Exhibit 2.1

 

 

SEPARATION AND DISTRIBUTION AGREEMENT

 

by and between

 

COMPOSECURE, INC.

 

and

 

RESOLUTE HOLDINGS MANAGEMENT, INC.

 

Dated as of _____, 2025

 

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I DEFINITIONS		2
Section 1.01	Definitions	2
ARTICLE II THE SEPARATION		11
Section 2.01	Transfer of Assets and Assumption of Liabilities	11
Section 2.02	Certain Matters Governing Exclusively by Ancillary Agreements	11
Section 2.03	Disclaimer of Representations and Warranties	12
Section 2.04	Waiver of Bulk-Sale and Bulk-Transfer Laws	12
Section 2.05	General Principles	12
ARTICLE III ACTIONS PENDING THE DISTRIBUTION		13
Section 3.01	Actions Prior to the Distribution	13
Section 3.02	Conditions Precedent to Consummation of the Distribution	14
ARTICLE IV THE DISTRIBUTION		15
Section 4.01	The Distribution	15
Section 4.02	Fractional Shares	16
Section 4.03	Sole Discretion of Parent	16
Section 4.04	Withholding	16
ARTICLE V MUTUAL RELEASES; INDEMNIFICATION		17
Section 5.01	Release of Pre-Distribution Claims	17
Section 5.02	Indemnification by SpinCo	19
Section 5.03	Indemnification by Parent	19
Section 5.04	Indemnification Obligations Net of Insurance Proceeds and Third-Party Proceeds	20
Section 5.05	Procedures for Indemnification of Third-Party Claims	20
Section 5.06	Tax Matters	22
Section 5.07	Additional Matters	23
Section 5.08	Remedies Cumulative	24
Section 5.09	Covenant Not to Sue	24
Section 5.10	Survival of Indemnities	24
Section 5.11	Indemnified Damages	25
ARTICLE VI ACCESS TO INFORMATION; PRIVILEGE; CONFIDENTIALITY		25
Section 6.01	Agreement for Exchange of Information; Archives	25
Section 6.02	Ownership of Information	25

 

 

Section 6.03	Compensation for Providing Information	26
Section 6.04	Record Retention	26
Section 6.05	Accounting Information	26
Section 6.06	Limitations of Liability	27
Section 6.07	Production of Witnesses; Records; Cooperation	28
Section 6.08	Privileged Matters	28
Section 6.09	Confidential Information	31
Section 6.10	Tax Information and Cooperation	32
ARTICLE VII EMPLOYEE MATTERS		33
Section 7.01	Retention of Benefit Plans	33
Section 7.02	Employees	33
Section 7.03	No Third-Party Beneficiaries	34
ARTICLE VIII EQUITY, INCENTIVE AND DIRECTOR COMPENSATION		34
Section 8.01	Generally	34
Section 8.02	Equity Incentive Awards	35
Section 8.03	Non-Equity Incentive Practices and Plan	36
Section 8.04	Director Compensation	36
ARTICLE IX FURTHER ASSURANCES AND ADDITIONAL COVENANTS		37
Section 9.01	Further Assurances	37
ARTICLE X TERMINATION		37
Section 10.01	Termination	37
Section 10.02	Effect of Termination	37
ARTICLE XI MISCELLANEOUS		38
Section 11.01	Counterparts; Entire Agreement; Corporate Power	38
Section 11.02	Negotiation	38
Section 11.03	Arbitration	39
Section 11.04	Specific Performance	40
Section 11.05	No Set-Off; Payments	40
Section 11.06	Continuity of Service and Performance	40
Section 11.07	Governing Law	40
Section 11.08	Assignability	41
Section 11.09	Third-Party Beneficiaries	41
Section 11.10	Notices	41
Section 11.11	Severability	42

 

 

Section 11.12	Publicity	42
Section 11.13	Expenses	43
Section 11.14	Headings	43
Section 11.15	Survival of Covenants	43
Section 11.16	Waivers of Default	43
Section 11.17	Amendments	43
Section 11.18	Interpretation	44

 

Schedules:
Schedule 1.01(a)	SpinCo Assets
Schedule 1.01(b)	SpinCo Employees
Schedule 7.02(d)	SpinCo Individual Agreements

 

 

SEPARATION AND DISTRIBUTION AGREEMENT, dated as of _____, 2025, by and between CompoSecure, Inc., a Delaware corporation ("Parent"), and Resolute Holdings Management, Inc., a Delaware corporation and indirect wholly owned Subsidiary of Parent ("SpinCo"). Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to them in Article I.

 

R E C I T A L S

 

WHEREAS, the board of directors of Parent (the "Parent Board") has determined that it is advisable and in the best interests of Parent and its stockholders for Parent to establish a management business to be conducted by SpinCo and subsequently spin off SpinCo, as an independent publicly traded company, in the manner contemplated by this Agreement;

 

WHEREAS, in connection with the Spin-Off, it is contemplated that: (a) Parent will cause CompoSecure Holdings, L.L.C., a Delaware limited liability company and direct wholly owned Subsidiary of Parent (the "Company"), to enter into a management agreement with SpinCo, substantially in the form attached as an exhibit to the Form 10 (the "Management Agreement"), pursuant to which SpinCo will become responsible for managing the Company's day-to-day business and operations and overseeing the Company's strategy, subject to and in accordance with the terms set forth therein; (b) Parent will enter into a letter agreement with SpinCo, substantially in the form attached as an exhibit to the Form 10 (the "Letter Agreement"), to support the Company's performance of its duties and obligations under the Management Agreement, subject to and in accordance with the terms set forth therein;

 

WHEREAS, upon and subject to the terms of this Agreement: (a) Parent will (i) contribute, convey, sell or otherwise transfer (or cause its Subsidiaries to contribute, convey, sell or otherwise transfer) the SpinCo Assets and (ii) transfer (or cause its Subsidiaries to transfer) the SpinCo Employees to SpinCo in exchange for (A) the assumption by SpinCo of the SpinCo Liabilities, (B) the issuance by SpinCo to the Company of shares of SpinCo Common Stock and (C) following such issuance of shares of SpinCo Common Stock, the distribution by the Company to Parent of all shares of SpinCo Common Stock then held by the Company (this clause (a), collectively, the "Pre-Distribution Transactions"); and (b) immediately following the Pre-Distribution Transactions, Parent will distribute, on a pro rata basis, to holders of shares of Parent Common Stock on the Record Date all of the outstanding shares of SpinCo Common Stock (the "Distribution" and, together with the Pre-Distribution Transactions, collectively, the "Spin-Off");

 

WHEREAS, SpinCo has been incorporated solely for these purposes and has not engaged in activities except in preparation for the Spin-Off;

 

WHEREAS, Parent and SpinCo have prepared, and SpinCo has filed with the Commission, the Form 10, which includes the Information Statement and sets forth certain disclosures concerning SpinCo and the Distribution; and

 

WHEREAS, it is appropriate and desirable to set forth the principal transactions required to effect the Spin-Off, certain other agreements that will govern the relationship of Parent and its Subsidiaries and SpinCo following the Distribution and certain matters relating to the allocation of rights and obligations under this Agreement and the Ancillary Agreements in connection with the Spin-Off.

 

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the Parties, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01           Definitions. For the purposes of this Agreement, the following terms shall have the following meanings:

 

"Action" means any claim, complaint, petition, hearing, charge, demand, action, suit, countersuit, arbitration, inquiry, audit, assessment, proceeding or investigation by or before any Governmental Authority, including any Government Investigation.

 

"Adversarial Action" means (i) an Action by one or more members of the Parent Group, on the one hand, against one or more members of the SpinCo Group, on the other hand, or (ii) an Action by one or more members of the SpinCo Group, on the one hand, against one or more members of the Parent Group, on the other hand.

 

"Affiliate" of any Person means a Person that controls, is controlled by or is under common control with such Person. As used herein, "control" of any entity means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such entity, whether through ownership of voting securities or other interests, by Contract or otherwise; provided that it is acknowledged and agreed that (i) members of the Parent Group shall not be deemed to be Affiliates of the SpinCo Group, (ii) members of the SpinCo Group shall not be deemed to be Affiliates of the Parent Group and (iii) if, after the Distribution Effective Time, SpinCo enters in one or more additional management agreements with any Person (other than any member of the Parent Group), such Person(s) party to such management agreement(s) shall not be deemed Affiliate(s) of the SpinCo Group.

 

"Agent" means the distribution agent appointed by Parent to distribute to the Record Holders, pursuant to the Distribution, the shares of SpinCo Common Stock held by Parent immediately following the Pre-Distribution Transactions.

 

"Agreement" means this Separation and Distribution Agreement, including the Schedules hereto.

 

"Ancillary Agreements" means the Management Agreement, the Letter Agreement, the U.S. State and Local Tax Sharing Agreement and any other instruments, assignments, documents and agreements executed or to be executed between one or more members of the Parent Group, on the one hand, and SpinCo, on the other hand, in each case in connection with the implementation of the transactions contemplated by this Agreement.

 

 

"Assets" means all assets, Contracts, properties and rights of every kind and nature (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere), whether real, personal or mixed, tangible or intangible, or accrued or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person.

 

"Benefit Plan" means any Contract, agreement, policy, practice, program, plan, trust, commitment or arrangement providing for benefits, perquisites or compensation of any nature from an employer to any Employee or Former Employee, or to any family member, dependent, or beneficiary of any such Employee or Former Employee, including cash or deferred arrangement plans, profit-sharing plans, post-employment programs, pension plans, supplemental pension plans, welfare plans, stock purchase, and Contracts, agreements, policies, practices, programs, plans, trusts, commitments and arrangements providing for terms of employment, fringe benefits, severance benefits, change-in-control protections or benefits, life, accidental death and dismemberment, disability and accident insurance, tuition reimbursement, adoption assistance, travel reimbursement, vacation, sick, personal or bereavement days, leaves of absences and holidays; provided, however, that the term "Benefit Plan" does not include any government-sponsored benefits, such as workers' compensation, unemployment or any similar plans, programs or policies or Individual Agreements.

 

"Business Day" means any day except a Saturday, a Sunday or a day on which banking institutions in New York, New York are not required to be open.

 

"Code" means the Internal Revenue Code of 1986, as amended.

 

"Commission" means the U.S. Securities and Exchange Commission.

 

"Company" has the meaning set forth in the Recitals hereof.

 

"Consents" means any consents, waivers, authorizations, ratifications, permissions, exemptions or approvals from or to any Person.

 

"Contract" means any oral or written contract, agreement or other legally binding instrument, including any note, bond, mortgage, deed, indenture, commitment, lease, sublease, license, sublicense or joint venture agreement.

 

"Dispute" has the meaning set forth in Section 11.02.

 

"Dispute Notice" has the meaning set forth in Section 11.02.

 

"Distribution" has the meaning set forth in the Recitals hereof.

 

"Distribution Date" means the date, determined by Parent in accordance with Section 4.03, on which the Distribution occurs.

 

"Distribution Effective Time" means [●] Eastern Time, or such other time as Parent may determine, on the Distribution Date.

 

 

"Distribution Ratio" shall have the meaning set forth in Section 4.01(b).

 

"Dual-Role Director" means each Person who serves as a director on each of the Parent Board and the SpinCo Board at any time on or after the Distribution.

 

"Employee" means any Parent Group Employee or SpinCo Employee.

 

"Exchange" means the Nasdaq Capital Market.

 

"Exchange Act" means the U.S. Securities Exchange Act of 1934, together with the rules and regulations promulgated thereunder.

 

"First Post-Distribution Report" has the meaning set forth in Section 11.12.

 

"Form 10" means the registration statement on Form 10 filed by SpinCo with the Commission to effect the registration of SpinCo Common Stock pursuant to the Exchange Act in connection with the Distribution, as such registration statement may be amended or supplemented from time to time.

 

"Former Employees" means any individual who is a former employee of the Parent Group as of the Distribution Date.

 

"Governmental Approvals" means any notices, reports or other filings given to or made with, or any Consents, registrations or permits obtained from, any Governmental Authority.

 

"Governmental Authority" means any federal, state, local, foreign, international or multinational government, political subdivision, governmental, quasi-governmental authority of any nature (including any department, commission, board, bureau, agency, court or tribunal) or other body exercising legislative, judicial, regulatory, administrative or taxing authority, arbitral body or official of any of the foregoing.

 

"Government Investigation" means any inquiry, investigation, probe, audit or inspection conducted by a Governmental Authority.

 

"Group" means either the Parent Group or the SpinCo Group, or both, as the context requires.

 

"Indemnifying Party" has the meaning set forth in Section 5.04(a).

 

"Indemnitee" has the meaning set forth in Section 5.04(a).

 

"Indemnity Payment" has the meaning set forth in Section 5.04(a).

 

"Individual Agreement" means any individual (i) employment contract, (ii) retention, severance or change in control agreement or (iii) other agreement containing restrictive covenants (including confidentiality, noncompetition and nonsolicitation provisions) between a member of the Parent Group and an Employee, as in effect immediately prior to the Distribution, in each case, other than any equity or equity-based incentive award agreement.

 

 

"Information" means information, whether or not patentable, copyrightable or protectable as a trade secret, in written, oral, electronic or other tangible or intangible forms, stored in any medium now known or yet to be created, including studies, reports, records, books, Contracts, instruments, surveys, analyses, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing or business plans, customer names or information, communications (including emails, text messages, IMs, and chats, including those by or to attorneys (whether or not subject to the attorney-client privilege)), memos and other materials (including those prepared by attorneys or under their direction (whether or not constituting attorney work product)) and other technical, financial, employee or business information or data, documents, correspondence, materials and files.

 

"Information Statement" means the Information Statement sent by or on behalf of Parent to the holders of shares of Parent Common Stock in connection with the Distribution, as such Information Statement may be amended from time to time.

 

"Insurance Proceeds" means those monies: (i) received by an insured (or its successor-in-interest) from an insurance carrier; (ii)           paid by an insurance carrier on behalf of the insured (or its successor-in-interest); or (iii)           received (including by way of set-off) from any third party in the nature of insurance in respect of any Liability, in any such case net of (A) any applicable premium adjustments (including reserves and retrospectively rated premium adjustments), (B) any costs or expenses incurred in the collection thereof, (iii) any reimbursement obligations under "fronted" or similar insurance policies and (C) any Taxes resulting from the receipt thereof.

 

"JAMS" has the meaning set forth in Section 11.03(a).

 

"Law" means any statute, law, regulation, ordinance, rule, judgment, rule of common law, order, decree, Governmental Approval, concession, grant, franchise, license, directive, guideline, policy, requirement or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Authority, whether now or hereinafter in effect.

 

"Liabilities" means any and all claims, debts, demands, causes of action, suits, damages, fines, penalties, obligations, prohibitions, accruals, accounts payable, bonds, indemnities and similar obligations, agreements, promises, guarantees, make-whole agreements and similar obligations, and other liabilities, obligations or requirements of any kind or nature, including all contractual obligations, whether absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, and including those arising under any Law, Action, threatened or contemplated Action or any award of any arbitrator or mediator, and those arising under any Contract, including those arising under this Agreement or any Ancillary Agreement, in each case, whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person. For the avoidance of doubt, Liabilities shall include reasonable attorneys' fees and expenses, the costs and expenses of all assessments, judgments, settlements, compromises and resolutions, and any and all other costs and expenses whatsoever reasonably incurred in connection with anything contemplated by the immediately preceding sentence (including reasonable costs and expenses incurred in investigating, preparing or defending against any such Actions or threatened or contemplated Actions).

 

 

"Letter Agreement" has the meaning set forth in the Recitals hereof.

 

"Management Agreement" has the meaning set forth in the Recitals hereof.

 

"Negotiation Period" has the meaning set forth in Section 11.02.

 

"Parent" has the meaning set forth in the Preamble hereof.

 

"Parent Assets" means, without duplication: (i) all Assets of the Parent Group as of immediately prior to the Distribution other than the SpinCo Assets; and (ii) all interests in the capital stock of, or other equity interests in, the members of the Parent Group (other than Parent).

 

"Parent Awards" means Parent Option Awards, Parent RSU Awards and Parent Performance-Based RSU Awards, collectively.

 

"Parent Benefit Plan" means any Benefit Plan established, sponsored or maintained by Parent or any of its Subsidiaries immediately prior to the Distribution.

 

"Parent Board" has the meaning set forth in the Recitals hereof.

 

"Parent Common Stock" means the Class A Common Stock, $0.0001 par value per share, of Parent.

 

"Parent Disclosure Sections" means all information contained in or incorporated by reference into the Form 10 or Information Statement, or used in documents for an offering of securities in connection with the Spin-Off or for an offering of securities as contemplated by this Agreement, to the extent relating to (i) the Parent Group, (ii) the Parent Liabilities, (ii) the Parent Assets or (iv) the substantive disclosure set forth in such documents relating to the Parent Board's consideration of the Spin-Off, including the section of the Form 10 entitled "Reasons for the Spin-Off".

 

"Parent Employee Liabilities" means, without duplication: (i) any and all wages, salaries, incentive compensation, equity compensation, commissions, bonuses and any other compensation or benefits payable to or on behalf of (x) any Parent Group Employees and Former Employees after the Distribution and (y) any SpinCo Employees prior to the Distribution, without regard to when such wages, salaries, incentive compensation, equity compensation, commissions, bonuses or other compensation or benefits are or may have been awarded or earned; (ii) any and all Liabilities whatsoever with respect to claims under a Benefit Plan; (iii) any and all Liabilities arising out of, relating to or resulting from the employment, or termination of employment of all Parent Group Employees and Former Employees; and (iv) any and all Liabilities arising out of, relating to or resulting from the employment of individuals who will become SpinCo Employees at the Distribution that are not expressly assumed or retained by SpinCo pursuant to this Agreement.

 

 

"Parent Group" means, Parent and each Subsidiary of Parent that is or was a Subsidiary of Parent at the time in respect of which the relevant determination is being made, but excluding any member of the SpinCo Group.

 

"Parent Group Employees" means (i) each individual who is an employee of the Parent Group as of immediately prior to the Distribution (including any such individual who is not actively working as of the Distribution Date as a result of an illness, injury or an approved leave of absence) and (ii) any other individual employed by the Parent Group as of the Distribution Date, in each case, who is not a SpinCo Employee.

 

"Parent Indemnified Taxes" any liability arising under Treasury Regulations Section 1.1502-6, or any similar provision of state, local or non-U.S. tax Law, as a result of a member of the SpinCo Group's membership in a U.S. federal income tax consolidated group (or similar group under state, local or non-U.S. Law) with any member of the Parent Group prior to the Distribution Date.

 

"Parent Indemnitees" has the meaning set forth in Section 5.02.

 

"Parent Liabilities" means, without duplication: (i) all Liabilities of the Parent Group to the extent relating to, arising out of or resulting from the Parent Assets; (ii) all Parent Employee Liabilities; and (iii) all Liabilities to the extent relating to, arising out of or resulting from any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to the Parent Disclosure Sections. For the avoidance of doubt, the Parent Liabilities shall not include any SpinCo Liabilities.

 

"Parent Omnibus Plan" means any equity compensation plan sponsored or maintained by Parent immediately prior to the Distribution, including the CompoSecure, Inc. 2021 Incentive Equity Plan, as amended from time to time, and the CompoSecure Holdings, L.L.C. Amended and Restated Equity Incentive Plan, as amended from time to time.

 

"Parent Option Award" means an award of options to purchase Parent Common Stock granted pursuant to a Parent Omnibus Plan that is outstanding as of immediately prior to the Distribution.

 

"Parent Performance-Based RSU Award" means a restricted stock unit award that is subject to performance-based vesting outstanding as of immediately prior to the Distribution, granted pursuant to the Parent Omnibus Plan.

 

"Parent Ratio" means the quotient obtained by dividing (i) the Pre-Separation Parent Stock Value by (ii) the Post-Separation Parent Stock Value, carried out to six decimal places.

 

 

"Parent RSU Award" means a restricted stock unit award outstanding as of immediately prior to the Distribution that is not subject to performance-based vesting conditions, granted pursuant to the Parent Omnibus Plan.

 

"Party" means either party hereto, and "Parties" means both parties hereto.

 

"Person" means an individual, a general or limited partnership, a corporation, an association, a trust, a joint venture, an unincorporated organization, a limited liability company, any other entity or any Governmental Authority.

 

"Post-Separation Parent Option Award" means a Parent Option Award, as adjusted as of the Distribution Date in accordance with Section 8.02(a).

 

"Post-Separation Parent Performance-Based RSU Award" means a Parent Performance-Based RSU Award, as adjusted as of the Distribution Date in accordance with Section 8.02(c), as applicable.

 

"Post-Separation Parent RSU Award" means a Parent RSU Award, as adjusted as of the Distribution Date in accordance with Section 8.02(b), as applicable.

 

"Post-Separation Parent Stock Value" means the volume-weighted average per share price of Parent Common Stock on the Nasdaq Global Market during the first regular trading session (9:30 a.m. to 4:00 p.m. Eastern Time) commencing after the Distribution Effective Time.

 

"Pre-Distribution Tax Period" means any Tax period ending on or before the Distribution Date and the portion of any Tax period beginning before the Distribution Date and ending after the Distribution Date that ends on the Distribution Date.

 

"Pre-Distribution Transactions" has the meaning set forth in the Recitals hereof.

 

"Pre-Separation Parent Stock Value" means the closing per-share price of Parent Common Stock trading regular way "with due bills" on the Nasdaq Global Market on the last regular trading session (9:30 a.m. to 4:00 p.m. Eastern Time) ending prior to the Distribution Effective Time.

 

"Record Date" means the close of business on the date determined by the Parent Board as the record date for determining the shares of Parent Common Stock in respect of which shares of SpinCo Common Stock will be distributed pursuant to the Distribution.

 

"Record Holders" has the meaning set forth in Section 4.01(b).

 

"Representative" means, with respect to any Person, its directors, officers, employees, agents, accountants, subcontractors, counsel and other advisors and representatives.

 

"Securities Act" has the meaning set forth in Section 8.01.

 

 

"Security Interest" means any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-way, covenant, condition, easement, encroachment, restriction on transfer or other encumbrance of any nature whatsoever.

 

"Specified Confidential Information" has the meaning set forth in Section 6.09(a).

 

"SpinCo" has the meaning set forth in the Preamble hereof.

 

"SpinCo Assets" means, without duplication, all Assets listed or described on Schedule 1.01(a). For the avoidance of doubt, the SpinCo Assets shall not include any Parent Assets.

 

"SpinCo Board" means the board of directors of SpinCo.

 

"SpinCo Common Stock" means the Common Stock, $0.0001 par value per share, of SpinCo.

 

"SpinCo Employee" means each individual set forth on Schedule 1.01(b).

 

"SpinCo Employee Liabilities" means, without duplication, all Liabilities arising out of, relating to or resulting from the employment of individuals who will become SpinCo Employees at the Distribution that are expressly assumed or retained by SpinCo pursuant to this Agreement.

 

"SpinCo Group" means SpinCo and each Person that becomes a Subsidiary of SpinCo, if any, after the Distribution Date at the time in respect of which the relevant determination is being made.

 

"SpinCo Indemnitees" has the meaning set forth in Section 5.03.

 

"SpinCo Individual Agreements" has the meaning set forth in Section 7.02(d).

 

"SpinCo Liabilities" means, without duplication: (i) all Liabilities to the extent relating to, arising out of or resulting from the SpinCo Assets; (ii); all SpinCo Employee Liabilities; and (iii) all Liabilities to the extent relating to, arising out of or resulting from any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in or incorporated by reference into the Form 10 or the Information Statement and any other documents filed with the Commission or used in documents for an offering of securities in connection with the Spin-Off, other than with respect to the Parent Disclosure Sections.

 

"SpinCo Omnibus Plan" means the Resolute Holdings Management, Inc. 2025 Omnibus Incentive Plan, as established by SpinCo as of the Distribution Date pursuant Section 8.01.

 

"Spin-Off" has the meaning set forth in the Recitals hereof.

 

 

"Straddle Period" has the meaning set forth in Section 6.05(c).

 

"Subsidiary" of any Person means any corporation or other organization, whether incorporated or unincorporated, of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization, is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries.

 

"Tax" or "Taxes" means (i) any and all taxes of any kind whatsoever, including all foreign, federal, state, county, or local income, alternative or add-on minimum, sales and use, excise, franchise, ad valorem, value added, real and personal property, escheat or unclaimed property, gross income, gross receipt, capital stock, production, license, estimated, environmental, net worth, business and occupation, disability, employment, unemployment, social security (or similar), transfer, payroll, severance, windfall profit, stamp, withholding, and all other taxes or assessments, fees, duties, levies, customs, tariffs, imposts, obligations and charges of the same or similar nature of the foregoing, including all interest, additions to tax, surcharges, fees and penalties related thereto, and (ii) any Liability for the payment of any amounts of a type described in clause (i) above of another Person arising by reason of Contract, assumption, transferee, successor or similar Liability (including bulk transfer or similar Laws), operation of Law (including pursuant to Treasury Regulations Section 1.1502-6 (or any predecessor or successor thereof or any analogous or similar state, local, or foreign Law)) or otherwise.

 

"Tax Contest" means any U.S. federal, state, local or foreign Tax audit or examination or notice of deficiency or other adjustment, assessment or redetermination of Taxes before a Governmental Authority.

 

"Tax Return" means any declaration, estimate, return, report, claim for refund, information statement, schedule or other document (including any related or supporting information), and including any amendment thereof with respect to Taxes that is filed or required to be filed with any Governmental Authority.

 

"Third-Party Claim" means any written assertion or other commencement by a Person (including any Governmental Authority) who is not a member of the Parent Group or the SpinCo Group of any claim, demand, inquiry or investigation, or the commencement by any such Person of any Action, against any member of the Parent Group or the SpinCo Group.

 

"Third-Party Proceeds" has the meaning set forth in Section 5.04(a).

 

"Treasury Regulations" means the income Tax regulations promulgated under the Code.

 

"U.S. State and Local Tax Sharing Agreement" means the U.S. State and Local Tax Sharing Agreement, dated as of _____, 2025, by and between Parent and SpinCo, pursuant to which Parent and SpinCo have agreed on certain procedural matters with respect to the filing of Tax Returns in respect of post-Spin-Off Tax periods that are required to be filed on a consolidated, combined, unitary or other group basis.

 

 

ARTICLE II

 

THE SEPARATION

 

Section 2.01           Transfer of Assets and Assumption of Liabilities.

 

(a)            Prior to the Distribution, the Parties shall, and Parent shall cause the other members of Parent Group to, execute such instruments of assignment, transfer or conveyance and take such other corporate actions as are necessary to: (i) transfer and convey to SpinCo all of the right, title and interest of the Parent Group in, to and under all SpinCo Assets; and (ii) cause SpinCo to assume all of the SpinCo Liabilities. Notwithstanding anything to the contrary herein, neither Party shall be required to transfer any Information, except as required by Article VI, the Management Agreement or the Letter Agreement.

 

(b)           In the event that it is discovered in the twelve (12) month period after the Distribution Effective Time that there was an omission of the transfer or conveyance by Parent (or another member of the Parent Group) to, or the acceptance or assumption by, SpinCo of any SpinCo Asset or SpinCo Liability, as the case may be, the Parties shall use reasonable best efforts to promptly effect such transfer, conveyance, acceptance or assumption of such Asset or Liability, as the case may be, for no consideration and subject to Section 2.03. Any transfer, conveyance, acceptance or assumption made pursuant to this Section 2.01(b) shall be treated by the Parties for all purposes as if it had occurred immediately prior to the Distribution, except as otherwise required by applicable Law.

 

(c)           In the event that it is discovered in the twelve (12) month period after the Distribution Effective Time that there was a transfer or conveyance by Parent (or a member of the Parent Group) to, or the acceptance or assumption by, SpinCo of any Parent Asset or Parent Liability, as the case may be, the Parties shall use reasonable best efforts to promptly effect such transfer, conveyance, acceptance or assumption of such Asset or Liability, as the case may be, for no consideration and subject to Section 2.03. Any transfer, conveyance, acceptance or assumption made pursuant to this Section 2.01(c) shall be treated by the Parties for all purposes as if it had occurred immediately prior to the Distribution, except as otherwise required by applicable Law.

 

Section 2.02           Certain Matters Governing Exclusively by Ancillary Agreements(a)           . Each of Parent and SpinCo agrees on behalf of itself and the other members of its Group, as applicable, that, except as explicitly provided in this Agreement and or any Ancillary Agreement, (a) the Management Agreement shall exclusively govern all matters relating to SpinCo's management of the day-to-day business and affairs of the Company and its Subsidiaries and (b) the Letter Agreement shall exclusively govern all matters relating to Parent's support of the Company's performance of its duties and obligations under the Management Agreement. Except as set forth in the immediately preceding sentence in respect of matters governed exclusively by the Management Agreement and the Letter Agreement, in the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of any other Ancillary Agreement, the provisions of this Agreement shall control (unless this Agreement or such other Ancillary Agreement explicitly provides otherwise in respect of such conflict).

 

 

Section 2.03           Disclaimer of Representations and Warranties. Each of Parent (on behalf of itself and each other member of the Parent Group) and SpinCo understands and agrees that, except as expressly set forth in this Agreement or any Ancillary Agreement, no party to this Agreement, any Ancillary Agreement or any other agreement or document contemplated by this Agreement or any Ancillary Agreement is representing or warranting in any way as to any Assets or Liabilities transferred or assumed as contemplated hereby or thereby, as to the sufficiency of the Assets or Liabilities transferred, conveyed, accepted or assumed hereby or thereby for the conduct and operations of the operating management business to be conducted by SpinCo, as to any notices, Governmental Approvals or other Consents required in connection therewith, as to the value or freedom from any Security Interests of, or any other matter concerning, any Assets or Liabilities of such party, or as to the absence of any defenses or rights of set-off or freedom from counterclaim with respect to any claim or other Asset, including any accounts receivable, of any such party, or as to the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any Asset or thing of value upon the execution, delivery and filing hereof or thereof, and each of Parent (on behalf of itself and each other member of the Parent Group) and SpinCo has relied only on the representations and warranties expressly contained in Section 11.01(c) or in any Ancillary Agreement. Except as may expressly be set forth herein or in any Ancillary Agreement, any such Assets are being transferred on an "as is," "where is," "with all faults" basis and SpinCo shall bear the economic and legal risks that (a) any conveyance shall prove to be insufficient to vest in SpinCo good and marketable title, free and clear of any Security Interest and (b) any necessary notices, Governmental Approvals or other Consents are not delivered or obtained, as applicable, or that any requirements of Laws or judgments are not complied with.

 

Section 2.04           Waiver of Bulk-Sale and Bulk-Transfer Laws. SpinCo hereby waives compliance by each and every member of the Parent Group with the requirements and provisions of any "bulk-sale" or "bulk-transfer" Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the SpinCo Assets to SpinCo.

 

Section 2.05           General Principles. All provisions herein shall be subject to the requirements of all applicable Law. Notwithstanding anything in this Agreement to the contrary, if the terms of applicable Law require that any Assets or Liabilities be retained or assumed by, or transferred to, a Party in a manner that is different than what is set forth in this Agreement, such retention, assumption or transfer shall be made in accordance with the terms of such applicable Law and shall not be made as otherwise set forth in this Agreement; provided that, in such case, the Parties shall take all necessary action to preserve the economic terms of the allocation of Assets and Liabilities contemplated by this Agreement. The provisions of this Agreement shall apply in respect of all jurisdictions.

 

 

ARTICLE III

 

ACTIONS PENDING THE DISTRIBUTION

 

Section 3.01           Actions Prior to the Distribution. Subject to the conditions specified in Section 3.02 and subject to Section 4.03, Parent and SpinCo shall use reasonable best efforts to consummate the Distribution. Such efforts shall include taking the following actions:

 

(a)           Availability of Information Statement. Prior to the Distribution, Parent shall mail the Notice of Internet Availability of the Information Statement or the Information Statement to the Record Holders.

 

(b)           Securities Law Matters. SpinCo shall file any amendments or supplements to the Form 10 as may be necessary or advisable in order to cause the Form 10 to become and remain effective as required by the Commission or federal, state or other applicable securities Laws. SpinCo shall prepare, file with the Commission and use its reasonable best efforts to cause to become effective any registration statements or amendments thereto required to effect the establishment of, or amendments to, any employee benefit and other plans necessary or appropriate in connection with the transactions contemplated by this Agreement or any of the Ancillary Agreements. Parent and SpinCo shall take all such action as may be necessary or appropriate under the securities or blue sky laws of the states or other political subdivisions of the United States or of other foreign jurisdictions in connection with the Distribution.

 

(c)           Notice to the Exchange. Parent shall, to the extent possible, give the Exchange not less than ten (10) days' advance notice of the Record Date in compliance with Rule 10b-17 of under the Exchange Act.

 

(d)           Exchange Listing. SpinCo shall prepare and file, and shall use reasonable best efforts to have approved prior to the Distribution, an application for the listing of the SpinCo Common Stock to be distributed in the Distribution on the Exchange, subject to official notice of distribution.

 

(e)           SpinCo Directors and Officers. Prior to the Distribution, (i) Parent shall cause the Company, as sole stockholder of SpinCo, to have duly elected to the SpinCo Board the individuals listed as members of the SpinCo Board in the Information Statement, and such individuals shall be the members of the SpinCo Board effective as of immediately after the Distribution; provided, however, that to the extent required by any Law or requirement of the Exchange or any other national securities exchange, as applicable, one independent director shall be appointed by the existing SpinCo Board prior to the date on which "when-issued" trading of SpinCo Common Stock begins on the Exchange and begin his or her term prior to the Distribution and shall serve on the audit committee of the SpinCo Board, and (ii) Parent shall deliver or cause to be delivered to SpinCo resignations, effective as of immediately after the Distribution, of each individual who will be an Employee of Parent or any member of the Parent Group after the Distribution and who is director or officer of SpinCo immediately prior to the Distribution (or shall otherwise cause such individuals to be removed as directors or officers, as applicable, of SpinCo), other than any individual expressly contemplated by the Information Statement to remain a member of the SpinCo Board following the Distribution.

 

 

(f)            SpinCo Organizational Documents. Immediately prior to the Distribution, the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of SpinCo, each in substantially the form filed as an exhibit to the Form 10, shall be in effect.

 

(g)           Distribution Agent. Parent shall enter into a distribution agent agreement with the Agent or otherwise provide instructions to the Agent regarding the Distribution.

 

(h)           Employee Matters; Equity, Incentive and Director Compensation. The Parties shall take all actions as are deemed necessary or advisable to effectuate the provisions of Articles VII and VIII.

 

(i)            Satisfying Conditions to the Distribution. The Parties shall, subject to Section 4.03, take all reasonable steps necessary and appropriate to cause the conditions set forth in Section 3.02 to be satisfied and to effect the Distribution on the Distribution Date.

 

Section 3.02           Conditions Precedent to Consummation of the Distribution. Subject to Section 4.03, as soon as practicable after the date of this Agreement, the Parties shall use reasonable best efforts to satisfy the following conditions prior to the consummation of the Distribution. The obligations of the Parties to consummate the Distribution shall be conditioned on the satisfaction, or waiver by Parent, of the following conditions:

 

(a)           The Parent Board shall have ratified, authorized and approved the Pre-Distribution Transactions and the Distribution and not withdrawn such authorization and approval, and shall have declared the dividend of SpinCo Common Stock to Parent stockholders.

 

(b)           Each of the Management Agreement, the Letter Agreement and the other Ancillary Agreements shall have been executed by each party to such agreement.

 

(c)           The SpinCo Common Stock shall have been accepted for listing on the Exchange or another national securities exchange approved by Parent, subject to official notice of issuance.

 

(d)           The Commission shall have declared effective the Form 10, no stop order suspending the effectiveness of the Form 10 shall be in effect and no proceedings for that purpose shall be pending before or threatened by the Commission.

 

(e)           The actions set forth in Sections 3.01(a), (e) and (f) shall have been completed and the covenants of the Parties set forth in Articles VII and VIII shall have been performed in all material respects.

 

(f)           The Pre-Distribution Transactions shall have been completed to the satisfaction of Parent.

 

(g)           No order, injunction or decree issued by any Governmental Authority of competent jurisdiction or other applicable legal restraint or prohibition preventing the consummation of the Distribution shall be in effect, and no other event outside the control of Parent shall have occurred, or failed to occur, that prevents the consummation of the Distribution.

 

 

(h)           No other events or developments shall have occurred prior to the Distribution that, in the judgment of the Parent Board, in its sole and absolute discretion, makes it inadvisable to effect the Distribution.

 

The foregoing conditions are for the sole benefit of Parent and shall not give rise to or create any duty on the part of Parent or the Parent Board to waive, or not waive, such conditions or in any way limit the right of Parent to terminate this Agreement as set forth in Article X or alter the consequences of any such termination from those specified in such Article. Any determination made by the Parent Board prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in this Section 3.02 shall be conclusive.

 

ARTICLE IV

 

THE DISTRIBUTION

 

Section 4.01           The Distribution.

 

(a)           SpinCo shall cooperate with Parent to accomplish the Distribution and shall, at the direction of Parent, use its reasonable best efforts to promptly take any and all actions reasonably necessary, customary or advisable to effect the Distribution. Parent shall select any investment bank or manager in connection with the Distribution, as well as any financial printer, solicitation, exchange or distribution agent and financial, legal, accounting, tax and other advisors for Parent in connection with the Distribution. Parent or SpinCo, as the case may be, will provide to the Agent all book-entry authorizations and any information required in order to complete the Distribution (provided that any information required to be provided under this Section 4.01(a) shall be subject to Section 6.09).

 

(b)           Subject to the terms and conditions set forth in this Agreement, (i) on or prior to the Distribution Date, for the benefit of and distribution to the holders of Parent Common Stock as of the Record Date ("Record Holders"), Parent will deliver to the Agent all of the issued and outstanding shares of SpinCo Common Stock held by Parent immediately following the Pre-Distribution Transactions and book-entry authorizations for such shares and (ii) on the Distribution Date, Parent shall instruct the Agent to distribute, by means of a pro rata dividend based on the aggregate number of shares of Parent Common Stock held by each applicable Record Holder, to each Record Holder (or such Record Holder's bank or brokerage firm on such Record Holder's behalf) electronically, by direct registration in book-entry form, the number of shares of SpinCo Common Stock to which such Record Holder is entitled based on a distribution ratio determined by Parent in its sole discretion (the "Distribution Ratio"). The Distribution shall be effective at 5:00 p.m. Eastern Time on the Distribution Date. Parent shall, on or as soon as practicable after the Distribution Date, instruct the Agent to mail to each Record Holder (or otherwise transmit in accordance with the Agent's regular practices) an account statement indicating the number of shares of SpinCo Common Stock that have been registered in book-entry form in the name of such Record Holder.

 

 

Section 4.02           Fractional Shares. Record Holders holding a number of shares of Parent Common Stock on the Record Date that would entitle such holders to receive less than one whole share of SpinCo Common Stock in the Distribution will receive cash in lieu of such fractional share. Fractional shares of SpinCo Common Stock will not be distributed in the Distribution nor credited to book-entry accounts. Parent shall cause the Agent to, as soon as practicable after the date on which "when-issued" trading of the SpinCo Common Stock begins on the Exchange, (a) determine the number of whole shares and fractional shares of SpinCo Common Stock allocable to each Record Holder and (b) aggregate all fractional shares into whole shares and sell the whole shares obtained thereby in open market transactions at then prevailing trading prices on behalf of holders who would otherwise be entitled to fractional share interests. Parent shall cause the Agent to, as soon as practicable after the Distribution Date, distribute to each such holder, or for the benefit of each beneficial owner, such holder's or owner's ratable share of the net proceeds of such sale, based upon the average gross selling price per share of SpinCo Common Stock after making appropriate deductions for any amount required to be withheld under applicable Tax Law and less any brokers' charges, commissions or transfer Taxes. The Agent, in its sole discretion, will determine the timing and method of selling such fractional shares, the selling price of such fractional shares and the broker-dealer through which such fractional shares will be sold; provided, however, that the designated broker-dealer shall not be an Affiliate of Parent or SpinCo. Neither Parent nor SpinCo will pay any interest on the proceeds from the sale of fractional shares.

 

Section 4.03           Sole Discretion of Parent. Parent shall, in its sole and absolute discretion, determine the Record Date, the Distribution Date and all terms of the Distribution, including the form, structure and terms of any transactions or offerings to effect the Distribution, and the timing of and conditions to the consummation thereof. In addition, and notwithstanding anything to the contrary set forth below, Parent may at any time and from time to time until the consummation of all or part of the Distribution decide to abandon the Distribution or modify or change the form, structure or terms of any transactions or offerings to effect the Distribution, including by accelerating or delaying the timing of the consummation of all or part of the Distribution. Any determinations regarding the allocation of Assets or Liabilities under this Agreement or under any Ancillary Agreement, including the identification of Assets or Liabilities for allocation hereunder, shall be made by Parent in its sole and absolute discretion; provided that, this sentence shall not amend the express terms of the Agreement or any Ancillary Agreement after the Distribution Date. Notwithstanding anything to the contrary in this Agreement, the allocation of costs and expenses incurred in connection with the performance of the respective duties and obligations of the parties to the Management Agreement and the Letter Agreement shall be governed by the express terms of the Management Agreement and the Letter Agreement, as applicable.

 

Section 4.04           Withholding. Notwithstanding any other provision of this Agreement, Parent, the Agent and any other Person that is a withholding agent under applicable Law shall be entitled to deduct and withhold from any consideration distributable or payable hereunder the amounts required to be deducted and withheld under the Code, or any provision of any federal, state, local or non-U.S. Tax Law. Any amounts so withheld shall be paid over to the appropriate Tax Authority in the manner prescribed by Law. To the extent that amounts are so deducted and withheld, such deducted and withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Persons in respect of which such deduction and withholding was made. An applicable withholding agent may collect the deducted or withheld amounts by reducing to cash a sufficient portion of the SpinCo Common Stock that a Person would otherwise receive pursuant to the Distribution, and may require that such Person bear the brokerage or other costs from this withholding procedure.

 

 

ARTICLE V

 

MUTUAL RELEASES; INDEMNIFICATION

 

Section 5.01           Release of Pre-Distribution Claims.

 

(a)           Except as provided in Section 5.01(c) or elsewhere in this Agreement or the Ancillary Agreements, effective as of the Distribution, SpinCo does hereby, for itself and its Affiliates as of the Distribution Effective Time, and to the extent it may legally do so, its and their respective successors and assigns, and all Persons who at any time on or prior to the Distribution have been stockholders, fiduciaries, directors, trustees, counsel, officers, members, managers, employees, agents, insurers, re-insurers, administrators, representatives, including legal representatives, or employee retirement or benefit plans (and the trustees, administrators, fiduciaries, agents, representatives, insurers and re-insurers of such plans) of SpinCo (in each case, in their respective capacities as such), remise, release and forever discharge Parent and the other members of the Parent Group, their respective Affiliates, successors and assigns, and all Persons who at any time on or prior to the Distribution have been stockholders, fiduciaries, directors, trustees, counsel, officers, members, managers, employees, agents, insurers, re-insurers, administrators, including legal representatives, or employee retirement or benefit plans (and the trustees, administrators, fiduciaries, agents, representatives, insurers and re-insurers of such plans) of any member of the Parent Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all SpinCo Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring, or failing to occur, or alleged to have occurred, or to have failed to occur, or any conditions existing or alleged to have existed on or before the Distribution, including in connection with the Spin-Off and all other activities to implement the Spin-Off.

 

(b)             Except as provided in Section 5.01(c) or elsewhere in this Agreement or the Ancillary Agreements, effective as of the Distribution, Parent does hereby, for itself and each other member of the Parent Group, their respective Affiliates as of the Distribution Effective Time, and to the extent it may legally do so, its and their respective successors and assigns, and all Persons who at any time on or prior to the Distribution have been stockholders, fiduciaries, directors, trustees, counsel, officers, members, managers, employees, agents, insurers, re-insurers, administrators, representatives, including legal representatives, or employee retirement or benefit plans (and the trustees, administrators, fiduciaries, agents, representatives, insurers and re-insurers of such plans) of Parent (in each case, in their respective capacities as such), remise, release and forever discharge SpinCo, its Affiliates, successors and assigns, and all Persons who at any time on or prior to the Distribution have been stockholders, fiduciaries, directors, trustees, counsel, officers, members, managers, employees, agents, insurers, re-insurers, administrators, representatives, including legal representatives, or employee retirement or benefit plans (and the trustees, administrators, fiduciaries, agents, representatives, insurers and re-insurers of such plans) of SpinCo (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Parent Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring, or failing to occur, or alleged to have occurred, or to have failed to occur, or any conditions existing or alleged to have existed on or before the Distribution, including in connection with the Spin-Off and all other activities to implement the Spin-Off.

 

 

(c)           Nothing contained in Section 5.01(a) or (b) shall impair any right of any Person to enforce this Agreement or any Ancillary Agreement in accordance with its terms. Nothing contained in Section 5.01(a) or (b) shall release:

 

(i)           any Person from any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement;

 

(ii)          any Person from any Liability provided in or resulting from any Contract that is entered into after the Distribution between one Party (or any member of such Party's Group), on the one hand, and the other Party (or any member of such Party's Group), on the other hand;

 

(iii)         any Person from any Liability that the Parties may have with respect to indemnification or contribution pursuant to this Agreement or any Ancillary Agreement for claims brought against the Parties, any member of their respective Groups or any of their respective directors, officers, employees, agents or representatives, by third Persons, which Liability shall be governed by Section 5.02, Section 5.03 and the other applicable provisions of this Article V or, if applicable, the appropriate provisions of the relevant Ancillary Agreement;

 

(iv)         any Party (or any member of its Group) from any Liability that such Party (or any member of its Group) may have to directors, officers, agents or employees under indemnification or similar agreements or arrangements; or

 

(v)          any employee from any Liability relating to, arising out of or resulting from such Person's fraud, embezzlement or misappropriation of intellectual property.

 

(d)           SpinCo shall not make, and shall cause any other member of the SpinCo Group not to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Parent or any other member of the Parent Group, or any other Person released pursuant to Section 5.01(a), with respect to any Liabilities released pursuant to Section 5.01(a). Parent shall not make, and shall cause each other member of the Parent Group not to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification against SpinCo or any other member of the SpinCo Group, or any other Person released pursuant to Section 5.01(b), with respect to any Liabilities released pursuant to Section 5.01(b).

 

 

(e)            It is the intent of each of Parent and SpinCo, by virtue of the provisions of this Section 5.01, to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring, or failing to occur, or alleged to have occurred, or to have failed to occur, and all conditions existing or alleged to have existed on or before the Distribution Date, between SpinCo, on the one hand, and Parent or any other member of the Parent Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any member of the Parent Group and SpinCo on or before the Distribution Date), except as expressly set forth in Section 5.01, Section 5.02, Section 5.03 or elsewhere in this Agreement or any Ancillary Agreement. At any time, at the request of the other Party, each Party shall cause each member of its Group to execute and deliver releases reflecting the provisions hereof.

 

Section 5.02           Indemnification by SpinCo. Subject to Section 5.04, SpinCo shall indemnify, defend and hold harmless Parent, each other member of the Parent Group and each of their respective former and then-current directors, officers and employees, and each of the heirs, executors, administrators, successors and assigns of any of the foregoing (collectively, the "Parent Indemnitees"), from and against any and all Liabilities of the Parent Indemnitees to the extent relating to, arising out of or resulting from any of the following items (without duplication):

 

(a)            the SpinCo Liabilities, including the failure of SpinCo or any other member of the SpinCo Group or any other Person to pay, perform or otherwise promptly discharge any SpinCo Liability in accordance with its terms;

 

(b)           any breach by SpinCo or any other member of the SpinCo Group of this Agreement, or any Ancillary Agreement, unless such Ancillary Agreement expressly provides for separate indemnification therein (which shall be controlling); and

 

(c)           any breach by SpinCo of any of the representations and warranties made by SpinCo in Section 11.01(c).

 

Section 5.03           Indemnification by Parent. Subject to Section 5.04, Parent shall indemnify, defend and hold harmless SpinCo, each other member of the SpinCo Group and each of their respective former and then-current directors, officers and employees, and each of the heirs, executors, administrators, successors and assigns of any of the foregoing (collectively, the "SpinCo Indemnitees"), from and against any and all Liabilities of the SpinCo Indemnitees to the extent relating to, arising out of or resulting from any of the following items on or before the Distribution (without duplication):

 

(a)            the Parent Liabilities, including the failure of Parent or any other member of the Parent Group, or any other Person, to pay, perform or otherwise promptly discharge any Parent Liability in accordance with its terms;

 

(b)           any breach by Parent or any other member of the Parent Group of this Agreement, or any Ancillary Agreement, unless such Ancillary Agreement expressly provides for separate indemnification therein (which shall be controlling);

 

(c)           any Parent Indemnified Taxes; and

 

(d)           any breach by Parent of any of the representations and warranties made by Parent (on behalf of itself and the members of the Parent Group) in Section 11.01(c).

 

 

This Section 5.03 shall apply with respect to any Taxes solely to the extent such Taxes constitute Parent Indemnified Taxes and in no event shall Parent be required to indemnify, defend and hold the SpinCo Indemnitees harmless from and against any and all Losses to the extent such Losses relate to Taxes that are not Parent Indemnified Taxes.

 

Section 5.04           Indemnification Obligations Net of Insurance Proceeds and Third-Party Proceeds.

 

(a)           The Parties intend that any Liability subject to indemnification or reimbursement pursuant to this Agreement will be net of (i) Insurance Proceeds that actually reduce the amount of, or are paid to the applicable Indemnitee in respect of, such Liability and (ii) other amounts recovered from any third party (net of any out-of-pocket costs or expenses incurred in, or Taxes imposed with respect to, the collection thereof) that actually reduce the amount of, or are paid to the applicable Indemnitee in respect of, such Liability ("Third-Party Proceeds"). Accordingly, the amount that either Party (an "Indemnifying Party") is required to pay to any Person entitled to indemnification or reimbursement pursuant to this Agreement (an "Indemnitee") will be reduced by any Insurance Proceeds or Third-Party Proceeds theretofore actually recovered by or on behalf of the Indemnitee from a third party in respect of the related Liability. If an Indemnitee receives a payment required by this Agreement from an Indemnifying Party in respect of any Liability (an "Indemnity Payment") and subsequently receives Insurance Proceeds or Third-Party Proceeds in respect of such Liability, then the Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if such Insurance Proceeds or Third-Party Proceeds had been received, realized or recovered before the Indemnity Payment was made; provided that for the avoidance of doubt, such amount shall not exceed the amount of the Indemnity Payment.

 

(b)           An insurer that would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto by virtue of the indemnification provisions hereof, it being expressly understood and agreed that no insurer or any other third party shall be entitled to a "windfall" (i.e., a benefit it would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification provisions hereof. Subject to Section 5.11, each member of the Parent Group and the SpinCo Group shall use reasonable best efforts to collect or recover any Insurance Proceeds and any Third-Party Proceeds to which such Person is entitled in connection with any Liability for which such Person seeks indemnification pursuant to this Article V; provided, however, that such Person's inability to collect or recover any such Insurance Proceeds or Third-Party Proceeds shall not limit the Indemnifying Party's obligations hereunder.

 

Section 5.05           Procedures for Indemnification of Third-Party Claims.

 

(a)           If an Indemnitee shall receive notice or otherwise learn of a Third-Party Claim with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to this Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof as soon as reasonably practicable. Any such notice shall describe the Third-Party Claim in reasonable detail and shall include: (i) the basis for, and nature of, such Third-Party Claim, including the facts constituting the basis for such Third-Party Claim; (ii) the estimated amount of losses (to the extent so estimable) that have been or may be sustained by the Indemnitee in connection with such Third-Party Claim; and (iii) copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim; provided, however, that any such notice need only specify such information reasonably known to the Indemnitee as of the date of such notice and shall not limit or prejudice any of the rights or remedies of any Indemnitee on the basis of any limitations on the information included in such notice, including any such limitations made in good faith to preserve the attorney-client privilege, work product doctrine or any other similar privilege or doctrine. Notwithstanding the foregoing, the failure of any Indemnitee or other Person to give notice as provided in this Section 5.05(a) shall not relieve the related Indemnifying Party of its obligations under this Article V, except to the extent that such Indemnifying Party is actually prejudiced by such failure to give notice in accordance with this Section 5.05(a).

 

 

(b)           The Indemnifying Party shall have the right, exercisable by written notice to the Indemnitee within thirty (30) days after receipt of notice from an Indemnitee in accordance with Section 5.05(a), to assume and conduct the defense of such Third-Party Claim in accordance with the limits set forth in this Agreement with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnitee; provided, however, that the Indemnifying Party shall not have the right to control the defense of any Third-Party Claim (i) to the extent such Third-Party Claim seeks criminal penalties or injunctive or other equitable relief or (ii) if the Party to this Agreement which part of such Indemnitee's Group has determined in good faith that the Indemnifying Party controlling such defense would reasonably be expected to have a material adverse impact on the reputation or the business relations of the Indemnitee or its Group, and (z) if the Party that is part of such Indemnitee's Group determines in good faith that the proper defense of the Third-Party Claim requires that the election to assume the defense of such claim be made in fewer than thirty (30) days, the Indemnitee may request that such election be made in such shorter period as the Indemnitee may reasonably determine; provided that such shorter period may not be shorter than ten (10) days. The Indemnifying Party shall notify the Indemnitee in writing within the time period described in the immediately preceding sentence as to whether or not it will assume the defense of the applicable Third-Party Claim. During such notice period, and prior to an election by the Indemnifying Party to control the defense of the applicable Third-Party Claim, the Indemnitee shall be permitted to take such actions in respect of such Third-Party Claim as the Indemnitee determines in good faith are necessary or appropriate to avoid prejudice to the Indemnitee's interests in respect of such Third-Party Claim during such notice period, provided that the Indemnitee will consult reasonably and in good faith with the Indemnifying Party in respect of such actions in advance of taking such actions to the extent possible.

 

(c)           If the Indemnifying Party elects not to assume the defense of a Third-Party Claim (or is not permitted to assume the defense of such Third-Party Claim) in accordance with this Agreement, or fails to notify an Indemnitee of its election as provided in Section 5.05(b), such Indemnitee may defend such Third-Party Claim with counsel selected by the Indemnitee and reasonably acceptable to the Indemnifying Party. If the Indemnifying Party elects (and is permitted) to assume the defense of a Third-Party Claim in accordance with the terms of this Agreement, the Indemnitee shall, subject to the terms of this Agreement, reasonably cooperate with the Indemnifying Party with respect to the defense of such Third-Party Claim.

 

 

(d)           If the Indemnifying Party elects (and is permitted) to assume the defense of a Third-Party Claim in accordance with the terms of this Agreement, the Indemnifying Party will not be liable for any additional legal expenses subsequently incurred by the Indemnitee in connection with the defense of the Third-Party Claim; provided, however, that if the Indemnifying Party fails to take reasonable steps necessary to defend diligently such Third-Party Claim, or the nature of such Third-Party Claim changes such that the Indemnifying Party would no longer be entitled to assume the defense of such Third-Party Claim pursuant to Section 5.05(b), the Indemnitee may assume its own defense, and the Indemnifying Party will be liable for all reasonable and documented costs or expenses paid or incurred in connection with such defense. The Indemnifying Party or the Indemnitee, as the case may be, shall have the right to participate in (but, subject to the immediately preceding sentence, not control), at its own expense, the defense of any Third-Party Claim that the other is defending as provided in this Agreement. In the event, however, that such Indemnitee reasonably determines that representation by counsel to the Indemnifying Party of both such Indemnifying Party and the Indemnitee could reasonably be expected to present such counsel with a conflict of interest, then the Indemnitee may employ separate counsel to represent or defend it in any such Action and the Indemnifying Party will pay the reasonable and documented fees and expenses of such counsel.

 

(e)            No Indemnifying Party shall consent to entry of any judgment or enter into any settlement of any Third-Party Claim with respect to which an Indemnifying Party is obligated to provide indemnification to an Indemnitee pursuant to this Agreement without the prior written consent of the applicable Indemnitee or Indemnitees (not to be unreasonably withheld, conditioned or delayed); provided, however, that such consent shall not be required if the judgment or settlement: (i) contains no finding or admission of liability with respect to any such Indemnitee or Indemnitees; (ii) involves only monetary relief which the Indemnifying Party has agreed to pay; and (iii) includes a full and unconditional release of the Indemnitee or Indemnitees. Notwithstanding the foregoing, the consent of an Indemnitee shall be required for any entry of judgment or settlement if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against such Indemnitee (such consent not to be unreasonably withheld, conditioned or delayed).

 

(f)            Whether or not the Indemnifying Party assumes the defense of a Third-Party Claim, no Indemnitee shall admit any liability with respect to, or settle, compromise, resolve or discharge, such Third-Party Claim without the Indemnifying Party's prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).

 

Section 5.06           Tax Matters.

 

(a)            Each Party is responsible for its own Taxes as imposed under applicable Law, and no indemnification shall be provided under this Agreement by either Party with respect to Taxes, except for any Parent Indemnified Taxes, which shall be borne solely by Parent.

 

(b)           Parent shall prepare (or cause to be prepared) and file (or cause to be filed) (i) all Tax Returns with respect to members of the SpinCo Group that are required to be filed on a combined basis with any members of the Parent Group, and (ii) all other Tax Returns of the SpinCo Group that are required to be filed prior to the Distribution Date and shall, in each case, bear all Taxes shown as due thereon. SpinCo shall be solely responsible for the preparation and filing of (and payment of Taxes in respect of) any Tax Returns of the members of the SpinCo Group that are required to be filed after the Distribution Date, other than those described in the previous clause (i).

 

 

(c)            SpinCo shall notify Parent within twenty (20) Business Days after receipt by it or any of its Affiliates of written notice of any pending Tax Contest relating to any Parent Indemnified Taxes; provided, however, that the failure to give such notice shall not relieve Parent of any of its obligations under this Section 5.06(c), except to the extent that Parent is actually and materially prejudiced by such failure. Such notice shall specify in reasonable detail the basis for such Tax Contest and shall include a copy of the relevant portion of any correspondence received from any Governmental Authority. Parent will have the right to control, at its own expense, any Tax Contest that relates to any Parent Indemnified Taxes; provided, however, that Parent shall (i) keep SpinCo reasonably informed of material developments with respect to such Tax Contest, (ii) consult with SpinCo before taking any significant or material action in connection with such Tax Contest and (iii) to the extent such Tax Contest is reasonably expected to give rise to Taxes of SpinCo, its Subsidiaries, or their Affiliates that are not Parent Indemnified Taxes, not settle, compromise or abandon any such Tax Contest without obtaining the prior written consent of SpinCo (such consent not to be unreasonably withheld, conditioned or delayed).

 

(d)           Notwithstanding anything in this Agreement to the contrary, the U.S. State and Local Tax Sharing Agreement shall control with respect to any matters set forth therein.

 

Section 5.07           Additional Matters.

 

(a)           Any claim on account of a Liability that does not result from a Third-Party Claim shall be asserted by prompt written notice given by the Indemnitee to the applicable Indemnifying Party. Any failure by an Indemnitee to give notice shall not relieve the Indemnifying Party's indemnification obligations under this Agreement, except to the extent that the Indemnifying Party shall have been actually prejudiced by such failure.

 

(b)           In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

 

(c)           For the avoidance of doubt, Liabilities incurred by an Indemnitee pursuant to a contractual indemnification or similar obligation granted to a third party in respect of Liabilities otherwise indemnifiable under Section 5.02 or Section 5.03 shall be indemnifiable thereunder to the same extent that the underlying Liabilities would have been indemnifiable under Section 5.02 or Section 5.03.

 

(d)           To the maximum extent permitted by applicable Law, the rights to recovery of each Party's Subsidiaries in respect of any past, present or future Action are hereby delegated to such Party. It is the intent of the Parties that the foregoing delegation shall satisfy any Law requiring such delegation to be effected pursuant to a power of attorney or similar instrument. The Parties and their respective Subsidiaries shall execute such further instruments or documents as may be necessary to effect such delegation.

 

 

(e)           Each of Parent and SpinCo hereby agrees that with respect to any Third-Party Claim or Action pending as of the Distribution Date or commenced following the Distribution Date, in each case that (x) has named as a defendant one or more members of the SpinCo Group but otherwise relates only to the Parent Assets, the Parent Group Employees or the Distribution or (y) has named as a defendant one or more members of the Parent Group but otherwise relates only to SpinCo or the other members of the SpinCo Group, the Parties shall use reasonable best efforts, each at its own expense, to cause each such nominal defendant to be removed as a defendant from such Third-Party Claim or Action, as soon as reasonably practicable (including using reasonable best efforts to petition the applicable court or counterparty to remove each such nominal defendant).

 

Section 5.08           Remedies Cumulative. The remedies provided in this Article V shall be cumulative and, subject to the provisions of Section 5.01, Section 5.11 and Article XI, shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

 

Section 5.09           Covenant Not to Sue. Each Party hereby covenants and agrees that none of it, the members of such Party's Group or any Person claiming through it shall bring an Action or otherwise assert any claim or defense against any Person, including before any court, arbitrator, mediator or administrative agency anywhere in the world, and further (on behalf of itself, the members of such Party's Group and any other Person claiming through it) waives and releases any claim or defense against any Person, alleging that: (a) the assumption or retention of any SpinCo Liabilities by SpinCo on the terms and conditions set forth in this Agreement or the Ancillary Agreements is unlawful, a breach of a fiduciary or other duty, void, unenforceable, unconscionable, inequitable, or otherwise improper for any reason; (b) the assumption or retention of any Parent Liabilities by Parent or a member of the Parent Group on the terms and conditions set forth in this Agreement or the Ancillary Agreements is unlawful, a breach of a fiduciary or other duty, void, unenforceable, unconscionable, inequitable, or otherwise improper for any reason; (c) the provisions of this Agreement (including this Article V) or any Ancillary Agreement are unlawful, a breach of a fiduciary or other duty, void, unenforceable, unconscionable, inequitable, or otherwise improper for any reason; or (d) any member of the Parent Group owes fiduciary duties to any member of the SpinCo Group or any equity holder of such member in his, her or its capacity as such with respect to this Agreement, any Ancillary Agreement, any transaction contemplated hereby or thereby or any agreement entered into in connection herewith or therewith.

 

Section 5.10           Survival of Indemnities. The rights and obligations of each of Parent and SpinCo and their respective Indemnitees under this Article V shall survive the sale or other transfer by any Party or its Affiliates of any Assets or businesses or the assignment by it of any Liabilities.

 

 

Section 5.11           Indemnified Damages. Except as may expressly be set forth in this Agreement or any Ancillary Agreement, none of Parent, SpinCo, or any member of either Group shall in any event have any Liability to the other or to any other member of the other's Group, or to any other Parent Indemnitee or SpinCo Indemnitee, as applicable, under this Agreement for any indirect, special, punitive, consequential, exemplary, enhanced or treble damages, whether or not caused by or resulting from negligence or breach of obligations hereunder and whether or not informed of the possibility of the existence of such damages; provided, however, that the provisions of this Section 5.11 shall not limit an Indemnifying Party's indemnification obligations hereunder with respect to any Liability any Indemnitee may have to any third party not affiliated with any member of the Parent Group or the SpinCo Group for any indirect, special, punitive, consequential, exemplary, enhanced or treble damages.

 

ARTICLE VI

 

ACCESS TO INFORMATION; PRIVILEGE; CONFIDENTIALITY

 

Section 6.01           Agreement for Exchange of Information; Archives.

 

(a)           Except in the case of an Adversarial Action or threatened Adversarial Action, and subject to Section 6.01(b), each Party, on behalf of its Group, shall provide or cause to be provided, to the other Party, at any time after the Distribution, as soon as reasonably practicable after written request therefor, any Information relating to time periods on or prior to the Distribution Date in the possession or under the control of such other Party or any other member of its Group, which the requesting Party or any other member of its Group: (i) reasonably needs to comply with reporting, disclosure, filing or other requirements imposed on the requesting Party or any member of its Group (including under applicable securities Laws), by any national securities exchange or any Governmental Authority having jurisdiction over the requesting Party or any member of its Group; (ii) requests for use in any other judicial, regulatory, administrative or other Action, including possible Actions anticipated in good faith, or in order to satisfy audit, accounting, regulatory, litigation or other similar requirements; or (iii) reasonably needs to comply with its obligations under this Agreement or any Ancillary Agreement; provided that any request for information pursuant to this Section 6.01(a) shall be used only for the purposes described in this paragraph.

 

(b)           In the event that either Party determines in good faith that the disclosure of any Information pursuant to Section 6.01(a) could be commercially detrimental, violate any Law or Contract or waive or jeopardize any attorney-client privilege, attorney work product protection or other similar privilege or doctrine, such Party may restrict such information to view by the requesting Party's attorneys' and experts' eyes only before providing access to or furnishing such Information to the requesting Party; provided, however, that such Party shall take all commercially reasonable measures to permit compliance with this Section 6.01(b) in a manner that avoids any such harm or consequence.

 

Section 6.02           Ownership of Information. Any Information owned by one Group that is provided to the requesting Party hereunder shall be deemed to remain the property of the providing Party. Except as specifically set forth herein or any Ancillary Agreement, nothing herein shall be construed as granting or conferring rights of license or otherwise in any such Information.

 

 

Section 6.03           Compensation for Providing Information. Parent and SpinCo shall reimburse each other for the reasonable costs, if any, in complying with a request for Information pursuant to this Article VI (whether or not such Information was a SpinCo Asset or Parent Asset).

 

Section 6.04           Record Retention. To facilitate the possible exchange of Information pursuant to this Article VI and other provisions of this Agreement, each Party shall use its reasonable best efforts to retain all Information in such Party's possession relating to the other Party or its businesses, Assets or Liabilities, this Agreement or the Ancillary Agreements.

 

Section 6.05           Accounting Information. Without limiting the generality of Section 6.01 but subject to Section 6.01(b):

 

(a)           Until the end of the first full fiscal year occurring after the Distribution Date (and for a reasonable period of time afterwards, as determined in good faith by Parent, or as required by Law for Parent to prepare consolidated financial statements or complete a financial statement audit for any period during which the financial results of SpinCo were consolidated with those of Parent), SpinCo shall use its reasonable best efforts to enable Parent to meet its timetable for dissemination of its financial statements and to enable Parent's auditors to timely complete their annual audit and quarterly reviews of financial statements. As part of such efforts and during such period as specified in the immediately preceding sentence, to the extent reasonably necessary for the preparation of financial statements or completing an audit or review of financial statements or an audit of internal control over financial reporting, (i) SpinCo shall authorize and direct its auditors to make available to Parent's auditors, within a reasonable time prior to the date of Parent's auditors' opinion or review report, both (x) the personnel who performed or will perform the annual audits and quarterly reviews of SpinCo and (y) work papers to the extent related to such annual audits and quarterly reviews, to enable Parent's auditors to perform any procedures they consider reasonably necessary to take responsibility for the work of SpinCo's auditors as it relates to Parent's auditors' opinion or report and (ii) until all governmental audits of those financial statements of Parent specified in the immediately preceding sentence are complete, SpinCo shall provide reasonable access during normal business hours for Parent's internal auditors, counsel and other designated representatives to (x) the premises of SpinCo and all Information (and duplicating rights) within the knowledge, possession or control of SpinCo and (y) the officers and employees of SpinCo and its Subsidiaries, so that Parent may conduct reasonable audits relating to the financial statements provided by SpinCo; provided, however, that such access shall not be unreasonably disruptive to the business and affairs of SpinCo; provided, further, that, any request for access pursuant to this Section 6.05(a) shall be made in good faith and limited to the extent reasonable to satisfy the good faith basis for such request.

 

 

(b)           Until the end of the first full fiscal year occurring after the Distribution Date (and for a reasonable period of time afterwards, as determined in good faith by SpinCo, or as required by Law for SpinCo to prepare consolidated financial statements or complete a financial statement audit for any period during which the financial results of the Parent Group were consolidated those of Parent), Parent shall use its reasonable best efforts to enable SpinCo to meet its timetable for dissemination of its financial statements and to enable SpinCo's auditors to timely complete their annual audit and quarterly reviews of financial statements. As part of such efforts, and during such period as specified in the immediately preceding sentence, to the extent reasonably necessary for the preparation of financial statements or completing an audit or review of financial statements or an audit of internal control over financial reporting, (i) Parent shall authorize and direct its auditors to make available to SpinCo's auditors, within a reasonable time prior to the date of SpinCo's auditors' opinion or review report, both (x) the personnel who performed or will perform the annual audits and quarterly reviews of Parent and (y) work papers to the extent related to such annual audits and quarterly reviews, to enable SpinCo's auditors to perform any procedures they consider reasonably necessary to take responsibility for the work of Parent's auditors as it relates to SpinCo's auditors' opinion or report and (ii) until all governmental audits of those financial statements of SpinCo specified in the immediately preceding sentence are complete, Parent shall provide reasonable access during normal business hours for SpinCo's internal auditors, counsel and other designated representatives to (x) the premises of Parent and its Subsidiaries and all Information (and duplicating rights) within the knowledge, possession or control of Parent and its Subsidiaries and (y) the officers and employees of Parent and its Subsidiaries, so that SpinCo may conduct reasonable audits relating to the financial statements provided by Parent and its Subsidiaries; provided, however, that such access shall not be unreasonably disruptive to the business and affairs of the Parent Group; provided, further, that, any request for access pursuant to this Section 6.05(b) shall be made in good faith and limited to the extent reasonable to satisfy the good faith basis for such request.

 

(c)           Parent's disclosure controls and procedures and internal control over financial reporting (as each is contemplated by the Exchange Act) are currently applicable to SpinCo as an indirect wholly owned Subsidiary of Parent (and not as a reporting company under the Exchange Act). In order to enable the principal executive officer and principal financial officer of SpinCo to make the certifications required of them under Section 302 of the Sarbanes-Oxley Act of 2002 following the Distribution in respect of any quarterly or annual fiscal period of SpinCo that begins on or prior to the Distribution Date in respect of which financial statements are not included in the Form 10 (a "Straddle Period"), upon reasonable advance written request by SpinCo, Parent shall provide SpinCo with one (1) or more certifications with respect to such disclosure controls and procedures and the effectiveness thereof and whether there were any changes in the internal controls over financial reporting that have materially affected or are reasonably likely to materially affect the internal control over financing reporting, which certification(s) shall (x) be with respect to the applicable Straddle Period (it being understood that no certification need be provided with respect to any period or portion of any period after the Distribution Date) and (y) be in substantially the same form as those that had been provided by officers or employees of Parent in similar certifications delivered prior to the Distribution Date, with such changes thereto as Parent may reasonably determine. Such certification(s) shall be provided to SpinCo by Parent (and not by any officer or employee in their individual capacity).

 

Section 6.06           Limitations of Liability. Each of Parent (on behalf of itself and each other member of the Parent Group) and SpinCo (on behalf of itself and any other member of the SpinCo Group) understands and agrees that neither Party is representing or warranting in any way as to the accuracy or sufficiency of any Information exchanged or disclosed under this Agreement, including any Information that constitutes an estimate or forecast or is based upon an estimate or forecast.

 

 

Section 6.07           Production of Witnesses; Records; Cooperation.

 

(a)           Without limiting any of the rights or obligations of the Parties pursuant to Section 6.01 or Section 6.04, after the Distribution Date, except in the case of an Adversarial Action or threatened or contemplated Adversarial Action, and subject to Section 6.01(b), each of Parent and SpinCo shall use their reasonable best efforts to make reasonably available, upon written request: (i) the former, current and future directors, officers, employees, other personnel and agents of the Persons in its respective Group (whether as witnesses or otherwise); and (ii) subject to Section 6.01(b), Information contemplated by Sections 6.01(a), in each case of clauses (i) and (ii) above, to the extent that such Person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any Action, Commission comment or review or threatened or contemplated Action, Commission comment or review (including preparation for any such Action, Commission comment or review) in which Parent, SpinCo or any Person or Persons in such Party's Group, as applicable, may from time to time be involved, regardless of whether such Action, Commission comment or review or threatened or contemplated Action, Commission comment or review is a matter with respect to which indemnification may be sought hereunder. The requesting Party shall bear all reasonable out-of-pocket costs and expenses in connection therewith.

 

(b)           Without limiting the foregoing, Parent and SpinCo shall use their reasonable best efforts to cooperate and consult with each other to the extent reasonably necessary with respect to any Actions or threatened or contemplated Actions (including in connection with preparation for any such Action), other than an Adversarial Action or threatened or contemplated Adversarial Action.

 

(c)           The obligations of Parent and SpinCo, pursuant to this Section 6.07, to use their reasonable best efforts to make available former, current and future directors, officers, employees and other personnel and agents or provide witnesses and experts, except in the case of an Adversarial Action or threatened or contemplated Adversarial Action, is intended to be interpreted in a manner so as to facilitate cooperation and shall include the obligation to make available employees and other officers without regard to whether such individual or the employer of such individual could assert a possible business conflict. Without limiting the foregoing, each of Parent and SpinCo agrees that neither it nor any Person or Persons in such Party's Group will take any adverse action against any employee of its Group based on such employee's provision of assistance or information to each other pursuant to this Section 6.07.

 

Section 6.08           Privileged Matters.

 

(a)           Solely for purposes of asserting privileges which may be asserted under applicable Law: (x) the Parties recognize that legal and other professional services that have been and will be provided prior to the Distribution (whether by outside counsel, in-house counsel, other legal professionals, or other professionals acting at the direction of counsel) have been and will be rendered for the collective benefit of Parent and its Subsidiaries (in such capacity) and  (y) Parent, each other member of the Parent Group and SpinCo shall be deemed to have been the client in connection with such services with respect to periods prior to the Distribution. The Parties recognize that legal and other professional services will be provided following the Distribution, which services will be rendered solely for the benefit of the Parent Group or the SpinCo Group, as the case may be.

 

 

(b)           Subject to the terms of the Management Agreement and the Letter Agreement, Parent shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any privileged Information that relates solely to Parent Assets, Parent Group Employees or the Distribution and not to the SpinCo Assets or the SpinCo Employees, whether or not the privileged Information is in the possession or under the control of Parent or any other member of the Parent Group or SpinCo or any other member of the SpinCo Group. Parent shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any privileged Information that relates solely to any Parent Assets or Parent Liabilities, and not any SpinCo Assets or SpinCo Liabilities, in connection with any Actions that are now pending or may be asserted in the future, whether or not the privileged Information is in the possession or under the control of Parent or any other member of the Parent Group or SpinCo or any other member of the SpinCo Group. For the avoidance of doubt, Information shall not be deemed to relate to the Parent Assets, Parent Group Employees or the Distribution solely by virtue of the fact that personnel associated with the corporate function of Parent were involved in the production or evaluation of such Information or otherwise involved in the Actions relating to such Information.

 

(c)           SpinCo shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any privileged Information that relates solely to the SpinCo Assets or the SpinCo Employees and, subject to the terms of Management Agreement and the Letter Agreement, not to the Parent Assets, Parent Group Employees or the Distribution, whether or not the privileged Information is in the possession or under the control of SpinCo or any other member of the SpinCo Group or Parent or any other member of the Parent Group. SpinCo shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any privileged Information that relates solely to any SpinCo Assets or SpinCo Liabilities and, subject to the terms of the Management Agreement and the Letter Agreement, not any Parent Assets or Parent Liabilities in connection with any Actions that are now pending or may be asserted in the future, whether or not the privileged Information is in the possession or under the control of SpinCo or any other member of the SpinCo Group or Parent or any other member of the Parent Group. For the avoidance of doubt, Information shall not be deemed to relate to the SpinCo Assets or the SpinCo Employees solely by virtue of the fact that SpinCo personnel were involved in the production or evaluation of such Information or otherwise involved in the Actions relating to such Information.

 

(d)           Subject to the remaining provisions of this Section 6.08, the Parties agree that, subject to the terms of the Management Agreement and the Letter Agreement, Parent shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with privileged Information not otherwise allocated pursuant to this Section 6.08 in connection with any Actions, or threatened or contemplated Actions, or other matters that involve both Parties (or one or more members of their respective Groups), whether or not such privileged Information is in the possession or under the control of SpinCo or any other member of the SpinCo Group or Parent or any other member of the Parent Group.

 

 

(e)           Upon receipt by either Party, or by any other member of its respective Group, of any subpoena, discovery or other request (or of written notice that it will receive or has received such subpoena, discovery or other request) that may reasonably be expected to result in the production or disclosure of privileged Information subject to a shared privilege or immunity or as to which the other Party has the sole right hereunder to assert a privilege or immunity, or if either Party obtains knowledge or becomes aware that any of its, or any other member of its Group's, current or former directors, officers, agents or employees have received any subpoena, discovery or other requests (or have received written notice that they will receive or have received such subpoena, discovery or other requests) that may reasonably be expected to result in the production or disclosure of such privileged Information, such Party shall promptly notify the other Party of the existence of any such subpoena, discovery or other request and shall provide the other Party a reasonable opportunity to review the privileged Information and to assert any rights it or they may have, under this Section 6.08 or otherwise, to prevent the production or disclosure of such privileged Information; provided that if such Party is prohibited by applicable Law from disclosing the existence of such subpoena, discovery or other request, such Party shall provide written notice of such related information for which disclosure is not prohibited by applicable Law and use reasonable best efforts to inform the other Party of any related information such Party reasonably determines is necessary or appropriate for the other Party to be informed of to enable the other Party to review the privileged Information and to assert its rights, under this Section 6.08 or otherwise, to prevent the production or disclosure of such privileged Information.

 

(f)            The Parties agree that their respective rights to any access to Information, witnesses and other Persons, the furnishing of notices and documents and other cooperative efforts between the Parties contemplated by this Agreement, and the transfer of privileged Information between the Parties and other members of their respective Groups pursuant to this Agreement, shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise. The Parties further agree that: (i) the exchange by one Party to the other Party of any Information that should not have been exchanged pursuant to the terms of Section 6.09 shall not be deemed to constitute a waiver of any privilege or immunity that has been or may be asserted under this Agreement or otherwise with respect to such privileged Information; and (ii) the Party receiving such privileged Information shall promptly return such privileged Information to the Party who has the right to assert the privilege or immunity.

 

 

Section 6.09           Confidential Information.

 

(a)           From and after the Effective Time until the five (5)-year anniversary of the Effective Time (or in the case of trade secrets, for so long as such trade secrets constitute trade secrets under applicable Law), except as otherwise provided in the Management Agreement and the Letter Agreement, each of Parent and SpinCo, on behalf of itself and each other member of its Group, shall hold, and cause its respective Representatives to hold, in strict confidence, not release or disclose and protect with at least the same degree of care, but no less than a reasonable degree of care, that it applies to its own confidential and proprietary information pursuant to policies in effect as of the Distribution Date, all confidential or proprietary Information concerning the Parent Group (in the case of SpinCo or a member of its Group) or the SpinCo Group (in the case of Parent or a member of its Group) (such Group's, "Specified Confidential Information") that is either in its possession (including such Specified Confidential Information in its possession prior to the Distribution) or furnished by the other Group or its respective Representatives at any time pursuant to this Agreement or any Ancillary Agreement, and shall not use any such Specified Confidential Information other than for such purposes as shall be expressly permitted hereunder or thereunder, except, in each case, to the extent that such Specified Confidential Information is: (i) in the public domain at the time it is received by the Parent Group, the SpinCo Group or any of their respective Representatives, as applicable; (ii) becomes public other than by reason of a disclosure in breach of this Section 6.09(a) by the Parent Group, the SpinCo Group or any of their respective Representatives, as applicable; (iii) was already in the possession of the Parent Group, the SpinCo Group or any of their respective Representatives, as applicable, lawfully and on a non-confidential basis prior to the time it was received by the Parent Group, the SpinCo Group or any of their respective Representatives, as applicable, (iv) was obtained by the Parent Group, the SpinCo Group or any of their respective Representatives, as applicable, from a third party which, to Parent's or SpinCo's knowledge, was not disclosed in breach of an obligation of such third party not to disclose such information or (v) was developed independently by or on behalf of the Parent Group, the SpinCo Group or their respective Representatives, as applicable, without using or referring to any of the disclosing Group's Specified Confidential Information. Notwithstanding the foregoing, each of Parent and SpinCo may release or disclose, or permit to be released or disclosed, any such Specified Confidential Information of the other Group (A) to their respective Representatives who need to know such Specified Confidential Information (who shall be advised of the obligations hereunder with respect to such Specified Confidential Information), (B) to any nationally recognized statistical rating organization as it reasonably deems necessary, solely for the purpose of obtaining a rating of securities or other debt instruments upon normal terms and conditions, (C) if such Party or any other member of its Group is required or compelled to disclose any such Specified Confidential Information by judicial or administrative process (including any proceeding brought by a Governmental Authority) or by other requirements of Law or stock exchange rule, in each case, to the extent such Party is advised by counsel that it is advisable to do so, (D) as required in connection with any legal or other proceeding by one Party against the other Party or in respect of claims by one Party against the other Party brought in a proceeding, (E) as necessary in order to permit a Party to prepare and disclose its financial statements, Tax Returns or other required disclosures under applicable Law or in connection with the Distribution and (F) as necessary for a Party to enforce its rights or perform its obligations under this Agreement or any Ancillary Agreement; provided, however, that, with respect to clause (A) hereof: (1) such Representatives shall keep such Specified Confidential Information confidential and will not disclose such Specified Confidential Information to any other Person and (2) each Party agrees that it is responsible to the other Party for any action or failure to act that would constitute a breach or violation of this Section 6.09(a) by any such Representative; with respect to clause (B) hereof, the Party whose Specified Confidential Information is being disclosed or released to such rating organization is promptly notified thereof in writing in advance of such disclosure or release; with respect to public disclosures pursuant to clause (C) hereof, that the Party required to disclose such Specified Confidential Information gives the other Party a reasonable opportunity to review and comment on the portion of such disclosure containing or reflecting Specified Confidential Information prior to the disclosure thereof; and, in the case of disclosure required by judicial or administrative process pursuant to clause (C) hereof or disclosure pursuant to clause (D) hereof, that the Party required to disclose such Specified Confidential Information gives the other Party prompt and, to the extent reasonably practicable and legally permissible, prior notice of such disclosure and an opportunity to contest such disclosure and shall use reasonable best efforts to cooperate, at the expense of the requesting Party, in seeking any reasonable protective arrangements requested by such Party. In the event that such appropriate protective order or other remedy is not obtained, the Party that is required to disclose such Specified Confidential Information of the other Group shall furnish, or cause to be furnished, only that portion of such Specified Confidential Information that is legally required to be disclosed and shall use reasonable best efforts to ensure that confidential treatment is accorded such Specified Confidential Information.

 

 

(b)           Each Party acknowledges that it or other members of its Group may presently have and, after the Distribution, may gain access to or possession of confidential or proprietary Information of, or legally protected personal Information relating to, third parties: (i) that was received under confidentiality or non-disclosure agreements entered into between such third parties, on the one hand, and the other Party or members of such other Party's Group, on the other hand, prior to the Distribution or (ii) that, as between the two Parties, was originally collected by the other Party or such other Party's Group and that may be subject to and protected by privacy, data protection or other applicable Laws. Each Party agrees that it shall hold, protect and use, and shall cause the other members of its Group and direct its and their respective Representatives to hold, protect and use, in strict confidence the confidential and proprietary Information of, or legally protected personal Information relating to, third parties in accordance with privacy, data protection or other applicable Laws and the terms of any Contracts that were either entered into before the Distribution or affirmative commitments or representations that were made before the Distribution by, between or among the other Party or members of the other Party's Group, on the one hand, and such third parties, on the other hand.

 

Section 6.10           Tax Information and Cooperation. Each of Parent and SpinCo shall reasonably cooperate and shall cause their respective Affiliates and Representatives to reasonably cooperate, in respect of the Distribution, in preparing and filing all Tax Returns relating to any Pre-Distribution Tax Period, including maintaining and making available to each other, and to any Governmental Authority as reasonably requested, their respective employees and all records reasonably necessary in connection with Taxes of the SpinCo Group and in resolving all Tax Contests relating to a Pre-Distribution Tax Period. Parent and SpinCo agree to use commercially reasonable efforts (i) to retain all books and records (or, in the alternative, to deliver such books and records to SpinCo) with respect to Tax matters pertinent to the SpinCo Group relating to any Tax period beginning before the Distribution Date until ninety (90) days after the expiration of the applicable statute of limitations and to abide by all record retention agreements entered into with any Governmental Authority and (ii) to allow the other Party and its Representatives, at times and dates mutually acceptable to the Parties, to inspect, review and make copies of such records as may be reasonably necessary or appropriate from time to time, such activities to be conducted during normal business hours and at such Party's expense. The Party requesting such cooperation will bear the reasonable out-of-pocket costs of the other Party. In no event shall any Party be entitled to receive information under this Section 6.10 that does not relate solely to the SpinCo Assets, the SpinCo Employees or the SpinCo Group except that, in the case of Tax information relating in part to the SpinCo Group, a Party otherwise required to provide Tax information under this Section 6.10 shall use commercially reasonable efforts to provide such Tax information as relates solely to the SpinCo Assets, the SpinCo Employees or the SpinCo Group (which may include, to the extent commercially reasonable, redacted versions of such information that show solely the portions of the relevant materials that relate solely to the SpinCo Assets, the SpinCo Employees or the SpinCo Group).

 

 

ARTICLE VII

 

EMPLOYEE MATTERS

 

Section 7.01           Retention of Benefit Plans.

 

(a)           Retained Benefit Plans. Except as set forth in Section 7.02(d) or Section 8.03, Parent shall, or shall cause the other members of the Parent Group to, retain all Benefit Plans (and related trusts, if applicable), all Assets (including any insurance contracts, policies or other funding vehicles) and Liabilities relating to, arising out of or resulting from health and welfare coverage or other claims under the Benefit Plans whether arising before, at or after the Distribution Date, with such changes, modifications or amendments as may be required by applicable Law or to reflect the Spin-Off.

 

(b)           No Duplication or Acceleration of Benefits. No provision in this Agreement shall be construed to (i) create any right to accelerate vesting of distributions or entitlements under any Benefit Plan on the part of any Employee or Former Employee or (ii) limit the ability of Parent or any other member of the Parent Group or SpinCo or any other member of the SpinCo Group to amend, merge, modify, eliminate, reduce or otherwise alter in any respect any benefit under any Benefit Plan sponsored or maintained by a member of the Parent Group or a member of the SpinCo Group, respectively, or any trust, insurance policy or funding vehicle related thereto.

 

(c)           Beneficiaries. References to Parent Group Employees, Former Employees, SpinCo Employees, and current and former nonemployee directors of either Parent or SpinCo shall be deemed to refer to their beneficiaries, dependents, survivors and alternate payees, as applicable

 

Section 7.02           Employees.

 

(a)           Assignment and Transfer of Employees. Effective as of no later than the Distribution Effective Time, the applicable member of the Parent Group shall have taken such actions as are necessary to ensure that (i) each SpinCo Employee is employed by SpinCo as of immediately prior to the Distribution and (ii) each Employee not covered by Section 7.02(a)(i) is employed by a member of the Parent Group as of immediately prior to the Distribution. Each of the Parties agrees to execute, and to seek to have the applicable Employees execute, such documentation, if any, as may be necessary to reflect such assignment and/or transfer.

 

(b)           At-Will Status. Nothing in this Agreement shall create any obligation on the part of any member of the Parent Group or any member of the SpinCo Group to (i) continue the employment of any Employee or permit the return from a leave of absence for any period after the date of this Agreement (except as required by applicable Law) or (ii) change the employment status of any Employee from "at-will," to the extent that such Employee is an "at-will" employee under applicable Law. Except as provided in this Agreement, this Agreement shall not limit the ability of any member of the Parent Group or any member of the SpinCo Group to change the position, compensation or benefits of any Employees for performance-related, business or any other reason.

 

 

(c)           Not a Change in Control or Termination of Employment or Service. The Parties acknowledge and agree that the Spin-Off and other transactions contemplated by this Agreement, and the assignment, transfer or continuation of the employment of Employees as contemplated by this Section 7.02, shall (i) not be deemed a "change in control," "change of control," or term of similar import for purposes of any Benefit Plan (including the Parent Awards) sponsored or maintained by any member of the Parent Group or any member of the SpinCo Group and (ii) not be deemed an involuntary termination of employment entitling any SpinCo Employee or Parent Group Employee to non-compete, severance, change in control or other payments or benefits (including under the Parent Awards) or the termination of service for any non-employee director.

 

(d)           Assignment by Parent and Assumption by SpinCo. Parent shall assign, or cause any other applicable member of the Parent Group to assign, to SpinCo all Individual Agreements relating to the SpinCo Employees set forth on Schedule 7.02(d) (collectively, the "SpinCo Individual Agreements"), with such assignment to be effective as of no later than the Distribution Effective Time. Effective as of the Distribution Effective Time, SpinCo shall assume the SpinCo Individual Agreements. Notwithstanding the foregoing, in lieu of such assignment, Parent may, or may cause any other applicable member of the Parent Group to, enter into amended and restated SpinCo Individual Agreements with SpinCo and the applicable SpinCo Employee to reflect the transfer of such SpinCo Employee to SpinCo.

 

Section 7.03           No Third-Party Beneficiaries. No current or former Employee, officer, director, or independent contractor or any other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of this Agreement. Nothing in this Agreement is intended to amend any Benefit Plan or affect the applicable plan sponsor's right to amend or terminate any Benefit Plan pursuant to the terms of such plan or arrangement.

 

ARTICLE VIII

 

EQUITY, INCENTIVE AND DIRECTOR COMPENSATION

 

Section 8.01           Generally. Each Parent Award that is outstanding as of immediately prior to the Distribution shall be adjusted as described below. Prior to the Distribution, Parent shall take all necessary actions to cause the Company, as the sole stockholder of SpinCo, to approve the SpinCo Omnibus Plan. SpinCo agrees to file a registration statement on Form S-8 (and, solely with respect to SpinCo RSU Awards for which the underlying shares of SpinCo Common Stock are not eligible for registration on Form S-8, a registration statement on Form S-3 or Form S-1) with respect to, and to cause to be registered pursuant to the Securities Act of 1933, as amended (the "Securities Act"), the shares of SpinCo Common Stock authorized for issuance under the SpinCo Omnibus Plan, as required pursuant to the Securities Act, not later than the Distribution and in any event before the date of issuance of any shares of SpinCo Common Stock pursuant to the SpinCo Omnibus Plan.

 

 

Section 8.02           Equity Incentive Awards.

 

(a)           Option Awards. Each Parent Option Award that is outstanding as of immediately prior to the Distribution shall be converted, as of the Distribution Date, into a Post-Separation Parent Option Award and, except as otherwise provided in this Section 8.02(a), shall be subject to the same terms and conditions (including with respect to vesting and expiration) after the Distribution as applicable to such Parent Option Award immediately prior to the Distribution. From and after the Distribution (i) the number of shares of Parent Common Stock subject to such Post-Separation Parent Option Award shall be equal to the product obtained by multiplying (A) the number of shares of Parent Common Stock subject to the corresponding Parent Option Award immediately prior to the Distribution by (B) the Parent Ratio, rounded down to the nearest whole number of shares; and (ii) the per-share exercise price of such Post-Separation Parent Option Award shall be equal to the quotient obtained by dividing (A) the per share exercise price of the corresponding Parent Option Award as of immediately prior to the Distribution by (B) the Parent Ratio, rounded up to the nearest cent. Notwithstanding anything to the contrary in this Section 8.02(a), the exercise price and the number of shares of Parent Common Stock subject to each Post-Separation Parent Option Award, and the terms and conditions of exercise of such options, shall be determined in a manner consistent with the requirements of Section 409A of the Code.

 

(b)           RSU Awards. Each Parent RSU Award that is outstanding as of immediately prior to the Distribution shall be converted, as of the Distribution Date, into a Post-Separation Parent RSU Award and, except as otherwise provided in this Section 8.02(b), shall be subject to the same terms and conditions (including with respect to vesting) after the Distribution as were applicable to such Parent RSU Award immediately prior to the Distribution; provided, however, that from and after the Distribution Date, the number of shares of Parent Common Stock subject to such Post-Separation Parent RSU Award shall be equal to the product obtained by multiplying (A) the number of shares of Parent Common Stock subject to the corresponding Parent RSU Award immediately prior to the Distribution by (B) the Parent Ratio, rounded to the nearest whole number of shares.

 

(c)           Performance-Based RSU Awards. Each Parent Performance-Based RSU Award that is outstanding as of immediately prior to the Distribution shall be converted, as of the Distribution Date, into a Post-Separation Parent Performance-Based RSU Award and, except as otherwise provided in this Section 8.02(c), shall be subject to the same terms and conditions (including with respect to time-based and performance-based vesting) after the Distribution as were applicable to such Parent Performance-Based RSU Award immediately prior to the Distribution; provided, however, that from and after the Distribution Date, the target number of shares of Parent Common Stock subject to such Post-Separation Parent Performance-Based RSU Award shall be equal to the product obtained by multiplying (A) the target number of shares of Parent Common Stock subject to the corresponding Parent Performance-Based RSU Award immediately prior to the Distribution by (B) the Parent Ratio, rounded to the nearest whole number of shares.

 

 

(d)           Settlement, Delivery; Tax Withholding and Reporting.

 

(i)           After the Effective Time, Post-Separation Parent Option Awards, Post-Separation Parent Performance-Based RSU Awards, and Post-Separation Parent RSU, regardless of by whom held, shall be settled by Parent.

 

(ii)          Upon the vesting, payment or settlement, as applicable, of Post-Separation Parent Option Awards, Post-Separation Parent Performance-Based RSU Awards and Post-Separation Parent RSU Awards, Parent shall be responsible for ensuring the collection of applicable Tax withholding (in the case of a SpinCo Employee, solely to the extent that such award results in compensatory income to such individual that is subject to withholding), the withholding and remittance of the applicable employee-side employment Taxes and the payment and remittance of the applicable employer-side employment Taxes to the applicable Governmental Authority.

 

(iii)         After the Effective Time, Parent shall be responsible for all income Tax and employment Tax reporting in respect of Post-Separation Parent Option Awards, Post-Separation Parent Performance-Based RSU Awards and Post-Separation Parent RSU Awards.

 

(iv)         The Parties agree that they shall cooperate to avoid the duplication of any employment Taxes (such as social security Taxes) subject to an applicable wage base. The Parties will cooperate and communicate with each other and with third-party vendors to effectuate withholding, remittance and reporting of Taxes in a timely, efficient and appropriate manner.

 

Section 8.03           Non-Equity Incentive Practices and Plan.

 

(a)            Bonuses. SpinCo shall assume all Liabilities with respect to any bonuses that would otherwise be payable to SpinCo Employees for any performance periods that are open when the Distribution occurs and thereafter, and no member of the Parent Group shall have any obligations with respect thereto. The Parent Group shall retain all Liabilities with respect to any bonuses that would otherwise be payable to Parent Group Employees and Former Employees for any performance periods that are open when the Distribution occurs and thereafter, and none of SpinCo or any other member of the SpinCo Group shall have any obligations with respect thereto.

 

(b)           Other Cash Incentive Plans. No later than the Distribution Date, SpinCo shall assume as necessary any cash incentive plan for the exclusive benefit of SpinCo Employees, whether or not sponsored by SpinCo, and, from and after the Distribution Date, shall be solely responsible for all Liabilities thereunder. No later than the Distribution Date, the Parent Group shall continue to retain any cash incentive plan for the exclusive benefit of Parent Group Employees and Former Employees and, from and after the Distribution, shall be solely responsible for all Liabilities thereunder.

 

Section 8.04           Director Compensation. Parent shall be responsible for the payment of any fees for service on the Parent Board that are earned before, at or after the Distribution, and SpinCo shall not have any responsibility for any such payments. With respect to any SpinCo non-employee director, SpinCo shall be responsible for the payment of any fees for service on the SpinCo Board that are earned at any time after the Distribution, and Parent shall not have any responsibility for any such payments. For the avoidance of doubt, for any Dual-Role Director, Parent shall be responsible for the payment of such director's fees in connection with such director's service on the Parent Board before, on and after the Distribution Date, and SpinCo shall be responsible for the payment of such director's fees in connection with such director's service on the SpinCo Board on and after the Distribution Date.

 

 

ARTICLE IX

 

FURTHER ASSURANCES AND ADDITIONAL COVENANTS

 

Section 9.01           Further Assurances.

 

(a)            In addition to the actions specifically provided for elsewhere in this Agreement, but subject to the express limitations of this Agreement, each of the Parties shall, subject to Section 4.03, use reasonable best efforts, prior to, on and after the Distribution Date, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws and agreements to consummate, and make effective, the transactions contemplated by this Agreement.

 

(b)           Without limiting the foregoing, but subject to the express limitations and other provisions of this Agreement and of the Ancillary Agreements, prior to, on and after the Distribution Date, each Party shall cooperate with the other Parties, without any further consideration, but at the expense of the requesting Party: (i) to execute and deliver, or use reasonable best efforts to execute and deliver, or cause to be executed and delivered, all instruments, including any instruments of conveyance, assignment and transfer as such Party may reasonably be requested to execute and deliver by the other Parties; (ii) to deliver all required notices and make, or cause to be made, all filings with, and to obtain, or cause to be obtained, all Consents of any Governmental Authority or any other Person under any permit, license, Contract or other instrument; (iii) to obtain, or cause to be obtained, any Governmental Approvals or other Consents required to effect the Spin-Off; and (iv) to take, or cause to be taken, all such other actions as such Party may reasonably be requested to take by the other Parties from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement, the Ancillary Agreements and any transfers of Assets or assignments and assumptions of Liabilities hereunder and the other transactions contemplated hereby.

 

ARTICLE X

 

TERMINATION

 

Section 10.01           Termination. This Agreement may be terminated by Parent at any time, in its sole discretion, prior to the Distribution.

 

Section 10.02           Effect of Termination. In the event of any termination of this Agreement prior to the Distribution, neither Party (nor any other member of its Group or any of its directors or officers) shall have any Liability or further obligation to the other Party or any other member of its Group under this Agreement or the Ancillary Agreements.

 

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.01         Counterparts; Entire Agreement; Corporate Power.

 

(a)           This Agreement may be executed in one or more counterparts, all of which counterparts shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to the other Party. This Agreement may be executed by facsimile or PDF signature and scanned and exchanged by electronic mail, and such facsimile or PDF signature or scanned and exchanged copies shall constitute an original for all purposes.

 

(b)           This Agreement, the Ancillary Agreements and the Exhibits and Schedules hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties with respect to the subject matter hereof other than those set forth or referred to herein or therein.

 

(c)           Parent represents on behalf of itself and each other member of the Parent Group, and SpinCo represents on behalf of itself, as follows:

 

(i)           each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and each Ancillary Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby; and

 

(ii)           this Agreement and each Ancillary Agreement to which it is a party has been (or, in the case of any Ancillary Agreement, will be on or prior to the Distribution Date) duly executed and delivered by it and constitutes, or will constitute a valid and binding agreement of it enforceable in accordance with the terms hereof or thereof.

 

Section 11.02         Negotiation. In the event of any claim, controversy, demand or request for relief of any kind arising out of, in connection with, or in relation to the interpretation, performance, nonperformance, validity or breach of this Agreement or any Ancillary Agreement (other than the Management Agreement and the Letter Agreement) or otherwise arising out of or related to this Agreement or any such Ancillary Agreement or the transactions contemplated hereby or thereby, including any Action based on contract, tort, equity, statute, regulation or constitution (collectively, "Disputes"), the Party raising the Dispute shall give written notice of the Dispute (a "Dispute Notice"), and the executive officers designated by the Parties (or such other individuals designated by such executive officers) shall negotiate for a reasonable period of time to settle such Dispute; provided that such reasonable period shall not, unless otherwise agreed by the Parties in writing, exceed ninety (90) days (the "Negotiation Period") from the time of receipt of the Dispute Notice; provided further, that in the event of any arbitration in accordance with Section 11.03, (x) the Parties shall not assert the defenses of statute of limitations, laches or any other defense, in each such case based on the passage of time during the Negotiation Period, and (y) any contractual time period or deadline under this Agreement or any such Ancillary Agreement relating to such Dispute occurring after the Dispute Notice is received shall not be deemed to have passed until such arbitration has been resolved. For the avoidance of doubt, any dispute or disagreement between the parties to the Management Agreement or the Letter Agreement arising out of or in connection with any term or provision thereof, the subject matter thereof, or the interpretation or enforcement thereof, shall be exclusively governed by the terms set forth in the Letter Agreement or the Management Agreement, as applicable.

 

 

Section 11.03        Arbitration.

 

(a)           Arbitration Procedures. If the Parties are unable to resolve the Dispute pursuant to Section 11.02, then the Parties shall submit the Dispute to final and binding arbitration in New York, New York, administered by Judicial Arbitration & Mediation Services ("JAMS"), or its successor, in accordance with the rules and procedures of JAMS then in effect. The Parties agree that any and all Disputes (which for purposes of this Section 11.03 will be deemed to include any action pursuant to the immediately preceding sentence) that are submitted to arbitration shall be decided by three (3) neutral arbitrators who are retired judges or attorneys licensed to practice law in New York who are experienced in complex commercial transactions. Each Party shall select one (1) arbitrator and those Party-selected arbitrators shall jointly select the third (3^rd) arbitrator, who shall act as chair of the arbitral tribunal. If the Party-selected arbitrators are unable to select the third (3^rd) arbitrator, JAMS shall designate the third (3^rd) arbitrator. The Parties will cooperate with JAMS and with one another in selecting such arbitrators and in scheduling the arbitration proceedings in accordance with applicable JAMS procedures. The arbitration shall be conducted in accordance with the JAMS Comprehensive Rules. Any Party may commence the arbitration process called for in this Agreement by filing a written demand for arbitration with JAMS, with a copy to the other Party. The Parties agree that they will participate in the arbitration in good faith and the administrative costs and arbitrator's fees associated with the arbitration shall be allocated to the Parties as determined by the arbitrators based upon the relative success (in terms of percentages) of each Party's claim. For example, if Parent and SpinCo commence arbitration proceedings and the final determination by the arbitrators reflects a sixty (60)-forty (40) compromise of the Parties' claims, the arbitrators would allocate expenses forty percent (40%) to the Party whose claim was determined to be sixty percent (60%) successful and sixty percent (60%) to the Party whose claims was determined to be forty (40%) successful; provided, however, that each Party participating in any arbitration proceedings will bear such Party's own attorneys' fees and costs associated with the arbitration, unless such Party is ordered to pay reasonable costs and expenses pursuant to the final determination by the arbitrators. The arbitral tribunal shall apply Delaware law without reference to conflicts of laws principles that would result in the application of the law of a jurisdiction other than Delaware. Any award issued as a result of such arbitration shall be final and binding among the Parties and shall be enforceable by any court having jurisdiction over such Party against whom enforcement is sought. The Parties expressly acknowledge and understand that by entering into this Agreement, each Party is waiving such Party's respective rights to have any Dispute between the Parties adjudicated by a court or by a jury.

 

 

(b)           Confidentiality. Except as may be required by applicable Law or court order, the Parties agree to maintain confidentiality as to all aspects of any arbitration, including its existence and results, except that nothing herein shall prevent any Party from disclosing information regarding such arbitration for purposes of proceedings to enforce this clause or to enforce the award or for purposes of seeking provisional remedies from a court of competent jurisdiction. The Parties further agree to obtain the agreement of the arbitral tribunal to preserve the confidentiality of the arbitration.

 

(c)           Provisional Relief. By agreeing to arbitration, the Parties do not intend to deprive the Delaware Courts of their ability to issue any form of provisions remedy, including but not limited to a preliminary injunction or attachment in aid of the arbitration, or to order any appropriate interim or conservatory measure. A request for such provisional remedy or interim or conservatory measure by a Party to a Delaware Court shall not be deemed a waiver of this agreement to arbitrate.

 

Section 11.04         Specific Performance. Subject to Section 11.02 and Section 11.03, except as provided below, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any applicable Ancillary Agreement, the affected Party shall have the right to specific performance, declaratory relief and injunctive or other equitable relief (on a permanent, emergency, temporary, preliminary or interim basis) of its rights under this Agreement or any applicable Ancillary Agreement, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The other Party shall not oppose the granting of such relief on the basis that money damages are an adequate remedy. The Parties agree that the remedies at Law for any breach or threatened breach hereof, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at Law would be adequate is hereby waived. Any requirements for the securing or posting of any bond or similar security with such remedy are hereby waived. For the avoidance of doubt, the rights pursuant to this Section 11.04 shall be pursued in arbitration under Section 11.03.

 

Section 11.05         No Set-Off; Payments. Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement or as otherwise mutually agreed to in writing by the Parties, neither Party nor any member of such Party's Group shall have any right of set-off or other similar rights with respect to (a) amounts payable pursuant to this Agreement or any Ancillary Agreement or (b) any other amounts claimed to be owed to the other Party or any member of its Group arising out of this Agreement or any Ancillary Agreement.

 

Section 11.06         Continuity of Service and Performance. Unless otherwise agreed in writing, the Parties shall continue to provide services and honor all other commitments under this Agreement and each Ancillary Agreement during the course of dispute resolution pursuant to the provisions of Section 11.02, Section 11.03 or Section 11.04 with respect to all matters not subject to such dispute resolution.

 

Section 11.07         Governing Law. This Agreement and any disputes relating to, arising out of or resulting from this Agreement, including to its execution, performance, or enforcement, shall be governed by, and construed and enforced in accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under applicable principles of conflicts of Laws thereof.

 

 

Section 11.08         Assignability. Except as otherwise provided for in this Agreement, neither this Agreement nor any right, interest or obligation arising under this Agreement shall be assignable (including by means of a divisional or divisive merger or similar transaction), in whole or in part, directly or indirectly, by either Party without the prior written consent of the other Party, and any attempt to assign any rights, interests or obligations arising under this Agreement without such consent shall be void.

 

Section 11.09         Third-Party Beneficiaries. Except for the rights of the members of each Party's Group as set forth herein, and for the indemnification rights under this Agreement of any Parent Indemnitee or SpinCo Indemnitee in his, her or its capacity as such, (a) the provisions of this Agreement are solely for the benefit of the Parties and are not intended to confer upon any Person except the Parties any rights or remedies hereunder and (b) there are no third-party beneficiaries of this Agreement and this Agreement shall not provide any third person with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

 

Section 11.10         Notices. All notices or other communications under this Agreement shall be in writing and shall be deemed to be duly given (a) when delivered in person, (b) on the date received, if sent by a nationally recognized delivery or courier service, (c) upon written confirmation of receipt after transmittal by electronic mail (followed by delivery of an original via overnight courier service) or (d) upon the earlier of confirmed receipt or the fifth (5th) Business Day following the date of mailing if sent by registered or certified mail, return receipt requested, postage prepaid and addressed as follows:

 

	If to Parent, to:
		CompoSecure, Inc.
		309 Pierce Street
		Somerset, NJ 08873
		Attn:	Corporate Secretary
		Email:	legal@composecure.com
	with a copy to:
		Paul, Weiss, Rifkind, Wharton & Garrison LLP
		1285 Avenue of the Americas
		New York, NY 10019-6064
		Attn:	Scott A. Barshay
			Laura C. Turano
		Email:	sbarshay@paulweiss.com
			lturano@paulweiss.com

 

 

	If to SpinCo, to:
		Resolute Holdings Management, Inc.
		445 Park Avenue, Suite 15F
		New York, NY 10022
		Attn:	Thomas R. Knott
		Email:
	with a copy to:
		Paul, Weiss, Rifkind, Wharton & Garrison LLP
		1285 Avenue of the Americas
		New York, NY 10019-6064
		Attn:	Scott A. Barshay
			Laura C. Turano
		Email:	sbarshay@paulweiss.com
			lturano@paulweiss.com

 

Either Party may, by notice to the other Party, change the address and identity of the Person to which such notices and copies of such notices are to be given. Each Party agrees that nothing in this Agreement shall affect the other Party's right to serve process in any other manner permitted by Law (including pursuant to the rules for foreign service of process authorized by the Hague Convention).

 

Section 11.11           Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by an arbitrator or court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances, or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon any such determination, any such provision, to the extent determined to be invalid, void or unenforceable, shall be deemed replaced by a provision that such arbitrator or court determines is valid and enforceable and that comes closest to expressing the intention of the invalid, void or unenforceable provision.

 

Section 11.12           Publicity. Each of Parent and SpinCo shall consult with the other and shall, subject to the requirements of Section 6.09, provide the other Party the opportunity to review and comment upon any press releases or other public statements in connection with the Spin-Off or any of the other transactions contemplated hereby and any filings with any Governmental Authority or national securities exchange with respect thereto, in each case prior to the issuance or filing thereof, as applicable (including the Information Statement, the Parties' respective Current Reports on Form 8-K to be filed on the Distribution Date, the Parties' respective Quarterly Reports on Form 10-Q filed with respect to the fiscal quarter during which the Distribution Date occurs, or if such quarter is the fourth fiscal quarter, the Parties' respective Annual Reports on Form 10-K filed with respect to the fiscal year during which the Distribution Date occurs (each such Quarterly Report on Form 10-Q or Annual Report on Form 10-K, a "First Post-Distribution Report")). Each Party's obligations pursuant to this Section 11.12 shall terminate on the date on which such Party's First Post-Distribution Report is filed with the Commission.

 

 

Section 11.13           Expenses. Except as expressly provided in this Agreement or in any Ancillary Agreement, (a) all third-party fees, costs and expenses incurred by either Parent, any other member of the Parent Group or SpinCo in connection with effecting the Spin-Off prior to or on the Distribution Date will be borne and paid by Parent and (b) all third-party fees, costs and expenses incurred by either the Parent Group or the SpinCo Group in connection with effecting the Spin-Off following the Distribution Date, will be borne and paid by the Party incurring such fee, cost or expense. For the avoidance of doubt, this Section 11.13 shall not affect each Party's responsibility to indemnify Parent Liabilities or SpinCo Liabilities, as applicable, arising from the transactions contemplated by the Distribution.

 

Section 11.14           Headings. The article, section and paragraph headings contained in this Agreement, including in the table of contents of this Agreement, are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

Section 11.15           Survival of Covenants. Except as expressly set forth in this Agreement, the covenants in this Agreement and the Liabilities for the breach of any obligations in this Agreement shall survive the Spin-Off and shall remain in full force and effect.

 

Section 11.16           Waivers of Default. No failure or delay of any Party (or the applicable member of its Group) in exercising any right or remedy under this Agreement or any Ancillary Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default.

 

Section 11.17           Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of each Party; provided that a Party may assign any or all of its rights, interests and obligations hereunder to any other member of such Party's Group, so long as such assignee agrees pursuant to an agreement in writing reasonably satisfactory to the other Party to be bound by the terms of this Agreement as if named a "Party"; provided, further, that no assignment permitted by this Section 11.17 shall release the assigning Party from liability for the full performance of its obligations under this Agreement, unless agreed to in writing by the non-assigning Party. In the case of any assignment permitted by this Section 11.17, the assigning Party shall provide prompt written notice of such assignment to the non-assigning Party.

 

 

Section 11.18           Interpretation. Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires. The terms "hereof," "herein," "herewith" and words of similar import, unless otherwise stated, shall be construed to refer to this Agreement as a whole (including all of the Schedules hereto) and not to any particular provision of this Agreement. Article, Section or Schedule references are to the Articles, Sections and Schedules of or to this Agreement unless otherwise specified. Any capitalized terms used in any Schedule to this Agreement or to any Ancillary Agreement but not otherwise defined therein shall have the meaning as defined in this Agreement or the Ancillary Agreement to which such Schedule is attached, as applicable. Any definition of or reference to any agreement, instrument or other document herein (including any reference herein to this Agreement) shall, unless otherwise stated, be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein, including in Section 11.17). The word "including" and words of similar import when used in this Agreement shall mean "including, without limitation," unless the context otherwise requires or unless otherwise specified. The word "or" shall not be exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if." All references to "$" or dollar amounts are to the lawful currency of the United States of America. References herein to any Law shall be deemed to refer to such Law as amended, reenacted, supplemented or superseded in whole or in part and in effect from time to time and also to all rules and regulations promulgated thereunder. Except as expressly set forth in this Agreement, the Parties (or their respective Group members) shall make, or cause to be made, any payment that is required to be made pursuant to this Agreement as promptly as practicable and without regard to any local currency constraints or similar restrictions. In the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any provisions hereof.

 

[Remainder of page left intentionally blank; signature pages follow.]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first noted above by their duly authorized representatives.

 

	COMPOSECURE, INC.
	By:
		Name:
		Title:
	RESOLUTE HOLDINGS MANAGEMENT, INC.
	By:
		Name:
		Title:

 

[Signature Page to Separation and Distribution Agreement]

 

Exhibit 3.1

 

AMENDED AND RESTATED

 

CERTIFICATE OF INCORPORATION

 

OF

 

RESOLUTE HOLDINGS MANAGMENT, INC.

 

****************

 

Resolute Holdings Management, Inc. (the "Corporation"), a corporation duly organized and existing by virtue of the General Corporation Law of the State of Delaware (as from time to time in effect, the "DGCL"), DOES HEREBY CERTIFY as follows:

 

FIRST: The name of the Corporation is Resolute Holdings Management, Inc. The date of filing of its original certificate of incorporation with the Secretary of State of the State of Delaware was September 27, 2024.

 

SECOND: This Amended and Restated Certificate of Incorporation (this "Certificate of Incorporation"), which restates and integrates and also further amends the provisions of the Corporation's certificate of incorporation as heretofore in effect, was duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL and by the written consent of its stockholder in accordance with Section 228 of the DGCL.

 

THIRD: This Certificate of Incorporation is amended, integrated and restated to read in its entirety as set forth on Exhibit A attached hereto and made a part hereof.

 

****************

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Incorporation to be executed by its duly authorized officer on this            day of            , 20__.

 

	RESOLUTE HOLDINGS MANAGEMENT, INC.
	By:
	Name:
	Title:

 

[Signature page to Certificate of Incorporation]

 

 

Exhibit A

 

AMENDED AND RESTATED

 

CERTIFICATE OF INCORPORATION

 

OF

 

RESOLUTE HOLDINGS MANAGEMENT, INC.

 

****************

 

Article One

 

NAME

 

The name of the corporation is Resolute Holdings Management, Inc. (the "Corporation").

 

Article Two

 

REGISTERED OFFICE AND AGENT

 

The address of the Corporation's registered office in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington, County of New Castle, State of Delaware, 19808. The name of its registered agent at such address is Corporation Service Company.

 

Article Three

 

PURPOSE

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (as from time to time in effect, the "DGCL").

 

Article Four

 

AUTHORIZED CAPITAL STOCK

 

(a)            The total number of shares of all classes of stock that the Corporation shall have authority to issue is 1,100,000,000 of which 1,000,000,000 shares shall be designated as Common Stock, par value of $0.0001 per share ("Common Stock"), and 100,000,000 shares shall be designated as Preferred Stock, par value of $0.0001 per share ("Preferred Stock").

 

(b)            As provided in the last sentence of Section 242(b)(2) of the DGCL and subject to the rights of the holders of any series of Preferred Stock, the authorized number of shares of any class or series of stock of the Corporation may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of stock of the Corporation entitled to vote thereon, and no separate vote of any such class or series of stock of the Corporation the authorized number of which is to be increased or decreased shall be necessary to effect such change irrespective of the other sentences of Section 242(b)(2) of the DGCL.

 

 

Article Five

 

COMMON STOCK

 

The following is a statement of the designations, preferences, qualifications, limitations, restrictions and special or relative rights granted to or imposed upon the shares of Common Stock. Except as otherwise provided in this Certificate of Incorporation (which term, whenever used herein, shall include any certificate filed with the office of the Secretary of State of the State of Delaware establishing the terms of a series of Preferred Stock in accordance with Article FIVE (such certificate, a "Preferred Stock Designation")), all shares of Common Stock shall be identical and shall entitle the holders of such shares to the same rights and privileges. The terms of the Common Stock set forth below shall be subject to the express terms of any series of Preferred Stock then outstanding.

 

(a)            Dividends and Distributions. Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or other class or series of stock of the Corporation having a preference over or right to participate with the Common Stock as to dividends or other distributions pursuant to the relevant Preferred Stock Designation, holders of Common Stock shall be entitled to receive ratably on a per share basis such dividends or other distributions (payable in cash, shares of stock of the Corporation, property or assets of the Corporation or otherwise) as may be declared and paid on the Common Stock, at the times and in the amounts as the board of directors of the Corporation (the "Board of Directors") in its discretion may determine.

 

(b)            Liquidation, Dissolution or Winding Up. Upon the occurrence of the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, after payment or provision of the debts and other liabilities of the Corporation and subject to the rights, if any, of the holders of any outstanding series of Preferred Stock or other class or series of stock of the Corporation having a preference over or right to participate with the Common Stock as to distributions upon such liquidation, dissolution or winding up of the affairs of the Corporation, holders of Common Stock shall be entitled to receive all of the remaining assets of the Corporation available for distribution, ratably in proportion to the number of shares held by them.

 

(c)            Voting Rights. Holders of Common Stock shall have the general right to vote for all purposes, including the election, removal or replacement of directors, as provided by law and in this Certificate of Incorporation. Each holder of Common Stock shall be entitled to one vote for each share of Common Stock held. There shall be no cumulative voting. Notwithstanding the foregoing, except as otherwise provided by this Certificate of Incorporation or as required by the DGCL, no holder of Common Stock, as such, shall be entitled to vote on any amendment or alteration of this Certificate of Incorporation that exclusively alters, amends or changes the powers, preferences, rights or other terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other series of Preferred Stock, to vote on the applicable amendment or alteration pursuant to this Certificate of Incorporation or pursuant to the DGCL.

 

 

(d)            No Preemptive or Subscription Rights. No holder of shares of Common Stock shall be entitled to preemptive, redemption, conversion or subscription rights.

 

Article Six

 

PREFERRED STOCK

 

(a)            Shares of Preferred Stock may be issued in one or more series from time to time by Board of Directors. The Board of Directors is expressly authorized, by resolution or resolutions thereof, to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and, with respect to each such series, to fix the designations and the powers, preferences and rights, and the qualifications, limitations and restrictions of such powers, preferences and rights, of the shares of such series of Preferred Stock, including without limitation, the following:

 

(i)            the distinctive serial designation of such series that shall distinguish it from other series;

 

(ii)            the number of shares included in such series;

 

(iii)          the dividend rate (or method of determining such rate) payable to the holders of the shares of such series, any conditions upon which such dividends shall be paid and the date or dates upon which such dividends shall be payable;

 

(iv)          whether dividends on the shares of such series shall be cumulative and, in the case of shares of any series having cumulative dividend rights, the date or dates or method of determining the date or dates from which dividends on the shares of such series shall be cumulative;

 

(v)           the amount or amounts that shall be payable out of the assets of the Corporation to the holders of the shares of such series upon voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of the shares of such series;

 

(vi)          the price or prices at which, the period or periods within which and the terms and conditions upon which the shares of such series may be redeemed, in whole or in part, at the option of the Corporation or at the option of the holder or holders of the shares of such series or upon the happening of a specified event or events;

 

(vii)         the obligation, if any, of the Corporation to purchase or redeem shares of such series pursuant to a sinking fund or otherwise and the price or prices at which, the period or periods within which and the terms and conditions upon which the shares of such series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

(viii)        whether or not the shares of such series shall be convertible into, or exchangeable for, at any time or times at the option of the holder or holders of the shares of such series or at the option of the Corporation or upon the happening of a specified event or events, shares of any other class or classes or any other series of Preferred Stock or any other class or classes of stock of the Corporation, and the price or prices or rate or rates of exchange or conversion and any adjustments applicable to such exchange or conversion;

 

 

(ix)           whether or not the holders of the shares of such series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; and

 

(x)           any other powers, preferences and rights and qualifications, limitations and restrictions not inconsistent with the DGCL.

 

(b)           The powers, preferences and rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series of Preferred Stock at any time outstanding. Except as may otherwise be provided in this Certificate of Incorporation or required by the DGCL, no holder of any share of any series of Preferred Stock, as such, shall be entitled as of right to vote on: (i) any amendment or alteration of this Certificate of Incorporation to authorize or create, or increase the authorized amount of, any other series of Preferred Stock; or (ii) any alteration, amendment or repeal of any provision of any other series of Preferred Stock that does not adversely affect in any material respect the rights of the series of Preferred Stock held by such holder.

 

Article Seven

 

BOARD OF DIRECTORS

 

(a)            The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

 

(b)            Elections of directors need not be by written ballot except and to the extent provided in the bylaws of the Corporation (as amended from time to time, the "Bylaws").

 

(c)            Number of Directors.

 

(i)            Subject to the rights granted to holders of any series of Preferred Stock then outstanding to elect directors under specified circumstances or otherwise ("Preferred Stock Directors"), the number of directors of the Corporation shall be fixed from time to time pursuant to resolution or resolutions of the Board of Directors; provided that the maximum number of directors (other than Preferred Stock Directors) should not exceed twelve.

 

 

(ii)           During any period when the holders of any series of Preferred Stock have the right to elect Preferred Stock Directors, upon the commencement, and for the duration, of the period during which such right continues: (A) the then total authorized number of directors shall automatically be increased by such specified number of Preferred Stock Directors, and the holders of the related series of Preferred Stock shall be entitled to elect the Preferred Stock Directors pursuant to the provisions of the applicable Preferred Stock Designation and (B) each such Preferred Stock Director shall serve until such Preferred Stock Director's successor shall have been duly elected and qualified, or until such Preferred Stock Director's right to hold such office terminates pursuant to such provisions, whichever occurs earlier, subject to such Preferred Stock Director's earlier death, resignation, retirement, disqualification, removal from office or other cause. Except as otherwise provided in the Preferred Stock Designation in respect of such series of Preferred Stock, whenever the holders of such series of Preferred Stock having such right to elect Preferred Stock Directors are divested of such right pursuant to the provisions of such Preferred Stock Designation, the terms of office of all such Preferred Stock Directors elected by the holders of such series of Preferred Stock, or elected to fill any vacancies resulting from the death, resignation, retirement, disqualification, removal from office or other cause, shall forthwith terminate and the total and authorized number of directors shall be reduced accordingly.

 

(d)           Vacancies and Newly Created Directorships. Subject to subsection (c)(ii) of this Article SEVEN, except as otherwise required by law and unless the Board of Directors otherwise determines, newly created directorships resulting from any increase in the authorized number of directors or any vacancies on the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled only by an affirmative vote of the majority of the remaining directors then in office, though less than a quorum, or by a sole remaining director, and not by the stockholders. Any director so chosen to fill a vacancy not resulting from an increase in the number of directors shall have the same class designation and remaining term as that of his or her predecessor.

 

(e)           Classified Board. Upon the effectiveness of this Certificate of Incorporation (the "Effective Date"), the directors of the Corporation shall be divided into three classes, as nearly equal in number as reasonably possible, designated Class I, Class II and Class III. Class I directors shall initially serve until the first annual meeting of stockholders following the Effective Date. Class II directors shall initially serve until the second annual meeting of stockholders following the Effective Date. Class III directors shall initially serve until the third annual meeting of stockholders following the Effective Date. The directors of each class shall hold office until their successors have been duly elected and qualified. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed the directors whose terms expire at such annual meeting shall be elected to hold office for a term of three years following their election and until their successors have been duly elected and qualified. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain or attain a number of directors in each class as nearly equal as reasonably possible. In no event shall a decrease in the number of directors shorten the term of any incumbent director. Subject to the rights of any class or series of Preferred Stock to elect and remove directors, any director or the entire Board of Directors may only be removed for cause by an affirmative vote of the holders of at least two-thirds of the total voting power of the outstanding shares of stock of the Corporation entitled to vote at an election of directors. Following the date when Resolute Compo Holdings LLC and Resolute ManCo Holdings LLC (together with their respective affiliates (as defined below) and successors and assigns (other than the Corporation and its subsidiaries), collectively, the "Investor") cease to beneficially own, in the aggregate, 40% of the total voting power of the outstanding shares of stock of the Corporation entitled to vote for the election of directors (other than any Preferred Stock Directors) (such date, the "Trigger Date"), this Article SEVEN may not be amended, modified or repealed, except by the affirmative vote of the holders of at least two-thirds of the total voting power of the outstanding shares of stock of the Corporation entitled to vote thereon. The Board of Directors is authorized to assign directors already in office to their respective classes at the time this Article SEVEN becomes effective. For the purposes of this Certificate of Incorporation, beneficial ownership of shares shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

 

 

Article Eight

 

STOCKHOLDER ACTION BY WRITTEN CONSENT; SPECIAL MEETING

 

(a)            Stockholder Action by Written Consent. Prior to the Trigger Date, any action required or permitted to be taken by the stockholders of the Corporation or other persons as are authorized to call special meetings by the Bylaws, including but not limited to the election of directors, may be taken by written consent or consents of the stockholders of the Corporation if: (i) such consent or consents are signed by or on behalf of the holders of outstanding shares of stock of the Corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting of stockholders at which all outstanding shares of stock of the Corporation entitled to vote on the action were present and voted; and (ii) such consent or consents are delivered to the Corporation in accordance with the DGCL. Following the Trigger Date, subject to the rights of the holders of any series of Preferred Stock, any action required or permitted to be taken by stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders.

 

(b)            Special Meetings. Prior to the Trigger Date, special meetings of stockholders may be called only: (i) by or at the direction of the Executive Chairman of the Board of Directors or the Board of Directors pursuant to a resolution or resolutions thereof; or (ii) with respect to any action required or permitted to be taken by stockholders of the Corporation, by the Secretary of the Corporation (or, if there is no Secretary of the Corporation, the Executive Chairman) at the written request of the holders of a majority of the total voting power of the outstanding shares of stock of the Corporation that would be entitled to vote on such action. Following the Trigger Date, except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock, special meetings of stockholders may be called only by: (A) the Executive Chairman of the Board of Directors; or (B) the Secretary of the Corporation (or, if there is no Secretary of the Corporation, the Executive Chairman) at the direction of a majority of the directors then in office. Special meetings of stockholders may not be called by any person other than the persons specified in this subsection (b) of Article EIGHT.

 

 

Article Nine

 

LIMITATION OF DIRECTOR AND OFFICER LIABILITY

 

(a)            A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent that such exemption from liability or limitation is not permitted under the DGCL as currently in effect or as the same may be amended after the effectiveness of this Certificate of Incorporation. If the DGCL is amended after the effectiveness of this Certificate of Incorporation to authorize the further elimination or limitation of the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended from time to time. No amendment, modification or repeal of this Article NINE or the adoption of any provision of the Certificate of Incorporation inconsistent with this Article NINE, or, to the fullest extent permitted by the DGCL, any modification of law, shall adversely affect any right or protection of a director in respect of any act or omission occurring prior to the time of such amendment, modification, repeal or adoption.

 

(b)            An officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as an officer, except to the extent that such exemption from liability or limitation is (i) not permitted under the DGCL as currently in effect or as the same may be amended after the effectiveness of this Certificate of Incorporation or (ii) in any action brought by or in the right of the Corporation. If the DGCL is amended after the effectiveness of this Certificate of Incorporation to authorize the further elimination or limitation of the personal liability of officers other than in any action by or in the right of the Corporation, then the liability of an officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended from time to time, except to the extent any such amendment purports to eliminate a claim brought by or in the right of the Corporation prior to the effectiveness of such amendment. No amendment, modification or repeal of this Article NINE or the adoption of any provision of the Certificate of Incorporation inconsistent with this Article NINE, or, to the fullest extent permitted by the DGCL, any modification of law, shall adversely affect any right or protection of an officer in respect of any act or omission occurring prior to the time of such amendment, modification, repeal or adoption.

 

 

Article Ten

 

CORPORATE OPPORTUNITIES

 

(a)            Recognition of Corporate Opportunities. The Corporation recognizes and anticipates that: (i) certain directors, officers, principals, partners, members, managers, employees, agents and/or other representatives of Investor may serve as directors, officers or agents of the Corporation and its controlled affiliates; (ii) Investor may now or in the future engage in and may continue to engage in and may manage persons that engage in and may continue to engage in (x) the same or similar activities or related lines of business as those in which the Corporation and controlled affiliates, directly or indirectly, may engage and/or (y) other business activities that overlap with or compete with those in which the Corporation and its controlled affiliates, directly or indirectly, may engage; and (iii) there will be benefits to be derived by the Corporation or its controlled affiliates through its contractual, corporate and business relations with Investor (including possible service of Identified Persons (as defined below) as officers, directors and agents of the Corporation or its controlled affiliates) and there will be benefits in providing guidelines for the Identified Persons and of the Corporation with respect to the allocation of corporate opportunities and other matters. The provisions of this Article TEN are set forth to regulate and define the conduct of certain affairs of the Corporation and its controlled affiliates with respect to certain classes or categories of business opportunities as they may involve Investor, any person (as defined below) who, while a stockholder, director, officer or agent of the Corporation or any of its controlled affiliates, is a director, officer, principal, partner, member, manager, employee, agent and/or other representative of Investor (each, an "Identified Person"), on the one hand, and the powers, rights, duties and liabilities of the Corporation and its controlled affiliates and its and their respective stockholders, directors, officers and agents, on the other hand. To the fullest extent permitted by law (including, without limitation, the DGCL), and notwithstanding any other duty (contractual, fiduciary or otherwise, whether at law or in equity), each Identified Person shall have the right to, directly or indirectly, engage in, possess interests in and manage other business ventures of every type and description, including those engaged in the same or similar business activities or lines of business as the Corporation or any of its controlled affiliates or deemed to be competing with the Corporation or any of its controlled affiliates. In addition, no Identified Person shall have any duty, whether contractual, fiduciary or otherwise, whether at law or in equity, not to engage in any of the foregoing activities, interests, ventures or opportunities, whether competitive or otherwise. The scope of activities permitted or otherwise authorized by this Article TEN shall apply without regard to whether the Identified Person pursues such activities, interests, ventures or opportunities on its own account, or in partnership with, or as a direct or indirect equity holder, controlling person, stockholder, director, officer, employee, agent, affiliate, party to a management agreement for the oversight of the business, operations and strategy of another person, member, financing source, investor, director or indirect manager, general or limited partner or assignee of any other person. Under no circumstances shall any Identified Person have an obligation to offer to the Corporation or its controlled affiliates the right to participate in any of the activities, interests, ventures or opportunities described in this subsection (a). Each Identified Person shall also have the right to invest in, or provide services to, any person that is engaged in the same or similar business activities as the Corporation or its controlled affiliates or directly or indirectly competes with the Corporation or any of its controlled affiliates.

 

(b)            Competitive Opportunities. In the event that any Identified Person acquires knowledge of a potential transaction or matter that may be an investment, corporate or business opportunity or prospective economic or competitive advantage in which the Corporation or any of its controlled affiliates could have an interest or expectancy (contractual, equitable or otherwise) (a "Competitive Opportunity") or otherwise is then exploiting, to the fullest extent permitted under the DGCL and notwithstanding any other duty existing at law or in equity, the Corporation and its controlled affiliates will have no interest in, and no expectation (contractual, equitable or otherwise) that such Competitive Opportunity be offered to it. To the fullest extent permitted by law and subject to subsection (c) of this Article TEN, any such interest or expectation (contractual, equitable or otherwise) is renounced so that such Identified Person shall: (i) have no duty (contractual, fiduciary or otherwise) to communicate or present such Competitive Opportunity to the Corporation or its controlled affiliates; (ii) have the right to either hold any such Competitive Opportunity for such Identified Person's own account and benefit or the account of the former, current or future direct or indirect equity holders, controlling persons, stockholders, directors, officers, employees, agents, affiliates, members, financing sources, investors, direct or indirect managers, general or limited partners or assignees of any Identified Person or to direct, recommend, assign or otherwise transfer such Competitive Opportunity to persons other than the Corporation or any of its controlled affiliates or direct or indirect equity holders; and (iii) notwithstanding any provision in the Certificate of Incorporation to the contrary, not be obligated or liable to the Corporation, any stockholder, director or officer of the Corporation or any other person by reason of the fact that such Identified Person, directly or indirectly, took any of the actions noted in the immediately preceding clause (ii), pursued or acquired such Competitive Opportunity for itself or any other person or failed to communicate or present such Competitive Opportunity to the Corporation or its controlled affiliates.

 

 

(c)            Interpretation; Duties. In the event of a conflict or other inconsistency between this Article TEN and any other Article or provision of the Certificate of Incorporation, this Article TEN shall prevail under all circumstances. Notwithstanding anything to the contrary in this Certificate of Incorporation, under no circumstances shall the provisions of this Article TEN limit or eliminate any duty (contractual, fiduciary or otherwise, whether at law or in equity) owed by any employee of the Corporation or any of its controlled affiliates to the Corporation; provided that such employee is not a director, officer, principal, partner, member, manager, employee, agent and/or other representative of Investor (in which case, for the avoidance of doubt, Article TEN does so limit or eliminate any such duty). Further, under no circumstances shall the Corporation be deemed to have renounced any Competitive Opportunity as to any employee of the Corporation or its controlled affiliates.

 

(d)            Section 122(17) of the DGCL. For the avoidance of doubt, subject to subsection (c) of this Article TEN, this Article TEN is intended to constitute, with respect to the Identified Persons, a disclaimer and renunciation, to the fullest extent permitted under Section 122(17) of the DGCL, of any right of the Corporation or any of its controlled affiliates with respect to the matters set forth in this Article TEN. This Article TEN shall be construed to effect such disclaimer and renunciation to the fullest extent permitted under the DGCL.

 

(e)            Business Ventures. The Corporation and its controlled affiliates do not have any rights in and to the business ventures of any Identified Person, or the income or profits derived from those business ventures.

 

(f)            No Competitive Opportunity. In addition to and notwithstanding the foregoing provisions of this Article TEN, an investment, corporate or business opportunity shall not be deemed to be a Competitive Opportunity for the Corporation if it is an investment, corporate or business opportunity that: (i) the Corporation is neither financially or legally able, nor contractually permitted to undertake; (ii) from its nature, is not in the line of the Corporation's business or is of no practical advantage to the Corporation; or (iii) is one in which the Corporation has no interest or reasonable expectancy.

 

(g)            Amendments. Neither the alteration, amendment or repeal of this Article TEN, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article TEN, shall eliminate or reduce the effect of this Article TEN in respect of any Competitive Opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article TEN, would accrue or arise, prior to such alteration, amendment, repeal or adoption.

 

 

Article Eleven

 

SECTION 203 OF THE DGCL AND BUSINESS COMBINATIONS

 

(a)            Section 203 of the DGCL. The Corporation expressly elects not to be governed by Section 203 of the DGCL.

 

(b)            Business Combinations with Interested Stockholders. Notwithstanding any other provision in this Certificate of Incorporation, the Corporation shall not engage in any business combination (as defined below), at any point in time at which the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, with any interested stockholder (as defined below) for a period of three years following the time that such stockholder became an interested stockholder, unless:

 

(i)            prior to such time, the Board of Directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

 

(ii)           upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (A) by persons who are directors and also officers of the Corporation and (B) employee stock plans of the Corporation in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

 

(iii)           at or subsequent to such time, the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock of the Corporation which is not owned by the interested stockholder.

 

(c)            Exceptions to Prohibition on Interested Stockholder Transactions. The restrictions contained in this Article ELEVEN shall not apply if:

 

(i)            stockholder becomes an interested stockholder inadvertently and (A) as soon as practicable divests itself of ownership of sufficient shares so that such stockholder ceases to be an interested stockholder; and (B) would not, at any time within the three-year period immediately prior to a business combination between the Corporation and such stockholder, have been an interested stockholder but for the inadvertent acquisition of ownership; or

 

 

(ii)           the business combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required hereunder of a proposed transaction which (A) constitutes one of the transactions described in the second sentence of this subsection (c)(ii) of Article ELEVEN; (B) is with or by a person who either was not an interested stockholder during the previous three years or who became an interested stockholder with the approval of the Board of Directors; and (C) is approved or not opposed by a majority of the directors then in office (but not less than one) who were directors prior to any person becoming an interested stockholder during the previous three years or were recommended for election or elected to succeed such directors by a majority of such directors. The proposed transactions referred to in the preceding sentence are limited to (1) a merger or consolidation of the Corporation (except for a merger in respect of which, pursuant to Section 251(f) of the DGCL, no vote of the stockholders of the Corporation is required); (2) a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation (other than to any direct or indirect wholly-owned subsidiary or to the Corporation) having an aggregate market value equal to 50% or more of either that aggregate market value of all of the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock (as defined hereinafter) of the Corporation; or (3) a proposed tender or exchange offer for 50% or more of the outstanding voting stock of the Corporation. The Corporation shall give not less than 20 days' notice to all interested stockholders prior to the consummation of any of the transactions described in clause (1) or (2) of the second sentence of this subsection (c)(ii) of Article ELEVEN.

 

(d)            Definitions. For the purposes of Article SEVEN, Article TEN and this Article ELEVEN, each reference to:

 

(i)            "affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another person.

 

(ii)            "associate", when used to indicate a relationship with any person, means: (A) any corporation, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock; (B) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (C) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person.

 

(iii)          "business combination", when used in reference to the Corporation and any interested stockholder of the Corporation, means:

 

(A)            any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (1) with the interested stockholder, or (2) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the interested stockholder, and, as a result of such merger or consolidation, this Article ELEVEN is not applicable to the surviving entity;

 

 

(B)            any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the interested stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the Corporation;

 

(C)            any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any stock of the Corporation or of such subsidiary to the interested stockholder, except: (1) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the interested stockholder became such; (2) pursuant to a merger under Section 251(g) of the DGCL; (3) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is distributed, pro rata to all holders of a class or series of stock of the Corporation subsequent to the time the interested stockholder became such; (4) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all holders of said stock; or (5) any issuance or transfer of stock by the Corporation. In no case under items (3)-(5) of the preceding sentence shall there be an increase in the interested stockholder's proportionate share of the stock of any class or series of the Corporation or the voting stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments);

 

(D)            any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Corporation or of any such subsidiary which is owned by the interested stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the interested stockholder; or

 

(E)            any receipt by the interested stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (A)-(D) above) provided by or through the Corporation or any direct or indirect majority-owned subsidiary of the Corporation.

 

 

(iv)          "control", including the terms "controlling," "controlled by" and "under common control with," means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract, or otherwise. A person who is the owner of 20% or more of the outstanding voting stock of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this Article ELEVEN, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a "group" (as such term is used in Rule 13d-5 promulgated under the Exchange Act as such rule is in effect as of the date of this Certificate of Incorporation) have control of such entity.

 

(v)           "interested stockholder" means any person (other than the Corporation or any direct or indirect majority-owned subsidiary of the Corporation) that (i) is the owner of 15% or more of the outstanding voting stock of the Corporation, or (ii) is an affiliate or associate of the Corporation and was the owner of 15% or more of the outstanding voting stock of the Corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder; and the affiliates and associates of such person. Notwithstanding anything in this Article ELEVEN to the contrary, the term "interested stockholder" shall not include (A) Investor, any Investor Direct Transferee, any Investor Indirect Transferee, any of their respective affiliates, any person managed by any member of Investor pursuant to a management agreement or similar agreement, any successor of any of the foregoing persons or any "group", or any member of any such "group", to which such persons are a party under Rule 13d-5 of the Exchange Act or (B) any person whose ownership of shares in excess of the 15% limitation set forth in this Certificate of Incorporation is the result of any action taken solely by the Corporation, but such person shall be an interested stockholder if such person then acquires additional shares of voting stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder, the voting stock of the Corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of the definition of "owner" below but shall not include any other unissued stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

 

(vi)          "Investor Direct Transferee" means any person that acquires (other than in a registered public offering) directly from any member of Investor beneficial ownership of 15% or more of the then outstanding voting stock of the Corporation.

 

(vii)         "Investor Indirect Transferee" means any person that acquires (other than in a registered public offering) directly from any Investor Direct Transferee or other Investor Indirect Transferee beneficial ownership of 15% or more of the then outstanding voting stock of the Corporation.

 

 

(viii)        "owner", including the terms "own" and "owned", when used with respect to any stock, means a person that individually or with or through any of its affiliates or associates:

 

(A)            beneficially owns such stock, directly or indirectly;

 

(B)            has the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, except that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person's affiliates or associates until such tendered stock is accepted for purchase or exchange;

 

(C)            has the right to vote such stock pursuant to any agreement, arrangement or understanding, except that a person shall not be deemed the owner of any stock because of such person's right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten or more persons; or

 

(D)            has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in subsection (C) above), or disposing of such stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.

 

(ix)          "person" means any individual, corporation, partnership, unincorporated association or other entity.

 

(x)           "stock" means, with respect to any corporation, stock and, with respect to any other entity, any equity interest.

 

(xi)          "voting stock" means stock of any class or series entitled to vote generally in the election of directors.

 

 

Article Twelve

 

EXCLUSIVE FORUM

 

Unless the Corporation consents in writing to the selection of an alternative forum, and subject to applicable jurisdictional requirements, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee or stockholder of the Corporation to the Corporation or the Corporation's stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, this Certificate of Incorporation or the Bylaws or (d) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware lacks jurisdiction over such action or proceeding, then another court of the State of Delaware or, if no court of the State of Delaware has jurisdiction, then the United States District Court for the District of Delaware). The foregoing sentence shall not apply to claims arising under the Securities Act of 1933, as amended (the "Securities Act"), the Exchange Act or other federal securities laws for which there is exclusive federal or concurrent federal and state jurisdiction. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

 

Article Thirteen

 

AMENDMENTS

 

(a)            Amendment of Bylaws. The Board of Directors is expressly authorized to adopt, amend, alter, repeal or rescind, in whole or in part, the Bylaws. By affirmative vote of the holders of a majority of the total voting power of the shares of stock of the Corporation entitled to vote thereon, voting together as a single class, stockholders may adopt, amend, alter or repeal the Bylaws. Notwithstanding the previous sentence, following the Trigger Date, any amendment, alteration, repeal or rescission of Sections 2.2, 2.9, 2.10, 3.4, 8.5 or Article VII of the Bylaws (as such sections and Articles are numbered on the date hereof, and other than to change the numbers of such provisions upon the adoption or repeal of other provisions in accordance herewith) shall require the affirmative vote of at least two-thirds of the total voting power of the shares of stock of the Corporation entitled to vote on such amendment, alteration, repeal, rescission or adoption, voting together as a single class.

 

(b)            Amendment of Certificate of Incorporation. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, and in addition to any specific requirements contained in this Certificate of Incorporation with respect to any particular Article or provision of this Certificate of Incorporation, at any time following the Trigger Date, Article SIX, SEVEN, EIGHT, NINE, TEN, ELEVEN and this Article THIRTEEN may be amended, altered, repealed or rescinded, in whole or in part, or any provision inconsistent with those provisions or this provision may be adopted, only by the affirmative vote of the holders of at least two-thirds of the total voting power of the shares of stock of the Corporation entitled to vote on such amendment, alteration, repeal, rescission or adoption, voting together as a single class.

 

 

Exhibit 3.2

 

AMENDED AND RESTATED

 

BYLAWS

 

OF

 

RESOLUTE HOLDINGS MANAGEMENT, INC.

 

(Adopted as of                                       )

 

ARTICLE I

 

Offices

 

Section 1.1             Registered Office. The registered office of Resolute Holdings Management, Inc. (the "Corporation") in the State of Delaware, and the name of its registered agent at such address, shall be as set forth in the Certificate of Incorporation of the Corporation (as amended from time to time, the "Certificate of Incorporation").

 

Section 1.2             Other Offices. The Corporation may have a principal or other office or offices at such other place or places, either within or 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 shall be necessary or appropriate for the conduct of the business of the Corporation.

 

ARTICLE II

 

Stockholders

 

Section 2.1            Annual Meetings. An annual meeting of stockholders for the election of directors and such other business as shall be properly brought before the meeting in accordance with these Bylaws of the Corporation (as amended from time to time, these "Bylaws") shall be held at such date, time and place, if any, either within or without the State of Delaware as may be designed by the Board of Directors from time to time. Alternatively, the annual meeting may not be held at any place, but may instead be held solely by means of remote communication, as may be designated by the Board of Directors from time to time. The Board of Directors may postpone, reschedule or cancel any previously scheduled annual meeting of stockholders.

 

Section 2.2            Special Meetings. Special meetings of stockholders may only be called in the manner provided in the Certificate of Incorporation. Special meetings of stockholders shall be held at such date, time and place, if any, either within or without the State of Delaware as may be designed by the Board of Directors from time to time. Alternatively, the special meeting may not be held at any place, but may instead be held by means of remote communication, as may be designed by the Board of Directors from time to time. At a special meeting of stockholders, only such business shall be conducted as shall be specified in the notice of meeting (or any supplement to the notice of meeting).

 

 

Section 2.3            Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting shall be given in accordance with the General Corporation Law of the State of Delaware (as from time to time in effect, the "DGCL"). The notice shall state: (i) the place, if any, date and time of the meeting; (ii) the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting; (iii) the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting; and (iv) in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the notice of any meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be 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 given by electronic mail, such notice shall be deemed to be given as provided in the DGCL. Notice shall be deemed to have been given to all stockholders of record who share an address if notice is given in accordance with the "householding" rules set forth in the rules of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 233 of the DGCL.

 

Section 2.4            Adjournments. Subject to Section 2.2, any meeting of stockholders, annual or special, may be adjourned from time to time, to reconvene at the same or some other place or by means of remote communication by the person presiding over the meeting in accordance with Section 2.6 (in the case of adjournment after the establishment of a quorum) or in accordance with Section 2.5 (in the case of adjournment in the absence of a quorum). In such event, notice of the adjournment need not be given if the time, place, if any, and the means of remote communications, if any, of the adjourned meeting are (i) announced at the meeting at which the adjournment is taken, (ii) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication or (iii) set forth in the notice of the meeting. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

Section 2.5             Quorum. Except where otherwise provided by law or the Certificate of Incorporation or these Bylaws, at each meeting of stockholders, the holders of a majority of the total voting power of the outstanding shares of stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business at such meeting. When specified business is to be voted on by one or more classes or series of stock voting as a separate class, the holders of a majority of the voting power of the shares of such classes or series shall constitute a quorum of such separate class for the transaction of such business. In the absence of a quorum, the chairperson of the meeting determined in accordance with Section 2.6 or, in the absence of such person, the holders of a majority of the total voting power of the shares of stock present in person or represented by proxy at any meeting of stockholders, including an adjourned meeting, may adjourn such meeting to another time or place. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Notwithstanding anything to the contrary, the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity. The stockholders present at a duly called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

 

 

Section 2.6             Organization. At each meeting of stockholders, the Executive Chairman of the Board of Directors (the "Executive Chairman") shall preside over the meeting. If the Executive Chairman is absent, such meeting shall be presided over by a chairperson chosen by the Executive Chairman or, in the absence of such a choice, any director or officer of the Corporation designated by the Board of Directors (or in the absence of any such designation, the most senior officer present) shall preside over the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting. In the absence of the Secretary and any Assistant Secretary, the chairperson of the meeting may appoint any person to act as secretary of the meeting.

 

The Board of Directors may adopt such rules and regulations for the conduct of any meeting of the stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the order of business at and any other rules and regulations for the conduct of each such meeting shall be as determined by the chairperson of the meeting. Such rules and procedures, whether adopted by the Board of Directors or the chairperson of the meeting, may include, without limitations: (i) procedures for the maintenance of order and safety; (ii) limits on the time allotted to questions or comments on the affairs of the Corporation; (iii) restrictions on entry to such meeting after the time prescribed for the commencement of the meeting; and (iv) procedures for the opening and closing of the voting polls for each item on which a vote is to be taken. Unless and to the extent determined by the Board of Directors or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

 

Section 2.7             Inspectors. Prior to or at any meeting of stockholders, the Board of Directors or the Chief Executive Officer of the Corporation or the chairperson of the meeting: (i) shall appoint one or more inspectors to act at such meeting and make a written report of such meeting; and (ii) may designate one or more persons as alternate inspectors to replace any inspector who fails to act. Before entering upon the discharge of his or her duties, each inspector shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall: (A) ascertain the number of shares outstanding and the voting power of each; (B) determine the shares represented at the meeting and the validity of proxies and ballots; (C) count all votes and ballots; (D) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and (E) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons to assist them in the performance of their duties.

 

 

The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to: (i) an examination of the proxies, and any envelopes submitted with such proxies; (ii) any information provided by a stockholder who submits a proxy by telegram, cablegram, or other electronic transmission from which it can be determined that the proxy was authorized by the stockholder; (iii) any written ballot or, if authorized by the Board of Directors, a ballot submitted by electronic transmission together with any information from which it can be determined that the electronic transmission was authorized by the stockholder; (iv) any information provided in a record of a vote if such vote was taken at the meeting by means of remote communication along with any information used to verify that any person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder; and (v) the regular books and records of the Corporation. The inspectors may also consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for such purpose, at the time they make their certification, the inspectors shall specify (A) the precise information considered by them, including the person or persons from whom they obtained the information; (B) when the information was obtained; (C) the means by which the information was obtained; and (D) the basis for the inspectors" belief that such information is accurate and reliable.

 

Section 2.8             Voting; Proxies. Unless otherwise provided in the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder which has voting power upon the matter in question. If the Certificate of Incorporation provides for more or less than one vote for any share on any matter, every reference in these Bylaws to a majority or other proportion of stock, or shares of any class or series of stock, shall refer to such majority or other proportion of the votes of such stock or shares. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy. Notwithstanding the foregoing, no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable but only if the proxy is coupled with an interest sufficient in law to support an irrevocable power. Any such interest may be in the stock itself or an interest in the Corporation generally. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing a written instrument revoking the proxy or another duly executed proxy bearing a later date with the secretary of the meeting. Subject to the rights of holders of Preferred Stock with respect to the election of any Preferred Stock Directors (as defined in the Certificate of Incorporation), directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. In all other matters, unless otherwise provided by law or by the Certificate of Incorporation or these Bylaws, the affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. For purposes of this Section 2.8, votes cast "for" or "against" and "abstentions" with respect to such matter shall be counted as shares of stock of the Corporation entitled to vote on such matter, while "broker non-votes" (or other shares of stock of the Corporation similarly not entitled to vote) shall not be counted as shares entitled to vote on such matter. Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board of Directors.

 

Section 2.9             Notice of Stockholder Business and Nominations.

 

(a)            Annual Meeting of Stockholders.

 

(i)            At any annual meeting of the stockholders, nominations of persons for election to the Board of Directors or other business that have not been properly brought before the meeting shall not be considered or conducted. For nominations to be properly made at an annual meeting, and proposals of business to be properly brought before an annual meeting, nominations and proposals of other business must be: (A) pursuant to the Corporation's notice of meeting (or any supplement to the notice of meeting) delivered pursuant to Section 2.3; (B) by or at the direction of the Board of Directors or any duly authorized committee of the Board of Directors; or (C) by any stockholder of the Corporation who (x) was a stockholder of record at the time of giving of notice provided for in these Bylaws and at the time of the annual meeting, (y) is entitled to vote at the meeting and (z) complies with the notice procedures set forth in this Bylaw as to such business or nomination. Clause (C) of this Section 2.9(a)(i) shall be the exclusive means for a stockholder to make nominations or submit other business (other than matters properly brought under Rule 14a-8 under the Exchange Act and included in the Corporation's proxy statement for the solicitation of proxies by the Corporation for such meeting).

 

 

(ii)           Without qualification or limitation, for any nominations or any other business to be properly brought before an annual meeting by a stockholder pursuant to Section 2.9(a)(i)(C), the stockholder must have given timely notice of the nominations or other business in writing to the Secretary (or, if there is no Secretary, the Chief Financial Officer), and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the Secretary (or, if there is no Secretary, the Chief Financial Officer) at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth day and not later than the close of business on the ninetieth day prior to the first anniversary of the preceding year's annual meeting (which date shall, for purposes of the Corporation's first annual meeting of stockholders after its shares of common stock are first publicly traded, be deemed to have occurred on [●]). Notwithstanding the previous sentence, in the event that the date of the annual meeting is more than thirty days before or more than sixty days after such anniversary date, or if no annual meeting was held in the preceding year, notice by the stockholder to be timely must be so delivered not earlier than the opening of business on the one hundred twentieth day prior to the date of such annual meeting and not later than the close of business on the later of the ninetieth day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than one hundred days prior to the date of such annual meeting, the tenth day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall any adjournment or postponement of an annual meeting or the announcement of any adjournment or postponement of an annual meeting commence a new time period for the giving of a stockholder's notice as described above. In addition, to be timely, a stockholder's notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that is ten business days prior to the meeting or any adjournment or postponement of the meeting. Such update and supplement shall be delivered to the Secretary (or, if there is no Secretary, the Chief Financial Officer) at the principal executive offices of the Corporation not later than five business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight business days prior to the date for the meeting, any adjournment or postponement of the meeting in the case of the update and supplement required to be made as of ten business days prior to the meeting or any adjournment or postponement of the meeting. Whether given pursuant to this Section 2.9(a)(ii) or Section 2.9(b), to be in proper form, a stockholder's notice to the Secretary (or, if there is no Secretary, the Chief Financial Officer) must set forth, 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 each of (1) such stockholder, as they appear on the Corporation's books and records, (2) such beneficial owner, if any, and (3) their respective affiliates or associates; (B) the class or series and number of shares of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder, such beneficial owner, and of their respective affiliates or associates; (C) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation directly or indirectly owned beneficially by such stockholder, the beneficial owner, if any, or any affiliates or associates; (D) any derivative or synthetic arrangement having the characteristics of a long position in any class or series of shares of the Corporation directly or indirectly owned beneficially by such stockholder, the beneficial owner, if any, or any affiliates or associates; (E) any contract, derivative, swap or other transaction or series of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any class or series of shares of the Corporation, including due to the fact that the value of such contract, derivative, swap or other transaction or series of transactions is determined by reference to the price, value or volatility of any class or series of shares of the Corporation, whether or not such instrument, contract or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise, through the delivery of cash or other property, or otherwise, and without regard of whether the stockholder, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith, may have entered into transactions that hedge or mitigate the economic effect of such instrument, contract or right, or any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation (any of the foregoing, a "Derivative Instrument") directly or indirectly owned beneficially by such stockholder, the beneficial owner, if any, or any affiliates or associates; (F) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any shares of any security of the Corporation; (G) any contract, arrangement, understanding, relationship or otherwise, including any repurchase or similar so-called "stock borrowing" agreement or arrangement, engaged in, directly or indirectly, by such stockholder, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of the shares of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such stockholder with respect to any class or series of the shares of the Corporation, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any security of the Corporation (any of the foregoing, a "Short Interest"); (H) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the Corporation; (I) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership; (J) any performance-related fees (other than an asset-based fee) that such stockholder is directly or indirectly entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholder's immediate family sharing the same household; (K) representations that such stockholder (1) is entitled to vote at the meeting and intends to appear in person or represented by a proxy at the meeting to propose such nomination or other business and (2) shall provide all other information and affirmations, updates and supplements required pursuant to, and otherwise comply with, these Bylaws; and (L) with respect to any notice of such nomination, representations as to whether such stockholder intends to (1) deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation's outstanding capital stock to approve the nomination, (2) solicit proxies in support of director nominees other than the Corporation's nominees in accordance with the Exchange Act and (3) comply with all other applicable requirements of the Exchange Act with respect to the matters set forth therein. The notice described in the preceding sentence shall also set forth, as to each person, if any, whom the stockholder proposes to nominate for election or reelection to the Board of Directors all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person's written consent to being named in the Corporation's proxy statement as a nominee and to serving as a director if elected) and a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and beneficial owner (including any proposed nominee), if any, and their respective affiliates and associates, or others acting in concert with them, including, without limitation, all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate of them, or person acting in concert with them, were the "registrant" for purposes of such rule and the nominee were a director or executive officer of such registrant. In addition, with respect to each nominee for election or reelection to the Board of Directors, each such notice must include, at the time made, a completed and signed questionnaire, representation and agreement required by Section 2.10. At its sole discretion, the Corporation may also require any proposed nominee to furnish such information as may reasonably be required by the Corporation to determine: (x) the qualifications of such proposed nominee; (y) the eligibility of such proposed nominee to serve as an independent director of the Corporation; or (z) that could be material to a reasonable stockholder's understanding of the qualifications and independence, or lack thereof, of such nominee. The Corporation may also require any proposed nominee to furnish such information as may reasonably be required, pursuant to applicable law, to be disclosed in the proxy materials concerning all persons nominated (by the Corporation or otherwise) for election as a director of the Corporation, whether or not the nominee is to be included in the Corporation's proxy statement. The proposed nominee shall furnish to the Corporation the requested information pursuant to the preceding two sentences within ten days after receipt of any such request. The proposed nominee shall also agree and acknowledge that all information provided to the Company pursuant to this Bylaw may be publicly disclosed by the Company including in disclosures pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.

 

 

(iii)            If the notice described in Section 2.9(a)(ii) relates to any business other than a nomination of a director or directors that the stockholder proposes to bring before the meeting, then, to be in proper form, the notice shall also set forth: (i) a brief description of the business desired to be brought before the meeting; (ii) the reasons for conducting such business at the meeting and any material interest of such stockholder and beneficial owner, if any, in such business; (iii) 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 text of such proposed amendment); and (iv) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder. For the avoidance of doubt, if the notice described in Section 2.9(a)(ii) relates to both a nomination of a director or directors and other business, the notice shall set forth all of the required information pursuant to this paragraph and the immediately preceding paragraph.

 

(iv)            In the event that the number of directors to be elected to the Board of Directors is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least one hundred days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice of a nomination of a director or directors required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary (or, if there is no Secretary, the Chief Financial Officer) at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation.

 

(v)            Any stockholder giving notice pursuant to Section 2.9(a)(ii) or Section 2.9(b) shall (A) provide any other information reasonably requested from time to time by the Corporation within five business days after each such request, (B) update and supplement promptly (and in any event no later than two business days prior to the commencement of the applicable meeting of stockholders) any information provided to the Corporation in such notice, or at the Corporation's request pursuant to the foregoing clause (A), if any such information ceases for any reason to be accurate or complete in any material respect and (C) affirm such information as accurate and complete as of two business days prior to the commencement of the applicable meeting of stockholders. Any such affirmation, update and/or supplement must be delivered personally or mailed to, and received by the Secretary (or, if there is no Secretary, the Chief Financial Officer) at the principal executive offices of the Corporation.

 

(b)            Special Meetings of Stockholders. The only business that shall be conducted at a special meeting of stockholders shall be as set forth in the Corporation's notice of meeting, delivered prior to the special meeting in accordance with these Bylaws. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting by or at the direction of the Board of Directors. In addition, nominations for election of directors at a special meeting at which directors are to be elected pursuant to the Corporation's notice of meeting may be made by any stockholder of the Corporation who: (i) is a stockholder of record at the time of giving of notice provided for in this Bylaw and at the time of the special meeting; (ii) is entitled to vote at the meeting and (iii) complies with the notice procedures set forth in this Bylaw as to such nomination. With respect to the immediately preceding sentence, however, such nominations by stockholders shall only be made where the Board of Directors or Investor pursuant to subsection (b) of Article NINE of the Certificate of Incorporation have determined that directors will be elected at the meeting. The immediately preceding two sentences shall be the exclusive means by which a stockholder may make nominations before a special meeting of stockholders at which directors are to be elected or appointed. Any nominations that do not comply with the foregoing shall not be considered or conducted. In the event that the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any stockholder 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 only if the stockholder's notice required by Section 2.9(a)(ii) with respect to any nomination shall be delivered to the Secretary (or, if there is no Secretary, the Chief Financial Officer) at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth day prior to the date of such special meeting and not later than the close of business on the later of the ninetieth day prior to the date of such special meeting. For the avoidance of doubt, the stockholder's notice so delivered shall include the completed and signed questionnaire, representation and agreement required by Section 2.10. If the first public announcement of the date of such special meeting is less than one hundred days prior to the date of such special meeting, such notice shall be delivered to the Secretary (or, if there is no Secretary, the Chief Financial Officer) at the principal executive offices of the Corporation not later than the tenth day following the day on which the Corporation first makes a public announcement of the date of the special meeting at which directors are to be elected. In no event shall any adjournment or postponement of a special meeting or the announcement of any adjournment or postponement of a special meeting commence a new time period for the giving of a stockholder's notice as described in the immediately preceding sentence.

 

 

(c)            General.

 

(i)            Any persons who are not nominated in accordance with the procedures set forth in this Bylaw shall not be eligible to be elected as directors. Only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Bylaw. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws or as otherwise determined by the Board of Directors, the chairperson of the meeting shall have the power and duty 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 Bylaw. In the event any proposed nomination or business is not in compliance with this Bylaw, the chairperson shall declare the defective proposal or nomination to be invalid. Unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the Corporation's annual or special meeting of stockholders to make a nomination or present a proposal of other business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Bylaw, to be considered a qualified representative of the stockholder, a person 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. Such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

 

(ii)            For purposes of this Bylaw, "public announcement" shall mean disclosure in a press release reported by a national news service or in a document publicly filed or furnished 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.

 

(iii)            Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Notwithstanding the previous sentence, any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to Section 2.9(a)(i)(C) or Section 2.9(b). Nothing in this Bylaw shall be deemed to affect any rights: (A) of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act; or (B) of the holders of any series of Preferred Stock, par value of $0.0001 per share, of the Corporation, if and to the extent provided for under law, the Certificate of Incorporation or these Bylaws. Subject to Rule 14a-8 under the Exchange Act, nothing in these Bylaws shall be construed to permit any stockholder, or give any stockholder the right, to include or have disseminated or described in the Corporation's proxy statement any nomination of director or directors or any other business proposal.

 

Section 2.10           Submission of Questionnaire, Representation and Agreement. To be eligible to be a nominee of any stockholder for election or reelection as a director of the Corporation and qualified to serve as a director, a person must deliver to the Secretary (or, if there is no Secretary, the Chief Financial Officer) at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person (and the background of any other persons or entities on whose behalf the nomination is being made, if made, pursuant to Section 2.9(a)(1)(C) or the second sentence of Section 2.9(b)). If a person has not delivered such written questionnaire, such person shall not be eligible to be a nominee for election or reelection as a director of the Corporation. In the case of a person nominated for election as a director of the Corporation, pursuant to Section 2.9(a)(1)(C) or the second sentence of Section 2.9(b), such delivery shall be made in accordance with the time periods prescribed for delivery of notice in respect of such nominations under Section 2.9. In the case of a person nominated by or at the direction of the Board of Directors, such questionnaire shall be delivered in accordance with the policies of the Board of Directors in effect from time to time. If delivery of such notice is not made in accordance with these time periods, such person shall not be eligible to be a nominee for election or reelection as a director of the Corporation. In the case of a person nominated pursuant to Section 2.9(a)(1)(C) or the second sentence of Section 2.9(b), the questionnaire shall be provided by the Secretary (or, if there is no Secretary, the Chief Financial Officer) to the proposed nominee upon written request by the proposed nominee or the nominating stockholder on such person's behalf. In the case of a person nominated pursuant to Section 2.9(a)(1)(C) or the second sentence of Section 2.9(b), a person shall not be eligible to be a nominee of a stockholder for election or reelection as a director of the Corporation and qualified to serve as a director unless such person also delivers a written representation and agreement that such person: (a) is not and will not become a party to (i) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a "Voting Commitment") that has not been disclosed to the Corporation or (ii) any Voting Commitment that could limit or interfere with such person's ability to comply, if elected as a director of the Corporation, with such person's fiduciary duties under applicable law; (b) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed in the questionnaire; and (c) in such person's individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation. The form of written representation and agreement shall also be provided by the Secretary (or, if there is no Secretary, the Chief Financial Officer) to the proposed nominee upon written request by the proposed nominee or the nominating stockholder on such person's behalf.

 

 

Section 2.11           Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment of a meeting of stockholders, the Board of Directors may fix a record date. The record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors. The record date shall not be more than sixty nor less than ten days before the meeting date. If the Board of Directors fixes a date, that date shall 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 shall 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 and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting. Notwithstanding the previous sentence, the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting. In such case, the Board of Directors shall also fix the record date for stockholders entitled to notice of such adjourned meeting as the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting in accordance with this Section 2.11.

 

In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date. The record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors. The record date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors and when no prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with the DGCL. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

 

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

 

Section 2.12           List of Stockholders Entitled to Vote. At least ten days before every meeting of stockholders, the Secretary (or, if there is no Secretary, the Chief Financial Officer) shall prepare and make a complete list of the stockholders entitled to vote at the meeting. Notwithstanding the previous sentence, if the record date for determining the stockholders entitled to vote is less than ten days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date. The list shall be arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Nothing in this Section 2.12 shall require the Corporation to include electronic mail addresses or other electronic content information on such list. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting; or (b) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation.

 

 

ARTICLE III

 

Board of Directors

 

Section 3.1            Powers; Number; Qualifications. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by law or in the Certificate of Incorporation. The Board of Directors shall consist of one or more members, each of whom shall be a natural person. From time to time, the Board of Directors shall determine the number of members in accordance with the Certificate of Incorporation.

 

Section 3.2            Election; Term of Office; Resignation; Removal; Vacancies. Each director shall hold office until the next election of the class for which such director shall have been chosen, and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any director may resign at any time upon notice given in writing or by electronic transmission to the Board of Directors or to the Chief Executive Officer or the Secretary. Such resignation shall be effective upon delivery, unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. Unless otherwise specified in the resignation, no acceptance of such resignation shall be necessary to make the resignation effective. Any director or the entire Board of Directors may be removed in accordance with the Certificate of Incorporation. Unless otherwise provided in the Certificate of Incorporation or these Bylaws, vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class or from any other cause may be filled only by a majority of the directors then in office, although less than a quorum, or by the sole remaining director. Whenever the holders of any class or classes of stock or series of stock are entitled to elect one or more directors by the Certificate of Incorporation, vacancies and newly created directorships of such class or classes of stock or series of stock may be filled by a majority of the directors elected by such class or classes of stock or series of stock then in office, or by the sole remaining director so elected. Any director elected or appointed to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his or her predecessor.

 

Section 3.3            Regular Meetings. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board of Directors may from time to time determine, and, if so determined, notice of the meetings need not be given.

 

Section 3.4            Special Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Executive Chairman, if any, or the Chief Executive Officer. Prior to the Trigger Date (as defined in the Certificate of Incorporation), special meetings of the Board of Directors may be also called by Investor at any time. Special meetings shall be called by the Executive Chairman or Chief Executive Officer in like manner and on like notice on the written request of any three or more directors. Reasonable notice of special meetings shall be given by the person or persons calling the meeting.

 

Section 3.5            Participation in Meetings by Telephone Conference Permitted. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or of such committee by means of telephone conference or other communications equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation in a meeting pursuant to this Bylaw shall constitute presence in person at such meeting.

 

 

Section 3.6            Quorum; Vote Required for Action. At all meetings of the Board of Directors, the presence of a majority of the directors then in office shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless the Certificate of Incorporation or these Bylaws shall require a vote of a greater number. If at any meeting of the Board of Directors a quorum shall not be present, the members of the Board of Directors present may adjourn the meeting from time to time until a quorum shall be present. The directors present at any meeting at which a quorum has been established may continue to transact business until adjournment notwithstanding the withdrawal of enough directors to have less than a quorum.

 

Section 3.7            Organization. Meetings of the Board of Directors shall be presided over by the Executive Chairman. In the absence of the Executive Chairman, meetings of the Board of Directors shall be presided over by a chairperson chosen by the Executive Chairman or, if there is no Executive Chairman, the Board of Directors at the meeting. The Secretary, or in the absence of the Secretary, an Assistant Secretary or any other person designated by the Board of Directors at the meeting, shall act as secretary of the meeting.

 

Section 3.8            Action by Directors Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee of the Board of Directors, may be taken without a meeting if all members of the Board of Directors or of such committee consent in writing or by electronic transmission. Any such writing or writings or electronic transmission or transmissions shall be filed with the minutes of proceedings of the Board of Directors or such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

Section 3.9            Compensation of Directors. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board of Directors shall have the authority to fix the compensation, including fees, reimbursement of expenses and equity compensation, of directors for services to the Corporation in any capacity, including for attendance of meetings of the Board of Directors or participation on any committees. Directors who are officers or employees of the Corporation may receive, if the Board of Directors desires, compensation for service as directors. Nothing in these Bylaws shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation for such service.

 

ARTICLE IV

 

Committees

 

Section 4.1            Committees. The Board of Directors may designate one or more committees, including an executive committee and any committee required by the rules and regulations of any exchange as any securities of the Corporation are listed. Each committee shall consist of one or more of the directors of the Corporation. 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. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members of the committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. To the extent permitted by law and provided in the resolution of the Board of Directors establishing such committee or in these Bylaws, any committee of the Board of Directors shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation. No committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by law to be submitted to stockholders for approval or (ii) adopting, amending or repealing these Bylaws.

 

 

Section 4.2            Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board of Directors or a provision in the rules of such committee to the contrary, each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article III.

 

ARTICLE V

 

Officers

 

Section 5.1            Officers; Election. The officers of the Corporation shall include any officers required by the DGCL, each of whom shall be elected by the Board of Directors and who shall hold office for such terms as shall be determined by the Board of Directors and until their successors are elected and qualified or until their earlier resignation or removal. In addition, the Board of Directors may elect an Executive Chairman, Chief Executive Officer, a President, a Chief Financial Officer, one or more Vice Presidents, including one or more Executive Vice Presidents, Senior Vice Presidents, a Treasurer, one or more Assistant Treasurers, a Secretary, one or more Assistant Secretaries and any other additional officers as the Board of Directors may deem desirable or appropriate and may give any of them such further designations or alternate titles as it considers desirable. Any number of offices may be held by the same person unless prohibited by law or the Certificate of Incorporation or these Bylaws otherwise provide. The Board of Directors may also elect from among its members a Chairperson of the Board of Directors and a Vice Chairperson of the Board of Directors.

 

Section 5.2            Term of Office; Resignation; Removal; Vacancies. Unless otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice or electronic transmission to the Board of Directors or to the Chief Executive Officer or the Secretary. Such resignation shall be effective upon delivery, unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. Unless otherwise specified in the resignation, no acceptance of such resignation shall be necessary to make it effective. The Board of Directors may remove any officer with or without cause at any time. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation. The election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, may be filled by the Board of Directors at any regular or special meeting.

 

 

Section 5.3            Executive Chairman. The Executive Chairman shall be a director of the Corporation.

 

Section 5.4            Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer and shall have general charge and supervision of the business of the Corporation. The Chief Executive Officer shall perform all duties incident to the office of president of a corporation and such other duties as may, from time to time, be assigned to him or her by the Board of Directors or as may be provided by law.

 

Section 5.5            President. Each President shall have such general powers and duties of supervision and management as shall be assigned to him or her by the Board of Directors.

 

Section 5.6            Vice Presidents. Each Vice President shall have such powers and shall perform such duties as shall be assigned to him or her by the Board of Directors.

 

Section 5.7            Chief Financial Officer. The Board of Directors shall appoint a Chief Financial Officer to serve at the pleasure of the Board of Directors. The Chief Financial Officer shall: (i) have the custody of the corporate funds and securities, except as otherwise provided by the Board of Directors; (ii) keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation; (iii) deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors; (iv) disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements; and (v) render to the Chief Executive Officer and the Board of Directors, whenever they may require it, an account of all his or her transactions as Chief Financial Officer and of the financial condition of the Corporation.

 

Section 5.8            Secretary. The Secretary shall have the duty to record the proceedings of the meetings of the stockholders, the Board of Directors and any committees in a book to be kept for that purpose. The Secretary (i) shall see that all notices are given in accordance with the provisions of these Bylaws or as required by law and (ii) shall be custodian of the records of the Corporation. The Secretary shall perform all other duties incident to the office of secretary of a corporation and such other duties as may, from time to time, be assigned to him or her by the Board of Directors or the Chief Executive Officer or as may be provided by law.

 

Section 5.9            Other Officers. The Corporation's other officers shall have such powers and duties in the management of the Corporation as shall be stated in a resolution of the Board of Directors. Any such resolution shall not be inconsistent with these Bylaws and, to the extent not so stated, such other officers shall have such powers and duties as generally pertain to their respective offices and shall be subject to the Board of Director's control. The Board of Directors may require any officer, agent or employee to give security for the faithful performance of his or her duties.

 

Section 5.10          Actions with Respect to Securities of Other Entities. All stock and other securities of other entities owned or held by the Corporation for itself, or for other parties in any capacity, shall be voted (including by written consent), and all proxies with respect thereto shall be executed, by the person or persons authorized to do so by resolution of the Board of Directors or, except to the extent inconsistent with any resolution of the Board of Directors, by the Executive Chairman, if any, the Chief Executive Officer, the Chief Financial Officer or the Secretary, if any.

 

 

ARTICLE VI

 

Stock

 

Section 6.1            Stock Certificates and Uncertificated Shares. The shares of stock in the Corporation may be represented by certificates. The Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the Corporation's stock shall be uncertificated shares. Any such resolutions shall not apply to shares represented by a certificate previously issued until such certificate is surrendered to the Corporation. If the shares of stock of the Corporation shall be certificated, such certificates shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock represented by certificates, if any, shall be entitled to have a certificate signed by or in the name of the Corporation by any two authorized officers of the Corporation. Any or all of the signatures on a certificate may be a facsimile or other electronic signature. In case any officer, transfer agent or registrar who has signed or whose facsimile or electronic signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. The Corporation may not issue stock certificates in bearer form.

 

Section 6.2             Shares Without Certificates. The Corporation, if required by the DGCL or other applicable law, shall, within a reasonable time after the issue or transfer of shares without certificates, give a notice to the registered owner thereof containing the information required to be set forth or stated on stock certificates by the applicable provisions of the DGCL. The Corporation may adopt a system of issuance, recordation and transfer of its shares of stock by electronic or other means not involving the issuance of certificates, provided the use of such system by the Corporation is permitted in accordance with applicable law.

 

Section 6.3             Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate previously issued by it, alleged to have been lost, stolen or destroyed. The Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

 

Section 6.4            Transfer and Registry Agents. The Corporation may from time to time maintain one or more transfer offices or agents and registry offices or agents at such place or places as may be determined from time to time by the Board of Directors.

 

Section 6.5            Record Owners. The stock ledger shall be the only evidence as to who are the stockholders of the Corporation. The Corporation shall be entitled to recognize the exclusive right of a person registered on its stock ledger as the owner of shares to receive dividends, to vote and to receive notice, and otherwise to exercise all of the rights and powers of an owner of such shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice of the claim, except as otherwise required by law.

 

 

ARTICLE VII

 

Indemnification

 

Section 7.1            Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any 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 Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, agent or trustee of another corporation or of a partnership, joint venture, trust or other enterprise or nonprofit entity, 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, agent or trustee or in any other capacity while serving as a director, officer, employee, agent or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Delaware law, as the same exists or may be amended. In the case of any such amendment, the amendment shall, if permitted, be limited to the Corporation providing broader indemnification rights than such law permitted the Corporation to provide prior to such amendment. The right to indemnification shall cover any expense, liability and loss (including, without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith. Notwithstanding anything to the contrary in this Section 7.1, except as provided in Section 7.3 with respect to proceedings to enforce rights to indemnification or advancement of expenses or with respect to any compulsory counterclaim brought by such indemnitee, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part of a proceeding) initiated by such indemnitee only if such proceeding (or part of such proceeding) was authorized by the Board of Directors.

 

Section 7.2            Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 7.1, an indemnitee shall also have the right to be paid by the Corporation for the expenses (including, without limitation, attorney's fees) incurred in appearing at, participating in or defending any such proceeding referred to in Section 7.1 in advance of its final disposition or in connection with a proceeding brought to establish or enforce a right to indemnification or advancement of expenses under this Article VII (which shall be governed by Section 7.3 (an "advancement of expenses"). Notwithstanding the foregoing, but only to the extent so required by the DGCL, such payment of expenses in advance of the final disposition of the applicable proceeding shall be made upon receipt of an undertaking by the indemnitee to repay all amounts advanced if it should be ultimately 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 under this Article VII or otherwise.

 

 

Section 7.3             Right of Indemnitee to Bring Suit. If a claim under Section 7.1 or 7.2 is not paid in full by the Corporation within (a) sixty days after a written claim for indemnification has been received by the Corporation or (b) twenty days after a claim for an advancement of expenses has been received by the Corporation (in each case, provided that the indemnitee has delivered the undertaking contemplated by the last sentence of Section 7.2), the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim or to obtain advancement of expenses, as applicable. To the fullest extent permitted by law, if the indemnitee is successful in whole or in part in: (i) any suit to enforce his or her indemnification rights under these Bylaws or (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be reimbursed for all of the costs and expenses incurred in prosecuting or defending such suit, including, without limitation, reasonable attorneys' fees. In any suit brought by the indemnitee to enforce a right to indemnification under these Bylaws it shall be a defense that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. No such defense shall apply, however, with respect to a suit brought by the indemnitee to enforce a right to an advancement of expenses. In any suit brought by the indemnitee to enforce a right to indemnification under these Bylaws it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of expenses where the undertaking required pursuant to the last sentence of Section 7.2, if any, has been tendered to the Corporation) that the claimant has not met the applicable standard of conduct that makes it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proof shall be on the Corporation to the fullest extent permitted by law. In any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. For the avoidance of doubt, such expenses shall include, without limitation, reasonable attorneys' fees. Neither: (A) the failure of the Corporation 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 (B) an actual determination by the Corporation that the indemnitee has not met such applicable standard of conduct, shall 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. For the avoidance of doubt, the term Corporation as used in the immediately preceding sentence shall include the Corporation's directors who are not parties to such action, a committee of such directors, independent legal counsel or the Corporation's stockholders. Whether in an action brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses under these Bylaws, or in an action brought by the Corporation to recover an advancement of expenses 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, under this Article VII or otherwise shall be on the Corporation.

 

Section 7.4              Indemnification Not Exclusive.

 

(a)            The provision of indemnification to or the advancement of expenses and costs to any indemnitee under this Article VII, or the entitlement of any indemnitee to indemnification or advancement of expenses and costs under this Article VII, shall not limit or restrict in any way the power of the Corporation to indemnify or advance expenses and costs to such indemnitee in any other way permitted by law. Nor shall the provision of such indemnification or advancement be deemed exclusive of, or invalidate, any right to which any indemnitee seeking indemnification or advancement of expenses and costs may be entitled under any law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such indemnitee's capacity as an officer, director, employee or agent of the Corporation and as to action in any other capacity.

 

 

(b)            Given that certain jointly indemnifiable claims may arise due to the service of the indemnitee as a director and/or officer of the Corporation at the request of the indemnitee-related entities, the Corporation shall be fully and primarily responsible for the payment to the indemnitee in respect of indemnification or advancement of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of the Certificate of Incorporation or these Bylaws (or any other agreement between the Corporation and such persons) in connection with any such jointly indemnifiable claims, pursuant to and in accordance with the terms of this Article VII, irrespective of any right of recovery the indemnitee may have from the indemnitee-related entities. Any obligation on the part of any indemnitee-related entities to indemnify or advance expenses to any indemnitee shall be secondary to the Corporation's obligation and shall be reduced by any amount that the indemnitee may collect as indemnification or advancement from the Corporation. The Corporation irrevocably waives, relinquishes and releases the indemnitee-related entities from any and all claims it may have against the indemnitee-related entities for contribution, subrogation or any other recovery of any kind in respect of contribution or subrogation. Under no circumstance shall the Corporation be entitled to any right of subrogation or contribution by the indemnitee-related entities. No right of advancement or recovery the indemnitee may have from the indemnitee-related entities shall reduce or otherwise alter the rights of the indemnitee or the obligations of the Corporation regardless of source. In the event that any of the indemnitee-related entities shall make any payment to the indemnitee in respect of indemnification or advancement of expenses with respect to any jointly indemnifiable claim, the indemnitee-related entity making such payment shall be subrogated to the extent of such payment to all of the rights of recovery of the indemnitee against the Corporation. The indemnitee shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such documents as may be necessary to enable the indemnitee-related entities effectively to bring suit to enforce such rights. Each of the indemnitee-related entities shall be third-party beneficiaries with respect to this Section 7.4(b), entitled to enforce this Section 7.4(b).

 

For purposes of this Section 7.4(b), the following terms shall have the following meanings:

 

(1)            The term "indemnitee-related entities" means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Corporation or any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise for which the indemnitee has agreed, on behalf of the Corporation or at the Corporation's request, to serve as a director, officer, employee or agent and which service is covered by the indemnity described in these Bylaws) from whom an indemnitee may be entitled to indemnification or advancement of expenses with respect to which, in whole or in part, the Corporation may also have an indemnification or advancement obligation. For the avoidance of doubt, each member of Investor shall be an indemnitee-related entity.

 

 

(2)            The term "jointly indemnifiable claims" shall be broadly construed and shall include, without limitation, any action, suit or proceeding for which the indemnitee shall be entitled to indemnification or advancement of expenses from both the indemnitee-related entities and the Corporation pursuant to Delaware law, any agreement or certificate of incorporation, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or comparable organizational documents of the Corporation or the indemnitee-related entities, as applicable.

 

Section 7.5             Corporate Obligations; Reliance. The rights granted pursuant to the provisions of this Article VII shall vest at the time a person becomes a director or officer of the Corporation. Such vested rights shall be deemed to create a binding contractual obligation on the part of the Corporation to the persons who from time to time are elected as officers or directors of the Corporation. Persons acting in their capacities as officers or directors of the Corporation or any of its subsidiaries shall be entitled to rely on such provisions of this Article VII without giving notice of their reliance to the Corporation. Such rights shall continue as to an indemnitee who has ceased to be a director or officer and shall inure to the benefit of the indemnitee's heirs, executors and administrators. Any amendment, alteration or repeal of this Article VII that adversely affects any right of an indemnitee or its successors shall be prospective only. Any such amendment, alteration or repeal shall not limit, eliminate or impair any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.

 

Section 7.6             Insurance. At its expense, the Corporation may maintain insurance to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

 

Section 7.7             Indemnification of Employees and Agents of the Corporation. To the extent authorized from time to time by the Board of Directors, the Corporation may grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article VII with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

 

ARTICLE VIII

 

Miscellaneous

 

Section 8.1             Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors.

 

Section 8.2             Seal. The Board of Directors may provide a suitable corporate seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary (or, if there is no Secretary, the Chief Financial Officer). If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Chief Financial Officer, the Treasurer or by an Assistant Secretary or Assistant Treasurer.

 

Section 8.3            Waiver of Notices to Stockholders, Directors and Committees. Whenever notice is required to be given by law or under any provision of the Certificate of Incorporation or these Bylaws, a written waiver of the notice, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time that the notice is given or required to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or these Bylaws.

 

Section 8.4             Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or by means of, or be in the form of, any information storage device, or method. Records so kept in any manner permitted by the DGCL and subject to the previsions thereof.

 

Section 8.5            Amendment of Bylaws. These bylaws may be amended, altered or repealed, and new bylaws adopted, only in the manner set forth in the Certificate of Incorporation.

 

 

 

Exhibit 10.1

 

MANAGEMENT AGREEMENT

 

This MANAGEMENT AGREEMENT, dated as of __________, 2025, is entered into by and between CompoSecure Holdings, L.L.C., a Delaware limited liability company (the "Company"), and Resolute Holdings Management, Inc., a Delaware corporation (the "Manager").

 

WHEREAS, the board of directors (the "Parent Board") of CompoSecure, Inc., a Delaware corporation and parent of the Company (the "Parent"), has determined that it is advisable and in the best interests of Parent and its stockholders for Parent to establish a management business to be conducted by Manager and subsequently spin off the Manager, as an independent publicly traded company (the "Spin-Off");

 

WHEREAS, the Company desires to retain the Manager to provide various management and other related services with respect to the Company in the manner and on the terms herein set forth;

 

WHEREAS, the Manager is willing to provide such management and related services in the manner and on the terms hereinafter set forth; and

 

NOW THEREFORE, in consideration of the premises and agreements hereinafter set forth, the parties hereto hereby agree as follows:

 

Section 1.       Definitions.

 

(a) The following terms shall have the meanings set forth in this Section 1(a):

 

"Actions" has the meaning set forth in Section 9(a).

 

"Adjusted EBITDA" means , for any period, Net Income for such period, plus, without duplication, (i) the sum of the amounts for such period included in determining such Net Income of (A) Interest Expense, (B) Income Tax Expense, (C) Depreciation and Amortization Expense, (D) losses and expenses that are properly classified under GAAP as extraordinary, (E) all Quarterly Management Fees, (F) actual one-time and non-recurring fees, expenses and costs relating to any acquisition, business combination transaction or other transaction, in each case, evaluated, negotiated and, if applicable, implemented in accordance with the Management Agreement (whether or not closed), (G) any non-cash compensation charge or expense realized or resulting from any contingent payment obligation or similar payment obligation (including any "earn-out" obligation) that would require payments to any Person arising in connection with any acquisition, business combination transaction or other transaction consummated in accordance with the Management Agreement, (H) any impairment charges or asset write-offs, in each case, pursuant to GAAP, and (I) any other non-cash non-recurring expenses, minus, without duplication, (ii) (A) the sum of the amounts for such period included in determining such Net Income of (1) any gains on sales of assets and gains that are properly classified under GAAP as extraordinary, all as determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP and (2) any cash payments made during such period in respect of non-cash charges described in clause (I) taken in a prior period, and (B) Parent Allocated Expense.

 

 

"Affiliate" means, with respect to a Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such other Person, (ii) any executive officer, employee or general partner of such Person, (iii) any member of the board of directors or board of managers (or bodies performing similar functions) of such Person and (iv) any legal entity for which such Person acts as an executive officer or general partner; provided that it is acknowledged and agreed that (x) the Company and its Subsidiaries shall not be deemed to be Affiliates of the Manager and its Subsidiaries, (y) the Manager and its Subsidiaries shall not be deemed to be Affiliates of the Company and its Subsidiaries and (z) other Persons managed by the Manager shall not be deemed to be Affiliates of the Manager or its Subsidiaries or the Company or its Subsidiaries.

 

"Agreement" means this Management Agreement, as amended, restated, supplemented or otherwise modified from time to time.

 

"Automatic Renewal Term" has the meaning set forth in Section 11(a).

 

"Business Day" means any day except a Saturday, a Sunday or a day on which banking institutions in New York, New York are not required to be open.

 

"Capital Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under any Capitalized Lease, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

"Capitalized Lease" means any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP.

 

"Claim" has the meaning set forth in Section 9(c).

 

"Class A Common Stock" means the Class A Common Stock, par value $0.0001 per share, of Parent.

 

"Company" has the meaning set forth in the Preamble.

 

"Company's Business" means the activities, operations and business affairs of the Company and its controlled Affiliates.

 

"Company Expenses" has the meaning set forth in Section 8(b).

 

"Company Indemnified Party" has meaning set forth in Section 9(b).

 

"Company Kick-Out Event" means (i) a final judgment by any Governmental Authority of competent jurisdiction not stayed or vacated within thirty (30) days that the Manager has committed a felony or a material violation of applicable securities laws that has a material adverse effect on the business of the Company or the ability of the Manager to perform its duties under the terms of this Agreement, (ii) an order for relief in an involuntary bankruptcy case relating to the Manager or the Manager authorizing or filing a voluntary bankruptcy petition, (iii) the dissolution of the Manager or (iv) a final, non-appealable judgment by any Governmental Authority of competent jurisdiction that the Manager has (a) committed actual fraud against the Company, (b) misappropriated or embezzled funds of the Company or (c) acted, or failed to act, in a manner constituting bad faith, willful misconduct, gross negligence or reckless disregard in the performance of its duties under this Agreement; provided, however, that if any of the actions or omissions described in this clause (iv) are caused by an employee and/or officer of the Manager or one of its Affiliates and the Manager cures the damage caused by such actions or omissions within thirty (30) days of such determination, then such event shall not constitute a Company Kick-Out Event.

 

 

"Company Kick-Out Right" means the Company's right to terminate this Agreement, in accordance with the terms hereof, upon the occurrence of a Company Kick-Out Event.

 

"Company-Selected Valuation Firm" has the meaning set forth in Section 11(e)(ii).

 

"Company Termination Notice" has the meaning set forth in Section 11(b).

 

"Confidential Information" means all confidential, proprietary or non-public information of, or concerning the performance, terms, business, operations, activities, personnel, training, finances, actual or potential acquisitions, plans, compensation, clients or investors of the Company or its Subsidiaries, written or oral, obtained by the Manager in connection with the services rendered hereunder; provided that Confidential Information shall not include information which (i) is in the public domain at the time it is received by the Manager, (ii) becomes public other than by reason of a disclosure by the Manager in breach of this Agreement, (iii) was already in the possession of the Manager lawfully and on a non-confidential basis prior to the time it was received by the Manager from the Company or its Affiliates, (iv) was obtained by the Manager from a third-party which, to the Manager's knowledge, was not disclosed in breach of an obligation of such third-party not to disclose such information or (v) was developed independently by the Manager without using or referring to any of the Confidential Information.

 

"Consultation Period" has the meaning set forth in Section 11(b)(i).

 

"Covered Person" has the meaning set forth in Section 5(b).

 

"Depreciation and Amortization Expense" means, for any period, all depreciation and amortization expense of the Company and its Subsidiaries, all as determined on a consolidated basis in accordance with GAAP.

 

"Effective Date" means the date of the consummation of the Spin-Off.

 

"Effective Termination Date" means, as applicable, (a) with respect to any termination of this Agreement by the Company pursuant to Section 11(b), the last day of the Initial Term or Automatic Renewal Term during which the Company exercises such termination right, (b) with respect to any termination of this Agreement by the Manager pursuant to Section 11(d)(iii), the date upon which the Manager provides a Manager Termination Notice pursuant to Section 11(d)(iii), or (c) with respect to any other termination of this Agreement by the Company or the Manager pursuant to Section 11, the last day of the notice period required for the exercise by the Company or the Manager of its applicable termination right.

 

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute thereto.

 

"Fair Market Value of Fees Payable" means, as of the Effective Termination Date, the fair market value of the aggregate Quarterly Management Fees then payable or that would become payable hereunder if this Agreement were automatically renewed and remained in effect in perpetuity. For the avoidance of doubt, the Fair Market Value of Fees Payable shall be determined without regard to any waiver or other discount by the Manager of any Quarterly Management Fee (which shall be calculated for purposes of the determination of the Fair Market Value of Fees Payable as though no such waiver or discount was applied).

 

"GAAP" means generally accepted accounting principles in the U.S.

 

"Governing Agreements" means, with regard to any entity, the articles of incorporation or certificate of incorporation and bylaws in the case of a corporation, the certificate of limited partnership (if applicable) and the partnership agreement in the case of a general or limited partnership, the certificate of formation and limited liability company agreement in the case of a limited liability company, the trust instrument in the case of a trust, or similar governing documents in each case, as amended, restated, supplemented or otherwise modified from time to time.

 

"Governmental Authority" means any domestic, foreign or transnational governmental, competition or regulatory authority, court, arbitral tribunal, agency, commission, body or other legislative, executive or judicial governmental entity or self-regulatory agency.

 

"Income Tax Expense" means, for any period, all provisions for taxes based on the net income of the Company or any of its Subsidiaries (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto and any expensed taxes), all as determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

"Indemnified Party" has the meaning set forth in Section 9(b).

 

"Independent Director" means, a member of the Parent Board who qualifies as an "independent director" under the Exchange Act and the NASDAQ Rules.

 

"Interest Expense" means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of the Company and its Subsidiaries for such period with respect to all outstanding indebtedness of the Company and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptances and net costs under Swap Agreements in respect of interest rates, to the extent such net costs are allocable to such period in accordance with GAAP), calculated for The Company and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.

 

"Initial Term" has the meaning set forth in Section 11(a).

 

"Initial Valuation Firm Review Period" has the meaning set forth in Section 11(e)(ii).

 

"Investment Bank-Selected Valuation Firm" has the meaning set forth in Section 11(e)(iii).

 

 

"Investment Company Act" means the U.S. Investment Company Act of 1940, as amended from time to time, or any successor statute thereto.

 

"Letter Agreement" means the letter agreement, dated as of __________, 2025, by and between Parent and the Manager.

 

"Losses" means any expenses, losses, damages, liabilities, demands, penalties, costs, charges and claims of any nature whatsoever (including any Out-of-Pocket Expenses).

 

"LTM Adjusted EBITDA" means, with respect to any twelve (12)-month period prior to a determination date, the last twelve (12) months' aggregate amount of Adjusted EBITDA. Schedule I sets forth an illustrative calculation of LTM Adjusted EBITDA for the fiscal year ended December 31, 2023.

 

"Manager" has the meaning set forth in the Preamble.

 

"Manager Expenses" has the meaning set forth in Section 8(a).

 

"Manager Indemnified Party" has the meaning set forth in Section 9(a).

 

"Manager Permitted Disclosure Parties" has the meaning set forth in Section 6(b).

 

"Manager-Selected Valuation Firm" has the meaning set forth in Section 11(e)(ii).

 

"Manager Termination Notice" has the meaning set forth in Section 11(d)(ii).

 

"Mediation" has the meaning set forth in Section 11(b)(ii).

 

"Mediator" has the meaning set forth in Section 11(b)(ii).

 

"Multiple on Fees Value" means an amount equal to (i) the aggregate Quarterly Management Fees that became payable hereunder during the twenty-four (24)-month period ended as of the last day of the most recent fiscal quarter completed prior to the Effective Termination Date multiplied by (ii) four (4). For the avoidance of doubt, the Multiple on Fees Value shall be determined without regard to any waiver or other discount by the Manager of any Quarterly Management Fee (which shall be calculated for purposes of the determination of the Multiple on Fees Value as though no such waiver or discount was applied).

 

"NASDAQ" means the Nasdaq Stock Market LLC.

 

"NASDAQ Rules" means the NASDAQ listing rules currently in effect and, as amended, restated, supplemented or otherwise modified from time to time.

 

"Net Income" means, for any period, the consolidated net income (or loss) determined for the Company and its Subsidiaries, on a consolidated basis in accordance with GAAP; provided that there shall be excluded (i) the income (or deficit) of any Person (other than a Subsidiary) in which the Company or any Subsidiary has an ownership interest, except to the extent that any such income is actually received by the Company or such Subsidiary in the form of dividends or similar distributions and (ii) the undistributed earnings of any Subsidiary, to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation law applicable to such Subsidiary.

 

 

"Net Present Value of Fees Payable" means, as of the Effective Termination Date, (i) the net present value of the aggregate Quarterly Management Fees then payable or that would become payable hereunder during the five (5)-year period following the Effective Termination Date, discounted annually at a per annum rate equal to six percent (6.0%), plus (ii) the net present value of the terminal value of the Quarterly Management Fees that would become payable hereunder after such five (5)-year period if this Agreement were automatically renewed and remained in effect in perpetuity. For the avoidance of doubt, the Net Present Value of Fees Payable shall be determined without regard to any waiver or other discount by the Manager of any Quarterly Management Fee (which shall be calculated for purposes of the determination of the Net Present Value of Fees Payable as though no such waiver or discount was applied).

 

"Out-of-Pocket Expenses" means any and all documented and reasonable out-of-pocket expenses (including fees and out-of-pocket disbursements of counsel).

 

"Parent" has the meaning set forth in the Recitals.

 

"Parent Allocated Expense" means, for any period, the sum of (i) all selling, general and administrative expenses of Parent, all as determined for Parent in accordance with GAAP and (ii) all provisions for taxes based on the net income of Parent (including, without limitation, any additions to such taxes, any penalties and interest with respect thereto and any expensed taxes), all as determined for Parent in accordance with GAAP.

 

"Parent Board" has the meaning set forth in the Recitals.

 

"Parent Trading Price" means the VWAP of one (1) share of Class A Common Stock for the five (5) consecutive trading days ending on the trading day immediately preceding the date that the Termination Fee is finally determined pursuant to Section 11(e) (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).

 

"Person" means any natural person, corporation, partnership, association, limited liability company, estate, trust, joint venture, any federal, state, county or municipal government or any bureau, department or agency thereof or any other legal entity and any fiduciary acting in such capacity on behalf of the foregoing.

 

"Quarterly Management Fee" means, with respect to each fiscal quarter, the quarterly management fee, payable in arrears, in a cash amount equal to two-and-a-half percent (2.5%) of LTM Adjusted EBITDA, measured for the period ending on the last day of the fiscal quarter then ended. The Quarterly Management Fee shall be pro-rated for partial periods, to the extent necessary, as described more fully elsewhere herein.

 

"SEC" means the United States Securities and Exchange Commission.

 

 

"Securities Act" means the Securities Act of 1933, as amended from time to time, or any successor statute thereto.

 

"Subsidiary" means a corporation, limited liability company, partnership, joint venture or other entity or organization of which: (i) the Company or any other subsidiary of the Company is a general partner or managing member, or (ii) voting power to elect a majority of the board of directors, trustees or other Persons performing similar functions with respect to such entity or organization is held by the Company or by any one or more of the Company's subsidiaries; provided that, for the avoidance of doubt, it is acknowledged and agreed that (x) the Company and its Subsidiaries shall not be deemed to be Subsidiaries of the Manager and its Subsidiaries and (y) other Persons managed by the Manager shall not be deemed to be Subsidiaries of the Manager or its Subsidiaries or the Company or its Subsidiaries.

 

"Swap Agreement" means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Company or its Subsidiaries shall be a Swap Agreement.

 

"Termination Fee" means an amount equal to the greatest of (i) the Fair Market Value of Fees Payable, (ii) the Net Present Value of Fees Payable and (iii) the Multiple on Fees Value.

 

"Termination Fee Negotiation Period" has the meaning set forth in Section 11(e)(i).

 

"Termination Make-Whole Cash Payment" has the meaning set forth in Section 11(f).

 

"Termination Shares" has the meaning set forth in Section 11(f).

 

"Termination Shares Value" means an amount equal to (i) the aggregate number of Termination Shares multiplied by (ii) the Parent Trading Price.

 

"Termination Without a Company Kick-Out Event" has the meaning set forth in Section 11(b).

 

"Trading Days" means a day on which NASDAQ is open for the transaction of business.

 

"Valuation Firm" has the meaning set forth in Section 11(e)(iii).

 

"VWAP" means the daily per share volume-weighted average price of Class A Common Stock on the principal U.S. securities exchange, "over-the-counter" market or automated or electronic quotation system on which Class A Common Stock trades, as displayed under the heading Bloomberg VWAP on the Bloomberg page designated for Class A Common Stock (or its equivalent successor if such page is not available) in respect of the period from the open of trading on such day until the close of trading on such day (or if such volume-weighted average price is unavailable, the per share volume-weighted average price of such Class A Common Stock on such day (determined without regard to afterhours trading or any other trading outside the regular trading session or trading hours)).

 

 

(b) As used herein, "fiscal quarters" shall mean the applicable fiscal quarter of Parent and "fiscal year" shall mean the applicable fiscal year of Parent. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section references are to this Agreement unless otherwise specified. References herein to "Sections," "clauses" and other subdivisions, and to Schedules, without reference to a document are to the specified Sections, clauses and other subdivisions of and Schedules to, this Agreement. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning. References to "dollars" or "$" mean United States dollars, unless otherwise clearly indicated to the contrary.

 

Section 2.       Appointment of the Manager. To the fullest extent permitted by Delaware law, the Exchange Act, the Securities Act, the NASDAQ Rules and any other applicable rule or regulation (including the rules and regulations promulgated under the Exchange Act and the Securities Act), the Company hereby appoints the Manager (and grants to it all powers necessary, convenient or appropriate) to, and the Manager hereby agrees and covenants that it shall manage the Company's day-to-day business and operations, and oversee the Company's strategy, in accordance with the terms of this Agreement.

 

Section 3.       Obligations of the Manager.

 

(a) Subject to Section 2, the Manager shall use commercially reasonable efforts to perform (or cause to be performed) the following services (the "Services"):

 

(i) establishing and monitoring the Company's objectives, financing activities and operating performance;

 

(ii) selecting and overseeing the Company's management team and their performance;

 

(iii) reviewing and approving the Company's compensation and benefit plans, programs, policies and agreements, including with respect to any grants of equity awards to Persons providing services to the Company and its Affiliates;

 

(iv) devising and implementing capital allocation strategies, plans and policies of the Company;

 

(v) setting the budget parameters and expense guidelines of the Company and monitoring compliance therewith;

 

(vi) identifying and analyzing business opportunities and potential acquisitions, dispositions and other business combinations;

 

 

(vii) originating, recommending opportunities to form or acquire and assisting with the structuring and managing of any joint ventures;

 

(viii) overseeing negotiations with potential participants in any business opportunity under the Company's consideration and having discretion to determine (or delegate to any officer of the Company or its Subsidiaries the decision to determine) if and when to proceed;

 

(ix) engaging and supervising, on the Company's behalf, independent contractors and third-party service providers;

 

(x) communicating on behalf of the Company and its Subsidiaries with the holders of any securities of the Company or its Subsidiaries (A) as required to satisfy any reporting and other requirements of any Governmental Authority having jurisdiction over the Company or its Subsidiaries and (B) to maintain effective relations with such holders;

 

(xi) overseeing all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) in which the Company may be involved or to which the Company may be subject arising out of the Company's day-to-day activities (other than with the Manager or its Affiliates);

 

(xii) counselling the Company in connection with decisions required by Delaware law to be made by the Board; and

 

(xiii) performing such other services from time to time in connection with the management of the business and affairs of the Company and its activities as the Company shall reasonably request and/or the Manager shall deem appropriate under the particular circumstances.

 

(b) From the Effective Date until the termination of this Agreement, if any, in accordance with Section 11, the Company, on behalf of itself and its Subsidiaries, hereby constitutes, appoints and authorizes the Manager, and any officer of the Manager acting on its behalf from time to time, as the true and lawful agent and attorney-in-fact of the Company and such Subsidiaries, in its or their respective names, places and steads, to negotiate, execute, deliver and enter into any certificates, instruments, agreements, authorizations and other documentation in the name and on behalf of the Company or any such Subsidiary as the Manager, in its sole discretion, deems necessary or appropriate to perform the Services, in each case subject to subject to Section 2. This power of attorney is deemed to be coupled with an interest. In performing the Services, as an agent of the Company or any of its Subsidiaries, the Manager shall have the right to exercise all powers and authority which are reasonably necessary and customary to perform its obligations under this Agreement.

 

(c) The Manager may retain, for and on behalf, and at the sole cost and expense, of the Company, such services of the Persons as the Manager deems necessary or advisable to perform the Services (which Persons may include Affiliates of the Manager), in each case, subject to Section 2; provided that any such services may be provided by such Affiliates only to the extent such services are on arm's length terms. In performing or causing to be performed the Services, the Manager shall be entitled to rely reasonably on qualified experts and professionals (including, accountants, legal counsel and other professional service providers) hired by the Manager.

 

 

(d) At the Company's reasonable request, the Manager shall prepare, or, at the sole cost and expense of the Company, cause to be prepared, (i) reports and other information on the Company's operations and (ii) other information relating to any proposed or consummated business acquisition or divestiture.

 

(e) At all times during the term of this Agreement, the Manager shall maintain "errors and omissions" insurance coverage and other insurance coverage that is customarily carried by managers performing functions similar to those of the Manager under this Agreement with respect to assets similar to the assets of the Company and its Subsidiaries.

 

(f) Officers, employees and agents of the Manager and its Affiliates may serve as directors, officers, employees, agents, nominees or signatories for the Company or any of its Subsidiaries. When executing documents or otherwise acting in such capacities for the Company or any of its Subsidiaries, such Persons shall indicate in what capacity they are executing on behalf of the Company or any of its Subsidiaries.

 

(g) The Manager shall refrain from any action that, in its sole judgment made in good faith, would materially violate any law, rule or regulation of any Governmental Authority having jurisdiction over the Company and its Subsidiaries. Notwithstanding the foregoing, neither the Manager nor any of its Affiliates shall be liable to the Company, any of its Subsidiaries or any of their respective Affiliates or equityholders for any act or omission by the Manager or any of its Affiliates, except as provided in Section 9.

 

(h) For the avoidance of doubt, and not withstanding anything to the contrary in this Agreement, the entry by the Company and the Manager into this Agreement and the performance of their respective obligations hereunder shall not affect the authority, duties or responsibilities of the executive officers of the Company, including the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer.

 

Section 4.        Obligations of the Company.

 

(a) The Company agrees to take all actions reasonably required to permit and enable the Manager to carry out its duties and obligations under this Agreement, including, all steps reasonably necessary to allow the Manager, subject to Section 2, to make any filing required to be made under the Securities Act, Exchange Act, the NASDAQ Rules or other applicable law, rule or regulation on behalf of the Company in a timely manner.

 

(b) The Company further agrees to use commercially reasonable efforts to make available to the Manager all resources, information and materials reasonably requested by the Manager to enable the Manager to satisfy its obligations hereunder, including its obligations to deliver financial statements and any other information or reports with respect to the Company.

 

(c) The Company hereby acknowledges and agrees that the Manager may use the name "CompoSecure" and other trademarks of the Company in connection with its activities under this Agreement (including, in connection with the preparation of any filing with or notification to any Governmental Authority made on behalf of the Company or any of its Subsidiaries). The parties hereto will reasonably cooperate to maintain reasonable quality control with respect to the Manager's use of such trademarks.

 

 

Section 5.       Additional Activities of the Manager; Non-Solicitation.

 

(a) Nothing in this Agreement shall (i) prevent the Manager or any of its Affiliates, or any of its or their officers, directors or employees, from engaging in other businesses or from rendering services of any kind to any other Person, whether or not the business objectives or policies of any such other Person are similar to those of the Company, (ii) in any way bind or restrict the Manager or any of its Affiliates, or any of its or their officers, directors or employees from buying, selling or trading any securities or commodities for their own accounts or for the account of others for whom the Manager or any of its Affiliates, or any of its or their officers, directors or employees may be acting, or (iii) prevent the Manager or any of its Affiliates from receiving fees or other compensation or profits from such activities described in this Section 5(a) which shall be for the Manager's (and/or its Affiliates') sole benefit.

 

(b) In the event of a Termination Without a Company Kick-Out Event by the Company pursuant to Section 11(b), for a period of two (2) years following such termination, the Company shall not, without the consent of the Manager, employ or otherwise retain any employee of the Manager or any of its Affiliates or any Person who has been employed by the Manager or any of its Affiliates at any time within the two (2)-year period immediately preceding the date on which such Person commences employment with or is otherwise retained by the Company (any such Person, a "Covered Person"); provided that the preceding sentence shall not restrict the Company from employing or retaining any Covered Person who devotes substantially all of such Covered Person's business time and attention to the Company's Business, other than with respect to acquisitions, dispositions and other business combinations, joint ventures or other investments of the Company or any of its Subsidiaries. The Company acknowledges and agrees that, in addition to any damages, the Manager may be entitled to equitable relief for any violation of this Section 5(b) by the Company, including, injunctive relief.

 

Section 6.       Records; Confidentiality.

 

(a) The Manager shall maintain appropriate books of account, records and files relating to services performed hereunder, and such books of account, records and files shall be accessible for inspection by representatives of the Company at any time during normal business hours upon advance written notice. The Manager shall have full responsibility for the maintenance, care and safekeeping of all such books of account, records and files (it being understood that if any such recordkeeping services are performed by service providers to the Company and such service providers are monitored by the Manager with due care, the Manager shall be in compliance with the foregoing).

 

 

(b) Until the third (3^rd) anniversary of any termination of this Agreement pursuant to Section 11 (or in the case of trade secrets, for so long as such trade secrets constitute trade secrets under applicable law), the Manager shall keep confidential any and all Confidential Information and shall not use Confidential Information other than in connection with the performance of the Services or disclose Confidential Information, in whole or in part, to any Person other than (i) to officers, directors, employees, agents, representatives, advisors of the Manager or its Affiliates who need to know such Confidential Information for the purpose of rendering services hereunder, (ii) to appraisers, lenders or other financing sources, co-originators, custodians, administrators, brokers, commercial counterparties or any similar entity and others in the ordinary course of the Company's Business ((i) and (ii) collectively, "Manager Permitted Disclosure Parties"), (iii) in connection with any governmental or regulatory filings of the Company or its Affiliates or disclosure or presentations to investors in the Company's Business (subject to compliance with applicable law), (iv) to Governmental Authorities having jurisdiction over the Company or the Manager, (v) as requested by law, legal process or regulatory request to which the Manager or any Person to whom disclosure is permitted hereunder is a party or subject, (vi) to existing or prospective investors in the Company's Business and their advisors to the extent such Persons reasonably request such information, subject to an undertaking of confidentiality, non-disclosure and non-use, or (vii) with the consent of the Company, including pursuant to a separate agreement entered into between the Manager and the Company. The Manager agrees to inform each of its Manager Permitted Disclosure Parties of the non-public nature of the Confidential Information. Nothing herein shall prevent the Manager from disclosing Confidential Information (A) upon the order of any court or administrative agency, (B) upon the request or demand of, or pursuant to any law or regulation to, any regulatory agency or authority, (C) to the extent reasonably required in connection with the exercise of any remedy hereunder, or (D) to its legal counsel or independent auditors; provided, however, that with respect to clauses (A) and (B), it is agreed that, so long as not legally prohibited, the Manager will (x) consider, and if advisable seek, at the Company's sole expense, an appropriate protective order or confidentiality agreement, (y) notify the Company of such disclosure, and (z) in the absence of an appropriate protective order or confidentiality agreement, disclose only that portion of such information that is responsive to such request or demand.

 

Section 7.       Compensation.

 

(a) For the Services rendered, the Company shall pay the Quarterly Management Fees to the Manager. The Manager will not receive any Quarterly Management Fees for periods prior to the Effective Date. The Manager may (at its sole discretion) elect not to receive, or to discount, any Quarterly Management Fee for a given quarterly period, which election shall not be deemed to constitute a waiver or discount of the Quarterly Management Fee in any future periods and shall, for the avoidance of doubt, be ignored in calculating the Termination Fee (and the components thereof).

 

(b) The parties hereto acknowledge that the Quarterly Management Fee is intended in part to compensate the Manager and its Affiliates for the costs and expenses (other than reimbursable costs and expenses) the Manager will incur hereunder, as well as certain expenses not otherwise reimbursable under Section 8, in order for the Manager to provide the Services to the Company. A management fee paid by the Manager under a sub-management agreement (if any) shall not constitute an expense reimbursable by the Company under this Agreement or otherwise unless otherwise approved by the Company.

 

 

(c) Each Quarterly Management Fee shall be payable in arrears in cash, commencing with the fiscal quarter in which the Effective Date occurs. If applicable, the initial and final Quarterly Management Fees shall be pro-rated based on the number of days during the initial and final fiscal quarter, respectively, that this Agreement is in effect. The Manager shall calculate each Quarterly Management Fee, and deliver such calculation to the Company, within thirty (30) days following the last day of each fiscal quarter and the Company shall pay the Manager the applicable Quarterly Management Fee for such fiscal quarter within three (3) Business Days after the date of delivery to the Company of such computations.

 

(d) The Company shall make any payments due hereunder to the Manager or, if the Manager directs, to an Affiliate of the Manager.

 

Section 8.       Expenses.

 

(a) Subject to Section 8(b) and except as otherwise specifically acknowledged and agreed in writing, the Manager shall be responsible for the expenses related to any and all personnel of the Manager and its Affiliates who provide services to the Company pursuant to this Agreement or otherwise (including, each of the officers of the Company and any directors of the Company who are also directors, officers or employees of the Manager or any of its Affiliates), including, salaries, bonuses and other wages, payroll taxes and the cost of employee benefit plans of such personnel, and costs of insurance (other than insurance specifically required under this Agreement, including pursuant to Section 3(e)) with respect to such personnel (collectively, "Manager Expenses").

 

 

(b) The Company shall pay all of its costs and expenses and shall reimburse the Manager or its Affiliates for documented costs and expenses of the Manager and its Affiliates incurred on behalf of the Company other than Manager Expenses (collectively, "Company Expenses"). The Manager, in good faith, shall determine whether a cost or expense is a Manager Expense or Company Expense. Without limiting the generality of the foregoing, it is specifically agreed that the following costs and expenses shall be paid by the Company and shall not be paid by the Manager or its Affiliates: (i) fees, costs and expenses in connection with transaction costs incident to the acquisition, negotiation, structuring, trading, settling, disposition and financing of any investments of the Company and its Subsidiaries (whether or not consummated); (ii) fees, costs and expenses of legal, tax, accounting, consulting, auditing (including internal audit), finance, administrative, investment banking, capital market and other similar services rendered to the Company or any of its Subsidiaries (including, where the context requires, through one or more third-parties and/or Affiliates of the Manager) or, if provided by the Manager's personnel, in accordance with Section 3(c); (iii) the compensation and expenses of the directors and officers of the Company and its Subsidiaries, as applicable, the cost of liability insurance to indemnify such directors and officers and the non-cash equity incentive compensation (that is denominated in, or the value of which is determined with reference to, shares of capital stock of Parent) of the personnel of the Company and its Subsidiaries, the Manager and their respective Affiliates who provide services to the Company and its Affiliates; (iv) interest and fees and expenses arising out of borrowings made by the Company or any of its Subsidiaries, including, costs associated with the establishment and maintenance of any credit facilities, other financing arrangements, or other indebtedness of the Company or any of its Subsidiaries (including commitment fees, accounting fees, legal fees, closing and other similar costs) or any securities offerings of the Company or any of its Subsidiaries; (v) expenses connected with communications to holders of securities of the Company or any of its Subsidiaries and other bookkeeping and clerical work necessary in maintaining relations with holders of such securities and in complying with the continuous reporting and other requirements of any Governmental Authorities having jurisdiction over the Company or any of its Subsidiaries, including, all costs of preparing and filing required reports with the SEC, the costs payable by the Company or any of its Subsidiaries to any transfer agent and registrar in connection with the listing and/or trading of the securities of the Company or any of its Subsidiaries on any exchange, the fees payable by the Company or any of its Subsidiaries to any such exchange in connection with its listing, costs of preparing, printing and mailing any other reports or related statements of the Company or any of its Subsidiaries; (vi) costs of the Company or any of its Subsidiaries associated with technology-related expenses, including without limitation, any computer software or hardware, electronic equipment or purchased information technology services from third-party vendors or Affiliates of the Manager, technology service providers and related software/hardware utilized in connection with the investment and operational activities of the Company and its Subsidiaries; (vii) expenses incurred by managers, officers, personnel and agents of the Manager for travel on behalf of the Company or any of its Subsidiaries and other Out-of-Pocket Expenses incurred by them in connection with the Services or the acquisition, financing, refinancing, sale or other disposition of an investment or any securities offerings of the Company or any of its Subsidiaries; (viii) expenses incurred with respect to market information systems and publications, research publications and materials, including, news research and quotation equipment and services, obtained or used by the Manager in connection with rendering the Services or performing any other duty hereunder; (ix) the costs and expenses relating to ongoing regulatory compliance matters and regulatory reporting obligations relating to the Company's Business; (x) the costs of any litigation involving the Company or any of its Subsidiaries or its or their respective assets and the amount of any judgments or settlements paid in connection therewith, (xi) all taxes and license fees of the Company and its Subsidiaries; (xii) all costs of directors and officers, liability or other insurance relating to the Company's Business and other insurance costs incurred in connection with the operation of the Company's Business, except for the costs attributable to the insurance that the Manager elects to carry for itself and its personnel, and all indemnification or extraordinary expense or liability relating to the Company's Business; (xiii) costs and expenses incurred in contracting with any third-parties, in whole or in part, on behalf of the Company or any of its Subsidiaries; (xiv) all other costs and expenses relating to the Company's Business and operations, including, the costs and expenses of acquiring, owning, protecting, maintaining, developing and disposing of businesses, including appraisal, reporting, audit and legal fees; (xv) expenses relating to any office(s) or office facilities, including, disaster backup recovery sites and facilities, maintained for the Company, any of its Subsidiaries or any investments of the Company and its Subsidiaries separate from the office or offices of the Manager; (xvi) expenses connected with the payments of interest, dividends or distributions in cash or any other form authorized or caused to be made to or on account of holders of securities of the Company or any of its the Subsidiaries, including, in connection with any dividend reinvestment plan; (xvii) any judgment or settlement of pending or threatened proceedings (whether civil, criminal or otherwise) against the Company or any of its Subsidiaries, or against any trustee, director, partner, member or officer of the Company or any of its Subsidiaries in such Person's capacity as such for which the Company or any of its Subsidiaries is required to indemnify such trustee, director, partner, member or officer by any Governmental Authority; and (xviii) all other expenses actually incurred by the Manager (except as otherwise specifically excluded herein) which are reasonably necessary for the performance by the Manager of its duties and functions under this Agreement.

 

 

(c) The Manager may, at its option, elect not to seek reimbursement for certain expenses during a given quarterly period, which determination shall not be deemed to construe a waiver of reimbursement for the same type of expenses or similar expenses in future periods if such expenses or similar expenses are incurred in future periods.

 

(d) The provisions of this Section 8 shall survive any termination of this Agreement pursuant to Section 11 to the extent such expenses have previously been incurred or are incurred in connection with such termination.

 

Section 9.       Limits of the Manager's Responsibility; Indemnification.

 

(a) The Manager assumes no responsibility under this Agreement other than to render the Services in good faith in accordance with this Agreement. To the fullest extent permitted by Delaware law, the Manager and its Affiliates, including their respective directors, officers, employees, managers, trustees, control persons, partners, stockholders and equityholders, will not be liable to the Company, any of its Subsidiaries or any of their respective Affiliates or equityholders, for any acts or omissions by the Manager or its officers, employees or Affiliates performed in accordance with, pursuant to, or in furtherance of, this Agreement, whether by or through attempted piercing of the corporate veil, by or through a claim, by the enforcement of any judgment or assessment or by any legal or equitable proceeding (including any threatened or ongoing investigative, administrative, judicial or regulatory action or proceeding), or by virtue of any statute, regulation or other applicable law, or otherwise (together, "Actions"), except by reason of acts or omission constituting bad faith, fraud, willful misconduct, gross negligence or reckless disregard of their respective duties under this Agreement. The Company shall, to the fullest extent permitted by Delaware law, reimburse, indemnify and hold harmless the Manager, its Affiliates, and the directors, officers, employees and stockholders of the Manager and its Affiliates including their respective directors, officers, employees, managers, trustees, control persons, partners, stockholders and equityholders (each, a "Manager Indemnified Party"), (i) of and from any and all Losses in respect of or arising from any acts or omissions of such Manager Indemnified Party performed in good faith in accordance with, pursuant to, or in furtherance of, this Agreement and not constituting bad faith, fraud, willful misconduct, gross negligence or reckless disregard of duties of such Manager Indemnified Party under this Agreement and (ii) of and from any Out-of-Pocket Expenses incurred in connection with investigating, preparing or defending any Actions as such expenses are incurred or paid (provided that if it is ultimately finally judicially determined in a court of competent jurisdiction that such Manager Indemnified Party is not entitled to indemnification hereunder, such Manager Indemnified Party shall reimburse the Company for any Out-of-Pocket Expenses already paid or reimbursed by the Company in respect of which such final judicial determination was made). Notwithstanding the above, the Manager will not be liable for trade errors that may result from ordinary negligence, errors in the investment decision making process and/or in the trade process.

 

(b) The Manager shall, to the fullest extent permitted by Delaware law, reimburse, indemnify and hold harmless the Company, its Subsidiaries and the directors, officers and employees of the Company and its Subsidiaries, as applicable (each, a "Company Indemnified Party", a Manager Indemnified Party and a Company Indemnified Party are each sometimes hereinafter referred to as an "Indemnified Party") of and from any and all Losses in respect of or arising from (i) any acts or omissions of the Manager constituting bad faith, fraud, willful misconduct, gross negligence or reckless disregard of duties of the Manager under this Agreement or (ii) any claims by the Manager's or its Affiliate's employees relating to the terms and conditions of their employment by the Manager or its Affiliate.

 

 

(c) In case any such claim, suit, action, investigation or proceeding (a "Claim") is brought against any Indemnified Party in respect of which indemnification may be sought by such Indemnified Party pursuant hereto, the Indemnified Party shall give prompt written notice thereof to the indemnifying party, which notice shall include all documents and information in the possession of or under the control of such Indemnified Party reasonably necessary for the evaluation and/or defense of such Claim and shall specifically state that indemnification for such Claim is being sought under this Section 9; provided, however, that the failure of the Indemnified Party to so notify the indemnifying party shall not limit or affect such Indemnified Party's rights other than pursuant to this Section 9 unless the failure to provide such notice results in material prejudice to the indemnifying party. Upon receipt of such notice of Claim (together with such documents and information from such Indemnified Party), the indemnifying party shall, at its sole cost and expense, in good faith control and defend any such Claim (including any settlement thereof) with counsel reasonably satisfactory to such Indemnified Party, which counsel may, without limiting the rights of such Indemnified Party pursuant to the next succeeding sentence of this Section 9(c), also represent the indemnifying party in such Claim. In the alternative, such Indemnified Party may elect to conduct the defense of the Claim, if (i) such Indemnified Party reasonably determines that the conduct of its defense by the indemnifying party could be materially prejudicial to its interests, (ii) the indemnifying party refuses to assume such defense (or fails to give written notice to the Indemnified Party within ten (10) days of receipt of a notice of Claim that the indemnifying party assumes such defense), or (iii) the indemnifying party shall have failed, in such Indemnified Party's reasonable judgment, to defend the Claim in good faith. The indemnifying party may settle any Claim against such Indemnified Party; provided that (A) such settlement is without any Losses (including equitable relief) whatsoever to such Indemnified Party, (B) the settlement does not include or require any admission of liability or culpability by such Indemnified Party and (C) the indemnifying party obtains an effective written release of liability for such Indemnified Party from the party to the Claim with whom such settlement is being made, which release must be reasonably acceptable to such Indemnified Party, and a dismissal with prejudice with respect to all claims made by the party against such Indemnified Party in connection with such Claim. Subject to the immediately prior sentence, the applicable Indemnified Party shall reasonably cooperate with the indemnifying party, at the indemnifying party's sole cost and expense, in connection with the defense or settlement of any Claim in accordance with the terms hereof. If such Indemnified Party is entitled pursuant to this Section 9 to elect to defend such Claim by counsel of its own choosing and so elects, then the indemnifying party shall be responsible for any good faith settlement of such Claim entered into by such Indemnified Party. Except as provided in the immediately preceding sentence, no Indemnified Party may pay or settle any Claim and seek reimbursement therefor under this Section 9.

 

(d) Any Indemnified Party entitled to indemnification hereunder shall first seek recovery from any other indemnity then available with respect to portfolio entities and/or any applicable insurance policies by which such Indemnified Party is indemnified or covered prior to seeking recovery hereunder and shall obtain the written consent of the Company or the Manager (as applicable) prior to entering into any compromise or settlement which would result in an obligation of the Company or the Manager (as applicable) to indemnify such Indemnified Party. If such Indemnified Party shall actually recover any amounts under any applicable insurance policies or other indemnity then available, it shall offset the net proceeds so received against any amounts owed by the Company or the Manager (as applicable) by reason of the indemnity provided hereunder or, if all such amounts shall have been paid by the Company or the Manager (as applicable) in full prior to the actual receipt of such net insurance proceeds, it shall pay over such proceeds (up to the amount of indemnification paid by the Company or the Manager (as applicable) to such Indemnified Party) to the Company or the Manager (as applicable). If the amounts in respect of which indemnification is sought arise out of the conduct of the business and affairs of the Company or the Manager and also of any other Person or entity for which the Indemnified Party hereunder was then acting in a similar capacity, the amount of the indemnification to be provided by the Company or the Manager (as applicable) may be limited to the Company's or the Manager's (as applicable) allocable share thereof if so determined by the Company or Manager (as applicable) in good faith.

 

 

(e) The provisions of this Section 9 shall survive any termination of this Agreement pursuant to Section 11.

 

Section 10.     No Joint Venture. The Company and the Manager are not partners or joint venturers with each other and nothing herein shall be construed to make them such partners or joint venturers or impose any liability as such on either of them.

 

Section 11.     Term; Renewal; Termination.

 

(a)  Term; Renewal. This Agreement became effective on the Effective Date and shall continue in operation, unless terminated in accordance with the terms hereof, until the tenth (10th) anniversary of the Effective Date (the "Initial Term"). Following the Initial Term, this Agreement shall be deemed renewed automatically for successive and additional ten (10)-year period(s) (each, an "Automatic Renewal Term") unless the Company or the Manager elects to terminate or not renew this Agreement in accordance with Section 11(b), Section 11(c) or Section 11(d), as applicable. For the avoidance of doubt, during the Initial Term and each Automatic Renewal Term, the Company shall have the Company Kick-Out Right.

 

(b) Termination by the Company Without a Company Kick-Out Event. Notwithstanding any other provision of this Agreement to the contrary, upon (x) the expiration of the Initial Term or an Automatic Renewal Term, as applicable, and (y) one hundred eighty (180) days' prior written notice to the Manager (the "Company Termination Notice"), the Company may, without the occurrence of a Company Kick-Out Event, decline to renew this Agreement upon a two-thirds (2/3) vote of the Independent Directors (who have not recused themselves with respect to such vote) that the Quarterly Management Fees payable to the Manager are not fair, subject to clauses (i)-(iv) below (any such nonrenewal, a "Termination Without a Company Kick-Out Event"). The Company Termination Notice shall include reasonable supporting detail for the Independent Directors' determination that the Quarterly Management Fees payable to the Manager are not fair.

 

(i) No later than five (5) Business Days following the receipt by the Manager of the Company Termination Notice, the management teams of the Company and the Manager shall engage in good faith discussions and negotiations to resolve the Independent Directors' concerns that the Quarterly Management Fees are not fair for a period of sixty (60) days (the "Consultation Period").

 

 

(ii) If, at the end of the Consultation Period, the Company and the Manager have been unable to resolve such concerns, then the Company and the Manager shall attempt in good faith to retain as soon as reasonably practicable (but in no event later than ten (10) Business Days after the expiration of the Consultation Period) an agreed upon impartial professional mediator who is a partner or a retired partner, in each case, in a law firm of national standing based in New York City with experience in investment management (any such Person, a "Mediator") for a nonbinding mediation of such dispute (such process, a "Mediation"); provided that if the Company and the Manager cannot agree on a Mediator within such ten (10)-Business Day period, or if the Mediator agreed upon by the Company and the Manager does not accept being retained for the Mediation, then within an additional ten (10) Business Days, the Company and the Manager shall each select one (1) Mediator and those two (2) Mediators shall, within ten (10) Business Days after their selection, select a third (3^rd) Mediator. The Mediation shall be conducted by the Mediator selected in accordance with the preceding sentence on a strictly confidential basis, and no participant shall disclose the existence, nature, any documents, exhibits or information exchanged or presented, in connection with such Mediation, or the result of the Mediation, to any third-party, with the sole exceptions of its legal counsel and/or tax advisor, all of whom shall be bound by these confidentiality terms. The Company and the Manager agree to take all steps necessary to protect the confidentiality of the materials in respect of the Mediation, agree to file (and, if so required by applicable court rules, seek leave to file) confidential information (and documents containing confidential information) under seal, and agree to the entry of an appropriate protective order encompassing the confidentiality terms contained herein.

 

(iii) In the event that the Company and the Manager are able to resolve such concerns pursuant to Section 11(b)(i) or Section 11(b)(ii) prior to the Effective Termination Date, then the Termination Fee that became payable upon the Manager's receipt of the Company Termination Notice delivered by the Company pursuant to Section 11(b) shall no longer be payable, (B) such Company Termination Notice shall be deemed to be of no force and effect, (C) the Company and the Manager shall as promptly as practicable (and in no event later than five (5) Business Days following the resolution of such concerns) execute and deliver an amendment to this Agreement setting forth the revised Quarterly Management Fee as then agreed upon by the Company and the Manager and (D) this Agreement, as so amended, shall continue in full force and effect on the terms stated herein and in such amendment.

 

(iv) In the event that the Company and the Manager are unable to reach an understanding with respect to the Quarterly Management Fee, the Agreement shall be deemed terminated and the Company shall pay to the Manager the Termination Fee in accordance with Section 11(f).

 

(c) Termination by the Company Upon a Company Kick-Out Event. The Company may terminate this Agreement effective upon thirty (30) days' prior written notice of termination from the Company to the Manager, without payment of the Termination Fee, upon the occurrence of a Company Kick-Out Event.

 

 

(d) Termination by the Manager. The Manager shall have the following rights to terminate this Agreement:

 

(i) No later than one hundred eighty (180) days prior to the expiration of the Initial Term or the then current Automatic Renewal Term, the Manager may deliver written notice to the Company informing it of the Manager's intention to decline to renew this Agreement, whereupon this Agreement shall not be renewed and extended and this Agreement shall terminate effective on the expiration of the then-current term. The Company shall not be required to pay to the Manager the Termination Fee if the Manager terminates this Agreement pursuant to this Section 11(d)(i).

 

(ii) The Manager may terminate this Agreement effective upon sixty (60) days' prior written notice of termination to the Company (any such notice, a "Manager Termination Notice") (A) in the event that the Company shall default in the performance or observance of any material term, condition or covenant contained in this Agreement and such default shall continue for a period of thirty (30) days after written notice thereof specifying such default and requesting that the same be remedied in such thirty (30) day period or (B) upon the termination of the Letter Agreement, prior to any nonrenewal or termination of this Agreement. The Company shall be required to pay to the Manager the Termination Fee in accordance with Section 11(f) if the Manager terminates this Agreement pursuant to clause (A) or (B) above.

 

(iii) The Manager may terminate this Agreement if the Company becomes required to register as an investment company under the Investment Company Act, with such termination deemed to occur immediately before such event, in which case the Company shall not be required to pay to Manager the Termination Fee.

 

(e) Determination of the Termination Fee. If a Termination Fee becomes payable by the Company to the Manager upon a termination of this Agreement pursuant to Section 11(b), Section 11(d)(ii)(A) or Section 11(d)(ii)(B), the Termination Fee shall be finally determined as follows:

 

(i) If the Company and the Manager agree on the Termination Fee within thirty (30) days following receipt (A) by the Manager of a Company Termination Notice delivered by the Company pursuant to Section 11(b) or (B) by the Company of a Manager Termination Notice delivered by the Manager pursuant to Section 11(d)(ii)(A) or Section 11(d)(ii)(B) (the "Termination Fee Negotiation Period"), then the finally determined Termination Fee shall be the amount agreed in writing by the Company and the Manager.

 

 

(ii) If the Company and the Manager do not agree on the Termination Fee prior to the expiration of the Termination Fee Negotiation Period, then, as soon as reasonably practicable (but in no event later than ten (10) Business Days after the expiration of the Termination Fee Negotiation Period), the Manager shall retain an internationally recognized top-tier investment bank (the "Manager-Selected Valuation Firm") and the Company shall retain a different internationally recognized top-tier investment bank (the "Company-Selected Valuation Firm"), in each case, to deliver to the Manager and the Company, within thirty (30) days following the tenth (10^th) Business Day after the expiration of the Termination Fee Negotiation Period (the "Initial Valuation Firm Review Period"), a report setting forth in reasonable detail such Valuation Firm's good faith determination of (A) the Fair Market Value of Fees Payable, (B) the Net Present Value of Fees Payable, (C) the Multiple on Fees Payable and (D) the Termination Fee. If the Termination Fee determined by the Manager-Selected Valuation Firm and the Termination Fee determined by the Company-Selected Valuation Firm are within ten percent (10%) of each other, then the finally determined Termination Fee shall be the average of such Termination Fees determined by the Manager-Selected Valuation Firm and the Company-Selected Valuation Firm.

 

(iii) If the Termination Fees determined by the Manager-Selected Valuation Firm and the Company-Selected Valuation Firm are not within ten percent (10%) of each other, then:

 

(A)            as soon as reasonably practicable (but in no event later than ten (10) Business Days after the expiration of the Initial Valuation Firm Review Period, the Manager-Selected Valuation Firm and the Company-Selected Valuation Firm shall select a third (3^rd) internationally recognized top-tier investment bank (the "Investment Bank-Selected Valuation Firm", together with the Manager-Selected Valuation Firm and the Company-Selected Valuation Firm, the "Valuation Firms") to deliver to the Manager and the Company, within thirty (30) days following the tenth (10^th) Business Day after the expiration of the Initial Valuation Firm Review Period, a report setting forth in reasonable detail such Valuation Firm's good faith determination of (1) the Fair Market Value of Fees Payable, (2) the Net Present Value of Fees Payable, (3) the Multiple on Fees Payable and (4) the Termination Fee; and

 

(B)            the finally determined Termination Fee shall be the average of the Termination Fee determined by the Investment Bank-Selected Valuation Firm and whichever Termination Fee determined by the Manager-Selected Valuation Firm or the Company-Selected Valuation Firm is closer in value to the Termination Fee determined by the Investment Bank-Selected Valuation Firm.

 

(iv) In preparing their respective reports, each Valuation Firm shall (A) determine the Termination Fee and components thereof in accordance with the terms of this Agreement, (B) be provided with the same access to the Company's and the Manager's respective management teams and the same source documents and information regarding the Company and the Manager and (C) take into account all factors such Valuation Firm determines relevant to such determination, including the Company's historical financial and operating results, the Company's future business prospects and projected financial and operating results and public and private market and industry conditions. Each such report prepared shall set forth a single point determination (and not a range of values) of the Termination Fee.

 

 

(v) The Manager shall bear the fees and expenses of the Manager-Selected Valuation Firm. The Company shall bear the fees and expenses of the Company-Selected Valuation Firm. The fees and expenses of the Investment Bank-Selected Valuation Firm shall be borne by the party hereto whose Valuation Firm's determination of the Termination Fee was the furthest from the Termination Fee determined by the Investment-Bank Selected Valuation Firm, or, if the determinations of such other Valuation Firms were equally different from that determined by the Investment Bank-Selected Valuation Firm, then the Investment Bank-Selected Valuation Firm's fees and expenses shall be borne equally by the Manager and the Company.

 

(f) Payment of the Termination Fee. Within five (5) Business Days of the determination of the Termination Fee pursuant to Section 11(e), the Company shall pay to the Manager the Termination Fee, in cash, by wire transfer of immediately available funds, to one (1) or more accounts designated in writing by the Manager. Notwithstanding anything to the contrary in this Agreement, at the option of the Company, by action of a two-thirds (2/3) vote of the Independent Directors (who have not recused themselves with respect to such vote) and upon written notice to the Manager no later than two (2) Business Days after the determination of the Termination Fee pursuant to Section 11(e), the Company's obligation to pay the Termination Fee pursuant to this Section 11(f) may be satisfied by (i) the issuance to the Manager of an aggregate number of shares of Class A Common Stock equal to (A) all or any portion of the Termination Fee divided by (B) the Parent Trading Price (such shares, collectively, the "Termination Shares") and (ii) to the extent the Termination Fee exceeds the Termination Shares Value, the payment by the Company to the Manager of an amount equal to such excess, in cash, by wire transfer of immediately available funds, to one (1) or more accounts designated in writing by the Manager (such amount, the "Termination Make-Whole Cash Payment"); provided that any Termination Shares shall be issued and any Termination Make-Whole Cash Payment shall be paid to the Manager within five (5) Business Days of the determination of the Termination Fee pursuant to Section 11(e). For the avoidance of doubt, any issuance of Termination Shares pursuant to this Section 11(f) shall be in accordance with applicable laws and stock exchange regulations.

 

(g) No Liability. Except as expressly provided in Section 5(b), Section 6(b), Section 8 and Section 9 and the Termination Fee that shall become payable by the Company to the Manager upon any termination pursuant to Section 11(b), Section 11(d)(ii)(A) or Section 11(d)(ii)(B), a termination of this Agreement pursuant to this Section 11 shall be without any further liability or obligation of either party hereto to the other party hereto.

 

(h) Cooperation. Following a termination of this Agreement pursuant to this Section 11, the Manager shall cooperate, at the Company's request and expense, with the Company in executing an orderly transition of the management of the Company.

 

Section 12.     Assignments.

 

(a) Assignments by the Manager. This Agreement may not be assigned by the Manager without the consent of the Company, which consent shall be contingent on the affirmative vote of a majority of the Company's Independent Directors. Notwithstanding the foregoing, the Manager may, at any time without the approval of the Company and without the approval of the Company's Independent Directors, (i) assign this Agreement to one or more Affiliates of the Manager and (ii) delegate to one or more of its Affiliates, including sub-managers where applicable, the performance of any of its responsibilities hereunder so long as it remains liable for any such Affiliates' performance. Any such permitted assignment shall bind the assignee under this Agreement in the same manner as the Manager is bound, and the Manager shall be liable to the Company for all acts or omissions of the assignee under any such assignment. In addition, the assignee shall execute and deliver to the Company a counterpart of this Agreement naming such assignee as the Manager. Nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer of any amounts payable to the Manager under this Agreement.

 

 

(b) Assignments by the Company. This Agreement shall not be assigned by the Company without the prior written consent of the Manager.

 

Section 13.     Action Upon Termination. Notwithstanding anything to contrary contained herein, from and after any Effective Termination Date, the Manager shall not be entitled to compensation for further Services hereunder, but shall be paid all compensation accruing to such Effective Termination Date and, upon a termination of this Agreement pursuant to Section 11(b), Section 11(d)(ii)(A) or Section 11(d)(ii)(B), the Termination Fee.

 

Section 14.     Representations and Warranties.

 

(a) The Company hereby represents and warrants to the Manager as follows:

 

(i) The Company is duly organized, validly existing and in good standing under the laws of the State of Delaware, has the limited liability company power and authority and the legal right to own and operate its assets, to lease any property it may operate as lessee and to conduct the business in which it is now engaged and is duly qualified as a foreign limited liability company and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized or licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of the Company and its Subsidiaries, if any, taken as a whole.

 

(ii) The Company has the limited liability company power and authority and the legal right to make, deliver and perform this Agreement and all obligations required hereunder and has taken all necessary limited liability company action to authorize this Agreement on the terms and conditions hereof and the execution, delivery and performance of this Agreement and all obligations required hereunder. No consent of any other Person that has not already been obtained, including stockholders and creditors of the Company, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required by the Company in connection with this Agreement or the execution, delivery, performance, validity or enforceability of this Agreement and all obligations required hereunder. This Agreement has been, and each instrument or document required hereunder will be, executed and delivered by a duly authorized officer of the Company, and this Agreement constitutes, and each instrument or document required hereunder when executed and delivered hereunder will constitute, the legally valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

 

 

(iii) The execution, delivery and performance of this Agreement and the documents or instruments required hereunder will not violate any provision of any existing law or regulation binding on the Company, or any order, judgment, award or decree of any Governmental Authority binding on the Company, or the Governing Agreements of, or any securities issued by the Company or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Company is a party or by which the Company or any of its assets may be bound, the violation of which would have a material adverse effect on the business operations, assets or financial condition of the Company and its Subsidiaries, if any, taken as a whole, and will not result in, or require, the creation or imposition of any lien or any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.

 

(b) The Manager hereby represents and warrants to the Company as follows:

 

(i) The Manager is duly organized, validly existing and in good standing under the laws of the State of Delaware, has the corporate power and authority and the legal right to conduct the business in which it is now engaged and is duly qualified as a foreign corporation and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized or licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of the Manager.

 

(ii) The Manager has the corporate power and authority and the legal right to make, deliver and perform this Agreement and all obligations required hereunder and has taken all necessary corporate action to authorize this Agreement on the terms and conditions hereof and the execution, delivery and performance of this Agreement and all obligations required hereunder. No consent of any other Person, including stockholders of the Manager, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required by the Manager in connection with this Agreement or the execution, delivery, performance, validity or enforceability of this Agreement and all obligations required hereunder. This Agreement has been, and each instrument or document required hereunder will be, executed and delivered by a duly authorized officer of the Manager, and this Agreement constitutes, and each instrument or document required hereunder when executed and delivered hereunder will constitute, the legally valid and binding obligation of the Manager enforceable against the Manager in accordance with its terms.

 

(iii) The execution, delivery and performance of this Agreement and the documents or instruments required hereunder will not violate any provision of any existing law or regulation binding on the Manager, or any order, judgment, award or decree of any Governmental Authority binding on the Manager, or the Governing Agreements of, or any securities issued by the Manager or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Manager is a party or by which the Manager or any of its assets may be bound, the violation of which would have a material adverse effect on the business operations, assets or financial condition of the Manager, and will not result in, or require, the creation or imposition of any lien or any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.

 

 

Section 15.       Miscellaneous.

 

(a) Notices. Any notices that may or are required to be given hereunder by any party to another shall be deemed to have been duly given if (i) personally delivered or delivered by facsimile, when received, (ii) sent by U.S. Express Mail or recognized overnight courier, on the second (2^nd) following Business Day (or third (3^rd) following Business Day if mailed outside the United States), (iii) delivered by electronic mail, when received or (iv) posted on a password protected website maintained by the Manager and for which the Company has received access instructions by electronic mail, when posted:

 

The Company:	CompoSecure Holdings, L.L.C. 309 Pierce Street Somerset, NJ 08873 Attention: General Counsel
The Manager:	Resolute Holdings Management, Inc. 445 Park Avenue, Suite 15F New York, NY 10022 Attention: Chief Executive Officer

 

(b) Binding Nature of Agreement; Successors and Assigns; No Third-Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns as provided herein. Except for Section 5 and Section 9, none of the provisions of this Agreement are intended to be, nor shall they be construed to be, for the benefit of any third-party.

 

(c) Integration. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.

 

(d) Additional Agreements. In the event the Company forms any Subsidiary or acquires any business or any other equity interest (or other interest convertible or exchangeable into an equity interest) in any other Person, following the Effective Date, the Company shall, at the Manager's election, cause any such Subsidiary, business or other Person to enter into a management agreement with the Manager in a form substantially similar to this Agreement (for the avoidance of doubt, there will be no duplication of fees under this Agreement and any such agreement), and, if the Manager so elects shall not make such acquisition in the absence of such a management agreement.

 

 

(e) Amendments. Neither this Agreement, nor any terms hereof, may be amended, supplemented or modified except in an instrument in writing executed by the parties hereto.

 

(f) Governing Law. Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties hereto expressly agree that all of the terms and provisions hereof shall be governed by and construed under the laws of the State of Delaware.

 

(g) Forum; Consent to Service. To the fullest extent permitted by law, in the event of any proceeding arising out of the terms and conditions of this Agreement, the parties hereto irrevocably (i) consent and submit to the exclusive jurisdiction of the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (unless the Delaware Court of Chancery shall decline jurisdiction over a particular matter, in which case, any state or federal court within the State of Delaware), (ii) waive any defense based on doctrines of venue or forum non conveniens, or similar rules or doctrines and, (iii) agree that all claims in respect of such a proceeding must be heard and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (unless the Delaware Court of Chancery shall decline jurisdiction over a particular matter, in which case, any state or federal court within the State of Delaware). Process in any such proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Each of the parties hereto hereby agrees and consents that service of any process, summons, notice, or document pursuant to Section 15(a) shall be effective service of process for any suit or proceeding arising out of the terms and conditions of this Agreement.

 

(h) Waiver of Jury Trial. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

(i) Survival of Representations and Warranties. All representations and warranties made hereunder, and in any document, certificate or statement delivered pursuant hereto or in connection herewith, shall survive the execution and delivery of this Agreement.

 

(j) No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of a party hereto, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

(k) Costs and Expenses. Each party hereto shall bear its own costs and expenses (including the fees and disbursements of counsel and accountants) incurred in connection with the negotiations, preparation of and entry into this Agreement, and all matters incident thereto, prior to the Effective Time. For the avoidance of doubt, all costs and expenses incurred by the parties hereto on and after the Effective Time in connection with the performance of their respective duties hereunder shall be borne in accordance with Section 8.

 

 

(l) Headings. The section and subsection headings in this Agreement are for convenience in reference only and shall not be deemed to alter or affect the interpretation of any provisions hereof.

 

(m) Counterparts. This Agreement may be executed by the parties to this Agreement on any number of separate counterparts (including by facsimile), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

(n) Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(o) Action by the Company. Notwithstanding anything to the contrary in this Agreement, only the Company, by action of a two-thirds (2/3) vote of the Independent Directors (who have not recused themselves with respect to such vote), and for the avoidance of doubt not the Manager, may exercise the Company's rights or grant any consent, amendment or waiver hereunder, including the termination rights under Section 11(b).

 

[Signature Page Follows]

 

 

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

 

	Company:
	CompoSecure Holdings, L.L.C.
	By:
		Name:
		Title:
	Manager:
	Resolute Holdings Management, Inc.,
	By:
		Name:
		Title:

 

[Signature Page to CompoSecure Holdings, L.L.C. Management Agreement]

 

 

Exhibit 10.2

 

 

REGISTRATION RIGHTS AGREEMENT

by and among

RESOLUTE HOLDINGS MANAGEMENT, INC.,


and

RESOLUTE COMPO HOLDINGS LLC

Dated as of __________, 2025

 

 

TABLE OF CONTENTS

 

Page

 

Section 1.	Definitions	1
Section 2.	Demand Registrations	5
Section 3.	Inclusion of Other Securities; Priority	6
Section 4.	Shelf Registrations	7
Section 5.	Piggyback Registrations	10
Section 6.	Holdback Agreements	12
Section 7.	Suspensions	13
Section 8.	Registration Procedures	13
Section 9.	Participation in Underwritten Offerings	18
Section 10.	Registration Expenses	19
Section 11.	Indemnification; Contribution	20
Section 12.	Rule 144 Compliance	23
Section 13.	Miscellaneous	24

 

 

THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of __________, 2025 by and among Resolute Holdings Management, Inc., a Delaware corporation (the "Company") and Resolute Compo Holdings LLC ("Resolute Compo Holdings") and any transferee that becomes a party to this Agreement by executing and delivering a counterpart to this Agreement in the form attached as Exhibit A.

 

RECITALS

 

WHEREAS, in connection with the consummation of the Spin-Off of the Company, the parties desire to enter into this Agreement in order to grant certain registration rights to the Holders of Registrable Securities as set forth below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and other good and valid consideration, the receipt and sufficiency of which are acknowledged, the parties to this Agreement agree as follows:

 

Section 1.               Definitions.

 

(a)            As used in this Agreement, the following terms shall have the following meanings:

 

"Affiliate" of a Person has the meaning set forth in Rule 12b-2 under the Exchange Act, and "Affiliated" shall have a correlative meaning. For purposes of this definition, the term "control" (including the correlative meanings of the terms "controlled by" and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities or by contract or otherwise. Notwithstanding anything to the contrary set forth in this Agreement, Resolute Compo Holdings and its respective Affiliates shall not be deemed to be Affiliates of the Company.

 

"Agreement" means this Registration Rights Agreement, as amended, modified or supplemented from time to time, in accordance with the terms of this Registration Rights Agreement, together with any exhibits, schedules or other attachments to this Registration Rights Agreement.

 

"Alternative Transactions" has the meaning set forth in Section 4(d).

 

"Automatic Shelf Registration Statement" means an "automatic shelf registration statement" as defined in Rule 405 promulgated under the Securities Act.

 

"Common Stock" means the common stock, par value $0.0001 per share, of the Company, including any other shares of stock issued or issuable with respect to the common stock of the Company (whether by way of a stock dividend or stock split or in exchange for or upon conversion of such shares or otherwise in connection with a

 

 

combination of shares, distribution, recapitalization, merger, consolidation, other corporate reorganization or other similar event).

 

"Company" has the meaning set forth in the Preamble and includes the Company's successors by merger, acquisition, reorganization or otherwise.

 

"Controlling Person" has the meaning set forth in Section 11(a).

 

"Covered Person" has the meaning set forth in Section 11(a).

 

"Demand Registration" has the meaning set forth in Section 2(a).

 

"Demand Registration Request" has the meaning set forth in Section 2(a).

 

"Determination Date" has the meaning set forth in Section 4(f).

 

"Equity Securities" means shares of Common Stock, shares of any other class of common or preferred stock of the Company and any options, warrants, rights or securities of the Company convertible into or exchangeable for common or preferred stock of the Company.

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated under the Securities Exchange Act of 1934.

 

"Executive Officer" has the meaning as set forth in Rule 16a-1(f) or any successor rule, as promulgated by the SEC under the Exchange Act.

 

"Family Member" means, with respect to any Person who is an individual, any spouse or lineal descendants, including adoptive relationships.

 

"Governmental Entity" means any United States or foreign (i) federal, state, local, municipal or other government, (ii) governmental or quasi-governmental entity of any nature (including, without limitation, any governmental agency, branch, department, official or entity and any court or other tribunal) or (iii) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature, including, without limitation, any arbitral tribunal.

 

"Holder" means Resolute Compo Holdings and any direct or indirect transferee of Resolute Compo Holdings that has become a party to this Agreement by executing and delivering a counterpart to this Agreement in the form attached as Exhibit A, in each case to the extent such Person is a holder or beneficial owner of Registrable Securities.

 

"Permitted Transferee" shall mean any Affiliate, Family Member, direct or indirect member, partner, stockholder or other equity holder of Resolute Compo Holdings, and any Permitted Transferee of Resolute Compo Holdings shall be bound by the terms of this Agreement and treated as Resolute Compo Holdings for all purposes of this Agreement.

 

 

"Person" means any natural person, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, foundation, unincorporated organization or government or other agency or political subdivision of such government.

 

"Piggyback Registration" has the meaning set forth in Section 5(a).

 

"Piggyback Shelf Registration Statement" has the meaning set forth in Section 5(a).

 

"Piggyback Shelf Takedown" has the meaning set forth in Section 5(a).

 

"Prospectus" means the prospectus or prospectuses (whether preliminary or final) included in any Registration Statement and relating to Registrable Securities, as amended or supplemented and including all material incorporated by reference in such prospectus or prospectuses.

 

"Registrable Securities" means, at any time, (i) any shares of Common Stock held or beneficially owned by any Holder, (ii) any shares of Common Stock issued or issuable to any Holder upon the conversion, exercise or exchange, as applicable, of any other Equity Securities held or beneficially owned by any Holder and (iii) any shares of Common Stock issued or issuable to any Holder with respect to any shares described in clauses (i) and (ii) above by way of a stock dividend or stock split or in exchange for or upon conversion of such shares or otherwise in connection with a combination of shares, distribution, recapitalization, merger, consolidation, other reorganization or other similar event (it being understood that, for purposes of this Agreement, a Person shall be deemed to be a Holder of Registrable Securities whenever such Person in its sole discretion has the right to then acquire or obtain from the Company any Registrable Securities, whether or not such acquisition has actually been effected). As to any particular Registrable Securities, the shares described in the preceding sentence shall cease to constitute Registrable Securities when such shares become eligible for resale under Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144(c)(1).

 

"Registration Expenses" has the meaning set forth in Section 10(a).

 

"Registration Statement" means any registration statement of the Company under the Securities Act which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, all amendments and supplements to that Registration Statement, including post-effective amendments, all exhibits and all documents incorporated by reference in that Registration Statement.

 

"Remaining Registrable Securities" has the meaning set forth in Section 4(e).

 

"Requested Shelf Registered Securities" has the meaning set forth in Section 4(b).

 

"Resolute Compo Holdings" has the meaning set forth in the Preamble.

 

 

"Rule 144" means Rule 144 under the Securities Act or any successor rule.

 

"S-3 Shelf Eligible" has the meaning set forth in Section 4(a).

 

"SEC" means the Securities and Exchange Commission or any successor agency administering the Securities Act and the Exchange Act at the time.

 

"SEC Guidance" means (i) any publicly available written or oral interpretations, questions and answers, guidance and forms of the SEC, (ii) any oral or written comments, requirements or requests of the SEC or its staff, (iii) the Securities Act and the Exchange Act and (iv) any other rules, bulletins, releases, manuals and regulations of the SEC.

 

"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated under the Securities Act of 1933.

 

"Selling Expenses" means all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities.

 

"Shelf Public Offering" has the meaning set forth in Section 4(b).

 

"Shelf Public Offering Request" has the meaning set forth in Section 4(b).

 

"Shelf Public Offering Requesting Holder" has the meaning set forth in Section 4(b).

 

"Shelf Registered Securities" means any Registrable Securities whose offer and sale is registered pursuant to a Registration Statement filed in connection with a Shelf Registration (including an Automatic Shelf Registration Statement).

 

"Shelf Registration" has the meaning set forth in Section 4(a).

 

"Shelf Registration Statement" means a Registration Statement filed with the SEC on either Form S-3 or F-3 for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (or any successor provision) covering the offer and sale of all or any portion of the Registrable Securities, as applicable.

 

"Shelf Requesting Holder" has the meaning set forth in Section 4(a).

 

"Spin-Off" means the distribution by CompoSecure, Inc., and registration of the Common Stock pursuant to the Company's Form 10 filed with and declared effective by the SEC.

 

"Suspension" has the meaning set forth in Section 7.

 

"Transfer" means, when used as a noun, any direct or indirect, voluntary or involuntary, sale, disposition, hypothecation, mortgage, gift, pledge, assignment, attachment or other transfer (including the creation of any derivative or synthetic interest, including a participation or other similar interest) and, when used as a verb, voluntarily to

 

 

directly or indirectly sell, dispose, hypothecate, mortgage, gift, pledge, assign, attach or otherwise transfer, in any case, whether by operation of law or otherwise.

 

"underwritten offering" means a registered offering of securities conducted by one or more underwriters pursuant to the terms of an underwriting agreement.

 

(a)            In addition to the above definitions, unless the context requires otherwise:

 

(i)             any reference to any statute, regulation, rule or form as of any time shall mean such statute, regulation, rule or form as amended or modified and shall also include any successor statute, regulation, rule or form, as amended, from time to time;

 

(ii)            the words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation", in each case notwithstanding the absence of any express statement to such effect, or the presence of such express statement in some contexts and not in others;

 

(iii)           references to "Section" are references to Sections of this Agreement; and

 

(iv)           references to "dollars" and "$" mean U.S. dollars.

 

"Well-Known Seasoned Issuer" means a "well-known seasoned issuer" as defined in Rule 405 promulgated under the Securities Act and which (a)(i) is a "well-known seasoned issuer" under paragraph (1)(i)(A) of such definition or (ii) is a "well-known seasoned issuer" under paragraph (1)(i)(B) of such definition and is also eligible to Register a primary offering of its securities relying on General Instruction I.B.1 of Form S-3 under the Securities Act and (b) is not an "ineligible issuer" as defined in Rule 405 promulgated under the Securities Act.

 

Section 2.               Demand Registrations.

 

(a)            Right to Demand Registrations. At any time following the Spin-Off, each Holder may, by providing written notice to the Company, request to sell all or part of its Registrable Securities pursuant to a Registration Statement (a "Demand Registration") (such requesting Holder, a "Demand Holder"). Each request for a Demand Registration (a "Demand Registration Request") shall specify the number of Registrable Securities intended to be offered and sold by that Demand Holder pursuant to the Demand Registration and the intended method of distribution of those Registrable Securities, including whether the offering is intended to be an underwritten offering. Notwithstanding the prior sentence, the Company may, if the Board of Directors of the Company so determines that, due to a pending or contemplated material acquisition or disposition or public offering or other material event involving the Company or any of its subsidiaries, it would be inadvisable to effect the requested Demand Registration at that time (but in no event after the related Registration Statement has become effective), the Company may, upon providing the Demand Holder written notice (the "Delay Notice"), defer the Demand Registration for a single period set forth in that Delay Notice not to exceed 90 days.

 

 

The Company shall not postpone or delay a Demand Registration under this Section 2 more than once in any twelve (12) month period. Promptly (but in any event within three (3) business days) after receipt of a Demand Registration Request, the Company shall give written notice of the Demand Registration Request to all other Holders of Registrable Securities. As promptly as practicable and no later than ten (10) business days after receipt of a Demand Registration Request, the Company shall register all Registrable Securities (i) that have been requested to be registered in the Demand Registration Request and (ii) subject to Section 3, with respect to which the Company has received a written request for inclusion in the Demand Registration from a Holder no later than five (5) business days after the date on which the Company has given notice to Holders of the Demand Registration Request. The Company shall use its reasonable best efforts to cause the Registration Statement filed pursuant to this Section 2(a) to be declared effective by the SEC or otherwise become effective under the Securities Act as promptly as practicable after the filing of the Registration Statement. A Demand Registration may be effected by way of a Registration Statement on Form S-3 or any similar short-form registration statement to the extent the Company is permitted to use such form at such time. The Company shall not be required to effect a Demand Registration unless the expected aggregate gross proceeds from the offering of the Registrable Securities to be registered in connection with such Demand Registration are at least $50 million and shall not be required to effect more than four (4) Demand Registrations in any 12-month period.

 

The Company shall not be obligated to maintain a Registration Statement pursuant to a Demand Registration effective for more than (x) 360 days or (y) a shorter period when all of the Registrable Securities covered by that Registration Statement have been sold pursuant to that Registration Statement(the "Effectiveness Period").

 

(b)            Number of Demand Registrations. Resolute Compo Holdings, together with any direct or indirect transferee of Resolute Compo Holdings that has become a Holder, shall be entitled to request an unlimited number of Demand Registrations. At any time in which the Company is eligible to register Common Stock on Form S-3 (or any successor form), each Holder shall have an unlimited number of Demand Registrations on Form S-3.

 

(c)            Withdrawal. A Holder may, by written notice to the Company, withdraw its Registrable Securities from a Demand Registration at any time prior to the effectiveness of the applicable Registration Statement. Upon receipt of notices from all applicable Holders to that effect, the Company shall cease all efforts to seek effectiveness of the applicable Registration Statement, unless the Company intends to effect a primary offering of securities pursuant to such Registration Statement. In addition, a Demand Holder may, at any time prior to the effective date of the Registration Statement relating to a Demand Registration, revoke its request by providing a written notice of the revocation to the Company and only if that Demand Holder complies with this Section 2(c).

 

(d)           Selection of Underwriters. If a Demand Registration is an underwritten offering, the Demand Holder requesting the Demand Registration shall have the right to select the investment banking firm(s) to act as the managing underwriter(s) in connection with the related offering, subject to the approval of the Company (which approval shall not be unreasonably withheld, conditioned or delayed).

 

Section 3.               Inclusion of Other Securities; Priority. The Company shall not include in any Demand Registration any securities that are not Registrable Securities without the prior

 

 

written consent of the Holder(s) (which consent may not be unreasonably withheld or delayed) of the Registrable Securities participating in that Demand Registration. If a Demand Registration involves an underwritten offering and the managing underwriters of such offering advise the Company and the Holders in writing that, in their opinion, the number of Equity Securities proposed to be included in that Demand Registration, including all Registrable Securities and all other Equity Securities proposed to be included in such offering, exceeds the number of Equity Securities that can reasonably be expected to be sold in such offering without adversely affecting the success of the offering (including the price, timing or distribution of the securities to be sold in such offering), the Company shall include in such Demand Registration: (i) first, the Registrable Securities proposed to be sold by Holders in the offering; and (ii) second, to the extent additional Equity Securities may, in the opinion of the managing underwriters, be included in the offering without reasonably being expected to adversely affect the success of the offering (including the price, timing or distribution of the securities to be sold in the offering), any Equity Securities proposed to be included in such Demand Registration by any other Persons (including Equity Securities to be sold for the account of the Company and/or any other holders of Equity Securities), allocated, in the case of this clause (ii), among such Persons in such manner as the Company may determine. If more than one Holder is participating in such Demand Registration and the managing underwriters of such offering determine that a limited number of Registrable Securities held by the Holders may be included in the offering without reasonably being expected to adversely affect the success of the offering (including the price, timing or distribution of the securities to be sold in the offering), then the Registrable Securities that are included in such offering shall be allocated pro rata among the participating Holders on the basis of the number of Registrable Securities initially requested to be sold by the Holder in such offering.

 

Section 4.               Shelf Registrations.

 

(a)            Initial Shelf Registration. At any time when the Company becomes eligible to use Form S-3 in connection with a secondary public offering of its equity securities on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, in accordance with SEC Guidance ("S-3 Shelf Eligible"), upon the written request of any Holder of Registrable Securities (the "Shelf Requesting Holder"), the Company shall use its commercially reasonable efforts to register, under the Securities Act on Form S-3 for an offering on a delayed or continuous basis pursuant to Rule 415 promulgated under the Securities Act (a "Shelf Registration"), the offer and sale of such amount of Registrable Securities owned by such Shelf Requesting Holder as such Shelf Requesting Holder shall request. Upon the receipt of such written request, the Company shall promptly give notice (via facsimile or electronic transmission) of such requested Shelf Registration at least ten (10) business days prior to the anticipated filing date of such Shelf Registration to the other Holders of Registrable Securities, and such notice shall describe the proposed Shelf Registration, the intended method of disposition of such Registrable Securities and any other information that at the time would be appropriate to include in such notice, and offer such Holders of Registrable Securities the opportunity to register the number of Registrable Securities as each such Holder of Registrable Securities may request by written notice to the Company, given within five (5) business days after such Holders of Registrable Securities are given the Company's notice of the Shelf Registration. The "Plan of istribution" section of such Shelf Registration shall permit all lawful means of disposition of Registrable Securities, including firm-commitment underwritten public

 

 

offerings, block trades, agented transactions, sales directly into the market, purchases or sales by brokers, derivative transactions, short sales, stock loan or stock pledge transactions, hedging transactions and sales not involving a public offering. With respect to each Shelf Registration, the Company shall (x) as promptly as practicable after the written request of the Holder of Registrable Securities, file a Registration Statement and (y) use its commercially reasonable efforts to cause such Registration Statement to be declared effective as promptly as practicable, and remain effective until the date set forth in Section 8. No Holders of Registrable Securities shall be entitled to include any of its Registrable Securities in a Shelf Registration unless such Holder of Registrable Securities has complied with Section 9, to the extent applicable. The obligations set forth in this Section 4 shall not apply if the Company has a currently effective Shelf Registration Statement covering all Registrable Securities in accordance with Section 8 and has otherwise complied with its obligations pursuant to this Section 4. The rights of Holders of Registrable Securities with respect to any Shelf Registration shall be subject to Suspension, as provided in Section 7.

 

(b)            Underwritten Take-Downs. Upon written request by a Holder of Registrable Securities holding Shelf Registered Securities (the "Shelf Public Offering Requesting Holder"), which request (the "Shelf Public Offering Request") shall specify the class or series and amount of such Shelf Public Offering Requesting Holder's Shelf Registered Securities to be sold (the "Requested Shelf Registered Securities"), the Company shall perform its obligations hereunder with respect to the sale of such Requested Shelf Registered Securities in the form of a firm commitment underwritten public offering (unless otherwise consented to by the Shelf Public Offering Requesting Holder) (a "Shelf Public Offering") if the aggregate proceeds reasonably anticipated to be generated, net of underwriting discounts and commissions, from the sale of the Requested Shelf Registered Securities equals or exceeds $15,000,000 (as determined by the Shelf Public Offering Requesting Holder in good faith, as of the date the Company receives the Shelf Public Offering Request), unless such Shelf Public Offering shall include all of the Registrable Securities then owned by the Shelf Public Offering Requesting Holder(s). Promptly upon receipt of a Shelf Public Offering Request, the Company shall provide notice (the "Shelf Public Offering Notice") of such proposed Shelf Public Offering, to the extent known, as well as the identity of the Shelf Public Offering Requesting Holder, to the other Holders of Registrable Securities holding Shelf Registered Securities. Such other Holders of Registrable Securities may, by written request to the Company and the Shelf Public Offering Requesting Holders, within one (1) business day after receipt of such Shelf Public Offering Notice, offer and sell up to all of their Shelf Registered Securities of the same class or series as the Requested Shelf Registered Securities in such proposed Shelf Public Offering. No Holder of Registration Rights shall be entitled to include any of its Registrable Securities in a Shelf Public Offering unless such Holder of Registrable Securities has compiled with Section 9, to the extent applicable. The lead managing underwriter or underwriters selected for such Shelf Public Offering shall be selected in accordance with Section 8. The terms and conditions of any customary underwriting or purchase arrangements pursuant to which Registrable Securities shall be sold in a Shelf Public Offering shall be approved by the Shelf Public Offering Requesting Holder.

 

(c)            Priority. In a Shelf Public Offering, if the lead managing underwriter advises the Shelf Public Offering Requesting Holder and the Company that, in its opinion, the number of Equity Securities requested to be included in such Shelf Public Offering, including all Registrable Securities and all other Equity Securities proposed to be included in such offering,

 

 

exceeds the number of Equity Securities that can reasonably be expected to be sold in such offering without adversely affecting the success of the offering (including the price, timing or distribution of the securities to be sold in such offering), the Company shall include in such Shelf Public Offering: (i) first, the Registrable Securities that are requested to be included in such Shelf Public Offering, pro rata among Holders entitled to participate therein; and (ii) second, all securities that are registered on the applicable Shelf Registration Statement and are requested to be included in such Shelf Public Offering by the Company (including securities to be included pursuant to other applicable registration rights agreements or provisions).

 

(d)            Company Cooperation.

 

(i)             The Company shall use its commercially reasonable efforts to cooperate in a timely manner with any request of the Holders of Registrable Securities holding Shelf Registered Securities in respect of any block trade, agented transaction, sales directly into the market, purchase or sale by brokers, derivative transaction, short sale, stock loan or stock pledge transaction, sale not involving a public offering, hedging transaction or other transaction or disposition that is registered pursuant to a Shelf Registration that is not a firm commitment underwritten offering (each, an "Alternative Transaction"), including entering into customary agreements with respect to such Alternative Transactions (and providing customary representations, warranties, covenants and indemnities in such agreements).

 

(ii)            The Company shall bear all Registration Expenses in connection with any Shelf Registration, any Shelf Public Offering or any other transaction (including any Alternative Transaction) registered under a Shelf Registration pursuant to this Section 4(d), whether or not such Shelf Registration becomes effective or such Shelf Public Offering or other transactions is completed.

 

(e)            Subsequent Shelf Registration. After the Registration Statement with respect to a Shelf Registration is declared effective, upon written request by one or more Holders of Registrable Securities (which written request shall specify the amount of such Holders' Registrable Securities to be registered), the Company shall, as permitted by SEC Guidance, (i) if it is a Well-Known Seasoned Issuer and such Registration Statement is an Automatic Shelf Registration Statement, as promptly as practicable after receiving such request, file a prospectus supplement to include such Holders of Registrable Securities as selling stockholders in such Registration Statement or (ii) otherwise, as promptly as practicable after the date the Registrable Securities requested to be registered pursuant to this Section 4(e) that have not already been so registered represent more than 1.0% of the outstanding Registrable Securities, file a post-effective amendment to the Registration Statement to include such Holders of Registrable Securities in such Shelf Registration and use commercially reasonable efforts to have such post-effective amendment declared effective. To the extent that any Registration Statement with respect to a Shelf Registration is expected to no longer be usable for the resale of Registrable Securities registered thereon ("Remaining Registrable Securities") pursuant to SEC Guidance, the Company shall, not later than 90 days prior to the date such Registration Statement is expected to no longer be usable, use commercially reasonable efforts to prepare and file a new Registration Statement with respect to such Shelf Registration, as if the holders of such Remaining Registrable Securities had requested a Shelf Registration with respect thereto

 

 

pursuant to Section 4(a) and perform all actions required under this Agreement with respect to such Shelf Registration.

 

(f)             Automatic Shelf Registration Statements. Upon the Company becoming a Well-Known Seasoned Issuer eligible to use an Automatic Shelf Registration Statement in accordance with SEC Guidance, the Company shall, as promptly as practicable, register, under an Automatic Shelf Registration Statement, the sale of all of the Registrable Securities in accordance with the terms of this Section 4. If requested by any Holder, the Company shall use its commercially reasonable efforts to file such Automatic Shelf Registration Statement as promptly as practicable, but in no event later than fifteen (15) business days after it becomes a Well-Known Seasoned Issuer, and to cause such Automatic Shelf Registration Statement to remain effective thereafter until the date set forth in Section 8. The Company shall give written notice of filing such Registration Statement to all of the Holders of Registrable Securities as promptly as practicable thereafter. The Company shall not be required to include any Holders of Registrable Securities as a selling stockholder in any Registration Statement or prospectus unless such Holders of Registrable Securities has compiled with Section 9, to the extent applicable. At any time after the filing of an Automatic Shelf Registration Statement by the Company, if it is reasonably likely that it will no longer be a Well-Known Seasoned Issuer as of a future determination date (the "Determination Date"), as promptly as practicable and at least 30 days prior to such Determination Date, the Company shall (A) give written notice thereof to all of the Holders of Registrable Securities and (B) if the Company is S-3 Shelf Eligible, file a Registration Statement on Form S-3 with respect to a Shelf Registration in accordance with Section 4(a) and use all commercially reasonable efforts to have such Registration Statement declared effective prior to the Determination Date.

 

Section 5.               Piggyback Registrations.

 

(a)            Whenever the Company proposes to register any Equity Securities under the Securities Act (other than a registration (i) pursuant to a Registration Statement on Form S-8 (or other registration solely relating to an offering or sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit arrangement), (ii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule to Rule 145) or (iii) in connection with any dividend or distribution reinvestment or similar plan), whether for its own account or for the account of one or more stockholders of the Company (other than a Demand Registration (for which participation is provided under Section 2)) (a "Piggyback Registration"), the Company shall give prompt written notice to each Holder of Registrable Securities of its intention to effect such a registration. The Company shall in no event give that notice in less than ten (10) business days prior to the proposed date of filing of the applicable Registration Statement. Subject to Sections 5(b) and 6(c), the Company shall include in the Registration Statement and in any offering of Equity Securities to be made pursuant to that Registration Statement that number of Registrable Securities requested to be sold in such offering by a Holder for the account of that Holder if the Company has received a written request for inclusion in the Registration Statement from that Holder no later than five (5) business days after the date on which the Company has given notice of the Piggyback Registration to Holders. The Company may terminate or withdraw a Piggyback Registration prior to the effectiveness of such registration at any time in its sole discretion. If a Piggyback Registration is effected pursuant to a

 

 

Registration Statement on Form S-3 or the then appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act or any successor rule to Rule 415 (a "Piggyback Shelf Registration Statement"), the Holders of Registrable Securities shall be notified by the Company of and shall have the right, but not the obligation, to participate in any offering pursuant to such Piggyback Shelf Registration Statement (a "Piggyback Shelf Takedown"), subject to the same limitations that are applicable to any other Piggyback Registration as set forth above.

 

(b)            Priority on Primary Piggyback Registrations. If a Piggyback Registration or Piggyback Shelf Takedown is initiated as a primary underwritten offering on behalf of the Company and the managing underwriters of the offering advise the Company in writing that, in their opinion, the number of Equity Securities proposed to be included in that offering, including all Registrable Securities and all other Equity Securities proposed to be included in the offering, exceeds the number of Equity Securities that can reasonably be expected to be sold in the offering without adversely affecting the success of the offering (including the price, timing or distribution of the securities to be sold in the offering), the Company shall include in such Piggyback Registration or Piggyback Shelf Takedown: (i) first, the Equity Securities that the Company proposes to sell in the offering; (ii) second, any Equity Securities proposed to be included in the offering by Holders exercising their rights pursuant to this Section 5, allocated, in the case of this clause (ii), pro rata among those Holders on the basis of the number of Equity Securities initially proposed to be included by each Holder in the offering, up to the number of Equity Securities, if any, that the managing underwriters determine can be included in the offering without reasonably being expected to adversely affect the success of the offering (including the price, timing or distribution of the securities to be offered in the offering); and (iii) third, any Equity Securities proposed to be included in the offering by any other Person to whom the Company has a contractual obligation to facilitate such offering.

 

(c)            Priority on Secondary Piggyback Registrations. If a Piggyback Registration or a Piggyback Shelf Takedown is initiated as an underwritten offering on behalf of a holder of Equity Securities to whom the Company has a contractual obligation to facilitate such offering, other than Holders of Registrable Securities exercising rights pursuant to Section 2, for which the specified priorities are in Section 3, and the managing underwriters of the offering advise the Company in writing that, in their opinion, the number of Equity Securities proposed to be included in the offering, including all Registrable Securities and all other Equity Securities requested to be included in the offering, exceeds the number of Equity Securities which can reasonably be expected to be sold in the offering without adversely affecting the success of the offering (including the price, timing or distribution of the securities to be sold in the offering), the Company shall include in such Piggyback Registration or Piggyback Shelf Takedown: (i) first, any Equity Securities requested to be included in the offering by a Holder exercising their rights pursuant to this Section 5, allocated, in the case of this clause (i), pro rata among those Holders on the basis of the number of Equity Securities initially proposed to be included by each of those Holders in the offering; and (ii) second, the Equity Securities that the Person demanding the offering pursuant to such contractual right proposes to sell in the offering, in each case of clause (i) and clause (ii), up to the number of Equity Securities, if any, that the managing underwriters determine can be included in the offering without reasonably being expected to adversely affect the success of the offering (including the price, timing or distribution of the securities to be offered in the offering); and (iii) third, any Equity Securities proposed to be

 

 

included in the offering by any other Person to whom the Company has a contractual obligation to facilitate such offering or otherwise desires to include in such offering, if, and only if, the managing underwriters determine can be included in the offering without reasonably being expected to adversely affect the success of the offering (including the price, timing or distribution of the securities to be offered in the offering).

 

(d)            Selection of Underwriters. If a Piggyback Registration or Piggyback Shelf Takedown is initiated as a primary underwritten offering on behalf of the Company, the Company shall have the right to select the investment banking firm(s) to act as the managing underwriter(s) in connection with such offering.

 

Section 6.               Holdback Agreements.

 

(a)           Holders of Registrable Securities. Each Holder of Registrable Securities that holds or beneficially owns at least 10% of the outstanding Common Stock agrees that in connection with any registered underwritten offering of Common Stock, and upon request from the managing underwriter(s) for that offering, that Holder shall not, without the prior written consent of that managing underwriter(s), during such period as is reasonably requested by the managing underwriter(s) (which period shall in no event be longer than three (3) days prior to and ninety (90) days after the pricing of such offering), Transfer any Registrable Securities. The restrictions on Transfers in this Section 6(a) shall not apply to offers or sales of Registrable Securities that are included in an offering pursuant to Sections 2, 3 , 4 or 5 of this Agreement and shall be applicable to the Holders of Registrable Securities only if, for so long as and to the extent that the Company, all the directors and Executive Officers of the Company, each selling stockholder included in such offering and each other Person holding or beneficially owning at least 10% of the outstanding Common Stock are subject to the same restrictions. Each Holder of Registrable Securities agrees to execute and deliver such other agreements as may be reasonably requested by the managing underwriter(s) that are consistent with the provisions of this Section 6(a) and are necessary to give further effect to those provisions. If the Company releases any Holder of Registration Securities from such a holdback agreement, it shall similarly release all other Holders of Registrable Securities on a pro rata basis. Notwithstanding anything to the contrary in this Section 6(a), no Holder shall be subject to a holdback arrangement in excess of 180 days in any calendar year due to the registration of any Registrable Securities pursuant to Section 3.

 

(b)            The Company. To the extent requested by the managing underwriter(s) for the applicable offering, the Company shall not effect any sale registered under the Securities Act of Equity Securities during the period commencing three (3) days prior to and ending ninety (90) days after the pricing of an underwritten offering pursuant to Sections 2 or 5 of this Agreement, other than a registration (i) pursuant to a Registration Statement on Form S-8 (or other registration solely relating to an offering or sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit arrangement), (ii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule to Rule 145), (iii) in connection with any dividend or distribution reinvestment or similar plan or (iv) as consideration to any third party seller in connection with the bona fide acquisition by the Company or any subsidiary of the

 

 

Company of the assets or securities of any Person in any transaction approved by the Board of Directors of the Company.

 

(c)            In the case of any underwritten offering pursuant to this Agreement, the Company shall use commercially reasonable efforts to cause any stockholders that beneficially own 5% or more of the Common Stock (other than the Holders of Registrable Securities) and its directors and Executive Officers to execute any lock-up agreements in form and substance as agreed by the selling stockholders in such underwritten offering and as reasonably requested by the managing underwriters.

 

Section 7.               Suspensions. Upon giving no less than five (5) days' prior written notice to the Holders of Registrable Securities, the Company shall be entitled to delay or suspend the filing, effectiveness or use of a Registration Statement or Prospectus (a "Suspension") if the board of directors of the Company determines in good faith that (i) proceeding with the filing, effectiveness or use of such Registration Statement or Prospectus would reasonably be expected to require the Company to disclose any information the disclosure of which would have a material adverse effect on the Company and that the Company would not otherwise be required to disclose at such time, (ii) the registration or offering proposed to be delayed or suspended would reasonably be expected to, if not delayed or suspended, have a material adverse effect on any pending negotiation or plan of the Company to effect a merger, acquisition, disposition, financing, reorganization, recapitalization or other similar transaction, in each case that, if consummated, would be material to the Company or (iii) due to any other material event involving the Company or any of its subsidiaries, it would be inadvisable to effect the filing or use such Registration Statement or Prospectus. The Company shall not be entitled to exercise a Suspension (i) more than twice during any 12-month period or (ii) for a period exceeding 60 (sixty) days on any one occasion. Each Holder who is notified by the Company of a Suspension pursuant to this Section 7 shall keep the existence of such Suspension confidential and shall immediately discontinue (and direct any other Person making offers or sales of Registrable Securities on behalf of such Holder to immediately discontinue) offers and sales of Registrable Securities pursuant to such Registration Statement or Prospectus until such time as it is advised in writing by the Company that the use of the Registration Statement or Prospectus may be resumed and, if applicable, is furnished by the Company with a supplemented or amended Prospectus as contemplated by Section 8(g). If the Company delays or suspends a Demand Registration or Shelf Registration, the Holder that initiated such Demand Registration or Shelf Registration shall be entitled to withdraw its request. In the case of a Demand Registration Request, such Demand Registration Request shall not count against the limitation on the number of such Holder's Demand Registrations set forth in Section 2(b).

 

Section 8.               Registration Procedures. If and whenever the Company is required to effect the registration of any Registrable Securities pursuant to this Agreement, the Company shall use its reasonable best efforts to effect and facilitate the registration, offering and sale of such Registrable Securities in accordance with the intended method of disposition of those Registrable Securities as promptly as is practicable, and, the Company shall as expeditiously as possible and as applicable:

 

(a)            prepare and file with the SEC a Registration Statement with respect to those Registrable Securities, make all required filings required in connection with that

 

 

Registration Statement and (if the Registration Statement is not automatically effective upon filing) use its reasonable best efforts to cause the Registration Statement to become effective as promptly as practicable. Before filing a Registration Statement or any amendments or supplements to that Registration Statement, the Company shall furnish to counsel to the Holders for such registration copies of all documents proposed to be filed, which documents shall be subject to review by counsel to the Holders at the Company's expense, and give the Holders participating in such registration an opportunity to comment on such documents and keep such Holders reasonably informed as to the registration process. The Company shall not be obligated to maintain such registration effective for (i) a period longer than the Effectiveness Period, or (ii) in the case of a Shelf Registration, until the earlier of the date (x) on which all of the securities covered by such Shelf Registration are no longer Registrable Securities and (y) on which the Company cannot extend the effectiveness of such Shelf Registration because it is no longer S-3 Shelf Eligible;

 

(b)            prepare and file with the SEC such amendments and supplements to any Registration Statement and the Prospectus used in connection with that Registration Statement as may be necessary to keep the Registration Statement effective for a period of not less than the Effectiveness Period (but not prior to the expiration of the time period referred to in Section 4(3) of the Securities Act and Rule 174 under the Securities Act, if applicable) and comply with the applicable requirements of the Securities Act with respect to the disposition of the Registrable Securities covered by such Registration Statement in accordance with the intended method or methods of disposition by the sellers of such Registrable Securities set forth in such Registration Statement or supplement to the Prospectus;

 

(c)            furnish to each Holder participating in the registration, without charge, such number of copies of the Registration Statement and any post-effective amendment to such Registration Statement and such number of copies of the Prospectus included in such Registration Statement (including each preliminary Prospectus) and any supplement to that Registration Statement (in each case including all exhibits in and all documents incorporated by reference in the Registration Statement and any supplement to the Registration Statement) and such other documents as such Holder may reasonably request, including in order to facilitate the disposition of the Registrable Securities owned by such Holder (it being understood that the Company consents to the use of the Prospectus and any amendment or supplement to the Prospectus by the Holders covered by the Registration Statement and the underwriter or underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendments or supplements to the Prospectus);

 

(d)            use its reasonable best efforts to register or qualify such Registrable Securities under such other securities or "blue sky" laws of such U.S. jurisdiction(s) as any Holder participating in the registration or any managing underwriter reasonably requests and do any and all other acts and things that may be necessary or reasonably advisable to enable such Holder and each underwriter, if any, to consummate the disposition of that Holder's Registrable Securities in such jurisdiction(s), except that the Company shall not be required to qualify generally to do business, subject itself to taxation or consent to general service of process in any jurisdiction where it would not otherwise be required to do so but for its obligations pursuant to this Section 8(d);

 

 

(e)            use its reasonable best efforts to cause all Registrable Securities covered by any Registration Statement to be registered with or approved by such other Governmental Entities or self-regulatory bodies as may be necessary or reasonably advisable in light of the business and operations of the Company to enable each Holder participating in the registration to consummate the disposition of such Registrable Securities in accordance with the intended method or methods of disposition of such Registrable Securities;

 

(f)             promptly notify each Holder participating in the registration and the managing underwriters of any underwritten offering:

 

(i)             each time when the Registration Statement, any pre-effective amendment to the Registration Statement, the Prospectus or any Prospectus supplement or any post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment to the Registration Statement, when the same has become effective;

 

(ii)            of any oral or written comments by the SEC or of any request by the SEC for amendments or supplements to the Registration Statement or the Prospectus or for any additional information regarding such Holder;

 

(iii)           of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceedings for any such purpose; and

 

(iv)           of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction;

 

(g)            notify each Holder participating in such registration, at any time when a Prospectus relating to the registration is required to be delivered under the Securities Act, of the occurrence of any event that would cause the Prospectus included in the related Registration Statement to contain an untrue statement of a material fact or to omit any fact necessary to make the statements made in the Prospectus not misleading in light of the circumstances under which they were made, and, as promptly as practicable, prepare, file with the SEC and furnish to that Holder a reasonable number of copies of a supplement or amendment to the Prospectus so that, as thereafter delivered to the purchasers of the Registrable Securities, the Prospectus will not contain any untrue statement of a material fact or omit to state any fact necessary to make the statements made in the Prospectus not misleading in light of the circumstances under which they were made;

 

(h)            in the event of the issuance of any stop order suspending the effectiveness of a Registration Statement, any order suspending or preventing the use of any related Prospectus or any suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction, use its reasonable best efforts to promptly obtain the withdrawal or lifting of any such order or suspension;

 

(i)             not file or make any amendment to any Registration Statement with respect to any Registrable Securities, or any amendment of or supplement to the Prospectus used

 

 

in connection such Registration Statement, that refers to any Holder covered by the Registration Statement by name or otherwise identifies that Holder as the holder of any securities of the Company without the consent of that Holder (which consent may not be unreasonably withheld or delayed), unless and to the extent that disclosure is required by law. Notwithstanding the previous sentence, (i) each Holder shall furnish to the Company in writing such information regarding itself and the distribution proposed by it as the Company may reasonably request for use in connection with a Registration Statement or Prospectus and (ii) each Holder agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished to the Company by that Holder or of the occurrence of any event that would cause the Prospectus included in the Registration Statement to contain an untrue statement of a material fact regarding that Holder or the distribution of those Registrable Securities or to omit to state any material fact regarding that Holder or the distribution of those Registrable Securities required to be stated in the Prospectus or necessary to make the statements made in the Prospectus not misleading in light of the circumstances under which they were made. The Holder agrees to furnish to the Company, as promptly as practicable, any additional information required to correct and update the information previously furnished by that Holder such that the Prospectus shall not contain any untrue statement of a material fact regarding that Holder or the distribution of those Registrable Securities or omit to state a material fact regarding that Holder or the distribution of those Registrable Securities necessary to make the statements made in the Prospectus not misleading in light of the circumstances under which they were made;

 

(j)             cause the Registrable Securities to be listed on each securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on any securities exchange, use its reasonable best efforts to cause those Registrable Securities to be listed on a national securities exchange selected by the Company after consultation with the Holders participating in such registration;

 

(k)            provide a transfer agent and registrar (which may be the same entity) for all the Registrable Securities not later than the effective date of the Registration Statement;

 

(l)             make available for inspection by any Holder participating in the registration, any underwriter participating in any underwritten offering or counterparty in an Alternative Transaction participating in any disposition pursuant to a Registration Statement being filed by the Company pursuant to this Section 8 and any attorney, accountant or other agent retained by any Holder or underwriter, all corporate documents, financial and other records relating to the Company and its business reasonably requested by that Holder or underwriter, cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any such Holder, underwriter, attorney, accountant or agent in connection with that registration or offering and make senior management of the Company and the Company's independent accountants available for customary due diligence and drafting sessions. Any Person gaining access to information or personnel of the Company pursuant to this Section 8(l) shall (i) reasonably cooperate with the Company to limit any resulting disruption to the Company's business and (ii) protect the confidentiality of any information regarding the Company which the Company determines in good faith to be confidential and of which determination the Person is notified, unless the information (A) is or becomes known to the public without a breach of this Agreement, (B) is or becomes available to the Person on a non-confidential basis from a source other than the Company, (C) is independently developed by the

 

 

Person, (D) is requested or required by a deposition, interrogatory, request for information or documents by a Governmental Entity, subpoena or similar process or (E) is otherwise required to be disclosed by law;

 

(m)           otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its stockholders, as soon as reasonably practicable, an earnings statement (in a form that satisfies the provisions of Section 12(a) of the Securities Act and Rule 158 under the Securities Act or any successor rule to Rule 158) covering the period of at least 12 months beginning with the first day of the Company's first full fiscal quarter after the effective date of the applicable Registration Statement. This requirement will be deemed satisfied if the Company timely files complete and accurate information on Forms 10-K, 10-Q and 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act or any successor rule to Rule 158;

 

(n)            in the case of an underwritten offering of Registrable Securities, promptly incorporate in a supplement to the Prospectus or a post-effective amendment to the Registration Statement such information as is reasonably requested by the managing underwriter(s) or any Holder participating in such underwritten offering to be included in such Prospectus or post-effective amendment, the purchase price for the securities to be paid by the underwriters and any other applicable terms of such underwritten offering, and promptly make all required filings of such supplement or post-effective amendment after being notified of the matters to be incorporated in such supplement or amendment;

 

(o)            in the case of an underwritten offering of Registrable Securities, enter into such customary agreements (including underwriting and lock-up agreements in customary form) and take all such other customary actions as any Holder participating in the offering or the managing underwriter(s) of the offering reasonably requests in order to expedite or facilitate the disposition of the Registrable Securities;

 

(p)            furnish to each Holder and to each underwriter in an underwritten offering or counterparty in an Alternative Transaction, if any, participating in an offering of Registrable Securities (i) (A) all legal opinions of outside counsel to the Company required to be included in the Registration Statement and (B), in the case of an underwritten offering, a written legal opinion of outside counsel to the Company, dated the closing date of the offering, in form and substance as is customarily given in opinions of outside counsel to the Company to underwriters in underwritten registered offerings; and (ii) (A) obtain all consents of independent public accountants required to be included in the Registration Statement and (B), in the case of an underwritten offering, on the date of the applicable Prospectus, on the effective date of any post-effective amendment to the Registration Statement and at the closing of the offering, dated the respective dates of delivery of each of the foregoing, a "comfort letter" signed by the Company's independent public accountants in form and substance as is customarily given in accountants' letters to underwriters in underwritten registered offerings;

 

(q)            in the case of underwritten offerings or Alternative Transactions of Registrable Securities, make senior management of the Company available, to the extent requested by the managing underwriter(s) or counterparties in an Alternative Transaction, to assist in the marketing of the Registrable Securities to be sold in such underwritten offering or

 

 

Alternative Transaction, including the participation of such members of senior management of the Company in "road show" presentations and other customary marketing activities, including "one-on-one" meetings with prospective purchasers of the Registrable Securities to be sold in such underwritten offering, and otherwise facilitate, cooperate with, and participate in such underwritten offering and customary selling efforts related to such underwritten offering, in each case to the same extent as if the Company were engaged in a primary underwritten registered offering of its Common Stock;

 

(r)             cooperate with the Holders of the Registrable Securities to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold pursuant to such Registration Statement free of any restrictive legends and representing such number of shares of Common Stock and registered in such names as the Holders of the Registrable Securities may reasonably request a reasonable period of time prior to sales of Registrable Securities pursuant to such Registration Statement. Notwithstanding anything in this Agreement to the contrary, the Company may satisfy its obligations under this Agreement without issuing physical stock certificates through the use of The Depository Trust Company's Direct Registration System;

 

(s)            not later than the effective date of the Registration Statement, provide a CUSIP number for all Registrable Securities covered thereby and provide the applicable transfer agent with printed certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company. Notwithstanding anything in this Agreement to the contrary, the Company may satisfy its obligations under this Agreement without issuing physical stock certificates through the use of The Depository Trust Company's Direct Registration System;

 

(t)             reasonably cooperate with each Holder of Registrable Securities and each underwriter (or counterparty in an Alternative Transaction) participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made by FINRA;

 

(u)            in the case of a registration pursuant to a Registration Statement on Form S-3 or any similar short-form registration, include in such Registration Statement such additional information for marketing purposes as the managing underwriter or counterparty in an Alternative Transaction reasonably requests (which information may be provided by means of a prospectus supplement if permitted by SEC Guidance); and

 

(v)            otherwise use its reasonable best efforts to take or cause to be taken all other actions necessary or reasonably advisable to effect the registration, marketing and sale of such Registrable Securities contemplated by this Agreement.

 

Section 9.               Participation in Registrations and Underwritten Offerings. No Person may participate in any registration pursuant to this Agreement unless that Person completes and executes all questionnaires and other documents reasonably requested by the Company. No Person may participate in any underwritten offering pursuant to this Agreement unless that Person (i) agrees to sell that Person's securities on the basis provided in any underwriting arrangements in customary form approved by the Persons entitled under this Agreement to approve those arrangements and (ii) completes and executes all questionnaires, powers of

 

 

attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. No Holder of Registrable Securities included in any underwritten offering shall be required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding (A) that Holder's ownership of its Registrable Securities to be sold in the offering, (B) that Holder's power and authority to effect the relevant Transfer and (C) such matters pertaining to compliance with securities laws as may be reasonably requested by the managing underwriter(s)). In addition, no Holder of Registrable Securities included in an underwritten offering will be required to undertake any indemnification obligations to the Company or the underwriters, except to the extent otherwise provided in Section 12. Any liability of any Holder under an underwriting agreement entered into pursuant to this Section 9 shall be limited to liability arising from the breach of its representations and warranties contained in that underwriting agreement and shall be limited to an amount equal to the net amount received by that Holder from the sale of Registrable Securities pursuant to such Registration Statement.

 

Section 10.             Registration Expenses.

 

(a)            Subject to Section 2(c), the Company shall pay directly or promptly reimburse all costs, fees and expenses (other than Selling Expenses) incident to the Company's performance of or compliance with this Agreement, including, (i) all SEC, Financial Industry Regulation Authority and other registration and filing fees; (ii) all fees and expenses associated with filings to be made with, or the listing of any Registrable Securities on, any securities exchange or over-the-counter trading market on which the Registrable Securities are to be listed or quoted; (iii) all fees and expenses of complying with securities and blue sky laws (including fees and disbursements of counsel for the Company in connection with complying with securities and blue sky laws); (iv) all printing, messenger, telephone and delivery expenses (including the cost of distributing Prospectuses in preliminary and final form as well as any supplements to the Prospectuses); (v) all fees and expenses incurred in connection with any "road show" for underwritten offerings, including all costs of travel, lodging and meals; (vi) all transfer agent's and registrar's fees; (vii) all fees and expenses of counsel to the Company; (viii) all fees and expenses of the Company's independent public accountants (including any fees and expenses arising from any special audits or "comfort letters") and any other Persons retained by the Company in connection with or incident to any registration of Registrable Securities pursuant to this Agreement; and (ix) all fees and expenses of underwriters (other than Selling Expenses) customarily paid by the issuers or sellers of securities (all such costs, fees and expenses, "Registration Expenses"). In connection with each registration initiated pursuant to this Agreement (whether a Demand Registration or a Piggyback Registration), the Company shall reimburse the Holders covered by such registration for the reasonable fees and disbursements of one law firm chosen by a majority of the number of shares of Registrable Securities included in the Demand Registration Request, in the event of a Demand Registration, and, in the case of a Piggyback Registration, the Holders of a majority of the number of shares of Registrable Securities included in such registration. Each Holder shall pay the fees and expenses of any additional counsel engaged by that Holder and shall bear its respective Selling Expenses associated with a registered sale of its Registrable Securities pursuant to this Agreement.

 

(b)            The obligation of the Company to bear and pay the Registration Expenses shall apply irrespective of whether a registration, once properly demanded or requested, becomes

 

 

effective or is withdrawn or suspended. Notwithstanding the previous sentence, the Registration Expenses for any Registration Statement withdrawn solely at the request of one or more Holder(s) (unless withdrawn following commencement of a Suspension) shall be borne by such Holder(s) in accordance with Section 2(c).

 

Section 11.             Indemnification; Contribution.

 

(a)            The Company shall, to the fullest extent permitted by law, indemnify and hold harmless each Holder of Registrable Securities, any Person who is or might be deemed to be a "controlling person" of the Company or any of its subsidiaries within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each such Person, a "Controlling Person"), their respective direct and indirect general and limited partners, advisory board members, directors, officers, trustees, managers, members, employees, agents, Affiliates and shareholders, and each other Person, if any, who acts on behalf of or controls any such Holder or Controlling Person (each of the foregoing, a "Covered Person") against any losses, claims, actions, damages, liabilities and expenses, joint or several, to which such Covered Person may become subject under the Securities Act, the Exchange Act, any state blue sky securities laws, any equivalent non-U.S. securities laws or otherwise, insofar as such losses, claims, actions, damages, liabilities or expenses arise out of or are based upon (i) any untrue or alleged untrue statement of a material fact contained in or incorporated by reference in any Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 under the Securities Act or any successor rule to Rule 405) or any amendment or supplement to or any document incorporated by reference in the same, (ii) any omission or alleged omission of a material fact required to be stated in any such Registration Statement, Prospectus, preliminary Prospectus or free writing prospectus or necessary to make the statements made in the same not misleading or (iii) any violation or alleged violation by the Company of the Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated under such federal or state securities laws applicable to the Company and relating to any action or inaction required of the Company in connection with any registration of securities. In addition, the Company shall reimburse each Covered Person for any legal or other expenses reasonably incurred by such Covered Person in connection with investigating, defending or settling any such loss, claim, action, damage or liability. Notwithstanding the previous sentence, the Company shall not be so liable in any such case to the extent that any loss, claim, action, damage, liability or expense arises out of or is based upon any such untrue statement or alleged untrue statement, or omission or alleged omission, made or incorporated by reference in any such Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus or any amendment or supplement to or any document incorporated by reference in the same in reliance upon, and in conformity with, written information prepared and furnished to the Company by such Covered Person expressly for use in such Registration Statement, Prospectus, preliminary Prospectus or free writing prospectus. This indemnity shall be in addition to any liability the Company may otherwise have.

 

(b)            In connection with any registration in which a Holder of Registrable Securities is participating, each such Holder shall furnish to the Company in writing such information as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus. Each Holder shall, to the fullest extent permitted by law, indemnify and hold harmless the Company, its directors and officers, employees, agents and any

 

 

Person who is or might be deemed to be a Controlling Person against any losses, claims, actions, damages, liabilities and expenses, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act, any state blue sky securities laws, any equivalent non-U.S. securities laws or otherwise, insofar as such losses, claims, actions, damages, liabilities or expenses arise out of or are based upon (i) any untrue or alleged untrue statement of a material fact contained in the Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 under the Securities Act or any successor rule to Rule 405) or any amendment of or supplement to the same or (ii) any omission or alleged omission of a material fact required to be stated in such Registration Statement, Prospectus, preliminary Prospectus or free writing prospectus or necessary to make the statements made in the same not misleading, but, in the case of each of clauses (i) and (ii), only to the extent that such untrue statement or alleged untrue statement, or omission or alleged omission, is made in such Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus or any amendment or supplement to the same in reliance upon, and in conformity with, written information prepared and furnished to the Company by such Holder expressly for use in such Registration Statement, Prospectus, preliminary Prospectus or free writing prospectus. In addition, such Holder shall reimburse the Company, its directors and officers, employees, agents and any Person who is or might be deemed to be a Controlling Person for any legal or other expenses reasonably incurred by them in connection with investigating, defending or settling any such loss, claim, action, damage or liability. The obligation to indemnify pursuant to this Section 11(b) shall be individual and several, not joint and several, for each participating Holder and shall be proportional to and shall not exceed an amount equal to the net proceeds (after deducting Selling Expenses) actually received by such Holder in the sale of Registrable Securities to which such Registration Statement or Prospectus relates. The indemnity agreement contained in this Section 11(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, action or proceeding if such settlement is effected without the consent of such Holder. The Company and the Holders of the Registrable Securities hereby acknowledge and agree that, unless otherwise expressly agreed to in writing by such Holders, the only information furnished or to be furnished to the Company for use in any Registration Statement or Prospectus relating to the Registrable Securities or in any amendment, supplement or preliminary materials associated with the same are statements specifically relating to (a) the beneficial ownership of shares of Common Stock by such Holder and its Affiliates, (b) the name and address of such Holder and (c) any additional information about such Holder or the plan of distribution (other than for an underwritten offering) required by law or regulation to be disclosed in any such document. This indemnity shall be in addition to any liability which such Holder may otherwise have.

 

(c)            Any Person entitled to indemnification pursuant to this Agreement shall give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification. Notwithstanding the previous sentence, any failure or delay to so notify the indemnifying party shall not relieve the indemnifying party of its obligations under this Agreement, except to the extent that the indemnifying party is actually and materially prejudiced by reason of such failure or delay. In case a claim or an action that is subject or potentially subject to indemnification pursuant to this Agreement is brought against an indemnified party, the indemnifying party shall be entitled to participate in and shall have the right, exercisable by giving written notice to the indemnified party as promptly as practicable after receipt of written notice from such indemnified party of such claim or action, to assume, at the indemnifying

 

 

party's expense, the defense of any such claim or action, with counsel reasonably acceptable to the indemnified party. Notwithstanding the previous sentence, any indemnified party shall continue to be entitled to participate in the defense of such claim or action, with counsel of its own choice, but the indemnifying party shall not be obligated to reimburse the indemnified party for any fees, costs and expenses subsequently incurred by the indemnified party in connection with such defense unless (A) the indemnifying party has agreed in writing to pay such fees, costs and expenses, (B) the indemnifying party has failed to assume the defense of such claim or action within a reasonable time after receipt of notice of such claim or action, (C) having assumed the defense of such claim or action, the indemnifying party fails to employ counsel reasonably acceptable to the indemnified party or to pursue the defense of such claim or action in a reasonably vigorous manner, (D) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest or (E) the indemnified party has reasonably concluded that there may be one or more legal or equitable defenses available to it and/or other any other indemnified party which are different from or additional to those available to the indemnifying party. Subject to the foregoing sentence, no indemnifying party shall, in connection with any one claim or action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general circumstances or allegations, be liable for the fees, costs and expenses of more than one firm of attorneys (in addition to any local counsel) for all indemnified parties. The indemnifying party shall not have the right to settle a claim or action for which any indemnified party is entitled to indemnification pursuant to this Agreement without the consent of the indemnified party, The indemnifying party shall not consent to the entry of any judgment or enter into or agree to any settlement relating to such claim or action unless such judgment or settlement does not impose any admission of wrongdoing or ongoing obligations on any indemnified party and includes as an unconditional term of such judgment or settlement the giving by the claimant or plaintiff in such judgment or settlement to such indemnified party, in form and substance reasonably satisfactory to such indemnified party, of a full and final release from all liability in respect of such claim or action. The indemnifying party shall not be liable under this Agreement for any amount paid or payable or incurred pursuant to or in connection with any judgment entered or settlement effected with the consent of an indemnified party unless the indemnifying party has also consented to such judgment or settlement (such consent not to be unreasonably withheld, conditioned or delayed).

 

(d)            If the indemnification provided for in this Section 11 is held by a court of competent jurisdiction to be unavailable to, or unenforceable by, an indemnified party in respect of any loss, claim, action, damage, liability or expense referred to in this Section 11, then the applicable indemnifying party, in lieu of indemnifying such indemnified party under this Agreement, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, action, damage, liability or expense in such proportion as is appropriate to reflect the relative benefits received by the indemnified party and the indemnifying party. If the allocation provided by the preceding sentence is not permitted by applicable law, the indemnifying party shall contribute to such amount in such proportion as is appropriate to reflect not only the relative benefits referred to in the preceding sentence but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by

 

 

the indemnified party, whether the violation of the Securities Act or any other federal or state securities law or rule or regulation promulgated under such federal or state securities law applicable to the Company, and, relating to any action or inaction required of the Company in connection with any registration of securities, whether such action or inaction was perpetrated by the indemnifying party or the indemnified party. The relative fault shall also be determined by reference to the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement, omission or violation. The parties agree that it would not be just and equitable if contribution pursuant to this Agreement were determined by pro rata allocation or by any other method or allocation that does not take into account the equitable considerations referred to in this Section 11(d). In no event shall the amount which a Holder of Registrable Securities may be obligated to contribute pursuant to this Section 11(d) exceed an amount equal to the net proceeds (after deducting Selling Expenses) actually received by such Holder in the sale of Registrable Securities that gives rise to such obligation to contribute. No indemnified party guilty or liable of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

(e)            The provisions of this Section 11 shall remain in full force and effect regardless of any investigation made by or on behalf of any indemnified party or any officer, director or controlling person of such indemnified party and shall survive the Transfer of any Registrable Securities by any Holder.

 

Section 12.             Rule 144 Compliance and Other Transaction.

 

(a)            With a view to making available to the Holders of Registrable Securities the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration, the Company shall:

 

(i)             make and keep public information available, as those terms are understood and defined in Rule 144;

 

(ii)            use reasonable best efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

 

(iii)           furnish to any Holder of Registrable Securities, promptly upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act.

 

(b)           If requested by any Holder in connection with any transaction involving any Registrable Securities (including any sale or other transfer of such securities without registration under the Securities Act, any margin loan with respect to such securities and any pledge of such securities), the Company agrees to provide such Golder with customary and assistance to facilitate such transaction or similar transaction, including, without limitation, (i) such action as such Holder may reasonably request from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act and (ii) entering into an

 

 

"issuer's agreement" in connection with any margin loan with respect to such securities in customary form.

 

(c)            If any Holder (and/or any of its Affiliates) seeks to effectuate an in-kind distribution of all or part of their Registrable Securities to their respective direct or indirect equityholders, the Company will, subject to any applicable lock-ups, work with the foregoing Persons to facilitate such in-kind distribution in the manner reasonably requested and consistent with the Company's obligations under the Securities Act.

 

(d)            The Company shall not grant any shelf, demand, piggyback or incidental registration rights that are senior to or inconsistent with the rights granted to the Holders hereunder to any other Person without the prior written consent of the Holders.

 

Section 13.             Miscellaneous.

 

(a)            No Inconsistent Agreements. The Company represents and warrants that it has not entered into, and agrees that it will not enter into, any agreement with respect to its securities that violates or subordinates or is otherwise inconsistent with the rights granted to the Holders of Registrable Securities under this Agreement.

 

(b)            Adjustments Affecting Registrable Securities. The Company shall not take any action, or permit any change to occur, with respect to its Equity Securities which would materially and adversely affect the ability of the Holders of Registrable Securities to include such Registrable Securities in a registration undertaken pursuant to this Agreement or which would materially and adversely affect the marketability of such Registrable Securities in any such registration (including effecting a stock split or a combination of shares that would reasonably be expected to have such an effect).

 

(c)            Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns and transferees. Other than with respect to Transfers of Equity Securities to Permitted Transferees, neither this Agreement nor any right, benefit, remedy, obligation or liability arising under this Agreement may be assigned by any party without the prior written consent of the other parties, and any attempted assignment without such consent shall be null and void and of no effect, except that the Company may assign this Agreement at any time in connection with a sale or acquisition of the Company, whether by merger, consolidation, sale of all or substantially all of the Company's assets, or similar transaction, without the consent of the Holders, so long as the successor or acquiring Person agrees in writing to assume all of the Company's rights and obligations under this Agreement. The Company shall not, directly or indirectly, (x) enter into any merger, consolidation, recapitalization, combination of shares or other reorganization in which the Company shall not be the surviving corporation or (y) transfer or agree to transfer all or substantially all the Company's assets, unless prior to such merger, consolidation, reorganization or asset transfer, the surviving corporation or the transferee, as applicable, shall have agreed in writing to assume the obligations of the Company under this Agreement, and for that purpose references hereunder to "Registrable Securities" shall be deemed to include the securities which the Holders would be entitled to receive in exchange for

 

 

Registrable Securities, pursuant to any such merger, consolidation, reorganization or asset transfer.

 

(d)            No Third Party Beneficiaries. This Agreement is for the sole benefit of the parties and their respective successors and permitted assigns and transferees and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement. Notwithstanding the previous sentence, the parties acknowledge that the Persons set forth in Section 11 shall be express third-party beneficiaries of the obligations of the parties set forth in Section 11.

 

(e)            Remedies; Specific Performance. In the event of a breach or a threatened breach by any party to this Agreement of its obligations under this Agreement, any party injured or to be injured by such breach shall be entitled to specific performance of its rights under this Agreement or to injunctive relief, in addition to being entitled to exercise all rights provided in this Agreement and granted by law, it being agreed by the parties that the remedy at law, including monetary damages, for breach of any such provision will be inadequate compensation for any loss and that any defense or objection in any action for specific performance or injunctive relief for which a remedy at law would be adequate is hereby waived.

 

(f)             No Waivers. No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver of such right, power or privilege nor shall any single or partial exercise of such right, power or privilege preclude any other or further exercise of the same or the exercise of any other right, power or privilege.

 

(g)            Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of New York.

 

(h)            Jurisdiction and Venue. The parties irrevocably submit to the jurisdiction of the courts of the State of New York or, in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in the United States District Court for the Southern District of New York in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement of this Agreement or of any such document, that it is not subject to such jurisdiction or that such action, suit or proceeding may not be brought or is not maintainable in the courts of the State of New York, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in the United States District Court for the Southern District of New York, or that this Agreement or any such document may not be enforced in or by such courts, and the parties irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in the courts of the State of New York, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in the United States District Court for the Southern District of New York. The parties hereby consent to and grant the courts of the State of New York, or in the event (but only in the event)

 

 

that such court does not have subject matter jurisdiction over such action or proceeding, the United States District Court for the Southern District of New York, jurisdiction over the person of such parties and, to the extent permitted by law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 13(i) or in such other manner as may be permitted by law shall be valid and sufficient service of process. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(i)             Notices. Any notice, demand, request, waiver, or other communication under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if personally served or sent by facsimile; on the business day after such communication is delivered to a courier or mailed by express mail, if sent by courier delivery service or express mail for next day delivery; and on the third day after mailing, if mailed to the party to whom notice is to be given by first class mail, registered, return receipt requested, postage prepaid and addressed as follows:

 

If to the Company:

 

Resolute Holdings Management, Inc.
445 Park Avenue, Suite 15F
New York, NY 10022

Attention:	Thomas R. Knott
E-Mail:

 

with a copy (which shall not constitute notice) to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019

Attention:	John C. Kennedy
	Timothy Cruickshank
Phone:	212-373-3025
	212-373-3415
Facsimile:	212-492-0025
	212-492-0415
E-Mail:	jkennedy@paulweiss.com
	tcruickshank@paulweiss.com

 

If to Resolute Compo Holdings:

 

c/o Resolute Compo Holdings LLC
445 Park Avenue, Suite 15F
New York, NY 10022

 

 

Attention:	David M. Cote
E-Mail:

 

with a copy (which shall not constitute notice) to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019

Attention:	John C. Kennedy
	Timothy Cruickshank
Phone:	212-373-3025
	212-373-3415
Facsimile:	212-492-0025
	212-492-0415
E-Mail:	jkennedy@paulweiss.com
	tcruickshank@paulweiss.com

 

If to any other Holder, to such address as is designated by such Holder in the counterpart to this Agreement in the form attached as Exhibit A.

 

(j)             Headings. The headings and other captions in this Agreement are for convenience and reference only and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect.

 

(k)            Counterparts. This Agreement may be signed in any number of identical counterparts, each of which shall be deemed an original instrument (including signatures delivered via facsimile or electronic mail) and all of which together shall constitute one and the same instrument. The parties may deliver this Agreement by facsimile or by electronic mail and each party shall be permitted to rely upon the signatures so transmitted to the same extent and effect as if they were original signatures.

 

(l)             Entire Agreement. This Agreement contains the entire agreement among the parties with respect to the subject matter of this Agreement and supersedes and replaces all other prior agreements, written or oral, among the parties with respect to the subject matter of this Agreement.

 

(m)           Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

 

 

(n)           Amendments. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions of this Agreement may not be given, without the prior written consent of the Company and each Holder affected thereby.

 

(o)            Further Assurances. Each party to this Agreement shall cooperate and take such action as may be reasonably requested by another party to this Agreement in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby.

 

(p)           Termination. This Agreement shall terminate with respect to any Holder upon such time as such Holder ceases to hold or beneficially own any Registrable Securities. Notwithstanding the previous sentence, the provisions of Sections 9, 11 and this Section 13 shall survive termination.

 

[Signature Page Follows]

 

 

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

 

	RESOLUTE HOLDINGS MANAGEMENT, INC.
	By:
		Name: Thomas R. Knott
		Title: Chief Executive Officer
	RESOLUTE COMPO HOLDINGS LLC
	By: Tungsten 2024, LLC, its managing member
	By:
	Name:	John D. Cote
	Title:	Manager

 

 

[Signature page to Registration Rights Agreement]

 

 

Exhibit A

 

Form of Counterpart

 

	[NAME OF TRANSFEREE OR OTHER HOLDER]
	By:
		Name:
		Title:
	Address for Notices:
	Attention:
	Phone:
	Facsimile:
	E-Mail:
	with a copy (which shall not constitute notice) to:
	Attention:
	Phone:
	Facsimile:
	E-Mail:

 

 

 

Exhibit 10.3

 

RESOLUTE HOLDINGS MANAGEMENT, INC.
2025 Omnibus Incentive Plan

 

1.            Purpose. The purpose of the Resolute Holdings Management, Inc. 2025 Omnibus Incentive Plan (as amended from time to time, the “Plan”) is to (i) attract and retain individuals to serve as employees, advisors, consultants or Directors of Resolute Holdings Management, Inc., a Delaware corporation (together with its Subsidiaries, whether existing or thereafter acquired or formed, and any and all successor entities, the “Company”) and its Affiliates by providing them the opportunity to acquire an equity interest in the Company or other incentive compensation and (ii) align the interests of the foregoing with those of the Company’s stockholders.

 

2.            Effective Date; Duration. The effective date of the Plan is [·], 2025 (the “Effective Date”), which is the date that the Plan was approved by the sole stockholder of the Company. The expiration date of the Plan, on and after which date no Awards may be granted under the Plan, shall be the tenth anniversary of the Effective Date (the “Expiration Date”); provided, however, that such expiration shall not affect Awards then outstanding, and the terms and conditions of the Plan shall continue to apply to such Awards.

 

3.            Definitions. The following definitions shall apply throughout the Plan:

 

(a)            “Administrator” means the Board or any person(s) or body to which it has delegated all or any portion of its responsibilities and powers, pursuant to Section 4 of the Plan.

 

(b)            “Affiliate” means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Administrator, any person or entity in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise.

 

(c)            “Award” means, individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Other Stock-Based Award or Other Cash-Based Award granted under the Plan.

 

(d)            “Award Agreement” means any agreement (whether in written or electronic form) or other instrument or document evidencing any Award (other than an Other Cash-Based Award) granted under the Plan (including, in each case, in electronic form), which may, but need not, be executed or acknowledged by a Participant (as determined by the Administrator).

 

(e)            “Beneficial Ownership” has the meaning set forth in Rule 13d-3 promulgated under Section 13 of the Exchange Act.

 

(f)            “Board” means the Board of Directors of the Company.

 

(g)            “Cause” has the meaning given to that term in any Service Agreement between the Company and the Participant, or if no such agreement exists or if such term is not defined therein, and unless otherwise defined in the Award Agreement, Cause means a finding by the Administrator that the Participant (i) has breached his or her employment or service contract with the Company, (ii) has engaged in disloyalty to the Company, including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty, (iii) has disclosed trade secrets or confidential information of the Company to Persons not entitled to receive such information, (iv) has breached any written non-competition, non-solicitation, invention assignment or confidentiality agreement between the Participant and the Company or (v) has engaged in such other behavior detrimental to the interests of the Company as the Administrator determines.

 

 

(h)            “Change in Control” means, unless the applicable Award Agreement or the Administrator provides otherwise, the first to occur of any of the following events:

 

(i)            the acquisition by any Person or related “group” (as such term is used in Section 13(d) and Section 14(d) of the Exchange Act) of Persons, or Persons acting jointly or in concert, of Beneficial Ownership (including control or direction) of 50% or more (on a fully diluted basis) of either (A) the then-outstanding Shares, including Shares issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Shares or (B) the total voting power of the then-outstanding voting securities of the Company entitled to vote in the election of Directors (the “Outstanding Company Voting Securities”), but, in each case, excluding (x) any such acquisition by the Company, the Resolute Stockholder, any Permitted Transferee or any of their respective Affiliates or by any employee benefit plan sponsored or maintained by the Company or any of its Affiliates and (y) a Non-Qualifying Transaction (as defined in clause (iv) of this definition, modifying such definition for purposes of this clause (i) by including an acquisition of securities as an applicable transaction alongside “Business Combination” or “Sale”);

 

(ii)           a change in the composition of the Board such that members of the Board during any consecutive 24-month period (the “Incumbent Directors”) cease to constitute a majority of the Board. Any person becoming a Director through election or nomination for election approved by a valid vote of the Incumbent Directors shall be deemed an Incumbent Director; provided, however, that no individual becoming a Director as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board, shall be deemed an Incumbent Director;

 

(iii)          the approval by the stockholders of the Company of a plan of complete dissolution or liquidation of the Company; or

 

(iv)          the consummation of (I) a reorganization, recapitalization, merger, amalgamation, consolidation, statutory share exchange or similar form of corporate transaction involving (x) the Company or (y) any of its Subsidiaries, but in the case of this clause (y) only if Outstanding Company Voting Securities are issued or issuable (a “Business Combination”), or (II) a sale, transfer or other disposition of all or substantially all of the business or assets of the Company to an entity that is not an Affiliate of the Company (a “Sale”), unless immediately following such Business Combination or Sale: (A) more than 50% of the total voting power of the entity resulting from such Business Combination or the entity that acquired all or substantially all of the business or assets of the Company in such Sale (in either case, the “Surviving Company”), or the ultimate parent entity that has Beneficial Ownership of sufficient voting power to elect a majority of the board of directors (or analogous governing body) of the Surviving Company (the “Parent Company”), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination or Sale (or, if applicable, is represented by Shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination or Sale), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination or Sale, (B) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company) is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) and (C) at least a majority of the members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination or Sale were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination or Sale (any Business Combination or Sale which satisfies all of the criteria specified in (A), (B) and (C) of this clause (iv) will be deemed to be a “Non-Qualifying Transaction”).

 

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred if immediately after the occurrence of any of the events described in clauses (i) – (iv) above, the Resolute Stockholder’s aggregate Beneficial Ownership of the total voting power of the Company or any of its successors exceeds 50%.

 

(i)            “Code” means the U.S. Internal Revenue Code of 1986, as amended, and any successor thereto. References to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successors thereto.

 

(j)            “Common Stock” means the common stock of the Company, par value of $0.0001 per share (and any stock or other securities into which such common stock may be converted or into which it may be exchanged).

 

(k)            “Company” has the meaning set forth in Section 1 of the Plan.

 

(l)            “Deferred Award” means an Award granted pursuant to Section 13 of the Plan.

 

(m)            “Director” means any member of the Company’s Board.

 

(n)            “Disability” means, unless otherwise provided in an Award Agreement, a determination that a Participant is disabled in accordance with a long-term disability insurance program maintained by the Company or a determination by the U.S. Social Security Administration that the Participant is totally disabled.

 

(o)            “dollar” or “$” shall refer to United States dollars.

 

(p)            “Effective Date” has the meaning set forth in Section 2 of the Plan.

 

(q)            “Eligible Director” means a Director who satisfies the conditions set forth in Section 4(a) of the Plan.

 

(r)            “Eligible Person” means any (i) individual providing Services to the Company or an Affiliate, (ii) consultant or advisor to the Company or an Affiliate who may be offered securities registrable on Form S-8 under the Securities Act, or (iii) prospective employee, director, officer, consultant or advisor who has accepted an offer of Service from the Company or an Affiliate (and would satisfy the provisions of clause (i) or (ii) above once such individual begins providing Services to the Company or an Affiliate).

 

(s)            “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and any successor thereto. References to any section of (or rule promulgated under) the Exchange Act shall be deemed to include any rules, regulations or other interpretative guidance under such section or rule, and any amendments or successors thereto.

 

 

(t)            “Expiration Date” has the meaning set forth in Section 2 of the Plan.

 

(u)            “Fair Market Value” means, (i) with respect to a Share on a given date, (x) if the Shares are listed on a national securities exchange, the closing sales price of a Share reported on such exchange on such date or, if there is no such sale on that date, then on the last preceding date on which such a sale was reported or (y) if the Shares are not listed on any national securities exchange, the amount determined by the Administrator in good faith to be the fair market value of a Share or (ii) with respect to any other property on any given date, the amount determined by the Administrator in good faith to be the fair market value of such other property as of such date.

 

(v)            “Immediate Family Members” has the meaning set forth in Section 15(b)(ii) of the Plan.

 

(w)            “Incentive Stock Option” means an Option that is designated by the Administrator as an incentive stock option as described in Section 422 of the Code and otherwise meets the requirements set forth in the Plan.

 

(x)            “Intrinsic Value” with respect to an Option or SAR means (i) the excess, if any, of the price or implied price per Share in a Change in Control or other event over (ii) the exercise or hurdle price of such Award multiplied by (iii) the number of Shares covered by such Award.

 

(y)            “Indemnifiable Person” has the meaning set forth in Section 4(e) of the Plan.

 

(z)            “NASDAQ” means Nasdaq Global Market.

 

(aa)          “Nonqualified Stock Option” means an Option that is not designated by the Administrator as an Incentive Stock Option.

 

(bb)          “Option” means an Award granted under Section 7 of the Plan.

 

(cc)          “Option Period” has the meaning set forth in Section 7 of the Plan.

 

(dd)          “Other Cash-Based Award” means an Award granted under Section 10 of the Plan that is denominated and/or payable in cash, including cash awarded as a bonus or upon the attainment of specific performance criteria or as otherwise permitted by the Plan or as contemplated by the Administrator.

 

(ee)          “Other Stock-Based Award” means an Award granted under Section 10 of the Plan.

 

(ff)           “Participant” has the meaning set forth in Section 6 of the Plan.

 

(gg)         “Performance Conditions” means performance conditions determined by the Administrator in its sole discretion and set forth in an Award Agreement. The satisfaction of Performance Conditions shall be subject to certification by the Administrator. The Administrator has the authority to take appropriate action with respect to the Performance Conditions (including, without limitation, making adjustments to the Performance Conditions or determining the satisfaction of the Performance Conditions in connection with a corporate transaction); provided that any such action does not otherwise violate the terms of the Plan.

 

(hh)         “Permitted Transferee” has the meaning set forth in Section 15(b)(ii) of the Plan.

 

 

(ii)            “Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Shares of the Company.

  

(jj)            “Released Unit” has the meaning set forth in Section 9(f)(ii) of the Plan.

 

(kk)          “Resolute Stockholder” means, collectively, Resolute Compo Holdings LLC, Resolute ManCo Holdings LLC, any of their respective Affiliates and any of their respective members or other equityholders.

 

(ll)            “Restricted Period” has the meaning set forth in Section 9(a) of the Plan.

 

(mm)        “Restricted Stock” means any Share subject to certain specified restrictions and forfeiture conditions, granted pursuant to Section 9 of the Plan.

 

(nn)          “Restricted Stock Unit” means a contractual right granted pursuant to Section 9 of the Plan that is denominated in Shares. Each Restricted Stock Unit represents an unfunded and unsecured promise to deliver Shares, cash, other securities or other property, or a combination thereof, subject to certain specified restrictions, granted pursuant to Section 9 of the Plan.

 

(oo)            “SAR Period” has the meaning set forth in Section 8(c) of the Plan.

 

(pp)          “Securities Act” means the U.S. Securities Act of 1933, as amended, and any successor thereto. Reference in the Plan to any section of (or rule promulgated under) the Securities Act shall be deemed to include any rules, regulations or other interpretative guidance under such section or rule, and any amendments or successor provisions to such section, rules, regulations or other interpretive guidance.

 

(qq)          “Service” and “termination of Service” and similar references mean, respectively, employment with or services for, and termination or cessation of employment with or services for, the Company or an Affiliate, including services as a member of the Board.

 

(rr)          “Service Agreement” means any employment, severance, consulting or similar agreement (including any offer letter) between the Company or an Affiliate and a Participant.

 

(ss)          “Share” means a share of Common Stock, par value of $0.0001 per share.

 

(tt)          “Stock Appreciation Right” or “SAR” means an Award granted under Section 8 of the Plan.

 

(uu)          “Subsidiary” means (i) any corporation or other entity a majority of whose outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company and (ii) any other entity which the Administrator determines should be treated as a “Subsidiary.”

 

(vv)          “Substitute Award” means an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.

 

 

4.            Administration.

 

(a)            Authority of the Administrator. The Administrator shall administer the Plan, and shall have the sole and plenary authority to (i) designate Participants, (ii) determine the type, size, and terms and conditions of Awards to be granted and to grant such Awards (including Substitute Awards), (iii) determine the method by which an Award may be settled, exercised, canceled, forfeited, suspended or repurchased by the Company, (iv) determine the circumstances under which the delivery of cash, property or other amounts payable with respect to an Award may be deferred, either automatically or at the Participant’s or Administrator’s election, (v) interpret, administer, reconcile any inconsistency in, correct any defect in and supply any omission in the Plan and any Award granted under the Plan, (vi) establish, amend, suspend, or waive any rules and regulations and appoint such agents as the Administrator shall deem appropriate for the proper administration of the Plan, (vii) accelerate or modify the vesting, delivery or exercisability of, or payment for or lapse of restrictions on, or waive any condition in respect of, Awards and (viii) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan or to comply with any applicable law or accounting standard. To the extent determined by the Board and/or required to comply with the provisions of Rule 16b-3 promulgated under the Exchange Act (if applicable and if the Board is not acting as the Administrator under the Plan), or any exception or exemption under applicable securities laws or the applicable rules of the NASDAQ or any other securities exchange or inter-dealer quotation service on which the Shares are listed or quoted, as applicable, it is intended that each member of the Administrator shall, at the time such member takes any action with respect to an Award under the Plan, be (1) a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act and/or (2) an “independent director” under the rules of the NASDAQ or any other securities exchange or inter-dealer quotation service on which the Shares are listed or quoted, or a person meeting any similar requirement under any successor rule or regulation (“Eligible Director”). However, the fact that an Administrator member shall fail to qualify as an Eligible Director shall not invalidate any Award granted or action taken by the Administrator that is otherwise validly granted or taken under the Plan.

 

(b)            Delegation. The Board may delegate all or any portion of its responsibilities and powers to any person(s) or body selected by it, to the extent permitted by applicable law, regulations, the NASDAQ listing guidelines or the rules of any other securities exchange or inter-dealer quotation service on which the Shares are listed or quoted. To the extent permitted by applicable law, regulations, the NASDAQ listing guidelines or the rules of any other securities exchange or inter-dealer quotation service on which the Shares are listed or quoted, including Section 152(b) and 157(c) of the Delaware General Corporation Law, as applicable, the Board may delegate to any person(s) or body selected by it the authority to grant Options, SARs, Restricted Stock Units or other Awards in the form of rights to Shares. Any such delegation may be revoked by the Board at any time.

 

(c)            International Participants. As further set forth in Section 15(g) of the Plan, the Administrator shall have the authority to amend the Plan and Awards to the extent necessary to permit participation in the Plan by Eligible Persons who are located outside of the United States or are subject to laws outside of the United States on terms and conditions comparable to those afforded to Eligible Persons located within the United States; provided, however, that no such action shall be taken without stockholder approval if such approval is required by applicable securities laws or regulations, the NASDAQ listing guidelines or the rules of any other securities exchange or inter-dealer quotation service on which the Shares are listed or quoted.

 

(d)            Decisions Binding. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions regarding the Plan or any Award or any documents evidencing Awards granted pursuant to the Plan shall be within the sole discretion of the Administrator, may be made at any time and shall be final, conclusive and binding upon all persons and entities, including, without limitation, the Company, any Affiliate, any Participant, any holder or beneficiary of any Award and any stockholder of the Company.

 

 

(e)            Limitation of Liability. No member of the Board or the Administrator, nor any employee or agent of the Company (each such person, an “Indemnifiable Person”), shall be liable for any action taken or omitted to be taken or any determination made with respect to the Plan or any Award hereunder (unless constituting fraud or a willful criminal act or willful criminal omission). Each Indemnifiable Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense (including attorneys’ fees) that may be imposed upon or incurred by such Indemnifiable Person in connection with or resulting from any action, suit or proceeding to which such Indemnifiable Person may be involved as a party, witness or otherwise by reason of any action taken or omitted to be taken or determination made under the Plan or any Award Agreement and against and from any and all amounts paid by such Indemnifiable Person with the Company’s approval (not to be unreasonably withheld), in settlement thereof, or paid by such Indemnifiable Person in satisfaction of any judgment in any such action, suit or proceeding against such Indemnifiable Person, and the Company shall advance to such Indemnifiable Person any such expenses promptly upon written request (which request shall include an undertaking by the Indemnifiable Person to repay the amount of such advance if it shall ultimately be determined as provided below that the Indemnifiable Person is not entitled to be indemnified); provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding, and once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of recognized standing of the Company’s choice. The foregoing right of indemnification shall not be available to an Indemnifiable Person to the extent that a final judgment or other final adjudication (in either case not subject to further appeal) binding upon such Indemnifiable Person determines that the acts or omissions or determinations of such Indemnifiable Person giving rise to the indemnification claim resulted from such Indemnifiable Person’s fraud or willful criminal act or willful criminal omission or that such right of indemnification is otherwise prohibited by law or by the Company’s certificate of incorporation or bylaws. The foregoing right of indemnification shall not be exclusive of or otherwise supersede any other rights of indemnification to which such Indemnifiable Persons may be entitled under the Company’s certificate of incorporation or by-laws, as a matter of law, individual indemnification agreement or contract, or otherwise, or any other power that the Company may have to indemnify such Indemnifiable Persons or hold them harmless.

 

(f)            Board. The Board may at any time and from time to time grant Awards and administer the Plan with respect to such Awards. In any such case, the Board shall have all the authority granted to the Administrator under the Plan.

 

5.            Grant of Awards; Available Shares for Awards; Limitations.

 

(a)            Awards. The Administrator may grant Awards to one or more Eligible Persons. All Awards granted under the Plan shall vest and, if applicable, become exercisable in such manner and on such date or dates or upon such event or events as determined by the Administrator and as set forth in an Award Agreement, including, without limitation, attainment of Performance Conditions.

 

(b)            Available Shares. Subject to Section 11 of the Plan and subsection (e) below, the maximum number of Shares available for issuance under the Plan shall not exceed [·], plus the number of Shares set forth in the next sentence (the “Share Pool”) on a fully diluted basis assuming that all shares available for issuance under the Plan are issued and outstanding, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction. The Share Pool will automatically increase each fiscal year following the Effective Date beginning with fiscal year 2026 and ending with fiscal year 2035 by the lesser of (i) 5% of the total number of Shares outstanding on the last day of the immediately preceding fiscal year on a fully diluted basis assuming that all shares available for issuance under the Plan are issued and outstanding or (ii) such number of Shares determined by the Administrator. The increase shall occur on the first day of each such fiscal year or another day selected by the Administrator during such fiscal year.

 

 

(c)            Incentive Stock Options Limit. The maximum number of Shares that may be delivered pursuant to the exercise of Incentive Stock Options granted under the Plan shall not exceed [·].

 

(d)            Director Compensation Limit. The maximum amount (based on the fair value of Shares underlying Awards on the grant date as determined in accordance with applicable financial accounting rules) of Awards that may be granted in any single fiscal year to any non-employee member of the Board, taken together with any cash fees paid to such non-employee member of the Board during such fiscal year, shall be $750,000, increased to $1,000,000 in the year in which the non-employee member initially joins the Board. For the avoidance of doubt, in a year in which a non-employee member of the Board serves as an employee or consultant (including as an interim officer), such limit shall not apply to compensation approved to be paid to such non-employee member of the Board by the other non-employee members of the Board in respect of such Service as an employee or consultant.

 

(e)            Share Counting. The Share Pool shall be reduced by the number of Shares delivered for each Award granted under the Plan that is valued by reference to a Share; provided that Awards that are valued by reference to Shares but are required to or may be paid in cash pursuant to their terms shall not reduce the Share Pool. If and to the extent that Awards terminate, expire or are cash settled, canceled, forfeited, exchanged or surrendered without having been exercised, vested or settled, the Shares subject to such Awards shall again be available for Awards under the Share Pool. In addition, any (i) Shares tendered by Participants, or withheld by the Company, as full or partial payment to the Company upon the exercise of Options granted under the Plan; (ii) Shares reserved for issuance upon the grant of Stock Appreciation Rights, to the extent that the number of reserved Shares exceeds the number of Shares actually issued upon the exercise of the Stock Appreciation Rights; and (iii) Shares withheld by, or otherwise remitted to, the Company to satisfy a Participant’s tax withholding obligations upon the exercise of Options or SARs granted under the Plan, or upon the lapse of restrictions on, or settlement of, an Award, shall again be available for Awards under the Share Pool.

 

(f)            Source of Shares. Shares delivered by the Company in settlement of Awards may be authorized and unissued Shares, Shares held in the treasury of the Company, Shares purchased on the open market or by private purchase, or a combination of the foregoing.

 

(g)           Substitute Awards. Substitute Awards shall not reduce the Shares authorized for grant under the Plan. Additionally, in the event that a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by stockholders and not approved in contemplation or such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided that Awards using such available shares shall not be made after the date on which awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not providing Services to the Company immediately prior to such acquisition or combination. Notwithstanding the foregoing, Substitute Awards issued or intended as “incentive stock options” within the meaning of Section 422 of the Code shall be counted against the aggregate number of Incentive Stock Options available under the Plan.

 

 

6.            Eligibility. Participation shall be for Eligible Persons who have been selected by the Administrator to receive grants under the Plan (each such Eligible Person, a “Participant”). Holders of options and other types of awards granted by a company acquired by the Company or with which the Company combines are eligible for grants of Substitute Awards under the Plan to the extent permitted under applicable regulations of any stock exchange on which the Company is listed.

 

7.            Options.

 

(a)            Generally. Each Option shall be subject to the conditions set forth in the Plan and in the applicable Award Agreement. All Options granted under the Plan shall be Nonqualified Stock Options unless the Award Agreement expressly states otherwise. Incentive Stock Options shall be granted only subject to and in compliance with Section 422 of the Code, and only to Eligible Persons who are employees of the Company and its Affiliates and who are eligible to receive an Incentive Stock Option under the Code. If for any reason an Option intended to be an Incentive Stock Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option or portion thereof shall be regarded as a Nonqualified Stock Option properly granted under the Plan.

 

(b)            Exercise Price. The exercise price per Share for each Option, which is the purchase price per Share underlying the Option, shall be determined by the Administrator at the time of grant and, except in the case of a Substitute Award, such exercise price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option. Any modification to the exercise price of an outstanding Option shall be subject to the prohibition on repricing set forth in Section 14(b).

 

(c)            Vesting, Exercise and Expiration. The Administrator shall determine the manner and timing of vesting, exercise and expiration of Options. The period between the date of grant and the scheduled expiration date of the Option (“Option Period”) shall not exceed ten years, unless the Option Period (other than in the case of an Incentive Stock Option) would expire at a time when trading in the Shares is prohibited by the Company’s insider-trading policy or a Company-imposed “blackout period,” in which case, unless otherwise provided by the Administrator, the Option Period may be extended automatically until the 30^th day following the expiration of such prohibition (so long as such extension shall not violate Section 409A of the Code) or the Administrator may provide for the automatic exercise of such Option prior to the expiration of the Option Period. The Administrator may accelerate the vesting and/or exercisability of any Option, which acceleration shall not affect any other terms and conditions of such Option.

 

(d)            Method of Exercise and Form of Payment. No Shares shall be delivered pursuant to any exercise of an Option until the Participant has paid the exercise price to the Company in full, and an amount equal to any applicable U.S. federal, state and local income and employment taxes and non-U.S. income and employment taxes, social contributions and any other tax-related items required to be withheld. Options may be exercised by delivery of written or electronic notice of exercise to the Company or its designee (including a third-party administrator) in accordance with the terms of the Option and the Award Agreement, accompanied by payment of the exercise price and such applicable taxes. The exercise price and delivery of all applicable required withholding taxes shall be payable (i) in cash or by check or cash equivalent or (ii) by such other method or methods as the Administrator may permit, in its sole discretion, including without limitation: (A) in the form of other property (including previously owned Shares; provided that such Shares are not subject to any pledge or other security interest) having a Fair Market Value on the date of exercise equal to the exercise price and all applicable required withholding taxes; (B) if there is a public market for the Shares at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company or its designee (including third-party administrators) is delivered a copy of irrevocable instructions to a stockbroker to sell the Shares otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the exercise price and all applicable required withholding taxes against delivery of the Shares to settle the applicable trade; or (C) by means of a “net exercise” procedure effected by withholding the minimum number of Shares otherwise deliverable in respect of an Option that are needed to pay for the exercise price and all applicable required withholding taxes. In all events of cashless or net exercise, any fractional Shares shall be settled in cash.

 

 

(e)            Notification upon Disqualifying Disposition of an Incentive Stock Option. Each Participant awarded an Incentive Stock Option under the Plan shall notify the Company in writing immediately after the date on which the Participant makes a disqualifying disposition of any Share acquired pursuant to the exercise of such Incentive Stock Option. A disqualifying disposition is any disposition (including, without limitation, any sale) of such Share before the later of (i) two years after the date of grant of the Incentive Stock Option and (ii) one year after the date of exercise of the Incentive Stock Option. The Company may, if determined by the Administrator and in accordance with procedures established by the Administrator, retain possession, as agent for the applicable Participant, of any Share acquired pursuant to the exercise of an Incentive Stock Option until the end of the period described in the preceding sentence, subject to complying with any instruction from such Participant as to the sale of such Share.

 

(f)            Compliance with Laws. Notwithstanding the foregoing, in no event shall the Participant be permitted to exercise an Option in a manner that the Administrator determines would violate the Sarbanes-Oxley Act of 2002, or any other applicable law or the applicable rules and regulations of the Securities and Exchange Commission or the applicable rules and regulations of any securities exchange or inter-dealer quotation service on which the Shares of the Company are listed or quoted.

 

(g)            Incentive Stock Option Grants to 10% Stockholders. Notwithstanding anything to the contrary in this Section 7, if an Incentive Stock Option is granted to a Participant who owns stock representing more than 10% of the voting power of all classes of stock of the Company or of a parent or subsidiary of the Company (within the meaning of Sections 424(e) and 424(f) of the Code), the Option Period shall not exceed five years from the date of grant of such Option and the exercise price shall be at least 110% of the Fair Market Value (on the date of grant) of the shares subject to the Option.

 

(h)            $100,000 Per Year Limitation for Incentive Stock Options. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of Shares for which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company) exceeds $100,000, such excess Incentive Stock Options shall be treated as Nonqualified Stock Options.

 

8.            Stock Appreciation Rights (SARs).

 

(a)            Generally. Each SAR shall be subject to the conditions set forth in the Plan and in the applicable Award Agreement.

 

(b)            Exercise Price. The exercise or hurdle price per Share for each SAR shall be determined by the Administrator at the time of grant and, except in the case of a Substitute Award, such exercise or hurdle price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such SAR. Any modification to the exercise or hurdle price of an outstanding SAR shall be subject to the prohibition on repricing set forth in Section 14(b).

 

(c)            Vesting, Exercise and Expiration. The Administrator shall determine the manner and timing of vesting, exercise and expiration of SARs. The period between the date of grant and the scheduled expiration of the SAR (the “SAR Period”) shall not exceed ten years, unless the SAR Period would expire at a time when trading in the Shares is prohibited by the Company’s insider-trading policy or a Company-imposed “blackout period,” in which case, unless otherwise provided by the Administrator, the SAR Period may be extended automatically until the 30th day following the expiration of such prohibition (so long as such extension shall not violate Section 409A of the Code) or the Administrator may provide for the automatic exercise of such SAR prior to the expiration of the SAR Period. The Administrator may accelerate the vesting and/or exercisability of any SAR, which acceleration shall not affect any other terms and conditions of such SAR.

 

 

(d)            Method of Exercise and Form of Payment. SARs may be exercised by delivery of written or electronic notice of exercise to the Company or its designee (including a third-party administrator) in accordance with the terms of the SAR and the Award Agreement, specifying the number of SARs to be exercised and the date as of which such SARs were awarded. Upon the exercise of a SAR, the Company shall pay to the holder thereof an amount equal to the number of Shares subject to the SAR that are being exercised multiplied by the excess, if any, of the Fair Market Value of one Share on the exercise date over the exercise price, less an amount equal to any applicable U.S. federal, state and local income and employment taxes and non-U.S. income and employment taxes, social contributions and any other tax-related items required to be withheld. The Company shall pay such amount in cash, in Shares valued at Fair Market Value as determined on the date of exercise, or any combination thereof, as determined by the Administrator. Any fractional Shares shall be settled in cash.

 

9.            Restricted Stock and Restricted Stock Units.

 

(a)            Generally. Each Restricted Stock and Restricted Stock Unit shall be subject to the conditions set forth in the Plan and the applicable Award Agreement. The Administrator shall establish restrictions applicable to Restricted Stock and Restricted Stock Units, including the period during which the restrictions shall apply (the “Restricted Period”), and the time or times at which Restricted Stock or Restricted Stock Units shall become vested. The Administrator may accelerate the vesting and/or the lapse of any or all of the restrictions on Restricted Stock and Restricted Stock Units, which acceleration shall not affect any other terms and conditions of such Awards. No Share shall be issued at the time an Award of Restricted Stock Units is made, and the Company will not be required to set aside a fund for the payment of any such Award.

 

(b)          Stock Certificates; Escrow or Similar Arrangement. Upon the grant of Restricted Stock, the Administrator shall cause Share(s) to be registered in the name of the Participant, which may be evidenced in any manner the Administrator may deem appropriate, including in book-entry form subject to the Company’s directions or the issuance of a stock certificate registered in the name of the Participant. In such event, the Administrator may provide that such certificates shall be held by the Company or in escrow rather than delivered to the Participant pending vesting and release of restrictions, in which case the Administrator may require the Participant to execute and deliver to the Company or its designee (including third-party administrators) (i) an escrow agreement satisfactory to the Administrator, if applicable, and (ii) the appropriate stock power (endorsed in blank) with respect to the Restricted Stock.

 

(d)            Voting and Rights as a Stockholder. Subject to the restrictions set forth in the applicable Award Agreement, a Participant generally shall have the rights and privileges of a stockholder with respect to Awards of Restricted Stock, including, without limitation, the right to vote such Shares of Restricted Stock and the right to receive dividends. Unless otherwise provided by the Administrator or in an Award Agreement, a Restricted Stock Unit shall not convey to the Participant the rights and privileges of a stockholder with respect to the Share subject to the Restricted Stock Unit, such as the right to vote or the right to receive dividends, unless and until a Share is issued to the Participant to settle the Restricted Stock Unit.

 

 

(e)            Restrictions; Forfeiture. Restricted Stock and Restricted Stock Units awarded to the Participant shall be subject to forfeiture until the expiration of the Restricted Period and the attainment of any other vesting criteria established by the Administrator, and shall be subject to the restrictions on transferability set forth in the Award Agreement. Unless otherwise provided by the Administrator, in the event of any forfeiture, all rights of the Participant to such Restricted Stock (or as a stockholder with respect thereto) and to such Restricted Stock Units, as applicable, shall terminate without further action or obligation on the part of the Company. The Administrator shall have the authority to remove any or all of the restrictions on the Restricted Stock and Restricted Stock Units whenever it may determine that, by reason of changes in applicable laws or other changes in circumstances arising after the date of grant of the Restricted Stock Award or Restricted Stock Unit Award, such action is appropriate.

 

(f)            Delivery of Restricted Stock and Settlement of Restricted Stock Units.

 

(i)            Upon the expiration of the Restricted Period with respect to any Shares of Restricted Stock and the attainment of any other vesting criteria, the restrictions set forth in the applicable Award Agreement shall be of no further force or effect, except as set forth in the Award Agreement. If an escrow arrangement is used, upon such expiration the Company shall deliver to the Participant or such Participant’s beneficiary or Permitted Transferee (via book-entry notation or, if applicable, in stock certificate form) the Shares of Restricted Stock with respect to which the Restricted Period has expired (rounded down to the nearest full Share). To the extent provided in an Award Agreement, dividends, if any, that may have been withheld by the Company and attributable to the Restricted Stock shall be distributed to the Participant in cash or in Shares (or a combination of cash and Shares) having a Fair Market Value (on the date of distribution) equal to the amount of such dividends, upon the release of restrictions on the Restricted Stock.

 

(ii)            Unless otherwise provided by the Administrator in an Award Agreement, upon the expiration of the Restricted Period and the attainment of any other vesting criteria established by the Administrator in the applicable Award Agreement, with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Participant, or such Participant’s beneficiary (via book-entry notation or, if applicable, in stock certificate form), one Share (or other securities or other property, as applicable) for each such outstanding Restricted Stock Unit that has not then been forfeited and with respect to which the Restricted Period has expired and any other such vesting criteria are attained (“Released Unit”); provided, however, that the Administrator may elect to (A) pay cash or part cash and part Shares in lieu of delivering only Shares in respect of such Released Units or (B) defer the delivery of Shares (or cash or part Shares and part cash, as the case may be) beyond the expiration of the Restricted Period if such extension would not cause adverse tax consequences under Section 409A of the Code. If a cash payment is made in lieu of delivering Shares, the amount of such payment shall be equal to the Fair Market Value of the Shares as of the date on which the Shares would have otherwise been delivered to the Participant in respect of such Restricted Stock Units. To the extent provided in an Award Agreement, dividend or distribution equivalents, if any, that may have been withheld by the Company and attributable to the Restricted Stock Units shall be distributed to the Participant in cash or in Shares (or a combination of cash and Shares) having a Fair Market Value (on the date of distribution) equal to the amount of such dividends or distributions, upon the release of restrictions on the Restricted Stock Units.

 

(g)            Legends on Restricted Stock. Each Participant receiving Shares of Restricted Stock awarded under the Plan shall be issued a stock certificate in respect of such Shares of Restricted Stock. Such certificate shall be registered in the name of such Participant, and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Shares of Restricted Stock. The stock certificate evidencing such Shares of Restricted Stock shall be held in custody by the Company, or its designees, until the conditions to the vesting of such Shares of Restricted Stock have been satisfied and all other restrictions thereon shall have lapsed. Notwithstanding the foregoing, in the discretion of the Company, any Shares of Restricted Stock awarded under the Plan to any Eligible Person may be issued and held in book entry form. In such event, not stock certificates evidencing such Shares of Restricted Stock will be issued and the applicable restrictions will be noted in the records of the Company’s transfer agent and in the book entry system.

 

 

10.            Other Stock-Based Awards and Other Cash-Based Awards. The Administrator may issue unrestricted Shares, rights to receive future grants of Awards, or other Awards denominated in Shares (including performance shares or performance units), or Awards that provide for cash payments based in whole or in part on the value or future value of Shares (“Other Stock-Based Awards”) and Other Cash-Based Awards under the Plan to Eligible Persons, alone or in tandem with other Awards, in such amounts as the Administrator shall from time to time determine. Each Other Stock-Based Award shall be evidenced by an Award Agreement, which may include conditions including, without limitation, the payment by the Participant of the Fair Market Value of such Shares on the date of grant. Each Other Cash-Based Award granted under the Plan shall be evidenced in such form as the Administrator may determine from time to time.

 

11.            Changes in Capital Structure and Similar Events. In the event of (a) any dividend (other than regular cash dividends) or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, amalgamation, consolidation, split-up, split-off, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to acquire Shares or other securities of the Company, or other similar corporate transaction or event (including, without limitation, a Change in Control) that affects the Shares or (b) unusual or nonrecurring events (including, without limitation, a Change in Control) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation service, accounting principles or law, such that in any case an adjustment is determined by the Administrator to be necessary or appropriate, then the Administrator shall (other than with respect to Other Cash-Based Awards), to the extent permitted under Section 409A of the Code, make any such adjustments in such manner as it may deem equitable, including, without limitation, any or all of the following:

 

(i)            adjusting any or all of (A) the number of Shares or other securities of the Company (or number and kind of other securities or other property) that may be delivered in respect of Awards or with respect to which Awards may be granted under the Plan (including, without limitation, adjusting any or all of the limitations under Section 5 of the Plan) and (B) the terms of any outstanding Award, including, without limitation, (1) the number of Shares or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (2) the exercise price with respect to any Award and/or (3) any applicable performance measures (including, without limitation, Performance Conditions and performance periods);

 

(ii)            providing for a substitution or assumption of Awards (or awards of an acquired company), accelerating the delivery, vesting and/or exercisability of, lapse of restrictions and/or other conditions on, or termination of, Awards or providing for a period of time (which shall not be required to be more than ten days) for Participants to exercise outstanding Awards prior to the occurrence of such event (and any such Award not so exercised shall terminate or become no longer exercisable upon the occurrence of such event); and

 

 

(iii)            cancelling any one or more outstanding Awards (or awards of an acquired company) and causing to be paid to the holders thereof, in cash, Shares, other securities or other property, or any combination thereof, the value of such Awards, if any, as determined by the Administrator (which, if applicable, may be based upon the price per Share received or to be received by other stockholders of the Company in such event), including, without limitation, in the case of an outstanding Option or SAR, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Administrator) of the Shares subject to such Option or SAR over the aggregate exercise price of such Option or SAR, respectively (it being understood that, in such event, any Option or SAR having a per Share exercise price equal to, or in excess of, the Fair Market Value (as of the date specified by the Administrator) of a Share subject thereto may be canceled and terminated without any payment or consideration therefor);

 

provided, however, that the Administrator shall make an equitable or proportionate adjustment to outstanding Awards to reflect any “equity restructuring” (within the meaning of the Financial Accounting Standards Codification Topic 718 (or any successor pronouncement thereto)). Except as otherwise determined by the Administrator, any adjustment in Incentive Stock Options under this Section 11 (other than any cancellation of Incentive Stock Options) shall be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the Code, and any adjustments under this Section 11 shall be made in a manner that does not adversely affect the exemption provided pursuant to Rule 16b-3 promulgated under the Exchange Act. Any such adjustment hereunder, upon notice, shall be conclusive and binding for all purposes. In anticipation of the occurrence of any event listed in the first sentence of this Section 11, for reasons of administrative convenience, the Administrator in its sole discretion may refuse to permit the exercise of any Award or as it otherwise may determine during a period of up to 30 days prior to, and/or up to 30 days after, the anticipated occurrence of any such event.

 

12.          Effect of Termination of Service or a Change in Control on Awards.

 

(a)            Termination. To the extent permitted under Section 409A of the Code, the Administrator may provide, by rule or regulation or in any applicable Award Agreement, or may determine in any individual case, the circumstances in which, and to the extent to which, an Award may be exercised, settled, vested, paid or forfeited in the event of the Participant’s termination of Service prior to the end of a performance period or vesting, exercise or settlement of such Award.

 

(b)          Change in Control. In the event of a Change in Control, notwithstanding any provision of the Plan to the contrary, the Administrator may provide for: (i) continuation or assumption of such outstanding Awards under the Plan by the Company (if it is the surviving corporation) or by the surviving corporation or its parent; (ii) substitution by the surviving corporation or its parent of awards with substantially the same terms and value for such outstanding Awards (in the case of an Option or SAR, the Intrinsic Value at grant of such Substitute Award shall equal the Intrinsic Value of the Award); (iii) acceleration of the vesting (including the lapse of any restrictions, with any performance criteria or other Performance Conditions deemed met at such level of achievement as determined by the Administrator) or right to exercise such outstanding Awards immediately prior to or as of the date of the Change in Control, and the expiration of such outstanding Awards to the extent not timely exercised by the date of the Change in Control or other date thereafter designated by the Administrator; or (iv) cancellation of any outstanding Award and payment to the Participant who holds such Award in an amount equal to the Intrinsic Value of such Award (which may be equal to but not less than zero), which, if in excess of zero, shall be payable upon the effective date of such Change in Control. For the avoidance of doubt, in the event of a Change in Control, the Administrator may, in its sole discretion, terminate any Option or SAR for which the exercise or hurdle price is equal to or exceeds the per Share value of the consideration to be paid in the Change in Control transaction, without payment of consideration therefor.

 

 

13.            Deferred Awards. The Administrator is authorized, subject to limitations under applicable law, to grant to Participants Deferred Awards, which may be a right to receive Shares or cash under the Plan (either independently or as an element of or supplement to any other Award under the Plan), including, as may be required by any applicable law or regulations or determined by the Administrator, in lieu of any annual bonus, commission or retainer that may be payable to a Participant under any applicable, bonus, commission or retainer plan or arrangement. The Administrator shall determine the terms and conditions of such Deferred Awards, including, without limitation, the method of converting the amount of annual bonus into a Deferred Award, if applicable, and the form, vesting, settlement, forfeiture and cancellation provisions or any other criteria, if any, applicable to such Deferred Awards. Shares underlying a Share-denominated Deferred Award, which is subject to a vesting schedule or other conditions or criteria, including forfeiture or cancellation provisions, set by the Administrator shall not be issued before the date that those conditions and criteria have been satisfied. Deferred Awards shall be subject to such restrictions as the Administrator may impose (including any limitation on the right to vote a Share underlying a Deferred Award or the right to receive any dividend or distribution equivalent or other right), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Administrator may deem appropriate. The Administrator may determine the form or forms (including cash, Shares, other Awards, other property or any combination thereof) in which payment of the amount owing upon settlement of any Deferred Award may be made.

 

14.          Amendments and Termination.

 

(a)            Amendment and Termination of the Plan. The Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time; provided that no such amendment, alteration, suspension, discontinuance or termination shall be made without stockholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Plan (including, without limitation, as necessary to comply with any applicable rules or requirements of any securities exchange or inter-dealer quotation service on which the Shares may be listed or quoted, for changes in GAAP to new accounting standards); provided, further, that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary, unless the Administrator determines that such amendment, alteration, suspension, discontinuance or termination is either required or advisable in order for the Company, the Plan or the Award to satisfy any applicable law or regulation, the NASDAQ listing guidelines or the rules of any other securities exchange or inter-dealer quotation service on which the Shares are listed or quoted. No Awards may be granted or awarded during any period of suspension, after termination of the Plan or after the Expiration Date.

 

(b)            Amendment of Award Agreements. The Administrator may, to the extent not inconsistent with the terms of the Plan, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted or the associated Award Agreement, prospectively or retroactively (including after the Participant’s termination of Service); provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant with respect to any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant unless the Administrator determines that such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination is either required or advisable in order for the Company, the Plan or the Award to satisfy any applicable law or regulation, the NASDAQ listing guidelines or the rules of any other securities exchange or inter-dealer quotation service on which the Shares are listed or quoted; provided, further, that in the event the Company is no longer a “controlled company” (as such term is defined under the rules of the NASDAQ or any other securities exchange or inter-dealer quotation service on which the Shares are listed or quoted), except as otherwise permitted under Section 11 of the Plan, if (i) the Administrator reduces the exercise price of any Option or of any SAR, (ii) the Administrator cancels any outstanding Option or SAR and replaces it with a new Option or SAR (with a lower exercise price, as the case may be) or other Award or cash in a manner that would either (A) be reportable on the Company’s proxy statement or Form 10-K (if applicable) as Options that have been “repriced” (as such term is used in Item 402 of Regulation S-K promulgated under the Exchange Act) or (B) result in any “repricing” for financial statement reporting purposes (or otherwise cause the Award to fail to qualify for equity accounting treatment), (iii) take any other action that is considered a “repricing” for purposes of the stockholder approval rules of the applicable securities exchange or inter-dealer quotation service on which the Share is listed or quoted and/or (iv) cancel any outstanding Option or SAR that has a per Share exercise price (as applicable) at or above the Fair Market Value of a Share on the date of cancellation, and pay any consideration to the holder thereof, whether in cash, securities or other property, or any combination thereof, then, in the case of the immediately preceding clauses (i) through (iv), any such action shall not be effective without stockholder approval.

 

 

15.          General.

 

(a)            Award Agreements; Other Agreements. Each Award (other than an Other Cash-Based Award) under the Plan shall be evidenced by an Award Agreement, which shall be delivered (whether in written or electronic form) to the Participant and shall specify the terms and conditions of the Award and any rules applicable thereto. In the event of any conflict between the terms of the Plan and any Award Agreement or employment, change-in-control, severance or other agreement in effect with the Participant, the Administrator shall determine the resolution of such conflict.

 

(b)            Nontransferability.

 

(i)            Each Award shall be exercisable only by the Participant during the Participant’s lifetime or, if permissible under applicable law or the Plan, by the Participant’s legal guardian or representative or beneficiary or Permitted Transferee. No Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution or as set forth below in clause (ii), and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or an Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

 

(ii)           Notwithstanding the foregoing, the Administrator may permit Awards (other than Incentive Stock Options) to be transferred by the Participant, without consideration, subject to such rules as the Administrator may adopt, to (A) any person who is a “family member” of the Participant, as such term is used in the instructions to Form S-8 under the Securities Act or any successor form of registration statements promulgated by the Securities and Exchange Commission (collectively, the “Immediate Family Members”); (B) a trust solely for the benefit of the Participant or the Participant’s Immediate Family Members; (C) a partnership or limited liability company whose only partners or stockholders are the Participant and the Participant’s Immediate Family Members; or (D) any other transferee as may be approved either (1) by the Board or the Administrator or (2) as provided in the applicable Award Agreement (each transferee described in clause (A), (B), (C) or (D) above is hereinafter referred to as a “Permitted Transferee”); provided that the Participant gives the Administrator advance written notice describing the terms and conditions of the proposed transfer and the Administrator notifies the Participant in writing that such a transfer would comply with the requirements of the Plan.

 

 

(iii)          The terms of any Award transferred in accordance with the immediately preceding subsection shall apply to the Permitted Transferee, and any reference in the Plan, or in any applicable Award Agreement, to the Participant shall be deemed to refer to the Permitted Transferee, except that, unless otherwise provided by the Administrator: (A) Permitted Transferees shall not be entitled to transfer any Award, other than by will or the laws of descent and distribution; (B) Permitted Transferees shall not be entitled to exercise any transferred Option unless there shall be in effect a registration statement on an appropriate form covering the Shares to be acquired pursuant to the exercise of such Option if the Administrator determines, consistent with any applicable Award Agreement, that such a registration statement is necessary or appropriate; (C) the Administrator or the Company shall not be required to provide any notice to a Permitted Transferee, whether or not such notice is or would otherwise have been required to be given to the Participant under the Plan or otherwise; (D) the consequences of the termination of the Participant’s Services to the Company or an Affiliate under the terms of the Plan and the applicable Award Agreement shall continue to be applied with respect to the transferred Award, including, without limitation, that an Option shall be exercisable by the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the applicable Award Agreement; and (E) any non-competition, non-solicitation, non-disparagement, non-disclosure or other restrictive covenants contained in any Award Agreement or other agreement between the Participant and the Company or any Affiliate shall continue to apply to the Participant and the consequences of the violation of such covenants shall continue to be applied with respect to the transferred Award, including without limitation the clawback, forfeiture and detrimental conduct provisions of Section 15(u) of the Plan.

 

(c)            Dividends and Distribution Equivalents. The Administrator may specify in the Award Agreement that dividends or distributions (in the case of Restricted Stock) or dividend or distribution equivalents (in the case of an Award other than Restricted Stock) may be credited with respect an Award, either in cash or in additional Shares, and paid either on a current or deferred basis, and may be reinvested in additional Shares, which may be subject to the same restrictions as such Award; provided, however, that, with respect to an Option or SAR, (i) no dividend or distribution equivalents shall be credited following the date that such Award vests and (ii) any dividend or distribution equivalents that are paid on a deferred basis shall be paid no later than the date that such Award vests.

 

(d)            No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or an Award, and the Administrator shall determine whether cash or other securities shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be cancelled, terminated or otherwise eliminated.

 

(e)            Tax Withholding.

 

(i)            The Participant shall be required to pay to the Company or any Affiliate, and the Company or any Affiliate shall have the right (but not the obligation) and is hereby authorized to withhold, from any cash, Shares, other securities or other property deliverable under any Award or from any compensation or other amounts owing to the Participant, the amount (in cash, Shares, other securities or other property) of any required withholding taxes (up to the maximum permissible withholding amounts) in respect of an Award, its exercise, or any payment or transfer under an Award or under the Plan and to take such other action that the Administrator or the Company deems necessary to satisfy all obligations for the payment of such withholding taxes.

 

(ii)           Without limiting the generality of paragraph (i) above, the Administrator may permit the Participant to satisfy, in whole or in part, the foregoing withholding liability by (A) payment in cash, (B) the delivery of Shares (which Shares are not subject to any pledge or other security interest) owned by the Participant having a Fair Market Value on such date equal to such withholding liability or (C) having the Company withhold from the number of Shares otherwise issuable or deliverable pursuant to the exercise or settlement of the Award a number of Shares with a Fair Market Value on such date equal to such withholding liability. In addition, subject to any requirements of applicable law, the Participant may also satisfy the tax withholding obligations by other methods, including selling Shares that would otherwise be available for delivery; provided that the Board or the Administrator has specifically approved such payment method in advance.

 

 

(f)            No Claim to Awards; No Rights to Continued Service. No employee, Director of the Company, consultant providing Service to the Company or an Affiliate, or other person shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for a grant of any other Award. There is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Administrator’s determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively among Participants, whether or not such Participants are similarly situated. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the Service of the Company or an Affiliate, or to continue in the Service of the Company or an Affiliate, nor shall it be construed as giving any Participant who is a Director any rights to continued Service on the Board.

 

(g)            International Participants. With respect to Participants who reside or work outside of the United States or are subject to non-U.S. legal restrictions or regulations, the Administrator may amend the terms of the Plan or appendices thereto, or outstanding Awards, with respect to such Participants, in order to conform such terms with or accommodate the requirements of local laws, procedures or practices or to obtain more favorable tax or other treatment for the Participant, the Company or its Affiliates. Without limiting the generality of this subsection, the Administrator is specifically authorized to adopt rules, procedures and sub-plans with provisions that limit or modify rights on death, disability, retirement or other terminations of Service, available methods of exercise or settlement of an Award, payment of income, social insurance contributions or payroll taxes, withholding procedures and handling of any stock certificates or other indicia of ownership that vary with local requirements. The Administrator may also adopt rules, procedures or sub-plans applicable to particular Affiliates or locations.

 

(h)            Beneficiary Designation. The Participant’s beneficiary shall be the Participant’s spouse (or domestic partner if such status is recognized by the Company and in such jurisdiction) or, if the Participant is otherwise unmarried at the time of death, the Participant’s estate, except to the extent that a different beneficiary is designated in accordance with procedures that may be established by the Administrator from time to time for such purpose. Notwithstanding the foregoing, in the absence of a beneficiary validly designated under such Administrator-established procedures and/or applicable law who is living (or in existence) at the time of death of a Participant residing or working outside the United States, any required distribution under the Plan shall be made to the executor or administrator of the estate of the Participant, or to such other individual as may be prescribed by applicable law.

 

(i)             Termination of Service. The Administrator, in its sole discretion, shall determine the effect of all matters and questions related to the termination of Service of a Participant. Unless determined otherwise by the Administrator: (i) neither a temporary absence from Service due to illness, vacation or leave of absence (including, without limitation, a call to active duty for military service through a Reserve or National Guard unit) nor a transfer from Service with the Company to Service with an Affiliate (or vice versa) shall be considered a termination of Service with the Company or an Affiliate; and (ii) if the Participant’s Service as an employee with the Company or its Affiliates terminates, but such Participant continues to provide Services to such Company or such Affiliate in a non-employee capacity (including as a non-employee Director) (or vice versa), such change in status shall not be considered a termination of Service with the Company or an Affiliate for purposes of the Plan.

 

(j)             No Rights as a Stockholder. Except as otherwise specifically provided in the Plan or any Award Agreement, no person shall be entitled to the privileges of ownership in respect of Shares that are subject to Awards hereunder until such Shares have been issued or delivered to that person.

 

 

(k)            Government and Other Regulations.

 

(i)            Nothing in the Plan shall be deemed to authorize the Board, the Administrator or any members thereof to take any action contrary to applicable law or regulation, or rules of the NASDAQ or any other securities exchange or inter-dealer quotation service on which the Shares are listed or quoted.

 

(ii)           The obligation of the Company to settle Awards in Shares or other consideration shall be subject to all applicable laws, rules and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Shares pursuant to an Award unless such Shares have been properly registered for sale pursuant to the Securities Act with the Securities and Exchange Commission or unless the Company has received an opinion of counsel, satisfactory to the Company, that such Shares may be offered for sale or sold without such registration pursuant to and in compliance with the terms of an available exemption. The Company shall be under no obligation to register for sale under the Securities Act any of the Shares to be offered for sale or sold under the Plan. The Administrator shall have the authority to provide that all Shares or other securities of the Company or any Affiliate delivered under the Plan shall be subject to such stop-transfer orders and other restrictions as the Administrator may deem advisable under the Plan, the applicable Award Agreement, U.S. federal securities laws, or the rules, regulations and other requirements of the U.S. Securities and Exchange Commission, any securities exchange or inter-dealer quotation service upon which such Shares or other securities of the Company are then listed or quoted and any other applicable federal, state, local or non-U.S. laws, rules, regulations and other requirements, and, without limiting the generality of Section 9 of the Plan, the Administrator may cause a legend or legends to be put on any such certificates of Shares or other securities of the Company or any Affiliate delivered under the Plan to make appropriate reference to such restrictions or may cause such Shares or other securities of the Company or any Affiliate delivered under the Plan in book-entry form to be held subject to the Company’s instructions or subject to appropriate stop-transfer orders. Notwithstanding any provision in the Plan to the contrary, the Administrator reserves the right to add any additional terms or provisions to any Award granted under the Plan that it in its sole discretion deems necessary or advisable in order that such Award complies with the legal requirements of any governmental entity to whose jurisdiction the Award is subject.

 

(iii)          The Administrator may cancel an Award or any portion thereof if it determines that legal or contractual restrictions and/or blockage and/or other market considerations would make the Company’s acquisition of Shares from the public markets, the Company’s issuance of Shares to the Participant, the Participant’s acquisition of Shares from the Company and/or the Participant’s sale of Shares to the public markets illegal, impracticable or inadvisable. If the Administrator determines to cancel all or any portion of an Award in accordance with the foregoing, unless prevented by applicable laws, the Company shall pay to the Participant an amount equal to the excess of (A) the aggregate Fair Market Value of the Shares subject to such Award or portion thereof canceled (determined as of the applicable exercise date, or the date that the Shares would have been vested or delivered, as applicable), over (B) the aggregate exercise price (in the case of an Option or SAR) or any amount payable as a condition of delivery of Shares (in the case of any other Award). Such amount shall be delivered to the Participant as soon as practicable following the cancellation of such Award or portion thereof.

 

 

(l)             Payments to Persons Other Than Participants. If the Administrator shall find that any person to whom any amount is payable under the Plan is unable to care for such person’s affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or such person’s estate (unless a prior claim therefor has been made by a duly appointed legal representative or a beneficiary designation form has been filed with the Company) may, if the Administrator so directs the Company, be paid to such person’s spouse, child or relative, or an institution maintaining or having custody of such person, or any other person deemed by the Administrator to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Administrator and the Company therefor.

 

(m)           Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options or awards otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases.

 

(n)            No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate, on the one hand, and the Participant or other person or entity, on the other hand. No provision of the Plan or any Award shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or to otherwise segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company.

 

(o)            Reliance on Reports. Each member of the Administrator and each member of the Board (and each such member’s respective designees) shall be fully justified in acting or failing to act, as the case may be, and shall not be liable for having so acted or failed to act in good faith, in reliance upon any report made by the independent, registered public accounting firm of the Company and its Affiliates and/or any other information furnished in connection with the Plan by any agent of the Company, the Board or the Administrator, other than such member or designee.

 

(p)            Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit-sharing, group insurance or other benefit plan of the Company except as otherwise specifically provided in such other plan.

 

(q)            Governing Law. The Plan shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of laws thereof, or principles of conflicts of laws of any other jurisdiction that could cause the application of the laws of any jurisdiction other than the State of Delaware.

 

(r)            Severability. If any provision of the Plan or any Award or Award Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any person or entity or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicable laws, or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction, person or entity or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

 

(s)            Obligations Binding on Successors. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company.

 

 

(t)            Section 409A of the Code.

 

(i)            It is intended that the Plan comply with Section 409A of the Code, and all provisions of the Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. Each Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or in respect of such Participant in connection with the Plan or any other plan maintained by the Company, including any taxes and penalties under Section 409A of the Code, and neither the Company nor any Affiliate shall have any obligation to indemnify or otherwise hold such Participant or any beneficiary harmless from any or all of such taxes or penalties. With respect to any Award that is considered “deferred compensation” subject to Section 409A of the Code, references in the Plan to “termination of Service” (and substantially similar phrases) shall mean “separation from service” within the meaning of Section 409A of the Code. For purposes of Section 409A of the Code, each of the payments that may be made in respect of any Award granted under the Plan is designated as a separate payment.

 

(ii)           Notwithstanding anything in the Plan to the contrary, if the Participant is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, no payments or deliveries in respect of any Awards that are “deferred compensation” subject to Section 409A of the Code shall be made to such Participant prior to the date that is six months after the date of such Participant’s “separation from service” within the meaning of Section 409A of the Code or, if earlier, the Participant’s date of death. All such delayed payments or deliveries will be paid or delivered (without interest) in a single lump sum on the earliest date permitted under Section 409A of the Code that is also a business day.

 

(iii)          In the event that the timing of payments in respect of any Award that would otherwise be considered “deferred compensation” subject to Section 409A of the Code would be accelerated upon the occurrence of (A) a Change in Control, no such acceleration shall be permitted unless the event giving rise to the Change in Control satisfies the definition of a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation pursuant to Section 409A of the Code and any Treasury Regulations promulgated thereunder, or (B) a Disability, no such acceleration shall be permitted unless the Disability also satisfies the definition of “disability” pursuant to Section 409A of the Code and any Treasury Regulations promulgated thereunder.

 

(u)            Clawback/Forfeiture. The Administrator shall have full authority to implement any policies and procedures necessary to comply with Section 10D of the Exchange Act and any rules promulgated thereunder and any other regulatory regimes. Notwithstanding anything to the contrary contained herein, the Administrator may cancel an Award if the Participant, without the consent of the Company, (A) has engaged in or engages in activity that is in conflict with or adverse to the interests of the Company or any Affiliate while providing Services to the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities or (B) violates a non-competition, non-solicitation, non-disparagement, non-disclosure or other similar agreement with the Company or any Affiliate, as determined by the Administrator, or if the Participant’s Service is terminated for Cause. In any such event the Administrator may determine that the Participant will forfeit any compensation, gain or other value realized thereafter on the vesting, exercise or settlement of such Award, the sale or other transfer of such Award, or the sale of Shares acquired in respect of such Award, and must promptly repay such amounts to the Company. If the Participant receives any amount in excess of what the Participant should have received under the terms of the Award for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), all as determined by the Administrator, then the Participant shall be required to promptly repay any such excess amount to the Company. In addition, the Company shall retain the right to bring an action at equity or law to enjoin the Participant’s activity and recover damages resulting from such activity. Further, to the extent required by applicable law (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of the NASDAQ or any other securities exchange or inter-dealer quotation service on which the Shares are listed or quoted, or if so required pursuant to a written policy adopted by the Company, Awards shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements shall be deemed incorporated by reference into all outstanding Award Agreements).

 

 

(v)            No Representations or Covenants with Respect to Tax Qualification. Although the Company may endeavor to (i) qualify an Award for favorable U.S. or non-U.S. tax treatment or (ii) avoid adverse tax treatment, the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Awards under the Plan.

 

(w)            No Interference. The existence of the Plan, any Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company, the Board, the Administrator or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants, or rights to purchase stock or of bonds, debentures, or preferred or prior preference stocks whose rights are superior to or affect the Shares or the rights thereof or that are convertible into or exchangeable for Shares, or the dissolution or liquidation of the Company or any Affiliate, or any sale or transfer of all or any part of their assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

(x)            Expenses; Titles and Headings. The expenses of administering the Plan shall be borne by the Company and its Affiliates. The titles and headings of the sections in the Plan are for convenience of reference only, and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

 

(y)            Whistleblower Acknowledgments. Notwithstanding anything to the contrary herein, nothing in this Plan or any Award Agreement will (i) prohibit a Participant from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Exchange Act or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, or (ii) require prior approval by the Company or any of its Affiliates of any reporting described in clause (i).

 

(z)            Lock-Up Agreements. The Administrator may require a Participant receiving Shares pursuant to the Plan, as a condition precedent to receipt of such Shares, to enter into a shareholder agreement or “lock-up” agreement in such form as the Administrator shall determine is necessary or desirable to further the Company’s interests.

 

(aa)          Restrictive Covenants. The Administrator may impose restrictions on any Award with respect to non-competition, non-solicitation, non-disparagement, non-disclosure or other restrictive covenants as it deems necessary or appropriate in its sole discretion.

 

* * *

 

 

Exhibit 10.4

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of _____________, 2025 between Resolute Holdings Management, Inc., a Delaware corporation (the “Company”), and _____________________ (“Indemnitee”).

 

WITNESSETH THAT:

 

WHEREAS, highly competent persons have become more reluctant to serve corporations as directors 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 of Directors of the Company (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 certificate of incorporation of the Company, as amended and restated (as it may be further amended from time to time, the “Certificate of Incorporation”), and the bylaws of the Company, as amended and restated (as it may be further amended from time to time, the “Bylaws”), requires indemnification of the directors, officers, employees or agents of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”). The DGCL expressly provides that the indemnification provisions set forth therein are not exclusive, and thereby contemplates 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 have increased 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’s 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 Certificate of Incorporation and Bylaws of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and

 

 

WHEREAS, Indemnitee does not regard the protection available under the Company’s insurance, if any, as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee 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 he be so indemnified.

 

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director or officer (as the case may be) of the Company, the parties hereto agree as follows:

 

1.            Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:

 

(a)            Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

 

(b)            Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.

 

(c)            Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf 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 him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

 

(d)            Indemnification of Related Parties. If (i) Indemnitee is or was affiliated with one or more corporations, companies, voluntary associations, partnerships, joint ventures, limited liability companies, trusts, estates, unincorporated organizations or other entities that has invested in the Company (an “Appointing Stockholder”), (ii) the Appointing Stockholder is, or is threatened to be made, a party to or a participant in any proceeding, and (iii) the Appointing Stockholder’s involvement in the proceeding is related to Indemnitee’s service to the Company as a director of the Company or any direct or indirect subsidiaries of the Company, then, to the extent resulting from any claim based on the Indemnitee’s service to the Company as a director of the Company or any direct or indirect subsidiaries of the Company, the Appointing Stockholder will be entitled to indemnification hereunder for Expenses to the same extent as Indemnitee.

 

2.            Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful.

 

3.            Contribution.

 

(a)            Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

 

 

(b)            Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which the law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

 

(c)            The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

 

(d)            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).

 

4.            Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked to) respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

 

5.            Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.

 

 

6.            Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

 

(a)            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. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.

 

(b)            Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the board: (i) by a majority vote of the disinterested directors, even though less than a quorum, (ii) by a committee of disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum, (iii) if there are no disinterested directors or if the disinterested directors so direct, by independent legal counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee, or (iv) if so directed by the Board of Directors, by the stockholders of the Company. For purposes hereof, disinterested directors are those members of the board of directors of the Company who are not parties to the action, suit or proceeding in respect of which indemnification is sought by Indemnitee.

 

 

(c)            If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in this Section 6(c). The Independent Counsel shall be selected by the Board of Directors. Indemnitee may, within 10 (ten) days after such written notice of selection shall have been given, deliver to the Company, 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 13 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 a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the 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 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed.

 

(d)            In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal 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 legal 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.

 

(e)            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 officers of the Enterprise (as hereinafter defined) 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 or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

 

(f)            If the person, persons or entity empowered or selected under Section 6 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 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; 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 such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(g) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board of Directors or the Disinterested Directors, if appropriate, resolve 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.

 

(g)            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 Independent Counsel, member of the Board of Directors or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by 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.

 

(h)            The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(i)            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 he 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 his conduct was unlawful.

 

 

7.            Remedies of Indemnitee.

 

(a)            In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a). The Company shall not oppose Indemnitee’s right to seek any such adjudication.

 

(b)            In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).

 

(c)            If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(d)            In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

 

(e)            The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall 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 therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

 

 

(f)            Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

 

8.            Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.

 

(a)            The rights of indemnification as provided by this Agreement 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, a resolution of directors or otherwise. 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 such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Bylaws 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 or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, 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 director, officer, employee, agent or fiduciary 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 the commencement of such proceeding 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.

 

(c)            In the event of any payment 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 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, employee or agent of any other corporation, 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, partnership, joint venture, trust, employee benefit plan or other enterprise.

 

9.            Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against 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; or

 

(b)            for 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 Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or

 

(c)            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 of Directors of the Company authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

 

10.          Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so with respect to any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (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), assigns, spouses, heirs, executors and personal and legal representatives.

 

11.          Security. To the extent requested by Indemnitee and approved by the Board of Directors of the Company, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

 

 

12.          Enforcement.

 

(a)            The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer or director 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.

 

13.          Definitions. For purposes of this Agreement:

 

(a)            “Corporate Status” describes the status of a person who is or was a director (or a person entitled to designate a director), officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the express written request of the Company.

 

(b)            “Disinterested Director” means 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.

 

(c)            “Enterprise” means the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.

 

(d)            “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

 

(e)            “Independent Counsel” means 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 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 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.

 

(f)            “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was an officer or director of the Company (or designated a director), by reason of any action taken by him or of any inaction on his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.

 

14.          Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

 

15.          Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of 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 hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

16.          Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.

 

 

17.          Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:

 

(a)            To Indemnitee at the address set forth below Indemnitee signature hereto.

 

(b)            To the Company at:

 

Resolute Holdings Management, Inc.
445 Park Avenue, Suite 15F

New York, NY 10022
Attention: Thomas R. Knott

 

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

 

18.            Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

19.            Headings. The headings of the paragraphs 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.

 

20.            Governing 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. The Company and Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (or, only if such court declines to accept jurisdiction over a particular matter, then in the United States District Court for the District of Delaware or, if jurisdiction is not then available in the United States District Court for the District of Delaware (but only in such event), then in any court sitting in the State of Delaware in New Castle County) and any appellate court from any of such courts (in any case, 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, (b) 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, (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (d) 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.

 

SIGNATURE PAGE TO FOLLOW

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.

 

	RESOLUTE HOLDINGS MANAGEMENT, INC.
	By:
	Name: Thomas R. Knott
	Title: Chief Executive Officer
	INDEMNITEE
	Name:
	Address:
	c/o Resolute Holdings Management, Inc.
	445 Park Avenue, Suite 15F
	New York, NY 10022

 

[Signature page to Indemnification Agreement]

 

 

 

Exhibit 10.5

 

__, 2025

 

Mr. David M. Cote

By email

 

Dear David:

 

In connection with the spin-off (the “Spin-Off”) of Resolute Holdings Management, Inc. (“Resolute Holdings”) to shareholders of CompoSecure, Inc. (“CompoSecure”), I am pleased to confirm our offer to you to become the Executive Chairman of Resolute Holdings and assume the roles and positions described below. Following the Spin-Off, your employment will transfer to Resolute Holdings, while you continue to provide services and dedicate time to CompoSecure in your current role as Executive Chairman and Co-Chief Investment Officer. The effective date of your employment with Resolute Holdings will be the effective date of the Spin-Off (the “Effective Date”), subject to the terms and conditions of this amended and restated letter agreement (this “letter”). You will also serve as a director on the board of directors of Resolute Holdings (the “Resolute Board”) and will remain a director on the board of directors of CompoSecure (the “CompoSecure Board”). “Company”, as used in this letter, refers to CompoSecure, with respect to any services provided to CompoSecure and its subsidiaries, and Resolute Holdings, with respect to any services provided to Resolute Holdings and its subsidiaries, as applicable.

 

ROLES, DUTIES & RESPONSIBILITIES

 

You will have duties, responsibilities and obligations customarily assigned to similarly situated executives at comparable businesses, as reasonably and mutually determined by you and the CompoSecure Board or the Resolute Board, as applicable. You will report to the CompoSecure Board or the Resolute Board, as applicable.

 

During the Term (as defined in Exhibit A), your principal office will be based in Anna Maria, FL.

 

You will continue to be entitled to the following compensation and benefits package, as approved by the Compensation Committee of the Resolute Board.

 

COMPENSATION

 

Base Salary. As of the Effective Date, your annual base salary will be $750,000, which will be paid by Resolute Holdings.

 

Annual Bonus. You will be eligible, in the discretion of the Resolute Board, to receive an annual performance-based bonus with a target of 125% of base salary, which will be paid by Resolute Holdings; eligibility for the annual performance-based bonus started when you initially commenced employment with CompoSecure.

 

Annual Equity Awards. The equity grant in the form of options to purchase common stock of CompoSecure (the “Options”) that you received in connection with your offer of employment with CompoSecure will continue to vest under the terms of the CompoSecure, Inc. 2021 Incentive Equity Plan (as amended) and the applicable option award agreement. The vesting of the Options will accelerate upon a termination of employment without Cause, a termination due to death or disability or resignation for Good Reason (each, as defined in Exhibit A hereto); provided, however, that the transfer of your employment to Resolute Holdings pursuant to this letter shall not be deemed a termination of employment for purposes of the accelerated vesting or forfeiture under the applicable option award agreement and shall be adjusted as further described in the Separation and Distribution Agreement by and between CompoSecure and Resolute Holdings. You will remain eligible for annual grants of Options or other equity incentive awards as determined by CompoSecure or Resolute Holdings, as applicable.

 

 

You will not be entitled to any additional compensation with respect to your service as a director on the CompoSecure Board or the Resolute Board.

 

OTHER EXECUTIVE BENEFITS

 

You will also be entitled to the following Executive Benefits:

 

□

Benefits: You will be eligible to participate in substantially the same plans and programs made available by CompoSecure prior to the Spin-Off, and Resolute Holdings following the Spin-Off, to its employees generally from time to time in accordance with their terms.

 

□

Vacation: You will be entitled to four weeks of paid vacation per calendar year.

 

□

Severance: You will not be entitled to any severance cash payments or benefits following termination of your employment for any reason.

 

□

Expenses: You will be reimbursed for your validly incurred reasonable business expenses upon the proper completion and timely submission of requisite forms and receipts to the Company in accordance with the Company’s business expense reimbursement policy.

 

CONFIDENTIALITY & INTELLECTUAL PROPERTY

 

Disclosure of Confidential Information. You agree that you will, and will direct your attorneys, accountants, auditors, trustees, consultants, trustees, affiliates, advisors and family members (collectively, “Representatives”), as applicable, who have access to Confidential Information (as defined in Exhibit A hereto) to keep strictly confidential and not disclose any Confidential Information without the express consent of the Company, unless one or more of the following circumstances applies, in which case, you will, and will direct your Representatives to, disclose only the amount of Confidential Information required to be disclosed in order to satisfy such circumstance(s):

 

(i)

such disclosure will be required by applicable law, governmental rule or regulation, court order, administrative or arbitral proceeding or by any bank or insurance regulatory authority having jurisdiction over such party;

 

(ii)

such disclosure is requested by a governmental authority;

 

(iii)

such disclosure is reasonably required in connection with any tax audit involving the Company or any of its affiliates; or

 

(iv)

such disclosure is reasonably required in connection with any litigation against or involving the Company or any of its affiliates.

 

You acknowledge and agree that Confidential Information may be used by you and your Representatives only in connection with matters of the Company.

 

Notwithstanding anything to the contrary herein, nothing in this letter will prohibit you from (i) making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, (ii) discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination, and (iii) disclosing any trade secret (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law or (B) in a complaint or other document that is filed under seal in a lawsuit or other proceeding; nothing herein will require notification to, or prior approval by, the Company of any reporting described in the preceding clauses (i), (ii) and (iii).

 

 

Works. You acknowledge that your work on and contributions to documents, programs, methodologies, protocols and other expressions in any tangible medium (including, without limitation, all business ideas and methods, inventions, innovations, developments, procedures or processes, market research, databases and other works of authorship) which have been or will be prepared by you, or to which you have contributed or will contribute, in connection with your services to CompoSecure or Resolute Holdings (collectively, “Works”), are and will be within the scope of your employment and part of your duties and responsibilities. You agree that you hereby assign, grant and deliver exclusively and throughout the world to Resolute Holdings all rights, titles and interests in and to any such Works.

 

 

RESTRICTIVE COVENANTS

 

Investment Opportunities. You hereby agree that if an investment opportunity is presented to you and you believe in good faith such investment opportunity may be appropriate for the Company and/or its affiliates, then you will first offer such investment opportunity to the Company and/or its affiliates, and not pursue such investment opportunity unless the Company affirmatively declines to pursue such investment opportunity. You hereby agree that following your permanent disability, voluntary retirement or departure from the Company, you will not pursue any such transaction or investment opportunity or any other transaction or investment opportunity that you became aware of or that was otherwise discussed prior to the effective date of such departure.

 

ADDITIONAL PROVISIONS

 

Section 409A. The intent of the parties is that the payments and benefits under this letter comply with or be exempt from Section 409A of the Internal Revenue Code of 1986 (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum extent permitted, this letter will be interpreted to be in compliance therewith. You agree that you will be solely responsible and liable for the satisfaction of all taxes, interest and penalties that may be imposed on you or for your account in connection with any payment or benefit under this letter (including any taxes, interest and penalties under Section 409A), and the Company will not have an obligation to indemnify or otherwise hold you (or any beneficiary successor or assign) harmless from any or all such taxes, interest or penalties.

 

Section 280G. If a change in control of the Company occurs and any payment or benefit made under this letter or any other agreements providing you rights to compensation or equity would constitute a “parachute payment” within the meaning of Section 280G of the Code, each payment or benefit will be reduced to the maximum amount that does not trigger the excise tax under Section 4999 of the Code unless you would be better off (on an after-tax basis) receiving all payments and benefits and paying all excise and income taxes.

 

Withholding Taxes. Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this letter such federal, state and local income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

Cooperation. You agree that upon termination of employment for any reason, you will reasonably cooperate in assuring an orderly transition of all matters being handled by you and will assist in any litigation proceedings if reasonably requested by the Company.

 

Representations. In accepting this letter, you represent as follows: (i) you are not subject to any employment agreement or non-compete obligation that would preclude the Company from employing or engaging you in your position; (ii) you will not disclose to the Company or otherwise use any trade secrets or proprietary information from your prior places of employment, other than those trade secrets transferred from CompoSecure to Resolute Holdings in connection with the Spin-Off; and (iii) you will not refer to or otherwise solicit for employment at the Company any former coworkers or others in contravention of any non-solicitation obligations still in effect.

 

Counterparts. This letter may be executed in any number of counterparts, each of which will be deemed an original as against any party whose signature appears thereon, and all of which together will constitute one and the same instrument.

 

Modification. This letter may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this letter, which agreement is executed by both of the parties hereto.

 

 

Governing Law. This letter will be governed by and construed in accordance with the laws of the United States and the State of Delaware applicable to contracts made and to be performed wholly therein, and without regard to the conflicts of laws principles that would result in the application of the laws of another jurisdiction.

 

Entire Agreement. This letter supersedes all prior and contemporaneous oral or written, express or implied understandings or agreements regarding your employment or engagement with the Company or any of its affiliates, and contains the entire agreement between you and the Company regarding your employment or engagement with the Company.

 

[Remainder of this page is intentionally left blank]

 

 

ACCEPTANCE OF OFFER

 

Please indicate your acceptance of this offer by signing this letter in the space provided and returning it via Adobe.

 

RESOLUTE HOLDINGS MANAGEMENT, INC.
Thomas R. Knott
Chief Executive Officer

 

COMPOSECURE, L.L.C.
Jonathan Wilk
Chief Executive Officer

 

	ACKNOWLEDGED AND AGREED:
	David M. Cote
	Date:

 

Signature Page to Offer Letter

 

 

EXHIBIT A

DEFINITIONS

 

“Cause” will mean:

 

(i)

your conviction (after all appeals have been exhausted), guilty plea, or plea of nolo contendere of or to, a felony charge;

 

(ii)

your conviction (after all appeals have been exhausted), guilty plea, or plea of nolo contendere of or to, a crime involving fraud or embezzlement that causes material harm to Resolute Holdings or its stockholders; or

 

(iii)

willful and continued abuse or neglect of your position that exists for thirty (30) days after a majority of the Resolute Board delivers to you written demand that such abuse or neglect by you of your position cease and desist, where such written demand specifically identifies the manner in which such majority of the Resolute Board believes that you have so abused or neglected your position.

 

For purposes hereof, no act or failure to act on your part will be considered “willful abuse or neglect” unless done or omitted to be done by you in bad faith or without a reasonable belief that such act or omission was consistent with your responsibilities and in the best interest of Resolute Holdings.

 

“Confidential Information” will mean all non-public information concerning the Company, its subsidiaries and affiliates and their respective investment advisors and/or consultants, or any past and present officers, directors, partners, members, shareholders, employees, business partners, attorneys, representatives, agents, predecessors, successors and assigns of the foregoing, in each case, in whatever form such information is received, which includes, without limiting the generality of the foregoing, information that is stored in documents, text, text messages, pictures, videos or voice recordings. Confidential Information includes, but is not limited to, the following:

 

(i)

performance of the businesses managed by the Company and its subsidiaries and/or affiliates, the strategies or techniques utilized by the foregoing, and the substance of any conversations concerning the analysis undertaken, actions taken or opinions expressed by personnel of the foregoing;

 

(ii)

compensation of personnel of the Company and its subsidiaries and/or affiliates and financial information with respect to any of the foregoing;

 

(iii)

proprietary technology, uses and techniques utilized within the Company and its subsidiaries and/or affiliates, including source code, related algorithms, the form and format of output and their use and application within the Company and its subsidiaries and/or affiliates;

 

(iv)

training materials developed by and/or provided to the Company and its subsidiaries and/or affiliates;

 

(v)

the financial performance of the Company and its subsidiaries and/or affiliates, including their respective revenues, expenses and earnings (to the extent not publicly disclosed);

 

(vi)

any “trade secret” (as defined by applicable state law); and

 

(vii)

any other information that you acquire as a result of your employment and that you have a reasonable basis to believe the Company would not want disclosed to a competitor, the general public or any person that is not an employee of the Company and its subsidiaries and/or affiliates.

 

Confidential Information will not include information that (x) is already available through publicly available sources of information (other than as a result of disclosure by you in violation of this letter); (y) was available to you on a non-confidential basis prior to its disclosure; or (z) becomes available to you on a non-confidential basis from a third-party.

 

 

“Good Reason” means any of the following actions taken by Resolute Holdings without your express written consent:

 

(i)

any material reduction in your annual base salary, annual bonus opportunity or total compensation opportunity;

 

(ii)

any material diminution of your duties, responsibilities, authority, positions or titles;

 

(iii)

Resolute Holdings requiring you to be based at any location more than a 30 mile radius from your primary office for Resolute Holdings; or

 

(iv)

any material breach by Resolute Holdings of any material term or provision of this letter;

 

provided, however, that none of the events described in the foregoing clauses will constitute Good Reason unless you have notified Resolute Holdings in writing describing the events that constitute Good Reason within 30 calendar days following the first occurrence of such events and then only if Resolute Holdings fails to cure such events within 30 calendar days after the receipt of such written notice, and you will have terminated your employment with Resolute Holdings promptly following the expiration of such cure period.

 

“Term” will mean the period starting on the Effective Date and ending upon termination of your employment by you or by Resolute Holdings for any reason.

 

 

 

Exhibit 10.6

 

__, 2025

 

Mr. Thomas R. Knott

By email

 

Dear Thomas:

 

In connection with the spin-off (the “Spin-Off”) of Resolute Holdings Management, Inc. (“Resolute Holdings”) to shareholders of CompoSecure, Inc. (“CompoSecure”), I am pleased to confirm our offer to you to become the Chief Executive Officer of Resolute Holdings and assume the roles and positions described below. Following the Spin-Off, your employment will transfer to Resolute Holdings, while you continue to provide services and dedicate time to CompoSecure in your current role as Chief Investment Officer. The effective date of your employment with Resolute Holdings will be the effective date of the Spin-Off (the “Effective Date”), subject to the terms and conditions of this amended and restated letter agreement (this “letter”). You will also serve as a director on the board of directors of Resolute Holdings (the “Resolute Board”) and will remain a director on the board of directors of CompoSecure (the “CompoSecure Board”). “Company”, as used in this letter, refers to CompoSecure, with respect to any services provided to CompoSecure and its subsidiaries, and Resolute Holdings, with respect to any services provided to Resolute Holdings and its subsidiaries, as applicable.

 

ROLES, DUTIES & RESPONSIBILITIES

 

You will have duties, responsibilities and obligations customarily assigned to similarly situated executives at comparable businesses, as reasonably and mutually determined by you and the CompoSecure Board or the Resolute Board, as applicable. You will report to the Executive Chairman of Resolute Holdings and the Executive Chairman and Co-Chief Investment Officer of CompoSecure, as applicable.

 

During the Term (as defined in Exhibit A), your principal office will be based in New York, New York.

 

You will continue to be entitled to the following compensation and benefits package, as approved by the Compensation Committee of the Resolute Board.

 

COMPENSATION

 

Base Salary. As of the Effective Date, your annual base salary will be $750,000, which will be paid by Resolute Holdings.

 

Annual Bonus. You will be eligible, in the discretion of the Resolute Board, to receive an annual performance-based bonus with a target of 100% of base salary, which will be paid by Resolute Holdings; eligibility for the annual performance-based bonus started when you initially commenced employment with CompoSecure.

 

Annual Equity Awards. The equity grant in the form of options to purchase common stock of CompoSecure (the “Options”) that you received in connection with your offer of employment with CompoSecure will continue to vest under the terms of the CompoSecure, Inc. 2021 Incentive Equity Plan (as amended) and the applicable option award agreement. The vesting of the Options will accelerate upon a termination of employment without Cause, a termination due to death or disability or resignation for Good Reason (each, as defined in Exhibit A hereto); provided, however, that the transfer of your employment to Resolute Holdings pursuant to this letter, shall not be deemed a termination of employment for purposes of the accelerated vesting or forfeiture under the applicable option award agreement and shall be adjusted as further described in the Separation and Distribution Agreement by and between CompoSecure and Resolute Holdings. You will remain eligible for annual grants of Options or other equity incentive awards as determined by Resolute Holdings.

 

 

You will not be entitled to any additional compensation with respect to your service as a director on the CompoSecure Board or the Resolute Board.

 

OTHER EXECUTIVE BENEFITS

 

You will also be entitled to the following Executive Benefits:

 

□

Benefits: You will be eligible to participate in substantially the same plans and programs made available by CompoSecure prior to the Spin-Off, and Resolute Holdings following the Spin-Off, to its employees generally from time to time in accordance with their terms.

 

□

Vacation: You will be entitled to four weeks of paid vacation per calendar year.

 

□

Severance: You will not be entitled to any severance cash payments or benefits following termination of your employment for any reason.

 

□

Expenses: You will be reimbursed for your validly incurred reasonable business expenses upon the proper completion and timely submission of requisite forms and receipts to the Company in accordance with the Company’s business expense reimbursement policy.

 

CONFIDENTIALITY & INTELLECTUAL PROPERTY

 

Disclosure of Confidential Information. You agree that you will, and will direct your attorneys, accountants, auditors, trustees, consultants, trustees, affiliates, advisors and family members (collectively, “Representatives”), as applicable, who have access to Confidential Information (as defined in Exhibit A hereto) to keep strictly confidential and not disclose any Confidential Information without the express consent of the Company, unless one or more of the following circumstances applies, in which case, you will, and will direct your Representatives to, disclose only the amount of Confidential Information required to be disclosed in order to satisfy such circumstance(s):

 

(i)

such disclosure will be required by applicable law, governmental rule or regulation, court order, administrative or arbitral proceeding or by any bank or insurance regulatory authority having jurisdiction over such party;

 

(ii)

such disclosure is requested by a governmental authority;

 

(iii)

such disclosure is reasonably required in connection with any tax audit involving the Company or any of its affiliates; or

 

(iv)

such disclosure is reasonably required in connection with any litigation against or involving the Company or any of its affiliates.

 

You acknowledge and agree that Confidential Information may be used by you and your Representatives only in connection with matters of the Company.

 

Notwithstanding anything to the contrary herein, nothing in this letter will prohibit you from (i) making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, (ii) discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination, and (iii) disclosing any trade secret (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law or (B) in a complaint or other document that is filed under seal in a lawsuit or other proceeding; nothing herein will require notification to, or prior approval by, the Company of any reporting described in the preceding clauses (i), (ii) and (iii).

 

 

Works. You acknowledge that your work on and contributions to documents, programs, methodologies, protocols and other expressions in any tangible medium (including, without limitation, all business ideas and methods, inventions, innovations, developments, procedures or processes, market research, databases and other works of authorship) which have been or will be prepared by you, or to which you have contributed or will contribute, in connection with your services to CompoSecure or Resolute Holdings (collectively, “Works”), are and will be within the scope of your employment and part of your duties and responsibilities. You agree that you hereby assign, grant and deliver exclusively and throughout the world to Resolute Holdings all rights, titles and interests in and to any such Works.

 

RESTRICTIVE COVENANTS

 

You acknowledge and agree that you will be subject to the restrictive covenants attached hereto as Exhibit B.

 

ADDITIONAL PROVISIONS

 

Section 409A. The intent of the parties is that the payments and benefits under this letter comply with or be exempt from Section 409A of the Internal Revenue Code of 1986 (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum extent permitted, this letter will be interpreted to be in compliance therewith. You agree that you will be solely responsible and liable for the satisfaction of all taxes, interest and penalties that may be imposed on you or for your account in connection with any payment or benefit under this letter (including any taxes, interest and penalties under Section 409A), and the Company will not have an obligation to indemnify or otherwise hold you (or any beneficiary successor or assign) harmless from any or all such taxes, interest or penalties.

 

Section 280G. If a change in control of the Company occurs and any payment or benefit made under this letter or any other agreements providing you rights to compensation or equity would constitute a “parachute payment” within the meaning of Section 280G of the Code, each payment or benefit will be reduced to the maximum amount that does not trigger the excise tax under Section 4999 of the Code unless you would be better off (on an after-tax basis) receiving all payments and benefits and paying all excise and income taxes.

 

Withholding Taxes. Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this letter such federal, state and local income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

Cooperation. You agree that upon termination of employment for any reason, you will reasonably cooperate in assuring an orderly transition of all matters being handled by you and will assist in any litigation proceedings if reasonably requested by the Company.

 

Representations. In accepting this letter, you represent as follows: (i) you are not subject to any employment agreement or non-compete obligation that would preclude the Company from employing or engaging you in your position; (ii) you will not disclose to the Company or otherwise use any trade secrets or proprietary information from your prior places of employment, other than those trade secrets transferred from CompoSecure to Resolute Holdings in connection with the Spin-Off; and (iii) you will not refer to or otherwise solicit for employment at the Company any former coworkers or others in contravention of any non-solicitation obligations still in effect.

 

 

Counterparts. This letter may be executed in any number of counterparts, each of which will be deemed an original as against any party whose signature appears thereon, and all of which together will constitute one and the same instrument.

 

Modification. This letter may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this letter, which agreement is executed by both of the parties hereto.

 

Governing Law. This letter will be governed by and construed in accordance with the laws of the United States and the State of Delaware applicable to contracts made and to be performed wholly therein, and without regard to the conflicts of laws principles that would result in the application of the laws of another jurisdiction.

 

Entire Agreement. This letter supersedes all prior and contemporaneous oral or written, express or implied understandings or agreements regarding your employment or engagement with the Company or any of its affiliates, and contains the entire agreement between you and the Company regarding your employment or engagement with the Company.

 

[Remainder of this page is intentionally left blank]

 

 

ACCEPTANCE OF OFFER

 

Please indicate your acceptance of this offer by signing this letter in the space provided and returning it via Adobe.

 

RESOLUTE HOLDINGS MANAGEMENT, INC.

 

David M. Cote
Executive Chairman

 

COMPOSECURE, L.L.C.
Jonathan Wilk
Chief Executive Officer

 

	ACKNOWLEDGED AND AGREED:
	Thomas R. Knott
	Date:

 

Signature Page to Offer Letter

 

 

EXHIBIT A

DEFINITIONS

 

“Cause” will mean:

 

(i)

your conviction (after all appeals have been exhausted), guilty plea, or plea of nolo contendere of or to, a felony charge;

 

(ii)

your conviction (after all appeals have been exhausted), guilty plea, or plea of nolo contendere of or to, a crime involving fraud or embezzlement that causes material harm to Resolute Holdings or its stockholders; or

 

(iii)

willful and continued abuse or neglect of your position that exists for thirty (30) days after a majority of the Resolute Board delivers to you written demand that such abuse or neglect by you of your position cease and desist, where such written demand specifically identifies the manner in which such majority of the Resolute Board believes that you have so abused or neglected your position.

 

For purposes hereof, no act or failure to act on your part will be considered “willful abuse or neglect” unless done or omitted to be done by you in bad faith or without a reasonable belief that such act or omission was consistent with your responsibilities and in the best interest of Resolute Holdings.

 

“Confidential Information” will mean all non-public information concerning the Company, its subsidiaries and affiliates and their respective investment advisors and/or consultants, or any past and present officers, directors, partners, members, shareholders, employees, business partners, attorneys, representatives, agents, predecessors, successors and assigns of the foregoing, in each case, in whatever form such information is received, which includes, without limiting the generality of the foregoing, information that is stored in documents, text, text messages, pictures, videos or voice recordings. Confidential Information includes, but is not limited to, the following:

 

(i)

performance of the businesses managed by the Company and its subsidiaries and/or affiliates, the strategies or techniques utilized by the foregoing, and the substance of any conversations concerning the analysis undertaken, actions taken or opinions expressed by personnel of the foregoing;

 

(ii)

compensation of personnel of the Company and its subsidiaries and/or affiliates and financial information with respect to any of the foregoing;

 

(iii)

proprietary technology, uses and techniques utilized within the Company and its subsidiaries and/or affiliates, including source code, related algorithms, the form and format of output and their use and application within the Company and its subsidiaries and/or affiliates;

 

(iv)

training materials developed by and/or provided to the Company and its subsidiaries and/or affiliates;

 

(v)

the financial performance of the Company and its subsidiaries and/or affiliates, including their respective revenues, expenses and earnings (to the extent not publicly disclosed);

 

(vi)

any “trade secret” (as defined by applicable state law); and

 

(vii)

any other information that you acquire as a result of your employment and that you have a reasonable basis to believe the Company would not want disclosed to a competitor, the general public or any person that is not an employee of the Company or its subsidiaries and/or affiliates.

 

Confidential Information will not include information that (x) is already available through publicly available sources of information (other than as a result of disclosure by you in violation of this letter); (y) was available to you on a non-confidential basis prior to its disclosure; or (z) becomes available to you on a non-confidential basis from a third-party.

 

 

“Good Reason” means any of the following actions taken by Resolute Holdings without your express written consent:

 

(i)

any material reduction in your annual base salary, annual bonus opportunity or total compensation opportunity;

 

(ii)

any material diminution of your duties, responsibilities, authority, positions or titles;

 

(iii)

Resolute Holdings requiring you to be based at any location more than a 30 mile radius from your primary office for Resolute Holdings; or

 

(iv)

any material breach by Resolute Holdings of any material term or provision of this letter;

 

provided, however, that none of the events described in the foregoing clauses will constitute Good Reason unless you have notified Resolute Holdings in writing describing the events that constitute Good Reason within 30 calendar days following the first occurrence of such events and then only if Resolute Holdings fails to cure such events within 30 calendar days after the receipt of such written notice, and you will have terminated your employment with Resolute Holdings promptly following the expiration of such cure period.

 

“Term” will mean the period starting on the Effective Date and ending upon termination of your employment by you or by Resolute Holdings for any reason.

 

 

EXHIBIT B

 

RESTRICTIVE COVENANTS

 

1.            Non-Competition. You hereby acknowledge and agree that you will not, at any time from the date hereof until the date that is twelve (12) months after the date on which you cease to be an employee or service provider of the Company (the “Non-Compete Period”), without the prior express written permission of the Company, directly or indirectly (either alone or jointly with or on behalf of any third party and whether on such entity’s own account or as a principal, partner, member, shareholder, director, employee, consultant, agent or independent contractor for another person): (i) engage in any manner in any business, venture or activity that competes, directly or indirectly, with any business of the Company, any of its affiliates or any of its affiliated investments (a “Competing Business”), either in the United States or in any other place in the world; (ii) render any material services unrelated to investments or investment management to a Competing Business if such services would be materially injurious to the financial condition or business reputation of the Company or its affiliates; or (iii) acquire a financial interest in any Competing Business; provided, however, that nothing in this Section 1 will prevent you from acquiring, solely as a passive investment and through market purchases, less than 2% of the outstanding equity securities of any corporation that is registered under Section 12(b) of Section 12(g) of the Securities Exchange Act of 1934, as amended, or other entity that is registered under similar applicable law in any non-U.S. jurisdiction and that is publicly traded so long as you are not part of any control group of such corporation. So that the Company may enjoy the full benefit of the covenants contained in this Exhibit B, you further agree that the Non-Compete Period will be tolled, and will not run, during the period of any breach by you of any of the covenants contained in this Exhibit B. Notwithstanding the foregoing, restrictions under this Section 1 will not apply if you are terminated by the Company without Cause or if you resign for Good Reason.

 

2.            Non-Solicitation. You hereby acknowledge and agree that you will not, during the Non-Compete Period, directly or indirectly, through any third-party (including through a fund, partnership, company or similar entity), without the prior express written permission of the Company: (i) hire, solicit, recruit or induce (or attempt to hire, solicit, recruit or induce) any person (A) while he or she is an employee, partner or member of the Company and/or any of its affiliates or (B) who was an employee, partner or member of the Company and/or any of its affiliates at any time during the twelve (12) months prior to the date of termination of your employment or engagement; or (ii) encourage any such person described in this Section 2 to terminate their employment, partnership or membership with the Company and/or any of its affiliates; provided, however, that nothing in this Section 2 will prohibit you from making a general, public solicitation for employment (including via social media), or using an employee recruiting or search firm to conduct a search that does not specifically target employees or other service providers to the Company and/or its affiliates (but you will be prohibited from hiring or employing any such employee who responds to such solicitation or recruiting).

 

3.            Non-Disparagement. You hereby acknowledge and agree that you will not directly or indirectly issue or communicate any public statement, or statement likely to become public, that maligns, denigrates or disparages the Company or any directors, officers or employees of the Company; provided, that you may (i) confer in confidence with your legal representatives, (ii) make truthful responses to legal process or governmental inquiry and truthful statements required to correct any inaccurate or misleading statement made by others regarding you or your employment with or other service to the Company, (iii) make normal commercial competitive-type statements in a competitive business situation not based on your employment with the Company (to the extent such business situation does not otherwise violate the terms of Sections 1 (Non-Competition) or 2 (Non-Solicitation)) and (iv) make statements in the good faith performance of your duties to the Company; provided, further, that if you violate this Section 3 and such violation does not harm the Company’s business or reputation, such violation alone will not be a breach of this Section 3.

 

4.            Investment Opportunities. You hereby acknowledge and agree that if an investment opportunity is presented to you and you believe in good faith such investment opportunity may be appropriate for the Company and/or its affiliates, then you will first offer such investment opportunity to the Company and/or its affiliates, and not pursue such investment opportunity unless the Company affirmatively declines to pursue such investment opportunity. You further acknowledge and agree that if you cease to be an employee or service provider of the Company for any reason, you will not pursue any such transaction or investment opportunity or any other transaction that you became aware of or that was otherwise discussed while you were employed or engaged by or otherwise affiliated with the Company and/or any of its affiliates.

 

 

5.            Severability. The covenants in this Exhibit B are severable and separate, and the unenforceability of any specific covenant will not affect the provisions of any other covenant. If any provision of this Exhibit B relating to the time period, scope, or geographic area of the restrictive covenants will be declared by a court of competent jurisdiction or arbitrator to exceed the maximum time period, scope, or geographic area, as applicable, that such court or arbitrator deems reasonable and enforceable, then this Exhibit B will automatically be considered to have been amended and revised to reflect such determination.

 

6.            Independent Covenants. All of the covenants in this Exhibit B will be construed as an agreement independent of any other provisions of this Exhibit B or of the letter to which it is attached, and the existence of any claim or cause of action that you may have against the Company or any of its affiliates, whether predicated on this Exhibit B or otherwise, will not constitute a defense to the enforcement by the Company of such covenants.

 

7.            Reasonableness. By executing the letter to which this Exhibit B is attached, you acknowledge that you have carefully read and considered the provisions of this Exhibit B and, having done so, agree that these restrictive covenants impose a fair and reasonable restraint on you and are reasonably required to protect the Confidential Information, business and/or goodwill of the Company, its affiliates and their respective officers, directors, employees, and equityholders.

 

 

 

 

Exhibit 10.7

 

__, 2025

 

Mr. Kurt Schoen

By email

 

Dear Kurt:

 

In connection with the spin-off (the “Spin-Off”) of Resolute Holdings Management, Inc. (“Resolute Holdings”) to shareholders of CompoSecure, Inc. (“CompoSecure”), I am pleased to confirm our offer to you to become the Chief Financial Officer of Resolute Holdings and assume the roles and positions described below. Following the Spin-Off, your employment will transfer to Resolute Holdings, while you continue to provide services to CompoSecure.

 

The effective date of your employment with Resolute Holdings will be the effective date of the Spin-Off (the “Effective Date”), subject to the terms and conditions of this amended and restated letter agreement (this “letter”). “Company”, as used in this letter, refers to Resolute Holdings.

 

ROLES, DUTIES & RESPONSIBILITIES

 

You will have duties, responsibilities and obligations customarily assigned to similarly situated employees at comparable businesses, as reasonably determined by the Executive Chairman of Resolute Holdings.

 

During the Term (as defined in Exhibit A), your principal office will be based in New York.

 

You will continue to be entitled to the following compensation and benefits package, as approved by the Compensation Committee of the board of directors of Resolute Holdings (the “Resolute Board”).

 

COMPENSATION

 

Base Salary. As of the Effective Date, your annual base salary will be $500,000, which will be paid by Resolute Holdings.

 

Annual Bonus. You will be eligible, in the discretion of the Resolute Board, to receive an annual performance-based bonus with a target of 100% of base salary, which will be paid by Resolute Holdings; eligibility for the annual performance-based bonus started when you initially commenced employment with CompoSecure.

 

Annual Equity Awards. The equity grant in the form of restricted stock units of CompoSecure (the “Sign-On RSUs”) that you received in connection with your offer of employment with CompoSecure will continue to vest under the terms of the CompoSecure, Inc. 2021 Incentive Equity Plan (as amended) and the applicable restricted stock unit award agreement and shall be adjusted as further described in the Separation and Distribution Agreement by and between CompoSecure and Resolute Holdings. The vesting of the Sign-On RSUs will accelerate upon a termination due to death or disability. You will remain eligible for annual grants of restricted stock units or other equity incentive awards as determined by Resolute Holdings.

 

OTHER EMPLOYEE BENEFITS

 

You will also be entitled to the following Employee Benefits:

 

□

Benefits: You will be eligible to participate in substantially the same plans and programs made available by CompoSecure prior to the Spin-Off, and Resolute Holdings following the Spin-Off, to its employees generally from time to time in accordance with their terms.

 

 

□

Vacation: You will be entitled to four weeks of paid vacation per calendar year.

 

□

Severance: Upon a termination by the Employer without Cause, you will be entitled to 3 months’ base salary, payable in a lump sum as soon as practicable following termination of your employment, and a prorated portion of the Sign-On RSUs will accelerate and vest, determined based on the number of days you were employed during the vesting period in which such termination occurs, in each case, subject to your execution and non-revocation of a release of claims in favor of the Employer in a form provided by the Employer and your compliance with the restrictive covenants contained in this letter (including the restrictive covenants attached hereto as Exhibit B).

 

□

Expenses: You will be reimbursed for your validly incurred reasonable business expenses upon the proper completion and timely submission of requisite forms and receipts to the Company in accordance with the Company’s business expense reimbursement policy.

 

CONFIDENTIALITY & INTELLECTUAL PROPERTY

 

Disclosure of Confidential Information. You agree that you will, and will direct your attorneys, accountants, auditors, trustees, consultants, trustees, affiliates, advisors and family members (collectively, “Representatives”), as applicable, who have access to Confidential Information (as defined in Exhibit A hereto) to keep strictly confidential and not disclose any Confidential Information without the express consent of the Company, unless one or more of the following circumstances applies, in which case, you will, and will direct your Representatives to, disclose only the amount of Confidential Information required to be disclosed in order to satisfy such circumstance(s):

 

(i)

such disclosure will be required by applicable law, governmental rule or regulation, court order, administrative or arbitral proceeding or by any bank or insurance regulatory authority having jurisdiction over such party;

 

(ii)

such disclosure is requested by a governmental authority;

 

(iii)

such disclosure is reasonably required in connection with any tax audit involving the Company or any of its affiliates; or

 

(iv)

such disclosure is reasonably required in connection with any litigation against or involving the Company or any of its affiliates.

 

You acknowledge and agree that Confidential Information may be used by you and your Representatives only in connection with matters of the Company.

 

Notwithstanding anything to the contrary herein, nothing in this letter will prohibit you from (i) making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, (ii) discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination, and (iii) disclosing any trade secret (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law or (B) in a complaint or other document that is filed under seal in a lawsuit or other proceeding; nothing herein will require notification to, or prior approval by, the Company of any reporting described in the preceding clauses (i), (ii) and (iii).

 

Works. You acknowledge that your work on and contributions to documents, programs, methodologies, protocols and other expressions in any tangible medium (including, without limitation, all business ideas and methods, inventions, innovations, developments, procedures or processes, market research, databases and other works of authorship) which have been or will be prepared by you, or to which you have contributed or will contribute, in connection with your services to the Company (collectively, “Works”), are and will be within the scope of your employment and part of your duties and responsibilities. You agree that you hereby assign, grant and deliver exclusively and throughout the world to the Company all rights, titles and interests in and to any such Works.

 

 

RESTRICTIVE COVENANTS

 

You acknowledge and agree that you will be subject to the restrictive covenants attached hereto as Exhibit B.

 

ADDITIONAL PROVISIONS

 

Section 409A. The intent of the parties is that the payments and benefits under this letter comply with or be exempt from Section 409A of the Internal Revenue Code of 1986 (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum extent permitted, this letter will be interpreted to be in compliance therewith. You agree that you will be solely responsible and liable for the satisfaction of all taxes, interest and penalties that may be imposed on you or for your account in connection with any payment or benefit under this letter (including any taxes, interest and penalties under Section 409A), and the Company will not have an obligation to indemnify or otherwise hold you (or any beneficiary successor or assign) harmless from any or all such taxes, interest or penalties.

 

Section 280G. If a change in control of the Company occurs and any payment or benefit made under this letter or any other agreements providing you rights to compensation or equity would constitute a “parachute payment” within the meaning of Section 280G of the Code, each payment or benefit will be reduced to the maximum amount that does not trigger the excise tax under Section 4999 of the Code unless you would be better off (on an after-tax basis) receiving all payments and benefits and paying all excise and income taxes.

 

Withholding Taxes. Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this letter such federal, state and local income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

Cooperation. You agree that upon termination of employment for any reason, you will reasonably cooperate in assuring an orderly transition of all matters being handled by you and will assist in any litigation proceedings if reasonably requested by the Company.

 

Representations. In accepting this letter, you represent as follows: (i) you are not subject to any employment agreement or non-compete obligation that would preclude the Company from employing or engaging you in your position; (ii) you will not disclose to the Company or otherwise use any trade secrets or proprietary information from your prior places of employment, other than those trade secrets transferred from CompoSecure to Resolute Holdings in connection with the Spin-Off; and (iii) you will not refer to or otherwise solicit for employment at the Company any former coworkers or others in contravention of any non-solicitation obligations still in effect.

 

Counterparts. This letter may be executed in any number of counterparts, each of which will be deemed an original as against any party whose signature appears thereon, and all of which together will constitute one and the same instrument.

 

Modification. This letter may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this letter, which agreement is executed by both of the parties hereto.

 

Governing Law. This letter will be governed by and construed in accordance with the laws of the United States and the State of Delaware applicable to contracts made and to be performed wholly therein, and without regard to the conflicts of laws principles that would result in the application of the laws of another jurisdiction.

 

 

Entire Agreement. This letter supersedes all prior and contemporaneous oral or written, express or implied understandings or agreements regarding your employment with the Company or any of its affiliates, and contains the entire agreement between you and the Company regarding your employment with the Company.

 

[Remainder of this page is intentionally left blank]

 

 

ACCEPTANCE OF OFFER

 

Please indicate your acceptance of this offer by signing this letter in the space provided and returning it to via Adobe.

 

RESOLUTE HOLDINGS MANAGEMENT, INC.
David M. Cote
Executive Chairman
COMPOSECURE, L.L.C.
Jonathan Wilk
Chief Executive Officer

 

	ACKNOWLEDGED AND AGREED:
	Kurt Schoen
	Date:

 

Signature Page to Offer Letter

 

 

EXHIBIT A

DEFINITIONS

 

“Cause” will mean:

 

(i)

your breach of any employment or service contract with the Company (including this letter);

 

(ii)

your engagement in disloyalty to the Company, including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty;

 

(iii)

disclosure of trade secrets or confidential information of the Company to any natural person, corporation, limited liability company, partnership, trust, joint stock company, business trust, unincorporated association, joint venture, governmental authority or other legal entity of any nature whatsoever not entitled to receive such information;

 

(iv)

your breach of any written non-competition, non-solicitation, invention assignment or confidentiality agreement between you and the Company; or

 

(v)

your engagement in such other behavior that is detrimental to the interests of the Company as determined by the Company.

 

“Confidential Information” will mean all non-public information concerning the Company, its subsidiaries and affiliates and their respective investment advisors and/or consultants, or any past and present officers, directors, partners, members, shareholders, employees, business partners, attorneys, representatives, agents, predecessors, successors and assigns of the foregoing, in each case, in whatever form such information is received, which includes, without limiting the generality of the foregoing, information that is stored in documents, text, text messages, pictures, videos or voice recordings. Confidential Information includes, but is not limited to, the following:

 

(i)

performance of the businesses managed by the Company and its subsidiaries and/or affiliates, the strategies or techniques utilized by the foregoing, and the substance of any conversations concerning the analysis undertaken, actions taken or opinions expressed by personnel of the foregoing;

 

(ii)

compensation of personnel of the Company and its subsidiaries and/or affiliates and financial information with respect to any of the foregoing;

 

(iii)

proprietary technology, uses and techniques utilized within the Company and its subsidiaries and/or affiliates, including source code, related algorithms, the form and format of output and their use and application within the Company and its subsidiaries and/or affiliates;

 

(iv)

training materials developed by and/or provided to the Company and its subsidiaries and/or affiliates;

 

(v)

the financial performance of the Company and its subsidiaries and/or affiliates, including their respective revenues, expenses and earnings (to the extent not publicly disclosed);

 

(vi)

any “trade secret” (as defined by applicable state law), and

 

(vii)

any other information that you acquire as a result of your employment and that you have a reasonable basis to believe the Company would not want disclosed to a competitor, the general public or any person that is not an employee of the Company or its subsidiaries and/or affiliates.

 

Confidential Information will not include information that (x) is already available through publicly available sources of information (other than as a result of disclosure by you in violation of this letter); (y) was available to you on a non-confidential basis prior to its disclosure; or (z) becomes available to you on a non-confidential basis from a third-party.

 

“Term” will mean the period starting on the Effective Date and ending upon termination of your employment by you or by Resolute Holdings for any reason.

 

 

EXHIBIT B

 

RESTRICTIVE COVENANTS

 

1.            Non-Competition. You hereby acknowledge and agree that you will not, at any time from the date hereof until the date that is twenty-four (24) months after the date on which you cease to be an employee or service provider of the Company (the “Non-Compete Period”), without the prior express written permission of the Company, directly or indirectly (either alone or jointly with or on behalf of any third party and whether on such entity’s own account or as a principal, partner, member, shareholder, director, employee, consultant, agent or independent contractor for another person): (i) engage in any manner in any business, venture or activity that competes, directly or indirectly, with any business of the Company, any of its affiliates or any of its affiliated investments (a “Competing Business”), either in the United States or in any other place in the world; (ii) render any material services unrelated to investments or investment management to a Competing Business if such services would be materially injurious to the financial condition or business reputation of the Company or its affiliates; or (iii) acquire a financial interest in any Competing Business; provided, however, that nothing in this Section 1 will prevent you from acquiring, solely as a passive investment and through market purchases, less than 2% of the outstanding equity securities of any corporation that is registered under Section 12(b) of Section 12(g) of the Securities Exchange Act of 1934, as amended, or other entity that is registered under similar applicable law in any non-U.S. jurisdiction and that is publicly traded so long as you are not part of any control group of such corporation. So that the Company may enjoy the full benefit of the covenants contained in this Exhibit B, you further agree that the Non-Compete Period will be tolled, and will not run, during the period of any breach by you of any of the covenants contained in this Exhibit B.

 

2.            Non-Solicitation. You hereby acknowledge and agree that you will not, during the Non-Compete Period, directly or indirectly, through any third-party (including through a fund, partnership, company or similar entity), without the prior express written permission of the Company: (i) hire, solicit, recruit or induce (or attempt to hire, solicit, recruit or induce) any person (A) while he or she is an employee, partner or member of the Company and/or any of its affiliates or (B) who was an employee, partner or member of the Company and/or any of its affiliates at any time during the twelve (12) months prior to the date of termination of your employment; or (ii) encourage any such person described in this Section 2 to terminate their employment, partnership or membership with the Company and/or any of its affiliates; provided, however, that nothing in this Section 2 will prohibit you from making a general, public solicitation for employment (including via social media), or using an employee recruiting or search firm to conduct a search that does not specifically target employees or other service providers to the Company and/or its affiliates (but you will be prohibited from hiring or employing any such employee who responds to such solicitation or recruiting).

 

3.            Non-Disparagement. You hereby acknowledge and agree that you will not directly or indirectly issue or communicate any public statement, or statement likely to become public, that maligns, denigrates or disparages the Company or any directors, officers or employees of the Company; provided, that you may (i) confer in confidence with your legal representatives, (ii) make truthful responses to legal process or governmental inquiry and truthful statements required to correct any inaccurate or misleading statement made by others regarding you or your employment with or other service to the Company, (iii) make normal commercial competitive-type statements in a competitive business situation not based on your employment with the Company (to the extent such business situation does not otherwise violate the terms of Sections 1 (Non-Competition) or 2 (Non-Solicitation)) and (iv) make statements in the good faith performance of your duties to the Company; provided, further, that if you violate this Section 3 and such violation does not harm the Company’s business or reputation, such violation alone will not be a breach of this Section 3.

 

4.            Investment Opportunities. You hereby acknowledge and agree that if an investment opportunity is presented to you and you believe in good faith such investment opportunity may be appropriate for the Company and/or its affiliates, then you will first offer such investment opportunity to the Company and/or its affiliates, and not pursue such investment opportunity unless the Company affirmatively declines to pursue such investment opportunity. You further acknowledge and agree that if you cease to be an employee of the Company for any reason, you will not pursue any such transaction or investment opportunity or any other transaction that you became aware of or that was otherwise discussed while you were employed or engaged by or otherwise affiliated with the Company and/or any of its affiliates.

 

 

5.            Severability. The covenants in this Exhibit B are severable and separate, and the unenforceability of any specific covenant will not affect the provisions of any other covenant. If any provision of this Exhibit B relating to the time period, scope, or geographic area of the restrictive covenants will be declared by a court of competent jurisdiction or arbitrator to exceed the maximum time period, scope, or geographic area, as applicable, that such court or arbitrator deems reasonable and enforceable, then this Exhibit B will automatically be considered to have been amended and revised to reflect such determination.

 

6.            Independent Covenants. All of the covenants in this Exhibit B will be construed as an agreement independent of any other provisions of this Exhibit B or of the letter to which it is attached, and the existence of any claim or cause of action that you may have against the Company or any of its affiliates, whether predicated on this Exhibit B or otherwise, will not constitute a defense to the enforcement by the Company of such covenants.

 

7.            Reasonableness. By executing the letter to which this Exhibit B is attached, you acknowledge that you have carefully read and considered the provisions of this Exhibit B and, having done so, agree that these restrictive covenants impose a fair and reasonable restraint on you and are reasonably required to protect the Confidential Information, business and/or goodwill of the Company, its affiliates and their respective officers, directors, employees, and equityholders.

 

 

 

Exhibit 10.8

 

U.S. State and Local Tax Sharing Agreement

 

This U.S. STATE AND LOCAL TAX SHARING AGREEMENT, dated as of ____, 2025 (this “Agreement”)< is entered into by and between CompoSecure, Inc., a Delaware corporation (“Parent”), and Resolute Holdings Management, Inc., (“SpinCo”), a Delaware corporation (“SpinCo”, and together with Parent, the “Companies”, and each a “Company”). Each of Parent and SpinCo is sometimes referred to herein as a “Party” and, collectively, the “Parties”.

 

Recitals

 

WHEREAS, pursuant to that certain Separation and Distribution Agreement by and between the Parties, dated as of ____, 2025 (the “Separation and Distribution Agreement”), Parent intends to distribute 100 percent of the stock of SpinCo to its shareholders on a pro rata basis (the “Spin-Off”);

 

WHEREAS, after the Spin-Off, Parent, and its affiliates, on the one hand, and SpinCo, and its affiliates, on the other hand, may be required to file certain Combined US State and Local Tax Returns (as defined below); and

 

WHEREAS, Parent, and its affiliates, on the one hand, and SpinCo and its affiliates, on the other hand, wish to allocate Tax assets and liabilities between themselves for taxable periods ending after the Closing Date (defined below).

 

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, each of the Parties mutually covenants and agrees as follows:

 

Section 1.          Definitions.

 

For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings:

 

“Affiliate” means any entity that is directly or indirectly Controlled by either the person in question or an Affiliate of such person; provided, that neither Parent nor SpinCo shall be considered an Affiliate of the other. As used in this paragraph, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise;

 

“Apportionment Factor” means a ratio determined by a relevant taxing jurisdiction’s apportionment formula, including where applicable, sales, property and payroll tax factors.

 

“Benefited Party” shall have the meaning set forth in Section 3.04(c) of this Agreement;

 

“Business Day” means any day other than a Saturday, a Sunday, or a day on which the Federal Reserve Bank of New York is closed;

 

“Claiming Company” shall have the meaning set forth in Section 3.04(a) of this Agreement;

 

“Closing” means the completion of the Spin-Off pursuant to the Separation and Distribution Agreement (as amended and restated from time to time);

 

“Closing Date” means the date on which Closing takes place;

 

“Code” means the US Internal Revenue Code of 1986, as amended;

 

“Combined US State and Local Tax Returns” means a Tax Return which (i) relates to any arrangement (whether in place by reason of law, agreement or otherwise) with any Tax Authority in relation to US state Taxes (or any Taxes of any political subdivision thereof), (ii) relates to both the business of one or more members of the Parent Group and the business of one or more members of the SpinCo Group and (iii) uses a unitary combined apportionment methodology;

 

“Controlling Company” shall have the meaning set forth in Section 7.02(a) of this Agreement;

 

 

“Dispute” shall have the meaning set forth in Section 10.01 of this Agreement;

 

“Due Date” means the date (taking into account all valid extensions) upon which a Tax Return is required to be filed with or Taxes are required to be paid to a Tax Authority, whichever is applicable;

 

“Final Determination” means the final resolution of liability for any Tax, which resolution may be for a specific issue or adjustment or for a taxable period, (a) by a form comparable to IRS Form 870 or 870- AD (or any successor forms thereto), on the date of acceptance by or on behalf of the taxpayer, under the laws of a State (or political subdivision thereof), except that a form shall not constitute a Final Determination to the extent that it reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund or the right of the Tax Authority to assert a further deficiency in respect of such issue or adjustment or for such taxable period (as the case may be); (b) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (c) by a closing agreement or accepted offer in compromise under the laws of a State (or political subdivision thereof) comparable to Sections 7121 or 7122 of the Code; (d) by any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the jurisdiction imposing such Tax; or (e) by any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the Parties;

 

“Group” means the Parent Group or the SpinCo Group, or both, as the context requires;

 

“Indemnitee” shall have the meaning set forth in Section 9 of this Agreement;

 

“Indemnitor” shall have the meaning set forth in Section 9 of this Agreement;

 

“Non-Controlling Company” shall have the meaning set forth in Section 7.02(b) of this Agreement;

 

“Parent” has the meaning set forth in the first sentence of this Agreement;

 

“Parent Business” means all of the businesses and operations conducted by the Parent Group, excluding the SpinCo Business, at any time, whether prior to or after the Spin-Off;

 

“Parent Group” means Parent and its Affiliates, excluding any entity that is a member of the SpinCo Group;

 

“Payor” shall have the meaning set forth in Section 4.02(a) of this Agreement;

 

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof, without regard to whether any entity is treated as disregarded for US federal income tax purposes;

 

“Post-Closing Tax Benefits” means Tax Benefits attributable to any Tax period beginning after the Closing Date, and, in the case of any Straddle Period, the portion of such Straddle Period beginning the day after the Closing Date;

 

“Post-Closing Taxes” means Taxes attributable to any Tax period beginning after the Closing Date, and, in the case of any Straddle Period, the portion of such Straddle Period beginning the day after the Closing Date;

 

“Preliminary Tax Advisor” shall have the meaning set forth in Section 10.02 of this Agreement;

 

“Refunds” means any refund (or credit in lieu thereof) of Taxes (including any overpayment of Taxes) that can be refunded or, alternatively, applied to other Taxes payable, including any interest paid on or with respect to such refund of Taxes;

 

“Relevant Presence Ratio” means, with respect to each Group, a fraction determined by dividing the sum of the Apportionment Factor numerators of the each entity in such Group with nexus in the jurisdiction (in states employing a “Finnigan” apportionment methodology, also including the nexus entity’s share of Apportionment Factor numerators from non-nexus members of the applicable Group as determined using the ratio of the nexus entity’s Apportionment Factor numerator over the aggregate of the Apportionment Factor numerators of all nexus entity’s in such Group) by the unitary business group’s combined Apportionment Factor denominator. For the avoidance of doubt, the operations and assets of a member of the Parent Group or the SpinCo Group will be taken into account for this purpose only to the extent the member is a member of the relevant consolidated, combined, unitary or similar Tax group.

 

 

“Required Company” shall have the meaning set forth in Section 4.02(a) of this Agreement;

 

“Responsible Company” means the Company having responsibility for preparing and filing the relevant Combined US State and Local Tax Return pursuant to Section 3.02;

 

“SpinCo” has the meaning set forth in the first sentence of this Agreement;

 

“SpinCo Business” means the business and operations conducted by the SpinCo Group as such business and operations will continue after the Spin-Off; and

 

“SpinCo Group” means SpinCo and its Affiliates, as determined after the Spin-Off.

 

“Straddle Period” means any period relevant for Taxes commencing on or before the Closing Date but ending after the Closing Date;

 

“State” means any state of the United States, the District of Columbia, and any territory of the United States;

 

“Taxes” means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers compensation, unemployment, disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, escheat or unclaimed property liability, alternative minimum, estimated or other tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any State or political subdivision thereof, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing;

 

“Tax Advisor” means a tax counsel or accountant of recognized standing in the relevant jurisdiction;

 

“Tax Authority” means, with respect to any Tax, the State or political subdivision thereof that imposes such Tax and the agency (if any) charged with the collection of such Tax for such State or subdivision;

 

“Tax Benefit” means a Tax Item that decreases the Tax liability of a taxpayer;

 

“Tax Contest” means an audit, review, examination, or any other administrative or judicial proceeding with the purpose or effect of redetermining Taxes (including any administrative or judicial review of any claim for refund);

 

“Tax Item” means any item of income, gain, loss, deduction, expense, or credit, or other attribute that may have the effect of increasing or decreasing any Tax;

 

“Tax Records” means any Tax Returns, Tax Return work papers, documentation relating to any Tax Contests, and any other books of account or records (whether or not in written, electronic or other tangible or intangible forms and whether or not stored on electronic or any other medium) required to be maintained under applicable Tax laws or under any record retention agreement with any Tax Authority;

 

“Tax Return” means any and all reports, returns, declaration forms and statements (including amendments thereto) filed or required to be filed with respect to Taxes, and any attachments thereto;

 

Section 2.         Allocation of Tax Liabilities.

 

Section 2.01         General Rule.

 

(a)

SpinCo shall be liable for, and shall indemnify and hold harmless the Parent Group against, (i) the Post-Closing Taxes attributable to the SpinCo Business (as determined pursuant to Section 2.02) that the Parent Group pays or is required to pay to the relevant Tax Authority as a result of one or more members of the SpinCo Group being or having been included in any affiliated, consolidated, combined, unitary or similar Tax group with one or more members of the Parent Group and (ii) the Tax Benefits attributable to the Parent Business that the SpinCo Group is treated as using in accordance with Section 2.03(a).

 

 

(b)

Parent shall be liable for, and shall indemnify and hold harmless the SpinCo Group against, (i) any Taxes attributable to the Parent Business (as determined pursuant to Section 2.02) that the SpinCo Group pays or is required to pay to the relevant Tax Authority as a result of one or more members of the Parent Group being or having been included in any affiliated, consolidated, combined, unitary or similar Tax group with one or more members of the SpinCo Group and (ii) the Tax Benefits attributable to the SpinCo Business that the Parent Group is treated as using in accordance with Section 2.03(b).

 

Section 2.02         Attribution of Taxes and Tax Items.

 

(a)

General. For purposes of this Agreement, each Tax and any Tax Items shall be apportioned between the Parent Business on the one hand and the SpinCo Business on the other (but not both) in proportion to each such Group’s Relative Presence Ratio in the applicable jurisdiction.

 

(b)

Straddle Period Tax Allocation. The allocation of income or deductions required to determine any Taxes or other amounts attributable to the portion of the Straddle Period ending on, or beginning after, the Closing Date shall be made by means of a closing of the books and records as of the close of the Closing Date; provided that exemptions, allowances or deductions that are calculated on an annual or periodic basis shall be allocated between such portions in proportion to the number of days in each such portion; provided, further, that real property and other property or similar periodic Taxes shall be apportioned on a per diem basis.

 

Section 2.03         Use of Tax Benefits.

 

(a)

Use of Parent Tax Benefits. The SpinCo Group shall be treated as using Tax Benefits attributable to the Parent Business (as determined pursuant to Section 2.02) to the extent that Tax Benefits attributable to Parent Business reduce (i) Post-Closing Taxes attributable to, and payable by, SpinCo (or its Affiliates), computed on a “with and without basis” or (ii) Taxes payable by Parent (or its Affiliates) for which SpinCo would be liable pursuant to clause (i) of Section 2.01(a), computed on a “with and without” basis.

 

(b)

Use of SpinCo Tax Benefits. The Parent Group shall be treated as using Tax Benefits attributable to the SpinCo Business (as determined pursuant to Section 2.02) to the extent that Post-Closing Tax Benefits attributable to the SpinCo Business reduce (i) Taxes payable by Parent (or its Affiliates), computed on a “with and without basis” or (ii) Taxes payable by SpinCo (or its Affiliates) for which Parent would be liable pursuant to clause (i) of Section 2.01(b), computed on a “with and without” basis.

 

Section 3.         Preparation and Filing of Combined US State and Local Tax Returns.

 

Section 3.01         General. Combined US State and Local Tax Returns shall be prepared and filed when due (including extensions) in accordance with this Section 3. The Companies shall provide, and shall cause their Affiliates to provide, assistance and cooperation to one another in accordance with Section 5 with respect to the preparation and filing of such Tax Returns, including providing information required to be provided in Section 5. Each year the Parties shall assess whether the filing of any Combined US State and Local Tax Returns is required in one or more jurisdictions based on information available to them with respect to the overlapping ownership thereof with respect to all or a portion of the prior taxable year. The Parties shall cooperate in good faith to make such determination as soon as reasonably practicable so as to allow each Party sufficient time to prepare Combined US State and Local Tax Returns on such basis.

 

 

Section 3.02         Responsibility for Preparation and Filing and Payment of Taxes Shown Due.

 

(a)

Parent shall prepare and file (or cause to be prepared and filed) any Combined US State and Local Tax Returns for any Tax Period ending after the Closing Date (a “Post-Closing Tax Period”) that is required by law to be filed by a member of the Parent Group.

 

(b)

SpinCo shall prepare and file (or cause to be prepared and filed) any Combined US State and Local Tax Return for any Post-Closing Tax Period (i) that is required by law to be filed by any member of the SpinCo Group, or (ii) that is required by law and where the applicable law would allow for either a member of the Parent Group or a member of the SpinCo Group to file that Combined US State and Local Tax Return.

 

Section 3.03         Right to Review Combined US State and Local Tax Returns.

 

(a)

Except as otherwise agreed by the Companies, no later than fifteen (15) days prior to the Due Date of each such Combined US State and Local Tax Return, the Responsible Company shall make available or cause to be made available drafts of such Tax Return (together with all related work papers) to the other Company. The other Company shall have access to any and all data and information necessary for the preparation of all such Tax Returns and the Companies shall cooperate fully in the preparation and review of such Tax Returns. Subject to the preceding sentence, no later than ten (10) days after receipt of such Tax Returns, the other Company shall have a right to object to such Tax Return (or items with respect thereto) by written notice to the Responsible Company; such written notice shall contain such disputed item (or items) and the basis for its objection.

 

(b)

If a Company does object by proper written notice described in Section 3.03(a), the Companies shall act in good faith to resolve any such dispute as promptly as practicable; provided, however, that, notwithstanding anything to the contrary contained herein, if the Companies have not resolved the disputed item or items by the day five (5) days prior to the Due Date of such Tax Return, such Tax Return shall be filed as prepared pursuant to this Section 3.03 (revised to reflect all initially disputed items that the Companies have agreed upon prior to such date).

 

(c)

In the event a Combined US State and Local Tax Return is filed that includes any disputed item for which proper notice was given pursuant to Section 3.03(a) that was not finally resolved and agreed upon, such disputed item (or items) shall be resolved in accordance with Section 10. In the event that the resolution of such disputed item (or items) in accordance with Section 10 with respect to a Tax Return is inconsistent with such Tax Return as filed, the Responsible Company (with cooperation from the other Company) shall, as promptly as practicable, amend such Tax Return to properly reflect the final resolution of the disputed item (or items). In the event that the amount of Taxes shown to be due and owing on a Tax Return is adjusted as a result of a resolution pursuant to Section 10, proper adjustment shall be made to the amounts previously paid or required to be paid in accordance with Section 4 in a manner that reflects such resolution.

 

Section 3.04         Refunds

 

(a)

Each Company (and its Affiliates) (the “Claiming Company”) shall be entitled to Refunds that relate to Taxes for which it (or its Affiliates) is liable, or that are generated by Tax Benefits that are attributable to it (or its affiliates), pursuant to this Agreement.

 

(b)

To the extent a Company (or its Affiliates) applies or causes to be applied an overpayment of Taxes as a credit toward or a reduction in Taxes otherwise payable (or a Tax Authority requires such application in lieu of a Refund) and such Refund, if received, would have been payable by such Company to the Claiming Company pursuant to this Section 3.04, such Company shall be deemed to have actually received a Refund to the extent thereof on the Due Date of the Tax Return on which the overpayment is applied to reduce Taxes otherwise payable.

 

 

(c)

In the event of an adjustment relating to Taxes pursuant to a Final Determination for which one Party is responsible under this Agreement which would have given rise to a Refund but for an offset against the Taxes for which the other Party is or may be responsible pursuant to this Agreement (the “Benefited Party”), then the Benefited Party shall pay to the other Party, within ten (10) days of such offset an amount equal to the amount of such reduction in the Taxes of the Benefited Party.

 

(d)

Any Refund or portion thereof to which a Claiming Company is entitled pursuant to this Section 3.04 that is received or deemed to have been received as described herein by the other Company (or its Affiliates) shall be paid by such other Company to the Claiming Company within ten (10) days of the receipt or deemed receipt of such refund. Payments not made within the ten (10) day period shall bear interest computed at the rate per annum equal to the Wall Street Journal Prime Rate as published in The Wall Street Journal from time to time on the amount of the payment based on the number of days in the period beginning on the commencement of the ten (10) day period and ending on and including the date of payment.

 

(e)

To the extent that the amount of any Refund is subsequently reduced, such reduction shall be allocated to the Party that was entitled to the Refund pursuant to this Section 3.04 and an appropriate adjusting payment shall be made by such Party to the other Party if the other Party originally paid the Refund to such Party. To the extent a Party does not agree with the amount of any Refund calculated by the other Party, the dispute shall be resolved in accordance with Section 10.

 

Section 4.         Tax Payments.

 

Section 4.01         Payment of Taxes.

 

(a)

Computation and Payment of Tax Due. Prior to the Due Date for any Combined US State and Local Tax Return, the Responsible Company shall compute the amount of Tax required to be paid to the applicable Tax Authority with respect to such Tax Return on such Due Date. The Responsible Company shall pay such amount to such Tax Authority on or before the Due Date. Prior to the Due Date or as soon as reasonably practicable following the Due Date, the Responsible Company shall provide notice to the other Company setting forth such other Company’s responsibility for the amount of Taxes to be paid or paid to the Tax Authority and provide proof of payment of such Taxes.

 

(b)

Payment of Liability with Respect to Tax Due. If the Responsible Company notifies the other Company at least fifteen (15) days prior to the Due Date of the amount of any Taxes due to any Tax Authority and allocable to it under the provisions of this Agreement, the other Company shall pay such amounts to the Responsible Company prior to the Due Date (or at the direction of the Responsible Company, to the Tax Authority). If the Responsible Company notifies the other Company less than fifteen (15) days prior to the Due Date of the amount of any Taxes due to any Tax Authority and allocable to it under the provisions of this Agreement, the other Company shall pay such amounts to the Responsible Company within fifteen (15) days of the receipt of such notice.

 

 

(c)

Payments for Tax Benefits. Within fifteen (15) days following the use by the Responsible Company (or its Affiliates) of a Tax Benefit attributable to the other Company (or its Affiliates), if the SpinCo Group is treated as using a Tax Benefit attributable to the Parent Group under the provisions of this Agreement, SpinCo shall pay to Parent an amount equal to the amount such Tax Benefit, and if the Parent Group is treated as using a Tax Benefit attributable to the SpinCo Group under the provisions of this Agreement, Parent shall pay to SpinCo an amount equal to the amount of such Tax Benefit. For purposes of this Agreement, any such Tax Benefit shall be considered used as of the earlier of (i) the Due Date of the Tax Return that is filed with respect to such Tax Benefit or (ii) the date on which such Tax Return is filed. Within fifteen (15) days of the receipt of a notice from the Responsible Company that the other Company (or its Affiliates) has used a Tax Benefit attributable to the Responsible Company (or its Affiliates), if the SpinCo Group is treated as using a Tax Benefit attributable to the Parent Group under the provisions of this Agreement, SpinCo shall pay to Parent an amount equal to the amount such Tax Benefit, and if the Parent Group is treated as using a Tax Benefit attributable to the SpinCo Group under the provisions of this Agreement, Parent shall pay to SpinCo an amount equal to the amount of such Tax Benefit.

 

(d)

Interest on Late Payments. Payments not made within the time periods specified set forth in Sections 4.01(b) and (c) shall bear interest computed at the rate per annum equal to the Wall Street Journal Prime Rate as published in The Wall Street Journal from time to time on the amount of the payment based on the number of days in the period beginning the date such payments were due to the other Company and ending on and including the date of payment.

 

(e)

Subsequent Adjustments. In the case of any adjustment pursuant to a Final Determination with respect to any such Tax Return, the Responsible Company shall pay to the applicable Tax Authority when due any additional Tax due with respect to such Tax Return required to be paid as a result of such adjustment pursuant to such Final Determination. The Responsible Company shall redetermine the amounts payable by Parent to SpinCo or by SpinCo to Parent, as the case may be, under this Agreement. If the Responsible Company notifies the other Company at least fifteen (15) days prior to the date any additional Tax is due to such Tax Authority and allocable to it under the provisions of this Agreement, the other Company shall pay such amounts to the Responsible Company prior to the date such additional Tax is due (or at the direction of the Responsible Company, to the Tax Authority). If the Responsible Company notifies the other Company less than fifteen (15) days prior to the date any additional Tax is due to such Tax Authority and allocable to it under the provisions of this Agreement, the other Company shall pay such amounts to the Responsible Company within fifteen (15) days of the receipt of such notice. The Responsible Company shall pay to the other Company, or the other Company shall pay to the Responsible Company, any other amounts due under the provisions of this Agreement within fifteen (15) days from the later of (i) the date the additional Tax was due, (ii) the date of the Final Determination (if no cash payment was paid), or (iii) in the case of an amount payable by the other Company to the Responsible Company, the date of receipt of written notice and demand from the Responsible Company of the amount due. Any payments required under this Section 4.01(e) shall include interest computed at the rate per annum equal to the Wall Street Journal Prime Rate as published in The Wall Street Journal from time to time based on the number of days in the period beginning the date such payments were due to the other Company under this Section 4.01(e) and ending on and including the date of payment.

 

(f)

Disputes. To the extent a Party does not agree with any amount calculated pursuant to this Section 4.01, the dispute shall be resolved in accordance with Section 10

 

 

Section 4.02         Indemnification Payments.

 

(a)

If any Company (the “Payor”) is required under applicable Tax law to pay to a Tax Authority a Tax that another Company (the “Required Company”) is liable for under this Agreement, the Payor shall provide notice to the Required Company for the amount due, accompanied by evidence of payment and a statement detailing the Taxes paid and describing in reasonable detail the particulars relating thereto. Such Required Company shall have a period of thirty (30) days after the receipt of notice to respond thereto. Unless the Required Company disputes the amount it is liable for under this Agreement, the Required Company shall reimburse the Payor within forty-five (45) Business Days of delivery by the Payor of the notice described above. To the extent the Required Company does not agree with the amount the Payor claims the Required Company is liable for under this Agreement, the dispute shall be resolved in accordance with Section 10. Any reimbursement shall include interest on the Tax payment computed at the rate per annum equal to the Wall Street Journal Prime Rate as published in The Wall Street Journal from time to time based on the number of days in the period beginning the date such payments were due to the other Company under this Section 4.02 and ending on and including the date of payment.

 

(b)

All indemnification payments under this Agreement shall be made by Parent directly to SpinCo and by SpinCo directly to Parent; provided, however, that if the Companies mutually agree with respect to any such indemnification payment, any member of the Parent Group, on the one hand, may make such indemnification payment to any member of the SpinCo Group, on the other hand, and vice versa.

 

Section 5.         Cooperation and Reliance.

 

Section 5.01         Assistance and Cooperation.

 

(a)

The Companies shall cooperate (and cause their respective Affiliates to cooperate) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with Tax matters relating to the Companies and their Affiliates including (i) preparation and filing of any Combined US State and Local Tax Returns and the determination of whether filing of such returns on a combined basis is required, (ii) determining the liability for and amount of any Taxes due (including estimated Taxes) or the right to and amount of any refund of Taxes, (iii) examinations of such Tax Returns, and (iv) any administrative or judicial proceeding in respect of Taxes assessed or proposed to be assessed with respect to such Tax Returns. Such cooperation shall include making all information and documents in their possession relating to the other Company and its Affiliates available to such other Company as provided in Section 6. Each of the Companies shall also make available to the other, as reasonably requested and available, personnel (including officers, directors, employees and agents of the Companies or their respective Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes shown on such Tax Returns, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to such Taxes.

 

(b)

Any information or documents provided under this Section 5 shall be kept confidential by the Company receiving the information or documents, except as may otherwise be necessary in connection with the filing of such Tax Returns or in connection with any administrative or judicial proceedings relating to such Taxes. Notwithstanding any other provision of this Agreement or any other agreement, (i) neither Company nor any Affiliate shall be required to provide the other Company or any Affiliate or any other Person access to or copies of any information or procedures (including the proceedings of any Tax Contest) other than information or procedures that relate solely to the first Company, the business or assets of the first Company or any of its Affiliates and (ii) in no event shall any Company or its Affiliates be required to provide the other Company, any of the other Company’s Affiliates or any other Person access to or copies of any information if such action could reasonably be expected to result in the waiver of any privilege. In addition, in the event that a Company determines that the provision of any information to the other Company or an Affiliate of the other Company could be commercially detrimental, violate any law or agreement or waive any privilege, the Company shall use reasonable best efforts to permit compliance with its obligations under this Section 5 in a manner that avoids any such harm or consequence.

 

Section 5.02         Combined US State and Local Tax Return Information. Parent and SpinCo acknowledge that time is of the essence in relation to any request for information, assistance or cooperation made by Parent or SpinCo pursuant to Section 5.01 or this Section 5.02. Each Company shall provide to the other Company information and documents relating to its Group required by the other Company to prepare any Combined US State and Local Tax Returns. Any information or documents the Responsible Company requires to prepare such Tax Returns shall be provided in such form as the Responsible Company reasonably requests and in sufficient time for the Responsible Company to file such Tax Returns on a timely basis.

 

 

Section 5.03         Non-Performance. If a Company (or any of its Affiliates) fails to comply with any of its obligations set forth in this Section 5 upon reasonable request and notice by the other Company (or any of its Affiliates) and such failure results in the imposition of additional Taxes, the non-performing Company shall be liable in full for such additional Taxes.

 

Section 5.04         Costs. Each Company shall devote the personnel and resources necessary in order to carry out this Section 5 and shall make its employees available on a mutually convenient basis to provide explanations of any documents or information provided hereunder. Each Company shall carry out its responsibilities under this Section 5 at its own cost and expense.

 

Section 6.         Tax Records.

 

The Companies and their respective Affiliates shall make available to each other for inspection and copying during normal business hours upon reasonable notice all Tax Records (and, for the avoidance of doubt, any pertinent underlying data accessed or stored on any computer program or information technology system) in their possession and shall permit the other Company and its Affiliates, authorized agents and representatives and any representative of a Tax Authority or other Tax auditor direct access during normal business hours upon reasonable notice to any computer program or information technology system used to access or store any Tax Records, in each case to the extent reasonably required by the other Company in connection with the preparation of any Combined US State and Local Tax Return or financial accounting statements, audits, litigation, or the resolution of items under this Agreement. To the extent any Tax Records are required to be or are otherwise transferred by the Companies or their respective Affiliates to any person other than an Affiliate, the Company or its respective Affiliate shall transfer such records to the other Company at such time.

 

Section 7.         Tax Contests.

 

Section 7.01         Notice. Each of the Companies shall provide prompt notice to the other Company of any written communication from a Tax Authority regarding any pending or threatened Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware related to Taxes for which it is indemnified by the other Company hereunder. Such notice shall attach copies of the pertinent portion of any written communication from a Tax Authority and contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect of any such matters. If an indemnified Company has knowledge of an asserted Tax liability with respect to a matter for which it is entitled to indemnification hereunder and such Company fails to give the indemnifying Company prompt notice of such asserted Tax liability and the indemnifying Company is entitled under this Agreement to contest the asserted Tax liability, then (i) if the indemnifying Company is precluded from contesting the asserted Tax liability in any forum as a result of the failure to give prompt notice, the indemnifying Company shall have no obligation to indemnify the indemnified Company for such Tax liability or any other Taxes arising from such failure, and (ii) if the indemnifying Company is not precluded from contesting the asserted Tax liability in any forum, but such failure to give prompt notice results in a material monetary detriment to the indemnifying Company, then any amount which the indemnifying Company is otherwise required to pay the indemnified Company pursuant to this Agreement shall be reduced by the amount of such detriment.

 

Section 7.02         Control of Tax Contests.

 

(a)

Controlling Company. In the case of any Tax Contest with respect to any Combined US State and Local Tax Return, the Company that would be primarily liable under this Agreement to pay the applicable Tax Authority the Taxes resulting from such Tax Contest shall administer and control such Tax Contest (the “Controlling Company”).

 

 

(b)

Settlement Rights. The Controlling Company must obtain the prior consent (not to be unreasonably withheld, conditioned or delayed) of the other non-controlling Company (the “Non-Controlling Company”) prior to contesting, litigating, compromising or settling any Tax Contest related to an adjustment which the Non-Controlling Company may reasonably be expected to become liable to make any indemnification payment under this Agreement. Unless waived by the Companies in writing, in connection with any potential adjustment in a Tax Contest as a result of which adjustment the Non-Controlling Company may reasonably be expected to become liable to make any indemnification payment under this Agreement to the Controlling Company under this Agreement: (i) the Controlling Company shall keep the Non-Controlling Company informed in a timely manner of all actions taken or proposed to be taken by the Controlling Company with respect to such potential adjustment in such Tax Contest; (ii) the Controlling Company shall provide the Non-Controlling Company copies of any written materials relating to such potential adjustment in such Tax Contest received from any Tax Authority; (iii) the Controlling Company shall timely provide the Non-Controlling Company with copies of any correspondence or filings submitted to any Tax Authority or judicial authority in connection with such potential adjustment in such Tax Contest; (iv) the Controlling Company shall consult with the Non-Controlling Company (including, without limitation, regarding the use of outside advisors to assist with the Tax Contest) and offer the Non-Controlling Company a reasonable opportunity to comment and the Controlling Company shall consider such comments in good faith before submitting any written materials prepared or furnished in connection with such potential adjustment in such Tax Contest; and (v) the Controlling Company shall defend such Tax Contest diligently and in good faith. The failure of the Controlling Company to take any action specified in the preceding sentence with respect to the Non-Controlling Company shall not relieve the Non-Controlling Company of any liability and/or obligation which it may have to the Controlling Company under this Agreement except to the extent that the Non-Controlling Company was actually harmed by such failure, and in no event shall such failure relieve the Non-Controlling Company from any other liability or obligation which it may have to the Controlling Company.

 

(c)

Tax Contest Participation. Unless waived by the Companies in writing, the Controlling Company shall provide the Non-Controlling Company with written notice reasonably in advance of, and the Non-Controlling Company shall have the right to attend, any formally scheduled meetings with Tax Authorities or hearings or proceedings before any judicial authorities in connection with any potential adjustment in a Tax Contest pursuant to which the Non-Controlling Company may reasonably be expected to become liable to make any indemnification payment to the Controlling Company under this Agreement. The failure of the Controlling Company to provide any notice specified in this Section 7.02(c) to the Non- Controlling Company shall not relieve the Non-Controlling Company of any liability and/or obligation which it may have to the Controlling Company under this Agreement except to the extent that the Non-Controlling Company was actually harmed by such failure, and in no event shall such failure relieve the Non-Controlling Company from any other liability or obligation which it may have to the Controlling Company.

 

(d)

Power of Attorney. Each member of the SpinCo Group shall execute and deliver to Parent (or such member of the Parent Group as Parent shall designate) any power of attorney or other similar document reasonably requested by Parent (or such designee) in connection with any Tax Contest (as to which Parent is the Controlling Company) described in this Section 7. Each member of the Parent Group shall execute and deliver to SpinCo (or such member of the SpinCo Group as SpinCo shall designate) any power of attorney or other similar document requested by SpinCo (or such designee) in connection with any Tax Contest (as to which SpinCo is the Controlling Company) described in this Section 7.

 

 

(e)

Costs. All external out-of-pocket costs and expenses that are incurred by the Controlling Company with respect to a Tax Contest related to an adjustment which the Non-Controlling Company may reasonably be expected to become liable to make any indemnification payment under this Agreement shall be shared by the Companies according to each Company’s relative share of the potential Tax liability with respect to the Tax Contest as determined under this Agreement; provided, however, that a Non-Controlling Company shall not be liable for fees payable to outside advisors to the extent that the Controlling Company failed to consult with the Non-Controlling Company pursuant to Section 7.02(b). If the Controlling Company incurs out-of-pocket costs and expenses to be shared under this Section 7.02(e) during a fiscal quarter, such Controlling Company shall provide notice to the Non-Controlling Company within thirty (30) days after the end of such fiscal quarter for the amount due from such Non-Controlling Company pursuant to this Section 7.02(e), describing in reasonable detail the particulars relating thereto. Such Non-Controlling Company shall have a period of thirty (30) days after the receipt of notice to respond thereto. Unless the Non- Controlling Company disputes the amount it is liable for under this Section 7.02(e), the Non- Controlling Company shall reimburse the Controlling Company within forty-five (45) Business Days of delivery by the Controlling Company of the notice described above. To the extent the Non-Controlling Company does not agree with the amount the Controlling Company claims the Non-Controlling Company is liable for under this Section 7.02(e), the dispute shall be resolved in accordance with Section 10. Any reimbursement shall include interest computed at the rate per annum equal to the Wall Street Journal Prime Rate as published in The Wall Street Journal from time to time based on the number of days in the period beginning the date such payments were due to the other Company under this Section 7.02(e) and ending on and including the date of payment. During the first month of each fiscal quarter in which it expects to incur costs for which reimbursement may be sought under this Section 7.02(e), the Controlling Company will provide the Non-Controlling Company with a good faith estimate of such costs.

 

Section 8.         Survival of Obligations.

 

The representations, warranties, covenants and agreements set forth in this Agreement shall be unconditional and absolute and shall remain in effect without limitation as to time.

 

Section 9.         Treatment of Payments of Interest.

 

Anything herein to the contrary notwithstanding, to the extent one Company (“Indemnitor”) makes a payment of interest to another Company (“Indemnitee”) under this Agreement with respect to the period from the date that the Indemnitee made a payment of Tax to a Tax Authority to the date that the Indemnitor reimbursed the Indemnitee for such Tax payment, the interest payment shall be treated as interest expense to the Indemnitor (deductible to the extent provided by law) and as interest income by the Indemnitee (includible in income to the extent provided by law). The amount of the payment shall not be adjusted to take into account any associated Tax benefit to the Indemnitor or increase in Tax to the Indemnitee.

 

Section 10.       Disagreements.

 

Section 10.01         Discussion. The Companies mutually desire that friendly collaboration will continue between them. Accordingly, they will try, and they will cause their respective Group members to try, to resolve in an amicable manner all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement, including any amendments hereto. In furtherance thereof, in the event of any dispute or disagreement (a “Dispute”) between any member of the Parent Group and any member of the SpinCo Group as to the interpretation of any provision of this Agreement or the performance of obligations hereunder, the Tax departments of the Companies shall negotiate in good faith to resolve the Dispute.

 

 

Section 10.02         Referral to Tax Advisor for Computational Disputes. Notwithstanding anything to the contrary in Section 10, with respect to any Dispute under this Agreement involving computational matters, if the Companies are not able to resolve the Dispute through the discussion process set forth in Section 10.01, the Dispute will be referred to a Tax Advisor acceptable to each of the Companies to act as an arbitrator in order to resolve the Dispute. In the event that the Companies are unable to agree upon a Tax Advisor within fifteen (15) Business Days following the completion of the discussion process, the Companies shall each separately retain an independent, nationally recognized law or accounting firm (each, a “Preliminary Tax Advisor”), which Preliminary Tax Advisors shall jointly select a Tax Advisor on behalf of the Companies to act as an arbitrator in order to resolve the Dispute. The Tax Advisor may, in its discretion, obtain the services of any third-party appraiser, accounting firm or consultant that the Tax Advisor deems necessary to assist it in resolving such disagreement. The Tax Advisor shall furnish written notice to the Companies of its resolution of any such Dispute as soon as practical, but in any event no later than thirty (30) Business Days after its acceptance of the matter for resolution. Any such resolution by the Tax Advisor will be conclusive and binding on the Companies. Following receipt of the Tax Advisor’s written notice to the Companies of its resolution of the Dispute, the Companies shall each take or cause to be taken any action necessary to implement such resolution of the Tax Advisor. Each Company shall pay its own fees and expenses (including the fees and expenses of its representatives) incurred in connection with the referral of the matter to the Tax Advisor (and the Preliminary Tax Advisors, if any). All fees and expenses of the Tax Advisor (and the Preliminary Tax Advisors, if any) in connection with such referral shall be shared equally by the Companies.

 

Section 10.03         Injunctive Relief. Nothing in this Section 10 will prevent either Company from seeking injunctive relief if any delay resulting from the efforts to resolve the Dispute through the process set

 

forth above could result in serious and irreparable injury to either Company. Notwithstanding anything to the contrary in this Agreement, Parent and SpinCo are the only members of their respective Group entitled to commence a dispute resolution procedure under this Agreement, and each of Parent and SpinCo will cause its respective Group members not to commence any dispute resolution procedure other than as provided in this Section 10.

 

Section 11.       Expenses.

 

Except as otherwise provided in this Agreement, each Company and its Affiliates shall bear their own expenses incurred in connection with preparation of any Combined US State and Local Tax Returns, Tax Contests, and other matters related to Taxes under the provisions of this Agreement.

 

Section 12.       General Provisions.

 

Section 12.01         Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by facsimile or electronic transmission with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 12.01):

 

if to Parent, to:

 

CompoSecure, Inc.

309 Pierce Street

Somerset, NJ

	Attention:	Corporate Secretary
	Email:	legal@composecure.com

 

with a copy (which shall not constitute notice) to:

 

Paul, Weiss, Rifkind, Wharton & Garrison, LLP

1285 Avenue of the Americas

 

	Attention:	Scott A. Barshay
		Laura Turano
	E-mail:	sbarshay@paulweiss.com
		lturano@paulweiss.com

 

if to SpinCo, to:

 

Resolute Holdings Management, Inc.

445 Park Avenue, Suite 15F

	Attention:	Thomas R. Knott
	Email:

 

 

 

with a copy (which shall not constitute notice) to:

 

Paul, Weiss, Rifkind, Wharton & Garrison, LLP

1285 Avenue of the Americas

	Attention:	Scott A. Barshay
		Laura Turano
	E-mail:	sbarshay@paulweiss.com
		lturano@paulweiss.com

 

A Party may change the address for receiving notices under this Agreement by providing written notice of the change of address to the other Parties.

 

Section 12.02         Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and assigns.

 

Section 12.03         Waiver. The Parties may waive a provision of this Agreement only by a writing signed by the Party intended to be bound by the waiver. A Party is not prevented from enforcing any right, remedy or condition in the Party’s favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the Party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a Party’s rights and remedies in this Agreement is not intended to be exclusive, and a Party’s rights and remedies are intended to be cumulative to the extent permitted by law and include any rights and remedies authorized in law or in equity.

 

Section 12.04         Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the parties.

 

Section 12.05         Change in Law. If, due to any change in applicable law or regulations or their interpretation by any court of law or other governing body having jurisdiction subsequent to the date of the Agreement, performance of any provision of this Agreement becomes impracticable or impossible, the parties hereto will use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision.

 

Section 12.06         Authority. Each of the Parties represents to the other that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate or other action, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles.

 

Section 12.07         Further Action. The Parties shall execute and deliver all documents, provide all information, and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement, including the execution and delivery to the other Parties and their Affiliates and representatives of such powers of attorney or other authorizing documentation as is reasonably necessary or appropriate in connection with Tax Contests (or portions thereof) under the control of such other Parties in accordance with Section 7.

 

 

Section 12.08         Integration. This Agreement, together with each of the exhibits and schedules appended hereto constitutes the final agreement among the Parties, and is the complete and exclusive statement of the Parties’ agreement on the matters contained herein. All prior and contemporaneous negotiations and agreements among the Parties with respect to the matters contained herein are superseded by this Agreement, as applicable. In the event of any inconsistency between this Agreement and any other agreements relating to the Spin-Off, with respect to matters addressed herein, the provisions of this Agreement shall control.

 

Section 12.09         Rules of Construction. Interpretation of this Agreement shall be governed by the following rules of construction: (a) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (b) references to the terms “Section,” “paragraph,” and “clause” are references to the Sections, paragraphs, and clauses of this Agreement unless otherwise specified; (c) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to this entire Agreement; (d) references to “$” shall mean US dollars; (e) the word “including” and words of similar import when used in this Agreement shall mean “including without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) references to “written” or “in writing” include in electronic form; (h) provisions shall apply, when appropriate, to successive events and transactions; (i) the headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement; (j) Parent and SpinCo have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or burdening a Party by virtue of the authorship of any of the provisions in this Agreement or any interim drafts of this Agreement; and (k) a reference to any Person includes such Person’s successors and permitted assigns.

 

Section 12.10         No Double Recovery. No provision of this Agreement shall be construed to provide an indemnity or other recovery for any costs, damages, or other amounts for which the damaged Party has been fully compensated under any other provision of this Agreement or under any other agreement or action at law or equity. Unless expressly required in this Agreement, a Party shall not be required to exhaust all remedies available under other agreements or at law or equity before recovering under the remedies provided in this Agreement.

 

Section 12.11         Counterparts. This Agreement may be executed in one (1) or more counterparts (including by electronic or .pdf transmission), and by each Party in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of any signature page by facsimile, electronic or .pdf transmission shall be binding to the same extent as an original signature page.

 

Section 12.12         Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware without giving effect to the principles of conflicts of law thereof.

 

Section 12.13         Jurisdiction. If any dispute arises out of or in connection with this Agreement, except as expressly contemplated by another provision of this Agreement, the Parties irrevocably (and the Parties will cause each other member of their respective Group to irrevocably) (i) agrees that any dispute shall be subject to the exclusive jurisdiction of the state and federal courts located in the State of Delaware, (ii) waives any claims of forum non conveniens and agrees to submit to the jurisdiction of such courts and (iii) agrees that service of any process, summons, notice or document by US registered mail to its respective address set forth in Section 12.01 shall be effective service of process for any litigation brought against it in any such court or for the taking of any other acts as may be necessary or appropriate in order to effectuate any judgment of said courts.

 

Section 12.14         Amendment. No provision of this Agreement (except as otherwise provided therein) may be amended or modified except by a written instrument signed by each of the parties hereto or thereto, as applicable.

 

 

Section 12.15         Parent or SpinCo Affiliates. If, at any time, Parent or SpinCo acquires or creates one or more Affiliates that are includable in the Parent Group or SpinCo Group, as the case may be, they shall be subject to this Agreement and all references to the Parent Group or SpinCo Group, as the case may be, herein shall thereafter include a reference to such Affiliates.

 

Section 12.16         Successors. This Agreement shall be binding on and inure to the benefit of any successor by merger, acquisition of assets, or otherwise, to any of the Parties hereto (including but not limited to any successor of Parent or SpinCo succeeding to the Tax attributes of either under Section 381 of the Code), to the same extent as if such successor had been an original Party to this Agreement.

 

Section 12.17         Injunctions. The Parties acknowledge that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. The Parties hereto shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at law or in equity. 

 

 

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed on its behalf by a duly authorized officer on the date first set forth above.

 

	COMPOSECURE, INC.
	By:
		Name:
		Title:
	RESOLUTE HOLDINGS MANAGEMENT, INC.
	By:
		Name:
		Title:

 

 

Exhibit 10.9

 

Resolute Holdings Management, Inc.

445 Park Avenue, Suite 15F

New York, NY 10022

 

________, 2025

 

CompoSecure, Inc.

309 Pierce Street

Somerset, NJ 08873

Attention: Chief Executive Officer

 

Re: Management Agreement with CompoSecure Holdings, L.L.C.

 

Ladies and Gentlemen:

 

Reference is hereby made to the Management Agreement, dated as of _________, 2025 (the “Management Agreement”), by and between CompoSecure Holdings, L.L.C. (the “Company”), a Delaware limited liability company, and Resolute Holdings Management, Inc. (the “Manager”), a Delaware corporation. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Management Agreement.

 

WHEREAS, upon and subject to the terms of the Management Agreement, the Company has appointed the Manager (and granted to it all powers necessary, convenient or appropriate) to, and the Manager has agreed and covenanted that it shall manage the Company's day-to-day business and operations, and oversee the Company's strategy; and

 

WHEREAS, in furtherance of the performance by the Company and the Manager of their respective duties and obligations under the Management Agreement, CompoSecure, Inc., a Delaware corporation and parent of the Company (“Parent”), and the Manager desire to enter into this letter agreement (this “Letter Agreement”).

 

NOW, THEREFORE, in consideration of the mutual promises set forth herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions hereof, Parent and the Manager agree as follows:

 

1.             Term.  This Letter Agreement shall be coterminous with the Management Agreement, unless this Letter Agreement is terminated by the mutual written consent of Parent and the Manager.

 

2.             Covenants of Parent.

 

(a)            During the term of this Letter Agreement, to the fullest extent permitted by Delaware law, the Exchange Act, the Securities Act, the NASDAQ Rules and any other applicable rule or regulation (including the rules and regulations promulgated under the Exchange Act and the Securities Act):

 

(i)             Parent, the Parent Board or any committee thereof shall not take any action to modify, amend, qualify, interfere with or terminate the delegations set forth on Schedule I attached hereto (collectively, the “Delegations”); and

 

 

(ii)             Parent shall, and shall cause its Subsidiaries, as applicable, to: (A) take all steps reasonably necessary to allow the Manager to make any registrations, filings, declarations and notices on behalf of itself or the Company in connection with the Manager’s performance of its duties and obligations under the Management Agreement; (B) make customary representations, warranties and covenants in connection with any acquisition, business combination transaction or other transaction that is intended qualify in whole or in part as tax-free for U.S. federal income tax purposes, and is entered into, in each case, in accordance with the Management Agreement; and (C) use commercially reasonable efforts to make available to the Manager and its representatives all properties, personnel, representatives, resources, information and materials requested by the Manager in connection with the Manager’s performance of its duties and obligations under the Management Agreement, including its obligations to deliver financial statements and any other information or reports with respect to the Company.

 

(b)             Parent hereby acknowledges and agrees that the Manager may use the name “CompoSecure” and other trademarks of Parent and its Subsidiaries in connection with the Manager’s activities under the Management Agreement (including, in connection with the preparation of any filing with or notification to any Governmental Authority made on behalf of the Company or any of its Subsidiaries). The parties hereto will reasonably cooperate to maintain reasonable quality control with respect to the Manager's use of such trademarks.

 

3.             Covenants of the Manager. During the term of this Letter Agreement, any action of the Manager pursuant to the Grant Delegation (as defined in the Delegations) shall be in writing and the Manager shall, promptly following each Grant (as defined in the Plan) under the CompoSecure, Inc. 2021 Incentive Equity Plan (as in effect from time to time, the “Plan”) granted or acted upon by the Manager pursuant to the Grant Delegation (the “Delegated Grants”) (but not less frequently than every six months) keep the Compensation Committee of the Parent Board apprised as to the Delegated Grants.

 

4.             Representations and Warranties.

 

(a)             Parent hereby represents and warrants to the Manager as follows:

 

(i)             Parent is duly organized, validly existing and in good standing under the laws of the State of Delaware, has the corporate power and authority and the legal right to own and operate its assets, to lease any property it may operate as lessee and to conduct the business in which it is now engaged and is duly qualified as a foreign corporation and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized or licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of Parent and its Subsidiaries, if any, taken as a whole.

 

 

(ii)             Parent has the corporate power and authority and the legal right to make, deliver and perform this Letter Agreement and all obligations required hereunder and has taken all necessary corporate action to authorize this Letter Agreement on the terms and conditions hereof and the execution, delivery and performance of this Letter Agreement and all obligations required hereunder. No consent of any other Person that has not already been obtained, including stockholders and creditors of Parent, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required by Parent in connection with this Letter Agreement or the execution, delivery, performance, validity or enforceability of this Letter Agreement and all obligations required hereunder. This Letter Agreement has been, and each instrument or document required hereunder will be, executed and delivered by a duly authorized officer of Parent, and this Letter Agreement constitutes, and each instrument or document required hereunder when and executed and delivered hereunder will constitute, the legally valid and binding obligation of Parent enforceable against Parent in accordance with its terms.

 

(iii)             The execution, delivery and performance of this Letter Agreement and the documents or instruments required hereunder will not violate any provision of any existing law or regulation binding on Parent, or any order, judgment, award or decree of any Governmental Authority binding on Parent, or the Governing Agreements of, or any securities issued by Parent or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which Parent is a party or by which Parent or any of its assets may be bound, the violation of which would have a material adverse effect on the business operations, assets or financial condition of Parent and its Subsidiaries, if any, taken as a whole, and will not result in, or require, the creation or imposition of any lien or any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.

 

(b)            The Manager hereby represents and warrants to Parent as follows:

 

(i)             The Manager is duly organized, validly existing and in good standing under the laws of the State of Delaware, has the corporate power and authority and the legal right to conduct the business in which it is now engaged and is duly qualified as a foreign corporation and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized or licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of the Manager.

 

(ii)             The Manager has the corporate power and authority and the legal right to make, deliver and perform this Letter Agreement and all obligations required hereunder and has taken all necessary corporate action to authorize this Letter Agreement on the terms and conditions hereof and the execution, delivery and performance of this Letter Agreement and all obligations required hereunder. No consent of any other Person, including stockholders of the Manager, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required by the Manager in connection with this Letter Agreement or the execution, delivery, performance, validity or enforceability of this Letter Agreement and all obligations required hereunder. This Letter Agreement has been, and each instrument or document required hereunder will be, executed and delivered by a duly authorized officer of the Manager, and this Letter Agreement constitutes, and each instrument or document required hereunder when executed and delivered hereunder will constitute, the legally valid and binding obligation of the Manager enforceable against the Manager in accordance with its terms.

 

 

(iii)           The execution, delivery and performance of this Letter Agreement and the documents or instruments required hereunder will not violate any provision of any existing law or regulation binding on the Manager, or any order, judgment, award or decree of any Governmental Authority binding on the Manager, or the Governing Agreements of, or any securities issued by the Manager or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Manager is a party or by which the Manager or any of its assets may be bound, the violation of which would have a material adverse effect on the business operations, assets or financial condition of the Manager, and will not result in, or require, the creation or imposition of any lien or any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.

 

5.             Miscellaneous.

 

(a)             Notices. Any notices that may or are required to be given hereunder by any party to another shall be deemed to have been duly given if (i) personally delivered or delivered by facsimile, when received, (ii) sent by U.S. Express Mail or recognized overnight courier, on the second (2^nd) following Business Day (or third (3^rd) following Business Day if mailed outside the United States), (iii) delivered by electronic mail, when received or (iv) posted on a password protected website maintained by the Manager and for which the Company has received access instructions by electronic mail, when posted:

 

Parent	CompoSecure, Inc. 309 Pierce Street Somerset, NJ 08873 Attention:  General Counsel
The Manager:	Resolute Holdings Management, Inc. 445 Park Avenue, Suite 15F New York, NY 10022 Attention: Chief Executive Officer

 

(b)             Binding Nature of Agreement; Successors and Assigns; No Third-Party Beneficiaries. This Letter Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns as provided herein. None of the provisions of this Letter Agreement are intended to be, nor shall they be construed to be, for the benefit of any third party.

 

 

(c)             Integration. This Letter Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.

 

(d)             Additional Agreements. In the event the Company forms any Subsidiary, or acquires any business, following the date hereof and, at the Manager’s election, causes any such Subsidiary, or business, to enter into a management agreement with the Manager in a form substantially similar to the Management Agreement, Parent shall, at the Manager’s election, enter into a letter agreement with the Manager in a form substantially similar to this Letter Agreement.

 

(e)             Amendments. Neither this Letter Agreement, nor any terms hereof, may be amended, supplemented or modified except in an instrument in writing executed by the parties hereto.

 

(f)             Governing Law. Notwithstanding the place where this Letter Agreement may be executed by any of the parties hereto, the parties hereto expressly agree that all of the terms and provisions hereof shall be governed by and construed under the laws of the State of Delaware.

 

(g)             Forum; Consent to Service. To the fullest extent permitted by law, in the event of any proceeding arising out of the terms and conditions of this Letter Agreement, the parties hereto irrevocably (i) consent and submit to the exclusive jurisdiction of the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (unless the Delaware Court of Chancery shall decline jurisdiction over a particular matter, in which case, any state or federal court within the State of Delaware), (ii) waive any defense based on doctrines of venue or forum non conveniens, or similar rules or doctrines and, (iii) agree that all claims in respect of such a proceeding must be heard and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (unless the Delaware Court of Chancery shall decline jurisdiction over a particular matter, in which case, any state or federal court within the State of Delaware). Process in any such proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Each of the parties hereto hereby agrees and consents that service of any process, summons, notice, or document pursuant to Section 5(a) shall be effective service of process for any suit or proceeding arising out of the terms and conditions of this Letter Agreement. Any proceeding arising out of the terms and conditions of this Letter Agreement shall be governed by the provisions hereof and not by the provisions of Article XI of the Separation and Distribution Agreement, dated as of _________, 2025, by and between Parent and the Manager.

 

 

(h)             Waiver of Jury Trial. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS LETTER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS LETTER AGREEMENT.

 

(i)             Survival of Representations and Warranties. All representations and warranties made hereunder, and in any document, certificate or statement delivered pursuant hereto or in connection herewith, shall survive the execution and delivery of this Letter Agreement.

 

(j)             No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of a party hereto, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

(k)             Costs and Expenses. Each party hereto shall bear its own costs and expenses (including the fees and disbursements of counsel and accountants) incurred in connection with the negotiations, preparation of and entry into this Letter Agreement, and all matters incident thereto.

 

(l)             Headings; Interpretation. The section and subsection headings in this Letter Agreement are for convenience in reference only and shall not be deemed to alter or affect the interpretation of any provisions hereof. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Letter Agreement shall refer to this Letter Agreement as a whole and not to any particular provision of this Letter Agreement, and Section references are to this Letter Agreement unless otherwise specified. References herein to “Sections,” “clauses” and other subdivisions, and to Schedules, without reference to a document are to the specified Sections, clauses and other subdivisions of and Schedules to, this Letter Agreement. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.

 

(m)             Counterparts. This Letter Agreement may be executed by the parties to this Letter Agreement on any number of separate counterparts (including by facsimile), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

(n)             Severability. Any provision of this Letter Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

 

	Very truly yours,
	RESOLUTE HOLDINGS MANAGEMENT, INC.
	By:
	Name:
	Title:

 

Agreed and accepted,
COMPOSECURE, INC.
By:
Name:
Title:

 

[Signature Page to Letter Agreement]

 

 

Schedule I

 

Delegations

 

Exhibit 21.1

 

List of Subsidiaries

of

Resolute Holdings Management, Inc.

 

 

None.