Reorganization Agreement

REORGANIZATION AGREEMENT Dated as of [●], 2018

Exhibit 10.3

 

 

 

REORGANIZATION AGREEMENT

Dated as of [●], 2018

 

 

 


TABLE OF CONTENTS

 

 

PAGE

   ARTICLE 1   
     DEFINITIONS       

Section 1.01.

  

Certain Defined Terms

     3  

Section 1.02.

  

Terms Defined Elsewhere in this Reorganization Agreement

     4  

Section 1.03.

  

Other Definitional and Interpretative Provisions

     5  
   ARTICLE 2   
     THE REORGANIZATION       

Section 2.01.

  

Transactions

     5  

Section 2.02.

  

Consent to Reorganization Transactions; Power of Attorney

     8  

Section 2.03.

  

No Liabilities in Event of Termination; Certain Covenants

     9  
   ARTICLE 3   
     REPRESENTATIONS AND WARRANTIES       

Section 3.01.

  

Representations and Warranties

     10  
   ARTICLE 4   
     MISCELLANEOUS       

Section 4.01.

  

Amendments and Waivers

     11  

Section 4.02.

  

Successors and Assigns

     11  

Section 4.03.

  

Notices

     11  

Section 4.04.

  

Further Assurances

     12  

Section 4.05.

  

Entire Agreement

     12  

Section 4.06.

  

Governing Law

     12  

Section 4.07.

  

Jurisdiction

     12  

Section 4.08.

  

WAIVER OF JURY TRIAL

     13  

Section 4.09.

  

Severability

     13  

Section 4.10.

  

Enforcement

     13  

Section 4.11.

  

Counterparts; Facsimile Signatures

     13  

Section 4.12.

  

Expenses

     13  

Exhibits

 

Exhibit A

 

Form of Goosehead Insurance, Inc. Amended and Restated Certificate of Incorporation

Exhibit B

 

Form of Goosehead Insurance, Inc. Amended and Restated Bylaws

Exhibit C

 

Form of Max and Dane, LLC Subscription Agreement

Exhibit D

 

Form of Max and Dane, LLC Contribution Agreement

Exhibit E

 

Form of Goosehead Management, LLC Amended and Restated LLC Agreement


Exhibit F

 

Form of Evan and Jake, LLC Subscription Agreement

Exhibit G

 

Form of Evan and Jake, LLC Contribution Agreement

Exhibit H

 

Form of Texas Wasatch Insurance Holdings Group, LLC Amended and Restated Regulations

Exhibit I

 

Form of Evan and Jake, LLC Distribution Agreement

Exhibit J

 

Form of GHM Holdings, LLC Contribution Agreement

Exhibit K

 

Form of TWIHG Holdings, LLC Contribution Agreement

Exhibit L

 

Form of Class B Securities Purchase Agreement

Exhibit M

 

Form of Goosehead Management Note Transfer Agreement

Exhibit N

 

Form of Goosehead Management Note

Exhibit O

 

Form of Texas Wasatch Note Transfer Agreement

Exhibit P

 

Form of Texas Wasatch Note

Exhibit Q

 

Form of Goosehead Financial, LLC Amended and Restated LLC Agreement

Exhibit R

 

Form of First Goosehead Financial, LLC Contribution Agreement

Exhibit S

 

Form of Second Goosehead Financial, LLC Contribution Agreement

Exhibit T

 

Form of Registration Rights Agreement

Exhibit U

 

Form of Tax Receivable Agreement

Exhibit V

 

Form of Stockholders Agreement

 

 

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REORGANIZATION AGREEMENT (this “Reorganization Agreement”), dated as of [●], 2018, by and among Mark E. Jones, Robyn Jones, Michael C. Colby, Jeffrey Saunders, The Mark and Robyn Jones Descendants Trust 2014, Lanni Elaine Romney Family Trust 2014, Lindy Jean Langston Family Trust 2014, Camille LaVaun Peterson Family Trust 2014, Desiree Robyn Coleman Family Trust 2014, Adrienne Morgan Jones Family Trust 2014, Mark Evan Jones, Jr. Family Trust 2014, the estate of Doug Jones, Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., Colby 2014 Family Trust, Preston Michael Colby 2014 Trust, Lyla Kate Colby 2014 Trust, and Texas Wasatch Insurance Partners, L.P. (each, a “Post-IPO LLC Member” and, together, the “Post-IPO LLC Members”), Goosehead Insurance, Inc., a Delaware corporation (“Pubco”), Goosehead Financial, LLC (the “Company”), Texas Wasatch Insurance Holdings Group, LLC, Goosehead Management, LLC, Max and Dane, LLC, Evan and Jake, LLC, GHM Holdings, LLC, and TWIHG Holdings, LLC.

RECITALS

WHEREAS, the Board of Directors of Pubco (the “Board”) has determined to effect an underwritten initial public offering (the “IPO”) of Pubco’s Class A Common Stock (as defined below);

WHEREAS, the parties hereto desire to enter into the Reorganization Documents (as defined below) and effect the other Reorganization Transactions (as defined below) to facilitate completion of, or otherwise in connection with, the IPO.

NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual promises hereinafter set forth, the parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Certain Defined Terms. As used herein, the following terms shall have the following meanings:

Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by applicable law to close.

Class A Common Stock” shall mean Class A Common Stock, par value $0.01 per share, of Pubco, having the rights set forth in the Amended and Restated Certificate of Incorporation.

Class B Common Stock” shall mean Class B Common Stock, par value $0.01 per share, of Pubco, having the rights set forth in the Amended and Restated Certificate of Incorporation.


Common Stock” means, collectively, the Class A Common Stock and the Class B Common Stock.

Company” means Goosehead Financial, LLC.

IPO Closing” means the initial closing of the sale of the Class A Common Stock in the IPO.

IPO Closing Date” means the date of the IPO Closing.

Person” means any individual, firm, corporation, partnership, limited liability company, trust, estate, joint venture, governmental authority or other entity.

Pricing” means such date and time as the Board or the pricing committee thereof determines to price the IPO.

Reorganization Documents” means each of the documents attached as an exhibit hereto and all other agreements and documents entered into in connection with the Reorganization Transactions.

Section 1.02. Terms Defined Elsewhere in this Reorganization Agreement. Each of the following terms is defined in the Section set forth opposite such term:

 

Term

  

Section

Amended and Restated Certificate of Incorporation

  

2.01(a)(i)

Amended and Restated LLC Agreement

  

2.01(b)(iv)

Attorney

  

2.02(c)

Board

  

Recitals

Class B Securities Purchase Agreement

  

2.01(b)(i)

e-mail

  

4.03

Evan and Jake, LLC Contribution Agreement

  

2.01(a)(vii)

Evan and Jake, LLC Distribution Agreement

  

2.01(a)(ix)

Evan and Jake, LLC Subscription Agreement

  

2.01(a)(vi)

First Goosehead Financial, LLC Contribution Agreement

  

2.01(b)(v)

GHM Holdings, LLC Contribution Agreement

  

2.01(a)(x)

Goosehead Insurance, Inc. Amended and Restated Bylaws

  

2.01(a)(ii)

Goosehead Management, LLC Amended and Restated LLC Agreement

  

2.01(a)(v)

Goosehead Management Note

  

2.01(b)(ii)

Goosehead Management Note Transfer Agreement

  

2.01(b)(ii)

IPO

  

Recitals

LLC Units

  

2.01(b)(iv)

Max and Dane, LLC Contribution Agreement

  

2.01(a)(iv)

Max and Dane, LLC Subscription Agreement

  

2.01(a)(iii)

Member

  

Preamble

Post-IPO LLC Member

  

Preamble

Pre-IPO LLC Member

  

Preamble

 

4


Term

  

Section

Pubco

  

Preamble

Registration Rights Agreement

  

2.01(b)(vii)

Reorganization Agreement

  

Preamble

Reorganization Transactions

  

2.01

Second Goosehead Financial, LLC Contribution Agreement

  

2.01(b)(vi)

Stockholders Agreement

  

2.01(b)(ix)

Tax Receivables Agreement

  

2.01(b)(viii)

Texas Wasatch Insurance Holdings Group, LLC Amended and Restated Regulations

  

2.01(a)(viii)

Texas Wasatch Note

  

2.01(b)(iii)

Texas Wasatch Note Transfer Agreement

  

2.01(b)(iii)

TWIHG Holdings, LLC Contribution Agreement

  

2.01(a)(xi)

Section 1.03. Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Reorganization Agreement shall refer to this Reorganization Agreement as a whole and not to any particular provision of this Reorganization Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Reorganization Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Reorganization Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Reorganization Agreement. Any singular term in this Reorganization Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Reorganization Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

ARTICLE 2

THE REORGANIZATION

Section 2.01. Transactions. Subject to the terms and conditions hereinafter set forth, and on the basis of and in reliance upon the representations, warranties, covenants and agreements set forth herein, the parties hereto shall take the actions described in this

 

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Section 2.01, or cause such actions to take place (each, a “Reorganization Transaction” and, collectively, the “Reorganization Transactions”):

(a) One day prior to the IPO Closing Date, the applicable parties shall take the actions set forth below (or cause such actions to take place):

(i) Amend and Restate Pubco Certificate of Incorporation. Pubco shall adopt and file with the Secretary of State of the State of Delaware an amended and restated certificate of incorporation of Pubco, in substantially the form attached hereto as Exhibit A (the “Amended and Restated Certificate of Incorporation”), with such changes or modifications as approved by the Board of Pubco.

(ii) Amend and Restate Pubco By-laws. The Board shall adopt amended and restated by-laws of Pubco in substantially the form attached hereto as Exhibit B (the “Goosehead Insurance, Inc. Amended and Restated Bylaws”), with such changes or modifications as approved by the Board of Pubco.

(iii) Each of the members of Goosehead Management, LLC, a Delaware limited liability company, and Max and Dane, LLC, a Delaware limited liability company, shall enter into the Subscription Agreement attached hereto as Exhibit C (the “Max and Dane, LLC Subscription Agreement”).

(iv) Each of the members of Goosehead Management, LLC and Max and Dane, LLC, shall enter into the Contribution Agreement attached hereto as Exhibit D (the “Max and Dane, LLC Contribution Agreement”).

(v) Immediately after the effectiveness of the Max and Dane, LLC Contribution Agreement, Goosehead Management LLC shall amend and restate its limited liability company agreement in substantially the form attached hereto as Exhibit E (the “Goosehead Management, LLC Amended and Restated LLC Agreement”), with such changes or modifications as approved by the Board of Pubco.

(vi) Each of the members of Texas Wasatch Insurance Holdings Group, LLC, a Delaware limited liability company, and Evan and Jake, LLC, a Delaware limited liability company, shall enter into the Subscription Agreement attached hereto as Exhibit F (the “Evan and Jake, LLC Subscription Agreement”).

(vii) Each of the members of Evan and Jake, LLC and Evan and Jake, LLC, shall enter into the Contribution Agreement attached hereto as Exhibit G (the “Evan and Jake, LLC Contribution Agreement”).

(viii) Immediately after the effectiveness of the Evan and Jake, LLC Contribution Agreement, Texas Wasatch Insurance Holdings Group, LLC shall amend and restate its regulations in substantially the form attached hereto as Exhibit H (the “Texas Wasatch Insurance Holdings Group, LLC Amended

 

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and Restated Regulations”), with such changes or modifications as approved by the Board of Pubco.

(ix) Immediately after the effectiveness of the Evan and Jake, LLC Contribution Agreement, Texas Wasatch Insurance Holdings Group, LLC and Evan and Jake, LLC shall enter into the Distribution Agreement attached hereto as Exhibit I (the “Evan and Jake, LLC Distribution Agreement”).

(x) Immediately after the effectiveness of the Max and Dane, LLC Contribution Agreement, Max and Dane, LLC and GHM Holdings, LLC, a Delaware limited liability company, shall enter into the Contribution Agreement attached hereto as Exhibit J (the “GHM Holdings, LLC Contribution Agreement”).

(xi) Immediately after the effectiveness of the Evan and Jake, LLC Contribution Agreement, Evan and Jake, LLC and TWIHG Holdings, LLC, a Delaware limited liability company, shall enter into the Contribution Agreement attached hereto as Exhibit K (the “TWIHG Holdings, LLC Contribution Agreement”).

(b) Substantially concurrently with, but immediately prior to, the IPO Closing the applicable parties shall take the actions set forth below (or cause such actions to take place):

(i) Class B Securities Purchase Agreement. Each of the Post-IPO LLC Members and Pubco shall enter into the Securities Purchase Agreement attached hereto as Exhibit L (the “Class B Securities Purchase Agreement”), the Post-IPO LLC Members shall contribute the consideration set forth in Section 2 of the Class B Securities Purchase Agreement and Pubco shall issue to the Post-IPO LLC Members the number of shares of Class B Common Stock set forth in Schedule A to the Class B Securities Purchase Agreement.

(ii) Each of the members of Max and Dane, LLC and Pubco shall enter into the Transfer Agreement attached hereto as Exhibit M (the “Goosehead Management Note Transfer Agreement”), and Pubco shall issue to the members of Max and Dane, LLC the note attached hereto as Exhibit N (the “Goosehead Management Note”) pursuant to the terms of the Goosehead Management Note Transfer Agreement.

(iii) Each of the members of Evan and Jake, LLC, LLC and Pubco shall enter into the Transfer Agreement attached hereto as Exhibit O (the “Texas Wasatch Note Transfer Agreement”), and Pubco shall issue to the members of Evan and Jake, LLC the note attached hereto as Exhibit P (the “Texas Wasatch Note”) pursuant to the terms of the Texas Wasatch Note Transfer Agreement.

(iv) Amend and Restate Company LLC Agreement. The Company shall amend and restate its limited liability company agreement in substantially the form attached hereto as Exhibit Q (the “Amended and Restated LLC

 

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Agreement”), with such changes or modifications as approved by the Board of Pubco, so that, among other things, (aa) Pubco shall become the sole managing member of the Company, (bb) the equity interests in the Company shall be reclassified into the form of non-voting units (“LLC Units”) and (cc) each Post-IPO LLC Member shall be permitted to redeem or exchange its LLC Units for shares of Class A Common Stock in accordance with and subject to the terms of the Amended and Restated LLC Agreement.

(v) Immediately after the effectiveness of the Goosehead Management Note Transfer Agreement, Max and Dane, LLC and Goosehead Financial, LLC shall enter into the Contribution Agreement attached hereto as Exhibit R (the “First Goosehead Financial, LLC Contribution Agreement”).

(vi) Immediately after the effectiveness of the Texas Wasatch Note Transfer Agreement, Evan and Jake, LLC and Goosehead Financial, LLC shall enter into the Contribution Agreement attached hereto as Exhibit S (the “Second Goosehead Financial, LLC Contribution Agreement”).

(vii) Registration Rights Agreement. Each of the Post-IPO LLC Members and Pubco shall enter into a Registration Rights Agreement in substantially the form attached hereto as Exhibit T the (the “Registration Rights Agreement”), with such changes or modifications as approved by the Board of Pubco.

(viii) Tax Receivables Agreement. Each of the Post-IPO LLC Members and Pubco shall enter into a Tax Receivables Agreement in substantially the form attached hereto as Exhibit U (the “Tax Receivables Agreement”), with such changes or modifications as approved by the Board of Pubco.

(ix) Stockholders Agreement. Each of the Post-IPO LLC Members and Pubco shall enter into a Stockholders Agreement in the form attached hereto as Exhibit V (the “Stockholders Agreement”).

(c) Immediately following the IPO Closing, Pubco shall repay the amount due under each of the Goosehead Management Note and the Texas Wasatch Note with cash [and Class A Common Stock].

Section 2.02. Consent to Reorganization Transactions; Power of Attorney.

(a) Each of the parties hereto hereby acknowledges, agrees and consents to all of the Reorganization Transactions. Each of the parties hereto shall take all reasonable actions necessary or appropriate in order to effect, or cause to be effected, to the extent within its control, each of the Reorganization Transactions and the IPO.

(b) The parties hereto shall deliver to each other, as applicable, prior to or at the time specified herein (and in any event no later than the IPO Closing), duly executed versions of each of the Reorganization Documents to which it is a party, together with

 

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any other documents and instruments necessary or appropriate to be delivered in connection with the Reorganization Transactions.

(c) In connection with the foregoing, each Member hereby irrevocably constitutes and appoints Mark E. Jones, Michael C. Colby. Mark S. Colby and P. Ryan Langston as attorneys-in-fact (individually, an “Attorney” and collectively, the “Attorneys”) of the undersigned, each with full power and authority to act together or alone, including full power of substitution, in the name of and for and on behalf of the undersigned with respect to all matters arising in connection with the Reorganization Transactions including, but not limited to, the power and authority to execute and deliver each Reorganization Document on behalf of such Member and take any and all actions necessary to effectuate the foregoing, including endorsing (in blank or otherwise) on behalf of such Member any certificate or certificates representing LLC Units to be transferred by the undersigned, or a stock power or powers attached to such certificate or certificates and taking any other action that the Attorneys, or any one of them, in their or his or her sole discretion may consider necessary or proper in connection with or to carry out the foregoing, as fully as could such Member if personally present and acting. This power of attorney and all authority conferred hereby are granted and conferred subject to the interests of Pubco and in consideration of those interests, and for the purpose of completing the transactions contemplated by the Reorganization Documents. This power of attorney and all authority conferred hereby shall be irrevocable and shall not be terminated by a Member or by operation of law, whether by the dissolution or liquidation of any corporation, limited liability company or partnership, or by the occurrence of any other event. If any event described in the preceding sentence shall occur before the completion of the Reorganization Transactions, and all other actions required to be taken under the Reorganization Documents shall be taken, and action taken by the Attorneys, or any one of them, pursuant to this power of attorney shall be as valid as if such event had not occurred, whether or not the Attorneys, or any one of them, shall have received notice of such event. Notwithstanding the foregoing, if this agreement is terminated, then from and after such date the undersigned shall have the power to revoke all authority hereby conferred by giving notice on or promptly after such date to each of the Attorneys that this power of attorney has been terminated; subject, however, to all lawful action done or performed by the Attorneys or any one of them, pursuant to this power of attorney prior to the actual receipt of such notice. Each Member agrees to hold the Attorneys free and harmless from any and all loss, damage or liability that they, or either one of them, may sustain as a result of any action taken in good faith hereunder. It is understood that the Attorneys shall serve without compensation.

Section 2.03. No Liabilities in Event of Termination; Certain Covenants. (a) In the event that the IPO is abandoned or the IPO Closing has not occurred by [●], 2018, (i) this Reorganization Agreement shall automatically terminate and be of no further force or effect except for this Section 2.03 and Article 4 and (ii) there shall be no liability on the part of any of the parties hereto, except that such termination shall not preclude any party from pursuing judicial remedies for damages and/or other relief as a result of the breach by the other parties of any representation, warranty, covenant or agreement contained herein prior to such termination.

 

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(b) In the event that this Reorganization Agreement is terminated for any reason after the consummation of any Reorganization Transaction, but prior to the consummation of all of the Reorganization Transactions, the parties agree, as applicable, to cooperate and work in good faith to execute and deliver such agreements and consents and amend such documents and to effect such transactions or actions as may be necessary to re-establish the rights, preferences and privileges that the parties hereto had prior to the consummation of the Reorganization Transactions, or any part thereof, including, without limitation, voting any and all securities owned by such party in favor of any amendment to any organizational document and in favor of any transaction or action necessary to re-establish such rights, powers and privileges and causing to be filed all necessary documents with any governmental authority necessary to reestablish such rights, preferences and privileges.

(c) For the avoidance of doubt, each party hereto acknowledges and agrees that until the consummation of the Reorganization Transactions: (i) the parties hereto shall not receive or lose or convey any voting, governance or similar rights in connection with this Reorganization Agreement or the Reorganization Transactions and (ii) the rights of the parties hereto under the Amended and Restated LLC Agreement shall not be affected.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

Section 3.01. Representations and Warranties. Each party hereto hereby represents and warrants to all of the other parties hereto as follows:

(a) The execution, delivery and performance by such party of this Reorganization Agreement and of the applicable Reorganization Documents, to the extent a party thereto, has been duly authorized by all necessary action. Such party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or incorporation;

(b) Such party has the requisite power, authority and legal right to execute and deliver this Reorganization Agreement and each of the Reorganization Documents, to the extent a party thereto, and to consummate the transactions contemplated hereby and thereby, as the case may be;

(c) This Reorganization Agreement and each of the Reorganization Documents to which it is a party has been (or when executed will be) duly executed and delivered by such party and constitutes the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing; and

(d) Neither the execution, delivery and performance by such party of this Reorganization Agreement and the applicable Reorganization Documents, to the extent a

 

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party thereto, nor the consummation by such party of the transactions contemplated hereby, nor compliance by such party with the terms and provisions hereof, will, directly or indirectly (with or without notice or lapse of time or both), (i) if such party is not an individual, contravene or conflict with, or result in a breach or termination of, or constitute a default under (or with notice or lapse of time or both, result in the breach or termination of or constitute a default under) the organizational documents of such party, (ii) constitute a violation by such party of any existing requirement of law applicable to such party or any of its properties, rights or assets or (iii) require the consent or approval of any Person, except, in the case of clauses (ii) and (iii), as would not reasonably be expected to result in, individually or in the aggregate, a material adverse effect on the ability of such party to consummate the transactions contemplated by this Reorganization Agreement.

ARTICLE 4

MISCELLANEOUS

Section 4.01. Amendments and Waivers. This Reorganization Agreement may be modified, amended or waived only with the written approval of Pubco, Mark E. Jones and P. Ryan Langston. The failure of any party to enforce any of the provisions of this Reorganization Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Reorganization Agreement in accordance with its terms. Notwithstanding anything to the contrary in this Section 4.01, nothing in this Section 4.01 shall be deemed to contradict the provisions of Section 2.03 hereof.

Section 4.02. Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

Section 4.03. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and not received by automated response). All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. Central time on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt. All such notices, requests and other communications to any party hereunder shall be given to such party as follows:

If to the [●] Member addressed to it at:

Name: [●]

Attn: [●]

Address: [●]

Facsimile No.: [●]

 

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Email: [●]

With copies (which shall not constitute notice) to:

Name: [●]

Attn: [●]

Address: [●]

Facsimile No.: [●]

Email: [●]

If to Pubco or the Company:

Name: Goosehead Insurance, Inc.

Attn: Ryan Langston

Address: 1500 Solana Blvd

Building 4, Suite 4500

Westlake, Texas 76262

E-mail: [****]

With copies (which shall not constitute actual notice) to:

Davis Polk & Wardwell LLP

Attention: Richard Truesdell

450 Lexington Avenue

New York, New York 10017

Facsimile No.: [****]

E-mail: [****]

Section 4.04. Further Assurances. Each party to this Agreement, at any time and from time to time upon the reasonable request of another party to this Agreement, shall promptly execute and deliver, or cause to be executed and delivered, all such further instruments and take all such further actions as may be reasonably necessary or appropriate to confirm or carry out the purposes and intent of this Agreement..

Section 4.05. Entire Agreement. Except as otherwise expressly set forth herein, this Reorganization Agreement, together with the Reorganization Documents, embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, that may have related to the subject matter hereof in any way.

Section 4.06. Governing Law. This Reorganization Agreement shall be governed in all respects by the laws of the State of New York, without regard to the conflicts of law rules of such State.

Section 4.07. Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any

 

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New York State court sitting in the Borough of Manhattan, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 4.03 shall be deemed effective service of process on such party.

Section 4.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS REORGANIZATION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 4.09. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

Section 4.10. Enforcement. Each party hereto acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or agreements in this Reorganization Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.

Section 4.11. Counterparts; Facsimile Signatures. This Reorganization Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Reorganization Agreement may be executed by facsimile, e-mail or .pdf format signature(s).

Section 4.12. Expenses. Unless otherwise provided in the Reorganization Documents, all costs and expenses incurred in connection with the negotiation and

 

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execution of this Reorganization Agreement and the transactions contemplated by this Reorganization Agreement shall be paid by the party incurring such cost or expense.

[Signature page follows]

 

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

 

GOOSEHEAD INSURANCE, INC.
By:  

 

  Name:
  Title:

 

GOOSEHEAD FINANCIAL, LLC
By:  

 

  Name:
  Title:

 

GOOSEHEAD MANAGEMENT, LLC
By:  

 

  Name:
  Title:

 

TEXAS WASATCH INSURANCE

HOLDINGS GROUP, LLC

By:  

 

  Name:
  Title:

 

[Signature Page to the Reorganization Agreement]


TEXAS WASATCH INSURANCE

      PARTNERS, L.P.

 

By its General Partner

By:  

 

  Name:
  Title:
MARK E. JONES
By:  

 

  Name:
  Title:
ROBYN JONES
By:  

 

  Name:
  Title:
MICHAEL C. COLBY
By:  

 

  Name:
  Title:
JEFFREY SAUNDERS
By:  

 

  Name:
  Title:

 

[Signature Page to the Reorganization Agreement]


THE MARK AND ROBYN JONES

      DESCENDANTS TRUST 2014

By:  

 

  Name:
  Title:

LANNI ELAINE ROMNEY FAMILY

      TRUST 2014

By:  

 

  Name:
  Title:

LINDY JEAN LANGSTON FAMILY

      TRUST 2014

By:  

 

  Name:
  Title:

CAMILLE LAVAUN PETERSON

      FAMILY TRUST 2014

By:  

 

  Name:
  Title:

DESIREE ROBYN COLEMAN

      FAMILY TRUST 2014

By:  

 

  Name:
  Title:

 

[Signature Page to the Reorganization Agreement]


ADRIENNE MORGAN JONES

      FAMILY TRUST 2014

By:  

 

  Name:
  Title:

MARK EVAN JONES, JR. FAMILY

      TRUST 2014

By:  

 

  Name:
  Title:
THE ESTATE OF DOUG JONES
By:  

 

  Name:
  Title:
LANNI ROMNEY
By:  

 

  Name:
  Title:
LINDY LANGSTON
By:  

 

  Name:
  Title:
CAMILLE PETERSON
By:  

 

  Name:
  Title:

 

[Signature Page to the Reorganization Agreement]


DESIREE COLEMAN
By:  

 

  Name:
  Title:
ADRIENNE JONES
By:  

 

  Name:
  Title:
MARK E. JONES, JR.
By:  

 

  Name:
  Title:
COLBY 2014 FAMILY TRUST
By:  

 

  Name:
  Title:

PRESTON MICHAEL COLBY 2014

      TRUST

By:  

 

  Name:
  Title:
LYLA KATE COLBY 2014 TRUST
By:  

 

  Name:
  Title:

 

[Signature Page to the Reorganization Agreement]


MAX AND DANE, LLC
By:  

 

  Name:
  Title:
EVAN AND JAKE, LLC
By:  

 

  Name:
  Title:
GHM HOLDINGS, LLC
By:  

 

  Name:
  Title:
TWIHG HOLDINGS, LLC
By:  

 

  Name:
  Title:

 

[Signature Page to the Reorganization Agreement]


Exhibit A

Form of Goosehead Insurance, Inc. Amended and Restated Certificate of

Incorporation

[Attached]


AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

of

GOOSEHEAD INSURANCE, INC.

(Pursuant to Section 242 and 245 of

the General Corporation Law of the State of Delaware)

Goosehead Insurance, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

FIRST: The name of the Corporation is Goosehead Insurance, Inc. The date of filing of its original certificate of incorporation with the Secretary of State of the State of Delaware was November 13, 2017.

SECOND: This Amended and Restated Certificate of Incorporation (this “Certificate of Incorporation”) amends and restates in its entirety the Corporation’s certificate of incorporation as currently in effect and has been duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware (as from time to time in effect, the “General Corporation Law”), by written consent of the holders of all of the outstanding stock entitled to vote thereon in accordance with the provisions of Section 228 of the General Corporation Law. The effective date of this Certificate of Incorporation shall be the date it is filed with the Secretary of State of the State of Delaware.

THIRD: This Certificate of Incorporation amends and restates in its entirety the original certificate of incorporation of the Corporation to read as follows:

1. Name. The name of the Corporation is Goosehead Insurance, Inc.

2. Address; Registered Office and Agent. The address of the Corporation’s registered office in the State of Delaware is c/o Corporation Service Company, 251 Little Falls Drive, City of Wilmington, County of New Castle, State of Delaware 19808 and the name of its registered agent at such address is the Corporation Service Company.

3. Purposes. 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.

4. Number of Shares.

4.1 The total number of shares of all classes of stock that the Corporation shall have authority to issue is [            ] shares, consisting of: (i) [            ]


shares of common stock, divided into (a) [            ] shares of Class A common stock, with the par value of $0.01 per share (the “Class A Common Stock”) and (b) [            ] shares of Class B common stock, with the par value of $0.01 per share (the “Class B Common Stock” and, together with Class A Common Stock, the “Common Stock”); and (ii) [            ] shares of preferred stock, with the par value of $0.01 per share (the “Preferred Stock”).

4.2 Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, the number of authorized shares of any class of the Common Stock or the Preferred Stock may be increased or decreased, in each case by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together as a single class, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law, and no vote of the holders of any class of the Common Stock or the Preferred Stock voting separately as a class will be required therefor. Notwithstanding the immediately preceding sentence, the number of authorized shares of any particular class may not be decreased below the number of shares of such class then outstanding, plus:

(i) in the case of Class A Common Stock, the number of shares of Class A Common Stock issuable in connection with (x) the exchange of all outstanding shares of Class B Common Stock, together with the corresponding LLC Units, pursuant to Section [●] of the Amended and Restated Goosehead Financial, LLC Agreement and (y) the exercise of outstanding options, warrants, exchange rights, conversion rights or similar rights for Class A Common Stock;

(ii) in the case of Class B Common Stock, the number of shares of Class B Common Stock issuable in connection with the exercise of outstanding options, warrants, exchange rights, conversion rights or similar rights for Class B Common Stock.

5. Classes of Shares. The designation, relative rights, preferences and limitations of the shares of each class of stock are as follows:

5.1 Common Stock.

(i) Voting Rights.

(1) Each holder of Class A Common Stock will be entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote, and each holder of Class B Common Stock will be entitled to one vote for each share of Class B Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote, except that, in each case, to the fullest extent permitted by law and subject to Section 5.1(i)(2), holders of shares of each class of Common Stock, as such, will have no voting power with respect to, and will not be entitled to vote on, any amendment to this Certificate of Incorporation (including any certificate of designations

 

2


relating to any series of Preferred Stock) that relates solely to the terms of any outstanding Preferred Stock if the holders of such Preferred Stock are entitled to vote as a separate class thereon under this Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or under General Corporation Law.

(2) (a) The holders of the outstanding shares of Class A Common Stock shall be entitled to vote separately upon any amendment to this Certificate of Incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of Common Stock in a manner that is disproportionately adverse as compared to the Class B Common Stock and (b) the holders of the outstanding shares of Class B Common Stock shall be entitled to vote separately upon any amendment to this Certificate of Incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of Common Stock in a manner that is disproportionately adverse as compared to the Class A Common Stock, it being understood that any merger, consolidation or other business combination shall not be deemed an amendment hereof if such merger, consolidation or other business combination (x) constitutes a Disposition Event in which holders of Paired Interests are required to exchange such Paired Interests pursuant to Section [●] of the Amended and Restated Goosehead Financial, LLC Agreement in such Disposition Event and receive consideration in such Disposition Event in accordance with the terms of the Amended and Restated Goosehead Financial, LLC Agreement as in effect prior to such Disposition Event and (y) provides for payments under or in respect of the tax receivable or similar agreement entered by the Corporation from time to time with any holders of Common Stock and/or securities of Goosehead Financial, LLC to be made in connection with any such merger, consolidation or other business combination in accordance with the terms of such tax receivable or similar agreement as in effect prior to such merger, consolidation or other business combination.

(3) Except as otherwise required in this Certificate of Incorporation or by applicable law, the holders of Common Stock will vote together as a single class on all matters (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with the holders of Preferred Stock).

(ii) Dividends; Stock Splits or Combinations.

(1) Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference senior to or the right to participate with the Class A Common Stock with respect to the payment of dividends, dividends of cash or property may be declared and paid on the Class A Common Stock out of the assets of the Corporation that are by law available therefor, at the times and in the amounts as the board of directors of the Corporation (the “Board”) in its discretion may determine.

 

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(2) Except as provided in Section 5.1(ii)(3) with respect to stock dividends, dividends of cash or property may not be declared or paid on shares of Class B Common Stock.

(3) In no event will any stock dividend, stock split, reverse stock split, combination of stock, reclassification or recapitalization be declared or made on any class of Common Stock (each, a “Stock Adjustment”) unless (a) a corresponding Stock Adjustment for all other classes of Common Stock not so adjusted at the time outstanding is made in the same proportion and the same manner and (b) the Stock Adjustment has been reflected in the same economically equivalent manner on all LLC Units. Stock dividends with respect to each class of Common Stock may only be paid with shares of stock of the same class of Common Stock.

(iii) Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and of the preferential and other amounts, if any, to which the holders of Preferred Stock are entitled, if any, the holders of all outstanding shares of Class A Common Stock will be entitled to receive, pari passu, an amount per share equal to the par value thereof, and thereafter the holders of all outstanding shares of Class A Common Stock will be entitled to receive the remaining assets of the Corporation available for distribution ratably in proportion to the number of shares of Class A Common Stock. Without limiting the rights of the holders of Class B Common Stock to exchange their shares of Class B Common Stock, together with the corresponding LLC Units constituting the remainder of any Paired Interests in which such shares are included, for shares of Class A Common Stock in accordance with Section [•] of the Amended and Restated Goosehead Financial, LLC Agreement (or for the consideration payable in respect of shares of Class A Common Stock in such voluntary or involuntary liquidation, dissolution or winding-up), the holders of shares of Class B Common Stock, as such, will not be entitled to receive, with respect to such shares, any assets of the Corporation in excess of the par value thereof, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

5.2 Preferred Stock. Shares of Preferred Stock may be issued from time to time in one or more series of any number of shares, provided that the aggregate number of shares issued and not retired of any and all such series shall not exceed the total number of shares of Preferred Stock hereinabove authorized, and with such powers, including voting powers, if any, and the designations, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, all as shall hereafter be stated and expressed in the resolution or resolutions providing for the designation and issue of such shares of Preferred Stock from time to time adopted by the Board pursuant to authority so to do which is hereby expressly vested in the Board. The powers, including voting powers, if any, preferences and relative, participating, optional and other special 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 at any time outstanding. Each series of shares of Preferred Stock: (i) may have such voting rights or powers, full or limited, if

 

4


any; (ii) may be subject to redemption at such time or times and at such prices, if any; (iii) may be entitled to receive dividends (which may be cumulative or noncumulative) at such rate or rates, on such conditions and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or series of stock, if any; (iv) may have such rights upon the voluntary or involuntary liquidation, winding-up or dissolution of, upon any distribution of the assets of, or in the event of any merger, sale or consolidation of, the Corporation, if any; (v) may be made convertible into or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the Corporation (or any other securities of the Corporation or any other Person) at such price or prices or at such rates of exchange and with such adjustments, if any; (vi) may be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of shares of such series in such amount or amounts, if any; (vii) may be entitled to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary, upon the issue of any additional shares (including additional shares of such series or of any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any subsidiary of, any outstanding shares of the Corporation, if any; (viii) may be subject to restrictions on transfer or registration of transfer, or on the amount of shares that may be owned by any Person or group of Persons; and (ix) may have such other relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, if any; all as shall be stated in said resolution or resolutions of the Board providing for the designation and issue of such shares of Preferred Stock.

6. Class B Common Stock.

6.1 Retirement of Class B Shares. No holder of Class B Common Stock may transfer shares of Class B Common Stock to any person unless such holder transfers a corresponding number of LLC Units to the same person in accordance with the provisions of the Amended and Restated Goosehead Financial, LLC Agreement, as such agreement may be amended from time to time in accordance with the terms thereof. If any outstanding share of Class B Common Stock ceases to be held by a holder of an LLC Unit, such share shall automatically and without further action on the part of the Corporation or any holder of Class B Common Stock be transferred to the Corporation for no consideration and retired.

6.2 Reservation of Shares of Class A Common Stock. The Corporation will at all times reserve and keep available out of its authorized and unissued shares of Class A Common Stock, solely for the purpose of the issuance upon exchange of Paired Interests, the number of shares of Class A Common Stock that are issuable upon conversion of all outstanding Paired Interests, pursuant to Section [●] of the Amended and Restated Goosehead Financial, LLC Agreement. The Corporation covenants that all the shares of Class A Common Stock that are issued upon the exchange of such Paired Interests will, upon issuance, be validly issued, fully paid and non-assessable.

 

5


6.3 Taxes. The issuance of shares of Class A Common Stock upon the exercise by holders of shares of Class B Common Stock of their right under Section [●] of the Amended and Restated Goosehead Financial, LLC Agreement to exchange Paired Units will be made without charge to the holders of the shares of Class B Common Stock for any transfer taxes, stamp taxes or duties or other similar tax in respect of the issuance; provided, however, that if any such shares of Class A Common Stock are to be issued in a name other than that of the then record holder of the shares of Class B Common Stock being exchanged (or The Depository Trust Company or its nominee for the account of a participant of The Depository Trust Company that will hold the shares for the account of such holder), then such holder and/or the Person in whose name such shares are to be delivered, shall pay to the Corporation the amount of any tax that may be payable in respect of any transfer involved in the issuance or shall establish to the reasonable satisfaction of the Corporation that the tax has been paid or is not payable.

6.4 Preemptive Rights. To the extent LLC Units are issued pursuant to the Amended and Restated Goosehead Financial, LLC Agreement to anyone other than the Corporation or a wholly owned subsidiary of the Corporation (including pursuant to Section 9.03 (or any equivalent successor provision) of the Amended and Restated Goosehead Financial, LLC Agreement), an equivalent number of shares of Class B Common Stock (subject to adjustment as set forth herein) shall be issued to the same Person to which such LLC Units are issued at par.

7. Board of Directors.

7.1 Number of Directors.

(i) The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. Unless and except to the extent that the Amended and Restated By-laws of the Corporation (as such By-laws may be amended from time to time, the “By-laws”) shall so require, the election of the directors of the Corporation (the “Directors”) need not be by written ballot. Until such time as the Substantial Ownership Requirement is no longer met, the Board will consist of a single class of Directors each elected annually at the annual meeting of stockholders. Except as otherwise provided for or fixed pursuant to the provisions of Section 5.2 of this Certificate of Incorporation relating to the rights of the holders of any series of Preferred Stock to elect additional Directors, the total number of Directors constituting the entire Board shall be not less than three (3) nor more than eleven (11), with the then authorized number of Directors constituting the entire Board being fixed from time to time by the Board.

(ii) During any period when the holders of any series of Preferred Stock have the right to elect additional Directors as provided for or fixed pursuant to the provisions of Section 5.2 (“Preferred Stock Directors”), upon the commencement, and for the duration, of the period during which such right continues: (i) 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 Preferred

 

6


Stock shall be entitled to elect the Preferred Stock Directors pursuant to the provisions of the Board’s designation for the series of Preferred Stock and (ii) 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 his or her earlier death, disqualification, resignation or removal. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect Preferred Stock Directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such Preferred Stock Directors elected by the holders of such Preferred Stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such Preferred Stock Directors, shall forthwith terminate and the total and authorized number of Directors shall be reduced accordingly.

7.2 Staggered Board. Following the time when the Substantial Ownership Requirement is no longer met, the Board (other than Preferred Stock Directors) shall be divided into three (3) classes, as nearly equal in number as possible, designated Class I, Class II and Class III. Class I Directors shall initially serve until the first annual meeting of stockholders following the time when the Substantial Ownership Requirement is no longer met; Class II Directors shall initially serve until the second annual meeting of stockholders following the time when the Substantial Ownership Requirement is no longer met; and Class III Directors shall initially serve until the third annual meeting of stockholders following the time when the Substantial Ownership Requirement is no longer met. Commencing with the first annual meeting of stockholders following the time when the Substantial Ownership Requirement is no longer met, each Director of each class the term of which shall then expire shall be elected to hold office for a term ending on the date of the third annual meeting of stockholders next following the annual meeting at which such director was elected. In case of any increase or decrease, from time to time, in the number of Directors (other than Preferred Stock Directors), the number of Directors in each class shall be apportioned as nearly equal as possible. Immediately following the time when the Substantial Ownership Requirement is no longer met, the Board is authorized to designate the members of the Board then in office as Class I directors, Class II directors or Class III directors. In making such designation, the Board shall equalize, as nearly as possible, the number of directors in each class. In the event of any change in the number of directors, the Board shall apportion any newly created directorships among, or reduce the number of directorships in, such class or classes as shall equalize, as nearly as possible, the number of directors in each class. In no event will a decrease in the number of directors shorten the term of any incumbent director.

7.3 Vacancies and Newly Created Directorships. Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding and subject to the terms of the Stockholders Agreement (as long as such agreement is in effect), newly created directorships resulting from any increase in the authorized number of Directors or any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled only by the affirmative vote of a majority of the remaining Directors then in office, even if less than a quorum of

 

7


the Board, or, until the Substantial Ownership Requirement is no longer met, by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class. Any Director so chosen shall hold office until the next election of the class for which such Director shall have been chosen and until his or her successor shall be duly elected and qualified or until such Director’s earlier death, disqualification, resignation or removal. No decrease in the number of Directors shall shorten the term of any Director then in office.

7.4 Removal of Directors. Except for Preferred Stock Directors and subject to the terms of the Stockholders Agreement (as long as such agreement is in effect), any Director or the entire Board may be removed from office at any time, but only for cause by the affirmative vote of the holders of seventy-five percent (75%) of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class; provided, however, that until the Substantial Ownership Requirement is no longer met, any Director may be removed with or without cause by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class.

 

  8. Meetings of Stockholders.

8.1 Action by Written Consent. From and after the date that the Substantial Ownership Requirement is no longer met, any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders; provided, however, that any action required or permitted to be taken by the holders of Class B Common Stock, voting separately as a class, may be effected by the consent in writing of the holders of a majority of the total voting power of the Class B Common Stock entitled to vote thereon, voting together as a single class in lieu of a duly called annual or special meeting of holders of Class B Common Stock. Until the Substantial Ownership Requirement is no longer met, any action required or permitted to be taken by the stockholders of the Corporation may be effected by the consent in writing of the holders of a majority of the total voting power of the Corporation entitled to vote thereon, voting together as a single class in lieu of a duly called annual or special meeting of stockholders.

8.2 Meetings of Stockholders. (i) An annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the

 

8


transaction of such other business as may properly come before the meeting shall be held at such place, on such date, and at such time as the Board shall determine.

(ii) Subject to any special rights of the holders of any series of Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only (1) by or at the direction of the Board pursuant to a written resolution adopted by a majority of the total number of Directors that the Corporation would have if there were no vacancies or (2) by or at the direction of the Chairman, the Vice Chairman or the Chief Executive Officer. In addition, until the Substantial Ownership Requirement is no longer met, special meetings of stockholders of the Corporation may be called by the Secretary of the Corporation at the request of the holders of a majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

8.3 No Cumulative Voting; Election of Directors by Written Ballot. There shall be no cumulative voting in the election of directors. Unless and except to the extent that the By-laws shall so require, the election of the Directors need not be by written ballot.

 

  9. Business Combinations.

9.1 Section 203 of the General Corporation Law. The Corporation will not be subject to the provisions of Section 203 of the General Corporation Law until the Substantial Ownership Requirement is no longer met. At that time, such election shall be automatically withdrawn and the Corporation will thereafter be governed by Section 203 of the General Corporation Law; provided that it shall only apply to a “person” that became an “interested stockholder” (each as defined in Section 203 of the General Corporation Law) after the Corporation became subject to Section 203 of the General Corporation Law.

 

  10. Limitation of Liability.

10.1 To the fullest extent permitted under the General Corporation Law, as amended from time to time, no Director shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director.

10.2 Any amendment or repeal of Section 10.1 shall not adversely affect any right or protection of a Director hereunder in respect of any act or omission occurring prior to the time of such amendment or repeal.

 

  11. Indemnification.

11.1 Right to Indemnification. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any Person (a “Covered Person”) who was or is a party or

 

9


is threatened to be made a party to or otherwise involved any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a Person for whom he or she is the legal representative, is or was a Director or officer of the Corporation or, 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 entity or enterprise, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees and expenses, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended, and amounts paid or to be paid in settlement) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 11.3 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 be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by the Board.

Any reference to an officer of the Corporation in this Article 11 shall be deemed to refer exclusively to the Chairman, Vice Chairman, Chief Executive Officer, President, Vice Presidents, Secretary, Treasurer and any other officers of the Corporation appointed pursuant to Section 5.01 of the Corporation’s By-laws, and any reference to an officer of any other entity or other enterprise shall be deemed to refer exclusively to an officer appointed by the board of directors or equivalent governing body of such other entity pursuant to the certificate of incorporation and by-laws or equivalent organizational documents of such other entity or enterprise.

11.2 Prepayment of Expenses. To the extent not prohibited by applicable law, the Corporation shall pay the expenses (including attorneys’ fees) incurred by a Covered Person in appearing at, participating in or defending any Proceeding 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 11 (which shall be governed by Section 11.3); provided, however, that to the extent required by applicable law or in the case of advance made in a Proceeding brought to establish or enforce a right to indemnification or advancement, such payment of expenses in advance of the final disposition of the Proceeding shall be made solely upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified or entitled to advancement of expenses under this Article 11 or otherwise.

11.3 Claims. If a claim for indemnification or advancement of expenses under this Article 11 is not paid in full within thirty (30) days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim or to obtain an advancement of expenses, as applicable. To the fullest extent permitted by law, if successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Covered

 

10


Person shall be entitled to be paid the expense of prosecuting or defending such claim. In any such action the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law. In (i) any suit brought by a Covered Person to enforce a right to indemnification hereunder (but not in a suit brought by a Covered Person to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) 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, such Person has not met any applicable standard for indemnification set forth in the General Corporation Law. Neither the failure of the Corporation (including by its Directors who are not parties to such action, a committee of such Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Covered Person is proper in the circumstances because the Covered Person has met the applicable standard of conduct set forth in the General Corporation Law, nor an actual determination by the Corporation (including by its Directors who are not parties to such action, a committee of such Directors, independent legal counsel or its stockholders) that the Covered Person has not met such applicable standard of conduct, shall create a presumption that such Person has not met the applicable standard of conduct or, in the case of such a suit brought by the Covered Person, be a defense to such suit.

11.4 Nonexclusivity of Rights. The rights conferred on any Covered Person by this Article 11 shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, the By-laws, agreement, vote of stockholders or disinterested Directors or otherwise.

11.5 Other Sources. Subject to Section 11.6, the Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another entity or enterprise shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other entity or enterprise.

11.6 Indemnitor of First Resort. In all events, (i) the Corporation hereby agrees that it is the indemnitor of first resort (i.e., its obligation to a Covered Person to provide advancement and/or indemnification to such Covered Person is primary and any obligation of any Principal Stockholder (including any Affiliate thereof other than the Corporation) to provide advancement or indemnification hereunder or under any other indemnification agreement (whether pursuant to contract, by-laws or charter), or any obligation of any insurer of any Principal Stockholder to provide insurance coverage, for the same expenses, liabilities, judgments, penalties, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such expenses, liabilities, judgments, penalties, fines and amounts paid in settlement) incurred by such Covered Person are secondary) and (ii) if any Principal Stockholder (or any Affiliate thereof, other than the Corporation) pays or causes to be paid, for any reason, any amounts otherwise indemnifiable hereunder or under any other indemnification agreement (whether pursuant

 

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to contract, by-laws or charter) with such Covered Person, then (x) such Principal Stockholder (or such Affiliate, as the case may be) shall be fully subrogated to all rights of such Covered Person with respect to such payment, (y) the Covered Person 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 such Principal Stockholder (or such Affiliate) effectively to bring suit to enforce such rights and (z) the Corporation shall fully indemnify, reimburse and hold harmless such Principal Stockholder (or such other Affiliate, as the case may be) for all such payments actually made by such Principal Stockholder (or such other Affiliate). Each of the Principal Stockholders (and any Affiliate thereof) shall be third-party beneficiaries with respect to this Section 11.6, entitled to enforce this Section 11.6.

11.7 Amendment or Repeal. Any amendment or repeal of the foregoing provisions of this Article 11 shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such amendment or repeal.

11.8 Other Indemnification and Prepayment of Expenses. This Article 11 shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to Persons other than Covered Persons when and as authorized by appropriate corporate action.

11.9 Reliance. Covered Persons who after the date of the adoption of this provision become or remain a Covered Person described in Article 11 will be conclusively presumed to have relied on the rights to indemnity, advance of expenses and other rights contained in this Article 11 in entering into or continuing the service. The rights to indemnification and to the advance of expenses conferred in this Article 11 will apply to claims made against any Covered Person described in this Article 11 arising out of acts or omissions in respect of the Corporation or one of its subsidiaries that occurred or occur both prior and subsequent to the adoption hereof. The rights conferred upon Covered Persons in this Article 11 shall be contract rights and such rights shall continue as to a Covered Person who has ceased to be a Director or officer and shall inure to the benefit of the Covered Person’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article 11 that adversely affects any right of a Covered Person or its successors shall be prospective only and 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.

11.10 Insurance. The Corporation may purchase and maintain insurance, at its expense, 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 General Corporation Law.

 

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12. Adoption, Amendment or Repeal of By-Laws. In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized to make, alter, amend or repeal the By-laws subject to the power of the stockholders of the Corporation entitled to vote with respect thereto to make, alter, amend or repeal the By-laws; provided, that with respect to the powers of stockholders entitled to vote with respect thereto to make, alter, amend or repeal the By-laws, from and after the date that the Substantial Ownership Requirement is no longer met, in addition to any other vote otherwise required by law, the affirmative vote of the holders of seventy-five percent (75%) of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class, shall be required to make, alter, amend or repeal the By-laws.

13. Adoption, Amendment and Repeal of Certificate. Subject to Article 5, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by the General Corporation Law, and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, Directors or any other Persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended, are granted and held subject to this reservation. Notwithstanding anything to the contrary contained in this Certificate of Incorporation, and notwithstanding that a lesser percentage may be permitted from time to time by applicable law, no provision of Sections 7.2, 7.3 and 7.4 of Article 7, Sections 8.1 and 8.2 of Article 8 or Article 9, 12, 13 or 14 may be altered, amended or repealed in any respect, nor may any provision or by-law inconsistent therewith be adopted, unless in addition to any other vote required by this Certificate of Incorporation or otherwise required by law, (i) until the Substantial Ownership Requirement is no longer met, such alteration, amendment, repeal or adoption is approved by, in addition to any other vote otherwise required by law, the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class and (ii) from and after the date that the Substantial Ownership Requirement is no longer met, such alteration, amendment, repeal or adoption is approved by, in addition to any other vote otherwise required by law, the affirmative vote of the holders of seventy-five percent (75%) of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class, at a meeting of the stockholders called for that purpose.

14. Forum for Adjudication of Disputes. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any Director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law or (iv) any action asserting a claim governed by the internal affairs doctrine. Any Person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of consent to the provision of this Article 14.

 

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15. Severability. If any provision or provisions of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its Directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law.

16. Definitions. As used in this Certificate of Incorporation, unless the context otherwise requires or as set forth in another Article or Section of this Certificate of Incorporation, the term:

(a) “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person; provided, that (i) neither the Corporation nor any of its subsidiaries will be deemed an Affiliate of any stockholder of the Corporation or any of such stockholders’ Affiliates and (ii) no stockholder of the Corporation will be deemed an Affiliate of any other stockholder of the Corporation, in each case, solely by reason of any investment in the Corporation or any rights conferred on such stockholder pursuant to the Stockholder Agreement (including any representatives of such stockholder serving on the Board).

(b) “Amended and Restated Goosehead Financial, LLC Agreement” means the Amended and Restated Goosehead Financial, LLC Limited Liability Company Agreement, dated as of [●], 2018, by and among the Corporation, The Mark and Robyn Jones Descendants Trust 2014, Lanni Elaine Romney Family Trust 2014, Lindy Jean Langston Family Trust 2014, Camille LaVaun Peterson Family Trust 2014, Desiree Robyn Coleman Family Trust 2014, Adrienne Morgan Jones Family Trust 2014, Mark Evan Jones, Jr. Family Trust 2014, Mark E. Jones, Robyn Jones, Michael C. Colby, Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., Colby 2014 Family Trust, Preston Michael Colby 2014 Trust, Lyla Kate Colby 2014 Trust, Jeffrey Saunders, the estate of Doug Jones, Texas Wasatch Insurance Partners, L.P., Max and Dane, LLC and Evan and Jake, LLC and the other Persons that may become parties thereto from time to time, as the same may be amended, restated, supplemented and/or otherwise modified, from time to time.

(c) “Board” is defined in Section 5.1(ii)(1).

(d) “By-laws” is defined in Section 7.1.

(e) “Certificate of Incorporation” is defined in the recitals.

 

14


(f) “Chairman” means the Chairman of the Board.

(g) “Chief Executive Officer” means the Chief Executive Officer of the Corporation.

(h) “Class A Common Stock” is defined in Section 4.1.

(i) “Class B Common Stock” is defined in Section 4.1.

(j) “Common Stock” is defined in Section 4.1.

(k) “control” (including the terms “controlling” and “controlled”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of such subject Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

(l) “Corporation” means Goosehead Insurance, Inc.

(m) “Covered Person” is defined in Section 11.1.

(n) “Director” is defined in Section 7.1.

(o) “Disposition Event” means any merger, consolidation or other business combination of the Corporation, whether effectuated through one transaction or series of related transactions (including a tender offer followed by a merger in which holders of Class A Common Stock receive the same consideration per share paid in the tender offer), unless, following such transaction, all or substantially all of the holders of the voting power of all outstanding classes of Common Stock and series of Preferred Stock that are generally entitled to vote in the election of Directors prior to such transaction or series of transactions, continue to hold a majority of the voting power of the surviving entity (or its parent) resulting from such transaction or series of transactions in substantially the same proportions as immediately prior to such transaction or series of transactions.

(p) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor law or statute, together with the rules and regulations promulgated thereunder.

(q) “General Corporation Law” is defined in the recitals.

(r) “LLC Unit” means a nonvoting interest unit of Goosehead Financial, LLC.

(s) “Goosehead Financial, LLC” means Goosehead Financial, LLC, a Delaware limited liability company or any successor thereto.

 

15


(t) “Goosehead Management Holders” means The Mark and Robyn Jones Descendants Trust 2014, The Colby 2014 Family Trust, Mark Colby, P. Ryan Langston and Michael Moxley.

(u) “Paired Interest” means one LLC Unit together with one share of Class B Common Stock, subject to adjustment pursuant to Section [●] of the Amended and Restated Goosehead Financial, LLC Agreement.

(v) “Permitted Transferee” means (i) in the case of any transferor that is not a natural person, any Person that is an Affiliate of such transferor and (ii) in the case of any transferor that is a natural person, (A) any Person to whom Common Stock is transferred from such transferor (1) by will or the laws of descent and distribution or (2) by gift without consideration of any kind; provided that, in the case of clause (2), such transferee is the spouse, the lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of such transferor, (B) a trust that is for the exclusive benefit of such transferor or its Permitted Transferees under (A) above or (C) any institution qualified as tax-exempt under Section 501(c)(3) of the Code.

(w) “Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity.

(x) “Post-IPO LLC Members” means Mark E. Jones, Robyn Jones, Michael C. Colby, Jeffrey Saunders, The Mark and Robyn Jones Descendants Trust 2014, Lanni Elaine Romney Family Trust 2014, Lindy Jean Langston Family Trust 2014, Camille LaVaun Peterson Family Trust 2014, Desiree Robyn Coleman Family Trust 2014, Adrienne Morgan Jones Family Trust 2014, Mark Evan Jones, Jr. Family Trust 2014, the estate of Doug Jones, Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., Colby 2014 Family Trust, Preston Michael Colby 2014 Trust, Lyla Kate Colby 2014 Trust, Texas Wasatch Insurance Partners, L.P., Max and Dane, LLC and Evan and Jake, LLC.

(y) “Preferred Stock” is defined in Section 4.1.

(z) “Preferred Stock Directors” is defined in Section 7.1.

(aa) “Principal Stockholders” means the Post-IPO LLC Members, the Goosehead Management Holders and the Texas Wasatch Holders and each of their respective Permitted Transferees.

(bb) “Proceeding” is defined in Section 11.1.

(cc) “Stock Adjustment” is defined in Section 5.1(ii)(3).

(dd) “Stockholder Agreement” means the Stockholders Agreement, dated as of [●], 2018, by and among the Corporation, Mark E. Jones, Robyn Jones, Michael C. Colby, Jeffrey Saunders, The Mark and Robyn Jones Descendants

 

16


Trust 2014, The Lanni Elaine Romney Family Trust 2014, The Lindy Jean Langston Family Trust 2014, The Camille LaVaun Peterson Family Trust 2014, The Desiree Robyn Coleman Family Trust 2014, The Adrienne Morgan Jones Family Trust 2014, The Mark Evan Jones, Jr. Family Trust 2014, the estate of Doug Jones, Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., The Colby 2014 Family Trust, The Preston Michael Colby 2014 Trust, The Lyla Kate Colby 2014 Trust, Texas Wasatch Insurance Partners, L.P. and the other Persons who may become parties thereto from time to time, as they same may be amended, restated, supplemented and/or otherwise modified, from time to time.

(ee) “Substantial Ownership Requirement” means the beneficial ownership (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) by the Post-IPO LLC Members and any Permitted Transferee collectively, of shares of Common Stock representing at least ten percent (10%) of the issued and outstanding shares of Common Stock.

(ff) “Texas Wasatch Holders” means Mark E. Jones, Robyn Jones, Michael C. Colby, Jeffrey Saunders, Mark Colby, P. Ryan Langston and Michael Moxley.

(gg) “Transfer” of a share of Class B Common Stock means, directly or indirectly, any sale, assignment, transfer, exchange, gift, bequest, pledge, hypothecation or other disposition or encumbrance of such share or any legal or beneficial interest in such share, in whole or in part, whether or not for value and whether voluntary or involuntary or by operation of law; provided, however, that the following shall not be considered a “Transfer”: (i) the granting of a revocable proxy pursuant to the Stockholder Agreement or to officers or directors of the Corporation at the request of the Board in connection with actions to be taken at annual or special meetings of stockholders or in connection with any action by written consent of the stockholders solicited by the Board (at such times as action by written consent of stockholders is permitted under this Certificate of Incorporation); (ii) entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with the Corporation and/or its stockholders that (x) is disclosed either in a Schedule 13D filed with the Securities and Exchange Commission or in writing to the Secretary of the Corporation, (y) either has a term not exceeding one (1) year or is terminable by the holder of the shares subject thereto at any time and (z) does not involve any payment of cash, securities, property or other consideration to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner; (iii) entering into a customary voting or support agreement (with or without granting a proxy) in connection with any merger, consolidation or other business combination of the Corporation, whether effectuated through one transaction or series of related transactions (including a tender offer followed by a merger in which holders of Class A Common Stock receive the same consideration per share paid in the tender offer); (iv) the pledge of shares of capital stock of the Corporation by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction so long as such stockholder continues to exercise sole voting control over such pledged shares; provided, however, that a foreclosure on such shares or other similar action by the pledgee shall

 

17


constitute a “Transfer”; or (v) the fact that the spouse of any holder of Class B Common Stock possesses or obtains an interest in such holder’s shares of Class B Common Stock arising solely by reason of the application of the community property laws of any jurisdiction, so long as no other event or circumstance shall exist or have occurred that constitutes a “Transfer” of such shares of Class B Common Stock.

(hh) “Vice Chairman” means the Vice Chairman of the Board.

[Remainder of page intentionally left blank.]

 

18


IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation of Goosehead Insurance, Inc. has been duly executed by the officer below this [___] day of [____], 2018.

By: _______________________

Name: Mark E. Jones

Title:    Chairman and Chief Executive Officer

 

[Signature Page to Amended and Restated Certificate of Incorporation]


Exhibit B

Form of Goosehead Insurance, Inc. Amended and Restated Bylaws

[Attached]

 


AMENDED AND RESTATED BY-LAWS

of

GOOSEHEAD INSURANCE, INC.

(A Delaware Corporation)


TABLE OF CONTENTS

 

 

 

            PAGE  

ARTICLE 1

Definitions

 

ARTICLE 2

Stockholders

 

 

 

 

Section

    2.01.       

Place of Meetings

     3  

Section

    2.02.       

Annual Meetings; Stockholder Proposals

     3  

Section

    2.03.       

Special Meetings

     6  

Section

    2.04.       

Record Date

     6  

Section

    2.05.       

Notice of Meetings of Stockholders

     7  

Section

    2.06.       

Waivers of Notice

     8  

Section

    2.07.       

List of Stockholders

     8  

Section

    2.08.       

Quorum of Stockholders; Adjournment

     8  

Section

    2.09.       

Voting; Proxies

     9  

Section

    2.10.       

Voting Procedures and Inspectors at Meetings of Stockholders

     9  

Section

    2.11.       

Conduct of Meetings; Adjournment

     10  

Section

    2.12.       

Order of Business

     10  

Section

    2.13.       

Written Consent of Stockholders Without a Meeting

     10  
ARTICLE 3  
Directors  

Section

    3.01.       

General Powers

     11  

Section

    3.02.       

Term of Office

     11  

Section

    3.03.       

Nominations of Directors

     11  

Section

    3.04.       

Nominee and Director Qualifications

     14  

Section

    3.05.       

Resignation

     15  

Section

    3.06.       

Compensation

     15  

Section

    3.07.       

Regular Meetings

     15  

Section

    3.08.       

Special Meetings

     15  

Section

    3.09.       

Telephone Meetings

     15  

Section

    3.10.       

Adjourned Meetings

     15  

Section

    3.11.       

Notice Procedure

     16  

Section

    3.12.       

Waiver of Notice

     16  

Section

    3.13.       

Organization

     16  

Section

    3.14.       

Quorum of Directors

     16  

Section

    3.15.       

Action by Majority Vote

     16  

Section

    3.16.       

Action Without Meeting

     16  

 

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ARTICLE 4

Committees of the Board

 

ARTICLE 5

Officers

 

 

 

 

Section

    5.01.       

Positions; Election

     17  

Section

    5.02.       

Term of Office

     17  

Section

    5.03.       

Chairman

     18  

Section

    5.04.       

Vice Chairman

     18  

Section

    5.05.       

Chief Executive Officer

     18  

Section

    5.06.       

President

     18  

Section

    5.07.       

Vice Presidents

     19  

Section

    5.08.       

Secretary

     19  

Section

    5.09.       

Treasurer

     19  

Section

    5.10.       

Assistant Secretaries and Assistant Treasurers

     20  

ARTICLE 6

General Provisions

 

 

Section

    6.01.       

Certificates Representing Shares

     20  

Section

    6.02.       

Transfer and Registry Agents

     20  

Section

    6.03.       

Lost, Stolen or Destroyed Certificates

     20  

Section

    6.04.       

Form of Records

     20  

Section

    6.05.       

Seal

     20  

Section

    6.06.       

Fiscal Year

     21  

Section

    6.07.       

Amendments

     21  

Section

    6.08.       

Conflict with Applicable Law or Certificate of Incorporation

     21  

 

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ARTICLE 1

DEFINITIONS

As used in these By-laws, unless the context otherwise requires, the term:

Assistant Secretary” means an Assistant Secretary of the Corporation.

Assistant Treasurer” means an Assistant Treasurer of the Corporation.

Board” means the Board of Directors of the Corporation.

By-laws” means the By-laws of the Corporation, as amended and restated.

Certificate of Incorporation” means the Certificate of Incorporation of the Corporation, as amended and restated.

Chairman” means the Chairman of the Board and includes any Executive Chairman.

Chief Executive Officer” means the Chief Executive Officer of the Corporation.

control” (including the terms “controlling” and “controlled”), with respect to the relationship between or among two or more persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of such subject person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

Corporation” means Goosehead Insurance, Inc.

Derivative” is defined in Section 2.02(d)(iii).

Directors” means the directors of the Corporation.

Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor law or statute, and the rules and regulations promulgated thereunder.

Executive Chairman” means the Executive Chairman of the Board.

General Corporation Law” means the General Corporation Law of the State of Delaware, as amended.

law” means any U.S. or non-U.S. federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a governmental authority (including any department, court, agency or official, or non-governmental self-regulatory organization, agency or authority and any political subdivision or instrumentality thereof).

Nominating Stockholder” is defined in Section 3.03(b).


Notice of Business” is defined in Section 2.02(c).

Notice of Nomination” is defined in Section 3.03(c).

Notice Record Date” is defined in Section 2.04(a).

Office of the Corporation” means the executive office of the Corporation, anything in Section 131 of the General Corporation Law to the contrary notwithstanding.

President” means the President of the Corporation.

Proponent” is defined in Section 2.02(d)(i).

Public Disclosure” is defined in Section 2.02(i).

SEC” means the Securities and Exchange Commission.

Secretary” means the Secretary of the Corporation.

Stockholder Associated Person” is defined in Section 2.02(j).

Stockholder Business” is defined in Section 2.02(b).

Stockholder Information” is defined in Section 2.02(d)(iii).

Stockholder Nominees” is defined in Section 3.03(b).

Stockholders” means the stockholders of the Corporation.

Stockholders Agreement” means the Stockholders Agreement, dated as of [●], 2018, by and among the Corporation, Mark E. Jones, Robyn Jones, Michael C. Colby, Jeffrey Saunders, The Mark and Robyn Jones Descendants Trust 2014, The Lanni Elaine Romney Family Trust 2014, The Lindy Jean Langston Family Trust 2014, The Camille LaVaun Peterson Family Trust 2014, The Desiree Robyn Coleman Family Trust 2014, The Adrienne Morgan Jones Family Trust 2014, The Mark Evan Jones, Jr. Family Trust 2014, The Estate of Doug Jones, Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., The Colby 2014 Family Trust, The Preston Michael Colby 2014 Trust, The Lyla Kate Colby 2014 Trust and the other Persons who may become parties thereto from time to time, as it may be amended, supplemented or modified.

Treasurer” means the Treasurer of the Corporation.

Vice Chairman” means the Vice Chairman of the Board.

Vice President” means a Vice President of the Corporation.

Voting Commitment” is defined in Section 3.04.

Voting Record Date” is defined in Section 2.04(a).

 

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ARTICLE 2

STOCKHOLDERS

Section 2.01. Place of Meetings. Meetings of Stockholders may be held within or without the State of Delaware, at such place or solely by means of remote communication or otherwise, as may be designated by the Board from time to time.

Section 2.02. Annual Meetings; Stockholder Proposals.

(a) A meeting of Stockholders for the election of Directors and other business shall be held annually at such date and time as may be designated by the Board from time to time.

(b) At an annual meeting of the Stockholders, only business (other than business relating to the nomination or election of Directors, which is governed by Section 3.03) that has been properly brought before the Stockholder meeting in accordance with the procedures set forth in this Section 2.02 shall be conducted. To be properly brought before a meeting of Stockholders, such business must be brought before the meeting (i) by or at the direction of the Board or any committee thereof or (ii) by a Stockholder who (A) was a Stockholder of record of the Corporation when the notice required by this Section 2.2 is delivered to the Secretary and at the time of the meeting, (B) is entitled to vote at the meeting and (C) complies with the notice and other provisions of this Section 2.02. Subject to Section 2.02(k), and except with respect to nominations or elections of Directors, which are governed by Section 3.03, Section 2.02(b)(ii) is the exclusive means by which a Stockholder may bring business before a meeting of Stockholders; provided that if Rule 14a-8 of the Exchange Act (or any successor rule) is applicable, a Stockholder may not bring business before any meeting if the Stockholder fails to meet the requirements of such rule. Any business brought before a meeting in accordance with Section 2.02(b)(ii) is referred to as “Stockholder Business.”

(c) Subject to Section 2.02(k), at any annual meeting of Stockholders, all proposals of Stockholder Business must be made by timely written notice given by or on behalf of a Stockholder of record of the Corporation (the “Notice of Business”) and must otherwise be a proper matter for Stockholder action. To be timely, the Notice of Business must be delivered personally or mailed to, and received at, the Office of the Corporation, addressed to the Secretary, by no earlier than one hundred and twenty (120) days and no later than ninety (90) days before the first anniversary of the date of the prior year’s annual meeting of Stockholders; provided, however, that if (i) the annual meeting of Stockholders is advanced by more than thirty (30) days, or delayed by more than sixty (60) days, from the first anniversary of the prior year’s annual meeting of Stockholders or (ii) no annual meeting was held during the prior year, the notice by the Stockholder to be timely must be received (A) no earlier than one hundred and twenty (120) days before such annual meeting and (B) no later than the later of ninety (90) days before such annual meeting and the tenth day after the day on which the notice of such annual meeting was made by mail or Public Disclosure; provided, further, that, solely for the purposes of the notice requirements under this Section 2.02(c), with respect to the annual meeting of stockholders of the Corporation for 2019, the date of the preceding year’s annual meeting of stockholders shall be deemed to be [●], 2018. In no event shall an adjournment, postponement or deferral, or Public Disclosure of an adjournment, postponement or deferral, of a Stockholder

 

3


meeting commence a new time period (or extend any time period) for the giving of the Notice of Business.

(d) The Notice of Business must set forth:

(i) the name and record address of each Stockholder proposing Stockholder Business (the “Proponent”), as they appear on the Corporation’s books;

(ii) the name and address of any Stockholder Associated Person;

(iii) as to each Proponent and any Stockholder Associated Person, (A) the class or series and number of shares of stock directly or indirectly held of record and beneficially by the Proponent or Stockholder Associated Person, (B) the date such shares of stock were acquired, (C) a description of any agreement, arrangement or understanding, direct or indirect, with respect to such Stockholder Business between or among the Proponent, any Stockholder Associated Person or any others (including their names) acting in concert with any of the foregoing, (D) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, 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 of securities and/or borrowed or loaned shares) that has been entered into, directly or indirectly, as of the date of the Proponent’s notice by, or on behalf of, the Proponent or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the Proponent or any Stockholder Associated Person with respect to shares of stock of the Corporation or with a value derived in whole or in part from the value or decrease in value of any class or series of stock of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of stock of the Corporation or otherwise (a “Derivative”), (E) a description in reasonable detail of any proxy (including revocable proxies), contract, arrangement, understanding or other relationship pursuant to which the Proponent or Stockholder Associated Person has a right to vote any shares of stock of the Corporation, (F) any rights to dividends on the stock of the Corporation owned beneficially by the Proponent or Stockholder Associated Person that are separated or separable from the underlying stock of the Corporation, (G) any proportionate interest in stock of the Corporation or Derivatives held, directly or indirectly, by a general or limited partnership in which the Proponent or Stockholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (H) any performance-related fees (other than an asset-based fee) that the Proponent or Stockholder Associated Person is entitled to based on any increase or decrease in the value of stock of the Corporation or Derivatives thereof, if any, as of the date of such notice. The information specified in Section 2.02(d)(i) to (iii) is referred to herein as “Stockholder Information”;

(iv) Stockholder Information with respect to any stock or other interests of the Corporation held by members of the Proponent’s or Stockholder Associated Person’s immediate family sharing the same household;

 

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(v) a representation to the Corporation that each Proponent is a holder of record of stock of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such Stockholder Business;

(vi) a brief description of the Stockholder Business desired to be brought before the annual meeting, the text of the proposal (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend the By-laws, the language of the proposed amendment) and the reasons for conducting such Stockholder Business at the meeting;

(vii) any material interest of each Proponent and any Stockholder Associated Person in such Stockholder Business;

(viii) a representation to the Corporation as to whether the Proponent intends (A) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt such Stockholder Business or (B) otherwise to solicit proxies from the Stockholders in support of such Stockholder Business;

(ix) all other information that would be required to be filed with the SEC if the Proponents or Stockholder Associated Persons were participants in a solicitation subject to Section 14 of the Exchange Act; and

(x) a representation and covenant for the benefit of the Corporation that the Proponents shall provide any other information reasonably requested by the Corporation.

(e) The Proponents shall also provide any other information reasonably requested by the Corporation within ten (10) business days after such request.

(f) In addition, the Proponent shall further update and supplement the information provided to the Corporation in the Notice of Business or upon the Corporation’s request pursuant to Section 2.02(e) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is the later of ten (10) business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at, the Office of the Corporation, addressed to the Secretary, by no later than five (5) 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 seven (7) business days before the date for the meeting (in the case of the update and supplement required to be made as of ten (10) business days before the meeting or any adjournment or postponement thereof).

(g) The person presiding over the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the procedures set forth in this Section 2.02, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

 

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(h) If the Proponent (or a qualified representative of the Proponent) does not appear at the meeting of Stockholders to present the Stockholder Business, such business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.02, to be considered a qualified representative of the Stockholder, a person must be a duly authorized officer, manager or partner of such Stockholder or must be authorized by a writing executed by such Stockholder or an electronic transmission delivered by such Stockholder to act for such Stockholder as proxy at the meeting of Stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of Stockholders.

(i) “Public Disclosure” of any date or other information means disclosure thereof by a press release reported by the Dow Jones News Services, Associated Press or comparable U.S. national news service or in a document publicly filed by the Corporation with the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

(j) “Stockholder Associated Person” means, with respect to any Stockholder, (i) any other beneficial owner of stock of the Corporation that is owned by such Stockholder and (ii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Stockholder or such beneficial owner.

(k) The notice requirements of this Section 2.02 shall be deemed satisfied with respect to Stockholder proposals that have been properly brought under Rule 14a-8 of the Exchange Act and that are included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. Further, nothing in this Section 2.02 shall be deemed to affect any rights of the holders of any series of preferred stock of the Corporation pursuant to any applicable provision of the Certificate of Incorporation.

Section 2.03.    Special Meetings. Special meetings of the Stockholders may be called only in the manner set forth in the Certificate of Incorporation. Notice of every special meeting of the Stockholders shall state the purpose or purposes of such meeting. Except as otherwise required by law, the business conducted at a special meeting of Stockholders shall be limited exclusively to the business set forth in the Corporation’s notice of meeting, and the individual or group calling such meeting shall have exclusive authority to determine the business included in such notice.

Section 2.04.    Record Date.

(a) For the purpose of determining the Stockholders entitled to notice of any meeting of Stockholders or any adjournment thereof, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date (the “Notice Record Date”), which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than sixty (60) or less than ten (10) days before the date of such meeting. The Notice Record Date shall also be the record date for determining the Stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such Notice Record Date, that a later date on or before the date of the meeting shall be the date for making such determination (the “Voting Record Date”). For the purposes of determining the Stockholders entitled to express consent to corporate action in writing without a meeting,

 

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unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date, which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than ten (10) days after the date on which the record date was fixed by the Board. For the purposes of determining the Stockholders entitled to (i) receive payment of any dividend or other distribution or allotment of any rights, (ii) exercise any rights in respect of any change, conversion or exchange of stock or (iii) take any other lawful action, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date, which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than sixty (60) days prior to such action.

(b) If no such record date is fixed:

(i) 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;

(ii) the record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting (unless otherwise provided in the Certificate of Incorporation), when no prior action by the Board is required by applicable law, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law; and when prior action by the Board is required by applicable law, the record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board takes such prior action; and

(iii) when a determination of Stockholders of record entitled to notice of, or to vote at, any meeting of Stockholders has been made as provided in this Section 2.04, such determination shall apply to any adjournment thereof, unless the Board fixes a new Voting Record Date for the adjourned meeting, in which case the Board shall also fix such Voting Record Date or a date earlier than such date as the new Notice Record Date for the adjourned meeting.

Section 2.05. Notice of Meetings of Stockholders. Whenever, under the provisions of applicable law, the Certificate of Incorporation or these By-laws, Stockholders are required or permitted to take any action at a meeting, notice shall be given stating the place, if any, date and hour of the meeting; the means of remote communication, if any, by which Stockholders and proxy holders may be deemed to be present in person and vote at such meeting; the Voting Record Date, if such date is different from the Notice Record Date; and, in the case of a special meeting, the purposes for which the meeting is called. Unless otherwise provided by these By-laws or applicable law, notice of any meeting shall be given, not less than ten (10) nor more than sixty (60) days before the date of the meeting, to each Stockholder entitled to vote at such meeting as of the Notice Record Date. If mailed, such notice shall be deemed to be given when deposited in the U.S. mail, with postage prepaid, and directed to the Stockholder at his or her address as it appears on the records of the Corporation. An affidavit of the Secretary, an

 

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Assistant Secretary or the transfer agent of the Corporation that the notice required by this Section 2.05 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. If a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. Any business that might have been transacted at the meeting as originally called may be transacted at the adjourned meeting. If, however, the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each Stockholder of record entitled to vote at the meeting. If, after the adjournment, a new Voting Record Date is fixed for the adjourned meeting, the Board shall fix a new Notice Record Date in accordance with Section 2.04(b)(iii) hereof and shall give notice of such adjourned meeting to each Stockholder entitled to vote at such meeting as of the Notice Record Date.

Section 2.06. Waivers of Notice. Whenever the giving of any notice to Stockholders is required by applicable law, the Certificate of Incorporation or these By-laws, a waiver thereof, given by the person entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a Stockholder at a meeting shall constitute a waiver of notice of such meeting except when the Stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purposes of, any regular or special meeting of the Stockholders need be specified in any waiver of notice.

Section 2.07. List of Stockholders. The Secretary shall prepare and make available, at least ten (10) days before every meeting of Stockholders, a complete, alphabetical list of the Stockholders entitled to vote at the meeting, and showing the address of each Stockholder and the number of shares registered in the name of each Stockholder. Such list may be examined by any Stockholder, the Stockholder’s agent or attorney, at the Stockholder’s expense, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting, during ordinary business hours at the principal place of business of the Corporation or on a reasonably accessible electronic network as provided by applicable law. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any Stockholder who is present. If the meeting is held solely by means of remote communication, the list shall also be open for inspection as provided by applicable law. Except as provided by applicable law, the stock ledger shall be the only evidence as to who are the Stockholders entitled to examine the list of Stockholders or to vote in person or by proxy at any meeting of Stockholders.

Section 2.08. Quorum of Stockholders; Adjournment. Except as otherwise provided by these By-laws, at each meeting of Stockholders, the presence in person or by proxy of the holders of a majority of the voting power of all outstanding shares of stock entitled to vote at the meeting of Stockholders shall constitute a quorum for the transaction of any business at such meeting, except that, where a separate vote by a class or series of classes of shares is required, a quorum shall consist of no less than a majority of the voting power of all outstanding shares of stock of such class or series of classes, as applicable. In the absence of a quorum, the holders of a majority in 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 and place. Shares of its own stock belonging to the Corporation or to another corporation,

 

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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; provided, however, that 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.

Section 2.09. Voting; Proxies. Unless otherwise provided by the General Corporation Law or in the Certificate of Incorporation, every Stockholder entitled to vote at any meeting of Stockholders shall be entitled to one vote for each share of stock (and 10 votes for each share of Class B Common Stock until the Substantial Ownership Requirement is no longer met (each as defined in the Certificate of Incorporation)) held by such Stockholder which has voting power upon the matter in question. At any meeting of Stockholders, all matters other than the election of Directors, except as otherwise provided by the Certificate of Incorporation, these By-laws or any applicable law, shall be decided by the affirmative vote of a majority in voting power of shares of stock present in person or represented by proxy and entitled to vote thereon. At all meetings of Stockholders for the election of Directors, a plurality of the votes cast shall be sufficient to elect Directors. 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, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy expressly provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. A Stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or by delivering a new proxy bearing a later date.

Section 2.10. Voting Procedures and Inspectors at Meetings of Stockholders. The Board, in advance of any meeting of Stockholders, shall ppoint one or more inspectors, who may be employees of the Corporation, to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, 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 or entities to assist the inspectors in the performance of their duties. Unless otherwise provided by the Board, the date and time of the opening and the closing of the polls for each matter upon which the Stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting. No ballot, proxies, votes or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a Stockholder shall determine otherwise. In determining the validity and counting of proxies and ballots cast at any meeting of Stockholders, the inspectors

 

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may consider such information as is permitted by applicable law. No person who is a candidate for office at an election may serve as an inspector at such election.

Section 2.11. Conduct of Meetings; Adjournment. The Board may adopt such rules and procedures for the conduct of Stockholder meetings as it deems appropriate. At each meeting of Stockholders, the Chairman or, in the absence of the Chairman, the Vice Chairman or, in the absence of or if there is no Vice Chairman, the Chief Executive Officer or, in the absence of the Chairman, the Vice Chairman and the Chief Executive Officer, the President or, if there is no Chairman, Vice Chairman, Chief Executive Officer or President, or if they are absent, a Vice President and, in the case that more than one Vice President shall be present, that Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President present), shall preside over the meeting. Except to the extent inconsistent with the rules and procedures as adopted by the Board, the person presiding over the meeting of Stockholders shall have the right and authority to convene, adjourn and reconvene the meeting from time to time, to prescribe such additional rules and procedures and to do all such acts as, in the judgment of such person, are appropriate for the proper conduct of the meeting. Such rules and procedures, whether adopted by the Board or prescribed by the person presiding over the meeting, may include (a) the establishment of an agenda or order of business for the meeting, (b) rules and procedures for maintaining order at the meeting and the safety of those present, (c) limitations on attendance at or participation in the meeting to Stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the person presiding over the meeting shall determine, (d) restrictions on entry to the meeting after the time fixed for the commencement thereof and (e) limitations on the time allotted to questions or comments by participants. The person presiding over any meeting of Stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, may determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, he or she shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of Stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The Secretary or, in his or her absence, one of the Assistant Secretaries, shall act as secretary of the meeting. If none of the officers above designated to act as the person presiding over the meeting or as secretary of the meeting shall be present, a person presiding over the meeting or a secretary of the meeting, as the case may be, shall be designated by the Board and, if the Board has not so acted, in the case of the designation of a person to act as secretary of the meeting, designated by the person presiding over the meeting. To the extent permitted by applicable law, meetings of stockholders may be conducted by remote communications, including by webcast.

Section 2.12. Order of Business. The order of business at all meetings of Stockholders shall be as determined by the person presiding over the meeting.

Section 2.13. Written Consent of Stockholders Without a Meeting. If, and only if, the Certificate of Incorporation expressly permits action to be taken at any annual or special meeting of Stockholders without a meeting, without prior notice and without a vote, then a consent or consents in writing, setting forth the action to be so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to

 

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authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to the Corporation by delivery to its registered office in the State of Delaware, the Office of the Corporation or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of Stockholders are recorded. Every written consent shall bear the date of signature of each Stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this Section 2.13, written consents signed by a sufficient number of holders to take action are delivered to the Corporation as aforesaid. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by applicable law, be given to those Stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.

ARTICLE 3

DIRECTORS

Section 3.01. General Powers. The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. The Board may adopt such rules and procedures, not inconsistent with the Certificate of Incorporation, these By-laws or applicable law, as it may deem proper for the conduct of its meetings and the management of the Corporation.

Section 3.02. Term of Office. The Board shall consist of members as determined in accordance with the Certificate of Incorporation. Subject to obtaining any required stockholder votes or consents under the Stockholders Agreement (as long as such agreement is in effect), each Director shall hold office until a successor is duly elected and qualified or until the Director’s earlier death, resignation, disqualification or removal.

Section 3.03. Nominations of Directors.

(a) Subject to Section 3.03(k) and obtaining any required stockholder votes or consents under the Stockholders Agreement and except as otherwise provided by the Stockholders Agreement (as long as such agreement is in effect), only persons who are nominated in accordance with the procedures set forth in this Section 3.03 are eligible for election as Directors.

(b) Nominations of persons for election to the Board may only be made at a meeting properly called for the election of Directors and only (i) by or at the direction of the Board or any committee thereof or (ii) by a Stockholder who (A) was a Stockholder of record of the Corporation when the notice required by this Section 3.03 is delivered to the Secretary and at the time of the meeting, (B) is entitled to vote for the election of Directors at the meeting and (C) complies with the notice and other provisions of this Section 3.03. Subject to Section 3.03(k) and obtaining any required stockholder votes or consents under the Stockholders Agreement (as long as such agreement is in effect), Section 3.03(b)(ii) is the exclusive means by which a

 

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Stockholder may nominate a person for election to the Board. Persons nominated in accordance with Section 3.03(b)(ii) are referred to as “Stockholder Nominees.” A Stockholder nominating persons for election to the Board is referred to as the “Nominating Stockholder.”

(c) Subject to Section 3.03(k) and obtaining any required stockholder votes or consents under the Stockholders Agreement and except as otherwise provided by the Stockholders Agreement (as long as such agreement is in effect), all nominations of Stockholder Nominees must be made by timely written notice given by or on behalf of a Stockholder of record of the Corporation (the “Notice of Nomination”). To be timely, the Notice of Nomination must be delivered personally or mailed to and received at the Office of the Corporation, addressed to the attention of the Secretary, by the following dates:

(i) in the case of the nomination of a Stockholder Nominee for election to the Board at an annual meeting of Stockholders, no earlier than one hundred and twenty (120) days and no later than ninety (90) days before the first anniversary of the date of the prior year’s annual meeting of Stockholders; provided, however, that if (A) the annual meeting of Stockholders is advanced by more than thirty (30) days, or delayed by more than sixty (60) days, from the first anniversary of the prior year’s annual meeting of Stockholders or (B) no annual meeting was held during the prior year, the notice by the Stockholder to be timely must be received (1) no earlier than one hundred and twenty (120) days before such annual meeting and (2) no later than the later of ninety (90) days before such annual meeting and the tenth day after the day on which the notice of such annual meeting was made by mail or Public Disclosure; provided, further, that, solely for the purposes of the notice requirements under this Section 2.02(c), with respect to the annual meeting of stockholders of the Corporation for 2019, the date of the preceding year’s annual meeting of stockholders shall be deemed to be [●], 2018; and

(ii) in the case of the nomination of a Stockholder Nominee for election to the Board at a special meeting of Stockholders, no earlier than one hundred and twenty (120) days before and no later than the later of ninety (90) days before such special meeting and the tenth day after the day on which the notice of such special meeting was made by mail or Public Disclosure.

(d) Notwithstanding anything to the contrary, if the number of Directors to be elected to the Board at a meeting of Stockholders is increased and there is no Public Disclosure by the Corporation naming the nominees for the additional directorships at least one hundred (100) days before the first anniversary of the preceding year’s annual meeting, a Notice of Nomination shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered personally and received at the Office of the Corporation, addressed to the attention of the Secretary, no later than the close of business on the tenth day following the day on which such Public Disclosure is first made by the Corporation.

(e) In no event shall an adjournment, postponement or deferral, or Public Disclosure of an adjournment, postponement or deferral, of an annual or special meeting commence a new time period (or extend any time period) for the giving of the Notice of Nomination.

(f) The Notice of Nomination shall set forth:

 

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(i) the Stockholder Information with respect to each Nominating Stockholder and Stockholder Associated Person;

(ii) a representation to the Corporation that each Nominating Stockholder is a holder of record of stock of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such nomination;

(iii) all information regarding each Stockholder Nominee and Stockholder Associated Person that would be required to be disclosed in a solicitation of proxies subject to Section 14 of the Exchange Act, the written consent of each Stockholder Nominee to being named in a proxy statement as a nominee and to serve if elected and a completed signed questionnaire, representation and agreement required by Section 3.04;

(iv) 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 a Nominating Stockholder, Stockholder Associated Person or their respective associates, or others acting in concert therewith, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the Nominating Stockholder, Stockholder Associated Person or any person acting in concert therewith were the “registrant” for purposes of such rule and the Stockholder Nominee were a director or executive of such registrant;

(v) Stockholder Information with respect to any stock or other interests of the Corporation held by members of the Nominating Stockholder’s or its Stockholder Associated Person’s immediate family sharing the same household;

(vi) a representation to the Corporation as to whether each Nominating Stockholder intends (A) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve the nomination or (B) otherwise to solicit proxies from Stockholders in support of such nomination;

(vii) all other information that would be required to be filed with the SEC if the Nominating Stockholders and Stockholder Associated Persons were participants in a solicitation subject to Section 14 of the Exchange Act; and

(viii) a representation and covenant for the benefit of the Corporation that the Nominating Stockholders shall provide any other information reasonably requested by the Corporation.

(g) The Nominating Stockholders shall also provide any other information reasonably requested by the Corporation within ten (10) business days after such request.

(h) In addition, the Nominating Stockholders shall further update and supplement the information provided to the Corporation in the Notice of Nomination or upon the Corporation’s request pursuant to Section 3.03(g) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days before the

 

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meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at, the Office of the Corporation, addressed to the Secretary, by no later than five (5) 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 seven (7) business days before the date for the meeting (in the case of the update and supplement required to be made as of ten (10) business days before the meeting or any adjournment or postponement thereof).

(i) The person presiding over the meeting shall, if the facts warrant, determine and declare to the meeting, that the nomination was not made in accordance with the procedures set forth in this Section 3.03, and, if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.

(j) If the Stockholder (or a qualified representative of the Stockholder) does not appear at the applicable Stockholder meeting to nominate the Stockholder Nominees, such nomination shall be disregarded and such business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 3.03, to be considered a qualified representative of the Stockholder, a person must be a duly authorized officer, manager or partner of such Stockholder or must be authorized by a writing executed by such Stockholder or an electronic transmission delivered by such Stockholder to act for such Stockholder as proxy at the meeting of Stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of Stockholders.

(k) Nothing in this Section 3.03 shall be deemed to affect any rights of the holders of any series of preferred stock of the Corporation pursuant to any applicable provision of the Certificate of Incorporation.

Section 3.04. Nominee and Director Qualifications. Unless the Board determines otherwise or the Stockholders Agreement provides otherwise (as long as such agreement is in effect), to be eligible to be a nominee for election or reelection as a Director, a person must deliver (in accordance with the time periods prescribed for delivery of notice by the Board) to the Secretary at the Office of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) 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 will act or vote as a Director 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 with such person’s fiduciary duties as a Director 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 therein, 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, and will comply with all

 

14


applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading and other policies and guidelines of the Corporation that are applicable to Directors.

Section 3.05. Resignation. Any Director may resign at any time by notice given in writing or by electronic transmission to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified, and, unless otherwise specified in such resignation, the acceptance of such resignation shall not be necessary to make it effective.

Section 3.06. Compensation. Each Director, in consideration of his or her service as such, shall be entitled to receive from the Corporation such amount per annum or such fees (payable in cash or equity) for attendance at Directors’ meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in connection with the performance of his or her duties. Each Director who shall serve as a member of any committee of Directors in consideration of serving as such shall be entitled to such additional amount per annum or such fees for attendance at committee meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in the performance of his or her duties. Nothing contained in this Section 3.06 shall preclude any Director from serving the Corporation or its subsidiaries in any other capacity and receiving proper compensation therefor.

Section 3.07. Regular Meetings. Regular meetings of the Board may be held without notice at such times and at such places within or without the State of Delaware as may be determined from time to time by the Board or its Chairman.

Section 3.08. Special Meetings. Special meetings of the Board may be held at such times and at such places within or without the State of Delaware as may be determined by the Chairman, the Vice Chairman or the Chief Executive Officer on at least twenty-four (24) hours’ notice to each Director given by one of the means specified in Section 3.11 hereof other than by mail, or on at least three (3) days’ notice if given by mail. Special meetings shall be called by the Chairman, the Vice Chairman, the Chief Executive Officer, the President or the Secretary in like manner and on like notice on the written request of any two or more Directors.

Section 3.09. Telephone Meetings. Board or Board committee meetings may be held by means of telephone conference or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation by a Director in a meeting pursuant to this Section 3.09 shall constitute presence in person at such meeting.

Section 3.10. Adjourned Meetings. A majority of the Directors present at any meeting of the Board, including an adjourned meeting, whether or not a quorum is present, may adjourn and reconvene such meeting to another time and place. At least twenty-four (24) hours’ notice of any adjourned meeting of the Board shall be given to each Director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 3.11 hereof other than by mail, or at least three (3) days’ notice if by mail. Any business

 

15


may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.

Section 3.11. Notice Procedure. Subject to Section 3.08 and 3.12 hereof, whenever notice is required to be given to any Director by applicable law, the Certificate of Incorporation or these By-laws, such notice shall be deemed given effectively if given in person or by telephone, mail or electronic mail addressed to such Director at such Director’s address or email address, as applicable, as it appears on the records of the Corporation, facsimile or by other means of electronic transmission.

Section 3.12. Waiver of Notice. Whenever the giving of any notice to Directors is required by applicable law, the Certificate of Incorporation or these By-laws, a waiver thereof, in writing signed by the Director entitled to the notice, whether before or after such notice is required, shall be deemed equivalent to notice. Attendance by a Director at a meeting shall constitute a waiver of notice of such meeting except when the Director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting was not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special Board or committee meeting need be specified in any waiver of notice.

Section 3.13. Organization. At each meeting of the Board, the Chairman or, in the absence of the Chairman, the Vice Chairman or, in the absence of or if there is no Vice Chairman, the Chief Executive Officer or, in the absence of the Chairman, the Vice Chairman and the Chief Executive Officer, another Director selected by the Board shall preside. The Secretary shall act as secretary at each meeting of the Board. If the Secretary is absent from any meeting of the Board, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting.

Section 3.14. Quorum of Directors. The presence in person of a majority of the total members of the Board shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board.

Section 3.15. Action by Majority Vote. Except as otherwise expressly required by these By-laws, or the Certificate of Incorporation, 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; provided that to the extent one or more Directors recuses himself or herself from an act, the act of a majority of the remaining Directors present shall be the act of the Board.

Section 3.16. Action Without Meeting. Unless otherwise restricted by these By-laws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all Directors or members of such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writings or electronic transmissions are filed with the minutes of proceedings of the Board or committee.

 

16


ARTICLE 4

COMMITTEES OF THE BOARD

The Board may, by resolution, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may, by resolution, adopt charters for one or more of such committees. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present at the meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent permitted by applicable law, and to the extent provided in the resolution of the Board designating such committee or the charter for such committee, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it to the extent so authorized by the Board. The Board may remove any Director from any committee at any time, with or without cause. Unless the Board provides otherwise, at all meetings of such committee, a majority of the then authorized members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board provides otherwise, each committee designated by the Board may make, alter and repeal rules and procedures for the conduct of its business. In the absence of such rules and procedures, each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article 3.

ARTICLE 5

OFFICERS

Section 5.01. Positions; Election. The Board may from time to time elect officers of the Corporation, which may include a Chairman, Vice Chairman, Chief Executive Officer, President, Vice Presidents, Secretary, Treasurer and any other officers as it may deem proper or may delegate to any elected officer of the Corporation the power to appoint and remove any such officers and to prescribe their respective terms of office, authorities and duties. Any number of offices may be held by the same person. Should the Corporation or any of its Subsidiaries enter into any management services or similar agreement with another entity (each as may be amended, supplemented, restated or replaced from time to time), the officers of the Corporation may be the officers or employees of such entity to the extent permitted by applicable law.

Section 5.02. Term of Office. Each officer of the Corporation shall hold office for such terms as may be determined by the Board or, except with respect to his or her own office, the Chief Executive Officer, or until such officer’s successor is elected and qualifies or until such officer’s earlier death, resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified, and, unless otherwise specified, the acceptance of

 

17


such resignation shall not be necessary to make it effective. The resignation of an officer shall be without prejudice to the contract rights of the Corporation, if any. Any officer may be removed at any time with or without cause by the Board or, in the case of appointed officers, by any elected officer upon whom such power of removal shall have been conferred by the Board. Any vacancy occurring in any office of the Corporation may be filled by the Board or, in the case of appointed officers, by any elected officer upon whom such power of appointment shall have been conferred by the Board. The election or appointment of an officer shall not of itself create contract rights.

Section 5.03. Chairman. The Chairman shall preside at all meetings of the Stockholders and at all meetings of the Board and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board. In addition to the responsibilities, powers and duties of the Chairman, an Executive Chairman (if there be one) shall exercise such powers and perform such other duties as shall be determined from time to time by the Board and may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by resolution of the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed.

Section 5.04. Vice Chairman. The Vice Chairman (if there be one) shall preside at all meetings of the Stockholders and at all meetings of the Board at which the Chairman is not present and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board.

Section 5.05. Chief Executive Officer. The Chief Executive Officer shall have general supervision over, and direction of, the business and affairs of the Corporation, subject, however, to the control of the Board and of any duly authorized committee of the Board. The Chief Executive Officer shall preside at all meetings of the Stockholders and at all meetings of the Board at which the Chairman and the Vice Chairman (if there be one) are not present. The Chief Executive Officer may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by resolution of the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed and, in general, the Chief Executive Officer shall perform all duties incident to the office of Chief Executive Officer of a corporation and such other duties as may be determined from time to time by the Board.

Section 5.06. President. The President shall have duties incident to the office of President, and any other duties as may from time to time be assigned to the President by the Chief Executive Officer (if the President and Chief Executive Officer are not the same person) or the Board and subject to the control of the Chief Executive Officer (if the President and Chief Executive Officer are not the same person) and the Board in each case. The President shall preside at all meetings of the Stockholders at which the Chairman, the Vice Chairman (if there be one) and the Chief Executive Officer are not present. The President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by

 

18


these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed.

Section 5.07. Vice Presidents. Vice Presidents shall have the duties incident to the office of Vice President and any other duties that may from time to time be assigned to the Vice President by the Chief Executive Officer, the President or the Board. A Vice President shall preside at all meetings of the Stockholders at which the Chairman, the Vice Chairman (if there be one), the Chief Executive Officer and the President are not present. Any Vice President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed.

Section 5.08. Secretary. The Secretary shall attend all meetings of the Board and of the Stockholders, record all the proceedings of the meetings of the Board and of the Stockholders in a book to be kept for that purpose and perform like duties for committees of the Board, when required. The Secretary shall give, or cause to be given, notice of all special meetings of the Board and of the Stockholders and perform such other duties as may be prescribed by the Board, the Chief Executive Officer or the President. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary or an Assistant Secretary shall have authority to affix the same on any instrument that may require it, and when so affixed, the seal may be attested by the signature of the Secretary or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the same by such officer’s signature. The Secretary or an Assistant Secretary may also attest all instruments signed by the Executive Chairman, Chief Executive Officer, President or any Vice President. The Secretary shall have charge of all the books, records and papers of the Corporation relating to its organization and management, see that the reports, statements and other documents required by applicable law are properly kept and filed and, in general, perform all duties incident to the office of secretary of a corporation and such other duties as may from time to time be assigned to the Secretary by the Board, the Chief Executive Officer or the President.

Section 5.09. Treasurer. The Treasurer shall have charge and custody of, and be responsible for, all funds, securities and notes of the Corporation, receive and give receipts for moneys due and payable to the Corporation from any sources whatsoever; deposit all such moneys and valuable effects in the name and to the credit of the Corporation in such depositaries as may be designated by the Board, against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositaries of the Corporation signed in such manner as shall be determined by the Board and be responsible for the accuracy of the amounts of all moneys so disbursed, regularly enter or cause to be entered in books or other records maintained for the purpose full and adequate account of all moneys received or paid for the account of the Corporation, have the right to require from time to time reports or statements giving such information as the Treasurer may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same, render to the Chief Executive Officer, the President or the Board, whenever the Chief Executive Officer, the President or the Board shall require the Treasurer so to do, an account of the financial condition of the Corporation and of all financial transactions of the Corporation, disburse the funds of the

 

19


Corporation as ordered by the Board and, in general, perform all duties incident to the office of Treasurer of a corporation and such other duties as may from time to time be assigned to the Treasurer by the Board, the Chief Executive Officer or the President.

Section 5.10. Assistant Secretaries and Assistant Treasurers. Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Treasurer, respectively, or by the Board, the Chief Executive Officer or the President.

ARTICLE 6

GENERAL PROVISIONS

Section 6.01. Certificates Representing Shares. The shares of stock of the Corporation may be represented by certificates or all of such shares shall be uncertificated shares that may be evidenced by a book-entry system maintained by the registrar of such stock, or a combination of both. If shares are represented by certificates (if any), such certificates shall be in the form approved by the Board. The certificates representing shares of stock of each class shall be signed by, or in the name of, the Corporation by the Chairman, the Chief Executive Officer, the President or any Vice President, and by the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer. Any or all such signatures may be facsimiles. Although any officer, transfer agent or registrar whose manual or facsimile signature is affixed to such a certificate ceases to be such officer, transfer agent or registrar before such certificate has been issued, it may nevertheless be issued by the Corporation with the same effect as if such officer, transfer agent or registrar were still such at the date of its issue.

Section 6.02. 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.

Section 6.03. Lost, Stolen or Destroyed Certificates. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate or his 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.

Section 6.04. 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 maintained on any information storage device or method; provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable law.

Section 6.05. Seal. The corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

 

20


Section 6.06. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board.

Section 6.07. Amendments. These By-laws may be altered, amended or repealed in accordance with the Certificate of Incorporation and the General Corporation Law.

Section 6.08. Conflict with Applicable Law or Certificate of Incorporation. These By-laws are adopted subject to any applicable law and the Certificate of Incorporation. Whenever these By-laws may conflict with any applicable law or the Certificate of Incorporation, such conflict shall be resolved in favor of such law or the Certificate of Incorporation.

 

21


Exhibit C

Form of Max and Dane, LLC Subscription Agreement

[Attached]


SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT, dated as of [●], 2018 (this “Agreement”), is being entered into between the new members of Max and Dane, LLC listed on the signature pages hereto (each, a “New Member”, and together the “New Members”) and Max and Dane, LLC, a Delaware limited liability company (the “Company”). The New Members and the Company are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

WHEREAS, the Company desires to issue to the New Members, and the New Members desire to subscribe for, purchase and accept from the Company, limited liability company interests in the Company (the “Interests”).

ACCORDINGLY, in consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Issuance of the Interests. The Company hereby issues to the New Members, and the New Members hereby subscribe for, purchase and accept from the Company, the number of Interests with respect to each such New Member as set forth on Schedule A hereto. The consideration for the issuance and sale of the Interests is $0.01 per unit in cash to be paid by each New Member (the “Subscription Consideration”). Each New Member acknowledges and agrees that the Interests subscribed for by such New Member hereunder shall be subject to the restrictions on transfer and the other terms and conditions of the LLC Agreement.

2. Representations and Warranties of the New Members. Each New Member, severally but not jointly, represents and warrants to the Company that:

(a) If a New Member is not a natural person, such New Member is validly organized and existing under the laws of its state of organization and has all requisite power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby.

(b) Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of such New Member.

(c) The execution, delivery and performance by such New Member of this Agreement, and the consummation of the transactions contemplated hereby, do not (d) if such New Member is not a natural person, contravene or conflict with, or constitute a violation of the organizational documents of such person; or (e) contravene or conflict with, or constitute a violation of, any material applicable law or any agreement or order binding on such person.

3. Private Placement.

(a) Each New Member understands that (A) the Interests have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and, therefore, cannot be resold unless they are registered under the Securities Act or unless an exemption from


registration is available, and (B) there is no existing public or other market for the Interests and there can be no assurance that any New Member will be able to sell or dispose of its Interests.

(b) The Interests are being acquired for each New Member’s own account and without a view to the public distribution of such Interests or any interest therein other than as permitted under applicable law and the LLC Agreement.

(c) Each New Member is an “accredited investor” as such term is defined in Regulation D under the Securities Act. Each New Member has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Interests and each New Member is capable of bearing the economic risks of such investment, including a complete loss of its investment in the Interests.

(d) Each New Member has been given the opportunity to ask questions of, and receive answers from, the Company concerning the Company, the terms and conditions of the Interests and other related matters. Each New Member further represents and warrants to the Company that the Company has made available to such New Member or its agents all documents and information relating to an investment in the Interests that such New Member believed to be necessary or appropriate for its investment in the Company.

(e) Each New Member understands that its investment in the Company and the Interests involves a high degree of risk and is therefore a speculative investment, and such New Member is able to bear the economic risk of such investment for an indefinite period of time, and is presently able to afford the complete loss of such investment.

(f) Each New Member certifies that it has not had a “disqualifying event” described in Securities Act Rule 506(d)(1) subsections (i) through (viii).

4. Representations and Warranties of the Company. The Company represents and warrants to each Contributing Party that:

(a) The Company is validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as it is currently being conducted, and as described in the organizational documents of the Company.

(b) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, are within its limited liability company powers and have been duly authorized by all necessary limited liability company action. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of the Company.

(c) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, do not (d) contravene or conflict with, or constitute a violation of the organizational documents of the Company; or (e) contravene or conflict with, or constitute a violation of, any material applicable law or any material agreement or order binding on the Company.


5. Further Assurances. Each Party agrees to execute and deliver such further instruments and documents as may be reasonably requested by the other Party and that are necessary or appropriate in order to issue the Interests and admit each New Member as a “New Member” of the Company.

6. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided that no Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other Party hereto.

7. Costs and Expenses. Each Party to this Agreement shall be responsible for such Party’s own expenses in connection with the preparation and negotiation of this Agreement and the consummation of the transactions contemplated hereby.

8. Governing Law; WAIVER OF JURY TRIAL. All questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal law, and not the law of conflicts, of the State of Delaware. Each Party hereby agrees that (a) any and all litigation arising out of this Agreement shall be conducted only in state or federal courts located in the State of Delaware and (b) such courts shall have the exclusive jurisdiction to hear and decide such matters. Each Party hereby submits to the personal jurisdiction of such courts and waives any objection such Party may now or hereafter have to venue or that such courts are inconvenient forums. Each Party hereby (i) expressly waives any right to a trial by jury in any action or proceeding to enforce or defend any right, power or remedy under or in connection with this Agreement or arising from any relationship existing in connection with this Agreement, and (ii) agrees that any such action shall be tried before a court and not before a jury.

9. Entire Agreement. This Agreement, together with the LLC Agreement, constitutes the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersedes all prior agreements and understandings, both oral and written, between the Company and its affiliates, on the one hand and each New Member on the other, with respect to the subject matter hereof and thereof.

10. Counterparts, No Oral Modification. This Agreement may be executed by any Party hereto by facsimile or electronic transmission in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument, and may be amended or modified only in writing signed by the Parties hereto.

[Signature Page Follows]


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

 

COMPANY:
MAX AND DANE, LLC
By:                                                  
Name:  
Title:  

 

NEW MEMBER:

 

THE MARK AND ROBYN JONES

      DESCENDANTS TRUST 2014

By:

 
 

 

  Name:
  Title:

 

NEW MEMBER:

 

THE COLBY 2014 FAMILY TRUST

By:

 
 

 

  Name:
  Title:

 

NEW MEMBER:

 

 

MARK COLBY

By:

 
 

 

  Name:
  Title:

 

[Signature page to Max and Dane, LLC Subscription Agreement]


NEW MEMBER:

 

P. RYAN LANGSTON

By:

 
 

 

 

Name:

 

Title:

 

NEW MEMBER:

 

MICHAEL MOXLEY

By:

 
 

 

 

Name:

 

Title:

 

[Signature page to Max and Dane, LLC Subscription Agreement]


Schedule A

 

New Member    Interests of
Goosehead
Management,
LLC Owned
   Historical
Ownership
Percentage of
Goosehead
Management, LLC
   Interests of Max
and Dane, LLC to
be Issued to  New
Member
   Ownership
Percentage of Max
and Dane, LLC

The Mark and

Robyn Jones

Descendants

Trust 2014

 

                   

The Colby 2014

Family Trust

 

                   

Mark Colby

 

                   

P. Ryan Langston

 

                   

Michael Moxley

 

                   


Exhibit D

Form of Max and Dane, LLC Contribution Agreement

[Attached]


CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is entered into as of [·], 2018 by and among Max and Dane, LLC, a Delaware limited liability company (the “Company”), the members of Goosehead Management, LLC, a Delaware limited liability company (“Goosehead Management”), listed on the signature pages hereto (the “Contributing Parties”), Goosehead Management and Mark E. Jones, as Managing Member of Goosehead Management.

W I T N E S S E T H:

WHEREAS, Goosehead Insurance, Inc. intends to consummate an initial public offering of its Class A common stock (the “IPO”);

WHEREAS, prior to the date hereof, the Company was formed for the purpose of facilitating the transactions described herein;

WHEREAS, the Contributing Parties constitute all of the holders of the limited liability company interests of Goosehead Management (the “Interests”), which Interests constitute all of the outstanding equity of Goosehead Management, and the Contributing Parties desire to contribute the Interests to the Company;

WHEREAS, the Company has elected or will elect to be treated as a corporation for U.S. federal income tax purposes, effective on the date of its formation (the “Company Tax Election”);

WHEREAS, Goosehead Management has elected or will elect to be treated as a QSub for U.S. federal income tax purposes, effective as of the date hereof, and to be disregarded as separate from its owner for U.S. federal income tax purposes, effective as of one day after the date hereof (together, the “Goosehead Management Tax Elections”); and

WHEREAS, the Company, Goosehead Management and the Contributing Parties intend for (i) the formation of the Company, (ii) the Company Tax Election, (iii) the Goosehead Management Tax Elections and (iv) the contribution of Goosehead Management to the Company by the Contributing Parties pursuant to this Agreement, taken together, to qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended the (“Code”), and hereby adopt this agreement as a “plan of reorganization” within the meaning of Section 368 of the Code.

NOW THEREFORE, in consideration of the premises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties agree as follows:

1. Contribution of Interests. Each Contributing Party hereby contributes, assigns, transfers and conveys all of such Contributing Party’s right, title and interest in


and to all of the Interests held by such Contributing Party as set forth on Schedule A hereto to the Company, and the Company hereby accepts and assumes, all of such Contributing Party’s right, title and interest in and to such Interests.

2. Transfer of Interests. Pursuant to Section 11.2 of the Amended and Restated Limited Liability Company Agreement of Goosehead Management:

(a) the Company, in its capacity as transferee hereunder, hereby accepts all of the terms and provisions thereof;

(b) distributions and notifications in respect of the Interests should hereafter be sent to the Company at c/o Corporation Service Company, 251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808;

(c) Mark E. Jones, in his capacity as Managing Member of Goosehead Management, hereby explicitly waives the requirements of Section 11.2(B); and

(d) Mark E. Jones, in his capacity as Managing Member of Goosehead Management, hereby acknowledges that the provisions of this Agreement are satisfactory to evidence the transfer of the Interests to the Company and approves the transfer contemplated herein.

3. Representations and Warranties of the Contributing Parties. Each Contributing Party, severally but not jointly, represents and warrants to the Company that:

(a) The Interests held by such Contributing Party are being transferred to the Company free and clear of any and all liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or arrangements or other restrictions on title or transfer of any nature whatsoever (collectively, “Liens”), other than transfer restrictions under applicable securities laws. Upon execution of this Agreement, valid title to such Interests, free and clear of all Liens and adverse interests, will pass to the Company.

(b) If a Contributing Party is not a natural person, such Contributing Party is validly organized and existing under the laws of its state of organization and has all requisite power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby.

(c) Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of such Contributing Party.

(d) The execution, delivery and performance by such Contributing Party of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) if such Contributing Party is not a natural person, contravene or

 

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conflict with, or constitute a violation of the organizational documents of such person; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any agreement or order binding on such person.

4. Representations and Warranties of the Company. The Company represents and warrants to each Contributing Party that:

(a) The Company is validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as it is currently being conducted and as described in the organizational documents of the Company.

(b) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, are within its limited liability company powers and have been duly authorized by all necessary limited liability company action. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of the Company.

(c) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of the Company; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any material agreement or order binding on the Company.

5. General Provisions.

(a) Further Assurances. Each party to this Agreement, at any time and from time to time upon the reasonable request of another party to this Agreement, shall promptly execute and deliver, or cause to be executed and delivered, all such further instruments and take all such further actions as may be reasonably necessary or appropriate to confirm or carry out the purposes and intent of this Agreement.

(b) Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

(c) Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state.

(d) Consent to Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter

 

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arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in the Borough of Manhattan, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

(e) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(f) Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

(g) Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart pages or in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement, it being understood that both parties need not sign the same counterpart.

(h) Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes all prior and contemporaneous agreements and understanding, both oral and written, among the parties hereto with respect to the subject matter hereof.

 

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(i) Amendment; Waiver. No provision of this Agreement may be amended unless such amendment is approved in writing by the parties hereto. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

[Signature page follows]

 

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

 

GOOSEHEAD MANAGEMENT, LLC
By: its Managing Member
By:  

 

  Name: Mark E. Jones
 

Title:   Managing Member, Goosehead

Management, LLC

MAX AND DANE, LLC
By:  

 

  Name:
  Title:
MARK E. JONES
By:  

 

  Name:
 

Title: Managing Member,

Goosehead Management, LLC

THE MARK AND ROBYN JONES       DESCENDANTS TRUST 2014
By:  

 

  Name:
  Title:
THE COLBY 2014 FAMILY TRUST
By:  

 

  Name:
  Title:

 

[Signature Page to First Max and Dane, LLC Contribution Agreement]


MARK COLBY
By:  

 

  Name:
  Title:
P. RYAN LANGSTON
By:  

 

  Name:
  Title:
MICHAEL MOXLEY
By:  

 

  Name:
  Title:

 

[Signature Page to First Max and Dane, LLC Contribution Agreement]


Schedule A

 

Name of Contributing Party

 

  

Interests to be Contributed to the Company

 

The Mark and Robyn Jones Descendants

Trust 2014

   [·]

The Colby 2014 Family Trust

 

   [·]

Mark Colby

 

   [·]

P Ryan Langston

 

   [·]

Michael Moxley

 

   [·]


Exhibit E

Form of Goosehead Management, LLC Amended and Restated LLC Agreement

[Attached]


SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

GOOSEHEAD MANAGEMENT, LLC

This Limited Liability Company Agreement (this “Agreement”), dated as of [●], 2018, of Goosehead Management, LLC (the “Company”) is entered into by Max and Dane, LLC (the “Managing Member”) and GHM Holdings, LLC (the “Subsidiary Member”), as the members of the Company (the Managing Member, the Subsidiary Member and any other person who, at such time, is admitted to the Company as a member in accordance with the terms of this Agreement, being a “Member”).

R E C I T A L S

WHEREAS, the Company was formed as a Delaware limited liability company by filing the certificate of formation of the Company (the “Certificate”) with the Secretary of State of the State of Delaware on August 29, 2014, in accordance with the Act;

NOW, THEREFORE, in consideration of the representations, warranties, agreements and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Members hereby adopt this limited liability company agreement on the following terms and conditions:

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions. For purposes of this Agreement, each of the following terms shall have the meaning given such term in this Article 1.

Act” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq, as amended from time to time.

Affiliate” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person. The term “control”, as used with respect to any Person, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, the Managing Member shall not be considered an Affiliate of (x) any portfolio operating company in which the Managing Member or any of its Affiliates have made a debt or equity investment or (y) any Company Party.


Base Rate” means a variable rate per annum equal to the rate of interest most recently published by The Wall Street Journal as the “prime rate” at large U.S. money center banks.

Book Value” means, with respect to any of the Company’s property, unless otherwise determined by the Managing Member, the Company’s adjusted basis for federal income tax purposes, adjusted from time to time to reflect the adjustments required or permitted by Treasury Regulation Sections 1.704-l(b)(2)(iv)(d)-(g) and (m). The Book Value of the Company’s property as of the date hereof shall equal the fair market value of the property as of such date (as determined in good faith by the Managing Member).

Capital Account” has the meaning set forth in Section 3.03(a).

Capital Contributions” means, with respect to any Member, the amount of cash, cash equivalents or the fair market value of other assets, securities or property (net of any liabilities) which such Member contributes or is deemed to have contributed to the Company with respect to any Unit pursuant to this Agreement, in each case, as determined in good faith by the Managing Member.

Certificate” has the meaning set forth in the Recitals.

Code” means the Internal Revenue Code of 1986.

Company Party” means the Company or any of its subsidiaries.

Governmental Authority” means the United States or any state, provincial, local or foreign government, or any subdivision, agency or authority of any thereof having competent jurisdiction over any Company Party or any Member, as applicable.

Law” means each provision of any applicable federal, state or local law, statute, ordinance, order, code, rule or regulation, promulgated or issued by any Governmental Authority.

Officers” has the meaning set forth in Section 5.03(a).

Percentage Interest” means, in respect of a Member, the proportion of the total number of Units held by such Member as compared to the total number of Units outstanding from time to time.

Person” means any natural person or any corporation, partnership, limited liability company, other legal entity or Governmental Authority.

Pledgor Member” has the meaning set forth in Section 8.01(b).

 

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Unreturned Capital” means, with respect to any Unit, at any time, an amount equal to the excess, if any, of (i) the aggregate amount of Capital Contributions made with respect to such Unit, over (ii) the aggregate amount of Distributions made by the Company with respect to such Unit pursuant to Section 4.01(a)(ii) prior to such time.

Units” has the meaning set forth in Section 3.01.

ARTICLE 2

THE COMPANY

Section 2.01. Name. The name of the limited liability company is “Goosehead Management, LLC” and all business of the Company shall be conducted in such name or such other name as the Managing Member shall determine. The Company shall hold all of its property in the name of the Company and not in the name of any Member.

Section 2.02. Filings. The Managing Member, as an authorized person within the meaning of the Act, shall execute, deliver and file, or cause the execution, delivery and filing of, all certificates required or permitted by the Act to be filed in the Office of the Secretary of State of the State of Delaware and any other certificates, notices or documents required or permitted by Law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

Section 2.03. Limited Liability. Except as required by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Members shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

Section 2.04. Purpose. The purpose of the Company is engage in any lawful act or activity for which limited liability companies may be formed under the Act.

Section 2.05. Powers. In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Delaware Law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Managing Member.

Section 2.06. Term. The term of the Company shall be perpetual unless and until the Company is dissolved pursuant to the Act or as set forth herein. The

 

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existence of the Company as a separate legal entity shall continue until cancellation of the Certificate in the manner required by the Act.

Section 2.07. Registered Office; Registered Agent; Principal Office in the United States; Other Offices. The registered office of the Company required by the Act to be maintained in the State of Delaware shall be the initial registered office named in the Certificate of Formation or such other office (which need not be a place of business of the Company) as the Managing Member may designate from time to time in the manner provided by law. The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate of Formation or such other Person or Persons as the Managing Member may designate from time to time. The principal office of the Company in the United States shall be at such place as the Managing Member may designate from time to time, which need not be in the State of Delaware, and the Company shall maintain records there as required by the Act and shall keep the street address of such principal office at the registered office of the Company in the State of Delaware. The Company may have such other offices as the Managing Member may designate from time to time.

Section 2.08. No State-Law Partnership. The Members intend that the Company not be a partnership (including a limited partnership) or joint venture, and that no Member be a partner or joint venturer of any other Member by virtue of this Agreement, for any purposes other than as set forth in the last sentence of this Section 2.08, and neither this Agreement nor any other document entered into by the Company or any Member relating to the subject matter hereof shall be construed to suggest otherwise. The Members intend that the Company shall be treated as either an entity disregarded as separate from its owner or a partnership for federal and all applicable state and local income tax purposes, and that each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment.

ARTICLE 3

UNITS

Section 3.01. Units. Each Member’s ownership interest in the Company shall be represented by units in the Company (the “Units”), having the rights and privileges set forth in this Agreement. As of the date hereof, the Company shall have (a) authorized an unlimited number of Units and (b) issued [1,000] Units. The number of Units issued to each Member as of the date hereof is set forth opposite such Member’s name on Schedule A.

Section 3.02. Capital Contributions. Each Member listed on Schedule A shall be deemed for purposes of this Agreement to have made a Capital Contribution to the Company on the date hereof with respect to such Member’s Units, in the amount set forth opposite such Member’s name under the heading “Initial Capital” on Schedule A. Except as expressly provided in the immediately

 

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preceding sentence and as set forth on Schedule A, no Capital Contributions made with respect to any Unit prior to the date hereof shall be treated as Capital Contributions for purposes of this Agreement. No other Capital Contributions are required or permitted, except in accordance with the terms of this Agreement.

Section 3.03. Capital Accounts.

(a) Maintenance of Capital Accounts. As long as the Company is treated as a partnership for U.S. federal income tax purposes, the Company shall maintain a separate capital account for each Member according to the rules of Treasury Regulation Section 1.704-l(b)(2)(iv) (a “Capital Account”). For this purpose, the Company may, upon the occurrence of any of the events specified in Treasury Regulation Section 1.704-l(b)(2)(iv)(f), increase or decrease the Capital Accounts in accordance with the rules of such regulation and Treasury Regulation Section 1.704-l(b)(2)(iv)(g) to reflect a revaluation of the Company’s property.

Section 3.04. Negative Capital Accounts. No Member shall be required to make any payment to any other Member or the Company by reason of any deficit or negative balance which may exist from time to time in such Member’s Capital Account (including upon and after dissolution of the Company).

Section 3.05. No Withdrawal. No Person shall be entitled to withdraw or demand the return of any part of such Person’s Capital Contributions or Capital Account or to receive any distribution from the Company, except as expressly provided herein.

Section 3.06. Transfer of Capital Accounts. Upon a transfer of any Units in accordance with the terms of this Agreement, the transferee Member shall succeed to the Capital Account of the transferor which is attributable to such Units.

ARTICLE 4

DISTRIBUTIONS AND ALLOCATIONS

Section 4.01. Distributions.

(a) General. The Managing Member may (but shall not be obligated to) direct the Company to make distributions to the Members at any time or from time to time, and in amounts of any of the Company’s assets available therefor, as determined by the Managing Member in its sole discretion to be appropriate. All distributions shall be made to the Members in proportion to their respective Percentage Interests at the time of such distributions (without preference to any Member).

Section 4.02. Allocations. (a) As long as the Company is treated as a partnership for U.S. federal income tax purposes, except as otherwise provided in

 

5


this Agreement, each item of income, gain, loss, or deduction of the Company (determined in accordance with U.S. federal income tax principles as applied to the maintenance of capital accounts) for any Fiscal Year shall be allocated among the Members in proportion to their respective Percentage Interests.

(b) It is the intention of the Members that the allocations made by the Company be respected for U.S. federal income tax purposes, and in furtherance of this intention, the “partnership minimum gain” provisions of Treasury Regulations Section 1.704-2(f), the “partner minimum gain” provisions of Treasury Regulation Section 1.704-2(i), the “qualified income offset” provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and any such other provision required by Section 704 of the Code and applicable Treasury Regulations (the “Regulatory Allocations”) shall be incorporated by reference into this Agreement. The Regulatory Allocations shall be taken into account in computing subsequent allocations pursuant to this Section 4.02 so that the cumulative net amount of all items allocated to each Member shall, to the extent possible, be equal to the amount that would have been allocated to such Member if there had never been any allocations pursuant to this Section 4.02(b).

Section 4.03. Tax Allocations. (a) Allocations Generally. As long as the Company is treated as a partnership for U.S. federal income tax purposes, each item of income, gain, loss and deduction of the Company will be allocated for federal, state and local income tax purposes among the Members as nearly as possible in accordance with the allocation of such items of income, gains, losses, and deductions among the Members for computing their Capital Accounts pursuant to Section 4.02; provided that items of income, gain, loss and deduction with respect to any asset or liability of the Company that has Book Value that differs from its adjusted tax basis for U.S. federal income tax purposes shall be allocated, as determined by the Managing Member (using any permissible method selected by the Managing Member in its sole discretion), so as to take into account the variations between the Book Value of such asset or liability and its adjusted tax basis in accordance with the principles of Section 704(c) of the Code and the Treasury Regulations thereunder.

(b) Allocation of Tax Credits, Tax Credit Recapture, Etc. Tax credits, tax credit recapture, and any items related thereto shall be allocated to the Members according to their interests in such items as determined by the Managing Member taking into account the principles of Treasury Regulation Section 1.704-1(b)(4)(ii).

Section 4.04. Other Allocation Principles. If any allocation is required to be made under this Agreement in respect of a period that does not correspond to a full Fiscal Year, such allocation shall be made taking into account the items of income, gain, loss and deduction attributable to such period as determined by the Managing Member using any method that is permissible under Section 706 of the Code and the Treasury Regulations thereunder.

 

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ARTICLE 5

MANAGEMENT

Section 5.01. General Authority. In accordance with Section 18-402 of the Act, management of the Company shall be vested in the Managing Member. The Managing Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the Laws of the State of Delaware. The Managing Member has the authority to bind the Company.

Section 5.02. Managing Member. Max and Dane, LLC shall be the initial managing member of the Company. The Managing Member may be removed from office, and a new managing member may be elected, in each case, only upon the agreement of all of the Members. In such event, the Members shall file any amendment to the Certificate or other certificates that may be required.

Section 5.03. Officers.

(a) The Managing Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “Officers”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Managing Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Article 5 may be revoked at any time by the Managing Member. An Officer may be removed with or without cause by the Managing Member.

(b) As of the date hereof, the following individuals have been appointed as the initial Officers in such offices as are set forth opposite their respective names:

 

Name   Office   
[●]   President   
[●]   Secretary   

 

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ARTICLE 6

INDEMNIFICATION; RIGHTS AND OBLIGATIONS OF MEMBERS

Section 6.01. Exculpation and Indemnification.

(a) To the fullest extent permitted by the laws of the State of Delaware and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the fullest extent permitted by the laws of the State of Delaware for directors and officers of corporations organized under the laws of the State of Delaware. Any indemnity under this Section 6.01(b) shall be provided out of and to the extent of Company assets only, and no Member or Officer shall have personal liability on account thereof.

ARTICLE 7

BOOKS AND RECORDS

Section 7.01. Books and Records. The Company shall keep appropriate books and records pertaining to the business of the Company. The books and records of the Company shall be kept at the principal office of the Company or at such other place, within or without the State of Delaware, as the Managing Member shall reasonably from time to time determine.

Section 7.02. Determinations by Managing Member. All matters concerning (a) the determination of the relative amount of allocations and distributions among the Members pursuant to Article 3 and Article 4, (b) any tax elections required or permitted to be made by or with respect to the Company under applicable Law, and (c) accounting methods, procedures and determinations, and other determinations not specifically and expressly provided for by the terms of this Agreement, shall be determined by the Managing Member, whose determination shall be final and conclusive as to all of the Members absent manifest clerical error.

Section 7.03. Fiscal Year. The fiscal year of the Company shall begin on the first day of January and end on the last day of December each year or such

 

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other annual accounting period as may be established by the Managing Member as required under the Code (“Fiscal Year”).

ARTICLE 8

EXIT; TRANSFER RESTRICTIONS

Section 8.01. Transfers; Assignments.

(a) A Member may transfer or assign all or any portion of its Units only with the consent of the Managing Member. If a Member transfers all of its Units in the Company pursuant to this Section 8.01, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company (if such transferor Member transferred all of its limited liability company interest in the Company).

(b) Notwithstanding anything herein to the contrary, upon the sale, disposition or other transfer of the Managing Member’s Units (or the Units of another Member that is a party to any financing to which the Managing Member is also a party (such other Member, the “Pledgor Member”)) pursuant to a valid exercise of a remedy by any pledgee in accordance with a loan agreement, pledge agreement, security agreement or other collateral documentation entered into by the Managing Member (or such Pledgor Member), the pledgee shall become a Member of the Company and shall acquire all right, title and interest of the Managing Member (and such Pledgor Member) in the Company, including all rights under this Agreement (including removing or replacing any or all of the Managing Members and such Pledgor Members), and the Managing Member (and such Pledgor Members) shall be withdrawn as a Member of the Company hereunder and shall have no further right, title or interest in the Company under this Agreement. Such admission shall be deemed effective immediately prior to the sale, disposition or other transfer of the Managing Member’s Units (or such Pledgor Member’s Units ), and, immediately following such admission, the transferor Member shall cease to be a Member of the Company. None of the provisions of this Article 8 or any other provision of this Agreement may be amended in any way which alters, limits, restricts or adversely affects a pledgee’s ability to exercise its rights under any loan agreement, pledge agreement, security agreement or other collateral documentation entered into by the Managing Member and Pledgor Member or the intended result thereof, without the prior written consent of any such pledgee.

(c) Notwithstanding anything herein to the contrary, each of the Managing Member and the Pledgor Member shall have the right to mortgage, pledge, grant, hypothecate, sell, transfer or assign the Managing Member’s and Pledgor Member’s interest under this Agreement (for the avoidance of doubt,

 

9


including the Managing Member’s Units and Pledgor Member’s Units) to any Person if such sale, transfer or disposition complies with provisions of any loan agreement, pledge agreement, security agreement or other collateral documentation to which the Managing Member or the Pledgor Member is bound.

Section 8.02. Resignation. No Member shall have the power or right to withdraw or otherwise resign from the Company prior to the dissolution and winding up of the Company pursuant to Article 9, without the prior written consent of the Managing Member (which consent may be withheld by the Managing Member in its sole discretion), except as otherwise expressly permitted by this Agreement. Notwithstanding that payment on account of a withdrawal may be made after the effective time of such withdrawal, any completely withdrawing Member will not be considered a Member for any purpose after the effective time of such complete withdrawal, and, in the case of a partial withdrawal, such Member’s Capital Account (and corresponding voting and other rights) shall be reduced for all other purposes hereunder upon the effective time of such partial withdrawal.

Section 8.03. Admission of Additional Members. One or more additional members of the Company may be admitted to the Company with the written consent of the Managing Member. Prior to the admission of any such additional members to the Company, the Managing Member shall amend this Agreement, including Schedule A attached hereto, to make such changes as the Managing Member shall determine to reflect the fact that the Company shall have such additional member(s).

ARTICLE 9

DISSOLUTION

Section 9.01. Dissolution.

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Managing Member or (ii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

(c) As soon as practicable upon dissolution of the Company, the assets of the Company (or liquidation proceeds) shall be distributed in the following manner and order of priority (and ratably within each level of priority):

 

10


(i) first, to creditors of the Company, including Members and Affiliates of Members who are creditors, to the extent otherwise permitted by Law, in satisfaction of liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof) other than liabilities for which reasonable provision has been made and distributions to Members under Article 4; then

(ii) to the Members in respect of their Units in accordance with Section 4.01(a).

ARTICLE 10

TAX MATTERS

Section 10.01. Tax Matters. (a) The Managing Member shall cause all income tax returns of the Company to be prepared and filed on a timely basis.

(b) As long as the Company is treated as a partnership for U.S. federal income tax purposes, the Managing Member shall be the “partnership representative” as defined in Section 6223 of the Partnership Tax Audit Rules (the “Partnership Representative”). In such capacity, the Managing Partner shall have all of the rights, authority and power, and shall be subject to all of the obligations, of a “partnership representative” to the extent provided in the Code and the Regulations.

(c) As long as the Company is treated as a partnership for U.S. federal income tax purposes, the Company shall make a timely election under Section 754 of the Code (and a corresponding election under state and local Law) effective starting with the taxable year ended December 31, 2018, and the Managing Member shall not take any action to revoke such elections.

ARTICLE 11

MISCELLANEOUS

Section 11.01. Separability of Provisions. If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

Section 11.02. Entire Agreement. This Agreement constitutes the entire agreement of the Members with respect to the subject matter hereof.

Section 11.03. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles).

 

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Section 11.04. Amendments. Subject to Section 8.03, this Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Members.

Section 11.05. Sole Benefit of Members. The provisions of this Agreement are intended solely to benefit the Members and, to the fullest extent permitted by applicable Law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Members shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

Section 11.06. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be deemed an original. This Agreement shall become effective when the Members shall have executed and delivered the Agreement to the Company.

[The remainder of this page is intentionally left blank.]

 

12


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed this Agreement as of the date first written above.

 

GOOSEHEAD MANAGEMENT, LLC
By:  

 

  Name:
  Title:

MAX AND DANE, LLC

By:  

 

  Name:
  Title:

GHM HOLDINGS, LLC

By:  

 

  Name:
  Title:

 

Signature Page to Limited Liability Company Agreement of

Goosehead Management, LLC


Schedule A

 

 

Member

 

  Units   Initial Capital
     

Max and Dane, LLC

 

 

[]

 

$[]

     

GHM Holdings, LLC

 

 

[]

 

$[]

 


Exhibit F

Form of Evan and Jake, LLC Subscription Agreement

[Attached]

 


SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT, dated as of [●], 2018 (this “Agreement”), is being entered into between the new members of Evan and Jake, LLC listed on the signature pages hereto (each, a “New Member”, and together the “New Members”) and Evan and Jake, LLC, a Delaware limited liability company (the “Company”). The New Members and the Company are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

WHEREAS, the Company desires to issue to the New Members, and the New Members desire to subscribe for, purchase and accept from the Company, limited liability company interests in the Company (the “Interests”).

ACCORDINGLY, in consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Issuance of the Interests. The Company hereby issues to the New Members, and the New Members hereby subscribe for, purchase and accept from the Company, the number of Interests with respect to each such New Member as set forth on Schedule A hereto. The consideration for the issuance and sale of the Interests is $0.01 per unit in cash to be paid by each New Member (the “Subscription Consideration”). Each New Member acknowledges and agrees that the Interests subscribed for by such New Member hereunder shall be subject to the restrictions on transfer and the other terms and conditions of the LLC Agreement.

2. Representations and Warranties of the New Members. Each New Member, severally but not jointly, represents and warrants to the Company that:

(a) If a New Member is not a natural person, such New Member is validly organized and existing under the laws of its state of organization and has all requisite power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby.

(b) Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of such New Member.

(c) The execution, delivery and performance by such New Member of this Agreement, and the consummation of the transactions contemplated hereby, do not (d) if such New Member is not a natural person, contravene or conflict with, or constitute a violation of the organizational documents of such person; or (e) contravene or conflict with, or constitute a violation of, any material applicable law or any agreement or order binding on such person.

3. Private Placement.

(a) Each New Member understands that (A) the Interests have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and, therefore, cannot be resold unless they are registered under the Securities Act or unless an exemption from

 


registration is available, and (B) there is no existing public or other market for the Interests and there can be no assurance that any New Member will be able to sell or dispose of its Interests.

(b) The Interests are being acquired for each New Member’s own account and without a view to the public distribution of such Interests or any interest therein other than as permitted under applicable law and the LLC Agreement.

(c) Each New Member is an “accredited investor” as such term is defined in Regulation D under the Securities Act. Each New Member has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Interests and each New Member is capable of bearing the economic risks of such investment, including a complete loss of its investment in the Interests.

(d) Each New Member has been given the opportunity to ask questions of, and receive answers from, the Company concerning the Company, the terms and conditions of the Interests and other related matters. Each New Member further represents and warrants to the Company that the Company has made available to such New Member or its agents all documents and information relating to an investment in the Interests that such New Member believed to be necessary or appropriate for its investment in the Company.

(e) Each New Member understands that its investment in the Company and the Interests involves a high degree of risk and is therefore a speculative investment, and such New Member is able to bear the economic risk of such investment for an indefinite period of time, and is presently able to afford the complete loss of such investment.

(f) Each New Member certifies that it has not had a “disqualifying event” described in Securities Act Rule 506(d)(1) subsections (i) through (viii).

4. Representations and Warranties of the Company. The Company represents and warrants to each Contributing Party that:

(a) The Company is validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as it is currently being conducted, and as described in the organizational documents of the Company.

(b) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, are within its limited liability company powers and have been duly authorized by all necessary limited liability company action. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of the Company.

(c) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, do not (d) contravene or conflict with, or constitute a violation of the organizational documents of the Company; or (e) contravene or conflict with, or constitute a violation of, any material applicable law or any material agreement or order binding on the Company.

 


5. Further Assurances. Each Party agrees to execute and deliver such further instruments and documents as may be reasonably requested by the other Party and that are necessary or appropriate in order to issue the Interests and admit each New Member as a “New Member” of the Company.

6. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided that no Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other Party hereto.

7. Costs and Expenses. Each Party to this Agreement shall be responsible for such Party’s own expenses in connection with the preparation and negotiation of this Agreement and the consummation of the transactions contemplated hereby.

8. Governing Law; WAIVER OF JURY TRIAL. All questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal law, and not the law of conflicts, of the State of Delaware. Each Party hereby agrees that (a) any and all litigation arising out of this Agreement shall be conducted only in state or federal courts located in the State of Delaware and (b) such courts shall have the exclusive jurisdiction to hear and decide such matters. Each Party hereby submits to the personal jurisdiction of such courts and waives any objection such Party may now or hereafter have to venue or that such courts are inconvenient forums. Each Party hereby (i) expressly waives any right to a trial by jury in any action or proceeding to enforce or defend any right, power or remedy under or in connection with this Agreement or arising from any relationship existing in connection with this Agreement, and (ii) agrees that any such action shall be tried before a court and not before a jury.

9. Entire Agreement. This Agreement, together with the LLC Agreement, constitutes the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersedes all prior agreements and understandings, both oral and written, between the Company and its affiliates, on the one hand and each New Member on the other, with respect to the subject matter hereof and thereof.

10. Counterparts, No Oral Modification. This Agreement may be executed by any Party hereto by facsimile or electronic transmission in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument, and may be amended or modified only in writing signed by the Parties hereto.

[Signature Page Follows]

 


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

 

COMPANY:
TEXAS WASATCH INSURANCE HOLDINGS GROUP, LLC
By:                                              
Name:  
Title:  

 

NEW MEMBER:
MARK E. JONES
By:                                                             
  Name:
  Title:

 

NEW MEMBER:
ROBYN JONES
By:                                                             
  Name:
  Title:

 

NEW MEMBER:
MICHAEL C. COLBY
By:                                                             
  Name:
  Title:

 

[Signature Page to Evan and Jake, LLC Subscription Agreement]


NEW MEMBER:
JEFFREY SAUNDERS
By:                                                    
  Name:
  Title:

 

NEW MEMBER:
MARK COLBY
By:                                                    
  Name:
  Title:

 

NEW MEMBER:
P. RYAN LANGSTON
By:                                                    
  Name:
  Title:

 

NEW MEMBER:
MICHAEL MOXLEY
By:                                                    
  Name:
  Title:

 

[Signature Page to Evan and Jake, LLC Subscription Agreement]


Schedule A

 

New Member    Interests of Texas
Wasatch Insurance
Holdings Group,
LLC Owned
  

Historical
Ownership
Percentage of
Texas Wasatch
Insurance Holdings
Group, LLC

 

   Interests of Evan
and Jake, LLC to
be Issued to New
Member
   Ownership
Percentage of Evan
and Jake, LLC

Mark E. Jones

 

                   

Robyn Jones

 

                 

Michael Colby

 

                   

Jeff Saunders

 

                 

Mark Colby

 

                   

P. Ryan Langston

 

                 

Michael Moxley

 

                   

 


Exhibit G

Form of Evan and Jake, LLC Contribution Agreement

[Attached]

 


CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is entered into as of [●], 2018 by and among Evan and Jake, LLC, a Delaware limited liability company (the “Company”), and the members of Texas Wasatch Insurance Holdings Group, LLC, a Texas limited liability company (“TWIHG”), listed on the signature pages hereto (the “Contributing Parties”).

W I T N E S S E T H:

WHEREAS, Goosehead Insurance, Inc. intends to consummate an initial public offering of its Class A common stock (the “IPO”);

WHEREAS, prior to the date hereof, the Company was formed for the purpose of facilitating the transactions described herein;

WHEREAS, the Contributing Parties constitute all of the holders of the limited liability company interests of TWIHG (the “Interests”), which Interests constitute all of the outstanding equity of TWIHG, and the Contributing Parties desire to contribute the Interests to the Company;

WHEREAS, the Company has elected or will elect to be treated as a corporation for U.S. federal income tax purposes, effective on the date of its formation (the “Company Tax Election”);

WHEREAS, TWIHG has elected or will elect to be treated as a QSub for U.S. federal income tax purposes, effective as of the date hereof, and to be disregarded as separate from its owner for U.S. federal income tax purposes, effective as of one day after the date hereof (together, the “TWIHG Tax Elections”); and

WHEREAS, the Company, TWIHG and the Contributing Parties intend for (i) the formation of the Company, (ii) the Company Tax Election, (iii) the TWIHG Tax Elections and (iv) the contribution of TWIHG to the Company by the Contributing Parties pursuant to this Agreement, taken together, to qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended the (“Code”), and hereby adopt this agreement as a “plan of reorganization” within the meaning of Section 368 of the Code.

NOW THEREFORE, in consideration of the premises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties agree as follows:

1. Contribution of Interests. Each Contributing Party hereby contributes, assigns, transfers and conveys all of such Contributing Party’s right, title and interest in and to all of the Interests held by such Contributing Party as set forth on Schedule A hereto to the Company, and the Company hereby accepts and assumes, all of such Contributing Party’s right, title and interest in and to such Interests.

 


2. Transfer of Interests. Pursuant to Section 11.2 of the Second Amended and Restated Regulations of TWIHG:

(a) the Company, in its capacity as transferee hereunder, hereby accepts all of the terms and provisions thereof;

(b) distributions and notifications in respect of the Interests should hereafter be sent to the Company at c/o Corporation Service Company, 251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808;

(c) The Contributing Parties, in their capacity as the Members of TWIHG, hereby explicitly waive the requirements of Section 11.2(B); and

(d) Mark E. Jones and Robyn Jones, in their capacity as the Class A Members of TWIHG, hereby acknowledge that the provisions of this Agreement are satisfactory to evidence the transfer of the Interests to the Company and approve the transfer contemplated herein.

3. Representations and Warranties of the Contributing Parties. Each Contributing Party, severally but not jointly, represents and warrants to the Company that:

(a) The Interests held by such Contributing Party are being transferred to the Company free and clear of any and all liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or arrangements or other restrictions on title or transfer of any nature whatsoever (collectively, “Liens”), other than transfer restrictions under applicable securities laws. Upon execution of this Agreement, valid title to such Interests, free and clear of all Liens and adverse interests, will pass to the Company.

(b) If a Contributing Party is not a natural person, such Contributing Party is validly organized and existing under the laws of its state of organization and has all requisite power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby.

(c) Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of such Contributing Party.

(d) The execution, delivery and performance by such Contributing Party of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) if such Contributing Party is not a natural person, contravene or conflict with, or constitute a violation of the organizational documents of such person; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any agreement or order binding on such person.

 

2


4. Representations and Warranties of the Company. The Company represents and warrants to each Contributing Party that:

(a) The Company is validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as it is currently being conducted, and as described in the organizational documents of the Company.

(b) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, are within its limited liability company powers and have been duly authorized by all necessary limited liability company action. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of the Company.

(c) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of the Company; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any material agreement or order binding on the Company.

5. General Provisions.

(a) Further Assurances. Each party to this Agreement, at any time and from time to time upon the reasonable request of another party to this Agreement, shall promptly execute and deliver, or cause to be executed and delivered, all such further instruments and take all such further actions as may be reasonably necessary or appropriate to confirm or carry out the purposes and intent of this Agreement.

(b) Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

(c) Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state.

(d) Consent to Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in the Borough of Manhattan, so long as one of such courts shall have subject matter

 

3


jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

(e) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(f) Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

(g) Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart pages or in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement, it being understood that both parties need not sign the same counterpart.

(h) Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes all prior and contemporaneous agreements and understanding, both oral and written, among the parties hereto with respect to the subject matter hereof.

(i) Amendment; Waiver. No provision of this Agreement may be amended unless such amendment is approved in writing by the parties hereto. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

[Signature page follows]

 

4


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

 

EVAN AND JAKE, LLC

By:

 

 

 

Name:

 

Title:

MARK E. JONES

By:

 

 

 

Name:

 

Title:

ROBYN JONES

By:

 

 

 

Name:

 

Title:

MICHAEL C. COLBY

By:

 

 

 

Name:

 

Title:

JEFFREY SAUNDERS

By:

 

 

 

Name:

 

Title:

 

 

 

[Signature Page to First Evan and Jake, LLC Contribution Agreement]


MARK COLBY

By:

 

 

 

Name:

 

Title:

P. RYAN LANGSTON

By:

 

 

 

Name:

 

Title:

MICHAEL MOXLEY

By:

 

 

 

Name:

 

Title:

 

 

 

[Signature Page to First Evan and Jake, LLC Contribution Agreement]


Schedule A

 

Name of Contributing Party

 

  Interests to be Contributed to the Company

Mark Jones

 

  [●]

Robyn Jones

 

  [●]

Michael Colby

 

  [●]

Jeff Saunders

 

  [●]

Mark Colby

 

  [●]

P. Ryan Langston

 

  [●]

Michael Moxley

 

  [●]

 


Exhibit H

Form of Texas Wasatch Insurance Holdings Group, LLC Amended and Restated Regulations

[Attached]

 


THIRD AMENDED AND RESTATED REGULATIONS

OF

TEXAS WASATCH INSURANCE HOLDINGS GROUP, LLC

These Third Amended and Restated Regulations (these “Regulations”), dated as of [●], 2018, of Texas Wasatch Insurance Holdings Group, LLC (the “Company”) is entered into by Evan and Jake, LLC (the “Managing Member”) and TWIHG Holdings, LLC (the “Subsidiary Member”), as the members of the Company (the Managing Member, the Subsidiary Member and any other person who, at such time, is admitted to the Company as a member in accordance with the terms of these Regulations, being a “Member”).

R E C I T A L S

WHEREAS, the Company was formed as a Texas limited liability company by filing the Articles of Organization of the Company with, and a Certificate of Organization was issued by, the Secretary of State of the State of Texas on October 17, 2003 (the “Certificate”), in accordance with the BOC;

WHEREAS, the Members desire to amend and restate the Second Amended and Restated Regulations in their entirety;

NOW, THEREFORE, in consideration of the representations, warranties, agreements and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Members hereby adopt these Regulations on the following terms and conditions:

ARTICLE 1

DEFINITIONS

Section 1.01.    Definitions. For purposes of these Regulations, each of the following terms shall have the meaning given such term in this Article 1.

Affiliate” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person. The term “control”, as used with respect to any Person, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, the Managing Member shall not be considered an Affiliate of (x) any portfolio operating company in which the Managing Member or any of its Affiliates have made a debt or equity investment or (y) any Company Party.

Base Rate” means a variable rate per annum equal to the rate of interest most recently published by The Wall Street Journal as the “prime rate” at large U.S. money center banks.

 


Book Value” means, with respect to any of the Company’s property, unless otherwise determined by the Managing Member, the Company’s adjusted basis for federal income tax purposes, adjusted from time to time to reflect the adjustments required or permitted by Treasury Regulation Sections 1.704-l(b)(2)(iv)(d)-(g) and (m). The Book Value of the Company’s property as of the date hereof shall equal the fair market value of the property as of such date (as determined in good faith by the Managing Member).

BOC” means the Texas Business Organizations Code, as it may be amended from time to time, and any successor to such BOC.

Capital Account” has the meaning set forth in Section 3.03(a).

Capital Contributions” means, with respect to any Member, the amount of cash, cash equivalents or the fair market value of other assets, securities or property (net of any liabilities) which such Member contributes or is deemed to have contributed to the Company with respect to any Unit pursuant to these Regulations, in each case, as determined in good faith by the Managing Member.

Certificate” has the meaning set forth in the Recitals.

Code” means the Internal Revenue Code of 1986.

Company Party” means the Company or any of its subsidiaries.

Governmental Authority” means the United States or any state, provincial, local or foreign government, or any subdivision, agency or authority of any thereof having competent jurisdiction over any Company Party or any Member, as applicable.

Law” means each provision of any applicable federal, state or local law, statute, ordinance, order, code, rule or regulation, promulgated or issued by any Governmental Authority.

Officers” has the meaning set forth in Section 5.03(a).

Percentage Interest” means, in respect of a Member, the proportion of the total number of Units held by such Member as compared to the total number of Units outstanding from time to time.

Person” means any natural person or any corporation, partnership, limited liability company, other legal entity or Governmental Authority.

Pledgor Member” has the meaning set forth in Section 8.01(b).

Unreturned Capital” means, with respect to any Unit, at any time, an amount equal to the excess, if any, of (i) the aggregate amount of Capital

 

2


Contributions made with respect to such Unit, over (ii) the aggregate amount of Distributions made by the Company with respect to such Unit pursuant to Section 4.01(a)(ii) prior to such time.

Units” has the meaning set forth in Section 3.01.

ARTICLE 2

THE COMPANY

Section 2.01. Name. The name of the limited liability company is “Texas Wasatch Insurance Holdings Group, LLC” and all business of the Company shall be conducted in such name or such other name as the Managing Member shall determine. The Company shall hold all of its property in the name of the Company and not in the name of any Member.

Section 2.02. Filings. The Managing Member, as an authorized person within the meaning of the BOC, shall execute, deliver and file, or cause the execution, delivery and filing of, all certificates required or permitted by the BOC to be filed in the Office of the Secretary of State of the State of Texas and any other certificates, notices or documents required or permitted by Law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

Section 2.03. Limited Liability. Except as required by the BOC, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Members shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

Section 2.04. Purpose. The purpose of the Company is engage in any lawful act or activity for which limited liability companies may be formed under the BOC.

Section 2.05. Powers. In furtherance of its purposes, but subject to all of the provisions of these Regulations, the Company shall have and may exercise all the powers now or hereafter conferred by Texas Law on limited liability companies formed under the BOC. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Managing Member.

Section 2.06. Term. The term of the Company shall be perpetual unless and until the Company is dissolved pursuant to the BOC or as set forth herein. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate in the manner required by the BOC.

 

3


Section 2.07. Registered Office; Registered Agent; Principal Office in the United States; Other Offices. The registered office of the Company required by the BOC to be maintained in the State of Texas shall be the initial registered office named in the Certificate of Formation or such other office (which need not be a place of business of the Company) as the Managing Member may designate from time to time in the manner provided by law. The registered agent of the Company in the State of Texas shall be the initial registered agent named in the Certificate of Formation or such other Person or Persons as the Managing Member may designate from time to time. The principal office of the Company in the United States shall be at such place as the Managing Member may designate from time to time, which need not be in the State of Texas, and the Company shall maintain records there as required by the BOC and shall keep the street address of such principal office at the registered office of the Company in the State of Texas. The Company may have such other offices as the Managing Member may designate from time to time.

Section 2.08. No State-Law Partnership. The Members intend that the Company not be a partnership (including a limited partnership) or joint venture, and that no Member be a partner or joint venturer of any other Member by virtue of these Regulations, for any purposes other than as set forth in the last sentence of this Section 2.08, and neither these Regulations nor any other document entered into by the Company or any Member relating to the subject matter hereof shall be construed to suggest otherwise. The Members intend that the Company shall be treated as either an entity disregarded as separate from its owner or a partnership for federal and all applicable state and local income tax purposes, and that each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment.

ARTICLE 3

UNITS

Section 3.01. Units. Each Member’s ownership interest in the Company shall be represented by units in the Company (the “Units”), having the rights and privileges set forth in these Regulations. As of the date hereof, the Company shall have (a) authorized an unlimited number of Units and (b) issued [1,000] Units. The number of Units issued to each Member as of the date hereof is set forth opposite such Member’s name on Schedule A.

Section 3.02. Capital Contributions. Each Member listed on Schedule A shall be deemed for purposes of these Regulations to have made a Capital Contribution to the Company on the date hereof with respect to such Member’s Units, in the amount set forth opposite such Member’s name under the heading “Initial Capital” on Schedule A. Except as expressly provided in the immediately preceding sentence and as set forth on Schedule A, no Capital Contributions made

 

4


with respect to any Unit prior to the date hereof shall be treated as Capital Contributions for purposes of these Regulations. No other Capital Contributions are required or permitted, except in accordance with the terms of these Regulations.

Section 3.03. Capital Accounts.

(a) Maintenance of Capital Accounts. As long as the Company is treated as a partnership for U.S. federal income tax purposes, the Company shall maintain a separate capital account for each Member according to the rules of Treasury Regulation Section 1.704-l(b)(2)(iv) (a “Capital Account”). For this purpose, the Company may, upon the occurrence of any of the events specified in Treasury Regulation Section 1.704-l(b)(2)(iv)(f), increase or decrease the Capital Accounts in accordance with the rules of such regulation and Treasury Regulation Section 1.704-l(b)(2)(iv)(g) to reflect a revaluation of the Company’s property.

Section 3.04. Negative Capital Accounts. No Member shall be required to make any payment to any other Member or the Company by reason of any deficit or negative balance which may exist from time to time in such Member’s Capital Account (including upon and after dissolution of the Company).

Section 3.05. No Withdrawal. No Person shall be entitled to withdraw or demand the return of any part of such Person’s Capital Contributions or Capital Account or to receive any distribution from the Company, except as expressly provided herein.

Section 3.06. Transfer of Capital Accounts. Upon a transfer of any Units in accordance with the terms of these Regulations, the transferee Member shall succeed to the Capital Account of the transferor which is attributable to such Units.

ARTICLE 4

DISTRIBUTIONS AND ALLOCATIONS

Section 4.01. Distributions.

(a) General. The Managing Member may (but shall not be obligated to) direct the Company to make distributions to the Members at any time or from time to time, and in amounts of any of the Company’s assets available therefor, as determined by the Managing Member in its sole discretion to be appropriate. All distributions shall be made to the Members in proportion to their respective Percentage Interests at the time of such distributions (without preference to any Member).

Section 4.02. Allocations. (a) As long as the Company is treated as a partnership for U.S. federal income tax purposes, except as otherwise provided in

 

5


these Regulations, each item of income, gain, loss, or deduction of the Company (determined in accordance with U.S. federal income tax principles as applied to the maintenance of capital accounts) for any Fiscal Year shall be allocated among the Members in proportion to their respective Percentage Interests.

(b) It is the intention of the Members that the allocations made by the Company be respected for U.S. federal income tax purposes, and in furtherance of this intention, the “partnership minimum gain” provisions of Treasury Regulations Section 1.704-2(f), the “partner minimum gain” provisions of Treasury Regulation Section 1.704-2(i), the “qualified income offset” provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and any such other provision required by Section 704 of the Code and applicable Treasury Regulations (the “Regulatory Allocations”) shall be incorporated by reference into these Regulations. The Regulatory Allocations shall be taken into account in computing subsequent allocations pursuant to this Section 4.02 so that the cumulative net amount of all items allocated to each Member shall, to the extent possible, be equal to the amount that would have been allocated to such Member if there had never been any allocations pursuant to this Section 4.02(b).

Section 4.03. Tax Allocations. (a) Allocations Generally. As long as the Company is treated as a partnership for U.S. federal income tax purposes, each item of income, gain, loss and deduction of the Company will be allocated for federal, state and local income tax purposes among the Members as nearly as possible in accordance with the allocation of such items of income, gains, losses, and deductions among the Members for computing their Capital Accounts pursuant to Section 4.02; provided that items of income, gain, loss and deduction with respect to any asset or liability of the Company that has Book Value that differs from its adjusted tax basis for U.S. federal income tax purposes shall be allocated, as determined by the Managing Member (using any permissible method selected by the Managing Member in its sole discretion), so as to take into account the variations between the Book Value of such asset or liability and its adjusted tax basis in accordance with the principles of Section 704(c) of the Code and the Treasury Regulations thereunder.

(b) Allocation of Tax Credits, Tax Credit Recapture, Etc. Tax credits, tax credit recapture, and any items related thereto shall be allocated to the Members according to their interests in such items as determined by the Managing Member taking into account the principles of Treasury Regulation Section 1.704-1(b)(4)(ii).

Section 4.04. Other Allocation Principles. If any allocation is required to be made under these Regulations in respect of a period that does not correspond to a full Fiscal Year, such allocation shall be made taking into account the items of income, gain, loss and deduction attributable to such period as determined by the

 

6


Managing Member using any method that is permissible under Section 706 of the Code and the Treasury Regulations thereunder.

ARTICLE 5

MANAGEMENT

Section 5.01. General Authority. In accordance with Section 101.251 of the BOC, management of the Company shall be vested in the Managing Member. The Managing Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the Laws of the State of Texas. The Managing Member has the authority to bind the Company.

Section 5.02. Managing Member. Evan and Jake, LLC shall be the initial managing member of the Company. The Managing Member may be removed from office, and a new managing member may be elected, in each case, only upon the agreement of all of the Members. In such event, the Members shall file any amendment to the Certificate or other certificates that may be required.

Section 5.03. Officers.

(a) The Managing Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “Officers”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Managing Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the BOC, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Article 5 may be revoked at any time by the Managing Member. An Officer may be removed with or without cause by the Managing Member.

(b) As of the date hereof, the following individuals have been appointed as the initial Officers in such offices as are set forth opposite their respective names:

 

Name

  

Office

[●]

  

President

[●]

  

Secretary

 

7


ARTICLE 6

INDEMNIFICATION; RIGHTS AND OBLIGATIONS OF MEMBERS

Section 6.01. Exculpation and Indemnification.

(a) To the fullest extent permitted by the laws of the State of Texas and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by these Regulations.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the fullest extent permitted by the laws of the State of Texas for directors and officers of corporations organized under the laws of the State of Texas. Any indemnity under this Section 6.01(b) shall be provided out of and to the extent of Company assets only, and no Member or Officer shall have personal liability on account thereof.

ARTICLE 7

BOOKS AND RECORDS

Section 7.01. Books and Records. The Company shall keep appropriate books and records pertaining to the business of the Company. The books and records of the Company shall be kept at the principal office of the Company or at such other place, within or without the State of Texas, as the Managing Member shall reasonably from time to time determine.

Section 7.02. Determinations by Managing Member. All matters concerning (a) the determination of the relative amount of allocations and distributions among the Members pursuant to Article 3 and Article 4, (b) any tax elections required or permitted to be made by or with respect to the Company under applicable Law, and (c) accounting methods, procedures and determinations, and other determinations not specifically and expressly provided for by the terms of these Regulations, shall be determined by the Managing Member, whose determination shall be final and conclusive as to all of the Members absent manifest clerical error.

 

8


Section 7.03. Fiscal Year. The fiscal year of the Company shall begin on the first day of January and end on the last day of December each year or such other annual accounting period as may be established by the Managing Member as required under the Code (“Fiscal Year”).

ARTICLE 8

EXIT; TRANSFER RESTRICTIONS

Section 8.01. Transfers; Assignments.

(a) A Member may transfer or assign all or any portion of its Units only with the consent of the Managing Member. If a Member transfers all of its Units in the Company pursuant to this Section 8.01, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of these Regulations. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company (if such transferor Member transferred all of its limited liability company interest in the Company).

(b) Notwithstanding anything herein to the contrary, upon the sale, disposition or other transfer of the Managing Member’s Units (or the Units of another Member that is a party to any financing to which the Managing Member is also a party (such other Member, the “Pledgor Member”)) pursuant to a valid exercise of a remedy by any pledgee in accordance with a loan agreement, pledge agreement, security agreement or other collateral documentation entered into by the Managing Member (or such Pledgor Member), the pledgee shall become a Member of the Company and shall acquire all right, title and interest of the Managing Member (and such Pledgor Member) in the Company, including all rights under these Regulations (including removing or replacing any or all of the Managing Members and such Pledgor Members), and the Managing Member (and such Pledgor Members) shall be withdrawn as a Member of the Company hereunder and shall have no further right, title or interest in the Company under these Regulations. Such admission shall be deemed effective immediately prior to the sale, disposition or other transfer of the Managing Member’s Units (or such Pledgor Member’s Units ), and, immediately following such admission, the transferor Member shall cease to be a Member of the Company. None of the provisions of this Article 8 or any other provision of these Regulations may be amended in any way which alters, limits, restricts or adversely affects a pledgee’s ability to exercise its rights under any loan agreement, pledge agreement, security agreement or other collateral documentation entered into by the Managing Member and Pledgor Member or the intended result thereof, without the prior written consent of any such pledgee.

 

9


(c) Notwithstanding anything herein to the contrary, each of the Managing Member and the Pledgor Member shall have the right to mortgage, pledge, grant, hypothecate, sell, transfer or assign the Managing Member’s and Pledgor Member’s interest under these Regulations (for the avoidance of doubt, including the Managing Member’s Units and Pledgor Member’s Units) to any Person if such sale, transfer or disposition complies with provisions of any loan agreement, pledge agreement, security agreement or other collateral documentation to which the Managing Member or the Pledgor Member is bound.

Section 8.02. Resignation. No Member shall have the power or right to withdraw or otherwise resign from the Company prior to the dissolution and winding up of the Company pursuant to Article 9, without the prior written consent of the Managing Member (which consent may be withheld by the Managing Member in its sole discretion), except as otherwise expressly permitted by these Regulations. Notwithstanding that payment on account of a withdrawal may be made after the effective time of such withdrawal, any completely withdrawing Member will not be considered a Member for any purpose after the effective time of such complete withdrawal, and, in the case of a partial withdrawal, such Member’s Capital Account (and corresponding voting and other rights) shall be reduced for all other purposes hereunder upon the effective time of such partial withdrawal.

Section 8.03. Admission of Additional Members. One or more additional members of the Company may be admitted to the Company with the written consent of the Managing Member. Prior to the admission of any such additional members to the Company, the Managing Member shall amend these Regulations, including Schedule A attached hereto, to make such changes as the Managing Member shall determine to reflect the fact that the Company shall have such additional member(s).

ARTICLE 9

DISSOLUTION

Section 9.01. Dissolution.

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Managing Member or (ii) an order by a court to wind up and terminate under Section 101.621 of the BOC.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 11-052 of the BOC.

 

10


(c) As soon as practicable upon dissolution of the Company, the assets of the Company (or liquidation proceeds) shall be distributed in the following manner and order of priority (and ratably within each level of priority):

(i) first, to creditors of the Company, including Members and Affiliates of Members who are creditors, to the extent otherwise permitted by Law, in satisfaction of liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof) other than liabilities for which reasonable provision has been made and distributions to Members under Article 4; then

(ii) to the Members in respect of their Units in accordance with Section 4.01(a).

ARTICLE 10

TAX MATTERS

Section 10.01. Tax Matters. (a) The Managing Member shall cause all income tax returns of the Company to be prepared and filed on a timely basis.

(b) As long as the Company is treated as a partnership for U.S. federal income tax purposes, the Managing Member shall be the “partnership representative” as defined in Section 6223 of the Partnership Tax Audit Rules (the “Partnership Representative”). In such capacity, the Managing Partner shall have all of the rights, authority and power, and shall be subject to all of the obligations, of a “partnership representative” to the extent provided in the Code and the Regulations.

(c) As long as the Company is treated as a partnership for U.S. federal income tax purposes, the Company shall make a timely election under Section 754 of the Code (and a corresponding election under state and local Law) effective starting with the taxable year ended December 31, 2018, and the Managing Member shall not take any action to revoke such elections.

ARTICLE 11

MISCELLANEOUS

Section 11.01. Separability of Provisions. If any provision of these Regulations or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of these Regulations and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

Section 11.02. Entire Agreement. These Regulations constitute the entire agreement of the Members with respect to the subject matter hereof.

 

11


Section 11.03. Governing Law. These Regulations shall be governed by, and construed under, the laws of the State of Texas (without regard to conflict of laws principles).

Section 11.04. Amendments. Subject to Section 8.03, these Regulations may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Members.

Section 11.05. Sole Benefit of Members. The provisions of these Regulations are intended solely to benefit the Members and, to the fullest extent permitted by applicable Law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of these Regulations), and the Members shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

Section 11.06. Counterparts; Effectiveness. These Regulations may be signed in any number of counterparts, each of which shall be deemed an original. These Regulations shall become effective when the Members shall have executed and delivered the Agreement to the Company.

[The remainder of this page is intentionally left blank.]

 

12


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed these Regulations as of the date first written above.

 

TEXAS WASATCH INSURANCE
    HOLDINGS GROUP, LLC
By:  

 

  Name:
  Title:
EVAN AND JAKE, LLC
By:  

 

  Name:
  Title:
TWIHG HOLDINGS, LLC
By:  

 

  Name:
 

Title:

 

 

 

 

Signature Page to Third Amended and Restated Regulations of

Texas Wasatch Insurance Holdings Group, LLC


Schedule A

 

 

Member

 

  Units   Initial Capital
     

Evan and Jake, LLC

 

 

[]

 

$[]

     

TWIHG Holdings, LLC

 

 

[]

 

$[]


Exhibit I

Form of Evan and Jake, LLC Distribution Agreement

[Attached]


DISTRIBUTION AGREEMENT

This Distribution Agreement (this “Agreement”) is entered into as of [●], 2018 by and between Evan and Jake, LLC, a Delaware limited liability company (the “Company”) and Texas Wasatch Insurance Holdings Group, LLC, a Delaware limited liability company (the “Distributing Party”).

W I T N E S S E T H:

WHEREAS, Goosehead Insurance, Inc. intends to consummate an initial public offering of its Class A common stock (the “IPO”); and

WHEREAS, the Distributing Party owns 345.5 Class A limited liability company units (the “Interests”) of Goosehead Financial, LLC, a Delaware limited liability company, and the Distributing Party desires to distribute the Interests to the Company.

NOW THEREFORE, in consideration of the premises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties agree as follows:

1. Distribution of Interests. The Distributing Party hereby distributes, assigns, transfers and conveys all of the Distributing Party’s right, title and interest in and to all of the Interests held by the Distributing Party, and the Company hereby accepts and assumes, all of such Distributing Party’s right, title and interest in and to such Interests.

2. Transfer of Interests. Pursuant to Section 10.4 of the Limited Liability Company Agreement of Goosehead Financial, LLC:

(a) The Company, in its capacity as transferee hereunder, hereby agrees to deliver an executed counterpart of the Limited Liability Company Agreement of Goosehead Financial, LLC evidencing its adoption of the Limited Liability Company Agreement of Goosehead Financial, LLC; and

(b) Mark E. Jones, in his capacity as Managing Member of Goosehead Financial, LLC, hereby acknowledges that the provisions of this Agreement are satisfactory to evidence the transfer of the Interests to the Company, approves the transfer contemplated herein and agrees to accept the Company as a Member of Goosehead Financial, LLC upon receipt of a counterpart of the Limited Liability Company Agreement of Goosehead Financial, LLC duly executed by the Distributing Party.

3. Representations and Warranties of the Distributing Party. The Distributing Party represents and warrants to the Company that:

(a) The Interests held by such Distributing Party are being transferred to the Company free and clear of any and all liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements,


obligations, understandings or arrangements or other restrictions on title or transfer of any nature whatsoever (collectively, “Liens”), other than transfer restrictions under applicable securities laws. Upon execution of this Agreement, valid title to such Interests, free and clear of all Liens and adverse interests, will pass to the Company.

(b) The Distributing Party is validly organized and existing under the laws of its state of organization and has all requisite limited liability company power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of such Distributing Party.

(c) The execution, delivery and performance by such Distributing Party of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of such person; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any agreement or order binding on such person.

4. Representations and Warranties of the Company. The Company represents and warrants to each Distributing Party that:

(a) The Company is validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as it is currently being conducted, and as described in the organizational documents of the Company.

(b) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, are within its limited liability company powers and have been duly authorized by all necessary limited liability company action. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of the Company.

(c) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of the Company; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any material agreement or order binding on the Company.

5. General Provisions.

(a) Further Assurances. Each party to this Agreement, at any time and from time to time upon the reasonable request of another party to this Agreement, shall promptly execute and deliver, or cause to be executed and

 

2


delivered, all such further instruments and take all such further actions as may be reasonably necessary or appropriate to confirm or carry out the purposes and intent of this Agreement.

(b) Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

(c) Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state.

(d) Consent to Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in the Borough of Manhattan, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

(e) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(f) Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not

 

3


be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

(g) Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart pages or in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement, it being understood that both parties need not sign the same counterpart.

(h) Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes all prior and contemporaneous agreements and understanding, both oral and written, among the parties hereto with respect to the subject matter hereof.

(i) Amendment; Waiver. No provision of this Agreement may be amended unless such amendment is approved in writing by the parties hereto. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

[Signature page follows]

 

4


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

 

EVAN AND JAKE, LLC

By:

 

 

 

Name:

 

Title:

TEXAS WASATCH INSURANCE
HOLDINGS GROUP, LLC

By:

 

 

 

Name:

 

Title:

 

 

 

[Signature Page to Evan and Jake, LLC Distribution Agreement]


Exhibit J

Form of GHM Holdings, LLC Contribution Agreement

[Attached]


CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is entered into as of [●], 2018 by and between GHM Holdings, LLC, a Delaware limited liability company (the “Company”) and Max and Dane, LLC, a Delaware limited liability company (the “Contributing Party”).

W I T N E S S E T H:

WHEREAS, on the date hereof the former members of Goosehead Management, LLC, a Delaware limited liability company (“Goosehead Management”), contributed their limited liability company interest in Goosehead Management to the Contributing Party;

WHEREAS, Goosehead Insurance, Inc. intends to consummate an initial public offering of its Class A common stock (the “IPO”);

WHEREAS, the Company is a wholly-owned subsidiary of the Contributing Party; and

WHEREAS, the Contributing Party owns 100% of the limited liability company interests of Goosehead Management (the “Interests”), and the Contributing Party desires to contribute 0.1% of the Interests to the Company (the “Contributed Interest”).

NOW THEREFORE, in consideration of the premises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties agree as follows:

1. Contribution of Interests. The Contributing Party hereby contributes, assigns, transfers and conveys all of the Contributing Party’s right, title and interest in and to all of the Contributed Interest held by the Contributing Party, and the Company hereby accepts and assumes, all of such Contributing Party’s right, title and interest in and to such Contributed Interest effective immediately after the consummation of the transactions described in that certain Contribution Agreement by and among the Contributing Party, Goosehead Management and the former members of Goosehead Management dated as of the date hereof.

2. Transfer of Contributed Interest. Pursuant to Section 8.01(a) of the Amended and Restated Limited Liability Company Agreement of Goosehead Management, the Company, in its capacity as transferee hereunder, hereby agrees to be bound by the terms and conditions thereof.

3. Representations and Warranties of the Contributing Party. The Contributing Party represents and warrants to the Company that:

(a) The Contributed Interest held by such Contributing Party is being transferred to the Company free and clear of any and all liens, charges, security


interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or arrangements or other restrictions on title or transfer of any nature whatsoever (collectively, “Liens”), other than transfer restrictions under applicable securities laws. Upon execution of this Agreement, valid title to such Contributed Interest, free and clear of all Liens and adverse interests, will pass to the Company.

(b) The Contributing Party is validly organized and existing under the laws of its state of organization and has all requisite limited liability company power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of such Contributing Party.

(c) The execution, delivery and performance by such Contributing Party of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of such person; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any agreement or order binding on such person.

4. Representations and Warranties of the Company. The Company represents and warrants to each Contributing Party that:

(a) The Company is validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as it is currently being conducted, and as described in the organizational documents of the Company.

(b) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, are within its limited liability company powers and have been duly authorized by all necessary limited liability company action. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of the Company.

(c) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of the Company; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any material agreement or order binding on the Company.

5. General Provisions.

(a) Further Assurances. Each party to this Agreement, at any time and from time to time upon the reasonable request of another party to this

 

2


Agreement, shall promptly execute and deliver, or cause to be executed and delivered, all such further instruments and take all such further actions as may be reasonably necessary or appropriate to confirm or carry out the purposes and intent of this Agreement.

(b) Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

(c) Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state.

(d) Consent to Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in the Borough of Manhattan, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

(e) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(f) Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Agreement and the

 

3


application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

(g) Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart pages or in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement, it being understood that both parties need not sign the same counterpart.

(h) Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes all prior and contemporaneous agreements and understanding, both oral and written, among the parties hereto with respect to the subject matter hereof.

(i) Amendment; Waiver. No provision of this Agreement may be amended unless such amendment is approved in writing by the parties hereto. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

[Signature page follows]

 

4


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

 

MAX AND DANE, LLC

By:

 

 

 

Name:

 

Title:

GHM HOLDINGS, LLC

By:

 

 

 

Name:

 

Title:

 

[Signature Page to GHM Holdings, LLC Contribution Agreement]


Exhibit K

Form of TWIHG Holdings, LLC Contribution Agreement

[Attached]


CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is entered into as of [●], 2018 by and between TWIHG Holdings, LLC, a Delaware limited liability company (the “Company”) and Evan and Jake, LLC, a Delaware limited liability company (the “Contributing Party”).

W I T N E S S E T H:

WHEREAS, on the date hereof the former members of Texas Wasatch Insurance Holdings Group, LLC, a Texas limited liability company (“TWIHG”), contributed their limited liability company interest in TWIHG to the Contributing Party;

WHEREAS, Goosehead Insurance, Inc. intends to consummate an initial public offering of its Class A common stock (the “IPO”);

WHEREAS, the Company is a wholly-owned subsidiary of the Contributing Party; and

WHEREAS, the Contributing Party owns 100% of the limited liability company interests of TWIHG (the “Interests”), and the Contributing Party desires to contribute 0.1% of the Interests to the Company (the “Contributed Interest”).

NOW THEREFORE, in consideration of the premises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties agree as follows:

1. Contribution of Interests. The Contributing Party hereby contributes, assigns, transfers and conveys all of the Contributing Party’s right, title and interest in and to all of the Contributed Interest held by the Contributing Party, and the Company hereby accepts and assumes, all of such Contributing Party’s right, title and interest in and to such Contributed Interest effective immediately after the consummation of the transactions described in that certain Contribution Agreement by and among the Contributing Party, TWIHG and the former members of TWIHG dated as of the date hereof.

2. Transfer of Contributed Interest. Pursuant to Section 8.01(a) of the Third Amended and Restated Regulations of TWIHG, the Company, in its capacity as transferee hereunder, hereby agrees to be bound by the terms and conditions thereof.

3. Representations and Warranties of the Contributing Party. The Contributing Party represents and warrants to the Company that:

(a) The Contributed Interest held by such Contributing Party is being transferred to the Company free and clear of any and all liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or arrangements or other restrictions on


title or transfer of any nature whatsoever (collectively, “Liens”), other than transfer restrictions under applicable securities laws. Upon execution of this Agreement, valid title to such Contributed Interest, free and clear of all Liens and adverse interests, will pass to the Company.

(b) The Contributing Party is validly organized and existing under the laws of its state of organization and has all requisite limited liability company power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of such Contributing Party.

(c) The execution, delivery and performance by such Contributing Party of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of such person; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any agreement or order binding on such person.

4. Representations and Warranties of the Company. The Company represents and warrants to each Contributing Party that:

(a) The Company is validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as it is currently being conducted, and as described in the organizational documents of the Company.

(b) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, are within its limited liability company powers and have been duly authorized by all necessary limited liability company action. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of the Company.

(c) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of the Company; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any material agreement or order binding on the Company.

5. General Provisions.

(a) Further Assurances. Each party to this Agreement, at any time and from time to time upon the reasonable request of another party to this Agreement, shall promptly execute and deliver, or cause to be executed and delivered, all such further instruments and take all such further actions as may be

 

2


reasonably necessary or appropriate to confirm or carry out the purposes and intent of this Agreement.

(b) Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

(c) Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state.

(d) Consent to Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in the Borough of Manhattan, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

(e) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(f) Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or

 

3


unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

(g) Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart pages or in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement, it being understood that both parties need not sign the same counterpart.

(h) Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes all prior and contemporaneous agreements and understanding, both oral and written, among the parties hereto with respect to the subject matter hereof.

(i) Amendment; Waiver. No provision of this Agreement may be amended unless such amendment is approved in writing by the parties hereto. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

[Signature page follows]

 

4


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

 

EVAN AND JAKE, LLC

By:

 

 

 

Name:

 

Title:

TWIHG HOLDINGS, LLC

By:

 

 

 

Name:

 

Title:

 

[Signature Page to TWIHG Holdings, LLC Contribution Agreement]


Exhibit L

Form of Class B Securities Purchase Agreement

[Attached]


SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is entered into as of [●], 2018 by and among Goosehead Insurance, Inc., a Delaware corporation (“Pubco”), and certain owners of the limited liability company interests of Goosehead Financial, LLC, a Delaware limited liability company (“Goosehead Financial”), listed on the signature pages hereto (the “Post-IPO LLC Members”).

W I T N E S S E T H:

WHEREAS, Pubco intends to consummate an initial public offering of its Class A common stock (the “IPO”); and

WHEREAS, the Post-IPO LLC Members constitute all of the holders of the limited liability company interests (collectively, the “Interests”) of Goosehead Financial, which Interests constitute all of the outstanding equity of Goosehead Financial, and each Post-IPO LLC Members desires to receive Class B common shares of Pubco (“Class B Shares”) equal to the number of such Post-IPO LLC Member’s Interests in exchange for nominal consideration.

NOW THEREFORE, in consideration of the premises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties agree as follows:

1. Issuance of New Class B Shares. As of the Effective Time (as defined below), as consideration for the contribution to Pubco by each Post-IPO LLC Member of such consideration pursuant to the terms of this Agreement, Pubco shall issue the number of Class B Shares set forth on Schedule A to each such Post-IPO LLC Member. The number of such Class B Shares issued to such Post-IPO LLC Member shall be equal in number to the number of Interests owned by such Post-IPO LLC Member as of the Effective Time.

2. Contribution of Consideration. Substantially concurrently with, but immediately prior to, the closing of the IPO (the “Effective Time”), each Post-IPO LLC Member shall contribute $0.01 per share to Pubco as full and valid consideration for the issuance and sale of the Class B Shares.

3. Representations and Warranties of the Post-IPO LLC Members. Each Post-IPO LLC Member, severally but not jointly, represents and warrants to Pubco that:

(a) If such Post-IPO LLC Member is not a natural person, such Post-IPO LLC Member is validly organized and existing under the laws of its state of organization and has all requisite power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby.

 


(b) Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of such Post-IPO LLC Member.

(c) The execution, delivery and performance by such Post-IPO LLC Member of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) if such Post-IPO LLC Member is not a natural person, contravene or conflict with, or constitute a violation of the organizational documents of such person; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any agreement or order binding on such person.

(d) Such Post-IPO LLC Member understands that (A) the Class B Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and, therefore, cannot be resold unless they are registered under the Securities Act or unless an exemption from registration is available, and (B) there is no existing public or other market for the Class B Shares and there can be no assurance that any Post-IPO LLC Member will be able to sell or dispose of its Class B Shares.

(e) The Class B Shares are being acquired for such Post-IPO LLC Member’s own account and without a view to the public distribution of such Class B Shares or any interest therein other than as permitted under applicable law.

(f) Such Post-IPO LLC Member is an “accredited investor” as such term is defined in Regulation D under the Securities Act. Such Post-IPO LLC Member has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Class B Shares and such Post-IPO LLC Member is capable of bearing the economic risks of such investment, including a complete loss of its investment in the Class B Shares.

(g) Such Post-IPO LLC Member has been given the opportunity to ask questions of, and receive answers from, Pubco concerning Pubco, the terms and conditions of the Class B Shares and other related matters. Such Post-IPO LLC Member further represents and warrants to Pubco that Pubco has made available to such Post-IPO LLC Member or its agents all documents and information relating to an investment in the Class B Shares that such Post-IPO LLC Member believed to be necessary or appropriate for its investment in Pubco.

(h) Such Post-IPO LLC Member understands that its investment in Pubco and the Class B Shares involves a high degree of risk and is therefore a speculative investment, and such Post-IPO LLC Member is able to bear the economic risk of such investment for an indefinite period of time, and is presently able to afford the complete loss of such investment.

 

2


(i) Such Post-IPO LLC Member has not had a “disqualifying event” described in Securities Act Rule 506(d)(1) subsections (i) through (viii).

4. Representations and Warranties of Pubco. Pubco represents and warrants to each Post-IPO LLC Member that:

(a) Pubco is validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as it is currently being conducted, and, at the Effective Time, will have all requisite corporate power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as described in the organizational documents of Pubco.

(b) The execution, delivery and performance by Pubco of this Agreement, and the consummation of the transactions contemplated hereby, are within its corporate powers and have been duly authorized by all necessary corporate action. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of Pubco.

(c) The execution, delivery and performance by Pubco of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of Pubco; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any material agreement or order binding on Pubco.

(d) At the Effective Time, the Class B Shares to be issued to each Post-IPO LLC Member shall be (i) validly issued, and (ii) duly authorized, fully paid and nonassessable, free and clear of any and all Liens except for any restrictions set forth in the organizational documents of Pubco and transfer restrictions under applicable securities laws.

5. General Provisions.

(a) Further Assurances. Each party to this Agreement, at any time and from time to time upon the reasonable request of another party to this Agreement, shall promptly execute and deliver, or cause to be executed and delivered, all such further instruments and take all such further actions as may be reasonably necessary or appropriate to confirm or carry out the purposes and intent of this Agreement.

(b) Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

 

3


(c) Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state.

(d) Consent to Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in the Borough of Manhattan, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

(e) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(f) Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

(g) Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart pages or in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement, it being understood that both parties need not sign the same counterpart.

 

4


(h) Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes all prior and contemporaneous agreements and understanding, both oral and written, among the parties hereto with respect to the subject matter hereof.

(i) Amendment; Waiver. No provision of this Agreement may be amended unless such amendment is approved in writing by the parties hereto. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

(j) IPO Closing. This Agreement will automatically terminate and be of no force and effect if the Effective Time does not occur on or before [●], 2018.

[Signature page follows]

 

5


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

 

GOOSEHEAD INSURANCE, INC.
By:  

 

  Name:
  Title:

 

MAX AND DANE, LLC
By:  

 

  Name:
  Title:

 

EVAN AND JAKE, LLC
By:  

 

  Name:
  Title:

 

TEXAS WASATCH INSURANCE

PARTNERS, L.P.

 

By its General Partner

By:  

 

  Name:
  Title:

 

MARK E. JONES
By:  

 

  Name:
  Title:

 

[Signature Page to Class B Securities Purchase Agreement]


ROBYN JONES
By:  

 

  Name:
  Title:

 

MICHAEL C. COLBY
By:  

 

  Name:
  Title:

 

JEFFREY SAUNDERS
By:  

 

  Name:
  Title:

 

THE MARK AND ROBYN JONES

DESCENDANTS TRUST 2014

 
By:  

 

 

Name:

Title:

 

 

LANNI ELAINE ROMNEY FAMILY

TRUST 2014

By:  

 

  Name:
  Title:

 

LINDY JEAN LANGSTON FAMILY

TRUST 2014

By:  

 

 

[Signature Page to Securities Purchase Agreement]


Name:
Title:

 

CAMILLE LAVAUN PETERSON

FAMILY TRUST 2014

By:  

 

  Name:
  Title:

DESIREE ROBYN COLEMAN

FAMILY TRUST 2014

By:  

 

  Name:
  Title:

 

ADRIENNE MORGAN JONES

FAMILY TRUST 2014

By:  

 

  Name:
  Title:

 

MARK EVAN JONES, JR. FAMILY

TRUST 2014

By:  

 

  Name:
  Title:

 

THE ESTATE OF DOUG JONES
By:  

 

  Name:
  Title:

 

[Signature Page to Securities Purchase Agreement]


LANNI ROMNEY
By:  

 

  Name:
  Title:

 

LINDY LANGSTON
By:  

 

  Name:
  Title:

 

CAMILLE PETERSON
By:  

 

  Name:
  Title:

 

DESIREE COLEMAN
By:  

 

  Name:
  Title:

 

ADRIENNE JONES
By:  

 

  Name:
  Title:

 

MARK E. JONES, JR.
By:  

 

  Name:
  Title:

 

[Signature Page to Securities Purchase Agreement]


COLBY 2014 FAMILY TRUST
By:  

 

  Name:
  Title:

 

PRESTON MICHAEL COLBY 2014

TRUST

By:  

 

  Name:
  Title:

 

LYLA KATE COLBY 2014 TRUST
By:  

 

  Name:
  Title:

 

[Signature Page to Securities Purchase Agreement]


Schedule A

 

Name of Post-IPO LLC

Member

 

 

Interests owned by Post-IPO

LLC Member

 

 

Class B Shares to be Issued to Post-IPO LLC Member

 

Max and Dane, LLC

 

 

[●]

 

 

[●]

 

Evan and Jake, LLC

 

 

[●]

 

 

[●]

 

The Mark and Robyn Jones Descendants Trust 2014   [●]   [●]
Lanni Elaine Romney Family Trust 2014   [●]   [●]
Lindy Jean Langston Family Trust 2014   [●]   [●]
Camille LaVaun Peterson Family Trust 2014   [●]   [●]
Desiree Robyn Coleman Family Trust 2014   [●]   [●]
Adrienne Morgan Jones Family Trust 2014   [●]   [●]
Mark Evan Jones, Jr. Family Trust 2014   [●]   [●]

Mark Jones

 

 

[●]

 

 

[●]

 

Robyn Jones

 

 

[●]

 

 

[●]

 

Doug Jones

 

 

[●]

 

 

[●]

 

Lanni Romney

 

 

[●]

 

 

[●]

 

Lindy Langston

 

 

[●]

 

 

[●]

 

Camille Peterson

 

 

[●]

 

 

[●]

 

Desiree Coleman

 

 

[●]

 

 

[●]

 

Adrienne Jones

 

 

[●]

 

 

[●]

 

Mark E. Jones, Jr.

 

 

[●]

 

 

[●]

 

Texas Wasatch Insurance Partners, L.P.   [●]   [●]

Colby 2014 Family Trust

 

 

[●]

 

 

[●]

 

Preston Michael Colby 2014 Trust

 

 

[●]

 

 

[●]

 


Lyla Kate Colby 2014 Trust

 

 

[●]

 

 

[●]

 

Michael C. Colby

 

 

[●]

 

 

[●]

 

Jeff Saunders

 

 

[●]

 

 

[●]

 


Exhibit M

Form of Goosehead Management Note Transfer Agreement

[Attached]


TRANSFER AGREEMENT

This Transfer Agreement (this “Agreement”) is entered into as of [●], 2018 by and among Goosehead Insurance, Inc., a Delaware corporation (“Pubco”), and the holders of limited liability company interests of Max and Dane, LLC, a Delaware limited liability company (“Max and Dane, LLC”), listed on the signature pages hereto (the “Transferring Parties”).

W I T N E S S E T H:

WHEREAS, Pubco intends to consummate an initial public offering of its Class A common stock (the “IPO”); and

WHEREAS, the Transferring Parties constitute all of the holders of the limited liability company interests of Max and Dane, LLC (the “Interests”), which Interests constitute all of the outstanding equity of Max and Dane, LLC, and the Transferring Parties desire to transfer the Interests to Pubco in exchange for a note issued by Pubco, which will be repaid on the closing of the IPO (the “Goosehead Management Note”), attached hereto as Exhibit A.

NOW THEREFORE, in consideration of the premises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties agree as follows:

1. Transfer of Interests. Each Transferring Party hereby transfers, assigns, transfers and conveys all of such Transferring Party’s right, title and interest in and to all of the Interests held by such Transferring Party as set forth on Schedule A hereto to Pubco, and Pubco hereby accepts and assume, all of such Transferring Party’s right, title and interest in and to such Interests.

2. Issuance of Goosehead Management Note. Substantially concurrently with, but immediately prior to, the closing of the IPO (the “Effective Time”), as consideration for the transfer to Pubco by each Transferring Party of the Interests held by such Transferring Party pursuant to the terms of this Agreement, Pubco will issue the Goosehead Management Note to such Transferring Parties.

3. Representations and Warranties of the Transferring Parties. Each Transferring Party, severally but not jointly, represents and warrants to Pubco that:

(a) The Interests held by such Transferring Party are being transferred to Pubco free and clear of any and all liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or arrangements or other restrictions on title or transfer of any nature whatsoever (collectively, “Liens”), other than transfer restrictions under applicable securities laws. Upon execution of this Agreement, valid title to such Interests, free and clear of all Liens and adverse interests, will pass to Pubco.


(b) If a Transferring Party is not a natural person, such Transferring Party is validly organized and existing under the laws of its state of organization and has all requisite power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby.

(c) Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of such Transferring Party.

(d) The execution, delivery and performance by each Transferring Party of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) if such Transferring Party is not a natural person, contravene or conflict with, or constitute a violation of the organizational documents of such person; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any agreement or order binding on such person.

(e) Such Transferring Party understands that (A) the Goosehead Management Note and Pubco’s Class A common stock (the “Class A Common Stock”) have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and, therefore, cannot be resold unless they are registered under the Securities Act or unless an exemption from registration is available, and (B) there is no existing public or other market for the Goosehead Management Note and Class A Common Stock and there can be no assurance that any Transferring Party will be able to sell or dispose of its Goosehead Management Note and Class A Common Stock.

(f) The Goosehead Management Note and Class A Common Stock are being acquired for each Transferring Party’s own account and without a view to the public distribution of such Goosehead Management Note and Class A Common Stock or any interest therein other than as permitted under applicable law.

(g) Such Transferring Party is an “accredited investor” as such term is defined in Regulation D under the Securities Act. Each Transferring Party has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Goosehead Management Note and Class A Common Stock and each Transferring Party is capable of bearing the economic risks of such investment, including a complete loss of its investment in the Goosehead Management Note and Class A Common Stock.

(h) Such Transferring Party has been given the opportunity to ask questions of, and receive answers from, the Company concerning the Company, the terms and conditions of the Goosehead Management Note and Class A Common Stock and other related matters. Each Transferring Party further represents and warrants to the Company that the Company has made available to

 

2


such Transferring Party or its agents all documents and information relating to an investment in the Goosehead Management Note and Class A Common Stock that such Transferring Party believed to be necessary or appropriate for its investment in the Company.

(i) Such Transferring Party understands that its investment in the Company and the Goosehead Management Note and Class A Common Stock involves a high degree of risk and is therefore a speculative investment, and such Transferring Party is able to bear the economic risk of such investment for an indefinite period of time, and is presently able to afford the complete loss of such investment.

(j) Such Transferring Party has not had a “disqualifying event” described in Securities Act Rule 506(d)(1) subsections (i) through (viii).

4. Representations and Warranties of Pubco. Pubco represents and warrants to each Transferring Party that:

(a) Pubco is validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as it is currently being conducted, and, at the Effective Time, will have all requisite corporate power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as described in the organizational documents of Pubco.

(b) The execution, delivery and performance by Pubco of this Agreement, and the consummation of the transactions contemplated hereby, are within its corporate powers and have been duly authorized by all necessary corporate action. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of Pubco.

(c) The execution, delivery and performance by Pubco of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of Pubco; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any material agreement or order binding on Pubco.

(d) At the Effective Time, the Goosehead Management Note to be issued to the Transferring Parties shall be (i) validly issued, and (ii) duly authorized, fully paid and nonassessable, free and clear of any and all Liens except for any restrictions set forth in the organizational documents of Pubco and transfer restrictions under applicable securities laws.

5. General Provisions.

 

3


(a) Further Assurances. Each party to this Agreement, at any time and from time to time upon the reasonable request of another party to this Agreement, shall promptly execute and deliver, or cause to be executed and delivered, all such further instruments and take all such further actions as may be reasonably necessary or appropriate to confirm or carry out the purposes and intent of this Agreement.

(b) Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

(c) Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state.

(d) Consent to Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in the Borough of Manhattan, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

(e) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(f) Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (i) a suitable and equitable provision shall be substituted therefor in order to carry out,

 

4


so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

(g) Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart pages or in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement, it being understood that both parties need not sign the same counterpart.

(h) Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes all prior and contemporaneous agreements and understanding, both oral and written, among the parties hereto with respect to the subject matter hereof.

(i) Amendment; Waiver. No provision of this Agreement may be amended unless such amendment is approved in writing by the parties hereto. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

[Signature page follows]

 

5


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

 

GOOSEHEAD MANAGEMENT, LLC
By:  

 

  Name:
 

Title:

THE MARK AND ROBYN JONES DESCENDANTS TRUST 2014

By:  

 

  Name:
 

Title:

THE COLBY 2014 FAMILY TRUST

By:  

 

  Name:
 

Title:

MARK COLBY

By:  

 

  Name:
 

Title:

P. RYAN LANGSTON

By:  

 

  Name:
 

Title:

 

[Signature Page to Goosehead Management Note Transfer Agreement]


MICHAEL MOXLEY

By:  

 

  Name:
  Title:

 

[Signature Page to Goosehead Management Note Transfer Agreement]


SCHEDULE A

 

Holder   

Number of Units of

Max and Dane, LLC

Owned

The Mark and Robyn Jones Descendants Trust 2014    []

The Colby 2014 Family Trust

 

  

[]

 

Mark Colby

 

  

[]

 

Ryan Langston

 

  

[]

 

Michael Moxley

 

  

[]

 


EXHIBIT A

Goosehead Management Note

[Attached]


GOOSEHEAD MANAGEMENT PROMISSORY NOTE

U.S. $[●]

For value received, GOOSEHEAD INSURANCE, INC. (“Maker”) promises to pay on [●] 2018, to the owners of limited liability company interests of Max and Dane, LLC, a Delaware limited liability company, listed on Schedule A hereto (each, a “Holder”, and together, the “Holders”) at the respective addresses listed on Schedule A with respect to each Holder, or to a bank account designated by any Holder, the principal sum of U.S. Dollars and Cents listed on Schedule A with respect to each Holder. The note can be prepaid at any time without penalty. The note is payable in a combination of U.S. Dollars and shares of Class A common stock of the Maker in the amounts set forth on Schedule A. It is expressly provided that in the event default is made in the prompt payment of this note when due, and the same is placed in the hands of an attorney for collection, or suit is brought on same, or the same is collected through bankruptcy or other judicial proceedings, then the Maker agrees and promises to pay a reasonable attorney’s fee for collection, which in no event shall be less than the principal then owing.

Each Maker, surety and endorser of this note expressly waives all notices, demands for payment, presentations for payment, notices of intention to accelerate the maturity, protest and notice of protest, as this note and as to each, every and all installments hereof.

The provisions of this agreement shall be governed by and construed in accordance with New York law.

Westlake, [●], 2018

 

GOOSEHEAD INSURANCE, INC.
By:                                                         
Name:
Title:


Exhibit N

Form of Goosehead Management Note

[Attached]


GOOSEHEAD MANAGEMENT PROMISSORY NOTE

U.S. $[●]

For value received, GOOSEHEAD INSURANCE, INC. (“Maker”) promises to pay on [●] 2018, to the owners of limited liability company interests of Max and Dane, LLC, a Delaware limited liability company, listed on Schedule A hereto (each, a “Holder”, and together, the “Holders”) at the respective addresses listed on Schedule A with respect to each Holder, or to a bank account designated by any Holder, the principal sum of U.S. Dollars and Cents listed on Schedule A with respect to each Holder. The note can be prepaid at any time without penalty. The note is payable in a combination of U.S. Dollars and shares of Class A common stock of the Maker in the amounts set forth on Schedule A. It is expressly provided that in the event default is made in the prompt payment of this note when due, and the same is placed in the hands of an attorney for collection, or suit is brought on same, or the same is collected through bankruptcy or other judicial proceedings, then the Maker agrees and promises to pay a reasonable attorney’s fee for collection, which in no event shall be less than the principal then owing.

Each Maker, surety and endorser of this note expressly waives all notices, demands for payment, presentations for payment, notices of intention to accelerate the maturity, protest and notice of protest, as this note and as to each, every and all installments hereof.

The provisions of this agreement shall be governed by and construed in accordance with New York law.

Westlake, [●], 2018

 

GOOSEHEAD INSURANCE, INC.
By:                                                         
Name:
Title:


SCHEDULE A

 

Holder   Address   Principal Sum  

Amount to be

Repaid in U.S.

Dollars

 

Number of Shares of Class A Common Stock to be Issued in Repayment

 

The Mark and Robyn Jones Descendants Trust 2014   [●]   $[●]   $[●]   [●]
The Colby 2014 Family Trust   [●]   $[●]   $[●]   [●]

Mark Colby

 

 

[●]

 

 

$[●]

 

 

$[●]

 

 

[●]

 

Ryan Langston

 

 

[●]

 

 

$[●]

 

 

$[●]

 

 

[●]

 

Michael Moxley

 

 

[●]

 

 

$[●]

 

 

$[●]

 

 

[●]

 

 

2


Exhibit O

Form of Texas Wasatch Note Transfer Agreement

[Attached]


TRANSFER AGREEMENT

This Transfer Agreement (this “Agreement”) is entered into as of [●], 2018 by and among Goosehead Insurance, Inc., a Delaware corporation (“Pubco”), and the holders of limited liability company interests of Evan and Jake, LLC, a Delaware limited liability company (“Evan and Jake, LLC”), listed on the signature pages hereto (the “Transferring Parties”).

W I T N E S S E T H:

WHEREAS, Pubco intends to consummate an initial public offering of its Class A common stock (the “IPO”); and

WHEREAS, the Transferring Parties constitute all of the holders of the limited liability company interests of Evan and Jake, LLC (the “Interests”), which Interests constitute all of the outstanding equity of Evan and Jake, LLC, and the Transferring Parties desire to transfer the Interests to Pubco in exchange for a note issued by Pubco, which will be repaid on the closing of the IPO (the “Texas Wasatch Note”), attached hereto as Exhibit A.

NOW THEREFORE, in consideration of the premises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties agree as follows:

1. Transfer of Interests. Each Transferring Party hereby transfers, assigns, transfers and conveys all of such Transferring Party’s right, title and interest in and to all of the Interests held by such Transferring Party as set forth on Schedule A hereto to Pubco, and Pubco hereby accepts and assume, all of such Transferring Party’s right, title and interest in and to such Interests.

2. Issuance of Texas Wasatch Note. Substantially concurrently with, but immediately prior to, the closing of the IPO (the “Effective Time”), as consideration for the transfer to Pubco by each Transferring Party of the Interests held by such Transferring Party pursuant to the terms of this Agreement, Pubco will issue the Texas Wasatch Note to such Transferring Parties.

3. Representations and Warranties of the Transferring Parties. Each Transferring Party, severally but not jointly, represents and warrants to Pubco that:

(a) The Interests held by such Transferring Party are being transferred to Pubco free and clear of any and all liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or arrangements or other restrictions on title or transfer of any nature whatsoever (collectively, “Liens”), other than transfer restrictions under applicable securities laws. Upon execution of this Agreement, valid title to such Interests, free and clear of all Liens and adverse interests, will pass to Pubco.


(b) If a Transferring Party is not a natural person, such Transferring Party is validly organized and existing under the laws of its state of organization and has all requisite power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby.

(c) Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of such Transferring Party.

(d) The execution, delivery and performance by each Transferring Party of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) if such Transferring Party is not a natural person, contravene or conflict with, or constitute a violation of the organizational documents of such person; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any agreement or order binding on such person.

(e) Such Transferring Party understands that (A) the Texas Wasatch Note and Pubco’s Class A common stock (the “Class A Common Stock”) have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and, therefore, cannot be resold unless they are registered under the Securities Act or unless an exemption from registration is available, and (B) there is no existing public or other market for the Texas Wasatch Note and Class A Common Stock and there can be no assurance that any Transferring Party will be able to sell or dispose of its Texas Wasatch Note and Class A Common Stock.

(f) The Texas Wasatch Note and Class A Common Stock are being acquired for each Transferring Party’s own account and without a view to the public distribution of such Texas Wasatch Note and Class A Common Stock or any interest therein other than as permitted under applicable law.

(g) Such Transferring Party is an “accredited investor” as such term is defined in Regulation D under the Securities Act. Each Transferring Party has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Texas Wasatch Note and Class A Common Stock and each Transferring Party is capable of bearing the economic risks of such investment, including a complete loss of its investment in the Texas Wasatch Note and Class A Common Stock.

(h) Such Transferring Party has been given the opportunity to ask questions of, and receive answers from, the Company concerning the Company, the terms and conditions of the Texas Wasatch Note and Class A Common Stock and other related matters. Each Transferring Party further represents and warrants to the Company that the Company has made available to such Transferring Party or its agents all documents and information relating to an investment in the Texas Wasatch Note and Class A Common Stock that such Transferring Party believed to be necessary or appropriate for its investment in the Company.

 

2


(i) Such Transferring Party understands that its investment in the Company and the Texas Wasatch Note and Class A Common Stock involves a high degree of risk and is therefore a speculative investment, and such Transferring Party is able to bear the economic risk of such investment for an indefinite period of time, and is presently able to afford the complete loss of such investment.

(j) Such Transferring Party has not had a “disqualifying event” described in Securities Act Rule 506(d)(1) subsections (i) through (viii).

4. Representations and Warranties of Pubco. Pubco represents and warrants to each Transferring Party that:

(a) Pubco is validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as it is currently being conducted, and, at the Effective Time, will have all requisite corporate power and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as described in the organizational documents of Pubco.

(b) The execution, delivery and performance by Pubco of this Agreement, and the consummation of the transactions contemplated hereby, are within its corporate powers and have been duly authorized by all necessary corporate action. Upon execution by each of the parties to this Agreement, this Agreement will constitute the valid and binding agreement of Pubco.

(c) The execution, delivery and performance by Pubco of this Agreement, and the consummation of the transactions contemplated hereby, do not (i) contravene or conflict with, or constitute a violation of the organizational documents of Pubco; or (ii) contravene or conflict with, or constitute a violation of, any material applicable law or any material agreement or order binding on Pubco.

(d) At the Effective Time, the Texas Wasatch Note to be issued to the Transferring Parties shall be (i) validly issued, and (ii) duly authorized, fully paid and nonassessable, free and clear of any and all Liens except for any restrictions set forth in the organizational documents of Pubco and transfer restrictions under applicable securities laws.

5. General Provisions.

(a) Further Assurances. Each party to this Agreement, at any time and from time to time upon the reasonable request of another party to this Agreement, shall promptly execute and deliver, or cause to be executed and delivered, all such further instruments and take all such further actions as may be reasonably necessary or appropriate to confirm or carry out the purposes and intent of this Agreement.

 

3


(b) Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

(c) Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state.

(d) Consent to Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in the Borough of Manhattan, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

(e) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(f) Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

 

4


(g) Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart pages or in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement, it being understood that both parties need not sign the same counterpart.

(h) Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes all prior and contemporaneous agreements and understanding, both oral and written, among the parties hereto with respect to the subject matter hereof.

(i) Amendment; Waiver. No provision of this Agreement may be amended unless such amendment is approved in writing by the parties hereto. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

[Signature page follows]

 

5


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

 

GOOSEHEAD INSURANCE, INC.
By:  

 

  Name:
  Title:
MARK E. JONES
By:  

 

  Name:
  Title:
ROBYN JONES
By:  

 

  Name:
  Title:
MICHAEL C. COLBY
By:  

 

  Name:
  Title:
JEFFREY SAUNDERS
By:  

 

  Name:
  Title:

 

 

 

[Signature Page to Texas Wasatch Note Transfer Agreement]


MARK COLBY
By:  

 

  Name:
  Title:

 

 

 

[Signature Page to Texas Wasatch Note Transfer Agreement]


SCHEDULE A

 

Holder   

Number of Units of

Evan and Jake, LLC

Owned

 

Mark Jones

 

  

[●]

 

Robyn Jones

 

  

[●]

 

Michael Colby

 

  

[●]

 

Jeff Saunders

 

  

[●]

 

Mark Colby

 

  

[●]

 

Ryan Langston

 

  

[●]

 

Michael Moxley

 

  

[●]

 


EXHIBIT A

Texas Wasatch Note

[Attached]

 


TEXAS WASATCH PROMISSORY NOTE

U.S. $[●]

For value received, GOOSEHEAD INSURANCE, INC. (“Maker”) promises to pay on [●] 2018, to the owners of limited liability company interests of Evan and Jake, LLC, a Delaware limited liability company, listed on Schedule A hereto (each, a “Holder”, and together, the “Holders”) at the respective addresses listed on Schedule A with respect to each Holder, or to a bank account designated by any Holder, the principal sum of U.S. Dollars and Cents listed on Schedule A with respect to each Holder. The note can be prepaid at any time without penalty. The note is payable in a combination of U.S. Dollars and shares of Class A common stock of the Maker in the amounts set forth on Schedule A. It is expressly provided that in the event default is made in the prompt payment of this note when due, and the same is placed in the hands of an attorney for collection, or suit is brought on same, or the same is collected through bankruptcy or other judicial proceedings, then the Maker agrees and promises to pay a reasonable attorney’s fee for collection, which in no event shall be less than the principal then owing.

Each Maker, surety and endorser of this note expressly waives all notices, demands for payment, presentations for payment, notices of intention to accelerate the maturity, protest and notice of protest, as this note and as to each, every and all installments hereof.

The provisions of this agreement shall be governed by and construed in accordance with New York law.

Westlake, [●], 2018

 

GOOSEHEAD INSURANCE, INC.
By:                                                     
Name:
Title:


Exhibit P

Form of Texas Wasatch Note

[Attached]

 


TEXAS WASATCH PROMISSORY NOTE

U.S. $[●]

For value received, GOOSEHEAD INSURANCE, INC. (“Maker”) promises to pay on [●] 2018, to the owners of limited liability company interests of Evan and Jake, LLC, a Delaware limited liability company, listed on Schedule A hereto (each, a “Holder”, and together, the “Holders”) at the respective addresses listed on Schedule A with respect to each Holder, or to a bank account designated by any Holder, the principal sum of U.S. Dollars and Cents listed on Schedule A with respect to each Holder. The note can be prepaid at any time without penalty. The note is payable in a combination of U.S. Dollars and shares of Class A common stock of the Maker in the amounts set forth on Schedule A. It is expressly provided that in the event default is made in the prompt payment of this note when due, and the same is placed in the hands of an attorney for collection, or suit is brought on same, or the same is collected through bankruptcy or other judicial proceedings, then the Maker agrees and promises to pay a reasonable attorney’s fee for collection, which in no event shall be less than the principal then owing.

Each Maker, surety and endorser of this note expressly waives all notices, demands for payment, presentations for payment, notices of intention to accelerate the maturity, protest and notice of protest, as this note and as to each, every and all installments hereof.

The provisions of this agreement shall be governed by and construed in accordance with New York law.

Westlake, [●], 2018

 

GOOSEHEAD INSURANCE, INC.
By:                                                     
Name:
Title:


SCHEDULE A

 

Holder    Address    Principal Sum   

Amount to be

Repaid in U.S.

Dollars

  

Number of

Shares of Class

A Common

Stock to be

Issued in

Repayment

 

Mark Jones

 

  

[●]

 

  

$[●]

 

  

$[●]

 

  

[●]

 

Robyn Jones

 

  

[●]

 

  

$[●]

 

  

$[●]

 

  

[●]

 

Michael Colby

 

  

[●]

 

  

$[●]

 

  

$[●]

 

  

[●]

 

Jeff Saunders

 

  

[●]

 

  

$[●]

 

  

$[●]

 

  

[●]

 

Mark Colby

 

  

[●]

 

  

$[●]

 

  

$[●]

 

  

[●]

 

Ryan Langston

 

  

[●]

 

  

$[●]

 

  

$[●]

 

  

[●]

 

Michael Moxley

 

  

[●]

 

  

$[●]

 

  

$[●]

 

  

[●]

 

 

2


Exhibit Q

Form of Goosehead Financial, LLC Amended and Restated LLC Agreement

[Attached]


AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

of

GOOSEHEAD FINANCIAL, LLC

Dated as of [●], 2018


TABLE OF CONTENTS

 

 

 

 

            PAGE  
     ARTICLE 1   
       Definitions and Usage       

Section 1.01.

    

Definitions

     1  

Section 1.02.

    

Other Definitional and Interpretative Provisions

     14  
     ARTICLE 2   
       The Company       

Section 2.01.

    

Formation

     15  

Section 2.02.

    

Name

     15  

Section 2.03.

    

Term

     15  

Section 2.04.

    

Registered Agent and Registered Office

     15  

Section 2.05.

    

Purposes

     16  

Section 2.06.

    

Powers of the Company

     16  

Section 2.07.

    

Partnership Tax Status

     16  

Section 2.08.

    

Regulation of Internal Affairs

     16  

Section 2.09.

    

Ownership of Property

     16  

Section 2.10.

    

Subsidiaries

     16  

Section 2.11.

    

Qualification in Other Jurisdictions

     16  
     ARTICLE 3   
       Units; Members; Books and Records; Reports       

Section 3.01.

    

Units; Admission of Members

     17  

Section 3.02.

    

Substitute Members and Additional Members

     17  

Section 3.03.

    

Tax and Accounting Information

     19  

Section 3.04.

    

Books and Records

     21  
     ARTICLE 4   
       Pubco Ownership; Restrictions On Pubco Stock       

Section 4.01.

    

Pubco Ownership

     21  

Section 4.02.

    

Restrictions on Pubco Common Stock

     22  
     ARTICLE 5   
       Capital Contributions; Capital Accounts;       
       Distributions; Allocations       

Section 5.01.

    

Capital Contributions

     24  

Section 5.02.

    

Capital Accounts

     24  

Section 5.03.

    

Amounts and Priority of Distributions

     26  

Section 5.04.

    

Allocations

     28  

Section 5.05.

    

Other Allocation Rules

     31  

 

i


Section 5.06.

    

Tax Withholding; Withholding Advances

     31  
     ARTICLE 6   
       Certain Tax Matters       

Section 6.01.

    

Tax Matters Representative

     33  

Section 6.02.

    

Section 754 Election

     33  

Section 6.03.

    

Debt Allocation

     33  
     ARTICLE 7   
       Management of the Company       

Section 7.01.

    

Management by the Managing Member

     33  

Section 7.02.

    

Withdrawal of the Managing Member

     34  

Section 7.03.

    

Decisions by the Members

     34  

Section 7.04.

    

Duties

     35  

Section 7.05.

    

Officers

     35  
     ARTICLE 8   
       Transfers of Interests       

Section 8.01.

    

Restrictions on Transfers

     36  

Section 8.02.

    

Certain Permitted Transfers

     37  

Section 8.03.

    

Distributions

     37  

Section 8.04.

    

Registration of Transfers

     37  
     ARTICLE 9   
       Certain Other Agreements       

Section 9.01.

    

Non-Compete; Non-Disparagement

     37  

Section 9.02.

    

Company Call Right

     38  

Section 9.03.

    

Preemptive Rights

     39  
       ARTICLE 10       
       Redemption and Exchange Rights       

Section 10.01.

    

Redemption Right of a Member

     39  

Section 10.02.

    

Election and Contribution of Pubco

     42  

Section 10.03.

    

Exchange Right of Pubco

     42  

Section 10.04.

    

Tender Offers and Other Events with Respect to Pubco

     43  

Section 10.05.

    

Reservation of Shares of Class A Common Stock;

  
    

Certificate of Pubco

     44  

Section 10.06.

    

Effect of Exercise of Redemption or Exchange Right

     44  

Section 10.07.

    

Tax Treatment

     44  
       ARTICLE 11       
       Limitation on Liability, Exculpation and Indemnification       

 

 

ii


Section 11.01.

    

Limitation on Liability

     45  

Section 11.02.

    

Exculpation and Indemnification

     45  
     ARTICLE 12   
       Dissolution and Termination       

Section 12.01.

    

Dissolution

     48  

Section 12.02.

    

Winding Up of the Company

     48  

Section 12.03.

    

Termination

     49  

Section 12.04.

    

Survival

     49  
     ARTICLE 13   
       Miscellaneous       

Section 13.01.

    

Expenses

     49  

Section 13.02.

    

Further Assurances

     50  

Section 13.03.

    

Notices

     50  

Section 13.04.

    

Binding Effect; Benefit; Assignment

     51  

Section 13.05.

    

Jurisdiction

     51  

Section 13.06.

    

WAIVER OF JURY TRIAL

     52  

Section 13.07.

    

Counterparts

     52  

Section 13.08.

    

Entire Agreement

     52  

Section 13.09.

    

Severability

     53  

Section 13.10.

    

Amendment

     53  

Section 13.11.

    

Confidentiality

     54  

Section 13.12.

    

Governing Law

     55  
     ARTICLE 14   
       Arbitration       

Section 14.01.

    

Title

     55  
     ARTICLE 15   
       Representations of Members       

Section 15.01.

    

Representations of Members

     56  

Schedule A

    

Member Schedule

  

 

 

iii


AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) OF GOOSEHEAD FINANCIAL, LLC, a Delaware limited liability company (the “Company”), dated as of [            ], 2018, by and among the Company, Goosehead Insurance, Inc., a Delaware corporation (“Pubco”), and the other Persons listed on the signature pages hereto.

W I T N E S S E T H:

WHEREAS, the Company has been heretofore formed as a limited liability company under the Delaware Act (as defined below) pursuant to a certificate of formation which was executed and filed with the Secretary of State of the State of Delaware on December 22, 2015;

WHEREAS, Mark E. Jones, Robyn Jones, Michael C. Colby, Jeffrey Saunders, The Mark and Robyn Jones Descendants Trust 2014, Lanni Elaine Romney Family Trust 2014, Lindy Jean Langston Family Trust 2014, Camille LaVaun Peterson Family Trust 2014, Desiree Robyn Coleman Family Trust 2014, Adrienne Morgan Jones Family Trust 2014, Mark Evan Jones, Jr. Family Trust 2014, the estate of Doug Jones, Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., Colby 2014 Family Trust, Preston Michael Colby 2014 Trust, Lyla Kate Colby 2014 Trust, Texas Wasatch Insurance Holdings Group, LLC and Texas Wasatch Insurance Partners, L.P. entered into the initial Limited Liability Company Agreement of the Company, dated as of January 1, 2016 (the “Initial LLC Agreement”);

WHEREAS, pursuant to the terms of the Reorganization Agreement, dated as of the date hereof, by and among the Company, Pubco and the other Persons listed on the signature pages thereto (the “Reorganization Agreement”), the parties thereto have agreed to consummate the reorganization of the Company and to take the other actions contemplated in such Reorganization Agreement (collectively, the “Reorganization”); and

WHEREAS, the parties listed on the signature pages hereto and listed on Schedule A (as defined below) represent all of the holders of limited liability company interests in the Company (the “Members”).

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein made and other good and valuable consideration, the Members hereto hereby agree, to amend and restate the Initial LLC Agreement in its entirety as follows:

ARTICLE 1

DEFINITIONS AND USAGE

Section 1.01.    Definitions.


(a) The following terms shall have the following meanings for the purposes of this Agreement:

Additional Member” means any Person admitted as a Member of the Company pursuant to Section 3.02 in connection with the new issuance of Units to such Person.

Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:

(i) Credit to such Capital Account any amounts that such Member is deemed to be obligated to restore pursuant to the penultimate sentence in Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(ii) Debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person; provided that no Member nor any Affiliate of any Member shall be deemed to be an Affiliate of any other Member or any of its Affiliates solely by virtue of such Members’ Units.

Affiliated Transferee” means (i) in the case of any Member that is an individual, any Transferee of such Member that is (x) an immediate family member of such Member, (y) a trust, family-partnership or estate-planning vehicle for the benefit of such Member and/or any of its immediate family members or (z) otherwise an Affiliate of such Member or (ii) in the case of any Member that is a limited liability company or other entity, any Transferee of such Member that is (x) an immediate family member of the individual that controls a majority of the voting or economic interest in such Member, (y) a trust, family-partnership or estate-planning vehicle for the benefit of such individual and/or any of its immediate family members or (z) otherwise an Affiliate of such Member. For the purposes of this definition, none of Pubco, the Company or any of their respective Controlled Affiliates shall be deemed to be an “Affiliate” of any Member and vice versa.

Applicable Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person or its assets, as amended unless expressly specified otherwise.

 

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Business” means the business of distributing, and franchising the distribution of, personal lines insurance products and services as conducted by the Company and its Subsidiaries.

Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.

Capital Account” means the capital account established and maintained for each Member pursuant to Section 5.02.

Capital Contribution” means, with respect to any Member, the amount of money and the initial Carrying Value of any Property (other than money) contributed to the Company.

Carrying Value” means with respect to any Property (other than money), such Property’s adjusted basis for federal income tax purposes, except as follows:

(i) The initial Carrying Value of any such Property contributed by a Member to the Company shall be the gross fair market value of such Property, as reasonably determined by the Managing Member;

(ii) The Carrying Values of all such Properties shall be adjusted to equal their respective gross fair market values (taking Section 7701(g) of the Code into account), as reasonably determined by the Managing Member, at the time of any Revaluation pursuant to Section 5.02(c);

(iii) The Carrying Value of any item of such Properties distributed to any Member shall be adjusted to equal the gross fair market value (taking Section 7701(g) of the Code into account) of such Property on the date of distribution as reasonably determined by the Managing Member; and

(iv) The Carrying Values of such Properties shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such Properties pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the definition of “Net Income” and “Net Loss” or Section 5.04(b)(vi); provided, however, that Carrying Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). If the Carrying Value of such Property has been determined or adjusted pursuant to subparagraph (i), (ii) or (iv), such Carrying Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Net Income and Net Loss.

 

3


Class A Common Stock” means Class A common stock, $0.01 par value per share, of Pubco.

Class B Common Stock” means Class B common stock, $0.01 par value per share, of Pubco.

Code” means the Internal Revenue Code of 1986, as amended from time to time.

Common Equivalents” means (i) with respect to Units, the number of Units, (ii) with respect to any Equity Securities that are convertible into or exchangeable for Units, the number of Units issuable in respect of the conversion or exchange of such securities into Units.

Company Minimum Gain” means “partnership minimum gain,” as defined in Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d).

Competitive Activity” means (i) any business that competes with the business of the Company or any of its subsidiaries, or (ii) acquiring directly or through an Affiliate in the aggregate directly or beneficially, whether as a shareholder, partner, member or otherwise, any equity (including stock options or warrants, whether or not exercisable), voting or profit participation interests (collectively, “Ownership Interests”) in a Competitive Enterprise (it being understood that this clause (ii) shall not apply to prohibit the holding of an Ownership Interest if (a) at the time of acquisition of such Ownership Interest, the Person in which such direct or indirect Ownership Interest is acquired is not a Competitive Enterprise and the Member is not aware at the time of such acquisition, after reasonable inquiry, that such Person has any plans to become a Competitive Enterprise or (b) such Ownership Interest is a passive ownership position of less than five percent (5%) in any company whose shares are publicly traded).

Competitive Enterprise” means any Person or business enterprise (in any form, including without limitation as a corporation, partnership, limited liability company or other Person), or subsidiary, division, unit, group or portion thereof, whose primary business is engaging in a Competitive Activity (as reasonably determined by the Managing Member). For the sake of clarity, in the case of a subsidiary, division, unit, group or portion whose primary business is described above: (1) the larger business enterprise or Person owning such subsidiary, division, unit, group or portion shall not be deemed to be a Competitive Enterprise unless the primary business of such larger business enterprise or Person is engaged in a Competitive Activity and (2) the subsidiary, division, unit, group or portion whose primary business is engaging in a Competitive Activity shall be deemed a Competitive Enterprise.

Control” (including the terms “controlling” and “controlled”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of such subject Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

 

4


Covered Person” means (i) each Member or an Affiliate thereof, in each case in such capacity, (ii) each officer, director, shareholder, member, partner, employee, representative, agent or trustee of a Member or an Affiliate thereof, in all cases in such capacity, and (iii) each officer, director, shareholder (other than any public shareholder of Pubco that is not a Member), member, partner, employee, representative, agent or trustee of the Managing Member, Pubco (in the event Pubco is not the Managing Member), the Company or an Affiliate controlled thereby, in all cases in such capacity.

Delaware Act” means the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq.

Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Carrying Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount that bears the same ratio to such beginning Carrying Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall be determined with reference to such beginning Carrying Value using any reasonable method selected by the Managing Member.

DGCL” means the State of Delaware General Corporation Law, as amended from time to time.

Equity Securities” means, with respect to any Person, any (i) membership interests or shares of capital stock, (ii) equity, ownership, voting, profit or participation interests or (iii) similar rights or securities in such Person or any of its Subsidiaries, or any rights or securities convertible into or exchangeable for, options or other rights to acquire from such Person or any of its Subsidiaries, or obligation on the part of such Person or any of its Subsidiaries to issue, any of the foregoing.

Family Member” shall mean with respect to any natural person, the spouse, parents, grandparents, lineal descendants, siblings of such person or such person’s spouse, and lineal descendants of siblings of such person or such person’s spouse. Lineal descendants shall include adopted persons, but only so long as they are adopted during minority.

Fiscal Year” means the Company’s fiscal year, which shall initially be the calendar year and which may be changed from time to time as determined by the Managing Member.

Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.

Indebtedness” means (a) all indebtedness for borrowed money (including capitalized lease obligations, sale-leaseback transactions or other similar transactions,

 

5


however evidenced), (b) any other indebtedness that is evidenced by a note, bond, debenture, draft or similar instrument, (c) notes payable and (d) lines of credit and any other agreements relating to the borrowing of money or extension of credit.

Involuntary Transfer” means any Transfer of Units by a Member resulting from (i) any seizure under levy of attachment or execution, (ii) any bankruptcy (whether voluntary or involuntary), (iii) any Transfer to a state or to a public officer or agency pursuant to any statute pertaining to escheat or abandoned property, (iv) any divorce or separation agreement or a final decree of a court in a divorce action or (v) death or permanent disability.

IPO” means the initial underwritten public offering of Pubco.

IRS” means the Internal Revenue Service of the United States.

Liens” means any pledge, encumbrance, security interest, purchase option, conditional sale agreement, call or similar right.

LLC Unit” means a common limited liability interest in the Company.

Managing Member” means (i) Pubco so long as Pubco has not withdrawn as the Managing Member pursuant to Section 7.02 and (ii) any successor thereof appointed as Managing Member in accordance with Section 7.02.

Member” means any Person named as a Member of the Company on the Member Schedule and the books and records of the Company, as the same may be amended from time to time to reflect any Person admitted as an Additional Member or a Substitute Member, for so long as such Person continues to be a Member of the Company.

Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” in Treasury Regulations Section 1.704-2(b)(4).

Member Nonrecourse Debt Minimum Gain” means an amount with respect to each “partner nonrecourse debt” (as defined in Treasury Regulation Section 1.704-2(b)(4)) equal to the Company Minimum Gain that would result if such partner nonrecourse debt were treated as a nonrecourse liability (as defined in Treasury Regulation Section 1.752-1(a)(2)) determined in accordance with Treasury Regulation Section 1.704-2(i)(3).

Member Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse deductions” in Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

Net Income” and “Net Loss” mean, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such Fiscal Year or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section

 

6


703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments (without duplication):

(i) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of “Net Income” and “Net Loss” shall be added to such taxable income or loss;

(ii) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income and Net Loss pursuant to this definition of “Net Income” and “Net Loss,” shall be treated as deductible items;

(iii) In the event the Carrying Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of “Carrying Value,” the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Carrying Value of the asset) or an item of loss (if the adjustment decreases the Carrying Value of the asset) from the disposition of such asset and shall be taken into account, immediately prior to the event giving rise to such adjustment, for purposes of computing Net Income and/or Net Loss;

(iv) Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Carrying Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Carrying Value;

(v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year, computed in accordance with the definition of Depreciation;

(vi) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Net Income or Net Loss; and

(vii) Notwithstanding any other provision of this definition, any items that are specially allocated pursuant to Section 5.04(b), Section 5.04(c)

 

7


and Section 5.04(d) shall not be taken into account in computing Net Income and Net Loss.

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 5.04(b), Section 5.04(c) and Section 5.04(d) shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above.

Non-Pubco Member” means any Member that is not a Pubco Member.

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

Owned Shares” with respect to each of the Members, as the case may be, the total number of shares of Class A Common Stock beneficially owned (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) by such Member, in the aggregate and without duplication, as of the date of such calculation (determined on an “as-converted” basis taking into account any and all securities then convertible into, or exercisable or exchangeable for, shares of Class A Common Stock (including LLC Units and shares of Class B Common Stock exchangeable pursuant to Section [·] of this Agreement).

Percentage Interest” means, with respect to any Member, a fractional amount, expressed as a percentage: (i) the numerator of which is the aggregate number of LLC Units owned of record thereby and (ii) the denominator of which is the aggregate number of LLC Units issued and outstanding. The sum of the outstanding Percentage Interests of all Members shall at all times equal 100%.

Permitted Transferee” means, other than with respect to Pubco, Max and Dane, LLC and Evan and Jake, LLC, (a) any Member and (b) (i) in the case of any Member that is not a natural person, any Person that is an Affiliate of such Member, and (ii) in the case of any Member that is a natural person, (A) any Person to whom LLC Units are Transferred from such Member (1) by will or the laws of descent and distribution or (2) by gift without consideration of any kind; provided that, in the case of clause (2), such transferee is the spouse, the lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of such Member, (B) a trust that is for the exclusive benefit of such Member or its Permitted Transferees under (A) above or (C) any institution qualified as tax-exempt under Section 501(c)(3) of the Code.

Person” means any individual, firm, corporation, partnership, limited liability company, trust, estate, joint venture, governmental authority or other entity.

Prime Rate” means the rate of interest from time to time identified by JP Morgan Chase, N.A. as being its “prime” or “reference” rate.

Property” means an interest of any kind in any real, personal or intellectual (or mixed) property, including cash, and any improvements thereto, and shall include both tangible and intangible property.

 

8


Pubco Common Stock” means all classes and series of common stock of Pubco, including the Class A Common Stock and Class B Common Stock.

Pubco Member” means (i) Pubco and (ii) any Subsidiary of Pubco (other than the Company and its Subsidiaries) that is a Member.

Redeemed Units Equivalent” means the product of (a) the Share Settlement, times (b) the Unit Redemption Price.

Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, by and among Pubco and each of the Non-Pubco Members.

Relative Percentage Interest” means, with respect to any Member relative to another Member or Members, a fractional amount, expressed as a percentage, the numerator of which is the Percentage Interest of such Member; and the denominator of which is (x) the Percentage Interest of such Member plus (y) the aggregate Percentage Interest of such other Member or Members.

Reorganization Date Capital Account Balance” means, with respect to any Member, the positive Capital Account balance of such Member as of immediately following the Reorganization, the amount or deemed value of which is set forth on the Member Schedule.

Reorganization Agreement” means the Reorganization Agreement, dated as of [·], by and among Pubco, the Company and each of the Non-Pubco Members.

Reorganization Documents” means the Reorganization Agreement; the Max and Dane, LLC Contribution Agreement; the First Evan and Jake, LLC Contribution Agreement; the Second Evan and Jake, LLC Contribution Agreement; the GHM Holdings, LLC Contribution Agreement; the TWIHG Holdings, LLC Contribution Agreement; the Class B Securities Purchase Agreement; the Goosehead Management Note Exchange Agreement; the Goosehead Management Note; the Texas Wasatch Note Exchange Agreement; the Texas Wasatch Note; the Max and Dane, LLC Exchange Agreement; the Evan and Jake, LLC Exchange Agreement; this Agreement the Tax Receivable Agreement; the Registration Rights Agreement; the Securities Purchase Agreement and the Stockholders Agreement.

Reserves” means, as of any date of determination, amounts allocated by the Managing Member, in its reasonable judgment, to reserves maintained for working capital of the Company, for contingencies of the Company, for operating expenses and debt reduction of the Company.

SEC” means the United States Securities and Exchange Commission.

Stockholders Agreement” means the Stockholders Agreement, dated as of the date hereof, by and among Mark E. Jones, Robyn Jones, Michael C. Colby, Jeffrey Saunders, The Mark and Robyn Jones Descendants Trust 2014, The Lanni Elaine Romney Family Trust 2014, The Lindy Jean Langston Family Trust 2014, The Camille

 

9


LaVaun Peterson Family Trust 2014, The Desiree Robyn Coleman Family Trust 2014, The Adrienne Morgan Jones Family Trust 2014, The Mark Evan Jones, Jr. Family Trust 2014, The Estate of Doug Jones, Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., The Colby 2014 Family Trust, The Preston Michael Colby 2014 Trust, The Lyla Kate Colby 2014 Trust, Texas Wasatch Insurance Partners, L.P. and Goosehead Insurance, Inc.

Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of Equity Securities or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

Substantial Ownership Requirement” means the beneficial ownership (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) by Mark E. Jones, Robyn Jones, Michael C. Colby, Jeffrey Saunders, The Mark and Robyn Jones Descendants Trust 2014, The Lanni Elaine Romney Family Trust 2014, The Lindy Jean Langston Family Trust 2014, The Camille LaVaun Peterson Family Trust 2014, The Desiree Robyn Coleman Family Trust 2014, The Adrienne Morgan Jones Family Trust 2014, The Mark Evan Jones, Jr. Family Trust 2014, The Estate of Doug Jones, Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., The Colby 2014 Family Trust, The Preston Michael Colby 2014 Trust, The Lyla Kate Colby 2014 Trust, Texas Wasatch Insurance Partners, L.P. and any Permitted Transferees, collectively, of shares of common stock of Pubco representing at least ten percent (10%) of the issued and outstanding shares of the common stock of Pubco.

Substitute Member” means any Person admitted as a Member of the Company pursuant to Section 3.02 in connection with the Transfer of then-existing Units to such Person.

Tax Distribution” means a distribution made by the Company pursuant to Section 5.03(e)(i) or Section 5.03(e)(iii) or a distribution made by the Company pursuant to another provision of Section 5.03 but designated as a Tax Distribution pursuant to Section 5.03(e)(ii).

Tax Distribution Amount” means, with respect to a Member’s Units, whichever of the following applies with respect to the applicable Tax Distribution, in each case in amount not less than zero:

(i) With respect to a Tax Distribution pursuant to Section 5.03(e)(i), the excess, if any, of (A) such Member’s required annualized income installment for such estimated payment date under Section 6655(e) of the Code, assuming that (w) such Member is a corporation (which assumption, for the avoidance of doubt, shall not affect the determination of the Tax Rate), (x) Section

 

10


6655(e)(2)(C)(ii) is in effect, (y) such Member’s only income is from the Company, and (z) the Tax Rate applies, which amount shall be calculated based on the projections believed by the Managing Member in good faith to be, reasonable projections of the net taxable income to be allocated to such Units pursuant to this Agreement and without regard to any adjustments pursuant to Section 704(c), 734, 743, or 754 of the Code over (B) the aggregate amount of Tax Distributions designated by the Company pursuant to Section 5.03(e)(ii) with respect to such Units since the date of the previous Tax Distribution pursuant to Section 5.03(e)(i) (or if no such Tax Distribution was required to be made, the date such Tax Distribution would have been made pursuant to Section 5.03(e)(i)).

(ii) With respect to the designation of an amount as a Tax Distribution pursuant to Section 5.03(e)(ii), the product of (x) the net taxable income, determined without regard to any adjustments pursuant to Section 704(c), 734, 743, or 754 of the Code projected, in the good faith belief of the Managing Member, to be allocated to such Units pursuant to this Agreement during the period since the date of the previous Tax Distribution (or, if more recent, the date that the previous Tax Distribution pursuant to Section 5.03(e)(i) would have been made or, in the case of the first distribution pursuant to Section 5.03(e)(i)Section 5.03(b), the date of this Agreement), and (y) the Tax Rate.

(iii) With respect to an entire Fiscal Year to be calculated for purposes of Section 5.03(e)(iii), the excess, if any, of (A) the product of (x) the net taxable income, determined without regard to any adjustments pursuant to Section 704(c), 734, 743, or 754 of the Code, allocated to such Units pursuant to this Agreement for the relevant Fiscal Year, and (y) the Tax Rate, over (B) the aggregate amount of Tax Distributions (other than Tax Distributions under Section 5.03(e)(iii) with respect to a prior Fiscal Year) with respect to such Units made with respect to such Fiscal Year.

For purposes of this Agreement, in determining the Tax Distribution Amount of a Member, the taxable income allocated to such Member’s Units shall be offset by any taxable losses (determined without regard to any adjustments pursuant to Section 704(c), 734, 743, or 754 of the Code) previously allocated to such Units to the extent such losses were not allocated in the same proportion as the Member’s Percentage Interests and have not previously offset taxable income in the determination of the Tax Distribution Amount.

Tax Rate” means the highest marginal tax rates for an individual or corporation that is resident in the State of Texas applicable to ordinary income, qualified dividend income or capital gains, as appropriate, taking into account the holding period of the assets disposed of and the year in which the taxable net income is recognized by the Company, and taking into account the deductibility of state and local income taxes as applicable at the time for federal income tax purposes and any limitations thereon including pursuant to Section 68 of the Code, which Tax Rate shall be the same for all Members.

 

11


Tax Receivable Agreement” means the Tax Receivable Agreement, dated as of the date hereof, by and among Pubco and each of the Non-Pubco Members.

Trading Day” means a day on which the principal U.S. securities exchange on which the Class A Common Stock is listed or admitted to trading is open for the transaction of business (unless such trading shall have been suspended for the entire day).

Transfer” means any sale, assignment, transfer, exchange, gift, bequest, pledge, hypothecation or other disposition or encumbrance, direct or indirect, in whole or in part, by operation of law or otherwise, and shall include all matters deemed to constitute a Transfer under Article 8. The terms “Transferred”, “Transferring”, “Transferor”, “Transferee” and “Transferable” have meanings correlative to the foregoing.

Treasury Regulations” mean the regulations promulgated under the Code, as amended from time to time.

Units” means LLC Units or any other class of limited liability interests in the Company designated by the Company after the date hereof in accordance with this Agreement; provided that any type, class or series of Units shall have the designations, preferences and/or special rights set forth or referenced in this Agreement, and the membership interests of the Company represented by such type, class or series of Units shall be determined in accordance with such designations, preferences and/or special rights.

Unit Redemption Price” means the arithmetic average of the volume weighted average prices for a share of Class A Common Stock on the principal U.S. securities exchange or automated or electronic quotation system on which the Class A Common Stock trades, as reported by The Wall Street Journal or its successor, for each of the three (3) consecutive full Trading Days ending on and including the last full Trading Day immediately prior to the date of Redemption, subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the Class A Common Stock. If the Class A Common Stock no longer trades on a securities exchange or automated or electronic quotation system, then the Unit Redemption Price shall be determined in good faith by a committee of the Board composed of a majority of the directors of Pubco that do not have an interest in the LLC Units being redeemed.

(b) Each of the following terms is defined in the Section set forth opposite such term:

 

“Agreement”

 

Preamble

“Call Member”

 

9.02(a)

“Call Notice”

 

9.02(a)

“Call Units”

 

9.02(a)

 

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“Cash Settlement”

 

Section 10.01(b)

“Company”

 

Preamble

“Company Parties”

 

9.01(b)

“Confidential Information”

 

13.11(b)

“Contribution Notice”

 

10.01(b)

“Controlled Entities”

 

11.02(e)

“Direct Exchange”

 

10.03(a)

“Dispute”

 

14.01

“Dissolution Event”

 

12.01(c)

“Economic Pubco Security”

 

4.01(a)

“e-mail”

 

13.03

“Exchange Election Notice”

 

10.03(b)

“Expenses”

 

11.02(e)

“GAAP”

 

3.03(b)

“Indemnification Sources”

 

11.02(e)

“Indemnitee-Related Entities”

 

11.02(e)(i)

“Initial LLC Agreement”

 

Recitals

“Initiating Party”

 

14.01

“Jointly Indemnifiable Claims”

 

11.02(e)(ii)

“Member Parties”

 

13.11

“Member Schedule”

 

3.01(b)

“Officers”

 

7.05(a)

“Panel”

 

14.01

“Pubco”

 

Preamble

“Pubco Offer”

 

10.04(a)

 

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“Redeemed Units”

 

10.01(a)

“Redeeming Member”

 

10.01(a)

“Redemption”

 

10.01(a)

“Redemption Date”

 

10.01(a)

“Redemption Notice”

 

10.01(a)

“Redemption Right”

 

10.01(a)

“Regulatory Allocations”

 

5.04(c)

“Reorganization”

 

Recitals

“Reorganization Agreement”

 

Recitals

“Responding Party”

 

14.01

“Retraction Notice”

 

10.01(b)

“Revaluation”

 

5.02(c)

“Share Settlement”

 

Section 10.01(b)

“Tax Matters Partner”

 

6.01

“Tax Matters Representative”

 

6.01

“Transferor Member”

 

5.02(b)

“Withholding Advances”

 

5.06(b)

Section 1.02. Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections and Schedules are to Articles, Sections and Schedules of this Agreement unless otherwise specified. All Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to

 

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any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” or to a particular statute or law shall be deemed also to include any Applicable Law. As used in this Agreement, all references to “majority in interest” and phrases of similar import shall be deemed to refer to such percentage or fraction of interest based on the Relative Percentage Interests of the Members subject to such determination. Unless otherwise expressly provided herein, when any approval, consent or other matter requires any action or approval of any group of Members, including any holders of any class of Units, such approval, consent or other matter shall require the approval of a majority in interest of such group of Members. Except to the extent otherwise expressly provided herein, all references to any Member shall be deemed to refer solely to such Person in its capacity as such Member and not in any other capacity.

ARTICLE 2

THE COMPANY

Section 2.01. Formation. The Company was formed upon the filing of the certificate of formation of the Company with the Secretary of State of the State of Delaware on December 22, 2015. The authorized officer or representative, as an “authorized person” within the meaning of the Delaware Act, shall file and record any amendments and/or restatements to the certificate of formation of the Company and such other certificates and documents (and any amendments or restatements thereof) as may be required under the laws of the State of Delaware and of any other jurisdiction in which the Company may conduct business. The authorized officer or representative shall, on request, provide any Member with copies of each such document as filed and recorded. The Members hereby agree that the Company and its Subsidiaries shall be governed by the terms and conditions of this Agreement and, except as provided herein, the Delaware Act.

Section 2.02. Name. The name of the Company shall be Goosehead Financial, LLC; provided that the Managing Member may change the name of the Company to such other name as the Managing Member shall determine in its sole discretion, and shall have the authority to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by Applicable Law or as, in the reasonable judgment of the Managing Member, may be necessary or advisable to effect such change.

Section 2.03. Term. The Company shall have perpetual existence unless sooner dissolved and its affairs wound up as provided in Article 11.

Section 2.04. Registered Agent and Registered Office. The name of the registered agent of the Company for service of process on the Company in the State of

 

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Delaware shall be Corporation Service Company, and the address of such registered agent and the address of the registered office of the Company in the State of Delaware shall be Corporation Service Company, 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808. Such office and such agent may be changed to such place within the State of Delaware and any successor registered agent, respectively, as may be determined from time to time by the Managing Member in accordance with the Delaware Act.

Section 2.05. Purposes. The Company has been formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is to engage in the Business and to carry on any other lawful act or activities for which limited liability companies may be organized under the Delaware Act.

Section 2.06. Powers of the Company. The Company shall have the power and authority to take any and all actions necessary, appropriate or advisable to or for the furtherance of the purposes set forth in Section 2.05.

Section 2.07. Partnership Tax Status. The Members intend that the Company shall be treated as a partnership for federal, state and local income tax purposes to the extent such treatment is available, and agree to take (or refrain from taking) such actions as may be necessary to receive and maintain such treatment and refrain from taking any actions inconsistent thereof.

Section 2.08. Regulation of Internal Affairs. The internal affairs of the Company and the conduct of its business shall be regulated by this Agreement, and to the extent not provided for herein, shall be determined by the Managing Member.

Section 2.09. Ownership of Property. Legal title to all Property, conveyed to, or held by the Company or its Subsidiaries shall reside in the Company or its Subsidiaries and shall be conveyed only in the name of the Company or its Subsidiaries and no Member or any other Person, individually, shall have any ownership of such Property.

Section 2.10. Subsidiaries. The Company shall cause the business and affairs of each of the Subsidiaries to be managed by the Managing Member in accordance with and in a manner consistent with this Agreement.

Section 2.11. Qualification in Other Jurisdictions. The Managing Member shall execute, deliver and file certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in the jurisdictions in which the Company may wish to conduct business. In those jurisdictions in which the Company may wish to conduct business in which qualification or registration under assumed or fictitious names is required or desirable, the Managing Member shall cause the Company to be so qualified or registered in compliance with Applicable Law.

 

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ARTICLE 3

UNITS; MEMBERS; BOOKS AND RECORDS; REPORTS

Section 3.01. Units; Admission of Members. (a) Each Member’s interest in the Company, including such Member’s interest, if any, in the capital, income, gain, loss, deduction and expense of the Company and the right to vote, if any, on certain Company matters as provided in this Agreement, shall be represented by Units. The ownership by a Member of Units shall entitle such Member to allocations of profits and losses and other items and distributions of cash and other property as is set forth in Article 5. Units shall be issued in non-certificated form.

(b) Effective upon the Reorganization, pursuant to Section 2.01(a)(iii) of the Reorganization Agreement, (i) Pubco has been admitted to the Company as the Managing Member and (ii) the Company has hereby reclassified all of its outstanding equity interests outstanding into an aggregate of [●] LLC Units. After giving effect to the reclassification described in clause (ii) above and the Reorganization , each of the Persons listed on Schedule A (the “Member Schedule”) owns the number of LLC Units set forth opposite such Member’s name on the Member Schedule. The Member Schedule shall be maintained by the Managing Member on behalf of the Company in accordance with this Agreement and, upon any subsequent update to the Member Schedule, the Managing Member shall promptly deliver a copy of such updated Member Schedule to each of the Members. When any Units or other Equity Securities of the Company are issued, repurchased, redeemed, converted or Transferred in accordance with this Agreement, the Member Schedule shall be amended by the Managing Member to reflect such issuance, repurchase, redemption or Transfer, the admission of additional or substitute Members and the resulting Percentage Interest of each Member. Following the date hereof, no Person shall be admitted as a Member and no additional Units shall be issued except as expressly provided herein.

(c) The Managing Member may cause the Company to authorize and issue from time to time such other Units or other Equity Securities of any type, class or series and having the designations, preferences and/or special rights as may be determined by the Managing Member. Such Units or other Equity Securities may be issued pursuant to such agreements as the Managing Member shall approve with respect to Persons employed by or otherwise performing services for the Company or any of its Subsidiaries, other equity compensation agreements, options or warrants. When any such other Units or other Equity Securities are authorized and issued, the Member Schedule and this Agreement shall be amended by the Managing Member to reflect such additional issuances and resulting dilution, which shall be borne pro rata by all Members based on their LLC Units.

Section 3.02. Substitute Members and Additional Members. (a) No Transferee of any Units or Person to whom any Units are issued pursuant to this Agreement shall be admitted as a Member hereunder or acquire any rights hereunder, including any voting rights or the right to receive distributions and allocations in respect of the Transferred or issued Units, as applicable, unless (i) such Units are Transferred or issued in compliance with the provisions of this Agreement (including Article 8), (ii) such Transferee or

 

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recipient shall have executed and delivered to the Company such instruments as the Managing Member deems necessary or desirable, in its reasonable discretion, to effectuate the admission of such Transferee or recipient as a Member and to confirm the agreement of such Transferee or recipient to be bound by all the terms and provisions of this Agreement, (iii) the Managing Member shall have received the opinion of counsel, if any, required by Section 3.02(b) in connection with such Transfer and (iv) all necessary instruments reflecting such Transfer and/or admission shall have been filed in each jurisdiction in which such filling is necessary in order to qualify the company to conduct business or to preserve the limited liability of the Members. Upon complying with the immediately preceding sentence, without the need for any further action of any Person, a Transferee or recipient shall be deemed admitted to the Company as a Member. A Substitute Member shall enjoy the same rights, and be subject to the same obligations, as the Transferor; provided that such Transferor shall not be relieved of any obligation or liability hereunder arising prior to the consummation of such Transfer but shall be relieved of all future obligations with respect to the Units so Transferred. As promptly as practicable after the admission of any Person as a Member, the books and records of the Company shall be changed to reflect such admission of a Substitute Member or Additional Member. In the event of any admission of a Substitute Member or Additional Member pursuant to this Section 3.02(a), this Agreement shall be deemed amended to reflect such admission, and any formal amendment of this Agreement (including the Member Schedule) in connection therewith shall only require execution by the Company and such Substitute Member or Additional Member, as applicable, to be effective.

(b) As a further condition to any Transfer of all or any part of a Member’s Units, the Managing Member may, in its discretion, require a written opinion of counsel to the transferring Member reasonably satisfactory to the Managing Member, obtained at the sole expense of the transferring Member, reasonably satisfactory in form and substance to the Managing Member, as to such matters as are customary and appropriate in transactions of this type, including, without limitation (or, in the case of any Transfer made to a Permitted Transferee, limited to an opinion) to the effect that such Transfer will not result in a violation of the registration or other requirements of the Securities Act or any other federal or state securities laws. No such opinion, however, shall be required in connection with a Transfer made pursuant to Section [●] of this Agreement.

(c) If a Member shall Transfer all (but not less than all) its Units, the Member shall thereupon cease to be a Member of the Company.

(d) All reasonable costs and expenses incurred by the Managing Member and the Company in connection with any Transfer of a Member’s Units, including any filing and recording costs and the reasonable fees and disbursements of counsel for the Company, shall be paid by the transferring Member. In addition, the transferring Member hereby indemnifies the Managing Member and the Company against any losses, claims, damages or liabilities to which the Managing Member, the Company, or any of their Affiliates may become subject arising out of or based upon any false representation or warranty made by, or breach or failure to comply with any covenant or agreement of, such transferring Member or such transferee in connection with such Transfer.

 

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(e) In connection with any Transfer of any portion of a Member’s Units pursuant to Article 10 of this Agreement, the Managing Member shall cause the Company to take any action as may be required under Section [●] of this Agreement or requested by any party thereto to effect such Transfer promptly.

Section 3.03. Tax and Accounting Information. (a) Accounting Decisions and Reliance on Others. All decisions as to accounting matters, except as otherwise specifically set forth herein, shall be made by the Managing Member in accordance with Applicable Law and with accounting methods followed for federal income tax purposes. In making such decisions, the Managing Member may rely upon the advice of the independent accountants of the Company.

(b) Records and Accounting Maintained. The books and records of the Company shall be kept, and the financial position and the results of its operations recorded, in all material respects in accordance with United States generally accepted accounting principles as in effect from time to time (“GAAP”). The Fiscal Year of the Company shall be used for financial reporting and for federal income tax purposes.

(c) Financial Reports.

(i) The books and records of the Company shall be audited as of the end of each Fiscal Year by the same accounting firm that audits the books and records of Pubco (or, if such firm declines to perform such audit, by an accounting firm selected by the Managing Member).

(ii) In the event neither Pubco nor the Company is required to file an annual report on Form 10-K or quarterly report on Form 10-Q, the Company shall deliver, or cause to be delivered, the following to Pubco and each of the Non-Pubco Members, in each case for so long as the Substantial Ownership Requirement is met:

(A) not later than ninety (90) days after the end of each Fiscal Year of the Company, a copy of the audited consolidated balance sheet of the Company and its Subsidiaries as of the end of such Fiscal Year and the related statements of operations and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous year, all in reasonable detail; and

(B) not later than forty five (45) days or such later time as permitted under applicable securities law after the end of each of the first three fiscal quarters of each Fiscal Year, the unaudited consolidated balance sheet of the Company and its Subsidiaries, and the related statements of operations and cash flows for such quarter and for the period commencing on the first day of the Fiscal Year and ending on the last day of such quarter.

(d) Tax Returns.

 

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(i) The Company shall timely prepare or cause to be prepared by an accounting firm selected by the Managing Member all federal, state, local and foreign tax returns (including information returns) of the Company and its Subsidiaries, which may be required by a jurisdiction in which the Company and its Subsidiaries operate or conduct business for each year or period for which such returns are required to be filed and shall cause such returns to be timely filed. Upon request of any Member, the Company shall furnish to such Member a copy of each such tax return;

(ii) The Company shall furnish to each Member (a) as soon as reasonably practical after the end of each Fiscal Year and in any event by April 30, all information concerning the Company and its Subsidiaries required for the preparation of tax returns of such Members (or any beneficial owner(s) of such Member), including a report (including Schedule K-1), indicating each Member’s share of the Company’s taxable income, gain, credits, losses and deductions for such year, in sufficient detail to enable such Member to prepare its federal, state and other tax returns; provided that estimates of such information believed by the Managing Member in good faith to be reasonable shall be provided by March 10, (b) as soon as reasonably possible after the close of the relevant fiscal period, but in no event later than ten days prior to the date an estimated tax payment is due, such information concerning the Company as is required to enable such Member (or any beneficial owner of such Member) to pay estimated taxes and (c) as soon as reasonably possible after a request by such Member, such other information concerning the Company and its Subsidiaries that is reasonably requested by such Member for compliance with its tax obligations (or the tax obligations of any beneficial owner(s) of such Member) or for tax planning purposes; and

(iii) For so long as the Substantial Ownership Requirement is met, each Non-Pubco Member shall be entitled to review and comment on any tax returns or reports to be prepared pursuant to this Section 3.03(d) at least 60 days prior to the due date for the applicable tax return or report (including extensions). Each Non-Pubco Member shall notify the Company no later than 30 days after receipt of a tax return or report of any changes recommended thereby to such return or report. The Company shall consider in good faith all reasonable comments of the Non-Pubco Members to such tax returns or reports. If the Company does not accept any such comment, the Company shall notify the such Non-Pubco Member of that fact. If within five (5) days of such notification, a Non-Pubco Member request in writing a review of a rejected comment, the Company shall cause its regular tax advisors to review the comment and consult with such Non-Pubco Member. The determination of the tax advisors following such review and consultation shall definitively determine the position taken on the Company’s tax return or report.

(e) Inconsistent Positions. No Member shall take a position on its income tax return with respect to any item of Company income, gain, deduction, loss or credit that is different from the position taken on the Company’s income tax return with respect to such item unless such Member notifies the Company of the different position the Member desires to take and the Company’s regular tax advisors, after consulting with the

 

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Member, are unable to provide an opinion that (after taking into account all of the relevant facts and circumstances) the arguments in favor of the Company’s position outweigh the arguments in favor of the Member’s position.

Section 3.04. Books and Records. The Company shall keep full and accurate books of account and other records of the Company at its principal place of business. For so long as the Substantial Ownership Requirement is met, each Non-Pubco Member shall have any right to inspect the books and records of Pubco, the Company or any of its Subsidiaries; provided that (i) such inspection shall be at reasonable times and upon reasonable prior notice to the Company, but not more frequently than once per calendar quarter and (ii) neither Pubco, the Company nor any of its Subsidiaries shall be required to disclose (x) any information the Managing Member determines to be competitively sensitive or (y) any privileged information of Pubco, the Company or any of its Subsidiaries so long as the Company has used commercially reasonable efforts to enter into an arrangement pursuant to which it may provide such information to the Non-Pubco Members, as the case may be, without the loss of any such privilege.

ARTICLE 4

PUBCO OWNERSHIP; RESTRICTIONS ON PUBCO STOCK

Section 4.01. Pubco Ownership. (a) Except as otherwise determined by Pubco, if at any time Pubco issues a share of Class A Common Stock any other Equity Security of Pubco entitled to any economic rights (including in the IPO) (an “Economic Pubco Security”) with regard thereto (other than Class B Common Stock, or other Equity Security of Pubco not entitled to any economic rights with respect thereto), (i) the Company shall issue to Pubco one LLC Unit (if Pubco issues a share of Class A Common Stock) or such other Equity Security of the Company (if Pubco issues an Economic Pubco Security other than Class A Common Stock) corresponding to the Economic Pubco Security, and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Economic Pubco Security and (ii) the net proceeds received by Pubco with respect to the corresponding Economic Pubco Security, if any, shall be concurrently contributed to the Company; provided, however, that if Pubco issues any Economic Pubco Securities, some or all of the net proceeds of which are to be used to fund expenses or other obligations of Pubco for which Pubco would be permitted a distribution pursuant to Section 5.03(c), then Pubco shall not be required to transfer such net proceeds to the Company which are used or will be used to fund such expenses or obligations and provided, further, that if Pubco issues any shares of Class A Common Stock (including in the IPO) in order to purchase or fund the purchase from a Non-Pubco Member of a number of LLC Units (and shares of Class B Common Stock) or to purchase or fund the purchase of shares of Class A Common Stock, in each case equal to the number of shares of Class A Common Stock issued, then the Company shall not issue any new LLC Units in connection therewith and Pubco shall not be required to transfer such net proceeds to the Company (it being understood that such net proceeds shall instead be transferred to such Non-Pubco Member as consideration for such purchase).

 

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(b) For the avoidance of doubt, this Article 4 shall apply to the issuance and distribution to holders of shares of Pubco Common Stock of rights to purchase Equity Securities of Pubco under a “poison pill” or similar shareholders rights plan (it also being understood that upon redemption or exchange of LLC Units (including any such right to purchase LLC Units in the Company) for shares of Class A Common Stock, such Class A Common Stock will be issued together with a corresponding right to purchase Equity Securities of Pubco).

(c) If at any time Pubco issues one or more shares of Class A Common Stock in connection with an equity incentive program, whether such share or shares are issued upon exercise of an option, settlement of a restricted stock unit, as restricted stock or otherwise, the Company shall issue to Pubco a corresponding number of LLC Units; provided that Pubco shall be required to concurrently contribute the net proceeds (if any) received by Pubco from or otherwise in connection with such corresponding issuance of one or more shares of Class A Common Stock, including the exercise price of any option exercised, to the Company. If any such shares of Class A Common Stock so issued by Pubco in connection with an equity incentive program are subject to vesting or forfeiture provisions, then the LLC Units that are issued by the Company to Pubco in connection therewith in accordance with the preceding provisions of this Section 4.01(c) shall be subject to vesting or forfeiture on the same basis; if any, of such shares of Class A Common Stock vest or are forfeited, then a corresponding number of the LLC Units issued by the Company in accordance with the preceding provisions of this Section 4.01(c) shall automatically vest or be forfeited. Any cash or property held by either Pubco or the Company or on either’s behalf in respect of dividends paid on restricted Class A Common Stock that fails to vest shall be returned to the Company upon the forfeiture of such restricted Class A Common Stock.

Section 4.02. Restrictions on Pubco Common Stock. (a) Except as otherwise determined by the Managing Member in accordance with Section 4.02(d), (i) the Company may not issue any additional LLC Units to Pubco or any of its Subsidiaries unless substantially simultaneously therewith Pubco or such Subsidiary issues or sells an equal number of shares of Class A Common Stock to another Person, (ii) the Company may not issue any additional LLC Units to any Person (other than Pubco or any of its Subsidiaries) unless simultaneously therewith Pubco issues or sells an equal number of shares of Class B Common Stock to such Person and (iii) the Company may not issue any other Equity Securities of the Company to Pubco or any of its Subsidiaries unless substantially simultaneously therewith, Pubco or such Subsidiary issues or sells, to another Person, an equal number of shares of a new class or series of Equity Securities of Pubco or such Subsidiary with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Company.

(b) Except as otherwise determined by the Managing Member in accordance with Section 4.02(d), (i) Pubco or any of its Subsidiaries may not redeem, repurchase or otherwise acquire any shares of Class A Common Stock unless substantially simultaneously therewith the Company redeems, repurchases or otherwise acquires from Pubco or any of its Subsidiaries an equal number of LLC Units for the same price per

 

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security (or, if Pubco uses funds received from distributions from the Company or the net proceeds from an issuance of Class A Common Stock to fund such redemption, repurchase or acquisition, then the Company shall cancel an equal number of LLC Units for no consideration) and (ii) Pubco or any of its Subsidiaries may not redeem or repurchase any other Equity Securities of Pubco unless substantially simultaneously therewith the Company redeems or repurchases from Pubco or any of its Subsidiaries an equal number of Equity Securities of the Company of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) or other economic rights as those of such Equity Securities of Pubco for the same price per security (or, if Pubco uses funds received from distributions from the Company or the net proceeds from an issuance of Equity Securities other than Class A Common Stock to fund such redemption, repurchase or acquisition, then the Company shall cancel an equal number of its corresponding Equity Securities for no consideration). Except as otherwise determined by the Managing Member in accordance with Section 4.02(d), (x) the Company may not redeem, repurchase or otherwise acquire LLC Units from Pubco or any of its Subsidiaries unless substantially simultaneously Pubco or such Subsidiary redeems, repurchases or otherwise acquires an equal number of Class A Common Stock for the same price per security from holders thereof (except that if the Company cancels LLC Units for no consideration as described in Section 4.02(b)(i), then the price per security need not be the same) and (y) the Company may not redeem, repurchase or otherwise acquire any other Equity Securities of the Company from Pubco or any of its Subsidiaries unless substantially simultaneously Pubco or such Subsidiary redeems, repurchases or otherwise acquires for the same price per security an equal number of Equity Securities of Pubco of a corresponding class or series with substantially the same rights to dividends and distributions (including dividends and distributions upon liquidation) and other economic rights as those of such Equity Securities of Pubco (except that if the Company cancels Equity Securities for no consideration as described in Section 4.02(b)(ii), then the price per security need not be the same). Notwithstanding the immediately preceding sentence, to the extent that any consideration payable to Pubco in connection with the redemption or repurchase of any shares or other Equity Securities of Pubco or any of its Subsidiaries consists (in whole or in part) of shares or such other Equity Securities (including, for the avoidance of doubt, in connection with the cashless exercise of an option or warrant), then redemption or repurchase of the corresponding LLC Units or other Equity Securities of the Company shall be effectuated in an equivalent manner (except if the Company cancels LLC Units or other Equity Securities for no consideration as described in this Section 4.02(b)).

(c) The Company shall not in any manner effect any subdivision (by any stock or unit split, stock or unit dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock or unit split, reclassification, reorganization, recapitalization or otherwise) of the outstanding LLC Units unless accompanied by a substantively identical subdivision or combination, as applicable, of the outstanding Pubco Common Stock, with corresponding changes made with respect to any other exchangeable or convertible securities. Pubco shall not in any manner effect any subdivision (by any stock or unit split, stock or unit dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock or unit split, reclassification, reorganization, recapitalization or

 

23


otherwise) of the outstanding Pubco Common Stock unless accompanied by a substantively identical subdivision or combination, as applicable, of the outstanding LLC Units, with corresponding changes made with respect to any other exchangeable or convertible securities.

(d) Notwithstanding anything to the contrary in this Article 4:

(i) if at any time the Managing Member shall determine that any debt instrument of Pubco, the Company or its Subsidiaries shall not permit Pubco or the Company to comply with the provisions of Section 4.02(a) or Section 4.02(b) in connection with the issuance, redemption or repurchase of any shares of Class A Common Stock or other Equity Securities of Pubco or any of its Subsidiaries or any Units or other Equity Securities of the Company, then the Managing Member may in good faith implement an economically equivalent alternative arrangement without complying with such provisions; provided that, in the case that any such alternative arrangement is implemented because of restrictions in any debt instrument, such arrangement shall also be subject to the prior written consent (not to be unreasonably withheld) of each of the Non-Pubco Members, in each case for so long as the Substantial Ownership Requirement is met; and

(ii) if (x) Pubco incurs any indebtedness and desires to transfer the proceeds of such indebtedness to the Company and (y) Pubco is unable to lend the proceeds of such indebtedness to the Company on an equivalent basis because of restrictions in any debt instrument of Pubco, the Company or its Subsidiaries, then notwithstanding Section 4.02(a) or Section 4.02(b), the Managing Member may in good faith implement an economically equivalent alternative arrangement in connection with the transfer of proceeds to the Company using non-participating preferred Equity Securities of the Company without complying with such provisions; provided that, in the case that any such alternative arrangement is implemented because of restrictions in any debt instrument, such arrangement shall also be subject to the prior written consent (not to be unreasonably withheld) of each of the Non-Pubco Members, in each case for so long as the Substantial Ownership Requirement is met.

ARTICLE 5

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS ;

DISTRIBUTIONS; ALLOCATIONS

Section 5.01. Capital Contributions. (a) From and after the date hereof, no Member shall have any obligation to the Company, to any other Member or to any creditor of the Company to make any further Capital Contribution, except as expressly provided in Section 4.01(a).

(b) Except as expressly provided herein, no Member, in its capacity as a Member, shall have the right to receive any cash or any other property of the Company.

Section 5.02. Capital Accounts.

 

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(a) Maintenance of Capital Accounts. The Company shall maintain a Capital Account for each Member on the books of the Company in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and, to the extent consistent with such provisions, the following provisions:

(i) Each Member listed on the Member Schedule shall be credited with the Reorganization Date Capital Account Balance set forth on the Member Schedule. The Member Schedule shall be amended by the Managing Member after the closing of the IPO and from time to time to reflect adjustments to the Members’ Capital Accounts made in accordance with Sections 5.02(a)(ii), 5.02(a)(iii), 5.02(a)(iv), 5.02(c) or otherwise.

(ii) To each Member’s Capital Account there shall be credited: (A) such Member’s Capital Contributions, (B) such Member’s distributive share of Net Income and any item in the nature of income or gain that is allocated pursuant to Section 5.04 and (C) the amount of any Company liabilities assumed by such Member or that are secured by any Property distributed to such Member.

(iii) To each Member’s Capital Account there shall be debited: (A) the amount of money and the Carrying Value of any Property distributed to such Member pursuant to any provision of this Agreement, (B) such Member’s distributive share of Net Loss and any items in the nature of expenses or losses that are allocated to such Member pursuant to Section 5.04 and (C) the amount of any liabilities of such Member assumed by the Company or that are secured by any Property contributed by such Member to the Company.

(iv) In determining the amount of any liability for purposes of subparagraphs (ii) and (iii) above there shall be taken into account Section 752(c) of the Code and any other applicable provisions of the Code and the Treasury Regulations.

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event that the Managing Member shall reasonably determine that it is prudent to modify the manner in which the Capital Accounts or any debits or credits thereto are maintained (including debits or credits relating to liabilities that are secured by contributed or distributed Property or that are assumed by the Company or the Members), the Managing Member may make such modification so long as such modification will not have any effect on the amounts distributed to any Person pursuant to Article 11 upon the dissolution of the Company. The Managing Member also shall (i) make any adjustments that are necessary or appropriate to maintain equality between Capital Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as computed for book purposes, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause