Common use of Automatic Redemption Clause in Contracts

Automatic Redemption. (a) Each Restricted Member is willing to subject his Restricted Units to the automatic redemption provisions of this Section 3.9. (b) In the event that a Restricted Member voluntarily terminates his services to the Company or the Company terminates such Restricted Member’s services to the Company for any or no reason, with or without Cause, the Restricted Units held by such Restricted Member shall, upon the date of such termination (the “Redemption Date”), be automatically redeemed by the Company for no consideration (other than any Tax Distribution to which such Restricted Member is entitled with respect to the Restricted Units in accordance with Section 5.7 following the allocation of Profits and Losses through the Redemption Date). Upon the automatic redemption of any Restricted Units, the Company shall become the legal and beneficial owner of the Restricted Units so redeemed and all rights and interest therein or related thereto without further action by the Restricted Member. (c) The Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b) in the following manner: i. One third (1/3rd) of the Restricted Units shall be considered “Time Vested Restricted Units”. One third (1/3rd) of the Time Vested Restricted Units shall be automatically released from automatic redemption pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units for purposes of this Section 3.9, on each of the first three annual anniversaries of the date of the grant of such Profits Interest Units. ii. Two thirds (2/3rd) of the Restricted Units shall be considered “Performance-Based Restricted Units”. A.1 All of the Performance-Based Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units for purposes of this Section 3.9, if (x) the Company’s average 12-month EBITDA for the 24 months preceding a Liquidity Event is above $19 million; and (y) the Company’s 12-month EBITDA for the second 12 months preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first 12 months preceding the Liquidity Event. A.2 Only three fourths (3/4th) of the Performance-Based Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units for purposes of this Section 3.9, if (x) the Company’s average 12-month EBITDA for the 24 months preceding a Liquidity Event is above $18 million and up to $19 million; and (y) the Company’s 12-month EBITDA for the second 12 months preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first 12 months preceding the Liquidity Event. A.3 Only one half (1/2) of the Performance-Based Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units for purposes of this Section 3.9, if (x) the Company’s average 12-month EBITDA for the 24 months preceding a Liquidity Event is above $14 million and up to $18 million; and (y) the Company’s 12-month EBITDA for the second 12 months preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first 12 months preceding the Liquidity Event. A.4 Only one fourth (1/4th) of the Performance-Based Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units for purposes of this Section 3.9, if (x) the Company’s average 12-month EBITDA for the 24 months preceding a Liquidity Event is above $13 million and up to $14 million; and (y) the Company’s 12-month EBITDA for the second 12 months preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first 12 months preceding the Liquidity Event. A.5 None of the Performance-Based Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b) if he Company’s average 12-month EBITDA for the 24 months preceding a Liquidity Event is $13 million or less. A.6 If the Company sells or otherwise divests a portion of the Business, then “average 12-month EBITDA” and the “12-month EBITDA” used to determine the percentage of the Performance-Based Restricted Units that shall be released under Section 3.9(b) shall be automatically adjusted downwards based on the same Reset Ratio as used in Section 6.1(a) of the Master License Agreement. Any Restricted Units released from the automatic redemption provisions of this Section 3.9 shall continue to be subject to the other restrictions on transfer and the other provisions set forth in this Agreement. (d) In the event of a recapitalization or a similar transaction affecting the Company’s outstanding securities without receipt of consideration, any new, substituted or additional securities or other property that by reason of such transaction are distributed with respect to any Restricted Units or into which such Restricted Units thereby become convertible shall immediately be subject to the provisions of this Section 3.9. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the Restricted Units. (e) Upon the automatic redemption of any Restricted Units pursuant to the provisions of this Section 3.9, the Restricted Member shall no longer have any rights as a holder of the Restricted Units so redeemed and Exhibit A shall be restated to reflect the Restricted Units, if any, held by such Restricted Member.

Automatic Redemption. (a) Each Restricted Member is willing to subject his Restricted Units to the automatic redemption provisions of this Section 3.9.. 17 (b) In the event that a Restricted Member voluntarily terminates his services to the Company or the Company terminates such Restricted Member’s services to the Company for any or no reason, with or without Cause, the Restricted Units held by such Restricted Member shall, upon the date of such termination (the “Redemption Date”), be automatically redeemed by the Company for no consideration (other than any Tax Distribution to which such Restricted Member is entitled with respect to the Restricted Units in accordance with Section 5.7 following the allocation of Profits and Losses through the Redemption Date). Upon the automatic redemption of any Restricted Units, the Company shall become the legal and beneficial owner of the Restricted Units so redeemed and all rights and interest therein or related thereto without further action by the Restricted Member. (c) The Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b) in the following manner: : i. One third (1/3rd) of the Restricted Units shall be considered “Time Vested Restricted Units”. One third (1/3rd) of the Time Vested Restricted Units shall be automatically released from automatic redemption pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units for purposes of this Section 3.9, on each of the first three annual anniversaries of the date of the grant of such Profits Interest Units. . ii. Two thirds (2/3rd) of the Restricted Units shall be considered “Performance-Based Restricted Units”. A.1 All of the Performance-Based Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units for purposes of this Section 3.9, if (x) the Company’s average 12-month EBITDA for the 24 months preceding a Liquidity Event is above $19 million; and (y) the Company’s 12-month EBITDA for the second 12 months preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first 12 months preceding the Liquidity Event. A.2 Only three fourths (3/4th) of the Performance-Based Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units for purposes of this Section 3.9, if (x) the Company’s average 12-month EBITDA for the 24 months preceding a Liquidity Event is above $18 million and up to $19 million; and (y) the Company’s 12-month EBITDA for the second 12 months preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first 12 months preceding the Liquidity Event. . A.3 Only one half (1/2) of the Performance-Based Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units for purposes of this Section 3.9, if (x) the Company’s average 12-month EBITDA for the 24 months preceding a Liquidity Event is above $14 million and up to $18 million; and (y) the Company’s 12-month EBITDA for the second 12 months preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first 12 months preceding the Liquidity Event. A.4 Only one fourth (1/4th) of the Performance-Based Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units for purposes of this Section 3.9, if (x) the Company’s average 12-month EBITDA for the 24 months preceding a Liquidity Event is above $13 million and up to $14 million; and (y) the Company’s 12-month EBITDA for the second 12 months preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first 12 months preceding the Liquidity Event. A.5 None of the Performance-Based Restricted Units shall be released from automatic redemption pursuant to Section 3.9(b) if he Company’s average 12-month EBITDA for the 24 months preceding a Liquidity Event is $13 million or less. A.6 If the Company sells or otherwise divests a portion of the Business, then “average 12-month EBITDA” and the “12-month EBITDA” used to determine the percentage of the Performance-Based Restricted Units that shall be released under Section 3.9(b) shall be automatically adjusted downwards based on the same Reset Ratio as used in Section 6.1(a) of the Master License Agreement. Any Restricted Units released from the automatic redemption provisions of this Section 3.9 shall continue to be subject to the other restrictions on transfer and the other provisions set forth in this Agreement. (d) In the event of a recapitalization or a similar transaction affecting the Company’s outstanding securities without receipt of consideration, any new, substituted or additional securities or other property that by reason of such transaction are distributed with respect to any Restricted Units or into which such Restricted Units thereby become convertible shall immediately be subject to the provisions of this Section 3.9. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the Restricted Units. (e) Upon the automatic redemption of any Restricted Units pursuant to the provisions of this Section 3.9, the Restricted Member shall no longer have any rights as a holder of the Restricted Units so redeemed and Exhibit A shall be restated to reflect the Restricted Units, if any, held by such Restricted Member.