviving Pubco adopted the 2021 Equity Incentive Plan, the material features of which are described in the Proxy Statement/Prospectus under the heading “Shareholder Proposal 3: The Equity Incentive Plan Proposal” and such description is incorporated herein by reference.

  

The information contained in Item 1.01 and Item 2.01 to this Current Report on Form 8-K is also incorporated herein by reference.

 

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

 

The information contained in Item 3.03 of this Current Report on Form 8-K is incorporated in this Item 5.03 by reference.

 

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

 

On June 10, 2021, the Board of Surviving Pubco adopted a new Code of Ethics that applies to all of indie’s employees, officers and directors, including indie’s Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The full text of indie’s Code of Business Conduct and Ethics is available on indie’s website at investors.indiesemi.com under “Governance.” In addition, a copy of the Code of Ethics will be provided without charge upon request to indie in writing at 32 Journey, Suite 100, Aliso Viejo, California 92656.

 

Any waivers under the Code of Ethics will be disclosed on a Current Report on Form 8-K or as otherwise permitted by the rules of the SEC and Nasdaq (or other stock exchange on which indie’s securities are then listed).

 

Item 5.06. Change in Shell Company Status.

 

As a result of the consummation of the Transaction, which fulfilled the “initial Business Combination” requirement of Thunder Bridge II’s Memorandum and Articles of Association, as amended and restated, each of Thunder Bridge II and Surviving Pubco ceased to be a shell company. The material terms of the Transaction are described in the Proxy Statement/Prospectus under the heading “Shareholder Proposal No. 1 – The Domestication Proposal” and “Shareholder Proposal No. 2 – The Merger Proposal,” which is incorporated herein by reference. 

 

Further, the information set forth in the “Introductory Note” and under Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 8.01 Other Events.

  

indie’s Class A common stock and Public Warrants are listed for trading on the Nasdaq Capital Market under the symbols “INDI” and “INDIW,” respectively.

 

On June 10, 2021, indie and Surviving Pubco issued a joint press release announcing the consummation of the Business Combination. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired.

 

In accordance with Rule 12b-23 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 12b-23”), indie LLC’s audited consolidated balance sheets as of December 31, 2020 and 2019, the related consolidated statements of operations, members’ equity, and cash flows for each of the two years in the period ended December 31, 2020, and the related notes are incorporated by reference to such financial statements appearing on pages F-1 to F-37 of the Proxy Statement/Prospectus.

 

The unaudited financial statements of indie LLC as of March 31, 2021 and for the three months ended March 31, 2021 and 2020, together with the notes thereto, are set forth in Exhibit 99.2 and are incorporated herein by reference.

 

(b) Pro Forma Financial Information.

 

The unaudited pro forma consolidated financial information of Thunder Bridge II and indie LLC as of and for the three months March 31, 2021 and for the year ended December 31, 2020 is set forth in Exhibit 99.3 hereto and is incorporated herein by reference.

 

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(d) Exhibits

 

Exhibit
Number
  Description of Exhibit

2.1†

  Master Transactions Agreement, dated effective December 14, 2020, by and among Surviving Pubco, Thunder Bridge II, the Merger Subs named therein, indie, the ADK Blocker Group, ADK Service Provider Holdco, and the indie Securityholder Representative named therein, and also included as Annex B-1 to the proxy statement/prospectus (previously filed as Exhibit 2.1 of Form 8-K filed by Thunder Bridge II with the SEC on December 15, 2020).
2.2†    Amendment to Master Transactions Agreement, dated effective May 3, 2021, by and among Surviving Pubco, Thunder Bridge II, the Merger Subs named therein, indie, the ADK Blocker Group, ADK Service Provider Holdco, and the indie Securityholder Representative named therein (previously filed by Thunder Bridge II as Exhibit 2.2 of Form S-4/A filed with the SEC on May 4, 2021).
3.1*   Amended and Restated Certificate of Incorporation of indie Semiconductor, Inc., filed with the Secretary of State of Delaware on June 10, 2021.
3.2*   Amended and Restated Bylaws of indie Semiconductor, Inc.
4.1*   Specimen Common Stock Certificate.
4.2   Specimen Warrant Certificate (included in Exhibit 4.3, as amended by Exhibit 4.4).
4.3   Warrant Agreement between Continental Stock Transfer & Trust Company and Thunder Bridge II (previously filed as Exhibit 4.1 of Form 8-K filed by Thunder Bridge II with the SEC on August 14, 2019).
4.4*   Warrant Agreement Assignment and Assumption Agreement.
10.1*   Eight Amended and Restated Limited Liability Company Agreement of indie LLC
10.2   Subscription Agreement for the PIPE Investment (previously filed by Thunder Bridge II as Exhibit 10.1 of Form 8-K filed with the SEC on December 15, 2020).
10.3*   indie Semiconductor, Inc. 2021 Equity Incentive Plan
10.4*   Form of Indemnification Agreement between registrant and certain officers and directors of  registrant.
10.5*   Exchange Agreement, dated June 10, 2021, between registrant and certain indie Equity Holders.
10.6*   Tax Receivable Agreement, dated June 10, 2021, between registrant and certain indie Equity Holders.
10.7*   Registration Rights Agreement, dated June 10, 2021, between registrant and certain indie Equity Holders.
10.8*   Form of Lock-up Agreement by certain indie Equity Holders.
10.9   Registration Rights Agreement, dated August 8, 2019, between Thunder Bridge II, Sponsor and the holders party thereto (previously filed by Thunder Bridge II as Exhibit 10.4 of Form S-1/A (File No. 333-232688), filed with the SEC on July 29, 2019)
10.10   Private Placement Warrants Purchase Agreement between Thunder Bridge II and Thunder Bridge Acquisition II LLC (previously filed by Thunder Bridge II as Exhibit 10.6 of Form S-1/A (File No. 333-232688), filed with the SEC on July 29, 2019).
10.11   Sponsor Letter Agreement by and among Thunder Bridge II, Sponsor and indie, dated December 14, 2020 (incorporated by reference to Exhibit 10.6 of Form 8-K filed with by Thunder Bridge II the SEC on December 15, 2020).
10.12*   Loan and Security Agreement, dated January 13, 2015, and relevant amendments thereto, by and between Square 1 Bank (now Pacific Western Bank) and indie LLC.
21.1*   Subsidiaries of the Registrant.
99.1   Press Release, dated June 10, 2021 (previously filed by indie as Exhibit 99.1 of Form 8-K filed with the SEC on June 11, 2021)
99.2*   Unaudited financial statements of indie LLC as of and for the periods ending March 31, 2021.
99.3*   Unaudited pro forma financial statements.
99.4*   Management’s Discussion and Analysis of Financial Condition and Results of Operations of indie LLC for the periods ending March 31, 2021.

 

*Filed herewith.

 

Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish copies of any of the omitted schedules upon request by the Securities and Exchange Commission.

 

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SIGNATURE

 

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

 

  INDIE SEMICONDUCTOR, INC.
     
June 16, 2021 By: /s/ Ellen Bancroft
    Name:  Ellen Bancroft
    Title: General Counsel and Secretary

  

 

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Exhibit 3.1

 

AMENDED AND RESTATED

 

CERTIFICATE OF INCORPORATION

 

OF

 

THUNDER BRIDGE II SURVIVING PUBCO, INC.

 

June 10, 2021

 

Thunder Bridge II Surviving Pubco, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY AS FOLLOWS:

 

1. The name of the Corporation is “Thunder Bridge II Surviving Pubco, Inc.”. The original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on December 4, 2020 (the “Original Certificate”).

 

2. This Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate”), which both restates and further amends the provisions of the Original Certificate, was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, as amended from time to time (the “DGCL”), and by written consent of the Corporation’s stockholders in accordance with Section 228 of the DGCL.

 

3. This Amended and Restated Certificate shall become effective on the date of filing with the Secretary of State of Delaware.

 

4. The text of the Original Certificate is hereby restated and amended in its entirety to read as follows:

 

ARTICLE I
NAME

 

The name of the corporation is “indie Semiconductor, Inc.” (the “Company”).

 

ARTICLE II
REgistered Office and agent

 

The address of the Company’s registered office in the State of Delaware is c/o Corporate Creations Network Inc., 3411 Silverside Road, Tatnall Building #104, in the City of Wilmington, County of New Castle, State of Delaware 19810. The name of the Company’s registered agent at such address is Corporate Creations Network Inc.

 

ARTICLE III
Purpose

 

The purpose of the Company is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware, as amended (the “DGCL”).

 

ARTICLE IV
CAPITAL STOCK

 

Section 1. Authorized Capital Stock. The total number of shares of all classes of capital stock which the Company is authorized to issue is 300,000,000 shares, consisting of (i) 250,000,000 shares of Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), (ii) 40,000,000 shares of Class V common stock, par value $0.0001 per share (the “Class V Common Stock”), and (iii) 10,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”). Subject to the rights of the holders of any series of Preferred Stock, the number of authorized shares of Class A Common Stock, Class V Common Stock or Preferred Stock may be increased or decreased (but not below (i) the number of shares thereof then outstanding and (ii) with respect to the Class A Common Stock, the number of shares of Class A Common Stock reserved pursuant to Article IV, Section 2(e)(3) below) by the affirmative vote of the holders of capital stock representing a majority in voting power of all the then-outstanding shares of capital stock of the Company entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL.

 

 

 

 

Section 2. Common Stock.

 

(a) Ranking. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board upon any issuance of the Preferred Stock of any series.

 

(b) Voting. Subject to the rights of the holders of any series of Preferred Stock, (i) each holder of Class A Common Stock, as such, shall have the right to one (1) vote per share of Class A Common Stock held of record by such holder and (ii) each holder of Class V Common Stock, as such, shall have the right to one (1) vote per share of Class V Common Stock held of record by such holder. Except as otherwise required by applicable law or provided in this Certificate of Incorporation, the holders of shares of Class A Common Stock and Class V Common Stock, as such, shall at all times vote together as a single class on all matters (including the election of directors) submitted to a vote of the stockholders of the Company generally. Notwithstanding any other provision of this Certificate of Incorporation to the contrary, the holders of Common Stock will 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. There shall be no cumulative voting.

 

(c) Dividends and Distributions. Subject to the rights of the holders of any series of Preferred Stock, holders of shares of Class A Common Stock will be entitled to receive ratably, in proportion to the number of shares of Class A Common Stock held by them, such dividends and other distributions in cash, stock or property of the Company when, as and if declared thereon by the Board from time to time out of assets or funds of the Company legally available therefor. Dividends and other distributions shall not be declared or paid on the Class V Common Stock.

 

(d) Liquidation, Dissolution or Winding Up. Subject to the rights of the holders of Preferred Stock, holders of shares of Class A Common Stock will be entitled to receive ratably, in proportion to the number of shares of Class A Common Stock held by them, the assets and funds of the Company available for distribution in the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary. A liquidation, dissolution or winding up of the affairs of the Company, as such terms are used in this Article IV, Section 2(d), will not be deemed to be occasioned by or to include any consolidation or merger of the Company with or into any other person or a sale, lease, exchange or conveyance of all or a part of its assets. The holders of shares of Class V Common Stock, as such, shall not be entitled to receive any assets of the Company in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

 

(e) Transfer. No holder of Class V Common Stock shall be permitted to consummate a sale, pledge, conveyance, hypothecation, assignment or other transfer (“Transfer”) of Class V Common Stock other than as permitted pursuant to that certain Exchange Agreement (the “Exchange Agreement”) entered into by and between the Company and certain members of Ay Dee Kay LLC, d/b/a indie Semiconductor, a California limited liability company (“ADK”). Any purported Transfer of Class V Common Stock not in accordance with the terms of this Article IV, Section 2(e) shall be void ab initio. The Company may, as a condition to the Transfer or the registration of Transfer of shares of Class V Common Stock, require the furnishing of such affidavits or other proof as it deems necessary to establish whether such Transfer is permitted pursuant to the terms of this Article IV, Section 2(e).

 

(f) Retirement of Class V Common Stock. In the event that any outstanding share of Class V Common Stock shall cease to be held directly or indirectly by a holder of an LLC Unit (as defined in the Exchange Agreement) as set forth in the books and records of ADK, such share shall automatically and without further action on the part of the Company or any holder of Class V Common Stock be transferred to the Company for no consideration. The Company shall not issue additional shares of Class V Common Stock after the effectiveness of this Certificate of Incorporation.

 

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Section 3. Preferred Stock. The Preferred Stock may be issued in one or more series. The Board of Directors of the Company (the “Board”) is hereby authorized to issue the shares of Preferred Stock in such series and to fix from time to time before issuance the number of shares to be included in any such series and the designation, powers, preferences and relative participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof. The authority of the Board with respect to each such series will include, without limiting the generality of the foregoing, the determination of any or all of the following:

 

(a) the number of shares of any series and the designation to distinguish the shares of such series from the shares of all other series;

 

(b) the voting powers, if any, and whether such voting powers are full or limited in such series;

 

(c) the redemption provisions, if any, applicable to such series, including the redemption price or prices to be paid;

 

(d) whether dividends, if any, will be cumulative or noncumulative, the dividend rate of such series, and the dates and preferences of dividends on such series;

 

(e) the rights of such series upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of, the Company;

 

(f) the provisions, if any, pursuant to which the shares of such series are convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock, or any other security, of the Company or any other corporation or other entity, and the rates or other determinants of conversion or exchange applicable thereto;

 

(g) the right, if any, to subscribe for or to purchase any securities of the Company or any other corporation or other entity;

 

(h) the provisions, if any, of a sinking fund applicable to such series; and

 

(i) any other relative, participating, optional, or other special powers, preferences or rights and qualifications, limitations, or restrictions thereof;

 

all as may be determined from time to time by the Board and stated or expressed in the resolution or resolutions providing for the issuance of such Preferred Stock (collectively, a “Preferred Stock Designation”).

 

ARTICLE V
MEETINGS OF STOCKHOLDERS

 

Section 1. General. Subject to the rights of the holders of any series of Preferred Stock, (a) any action required or permitted to be taken by the stockholders of the Company may be taken at a duly called annual or special meeting of stockholders of the Company and (b) special meetings of stockholders of the Company may be called only (i) by the Chairman of the Board (the “Chairman”), (ii) by the Chief Executive Officer of the Company (the “Chief Executive Officer”), or (iii) by the Secretary of the Company (the “Secretary”) acting at the request of the Chairman, the Chief Executive Officer or a majority of the total number of Directors that the Company would have if there were no vacancies on the Board. At any annual meeting or special meeting of stockholders of the Company, only such business will be conducted or considered as has been brought before such meeting in the manner provided in the Bylaws of the Company. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 66-2/3% of the voting power of the outstanding voting capital stock of the Company, voting together as a single class, will be required to amend or repeal, or adopt any provision inconsistent with, this Article V.

 

Section 2. Written Consent. Unless otherwise provided in this Amended and Restated Certificate of Incorporation or the Bylaws of the Company, any action required to be taken at any annual or special meeting of stockholders of the Company, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take action were delivered to the Company.

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ARTICLE VI
BOARD OF DIRECTORS

 

Section 1. General. The business and affairs of the Company will be managed by or under the direction of the Board.

 

Section 2. Number. Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock Designation, the number of the Directors of the Company will be fixed from time to time in the manner provided in the Bylaws of the Company.

 

Section 3. Election and Terms of Service.

 

(a) Subject to the rights of holders of any series of Preferred Stock to elect Directors, the Board 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 is authorized to assign members of the Board already in office to Class I, Class II or Class III at the time such classification becomes effective.

 

(b) Subject to the rights of holders of any series of Preferred Stock to elect directors, each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected; provided that each director initially assigned to Class I shall serve for a term expiring at the Company’s first annual meeting of stockholders held following the time at which the initial classification of the Board becomes effective; each director initially assigned to Class II shall serve for a term expiring at the Company’s second annual meeting of stockholders held following the time at which the initial classification of the Board becomes effective; and each director initially assigned to Class III shall serve for a term expiring at the Company’s third annual meeting of stockholders held following the time at which the initial classification of the Board becomes effective; provided further, that the term of each director shall continue until the election and qualification of his or her successor and be subject to his or her earlier death, disqualification, resignation or removal.

 

(c) Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock Designation, Directors may be elected by the stockholders only at an annual meeting of stockholders. Election of Directors of the Company need not be by written ballot unless requested by the presiding officer or by the holders of a majority of the voting capital stock of the Company present in person or represented by proxy at a meeting of the stockholders at which Directors are to be elected. If authorized by the Board, such requirement of a written ballot will be satisfied by a ballot submitted by electronic transmission as long as any such electronic transmission either sets forth or is submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder or proxy holder.

 

Section 4. Nomination of Director Candidates. Advance notice of stockholder nominations for the election of Directors must be given in the manner provided in the Bylaws of the Company.

 

Section 5. Newly Created Directorships and Vacancies. Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock Designation, newly created directorships resulting from any increase in the number of Directors and any vacancies on the Board resulting from death, resignation, disqualification, removal, or other cause will be filled solely by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board, or by a sole remaining Director. Any Director elected in accordance with the preceding sentence will hold office for the remainder of the full term of the class of Directors in which the new directorship was created or the vacancy occurred and until such Director’s successor has been elected and qualified. No decrease in the number of Directors constituting the Board may shorten the term of any incumbent Director.

 

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Section 6. Removal. Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock Designation, any director may be removed from office at any time, but only for cause, by the affirmative vote of the holders of at least 66-2/3% of the voting power of the outstanding voting capital stock of the Company, voting together as a single class.

 

ARTICLE VII
LIMITATION OF DIRECTOR LIABILITY

 

To the full extent permitted by the DGCL and any other applicable law currently or hereafter in effect, no Director of the Company will be personally liable to the Company or its stockholders for or with respect to any breach of fiduciary duty or other act or omission as a Director of the Company; provided, however, that nothing contained in this Article VII shall eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the Company or its stockholders, or (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law. No repeal or modification of this Article VII will adversely affect the protection of any Director of the Company provided hereby in relation to any breach of fiduciary duty or other act or omission as a Director of the Company occurring prior to the effectiveness of such repeal or modification. If any provision of the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of directors will be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

 

ARTICLE VIII
INDEMNIFICATION

 

Section 1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise subject to or involved in any claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she is or was a director or an officer of the Company or is or was serving at the request of the Company as a director, officer, employee or agent of another company or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an “Indemnitee”), whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, will be indemnified by the Company to the fullest extent permitted or required by the DGCL and any other applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith (“Indemnifiable Losses”); provided, however, that, except as provided in Section 4 of this Article VIII with respect to Proceedings to enforce rights to indemnification, the Company will indemnify any such Indemnitee pursuant to this Section 1 in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board.

 

Section 2. Right to Advancement of Expenses. The right to indemnification conferred in Section 1 of this Article VIII will include the right to advancement by the Company of any and all expenses (including, without limitation, attorneys’ fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an “Advancement of Expenses”); provided, however, that, if the DGCL so requires, an Advancement of Expenses incurred by an Indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such Indemnitee, including without limitation service to an employee benefit plan) will be made pursuant to this Section 2 only upon delivery to the Company of an undertaking (an “Undertaking”), by or on behalf of such Indemnitee, to repay, without interest, all amounts so advanced if it is ultimately be determined by final judicial decision from which there is no further right to appeal (a “Final Adjudication”) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 2. An Indemnitee’s right to an Advancement of Expenses pursuant to this Section 2 is not subject to the satisfaction of any standard of conduct and is not conditioned upon any prior determination that Indemnitee is entitled to indemnification under Section 1 of this Article VIII with respect to the related Proceeding or the absence of any prior determination to the contrary.

 

Section 3. Contract Rights. The rights to indemnification and to the Advancement of Expenses conferred in Sections 1 and 2 of this Article VIII are contract rights and such rights will continue as to an Indemnitee who has ceased to be a director, officer, employee or agent and will inure to the benefit of the Indemnitee’s heirs, executors and administrators.

 

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Section 4. Right of Indemnitee to Bring Suit. If a claim under Section 1 or 2 of this Article VIII is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period will be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee will be entitled to the fullest extent permitted or required by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader reimbursements of prosecution or defense expenses than such law permitted the Company to provide prior to such amendment), to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it will be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company will be entitled to recover such expenses, without interest, upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Company (including its Board of Directors or a committee thereof, its stockholders or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Company (including its Board of Directors or a committee thereof, its stockholders or independent legal counsel) that the Indemnitee has not met such applicable standard of conduct, will create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by an Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses hereunder pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such Advancement of Expenses, will be on the Company.

 

Section 5. Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Article VIII will not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Company’s Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. Nothing contained in this Article VIII will limit or otherwise affect any such other right or the Company’s power to confer any such other right.

 

Section 6. Insurance. The Company may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the DGCL.

 

Section 7. No Duplication of Payments. The Company will not be liable under this Article VIII to make any payment to an Indemnitee in respect of any Indemnifiable Losses to the extent that the Indemnitee has otherwise actually received payment (net of any expenses incurred in connection therewith and any repayment by the Indemnitee made with respect thereto) under any insurance policy or from any other source in respect of such Indemnifiable Losses.

 

ARTICLE IX
AMENDMENT OF CERTIFICATE OF INCORPORATION

 

The Company reserves the right at any time 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 IX. Notwithstanding any other provision of this Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any series of Preferred Stock required by law, the affirmative vote of the holders of at least a majority in voting power of the outstanding voting capital stock of the Company, voting together as a single class, will be required to amend, alter, change or repeal, or adopt any provision inconsistent with, any of Article VII, Article VIII, this Article IX and Article X, or in each case, the definition of any capitalized terms used therein or any successor provision (including, without limitation, any such article or section as renumbered as a result of any amendment, alteration, change, repeal or adoption of any other provision of this Certificate of Incorporation). Any amendment, repeal or modification of any Article VII, Article VIII and this Article IX will not adversely affect any right or protection of any person existing thereunder with respect to any act or omission occurring prior to such amendment, repeal or modification.

 

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ARTICLE X
FORUM SELECTION

 

Unless the Company consents in writing to the selection of an alternative forum, (a) the Court of Chancery (the ”Chancery Court”) of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action, suit or proceeding brought on behalf of the Company, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or stockholder of the Company to the Company or to the Company’s stockholders, (iii) any action, suit or proceeding arising pursuant to any provision of the DGCL or the Bylaws or this Certificate of Incorporation (as either may be amended and/or restated from time to time) or as to which the DGCL confers jurisdiction on the Chancery Court, or (iv) any action, suit or proceeding asserting a claim against the Company governed by the internal affairs doctrine; and (b) subject to the preceding provisions of this Article X, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. If any action the subject matter of which is within the scope of clause (a) of the immediately preceding sentence is filed in a court other than the courts in the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder will be deemed to have consented to (1) the personal jurisdiction of the state and federal courts in the State of Delaware in connection with any action brought in any such court to enforce the provisions of clause (a) of the immediately preceding sentence and (2) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder. Any person or entity purchasing or otherwise acquiring or holding any interest in any security of the Company will be deemed to have notice of and consented to this Article X. Notwithstanding the foregoing, the provisions of this Article X will not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts of the United States have exclusive jurisdiction.

 

ARTICLE XI
Section 203

 

The Company shall not be governed by Section 203 of the DGCL (“Section 203”), and the restrictions contained in Section 203 shall not apply to the Company.

 

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Exhibit 3.2

 

BYLAWS

OF

INDIE SEMICONDUCTOR, INC.

(the “Corporation”)

ARTICLE I

OFFICES

SECTION 1.  Principal Office.  The registered office of the Corporation will be located in such place as may be provided from time to time in the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”).

SECTION 2.  Other Offices.  The Corporation may also have offices at such other places both within and without the State of Delaware as the board of directors of the Corporation (the “Board of Directors”) may from time to time determine or as the business of the Corporation may require.

ARTICLE II

STOCKHOLDERS

SECTION 1.  Annual Meetings.  The annual meeting of the stockholders of the Corporation will be held wholly or partially by means of remote communication or at such place, within or without the State of Delaware, on such date and at such time as may be determined by the Board of Directors, the Chief Executive Officer or the chairman of the Board (the “Chairman”) and as will be designated in the notice of said meeting. The Board of Directors may, in its sole discretion, determine that a meeting will 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 (as amended, “DGCL”). The Board of Directors, the Chief Executive Officer or the Chairman may postpone, reschedule or cancel any previously scheduled annual meeting of stockholders. At each annual meeting of the stockholders, the stockholders will elect the directors from the nominees for director, to succeed those directors whose terms expire at such meeting and will transact such other business, in each case as may be properly brought before the meeting in accordance with Section 8 of this Article II.

SECTION 2. Special Meetings.  Special meetings of the stockholders for any purpose or purposes, unless otherwise prescribed by law or by the Certificate of Incorporation, may only be held wholly or partially by means of remote communication or at any place, within or without the State of Delaware, and may only be called by the Secretary at the direction of the Board of Directors, by the Chairman or the Chief Executive Officer. Business transacted at any special meeting of stockholders will be limited to matters relating to the purpose or purposes stated in the notice of meeting. Those persons with the power to call a special meeting in accordance with this Section 2 of this Article II also have the power and authority to postpone, reschedule or cancel any previously scheduled special meeting of stockholders. The stockholders may cause business to be specified in the notice of meeting only as and to the extent provided in Section 8 and shall not otherwise be permitted to propose business to be brought before a special meeting of stockholders.

SECTION 3.  Notice and Purpose of Meetings.  Except as otherwise provided by law, the Certificate of Incorporation or these bylaws, written or printed notice of the meeting of the stockholders stating the place, day and hour of the meeting and, in case of a special meeting, stating the purpose or purposes for which the meeting is called, and in case of a meeting held by remote communication stating such means, will be delivered not less than ten nor more than 60 calendar days before the date of the meeting, either personally or by mail, to each stockholder of record entitled to vote at such meeting. Without limiting the manner by which notice otherwise may be given to stockholders, any notice will 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. If notice is given by mail, such notice will 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 will be deemed given at the time specified in Section 232 of the DGCL.

 

 

SECTION 4.  Quorum.  Except as otherwise provided by law, the Certificate of Incorporation or these bylaws, the holders of a majority of the shares of common stock issued and outstanding and entitled to vote, present in person, present by means of remote communication in a manner, if any, authorized by the Board of Directors in its sole discretion, or represented by proxy, will constitute a quorum at all meetings of the stockholders for the transaction of business.   A quorum, once established at a meeting, will not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such a quorum is not present or represented at any meeting of the stockholders, the Chairman of the meeting will have the power to adjourn the meeting from time to time, in the manner provided in Section 7 of this Article II, until a quorum is present or represented.

SECTION 5.  Voting Process.  When a quorum is present at any meeting, any matter other than the election of directors to be voted upon by the stockholders at such meeting will be decided by a majority vote of the holders of shares of capital stock present or represented at the meeting and voting affirmatively or negatively on such matter.  Each outstanding share of stock having voting power, is entitled to one vote on each matter submitted to a vote at a meeting of stockholders.  A stockholder may vote either in person, by proxy executed in writing by the stockholder or by his duly authorized attorney-in-fact, or by an electronic ballot from which it can be determined that the ballot was authorized by a stockholder or proxyholder.  The term, validity and enforceability of any proxy will be determined in accordance with the DGCL. Voting at meetings of stockholders need not be by written ballot. At all meetings of stockholders for the election of directors at which a quorum is present a plurality of the votes cast will be sufficient to elect such directors.

SECTION 6. Proxies. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person (including by means of remote communications, if any, 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 will be voted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period.

 

SECTION 7.  Adjournment.  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. If the adjournment is for more than 30 calendar days, a notice of the adjourned meeting will 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 of Directors will 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 will give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting.

 

SECTION 8. Nominations.

 

(a) Subject to the rights, if any, of any series of Preferred Stock to nominate or elect directors under circumstances specified in a Preferred Stock Designation (as defined in the Certificate of Incorporation), only persons who are nominated in accordance with the procedures set forth in this Section 8 of Article II will be eligible to serve as directors. Nominations of persons for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made at either an annual meeting or special meeting of stockholders only (i) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (ii) by or at the direction of the Board of Directors or any committee thereof or (iii) 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 8 of Article II is delivered to the Secretary, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 8 of Article II.

 

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(b) For any nominations or other business to be properly brought before an annual meeting or special meeting by a stockholder pursuant to Section 8(a)(iii) of this Article II, the stockholder must have given timely notice thereof in writing to the Secretary and any such proposed business (except as otherwise in this Section 8 Article II with respect to the nominations of persons for election to the Board of Directors) must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice will be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting. In no event will the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Such stockholder’s notice will set forth: (i) as to each person whom the stockholder proposes to nominate for election as a director (A) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, and (B) such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (ii) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the bylaws, the language of the proposed amendment), the reasons for conducting such business at the 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 (iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (A) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (B) the class or series and number of shares of capital stock of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (C) 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, (D) 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, 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, whether or not such instrument or right will be subject to settlement in underlying shares of capital stock of the Corporation, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner, with respect to securities of the Corporation, (E) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination, (F) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (1) to deliver a 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 (2) otherwise to solicit proxies or votes from stockholders in support of such proposal or nomination, and (G) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal 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. The foregoing notice requirements of this Section 8(b) will be deemed satisfied by a stockholder with respect to business other than a 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 applicable rules and regulations promulgated under the Exchange Act 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. The Corporation may require any proposed nominee to furnish such other information as the Corporation may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation.

 

(c) Notwithstanding anything in the second sentence of Section 8(b) of Article II to the contrary, in the event that the number of directors to be elected to the Board of Directors at the annual meeting is increased effective after the time period for which nominations would otherwise be due under Section 8(b) of Article II and there is no public announcement by the Corporation naming the nominees for the additional directorships at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 8 of Article II will also be considered timely, but only with respect to nominees for the additional directorships, if it will be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

 

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(d) Only such business will be conducted at a special meeting of stockholders as will have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders, as called in accordance with the terms of the Certificate of Incorporation, at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors or any committee thereof or (ii) provided that the Board of Directors has determined that directors will be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time the notice provided for in this Section 8 of Article II is delivered to the Secretary, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 8 of Article II. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, 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 Section 8(b) of Article II will be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th 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 of Directors to be elected at such meeting. In no event will the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

 

(e) 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 8 of Article II, and in accordance with the terms and requirements of the Certificate of Incorporation, will be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business will be conducted at a meeting of stockholders as will have been brought before such annual meeting in accordance with the procedures set forth in this Section 8 of Article II. Except as otherwise provided by law, the Chairman will have the power and duty (i) to determine whether a nomination or any 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 8 of Article II (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 Section 8(b)(iii)(F)) of Article II and (b) if any proposed nomination or business was not made or proposed in compliance with this Section 8 of Article II, to declare that such nomination will be disregarded or that such proposed business will not be transacted. Notwithstanding the foregoing provisions of this Section 8 of Article II, 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, as applicable, such nomination will be disregarded and such proposed business will not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 8 of Article II, 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 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 meeting of stockholders.

 

(f) For purposes of this Section 8 of Article II, “public announcement” will 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.

 

(g) Notwithstanding the foregoing provisions of this Section 8 of Article II, a stockholder will 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 8 of Article II; provided however, that any references in these bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and will not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 8 of Article II (including Sections 8(a)(iii) and 8(d) of this Article II), and compliance with Sections 8(a)(iii) and 8(d) of Article II will be the exclusive means for a stockholder to make nominations or submit other business (other than, as provided in the third to last sentence of Section 8(b) of Article II, business other than nominations brought properly under and in compliance with Rule 14a-8 of the Exchange Act, as may be amended from time to time). Nothing in this Section 8 of Article II will 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 rules and regulations promulgated under the Exchange Act, or (b) of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

 

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SECTION 9. Conduct of Meetings.

 

(a) Meetings of stockholders will be presided over by the Chairman, or in the Chairman’s absence by a vice chairman, if any, or in the Vice Chairman’s absence by a chairman designated by the Board of Directors. The Secretary will 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 of Directors may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the Corporation as it deems appropriate including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board of Directors, the chairman of any meeting of stockholders will 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 of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as will be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The chairman of any meeting, in addition to making any other determinations that may be appropriate to the conduct of the meeting, will, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if the chairman should so determine, the chairman will so declare to the meeting and any such matter or business not properly brought before the meeting will not be transacted or considered. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders will not be required to be held in accordance with the rules of parliamentary procedure.

 

(c) The chairman of the meeting will announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.

 

(d) In advance of any meeting of stockholders, the Board of Directors will appoint one or more inspectors of election to act at the meeting or any adjournment thereof 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 will 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. No person who is a candidate for an office at an election may serve as an inspector at such election.

 

SECTION 10.  No Right to Have Proposal/Nominees Included. A stockholder is not entitled to have its proposal for business or nominees included in the Corporation’s proxy statement and form of proxy solely as a result of such stockholder’s compliance with the foregoing provisions of Section 8, Article II.

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ARTICLE III

DIRECTORS

SECTION 1.  Powers.  The business affairs of the Corporation will be managed by the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these bylaws directed or required to be exercised or done by the stockholders.  The Board of Directors may adopt such rules and regulations, not inconsistent with the Certificate of Incorporation or these bylaws or applicable laws, as it may deem proper for the conduct of its meetings and the management of the Corporation.

SECTION 2.  Number, Qualifications, Term.  The number of directors will be fixed by the Board of Directors and may thereafter be changed from time to time by resolution of the Board of Directors. Directors need not be residents of the State of Delaware nor stockholders of the Corporation. Subject to the Certificate of Incorporation, directors will be elected at each annual meeting of stockholders and will serve for three years after being elected or and until their successors are elected and qualified; provided that any directors that are to be elected by the holders of any series of the Preferred Stock will be so elected in the manner provided in the applicable Preferred Stock Designation (as defined in the Certificate of Incorporation).

SECTION 3.  Vacancies; Newly-Created Directorships.  Subject to the Certificate of Incorporation and the rights of holders of any series of Preferred Stock, vacancies and newly created directorships resulting from any increase in the number of directors or any vacancy on the Board that results from the death, disability, resignation, disqualification, removal or other cause may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and the directors so chosen will hold office until the next annual election and until their successors are duly elected and will qualify, and will not be filled by the stockholders. Any director elected to fill a vacancy not resulting from an increase in the number of directors will hold office for the remaining term of his or her predecessor. No decrease in the authorized number of directors will shorten the term of any incumbent director.

SECTION 4.  Place of Meetings.  Meetings of the Board of Directors, regular or special, may be held either within or without the State of Delaware.

SECTION 5.  Regular Meetings.  Regular meetings of the Board of Directors may be held upon such notice, or without notice, and at such time and at such place as will from time to time be determined by the Board of Directors; provided that any director who is absent when such a determination is made will be given notice of the determination. A regular meeting of the Board of Directors may be held without notice immediately after and at the same place as the annual meeting of stockholders.

SECTION 6.  Special Meetings.  Special meetings of the Board of Directors may be called by the Chairman or by the number of directors who then legally constitute a quorum.  Notice of the date, place and time of any special meeting of the Board will be given to each director by the Secretary or by the person or persons calling the meeting. Notice will be duly given to each director (a) in person or by telephone at least 24 hours in advance of the meeting, (b) by sending written notice by reputable overnight courier, 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 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 72 hours in advance of the meeting.

SECTION 7.  Notice; Waiver.  A notice or waiver of notice of a meeting of the Board need not specify the purposes of the meeting. 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, will be deemed equivalent to notice required to be given to such person. Attendance of a director at any meeting will constitute a waiver of notice of such meeting, except where a director attends for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

SECTION 8.  Quorum.  At all meetings of the Board, a majority of the directors then in office will constitute a quorum for the transaction of business unless a greater number is required by law, by the Certificate of Incorporation or by these bylaws.  If a quorum is not be present at any meeting of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

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SECTION 9. Meetings by Conference Communications Equipment. Directors may participate in meetings of the Board of Directors or any committee thereof by means of video or telephone conference or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means will constitute presence in person at such meeting.

 

SECTION 10.  Action Without A Meeting.  Any action required or permitted to be taken at a meeting of the directors may be taken without a meeting if a consent in writing or by electronic transmission, setting forth the action so taken, will be signed by all of the directors entitled to vote with respect to the subject matter thereof. 

SECTION 11.  Action.  Except as otherwise provided by law or in the Certificate of Incorporation or these bylaws, if a quorum is present, the affirmative vote of a majority of the members of the Board of Directors will be required for any action.

SECTION 12.  Removal of Directors. Subject to any provisions of applicable law and the Certificate of Incorporation, any or all of the directors may be removed from office at any time, but only for cause, by the holders of at least 66 ⅔% of the shares of capital stock of the Corporation then entitled to vote at an election of directors.

 

SECTION 13. Resignation. Any director may resign at any time by delivering a resignation in writing or by electronic transmission to the Corporation at its principal office or to the Chairman, the Chief Executive Officer or the Secretary. Such resignation will be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event.

 

SECTION 14. Compensation of Directors. Directors may be paid such compensation for their services provided to the Corporation at the request of the Board of Directors and such reimbursement for expenses of attendance at meetings of the Board of Directors or any committee thereof as the Board of Directors may from time to time determine. No such payment will 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 IV

COMMITTEES

SECTION 1. Designation of Committees.  The Board of Directors may, by resolution adopted by a majority of the entire Board of Directors, designate one or more committees, each of which will, except as otherwise prescribed by law, have such authority of the Board of Directors as will be specified in the resolution of the Board of Directors designating such committee; provided that no committee will have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter (other than election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval or (b) adopting, amending or repealing any provision of these bylaws.  The Board of Directors will have the power at any time to change the membership of, to fill all vacancies in and to discharge any such committee, either with or without cause. The Board of Directors 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. Except as otherwise provided in the Certificate of Incorporation, these bylaws, or the resolution of the Board of Directors 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

 

SECTION 2. Procedure; Meetings; Quorum.  Committee meetings, of which no notice will be necessary, may be held at such times and places as will be fixed by resolution adopted by a majority of the members thereof.  So far as applicable, the provisions of Article III relating to notice, quorum and voting requirements applicable to meetings of the Board of Directors will govern meetings of any committee of the Board of Directors.  Except as the Board of Directors may otherwise determine, any committee may make, alter and repeal rules for the conduct of its business, but unless otherwise provided in such rules, its business will be conducted as nearly as possible in the same manner as is provided in these bylaws for the Board of Directors. Any resolution of the Board establishing or directing any committee of the Board or establishing or amending the charter of any such committee may establish requirements or procedures relating to the governance and/or operation of such committee that are different from, or in addition to, those set forth in these bylaws. Each committee of the Board of Directors will keep written minutes of its proceedings and circulate summaries of such written minutes to the Board of Directors before or at the next meeting of the Board of Directors.

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ARTICLE V

OFFICERS

SECTION 1.  Titles.  The Board of Directors at its first meeting after each annual meeting of stockholders will choose a Chief Executive Officer, a Secretary and a Treasurer, none of whom need be a member of the Board of Directors.  The Board of Directors may also choose a Chairman from among the directors, one or more Vice Presidents (who may be given particular designations with respect to authority, function, or seniority), one or more Assistant Secretaries, and one or more Assistant Treasurers.  The Board of Directors may appoint such other officers and agents as it deems necessary, who will hold their offices for such terms and will exercise such powers and perform such duties as will be determined from time to time by the Board of Directors.  Any number of offices may be held by the same person.

SECTION 2.  Compensation.  Officers of the Corporation will be entitled to such salaries, compensation or reimbursement as may be fixed or allowed from time to time by the Board of Directors or by a committee of the Board of Directors. The Chief Executive Officer of the Corporation will have the authority to fix the salaries, compensation or reimbursements of all other officers of the Corporation.  No officer will be prevented from receiving a salary or other compensation by reason of the fact that he or she is also a director. Except as the Board may otherwise determine, no officer who resigns or is removed will have any right to any compensation as an officer for any period following such officer’s resignation or removal, or any right to damages on account of such removal, whether such officer’s compensation be by the month or by the year or otherwise, unless such compensation is expressly provided for in a duly authorized written agreement with the Corporation.

SECTION 3.  Term; Removal; Vacancy.  The officers of the Corporation will hold office until their successors are chosen and qualify.  Any officer may be removed at any time, with or without cause, by the affirmative vote of a majority of the whole Board of Directors.  Any officer may resign by delivering a written resignation to the Corporation at its principal office or to the Board of Directors, the Chief Executive Officer or the Secretary. Such resignation will be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event. Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors and may, in the Board of Director’s discretion, be left unfilled, for such period as it may determine, any offices.

SECTION 4.  Chairman.  The Chairman shall not be considered an officer of the Corporation in his or her capacity as such. The Chairman will preside at all meetings of the stockholders and all meetings of the Board of Directors. The Chairman will perform such other duties and may exercise such other powers as may from time to time be assigned by these bylaws or by the Board of Directors. In the absence of the Chairman, such other director of the Corporation designated by the Chairman or by the Board of Directors shall act as chairman of any such meeting. The Chairman or the Board of Directors may appoint a vice chairman of the Board of Directors to exercise and perform such other powers and duties as may from time to time be assigned to him or her by the Chairman or by the Board of Directors.

SECTION 5.  Chief Executive Officer.  The Chief Executive Officer will have general charge and supervision of the business of the Corporation subject to the direction of the Board of Directors, and will 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 of Directors from time to time. In the event of the absence, inability or refusal to act of the Chief Executive Officer, the Vice President (or if there is more than one, the Vice Presidents in the order determined by the Board) will perform the duties of the Chief Executive Officer and when so performing such duties will have all the powers of and be subject to all the restrictions upon the Chief Executive Officer.

SECTION 6.  Vice President.  Each Vice President will perform such duties and possess such powers as the Board of Directors or the Chief Executive Officer may from time to time prescribe. The Board of Directors may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors.

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SECTION 7.  Secretary.  The Secretary will perform such duties and will have such powers as the Board or the Chief Executive Officer may from time to time prescribe. In addition, the Secretary will perform such duties and have such powers as are incident to the office of the secretary, including attending all meetings of the Board of Directors and all meetings of the stockholders, recording all proceedings of the meetings of the Corporation and of the Board of Directors in a book to be kept for that purpose, maintaining a stock ledger and preparing lists of stockholders and their addresses as require and being custodian of corporate records.  The Secretary will give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and will perform such other duties as may be prescribed by the Board of Directors, the Chief Executive Officer or the committees designated by the Board of Directors.  The Secretary will have custody of the corporate seal of the corporation and the Secretary, or an assistant secretary, will have the authority to affix the same to an instrument requiring it and when so affixed, it may be attested by the Secretary’s signature or by the signature of such assistant secretary.  The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature.

SECTION 8.  Assistant Secretary.  The Assistant Secretary, if there is one or more than one, the assistant secretaries in the order determined by the Board of Directors, will, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and will perform such other duties and have such powers as the Board of Directors may from time to time prescribe.

SECTION 10.  Treasurer.  The Treasurer will perform such duties and will have such powers as may from time to time be assigned by the Board or the Chief Executive Officer. In addition, the Treasurer will perform such duties and have such powers as are incident to the office of treasurer, including custody of the corporate funds, securities and other property of the Corporation, keeping full and accurate accounts of receipts and disbursements in books belonging to the Corporation, depositing all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors, disbursing the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and rendering to the Chairman, the Chief Executive Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all of his or her transactions as Treasurer and of the financial condition of the Corporation.

  

SECTION 11.  Assistant Treasurer.  The Assistant Treasurer, if there is one or more than one, the Assistant Treasurers in the order determined by the Board of Directors, will, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and will perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

 

SECTION 12. Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

 

SECTION 13. Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chief Executive Officer, any Vice President or any other officer authorized to do so by the Board of Directors and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of stockholders of any company in which the Corporation may own securities and at any such meeting will possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

 

ARTICLE VI

CAPITAL STOCK

 SECTION 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 of Directors in such manner, for such lawful consideration and on such terms as the Board of Directors may determine.

 

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SECTION 2. Uncertificated Shares. The Corporation shall issue shares in uncertificated form. The Corporation shall not issue stock certificates unless specifically requested by a stockholder upon written request by such stockholder to the Secretary. The Corporation shall provide to the record holders of such shares a written statement of the information required by the DGCL to be included on stock certificates. In the event that the Corporation issues shares of stock represented by certificates pursuant to a stockholders request, such certificates shall be in such form as prescribed by the Board or a duly authorized officer, shall contain the statements and information required by the DGCL and shall be signed by the officers of the Corporation in the manner permitted by the DGCL. Each such certificate will be numbered and signed in a manner that complies with Section 158 of the DGCL. Any or all of the signatures on a certificate may be a facsimile signature. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation will 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.

 

SECTION 3.  Lost and Destroyed Certificates.  If the Corporation issues certificates as set forth in Section 2 of this Article VI, the Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact, satisfactory to the Secretary, by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issue of a new certificate, the Board of Directors, in its discretion and as a condition precedent to the issuance thereof, may prescribe such terms and conditions as it deems expedient, and may require such indemnities or bonds as it deems adequate, to protect the Corporation from any claim that may be made against it with respect to any such certificate alleged to have been lost or destroyed.

SECTION 4.  Transfer of Shares.  Shares of stock of the Corporation will be transferable in the manner prescribed by law, the Certificate of Incorporation and in these bylaws. Transfers of shares of stock of the Corporation will 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 will 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 is 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.

 

SECTION 5. Record Date.

 

(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date will not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date will, unless otherwise required by law, not be more than 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date will also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting will be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders will be at the close of business on the day immediately preceding the day on which notice is given, or, if notice is waived, at the close of business on the day immediately 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 will apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case will 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.

 

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(b) 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 of Directors may fix a record date, which record date will not precede the date upon which the resolution fixing the record date is adopted, and which will not be more than 60 days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose will be at the close of business on the day on which the Board adopts the resolution relating thereto.

 

ARTICLE VII

GENERAL PROVISIONS

 

SECTION 1.  Checks.  All checks or demands for money and notes of the Corporation will be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

SECTION 2.  Fiscal Year.  The fiscal year of the Corporation will be determined, and may be changed, by resolution of the Board of Directors.

SECTION 3.  Seal.  The corporate seal will have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced.

SECTION 4.  Pronouns.  All pronouns used in these bylaws will be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.

 

SECTION 5. Reliance upon Books, Reports and Records. Each director, each member of a committee designated by the Board of Directors, and each officer of the Corporation will, in the performance of his or her duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports, or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board of Directors, or by any other person or entity as to matters the director, committee member, or officer believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

 

SECTION 6. 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 will as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

 

SECTION 7. Severability. Any determination that any provision of these bylaws is for any reason inapplicable, illegal or ineffective will not affect or invalidate any other provision of these bylaws.

 

SECTION 8. 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.

 

SECTION 9. Certificate of Incorporation. All references in these bylaws to the Certificate of Incorporation will be deemed to refer to the Certificate of Incorporation of the Corporation, as amended and/or restated and in effect from time to time.

 

SECTION 10.  Defined Terms.  Capitalized terms used herein and not otherwise defined have the meanings given to them in the Certificate of Incorporation.

 

ARTICLE IX

AMENDMENTS

Except as otherwise provided by law or by the Certificate of Incorporation, these bylaws or any of them may be amended in any respect or repealed at any time, either (a) at any meeting of stockholders, provided that any amendment or supplement proposed to be acted upon at any such meeting has been properly described or referred to in the notice of such meeting, or (b) by the Board, provided that no amendment adopted by the Board may vary or conflict with any amendment adopted by the stockholders in accordance with the Certificate of Incorporation and these bylaws. Notwithstanding the foregoing and anything contained in these bylaws to the contrary, Sections 1, 2, 8, and 9 of Article II, Sections 2, 3, and 12 of Article III, and this Article IX may not be amended or repealed by the stockholders, and no provision inconsistent therewith may be adopted by the stockholders, without the affirmative vote of the holders of at least 66-⅔% of the capital stock of the Corporation, voting together as a single class.

 

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Exhibit 4.1

 

NUMBER   C-
    SHARES
    SEE REVERSE FOR CERTAIN DEFINITIONS
    CUSIP     45569U 101

 

INDIE SEMICONDUCTOR, INC.

 

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE 
CLASS A COMMON STOCK

 

This Certifies that

 

is the owner of

 

FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF $0.0001 EACH OF THE CLASS A COMMON STOCK OF

 

INDIE SEMICONDUCTOR, INC.
(THE “COMPANY”)

 

transferable on the books of the Company in person or by duly authorized attorney upon surrender of this certificate properly endorsed.

 

This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.

 

Witness the seal of the Company and the facsimile signatures of its duly authorized officers.

 

Chief Executive Officer [Corporate Seal] Delaware Chief Financial Officer
     

 

 

 

  

INDIE SEMICONDUCTOR, INC.

 

The Company 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 of the Company and the qualifications, limitations, or restrictions of such preferences and/or rights. This certificate and the shares represented thereby are issued and shall be held subject to all the provisions of the Certificate of Incorporation and all amendments thereto and resolutions of the Board of Directors providing for the issue of securities (copies of which may be obtained from the secretary of the Company), to all of which the holder of this certificate by acceptance hereof assents. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

 

TEN COM as tenants in common UNIF GIFT MIN ACT   Custodian  
TEN ENT as tenants by the entireties     (Cust)   (Minor)
JT TEN as joint tenants with right of survivorship and not as tenants in common

under Uniform Gifts to Minors Act

            (State)  

 

Additional abbreviations may also be used though not in the above list.

 

For value received,                    hereby sells, assigns and transfers unto

 

(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER(S) OF ASSIGNEE(S))

 

(PLEASE PRINT OR TYPEWRITE NAME(S) AND ADDRESS(ES), INCLUDING ZIP CODE, OF ASSIGNEE(S))

 

shares of the capital stock represented by the within Certificate, and hereby irrevocably constitutes and appoints

 

Attorney to transfer the said stock on the books of the within named Company with full power of substitution in the premises.

 

Dated:  
 

 

 

NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

 

Signature(s) Guaranteed:  
By  
 

 

 

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 (OR ANY SUCCESSOR RULE).

 

 

 

Exhibit 4.4 

 

ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

 

This Assignment, Assumption and Amendment Agreement (this “Agreement”) is made as of June 10, 2021, by and among Thunder Bridge Acquisition II, Ltd., a Cayman Islands exempted company (the “Company”), Thunder Bridge II Surviving Pubco, Inc., a Delaware corporation (“New Pubco”), and Continental Stock Transfer & Trust Company, a New York corporation (the “Warrant Agent”).

 

WHEREAS, the Company and the Warrant Agent are parties to that certain Warrant Agreement, dated as of August 8, 2019, and filed with the United States Securities and Exchange Commission on August 14, 2019 (the “Existing Warrant Agreement”; capitalized terms used herein but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Existing Warrant Agreement);

 

WHEREAS, pursuant to the Existing Warrant Agreement, the Company issued (a) 8,650,000 warrants to the Sponsor (collectively, the “Private Placement Warrants”) to purchase shares of the Company’s ordinary shares, par value $0.0001 per share (“Ordinary Shares”), simultaneously with the closing of the Offering, at a purchase price of $1.00 per Private Placement Warrant, with each Private Placement Warrant being exercisable for one Ordinary Share and with an exercise price of $11.50 per share and (b) 17,250,000 warrants to public investors in the Offering (collectively, the “Public Warrants”) to purchase Ordinary Shares, with each whole Public Warrant being exercisable for one Ordinary Share and with an exercise price of $11.50 per share;

 

WHEREAS, on December 14, 2020, a Transaction Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Transaction Agreement”) was entered into by and among the Company, New Pubco, TBII Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of New Pubco (“TBII Merger Sub”), ADK Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of New Pubco (“ADK Merger Sub”), ADK Service Provider Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of New Pubco (“ADK Service Provider Merger Sub”), ADK Blocker Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of New Pubco (“ADK Blocker Merger Sub”) (TBII Merger Sub, ADK Merger Sub, ADK Service Provider Merger Sub and ADK Blocker Merger Sub may be referred to herein, collectively, as the “Merger Subs”), Ay Dee Kay LLC, d/b/a indie Semiconductor, a California limited liability company (“Seller”), each of the corporate entities listed on Schedule 1to the Transaction Agreement holding membership units in Seller (each an “ADK Blocker” and collectively, the “ADK Blocker Group”), ADK Service Provider Holdco LLC, a Delaware limited liability company (“ADK Service Provider Holdco”), and, solely in his capacity as the Seller Securityholder Representative, Donald McClymont (the “Seller Securityholder Representative”);

 

WHEREAS, the Transaction Agreement provides, among other things, that the Company will domesticate from a Cayman Islands exempted company to a Delaware corporation (the “Domestication”) and immediately following the Domestication, TBII Merger Sub will merge with and into the Company with the Company continuing as the surviving entity and a subsidiary of New Pubco (the “Merger” and together with the Domestication and the other transactions contemplated by the Transaction Agreement, the “Transactions”), pursuant to which, among other things, (A) each Company share outstanding immediately prior to the Merger shall be automatically converted into the right to receive one share of validly issued, fully paid and non-assessable Class A common stock, par value $0.0001 per share, of New Pubco (“Class A Common Stock”), (B) all of the Private Placement Warrants owned by the Sponsor shall be automatically converted into a like number of warrants to purchase one share of Class A Common Stock, at the same contractual terms and conditions as were in effect immediately prior to the Domestication, and (C) each Public Warrant to purchase one Ordinary Share will automatically convert into a warrant to purchase one share of Class A Common Stock, on the same contractual terms and conditions as were in effect immediately prior to the Domestication, under the terms of the Existing Warrant Agreement as amended hereby;

 

WHEREAS, all of the Warrants are governed by the Existing Warrant Agreement;

 

WHEREAS, the board of directors of the Company has determined that the consummation of the transactions contemplated by the Transaction Agreement will constitute a Business Combination (as defined in Section 3.2 of the Existing Warrant Agreement);

 

1

 

 

WHEREAS, in connection with the Transactions, the Company desires to assign all of its right, title and interest in the Existing Warrant Agreement to New Pubco and New Pubco wishes to accept such assignment; and

 

WHEREAS, Sections 4.4 and 9.8 of the Existing Warrant Agreement provides that the Company and the Warrant Agent may amend the Existing Warrant Agreement without the consent of any Registered Holders for the purpose of providing for a replacement of the securities upon reorganization and of curing any ambiguity, or curing, correcting or supplementing any defective provision contained therein or adding or changing any other provisions with respect to matters or questions arising under the Existing Warrant Agreement as the Company and the Warrant Agent may deem necessary or desirable and that the Company and the Warrant Agent deem shall not adversely affect the interest of the Registered Holders.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree as follows:

 

1. Assignment and Assumption; Consent.

 

1.1 Assignment and Assumption. The Company hereby assigns to New Pubco all of the Company’s right, title and interest in and to the Existing Warrant Agreement (as amended hereby) as of the Purchaser Merger Effective Time (as defined in the Transaction Agreement). New Pubco hereby assumes, and agrees to pay, perform, satisfy and discharge in full, as the same become due, all of the Company’s liabilities and obligations under the Existing Warrant Agreement (as amended hereby) arising from and after the Purchaser Merger Effective Time.

 

1.2 Consent. The Warrant Agent hereby consents to the assignment of the Existing Warrant Agreement by the Company to New Pubco pursuant to Section 1.1 hereof effective as of the Purchaser Merger Effective Time, and the assumption of the Existing Warrant Agreement by New Pubco from the Company pursuant to Section 1.1 hereof effective as of the Purchaser Merger Effective Time, and to the continuation of the Existing Warrant Agreement in full force and effect from and after the Purchaser Merger Effective Time, subject at all times to the Existing Warrant Agreement (as amended hereby) and to all of the provisions, covenants, agreements, terms and conditions of the Existing Warrant Agreement and this Agreement.

 

2. Amendment of Existing Warrant Agreement. The Company and the Warrant Agent hereby amend the Existing Warrant Agreement as provided in this Section 2, effective as of the Purchaser Merger Effective Time, and acknowledge and agree that the amendments to the Existing Warrant Agreement set forth in this Section 2 are necessary or desirable and that such amendments do not adversely affect the interests of the Registered Holders:

 

2.1 Preamble. The preamble on page one of the Existing Warrant Agreement is hereby amended by deleting “Thunder Bridge Acquisition II, Ltd., a Cayman Islands exempted company” and replacing it with “Thunder Bridge II Surviving Pubco, Inc., a Delaware corporation”. As a result thereof, all references to the “Company” in the Existing Warrant Agreement shall be references to Thunder Bridge II Surviving Pubco, Inc. rather than Thunder Bridge Acquisition II, Ltd.

 

2.2 Recitals. The recitals on pages one and two of the Existing Warrant Agreement are hereby deleted and replaced in their entirety as follows:

 

“WHEREAS, on August 8, 2019, Thunder Bridge Acquisition II, Ltd. (“Thunder Bridge II”) entered into that certain Private Placement Warrants Purchase Agreement (the “Warrant Purchase Agreement”) with Thunder Bridge Acquisition II LLC, a Delaware limited liability company (the “Sponsor) pursuant to which the Sponsor agreed to purchase an aggregate of 8,650,000 warrants (including those received by Sponsor in connection with the full exercise by the underwriters of their right to purchase additional units in connection with Thunder Bridge II’s Offering (as defined below) (the “Over-allotment Option”) simultaneously with the closing of the Offering (and the closing of the Over-allotment Option) bearing the legend set forth in Exhibit B hereto (the “Private Placement Warrants”) at a purchase price of $1.00 per Private Placement Warrant; and

 

2

 

 

WHEREAS, on August 13, 2019, Thunder Bridge II consummated its initial public offering (the “Offering”) of 34,500,000 units of Thunder Bridge II’s equity securities (the “Units”), each such Unit consisting of one ordinary share of Thunder Bridge II, par value $0.0001 per share (“Ordinary Shares”), and one-half of one warrant (the “Public Warrants” and, together with the Private Placement Warrants, the “Thunder Bridge II Warrants”) and, in connection therewith, Thunder Bridge II issued and delivered 17,250,000 Public Warrants to public investors in the Offering. Each whole Public Warrant entitles the holder thereof to purchase one Ordinary Share at a price of $11.50 per share; and

 

WHEREAS, Thunder Bridge II has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1, File No. 333-232688 (the “Registration Statement”) and prospectus (the “Prospectus”), for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Units, the Public Warrants and the Ordinary Shares included in the Units; and

 

WHEREAS, the Company, Thunder Bridge II, TBII Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“TBII Merger Sub”), ADK Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“ADK Merger Sub”), ADK Service Provider Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“ADK Service Provider Merger Sub”), ADK Blocker Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“ADK Blocker Merger Sub”) (TBII Merger Sub, ADK Merger Sub, ADK Service Provider Merger Sub and ADK Blocker Merger Sub may be referred to herein, collectively, as the “Merger Subs”), Ay Dee Kay LLC, d/b/a indie Semiconductor, a California limited liability company (“Seller”), each of the corporate entities listed on Schedule 1 to the Transaction Agreement holding membership units in Seller (each an “ADK Blocker” and collectively, the “ADK Blocker Group”), ADK Service Provider Holdco LLC, a Delaware limited liability company (“ADK Service Provider Holdco”), and, solely in his capacity as the Seller Securityholder Representative, Donald McClymont (the “Seller Securityholder Representative”) are parties to that certain Transaction Agreement, dated as of December 14, 2020 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Transaction Agreement”); and

 

WHEREAS, the Transaction Agreement provides, among other things, (i) that Thunder Bridge II will domesticate from a Cayman Islands exempted company to a Delaware corporation (the “Domestication”) and immediately following the Domestication, TBII Merger Sub will merge with and into the Thunder Bridge II with Thunder Bridge II continuing as the surviving entity and a subsidiary of the Company (the “Merger” and together with the Domestication and the other transactions contemplated by the Transaction Agreement, the “Transactions”), pursuant to which, among other things, (A) each Thunder Bridge II share outstanding immediately prior to the Merger shall be automatically converted into the right to receive one share of validly issued, fully paid and non-assessable Class A common stock, par value $0.0001 per share, of the Company (“Class A Common Stock”), (B) all of the Private Placement Warrants owned by the Sponsor shall be automatically converted into a like number of warrants to purchase one share of Class A Common Stock, at the same contractual terms and conditions as were in effect immediately prior to the Domestication, and (C) each Public Warrant to purchase one Ordinary Share will automatically convert into a warrant to purchase one share of Class A Common Stock, on the same contractual terms and conditions as were in effect immediately prior to the Domestication, under the terms of the Existing Warrant Agreement as amended hereby; and

 

WHEREAS, on June 10, 2021, pursuant to the terms of the Transaction Agreement, Thunder Bridge II, the Company and the Warrant Agent entered into an Assignment, Assumption and Amendment Agreement (the “Warrant Assumption Agreement”), pursuant to which Thunder Bridge II assigned this Agreement to the Company and the Company assumed this Agreement from Thunder Bridge II; and

 

WHEREAS, pursuant to the Transaction Agreement, the Warrant Assumption Agreement and Section 4.4 of this Agreement, effective as of the Effective Time (as defined in the Transaction Agreement), each of the issued and outstanding Thunder Bridge II Warrants were automatically converted for warrants to purchase one share of Class A Common Stock (subject to the terms and conditions of this Agreement) (each a “Warrant” and collectively, the “Warrants”); and

 

3

 

 

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, conversion, exchange, redemption and exercise of the Warrants; and

 

WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and

 

WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:”

 

2.3 Reference to Class A Common Stock. All references to “Ordinary Share” in Sections 2.5 through 8.6 of the Existing Warrant Agreement and all Exhibits to the Existing Warrant Agreement shall mean “Class A Common Stock” or “shares of Class A Common Stock” as the context requires.

 

2.4 Reference to Warrant. All references to “Public Warrant” in Sections 2.3 through 9.8 of the Existing Warrant Agreement and all Exhibits to the Existing Warrant Agreement shall mean “Warrant”.

 

2.5 Detachability of Warrants. Section 2.4 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

 

“[INTENTIONALLY OMITTED]”

 

2.6 No Fractional Warrants Other Than as Part of Units. Section 2.5 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

 

No Fractional Warrants. The Company shall not issue fractional Warrants. If a holder of Warrants would be entitled to receive a fractional Warrant, the Company shall round down to the nearest whole number the number of Warrants to be issued to such holder.”

 

2.7 Transfer of Warrants. Section 5.6 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

 

“[INTENTIONALLY OMITTED]”

 

2.8 Notices. Section 9.2 of the Existing Warrant Agreement is hereby amended in part to change the delivery of notices to the Company to the following:

 

indie Semiconductor
32 Journey
Aliso Viejo, California 92656
Attention: Tom Schiller, CFO
(949) 608 0854
info@indiesemi.com

 

With a required copy to (which shall not constitute notice):

 

Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Attention: Mitchell Nussbaum
Giovanni Caruso
(212) 407-4159
mnussbaum@loeb.com
gcaruso@loeb.com

 

4

 

 

And

 

Nelson Mullins Riley & Scarborough LLP
101 Constitution Ave NW, Suite 900
Washington, DC 20001
Attention: Jonathan Talcott
Peter Strand
(202) 689-2800
jon.talcott@nelsonmullins.com
peter.strand@nelsonmullins.com
 

2.9 Currency. A new Section 9.10 is hereby inserted as follows:

 

Currency. Unless otherwise specified in this Agreement, all references to currency, monetary values and dollars set forth herein shall mean U.S. dollars (USD) and all payments hereunder shall be made in U.S. dollars (USD).”

 

2.10 Exhibit A to the Existing Warrant Agreement is hereby amended by replacing “Ordinary Shares” with “Class A Common Stock” and inserting after “(the “Warrant Agreement”),” “as amended by that certain Assignment, Assumption and Amendment Agreement dated June 10, 2021”.

 

3. Miscellaneous Provisions.

 

3.1 Effectiveness of Warrant. Each of the parties hereto acknowledges and agrees that the effectiveness of this Agreement shall be expressly subject to the occurrence of the Transactions and shall automatically be terminated and shall be null and void if the Transaction Agreement shall be terminated for any reason.

 

3.2 Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

 

3.3 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

 

3.4 Applicable Law. The validity, interpretation and performance of this Agreement shall be governed in all respects by the laws of the State of New York, without giving effect to conflict of law principles that would result in the application of the substantive laws of another jurisdiction. The parties hereby agree that any action, proceeding or claim against a party arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Each of the parties hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

 

3.5 Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to submit his Warrant for inspection by it.

 

5

 

 

3.6 Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Signatures to this Agreement transmitted by electronic mail in PDF form, or by any other electronic means designed to preserve the original graphic and pictorial appearance of a document (including DocuSign), will be deemed to have the same effect as physical delivery of the paper document bearing the original signatures.

 

3.7 Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

 

3.8 Reference to and Effect on Agreements; Entire Agreement.

 

3.8.1 Any references to “this Agreement” in the Existing Warrant Agreement will mean the Existing Warrant Agreement as amended by this Agreement. Except as specifically amended by this Agreement, the provisions of the Existing Warrant Agreement shall remain in full force and effect.

 

3.8.2 This Agreement and the Existing Warrant Agreement, as modified by this Agreement, constitutes the entire understanding of the parties and supersedes all prior agreements, understandings, arrangements, promises and commitments, whether written or oral, express or implied, relating to the subject matter hereof, and all such prior agreements, understandings, arrangements, promises and commitments are hereby canceled and terminated.

 

[Remainder of page intentionally left blank.]

 

6

 

  

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

 

  THUNDER BRIDGE ACQUISITION II, LTD.
     
  By:

/s/ Gary Simanson

  Name: Gary A. Simanson
  Title: Chief Executive Officer
   
  THUNDER BRIDGE II SURVIVING PUBCO, INC.
     
  By:

/s/ Gary Simanson

  Name: Gary A. Simanson
  Title: Chief Executive Officer
   
  CONTINENTAL STOCK TRANSFER & TRUST COMPANY
     
  By:

/s/ Douglas Reed

  Name: Douglas Reed
  Title: Vice President

 

[Signature Page to Warrant Assignment, Assumption and Amendment Agreement]

 

7

 

Exhibit 10.1

 

EIGHTH AMENDED AND RESTATED

 

OPERATING AGREEMENT

 

OF

 

AY DEE KAY, LLC

 

A California Limited Liability Company

 

Dated as of June 10, 2021

 

 

 

THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS AGREEMENT IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.

 

THE DELIVERY OF THIS AGREEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY OFFER, SOLICITATION OR SALE OF LIMITED LIABILITY COMPANY INTERESTS IN AY DEE KAY, LLC IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE IS NOT AUTHORIZED OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE. 

 

 

 

 

 

 

Table of Contents

 

    Page
     
ARTICLE I IN GENERAL   2
Section 1.1 Name.   2
Section 1.2 Formation of Limited Liability Company.   2
Section 1.3 Agreement; Inconsistencies with Act.   2
Section 1.4 Principal Place of Business.   3
Section 1.5 Registered Office and Registered Agent.   3
Section 1.6 Term.   3
Section 1.7 Permitted Businesses.   3
Section 1.8 Defined Terms.   3
Section 1.9 Maintenance of Separate Existence   3
Section 1.10 No State-Law Partnership.   3
     
ARTICLE II MEMBERS; MEMBERSHIP INTERESTS; UNITS   4
Section 2.1 Members of the Company.   4
Section 2.2 Capital Contributions and Capital Accounts   4
Section 2.3 Classes of Units.   6
Section 2.4 Representations and Warranties.   8
Section 2.5 Voting; Meetings of Members.   9
Section 2.6 Members are Not Agents.   12
Section 2.7 Members as Creditors.   12
Section 2.8 No Right of Withdrawal or Resignation.   12
Section 2.9 Limited Liability.   12
     
ARTICLE III MANAGEMENT AND CONTROL OF BUSINESS   13
Section 3.1 Management Vested in the Manager   13
Section 3.2 Voting Rights.   13
Section 3.3 Certain Powers of the Manager.   13
Section 3.4 Limited Liability of the Manager.   14
Section 3.5 Fiduciary Duties of the Manager.   14
Section 3.6 Manager and Members Duties to Company.   14
Section 3.7 Transactions between the Company and the Manager.   14
Section 3.8 Bank Accounts.   15
Section 3.9 Officers.   15
     
ARTICLE IV TAXES, ALLOCATIONS AND DISTRIBUTIONS   18
Section 4.1 Allocations and Tax Provisions.   18
Section 4.2 Distributions.   18
     
ARTICLE V ACCOUNTING AND RECORDS   22
Section 5.1 Accounting and Records.   22
Section 5.2 Access to Accounting and Other Records.   22
Section 5.3 Annual and Tax Information; Financial Information.   23

 

i

 

 

Table of Contents continued

 

    Page
ARTICLE VI INDEMNIFICATION   23
Section 6.1 Indemnification.   23
Section 6.2 Procedures; Survival.   24
     
ARTICLE VII TRANSFERS OF UNITS; LIMITATIONS   25
Section 7.1 Transfer or Assignment of Units.   25
Section 7.2 Conditions to Transfer by Member.   25
Section 7.3 Permitted Transfers.   26
Section 7.4 Repurchase of Class B Units   27
Section 7.5 Unauthorized Transfers Void.   27
Section 7.6 Change of Control.   27
     
ARTICLE VIII ADMISSION OF ADDITIONAL MEMBERS   27
Section 8.1 Admission of Additional Members.   27
Section 8.2 Procedure for Admission.   28
     
ARTICLE IX TERMINATION, DISSOLUTION AND  LIQUIDATION OF THE COMPANY   28
Section 9.1 Events Causing Dissolution.   28
Section 9.2 Liquidation and Winding Up.   28
Section 9.3 Limitations on Payments Made in Dissolution.   29
     
ARTICLE X MISCELLANEOUS   29
Section 10.1 Complete Agreement.   29
Section 10.2 Governing Law.   29
Section 10.3 No Assignment; Binding Effect.   29
Section 10.4 Severability.   30
Section 10.5 No Partition.   30
Section 10.6 Multiple Counterparts.   30
Section 10.7 Additional Documents and Acts.   30
Section 10.8 No Employment Rights.   30
Section 10.9 Amendments.   31
Section 10.10 No Waiver.   31
Section 10.11 Representations and Warranties; Reliance.   31
Section 10.12 Notices.   31
Section 10.13 Dispute Resolution; Arbitration.   32
Section 10.14 Specific Performance.   33
Section 10.15 No Third Party Beneficiary.   33
Section 10.16 Cumulative Remedies.   33
Section 10.17 Exhibits.   33
Section 10.18 Interpretation.   33
Section 10.19 Survival.   34
Section 10.20 Confidentiality.   34
Section 10.21 No Recourse.   34

 

ii

 

 

EIGHTH AMENDED AND RESTATED
OPERATING AGREEMENT
OF
AY DEE KAY, LLC

 

This EIGHTH Amended and Restated Operating Agreement (together with all Exhibits attached hereto, this “Agreement”) is made and entered into as of June 10, 2021 (the “Effective Date”) by the Members specified in Section 2.1.

 

WHEREAS, the Company was formed as a limited liability company pursuant to and in accordance with the Beverly-Killea Limited Liability Company Act, by the filing of Articles of Organization filed with the California Secretary of State on February 9, 2007, entity number 200704010265, and the execution of that certain Operating Agreement of Limited Liability Company (the “Original Agreement”), dated March 28, 2007;

 

WHEREAS, the then Members and the Company made and entered into that certain Amended and Restated Limited Liability Company Agreement (the “First Restated Agreement”), dated as of December 28, 2012, which amended and restated the Original Agreement in its entirety;

 

WHEREAS, the then Members and the Company made and entered into that certain Second Amended and Restated Limited Liability Company Agreement (the “Second Restated Agreement”), dated as of July 24, 2015, which amended and restated the First Restated Agreement in its entirety;

 

WHEREAS, the then Members and the Company made and entered into that certain Third Amended and Restated Limited Liability Company Agreement (the “Third Restated Agreement”), dated as of August 28, 2015, which amended and restated the Second Restated Agreement in its entirety;

 

WHEREAS, the then Members and the Company made and entered into that certain Fourth Amended and Restated Limited Liability Company Agreement (the “Fourth Restated Agreement”), dated as of July 12, 2017, which amended and restated the Third Restated Agreement in its entirety;

 

WHEREAS, the then Members and the Company made and entered into that certain Fifth Amended and Restated Limited Liability Company Agreement (the “Fifth Restated Agreement”), dated as of June 22, 2018, which amended and restated the Fourth Restated Agreement in its entirety;

 

WHEREAS, the then Members and the Company made and entered into that certain Sixth Amended and Restated Limited Liability Company Agreement (the “Sixth Restated Agreement”), dated as of April 6, 2020, which amended and restated the Fifth Restated Agreement in its entirety;

 

WHEREAS, the then Members and the Company made and entered into that certain Seventh Amended and Restated Limited Liability Company Agreement (the “Seventh Restated Agreement”), dated as of April 20, 2020, which amended and restated the Sixth Restated Agreement in its entirety;

 

 

 

 

WHEREAS, the Company is a party to that certain Master Transaction Agreement (the “Transaction Agreement”), by and among Thunder Bridge II Surviving Pubco, Inc., a Delaware corporation (“Surviving Pubco”), Thunder Bridge Acquisition II, Ltd., a Cayman Islands exempted company, the Merger Subs (as defined therein), each of the corporate entities listed on Schedule 1 to the Transaction Agreement, ADK Service Provider Holdco LLC, a Delaware limited liability company, and, solely in its capacity as the Company Securityholder Representative, Donald McClymont.

 

WHEREAS, the Board, the Preferred Members and a Majority Vote under the Seventh Restated Agreement adopted certain amendments to the Seventh Restated Agreement in accordance with Section 10.10 thereof.

 

WHEREAS, the Board, the Preferred Members and a Majority Vote under the Seventh Restated Agreement adopted this Agreement.

 

WHEREAS, pursuant to the transactions contemplated in the Transaction Agreement (the “Reorganization”), effective at the Effective Date, and as previously approved in accordance with Section 10.10 of the Seventh Restated Agreement, the Members and Manager, as a result of the Reorganization, desire to amend and restate in its entirety the Seventh Restated Agreement.

 

NOW, THEREFORE, in consideration of their mutual promises, covenants and agreements, the Company and Members agree as follows:

 

ARTICLE I
IN GENERAL

 

Section 1.1 Name.

 

The name of the Company is Ay Dee Kay, LLC (the “Company”).

 

Section 1.2 Formation of Limited Liability Company.

 

The Company was duly formed upon the filing of articles of organization of the Company (the “Articles of Organization”) with the Secretary of State of the State of California on February 9, 2007, in accordance with the Beverly-Killea Limited Liability Company Act.

 

Section 1.3 Agreement; Inconsistencies with Act.

 

(a) This Agreement constitutes the “operating agreement” of the Company within the meaning of California Revised Uniform Limited Liability Company Act, as amended from time to time (the “Act”). This Agreement amends, restates and replaces in its entirety the Seventh Restated Agreement.

 

(b) This Agreement will govern the rights, powers, duties, obligations and liabilities of the Members, except to the extent a provision of this Agreement is expressly prohibited or ineffective under the Act or under the Articles of Organization. If any provision of this Agreement is prohibited or ineffective under the Act or the Articles of Organization, this Agreement will be considered amended to the smallest degree possible in order to make such provision effective under the Act or Articles of Organization.

 

2

 

 

Section 1.4 Principal Place of Business.

 

The principal place of business of the Company within the State of California shall be 32 JOURNEY, SUITE 100, ALISO VIEJO, CA 92656. The Company may locate its place of business and registered office at any other place or places as the Manager of the Company may from time to time deem advisable.

 

Section 1.5 Registered Office and Registered Agent.

 

The Company’s registered office shall be at the office of its registered agent at 32 JOURNEY SUITE 100, ALISO VIEJO, CA 92656 and the name of its registered agent at such address shall be DONALD MCCLYMONT. The registered office and registered agent may be changed by the Manager from time to time by filing the address of the new registered office or the name of the new registered agent with the California Secretary of State pursuant to the Act.

 

Section 1.6 Term.

 

The existence of the Company (“Term”) shall continue until terminated, dissolved or liquidated in accordance with this Agreement and the Act.

 

Section 1.7 Permitted Businesses.

 

The business of the Company shall be to accomplish any lawful business or activity whatsoever, except the banking business, the business of issuing policies of insurance and assuming insurance risks or the trust company business.

 

Section 1.8 Defined Terms.

 

Capitalized terms used in this Agreement but not defined in this Agreement will have the meanings indicated on Exhibit A attached hereto and made a part hereof.

 

Section 1.9 Maintenance of Separate Existence

 

The Company shall do all things necessary to maintain its limited liability company existence separate and apart from each Member and any Affiliate of any Member, including holding regular meetings of the Members and maintaining its books and records on a current basis separate from that of any Affiliate of the Company or any other Person, and shall not commingle the Company’s assets with those of any Affiliate of the Company or any other Person.

 

Section 1.10 No State-Law Partnership.

 

The Members intend that the Company not be a partnership (including a limited partnership) or joint venture, and that no Member be a partner or joint venturer of any other Member by virtue of this Agreement, for any purposes other than as set forth in the last sentence of this Section 1.10, and neither this Agreement nor any other document entered into by the Company or any Member relating to the subject matter hereof shall be construed to suggest otherwise. The Members intend that the Company shall be treated as a partnership for federal and, if applicable, state or local income tax purposes, and that each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment.

 

3

 

 

ARTICLE II
MEMBERS; MEMBERSHIP INTERESTS; UNITS

 

Section 2.1 Members of the Company.

 

Set forth on Exhibit B is a current list of (i) the full name of each Member, (ii) the Member’s Number of Class A Units, (iii) the Member’s Class B Units, (iv) the Member’s Redetermined Capital Account as of Date of this Agreement, and (v) the Member’s Percentage Interest. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. In all events, the sum of all Percentage Interests shall total 100%. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members.

 

Section 2.2 Capital Contributions and Capital Accounts

 

(a) Acquisition of Units as of the Effective Date. The terms of the Agreement modify the rights, privileges and obligations of the existing Units held by the Members. Except as set forth in Exhibit B as in effect on the Effective Date, no Member has as of the Effective Date any Membership Interest in the Company.

 

(b) Class A Members. As of the date specified in Exhibit B, each Class A Member has the Capital Account set forth opposite such Members name on Exhibit B. As of the date specified in Exhibit B, each Class A Member has the number of Class A Units set forth opposite such Member’s name on Exhibit B.

 

(c) Class B Members. The parties hereto intend that Class B Units issued hereunder may be issued in exchange for services rendered to or on behalf of the Company by certain persons in anticipation of becoming Members. Except to the extent of any cash and property contributed, the Class B Units, when issued, are intended to qualify as “profits interests,” as that term is used in Revenue Procedure 93-27 and Revenue Procedure 2001-43. All Class B Members as of the Effective Date are listed in the books and records of the Company. Except as required by law, the Class B Members shall have no vote.

 

(d) Additional Capital Contributions. No Member shall be required to make any additional Capital Contributions.

 

(e) No Right to Return of Contribution; No Interest on Capital. Except as provided in this Agreement, no Member will have the right to withdraw or receive any return of, or interest on, any Capital Contribution or on any balance in such Member’s Capital Account. If the Company is required to return any Capital Contribution to a Member, the Member shall not have the right to receive any property other than cash.

 

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(f) Profits Interests.

 

(i) The Company intends that each Class B Unit (such Class B Units, a “Profits Interest”), when issued, be treated as a separate “profits interest” within the meaning of Revenue Procedure 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure.

 

(ii) The Class B Units are Profits Interests. In accordance with Revenue Procedure 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company shall treat a Member holding a Profits Interest as the owner of such Profits Interest from the date it is granted, and shall file its IRS form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting as if it were fully vested. Each Member agrees to take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits Interest. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value of such Profits Interest issued to a Member, either at the time of grant of the Profits Interest or at the time any unvested Profits Interest becomes substantially vested.

 

(iii) The Company is hereby authorized to make an election to value any Profits Interests at liquidation value (the “Safe Harbor Election”), as the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”). Upon making such an election, the Company shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election.

 

(iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule.

 

(v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective.

 

(vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election.

 

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(vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company.

 

(viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(f).

 

(ix) On the forfeiture of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vest.

 

(x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

 

Section 2.3 Classes of Units.

 

The Company is authorized to issue two (2) classes of units in the Company which shall represent the Membership Interests of the Members in the Company and shall be designated “Class A Units” and “Class B Units.”

 

(a) Class A Units. Class A Units are Membership Interests in the Company. The Percentage Interest of each holder of Class A Units is set forth beside each Class A Member’s name in the column entitled “Percentage Interest” on Exhibit B.

 

(b) Class B Units. Class B Units are Membership Interests in the Company. Class B Units may be issued, with or without monetary consideration, only to those employees, consultants, advisors and independent contractors and in such amounts and subject to such vesting and other restrictions as determined by the Manager, acting in good faith. The Percentage Interest of each holder of Class B Units is set forth beside each Class B Member’s name in the column entitled “Percentage Interest” on Exhibit B.

 

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(c) Earn Out Event. Upon the occurrence of an Earn Out Event, the Company shall cause the number of outstanding Units to be adjusted, as determined by the Company in good faith, such that, after the adjustment, (i) the number of Units held by the Surviving Pubco shall equal the number of Surviving Pubco shares issued and outstanding immediately after the Earn Out Event, and (ii) the number of Units held by the Legacy Members shall equal the sum of (A) the number of Units held by the Legacy Members immediately prior to the Earn Out Event plus (B) the number of share equivalents that would have been issued to the Legacy Members in the Earn Out if the Legacy Members had held Surviving Pubco shares at the time of the Earn Out Event. The Company will divide and, if necessary, issue additional Units and recalculate Percentage Interests on account of this recapitalization. The Members agree that Capital Accounts of Legacy Members prior to the Earn Out shall be treated as provisional and contingent Capital Accounts and that Capital Accounts shall be redetermined on each Earn Out Event so that the Capital Accounts of all Members are equal on a per Unit basis. The Members also agree, unless otherwise not permissible for Federal or state tax purposes, to treat such adjustment as a non-taxable adjustment. The Company shall amend Exhibit B on each Earn Out Event to be consistent with the readjustments made pursuant to this Section 2.3 (c).

 

(d) Issuance of Additional Pubco Shares. In the event that Surviving Pubco shall issue additional shares of Surviving Pubco stock other than upon an Earn Out Event, (i) the Company shall issue additional Class A Units to Surviving Pubco in such a number as to preserve the ratio existing between (A) the number of shares of issued and outstanding Surviving Pubco stock to (B) the number of Class A Units held by Surviving Pubco, and (ii) Surviving Pubco shall contribute to the Company any consideration, net of expenses of issuance, received by Surviving Pubco for the issuance of these shares. It is the intention of the Company and of Surviving Pubco that, at all times, Surviving Pubco shall hold a number of Class A Units equal to the number of issued and outstanding shares of Surviving Pubco stock. The Company shall issue additional Class A Units to Surviving Pubco or cancel outstanding Class A Units held by Surviving Pubco in such a manner that, at all times, Surviving Pubco shall hold a number of Class A Units equal to the number of issued and outstanding shares of Surviving Pubco stock.

 

(e) Changes in Pubco. The Company shall issue additional Units or cancel outstanding Units as necessary reasonably to reflect changes in the outstanding stock ownership of Surviving Pubco, including stock issuances, stock splits, reverse stock splits, stock dividends, reorganizations, combinations recapitalizations and similar transactions affecting the Surviving Pubco Class A Shares after the date of this Agreement. In all events, Surviving Pubco shall hold a number of Class A Units equal to the number of issued and outstanding stock of Surviving Pubco. Any net consideration received by Surviving Pubco in these transaction will be contributed by Surviving Pubco to the Company.

 

(f) The Company shall issue the number of Class A Units and Class B Units in connection with the Earn Out (as defined in the Master Transaction Agreement), as required by and pursuant to the terms and conditions set forth in the Master Transaction Agreement.

 

(g) The Units of each Legacy Member of the Company are as set forth in Exhibits D.

 

(h) The Units of each Member of the Company are as set forth in Exhibit B.

 

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(i) The number of Units issued to any Member shall not be adjusted for any increase or decrease in the Capital Account of such Member at any time.

 

(j) Any Transfer of Units by a Member shall be deemed to be the Transfer of the Membership Interest of the Member represented and evidenced by such Units for all purposes; and no Transfer of the Membership Interest separate and apart from a Transfer of Units shall be required or permitted for any purpose.

 

(k) The Company may not reissue any Units that it acquires from any Member or other Person.

 

(l) The Company may issue fractional Units.

 

Section 2.4 Representations and Warranties.

 

Each Member hereby represents and warrants to the Company and each other Member that:

 

(a) If such Member is a Person who is not an individual, such Member is duly organized, validly existing, and in good standing under the law of its state of organization and has full organizational power to execute and deliver this Agreement and to perform its obligations hereunder.

 

(b) If such Member is a Person who is not an individual, such Member has full right, authority and power under its charter, by-laws or governing partnership agreement, as applicable, to enter into this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action under such Member’s charter, by-laws or governing partnership agreement, as applicable. The execution, delivery and performance by such Member of this Agreement does not (i) violate or result in a violation of, conflict with or constitute or result in a default (whether after the giving of notice, lapse or time or both) under, accelerate any obligation under, or give rise to a right of termination of, any material contract, permit, license or authorization to which such Member is a party or by which such Member or its assets is bound, or any provision of such Member’s organizational documents; (ii) violate or result in a violation of, or constitute a default (whether after the giving of notice, lapse of time or both) under, any provision of any law, or any order of, or any restriction imposed by, any governmental entity applicable to such Member; or (iii) require from such Member any notice to, declaration or filing with, or consent or approval of, any governmental entity or other third party.

 

(c) Such Member is (i) an “accredited investor” as that term is defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as amended (“Securities Act”) or (ii) qualifies for the exemption provided in Rule 701 of the Securities Act.

 

(d) Such Member, by reason of his or her or its business and financial experience has such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that the Member is capable of (i) evaluating the merits and risks of an investment in the Company and the Units and making an informed investment decision, (ii) protecting his or her or its own interest and (iii) bearing the economic risk of such investment.

 

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(e) Such Member has acquired or is acquiring its Units in the Company for such Member’s own account as an investment and without a view to the distribution thereof.

 

(f) Such Member understands that the Units have not been registered under the Securities Act or any state securities laws and are being issued by reason of a specific exemption from the registration provisions of the Securities Act and applicable state securities laws that depend upon, among other matters, the bona fide nature of the investment intent and the accuracy of the Member’s representations and warranties as expressed herein. Such Member further understands that except as otherwise provided herein, the Company shall have no obligation to register the Units under the Securities Act or any state securities laws or to take any action that would make available any exemption from the registration requirements of such laws. Such Member further understands and agrees that such Member will observe and comply with this Agreement and with all applicable securities laws at all times in connection with the Units, and that the Units may not be resold or transferred by such Member without appropriate registration or the availability of an exemption from applicable registration and then only upon compliance with the terms and conditions set forth in this Agreement.

 

(g) Such Member has had access to all information regarding the Company and its present and prospective business, assets, liabilities and financial condition that the Member reasonably considers important in making the decision to purchase the Units.

 

(h) Such Member has not been formed for the purpose of acquiring the Units.

 

(i) Each Member represents and warrants that neither (i) such Member, nor (ii) any entity that controls such Member, or is under the control of or under common control with, such Member, is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (each, a “Disqualification Event”), except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) under the Securities Act and disclosed in writing in reasonable detail to the Company.

 

Section 2.5 Voting; Meetings of Members.

 

(a) Vote or Written Consent of the Members. Except as expressly provided in this Agreement or required by the Act, Members shall have no voting, approval or consent rights. Except as otherwise provided, each matter requiring the vote or written consent of the Members shall be authorized or approved by the vote or written consent of a majority vote of Units voting. Notwithstanding the foregoing, the Manager may from time to time elect to submit a matter approved by the Manager to the vote or approval of the Members even though the Manager is not obligated to submit such matter to the vote or approval of the Members.

 

(b) Meetings of Members.

 

(i) The Members shall meet at least annually.

 

(ii) The Manager shall be elected by a simple majority of votes cast at the annual meeting of the Members of the Company for a term ending on the end of the next annual meeting.

 

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(iii) All meetings of the Members shall be held at such date, time, and place either within or without the State of California as may be designated by the Manager from time to time in the notice of the meeting.

 

(iv) An annual meeting shall be held for the election of the Manager, and any other proper business may be transacted thereat.

 

(v) The holders of a majority of the combined outstanding Class A Units issued and outstanding, and entitled to vote thereat, present in person, or represented by proxy, shall constitute a quorum at all meetings of the Members for the transaction of business except as otherwise provided by law. In the absence of a quorum, the Manager may, or the Members so present may, by majority vote, adjourn the meeting from time to time until a quorum shall attend.

 

(vi) Any meeting of Members, annual or special, may be adjourned by the Manager or by a majority vote of the Members present, whether or not a quorum, and reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Company may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Member of record entitled to vote at the meeting.

 

(vii) At any meeting of the Members, every Member having the right to vote shall be entitled to vote in person, or by proxy appointed by an instrument in writing subscribed by such Member and bearing a date not more than three (3) years prior to said meeting, unless said instrument provides for a longer period. Each Member shall have one vote for each Class A Unit registered in his or her name on the books of the Company.

 

(viii) Written notice of the annual meeting which shall state the place, date, and hour of the meeting shall be mailed to each Member entitled to vote thereat at such address as appears in the records of the Company, or sent by electronic delivery at least ten (10) days prior to the meeting and not more than sixty (60) days prior to the meeting.

 

(ix) No business may be transacted at an annual meeting of Members, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Manager, (b) otherwise properly brought before the annual meeting by or at the direction of the Manager or (c) otherwise properly brought before the annual meeting by any Member (i) who is a Member of record on the date of the giving of the notice provided for in this Section and on the record date for the determination of Members entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section.

 

(x) In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a Member, such Member must have given timely notice thereof in proper written form to the Manager.

 

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(xi) To be timely, a Member's notice to the Manager must be delivered to or mailed and received at the principal executive offices of the Company not less than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting of Members; provided, however, that in the event that the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the Member in order to be timely must be so received before the later (a) of the close of business on the twenty-first (21st) day following the day on which such notice of the date of the annual meeting was mailed or the day on which public disclosure of the date of the annual meeting was made, whichever first occurs and (b) the close of business on the day which is ninety (90) days prior to the date of the annual meeting.

 

(xii) To be in proper written form, a Member's notice to the Manager must set forth as to each matter such Member proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such Member, (iii) the class or series (if any) and number of Units of the Company which are owned beneficially or of record by such Member, (iv) a description of all arrangements or understandings between such Member and any other person or persons (including their names) in connection with the proposal of such business by such Member and any material interest of such Member in such business and (v) a representation that such Member intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.

 

(xiii) No business shall be conducted at the annual meeting of Members except business brought before the annual meeting in accordance with the procedures set forth in this Section, provided, however, that, once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section shall be deemed to preclude discussion by any Member of any such business. If the Manager determines that business was not properly brought before the annual meeting in accordance with the foregoing procedures, the Manager shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

 

(xiv) A complete list of the Members entitled to vote at each meeting of Members, arranged in alphabetical order, with the record address of each, and the number of voting shares held by each, shall be prepared by the Manager and made available for examination by any Member either (i) on a reasonably accessible electronic network, provided that information required to gain access is provided with the notice of the meeting or (ii) during ordinary business hours at the Company’s principal place of business, at least ten (10) days before every meeting, and shall at all times during said meeting continue to be open to the examination of any Member.

 

(xv) Special meetings of the Members may be called for any purpose or purposes by the Manager, and shall be called by the Manager. Business transacted at all special meetings shall be confined to the objects stated in the notice of the meeting.

 

(xvi) Written notice of a special meeting of Members, stating the time and place and object thereof, shall be mailed postage prepaid, at least ten (10) days before such meeting, to each Member entitled to vote thereat at such address as appears on the books of the Company or sent by electronic delivery.

 

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(xvii) The Manager shall appoint two persons as inspectors of election, to serve for one year or until their successors are chosen. The inspectors shall act at meetings of Members on elections of the Manager and on all other matters voted upon by ballot.

 

(xviii) If at the time of any meeting inspectors have not been appointed or if none, or only one, of the inspectors is present and willing to act, the shall appoint the required number of inspectors so that two inspectors shall be present and acting.

 

Section 2.6 Members are Not Agents.

 

Pursuant to Section 3.1, the management of the Company is vested in the Manager. No Member, acting solely in such capacity, is an agent of the Company, nor can any Member in such capacity bind nor execute any instrument on behalf of the Company. Any Member who takes any action or binds the Company in violation of this Section 2.6 shall be solely responsible for any loss and expense incurred by the Company as a result of the unauthorized action and shall indemnify and hold the Company harmless with respect to the loss or expense.

 

Section 2.7 Members as Creditors.

 

Subject to Section 3.7 and approval by the Manager, any Member may lend money to and transact other business with the Company as a creditor and, subject to applicable law, any Member has the same rights and obligations with respect thereto as a person who is not a Member. Loans by Members to the Company shall not be considered Capital Contributions. If any Member shall loan funds to the Company in excess of the amounts required hereunder to be contributed by such Member to the capital of the Company, the making of such loans shall not result in any increase in the amount of the Capital Account of such Member. The amount of any such loans shall be a debt of the Company to such Member and shall be payable or collectible in accordance with the terms and conditions upon which such loans are made.

 

Section 2.8 No Right of Withdrawal or Resignation.

 

No Member shall have the right to disassociate, withdraw or resign from the Company except as otherwise provided for in this Agreement. Notwithstanding any other provision of this Agreement, the disassociating, withdrawing or resigning Member shall not be entitled to any return or repayment of its Capital Contribution or other distribution or transfer in the event of disassociation, withdrawal or resignation. The foregoing provisions are exclusive and no Member shall be entitled to claim any distribution or transfer upon disassociation, withdrawal or resignation pursuant to the Act or otherwise.

 

Section 2.9 Limited Liability.

 

Except as expressly set forth in this Agreement or required by law, no Member will (a) be personally liable for any debt, obligation, or liability of the Company or other Members, whether that liability or obligation arises in contract, tort, or otherwise, solely by reason of being a Member of the Company, or (b) have any obligation to restore any deficit or negative balance that may exist from time to time in the Capital Account of such Member (including upon and after dissolution of the Company). Notwithstanding anything contained herein to the contrary, the failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business and affairs under this Agreement or the Act shall not be grounds for imposing personal liability on any of the Members for liabilities of the Company.

 

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ARTICLE III
MANAGEMENT AND CONTROL OF BUSINESS

 

Section 3.1 Management Vested in the Manager

 

(a) Manager. Subject to the terms hereof, management of the Company shall be vested in the Manager (the “Manager”). The Manager of the Company shall have all the rights and powers that may be possessed by a manager under the Act. The Members intend that the provisions of Section 17704.07(c)(4) of the Act shall not apply to the Company or this Agreement. The Manager shall have full and complete authority, power and discretion to manage and control the business and affairs of the Company, to make all decisions regarding those matters and to perform any and all other acts customary or incident to the powers granted by law or under this Agreement.

 

(b) Initial Manager; Selection of Manager. The initial Manager shall be Surviving Pubco. The Manager shall serve as such until the next annual meeting of the Members, at which a new Manager will be elected or the then-current Manager will be re-elected.

 

Section 3.2 Voting Rights.

 

(a) Except as otherwise required by law or provided herein, each holder of Class A Units shall be entitled to one (1) vote per Class A Unit at the record date for determination of the Members entitled to vote, or, if no such record date is established, at the date such vote is taken or any written consent of the Members is solicited. Except as otherwise required by law or provided herein, each holder of Class B Units shall not be entitled to vote except as required by applicable law.

 

Section 3.3 Certain Powers of the Manager.

 

(a) Without limiting the generality of Section 3.1, the Manager shall have power and authority, on behalf of the Company:

 

(i) to appoint officers to run and manage the day-to-day operations of the Company and to remove such officers;

 

(ii) to borrow money for the Company from banks, other lending institutions, Members, or Affiliates of the Members on such terms as the Manager deems appropriate, and in connection therewith, to hypothecate, encumber and grant security interests in the assets of the Company to secure repayment of the borrowed sums. No debt shall be contracted or liability incurred by or on behalf of the Company except as approved by the Manager, or by agents or employees of the Company expressly authorized by the Manager to contract such debt or incur such liability; and

 

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(iii) to employ accountants, legal counsel, managing agents or other experts to perform services for the Company and to compensate them from Company funds.

 

(b) The Manager shall have the power to recompute Percentage Interests in accordance with this Agreement and to amend this Agreement by making changes to Exhibit B to reflect changes in the Members of the Company, changes in Member information, and changes in Percentage Interests of the Members.

 

Section 3.4 Limited Liability of the Manager.

 

Except as expressly set forth in this Agreement or as required by law, no Manager will be personally liable for any debt, obligation or liability of the Company whether that liability or obligation arises in contract, tort, or otherwise, solely by reason of being the Manager of the Company.

 

Section 3.5 Fiduciary Duties of the Manager.

 

The Manager shall perform the duties as the Manager in good faith, consistent with the terms of this Agreement, in a manner the Manager reasonably believes to be in the best interests of the Company, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. The Manager who so performs the duties as Manager shall not have any personal liability for any obligation of the Company by reason of being or having been the Manager of the Company. The Manager does not, in any manner, guarantee the return of the Members’ Capital Contributions or a profit for the Members from the operations of the Company. Subject to Section 17701.10(g) of the Act, the Manager shall not be liable to the Company or to any Member for any loss or damage sustained by the Company or any Member, unless the loss or damage shall have been the result of fraud, intentional misconduct, or a willful and knowing violation of law by such Manager.

 

Section 3.6 Manager and Members Duties to Company.

 

The Manager shall not be required to manage the Company as its sole and exclusive function and the Manager or Member may have other business interests and may engage in other activities in addition to those relating to the Company.

 

Section 3.7 Transactions between the Company and the Manager.

 

Notwithstanding that it may constitute a conflict of interest, the Manager may directly or indirectly engage in any transaction (including the purchase, sale, lease, or exchange of any property, or the lending of funds, or the rendering of any service, or the establishment of any salary, other compensation, or other terms of employment) with the Company; provided, however, that in each case (a) such transaction is not expressly prohibited by this Agreement, and (b) (i) the terms and conditions of such transaction on an overall basis are fair and reasonable to the Company, and (ii) the transaction has been approved by an affirmative Majority Vote.

 

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Section 3.8 Bank Accounts.

 

The Manager shall maintain, and may from time to time open, bank accounts in the name of the Company at such depository institution or institutions as determined by the Manager, acting in good faith, and the Company shall maintain all of the funds of the Company in such bank account or accounts. The Manager or officers as authorized by the Manager shall be the sole signatories thereon, unless the Manager determines otherwise.

 

Section 3.9 Officers.

 

(a) Certain Powers of Officers. Without limiting the generality of the powers of the officers described below, the Manager hereby grant the officers the power and authority, on behalf of the Company (with the exercise of such power and authority to be subject to the management and direction of the Manager):

 

(i) To acquire property from any Person as the Manager may determine and approve. The fact that the Manager or a Member is directly or indirectly Affiliated or connected with any such Person shall not prohibit the Manager s from dealing with such Person;

 

(ii) To purchase liability and other insurance to protect the Company’s property and business and to protect the assets of the Members and the Manager;

 

(iii) To acquire, hold and dispose of any Company real or personal properties;

 

(iv) To execute on behalf of the Company all instruments and documents, including checks; drafts; notes and other negotiable instruments; mortgages or deeds of trust; security agreements; financing statements; documents providing for the acquisition, mortgage or disposition of the Company’s property; assignments; bills of sale; leases; contracts; partnership agreements, operating agreements of other limited liability companies; and any other instruments or documents necessary, in the opinion of the Manager, to conduct the business of the Company;

 

(v) To employ accountants, legal counsel, managing agents or other experts to perform services for the Company and to compensate them from Company funds, in a manner and in an amount consistent with the Company’s annual budget;

 

(vi) To enter into any and all other agreements on behalf of the Company, with any other Person for any purpose, in such forms as the Manager may approve; and

 

(vii) To do and perform all other acts as may be necessary or appropriate to the conduct of the Company’s business.

 

(b) The officers of the Company shall be chosen by the Manager and may consist of the Chairman, the President, the Chief Executive Officer, the Chief Operating Officer, the Secretary, and the Chief Financial Officer; and each of them shall be appointed by the Manager (subject to the proviso below in this Section 3.9 (b)). The Company may also have one or more Vice Presidents, one or more Assistant Secretaries and Assistant Chief Financial Officers, and such other officers as may be appointed by the Manager, or by the President or the Chief Executive Officer with authorization from the Manager. Any two or more offices may be held by the same person. All officers of the Company shall serve and may be removed at the pleasure of the Manager at any time, without waiver of any claim under any contract to which such officer may be a party.

 

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(c) Compensation. The salary and other compensation of the officers shall be fixed from time to time by resolution of or in the manner determined by the Manager, acting in good faith.

 

(d) Duties and Powers of the Chairman. The Chairman shall be an officer of the Company and shall, if present, preside at meetings of the Manager, if any, and at meetings of the Members, if any, and exercise and perform such other powers and duties as may be from time to time assigned to the Chairman by the Manager or prescribed by this Agreement.

 

(e) Duties of the Chief Executive Officer. Subject to the supervisory powers of the Manager, the Chief Executive Officer, if there is one, shall be the chief executive officer of the Company, and the Chief Executive Officer shall supervise, coordinate and manage the business and activities of the Company. The Chief Executive Officer shall perform such other duties and have such other powers as the Manager shall designate from time to time and shall see that all orders and resolutions of the Manager are carried into effect. Subject to the foregoing, the Chief Executive Officer shall have general authority general powers and duties of management usually vested in the office of chief executive officer of a corporation. In the absence of a separate appointment of the Chief Executive Officer, the President shall have the powers and authorities of the Chief Executive Officer.

 

(f) Duties and Powers of the President. Subject to the supervisory powers of the Manager, the President, if there is one, shall be the chief executive officer of the Company, in the absence of a separate appointment of the Chief Executive Officer. The President also shall preside at all meetings of the Members. The President shall perform such other duties and have such other powers as the Manager shall designate from time to time and shall see that all orders and resolutions of the Manager are carried into effect. Subject to the foregoing, the President shall have the general powers and duties of management usually vested in the office of president of a corporation.

 

Without limiting the foregoing, the President shall (i) execute bonds, mortgages and other contracts requiring a seal, under the seal of the Company, except where required or permitted by law to be otherwise signed and executed, and except where the signing and execution thereof shall be expressly delegated by the Manager to some other officer or agent of the Company and (ii) be entitled to vote securities and other equity interests held by the Company.

 

(g) Duties and Powers of the Chief Operating Officer. Subject to the supervisory powers of the Chief Executive Officer, the Chief Operating Officer, if there is one, shall have supervision over the day-to-day operations and administration of the Company. The Chief Operating Officer shall perform such other duties and have such other powers as the Manager shall designate from time to time and shall see that all orders and resolutions of the Manager and all directions of the Chief Executive Officer are carried into effect. Subject to the foregoing, the Chief Operating Officer shall have the general powers and duties of management usually vested in the office of chief operating officer of a corporation.

 

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(h) Duties and Powers of the Vice President(s). The Vice President, if there is one, or if there shall be more than one, the Vice Presidents in the order determined by a resolution of the Manager, shall perform such duties and have such powers as the Manager by resolution may from time to time prescribe.

 

(i) Duties and Powers of the Secretary. Subject to the supervisory powers of the Chief Executive Officer, and unless otherwise determined by the Manager, the Secretary shall attend all meetings of the Manager, if any, and all meetings of the Members, if any, and shall record all the proceedings of the meetings in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all validly called meetings of the Members and shall perform such other duties as may be prescribed by the Manager. The Secretary shall have custody of the seal, if any, and the Secretary shall have authority to affix the same to any instrument requiring it, and when so affixed, it may be attested by his or her signature. The Manager may give general authority to any other officer to affix the seal of the Company, if any, and to attest the affixing by his or her signature.

 

The Secretary shall keep, or cause to be kept, at the principal executive office of the Company, a register, or a duplicate register, showing the names of all Members and their addresses, and the number and classes of Units held by each Member. The Secretary shall also keep all documents as may be required under the Act. The Secretary shall perform such other duties and have such other authority as may be prescribed elsewhere in this Agreement or from time to time by the Manager. Subject to the foregoing, the Secretary shall have the general duties, powers and responsibilities of a secretary of a corporation.

 

If the Manager chooses to appoint an Assistant Secretary or Assistant Secretaries, the Assistant Secretaries, in the order of their seniority, in the absence, disability or inability to act as the Secretary, shall perform the duties and exercise the powers of the Secretary, and shall perform such other duties as the Manager may from time to time prescribe.

 

(j) Duties and Powers of the Chief Financial Officer. Subject to the supervisory powers of the Chief Executive Officer, the Chief Financial Officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Company, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, and capital. The books of account shall at all reasonable times be open to inspection by the Manager.

 

The Chief Financial Officer shall have the custody of the funds and securities of the Company, and shall keep or cause to be kept full and accurate accounts of receipts and disbursements in books belonging to the Company, and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Manager.

 

The Chief Financial Officer shall disburse the funds of the Company as may be ordered by the Manager or the Chief Executive Officer, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer and the Manager, when so requested by the Manager or the Chief Executive Officer, an account of all his or her transactions as Chief Financial Officer and of the financial condition of the Company.

 

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The Chief Financial Officer shall perform such other duties and shall have such other responsibility and authority as may be prescribed elsewhere in this Agreement or from time to time by the Manager. In lieu of a separate appointment by the Manager, the Chief Financial Officer shall also be the Treasurer of the Company. Subject to the foregoing, the Chief Financial Officer shall have the general duties, powers and responsibilities of a chief financial officer of a corporation and shall be the chief financial and accounting officer of the Company.

 

If the Manager chooses to appoint an Assistant Chief Financial Officer or Assistant Chief Financial Officers, the Assistant Chief Financial Officers in the order of their seniority shall, in the absence, disability or inability to act of the Chief Financial Officer, perform the duties and exercise the powers of the Chief Financial Officer, and shall perform such other duties as the Manager shall from time to time prescribe.

 

(k) Signing Authority of Officers. Subject to any restrictions imposed by the Manager and unless the Manager specifically provides otherwise, the President, Chief Executive Officer or Chief Financial Officer, acting alone or any two officers acting together, are authorized to (i) endorse checks, drafts and other evidences of indebtedness made payable to the order of the Company, but only for the purpose of deposit into the Company’s accounts, and (ii) sign on behalf of the Company, all checks, drafts, and other instruments obligating the Company to pay money and all contracts, obligations and other documents.

 

ARTICLE IV
TAXES, ALLOCATIONS AND DISTRIBUTIONS

 

Section 4.1 Allocations and Tax Provisions.

 

The allocations of income, gains, losses and deductions, certain tax matters and related items shall be as set forth in Exhibit C attached hereto and made a part hereof.

 

Section 4.2 Distributions.

 

(a) Distributions. Distributions of cash or other assets of the Company other than Tax Distributions, if any, shall be made to the Members in such amounts and at such times as the Manager may determine from time to time in its sole judgment and discretion in the priorities specified in this Section 4.2(a). All Distributions shall be made:

 

(i) first, as Tax Distributions as provided under Section 4.2(b), and (ii) second, in accordance with Percentage Interests.

 

(ii) second, in accordance with Percentage Interests.

 

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(b) Tax Distributions.

 

(i) To the extent that the Company has funds legally available that are not otherwise required by the Company in the operations or business of the Company or in reserves of the Company, as determined by the Manager acting in good faith, prior to making Distributions under Section 4.2(a)(i), the Company will distribute to each Member, prior to March 15 of each year, a tax distribution amount (“Tax Distributions”) as determined in Section 4.2 (b) below. All Tax Distributions will be made to the Members in accordance with their Percentage Interests.

 

(ii) The Tax Distribution to each Member equals the product of (A) the Member’s Percentage Interest and (B) an amount that, when added to all other Distributions made in the aggregate to all Members (or their predecessors in interest) with respect to the previous Fiscal Year, equals the estimated federal and state income tax liabilities applicable in the aggregate to such Members (or their predecessors in interest) (“Tax Distributions”) for the immediately preceding Fiscal Year as the result of its, his or her ownership of the Units. For this purpose, any increases in a Member’s share of income of the Partnership shall be disregarded to the extent that the income is specially allocated to the Member pursuant to Code Section 704(c). This computation of the Tax Distribution also will disregard any adjustments to tax basis resulting from adjustments under Code Section 743. Items adjusted in an audit of the Company shall be considered in computing the Tax Distribution.

 

(iii) The Tax Distribution for each Member shall be determined by the Manager, acting in good faith.

 

(iv) In computing the Tax Distribution, the Manager will conclusively assume that each Member is a domestic C corporation domiciled in the State of California and that all of the Member’s distributive share from the Company is California source. This computation shall conclusively assume that all of the Member’s distributive share from the Company is taxable in the federal and state tax brackets appropriate for the highest amounts of taxable income.

 

(v) The Manager shall consider any federal deduction for state taxes, to the extent available.

 

(vi) The Manager shall consider as reductions to taxable income for such previous Fiscal Year the cumulative excess of items of expense, deduction and loss over items of income and gain allocated to such Member (and predecessor owners of the Member’s Units) by the Company from prior periods, to the extent the Manager determines that this reduction is reasonable.

 

(vii) The Manager shall consider the various components of the Member’s distributive share from the Company as taxable at appropriate tax rates depending on character of income.

 

(viii) The Manager shall consider any effective tax rates that apply to capital gains, collectables, or other special rates of tax that depend on character of income.

 

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(ix) The Manager additionally shall consider any minimum taxes, alternative minimum taxes, taxes on investment income, tax surcharges, special income taxes on high income taxpayers, special taxes imposed on income of a special character, and other similar taxes.

 

(x) The Manager shall apply tax rates and tax law applicable to the immediately previous Fiscal Year.

 

(xi) The Manager shall not consider Code Section 1061.

 

(xii) The Manager shall not consider any special tax characteristics personal to the Member such as net operating losses, carryover or capital losses, etc.

 

(xiii) Notwithstanding any of the foregoing, no Tax Distributions shall be made in violation of the Act.

 

(xiv) The Company will make Tax Distributions only to the extent that the Company has funds available for the Tax Distributions after considering the needs of the business of the Company for current operations and for reasonable reserves and any applicable restrictions on Distributions under law or under contract.

 

(xv) No Tax Distributions shall be made following the occurrence of an event resulting in a liquidation of the Company, or sale of all or substantially all of the assets of or Membership Interests in, the Company or in connection with a Liquidity Event in connection with the final liquidation of the Company.

 

(xvi) Each Member waives any action against the Company, against the Manager, and any member of the Manager disputing the calculation of the Tax Distribution or the decision to pay the Tax Distribution.

 

(xvii) The Tax Distribution shall be considered an advance or draw against other Distributions to the Members from the Company.

 

(c) The Company shall withhold taxes from Distributions to, and allocations among, the Members to the extent required by law. All amounts withheld hereunder shall be deemed to have been actually distributed to such Member for purposes hereof.

 

(i) The Company will withhold from Distributions (or on account of allocations to a Member or Assignee) those amounts required to be withheld under the Code, the laws of any state, or any other provision of law.

 

(ii) The Company will treat any withheld amounts as having been distributed to that Member or Assignee (with respect to whom the withholding was undertaken) under this Agreement.

 

(iii) The Company will remit any sums withheld under this provision to (and file the required forms with) the appropriate governmental agency.

 

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(iv) A Member or Assignee will be limited to an action against the appropriate governmental agency for refund if the Member or Assignee makes any claim of over-withholding. This action is the Member or Assignee’s exclusive remedy on account of any claimed over-withholding.

 

(v) Each Member or Assignee waives any claim or right of action against the Company or anyone acting on behalf of the Company on account of withholding.

 

(vi) The Member or Assignee will contribute any excess to the Company (within ten (10) business days after notice from the Company) if the amounts required to be withheld exceed the amounts that otherwise would have been distributed to a Member or Assignee. This Section 4.2(c)(vi) applies regardless of whether the Member or Assignee disputes the withheld amounts.

 

(vii) The Company will consider any excess amounts determined under Section 4.2(c)(vi) that the Member or Assignee has failed to contribute to the Company, as a demand loan from the Company to that Member or Assignee.

 

(viii) This demand loan will bear interest at a rate equal to the lesser of (i) ten percent (10%) or (ii) the highest rate permitted by law, if lower.

 

(ix) The Company will compute interest on the basis of a computational year of 360 days comprised of 30-day months, using the “30/360 US” day count convention.

 

(x) The Company will compound interest annually on the anniversary of the loan.

 

(xi) The Member or Assignee who is treated as the borrower of this demand loan will repay this demand loan in full within ten (10) business days after demand by the Company.

 

(d) Other Rules.

 

(i) Provided such Distributions are made in accordance with applicable law, neither the Company nor the Manager will incur any liability for making Distributions in accordance with this Section 4.2.

 

(ii) In the event Units of a Member are permissibly Transferred during any Fiscal Year in full compliance with Article VII, (A) all Distributions on or before the date of such transfer shall be made to the transferring Member of record, and (B) all Distributions thereafter shall be made to the assignee of record; provided, however, that neither the Company nor the Manager or Member shall incur any liability for making Distributions in accordance with the foregoing, whether or not such Person has knowledge of any transfer or purported transfer of ownership of any Units.

 

(iii) No Distribution of assets shall be made to the Members if, after giving effect to the Distribution, the Company would not be able to pay its debts as they become due in the usual course of business. Each Member acknowledges that if such Member receives any Distribution from the Company in violation of the Act, the Member may be liable to the Company or its successors for the return of such Distributions.

 

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ARTICLE V
ACCOUNTING AND RECORDS

 

Section 5.1 Accounting and Records.

 

The books and records of the Company shall be kept, and the financial position and the results of its operations recorded, in accordance with the accounting methods elected to be followed by the Company for federal income tax purposes or Generally Accepted Accounting Principles, as appropriate. The books and records of the Company shall reflect all Company transactions and shall be appropriate and adequate for the Company’s business in accordance with the Act. All books and records of the Company shall be maintained at the Company’s principal executive offices.

 

Section 5.2 Access to Accounting and Other Records.

 

(a) Subject to such reasonable standards and conditions as imposed by the Manager, including but not limited to the entering into of a nondisclosure or similar agreement as deemed appropriate by the Company, upon request of any Member for purposes reasonably related to the interest of that Person as a Member, the Company shall promptly deliver or cause to be delivered to the requesting Member, at the expense of the Company, a copy of (i) a current list of the full name and last known address of each Member and the Capital Contributions and Units held of record by each Member; and (ii) the Company’s federal, state and local income tax returns and reports, if any, for each of its Fiscal Years.

 

(b) Subject to such reasonable standards and conditions as imposed by the Manager, including the entering into of a nondisclosure or similar agreement as deemed appropriate by the Company, each Member also has the right, upon reasonable request for purposes reasonably related to the interest of the Person as a Member, to inspect and copy during normal business hours (i) any of the Company records described in the foregoing Section 5.2(a); (ii) the Articles of Organization of the Company, any amendments thereto, and executed copies of any powers of attorney granted for the purpose of executing the such Articles or amendments; (iii) this Agreement and any amendments to this Agreement; (iv) financial statements of the Company, if any, for the five (5) most recent Fiscal Years; and (v) the written minutes of any meeting of the Members and any written consents of the Manager or the Members for actions taken without a meeting.

 

(c) The Company also shall promptly furnish to a Member a copy of any amendment to the Articles of Organization or this Agreement executed pursuant to a power of attorney from such Member.

 

(d) Any request by a Member for documents or request to inspect or copy documents under this Section 5.2 (i) may be made by that Member or that Member’s agent or attorney; and (ii) shall be made in writing and shall state the purpose of such demand.

 

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(e) Notwithstanding any contrary provision of this Agreement, the Manager or officers of the Company designated by the Manager shall have the right to keep confidential from the Members, for such period of time as the Manager deems reasonable, any information which the Manager reasonably believes to be in the nature of trade secrets or other information the disclosure of which the Manager in good faith believes is not in the best interest of the Company or could damage the Company or its business or which the Company is required by law or by agreement with a third party to keep confidential.

 

(f) No Person who is not the Manager or Member shall have any information or inspection rights.

 

Section 5.3 Annual and Tax Information; Financial Information.

 

(a) The Company shall deliver to each Member (i) within 90 days after the end of each Fiscal Year all information necessary for the preparation of such Member’s federal and state income tax or information returns, (ii) within 90 days after the end of each Fiscal Year an Annual Report containing a balance sheet as of the Fiscal Year end and an income statement and statement of changes in financial position for such year and (iii) within 30 days after the end of each Fiscal Quarter all information necessary for the preparation of such Member’s federal and state estimated income tax payments and (iv) for so long as the Company has 35 or fewer Members, a copy of the Company’s federal, state and local income tax or information returns within 90 days after the end of each Fiscal Year. Such Annual Report need not be audited by an independent public accounting firm at the discretion of the Manager.

 

ARTICLE VI
INDEMNIFICATION

 

Section 6.1 Indemnification.

 

(a) To the fullest extent permitted by the Act and other applicable law, the Company will indemnify, hold harmless and defend the Manager and officers of the Company, the Partnership Representative, the Designated Individual, the Tax Matters Partner, and each equityholder, officer, employee, or agent of the Manager or officer of the Company (each, an “Indemnitee”) from and against any and all losses, claims, damages, liabilities, whether joint or several, expenses (including legal fees and expenses), judgments, fines and other amounts paid in settlement (collectively, “Indemnified Losses”), incurred or suffered by such Indemnitee, as a party or otherwise, in connection with any threatened, pending or completed claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, arising out of or in connection with the business or the operation of the Company, or by reason of the Indemnitee’s status as the Manager or officer of the Company or any of its subsidiaries, regardless of whether the Indemnitee retains such status at the time any such Indemnified Loss is paid or incurred, unless the Indemnified Losses were the result of fraud, intentional misconduct, or a willful and knowing violation of law by such Indemnitee.

 

(b) Subject to Section 17701.10(g) of the Act, (i) no Indemnitee shall be liable to the Company or to any Member for any loss or damage sustained by the Company or any Member, unless the loss or damage shall have been the result of fraud, intentional misconduct, or a willful and knowing violation of law by such Indemnitee and (ii) no Indemnitee shall be liable to the Company or to any Member for any actions taken in good faith in a manner such Indemnitee reasonably believes to be in the best interests of the Company. An Indemnitee shall be deemed to have acted in good faith and without negligence with regard to any action or inaction that is taken in accordance with the advice or opinion of an attorney, accountant or other expert advisor so long as such advisor was selected with reasonable care and the Indemnitee made a good faith effort to inform such advisor of all the facts pertinent to such advice or opinion. An Indemnitee’s reliance upon the truth and accuracy of any written statement, representation or warranty of a Member shall be deemed to have been reasonable and in good faith absent such Indemnitee’s actual knowledge that such statement, representation or warranty was not, in fact, true and accurate.

 

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(c) To the fullest extent permitted by law, expenses incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding subject to this Section 6.1 will, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Indemnitee to repay such amount unless it is determined that such Indemnitee is entitled to be indemnified therefor pursuant to this Section 6.1.

 

(d) The indemnification provided by this Section 6.1 will be in addition to any other rights to which any Indemnitee may be entitled under this Agreement, any other agreement, as a matter of law or otherwise, and will inure to the benefit of the heirs, legal representatives, successors, assigns and administrators of the Indemnitee.

 

Section 6.2 Procedures; Survival.

 

(a) If an Indemnitee wishes to make a claim under Section 6.1, the Indemnitee should notify the Company in writing within five (5) days after receiving notice of the commencement of any action that may result in a right to be indemnified under Section 6.1; provided, however, that the failure to notify the Company will not relieve the Company of any liability for indemnification pursuant to Section 6.1 (except to the extent that the failure to give notice has prejudiced the Company).

 

(b) An Indemnitee will have the right to employ separate legal counsel in any action pursuant to Section 6.1 and to participate in the defense of the action. The fees and expenses of such legal counsel will be at the expense of the Indemnitee unless (i) the Company has agreed in writing to pay such fees and expenses, (ii) the Company has failed to assume the defense of the action without reservation and employ counsel within a reasonable period of time after being given the notice required above, or (iii) the named parties to any such action (including any impleaded parties) include both the Indemnitee and the Company and the Indemnitee has been advised by its legal counsel that representation of the Indemnitee and the Company by the same counsel would be inappropriate under applicable standards of professional conduct because of actual or potential differing interests between them. It is understood, however, that the Company will, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys at any time for all such Indemnitees having actual or potential differing interests with the Company.

 

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(c) The Company will not be liable for any settlement of any action agreed to without the Company’s written consent, such consent not to be unreasonably withheld.

 

(d) The indemnification obligations set forth in this Article VI will survive the termination of this Agreement.

 

ARTICLE VII
TRANSFERS OF UNITS; LIMITATIONS

 

Section 7.1 Transfer or Assignment of Units.

 

No Member shall be entitled to assign, convey, sell, encumber or in any manner alienate or otherwise Transfer all or part of such Member’s Units in the Company or any other rights or obligations or interests of such Member as a Member except with the express written consent of the Manager and in strict compliance with each and all of the other Sections of this Article VII.

 

Section 7.2 Conditions to Transfer by Member.

 

Without limiting any other provisions or restrictions or conditions of this Article VII and in addition thereto, a Transfer of Units or any other rights or obligations or interests of a Member proposed to be effected in accordance with this Article VII may not be effected unless each and all of the following requirements and conditions precedent are satisfied:

 

(a) Units Only. Members may Transfer entire Units only. No rights or obligations or interests of a Member of any kind shall be severable from the Units at any time or under any circumstances. Members therefore shall have no right to and shall not Transfer or purport to Transfer any rights or obligations or interests as a Member separate from the Units.

 

(b) Required Documents. The following are delivered to the Company:

 

(i) Notice of Intent to Transfer. At a reasonable time prior to the consummation of the Transfer, written notice by the Member of the intent to make a Transfer of Units, together with a detailed statement of the circumstances surrounding the proposed Transfer which is sufficient to enable the Company and the Manager to determine whether such Transfer is permissible hereunder, and what opinions of counsel, certificates or documents, if any, may be needed to complete such Transfer in compliance with Section 7.2(c);

 

(ii) Agreement to be Bound. An instrument pursuant to which the proposed assignee agrees to all of the terms and conditions of, and to be bound by, this Agreement, and to assume all of the obligations with respect to the Units proposed to be transferred of the transferring Member and to be subject to all the restrictions and obligations to which the transferring Member is subject under the terms of this Agreement; and

 

(iii) Additional Documents. Such additional instruments, documents and certificates as shall be requested by the Company (including opinions of counsel to any transferor satisfactory to the Company with respect to any of the matters set forth in Section 7.2(c)).

 

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(c) Restrictions. Such Transfer would not:

 

(i) Securities Laws. Result in the violation of the Securities Act of 1933, as amended, or any regulation issued pursuant thereto, or any state securities laws or regulations, or any other applicable federal or state laws or order of any court having jurisdiction over the Company;

 

(ii) Events of Default. Be a violation of or an event of default under, or give rise to a right to accelerate any indebtedness described in, any note, mortgage, loan agreement or similar instrument or document to which the Company is a party unless such violation or event of default shall be waived by the parties thereto;

 

(iii) Not Legally Competent. Be a Transfer to an individual who is not legally competent or who has not achieved his or her majority under the laws of the State of California (excluding trusts for the benefit of minors as otherwise permitted in Section 7.3);

 

(iv) Tax Status of Company. Cause a material risk, in the opinion of independent reputable tax counsel (whose fees and disbursements shall be paid by the assignee), which counsel has been reasonably approved by the Manager of the Company, that the classification of the Company as a partnership for purposes of the Code could be adversely affected;

 

(v) Restriction on Number of Partners.. Notwithstanding anything in this Agreement to the contrary, no Disposition of a Member's Membership Interest or any portion thereof shall cause the Company to have more than 95 partners at any time during the taxable year of the Company. Any Disposition that would cause the Company to have more than 95 partners at any time will be void ab initial and of no force or effect whatsoever, nor shall this Disposition cause the transferee to have any interest in the Company, whether legal or equitable. This Section 7.2 (c)(v) is intended to permit the Company to qualify under the private placement safe harbor of Treasury Regulations Section 1.7704-1 and shall be interpreted in accordance with this safe harbor.

 

(d) Costs. If requested by the Manager, the transferring Member or assignee shall pay to the Company any and all costs incurred and to be incurred by the Company in connection with or as a result of such Transfer, to the extent such costs would not have been incurred by the Company if such Transfer had not been proposed or made.

 

Section 7.3 Permitted Transfers.

 

Notwithstanding the limitations in Section 7.1, subject to full compliance with and subject to the limitations contained in Section 7.2, including to the requirement for an agreement to be bound, and, subject to the provisions of any other agreement between the Member and the Company:

 

(a) A Member shall be permitted to Transfer all or any part of its or his or her Units without further consent hereunder only to (i) to any Affiliate of such Member; (ii) to the spouse of said Member; (iii) to any revocable trust established solely for the benefit of such Member or his or her parents, spouse or issue; or (iv) upon the death of such Member, to his or her estate or issue or devisees (each a “Permitted Assignee” and each Transfer permitted under this Section 7.3(a), a “Permitted Transfer”).

 

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(b) A Member shall be permitted to Transfer Units in accordance with such Member’s Exchange Agreement.

 

(c) If the consideration to be paid for the Units is in whole or in part in property, services or other non-cash consideration, the Fair Market Value of such consideration shall be determined in good faith by the Manager. If the Company or any Member cannot for any reason pay for the Units in the same form of non-cash consideration, the Company or such Member may instead pay the Fair Market Value (as determined pursuant to the preceding sentence) therefor.

 

Section 7.4 Repurchase of Class B Units

 

The terms governing the repurchase of Class B Units (for example, in the event of termination of employment), shall be contained in each agreement by which such Class B Member receives their Class B Units.

 

Section 7.5 Unauthorized Transfers Void.

 

Any Transfer or purported Transfer in violation of the provisions of this Article VII shall be null and void ab initio and shall constitute a material breach of this Agreement. In the event of any Transfer or purported Transfer of any Units in violation of this Agreement, without limiting any other rights or remedies of the Company or the other Members, the assignee or purported assignee shall have no right to participate in the management of the business and affairs of the Company or to become a Member, or to receive any Distributions of any kind or to receive any part of the share of profits or other compensation by way of income and the return of contributions, or any allocation of income, gain, loss, deduction, credit or other items to which the owner of such Units would otherwise be entitled.

 

Section 7.6 Change of Control.

 

In connection with a Change of Control (as defined in the Exchange Agreement), the provisions of Section 2.4(a) of the Exchange Agreement shall apply and the provisions of Section 2.4(a) of the Exchange Agreement are incorporated in this Agreement as if they were expressly set forth in this Agreement.

 

 

ARTICLE VIII
ADMISSION OF ADDITIONAL MEMBERS

 

Section 8.1 Admission of Additional Members.

 

Upon approval by the Manager, the Company may (a) admit, from time to time, Additional Members; (b) determine the Capital Contributions required from Additional Members; and (c) issue such Units representing the Membership Interests of such Additional Members on such terms and conditions as the Manager deems necessary or advisable.

 

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Section 8.2 Procedure for Admission.

 

No Person will be admitted as an Additional Member until such Person (i) executes and acknowledges such instruments, in form and substance satisfactory to the Manager, as the Manager deems necessary or advisable to effect such admission and to confirm the agreement of the Person being admitted to be bound by the terms and provisions of this Agreement; and (ii) makes such Capital Contribution as determined by the Manager. The Company shall reflect the admission of such Additional Member in the records of the Company as soon as possible after satisfaction of the conditions set forth in this Agreement. Exhibit B shall be deemed to be amended to reflect the admission of the Additional Member upon such admission; and each of the Members then of record hereby consents to such amendment to the extent required by law or this Agreement.

 

ARTICLE IX
TERMINATION, DISSOLUTION AND
LIQUIDATION OF THE COMPANY

 

Section 9.1 Events Causing Dissolution.

 

The Company will be dissolved only upon the occurrence of any of the following events (each, a “Dissolution Event”):

 

(a) Permanent cessation of the Company’s business;

 

(b) (i) The consent of the Manager and (ii) the affirmative Majority Vote; or

 

(c) The final decree of a court of competent jurisdiction that such dissolution is required under applicable law.

 

Section 9.2 Liquidation and Winding Up.

 

Upon the occurrence of a Dissolution Event, the Company will be liquidated and the Manager who has not wrongfully dissolved the Company will wind up the affairs of the Company provided, (i) if there is no such Manager, the Members will wind up the affairs of the Company, and (ii) if there is a Person designated by a decree of court to wind up the affairs, then notwithstanding any other provision of this Section 9.2, such Person will wind up the affairs of the Company. In such case, the Manager (or such Members or such other Person designated by a decree of court) shall have the authority, in its sole and absolute discretion, to sell the Company’s assets and properties or distribute them in kind. The Manager or other Person winding up the affairs of the Company will promptly proceed to the liquidation of the Company. In a Dissolution Event, the assets and property of the Company will be distributed in the following order of priority:

 

(a) To the payment of all debts and liabilities of the Company in the order of priority as provided by law (other than outstanding loans from a Member the Manager);

 

(b) To the establishment of any reserves deemed necessary by the Manager, or the Person winding up the affairs of the Company, for any contingent liabilities or obligations of the Company (including those of the Person serving as the liquidator), which reserves when they become unnecessary shall be distributed in accordance with the provisions of Section 9.2(d);

 

28

 

 

(c) To the repayment of any outstanding loans from a Member or the Manager to the Company; and

 

(d) The balance, if any, to the Members in accordance with Sections 4.2(a)(ii).

 

Upon liquidation of the Company, no Member shall be required to contribute any amount to the Company solely because of a deficit or negative balance in the Capital Account of such Member. Any deficit or negative balance shall not be considered an asset of the Company for any purpose.

 

Section 9.3 Limitations on Payments Made in Dissolution.

 

Except as otherwise provided in this Agreement, each Member shall be entitled to look solely to the assets and properties of the Company for return of the Member’s Capital Contribution and returns thereon, and, if such assets and properties are insufficient to return such Member’s Capital Contributions or returns thereon, the Member shall have no recourse against the Manager, other Members or officers of the Company.

 

ARTICLE X
MISCELLANEOUS

 

Section 10.1 Complete Agreement.

 

This Agreement and the Class B Unit Purchase Agreements of the Members including the Exhibits and ancillary documents hereto and thereto, the Articles of Organization and the Exchange Agreements and the Earn Out Provisions of the Master Transaction Agreement constitute the complete and exclusive statement of agreement among the Members with respect to the subject matter hereof. This Agreement, including the Exhibits and ancillary documents hereto, and the Articles of Organization replace and supersede all prior agreements by and among the Members or any of them in respect of the Company with respect to the subject matter hereof. This Agreement, including the Exhibits and ancillary documents hereto, and the Articles of Organization supersede all prior written and oral statements; and no representation, statement, condition or warranty not contained in this Agreement, including the Exhibits and ancillary documents hereto, or the Articles of Organization will be binding on the Members or the Company or have any force or effect whatsoever with respect to the subject matter hereof. Any conflict between the Exchange Agreements and this Agreement shall be controlled by the applicable Exchange Agreement.

 

Section 10.2 Governing Law.

 

This Agreement and the rights of the parties hereunder will be governed by, interpreted, and enforced in accordance with the laws of the State of California, without reference to conflicts of law principles.

 

Section 10.3 No Assignment; Binding Effect.

 

This Agreement may not be transferred or assigned by any party hereto other than (a) in the case of a Member, in full compliance with Article VII as an integrated part of a permissible Transfer of any or all of the Units of such Member; and (b) in the case of the Company, in connection with the transfer or assignment of all or substantially all of the assets of the Company. Any purported assignment, sale, Transfer, delegation or other disposition, except as expressly permitted herein, will be null and void and shall constitute a material breach of this Agreement. Subject to the foregoing restrictions and Article VII, this Agreement will be binding upon and inure to the benefit of the Members and their respective spouses, heirs, devisees, representatives, successors and assigns.

 

29

 

 

Section 10.4 Severability.

 

If any provision of this Agreement is held to be illegal, invalid, or unenforceable under any present or future laws applicable to the Company effective during the term of this Agreement, such provision will be fully severable; this Agreement will be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this Agreement; and the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement.

 

Section 10.5 No Partition.

 

The parties acknowledge that the assets and properties of the Company are not and will not be suitable for partition. Thus, each Member (on behalf of such Member and his, her or its successors and assigns) hereby irrevocably waives any and all rights that such Member may have to maintain any action for partition of such assets and properties.

 

Section 10.6 Multiple Counterparts.

 

This Agreement may be executed by written signature or electronically and delivered in multiple counterparts, including facsimile, PDF, or other electronic counterparts, each of which shall be an original, but all of which together shall constitute one instrument. A party may deliver this Agreement by transmitting a facsimile, PDF, or other electronic counterpart copy of the signed signature page to the other parties.

 

Section 10.7 Additional Documents and Acts.

 

Each Member agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions, and conditions of this Agreement and the transactions contemplated hereby at any time.

 

Section 10.8 No Employment Rights.

 

Nothing in this Agreement shall confer upon any Person any right to be employed or to continue employment by the Company or any affiliated entity, or interfere in any manner with any right of the Company or affiliated entity to terminate such employment at any time.

 

30

 

 

Section 10.9 Amendments.

 

All amendments and modifications to this Agreement must be in writing and shall be approved (i) by the Manager, and (ii) by the affirmative Majority Vote; provided, however, that no approval shall be needed for an amendment of Exhibit B in connection with the admission of Additional Members in accordance with this Agreement or the issuance of additional Units to certain Members in accordance with this Agreement and the Transaction Agreement. In addition to the foregoing, the Company may not amend or modify this Agreement in any way that alters or changes the rights, preferences or privileges in a manner that would be prejudicial and disproportionate with respect to any class of Members without the written approval of the majority of such class of Members.

 

Section 10.10 No Waiver.

 

No delay, failure or waiver by any party to exercise any right or remedy under this Agreement, and no partial or single exercise of any such right or remedy, will operate to limit, preclude, cancel, waive or otherwise affect such right or remedy, nor will any single or partial exercise of such right or remedy limit, preclude, impair or waive any further exercise of such right or remedy or the exercise of any other right or remedy.

 

Section 10.11 Representations and Warranties; Reliance.

 

(a) Each party represents and warrants that such party has the full right, power, legal capacity and authority to enter into and execute this Agreement and to discharge all of his or her or its obligations hereunder, and that such party does not have any outstanding obligation and is not a party to any outstanding agreement which obligation or agreement is inconsistent with this Agreement. This Agreement has been duly executed and delivered by such party after all legally required approvals, and constitutes its or his or her valid and legally binding agreement and obligation and is enforceable in accordance with its terms.

 

(b) Without limiting the foregoing, in the event that a Member is not a natural person, neither the Company nor any Member will (i) be required to determine the authority of the individual signing this Agreement to make any commitment or undertaking on behalf of such entity or to determine any fact or circumstance bearing upon the existence of the authority of such individual or (ii) be required to see to the application or distribution of proceeds paid or credited to individuals signing this Agreement on behalf of such entity.

 

Section 10.12 Notices.

 

Except as otherwise provided in this Agreement regarding notices by electronic mail or other electronic means to Members and the Manager and regarding Member proxies, all notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be delivered (a) by personal delivery, (b) by a nationally recognized overnight courier service, (c) by facsimile if the writing is legible and sent from a facsimile machine providing written confirmation of receipt, (d) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient or (e) by deposit in the United States Postal Service as registered or certified US Mail, postage and charges prepaid, return receipt requested, to the Company at its principal executive office and to any Member at the address then shown as the current address of such Member on the books and records of the Company. Any such notice shall be deemed to have been given on the date so delivered, if delivered personally or by overnight air courier service; or if by facsimile, on the first day following the transmission of such facsimile; or if mailed, five (5) calendar days after mailing. Any party may by written notice to the other parties specify a different address or facsimile number for notice purposes by sending notice thereof in the foregoing manner.

 

31

 

 

Section 10.13 Dispute Resolution; Arbitration.

 

(a) Any controversy, claim or dispute arising out of or related to this Agreement or the interpretation, performance, or breach hereof, including alleged violations of state or federal statutory or common law rights or duties, all tort claims and all claims for punitive damages (a “Dispute”), shall be resolved solely according to the procedures set forth in this Section 10.13 .

 

(b) The parties shall attempt, whenever possible, to discuss and resolve any Disputes on an informal basis, in order to avoid the expense and delay associated with arbitration. A party invoking these dispute resolution procedures shall deliver a notice to the other parties (a “Dispute Notice”) of the claims it intends to bring and the relief sought, including sufficient details regarding the factual, contractual or other legal bases for the party’s claim as reasonably required to enable the parties receiving the Dispute Notice to evaluate the claim and respond thereto. No arbitrator shall have authority to consider or resolve any Dispute that is not first the subject of a Dispute Notice and subject to informal dispute resolution pursuant to this Section 10.13 .

 

(c) If the parties are unable to resolve one or more Disputes informally, any party to the Dispute may initiate a binding arbitration proceeding for the final resolution of such remaining Dispute(s). A party shall initiate arbitration by delivering a notice to the other parties to such Dispute(s) (an “Arbitration Notice”) describing the Dispute(s) to be arbitrated. Within twenty (20) days of receiving an Arbitration Notice, the receiving party may deliver its own Arbitration Notice, specifying additional Disputes to be submitted to arbitration. If more than one Dispute is to be arbitrated, the subject matters of the various Disputes need not be related to each other.

 

(d) The arbitration, which shall take place in Los Angeles County, State of California, shall be administered by the Los Angeles, California office of the American Arbitration Association (“AAA”), or any successor hereof, in accordance with the AAA Rules, except as otherwise provided herein. The arbitration shall be held before and decided by a single neutral arbitrator (the “Arbitrator”). The arbitrator shall be a member of the AAA Large and Complex Case Panel selected in accordance with the AAA Rules. The arbitration decision shall be binding and final upon the parties thereto, and judgment on any award rendered by the Arbitrator may be entered in any court having jurisdiction thereof.

 

(e) Notwithstanding any contrary provision of this Section 10.13 , any party may seek emergency or temporary injunctive remedies exclusively in any federal or state court located within Los Angeles County, State of California, in aid of its claims for relief in the arbitration notwithstanding this agreement to arbitrate; provided, however, that such action shall not be deemed a waiver of the right to arbitrate the merits of the dispute. Each party hereto irrevocably submits to the exclusive jurisdiction and venue of any such court in any such action or proceeding.

 

32

 

 

(f) In any judicial or arbitration proceeding hereunder, the prevailing party shall be entitled to receive its reasonable attorneys’ fees and costs incurred in connection with such proceeding in addition to its judgment. The arbitrator’s remedies shall be limited to those which could be granted by a court of competent jurisdiction hearing the same dispute.

 

Section 10.14 Specific Performance.

 

Because of the unique character of the Membership Interests and the Units, the Members and the Company will be irreparably damaged if this Agreement is not specifically enforced. If any dispute arises concerning the Transfer of any Units, or any portion thereof, an injunction may be issued restraining any purported Transfer pending the determination of such controversy. If any dispute arises concerning the right or obligation to purchase or sell any such Units, or any portion thereof, such right or obligation will be enforceable in a court of equity by a decree of specific performance. Such remedy may, however, be cumulative and not exclusive, and will be in addition to any other remedy which the Members or the Company may have.

 

Section 10.15 No Third Party Beneficiary.

 

This Agreement is made solely and specifically among and for the benefit of the parties hereto, and their respective successors and permitted assigns, and no other Person will have any rights, interest, or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise.

 

Section 10.16 Cumulative Remedies.

 

The rights and remedies of any party as set forth in this Agreement are not exclusive and are in addition to any other rights and remedies now or hereafter provided by law or at equity, subject to the Dispute Resolution and Arbitration provisions of Section 10.13 .

 

Section 10.17 Exhibits.

 

All Exhibits attached hereto are hereby incorporated by reference into, and made a part of, this Agreement.

 

Section 10.18 Interpretation.

 

The titles and section headings set forth in this Agreement are for convenience only and shall not be considered as part of agreement of the parties. No provision of this Agreement shall be interpreted or construed against any party because such party or its counsel was the drafter thereof. Unless the context clearly requires otherwise:(i) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms; (ii) the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (iii) the use of the word “includes” and “including” in this Agreement shall be by way of example rather than by limitation; (iv) reference to any agreement, document or instrument means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof; (v) the use of the words “or,” “either” and “any” shall not be exclusive; (vi) all references in this Agreement to designated “Sections” and other subdivisions, or to designated “Exhibits” or “Schedules”, are to the designated Sections and other subdivisions of, or the designated Exhibits or Schedules to, this Agreement; (vii) the words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision hereof;.

 

33

 

 

Section 10.19 Survival.

 

It is the express intention and agreement of the Company and the Members that all covenants, agreements, statement, representations, warranties and indemnities made in this Agreement will survive the execution and delivery of this Agreement and the Units and, where appropriate to facilitate the intent of this Agreement, the dissolution, liquidation and winding up of the Company.

 

Section 10.20 Confidentiality.

 

Each Member agrees that it will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 10.20 by such Member), (b) is or has been independently developed or conceived by the Member without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Member by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that a Member may disclose confidential information: (i) to its attorneys, accountants, consultants, and other professionals and advisors to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Units from such Member, if such prospective purchaser agrees to be bound by confidentiality restrictions no less protective of the confidential information than those contained in this Section 10.20 ; (iii) to any Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Member in the ordinary course of business, provided, however, that such Person described in the foregoing clauses (i), (ii) or (iii) (A) is not, in the reasonable judgment of the Manager, a competitor of the Company or an officer, employee, or director of, or holder of more than ten percent (10%) of the equity securities of, a competitor of the Company, unless such Person is a bona fide prospective purchaser of Units from a Member, and (B) is informed by the Member that such information is confidential and such Person agrees to be bound by the confidentiality provisions of this section or comparable restrictions to maintain the confidentiality of such information; (iv) to any governmental agency pursuant to a subpoena or order and as reasonably necessary or required during the course of any tax audit, dispute or controversy, or (v) as may otherwise be required by law, provided, however, that the Member promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.

 

Section 10.21 No Recourse.

 

Notwithstanding anything that may be expressed or implied in this Agreement, each of the Company and the Members 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 current or future manager, officer, employee, general or limited partner or equity holder of any Member or of any Affiliate or assignee thereof, 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 current or future officer, agent or employee of any Member or any current or future member of any Member or any current or future manager, officer, employee, partner or member of any Member or of any Affiliate or assignee thereof, as such for any obligation of any Member 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.

 

* * *

 

[Signature Pages to Follow]

 

34

 

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first hereinabove set forth.

 

COMPANY:  
AY DEE KAY, LLC,  
a California limited liability company  
     
By:/s/ Donald McClymont  
 Donald McClymont  
 Chief Executive Officer  

 

MEMBERS:    
Thunder Bridge II Surviving Pubco, Inc.,   /s/ Donald McClymont
a Delaware corporation (which will change   Donald McClymont
its name to indie Semiconductor, Inc.)    
         
  By: /s/ Gary Simanson   /s/ Ichiro Aoki
    Gary Simanson   Ichiro Aoki
    Chief Executive Officer    
         
        /s/ Scott Kee
        Scott Kee
         
        /s/ David Kang
        David Kang

 

Bison Capital Partners IV, L.P..  
  By:  Bison Capital Partners IV GP, L.P., its General Partner
    By: Bison Capital Partners GP LLC,  
      its General Partner  
         
    By: /s/ Peter Macdonald  
    Name:  Peter Macdonald  
    Title: Managing Member  

 

 

 

 

EXHIBIT A

 

DEFINITIONS

 

As used in this Agreement, the following terms will have the following meanings:

 

Act” has the meaning provided in Section 1.3.

 

Additional Member” means a Member who has acquired Units from the Company and who has been admitted as a Member pursuant to Article VIII.

 

Adjusted Capital Account” means, with respect to any Member, such Member’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:(i) credit to such Capital Account any amounts which such Member is obligated or treated as obligated to restore with respect to any deficit balance in such Capital Account pursuant to Section 1.704-1(b)(2)(ii)(c) of the Treasury Regulations, or is deemed to be obligated to restore with respect to any deficit balance pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Treasury Regulations; and (ii) debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and will be interpreted consistently therewith.

 

ADK Principal Owners” means the Class A Members listed on Exhibit B-1.

 

Affiliate” or “Affiliated” shall mean any corporation, firm or other entity that is directly or indirectly controlling, controlled by, or under common control with a party hereto; provided, however, that the Company shall not be deemed to be an Affiliate of any of the Members or any of their respective Affiliates, and no Member or any of its Affiliates shall be deemed to be an Affiliate of the Company. For the purpose of this definition, “control” shall mean the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

 

Agreement” means this Seventh Amended and Restated Operating Agreement and any amendments hereto.

 

Articles of Organization” has the meaning set forth in Section 1.2.

 

Bankruptcy” means with respect to any Person, (i) the inability of such Person generally to pay its debts as such debts become due, or an admission in writing by such Person of its inability to pay its debts generally or a general assignment by such Person for the benefit of creditors; the filing of any petition or answer by such Person seeking to adjudicate it a bankrupt or insolvent, or seeking for itself any liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of such Person or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property; or corporate action taken by such Person to authorize any of the actions set forth above; or (ii) without the consent or acquiescence of such Person, the entering of an order for relief or approving a petition for relief or reorganization or any other petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency, or similar statute, law, or regulation, or the filing of any such petition against such Person which petition shall not be dismissed or stayed within sixty(60) days, or, without the consent or acquiescence of such Person, the entering of an order appointing a trustee, custodian, receiver or liquidator of such Person or of all or any substantial part of the property of such Person which order shall not be dismissed or stayed within sixty (60) days.

 

A-1

 

 

Capital Account” means the capital account established on behalf of each Member on the books of the Company. The Capital Account shall be computed and maintained strictly in accordance with the capital account maintenance rules of Treasury Regulations Section 1.704-1(b)(2)(iv). The Manager shall have the absolute discretion to elect for the Company to revalue assets and to redetermine Capital Accounts to the extent and as permitted under Treasury Regulations Section 1.704-1(b)(2)(iv)(f). In the case of a revaluation of assets, the Manager will revalue assets in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) and Treasury Regulations Section 1.704-1(b)(2)(iv)(h). Upon the Transfer of a Membership Interest in accordance with this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent provided in the rules of Treasury Regulations Section 1.704-1(b)(2)(iv)(l).

 

Capital Contribution” means any contribution to the capital of the Company in cash or other assets or property by a Member.

 

Class A Members” mean those Members that hold Class A Units of the Company.

 

Class B Members” mean those Members that hold Class B Units of the Company.

 

Class B Unit Purchase Agreements” mean those certain agreements between the Company and the Class B Members governing the award, terms and conditions of the Class B Units granted to such Class B Members.

 

Code” means the Internal Revenue Code of 1986 as amended, or corresponding provisions of subsequent superseding federal revenue laws.

 

Company” means Ay Dee Kay, LLC, a California limited liability company.

 

Company Minimum Gain” means “partnership minimum gain” set forth in Section 1.704-2(b)(2) of the Treasury Regulations.

 

Dissolution Event” shall have the meaning set forth in Section 9.1.

 

Distribution” means each distribution made by the Company to a Member, whether in cash, property or securities of the Company and whether by liquidating distribution, redemption, repurchase or otherwise; provided, however, that none of the following shall be a Distribution: any recapitalization, exchange or conversion of Units, and any subdivision (by unit split or otherwise) or any combination (by reverse unit split or otherwise) of any outstanding Units that does not involve (i) a distribution of cash, or (ii) a direct or indirect change in the ownership of the fully diluted equity of the Company.

 

A-2

 

 

Earn Out Event” shall mean the achievement by the Surviving Pubco of the trading levels resulting in an issuance of additional Surviving Pubco shares to Legacy Members under Section 2.5 of the Master Transaction Agreement.

 

Earn Out Provisions” means those provisions in the Master Transaction Agreement whereby certain equity holders of the Company will have a contingent right to receive up to an additional 10,000,000 shares of Class A common stock of Surviving Pubco after the Closing based on the achievement of certain stock price performance thresholds of the Company.

 

Equity Financing Transaction” has the meaning set forth in Section 3.4(d)(i).

 

Exchange Agreements” means those certain Exchange Agreements by and between Surviving Pubco, each ADK Principal Owners and each ADK Non-Contributing Service Providers, dated as of the date hereof, pursuant to which the ADK Principal Owners and the ADK Non-Contributing Service Providers shall have the right to exchange their Class A Units and Class B Units, respectively, for stock in Surviving Pubco, pursuant to the terms and conditions set forth therein.

 

Fair Market Value” means, except as otherwise specifically provided herein, with respect to any property, services or other non-cash asset, the fair market value thereof determined in accordance with Treasury Regulations Section 1.704-1(b)(2)(h). This provision will be applied by the Manager in accordance with these regulations.

 

Fiscal Year” means the Company’s fiscal year. The Company’s fiscal year and taxable year will be the Fiscal Year, unless otherwise required by the Code or Treasury Regulations, as reasonably determined by the Manager.

 

Indemnified Losses” has the meaning set forth in Section 6.1.

 

Indemnitee” has the meaning set forth in Section 6.1.

 

Legacy Members” shall mean those members listed as Legacy Members on Exhibit D.

 

Majority Vote” means the affirmative vote or consent of (1) the Class A Members of record owning more than Fifty Percent (50%) of the Class A Units and (2) the ADK Principal Owners owning more than Fifty Percent (50%) of the Class A Units owned by the ADK Principal Owners.

 

Manager” means Surviving Pubco.

 

Master Transactions Agreement” means that certain Master Transactions Agreement by and among Thunder Bridge II Surviving Pubco. Inc., the Thunder Bridge Surviving Pubco., Inc. Merger Subs described therein, Thunder Bridge Acquisition II, Ltd., Ay Dee Kay LLC, d/b/a indie Semiconductor, each ADK Blocker, ADK Service Provider HoldCo, LLC and Donald Mc, as the Company Securityholder Representative, dated as of December 14, 2020.

 

A-3

 

 

Member” or “Members” means the Members of the Company listed on Exhibit B, including any other Members subsequently admitted as members in accordance with this Agreement and the Act.

 

Member Nonrecourse Debt” means “partner nonrecourse debt” in Treasury Regulations Section 1.704-2(b)(4).

 

Member Nonrecourse Deductions” means “partner nonrecourse deductions” in Treasury Regulations Section 1.704-2(i)(2).

 

Membership Interest” means the entire ownership interest of a Member in the Company at any particular time, including all economic rights and voting rights of the Member in the Company, the right of such Member to any and all benefits to which a Member may be entitled as provided in this Agreement and under law, and the obligations of such Member to comply with all of the terms and provisions set forth in this Agreement and under applicable law, all of which Membership Interest is represented and evidenced by Units.

 

Minimum Gain Attributable to Member Nonrecourse Debt” means “partner nonrecourse debt minimum gain” as determined in accordance with Treasury Regulations Section 1.704-2(i)(2).

 

Nonrecourse Deductions” has the meaning set forth under Sections 1.704-2(b)(1) and (c) of the Treasury Regulations.

 

Nonrecourse Liabilities” has the meaning set forth under Section 1.704-2(b)(3) of the Treasury Regulations.

 

Partnership Representative” means the “partnership representative” of the Company as that term is used in Code Section 6223.

 

Percentage Interest” shall mean the percentage (rounded to the nearest 0.1%) determined for each Member equal to the number of Units held by the Member divided by the number of Units held by all Members. The Percentage Interest of each Member as of the date of this Agreement is set forth beside the Member’s name on Exhibit B in the column “Percentage Interest”. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. In all events, the sum of all Percentage Interests shall total 100%. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members.

 

Permitted Assignee” shall have the meaning provided in Section 7.3.

 

Permitted Transfer” shall have the meaning provided in Section 7.3.

 

Person” means any individual, limited liability company, corporation, partnership, trust or other entity.

 

Profits” and “Losses” shall mean, for each Fiscal Year or other period, the net “book” income or loss of the Company (including revaluation surplus and revaluation loss on a permitted revaluation of partnership assets), computed by excluding all items specially allocated under Paragraph C or Paragraph D of Exhibit “D”. In this regard, the term “book” is used in the sense in which that term is used in Treasury Regulations Section 1.704-1(b)(2)(iv).

 

A-4

 

 

Tax Items” has the meaning set forth in Section D(1) of Exhibit C.

 

Tax Matters Member” means the “tax matters partner” as defined in Section 6231(a)(7) of the Code.

 

Term” has the meaning provided in Section 1.6.

 

Transfer” means the sale, assignment, transfer, mortgage, pledge, hypothecation, encumbrance, exchange or other disposition of any Units of the Company, directly or indirectly, whether or not for value, and whether voluntarily, by operation of law or otherwise, and “Transferred” has the correlative meaning.

 

Treasury Regulations” means the temporary and final regulations issued by the U.S. Treasury Department under the Code, as amended or superseded from time to time.

 

Unit” means a unit representing and evidencing a fractional part of the respective Membership Interest of each Member in the Company, pursuant to Section 2.3.

 

A-5

 

 

EXHIBIT B

 

MEMBERS, CONTRIBUTIONS, AND UNITS 

 

Listed on the books and records of the Company

 

B-1

 

 

EXHIBIT B-1

ADK PRINCIPAL OWNER (CLASS A MEMBERS)

 

 Listed on the books and records of the Company

 

B-1-1

 

 

EXHIBIT B-2

 

CLASS B MEMBERS

 

(As of the Effective Date)

 

Listed on the books and records of the Company

 

B-2-1

 

 

EXHIBIT C
TAXES; ALLOCATIONS; RELATED MATTERS

 

A Profits and Losses Generally.

 

All Profits and Losses of the Company shall be allocated in accordance with “partners’ interests in the partnership” as defined in Treasury Regulations Section 1.704-1(b)(3) and as required by Treasury Regulations Section 1.704-1. The Profits and Losses of the Company (and, at the discretion of the Manager, individual items of Profit and Loss) shall be allocated annually (and at such other times as the tax law may require). Subject to the first sentence of this paragraph, allocations of Profits and Losses Company (and, at the discretion of the Manager, individual items of Profit and Loss) will be made to the Members in such manner that the Adjusted Capital Account balance of each Member, to the greatest extent possible, after this allocation (and recognition of any partner minimum gain or partnership minimum gain) shall be equal to the amount, positive or negative, that would be distributed to such Member (in the case of a positive amount) or for which such Member would be liable to the Company under this Agreement (in the case of a negative amount), if (a) the Company were to sell the assets of the Company for their Adjusted Asset Values, (b) all Company liabilities were satisfied (limited with respect to each nonrecourse liability to the Adjusted Asset Values of the assets securing such liability), (c) the Company were to distribute the proceeds of sale pursuant to Section 4.2(a)(ii) and (d) the Company were to dissolve pursuant to Article IX.

 

A. [Intentionally Omitted.]

 

B. Regulatory Allocations and Other Allocation Rules.

 

Notwithstanding the foregoing, the following special allocations will be made as follows, and, as appropriate, in the following order:

 

(1) Company Minimum Gain Chargeback. If there is a net decrease in Company Minimum Gain for any Fiscal Year (except as a result of conversion or refinancing of Company indebtedness, certain capital contributions or revaluation of the Company’s property as further outlined in Treasury Regulation Sections 1.704-2(d)(4), (f)(2) or (f)(3)), the minimum gain chargeback set forth in Treasury Regulations Section 1.704-2(f) shall apply as if those requirements were expressly set forth in this Agreement.

 

(2) Chargeback of Minimum Gain Attributable to Member Nonrecourse Debt. If there is a net decrease in Minimum Gain Attributable to Member Nonrecourse Debt during any Fiscal Year (other than due to the conversion, refinancing or other change in the debt instrument causing it to become partially or wholly nonrecourse, certain capital contributions, or certain reevaluations of the Company’s property as further outlined in Treasury Regulations Section 1.704-2(i)(4)), the partner nonrecourse debt minimum gain chargeback set forth in Treasury Regulations Section 1.704-2(i) shall apply as if those requirements were expressly set forth in this agreement.

 

(3) Qualified Income Offset. In the event a Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and such Member has an Adjusted Capital Account Deficit, the qualified income offset set forth in Treasury Regulations Section 1.704-2(d) shall apply as if those requirements were expressly set forth in this Agreement.

 

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(4) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year or other applicable period shall be allocated to the Members in accordance with Percentage Interests.

 

(5) Member Nonrecourse Deductions. Member Nonrecourse Deductions for any Fiscal Year or other applicable period shall be specially allocated in accordance with Treasury Regulations Section 1.704-2(i) as if its requirements were set forth explicitly in this Agreement.

 

(6) Varying Interests Rule. Allocations to Members whose interests vary during a year by reason of transfer, redemption, admission, capital contributions, or otherwise, shall be made as determined by the Manager, acting in good faith, in accordance with permissible methods under Code Section 706.

 

(7) Limitations on Losses. Losses allocated pursuant this Agreement shall not exceed the maximum amount of Losses that can be allocated without causing any Member to have a deficit balance in such Member’s Adjusted Capital Account. In the event some but not all of the Members would have deficit balance in such Members’ Adjusted Capital Accounts, Losses not allocated to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Member’s Adjusted Capital Accounts.

 

(8) Forfeiture Allocations. The Company shall make Forfeiture Allocations with respect to any unvested Class B Units that have been forfeited. “Forfeiture Allocations” refer to allocations of loss and deduction as described in REG-105346-03, 70 Fed. Reg. 29675-29683, as it may be amended or supplemented.

 

C. Tax Allocations.

 

(1) Except as otherwise provided in this Agreement, all tax items of income, deduction, gain, or loss of the Company (“Tax Items”) shall be allocated in accordance with “partners’ interests in the partnership” as defined in Treasury Regulations Section 1.704-1(b)(3) and as required by Treasury Regulations Section 1.704-1 and Treasury Regulations Section 1.704-3. Subject to the foregoing and except as specifically provided under Paragraph A and Paragraph C, all tax items of income, deduction, gain, or loss of the Company shall be allocated in accordance with Percentage Interests.

 

(2) If any Company property is subject to Code Section 704(c) or is reflected in the Capital Accounts of the Members and on the books of the Company at a value that differs from the adjusted tax basis of such property, then the Tax Items with respect to such property will be allocated in accordance with Treasury Regulations Section 1.704-1(b)(4)(i) and Treasury Regulations Section 1.704-3 in accordance with the principles of Section 704(c), using the “traditional” method or any other permitted method selected by the Manager.

 

(3) A Member's share of the nonrecourse liabilities of the Company shall equal the sum of (i) the Member's share of partnership minimum gain determined in accordance with the rules of Code Section 704(b) and the Treasury Regulations thereunder, (ii) the amount of any taxable gain that would be allocated to the Member under Code Section 704(c) (or in the same manner as Code Section 704(c) in connection with a revaluation of Company property) if the Company disposed of (in a taxable transaction) all Company property subject to one or more nonrecourse liabilities of the Company in full satisfaction of the liabilities and for no other consideration, (iii) the amount of built-in gain that is allocable to the Member with respect to Code Section 704(c) property (as defined under Treasury Regulations Section 1.704-3(a)(3)(ii) or property for which reverse Code Section 704(c) allocations are applicable (where such property is subject to the nonrecourse liability to the extent that such built-in gain exceeds the gain described clause (ii) above); provided that the liabilities allocated pursuant to this clause (iii) shall be allocated to the greatest extent possible in an amount up to and in proportion to the Members' negative tax capital accounts, and (iv) any excess nonrecourse liabilities not allocated pursuant to the preceding clause (iii)  shall be allocated to the Members in proportion to Percentage Interests or such other permissible method selected by the Manager.

 

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(4) Any payment of foreign tax that may be creditable against any Member’s United States federal income tax liability and any tax credits shall be allocated to the Members in a manner reasonably determined by the Manager, but strictly in accordance with Treasury Regulations Section 1.704-1(b)(2) and any other applicable Treasury Regulations.

 

(5) The Members are aware of the income tax consequences of the allocations made by this Agreement and will report their shares of Profits and Losses and other items of Company, gross income, gain, loss and deduction for income tax purposes consistently with this Agreement and the Form 1065 and Schedules K-1 issued by the Company.

 

D. Tax Classification.

 

The Members intend that the Company shall always be operated in a manner consistent with its treatment as a “partnership” for federal, state and local income and franchise tax purposes. In accordance therewith, (a) no Member shall file any election with any taxing authority to have the Company treated otherwise, and (b) each Member hereby represents, covenants, and warrants that it shall not maintain a position inconsistent with such treatment. The Manager shall not at any time, except as otherwise required by applicable law cause or permit the Company to elect (A) to be excluded from the provisions of Subchapter K of the Code, or (B) to be treated as a corporation or an association taxable as a corporation for any tax purposes. The Manager shall (i) cause the Company to make any election reasonably determined to be necessary or appropriate in order to ensure the treatment of the Company as a partnership for all tax purposes; and (ii) cause the Company to file any required tax returns in a manner consistent with its treatment as a partnership for tax purposes. The Manager shall not take any action or cause any officer or agent or representative of the Company to take any action that would be inconsistent with the treatment of the Company as a partnership for such purposes.

 

E. Annual and Tax Information.

 

The Manager will cause the Company to deliver to each Member, within 90 days after the end of each Fiscal Year, all information with respect to the Company necessary for the preparation of such Member’s federal and state income tax returns.

 

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F. Tax Audit.

 

(1) For fiscal years of the Company beginning before December 31, 2017, these terms shall apply to any audit of the Company:

 

(a) Surviving Pubco shall serve as the Tax Matters Member.

 

(b) If Surviving Pubco is no longer a Member of the Company, then a replacement Tax Matters Member shall be designated by the Manager.

 

(c) Except to the extent specifically provided in the Code or Treasury Regulations (or the laws of other relevant taxing jurisdiction) or otherwise provided herein, the Tax Matters Member in his sole and absolute discretion shall have exclusive authority to act for or on behalf of the Company with regard to tax matters to the extent such matters are reserved to a tax matters partner under the Code and related Treasury Regulations and corresponding provisions of state or local law if any.

 

(d) Any Member entering into a settlement agreement with the Internal Revenue Service that concerns a Company item shall notify the Tax Matters Member of such settlement agreement and its terms within ten (10) days after the date thereof. During any Company income tax audit or other income tax controversy with any governmental agency over which the Tax Matters Member has control, the Tax Matters Member shall keep the other Members informed of all material facts and developments on a reasonably prompt basis.

 

(e) All expenses incurred by the Tax Matters Member on behalf of the Company with respect to any tax matter that does or may affect the Company, or any Member by reason thereof, shall be paid for out of Company assets, These expenses shall be treated as Company expenses; provided however that the Company shall not be obligated to pay any such expenses incurred as a result of the Tax Matters Member’s breach of fiduciary duty, breach of duty of loyalty, bad faith, gross negligence, reckless or intentional misconduct or knowing violation of the law.

 

(f) The Tax Matters Partner shall give prompt notice to the Members upon receipt of advice that the Internal Revenue Service or other taxing authority intends to examine any income tax return, or records or books of the Company and upon the occurrence of any significant developments with respect thereto.

 

(g) If a Member is permitted by the Tax Matters Member or permitted under the Code to participate in Company-level administrative or judicial tax proceedings, such Member shall be responsible for all expenses incurred by it in connection with such participation.

 

(h) The cost of any adjustments to all Members and the cost of any resulting audits or adjustments of Members will be borne solely by the Members without reimbursement by the Company.

 

(2) Tax Audit of the Partnership under Consolidated Tax Audit Rules. The provisions of this Paragraph G(2) will apply to an Audit of the Partnership pursuant to the audit provisions enacted as part of the Centralized Company Audit Regime.

 

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(a) Definitions. These definitions apply for purposes of this Paragraph G(2):

 

(i) Audit. “Audit” means a federal tax audit of the Company and subsequent administrative proceedings and judicial proceedings under the Centralized Company Audit Regime.

 

(ii) Audit Expenses. “Audit Expenses” mean all expenses of the conduct of an Audit. Audit Expenses include the Imputed Underpayment.

 

(iii) Centralized Company Audit Regime. “Centralized Company Audit Regime” means the provisions of the Internal Revenue Code enacted by the Bipartisan Budget Act of 2015, Section 1101, Pub. L. No. 114-74, contained in Subchapter C, Chapter 63, of Subtitle F of Title 26, as these rules may be amended.

 

(iv) Designated Individual. “Designated Individual” means the “designated individual” as that term is used in Treasury Regulations Section 301.6223-1.

 

(v) Imputed Underpayment. “Imputed Underpayment” means the “Imputed Underpayment” of the Partnership as that term is used in Section 6225. For purposes of this Agreement, the “Imputed Underpayment” will include any penalties, interest, and additions to tax with respect to the Imputed Underpayment.

 

(vi) In Good Faith. “In Good Faith” means, to act for a purpose reasonably believed by the Partnership Representative to be in, or not opposed to, the best interests of the Partnership and not any improper personal benefit, without fraud or gross negligence.

 

(vii) Indemnified Audit Claim. “Indemnified Audit Claim” means any civil investigation or civil action undertaken, filed or threatened to be filed against the Partnership Representative before any governmental agency or in a federal or state court or in an arbitration or mediation or similar forum for nonjudicial adjudication in connection with the Partnership Representative’s activities, actions, or status in connection with an Audit.

 

(viii) Indemnified Audit Claim Expenses. “Indemnified Audit Claim Expenses” mean liabilities, costs and expenses related to defense against an Indemnified Audit Claim.

 

(ix) Indemnified Expenses. “Indemnified Expenses” mean liabilities, costs and expenses (other than Indemnified Audit Claim Expenses) related to an Audit incurred In Good Faith.

 

(x) Partnership Representative.. “Partnership Representative” means the “partnership representative” of the Company as the term “partnership representative” is used in Code Section 6223.

 

(b) Selection of Partnership Representative.

 

(i) The Manager will appoint the Partnership Representative. The initial Partnership Representative will be Surviving Pubco.

 

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(ii) The Partnership Representative shall have the power to designate a Designated Individual in accordance with Treasury Regulations Section 301.6223-1. The Designated Individual shall have the powers of the “designated individual” under the Centralized Company Audit Regime, but shall be limited by the limitations set forth in this Agreement on the Partnership Representative.

 

(iii) The Manager can remove the Partnership Representative with or without cause, subject to the rules of the Centralized Company Audit Regime.

 

(iv) The Partnership Representative will serve until replaced by the Manager.

 

(v) The Partnership Representative and any replacement Partnership Representative must meet the qualification requirements under the Centralized Company Audit Regime.

 

(c) General Duties of Partnership Representative.

 

(i) The Partnership Representative will undertake the duties of the “Partnership Representative” for the Partnership under the Code and Regulations.

 

(ii) The Partnership Representative shall defend any audit of the Company and any related administrative or court proceedings using the accountants of the Company and counsel of the Company, as determined by the Manager.

 

(iii) The Partnership Representative shall supervise the Company’s accountants and counsel in connection with an audit of the Company and any related administrative or court proceedings, subject to the overall supervision by the Manager. In any event, the Manager shall have final authority to engage or to discharge accountants and counsel.

 

(iv) The Partnership Representative will have the sole authority to bind the Partnership under Section 6223(b).

 

(v) Subject to the terms of this Agreement, the Partnership Representative shall undertake all duties, have all responsibilities, and shall have all powers of the “partnership representative” of the Company under the Centralized Company Audit Regime.

 

(d) Partnership Representative Will Keep Manager Informed. The Partnership Representative will keep the Manager reasonably apprised on a current basis of all material developments in connection with any Company Audit, administrative proceedings, and judicial proceedings.

 

(e) Partnership Representative Will Follow All Instructions of Manager. The Partnership Representative will follow all instructions of the Manager in connection with the Company Audit, administrative proceedings, and judicial proceedings.

 

(f) Actions Requiring Prior Approval of Manager. The Partnership Representative will undertake these acts only with the prior approval of the Manager:

 

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(i) Scheduling Meetings. To schedule or to attend any meeting with representatives of the Internal Revenue Service, the United States Department of Justice, or state tax authorities.

 

(ii) Written Communications. To make any written filings or to send to the Internal Revenue Service, United States Department of Justice, or state tax authorities any letters, memoranda, responses to information document requests, responses to any requests for admissions, or any other written arguments, responses or communications.

 

(iii) Depositions. To schedule any depositions.

 

(iv) Election Out. To make the “election out” under Section 6221.

 

(v) Push-Out Election. To make the “push-out” election under Section 6226 to apply to the Partnership.

 

(vi) Pull-in Election. To cause the Company to make the “pull-in” election under Section 6225(c)(2)(B).

 

(vii) Administrative Adjustment. To cause the Company to request an administrative adjustment for any Partnership taxable year under Section 6227.

 

(viii) Waive Section 6232(b) Restrictions. To waive the restrictions in Section 6232(b) on the making of any Partnership adjustment.

 

(ix) File Petition for Readjustment in Court. To file a petition for readjustment with the Tax Court, the district court of the United States for the district in which the Partnership’s principal place of business is located, or the Court of Federal Claims.

 

(x) Filings. To make any filings with any court or the appellate division of the Internal Revenue Service.

 

(xi) To Seek Member Information in Connection with Company Audit, Administrative Proceedings, and Judicial Proceedings. To seek information from Members and former Members necessary or reasonably desirable in connection with the Company audit, administrative proceedings, and judicial proceedings.

 

(xii) Extend Period of Limitations on Adjustments. To extend the period of the period of limitations on making adjustments.

 

(xiii) Settlement Agreement. To enter into a settlement agreement or closing agreement with the Internal Revenue Service.

 

(xiv) Amended Tax Returns. To file any amended tax returns for the Company.

 

(xv) Tax Appeal. To file any appeal to an audit determination.

 

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(xvi) Court Action. To file any court action for the determination of the taxes of the Company.

 

(xvii) To File Amended Returns. To cause the Company to file any amended tax returns.

 

(g) Partnership Representative Will Keep Manager Informed. The Partnership Representative will inform the Manager on a current basis of all material developments in connection with any Company Audit, administrative proceedings, and judicial proceedings.

 

(h) Manager May Remove and Replace Partnership Representative. The Manager may remove the Partnership Representative and appoint a successor Partnership Representative, with or without cause and with or without prior notice. Notwithstanding the foregoing, the removal and selection of the successor Partnership Representative will be effective only as provided in controlling Treasury Regulations.

 

(i) Partnership Representative May Resign. The Partnership Representative may resign as Partnership Representative’s on 30-days’ advance written notice to the Manager. Notwithstanding the foregoing, the resignation and selection of the successor Partnership Representative will be effective only as provided in controlling Treasury Regulations.

 

(j) Delivery of Files on Removal or Resignation. The Partnership Representative may resign or be removed. In that event, the former Partnership Representative promptly will deliver to the Manager all of the Partnership Representative’s written and electronic files and writings with respect to the Partnership Representative’s position.

 

(k) Manager May Elect Successor Partnership Representative. The Manager may elect a successor Partnership Representative at any time at which the office of Partnership Representative is vacant.

 

(l) Member Cooperation in Connection With Company Audits. Each Member and former Member will fully cooperate with the Partnership Representative in connection with Company Audits.

 

(m) Allocation of Audit Expenses. The Partnership Representative may allocate, In Good Faith, Audit Expenses and reasonably expected Audit Expenses equitably among current and former Members.

 

(n) Contribution of Imputed Underpayment.

 

(i) Election Out. The Manager, in their discretion, may reasonably determine any imputed underpayment imposed on the Company pursuant to Code Section 6232 (and any related interest, penalties or other additions to tax) that is attributable to one or more Members or former Members.

 

(ii) Contribution by Members. At the discretion of the Manager, the Manager shall require that such Members promptly pay to the Company the imputed underpayment (pro rata in proportion to their respective shares of such imputed underpayment, as reasonably determined by the Manager) within fifteen days following the Partnership Representative’s request for payment.

 

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(iii) Failure to Pay. Any failure of a Member or former Member to pay such amount shall result in a subsequent reduction in Distributions otherwise payable to such Members or former Members plus interest on such amount calculated at the Prime Rate plus two percent (2%)).

 

(iv) Allocation of Imputed Underpayment. In making the determination of which Members (including former Members) should contribute a share of the imputed underpayment, the Manager will allocate any imputed underpayment imposed on the Company (and any related interest, penalties, additions to tax and audit costs) among the Members and former Members in good faith taking into account each Member’s particular status, including, for the avoidance of doubt, a Member’s tax-exempt status.

 

(v) Imputed Underpayment of Lower-Tier Entity. Any amounts that the Company is required to contribute to any passthrough entity in which it owns an interest (a “Lower-Tier Entity”) with respect to taxes of the Lower-Tier Entity (“Lower-Tier Taxes”) that the Manager reasonably determines is reasonably allocable to one or more Members or former Members shall be treated as an imputed underpayment of the Company.

 

(A) In the discretion of the Manager, this amount shall be promptly paid by such Members or former Members to the Company (pro rata in proportion to their respective shares of “Lower-Tier Taxes” as determined by the Manager) within fifteen days following the Manager’ request for payment. Any failure to pay such amount shall result in a subsequent reduction in Distributions otherwise payable to such Members or former Members plus interest on such amount calculated at the Prime Rate plus two percent (2%)).

 

(B) In making the determination of which Members or former Members (including former Members or former Members) are liable for any “Lower-Tier Taxes”, the Manager will allocate any “Lower-Tier Taxes” among the Members or former Members in good faith taking into account each Member’s particular status, including, for the avoidance of doubt, a Member’s tax-exempt status.

 

(C) All of the indemnification provisions of Article VI shall apply to the Manager and the Manager shall have no liability to the Company or any Member for any loss suffered by the Company or any Member that arises out of any action or inaction of the Manager, unless such action or inaction is adjudicated by a court of competent jurisdiction to constitute bad faith, actual fraud, gross negligence or willful misconduct by the Manager.

 

(o) Audit Notification. The Partnership Representative will provide prompt written notification to each Member in the event of any audit of the Company by the United States Internal Revenue Service.

 

(p) Member Contribution for Audit Expenses. At the Manager’ option, the Partnership may require each current and former Member to contribute to the Partnership the current or former Member’s share of the Audit Expenses and reasonably expected Audit Expenses as so allocated.

 

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(q) Member Covenant Not to Sue. No current or former Member will sue (and neither the Partnership nor any current and former Member or other Member will have any claim against) the Tax Matters Partner, the Partnership Representative, the Manager, or the Company on account of any act or failure to act by the Tax Matters Partner, the Partnership Representative, the Manager, or the Company in connection with an Audit.

 

(r) Partnership Indemnification against Expenses. The Partnership will indemnify and will hold harmless the Partnership Representative from and against any and all Indemnified Audit Claim Expenses and Indemnified Expenses.

 

(s) Survival of Audit Provisions. Each Member agrees that the provisions of this Paragraph G will survive the termination of the Partnership and the termination of any Member’s interest in the Partnership.

 

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EXHIBIT D
LEGACY MEMBERS

 

The Legacy Members are:

 

Scott Kee

 

Ichiro Aoki

 

Donald McClymont

 

David Kang

 

Bison Capital Partners IV, L.P

 

 

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Exhibit 10.3

 

 

 

 

 

 

 

 

 

 

 

INDIE SEMICONDUCTOR, INC.

 

2021 OMNIBUS EQUITY INCENTIVE PLAN

 

 

 

 

 

 

 

 

 

 

 

 

Effective June 10, 2021

 

Approved by Shareholders of Thunder Bridge Acquisition II, Ltd. (the predecessor by mergers to indie Semiconductor, Inc.) on June 9, 2021

 

 

 

INDIE SEMICONDUCTOR, INC.
2021 OMNIBUS EQUITY INCENTIVE PLAN

 

Article I
PURPOSE

 

The purpose of this indie Semiconductor, Inc. 2021 Omnibus Equity Incentive Plan (the “Plan”) is to benefit indie Semiconductor, Inc., a Delaware corporation (the “Company”) and its stockholders, by assisting the Company and its subsidiaries to attract, retain and provide incentives to key management employees, directors, and consultants of the Company and its Affiliates, and to align the interests of such service providers with those of the Company’s stockholders. Accordingly, the Plan provides for the granting of Non-qualified Stock Options, Incentive Stock Options, Restricted Stock Awards, Restricted Stock Unit Awards, Stock Appreciation Rights, Performance Stock Awards, Performance Unit Awards, Unrestricted Stock Awards, Distribution Equivalent Rights or any combination of the foregoing.

 

Article II
DEFINITIONS

 

The following definitions shall be applicable throughout the Plan unless the context otherwise requires:

 

2.1 “Affiliate” shall mean any corporation which, with respect to the Company, is a “subsidiary corporation” within the meaning of Section 424(f) of the Code or other entity in which the Company has a controlling interest in such entity or another entity which is part of a chain of entities in which the Company or each entity has a controlling interest in another entity in the unbroken chain of entities ending with the applicable entity.

 

2.2 “Award” shall mean, individually or collectively, any Option, Restricted Stock Award, Restricted Stock Unit Award, Performance Stock Award, Performance Unit Award, Stock Appreciation Right, Distribution Equivalent Right or Unrestricted Stock Award.

 

2.3 “Award Agreement” shall mean a written agreement between the Company and the Holder with respect to an Award, setting forth the terms and conditions of the Award, as amended.

 

2.4 “Board” shall mean the Board of Directors of the Company.

 

2.5 “Base Value” shall have the meaning given to such term in Section 14.2.

 

 

 

2.6 “Cause” shall mean (i) if the Holder is a party to an employment or service agreement with the Company or an Affiliate which agreement defines “Cause” (or a similar term), “Cause” shall have the same meaning as provided for in such agreement, or (ii) for a Holder who is not a party to such an agreement, “Cause” shall mean termination by the Company or an Affiliate of the employment (or other service relationship) of the Holder by reason of the Holder’s (A) intentional failure to perform reasonably assigned duties, (B) dishonesty or willful misconduct in the performance of the Holder’s duties, (C) involvement in a transaction which is materially adverse to the Company or an Affiliate, (D) breach of fiduciary duty involving personal profit, (E) willful violation of any law, rule, regulation or court order (other than misdemeanor traffic violations and misdemeanors not involving misuse or misappropriation of money or property), (F) commission of an act of fraud or intentional misappropriation or conversion of any asset or opportunity of the Company or an Affiliate, or (G) material breach of any provision of the Plan or the Holder’s Award Agreement or any other written agreement between the Holder and the Company or an Affiliate, in each case as determined in good faith by the Board, the determination of which shall be final, conclusive and binding on all parties.

 

2.7 “Change of Control” shall mean, except as otherwise provided in an Award Agreement, (i) for a Holder who is a party to an employment or consulting agreement with the Company or an Affiliate which agreement defines “Change of Control” (or a similar term), “Change of Control” shall have the same meaning as provided for in such agreement, or (ii) for a Holder who is not a party to such an agreement, “Change of Control” shall mean the satisfaction of any one or more of the following conditions (and the “Change of Control” shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have been satisfied):

 

(a) Any person (as such term is used in paragraphs 13(d) and 14(d)(2) of the Exchange Act, hereinafter in this definition, “Person”), other than the Company or an Affiliate or an employee benefit plan of the Company or an Affiliate, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities;

 

(b) The closing of a merger, consolidation or other business combination (a “Business Combination”) other than a Business Combination in which holders of the Shares immediately prior to the Business Combination have substantially the same proportionate ownership of the common stock or ordinary shares, as applicable, of the surviving corporation immediately after the Business Combination as immediately before;

 

(c) The closing of an agreement for the sale or disposition of all or substantially all of the Company’s assets to any entity that is not an Affiliate;

 

(d) The approval by the holders of shares of Shares of a plan of complete liquidation of the Company, other than a merger of the Company into any subsidiary or a liquidation as a result of which persons who were stockholders of the Company immediately prior to such liquidation have substantially the same proportionate ownership of shares of common stock or ordinary shares, as applicable, of the surviving corporation immediately after such liquidation as immediately before; or

 

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(e) Within any twenty-four (24) month period, the Incumbent Directors shall cease to constitute at least a majority of the Board or the board of directors of any successor to the Company; provided, however, that any director elected to the Board, or nominated for election, by a majority of the Incumbent Directors then still in office, shall be deemed to be an Incumbent Director for purposes of this paragraph (e), but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, entity or “group” other than the Board (including, but not limited to, any such assumption that results from paragraphs (a), (b), (c), or (d) of this definition).

 

Unless otherwise provided in an applicable Award Agreement, solely for the purpose of determining the timing of any payments pursuant to any Award constituting a “deferral of compensation” subject to Code Section 409A, a Change of Control shall be limited to a “change in the ownership of the Company,” a “change in the effective control of the Company,” or a “change in the ownership of a substantial portion of the assets of the Company” as such terms are defined in Section 1.409A-3(i)(5) of the U.S. Treasury Regulations.

 

2.8 “Code” shall mean the United States of America Internal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code shall be deemed to include any amendments or successor provisions to any section and any regulation under such section.

 

2.9 “Committee” shall mean a committee comprised of two (2) or more members of the Board who are selected by the Board as provided in Section 4.1.

 

2.10  “Company” shall have the meaning given to such term in the introductory paragraph, including any successor thereto.

 

2.11 “Consultant” shall mean any natural person that provides bona fide services as an independent contractor and who qualifies as a consultant or advisor under Instruction A.1.(a)(1) of Form S-8 of the Securities Act of 1933, as amended.

 

2.12 “Director” shall mean a member of the Board or a member of the board of directors of an Affiliate, in either case, who is not an Employee.

 

2.13 “Distribution Equivalent Right” shall mean an Award granted under Article XIII of the Plan which entitles the Holder to receive bookkeeping credits, cash payments and/or Share distributions equal in amount to the distributions that would have been made to the Holder had the Holder held a specified number of Shares during the period the Holder held the Distribution Equivalent Right.

 

2.14 “Distribution Equivalent Right Award Agreement” shall mean a written agreement between the Company and a Holder with respect to a Distribution Equivalent Right Award.

 

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2.15  “Effective Date” shall mean June 10, 2021.

 

2.16 “Employee” shall mean any employee, including any officer, of the Company or an Affiliate.

 

2.17 “Exchange Act” shall mean the United States of America Securities Exchange Act of 1934, as amended.

 

2.18 “Fair Market Value” shall mean, as of any specified date, the closing sales price of the Shares for such date (or, in the event that the Shares are not traded on such date, on the immediately preceding trading date) on the NASDAQ Stock Market (“NASDAQ”), as reported by NASDAQ, or such other domestic or foreign national securities exchange on which the Shares may be listed. If the Shares are not listed on NASDAQ or on a national securities exchange, but are quoted on the OTC Bulletin Board or by the National Quotation Bureau, the Fair Market Value of the Shares shall be the mean of the highest bid and lowest asked prices per Share for such date. If the Shares are not quoted or listed as set forth above, Fair Market Value shall be determined by the Board in good faith by any fair and reasonable means (which means may be set forth with greater specificity in the applicable Award Agreement). The Fair Market Value of property other than Shares shall be determined by the Board in good faith by any fair and reasonable means consistent with the requirements of applicable law.

 

2.19 “Family Member” of an individual shall mean any child, stepchild, grandchild, parent, stepparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, any person sharing the Holder’s household (other than a tenant or employee of the Holder), a trust in which such persons have more than fifty percent (50%) of the beneficial interest, a foundation in which such persons (or the Holder) control the management of assets, and any other entity in which such persons (or the Holder) own more than fifty percent (50%) of the voting interests.

 

2.20 “Holder” shall mean an Employee, Director or Consultant who has been granted an Award or any such individual’s beneficiary, estate or representative, who has acquired such Award in accordance with the terms of the Plan, as applicable.

 

2.21  “Incentive Stock Option” shall mean an Option which is intended by the Committee to constitute an “incentive stock option” and conforms to the applicable provisions of Section 422 of the Code.

 

2.22 “Incumbent Director” shall mean, with respect to any period of time specified under the Plan for purposes of determining whether or not a Change of Control has occurred, the individuals who were members of the Board at the beginning of such period.

 

2.23 “Non-qualified Stock Option” shall mean an Option which is not an Incentive Stock Option or which is designated as an Incentive Stock Option but does not meet the applicable requirements of Section 422 of the Code.

 

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2.24 “Option” shall mean an Award granted under Article VII of the Plan of an option to purchase Shares and shall include both Incentive Stock Options and Non-qualified Stock Options.

 

2.25 “Option Agreement” shall mean a written agreement between the Company and a Holder with respect to an Option.

 

2.26 “Performance Criteria” shall mean the criteria selected by the Committee for purposes of establishing the Performance Goal(s) for a Holder for a Performance Period.

 

2.27 “Performance Goals” shall mean, for a Performance Period, the written goal or goals established by the Committee for the Performance Period based upon the Performance Criteria, which may be related to the performance of the Holder, the Company or an Affiliate.

 

2.28 “Performance Period” shall mean one or more periods of time, which may be of varying and overlapping durations, selected by the Committee, over which the attainment of the Performance Goals shall be measured for purposes of determining a Holder’s right to, and the payment of, a Performance Stock Award or a Performance Unit Award.

 

2.29 “Performance Stock Award” or “Performance Stock” shall mean an Award granted under Article XII of the Plan under which, upon the satisfaction of predetermined Performance Goals, Shares are paid to the Holder.

 

2.30 “Performance Stock Agreement” shall mean a written agreement between the Company and a Holder with respect to a Performance Stock Award.

 

2.31  “Performance Unit Award” or “Performance Unit” shall mean an Award granted under Article XI of the Plan under which, upon the satisfaction of predetermined Performance Goals, a cash payment shall be made to the Holder, based on the number of Units awarded to the Holder.

 

2.32 “Performance Unit Agreement” shall mean a written agreement between the Company and a Holder with respect to a Performance Unit Award.

 

2.33 “Plan” shall mean this indie Semiconductor, Inc. 2021 Omnibus Equity Incentive Plan, as amended from time to time, together with each of the Award Agreements utilized hereunder.

 

2.34 “Restricted Stock Award” and “Restricted Stock” shall mean an Award granted under Article VIII of the Plan of Shares, the transferability of which by the Holder is subject to Restrictions.

 

2.35 “Restricted Stock Agreement” shall mean a written agreement between the Company and a Holder with respect to a Restricted Stock Award.

 

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2.36 “Restricted Stock Unit Award” and “RSUs” shall refer to an Award granted under Article X of the Plan under which, upon the satisfaction of predetermined individual service-related vesting requirements, a payment in cash or Shares shall be made to the Holder, based on the number of Units awarded to the Holder.

 

2.37 “Restricted Stock Unit Agreement” shall mean a written agreement between the Company and a Holder with respect to a Restricted Stock Award.

 

2.38  “Restriction Period” shall mean the period of time for which Shares subject to a Restricted Stock Award shall be subject to Restrictions, as set forth in the applicable Restricted Stock Agreement.

 

2.39 “Restrictions” shall mean the forfeiture, transfer and/or other restrictions applicable to Shares awarded to an Employee, Director or Consultant under the Plan pursuant to a Restricted Stock Award and set forth in a Restricted Stock Agreement.

 

2.40 “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act, as such may be amended from time to time, and any successor rule, regulation or statute fulfilling the same or a substantially similar function.

 

2.41 “Shares” or “Stock” shall mean the Class A common stock of the Company, par value $0.0001 per share.

 

2.42 “Stock Appreciation Right” or “SAR” shall mean an Award granted under Article XIV of the Plan of a right, granted alone or in connection with a related Option, to receive a payment equal to the increase in value of a specified number of Shares between the date of Award and the date of exercise.

 

2.43 “Stock Appreciation Right Agreement” shall mean a written agreement between the Company and a Holder with respect to a Stock Appreciation Right.

 

2.44 “Tandem Stock Appreciation Right” shall mean a Stock Appreciation Right granted in connection with a related Option, the exercise of some or all of which results in termination of the entitlement to purchase some or all of the Shares under the related Option, all as set forth in Article XIV.

 

2.45  “Ten Percent Stockholder” shall mean an Employee who, at the time an Option is granted to him or her, owns shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or of any parent corporation or subsidiary corporation thereof (both as defined in Section 424 of the Code), within the meaning of Section 422(b)(6) of the Code.

 

2.46 “Termination of Service” shall mean a termination of a Holder’s employment with, or status as a Director or Consultant of, the Company or an Affiliate, as applicable, for any reason, including, without limitation, Total and Permanent Disability or death, except as provided in Section 6.4. In the event Termination of Service shall constitute a payment event with respect to any Award subject to Code Section 409A, Termination of Service shall only be deemed to occur upon a “separation from service” as such term is defined under Code Section 409A and applicable authorities.

 

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2.47 “Total and Permanent Disability” of an individual shall mean the inability of such individual to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months, within the meaning of Section 22(e)(3) of the Code.

 

2.48 “Unit” shall mean a bookkeeping unit, which represents such monetary amount as shall be designated by the Committee in each Performance Unit Agreement, or represents one Share for purposes of each Restricted Stock Unit Award.

 

2.49 “Unrestricted Stock Award” shall mean an Award granted under Article IX of the Plan of Shares which are not subject to Restrictions.

 

2.50 “Unrestricted Stock Agreement” shall mean a written agreement between the Company and a Holder with respect to an Unrestricted Stock Award.

 

Article III
EFFECTIVE DATE OF PLAN

 

The Plan shall be effective as of the Effective Date, provided that the Plan is approved by the stockholders of the Company within twelve (12) months of such date.

 

Article IV
ADMINISTRATION

 

4.1 Composition of Committee. The Plan shall be administered by the Committee, which shall be appointed by the Board. If necessary, in the Board’s discretion, to comply with Rule 16b-3 under the Exchange Act or relevant securities exchange or inter-dealer quotation service, the Committee shall consist solely of two (2) or more Directors who are each (i) “non-employee directors” within the meaning of Rule 16b-3 and (ii) “independent” for purposes of any applicable listing requirements;. If a member of the Committee shall be eligible to receive an Award under the Plan, such Committee member shall have no authority hereunder with respect to his or her own Award.

 

4.2 Powers. Subject to the other provisions of the Plan, the Committee shall have the sole authority, in its discretion, to make all determinations under the Plan, including but not limited to (i) determining which Employees, Directors or Consultants shall receive an Award, (ii) the time or times when an Award shall be made (the date of grant of an Award shall be the date on which the Award is awarded by the Committee), (iii) what type of Award shall be granted, (iv) the term of an Award, (v) the date or dates on which an Award vests, (vi) the form of any payment to be made pursuant to an Award, (vii) the terms and conditions of an Award (including the forfeiture of the Award, and/or any financial gain, if the Holder of the Award violates any applicable restrictive covenant thereof), (viii) the Restrictions under a Restricted Stock Award, (ix) the number of Shares which may be issued under an Award, (x) Performance Goals applicable to any Award and certification of the achievement of such goals, and (xi) the waiver of any Restrictions or Performance Goals, subject in all cases to compliance with applicable laws. In making such determinations the Committee may take into account the nature of the services rendered by the respective Employees, Directors and Consultants, their present and potential contribution to the Company’s (or the Affiliate’s) success and such other factors as the Committee in its discretion may deem relevant.

 

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4.3 Additional Powers. The Committee shall have such additional powers as are delegated to it under the other provisions of the Plan. Subject to the express provisions of the Plan, the Committee is authorized to construe the Plan and the respective Award Agreements executed hereunder, to prescribe such rules and regulations relating to the Plan as it may deem advisable to carry out the intent of the Plan, to determine the terms, restrictions and provisions of each Award and to make all other determinations necessary or advisable for administering the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in any Award Agreement in the manner and to the extent the Committee shall deem necessary, appropriate or expedient to carry it into effect. The determinations of the Committee on the matters referred to in this Article IV shall be conclusive and binding on the Company and all Holders.

 

4.4 Committee Action. Subject to compliance with all applicable laws, action by the Committee shall require the consent of a majority of the members of the Committee, expressed either orally at a meeting of the Committee or in writing in the absence of a meeting. No member of the Committee shall have any liability for any good faith action, inaction or determination in connection with the Plan.

 

Article V
SHARES SUBJECT TO PLAN AND LIMITATIONS THEREON

 

5.1 Authorized Shares and Award Limits. The Committee may from time to time grant Awards to one or more Employees, Directors and/or Consultants determined by it to be eligible for participation in the Plan in accordance with the provisions of Article VI. Subject to Article XV, the aggregate number of Shares that may be issued under the Plan shall not exceed ten million, three hundred sixty-eight thousand, seven hundred and fifty (10,368,750) Shares. Shares shall be deemed to have been issued under the Plan solely to the extent actually issued and delivered pursuant to an Award. To the extent that an Award lapses, expires, is canceled, is terminated unexercised or ceases to be exercisable for any reason, or the rights of its Holder terminate, any Shares subject to such Award shall again be available for the grant of a new Award. Notwithstanding any provision in the Plan to the contrary, the maximum number of Shares that may be subject to Awards of Incentive Stock Options shall not be more than ten million, three hundred sixty-eight thousand, seven hundred and fifty (10,368,750) Shares (subject to adjustment in the same manner as provided in Article XV with respect to Shares subject to Awards then outstanding).

 

5.2 Types of Shares. The Shares to be issued pursuant to the grant or exercise of an Award may consist of authorized but unissued Shares, Shares purchased on the open market or Shares previously issued and outstanding and reacquired by the Company.

 

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Article VI
ELIGIBILITY AND TERMINATION OF SERVICE

 

6.1 Eligibility. Awards made under the Plan may be granted solely to individuals who, at the time of grant, are Employees, Directors or Consultants. An Award may be granted on more than one occasion to the same Employee, Director or Consultant, and, subject to the limitations set forth in the Plan, such Award may include, a Non-qualified Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, an Unrestricted Stock Award, a Distribution Equivalent Right Award, a Performance Stock Award, a Performance Unit Award, a Stock Appreciation Right, a Tandem Stock Appreciation Right, or any combination thereof, and solely for Employees, an Incentive Stock Option.

 

6.2 Termination of Service. Except to the extent inconsistent with the terms of the applicable Award Agreement and/or the provisions of Section 6.3 or 6.4, the following terms and conditions shall apply with respect to a Holder’s Termination of Service with the Company or an Affiliate, as applicable:

 

(a) The Holder’s rights, if any, to exercise any then exercisable Options and/or Stock Appreciation Rights shall terminate:

 

(i) If such termination is for a reason other than the Holder’s Total and Permanent Disability or death, ninety (90) days after the date of such Termination of Service;

 

(ii) If such termination is on account of the Holder’s Total and Permanent Disability, one (1) year after the date of such Termination of Service; or

 

(iii) If such termination is on account of the Holder’s death, one (1) year after the date of the Holder’s death.

 

Upon such applicable date the Holder (and such Holder’s estate, designated beneficiary or other legal representative) shall forfeit any rights or interests in or with respect to any such Options and Stock Appreciation Rights. Notwithstanding the foregoing, the Committee, in its sole discretion, may provide for a different time period in the Award Agreement, or may extend the time period, following a Termination of Service, during which the Holder has the right to exercise any vested Non-qualified Stock Option or Stock Appreciation Right, which time period may not extend beyond the expiration date of the Award term.

 

(b) In the event of a Holder’s Termination of Service for any reason prior to the actual or deemed satisfaction and/or lapse of the Restrictions, vesting requirements, terms and conditions applicable to a Restricted Stock Award and/or Restricted Stock Unit Award, such Restricted Stock and/or RSUs shall immediately be canceled, and the Holder (and such Holder’s estate, designated beneficiary or other legal representative) shall forfeit any rights or interests in and with respect to any such Restricted Stock and/or RSUs.

 

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6.3 Special Termination Rule. Except to the extent inconsistent with the terms of the applicable Award Agreement, and notwithstanding anything to the contrary contained in this Article VI, if a Holder’s employment with, or status as a Director of, the Company or an Affiliate shall terminate, and if, within ninety (90) days of such termination, such Holder shall become a Consultant, such Holder’s rights with respect to any Award or portion thereof granted thereto prior to the date of such termination may be preserved, if and to the extent determined by the Committee in its sole discretion, as if such Holder had been a Consultant for the entire period during which such Award or portion thereof had been outstanding. Should the Committee effect such determination with respect to such Holder, for all purposes of the Plan, such Holder shall not be treated as if his or her employment or Director status had terminated until such time as his or her Consultant status shall terminate, in which case his or her Award, as it may have been reduced in connection with the Holder’s becoming a Consultant, shall be treated pursuant to the provisions of Section 6.2, provided, however, that any such Award which is intended to be an Incentive Stock Option shall, upon the Holder’s no longer being an Employee, automatically convert to a Non-qualified Stock Option. Should a Holder’s status as a Consultant terminate, and if, within ninety (90) days of such termination, such Holder shall become an Employee or a Director, such Holder’s rights with respect to any Award or portion thereof granted thereto prior to the date of such termination may be preserved, if and to the extent determined by the Committee in its sole discretion, as if such Holder had been an Employee or a Director, as applicable, for the entire period during which such Award or portion thereof had been outstanding, and, should the Committee effect such determination with respect to such Holder, for all purposes of the Plan, such Holder shall not be treated as if his or her Consultant status had terminated until such time as his or her employment with the Company or an Affiliate, or his or her Director status, as applicable, shall terminate, in which case his or her Award shall be treated pursuant to the provisions of Section 6.2.

 

6.4 Termination of Service for Cause. Notwithstanding anything in this Article VI or elsewhere in the Plan to the contrary, and unless a Holder’s Award Agreement specifically provides otherwise, in the event of a Holder’s Termination of Service for Cause, all of such Holder’s then outstanding Awards shall expire immediately and be forfeited in their entirety upon such Termination of Service.

 

Article VII
OPTIONS

 

7.1 Option Period. The term of each Option shall be as specified in the Option Agreement; provided, however, that except as set forth in Section 7.3, no Option shall be exercisable after the expiration of ten (10) years from the date of its grant.

 

7.2 Limitations on Exercise of Option. An Option shall be exercisable in whole or in such installments and at such times as specified in the Option Agreement

 

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7.3 Special Limitations on Incentive Stock Options. To the extent that the aggregate Fair Market Value (determined at the time the respective Incentive Stock Option is granted) of Shares with respect to which Incentive Stock Options are exercisable for the first time by an individual during any calendar year under all plans of the Company and any parent corporation or subsidiary corporation thereof (both as defined in Section 424 of the Code) which provide for the grant of Incentive Stock Options exceeds One Hundred Thousand Dollars ($100,000) (or such other individual limit as may be in effect under the Code on the date of grant), the portion of such Incentive Stock Options that exceeds such threshold shall be treated as Non-qualified Stock Options. The Committee shall determine, in accordance with applicable provisions of the Code, Treasury Regulations and other administrative pronouncements, which of a Holder’s Options, which were intended by the Committee to be Incentive Stock Options when granted to the Holder, will not constitute Incentive Stock Options because of such limitation, and shall notify the Holder of such determination as soon as practicable after such determination. No Incentive Stock Option shall be granted to an Employee if, at the time the Incentive Stock Option is granted, such Employee is a Ten Percent Stockholder, unless (i) at the time such Incentive Stock Option is granted the Option price is at least one hundred ten percent (110%) of the Fair Market Value of the Shares subject to the Incentive Stock Option, and (ii) such Incentive Stock Option by its terms is not exercisable after the expiration of five (5) years from the date of grant. No Incentive Stock Option shall be granted more than ten (10) years from the earlier of the Effective Date or date on which the Plan is approved by the Company’s stockholders. The designation by the Committee of an Option as an Incentive Stock Option shall not guarantee the Holder that the Option will satisfy the applicable requirements for “incentive stock option” status under Section 422 of the Code.

 

7.4 Option Agreement. Each Option shall be evidenced by an Option Agreement in such form and containing such provisions not inconsistent with the other provisions of the Plan as the Committee from time to time shall approve, including, but not limited to, provisions intended to qualify an Option as an Incentive Stock Option. An Option Agreement may provide for the payment of the Option price, in whole or in part, by the delivery of a number of Shares (plus cash if necessary) that have been owned by the Holder for at least six (6) months and having a Fair Market Value equal to such Option price, or such other forms or methods as the Committee may determine from time to time, in each case, subject to such rules and regulations as may be adopted by the Committee. Each Option Agreement shall, solely to the extent inconsistent with the provisions of Sections 6.2, 6.3, and 6.4, as applicable, specify the effect of Termination of Service on the exercisability of the Option. Moreover, without limiting the generality of the foregoing, a Non-qualified Stock Option Agreement may provide for a “cashless exercise” of the Option, in whole or in part, by (a) establishing procedures whereby the Holder, by a properly-executed written notice, directs (i) an immediate market sale or margin loan as to all or a part of Shares to which he is entitled to receive upon exercise of the Option, pursuant to an extension of credit by the Company to the Holder of the Option price, (ii) the delivery of the Shares from the Company directly to a brokerage firm and (iii) the delivery of the Option price from sale or margin loan proceeds from the brokerage firm directly to the Company, or (b) reducing the number of Shares to be issued upon exercise of the Option by the number of such Shares having an aggregate Fair Market Value equal to the Option price (or portion thereof to be so paid) as of the date of the Option’s exercise. An Option Agreement may also include provisions relating to: (i) subject to the provisions hereof, accelerated vesting of Options, including but not limited to, upon the occurrence of a Change of Control, (ii) tax matters (including provisions covering any applicable Employee wage withholding requirements) and (iii) any other matters not inconsistent with the terms and provisions of the Plan that the Committee shall in its sole discretion determine. The terms and conditions of the respective Option Agreements need not be identical.

 

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7.5 Option Price and Payment. The price at which an Share may be purchased upon exercise of an Option shall be determined by the Committee; provided, however, that such Option price (i) shall not be less than the Fair Market Value of an Share on the date such Option is granted (or 110% of Fair Market Value for an Incentive Stock Option held by Ten Percent Stockholder, as provided in Section 7.3), and (ii) shall be subject to adjustment as provided in Article XV. The Option or portion thereof may be exercised by delivery of an irrevocable notice of exercise to the Company. The Option price for the Option or portion thereof shall be paid in full in the manner prescribed by the Committee as set forth in the Plan and the applicable Option Agreement, which manner, with the consent of the Committee, may include the withholding of Shares otherwise issuable in connection with the exercise of the Option. Separate share certificates shall be issued by the Company for those Shares acquired pursuant to the exercise of an Incentive Stock Option and for those Shares acquired pursuant to the exercise of a Non-qualified Stock Option.

 

7.6 Stockholder Rights and Privileges. The Holder of an Option shall be entitled to all the privileges and rights of a stockholder of the Company solely with respect to such Shares as have been purchased under the Option and for which share certificates have been registered in the Holder’s name.

 

7.7 Options and Rights in Substitution for Stock or Options Granted by Other Corporations. Options may be granted under the Plan from time to time in substitution for stock options held by individuals employed by entities who become Employees, Directors or Consultants as a result of a merger or consolidation of the employing entity with the Company or any Affiliate, or the acquisition by the Company or an Affiliate of the assets of the employing entity, or the acquisition by the Company or an Affiliate of stock or shares of the employing entity with the result that such employing entity becomes an Affiliate. Any substitute Awards granted under this Plan shall not reduce the number of Shares authorized for grant under the Plan.

 

7.8 Prohibition Against RePricing. Except to the extent (i) approved in advance by holders of a majority of the shares of the Company entitled to vote generally in the election of directors, or (ii) as a result of any Change of Control or any adjustment as provided in Article XV, the Committee shall not have the power or authority to reduce, whether through amendment or otherwise, the exercise price under any outstanding Option or Stock Appreciation Right, or to grant any new Award or make any payment of cash in substitution for or upon the cancellation of Options and/or Stock Appreciation Rights previously granted.

 

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Article VIII
RESTRICTED STOCK AWARDS

 

8.1 Award. A Restricted Stock Award shall constitute an Award of Shares to the Holder as of the date of the Award which are subject to a “substantial risk of forfeiture” as defined under Section 83 of the Code during the specified Restriction Period. At the time a Restricted Stock Award is made, the Committee shall establish the Restriction Period applicable to such Award. Each Restricted Stock Award may have a different Restriction Period, in the discretion of the Committee. The Restriction Period applicable to a particular Restricted Stock Award shall not be changed except as permitted by Section 8.2.

 

8.2 Terms and Conditions. At the time any Award is made under this Article VIII, the Company and the Holder shall enter into a Restricted Stock Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate. The Company shall cause the Shares to be issued in the name of Holder, either by book-entry registration or issuance of one or more stock certificates evidencing the Shares, which Shares or certificates shall be held by the Company or the stock transfer agent or brokerage service selected by the Company to provide services for the Plan. The Shares shall be restricted from transfer and shall be subject to an appropriate stop-transfer order, and if any certificate is issued, such certificate shall bear an appropriate legend referring to the restrictions applicable to the Shares. After any Shares vest, the Company shall deliver the vested Shares, in book-entry or certificated form in the Company’s sole discretion, registered in the name of Holder or his or her legal representatives, beneficiaries or heirs, as the case may be, less any Shares withheld to pay withholding taxes. If provided for under the Restricted Stock Agreement, the Holder shall have the right to vote Shares subject thereto and to enjoy all other stockholder rights, including the entitlement to receive dividends on the Shares during the Restriction Period. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Restricted Stock Awards, including, but not limited to, rules pertaining to the effect of Termination of Service prior to expiration of the Restriction Period. Such additional terms, conditions or restrictions shall, to the extent inconsistent with the provisions of Sections 6.2, 6.3 and 6.4, as applicable, be set forth in a Restricted Stock Agreement made in conjunction with the Award. Such Restricted Stock Agreement may also include provisions relating to: (i) subject to the provisions hereof, accelerated vesting of Awards, including but not limited to accelerated vesting upon the occurrence of a Change of Control, (ii) tax matters (including provisions covering any applicable Employee wage withholding requirements) and (iii) any other matters not inconsistent with the terms and provisions of the Plan that the Committee shall in its sole discretion determine. The terms and conditions of the respective Restricted Stock Agreements need not be identical. All Shares delivered to a Holder as part of a Restricted Stock Award shall be delivered and reported by the Company or the Affiliate, as applicable, to the Holder at the time of vesting.

 

8.3 Payment for Restricted Stock. The Committee shall determine the amount and form of any payment from a Holder for Shares received pursuant to a Restricted Stock Award, if any, provided that in the absence of such a determination, a Holder shall not be required to make any payment for Shares received pursuant to a Restricted Stock Award, except to the extent otherwise required by law.

 

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Article IX
UNRESTRICTED STOCK AWARDS

 

9.1 Award. Shares may be awarded (or sold) to Employees, Directors or Consultants under the Plan which are not subject to Restrictions of any kind, in consideration for past services rendered thereby to the Company or an Affiliate or for other valid consideration.

 

9.2 Terms and Conditions. 

At the time any Award is made under this Article IX, the Company and the Holder shall enter into an Unrestricted Stock Agreement setting forth each of the matters contemplated hereby and such other matters as the Committee may determine to be appropriate.

 

9.3 Payment for Unrestricted Stock 

. The Committee shall determine the amount and form of any payment from a Holder for Shares received pursuant to an Unrestricted Stock Award, if any, provided that in the absence of such a determination, a Holder shall not be required to make any payment for Shares received pursuant to an Unrestricted Stock Award, except to the extent otherwise required by law.

 

Article X
RESTRICTED STOCK UNIT AWARDS

 

10.1 Award. A Restricted Stock Unit Award shall constitute a promise to grant Shares (or cash equal to the Fair Market Value of Shares) to the Holder at the end of a specified vesting schedule. At the time a Restricted Stock Unit Award is made, the Committee shall establish the vesting schedule applicable to such Award. Each Restricted Stock Unit Award may have a different vesting schedule, in the discretion of the Committee. A Restricted Stock Unit shall not constitute an equity interest in the Company and shall not entitle the Holder to voting rights, dividends or any other rights associated with ownership of Shares prior to the time the Holder shall receive a distribution of Shares pursuant to Section 10.3.

 

10.2 Terms and Conditions. At the time any Award is made under this Article X, the Company and the Holder shall enter into a Restricted Stock Unit Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate. The Restricted Stock Unit Agreement shall set forth the individual service-based vesting requirement which the Holder would be required to satisfy before the Holder would become entitled to distribution pursuant to Section 10.3 and the number of Units awarded to the Holder. Such conditions shall be sufficient to constitute a “substantial risk of forfeiture” as such term is defined under Section 409A of the Code. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Restricted Stock Unit Awards in the Restricted Stock Unit Agreement, including, but not limited to, rules pertaining to the effect of Termination of Service prior to expiration of the applicable vesting period. The terms and conditions of the respective Restricted Stock Unit Agreements need not be identical.

 

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10.3 Distributions of Shares. The Holder of a Restricted Stock Unit shall be entitled to receive Shares or a cash payment equal to the Fair Market Value of a Share, or one Share, as determined in the sole discretion of the Committee and as set forth in the Restricted Stock Unit Agreement, for each Restricted Stock Unit subject to such Restricted Stock Unit Award, if the Holder satisfies the applicable vesting requirement. Such distribution shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the calendar year in which the Restricted Stock Unit first becomes vested (i.e., no longer subject to a “substantial risk of forfeiture”).

 

Article XI
PERFORMANCE UNIT AWARDS

 

11.1 Award. A Performance Unit Award shall constitute an Award under which, upon the satisfaction of predetermined individual and/or Company (and/or Affiliate) Performance Goals based on selected Performance Criteria, a cash payment shall be made to the Holder, based on the number of Units awarded to the Holder. At the time a Performance Unit Award is made, the Committee shall establish the Performance Period and applicable Performance Goals. Each Performance Unit Award may have different Performance Goals, in the discretion of the Committee. A Performance Unit Award shall not constitute an equity interest in the Company and shall not entitle the Holder to voting rights, dividends or any other rights associated with ownership of Shares.

 

11.2 Terms and Conditions. At the time any Award is made under this Article XI, the Company and the Holder shall enter into a Performance Unit Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate. The Committee shall set forth in the applicable Performance Unit Agreement the Performance Period, Performance Criteria and Performance Goals which the Holder and/or the Company would be required to satisfy before the Holder would become entitled to payment pursuant to Section 11.3, the number of Units awarded to the Holder and the dollar value or formula assigned to each such Unit. Such payment shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Performance Unit Awards, including, but not limited to, rules pertaining to the effect of Termination of Service prior to expiration of the applicable performance period. The terms and conditions of the respective Performance Unit Agreements need not be identical.

 

11.3 Payments. The Holder of a Performance Unit shall be entitled to receive a cash payment equal to the dollar value assigned to such Unit under the applicable Performance Unit Agreement if the Holder and/or the Company satisfy (or partially satisfy, if applicable under the applicable Performance Unit Agreement) the Performance Goals set forth in such Performance Unit Agreement. All payments shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year to which such performance goals and objectives relate.

 

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Article XII
PERFORMANCE STOCK AWARDS

 

12.1 Award. A Performance Stock Award shall constitute a promise to grant Shares (or cash equal to the Fair Market Value of Shares) to the Holder at the end of a specified Performance Period subject to achievement of specified Performance Goals. At the time a Performance Stock Award is made, the Committee shall establish the Performance Period and applicable Performance Goals based on selected Performance Criteria. Each Performance Stock Award may have different Performance Goals, in the discretion of the Committee. A Performance Stock Award shall not constitute an equity interest in the Company and shall not entitle the Holder to voting rights, dividends or any other rights associated with ownership of Shares unless and until the Holder shall receive a distribution of Shares pursuant to Section 12.3.

 

12.2 Terms and Conditions. At the time any Award is made under this Article XII, the Company and the Holder shall enter into a Performance Stock Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate. The Committee shall set forth in the applicable Performance Stock Agreement the Performance Period, selected Performance Criteria and Performance Goals which the Holder and/or the Company would be required to satisfy before the Holder would become entitled to the receipt of Shares pursuant to such Holder’s Performance Stock Award and the number of Shares subject to such Performance Stock Award. Such distribution shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code. If such Performance Goals are achieved, the distribution of Shares (or the payment of cash, as determined in the sole discretion of the Committee), shall be made in accordance with Section 12.3, below. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Performance Stock Awards, including, but not limited to, rules pertaining to the effect of the Holder’s Termination of Service prior to the expiration of the applicable performance period. The terms and conditions of the respective Performance Stock Agreements need not be identical.

 

12.3 Distributions of Shares. The Holder of a Performance Stock Award shall be entitled to receive a cash payment equal to the Fair Market Value of a Share, or one Share, as determined in the sole discretion of the Committee, for each Performance Stock Award subject to such Performance Stock Agreement, if the Holder satisfies the applicable vesting requirement. Such distribution shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year to which such performance goals and objectives relate.

 

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Article XIII
DISTRIBUTION EQUIVALENT RIGHTS

 

13.1 Award. A Distribution Equivalent Right shall entitle the Holder to receive bookkeeping credits, cash payments and/or Share distributions equal in amount to the distributions that would have been made to the Holder had the Holder held a specified number of Shares during the specified period of the Award.

 

13.2 Terms and Conditions. At the time any Award is made under this Article XIII, the Company and the Holder shall enter into a Distribution Equivalent Rights Award Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate. The Committee shall set forth in the applicable Distribution Equivalent Rights Award Agreement the terms and conditions, if any, including whether the Holder is to receive credits currently in cash, is to have such credits reinvested (at Fair Market Value determined as of the date of reinvestment) in additional Shares or is to be entitled to choose among such alternatives. Such receipt shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code and, if such Award becomes vested, the distribution of such cash or Shares shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year in which the Holder’s interest in the Award vests. Distribution Equivalent Rights Awards may be settled in cash or in Shares, as set forth in the applicable Distribution Equivalent Rights Award Agreement. A Distribution Equivalent Rights Award may, but need not be, awarded in tandem with another Award (other than an Option or a SAR), whereby, if so awarded, such Distribution Equivalent Rights Award shall expire, terminate or be forfeited by the Holder, as applicable, under the same conditions as under such other Award.

 

13.3 Interest Equivalents. The Distribution Equivalent Rights Award Agreement for a Distribution Equivalent Rights Award may provide for the crediting of interest on a Distribution Rights Award to be settled in cash at a future date (but in no event later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year in which such interest is credited and vested), at a rate set forth in the applicable Distribution Equivalent Rights Award Agreement, on the amount of cash payable thereunder.

 

Article XIV
STOCK APPRECIATION RIGHTS

 

14.1 Award. A Stock Appreciation Right shall constitute a right, granted alone or in connection with a related Option, to receive a payment equal to the increase in value of a specified number of Shares between the date of Award and the date of exercise.

 

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14.2 Terms and Conditions. At the time any Award is made under this Article XIV, the Company and the Holder shall enter into a Stock Appreciation Right Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate. The Committee shall set forth in the applicable Stock Appreciation Right Agreement the terms and conditions of the Stock Appreciation Right, including (i) the base value (the “Base Value”) for the Stock Appreciation Right, which shall be not less than the Fair Market Value of a Share on the date of grant of the Stock Appreciation Right, (ii) the number of Shares subject to the Stock Appreciation Right, (iii) the period during which the Stock Appreciation Right may be exercised; provided, however, that no Stock Appreciation Right shall be exercisable after the expiration of ten (10) years from the date of its grant, and (iv) any other special rules and/or requirements which the Committee imposes upon the Stock Appreciation Right. Upon the exercise of some or all of the portion of a Stock Appreciation Right, the Holder shall receive a payment from the Company, in cash or in the form of Shares having an equivalent Fair Market Value or in a combination of both, as determined in the sole discretion of the Committee, equal to the product of:

 

(a) The excess of (i) the Fair Market Value of a Share on the date of exercise, over (ii) the Base Value, multiplied by,

 

(b) The number of Shares with respect to which the Stock Appreciation Right is exercised.

 

14.3 Tandem Stock Appreciation Rights. If the Committee grants a Stock Appreciation Right which is intended to be a Tandem Stock Appreciation Right, the Tandem Stock Appreciation Right shall be granted at the same time as the related Option, and the following special rules shall apply:

 

(a) The Base Value shall be equal to or greater than the per Share exercise price under the related Option;

 

(b) The Tandem Stock Appreciation Right may be exercised for all or part of the Shares which are subject to the related Option, but solely upon the surrender by the Holder of the Holder’s right to exercise the equivalent portion of the related Option (and when a Share is purchased under the related Option, an equivalent portion of the related Tandem Stock Appreciation Right shall be canceled);

 

(c) The Tandem Stock Appreciation Right shall expire no later than the date of the expiration of the related Option;

 

(d) The value of the payment with respect to the Tandem Stock Appreciation Right may be no more than one hundred percent (100%) of the difference between the per Share exercise price under the related Option and the Fair Market Value of the Shares subject to the related Option at the time the Tandem Stock Appreciation Right is exercised, multiplied by the number of the Shares with respect to which the Tandem Stock Appreciation Right is exercised; and

 

(e) The Tandem Stock Appreciation Right may be exercised solely when the Fair Market Value of the Shares subject to the related Option exceeds the per Share exercise price under the related Option.

 

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Article XV
RECAPITALIZATION OR REORGANIZATION

 

15.1 Adjustments to Shares. The shares with respect to which Awards may be granted under the Plan are Shares as presently constituted; provided, however, that if, and whenever, prior to the expiration or distribution to the Holder of Shares underlying an Award theretofore granted, the Company shall effect a subdivision or consolidation of the Shares or the payment of an Share dividend on Shares without receipt of consideration by the Company, the number of Shares with respect to which such Award may thereafter be exercised or satisfied, as applicable, (i) in the event of an increase in the number of outstanding Shares, shall be proportionately increased, and the purchase price per Share shall be proportionately reduced, and (ii) in the event of a reduction in the number of outstanding Shares, shall be proportionately reduced, and the purchase price per Share shall be proportionately increased. Notwithstanding the foregoing or any other provision of this Article XV, any adjustment made with respect to an Award (x) which is an Incentive Stock Option, shall comply with the requirements of Section 424(a) of the Code, and in no event shall any adjustment be made which would render any Incentive Stock Option granted under the Plan to be other than an “incentive stock option” for purposes of Section 422 of the Code, and (y) which is a Non-qualified Stock Option, shall comply with the requirements of Section 409A of the Code, and in no event shall any adjustment be made which would render any Non-qualified Stock Option granted under the Plan to become subject to Section 409A of the Code.

 

15.2 Recapitalization. If the Company recapitalizes or otherwise changes its capital structure, thereafter upon any exercise or satisfaction, as applicable, of a previously granted Award, the Holder shall be entitled to receive (or entitled to purchase, if applicable) under such Award, in lieu of the number of Shares then covered by such Award, the number and class of shares and securities to which the Holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior to such recapitalization, the Holder had been the holder of record of the number of Shares then covered by such Award.

 

15.3 Other Events. In the event of changes to the outstanding Shares by reason of an extraordinary cash dividend, reorganization, merger, consolidation, combination, split-up, spin-off, exchange or other relevant change in capitalization occurring after the date of the grant of any Award and not otherwise provided for under this Article XV, any outstanding Awards and any Award Agreements evidencing such Awards shall be adjusted by the Board in its discretion in such manner as the Board shall deem equitable or appropriate taking into consideration the applicable accounting and tax consequences, as to the number and price of Shares or other consideration subject to such Awards. In the event of any adjustment pursuant to Sections 15.1, 15.2 or this Section 15.3, the aggregate number of Shares available under the Plan pursuant to Section 5.1 may be appropriately adjusted by the Board, the determination of which shall be conclusive. In addition, the Committee may make provision for a cash payment to a Holder or a person who has an outstanding Award.

 

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15.4 Change of Control. The Committee may, in its sole discretion, at the time an Award is made or at any time prior to, coincident with or after the time of a Change of Control, cause any Award either (i) to be canceled in consideration of a payment in cash or other consideration in amount per share equal to the excess, if any, of the price or implied price per Share in the Change of Control over the per Share exercise, base or purchase price of such Award, which may be paid immediately or over the vesting schedule of the Award; (ii) to be assumed, or new rights substituted therefore, by the surviving corporation or a parent or subsidiary of such surviving corporation following such Change of Control; (iii) accelerate any time periods, or waive any other conditions, relating to the vesting, exercise, payment or distribution of an Award so that any Award to a Holder whose employment has been terminated as a result of a Change of Control may be vested, exercised, paid or distributed in full on or before a date fixed by the Committee; (iv) to be purchased from a Holder whose employment has been terminated as a result of a Change of Control, upon the Holder’s request, for an amount of cash equal to the amount that could have been obtained upon the exercise, payment or distribution of such rights had such Award been currently exercisable or payable; or (v) terminate any then outstanding Award or make any other adjustment to the Awards then outstanding as the Committee deems necessary or appropriate to reflect such transaction or change. The number of Shares subject to any Award shall be rounded to the nearest whole number.

 

15.5 Powers Not Affected. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or of the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change of the Company’s capital structure or business, any merger or consolidation of the Company, any issue of debt or equity securities ahead of or affecting Shares or the rights thereof, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding.

 

15.6 No Adjustment for Certain Awards. Except as hereinabove expressly provided, the issuance by the Company of shares of any class or securities convertible into shares of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect previously granted Awards, and no adjustment by reason thereof shall be made with respect to the number of Shares subject to Awards theretofore granted or the purchase price per Share, if applicable.

 

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Article XVI
AMENDMENT AND TERMINATION OF PLAN

 

The Plan shall continue in effect, unless sooner terminated pursuant to this Article XVI, until the tenth (10th) anniversary of the date on which it is adopted by the Board (except as to Awards outstanding on that date). The Board in its discretion may terminate the Plan at any time with respect to any shares for which Awards have not theretofore been granted; provided, however, that the Plan’s termination shall not materially and adversely impair the rights of a Holder with respect to any Award theretofore granted without the consent of the Holder. The Board shall have the right to alter or amend the Plan or any part hereof from time to time; provided, however, that without the approval by a majority of the votes cast at a meeting of stockholders at which a quorum representing a majority of the shares of the Company entitled to vote generally in the election of directors is present in person or by proxy, no amendment or modification of the Plan may (i) materially increase the benefits accruing to Holders, (ii) except as otherwise expressly provided in Article XV, materially increase the number of Shares subject to the Plan or the individual Award Agreements specified in Article V, (iii) materially modify the requirements for participation in the Plan, or (iv) amend, modify or suspend Section 7.7 (re-pricing prohibitions) or this Article XVI. In addition, no change in any Award theretofore granted may be made which would materially and adversely impair the rights of a Holder with respect to such Award without the consent of the Holder (unless such change is required in order to exempt the Plan or any Award from Section 409A of the Code).

 

Article XVII
MISCELLANEOUS

 

17.1 No Right to Award. Neither the adoption of the Plan by the Company nor any action of the Board or the Committee shall be deemed to give an Employee, Director or Consultant any right to an Award except as may be evidenced by an Award Agreement duly executed on behalf of the Company, and then solely to the extent and on the terms and conditions expressly set forth therein.

 

17.2 No Rights Conferred. Nothing contained in the Plan shall (i) confer upon any Employee any right with respect to continuation of employment with the Company or any Affiliate, (ii) interfere in any way with any right of the Company or any Affiliate to terminate the employment of an Employee at any time, (iii) confer upon any Director any right with respect to continuation of such Director’s membership on the Board, (iv) interfere in any way with any right of the Company or an Affiliate to terminate a Director’s membership on the Board at any time, (v) confer upon any Consultant any right with respect to continuation of his or her consulting engagement with the Company or any Affiliate, or (vi) interfere in any way with any right of the Company or an Affiliate to terminate a Consultant’s consulting engagement with the Company or an Affiliate at any time.

 

17.3 Other Laws; No Fractional Shares; Withholding. The Company shall not be obligated by virtue of any provision of the Plan to recognize the exercise of any Award or to otherwise sell or issue Shares in violation of any laws, rules or regulations, and any postponement of the exercise or settlement of any Award under this provision shall not extend the term of such Award. Neither the Company nor its directors or officers shall have any obligation or liability to a Holder with respect to any Award (or Shares issuable thereunder) (i) that shall lapse because of such postponement, or (ii) for any failure to comply with the requirements of any applicable law, rules or regulations, including but not limited to any failure to comply with the requirements of Section 409A of this Code. No fractional Shares shall be delivered, nor shall any cash in lieu of fractional Shares be paid. The Company shall have the right to deduct in cash (whether under this Plan or otherwise) in connection with all Awards any taxes required by law to be withheld and to require any payments required to enable it to satisfy its withholding obligations. In the case of any Award satisfied in the form of Shares, no Shares shall be issued unless and until arrangements satisfactory to the Company shall have been made to satisfy any tax withholding obligations applicable with respect to such Award. Subject to such terms and conditions as the Committee may impose, the Company shall have the right to retain, or the Committee may, subject to such terms and conditions as it may establish from time to time, permit Holders to elect to tender, Shares (including Shares issuable in respect of an Award) to satisfy, in whole or in part, the amount required to be withheld.

 

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17.4 No Restriction on Corporate Action. Nothing contained in the Plan shall be construed to prevent the Company or any Affiliate from taking any corporate action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Employee, Director, Consultant, beneficiary or other person shall have any claim against the Company or any Affiliate as a result of any such action.

 

17.5 Restrictions on Transfer. No Award under the Plan or any Award Agreement and no rights or interests herein or therein, shall or may be assigned, transferred, sold, exchanged, encumbered, pledged or otherwise hypothecated or disposed of by a Holder except (i) by will or by the laws of descent and distribution, or (ii) where permitted under applicable tax rules, by gift to any Family Member of the Holder, subject to compliance with applicable laws. An Award may be exercisable during the lifetime of the Holder only by such Holder or by the Holder’s guardian or legal representative unless it has been transferred by gift to a Family Member of the Holder, in which case it shall be exercisable solely by such transferee. Notwithstanding any such transfer, the Holder shall continue to be subject to the withholding requirements provided for under Section 17.3 hereof.

 

17.6 Beneficiary Designations. Each Holder may, from time to time, name a beneficiary or beneficiaries (who may be contingent or successive beneficiaries) for purposes of receiving any amount which is payable in connection with an Award under the Plan upon or subsequent to the Holder’s death. Each such beneficiary designation shall serve to revoke all prior beneficiary designations, be in a form prescribed by the Company and be effective solely when filed by the Holder in writing with the Company during the Holder’s lifetime. In the absence of any such written beneficiary designation, for purposes of the Plan, a Holder’s beneficiary shall be the Holder’s estate.

 

17.7 Rule 16b-3. It is intended that the Plan and any Award made to a person subject to Section 16 of the Exchange Act shall meet all of the requirements of Rule 16b-3. If any provision of the Plan or of any such Award would disqualify the Plan or such Award under, or would otherwise not comply with the requirements of, Rule 16b-3, such provision or Award shall be construed or deemed to have been amended as necessary to conform to the requirements of Rule 16b-3.

 

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17.8 Clawback Policy. Notwithstanding anything contained herein or in any incentive “performance based” award, Awards under the Plan shall be subject to reduction, forfeiture or repayment by reason of a correction or restatement of the Company’s financial information if and to the extent such reduction or repayment is required by any applicable law.

 

17.9 No Obligation to Notify or Minimize Taxes.  The Company shall have no duty or obligation to any Holder to advise such Holder as to the time or manner of exercising any Award. Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such Holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised.  The Company has no duty or obligation to minimize the tax consequences of an Award to any person.

 

17.10 Section 409A. Notwithstanding any other provision of the Plan, the Committee shall have no authority to issue an Award under the Plan with terms and/or conditions which would cause such Award to constitute non-qualified “deferred compensation” under Section 409A of the Code unless such Award shall be structured to be exempt from or comply with all requirements of Code Section 409A. The Plan and all Award Agreements are intended to comply with the requirements of Section 409A of the Code (or to be exempt therefrom) and shall be so interpreted and construed and no amount shall be paid or distributed from the Plan unless and until such payment complies with all requirements of Code Section 409A. If an Award is subject to Section 409A of the Code, (i) distributions shall only be made in a manner and upon an event permitted under Section 409A of the Code, (ii) payments to be made upon a termination of employment or service shall only be made upon a “separation from service” under section 409A of the Code, (iii) unless the Award specifies otherwise, each installment payment shall be treated as a separate payment for purposes of Section 409A of the Code, and (iv) in no event shall a Holder, directly or indirectly, designate the calendar year in which a distribution is made except in accordance with Section 409A of the Code. Any Award that is subject to Section 409A of the Code and that is to be distributed to a Key Employee (as defined below) upon separation from service shall be administered so that any distribution with respect to such Award shall be postponed for six months following the date of the Holder’s separation from service (unless an earlier death), if required by Section 409A. The determination of Key Employees, including the number and identity of persons considered Key Employees and the identification date, shall be made by the Committee or its delegate each year in accordance with section 416(i) of the Code and the “specified employee” requirements of Section 409A of the Code. It is the intent of the Company that the provisions of this Plan and all other plans and programs sponsored by the Company be interpreted to comply in all respects with Code Section 409A, however, the Company shall have no liability to the Holder, or any successor or beneficiary thereof, in the event taxes, penalties or excise taxes may ultimately be determined to be applicable to any payment or benefit received by the Holder or any successor or beneficiary thereof.

 

17.11 Indemnification. Each person who is or shall have been a member of the Committee or of the Board shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred thereby in connection with or resulting from any claim, action, suit, or proceeding to which such person may be made a party or may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid thereby in settlement thereof, with the Company’s approval, or paid thereby in satisfaction of any judgment in any such action, suit, or proceeding against such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive and shall be independent of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation or By-laws, by contract, as a matter of law, or otherwise.

 

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17.12 Other Benefit Plans. No Award, payment or amount received hereunder shall be taken into account in computing an Employee’s salary or compensation for the purposes of determining any benefits under any pension, retirement, life insurance or other benefit plan of the Company or any Affiliate, unless such other plan specifically provides for the inclusion of such Award, payment or amount received. Nothing in the Plan shall be construed to limit the right of the Company to establish other plans or to pay compensation to its employees, in cash or property, in a manner which is not expressly authorized under the Plan.

 

17.13 Limits of Liability. Any liability of the Company with respect to an Award shall be based solely upon the contractual obligations created under the Plan and the Award Agreement. None of the Company, any member of the Board nor any member of the Committee shall have any liability to any party for any action taken or not taken, in good faith, in connection with or under the Plan.

 

17.14 Governing Law. Except as otherwise provided herein, the Plan shall be construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.

 

17.15 Subplans. The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to the Plan setting forth (i) such limitations on the Committee’s discretion under the Plan as the Board deems necessary or desirable and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Holders within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Holders in any jurisdiction that is not affected.

 

17.16 Severability of Provisions. If any provision of the Plan is held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of the Plan, and the Plan shall be construed and enforced as if such invalid or unenforceable provision had not been included in the Plan.

 

17.17 No Funding. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of funds or assets to ensure the payment of any Award. Prior to receipt of Shares or a cash distribution pursuant to the terms of an Award, such Award shall represent an unfunded unsecured contractual obligation of the Company and the Holder shall have no greater claim to the Shares underlying such Award or any other assets of the Company or Affiliate than any other unsecured general creditor.

 

17.18 Headings. Headings used throughout the Plan are for convenience only and shall not be given legal significance.

 

 

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Exhibit 10.4

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (“Agreement”) is made as of June 10, 2021 by and between indie Semiconductor, Inc., a Delaware corporation formerly known as indie Semiconductor, Inc. (the “Company”), and ______________ (“Indemnitee”). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.

 

RECITALS

 

WHEREAS, the Board of Directors of the Company (the “Board”) believes that highly competent persons have become more reluctant to serve publicly-held corporations as directors and/or officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

 

WHEREAS, the Board has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The amended and Restated Certificate of Incorporation of the Company (the “Certificate of Incorporation”) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”). The Certificate of Incorporation and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;

 

WHEREAS, the uncertainties relating to such insurance and to indemnification may increase the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

 

 

 

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Amended and Restated Certificate of Incorporation, as amended from time to time (the “Certificate of Incorporation”) and any resolutions adopted pursuant thereto, as well as any rights of Indemnitees under any directors’ and officers’ liability insurance policy, and this Agreement shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;

 

[WHEREAS, Indemnitee is a representative of Anthem/MIC Strategic Partners, L.P., a Cayman Islands limited partnership (the “Fund”), and has certain rights to indemnification and/or insurance provided by the Fund which Indemnitee and the Fund intend to be secondary to the primary obligation of the Company to indemnify Indemnitee as provided herein, with the Company’s acknowledgement and agreement to the foregoing being a material condition to Indemnitee’s willingness to serve on the Board.]1

 

WHEREAS, Indemnitee does not regard the protection available under the Bylaws Certificate of Incorporation and insurance as adequate in the present circumstances, and may not be willing to serve or continue to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve or continue to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified.

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1. Services to the Company. Indemnitee agrees to serve as an officer and/or a director of the Company and also, at the request of the Company, as a director and/or officer Ay Dee Kay, LLC, a California limited liability company (“ADK”) or of another affiliated corporation, partnership, joint venture, trust or other enterprise. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as an officer and director of the Company or ADK, LLC and, at the request of the Company, as a director and/or officer of another corporation, partnership, joint venture, trust or other enterprise, as provided in Section 16 hereof.

 

 

 

1 This section is only added for directors who are affiliated with funds that have separate D&O insurance

 

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Section 2. Definitions. As used in this Agreement:

 

(a) References to “agent” shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.

 

(b) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

 

i. Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing fifteen percent (15%) or more of the combined voting power of the Company’s then outstanding securities unless the change in relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;

 

ii. Change in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 2(b)(i), 2(b)(iii) or 2(b)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;

 

iii. Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the Surviving Entity) more than 50% of the combined voting power of the voting securities of the Surviving Entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such Surviving Entity;

 

iv. Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; and

 

v. Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

 

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For purposes of this Section 2(b), the following terms shall have the following meanings:

 

(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

(B) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

(C) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.

 

(d) “Surviving Entity” shall mean the surviving entity in a merger or consolidation or any entity that controls, directly or indirectly, such surviving entity.

 

(c) “Corporate Status” describes the status of a person who is or was a director, trustee, partner, managing member, officer, employee, agent or fiduciary of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company, including as a deemed fiduciary thereto.

 

(d) “Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

(e) “Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, employee, agent or fiduciary, including as a deemed fiduciary thereto.

 

(f) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees and other costs of experts and other professionals, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements, obligations or expenses of the types customarily incurred in connection with, or as a result of, prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a deponent or witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, (ii) Expenses incurred in connection with recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee is ultimately determined to be entitled to such indemnification, advancement or Expenses or insurance recovery, as the case may be, and (iii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, the Certificate of Incorporation, the Bylaws or under any directors’ and officers’ liability insurance policies maintained by the Company, by litigation or otherwise. The parties agree that for the purposes of any advancement of Expenses for which Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable in the good faith judgment of such counsel shall be presumed conclusively to be reasonable. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

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(g) “Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(h) The term “Proceeding” shall include any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, regulatory or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of Indemnitee’s Corporate Status, by reason of any action taken by Indemnitee (or a failure to take action by Indemnitee) or of any action (or failure to act) on Indemnitee’s part while acting pursuant to Indemnitee’s Corporate Status, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.

 

(i) Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company 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 Indemnitee reasonably believed to be in the best interests 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 Company” as referred to in this Agreement.

 

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Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding had no reasonable cause to believe that Indemnitee’s conduct was unlawful. The parties hereto intend that this Agreement shall provide to the fullest extent permitted by law for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Certificate of Incorporation, the Bylaws, vote of the Company’s stockholders or disinterested directors or applicable law.

 

Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court (as hereinafter defined) or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

 

Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, Indemnitee will be deemed to have been “successful on the merits” in circumstances including but not limited to the termination of any Proceeding or of any claim, issue or matter therein, by the winning of a dismissal (with or without prejudice), motion for summary judgment, settlement (with or without court approval), or upon a plea of nolo contendere or its equivalent.

 

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Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness, is or was made (or asked) to respond to discovery requests in any Proceeding, or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

 

Section 7. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

Section 8. Additional Indemnification.

 

(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) by reason of Indemnitee’s Corporate Status.

 

(b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to:

 

i. to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

 

ii. to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

 

Section 9. Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification payment in connection with any claim involving Indemnitee:

 

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; [provided, that the foregoing shall not affect the rights of the Indemnitee or the Fund Indemnitors set forth in Section 15(e)];2 or

 

 

 

2[Alt. provision for Fund directors]

 

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(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act) or (iii) any reimbursement of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or the compensation committee of the Board, including but not limited to any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act;

 

(c) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation, (ii) such payment arises in connection with any mandatory counterclaim or cross claim brought or raised by Indemnitee in any Proceeding (or any part of any Proceeding), or (iii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; or

 

(d) .

 

Section 10. Advances of Expenses. Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d)), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee or any Proceeding initiated by Indemnitee with the prior approval of the Board as provided in Section 9(c), and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding, but in no case shall Indemnitee be required to convey any information that would cause Indemnitee to waive any privilege accorded by applicable law. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the Expenses, without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement, and without regard to the entitlement to and availability of insurance coverage, including advancement, payment or reimbursement of defense costs, expenses of covered loss under the provisions of any applicable insurance policy (including, without limitation, whether such advancement, payment or reimbursement is withheld, conditioned or delayed by the insurer(s)). In accordance with Section 14(d), advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes to repay the amounts advanced (without interest) by the Company pursuant to this Section 10, if and only to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. No other form of undertaking shall be required other than the execution of this Agreement. Without limiting the generality or effect of the foregoing, within thirty days after any request by Indemnitee, the Company shall, in accordance with such request (but without duplication), (a) pay such Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses

 

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Section 11. Procedure for Notification and Defense of Claim.

 

(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof; provided, however, that notice will be deemed to have been given without any action on the part of Indemnitee in the event the Company is a party to the same Proceeding. .. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

 

(b) The Company will be entitled to participate in the Proceeding at its own expense.

 

(c) The Company shall not settle any Proceeding (in whole or in part) if such settlement would impose any Expense, judgment, liability, fine, penalty or limitation on Indemnitee in respect of which Indemnitee is not entitled to be indemnified hereunder without Indemnitee’s prior written consent, which shall not be unreasonably withheld. The Company shall not, on its own behalf, settle any part of any Proceeding to which Indemnitee is party with respect to other parties (including the Company) if any portion of such settlement is to be funded from corporate insurance proceeds unless approved by (i) the written consent of Indemnitee or (ii) a majority of the independent directors of the board; provided, however, that the right to constrain the Company’s use of corporate insurance as described in this section shall terminate at the time the Company concludes (per the terms of this Agreement) that (i) Indemnitee is not entitled to indemnification pursuant to this agreement, or (ii) such indemnification obligation to Indemnitee has been fully discharged by the Company.

 

Section 12. Procedure Upon Application for Indemnification.

 

(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys’ fees and disbursements) incurred by or on behalf of Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied.

 

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(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

(c) If the Company disputes a portion of the amounts for which indemnification is requested, the undisputed portion shall be paid and only the disputed portion withheld pending resolution of any such dispute.

 

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Section 13. Presumptions and Effect of Certain Proceedings.

 

(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption by clear and convincing evidence to the contrary in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b) Subject to Section 14(e), if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law as determined by a court of competent jurisdiction in a final adjudication not subject to further appeal; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.

 

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(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

(d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the directors or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser, financial advisor or other expert selected with reasonable care by or on behalf of the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

(e) The knowledge and/or actions, or failure to act, of any director, officer, trustee, partner, managing member, fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

Section 14. Remedies of Indemnitee.

 

(a) Subject to Section 14(e), in the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6 or 7 or the second to last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of Indemnitee’s entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a). The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

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(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

 

(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law as determined by a court of competent jurisdiction in a final adjudication not subject to further appeal.

 

(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by or on behalf of Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.

 

(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

 

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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

 

(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement (i) shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise and (ii) shall be interpreted independently of, and without reference to, any other such rights to which Indemnitee may at any time be entitled. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Certificate of Incorporation and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. Further, if requested by Indemnitee, within two business days of such request the Company will instruct the insurance carriers and the Company’s insurance broker that they may communicate directly with Indemnitee regarding such claim.

 

(c) In the event of any payment made by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. 

 

(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.

 

 
3[For directors affiliated with funds with separate coverage, paragraph (e) is to be replaced with:

 

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(f) In the event of a Change of Control or the Company’s becoming insolvent, the Company shall maintain in force any and all insurance policies then maintained by the Company in providing insurance--directors’ and officers’ liability, fiduciary, employment practices or otherwise--in respect of the individual directors and officers of the Company, for a fixed period of six years thereafter (a “Tail Policy”). Such coverage shall be non-cancellable and shall be placed and serviced for the duration of its term by the Company’s incumbent insurance broker. Such broker shall place the Tail Policy with the incumbent insurance carriers using the policies that were in place at the time of the change of control event (unless the incumbent carriers will not offer such policies, in which case the Tail Policy placed by the Company’s insurance broker shall be substantially comparable in scope and amount as the expiring policies, and the insurance carriers for the Tail Policy shall have an AM Best rating that is the same or better than the AM Best ratings of the expiring policies).

 

“The Company hereby acknowledges that Indemnitee has certain rights to indemnification, advancement of expenses and/or insurance provided by the Fund and certain of its affiliates (collectively, the “Fund Indemnitors”). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of Expenses incurred by Indemnitee 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 Certificate of Incorporation (or any agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Fund Indemnitors, and, (iii) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Fund 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 Indemnitee against the Company. The Company and Indemnitee agree that the Fund Indemnitors are express third party beneficiaries of the terms hereof.”

 

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Section 16. Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a director and/or officer of the Company, ADK, LLC and, at the request of the Company, as a director and/or of another corporation, partnership, joint venture, trust or other enterprise or (b) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding (including any appeal thereof) commenced by Indemnitee pursuant to Section 14 of this Agreement relating thereto. The indemnification and advancement of expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives. The Company shall require and shall cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to, by written agreement, expressly assume and agree to perform this Agreement to the fullest extent permitted by law.

 

Section 17. Severability. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 18. Enforcement.

 

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving or continuing to serve as a director or officer of the Company.

 

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporations, the Bylaws, any directors’ and officers’ insurance maintained by the Company and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

(c) The Company and Indemnitee agree that a monetary remedy for breach of this Agreement may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm (having agreed that actual and irreparable harm will result in not forcing the Company to specifically perform its obligations pursuant to this Agreement) and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which he may be entitled. The Company and Indemnitee further agree that Indemnitee shall be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by the Court, and the Company hereby waives any such requirement of a bond or undertaking. If Indemnitee seeks mandatory injunctive relief, it shall not be a defense to enforcement of the Company’s obligations set forth in this Agreement that Indemnitee has an adequate remedy at law for damages.

 

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Section 19. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

 

Section 20. Notice by Indemnitee or Company.

 

(a) Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

 

(b) If the Indemnitee is the subject of, or is, to the knowledge of the Company, implicated in any way during an investigation, whether formal or informal, that is related to Indemnitee’s Corporate Status and that reasonably could lead to a Proceeding for which indemnification can be provided under this Agreement, the Company shall notify the Indemnitee of such investigation and shall share (to the extent legally permissible) with Indemnitee any information it has provided to any third parties concerning the investigation (“Shared Information”). By executing this Agreement, Indemnitee agrees that such Shared Information is material non-public information that Indemnitee is obligated to hold in confidence and may not disclose publicly; provided, however, that Indemnitee may use the Shared Information and disclose such Shared Information to Indemnitee’s legal counsel and third parties, in each case solely in connection with defending Indemnitee from legal liability.

 

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Section 21. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

 

(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

 

(b) If to the Company to

 

indie Semiconductor, Inc.
32 Journey
Aliso Viejo, CA 92656
Attn: CFO and General Counsel
email: legal@indiesemi.com

 

or to any other address as may have been furnished to Indemnitee by the Company.

 

Section 22. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s). The Company hereby agrees to fully indemnify and hold harmless Indemnitee from any claims for contribution which may be brought by officers, directors or employees of the Company (other than Indemnitee) who may be jointly liable with Indemnitee.

 

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Section 23. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Court of Chancery of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably Corporate Creations Network Inc., 3411 Silverside Road, Tatnall Building #104, Wilmington, New Castle County, Delaware 19801 as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

 

Section 24. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

Section 25. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

 

INDIE SEMICONDUCTOR, INC.  
   
By:    
   
Name:                         
   
Title:    

 

INDEMNITEE  
   
Signature:    
   
Print Name:     
   
Address:    
   
   
   

 

 

 

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Exhibit 10.5

 

EXCHANGE AGREEMENT

 

EXCHANGE AGREEMENT (this “Agreement”), dated as of June 10, 2021, among Thunder Bridge II Surviving Pubco, Inc., a Delaware corporation, which will change its name to indie Semiconductor, Inc. in connection with the Closing (the “Corporation”), Ay Dee Kay, LLC, d/b/a indie Semiconductor, a California limited liability company (“Ay Dee Kay LLC”), and the holders of LLC Units (as defined herein) from time to time party hereto. Capitalized terms used herein and not otherwise defined shall have the meaning given to them in that certain Master Transactions Agreement by and among the Corporation, ADK Merger Sub LLC, a Delaware limited liability company, Ay Dee Kay LLC and certain other parties thereto, dated as of December 14, 2020 (the “MTA”).

 

WHEREAS, in accordance with MTA, the Corporation is entering into this Agreement pursuant to which the Principal Class A Unitholders (as defined below) and the Class B Unitholders (as defined below) shall have the right to elect to exchange their LLC Units for shares of Class A Common Stock (as defined herein), on the terms and subject to the conditions set forth herein.

 

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

 

ARTICLE I

 

SECTION 1.1. Definitions

 

The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

 

Acceleration” has the meaning set forth in Section 2.4(b) of this Agreement.

 

Agreement” has the meaning set forth in the Preamble to this Agreement.

 

Ay Dee Kay LLC” has the meaning set forth in the Preamble to this Agreement.

 

Ay Dee Kay LLC Agreement” means the Eighth Amended and Restated Operating Agreement of Ay Dee Kay, LLC, dated on or about the date hereof, as such agreement may be amended from time to time.

 

Change of Control” means the occurrence of any of the following:

 

a.if the Corporation engages in a “going private” transaction pursuant to Rule 13e-3 under the Exchange Act or otherwise cease to be subject to reporting obligations under Sections 13 or 15(d) of the Exchange Act;

 

b.if the Corporation Class A Common Stock or successor shares to the Class A Common Stock cease to be listed on a national securities exchange, other than for the failure to satisfy:

 

i.any applicable minimum listing requirements, including minimum round lot holder requirements, of such national securities exchange, unless such failure is caused by an action or omission of the Corporation or its Subsidiaries taken after the Closing with the primary intent of causing, or which would otherwise reasonably be expected to cause, the Corporation to violate such applicable minimum listing requirements; or

 

ii.a minimum price per share requirement of such national securities exchange;

 

c.or if any of the following shall occur:

 

i.there is consummated a merger or consolidation of the Corporation with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (x) the Corporation board of directors immediately prior to the merger or consolidation does not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a Subsidiary, the ultimate parent thereof, or (y) the voting securities of the Corporation immediately prior to such merger or consolidation do not continue to represent or are not converted into more than 50% of the combined voting power of then outstanding voting securities of the Person resulting from such merger or consolidation or, if the surviving company is a Subsidiary, the ultimate parent thereof; or

 

 

 

 

ii.the shareholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement or series of related agreements for the sale, lease or other disposition, directly or indirectly, by the Corporation of all or substantially all of the assets of the Corporation and its Subsidiaries, taken as a whole, other than such sale or other disposition by the Corporation of all or substantially all of the assets of the Corporation and its Subsidiaries, taken as a whole, to an entity at least 50% of the combined voting power of the voting securities of which are owned by shareholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale; or

 

iii.any Person or any group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act or any successor provisions thereto (excluding a corporation or other entity owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation representing more than 50% of the combined voting power of the Corporation’s then outstanding voting securities.

 

Class A Common Stock” means the Class A common stock, par value $0.0001 per share, of the Corporation.

 

Class A Units” has the meaning given to them in the Ay Dee Kay LLC Agreement.

 

Class B Units” has the meaning given to them in the Ay Dee Kay LLC Agreement.

 

Class B Unitholders” means the holders of Class B Units in Ay Dee Kay LLC.

 

Class V Common Stock” means the Class V common stock, par value $0.0001 per share, of the Corporation.

 

Code” means the Internal Revenue Code of 1986, as amended.

 

Corporation” has the meaning set forth in the Preamble to this Agreement.

 

Earn Out Exchange” has the meaning set forth in Section 2.1(a)(iii) of this Agreement.

 

Earn Out Unit” has the meaning set forth in Section 2.1(a)(iii) of this Agreement.

 

Exchange” has the meaning set forth in Section 2.1(a)(iii) of this Agreement.

 

Exchange Date” means the date on which an Exchanging Member exercises his, her or its Exchange right under this Agreement.

 

Exchanging Member” mean each Principal Class A Unitholders and Class B Unitholders, in his, her or its capacity as a party to this Agreement, having the rights and obligations set out in this Agreement.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

2

 

 

Exchange Rate” means 1.0, subject to adjustment pursuant to Section 2.2 hereof.

 

Fair Market Value” means, with respect to any shares of Class A Common Stock, the product of (i) the number of such shares of Class A Common Stock, multiplied by (ii) the average of the VWAP of the Class A Common Stock for each of the seven (7) consecutive Trading Days ending on the Trading Day immediately preceding the date such Fair Market Value is to be determined pursuant to this Agreement.

 

LLC Unit” means (i) each Class A Unit held by the Principal Class A Unitholders and each Class B Unit issued and outstanding, in each case as of the date hereof and (ii) each Class A Unit and each Class B Unit or other interest in Ay Dee Kay LLC that may be issued by Ay Dee Kay LLC in the future that is designated as an “LLC Unit”.

 

LLC Unitholder” means each holder of one or more LLC Units that may from time to time be a party to this Agreement.

 

Member” means a “Member” of Ay Dee Kay LLC, as such term is defined in the Ay Dee Kay LLC Agreement.

 

MTA” has the meaning set forth in the Preamble to this Agreement.

 

Permitted Transferee” has the meaning given to such term in Section 3.1 of this Agreement.

 

Principal Class A Unitholders” means the following Members of Ay Dee Kay LLC: Bison Capital Partners IV, L.P., Donald McClymont, Ichiro Aoki, Scott Kee, and David Kang.

 

Principal Exchange” has the meaning set forth in Section 2.1(a)(i) of this Agreement.

 

Publicly Traded” means listed or admitted to trading on the New York Stock Exchange or another national securities exchange or designated for quotation on the NASDAQ National Market, or any successor to any of the foregoing.

 

Securities Act” has the meaning set forth in Section 2.1(e) of this Agreement.

 

Service Provider Exchange” has the meaning set forth in Section 2.1(a)(ii) of this Agreement.

 

Service Provider Grant Award” means, with respect to each Class B Unitholder, that certain Class B Unit Purchase Agreement by and between such Class B Unitholder and Ay Dee Kay LLC. 

 

Trading Day” means any day on which Class A Common Stock is actually traded on the principal securities exchange or securities market on which Class A Common Stock is then traded.

 

VWAP” means, for any security as of any date(s), the dollar volume-weighted average price for such security on the principal securities exchange or securities market on which such security is then traded during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported by OTC Markets Group Inc. If the VWAP cannot be calculated for such security on such date(s) on any of the foregoing bases, the VWAP of such security on such date(s) shall be the fair market value per share on such date(s) as reasonably determined by a nationally recognized independent investment banking firm selected by the Corporation.

 

3

 

 

ARTICLE II

 

SECTION 2.1. Exchange of LLC Units for Class A Common Stock.

 

(a) The Exchanges.

 

(i) Principal Exchange. Effective immediately following the Closing, with respect to the Principal Class A Unitholders, from and after the six-month anniversary of the Closing, each Principal Class A Unitholder shall be entitled at any time and from time to time thereafter, upon the terms and subject to the conditions hereof, to surrender to the Corporation any LLC Units held by such Principal Class A Unitholder as of the Exchange Date, in exchange for the delivery by the Corporation to such exchanging Principal Class A Unitholder, of a number of shares of Class A Common Stock that is equal to the product of (i) the number of LLC Units surrendered multiplied by (ii) the Exchange Rate (such exchange, a “Principal Exchange”).

 

(ii) Service Provider Exchange. Effective at the Closing, with respect to each of the Class B Unitholders, from and after the later of (i) the six-month anniversary of the Closing and (ii) the date that is the two year anniversary of the Effective Date as defined in such Class B Unitholder’s Service Provider Grant Agreement (or if the Class B Unitholder has entered into more than one Service Provider Grant Agreement, then the date that is the two year anniversary of the Effective Date of the latest Service Provider Grant Agreement entered into by such Class B Unitholder), each Class B Unitholder shall be entitled at any time and from time to time thereafter, upon the terms and subject to the conditions hereof, to surrender to the Corporation any or all of the LLC Units held by such Class B Unitholder as of the Exchange Date, in exchange for the delivery by the Corporation to such exchanging Class B Unitholder, a number of shares of Class A Common Stock that is equal to the product of (i) the number of LLC Units surrendered multiplied by (ii) the Exchange Rate (such exchange, a “Service Provider Exchange”); provided, that any portion of the Class B Units held by a Class B Unitholder that remains subject to forfeiture in accordance with the Service Provider Grant Agreement shall not be eligible for the Service Provider Exchange until such time as such Class B Units are no longer subject to forfeiture pursuant to the terms of the applicable Service Provider Grant Agreement.

 

(iii) Earn Out Exchange. The parties to this Agreement acknowledge and agree that pursuant to Section 2.5 of the MTA (the Earn Out), the Principal Class A Unitholders and the Class B Unitholders are eligible to receive additional LLC Units in Ay Dee Kay LLC pursuant to the terms and conditions set forth in the MTA (“Earn Out Unit”), and from and after the six-month anniversary of the Closing, each Principal Class A Unitholder and Class B Unitholder shall be entitled at any time and from time to time thereafter, upon the terms and subject to the conditions hereof, to surrender to the Corporation any or all of the Earn Out Units held by such LLC Unitholder, in exchange for the delivery by the Corporation to such exchanging LLC Unitholder, a number of shares of Class A Common Stock that is equal to the product of (i) the number of Earn Out Units surrendered multiplied by (ii) the Exchange Rate (such exchange, an “Earn Out Exchange” and together with the Principal Exchange and the Service Provider Exchange, the “Exchange”); provided, however, with respect to the Class B Unitholders, a Class B Unitholder shall not be entitled to an Earn Out Exchange until the later of (x) the six-month anniversary of the Closing and (y) the date that is the two year anniversary of the Effective Date as defined in such Class B Unitholder’s Service Provider Grant Agreement (or if the Class B Unitholder has entered into more than one Service Provider Grant Agreement, then the date that is the two year anniversary of the Effective Date of the latest Service Provider Grant Agreement entered into by such Class B Unitholder).

 

(b) An LLC Unitholder shall exercise its right to make an Exchange as set forth in Section 2.1(a) above by delivering to the Corporation and to Ay Dee Kay LLC a written election of exchange in respect of the LLC Units to be exchanged, substantially in the form of Exhibit A hereto, duly executed by such holder or such holder’s duly authorized attorney, in each case delivered during normal business hours at the principal executive offices of the Corporation or of Ay Dee Kay LLC . As promptly as practicable following the delivery of such a written election of exchange (and the concurrent consummation of the transfer of LLC Units from such LLC Unitholder to the Corporation in connection therewith), the Corporation shall deliver or cause to be delivered at the offices of then-acting registrar and transfer agent of the Class A Common Stock or, if there is no then-acting registrar and transfer agent of the Class A Common Stock, at the principal executive offices of the Corporation, the number of shares of Class A Common Stock deliverable upon such Exchange, registered in the name of the relevant exchanging LLC Unitholder or its designee. Notwithstanding the foregoing, if the Class A Common Stock is settled through the facilities of The Depository Trust Company, and the exchanging LLC Unitholder is permitted to hold shares of Class A Common Stock through The Depository Trust Company, Ay Dee Kay LLC will, subject to Section 2.1(c) hereof, upon the written instruction of an exchanging LLC Unitholder, use its reasonable best efforts to deliver or cause to be delivered the shares of Class A Common Stock deliverable to such exchanging LLC Unitholder, through the facilities of The Depository Trust Company, to the account of the participant of The Depository Trust Company designated by such exchanging LLC Unitholder. The Corporation, including in its capacity as the Manager of Ay Dee Kay LLC, shall take such actions as may be required to ensure the performance by Ay Dee Kay LLC of its obligations under this Section 2(b) and the foregoing Section 2(a), including the issuance and sale of shares of Class A Common Stock to or for the account of Ay Dee Kay LLC in exchange for the delivery to the Corporation of a number of LLC Units that is equal to the number of LLC Units surrendered by an exchanging LLC Unitholder. Any LLC Unitholder that surrenders all of the LLC Units held by such LLC Unitholder to the Corporation, for the account of Ay Dee Kay LLC or to Ay Dee Kay LLC pursuant to this Section 2.1(b) shall concurrently surrender all shares of Class V Common Stock held by such LLC Unitholder (including any fractions thereof) to the Corporation for no additional consideration.

 

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(c) Ay Dee Kay LLC and each exchanging LLC Unitholder shall bear its own expenses in connection with the consummation of any Exchange, whether or not any such Exchange is ultimately consummated, except that Ay Dee Kay LLC shall bear any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any Exchange; providedhowever, that if any shares of Class A Common Stock are to be delivered in a name other than that of the LLC Unitholder that requested the Exchange, then such LLC Unitholder and/or the person in whose name such shares are to be delivered shall pay to Ay Dee Kay LLC the amount of any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, such Exchange or shall establish to the reasonable satisfaction of Ay Dee Kay LLC that such tax has been paid or is not payable.

 

(d) Notwithstanding anything to the contrary herein, to the extent the Corporation or Ay Dee Kay LLC shall determine that LLC Units do not meet the requirements of Treasury Regulation section 1.7704-1(h), the Corporation or Ay Dee Kay LLC may impose such restrictions on an Exchange with respect to such LLC Units as the Corporation or Ay Dee Kay LLC may determine to be necessary or advisable so that Ay Dee Kay LLC is not treated as a “publicly traded partnership” under Section 7704 of the Code; provided, that each LLC Unitholder shall be entitled at any time to exchange LLC Units for Class A Common Stock, provided that the transfer satisfies the “block transfer” exception of Treasury Regulations Section 1.7704-1(e)(2) Notwithstanding anything to the contrary herein, no Exchange shall be permitted (and, if attempted, shall be void ab initio) if, in the good faith determination of the Corporation or of Ay Dee Kay LLC, such an Exchange would pose a material risk that Ay Dee Kay LLC would be a “publicly traded partnership” under Section 7704 of the Code.

 

(e) For the avoidance of doubt, and notwithstanding anything to the contrary herein, an LLC Unitholder shall not be entitled to effect an Exchange to the extent the Corporation determines that such Exchange (i) would be prohibited by law or regulation (including, without limitation, the unavailability of any requisite registration statement filed under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any exemption from the registration requirements thereunder) or (ii) would not be permitted under any other agreements with the Corporation or its subsidiaries to which such LLC Unitholder may be party (including, without limitation, the Ay Dee Kay LLC Agreement) or any written policies of the Corporation related to unlawful or inappropriate trading applicable to its directors, officers or other personnel.

 

(f) The Corporation may adopt reasonable procedures for the implementation of the exchange provisions set forth in this Article II, including, without limitation, procedures for the giving of notice of an election of an Exchange.

 

SECTION 2.2. Adjustment. The Exchange Rate shall be adjusted accordingly, by the Corporation in good faith, if there is: (a) any subdivision (by any unit split, unit distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse unit split, reclassification, reorganization, recapitalization or otherwise) of the LLC Units that is not accompanied by an identical subdivision or combination of the Class A Common Stock or (b) any subdivision (by any stock split, stock dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock split, reclassification, reorganization, recapitalization or otherwise) of the Class A Common Stock that is not accompanied by an identical subdivision or combination of the LLC Units. If there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock are converted or changed into another security, securities or other property, then upon any subsequent Exchange, an exchanging LLC Unitholder shall be entitled to receive the amount of such security, securities or other property that such exchanging LLC Unitholder would have received if such Exchange had occurred immediately prior to the effective time of such reclassification, reorganization, recapitalization or other similar transaction, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. Except as may be required in the immediately preceding sentence, no adjustments in respect of distributions shall be made upon the exchange of any LLC Unit.

 

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SECTION 2.3. Class A Common Stock to be Issued.

 

(a) The Corporation shall at all times reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon an Exchange, such number of shares of Class A Common Stock as may be deliverable upon any such Exchange; provided, that nothing contained herein shall be construed