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Report of unscheduled material events or corporate event

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 21, 2019

 

 

 

LOGO

BellRing Brands, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-39093   83-4096323

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

2503 S. Hanley Road

St. Louis, Missouri 63144

(Address, including Zip Code, of principal executive offices)

Registrant’s telephone number, including area code: (314) 644-7600

 

 

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

 

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

 

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

 

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

 

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

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Class A common stock, par value $0.01
per share
  BRBR   New York Stock Exchange

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

Emerging growth company  ☒

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

 

 

 


Item 1.01. Entry into a Material Definitive Agreement.

Closing of Initial Public Offering

On October 21, 2019, BellRing Brands, Inc. (the “Company”) closed its initial public offering (the “IPO”) of 39,428,571 shares of its Class A common stock, $0.01 par value per share (the “Class A Common Stock”), which number of shares included the underwriters’ exercise in full of their option to purchase up to an additional 5,142,857 shares of Class A Common Stock, at an offering price of $14.00 per share, pursuant to the Company’s registration statement on Form S-1 (File No. 333-233867) (as amended from time to time, and together with the Company’s related registration statement on Form S-1 (File No. 333-234237) filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”), the “Registration Statement”). The Company received net proceeds from the IPO of approximately $516.4 million, after deducting underwriting discounts and commissions and expenses of the offering, all of which were contributed to BellRing Brands, LLC, a Delaware limited liability company and subsidiary of the Company (“BellRing Brands, LLC”), in exchange for BellRing Brands, LLC units (as defined below), as further described in the Registration Statement.

In connection with the IPO, the Company entered into the following agreements (the “Formation Agreements”), forms of which were previously filed as exhibits to the Registration Statement:

 

   

an Amended and Restated Limited Liability Company Agreement of BellRing Brands, LLC, dated October 21, 2019, by and among BellRing Brands, LLC, the Company and Post Holdings, Inc., a Missouri corporation (“Post”) (such agreement, the “Limited Liability Company Agreement”), that governs the operations of BellRing Brands, LLC and the rights and obligations of its members (which are, as of October 21, 2019, Post and the Company);

 

   

an Employee Matters Agreement, dated October 21, 2019, by and among the Company, BellRing Brands, LLC and Post, which covers a wide range of compensation and benefits matters;

 

   

an Investor Rights Agreement, dated October 21, 2019, between the Company and Post, that provides Post with certain demand, shelf and piggyback registration rights with respect to any shares of the Class A Common Stock and also provides Post with certain governance rights, depending on the percentage of the total voting power of the Company’s outstanding common stock held by Post;

 

   

a Tax Matters Agreement, dated October 21, 2019, by and among the Company, BellRing Brands, LLC and Post, that governs the parties’ respective rights, responsibilities and obligations with respect to tax matters, including responsibility for taxes attributable to BellRing Brands, LLC and its subsidiaries, entitlement to refunds, allocation of tax attributes, preparation of tax returns, certain tax elections, control of tax contests and other matters;

 

   

a Tax Receivable Agreement, dated October 21, 2019, by and among the Company, BellRing Brands, LLC and Post, under which the Company will be required to make cash payments to Post (or certain of its transferees or assignees) equal to 85% of the cash savings, if any, in federal, state or local income or franchise tax that the Company realizes (or is deemed to realize) under certain circumstances as described therein; and

 

   

a Master Services Agreement, dated October 21, 2019, by and among the Company, BellRing Brands, LLC and Post, under which Post provides certain services to the Company following completion of the IPO, including, among others, assistance with certain legal, finance, internal audit, treasury, information technology support, insurance and tax matters, the use of office and/or data center space, payroll processing services and tax compliance services.

The terms of each of the Formation Agreements are substantially the same as the terms set forth in the forms of such respective agreements that were filed as exhibits to the Registration Statement and as previously described in the Registration Statement under the heading “Certain Relationships and Related Party Transactions—Post-Offering Relationship with Post,” which descriptions are each incorporated herein by reference. These descriptions are only summaries and do not purport to be complete and are qualified in their entirety by reference to the full text of the Formation Agreements, copies of which are attached hereto as Exhibit 10.1 through Exhibit 10.6 and are incorporated herein by reference.

Indemnification Agreements

In connection with the IPO, the Company also entered into Indemnification Agreements, each dated October 21, 2019 (the “Indemnification Agreements”), under which the Company is obligated to indemnify its directors and executive officers against certain liabilities that may arise because of their status or service as directors or executive officers. The individuals with whom the Company entered into Indemnification Agreements are Robert V. Vitale (Executive Chairman), Darcy Horn Davenport (President and Chief Executive Officer and Director), Elliot H. Stein, Jr. (Director), Thomas P. Erickson (Director), Jennifer Kuperman (Director), Paul A. Rode (Chief Financial Officer and Treasurer), Craig L. Rosenthal (Senior Vice President and General Counsel, Secretary), Douglas J. Cornille (Senior Vice President, Marketing of Premier


Nutrition), R. Lee Partin (Senior Vice President, Sales of Premier Nutrition) and Robin Singh (Senior Vice President, Operations of Premier Nutrition). Each of the Indemnification Agreements is substantially the same. The description of the Indemnification Agreements is only a summary and does not purport to be complete and is qualified in its entirety by reference to the full text of the Form of Indemnification Agreement, a copy of which is attached hereto as Exhibit 10.7 and is incorporated herein by reference.

Assumption of Bridge Loan

On October 21, 2019 and in connection with the completion of the IPO, BellRing Brands, LLC entered into a Borrower Assignment and Assumption Agreement with Post and Morgan Stanley Senior Funding, Inc., as administrative agent (the “Assignment and Assumption Agreement”), under which BellRing Brands, LLC became the borrower under a $1,225.0 million Bridge Facility Agreement, dated October 11, 2019, by and among Post, as borrower, certain subsidiaries of Post, as guarantors, each lender from time to time party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent, and Morgan Stanley Senior Funding, Inc., BofA Securities, Inc., Citigroup Global Markets Inc., Credit Suisse Loan Funding LLC, Goldman Sachs Bank USA and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint physical bookrunners (the “Post Bridge Loan”). Pursuant to the Assignment and Assumption Agreement, Post and its subsidiaries (other than BellRing Brands, LLC and certain of its subsidiaries) have no further material obligations under the Post Bridge Loan. The domestic subsidiaries of BellRing Brands, LLC continued to guarantee the Post Bridge Loan and BellRing Brands, LLC’s obligations under the Post Bridge Loan became secured by a first priority security interest in substantially all of the assets of BellRing Brands, LLC and in substantially all of the assets of its subsidiary guarantors. Post retained the net cash proceeds of the Post Bridge Loan.

The foregoing summary of the Assignment and Assumption Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Assignment and Assumption Agreement, a copy of which is attached hereto as Exhibit 10.8 and is incorporated herein by reference.

Credit Agreement

On October 21, 2019, BellRing Brands, LLC entered into a Credit Agreement (the “Credit Agreement”) by and among BellRing Brands, LLC, the institutions from time to time party thereto as lenders (the “Lenders”), Credit Suisse Loan Funding LLC, BofA Securities, Inc., Morgan Stanley Senior Funding, Inc., Barclays Bank PLC, Citibank, N.A., Goldman Sachs Bank USA and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint bookrunners, and BMO Capital Markets Corp., Coöperatieve Rabobank U.A., New York Branch, Nomura Securities International, Inc., Suntrust Robinson Humphrey, Inc., UBS Securities LLC and Wells Fargo Securities, LLC, as co-managers, and Credit Suisse AG, Cayman Islands Branch, as administrative agent for the Lenders (in such capacity, the “Agent”).

The Credit Agreement provides for a term B loan facility in an aggregate principal amount of $700.0 million (the “Term B Facility”), and a revolving credit facility in an aggregate principal amount of $200.0 million (the “Revolving Credit Facility”; and together with the Term B Facility, the “Loans”), with the commitments under the Revolving Credit Facility to be made available to BellRing Brands, LLC in U.S. Dollars, Euros and Pounds Sterling. Letters of credit are available under the Credit Agreement in an aggregate amount of up to $20.0 million. The outstanding amounts under the Revolving Credit Facility and Term B Facility must be repaid on or before October 21, 2024.

On October 21, 2019, BellRing Brands, LLC borrowed the full amount under the Term B Facility and $100.0 million under the Revolving Credit Facility and used the proceeds, together with the net proceeds of the IPO that were contributed to it by the Company, (i) to repay in full the balance of the Post Bridge Loan and all interest thereunder, (ii) to pay directly, or reimburse Post for, as applicable, all fees and expenses incurred by BellRing Brands, LLC or Post in connection with the IPO and the formation transactions described in the Registration Statement (the “Formation Transactions”), (iii) to reimburse Post for the amount of cash on BellRing Brands, LLC’s balance sheet immediately prior to the completion of the IPO and (iv) to the extent there were any remaining proceeds, for general corporate and working capital purposes.

Borrowings under the Term B Facility bear interest, at the option of BellRing Brands, LLC, at an annual rate equal to either (a) the Eurodollar rate or (b) the base rate determined by reference to the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Eurodollar rate plus 1.00% per annum, in each case plus an applicable margin of 5.00% for Eurodollar rate-based loans and 4.00% for base rate-based loans. The Term B Facility requires scheduled amortization payments of $8,750,000, payable quarterly (commencing on March 31, 2020), with the balance to be paid at maturity on October 21, 2024. The Term B Facility contains customary mandatory prepayment provisions, including provisions for mandatory prepayment (a) from the net cash proceeds of certain asset sales and (b) beginning with the fiscal year ending September 30, 2020, of 75% of annual excess cash flow (which percentage will be reduced to 50% if the secured net leverage ratio (as defined in the Credit Agreement) is below a specified level as of a fiscal year end). The Term B Facility may be optionally prepaid at 101% of the principal amount prepaid at any time during the first 12 months following the closing of the Term B Facility, and without premium or penalty thereafter.

 

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Borrowings under the Revolving Credit Facility bear interest, at the option of BellRing Brands, LLC, at an annual rate equal to either the Eurodollar rate or the base rate (determined as described above) plus a margin, which initially will be 4.25% for Eurodollar rate-based loans and 3.25% for base rate-based loans, and thereafter, will be determined by reference to the secured net leverage ratio, with the applicable margin for Eurodollar rate loans and base rate loans being (i) 4.25% and 3.25%, respectively, if the secured net leverage ratio is greater than or equal to 3.50:1:00, (ii) 4.00% and 3.00%, respectively, if the secured net leverage ratio is less than 3.50:1:00 and greater than or equal to 2.50:1.00 or (iii) 3.75% and 2.75%, respectively, if the secured net leverage ratio is less than 2.50:1:00. Facility fees on the daily unused amount of commitments under the Revolving Credit Facility will initially accrue at the rate of 0.50%, and thereafter, depending on BellRing Brands, LLC’s secured net leverage ratio, will accrue at rates ranging from 0.25% to 0.50%.

The Credit Agreement provides for potential incremental revolving and term facilities at the request of BellRing Brands, LLC and at the discretion of the Lenders or other persons providing such incremental facilities, in each case on terms to be determined, and also permits BellRing Brands, LLC to incur other secured or unsecured debt, in all cases subject to conditions and limitations on the amount as specified in the Credit Agreement.

The Credit Agreement contains customary affirmative and negative covenants for agreements of this type, including: delivery of financial and other information; compliance with laws; maintenance of property, existence, insurance and books and records; maintenance of public ratings; inspection rights; obligation to provide collateral and guarantees by certain new subsidiaries; delivery of environmental reports; participation in an annual meeting with the Agent and the Lenders; further assurances; and limitations with respect to indebtedness, liens, fundamental changes, restrictive agreements, use of proceeds, amendments of organization documents, prepayments and amendments of certain indebtedness, dispositions of assets, acquisitions and other investments, sale leaseback transactions, changes in the nature of business, transactions with affiliates and dividends and redemptions or repurchases of stock.

The Credit Agreement also contains a financial covenant requiring BellRing Brands, LLC to maintain a total net leverage ratio (as defined in the Credit Agreement) not to exceed 6.00 to 1.00, measured as of the last day of each fiscal quarter, beginning with the fiscal quarter ending March 31, 2020.

The Credit Agreement provides for customary events of default, including material breach of representations and warranties, failure to make required payments, failure to comply with certain agreements or covenants, failure to pay or default under certain other material indebtedness, certain events of bankruptcy and insolvency, inability to pay debts, the occurrence of one or more unstayed or undischarged judgments in excess of $65.0 million, attachments issued against all or any material part of BellRing Brands, LLC’s property, certain ERISA events, a change in control, the invalidity of any loan document and the failure of the collateral documents to create a valid and perfected first priority lien. Upon the occurrence and during the continuance of an event of default, the maturity of the loans under the Credit Agreement may accelerate and the Agent and Lenders under the Credit Agreement may exercise other rights and remedies available at law or under the loan documents, including with respect to the collateral and guarantees of BellRing Brands, LLC’s obligations under the Credit Agreement.

BellRing Brands, LLC’s obligations under the Credit Agreement are unconditionally guaranteed by its existing and subsequently acquired or organized direct and indirect domestic subsidiaries (other than immaterial domestic subsidiaries and certain excluded subsidiaries) and are secured by security interests in substantially all of BellRing Brands, LLC’s assets and the assets of its subsidiary guarantors, but excluding, in each case, real property.

The foregoing summary of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, a copy of which is attached hereto as Exhibit 10.9 and is incorporated herein by reference.

Representations and warranties contained in the Formation Agreements, the Indemnification Agreements, the Assignment and Assumption Agreement and the Credit Agreement were made only for purposes of each such agreement and as of the dates specified therein; were solely for the benefit of the parties to each such agreement; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations and warranties or any description thereof as characterizations of the actual state of facts or condition of the Company and its subsidiaries or Post and its subsidiaries. Moreover, information concerning the subject matter of the representations and warranties may change after the date of such agreements, which subsequent information may or may not be fully reflected in public disclosures by the Company.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above in Item 1.01 under the headings “Assumption of Bridge Loan” and “Credit Agreement” is hereby incorporated into this Item 2.03 by reference.

 

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Item 3.02. Unregistered Sales of Equity Securities.

On October 21, 2019, in connection with the completion of the IPO, the filing of the Company’s Certificate of Incorporation (as defined below) and BellRing Brands, LLC’s, the Company’s and Post’s entry into the Limited Liability Company Agreement, (a) the Company issued one share of Class B common stock of the Company, par value $0.01 per share (the “Class B Common Stock”), to Post, in exchange for the 1,000 shares of common stock of the Company initially issued to Post in connection with the Company’s incorporation, which shares were cancelled as part of the exchange, and (b) BellRing Brands, LLC issued 39,428,571 of its non-voting common units (“BellRing Brands, LLC units”) to the Company and 97,474,180 BellRing Brands, LLC units to Post.

Under the Limited Liability Company Agreement, Post may from time to time redeem BellRing Brands, LLC units for, at BellRing Brands, LLC’s option (as determined by its board of managers), (i) shares of Class A Common Stock or (ii) cash (based on the market price of the shares of Class A Common Stock). The redemption of BellRing Brands, LLC units for shares of Class A Common Stock will be at an initial redemption rate of one share of Class A Common Stock for one BellRing Brands, LLC unit, subject to customary redemption rate adjustments for stock splits, stock dividends and reclassifications.

The issuance of the Class B Common Stock and the issuance of the BellRing Brands, LLC units described in this Item 3.02 were made in reliance on Section 4(a)(2) of the Securities Act.

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

Effective October 21, 2019, Darcy Horn Davenport and Elliot H. Stein, Jr. were appointed to the Board of Directors of the Company as Class I directors for terms expiring at the Company’s 2020 annual meeting of stockholders, and Thomas P. Erickson and Jennifer Kuperman were appointed to the Board of Directors of the Company as Class II directors for terms expiring at the Company’s 2021 annual meeting of stockholders. Robert V. Vitale, the Company’s executive chairman, was designated a Class III director with a term expiring at the Company’s 2022 annual meeting of stockholders. Mr. Stein, Mr. Erickson and Ms. Kuperman were all determined to qualify as “independent” under New York Stock Exchange corporate governance standards and were appointed to serve as members of the Audit Committee of the Board of Directors and as members of the Corporate Governance and Compensation Committee of the Board of Directors. Mr. Stein and Mr. Erickson, along with Mr. Vitale, were appointed to serve as members of the Executive Committee of the Board of Directors. Biographical information regarding these directors and a description of the material terms of the directors’ annual compensation have previously been described by the Company in the Registration Statement under the heading “Management,” and such biographical information and terms are incorporated herein by reference.

The information set forth in Item 1.01 above under the heading “Indemnification Agreements” is hereby incorporated into this Item 5.02 by reference.

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

Amended and Restated Certificate of Incorporation

Effective October 21, 2019, the Company amended and restated its certificate of incorporation (as so amended and restated, the “Certificate of Incorporation”). Among other things, the Certificate of Incorporation provides that:

 

   

the Company’s authorized capital stock consists of 500,000,000 shares of Class A Common Stock, one share of Class B Common Stock and 50,000,000 shares of preferred stock, par value $0.01 per share;

 

   

(i) holders of the Company’s Class A Common Stock are entitled to one vote for each share held on all matters submitted to stockholders for their vote or approval, (ii) for so long as Post or its affiliates (other than the Company and its subsidiaries) directly own more than 50% of the BellRing Brands, LLC units, the aggregate voting power of the share of the Company’s Class B Common Stock represents 67% of the combined voting power of the common stock of the Company, and (iii) if Post and its affiliates (other than the Company and its subsidiaries) hold 50% or less of the BellRing Brands, LLC units, the holder of the share of Class B Common Stock is entitled to a number of votes equal to the number of BellRing Brands, LLC units held by all persons other than the Company, subject to certain conditions described in the fifth bullet point below;

 

   

the holders of the Class A Common Stock are entitled to receive dividends when, as and if declared by the Company’s Board of Directors out of legally available funds and that the holder of the Class B Common Stock does not have any right to receive dividends;

 

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upon the Company’s liquidation or dissolution, the holders of the Class A Common Stock are entitled to share ratably in assets legally available for distribution to stockholders, subject to the prior rights of any holders of preferred stock then outstanding, and that, other than its par value, the holder of the Class B Common Stock does not have any right to receive a distribution upon a liquidation or dissolution of the Company;

 

   

the share of the Class B Common Stock may not be transferred by Post except to an affiliate of Post (other than the Company and its subsidiaries); provided that Post may grant one or more proxies to, or enter into one or more voting agreements or other voting arrangements with, any persons other than the Company and its subsidiaries or Post’s affiliates to whom Post or any of its affiliates (other than the Company and its subsidiaries) transfers BellRing Brands, LLC units pursuant to the Limited Liability Company Agreement, and Post may transfer the share of Class B Common Stock in connection with any distribution of its ownership interests in BellRing Brands, LLC by means of a spin-off or split-off to its shareholders; and

 

   

as permitted under the General Corporation Law of the State of Delaware, Post and its affiliates may carry on and conduct any business of any kind, nature or description, whether or not such business is competitive with or in the same or similar lines of business as the Company; that Post and its affiliates may do business with any of the Company’s customers, vendors and lessors; and that Post and its affiliates may make investments in any kind of property in which the Company may make investments.

The Certificate of Incorporation is the same as the form that was filed as an exhibit to the Registration Statement and as previously described in the Registration Statement under the heading “Description of Capital Stock,” which description is incorporated herein by reference. The descriptions set forth herein and in the Registration Statement do not purport to be complete and are qualified in their entirety by reference to the full text of the Certificate of Incorporation, a copy of which is attached hereto as Exhibit 3.1 and is incorporated herein by reference.

Amended and Restated Bylaws

On October 21, 2019, the Company amended and restated its bylaws (as amended and restated, the “Bylaws”). Among other things, the Bylaws:

 

   

established procedures relating to the presentation of stockholder proposals at stockholder meetings;

 

   

established procedures relating to the nomination of directors; and

 

   

conformed certain provisions in light of the amended provisions of the Certificate of Incorporation.

The Bylaws are the same as the form that was filed as an exhibit to the Registration Statement and as previously described in the Registration Statement under the heading “Description of Capital Stock,” which description is incorporated herein by reference. The descriptions set forth herein and in the Registration Statement do not purport to be complete and are qualified in their entirety by reference to the full text of the Bylaws, a copy of which is attached hereto as Exhibit 3.2 and is incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

In a press release dated October 21, 2019, the Company and Post announced the closing of the IPO. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Item 7.01 and the accompanying Exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

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Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
No.

  

Description

  3.1    Amended and Restated Certificate of Incorporation of BellRing Brands, Inc.
  3.2    Amended and Restated Bylaws of BellRing Brands, Inc.
10.1    Amended and Restated Limited Liability Company Agreement of BellRing Brands, LLC, dated October 21, 2019, by and among BellRing Brands, LLC, BellRing Brands, Inc. and Post Holdings, Inc.
10.2    Employee Matters Agreement, dated October 21, 2019, by and among BellRing Brands, Inc., BellRing Brands, LLC and Post Holdings, Inc.
10.3    Investor Rights Agreement, dated October 21, 2019, between BellRing Brands, Inc. and Post Holdings, Inc.
10.4    Tax Matters Agreement, dated October 21, 2019, by and among BellRing Brands, Inc., BellRing Brands, LLC and Post Holdings, Inc.
10.5    Tax Receivable Agreement, dated October 21, 2019, by and among BellRing Brands, Inc., BellRing Brands, LLC and Post Holdings, Inc.
10.6    Master Services Agreement, dated October 21, 2019, by and among BellRing Brands, Inc., BellRing Brands, LLC and Post Holdings, Inc.
10.7    Form of Indemnification Agreement.
10.8    Borrower Assignment and Assumption Agreement, dated as of October 21, 2019, by and among Post Holdings, Inc., BellRing Brands, LLC and Morgan Stanley Senior Funding, Inc., as administrative agent.
10.9    Credit Agreement, dated as of October  21, 2019, by and among BellRing Brands, LLC, the institutions from time to time party thereto as lenders, Credit Suisse Loan Funding LLC, BofA Securities, Inc., Morgan Stanley Senior Funding, Inc., Barclays Bank PLC, Citibank, N.A., Goldman Sachs Bank USA and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint bookrunners, and BMO Capital Markets Corp., Coöperatieve Rabobank U.A., New York Branch, Nomura Securities International, Inc., Suntrust Robinson Humphrey, Inc., UBS Securities LLC and Wells Fargo Securities, LLC, as co-managers, and Credit Suisse AG, Cayman Islands Branch, as administrative agent.
99.1    Press Release, dated October 21, 2019.


SIGNATURES

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

 

Date: October 21, 2019     BellRing Brands, Inc.
    (Registrant)
    By:  

/s/ Craig L. Rosenthal

    Name:   Craig L. Rosenthal
    Title:   Senior Vice President and General Counsel, Secretary
EX-3.1

Exhibit 3.1

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

of

BELLRING BRANDS, INC.

(Pursuant to Sections 242 and 245 of

the General Corporation Law of the State of Delaware)

BellRing Brands, 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 BellRing Brands, Inc. The date of filing of its original certificate of incorporation (the “Original Certificate of Incorporation”) with the Secretary of State of the State of Delaware was March 20, 2019.

SECOND: This Amended and Restated Certificate of Incorporation (this “Amended Certificate of Incorporation”) 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”) and by the written consent of the holder of all of the outstanding stock entitled to vote thereon in accordance with the provisions of Section 228 of the General Corporation Law.

THIRD: This Amended Certificate of Incorporation amends and restates in its entirety the Original Certificate of Incorporation of the Corporation to read as follows, effective as of 12:01 a.m. October 21, 2019:

1. Name. The name of the Corporation is BellRing Brands, Inc.

2. Address; Registered Office and Agent. The address of the Corporation’s registered office is Corporation Service Company, 251 Little Falls Drive in the City of Wilmington, County of New Castle, Delaware 19808; and the name of its registered agent at such address is 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 capital stock that the Corporation shall have authority to issue is Five Hundred Fifty Million One (550,000,001) shares, consisting of: (i) Five Hundred Million One (500,000,001) shares of common stock, divided into (a) Five Hundred Million (500,000,000) shares of Class A common stock, with the par value of $0.01 per share (the “Class A Common Stock”), and (b) one (1) share of Class B common stock, with the par value of $0.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”); and (ii) Fifty Million (50,000,000) shares of preferred stock, with the par value of $0.01 per share (the “Preferred Stock”).

4.2. Upon the effectiveness of this Amended Certificate of Incorporation, the 1,000 shares of common stock of the Corporation issued on March 20, 2019 shall automatically be converted into one (1) share of Class B Common Stock.


4.3. 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 all 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 shall 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, in the case of Class A Common Stock, the number of shares of Class A Common Stock issuable in connection with (1) the redemption of all outstanding Nonvoting Common Units (as defined in Section 14) pursuant to Article IX of the LLC Agreement (as defined in Section 14) and (2) the exercise of outstanding options, warrants, exchange rights, conversion rights or similar rights for Class A Common Stock.

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

5.1. Common Stock.

(i) Voting Rights.

(1) So long as Post holds in the aggregate more than 50% of the Nonvoting Common Units, then (i) each holder of Class A Common Stock shall be entitled, with respect to each share of Class A Common Stock held by such holder on the applicable record date, to one vote, in person or by proxy, on all matters on which stockholders generally are entitled to vote (whether at a meeting of stockholders or by written consent, and whether voting separately as a class or otherwise), and (ii) the holder of the share of Class B Common Stock shall be entitled, with respect to such share of Class B Common Stock held by such holder on the applicable record date, to a number of votes, in person or by one or more proxies, on all matters on which stockholders generally are entitled to vote (whether at a meeting of stockholders or by written consent, and whether voting separately as a class or otherwise) equal to 67% of the combined voting power of the outstanding shares of Common Stock (for purposes of illustration, if 20,000,000 shares of Class A Common Stock are outstanding on the applicable record date, then the share of Class B Common Stock would be entitled to 40,606,060 votes, or 67% of the combined voting power of the outstanding shares of Common Stock).

(2) In the event that, as of the record date for any meeting at which stockholders are entitled to vote, Post holds in the aggregate 50% or less of the Nonvoting Common Units outstanding as of such record date, then (i) each holder of Class A Common Stock shall be entitled, with respect to each share of Class A Common Stock held by such holder on the applicable record date, to one (1) vote, in person or by proxy, on all matters on which stockholders generally are entitled to vote (whether voting separately as a class or otherwise), and (ii) the holder of the share of Class B Common Stock shall be entitled, with respect to such share of Class B Common Stock held by such holder on the applicable record date, to a number of votes, in person or by one or more proxies, on all matters on which stockholders generally are entitled to vote (whether voting separately as a class or otherwise) equal to the number of Nonvoting Common Units held by all Persons other than the Corporation and its subsidiaries; provided that, of such votes, (a) the holder of the share of Class B Common Stock shall only be entitled to cast a number of such votes on its own behalf, in person or by one or more proxies, and in its sole discretion equal to the number of Nonvoting Common Units held by Post on the applicable record date, and (b) in the event that, on the applicable record date, any of the Nonvoting Common Units are held by Persons other than the Corporation or any of its subsidiaries or Post (each such Person, a “Non-Affiliated

 

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BellRing Brands, LLC Member”), then the holder of the share of Class B Common Stock shall cast the remainder of the votes to which the outstanding share of Class B Common Stock shall be entitled only in accordance with instructions and directions from the Non-Affiliated BellRing Brands, LLC Member(s) in accordance with the proxy(ies) granted to, or the voting agreement(s) or other voting arrangement(s) entered into with, the Non-Affiliated BellRing Brands, LLC Member(s) pursuant to Section 8.04 of the LLC Agreement (for purposes of illustration, if 100,000,000 Nonvoting Common Units are outstanding on the applicable record date, the Corporation and its subsidiaries hold 20,000,000 Nonvoting Common Units and Post holds 50,000,000 Nonvoting Common Units, then the share of Class B Common Stock would be entitled to 80,000,000 votes, with 30,000,000 of such votes to be cast as directed by the Non-Affiliated BellRing Brands, LLC Member(s)).

(3) The holders of the outstanding shares of Class A Common Stock and Class B Common Stock shall each be entitled to vote separately upon any amendment to this Amended Certificate of Incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of the shares of such class of Common Stock in a manner that affects them adversely.

(4) Except as otherwise required in this Amended Certificate of Incorporation or by applicable law, the holders of Common Stock shall 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 capital 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.

(2) Dividends of cash or property may not be declared or paid on the Class B Common Stock.

(3) In no event shall any stock dividend, stock split, reverse stock split, combination of stock, reclassification or recapitalization be declared or made on the Class A Common Stock (each, a “Stock Adjustment”) unless the Stock Adjustment has been reflected in the same economically equivalent manner on all Nonvoting Common Units. Stock dividends with respect to the Class A Common Stock may only be paid with shares of Class A 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 Common Stock shall 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 shall be entitled to receive the remaining assets of the Corporation available for distribution ratably in proportion to the number of shares of

 

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Class A Common Stock held by each holder. Without limiting the rights of the holder of Class B Common Stock to redeem its Nonvoting Common Units for shares of Class A Common Stock in accordance with Article IX of the 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 holder of the share of Class B Common Stock, as such, shall not be entitled to receive, with respect to such share, 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.

(iv) Restrictions on Class B Common Stock. The share of Class B Common Stock may not be owned or held by or transferred to any Person other than Post; provided, however, that Post, as the holder of the share of Class B Common Stock, shall be permitted to (a) grant one or more proxies to, or enter into one or more voting agreements or other voting arrangements with, any Non-Affiliated BellRing Brands, LLC Members pursuant to Section 8.04 of the LLC Agreement (and, for avoidance of doubt, (1) each such proxy, agreement or arrangement shall cover a specific number or percentage of votes to which the share of Class B Common Stock is entitled under this Amended Certificate of Incorporation, and (2) the holder(s) of such proxy(ies), agreement(s) or arrangement(s) may in its (their) discretion direct the holder of the Class B Common Stock as to the manner in which the votes covered by such proxy(ies), agreement(s) or arrangement(s) are to be cast (or not cast, as the case may be) and the holder of the Class B Common Stock shall so cast such votes as so directed by such holder(s), it being understood that some of the votes to which the share of Class B Common Stock is entitled may be voted in favor of, and others may be voted against, the particular matter upon which the holder of the Class B Common Stock is entitled to vote) and (b) transfer the share of Class B Common Stock in connection with any distribution of its ownership interest in BellRing Brands, LLC (as defined in Section 14) by means of a spin-off or split-off to its shareholders. Any stock certificate representing the share of Class B Common Stock shall include a legend referencing the restrictions described above.

(v) Taxes. The issuance of shares of Class A Common Stock upon the exercise by a holder of Nonvoting Common Units of its right to redeem its Nonvoting Common Units for shares of Class A Common Stock in accordance with Article IX of the LLC Agreement shall be made without charge to such holder 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 Nonvoting Common Units being redeemed (or The Depository Trust Company or its nominee for the account of a participant of The Depository Trust Company that shall 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.

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

 

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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 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 non-cumulative) 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 capital 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 capital 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. Stockholder Matters.

6.1. Actions by Written Consent. From and after the Triggering Event, any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, 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. Prior to the Triggering Event, any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holder or holders of capital stock of the Corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted; provided, however, that, unless otherwise provided in any certificate of designation relating to a series of Preferred Stock, any action required or permitted to be taken by the holders of Preferred Stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote, to the extent expressly so provided by the applicable certificate of designation relating to such series of Preferred Stock. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given by the Corporation to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.

6.2. Election of Directors by Written Ballot. Unless and except to the extent that the Amended and Restated Bylaws of the Corporation (as such Bylaws may be amended from time to time, the “Bylaws”) shall so require, the election of the directors of the Corporation need not be by written ballot.

 

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7. Directors.

7.1. Number and Classification. The number of directors shall be fixed by, or in the manner provided in, the Bylaws, but shall not be less than five nor more than twelve members. The directors shall be divided into three classes, as nearly equal in number as reasonably possible, except that one class may be one greater or one less in number than the other two classes. At each annual meeting of stockholders, successors to the class of directors whose term expires at that annual meeting shall be elected for a three year term (and until their respective successors shall have been elected and qualified in each class or until their earlier death, resignation or removal), so that the term of one class of directors shall expire in each year. With respect to directors in office on October 21, 2019, the first class of directors shall hold office until the first annual meeting of stockholders following the date shares of capital stock of the Corporation are first publicly traded (the “IPO Date”), the second class of directors shall hold office until the second annual meeting of stockholders following the IPO Date, and the third class of directors shall hold office until the third annual meeting of stockholders following the IPO Date. The Board of Directors is authorized to assign members of the Board of Directors already in office to their respective class. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of capital stock of the Corporation, other than shares of Common Stock, shall have the right, voting separately by class or series, to elect directors, the election, term of office, filling of vacancies and other features of such directorship shall be governed by the terms of this Amended Certificate of Incorporation or any certificate of designation thereunder applicable thereto. As used in this Amended Certificate of Incorporation, the term “entire Board” means the total number of directors fixed by, or in accordance with, this Amended Certificate of Incorporation and the Bylaws.

7.2. Removal of Directors. Subject to the rights, if any, of the holders of any class or series of capital stock of the Corporation (other than the Common Stock) then outstanding, at a meeting called expressly for that purpose or by the written consent of stockholders as provided in Section 6.1, one or more members of the Board may be removed with or without cause by the affirmative vote of not less than a majority of the voting power of all of the outstanding shares of capital stock then entitled to vote in the election of directors, voting together as a single class. Whenever the holders of the shares of any class or series are entitled to elect one or more directors, the provisions of this Section 7.2 shall apply in respect of the removal of a director or directors so elected without cause, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the holders of the outstanding shares as a whole.

7.3. Vacancies. Subject to the rights, if any, of the holders of any class or series of capital stock of the Corporation (other than the Common Stock) then outstanding and the rights of Post Holdings, Inc. and its successors and assigns under the Investor Rights Agreement (as defined in Section 14) (so long as such agreement is in effect), any vacancies in the Board which occur for any reason prior to the expiration of the term of office of the class in which the vacancy occurs, including vacancies which occur by reason of an increase in the number of directors, may be filled (i) by the Board, acting by the affirmative vote of a majority of the remaining directors then in office (even if less than a quorum), or by a sole remaining director, (ii) at a special meeting of stockholders of the Corporation called for such purpose, or (iii) prior to the Triggering Event, by written consent of one or more stockholders of the Corporation as provided in Section 6.1, in each case until the next election of directors by the stockholders of the Corporation at which such class is elected.

7.4. Amendment. Whenever the holders of shares of any class or series of capital stock of the Corporation (other than the Common Stock) are entitled to elect one or more directors, any amendment, alteration, change or repeal of this Section 7 also shall require the affirmative vote of not less than a majority of the outstanding shares of each such class or series of capital stock of the Corporation entitled to vote on such directors.

 

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8. Business Combinations.

8.1. Section 203 of the General Corporation Law. The Corporation shall not be subject to the provisions of Section 203 of the General Corporation Law.

8.2. Limitations on Business Combinations. Notwithstanding Section 8.1, the Corporation shall not, at any point in time at which the Class A Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act (as defined in Section 14) (or if the Class A Common Stock is no longer so registered as a result of action taken, directly or indirectly, by an Interested Stockholder (as defined in Section 8.3(iv)) or as a result of a transaction in which a person becomes an Interested Stockholder), engage in any Business Combination (as defined in Section 8.3(ii)) with any Interested Stockholder for a period of three years following the time that such stockholder became an Interested Stockholder, unless:

(i) prior to such time, the Board approved either the Business Combination or the transaction which resulted in the stockholder becoming an Interested Stockholder, or

(ii) upon consummation of the transaction which resulted in the stockholder becoming an Interested Stockholder, the Interested Stockholder owned at least 85% of the Voting Stock (as defined in Section 8.3(viii)) of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the Voting Stock outstanding (but not the outstanding Voting Stock owned by the Interested Stockholder) those shares owned by (1) Persons who are directors and also officers of the Corporation or (2) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or

(iii) at or subsequent to such time, the Business Combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds (2/3) of the outstanding Voting Stock of the Corporation which is not owned by the Interested Stockholder.

8.3. Definitions. In addition to the terms defined in Section 14, for purposes of this Section 8:

(i) “Associate,” when used to indicate a relationship with any Person, means: (1) any corporation, partnership, unincorporated association or other entity of which such Person is a director, officer, manager or partner or is, directly or indirectly, the Owner of 20% or more of any class of Voting Stock; (2) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (3) any relative or spouse of such Person, or any relative of such spouse, who has the same residence as such Person.

 

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(ii) “Business Combination,” when used in reference to the Corporation and any Interested Stockholder, means:

(1) any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (a) with the Interested Stockholder, or (b) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Stockholder and as a result of such merger or consolidation Section 8.2 is not applicable to the surviving entity;

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

(3) any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any Stock of the Corporation or of such subsidiary to the Interested Stockholder, except: (a) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into Stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the Interested Stockholder became such; (b) pursuant to a merger under Section 251(g) of the General Corporation Law; (c) pursuant to a dividend or distribution paid or made on, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into, Stock of the Corporation or any such subsidiary which security is distributed pro rata to all holders of a class or series of Stock of the Corporation subsequent to the time the Interested Stockholder became such; (d) pursuant to an exchange offer by the Corporation to purchase Stock made on the same terms to all holders of said Stock; or (e) any issuance or transfer of Stock by the Corporation; provided, however, that in no case under items (c)-(e) of this subsection (3) shall there be an increase in the Interested Stockholder’s proportionate share of the Stock of any class or series of the Corporation or of the Voting Stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments);

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

(5) any receipt by the Interested Stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges or other financial benefits (other than those expressly permitted in subsections (1)-(4) above) provided by or through the Corporation or any direct or indirect majority-owned subsidiary.

(iii) “Control,” including the terms “Controlling,” “Controlled by” and “under common Control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Stock, by contract or otherwise. A Person who is the Owner of 20% or more of the outstanding Voting

 

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Stock of a corporation, partnership, unincorporated association or other entity shall be presumed to have Control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of Control shall not apply where such Person holds Voting Stock, in good faith and not for the purpose of circumventing this Section 8, as an agent, bank, broker, nominee, custodian or trustee for one or more Owners who do not individually or as a group have Control of such entity. The definition of Control and correlated terms set forth in Section 14 shall not apply for purposes of this Section 8.

(iv) “Interested Stockholder” means any Person (other than the Corporation or any direct or indirect majority-owned subsidiary of the Corporation) that (1) is the Owner of 15% or more of the outstanding Voting Stock of the Corporation, or (2) is an Affiliate or Associate of the Corporation and was the Owner of 15% or more of the outstanding Voting Stock of the Corporation at any time within the three year period immediately prior to the date on which it is sought to be determined whether such Person is an Interested Stockholder, and the Affiliates and Associates of such Person; provided, however, that the term “Interested Stockholder” shall not include (a) Post (as defined in Section 14) or Post Transferees, or any Affiliates of any such Post Transferees, (b) any Person whose ownership of Stock in excess of the 15% limitation set forth herein is the result of any action taken solely by the Corporation; provided that such Person specified in this clause (b) shall be an Interested Stockholder if thereafter such Person acquires additional shares of Voting Stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such Person; or (c) any Person whose ownership of Stock in excess of the 15% limitation set forth herein is the result of any action taken inadvertently; provided that such Person specified in this clause (c) (1) as soon as practicable divests itself of ownership of sufficient shares so that the Person ceases to otherwise be an Interested Stockholder, and (2) would not, at any time within the three year period immediately prior to a Business Combination between the Corporation and such Person, have been an Interested Stockholder but for the inadvertent acquisition of ownership. For the purpose of determining whether a Person is an Interested Stockholder, the Voting Stock of the Corporation deemed to be outstanding shall include Stock deemed to be owned by the Person through application of the definition of “Owner” below but shall not include any other unissued Stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

(v) “Owner,” including the terms “Own” and “Owned,” when used with respect to any Stock, means a Person that individually or with or through any of its Affiliates or Associates:

(1) beneficially owns such Stock, directly or indirectly; or

(2) has (a) the right to acquire such Stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Owner of Stock tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered Stock is accepted for purchase or exchange; or (b) the right to vote such Stock pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Owner of any Stock because of such Person’s right to vote such Stock if the agreement, arrangement or understanding to vote such Stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten or more Persons; or

 

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(3) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (b) of subsection (2) above), or disposing of such Stock with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, such Stock.

(vi) “Post Transferee” means any Person who (a) acquires Voting Stock of the Corporation from Post (other than in connection with a public offering) or (b) is granted a proxy by, or enters into a voting agreement or other voting arrangement with, Post pursuant to Section 8.04 of the LLC Agreement, and in either case is designated in writing by Post as a “Post Transferee.” For avoidance of doubt, a Person described in clause (b) of the preceding sentence who shall have been designated in writing by Post as a Post Transferee shall continue to be a Post Transferee in the event such Person acquires shares of Class A Common Stock through the exercise of its right to redeem the Nonvoting Common Units, which were the subject of such proxy, agreement or other arrangement, in accordance with Article IX of the LLC Agreement.

(vii) “Stock” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.

(viii) “Voting Stock” means Stock of any class or series entitled to vote generally in the election of directors (or such equivalent office with the power to direct or cause the direction of the management and policies of a Person). Every reference in this Section 8 to a percentage of Voting Stock shall refer to such percentage of the votes of such Voting Stock.

9. Corporate Opportunities.

9.1. Competition and Corporate Opportunities.

(i) Subject to any express agreement that may from time to time be in effect, to the fullest extent permitted by law, Post may, and shall have no duty not to, (a) carry on and conduct, whether directly or indirectly, including, but not limited to, as a partner in any partnership or member, manager or owner of any limited liability company or other type of entity, as a joint venturer in any joint venture, as an officer, director or stockholder of any corporation or as a participant in any syndicate, pool, trust or association, any business of any kind, nature or description, whether or not such business is competitive with or in the same or similar lines of business as the Corporation or any of its Controlled Companies (as defined in Section 14), (b) do business with any client, customer, vendor or lessor of the Corporation or any of its Controlled Companies and (c) make investments in any kind of property in which the Corporation or any of its Controlled Companies may make investments, and no Dual Role Person (as defined in Section 14) shall, to the fullest extent permitted by law, be deemed to have breached his, her or its fiduciary duties, if any, to the Corporation solely by reason of Post’s engaging in any such activity.

(ii) To the fullest extent permitted by Section 122(17) of the General Corporation Law, the Corporation hereby renounces any interest or expectancy of the Corporation or any of its Controlled Companies to participate in any business of Post, and waives any claim against each Dual Role Person, and shall indemnify each Dual Role Person against any claim, that such Dual Role Person is liable to the Corporation or its stockholders for breach of any fiduciary duty solely by reason of such Dual Role Person’s participation in any such business. The Corporation shall pay in advance any expenses incurred in defense of any such claim against any Dual Role Person pursuant to Section 10 or as provided in the Bylaws.

 

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(iii) To the fullest extent permitted by Section 122(17) of the General Corporation Law, the Corporation hereby renounces any interest or expectancy of the Corporation or any of its Controlled Companies in any potential transaction or matter which may constitute a corporate opportunity for both (a) Post and (b) the Corporation or any of its Controlled Companies, and waives any claim against each Dual Role Person, and shall indemnify each Dual Role Person against any claim, that such Dual Role Person is liable to the Corporation or its stockholders for breach of any fiduciary duty solely by reason of the fact that such Dual Role Person (a) pursues or acquires any corporate opportunity for the account of Post, (b) directs, recommends or otherwise transfers such corporate opportunity to Post or (c) does not offer or communicate information regarding such corporate opportunity to the Corporation or any of its Controlled Companies because such Dual Role Person has directed or intends to direct such opportunity to Post; provided, however, in each case, that any corporate opportunity which is expressly offered to a Dual Role Person solely in his or her capacity as a director, officer, manager, employee or agent of the Corporation or any of its Controlled Companies, as reasonably determined by such Dual Role Person, shall belong to the Corporation. The Corporation shall pay in advance any expenses incurred in defense of any such claim pursuant to Section 10 or as provided in the Bylaws.

(iv) The foregoing provisions in this Section 9.1, and the action of any Dual Role Person taken in accordance with, or in reliance upon, the foregoing provisions in this Section 9.1, including entering into or performing any agreement, transaction or arrangement, are, to the fullest extent permitted by law, deemed and presumed to be fair to the Corporation.

9.2. Certain Matters Deemed not Corporate Opportunities. In addition to and notwithstanding the foregoing provisions of this Section 9, the Corporation renounces any interest or expectancy of the Corporation or any of its Controlled Companies in, or in being offered an opportunity to participate in, any business opportunity pursued by or at the direction of Post that the Corporation is not financially able, contractually permitted or legally able to undertake. Moreover, nothing in this Section 9 shall amend or modify in any respect any written contractual agreement between Post, on the one hand, and the Corporation or any of its Controlled Companies, on the other hand.

9.3. Deemed Notice. Any Person purchasing or otherwise acquiring or obtaining any interest in any capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Section 9.

9.4. Severability. The invalidity or unenforceability of any particular provision, or part of any provision, of this Section 9 shall not affect the other provisions or parts hereof, and this Section 9 shall be construed in all respects as if such invalid or unenforceable provisions or parts were omitted.

9.5. Amendment; Terminations.

(i) The provisions of this Section 9 shall have no further force or effect at such time as (1) the Corporation and Post are no longer Affiliates of one another and (2) none of the directors, officers, employees, agents and/or Affiliates of Post serve as directors, officers, managers, employees and/or agents of the Corporation or any of its Controlled Companies.

 

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(ii) No amendment, alteration, change, repeal or termination of this Section 9, nor the adoption of a provision inconsistent with this Section 9, shall eliminate or reduce the effect of such provisions with respect to (1) any matter occurring, or any action or proceeding accruing or arising, prior to such amendment, alteration, change, repeal, termination or adoption of an inconsistent provision or (2) any agreement, arrangement or other understanding between the Corporation and/or a Controlled Company, on the one hand, and Post, on the other hand, that was entered into prior to such amendment, alteration, change, repeal, termination or adoption of an inconsistent provision or any transaction entered into in the performance of such agreement, arrangement or other understanding, whether entered into before or after such time.

10. Indemnification.

10.1. Actions Involving Directors and Officers. The Corporation shall indemnify each person (other than a party plaintiff suing on his or her behalf or in the right of the Corporation) who at any time is serving or has served as a director or officer of the Corporation against any claim, liability or expense incurred as a result of such service, any other service on behalf of the Corporation or any service at the request of the Corporation as a director, officer, manager, employee, member or agent of another corporation, partnership, joint venture, trust or other enterprise (whether incorporated or unincorporated, for-profit or not-for-profit), to the maximum extent permitted by law. Without limiting the generality of the foregoing, the Corporation shall indemnify any such person who was or is a party (other than a party plaintiff suing on his or her behalf or in the right of the Corporation), or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including, but not limited to, an action by or in the right of the Corporation) by reason of such service, against expenses (including, without limitation, attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding.

10.2. Actions Involving Employees or Agents.

(i) Permissive Indemnification. The Corporation may, if it deems appropriate and as may be permitted by this Section 10, indemnify any person (other than a party plaintiff suing on his or her own behalf or in the right of the Corporation) who at any time is serving or has served as an employee or agent of the Corporation against any claim, liability or expense incurred as a result of such service, any other service on behalf of the Corporation or any service at the request of the Corporation as a director, officer, manager, employee, member or agent of another corporation, partnership, joint venture, trust or other enterprise (whether incorporated or unincorporated, for-profit or not-for-profit), to the maximum extent permitted by law or to such lesser extent as the Corporation, in its discretion, may deem appropriate. Without limiting the generality of the foregoing, the Corporation may indemnify any such person who was or is a party (other than a party plaintiff suing on his or her own behalf or in the right of the Corporation), or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including, but not limited to, an action by or in the right of the Corporation) by reason of such service, against expenses (including, without limitation, attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding.

(ii) Mandatory Indemnification. To the extent that an employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 10.2(i), or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including, without limitation, attorneys’ fees) actually and reasonably incurred by him or her in connection with the action, suit or proceeding.

 

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10.3. Determination of Right to Indemnification in Certain Circumstances. Any indemnification required under Section 10.1 or authorized by the Corporation in a specific case or otherwise required pursuant to Section 10.2 shall be made by the Corporation, unless a determination is made reasonably and promptly that indemnification of the director, officer, employee or agent is not proper under the circumstances. Such determination shall be made (1) by the Board by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, (2) if such a quorum is not obtainable, or even if obtainable, by independent legal counsel in a written opinion or (3) by majority vote of the stockholders; provided that no such determination shall preclude an action brought in an appropriate court to challenge such determination.

10.4. Advance Payment of Expenses. To the extent not prohibited by applicable law, expenses incurred in defense of a claim against a Dual Role Person (as defined in Section 14) pursuant to Section 9.1(ii) or Section 9.1(iii) and expenses incurred by a person who is or was a director or officer of the Corporation in defending a civil or criminal action, suit, proceeding or claim shall be paid by the Corporation in advance of the final disposition of such action, suit, proceeding or claim, and expenses incurred by a person who is or was an employee or agent of the Corporation in defending a civil or criminal action, suit, proceeding or claim may be paid by the Corporation in advance of the final disposition of such action, suit, proceeding or claim as authorized by or at the direction of the Board, in any case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in or pursuant to this Section 10 or otherwise.

10.5. Rights Not Exclusive. The indemnification and other rights provided by this Section 10 shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, and the Corporation is hereby specifically authorized to provide such indemnification and other rights by any agreement, vote of stockholders or disinterested directors or otherwise. The Corporation shall be considered the indemnitor of first resort in all circumstances to which this Section 10 applies.

10.6. Indemnification Agreements Authorized. Without limiting the other provisions of this Section 10, the Corporation is authorized from time to time, without further action by the stockholders of the Corporation, to enter into agreements with any director, officer, employee or agent of the Corporation, or any person who is otherwise serving on behalf of the Corporation at the request of the Corporation as a director, officer, manager, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (whether incorporated or unincorporated, for-profit or not-for-profit), providing such rights of indemnification as the Corporation may deem appropriate, up to the maximum extent permitted by law. Any agreement entered into by the Corporation with a director may be authorized by the other directors, and such authorization shall not be invalid on the basis that similar agreements may have been or may thereafter be entered into with other directors.

10.7. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or who is or was otherwise serving on behalf of the Corporation at the request of the Corporation as a director, officer, manager, employee or agent of another corporation, partnership, joint venture, trust or other enterprise

 

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(whether incorporated or unincorporated, for-profit or not-for-profit) against any claim, liability or expense asserted against such person and incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Section 10.

10.8. Certain Definitions. For purposes of this Section 10:

(i) Any director, officer, employee or agent of the Corporation who shall serve as a director, officer, manager, employee, member or agent of another corporation, partnership, joint venture, trust or other enterprise of which the Corporation, directly or indirectly, is or was the owner of 20% or more of the outstanding voting stock (or comparable interests), shall be deemed to be so serving at the request of the Corporation, unless the Board shall determine otherwise. In all other instances when any person shall serve as a director, officer, manager, employee, member or agent of another corporation, partnership, joint venture, trust or other enterprise of which the Corporation is or was a shareholder or creditor, or in which the Corporation is or was otherwise interested, if it is not otherwise established that such person is or was serving as a director, officer, manager, employee, member or agent at the request of the Corporation, the Board may determine whether such service is or was at the request of the Corporation, and it shall not be necessary to show any actual or prior request for such service. For the avoidance of doubt, any person who is deemed to be serving at the request of the Corporation pursuant to this Section 10.8 is only deemed to be serving at the request of the Corporation for purposes of this Section 10, and is not actually employed by the Corporation.

(ii) References to a corporation include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, manager, employee, member or agent of a constituent corporation or is or was serving at the request of a constituent corporation as a director, officer, manager, employee, member or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this Section 10 with respect to the resulting or surviving corporation as such person would if such person had served the resulting or surviving corporation in the same capacity.

(iii) The term “other enterprise” shall include, without limitation, employee benefit plans and voting or taking action with respect to stock or other assets therein; the term “serving at the request of the Corporation” shall include, without limitation, any service as a director, officer, manager, employee, member or agent of a corporation or other entity which imposes duties on, or involves services by, a director, officer, employee or agent of the Corporation with respect to any employee benefit plan or its participants or beneficiaries, and unless a person’s conduct in connection with an employee benefit plan is finally adjudicated to have been knowingly fraudulent, deliberately dishonest or willful misconduct, such person shall be deemed to have satisfied any standard of care required by or pursuant to this Section 10 in connection with such plan; and the term “fines” shall include, without limitation, any excise taxes assessed on a person with respect to an employee benefit plan and also shall include any damages (including treble damages) and any other civil penalties.

10.9. Survival. The indemnification and other rights provided pursuant to this Section 10 shall apply both to action by any director, officer, employee or agent of the Corporation in an official capacity and to action in another capacity (including, without limitation, any other service on behalf of the Corporation or any service at the request of the Corporation as a director, officer, manager, employee, member or agent of another corporation, partnership, joint venture, trust or other enterprise (whether

 

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incorporated or unincorporated, for-profit or not-for-profit) while holding such office or position and shall continue as to a person who has ceased to be a director, officer, employee or agent of the Corporation and shall inure to the benefit of the heirs, executors and administrators of such a person. Notwithstanding any other provision in this Amended Certificate of Incorporation, any indemnification rights arising under or granted pursuant to this Section 10 shall survive amendment or repeal of this Section 10 with respect to any acts or omissions occurring prior to the effective time of such amendment or repeal and persons to whom such indemnification rights are given shall be entitled to rely upon such indemnification rights with respect to such acts or omissions occurring prior to the effective time of such amendment or repeal as a binding contract with the Corporation.

10.10. Liability of the Directors. The liability of the Corporation’s directors to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director shall be eliminated to the fullest extent permitted by law. It is the intention of the Corporation to eliminate such liability, whether to the Corporation, its stockholders or otherwise, to the fullest extent permitted by law. Consequently, should the General Corporation Law or any other applicable law be amended or adopted hereafter so as to permit the elimination or limitation of such liability, the liability of the directors of the Corporation shall be so eliminated or limited without the need for amendment of this Amended Certificate of Incorporation or further action on the part of the stockholders of the Corporation. Any repeal or modification of this Section 10 by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

10.11. Amendment. This Section 10 may be amended, altered, changed or repealed, or a provision inconsistent with this Section 10 may be adopted, only upon the affirmative vote of not less than 85% of the total voting power of all of the outstanding shares of Common Stock then entitled to vote in the election of directors, voting together as a single class.

11. Amendment or Repeal of Bylaws. A majority of all of the members of the Board may amend, alter, change or repeal any provision of the Bylaws; provided that the Board shall not have the power to amend, alter, change or repeal any provision of the Bylaws relating to amendment in any manner that alters the stockholders’ power to amend, alter, change or repeal the Bylaws. The stockholders of the Corporation also may amend, alter, change or repeal any provision of the Bylaws upon the affirmative vote of a majority of all of the voting power of the Corporation entitled to vote thereon; provided that the stockholders shall not have the power to amend, alter, change or repeal any provision of the Bylaws relating to amendment in any manner that alters the Board’s power to amend, alter, change or repeal the Bylaws.

12. Amendment or Repeal of Certificate. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended Certificate of Incorporation in the manner now or hereafter prescribed by the General Corporation Law, except as otherwise set forth herein, and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other Persons whomsoever by and pursuant to this Amended Certificate of Incorporation in its present form or as hereafter amended, are granted and held subject to this reservation.

 

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13. Severability. If any provision or provisions of this Amended 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 Amended Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Amended 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 Amended Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Amended 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.

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

Affiliate” means a Person that directly, or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, another Person.

Amended Certificate of Incorporation” is defined in the Recitals.

BellRing Brands, LLC” means BellRing Brands, LLC, a Delaware limited liability company, and its successors and assigns.

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

Bylaws” is defined in Section 6.2.

Class A Common Stock” is defined in Section 4.1.

Class B Common Stock” is defined in Section 4.1.

Common Stock” is defined in Section 4.1.

Control” (including the terms “Controlling” and “Controlled”) means the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. The definition of Control and correlated terms set forth in Section 8.3(iii) shall only apply for purposes of Section 8.

Controlled Company” means, with respect to the Corporation, any Person Controlled by the Corporation, including BellRing Brands, LLC.

Corporation” is defined in the Recitals.

Dual Role Person” means each of (1) any director, officer, manager, employee or agent of the Corporation and/or any of its Controlled Companies who is also a director, officer, employee, agent and/or Affiliate of Post and (2) Post.

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.

 

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General Corporation Law” is defined in the Recitals.

Investor Rights Agreement” means the Investor Rights Agreement dated as of October 21, 2019 between PHI and the Corporation (as the same may be amended, restated, supplemented and/or otherwise modified from time to time).

LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of BellRing Brands, LLC, dated as of October 21, 2019, as the same may be amended, restated, supplemented and/or otherwise modified, from time to time.

Non-Affiliated BellRing Brands, LLC Member” is defined in Section 5.1(i)(2).

Nonvoting Common Unit” means a Nonvoting Common Unit of BellRing Brands, LLC as defined in the LLC Agreement.

Original Certificate of Incorporation” is defined in the Recitals.

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

Post” means Post Holdings, Inc. and its Affiliates (other than the Corporation and its Controlled Companies), successors and assigns.

Preferred Stock” is defined in Section 4.1.

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

Triggering Event” means the first date on which Post ceases to own of record more than 50% of the outstanding Nonvoting Common Units.

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation of BellRing Brands, Inc. has been duly executed by the authorized officer below this 16th day of October, 2019.

 

By:  

/s/ Darcy Horn Davenport

  Name: Darcy Horn Davenport
  Title:   President and Chief Executive Officer

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION]

EX-3.2

Exhibit 3.2

BYLAWS

OF

BELLRING BRANDS, INC.

(As Amended and Restated October 21, 2019)

* * *

ARTICLE I – STOCKHOLDERS

SECTION 1. ANNUAL MEETING: The annual meeting of stockholders shall be held at the principal executive office of BellRing Brands, Inc. (the “Company”), or at such other place either within or without the State of Delaware as the Board of Directors (the “Board”) may from time to time determine, on such date and at such time as may be determined by the Board, to elect directors and transact such other business as may properly come before the meeting. At any annual meeting of stockholders only such business shall be conducted, and only such proposals shall be acted upon, as shall have been properly brought before the meeting by the Board or by a stockholder of record entitled to vote at such meeting.

SECTION 2. SPECIAL MEETINGS: Special meetings of the stockholders or of the holders of any class of capital stock of the Company, unless otherwise prescribed by statute or by the Certificate of Incorporation of the Company (as may be amended from time to time, including the terms of any certificate of designation for any series of the Company’s preferred stock, the “Certificate of Incorporation”), may be called only by (a) the affirmative vote of a majority of the Board, (b) the Chairperson of the Board, (c) by the Secretary of the Company, on the request of Post Holdings, Inc. and its successors (“Post”), for such a meeting in writing so long as Post and its subsidiaries (other than the Company and its subsidiaries) own of record, in the aggregate, more than 50% of the Nonvoting Common Units of BellRing Brands, LLC, a Delaware limited liability company (as defined in the Amended and Restated Limited Liability Company Agreement of BellRing Brands, LLC, dated as of October 21, 2019, as the same may be amended, restated, supplemented and/or otherwise modified, from time to time) or (d) the President of the Company. Such request shall be delivered to the Secretary of the Company and shall state the purpose or purposes of the proposed meeting. Upon such direction or request, subject to any requirements or limitations imposed by the Certificate of Incorporation, by these Bylaws or by law, it shall be the duty of the Secretary of the Company to call a special meeting of the stockholders to be held at such time as is specified in the request. Only such business shall be conducted, and only such proposals shall be acted upon, as is specified in the call of any special meeting of stockholders.

SECTION 3. NOTICE: (a) Unless otherwise required by the General Corporation Law of the State of Delaware (as from time to time in effect, the “General Corporation Law”), notice of each meeting of the stockholders, whether annual or special, shall be given in writing or by electronic transmission or otherwise, except that it shall not be necessary to give notice to any stockholder who properly waives notice before or after the meeting, whether in writing or by electronic transmission or otherwise, and no notice of an adjourned meeting need be given, except when required under these Bylaws or by law. Such notice shall state the date, time and place, if any, of the meeting (and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person at such meeting), the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and in the case of a special meeting, also shall state the purpose or purposes thereof. Except as otherwise required by law, each notice of a meeting shall be given in any manner permitted by law not less than 10 nor more than 60 days before the meeting and shall state the time and place of the meeting, and unless it is the annual meeting, shall state at whose direction or request the meeting is called and the purposes for


which it is called. The attendance of any stockholder at a meeting, without protesting at the beginning of the meeting that the meeting is not lawfully called or convened, shall constitute a waiver of notice of such meeting, and the requirement of notice also may be waived in accordance with Section 3 of Article V of these Bylaws. Any previously scheduled meeting of stockholders may be postponed and (unless the Certificate of Incorporation otherwise provides) any special meeting of stockholders may be canceled or postponed, by resolution of the Board upon public announcement (as defined in Section 8(c) of Article I of these Bylaws) given on or prior to the date previously scheduled for such meeting of stockholders, except that no special meeting of stockholders called by Post may be postponed, rescheduled or cancelled by the Company without the prior written consent of Post.

(b) Without limiting the manner by which notice may otherwise be given effectively to stockholders, any notice to a stockholder given by the Company may be given by a form of electronic transmission. For purposes of these Bylaws, “electronic transmission” shall mean any process of communication, not directly involving the physical transfer of paper, that is suitable for the retention, retrieval and reproduction of information by the recipient.

(c) Notice shall be deemed given, if mailed, when deposited in the United States mail with postage prepaid, if addressed to a stockholder at his, her or its address on the Company’s records. Notice given by electronic transmission shall be deemed given (i) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (ii) if by any facsimile, electronic mail or other form of electronic transmission, when directed to the stockholder at his, her or its address on the Company’s records. An affidavit of the Secretary or an Assistant Secretary or the transfer agent or other agent of the Company that notice has been given, whether by a form of electronic transmission or otherwise, shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

SECTION 4. QUORUM: Except as otherwise required by law, the holders of shares representing a majority of the combined voting power of the Company entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business; provided, however, that where a separate vote by a class or series of capital stock or classes or series of capital stock is required, a majority of the voting power of such class or series or classes or series entitled to vote shall constitute a quorum with respect to such vote. Less than such quorum shall have the right successively to adjourn the meeting to a specified date not more than 30 days after such adjournment, and no notice need be given of such adjournment to stockholders not present at such meeting. The stockholders present at a meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of such numbers of stockholders as to reduce the remaining stockholders to less than a quorum.

SECTION 5. ACTION BY CONSENT: From and after the Triggering Event (as defined in the Certificate of Incorporation), any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders of the Company, or any action which may be taken at any annual or special meeting of stockholders of the Company, may be effected only at a duly called annual or special meeting of stockholders of the Company and may not be effected by any consent in writing by

 

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such stockholders. Unless otherwise prescribed by the Certificate of Incorporation, prior to the Triggering Event, any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders of the Company, or any action which may be taken at any annual or special meeting of stockholders of the Company, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holder or holders of Common Stock (as defined in the Certificate of Incorporation) having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given by the Company to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Company.

SECTION 6. VOTING: The shares of the Class A Common Stock (as defined in the Certificate of Incorporation) and the share of the Class B Common Stock (as defined in the Certificate of Incorporation) shall have the voting rights set forth in the Certificate of Incorporation. Except as otherwise provided in the Certificate of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to vote the number of votes in person or by proxy for each share of the class of capital stock having voting power held by such stockholder. If a quorum is present, the affirmative vote of the majority of the voting power represented in person or by proxy and entitled to vote at the meeting shall be the act of the stockholders, except in connection with the election of directors or as otherwise required by the Certificate of Incorporation, by these Bylaws or by law. No person shall be permitted to vote on any shares belonging or hypothecated to the Company.

SECTION 7. PROXIES: The following shall constitute valid means by which a stockholder may authorize a person to act for the stockholder as a proxy:

(a) A stockholder or the stockholder’s duly authorized attorney-in-fact may execute a writing authorizing another person to act for the stockholder as proxy. Execution may be accomplished by the stockholder or duly authorized attorney-in-fact signing such writing or causing the stockholder’s signature to be affixed to such writing by any reasonable means, including, but not limited to, facsimile signature;

(b) A stockholder may authorize another person to act for the stockholder as proxy by transmitting or authorizing the transmission of a facsimile or other means of electronic transmission, or by telephone, to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such facsimile or other means of electronic transmission or telephonic transmission shall either set forth or be submitted with information from which it can be determined that the facsimile or other electronic transmission or telephonic transmission was authorized by the stockholder. If it is determined that such facsimiles or other electronic transmissions or telephonic transmissions are valid, the inspectors or, if there are no inspectors, such other persons making such determination, shall specify the information upon which they relied; or

(c) The holder of the Class B Common Stock may grant one or more proxies or enter into one or more voting agreements or arrangements as provided in the Certificate of Incorporation.

SECTION 8. BUSINESS TO BE CONDUCTED; ADVANCE NOTICE: (a) At an annual meeting of stockholders, only such business (other than nominations of directors, which must be made in compliance with, and shall be exclusively governed by, Section 1 of Article II of these Bylaws) shall be conducted as shall have been brought before the meeting (i) pursuant to the Company’s notice of the meeting (or any supplement thereto), (ii) by or at the direction of the Board or any committee thereof or (iii) by any stockholder of the Company who is a stockholder of record at the time of giving of the notice provided for in this Section 8 of Article I of these Bylaws, and at the time of the annual meeting, who

 

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shall be entitled to vote at such meeting and, in the case of any stockholder other than Post, who shall have complied with the notice procedures set forth in this Section 8 of Article I of these Bylaws; clause (iii) shall be the exclusive means for a stockholder, other than Post, to submit such business to be brought before the meeting (other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and to be included in the Company’s notice of meeting before or at an annual meeting of stockholders.

(b) At any special meeting of stockholders, only such business or proposals as are specified in the notice of the meeting may be properly brought before the meeting.

(c) For any such business to be properly brought before an annual meeting by a stockholder of record, other than Post, pursuant to Section 8(a)(iii) of this Article I of these Bylaws, the stockholder must have given timely notice thereof in writing to the Secretary of the Company and any such proposed business must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice, in writing, must be delivered to, or mailed to and received by, the Secretary of the Company at the principal executive office of the Company not less than 90 days nor more than 120 days prior to the first anniversary of the date of the preceding year’s annual meeting (and for purposes of calculating this date with respect to the first annual meeting after the date shares of capital stock of the Company are first publicly traded (the “IPO Date”), the Company shall be deemed to have held an annual meeting on January 24, 2019); provided, however, that in the event that the date of the meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder must be received not earlier than the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or the 10th day following the day on which public announcement of the date of the annual meeting is first made. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. For purposes of these Bylaws, “public announcement” shall include disclosure in a press release reported by a national news service or in a publicly available document filed or furnished by the Company with the Securities and Exchange Commission pursuant to the Exchange Act.

(d) No business (other than the election of directors) shall be conducted at an annual meeting, except in accordance with the procedures set forth in this Section 8 of Article I of these Bylaws. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the person presiding over the meeting (the “chairperson”) may, if the facts warrant, determine that the proposed business was not properly brought before the meeting in accordance with the provisions of this Section 8 of Article I of these Bylaws (including whether the stockholder or beneficial owner, if any, on whose behalf the proposal is solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s proposal in compliance with such stockholder’s representation as required by Section 8(e)(iii)(d) of Article I of these Bylaws); and if the chairperson should so determine, the chairperson shall so declare to the meeting, and any such proposed business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 8 of Article I of these Bylaws, a stockholder also shall comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 8 of Article I of these Bylaws; provided, however, that any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to business proposals to be considered pursuant to Section 8 of Article I of these Bylaws (including Section 8(a)(iii) of Article I of these Bylaws). Nothing in this Section 8 of Article I of these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Company’s proxy statement pursuant to Rule 14a-8 under the Exchange Act. The provisions of this Section 8 of Article I of these Bylaws also shall govern what constitutes timely notice for purposes of Rule 14a-4(c) of the Exchange Act.

 

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(e) For any such business to be properly brought before a meeting, such stockholder’s notice to the Secretary of the Company shall set forth as to each matter he or she proposes to bring before the meeting:

(i) a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including any proposed resolutions for consideration and, in the event that such business includes a proposal to request or otherwise relating to the amendment of these Bylaws, the text of the proposed amendment), the reasons for proposing to conduct such business at the meeting and any material interest of such stockholder (and of the beneficial owner, if any, on whose behalf the proposal is made) in such business;

(ii) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder;

(iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made:

a. the name and address of such stockholder and beneficial owner as they appear in the Company’s stockholder records;

b. (1) the class or series and number of shares of the Company’s capital stock which are directly or indirectly beneficially owned or owned of record by such stockholder and such beneficial owner, (2) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of capital stock of the Company or with a value derived in whole or in part from the value of any class or series of shares of capital stock of the Company, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Company or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such stockholder or beneficial owner and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Company, (3) any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder or beneficial owner has a right to vote any shares or any security of the Company, (4) any short interest of such stockholder or beneficial owner in any security of the Company (for purposes of these Bylaws, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (5) any rights to dividends on the shares of the Company owned beneficially by such stockholder or beneficial owner that are separated or separable from the underlying shares of the Company, (6) any proportionate interest in shares of the Company or Derivative Instruments held, directly or indirectly, by a general or limited partnership or limited liability company in which such stockholder or beneficial owner is a general partner or manager or directly or indirectly beneficially owns an interest in a general partner or manager, (7) any performance-related fees (other than an asset-based fee) that such stockholder or beneficial owner is entitled to based on any increase or decrease in the value of shares of the Company or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholder’s or beneficial owner’s immediate family sharing the same household, and (8) any other information relating to such stockholder or beneficial

 

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owner that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies for, as applicable, the proposal and/or the election of directors in a contested election, or is otherwise required, pursuant to Section 14 of the Exchange Act and the rules and regulations thereunder (the foregoing items (1) through (8), individually or collectively, the “Proposing Stockholder Information,” which information shall be supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership or other information as of the record date);

c. a representation that the stockholder is a holder of record of shares of the Company, is entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such business; and

d. a representation as to whether the stockholder or the beneficial owner, if any, is or intends to be part of a group which intends (1) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding capital stock required to approve or adopt the proposal or (2) otherwise to solicit proxies from stockholders in support of such proposal. The meaning of the term “group” shall be within the meaning ascribed to such term under Section 13(d)(3) of the Exchange Act.

The proposed business must not be an improper subject for stockholder action under applicable law, and the stockholder must comply with state law, the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 8 of Article I of these Bylaws.

SECTION 9. ORGANIZATION; CONDUCT OF STOCKHOLDER MEETINGS: (a) Each meeting of stockholders shall be convened by the President, Secretary or other officer of the Company or other person calling the meeting by notice given in accordance with these Bylaws. The Chairperson of the Board, or any person appointed by the Chairperson of the Board prior to any meeting of stockholders, shall act as chairperson of each meeting of stockholders. In the absence of the Chairperson of the Board, or a person appointed by the Chairperson of the Board to act as chairperson of the meeting, the stockholders present at the meeting shall designate a stockholder or officer of the Company present to act as chairperson of the meeting. The Secretary of the Company, or a person designated by the chairperson, shall act as secretary of each meeting of stockholders. Whenever the Secretary of the Company shall act as chairperson of the meeting, or shall be absent, the chairperson of the meeting shall appoint a person present to act as secretary of the meeting.

(b) The Board shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem appropriate. Subject to such rules and regulations of the Board, if any, the person presiding over the meeting shall have the right and authority to convene and adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of the person presiding over the meeting, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, adjournment of the meeting, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the Company and their duly authorized and constituted proxies and such other persons as the person presiding over the meeting shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants, either by the person presiding over the meeting or by vote of the shares present in person or by proxy at the meeting, and regulation of the voting or balloting, as applicable, including, without limitation, matters which are to be voted on by ballot, if any. The chairperson of the meeting shall have sole, absolute and complete authority and

 

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discretion to decide questions of compliance with the foregoing procedures and his or her ruling thereon shall be final and conclusive. The chairperson of the meeting, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if the chairperson of the meeting should so determine and declare, any such matter or business shall not be transacted or considered. Unless and to the extent determined by the Board or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.

(c) Notwithstanding anything to the contrary in these Bylaws, unless otherwise required by law, if a stockholder (or qualified representative) does not appear at the annual or special meeting of stockholders of the Company to present business or a nomination proposed by such stockholder pursuant to Section 8 of Article I of these Bylaws or Section 1 of Article II of these Bylaws, such proposed business shall not be transacted and such nomination shall be disregarded, as the case may be, even though proxies in respect of such vote may have been received by the Company. In order to be considered a qualified representative of the stockholder for purposes of Section 8 of Article I of these Bylaws or Section 1 of Article II of these Bylaws, 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.

ARTICLE II – BOARD OF DIRECTORS

SECTION 1. ELECTION; TENURE; QUALIFICATIONS; NOMINATIONS: (a) The Board shall consist of not less than five nor more than twelve members, such directors to be classified in respect of the time for which they shall severally hold office by dividing them into three classes of approximately equal size, and the number of directors shall be fixed by a resolution of the Board adopted from time to time.

(b) In the event of any increase or decrease in the number of directors, the number of directors assigned to each class shall be adjusted as may be necessary so that all classes shall be as nearly equal in number as reasonably possible, except that one class may be one greater or one less in number than the other two classes. No reduction in the number of directors shall affect the term of office of any incumbent director. Subject to the foregoing and the rights of Post under the Investor Rights Agreement dated as of October 21, 2019 between Post and the Company (as the same may be amended, restated, supplemented and/or otherwise modified from time to time, the “Investor Rights Agreement”) (as long as such agreement is in effect), the Board shall determine the class or classes to which any director shall be assigned and the class or classes which shall be increased or decreased in the event of any increase or decrease in the number of directors.

(c) Each director shall hold office until a successor is duly elected and qualified or until the director’s earlier death, resignation, disqualification or removal. With respect to the members of the Board in office on October 21, 2019, the first class of directors shall hold office until the first annual meeting of stockholders following the IPO Date, the second class of directors shall hold office until the second annual meeting of stockholders following the IPO Date, and the third class of directors shall hold office until the third annual meeting of stockholders following the IPO Date. Thereafter, directors shall be elected to hold office for a term of three years, and at each annual meeting of stockholders, the successors to the class of directors whose term shall then expire shall be elected for a term expiring at the third succeeding annual meeting after that election or until their successors shall be elected and qualified.

 

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(d) Subject to Section 1(h) in this Article II (including the exceptions for Post set forth therein) and in addition to the qualifications set out in Section 11 of Article II of these Bylaws, only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible as directors at a meeting of stockholders. Nominations of persons for election to the Board may be made at an annual meeting of stockholders (i) pursuant to the Company’s notice of the meeting (or any supplement thereto), (ii) by or at the direction of the Board or any committee thereof or (iii) by any stockholder of the Company who is a stockholder of record of the Company at the time of giving of the notice provided for in this Section 1 of Article II of these Bylaws, and at the time of the annual meeting, who shall be entitled to vote for the election of directors at the annual meeting and who shall have complied with the notice procedures set forth in this Section 1 of Article II of these Bylaws; the foregoing clause (iii), subject to Section 1(h) in this Article II (including the exceptions for Post set forth therein) shall be the exclusive means for a stockholder other than Post to make nominations of persons for election to the Board at an annual meeting of stockholders. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the notice of meeting (x) by or at the direction of the Board or any committee thereof or (y) provided that the Board has determined that directors shall be elected at such meeting, by any stockholder of the Company who is a stockholder of record at the time the notice provided in this Section 1(d) of Article II of these Bylaws is delivered to the Secretary of the Company, and at the time of the special meeting, who shall be entitled to vote at the special meeting for the election of directors at the special meeting and who shall have complied with the notice provisions set forth in this Section 1 of Article II of these Bylaws; the foregoing clause (y), subject to Section 1(h) in this Article II (including the exceptions for Post set forth therein) shall be the exclusive means for a stockholder other than Post to make nominations of persons for election to the Board at a special meeting of stockholders.

Subject to Section 1(h) in this Article II (including the exceptions for Post set forth therein) for any nominations by a stockholder other than Post to be properly brought before an annual or special meeting of stockholders pursuant to clauses (d)(iii) and (d)(y) of the preceding paragraph of these Bylaws, the stockholder must have given timely notice thereof in writing to the Secretary of the Company. To be timely, a stockholder’s notice in writing must be delivered or mailed to and received by the Secretary of the Company at the principal executive office of the Company (i) in the case of an annual meeting, not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting (and for purposes of calculating this date with respect to the first annual meeting after the IPO Date, the Company shall be deemed to have held an annual meeting on January 24, 2019), provided, however, that in the event that the date of the meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder must be received not earlier than the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or the 10th day following the day on which public announcement (as defined in Section 8(c) of Article I of these Bylaws) of the date of the annual meeting is first made; or (ii) in the case of a special meeting at which directors are to be elected pursuant to the notice of meeting, not earlier than the 120th day prior to the date of such special meeting and not later than the close of business on the later of the 90th day prior to the date of such special meeting or the 10th day following the day on which public announcement of the date of the meeting and of the nominees proposed by the Board to be elected at such meeting is first made. In no event shall any adjournment or postponement of a meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

At the request of the Board, any person nominated by the Board for election as a director shall furnish to the Secretary of the Company that information required to be set forth in a stockholder’s notice of nomination under Section 1(e) in this Article II which pertains to the nominee. Notwithstanding anything in this Section 1 of Article II of these Bylaws to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased effective at the annual meeting and there is no public announcement by the Company naming all of the nominees proposed by the Board for the additional directorships at least 70 days prior to the first anniversary of the preceding year’s annual

 

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meeting, a stockholder’s notice required by this Section 1 of Article II of these Bylaws also shall be considered timely, but only with respect to nominees for such additional directorships, if it shall be delivered to the Secretary of the Company at the principal executive office of the Company not later than the close of business on the 10th day following the day on which such public announcement is first made by the Company.

(e) For nominations to be properly brought before an annual or special meeting, such stockholder’s notice to the Secretary shall set forth as to each person whom the stockholder proposes to nominate for election or re-election as a director:

(i) the name, age, business address and residence of such person;

(ii) the principal occupation or employment of such person currently and for the previous five years;

(iii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships between or among such stockholder and beneficial owner, if any, on whose behalf the nomination is being made, and their respective affiliates and associates or others acting in concert therewith (on the one hand) and each proposed nominee and his or her respective affiliates and associates or others acting in concert therewith (on the other hand), including without limitation all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such requirement and the nominee were a director or executive officer of such registrant;

(iv) such person’s representation that he or she is eligible to serve as a director pursuant to Section 11 of Article II of these Bylaws and whether such person has acted in any manner contrary to the best interest of the Company, including, but not limited to, the violation of any federal or state law or breach of any agreement between that person and the Company relating to his or her services as a director, employee or agent of the Company;

(v) such person’s written consent to being named as a nominee and to serving as a director if elected; and

(vi) any other information relating to such person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies for election of directors in a contested election, or is otherwise required, pursuant to Section 14 of the Exchange Act and the rules and regulations thereunder.

(f) Such stockholder’s notice also shall set forth as to the stockholder(s) giving the notice and the beneficial owner, if any, on whose behalf the nomination is made:

(i) the name and address of such stockholder and beneficial owner, as they appear in the Company’s stockholder records;

(ii) the Proposing Stockholder Information as defined in Section 8(e) of Article I of these Bylaws;

 

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(iii) a representation that the stockholder is a holder of record of shares of the Company, is entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;

(iv) any other information relating to such stockholder or beneficial owner that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies for the election of directors in a contested election, or is otherwise required pursuant to Section 14 of the Exchange Act and the rules and regulations thereunder; and

(v) a representation as to whether the stockholder or beneficial owner, if any, is or intends to be part of a group (as defined in Section 8(e) of Article I of these Bylaws) which intends (i) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding capital stock required to elect the nominee, or (ii) otherwise solicit proxies from stockholders in support of such nominee.

(g) In addition to the qualifications set out in Section 11 of Article II of these Bylaws, to be eligible to be a nominee for election or reelection as a director of the Company, the prospective nominee (whether nominated by or at the direction of the Board or by a stockholder), or someone acting on such prospective nominee’s behalf, must deliver (in accordance with any applicable time periods prescribed for delivery of notice under this Section 1 of Article II of these Bylaws) to the Secretary of the Company at the principal executive office of the Company a written questionnaire providing such information 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 that would be required to be disclosed to stockholders pursuant to applicable law or the rules and regulations of any stock exchange applicable to the Company, including without limitation (i) all information concerning such person that would be required to be disclosed in solicitation of proxies for election of directors pursuant to and in accordance with Regulation 14A under the Exchange Act and (ii) any information the Company may reasonably request to determine the eligibility of the proposed nominee to serve as an independent director under the rules of any exchange upon which shares of the Company’s capital stock are then listed or that could be material to a reasonable stockholder’s understanding of the independence or lack thereof of such nominee (which questionnaire shall be provided by the Secretary upon written request). The prospective nominee also must provide a written representation and agreement, in the form provided by the Secretary of the Company upon written request, that such prospective nominee: (A) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such prospective nominee, if elected as a director of the Company, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Company or (2) any Voting Commitment that could limit or interfere with such prospective nominee’s ability to comply, if elected as a director of the Company, with such prospective nominee’s fiduciary duties under applicable law; (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity (other than the Company) 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) would be in compliance, if elected as a director of the Company, and will comply with all applicable corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Company. For purposes of this Section 1(g) of Article II of these Bylaws a “nominee” shall include any person being considered to fill a vacancy on the Board.

 

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(h) For so long as the Investor Rights Agreement is in effect, the notice and other requirements set forth in Section 1(d) through this Section 1(h) of Article II of these Bylaws shall not apply to Post or any Post Nominees (as defined in the Investor Rights Agreement). Subject to the preceding sentence, no person shall be eligible for election as a director of the Company unless nominated in accordance with the procedures set forth in this Section 1 of Article II of these Bylaws and qualified under Section 11 of Article II of these Bylaws. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the chairperson of the meeting may, if the facts warrant, determine that a nominee is not qualified or a nomination was not properly made in accordance with the procedures prescribed in this Section 1 of Article II of these Bylaws (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee in compliance with such stockholder’s representation as required by clause (f)(v) of this Section 1 of Article II of these Bylaws); and if the chairperson should so determine, the chairperson shall so declare to the meeting, and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 1 of Article II of these Bylaws, a stockholder also shall comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 1 of Article II of these Bylaws; provided, however, that any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations to be considered pursuant to this Section 1 of Article II of these Bylaws (including clause (d) of this Section 1). Nothing in this Section 1 of Article II of these Bylaws shall be deemed to affect any rights of the holders of any series of preferred stock of the Company to elect directors pursuant to any applicable provisions of the Certificate of Incorporation or the rights of Post under the Investor Rights Agreement (so long as such agreement is in effect).

SECTION 2. POWERS: The Board shall have power to manage and control the property and affairs of the Company, and to do all such lawful acts and things which, in its absolute judgment and discretion, it may deem necessary and appropriate for the expedient conduct and furtherance of the Company’s business.

SECTION 3. CHAIRPERSON: The directors shall elect one of the members of the Board to be Chairperson of the Board. The Chairperson shall preside at all meetings of the Board, unless absent from such meeting, in which case, if there is a quorum, the directors present may elect another director to preside at such meeting.

SECTION 4. MEETINGS: (a) Regular meetings of the Board shall be held on such days and at such times and places either within or without the State of Delaware as shall from time to time be fixed by the Board. Notice of such regular meetings need not be given. Special meetings of the Board may be held on any day and at any time and place, within or without the State of Delaware, upon the call of the Chairperson of the Board or the President or Secretary of the Company, by oral, written or email notice duly given, sent or mailed to each director, at such director’s last known address, not less than twenty-four hours before such meeting; provided, however, that any director may, at any time, in writing or by email, waive notice of any meeting at which he or she may not be or may not have been present. Attendance of a director at any meeting shall constitute a waiver of notice of the meeting, except where a director attends a meeting for the sole and express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of the Board need be specified in the notice or waiver of notice of such meeting. Rules of procedure for the conduct of such meetings may be adopted by resolution of the Board.

(b) Members of the Board or of any committee designated by the Board may participate in a meeting of the Board or committee by means of conference telephone or other communications equipment whereby all persons participating in the meeting can hear each other, and participation in a meeting in this manner shall constitute presence in person at the meeting.

 

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SECTION 5. ACTION BY CONSENT: Unless otherwise specifically prohibited by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or such committee, as the case may be, execute a consent thereto in writing, or by electronic transmission, setting forth the action so taken. After an action is taken, the consent or consents relating thereto shall be filed with the minutes of proceedings of the Board or committee in the same paper or electronic form as the minutes are maintained.

SECTION 6. QUORUM: A majority of the Board then in office shall constitute a quorum at all meetings of the Board (provided that in no event shall less than one-third of the entire Board constitute a quorum), and the act of the majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, unless a greater number of directors is required by the Certificate of Incorporation, by these Bylaws or by law. At any meeting of directors, whether or not a quorum is present, the directors present thereat may adjourn the same from time to time without notice other than announcement at the meeting. A director who may be disqualified, by reason of personal interest, from voting on any particular matter before a meeting of the Board may nevertheless be counted for the purpose of constituting a quorum of the Board.

SECTION 7. RESIGNATION OF DIRECTORS: Any director of the Company may resign at any time by giving written notice of such resignation to the Board, the Chairperson of the Board or the President or Secretary of the Company. Any such resignation shall take effect at the time specified therein or, if no time is specified, upon receipt thereof by the Board, the Chairperson of the Board or one of the above-named officers of the Company; and, unless specified therein, the acceptance of such resignation shall not be necessary to make it effective.

SECTION 8. VACANCIES: Subject to the rights, if any, of the holders of any class of capital stock of the Company (other than the Common Stock) then outstanding and the rights of Post under the Investor Rights Agreement (so long as such agreement is in effect), any vacancies in the Board which occur for any reason prior to the expiration of the term of office of the class of directors in which the vacancy occurs, including vacancies which occur by reason of an increase in the number of directors, may be filled (i) by the Board, acting by the affirmative vote of a majority of the remaining directors then in office (even if less than a quorum), or by a sole remaining director, (ii) at a special meeting of stockholders of the Company called for such purpose, or (iii) prior to the Triggering Event, by written consent of one or more stockholders of the Company, in each case until the next election of directors by the stockholders of the Company at which such class of directors is elected.

SECTION 9. COMPENSATION OF DIRECTORS: The Board may, by resolution passed by a majority of the entire Board, fix the terms and amount of compensation payable to any person for his or her services as director, if he or she is not otherwise compensated for services rendered as an officer or employee of the Company; provided, however, that any director may be reimbursed for reasonable and necessary expenses of attending meetings of the Board, or otherwise incurred for any Company purpose; and provided, further, that members of any special or standing committee of directors also may be allowed compensation and expenses similarly incurred. Nothing herein contained shall be construed to preclude any director from serving the Company in any other capacity and receiving compensation therefor.

SECTION 10. COMMITTEES OF THE BOARD OF DIRECTORS: Subject to the rights of Post under the Investor Rights Agreement (so long as such agreement is in effect), the Board (i) may, by resolution passed by a majority of the entire Board, designate two or more directors to constitute an Executive Committee of the Board which shall, to the fullest extent permitted by law, have and exercise all of the authority of the Board in the management of the Company, in the intervals between meetings of the Board, (ii) may appoint any other committee or committees, with such members, functions and powers as the Board may designate, and (iii) shall have the power at any time to fill vacancies in, to change the size or membership of, or to dissolve,

 

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any one or more of such committees. Each such committee shall have such name as may be determined by the Board and shall keep regular minutes of its proceedings and report the same to the Board for approval as required. At all meetings of a committee, a majority of the committee members then in office shall constitute a quorum for the purpose of transacting business, and the acts of a majority of the committee members present at any meeting at which there is a quorum shall be the acts of the committee. A director who may be disqualified, by reason of personal interest, from voting on any particular matter before a meeting of a committee may nevertheless be counted for the purpose of constituting a quorum of the committee. Any action which is required to be or may be taken at a meeting of a committee of directors may be taken without a meeting if consents in writing, setting forth the action so taken, are signed, including signing by electronic transmission, by all of the members of the committee.

SECTION 11. QUALIFICATIONS: A director shall not be eligible for reelection after his or her 72nd birthday, unless the Board or the applicable committee of the Board determines that such director continues to meet the criteria for Board service and, in the case such determination is made by such committee of the Board, recommends to the Board that he or she stand for reelection notwithstanding his or her age.

ARTICLE III – OFFICERS

SECTION 1. OFFICERS; ELECTION: The officers of the Company shall be a Chief Executive Officer, a President and a Secretary, each of whom shall be elected by the Board. The Board may from time to time elect and appoint one or more Assistant Secretaries of the Board and one or more Vice Chairpersons of the Board. In addition, the President may from time to time elect and appoint the other officers of the Company, including one or more Executive Vice Presidents, one or more Senior Vice Presidents, a Controller, a Treasurer and such other officers as the President may deem appropriate. Any two or more offices may be held by the same person except the offices of Chairperson of the Board and Secretary.

SECTION 2. TERMS: All officers of the Company shall hold their respective offices until their death, resignation or removal.

SECTION 3. POWERS; DUTIES: Each officer of the Company shall have such powers and duties as may be prescribed by resolution of the Board or as may be assigned by the Board or the President of the Company.

SECTION 4. REMOVAL: Any officer or agent may be removed by the person or persons, which shall include the Board where applicable, that have authority to appoint such officer or agent, with or without cause, whenever in such person’s or persons’ judgment, as applicable, the best interest of the Company will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the officer or agent so removed. Any vacancy occurring in any office of the Company shall be filled by the person or persons, which shall include the Board where applicable, that have authority to appoint such officer.

ARTICLE IV – CAPITAL STOCK

SECTION 1. STOCK CERTIFICATES AND UNCERTIFICATED SHARES: (a) The shares of the Company shall be represented by certificates; provided, however, that the Board may provide by resolution that some or all of any classes or series of the Company’s capital stock shall be uncertificated

 

13


shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Company. Every holder of stock represented by certificates shall be entitled to have a certificate, in any form approved by the Board, signed by any two authorized officers of the Company (it being understood that the Chairperson of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer and any Assistant Treasurer shall be an authorized officer for such purpose), and shall bear the corporate seal of the Company. If the certificate is countersigned by a transfer agent or registrar other than the Company or its employee, any other signature and the corporate seal appearing on certificates of stock may be facsimile, engraved or printed. In case any such officer, transfer agent or registrar who has signed or whose facsimile, engraved or printed signature appears on any such certificate shall have ceased to be such officer, transfer agent or registrar before the certificate is issued, such certificate may nevertheless be issued by the Company with the same effect as if such officer, transfer agent or registrar had not ceased to be such officer, transfer agent or registrar at the date of its issue. Every holder of uncertificated shares shall be entitled to receive a statement of holdings as evidence of share ownership.

(b) All certificates of stock of each class and series shall be numbered appropriately.

SECTION 2. RECORD OWNERSHIP: The Company shall maintain a record of the name and address of the holder of each share of Company capital stock, the number of shares held by such holder thereby, and the date of issue thereof. The Company shall be entitled to treat the holder of record of any share of capital stock as the holder in fact thereof, and accordingly it will not be bound to recognize any legal, equitable or other claim of interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.

SECTION 3. TRANSFERS: Transfers of shares of capital stock shall be made on the books of the Company only by direction of the holder thereof in person or by his, her or its duly authorized attorney or legal representative. Upon transfer of certificated shares, the old certificates shall be surrendered to the Company by the delivery thereof to the person in charge of the capital stock and transfer books and ledgers, or to such other persons as the Board may designate, by whom they shall be cancelled and new certificates shall thereupon be issued. In the case of uncertificated shares, transfer shall be made only upon receipt of transfer documentation reasonably acceptable to the Company.

SECTION 4. TRANSFER AGENTS; REGISTRARS: The Board shall, by resolution, from time to time appoint one or more transfer agents, that may be officers or employees of the Company, to make transfers of shares of capital stock of the Company and one or more registrars to register shares of capital stock issued by or on behalf of the Company. The Board may adopt such rules as it may deem expedient concerning the issue, transfer and registration of shares of capital stock of the Company.

SECTION 5. LOST CERTIFICATES: The Company may issue a new certificate in place of any certificate theretofore issued by it which is alleged to have been lost, stolen or destroyed and the Board may require the owner of the lost, stolen or destroyed certificate or the owner’s legal representative to give the Company a bond in a sum and in a form approved by the Board, and with a surety or sureties which the Board finds satisfactory, to indemnify the Company and its transfer agents and registrars, if any, against any claim or liability that may be asserted against or incurred by it or any transfer agent or registrar on account of the alleged loss, theft or destruction of any certificate or the issuance of any new certificate. A new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper to do so. The Board may delegate to any officer or officers of the Company any of the powers and authorities contained in this section.

 

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SECTION 6. RECORD DATES: In order that the Company may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of the stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the determination of the stockholders entitled to notice of or to vote at the adjourned meeting. In order that the Company may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating to the action taken.

ARTICLE V – SEAL, BOOKS, FISCAL YEAR, AMENDMENT

SECTION 1. SEAL: The corporate seal, if any, of the Company 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 in any other manner reproduced.

SECTION 2. PLACE FOR KEEPING BOOKS AND SEAL: The books of the Company, and its corporate minutes and corporate seal, shall be kept in the custody of the Secretary of the Company at the principal executive office of the Company, or at such other place or places and in the custody of such other person or persons as the Board may from time to time determine.

SECTION 3. NOTICES: (a) Whenever, under the provisions of applicable law, the Certificate of Incorporation or these Bylaws, written notice is required to be given to any director or stockholder, it shall not be construed to require personal notice, but such notice may be given by mail, by depositing the same in the post office or in a letter box, in a postage paid sealed wrapper, addressed to such director or stockholder at such address as appears on the books of the Company, and such notice shall be deemed to be given at the time when the same shall be thus mailed, or may be given by facsimile or other electronic transmission to the extent authorized or allowed by law.

(b) Any person may waive any notice required to be given under these Bylaws. Whenever notice is required to be given pursuant to the General Corporation Law, the Certificate of Incorporation or these Bylaws, a written waiver thereof, signed by the person entitled to notice, or a waiver by facsimile or other electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting of stockholders or the Board or a committee thereof shall constitute a waiver of notice of such meeting, except when the stockholder or director attends such meeting for the express purpose of objecting, and such stockholder or director objects at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders or the Board or committee thereof need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or by these Bylaws.

 

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SECTION 4. FISCAL YEAR: The fiscal year of the Company shall commence with the first day of October in each year.

SECTION 5. AMENDMENT: A majority of all of the members of the Board may amend, alter, change or repeal any provision of these Bylaws; provided that the Board shall not have the power to amend, alter, change or repeal this Section 5 of Article V of these Bylaws in any manner that alters the stockholders’ power to amend, alter, change or repeal these Bylaws. The stockholders of the Company also may amend, alter, change or repeal any provision of these Bylaws upon the affirmative vote of a majority of all of the voting power of the Company entitled to vote thereon; provided that the stockholders shall not have the power to amend, alter, change or repeal this Section 5 of Article V of these Bylaws in any manner that alters the Board’s power to amend, alter, change or repeal these Bylaws.

 

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EX-10.1

Exhibit 10.1

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

of

BELLRING BRANDS, LLC

Dated as of October 21, 2019

 


TABLE OF CONTENTS

 

         Page  

ARTICLE I. DEFINITIONS AND USAGE

     1  

Section 1.01.

  Definitions      1  

Section 1.02.

  Other Definitional and Interpretative Provisions      9  

ARTICLE II. THE COMPANY

     10  

Section 2.01.

  Formation      10  

Section 2.02.

  Name      10  

Section 2.03.

  Term      10  

Section 2.04.

  Registered Agent and Registered Office      10  

Section 2.05.

  Purposes      11  

Section 2.06.

  Powers of the Company      11  

Section 2.07.

  Partnership Tax Status      11  

Section 2.08.

  Regulation of Internal Affairs      11  

Section 2.09.

  Ownership of Property      11  

Section 2.10.

  Subsidiaries      11  

ARTICLE III. UNITS; MEMBERS; BOOKS AND RECORDS; REPORTS

     11  

Section 3.01.

  Units; Admission of Members      11  

Section 3.02.

  Substitute Members and Additional Members      12  

Section 3.03.

  Accounting and Tax Information      12  

Section 3.04.

  Books and Records      13  

ARTICLE IV. PUBCO OWNERSHIP; RESTRICTIONS ON PUBCO STOCK

     14  

Section 4.01.

  Pubco Ownership      14  

Section 4.02.

  Restrictions on Pubco Common Stock      14  

ARTICLE V. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS

     16  

Section 5.01.

  Capital Contributions      16  

Section 5.02.

  Capital Accounts      16  

Section 5.03.

  Amounts and Priority of Distributions      18  

Section 5.04.

  Allocations      19  

Section 5.05.

  Other Allocation Rules      21  

Section 5.06.

  Tax Withholding; Withholding Advances      22  

ARTICLE VI. CERTAIN TAX MATTERS

     23  

Section 6.01.

  Partnership Representative      23  

Section 6.02.

  Section 754 Election      24  

ARTICLE VII. MANAGEMENT OF THE COMPANY

     24  

Section 7.01.

  Establishment of the Board      24  

Section 7.02.

  Board Composition; Vacancies      25  

Section 7.03.

  Removal; Resignation      25  

Section 7.04.

  Meetings      25  

Section 7.05.

  Action By Written Consent      25  

Section 7.06.

  Quorum      26  

Section 7.07.

  Compensation      26  

Section 7.08.

  Committees      26  

Section 7.09.

  Decisions by the Members      26  

Section 7.10.

  Officers      26  

 

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ARTICLE VIII. TRANSFERS OF INTERESTS

     27  

Section 8.01.

  Restrictions on Transfers.      27  

Section 8.02.

  Certain Permitted Transfers      28  

Section 8.03.

  Registration of Transfers      28  

Section 8.04.

  Class B Common Stock Voting Rights      28  

ARTICLE IX. REDEMPTION

     29  

Section 9.01.

  Redemption Right of a Member      29  

Section 9.02.

  Election and Contribution of Pubco      32  

Section 9.03.

  Reservation of Shares of Class A Common Stock and other Procedures      32  

Section 9.04.

  Effect of Exercise of Redemption      33  

Section 9.05.

  Tax Treatment      33  

ARTICLE X. LIMITATION ON LIABILITY, EXCULPATION AND INDEMNIFICATION

     34  

Section 10.01.

  Limitation on Liability      34  

Section 10.02.

  Exculpation and Indemnification      34  

ARTICLE XI. DISSOLUTION AND TERMINATION

     36  

Section 11.01.

  Dissolution      36  

Section 11.02.

  Winding Up of the Company      36  

Section 11.03.

  Termination      37  

Section 11.04.

  Survival      37  

ARTICLE XII. MISCELLANEOUS

     37  

Section 12.01.

  Expenses      37  

Section 12.02.

  Further Assurances      37  

Section 12.03.

  Notices      37  

Section 12.04.

  Binding Effect; Benefit; Assignment      38  

Section 12.05.

  Jurisdiction      38  

Section 12.06.

  WAIVER OF JURY TRIAL      39  

Section 12.07.

  Counterparts      39  

Section 12.08.

  Entire Agreement      39  

Section 12.09.

  Severability      39  

Section 12.10.

  Amendment      39  

Section 12.11.

  Confidentiality      40  

Section 12.12.

  Governing Law      41  

 

 

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AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of BellRing Brands, LLC, a Delaware limited liability company (the “Company”), dated as of October 21, 2019, by and among the Company, BellRing Brands, Inc., a Delaware corporation (“Pubco”), Post Holdings, Inc., a Missouri corporation (“Holdings”), and each other Person admitted as a Member pursuant to Section 3.02(a).

RECITALS

WHEREAS, the Company has been heretofore formed as a limited liability company under the Delaware LLC 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 November 27, 2013, which certificate of formation was amended (i) pursuant to a certificate of amendment which was executed on January 24, 2014 and filed with the Secretary of State of the State of Delaware on January 27, 2014; (ii) pursuant to a certificate of amendment which was executed on February 13, 2014 and filed with the Secretary of State of the State of Delaware on February 14, 2014; and (iii) pursuant to a certificate of amendment which was executed on August 1, 2019 and filed with the Secretary of State of the State of Delaware on August 2, 2019;

WHEREAS, the Company and its members have previously entered into an amended and restated limited liability company agreement of the Company, dated as of November 24, 2015 (as so amended, the “Existing LLC Agreement”); and

WHEREAS, pursuant to the terms of the Master Transaction Agreement (the “Master Transaction Agreement”), dated as of October 7, 2019, by and among the Company, Pubco and Holdings, the parties thereto have agreed to consummate the separation of the Company and its business from Holdings as contemplated thereby and to take the other actions contemplated in such Master Transaction Agreement (collectively, the “Formation Transactions”).

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein made and other good and valuable consideration, the parties hereto hereby agree to amend and restate the Existing LLC Agreement in its entirety as set forth herein.

ARTICLE I.

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 Economic Member, the deficit balance, if any, in such Economic 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 Economic 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.

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 or Regulatory Agency, as amended, that is binding upon or applicable to such Person or its assets, unless expressly specified otherwise.

Assumed Tax Liability” means, with respect to an Economic Member, an amount equal to the Tax Rate multiplied by the estimated or actual taxable income of the Company, as determined for U.S. federal income tax purposes, allocated to such Economic Member for the period to which the Assumed Tax Liability relates as determined for federal income tax purposes to the extent not previously taken into account in determining the Assumed Tax Liability, as reasonably determined by the Board; provided that such Assumed Tax Liability shall never cause the pro rata amount distributed to Pubco pursuant to Section 5.03(e) to be less than an amount sufficient to enable Pubco to timely (x) satisfy all of its U.S. federal, state and local and non-U.S. tax liabilities, and (y) meet its obligations pursuant to the Tax Matters Agreement and Tax Receivable Agreement, in each case, as reasonably determined by the Board.

Black-Out Period” means any “black-out” or similar period under Pubco’s policies covering trading in Pubco’s securities to which the applicable Redeeming Member is subject (or will be subject at such time as it owns Class A Common Stock), which period restricts the ability of such Redeeming Member to immediately resell shares of Class A Common Stock to be delivered to such Redeeming Member in connection with a Share Settlement.

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 Economic 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 Board;

(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 Board, 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 Board; and

 

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(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 Section 734(b) or Section 743(b) of the Code, 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.

Cash Settlement” means immediately available funds in U.S. dollars in an amount equal to the Redeemed Units Equivalent.

Centralized Partnership Audit Regime” means the centralized partnership audit rules of Sections 6221 through 6241 of the Code, and any regulations promulgated or proposed under any such Sections and any administrative guidance with respect thereto, and any similar rules under state or local tax law.

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 Unit” means the Voting Common Unit or a Nonvoting Common Unit.

Common 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 is traded or quoted, as reported by Bloomberg, L.P. or its successor, for each of the five (5) consecutive full Trading Days ending on and including the last full Trading Day immediately prior to the Redemption Date, 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 is quoted on automated or electronic quotation system, then the Board shall determine the Common Unit Redemption Price in good faith.

Company Minimum Gain” means “partnership minimum gain,” as defined in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

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.

Covered Person” means (i) each Member or an Affiliate thereof, in each case in such capacity, (ii) each Manager and Officer, in each case in such capacity, (iii) each officer, director, manager, stockholder, member, partner, employee, representative, agent or trustee of a Member or an Affiliate thereof, in all cases in such capacity and (iv) the Partnership Representative.

Delaware LLC Act” means the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq.

 

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DGCL” means the Delaware General Corporation Law, 8 Del. C. §§ 1-101 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 Board.

Designated Individual” shall be the individual, if any, designated by the Board pursuant to Section 6.01 with respect to Company Audits pursuant to the Centralized Partnership Audit Regime and shall have the meaning set forth in Treasury Regulations Section 301.6223–1(b)(3).

Disposition Event” means any merger, consolidation or other business combination of Pubco, whether effectuated through one transaction or a series of related transactions (including a tender offer followed by a merger in which the 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 of Pubco and series of preferred stock of Pubco that are generally entitled to vote in the election of directors of Pubco 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.

Economic Members” means the Members holding Nonvoting Common Units.

Economic Percentage Interest” means, with respect to any Economic Member, a fractional amount, expressed as a percentage: (i) the numerator of which is the aggregate number of Nonvoting Common Units owned of record by such Economic Member and (ii) the denominator of which is the aggregate number of Nonvoting Common Units issued and outstanding. The sum of the outstanding Economic Percentage Interests of all Economic Members shall at all times equal 100%.

Effective Time” has the meaning set forth in the Master Transaction Agreement.

Employee Matters Agreement” means the Employee Matters Agreement, dated as of the date hereof, by and among the Company and each of the parties identified therein.

Equity Securities” means, with respect to any Person, any (i) limited liability company or partnership interests or shares of capital stock, (ii) equity, ownership, voting, profits 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.

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

Fiscal Year” means the Company’s fiscal year, which shall initially end on September 30 of each calendar year or as otherwise required by Section 706 of the Code.

 

4


Formation Date Capital Account Balance” means, with respect to any Economic Member, the positive Capital Account balance of such Member as of immediately following the Formation Transactions, the amount of which is set forth on the Member Schedule.

Formation Documents” means the Master Transaction Agreement, this Agreement, the Employee Matters Agreement, the Investor Rights Agreement, the Tax Matters Agreement, the Tax Receivable Agreement and the Master Services Agreement.

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.

Investor Rights Agreement” means the Investor Rights Agreement, dated as of the date hereof, by and between Pubco and Holdings.

IPO” means the initial underwritten public offering of Pubco.

IRS” means the U.S. Internal Revenue Service.

Master Services Agreement” means the Master Services Agreement, dated as of the date hereof, by and among the Company and each of the other parties identified therein.

Member” means any Person named as a Member of the Company on the Member Schedule, 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 Regulations 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 Regulations Section 1.752-1(a)(2)) determined in accordance with Treasury Regulations 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 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 or Net Loss pursuant to this definition of “Net Income” and “Net Loss,” shall be treated as deductible items;

 

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(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 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-(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) and Section 5.04(d) shall not be taken into account in computing Net Income or 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).

Nonvoting Common Units” means the Nonvoting Common Units of the Company, having the rights, privileges and preferences set forth herein.

Partnership Representative means the entity or individual designated by the Board in accordance with Section 6.01 with respect to partnership audits and proceedings pursuant to the Centralized Partnership Audit Regime and shall have the meaning set forth in Section 6223(a) of the Code. Unless otherwise stated, all references to Partnership Representative also shall apply to the Designated Individual if the appointment of a Designated Individual is required.

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

Prime Rate” means the rate that JPMorgan Chase Bank, National Association (or any successor thereto or other major money center commercial bank agreed to by the Board) announces from time to time as its prime lending rate, as in effect from time to time.

 

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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.

Pubco Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of Pubco, as it may be amended from time to time.

Pubco Common Stock” means all classes and series of common stock of Pubco, including the Class A Common Stock and the 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 and (b) the Common Unit Redemption Price.

Regulatory Agency” means the SEC, the Financial Industry Regulatory Authority, any non-U.S. regulatory agency and any other regulatory authority or body (including any state or provincial securities authority and any self-regulatory organization) with jurisdiction over the Company or any of its Subsidiaries.

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 aggregate number of Units in the applicable class(es) owned of record by such Member; and the denominator of which is (x) the aggregate number of Units in the applicable class(es) owned of record by such Member plus (y) the aggregate number of Units in the applicable class(es) owned of record by such other Member or Members.

SEC” means the United States Securities and Exchange Commission.

Share Settlement” means a number of shares of Class A Common Stock equal to the number of Redeemed Units, subject to adjustment as set forth in Section 9.01(e).

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.

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).

Tax Matters Agreement” means the Tax Matters Agreement, dated as of the date hereof, by and among the Company and each of the other parties identified therein.

Tax Rate” means the highest marginal U.S. federal and state tax rate applicable to corporations (or, if appropriate, to individuals) (taking into account the deductibility of state and local taxes) determined from time to time by the Board.

 

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Tax Receivable Agreement” means the Tax Receivable Agreement, dated as of the date hereof, by and among Pubco and each of the other parties identified therein.

Trading Day” means a day on which the principal U.S. securities exchange or automated or electronic quoting system on which the Class A Common Stock is traded or quoted 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 VIII. 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 Common 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.

Voting Common Unit” means the Voting Common Unit of the Company, having the rights, privileges and preferences set forth herein.

Voting Member” means Pubco, so long as it is the holder of the Voting Common Unit, or any successor holder of the Voting Common Unit.

 

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(b) Each of the following terms is defined in the Section set forth opposite such term:

 

Term

  

Section

Agreement    Preamble
Audit    Section 6.01(b)
Board    Section 7.01
Company    Preamble
Confidential Information    Section 12.11(b)
Contribution Notice    Section 9.01(b)
Controlled Entities    Section 10.02(e)
Dissolution Event    Section 11.01(c)
Economic Pubco Security    Section 4.01(a)
e-mail    Section 12.03
Existing LLC Agreement    Recitals
Expenses    Section 10.02(e)
Formation Transactions    Recitals
GAAP    Section 3.03(b)
Holdings    Preamble
Indemnification Sources    Section 10.02(e)
Indemnitee-Related Entities    Section 10.02(e)(i)
Jointly Indemnifiable Claims    Section 10.02(e)(ii)
Manager    Section 7.01
Master Transaction Agreement    Recitals
Member Parties    Section 12.11(a)
Member Schedule    Section 3.01(a)
Non-Affiliated Transferee    Section 8.04
Officers    Section 7.10(a)
Process Agent    Section 12.05(b)
Pubco    Preamble
Pubco Offer    Section 9.01(f)
Redeemed Units    Section 9.01(a)
Redeeming Member    Section 9.01(a)
Redemption    Section 9.01(a)
Redemption Date    Section 9.01(a)
Redemption Notice    Section 9.01(a)
Redemption Right    Section 9.01(a)
Regulatory Allocations    Section 5.04(c)
Retraction Notice    Section 9.01(b)
Revaluation    Section 5.02(c)
Transferor Member    Section 5.02(b)
Withholding Advances    Section 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

 

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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 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 II.

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 November 27, 2013. Any authorized officer or representative, as an “authorized person” within the meaning of the Delaware LLC 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. Any such 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 LLC Act.

Section 2.02. Name. The name of the Company shall be BellRing Brands, LLC; provided that the Board may change the name of the Company to such other name as the Board shall determine in its sole discretion, and the Board 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 Board, 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 XI.

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 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 251 Little Falls Drive in the City of Wilmington, County of New Castle, 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 Board in accordance with the Delaware LLC Act.

 

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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 carry on any lawful act or activities for which limited liability companies may be organized under the Delaware LLC 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. The Members acknowledge and agree that any Subsidiary of the Company that is classified as a partnership or disregarded entity at the time of IPO will not be converted to entity classified as a C corporation for federal income tax purposes.

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 Board. The Board shall be responsible for the oversight of the Company’s operations and overall performance and strategy, while the management of the day-to-day operations of the business of the Company and the execution of business strategy shall be the responsibility of the Officers and employees of the Company and its Subsidiaries.

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 Board and the Officers and employees of the Company in accordance with and in a manner consistent with this Agreement.

ARTICLE III.

UNITS; MEMBERS; BOOKS AND RECORDS; REPORTS

Section 3.01. Units; Admission of Members.

(a) Immediately after the Effective Time, pursuant to the Master Transaction Agreement, (i) the Company hereby establishes a new class of Common Units consisting of one Voting Common Unit having the terms set forth herein, and issues such Voting Common Unit to Pubco as set forth on Schedule A (the “Member Schedule”) and (ii) the Company hereby establishes a new class of Nonvoting Common Units having the terms set forth herein. All limited liability company interests in the Company outstanding as of immediately prior to the Effective Time, all of which are held by Holdings, shall be reclassified into 97,474,180 Nonvoting Common Units, and the Company hereby issues 39,428,571 Nonvoting Common Units to Pubco, in each case, as set forth on the Member Schedule. The Member Schedule shall be maintained by the Officers on behalf of the Company in accordance with this Agreement, and the Board shall promptly deliver a copy of the Member Schedule to any Member that so requests. 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 Officers to reflect such issuance, repurchase, redemption or Transfer, the admission of Additional Members or Substitute Members and the resulting Economic 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.

 

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(b) The Board may cause the Company to authorize and issue from time to time such additional Units or other Equity Securities of any type, class or series and having the designations, preferences and/or special rights as may be determined the Board. Such Units or other Equity Securities may be issued pursuant to such agreements as the Board shall approve. When any such additional Units or other Equity Securities are authorized and issued, the Member Schedule and this Agreement shall be amended by the Board to reflect such additional issuances.

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 VIII) and (ii) such Transferee or recipient shall have executed and delivered to the Company such instruments as the Board 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 of the terms and provisions of this Agreement; provided, however, that Transfers which are permitted pursuant to Section 8.02(c), Section 8.02(d), Section 8.02(e) and Section 8.02(f) shall not be subject to clause (ii) of this sentence. 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) If a Member shall Transfer all (but not less than all) of its Units, the Member shall thereupon cease to be a Member of the Company.

Section 3.03. Accounting and Tax 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 Board or the Officers of the Company in accordance with this Agreement and Applicable Law. In making such decisions, the Board and the Officers of the Company 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”) and in accordance with Sections 6.1 and 6.2 of the Master Transaction Agreement. The Fiscal Year of the Company shall be used for financial reporting and for federal income tax purposes.

(c) Financial Reports. To the extent required under Applicable Law, the Formation Documents or such other agreements by which the Company may be bound from time to time or as otherwise determined by the Board, the books and records of the Company shall be audited as of the end of each Fiscal Year by an accounting firm selected by the Board.

 

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(d) Tax Returns.

(i) The Company shall timely prepare, or cause to be prepared by an accounting firm selected by the Board, 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, 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 and (b) 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) So long as it holds at least a 5% Economic Percentage Interest, Holdings 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 sixty days prior to the due date for the applicable tax return or report (including extensions). Holdings shall notify the Company no later than thirty 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 Holdings to such tax returns or reports. If the Company does not accept any such comment, the Company shall notify Holdings, as applicable, of that fact. If within five days of such notification, Holdings requests in writing a review of a rejected comment, the Company shall cause its regular tax advisors to review the comment and consult with Holdings. 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 provides a tax opinion from a nationally recognized advisor to the effect that the position adopted by the Company is not supported by substantial authority.

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 executive office or at such other location determined by the Board. No Member (other than, so long as each holds an interest in the Company, Pubco and Holdings) shall have any right to inspect the books and records of the Company or any of its Subsidiaries.

 

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ARTICLE IV.

PUBCO OWNERSHIP; RESTRICTIONS ON PUBCO STOCK

Section 4.01. Pubco Ownership.

(a) If at any time Pubco issues a share of Class A Common Stock or any other Equity Security of Pubco entitled to any economic rights (including, without limitation, in the IPO or pursuant to equity compensation plans or outstanding options, rights, warrants or other awards thereunder or pursuant to Share Settlements of Redemptions under Article IX) (an “Economic Pubco Security”) with regard thereto (not including, for the avoidance of doubt, the 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 Nonvoting Common 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 (but the Capital Account of Pubco shall be increased by the amount of such net proceeds not contributed to the Company), and provided, further, that if Pubco issues any shares of Class A Common Stock in order to purchase or fund the purchase from a Non-Pubco Member of a number of Nonvoting Common Units 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 (including, in each case, by way of exchange), then the Company shall not issue any new Nonvoting Common 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 the Person from which such purchase was made).

(b) Notwithstanding Section 4.01(a), this Article IV shall not apply (i) 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 stockholders rights plan (it being understood that upon a Redemption, such Class A Common Stock will be issued together with a corresponding right) or (ii) to the issuance under Pubco’s employee benefit plans or directors’ compensation plan of any warrants, options or other rights to acquire Equity Securities of Pubco or rights or property that may be converted into or settled in Equity Securities of Pubco, but shall in each of the foregoing cases apply to the issuance of Equity Securities of Pubco in connection with the exercise or settlement of such rights, warrants, options or other rights or property.

Section 4.02. Restrictions on Pubco Common Stock.

(a) Except as otherwise determined by the Board in accordance with Section 4.02(d), (i) the Company may not issue any additional Nonvoting Common 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 and (ii) 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 dividends and distributions upon liquidation) and other economic rights as those of such Equity Securities of the Company.

 

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(b) Except as otherwise determined by the Board 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 an equal number of Nonvoting Common Units for the same price per security (or, if Pubco uses funds received from prior distributions from the Company or other funds available to Pubco that were not provided by the Company or the net proceeds from an issuance of shares of Class A Common Stock to fund such redemption, repurchase or acquisition, then the Company shall cancel an equal number of Nonvoting Common 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 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 dividends and 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 Board in accordance with Section 4.02(d): (x) the Company may not redeem, repurchase or otherwise acquire Nonvoting Common Units from Pubco or any of its Subsidiaries unless substantially simultaneously therewith Pubco or such Subsidiary redeems, repurchases or otherwise acquires an equal number of shares of Class A Common Stock for the same price per security from holders thereof (except that if the Company cancels Nonvoting Common 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 therewith 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, if any consideration payable to Pubco in connection with the exercise of options or warrants issued for shares of Class A Common Stock consists (in whole or in part) of shares or other Equity Securities of Pubco (including, for the avoidance of doubt, in connection with the cashless or net exercise of an option or warrant), then the redemption or repurchase of the corresponding Nonvoting Common Units or other Equity Securities of the Company shall be effectuated in a substantially equivalent manner (except if the Company cancels Nonvoting Common 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 Nonvoting Common Units unless accompanied by a substantively identical subdivision or combination, as applicable, of the outstanding Class A 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 otherwise) of the outstanding Class A Common Stock unless accompanied by a substantively identical subdivision or combination of the outstanding Nonvoting Common Units, with corresponding changes made with respect to any other exchangeable or convertible securities.

 

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(d) Notwithstanding anything to the contrary in this Article IV:

(i) if at any time the Board 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 Board may in good faith implement an economically equivalent alternative arrangement without complying with such provisions; provided that such arrangement shall also be subject to the prior written consent (not to be unreasonably withheld) of Holdings, so long as it holds at least a 10% Economic Percentage Interest; 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 Board 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 such arrangement shall also be subject to the prior written consent (not to be unreasonably withheld) of Holdings, so long as it holds at least a 10% Economic Percentage Interest.

ARTICLE V.

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) or Section 9.02.

(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.

(a) Maintenance of Capital Accounts. The Company shall maintain a Capital Account for each Economic 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 Economic Member listed on the Member Schedule shall be credited with the Formation Date Capital Account Balance set forth on the Member Schedule. The Member Schedule shall be amended after the closing of the IPO and from time to time (without the consent or approval of any Member) to reflect adjustments to the Economic Members’ Capital Accounts made in accordance with Section 5.02(a)(ii), Section 5.02(a)(iii), Section 5.02(a)(iv), Section 5.02(c) or otherwise.

(ii) To each Economic Member’s Capital Account there shall be credited: (A) such Economic Member’s Capital Contributions (without duplication for any amounts credited to such Member’s Capital Account under Section 5.02(a)(i)), (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.

 

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(iii) To each Economic 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 Section 5.02(a)(ii) and Section 5.02(a)(iii) 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 Board 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 Board may make such modification so long as such modification will not have any effect on the amounts distributed to any Person pursuant to Article XI upon the dissolution of the Company. The Board 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 this Agreement not to comply with Treasury Regulations Section 1.704-1(b).

(b) Succession to Capital Accounts. In the event any Person becomes a Substitute Member in accordance with the provisions of this Agreement, such Substitute Member shall succeed to the Capital Account of the former Member (the “Transferor Member”) to the extent such Capital Account relates to the Transferred Units.

(c) Adjustments of Capital Accounts. The Company shall revalue the Capital Accounts of the Members in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) (a “Revaluation”) at the following times: (i) immediately prior to the contribution of more than a de minimis amount of money or other property to the Company by a new or existing Member as consideration for one or more Units; (ii) the distribution by the Company to a Member of more than a de minimis amount of property in respect of one or more Units; (iii) the issuance by the Company of more than a de minimis amount of Units as consideration for the provision of services to or for the benefit of the Company (as described in Treasury Regulations Section 1.704-1(b)(2)(iv)(f)(5)(iii)) and (iv) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (i), (ii) and (iii) above shall be made only if the Board reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interest of the Members.

(d) Withdrawal/Distribution Limitations. No Member shall be entitled to withdraw capital or receive distributions except as specifically provided herein. A Member shall have no obligation to the Company, to any other Member or to any creditor of the Company to restore any negative balance in the Capital Account of such Member. Except as expressly provided elsewhere herein, no interest shall be paid on the balance in any Member’s Capital Account.

(e) Per Unit Determination. Whenever it is necessary for purposes of this Agreement to determine a Member’s Capital Account on a per Unit basis, such amount shall be determined by dividing the Capital Account of such Member attributable to the applicable class of Units held of record by such Member by the number of Units of such class held of record by such Member.

 

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Section 5.03. Amounts and Priority of Distributions.

(a) Distributions Generally. Except as otherwise provided in Section 11.02, distributions shall be made to the Economic Members as set forth in this Section 5.03, at such times and in such amounts as the Board, in its sole discretion, shall determine; provided, however, that no distribution will be made hereunder to the extent such distribution would have the effect of rendering the Company insolvent. For purposes of the foregoing sentence, “insolvent” means the inability of the Company to pay its debts as they become due in the usual course of business. For the avoidance of doubt, the Voting Member shall not be entitled to receive any distributions hereunder in its capacity as Voting Member.

(b) Distributions to the Members. Subject to Section 5.03(e), at such times and in such amounts as the Board, in its sole discretion, shall determine, distributions shall be made to the Economic Members in proportion to their respective Economic Percentage Interests.

(c) Pubco Distributions. Notwithstanding the provisions of Section 5.03(b), the Board, in its sole discretion, may authorize that cash be paid to Pubco (which payment shall be made without pro rata distributions to the other Members) in exchange for the redemption, repurchase or other acquisition of Nonvoting Common Units held by Pubco to the extent that such cash payment is used to redeem, repurchase or otherwise acquire an equal number of shares of Class A Common Stock in accordance with Section 4.02(b). For the avoidance of doubt, distributions made under this Section 5.03(c) may not be used to pay or facilitate dividends or distributions on the Pubco Common Stock and must be used solely for the express purpose set forth under this Section 5.03(c).

(d) Distributions in Kind. Any distributions to the Economic Members in kind shall be made at such times and in such amounts as the Board, in its sole discretion, shall determine based on their fair market value, as determined by the Board, in the same proportions as if distributed in accordance with Section 5.03(b), with all Economic Members participating in proportion to their respective Economic Percentage Interests. If cash and property are to be distributed in kind simultaneously, the Company shall distribute such cash and property in kind in the same proportion to each Economic Member.

(e) Tax Distributions. Notwithstanding any other provision of this Section 5.03 to the contrary, to the extent permitted by Applicable Law and consistent with the Company’s obligations to its creditors as reasonably determined by the Board, the Company, subject to availability of sufficient cash, shall make quarterly cash distributions by wire transfer of immediately available funds pursuant to this Section 5.03(e) to each Economic Member pro rata, in accordance with the Member’s Economic Percentage Interest, at least two Business Days prior to the date on which any U.S. federal corporate estimated tax payments are due, until each Member has received an amount at least equal to its Assumed Tax Liability, if any, less the amounts previously distributed under Section 5.03 in the then-current taxable year (or portion thereof); provided that none of the Company, the Board or any Manager, officer or employee of the Company shall have any liability to any Member in connection with any underpayment of estimated taxes, so long as cash distributions are made in accordance with this Section 5.03(e) and the Assumed Tax Liability is determined as provided in the definition of Assumed Tax Liability. For the avoidance of doubt, Tax Distributions shall be made to all Members on a pro rata basis in accordance with their Economic Percentage Interests, notwithstanding the differing actual tax liabilities of such Members. If, on a Tax Distribution date, there are insufficient funds on hand to distribute to the Members the full amount of the Tax Distributions to which such Members are

 

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otherwise entitled, Tax Distributions pursuant to this Section 5.03(e) shall be made to the Members to the extent of available funds in proportion to the amounts that would be otherwise distributable under this Section 5.03(e), and the Company shall make future Tax Distributions as soon as funds become available sufficient to pay the remaining portion of the Tax Distributions to which such Members are otherwise entitled.

(f) Assignment. Holdings shall have the right to assign to any Transferee of Nonvoting Common Units, pursuant to a Transfer made in compliance with this Agreement, the right to receive any portion of the amounts distributable or otherwise payable to Holdings pursuant to Section 5.03(b).

Section 5.04. Allocations.

(a) Net Income and Net Loss. Except as otherwise provided in this Agreement, and after giving effect to the special allocations set forth in Section 5.04(b), Section 5.04(c) and Section 5.04(d), Net Income and Net Loss (and, to the extent necessary, individual items of income, gain, loss, deduction or credit) of the Company shall be allocated among the Economic Members in a manner such that the Capital Account of each Economic Member, immediately after making such allocation, is, as nearly as possible, equal to (i) the distributions that would be made to such Economic Member pursuant to Section 5.03(b) if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Carrying Value, all Company liabilities were satisfied (limited with respect to each nonrecourse liability to the Carrying Value of the assets securing such liability), and the net assets of the Company were distributed, in accordance with Section 5.03(b), to the Economic Members immediately after making such allocation minus (ii) such Economic Member’s share of Company Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets.

(b) Special Allocations. The following special allocations shall be made in the following order:

(i) Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2(f), notwithstanding any other provision of this Article V, if there is a net decrease in Company Minimum Gain during any Fiscal Year, each Economic Member shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Economic Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g). Allocations pursuant to the immediately preceding sentence shall be made in proportion to the respective amounts required to be allocated to each Economic Member pursuant thereto, and shall be calculated so as to result in the smallest and non-duplicative minimum gain chargebacks. The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.04(b)(i) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii) Member Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article V, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal Year, each Economic Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Economic Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(4).

 

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Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Economic Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.04(b)(ii) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

(iii) Qualified Income Offset. In the event any Economic Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or Section 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be specially allocated to such Economic Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of the Economic Member as promptly as possible; provided that an allocation pursuant to this Section 5.04(b)(iii) shall be made only if and to the extent that the Economic Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article V have been tentatively made as if this Section 5.04(b)(iii) were not in this Agreement.

(iv) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Members in a manner determined by the Board consistent with Treasury Regulations Sections 1.704-2(b) and 1.704-2(c).

(v) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Economic Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(j)(1).

(vi) Section 754 Adjustments. (A) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(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 an Economic 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 such asset) or loss (if the adjustment decreases the basis of such asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income and Net Loss. (B) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulations Sections 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to an Economic Member in complete liquidation of such Economic Member’s interest in the Company, the amount of such adjustment to Capital Accounts 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) and such gain or loss shall be specially allocated to such Economic Members in accordance with their interests in the Company in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Economic Member to whom such distribution was made in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

(c) Curative Allocations. The allocations set forth in Section 5.04(b)(i) through Section 5.04(b)(vi) and Section 5.04(d) (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Economic Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 5.04(c). Therefore, notwithstanding any other provision of this Article V (other than the Regulatory Allocations), the Board shall make such offsetting special allocations of Company income,

 

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gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Economic Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Economic Member would have had if the Regulatory Allocations were not part of this Agreement and all Company items were allocated pursuant to Section 5.04(a).

(d) Loss Limitation. Net Loss (or individual items of loss or deduction) allocated pursuant to Section 5.04 shall not exceed the maximum amount of Net Loss (or individual items of loss or deduction) that can be allocated without causing any Economic Member to have an Adjusted Capital Account Deficit at the end of any Fiscal Year. In the event some but not all of the Economic Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Net Loss (or individual items of loss or deduction) pursuant to Section 5.04, the limitation set forth in this Section 5.04(d) shall be applied on a Member by Member basis and Net Loss (or individual items of loss or deduction) not allocable to any Economic Member as a result of such limitation shall be allocated to the other Economic Members in accordance with the positive balances in such Economic Members’ Capital Accounts so as to allocate the maximum permissible Net Loss to each Economic Member under Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Any reallocation of Net Loss pursuant to this Section 5.04(d) shall be subject to chargeback pursuant to the curative allocation provision of Section 5.04(c).

Section 5.05. Other Allocation Rules.

(a) Interim Allocations Due to Percentage Adjustment. If an Economic Percentage Interest is the subject of a Transfer or the Economic Members’ interests in the Company change pursuant to the terms of this Agreement during any Fiscal Year, the amount of Net Income and Net Loss (or items thereof) to be allocated to the Economic Members for such entire Fiscal Year shall be allocated to the portion of such Fiscal Year which precedes the date of such Transfer or change (and if there shall have been a prior Transfer or change in such Fiscal Year, which commences on the date of such prior Transfer or change) and to the portion of such Fiscal Year which occurs on and after the date of such Transfer or change (and if there shall be a subsequent Transfer or change in such Fiscal Year, which precedes the date of such subsequent Transfer or change) in accordance with Section 706 of the Code and the Treasury Regulations promulgated thereunder as determined by the Board and the amounts of the items so allocated to each such portion shall be credited or charged to the Members, with the consent of Holdings (so long as it remains a Member), in accordance with Section 5.04 as in effect during each such portion of the Fiscal Year in question.

(b) Tax Allocations. In accordance with Section 704(c) of the Code and the Treasury Regulations promulgated thereunder, income, gain, loss and deduction with respect to any Property contributed to the capital of the Company and with respect to reverse Code Section 704(c) allocations described in Treasury Regulations Section 1.704-3(a)(6) shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such Property to the Company for federal income tax purposes and its initial Carrying Value or its Carrying Value determined pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) (computed in accordance with the definition of Carrying Value) using the traditional allocation method under Treasury Regulations Section 1.704-3(b). The Company shall make curative allocations of the resulting tax gain or loss from the sale or disposition of any Property in a manner that is intended to offset the effect of the cumulative amount of any “ceiling rule limitations” with respect to allocations of depreciation or amortization deductions in respect of such Property in the current and all prior Fiscal Years, as outlined in Treasury Regulations Section 1.704-3(c)(3).

 

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(c) Any elections or other decisions relating to such allocations shall be made by the Board in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 5.05(b), Section 704(c) of the Code (and the principles thereof) and Treasury Regulations Section 1.704-1(b)(4)(i) are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Economic Member’s Capital Account or share of Net Income, Net Loss, other items or distributions pursuant to any provision of this Agreement. To the extent permissible under Applicable Law, the Board shall allocate the “nonrecourse liabilities” of the Company for purposes of Treasury Regulations Section 1.752-3(a) in a manner that avoids the recognition by the Economic Members of gain pursuant to Section 731(a) of the Code or reduces the aggregate recognition of such gain by the Economic Members for the relevant Fiscal Year, provided that such allocation shall be subject to the approval of Holdings (such approval not to be unreasonably withheld, conditioned or delayed).

Section 5.06. Tax Withholding; Withholding Advances.

(a) Tax Withholding.

(i) If requested by the Company, each Economic Member shall, if able to do so, deliver to the Company: (A) an affidavit, in a form satisfactory to the Company, that the applicable Economic Member (or its partners, as the case may be) is not subject to withholding under the provisions of any federal, state, local, foreign or other law (including under the Centralized Partnership Audit Regime and Section 1446(f) of the Code); (B) any certificate that the Company may reasonably request with respect to any such laws; and/or (C) any other form or instrument reasonably requested by the Company relating to any Economic Member’s status under such law. In the event that an Economic Member fails or is unable to deliver to the Company an affidavit described in subclause (A) of this clause (i), the Company may withhold amounts from such Economic Member in accordance with Section 5.06(b).

(ii) After receipt of a written request of any Economic Member, the Company shall provide such information to such Economic Member and take such other action as may be reasonably necessary to assist such Economic Member in making any necessary filings, applications or elections to obtain any available exemption from, or any available refund of, any withholding imposed by any taxing authority with respect to amounts distributable or items of income allocable to such Economic Member hereunder to the extent not adverse to the Company or any Member. In addition, the Company shall, at the request of any Economic Member, make or cause to be made any such filings, applications or elections referred to in the preceding sentence; provided that any such requesting Economic Member shall cooperate with the Company with respect to any such filing, application or election to the extent reasonably determined by the Company and that any filing fees, taxes or other out-of-pocket expenses reasonably incurred and related thereto shall be paid and borne by such requesting Economic Member or, if there is more than one requesting Economic Member, by such requesting Economic Members in accordance with their Relative Percentage Interests.

(b) Withholding Advances. To the extent the Company is required by Applicable Law to withhold or to otherwise make tax payments on behalf of or with respect to any Economic Member (e.g., backup withholding, or withholding (or deduction from amounts otherwise due to such Member under this Agreement) of amounts due under the Centralized Partnership Audit Regime or Section 1446(f) of the Code) (“Withholding Advances”), the Company may withhold or deduct from amounts otherwise due under this Agreement such amounts and make such tax payments as so required.

(c) Repayment of Withholding Advances. All Withholding Advances made on behalf of an Economic Member, plus interest thereon at a rate equal to the Prime Rate as of the date of such Withholding Advances plus 2.0% per annum, shall (i) be paid on demand by the Economic Member on whose behalf such Withholding Advances were made (it being understood that no such payment shall increase such Member’s Capital Account), or (ii) with the consent of the Board, be repaid by reducing the

 

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amount of the current or next succeeding distribution or distributions that would otherwise have been made to such Economic Member or, if such distributions are not sufficient for that purpose, by so reducing the proceeds of liquidation otherwise payable to such Economic Member. Whenever repayment of a Withholding Advance by an Economic Member is made as described in clause (ii) of this Section 5.06(c), for all other purposes of this Agreement, such Economic Member shall be treated as having received all distributions (whether before or upon any Dissolution Event) unreduced by the amount of such Withholding Advance and interest thereon.

(d) Withholding Advances — Reimbursement of Liabilities. Each Economic Member hereby agrees to reimburse the Company for any liability with respect to Withholding Advances (including interest thereon) required or made on behalf of or with respect to such Economic Member (including penalties imposed with respect thereto).

(e) Survival. The provisions of this Section 5.06, including any obligations arising therefrom, shall survive the dissolution of the Company or the termination of the Member’s interest in the Company and shall remain binding on the Member.

ARTICLE VI.

CERTAIN TAX MATTERS

Section 6.01. Partnership Representative.

(a) Initial Partnership Representative. The Board shall designate the Partnership Representative (and if the Partnership Representative is an entity, an individual to serve as the Designated Individual) of the Company.

(b) Authority. Notwithstanding anything to the contrary herein, all decisions and all actions, including the making of (and decision not to make) elections, that the Partnership Representative is authorized to make or do under the Centralized Partnership Audit Regime or this Agreement may be made by the Partnership Representative only as directed by the Board. The Partnership Representative shall keep the Board fully and timely informed by written notice of any pending or threatened tax action, investigation, claim, controversy or other proceedings involving the Company (each, an “Audit”), as well as the commencement of any Audit, the current developments and status of any Audit and the availability of elections, options and different possible actions involving any Audit. Each Member shall fully and timely cooperate with the Partnership Representative for purposes of carrying out the Partnership Representative’s duties as set forth under the Centralized Partnership Audit Regime. The Partnership Representative shall keep each Member informed of all administrative and judicial tax proceedings; provided, however, that in no event shall the Partnership Representative settle any Audit (i) that could reasonably be expected to have a significant adverse effect on Pubco without the consent (not to be unreasonably withheld) of Pubco and (ii) without the consent of Holdings if such settlement relates to the treatment of Holdings’ transfer of assets and liabilities to the Company. In addition, the Company shall, upon reasonable request by the Members, cooperate and provide information and access to books and records as is necessary or desirable to assist Members in connection with any Audit related to income of the Company.

(c) Elections/Adjustments. The Partnership Representative shall have the right to make an annual election under Section 6221(b) of the Code (if eligible) on the Company’s tax return or in connection with an audit, an election under Section 6226 of the Code. If an election under Section 6226 of the Code is made, the Partnership Representative shall furnish to each Member for the year under Audit a statement of the Member’s share of the Member’s assessment as set forth in the Notice of Final Partnership Administrative Adjustment, and each Member shall take such adjustment into account as required under Section 6226(b) of the Code. If the Partnership Representative elects to apply the

 

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procedures set forth in Section 6225(c)(2)(A) of the Code (the “amended return option”) or Section 6225(c)(2)(B) of the Code (the “pull in option”), each Member agrees (i) to cooperate with, and to provide on a timely basis to the Partnership Representative, all information required to comply with either the amended return option or the pull in option, and (ii) upon the request of the Partnership Representative, to file any amended U.S. federal income tax return and pay any tax due in connection with such tax return in accordance with Section 6225(c) of the Code (as determined in the Board’s reasonable discretion, taking into account relevant factors) within ten calendar days prior to the date the amount is owed to the IRS (which amount shall not be treated as a Capital Contribution); provided, however, that in no event shall Holdings or Pubco be required to file any such amended U.S. federal income tax return without its prior written consent.

(d) Expenses. Any direct or indirect cost incurred by the Partnership Representative, acting in its capacity as such, shall be deemed costs and expenses of the Company, and the Company shall reimburse the Partnership Representative for such amounts.

(e) Survival. The provisions of this Section 6.01, including any obligations arising therefrom, shall survive the termination of the Company or the termination of the Member’s interest in the Company and shall remain binding on the Member, the Board, and the Company for the period of time necessary to resolve with the IRS or other federal, state or applicable local tax agency any and all tax matters relating to the Company for taxable years that are subject to the Centralized Partnership Audit Regime.

Section 6.02. Section 754 Election. The Company and each of its Subsidiaries that is treated as a partnership for U.S. federal income tax purposes shall have in effect an election under Section 754 of the Code (and a corresponding election under state and local law, as applicable) for each taxable year, and the Board shall not take any action to revoke such election.

ARTICLE VII.

MANAGEMENT OF THE COMPANY

Section 7.01. Establishment of the Board. A board of managers of the Company (the “Board”) is hereby established and shall be comprised of natural Persons (each, a “Manager”) who shall be appointed in accordance with the provisions of Section 7.02. No Manager need be a Member. Except as otherwise specifically set forth in this Agreement, each member of the Board shall be deemed to be a “manager” for purposes of applying the Delaware LLC Act. Except as expressly provided in this Agreement or the Delaware LLC Act, none of the Members shall have management authority or rights over the Company or its Subsidiaries. The Board and the Officers of the Company are, to the extent of their respective rights and powers set forth in this Agreement, agents of the Company for the purpose of the Company’s and its Subsidiaries’ business, and the actions of the Board and the Officers of the Company, taken in accordance with such rights and powers shall bind the Company (and none of the Members shall have such right). The Board shall be responsible for the oversight of the Company’s operations and overall performance and strategy, while the management of the day-to-day operations of the business of the Company and the execution of business strategy shall be the responsibility of the Officers and employees of the Company and the officers and employees of its Subsidiaries. Except as expressly provided in this Agreement, the Board shall have all necessary powers to carry out the purposes, business and objectives of the Company and its Subsidiaries. The Board may delegate to Members, employees, Officers or agents of the Company or any Subsidiary in its discretion the authority to sign agreements and other documents on behalf of the Company or any Subsidiary.

 

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Section 7.02. Board Composition; Vacancies.

(a) The number of Managers constituting the Board shall be fixed by the Voting Member from time to time, but shall not be less than five nor more than twelve members. Any vacancies in the Board that occur for any reason, including vacancies that occur by reason of an increase in the number of Managers, may be filled only by the Voting Member.

(b) The Managers shall elect one of the members of the Board to be chairperson of the Board. The chairperson shall preside at all meetings of the Board, unless absent from such meeting, in which case, if there is a quorum, the Managers present may elect another Manager to preside at such meeting.

Section 7.03. Removal; Resignation. A Manager may be removed at any time, with or without cause, by the Voting Member. A Manager may resign at any time from the Board by delivering his or her written resignation to the Board. Any such resignation shall be effective upon receipt thereof unless it is specified to be effective at some other time or upon the occurrence of some other event. The Board’s acceptance of a resignation shall not be necessary to make it effective.

Section 7.04. Meetings.

(a) Regular meetings of the Board shall be held on such days and at such times and places either within or without the State of Delaware as shall from time to time be fixed by the chairperson of the Board. Notice of such regular meetings need not be given. Special meetings of the Board may be held at any day, time and place, within or without the State of Delaware, upon the call of the chairperson of the Board or the president or other chief executive officer of the Company, by oral, written, e-mail or other electronically transmitted notice duly given, sent or mailed to each Manager, at such Manager’s last known address, not less than twenty-four hours before such meeting; provided, however, that any Manager may, at any time, in writing or by e-mail or other electronic transmission, waive notice of any meeting at which he or she may not be or may not have been present. Attendance of a Manager at any meeting shall constitute a waiver of notice of the meeting, except where a Manager attends a meeting for the sole and express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of the Board need be specified in the notice or waiver of notice of such meeting. Rules of procedure for the conduct of such meetings may be adopted by resolution of the Board.

(b) Members of the Board or of any committee designated by the Board may participate in a meeting of the Board or committee by means of conference telephone or similar communications equipment whereby all persons participating in the meeting can hear each other, and participation in a meeting in this manner shall constitute presence in person at the meeting.

(c) Each Manager shall have one vote on all matters submitted to the Board or any committee thereof.

Section 7.05. Action By Written Consent. Notwithstanding anything herein to the contrary, 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 a majority of the Managers or the majority of the members of such committee, as the case may be, execute a consent thereto in writing, or by electronic transmission, setting forth the action so taken. Such consent shall have the same force and effect as a vote at a meeting where a quorum was present and shall be filed with the minutes of proceedings of the Board or such committee, as applicable.

 

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Section 7.06. Quorum. A majority of the Board then in office shall constitute a quorum at all meetings of the Board, and the act of the majority of the Managers present at any meeting at which a quorum is present shall be the act of the Board, unless a greater number of Managers is required by the Company’s Certificate of Formation, this Agreement or by Applicable Law. At any meeting of Managers, whether or not a quorum is present, the Managers present thereat may adjourn the same from time to time without notice other than announcement at the meeting. A Manager who may be disqualified, by reason of personal interest, from voting on any particular matter before a meeting of the Board may nevertheless be counted for the purpose of constituting a quorum of the Board.

Section 7.07. Compensation. The Board may, by resolution passed by a majority of the Board, fix the terms and amount of compensation payable to any Person for his or her services as Manager, if he or she is not otherwise compensated for services rendered as an Officer or employee of the Company, as an officer or employee of any Subsidiary of the Company, as an officer or employee of Holdings or any Subsidiary of Holdings or as a director of Pubco; provided, however, that any Manager may be reimbursed for reasonable and necessary expenses of attending meetings of the Board, or otherwise incurred for any Company purpose; and provided, further, that members of any special or standing committee of Managers also may be allowed compensation and expenses similarly incurred. Nothing herein contained shall be construed to preclude any Manager from serving the Company, any Subsidiary of the Company, Holdings, any Subsidiary of Holdings (other than the Company and its Subsidiaries), Pubco or any of their respective Affiliates in any other capacity and receiving compensation therefor.

Section 7.08. Committees. The Board may, by resolution passed by a majority of the entire Board, designate two or more Managers to constitute an executive committee of the Board which shall have and exercise all of the authority of the Board in the management of the Company, in the intervals between meetings of the Board. In addition, the Board may appoint any other committee or committees, with such members, functions and powers as the Board may designate. The Board shall have the power at any time to fill vacancies in, to change the size or membership of or to dissolve any one or more of such committees. Each such committee shall have such name as may be determined by the Board, and shall keep regular minutes of its proceedings and report the same to the Board for approval as required. At all meetings of a committee, a majority of the committee members then in office shall constitute a quorum for the purpose of transacting business, and the acts of a majority of the committee members present at any meeting at which there is a quorum shall be the acts of the committee. A Manager who may be disqualified, by reason of personal interest, from voting on any particular matter before a meeting of a committee may nevertheless be counted for the purpose of constituting a quorum of the committee.

Section 7.09. Decisions by the Members. Except as expressly provided herein (including with respect to any special approval rights granted to Holdings hereunder), no Members nor any class of Members shall have any voting rights nor the power or authority to vote, approve or consent to any matter or action taken by the Company. Except as otherwise provided herein, any proposed matter or action subject to the vote, approval or consent of the Members shall require the approval of the Board.

Section 7.10. Officers.

(a) Appointment of Officers. The Board may appoint individuals as officers (“Officers”) of the Company, which may include such officers as the Board determines are necessary and appropriate. No Officer need be a Member. An individual may be appointed to more than one office.

(b) Authority of Officers. The Officers shall have the duties, rights, powers and authority as may be prescribed by the Board from time to time, and shall be responsible for carrying out the Company’s business and affairs on a day-to-day basis, including the execution of business strategy of the Company and its Subsidiaries.

 

 

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(c) Removal, Resignation and Filling of Vacancy of Officers. The Board may remove any Officer, for any reason or for no reason, at any time. Any Officer may resign at any time by giving written notice to the Company, and such resignation shall take effect at the date of the receipt of that notice or any later time specified in that notice; provided that, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any such resignation shall be without prejudice to the rights, if any, of the Company or such Officer under this Agreement. A vacancy in any office because of death, resignation, removal or otherwise shall be filled by the Board.

Section 7.11. Reimbursement for Expenses. The Members acknowledge and agree that, upon consummation of the IPO, Pubco’s Class A Common Stock is and will continue to be publicly traded and therefore Pubco will have access to the public capital markets and that such status and the services performed by Pubco will inure to the benefit of the Company and all Members; therefore, Pubco shall be reimbursed by the Company for any reasonable out-of-pocket expenses incurred on behalf of the Company, including all fees, expenses and costs of Pubco associated with being a public company (including public reporting obligations, proxy statements, stockholder meetings, stock exchange fees, transfer agent fees, SEC and FINRA filing fees and offering expenses) and maintaining its corporate existence. To the extent practicable, expenses incurred by Pubco on behalf of or for the benefit of the Company shall be billed directly to and paid by the Company and, if and to the extent any reimbursements to Pubco or any of its Affiliates by the Company pursuant to this Section 7.11 constitute gross income to such Person (as opposed to the repayment of advances made by such Person on behalf of the Company), such amounts shall be treated as “guaranteed payments” within the meaning of Code Section 707(c) and shall not be treated as distributions for purposes of computing the Members’ Capital Accounts. Notwithstanding the foregoing, the Company shall not bear any income tax obligations of Pubco or any payments made pursuant to the Tax Matters Agreement or Tax Receivable Agreement.

ARTICLE VIII.

TRANSFERS OF INTERESTS

Section 8.01. Restrictions on Transfers.

(a) Except as expressly permitted by Section 8.02, and subject to Section 8.01(b), Section 8.01(c), Section 8.01(d) and Section 8.04, any underwriter lock-up agreement applicable to such Member and/or any other agreement between such Member and the Company, Pubco or any of their controlled Affiliates, without the prior written approval of the Board, no Member shall directly or indirectly Transfer all or any part of its Units or any right or economic interest pertaining thereto, including the right to vote or consent on any matter or to receive or have any economic interest in distributions or advances from the Company pursuant thereto. Any such Transfer which is not in compliance with the provisions of this Agreement shall be deemed a Transfer by such Member of Units in violation of this Agreement (and a breach of this Agreement by such Member) and shall be null and void ab initio.

(b) Except as otherwise expressly provided herein, it shall be a condition precedent to any Transfer otherwise permitted or approved pursuant to this Article VIII that:

(i) the Transferor shall have provided to the Company prior written notice of such Transfer; and

(ii) the Transfer shall comply with all Applicable Laws.

(c) Notwithstanding any other provision of this Agreement to the contrary, no Member shall directly or indirectly Transfer all or any part of its Units or any right or economic interest pertaining thereto if such Transfer, in the reasonable discretion of the Board, would cause the Company to be classified as a “publicly traded partnership” as that term is defined in Section 7704 of the Code and the Treasury Regulations promulgated thereunder.

 

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(d) Any Transfer of Units pursuant to this Agreement, including this Article VIII, shall be subject to the provisions of Section 3.01 and Section 3.02.

Section 8.02. Certain Permitted Transfers. Notwithstanding anything to the contrary herein, the following Transfers shall be permitted without the prior written consent of the Board pursuant to Section 8.01:

(a) Any Transfer by any Member of its Units pursuant to a Pubco Offer or Disposition Event;

(b) Any Transfer of Units or other Equity Securities by Holdings or its Affiliates (other than Pubco or any of its Subsidiaries) to any Person; provided that this Section 8.02(b) shall not apply to any Transfers otherwise described in Section 8.02(c), Section 8.02(d), Section 8.02(e) or Section 8.02(f); provided further that any Transfer in reliance on this Section 8.02(b) shall be subject to Section 8.04;

(c) Any Transfer by any Member of its Units in connection with a Redemption pursuant to Article IX;

(d) Any Transfer of Registrable Securities (as such term is defined in the Investor Rights Agreement) in accordance with the Investor Rights Agreement;

(e) Any Transfer by Holdings of Units or any other Equity Securities to the shareholders of Holdings in connection with any distribution of any direct or indirect interest of Holdings in the Company (including transfers to a Subsidiary of Holdings in connection with a transaction that is intended to satisfy the requirements of Section 355 or Section 368 of the Code (whether or not accompanied by a merger of such Subsidiary with Pubco or any of its Subsidiaries)); or

(f) Any Transfer of shares of Class A Common Stock.

Section 8.03. Registration of Transfers. When any Units are Transferred in accordance with the terms of this Agreement, the Company shall cause such Transfer to be registered on the books of the Company.

Section 8.04. Class B Common Stock Voting Rights. In connection with any (i) Transfer by Holdings or its Affiliates (other than Pubco or any of its Subsidiaries) of any Nonvoting Common Units to any Person other than Holdings, any Affiliates of Holdings or Pubco or any of its Subsidiaries (each, a “Non-Affiliated Transferee”) in reliance on Section 8.02(b), or (ii) issuance of additional Nonvoting Common Units by the Company to any Non-Affiliated Transferee, in either case, the holder of the share of Class B Common Stock shall either grant to such Non-Affiliated Transferee a written proxy, or enter into a written voting agreement or other voting arrangement with such Non-Affiliated Transferee, in either case, which shall provide as follows:

(a) the specific number or percentage of votes to which the share of Class B Common Stock is entitled that is covered by such proxy, agreement or other arrangement;

(b) so long as the holder of the share of Class B Common Stock and its Affiliates (other than Pubco or any of its Subsidiaries) hold in the aggregate more than fifty percent (50%) of the Nonvoting Common Units, such Non-Affiliated Transferee shall have the right, in its discretion, to direct the holder of the share of Class B Common Stock to cast a number of votes to which the outstanding share of Class B Common Stock is entitled on all matters on which stockholders in Pubco generally are entitled to vote (whether at a meeting of stockholders or by written consent) as set forth in such proxy, agreement or other arrangement, which, for the avoidance of doubt, need not provide for any such right until the occurrence of the event described in Section 8.04(c);

 

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(c) in the event that, as of the record date for any meeting of the Pubco stockholders at which such stockholders are entitled to vote, the holder of the share of Class B Common Stock and its Affiliates (other than Pubco or any of its Subsidiaries) holds in the aggregate fifty percent (50%) or less of the Nonvoting Common Units outstanding as of such record date, such Non-Affiliated Transferee shall have the right, in its discretion, to direct the holder of the share of Class B Common Stock to cast a number of votes to which the outstanding share of Class B Common Stock is entitled on all matters on which stockholders in Pubco generally are entitled to vote equal to the number of Nonvoting Common Units held by such Non-Affiliated Transferee (and, for the avoidance of doubt, in the event no such direction is provided by such Non-Affiliated Transferee, the holder of the share of Class B Common Stock shall not otherwise have the right to cast such number of votes subject to such proxy, agreement or other arrangement for which no direction was provided); and

(d) in the event of a subsequent Transfer by the Non-Affiliated Transferee of Nonvoting Common Units to another Person (which must be permitted by and pursuant to the terms of this Agreement), the Transferor’s rights under the proxy, agreement or other arrangement referenced in this Section 8.04 shall automatically be deemed assigned or transferred, in whole or in part, to such acquiring Person to the extent it acquires associated Nonvoting Common Units; provided, however, that such rights shall not extend to any Affiliates of the holder of the share of Class B Common Stock, and the Transfer of any Nonvoting Common Units by any Non-Affiliated Transferee to the holder of the share of Class B Common Stock or any of its Affiliates (including, for the avoidance of doubt, Pubco or the Company) shall constitute a revocation of the rights granted under such proxy, agreement or other arrangement with respect to such Nonvoting Common Units.

ARTICLE IX.

REDEMPTION

Section 9.01. Redemption Right of a Member.

(a) Subject to the provisions set forth in this Section 9.01, each Member (other than Pubco) shall be entitled to cause the Company to redeem (a “Redemption”) its Nonvoting Common Units (the “Redemption Right”) at any time (subject to any applicable lock-up agreements). A Member desiring to exercise its Redemption Right (the “Redeeming Member”) shall exercise such right by giving written notice (the “Redemption Notice”) to the Company with a copy to Pubco. The Redemption Notice shall specify the number of Nonvoting Common Units (the “Redeemed Units”) that the Redeeming Member intends to have the Company redeem and a date, not less than seven (7) Business Days nor more than ten (10) Business Days after delivery of such Redemption Notice (unless and to the extent that the Board in its sole discretion agrees in writing to waive such time periods), on which exercise of the Redemption Right shall be completed (the “Redemption Date”); provided that the Company, Pubco and the Redeeming Member may change the number of Redeemed Units and/or the Redemption Date specified in such Redemption Notice to another number and/or date by mutual agreement signed in writing by each of them; provided further that a Redemption may be conditioned on (i) the Redeeming Member having entered into a valid and binding agreement with a third party for the sale of shares of Class A Common Stock that may be distributed to the Redeeming Member in connection with such proposed Redemption (whether in a tender or exchange offer, private sale or otherwise) and such agreement is subject to customary closing conditions for agreements of such kind and the delivery of the Class A Common Stock by the Redeeming Member to such third party, (ii) the closing of an announced merger, consolidation or other transaction in which the shares of Class A Common Stock that may be distributed to the Redeeming Member in connection with such proposed Redemption would be exchanged

 

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or converted or become exchangeable for or convertible into cash or other securities or property and/or (iii) the closing of an underwritten distribution of the shares of Class A Common Stock that may be distributed to the Redeeming Member in connection with such proposed Redemption. Unless the Redeeming Member timely has delivered a Retraction Notice as provided in Section 9.01(b) or has revoked or delayed a Redemption as provided in Section 9.01(c), on the Redemption Date (to be effective immediately prior to the close of business on the Redemption Date): (A) the Redeeming Member shall transfer and surrender the Redeemed Units to the Company, free and clear of all liens and encumbrances, and (B) the Company shall (x) cancel the Redeemed Units, (y) transfer to the Redeeming Member the consideration to which the Redeeming Member is entitled under Section 9.01(b), and (z) if the Units are certificated, issue to the Redeeming Member a certificate for a number of Nonvoting Common Units equal to the difference (if any) between the number of Nonvoting Common Units evidenced by the certificate surrendered by the Redeeming Member pursuant to clause (A) of this Section 9.01(a) and the Redeemed Units.

(b) In exercising its Redemption Right, a Redeeming Member shall be entitled to receive the Share Settlement or the Cash Settlement; provided that the Company shall have the option (as determined by the Board) as provided in Section 9.02 and subject to Section 9.01(d) to select whether the redemption payment is made by means of a Share Settlement or a Cash Settlement. Within three (3) Business Days of delivery of the Redemption Notice, the Company shall give written notice (the “Contribution Notice”) to Pubco and to the Redeeming Member of its intended settlement method; provided that if the Company does not timely deliver a Contribution Notice, the Company shall be deemed to have elected the Share Settlement method. If the Company elects the Cash Settlement method, the Redeeming Member may retract its Redemption Notice by giving written notice (the “Retraction Notice”) to the Company (with a copy to Pubco) within two (2) Business Days of delivery of the Contribution Notice. The timely delivery of a Retraction Notice shall terminate all of the Redeeming Member’s, the Company’s and Pubco’s rights and obligations under this Section 9.01 arising from the Redemption Notice.

(c) In the event the Company elects a Share Settlement in connection with a Redemption, a Redeeming Member shall be entitled to revoke its Redemption Notice or delay the consummation of a Redemption if any of the following conditions exists: (i) any registration statement pursuant to which the resale of the Class A Common Stock to be registered for such Redeeming Member at or immediately following the consummation of the Redemption shall have ceased to be effective pursuant to any action or inaction by the SEC or no such resale registration statement has yet become effective; (ii) Pubco shall have failed to cause any related prospectus to be supplemented by any required prospectus supplement necessary to effect such Redemption; (iii) Pubco shall have exercised its right to defer, delay or suspend the filing or effectiveness of a registration statement and such deferral, delay or suspension shall affect the ability of such Redeeming Member to have its Class A Common Stock registered at or immediately following the consummation of the Redemption; (iv) Pubco shall have disclosed to such Redeeming Member any material non-public information concerning Pubco, the receipt of which could reasonably be determined to result in such Redeeming Member being prohibited or restricted from selling Class A Common Stock at or immediately following the Redemption without disclosure of such information, and Pubco does not permit such Redeeming Member to disclose such information; (v) any stop order relating to the registration statement pursuant to which the Class A Common Stock was to be registered by such Redeeming Member at or immediately following the Redemption shall have been issued by the SEC; (vi) there shall have occurred a material disruption in the securities markets generally or in the market or markets in which the Class A Common Stock is then traded; (vii) there shall be in effect an injunction, a restraining order or a decree of any nature of any Governmental Authority that restrains or prohibits the Redemption; (viii) Pubco shall have failed to comply in all material respects with its obligations under the Investor Rights Agreement, and such failure shall have affected the ability of such Redeeming Member to consummate the resale of the Class A

 

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Common Stock to be received upon such redemption pursuant to an effective registration statement or (ix) the Redemption Date would occur three (3) Business Days or less prior to, or during, a Black-Out Period; provided that in no event shall the Redeeming Member seek to revoke its Redemption Notice or delay the consummation of such Redemption in reliance on any of the matters contemplated in clauses (i) through (ix) above if the Redeeming Member shall have controlled or intentionally materially influenced any facts, circumstances or Persons in connection therewith (except in the good faith performance of his or her duties as an officer or director of Pubco) in order to provide such Redeeming Member with a basis for such delay or revocation. If a Redeeming Member delays the consummation of a Redemption pursuant to this Section 9.01(c), the Redemption Date shall occur on the fifth (5th) Business Day following the date on which the conditions giving rise to such delay cease to exist (or such earlier day as Pubco, the Company and such Redeeming Member may agree in writing).

(d) The number of shares of Class A Common Stock or the Redeemed Units Equivalent that a Redeeming Member is entitled to receive under Section 9.01(b) shall not be adjusted on account of any distributions previously made with respect to the Redeemed Units or dividends previously paid with respect to Class A Common Stock; provided, however, that if a Redeeming Member causes the Company to redeem Redeemed Units and the Redemption Date occurs subsequent to the record date for any distribution with respect to the Redeemed Units but prior to payment of such distribution, the Redeeming Member shall be entitled to receive such distribution with respect to the Redeemed Units on the date that it is made notwithstanding that the Redeeming Member transferred and surrendered the Redeemed Units to the Company prior to such date; provided further, however, that a Redeeming Member shall be entitled to receive any and all Tax Distributions that such Redeeming Member otherwise would have received in respect of income allocated to such Member for the portion of any Fiscal Year irrespective of whether such Tax Distribution(s) are declared or made after the Redemption Date.

(e) In the event of a reclassification, reorganization, recapitalization or other similar transaction as a result of which the shares of Class A Common Stock are converted into another security, securities or other property, then in exercising its Redemption Right a Redeeming Member shall be entitled, in the case of a Redemption effected using the Share Settlement method, to receive the amount of such security, securities or other property that the Redeeming Member would have received if such Redemption Right had been exercised and the Redemption Date had occurred immediately prior to the record date of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction as a result of which the shares of Class A Common Stock are converted into another security, securities or other property, this Section 9.01(e) shall continue to be applicable, mutatis mutandis, with respect to such security or other property.

(f) In the event that a tender offer, share exchange offer, issuer bid, take-over bid, recapitalization or similar transaction with respect to Class A Common Stock (a “Pubco Offer”) is proposed by Pubco or is proposed to Pubco or its stockholders and approved by the board of directors of Pubco or is otherwise effected or to be effected with the consent or approval of the board of directors of Pubco, each Member (other than Pubco) shall be permitted to participate in such Pubco Offer by delivery of a Redemption Notice (which Redemption Notice shall be effective immediately prior to the consummation of such Pubco Offer (and, for the avoidance of doubt, shall be contingent upon such Pubco Offer and not be effective if such Pubco Offer is not consummated)). In the case of a Pubco Offer proposed by Pubco, Pubco shall use its reasonable best efforts expeditiously and in good faith to take all such actions and do all such things as are necessary or desirable to enable and permit the Economic Members to participate in such Pubco Offer to the same extent or on an economically equivalent basis as the holders of shares of Class A Common Stock without discrimination. For the avoidance of doubt (but subject to Section 9.01(g)), in no event shall the Members be entitled to receive in such Pubco Offer aggregate consideration for each Nonvoting Common Unit that is greater than the consideration payable in respect of each share of Class A Common Stock in connection with a Pubco Offer.

 

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(g) Notwithstanding anything to the contrary contained herein, in Pubco Offer, payments under or in respect of the Tax Receivable Agreement shall not be considered part of the consideration payable in respect of any Nonvoting Common Unit or share of Class A Common Stock in connection with such Pubco Offer for the purposes of Section 9.01(f).

(h) Notwithstanding anything to the contrary contained herein, neither the Company nor Pubco shall be obligated to effectuate a Redemption if such Redemption could (as determined in the sole discretion of the Board) cause the Company to be treated as a “publicly traded partnership” or to be taxed as corporation pursuant Section 7704 of the Code or successor provisions of the Code.

Section 9.02. Election and Contribution of Pubco. In connection with the exercise of a Redeeming Member’s Redemption Rights under Section 9.01(a), Pubco shall contribute to the Company the consideration the Redeeming Member is entitled to receive under Section 9.01(b). Unless the Redeeming Member has timely delivered a Retraction Notice as provided in Section 9.01(b), or has revoked or delayed a Redemption as provided in Section 9.01(c), on the Redemption Date (to be effective immediately prior to the close of business on the Redemption Date) (i) Pubco shall make its Capital Contribution to the Company (in the form of the Share Settlement or the Cash Settlement) required under this Section 9.02, and (ii) in the event of a Share Settlement, the Company shall issue to Pubco a number of Nonvoting Common Units equal to the number of Redeemed Units surrendered by the Redeeming Member. Notwithstanding any other provisions of this Agreement to the contrary, in the event that the Company elects a Cash Settlement, Pubco shall be obligated to contribute to the Company only an amount in respect of such Cash Settlement equal to the net proceeds (after deduction of any underwriters’ discounts or commissions and brokers’ fees or commissions) from the sale by Pubco of a number of shares of Class A Common Stock equal to the number of Redeemed Units to be redeemed with such Cash Settlement, which in no event shall exceed the amount paid by the Company to the Redeeming Member as Cash Settlement; provided that, for the avoidance of doubt, if the Cash Settlement to which the Redeeming Member is entitled exceeds the amount that is contributed to the Company by Pubco, the Company shall still be required to pay the Redeeming Member the full amount of the Cash Settlement. The timely delivery of a Retraction Notice shall terminate all of the Company’s and Pubco’s rights and obligations under this Section 9.02 arising from the Redemption Notice.

Section 9.03. Reservation of Shares of Class A Common Stock and other Procedures.

(a) At all times Pubco shall reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon a Redemption, such number of shares of Class A Common Stock as shall be issuable upon any such Redemption pursuant to Share Settlements; provided that nothing contained herein shall be construed to preclude Pubco from satisfying its obligations in respect of any such Redemption by delivery of purchased shares of Class A Common Stock (which may or may not be held in the treasury of Pubco) or the delivery of cash pursuant to a Cash Settlement. Pubco shall deliver shares of Class A Common Stock that have been registered under the Securities Act with respect to any Redemption to the extent a registration statement is effective and available for such shares. Pubco shall use its commercially reasonable efforts to list the shares of Class A Common Stock required to be delivered upon any such Redemption prior to such delivery upon each national securities exchange upon which the outstanding shares of Class A Common Stock are listed or quoted on at the time of such Redemption (it being understood that any such shares may be subject to transfer restrictions under applicable securities laws). Pubco covenants that all shares of Class A Common Stock issued upon a Redemption will, upon issuance, be validly issued, fully paid and non-assessable. The provisions of this Article IX shall be interpreted and applied in a manner consistent with the corresponding provisions of Pubco’s certificate of incorporation.

 

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(b) The shares of Class A Common Stock issued upon a Redemption, if any, shall bear a legend in substantially the following form:

THE TRANSFER OF THESE SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD OR TRANSFERRED OTHER THAN IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (OR OTHER APPLICABLE LAW), OR AN EXEMPTION THEREFROM.

(c) If (i) any shares of Class A Common Stock may be sold pursuant to a registration statement that has been declared effective by the SEC, (ii) all of the applicable conditions of Rule 144 are met or (iii) the legend (or a portion thereof) otherwise ceases to be applicable, Pubco, as applicable, upon the written request of the Member thereof shall promptly provide such Member or its respective transferees, without any expense to such Persons (other than applicable transfer taxes and similar governmental charges, if any), with new certificates (or evidence of book-entry shares) for securities of like tenor not bearing the provisions of the legend with respect to which the restriction has terminated. In connection therewith, such Member shall provide Pubco with such information in its possession as Pubco may reasonably request in connection with the removal of any such legend.

(d) Pubco shall bear all expenses in connection with the consummation of any Redemption, whether or not any such Redemption is ultimately consummated, including any transfer taxes, stamp taxes or duties or other similar taxes in connection with, or arising by reason of, any Redemption; provided, however, that if any shares of Class A Common Stock are to be delivered in a name other than that of the Member that requested the Redemption (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 Member), then such Member and/or the Person in whose name such shares are to be delivered shall pay to Pubco the amount of any transfer taxes, stamp taxes or duties or other similar taxes in connection with, or arising by reason of, such Redemption or shall establish to the reasonable satisfaction of Pubco that such tax has been paid or is not payable.

Section 9.04. Effect of Exercise of Redemption. This Agreement shall continue notwithstanding the consummation of a Redemption and all governance or other rights set forth herein shall be exercised by the remaining Members and the Redeeming Member (to the extent of such Redeeming Member’s remaining interest in the Company). No Redemption shall relieve such Redeeming Member of any prior breach of this Agreement.

Section 9.05. Tax Treatment. The parties hereto acknowledge and agree that each Redemption pursuant to this Article IX shall be treated as a taxable sale of Units by the Redeeming Member from Pubco pursuant to Section 707(a)(2)(B) of the Code (or any similar provisions of applicable state, local or foreign tax law).

 

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ARTICLE X.

LIMITATION ON LIABILITY, EXCULPATION AND INDEMNIFICATION

Section 10.01. Limitation on Liability. 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 no Covered Person shall be obligated personally for any such debt, obligation or liability of the Company; provided that the foregoing shall not alter a Member’s obligation to return funds wrongfully distributed to it.

Section 10.02. Exculpation and Indemnification.

(a) No Covered Person shall be liable, including under any legal or equitable theory of fiduciary duty or other theory of liability, to the Company or to any other Covered Person for any losses, claims, damages or liabilities incurred by reason of any act or omission performed or omitted by the Board or such Covered Person in good faith on behalf of the Company. There shall be, and each Covered Person shall be entitled to, a presumption that such Covered Person acted in good faith.

(b) A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such Person’s professional or expert competence.

(c) The Company shall indemnify, defend and hold harmless each Covered Person against any losses, claims, damages, liabilities, expenses (including all reasonable out-of-pocket fees and expenses of outside counsel and other advisors), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings in which such Covered Person may be involved or become subject to, in connection with any matter arising out of or in connection with the Company’s business or affairs, or this Agreement or any related document, unless such loss, claim, damage, liability, expense, judgment, fine, settlement or other amount (i) is as a result of a Covered Person not acting in good faith on behalf of the Company or arose as a result of the willful commission by such Covered Person of any act that is dishonest and materially injurious to the Company, (ii) results from its contractual obligations under any Formation Document to be performed in a capacity other than as a Covered Person or (iii) results from the breach by any Member (in such capacity) of its contractual obligations under this Agreement; provided that in no event shall the Company be required to indemnify a Member for any loss of such Member’s Capital Contribution or other investment loss or taxes imposed in connection with such Member’s interest in the Company. If any Covered Person becomes involved in any capacity in any action, suit, proceeding or investigation in connection with any matter arising out of or in connection with the Company’s business or affairs, or this Agreement or any related document (other than any Formation Document), other than by reason of any act or omission performed or omitted by such Covered Person that was not in good faith on behalf of the Company or constituted a willful commission by such Covered Person of an act that is dishonest and materially injurious to the Company, the Company shall reimburse such Covered Person for its reasonable outside counsel legal and other reasonable out-of-pocket expenses (including the cost of any investigation and preparation) as they are incurred in connection therewith; provided that such Covered Person shall promptly repay to the Company the amount of any such reimbursed expenses paid to it if it shall be finally judicially determined that such Covered Person was not entitled to indemnification by, or contribution from, the Company in connection with such action, suit, proceeding or investigation. If for any reason (other than the bad faith of a Covered Person or the willful commission by such Covered Person of an act that is dishonest and materially injurious to the Company) the foregoing indemnification is unavailable to such Covered Person, or insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable by such Covered Person as a result of such loss, claim, damage, liability, expense, judgment, fine, settlement or other amount in such proportion as is appropriate to reflect any relevant equitable considerations. There shall be, and each Covered Person shall be entitled to, a rebuttable presumption that such Covered Person acted in good faith.

 

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(d) The obligations of the Company under Section 10.02(c) shall be satisfied solely out of and to the extent of the Company’s assets, and no Covered Person shall have any personal liability on account thereof.

(e) Given that certain Jointly Indemnifiable Claims may arise by reason of the service of a Covered Person to the Company and/or as a director, trustee, officer, partner, member, manager, employee, consultant, fiduciary or agent of other corporations, limited liability companies, partnerships, joint ventures, trusts, employee benefit plans or other enterprises controlled by the Company (collectively, the “Controlled Entities”), or by reason of any action alleged to have been taken or omitted in any such capacity, the Company acknowledges and agrees that the Company shall, and to the extent applicable shall cause the Controlled Entities to, be fully and primarily responsible for the payment to the Covered Person in respect of indemnification or advancement of all out-of-pocket costs of any type or nature whatsoever (including, without limitation, all outside attorneys’ fees and related disbursements), in each case, actually and reasonably incurred by or on behalf of a Covered Person in connection with either the investigation, defense or appeal of a claim, demand, action, suit or proceeding or establishing or enforcing a right to indemnification under this Agreement or otherwise incurred in connection with a claim that is indemnifiable hereunder (collectively, “Expenses”) in connection with any such Jointly Indemnifiable Claim, pursuant to and in accordance with (as applicable) the terms of (i) the Delaware LLC Act, (ii) this Agreement, (iii) any other agreement between the Company or any Controlled Entity and the Covered Person pursuant to which the Covered Person has rights to indemnification, advancement of expenses and/or insurance, (iv) the laws of the jurisdiction of incorporation or organization of any Controlled Entity and/or (v) the certificate of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership, certificate of qualification or other organizational or governing documents of any Controlled Entity ((i) through (v) collectively, the “Indemnification Sources”), irrespective of any right of recovery the Covered Person may have from the Indemnitee- Related Entities. Under no circumstance shall the Company or any Controlled Entity be entitled to any right of subrogation or contribution by the Indemnitee-Related Entities and no right of advancement or recovery the Covered Person may have from the Indemnitee-Related Entities shall reduce or otherwise alter the rights of the Covered Person or the obligations of the Company or any Controlled Entity under the Indemnification Sources. In the event that any of the Indemnitee-Related Entities shall make any payment to the Covered Person in respect of indemnification or advancement of Expenses with respect to any Jointly Indemnifiable Claim, (i) the Company shall, and to the extent applicable shall cause the Controlled Entities to, reimburse the Indemnitee-Related Entity making such payment to the extent of such payment promptly upon written demand from such Indemnitee-Related Entity, (ii) to the extent not previously and fully reimbursed by the Company and/or any Controlled Entity pursuant to clause (i), the Indemnitee-Related Entity making such payment shall be subrogated to the extent of the outstanding balance of such payment to all of the rights of recovery of the Covered Person against the Company and/or any Controlled Entity, as applicable, and (iii) 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 the Indemnitee-Related Entities effectively to bring suit to enforce such rights. The Company and the Covered Person agree that each of the Indemnitee-Related Entities shall be third party beneficiaries with respect to this Section 10.02(e), entitled to enforce this Section 10.02(e) as though each such Indemnitee-Related Entity were a party to this Agreement. For the avoidance of doubt, the Company acknowledges and agrees that insurance policies carried by the

 

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Indemnitee-Related Entities may have provisions reflecting the allocation of liability set forth in this Section 10.02(e). The Company shall cause each of the Controlled Entities to perform the terms and obligations of this Section 10.02(e) as though each such Controlled Entity was the “Company” under this Agreement. For purposes of this Section 10.02(e), the following terms shall have the following meanings:

(i) The term “Indemnitee-Related Entities” means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Company, any Controlled Entity or the insurer under and pursuant to an insurance policy of the Company or any Controlled Entity) from whom a Covered Person may be entitled to indemnification or advancement of Expenses with respect to which, in whole or in part, the Company or any Controlled Entity also may have an indemnification or advancement obligation.

(ii) The term “Jointly Indemnifiable Claims” shall be broadly construed and shall include, without limitation, any claim, demand, action, suit or proceeding for which the Covered Person shall be entitled to indemnification or advancement of Expenses from both (i) the Company and/or any Controlled Entity pursuant to the Indemnification Sources, on the one hand, and (ii) any Indemnitee-Related Entity pursuant to any other agreement between any Indemnitee-Related Entity and the Covered Person pursuant to which the Covered Person is indemnified, the laws of the jurisdiction of incorporation or organization of any Indemnitee-Related Entity and/or the certificate of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or other organizational or governing documents of any Indemnitee-Related Entity, on the other hand.

ARTICLE XI.

DISSOLUTION AND TERMINATION

Section 11.01. Dissolution.

(a) The Company shall not be dissolved by the admission of Additional Members or Substitute Members pursuant to Section 3.02.

(b) No Member shall (i) resign from the Company prior to the dissolution and winding up of the Company except in connection with a Transfer of Units pursuant to the terms of this Agreement or (ii) take any action to dissolve, terminate or liquidate the Company or to require apportionment, appraisal or partition of the Company or any of its assets, or to file a bill for an accounting, except as specifically provided in this Agreement, and each Member, to the fullest extent permitted by Applicable Law, hereby waives any rights to take any such actions under Applicable Law, including any right to petition a court for judicial dissolution under Section 18-802 of the Delaware LLC Act.

(c) The Company shall be dissolved and its business wound up only upon the earliest to occur of any one of the following events (each a “Dissolution Event”): (i) the expiration of forty-five (45) days after the sale or other disposition of all or substantially all of the assets of the Company; or (ii) upon the approval of the Board.

(d) The death, retirement, resignation, expulsion, bankruptcy, insolvency or dissolution of a Member or the occurrence of any other event that terminates the continued membership of a Member of the Company shall not in and of itself cause dissolution of the Company.

Section 11.02. Winding Up of the Company.

(a) The Board shall promptly notify the other Members of any Dissolution Event. Upon dissolution, the Company’s business shall be liquidated in an orderly manner. The Board shall appoint a liquidating trustee to wind up the affairs of the Company pursuant to this Agreement. In performing its duties, the liquidating trustee is authorized to sell, distribute, exchange or otherwise dispose of the assets of the Company in accordance with the Delaware LLC Act and in any reasonable manner that the liquidating trustee shall determine to be in the best interest of the Members.

 

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(b) The proceeds of the liquidation of the Company shall be distributed in the following order and priority:

(i) first, to the creditors (including any Members or their respective Affiliates that are creditors) of the Company in satisfaction of all of the Company’s liabilities (whether by payment or by making reasonable provision for payment thereof, including the setting up of any reserves which are, in the judgment of the liquidating trustee, reasonably necessary therefor); and

(ii) second, to the Economic Members in the same manner as distributions under Section 5.03(b), subject to Section 5.03(e).

(c) Distribution of Property. In the event it becomes necessary in connection with the liquidation of the Company to make a distribution of Property in-kind, subject to the priority set forth in Section 11.02, the liquidating trustee shall have the right to compel each Economic Member to accept a distribution of any Property in-kind (with such Property, as a percentage of the total liquidating distributions to such Economic Member, corresponding as nearly as possible to such Economic Member’s Economic Percentage Interest), with such distribution being based upon the amount of cash that would be distributed to such Members if such Property were sold for an amount of cash equal to the fair market value of such Property, as determined by the liquidating trustee in good faith, subject to the last sentence of Section 5.03(d).

Section 11.03. Termination. The Company shall terminate when all of the assets of the Company, after payment of or reasonable provision for the payment of all debts and liabilities of the Company shall have been distributed to the Members in the manner provided for in this Article XI, and the certificate of formation of the Company shall have been cancelled in the manner required by the Delaware LLC Act.

Section 11.04. Survival. Termination, dissolution, liquidation or winding up of the Company for any reason shall not release any party from any liability which at the time of such termination, dissolution, liquidation or winding up already had accrued to any other party or which thereafter may accrue in respect to any act or omission prior to such termination, dissolution, liquidation or winding up.

ARTICLE XII.

MISCELLANEOUS

Section 12.01. Expenses. Subject to the terms and conditions of the Master Transaction Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense.

Section 12.02. Further Assurances. Each Member agrees 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 Board, may be necessary or advisable to carry out the intent and purposes of this Agreement.

Section 12.03. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given to such party at the address or e-mail address specified for such party on the Member Schedule hereto, or to such other address or e-mail address as such party may

 

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hereafter specify for the purpose by notice to the other parties hereto. 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. 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.

Section 12.04. Binding Effect; Benefit; Assignment.

(a) The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns, except to the extent provided herein with respect to Indemnitee-Related Entities and Covered Parties, each of whom are intended third party beneficiaries of those provisions that specifically relate to them with the right to enforce such provisions as if they were a party hereto.

(b) Except as provided in Article VIII, no Member may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the Board.

Section 12.05. Jurisdiction.

(a) 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 (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Court of Chancery or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, 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 Applicable 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 12.03 shall be deemed effective service of process on such party.

(b) EACH OF THE COMPANY AND THE MEMBERS HEREBY IRREVOCABLY DESIGNATES CORPORATION SERVICE COMPANY (IN SUCH CAPACITY, THE “PROCESS AGENT”), WITH AN OFFICE AT 251 LITTLE FALLS DRIVE, WILMINGTON, NEW CASTLE COUNTY, DELAWARE 19808, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF, SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDINGS WITH RESPECT TO THIS AGREEMENT, AND SUCH SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY THEREOF TO THE PROCESS AGENT; PROVIDED THAT IN THE CASE OF ANY SUCH SERVICE UPON THE PROCESS AGENT, THE PARTY EFFECTING SUCH SERVICE SHALL ALSO DELIVER A COPY THEREOF TO EACH OTHER SUCH PARTY IN THE MANNER PROVIDED IN SECTION 12.03 OF THIS AGREEMENT. EACH PARTY SHALL TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO CONTINUE SAID APPOINTMENT IN FULL FORCE AND EFFECT OR TO APPOINT ANOTHER AGENT SO THAT SUCH PARTY SHALL AT ALL TIMES HAVE AN AGENT FOR SERVICE OF PROCESS FOR THE ABOVE PURPOSES IN WILMINGTON, DELAWARE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW. EACH PARTY EXPRESSLY ACKNOWLEDGES THAT THE FOREGOING WAIVER IS INTENDED TO BE IRREVOCABLE UNDER THE LAWS OF THE STATE OF DELAWARE AND OF THE UNITED STATES OF AMERICA.

 

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Section 12.06. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 12.07. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

Section 12.08. Entire Agreement. This Agreement and the Formation Documents constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, among the parties with respect to the subject matter of this Agreement. Nothing in this Agreement shall create any third party beneficiary rights in favor of any Person or other party, except to the extent provided herein with respect to Indemnitee-Related Entities and Covered Parties, each of whom are intended third party beneficiaries of those provisions that specifically relate to them with the right to enforce such provisions as if they were a party hereto.

Section 12.09. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

Section 12.10. Amendment.

(a) Except as set forth in Section 12.10(b), no amendment to this Agreement may be made without the prior written consent of the Board and a majority in interest of the Economic Members.

(b) Notwithstanding Section 12.10(a), this Agreement, including the Member Schedule, can be amended at any time and from time to time by the Board, acting alone: (i) to reflect the admission of new Members or Transfers of Units, each as provided by and in accordance with the terms of this Agreement, (ii) to effect any subdivisions or combinations of Units made in compliance with Section 4.02(c) and (iii) to issue additional Nonvoting Common Units or any new class of Units (whether or not pari passu with the Nonvoting Common Units) in accordance with the terms of this Agreement.

(c) No waiver of any provision or default under, nor consent to any exception to, the terms of this Agreement or any agreement contemplated hereby shall be effective unless in writing and signed by the party to be bound and then only to the specific purpose, extent and instance so provided.

 

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Section 12.11. Confidentiality.

(a) Each Member shall, and shall direct those of its Affiliates and their respective directors, officers, members, managers, stockholders, partners, employees, attorneys, accountants, consultants, trustees and other advisors (the “Member Parties”) who have access to Confidential Information to, keep confidential and not disclose any Confidential Information to any Person other than a Member Party who agrees to keep such Confidential Information confidential in accordance with this Section 12.11, in each case without the express consent, in the case of Confidential Information acquired from the Company, of the Company or, in the case of Confidential Information acquired from another Member, such other Member, unless:

(i) such disclosure shall be required by Applicable Law;

(ii) such disclosure is reasonably required in connection with any Audit involving the Company or any Member or its Affiliates;

(iii) such disclosure is reasonably required in connection with any litigation against or involving the Company or any Member;

(iv) such information is publicly disclosed in connection with or as part of Holdings’ or Pubco’s ordinary course investor relations activities; or

(v) such disclosure is reasonably required in connection with any proposed Transfer of all or any part of such Member’s Units in the Company; provided that with respect to any such use of any Confidential Information referred to in this clause (v), advance notice must be given to the Company so that it may require any proposed Transferee that is not a Member to enter into a confidentiality agreement with terms substantially similar to the terms of this Section 12.11 (excluding this clause (v)) prior to the disclosure of such Confidential Information.

(b) “Confidential Information” means any information related to the activities of the Company, the Members and their respective Affiliates that a Member may acquire from the Company or the Members, other than information that (i) is already available through publicly available sources of information (other than as a result of disclosure by such Member in violation of this Agreement or any other applicable agreement containing confidentiality provisions signed by such Member), (ii) was available to a Member on a non-confidential basis prior to its disclosure to such Member by the Company, or (iii) becomes available to a Member on a non-confidential basis from a third party; provided such third party is not known by such Member, after reasonable inquiry, to be bound by this Agreement or another confidentiality agreement with the Company. Such Confidential Information may include information that pertains or relates to the business and affairs of any other Member or any other Company matters. Confidential Information may be used by a Member and its Member Parties only in connection with Company matters and in connection with the maintenance of its interest in the Company.

(c) In the event that any Member or any Member Parties of such Member is required to disclose any of the Confidential Information, such Member shall use reasonable efforts to provide the Company with prompt written notice so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement, and such Member shall use reasonable efforts to cooperate with the Company in any effort any such Person undertakes to obtain a protective order or other remedy. In the event that such protective order or other remedy is not obtained, or that the Company waives compliance with the provisions of this Section 12.11, such Member and its Member Parties shall furnish only that portion of the Confidential Information that is legally required and shall exercise all reasonable efforts to obtain reasonably reliable assurance that the Confidential Information shall be accorded confidential treatment.

 

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(d) Notwithstanding anything in this Agreement to the contrary, each Member may disclose to any persons the U.S. federal income tax treatment and tax structure of the Company and the transactions set out in the Master Transaction Agreement. For this purpose, “tax structure” is limited to any facts relevant to the U.S. federal income tax treatment of the Company and does not include information relating to the identity of the Company or any Member.

Section 12.12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Limited Liability Company Agreement to be duly executed as of the day and year first written above.

 

BELLRING BRANDS, LLC,
a Delaware limited liability company
By:  

/s/ Darcy Horn Davenport

  Name: Darcy Horn Davenport
  Title:   President and Chief Executive Officer
BELLRING BRANDS, INC.,
a Delaware corporation
By:  

/s/ Darcy Horn Davenport

  Name: Darcy Horn Davenport
  Title:   President and Chief Executive Officer
POST HOLDINGS, INC.,
a Missouri corporation
By:  

/s/ Diedre J. Gray

  Name: Diedre J. Gray
 

Title:   Executive Vice President, General Counsel and Chief Administrative Officer, Secretary

[SIGNATURE PAGE TO

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT]

EX-10.2

Exhibit 10.2

EMPLOYEE MATTERS AGREEMENT

This EMPLOYEE MATTERS AGREEMENT (this “Agreement”), dated as of October 21, 2019, is made by and among Post Holdings, Inc., a Missouri corporation (“Post”), BellRing Brands, Inc., a Delaware corporation (“BellRing Inc.”), and BellRing Brands, LLC, a Delaware limited liability company (“BellRing LLC”).

RECITALS

A.    BellRing Inc., BellRing LLC, and Post are parties to that certain Master Transaction Agreement, dated as of October 7, 2019 (the “Transaction Agreement”).

B.    To facilitate the transaction described in the Transaction Agreement, the parties deem it appropriate and in the best interests of the parties to enter into this Agreement for the purpose of, together with the Master Services Agreement, allocating assets, Liabilities and responsibilities with respect to certain employment matters, employee compensation and benefit plans and programs described herein between and among them.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby approve and adopt this Agreement and mutually covenant and agree with each other as follows:

ARTICLE I

DEFINITIONS

Unless otherwise defined or provided herein, the capitalized terms used herein shall have the meanings given to them in the Transaction Agreement. In addition to the other terms defined elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the meaning set forth below:

BellRing Benefit Plans means any Benefit Plan sponsored or maintained or contributed to by BellRing Inc. or any member of the BellRing Group (or their predecessors), and any Benefit Plan assumed or adopted by BellRing Inc. or any member of the BellRing Group, specifically excluding any Post Benefit Plan.

BellRing Employees means employees of and service providers to BellRing Inc. or any member of the BellRing Group.

Benefit Plan means, with respect to an entity, each plan, program, arrangement, agreement or commitment (whether written or unwritten, formal or informal) that is an employment, consulting, non-competition or deferred compensation agreement, or an executive compensation, incentive bonus or other bonus, employee pension, profit-sharing, savings, retirement, supplemental retirement, stock option, stock purchase, stock appreciation rights, restricted stock, other equity-based compensation, severance pay, salary continuation, life, health, hospitalization, wellness, sick leave, vacation pay, disability or accident insurance plan, or other employee benefit plan, program, arrangement, agreement or commitment, (a) including any “employee benefit plan” (as defined in Section 3(3) of ERISA), sponsored or maintained by such entity (or to which such entity contributes or is required to contribute or has any Liabilities, directly or indirectly, contingent or fixed) and (b) excluding any indemnification obligations, other than any obligations contained in any of the foregoing.

 

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A “Change of Control” of BellRing Inc. and BellRing LLC shall have occurred in the event any transaction or series of transactions (however structured or evidenced) is/are consummated which (a) results in Post no longer controlling more than 50% of the combined voting power of the capital stock of BellRing Inc. entitled to vote generally in the election of directors of BellRing Inc. (including, for avoidance of doubt, (i) the granting or entry into by Post or any of its Affiliates (other than BellRing Inc. or any of its Subsidiaries) of proxies, voting agreements or other voting arrangements with third parties in accordance with the BellRing Limited Liability Company Agreement pursuant to which such third parties have the right to direct how Post or any of its Affiliates (other than BellRing Inc. or any of its Subsidiaries) shall cast all or a portion of the votes to which the Class B Common Stock of BellRing Inc. is entitled, or (ii) the distribution by Post of its retained beneficial interest in BellRing Inc. by means of a spin-off or split-off to its shareholders (however structured or evidenced)), or (b) involves the sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the assets of BellRing Inc. and its Subsidiaries taken as a whole; and a “Change of Control” of BellRing LLC shall have occurred in the event any transaction or series of transactions (however structured or evidenced) is/are consummated which (x) results in BellRing LLC no longer being a direct or indirect Subsidiary of BellRing Inc. or (y) involves the sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the assets of BellRing LLC.

COBRA means the Consolidated Omnibus Budget and Reconciliation Act of 1985, as amended.

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

Former BellRing Employees” means former employees of and service providers to BellRing Inc. or any member of the BellRing Group, or any predecessor company thereto.

HIPAA means the Health Insurance Portability and Accountability Act of 1996, as amended.

Post Benefit Plans means any Benefit Plan sponsored or maintained by Post or any member of the Post Group, specifically excluding any BellRing Benefit Plan.

ARTICLE II

U.S. 401(K) AND HEALTH AND WELFARE PLANS

2.1    401(k) Plan. Members of the BellRing Group which employ employees eligible for the Post Holdings, Inc. Savings Investment Plan (“Post SIP”) shall remain “participating employers” (as such term is defined in the Post SIP) in the Post SIP through December 31, 2019. BellRing Inc. shall establish and adopt, effective January 1, 2020, a safe harbor 401(k) plan meeting the requirements of Code Section 401(k)(12)(B) and 401(m)(11) (the “BellRing Brands, Inc. 401(k) Plan”) and require that the trust that funds the BellRing Brands, Inc. 401(k) Plan shall accept a direct trust-to-trust transfer of the account balances of such eligible employees of BellRing Inc. and the BellRing Group from the trust that funds the Post SIP, which transfer shall include without limitation such employees’ loans taken out under the Post SIP. Without limiting the foregoing, BellRing Inc. shall ensure that the terms of the BellRing Brands, Inc. 401(k) Plan proposed to be adopted in accordance with the immediately preceding sentence and maintained thereafter may not differ significantly from those of the Post SIP to the extent that: (a) the difference in such terms would result in the service provider(s) selected for the BellRing Brands, Inc. 401(k) Plan not being able to establish the plan and accept contributions into the accounts for the BellRing Brands, Inc. 401(k) Plan effective January 1, 2020, as determined by such service provider(s); or (b) in the reasonable assessment of Post, the difference in such proposed terms (i) would pose a material risk that the Post SIP may fail any applicable nondiscrimination testing under the Code or (ii)

 

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would otherwise be legally inadvisable with respect to Post or the Post SIP. As soon as feasibly possible and without unreasonable delay BellRing Inc. shall submit an application to the IRS seeking a favorable determination or opinion letter from the IRS that the BellRing Brands, Inc. 401(k) Plan is tax-qualified under Section 401(a) of the Code. Upon the adoption of the BellRing Brands, Inc. 401(k) Plan, BellRing Inc. and BellRing LLC shall permit and facilitate the participation of eligible employees of BellRing Inc. or any member of the BellRing Group who, as of December 31, 2019, were eligible to participate in the Post SIP.

 

  2.2

U.S. Health and Welfare Benefit Plan.

(a)    Unless otherwise determined by Post, BellRing Inc. and its Subsidiaries’ participation in the Post Holdings, Inc. Health and Welfare Benefit Plan, including the Post severance plans which form part of the Post Holdings, Inc. Health and Welfare Benefit Plan (“Post H&W Plan”), shall cease December 31, 2019. Provided such participation in the Post H&W Plan ceases December 31, 2019, (i) BellRing Inc. or BellRing LLC shall adopt, or BellRing LLC shall cause one of its Subsidiaries to adopt, with Post’s good faith and reasonable efforts to assist, a health and welfare benefit plan subject to ERISA (“BellRing Health and Welfare Benefit Plan”), and (ii) effective January 1, 2020, BellRing Inc. or BellRing LLC (or its Subsidiary) shall, subject to any actively-at-work requirements, permit and facilitate participation of eligible employees of BellRing Inc. and each member of the BellRing Group (and their dependents and beneficiaries), who, as of December 31, 2019, were eligible to participate in the Post H&W Plan, with such component benefits and under such terms and conditions as are substantially comparable in the aggregate to those that comprise the Post H&W Plan applicable to such employees as of December 31, 2019. BellRing Inc. or BellRing LLC shall, or BellRing LLC shall cause its applicable Subsidiary to, enter into HIPAA business associate agreements with applicable vendors of and service providers to the BellRing Health and Welfare Benefit Plan in accordance with applicable Law. For so long as BellRing Inc. or its Subsidiary(ies) that employ(s) or employed participants in the BellRing Health and Welfare Benefit Plan or participants in any other employee benefit program (x) are, when combined with Post or any of its Subsidiaries (other than BellRing Inc. or any of its Subsidiaries) treated as a “single employer” under Code Section 414(b) or 414(c) or successor provisions and the regulations thereunder, or (y) would otherwise be aggregated with Post or any of its Subsidiaries (other than BellRing Inc. or any of its Subsidiaries) for purposes of performing applicable nondiscrimination tests (all as determined by Post in its reasonable discretion), BellRing Inc. or BellRing LLC shall ensure or BellRing LLC shall cause its applicable Subsidiary to ensure that the BellRing Health and Welfare Benefit Plan shall not contain terms or conditions that vary from those of the Post H&W Plan in a manner that creates, in the reasonable assessment of Post, a risk that the Post H&W Plan would fail nondiscrimination requirements under any applicable provision of the Code or other applicable Law (including, without limitation, Code Section 105(h) with respect to any medical reimbursement plan and/or Code Section 79 with respect to any life insurance plan (or any successor Law(s) thereto)).

(b)    Notwithstanding anything in this Agreement to the contrary, BellRing LLC shall be responsible for any Liabilities associated with the participation in the Post H&W Plan of BellRing Employees and former BellRing Employees (and their dependents or beneficiaries) incurred prior to terminating participation in the Post H&W Plan, no matter when such claims or Liabilities are filed, reported or payable; provided however, that any premiums, claims and other administrative costs shall be allocated or passed through in accordance with Section 5.1(a) of this Agreement and with the Master Services Agreement.

 

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ARTICLE III

EXECUTIVE COMPENSATION

3.1    Nonqualified Deferred Compensation.

(a)    The participation of employees of BellRing Inc. or any member of the BellRing Group in the Post Holdings, Inc. Deferred Compensation Plan for Key Employees and the Post Holdings, Inc. Executive Savings Investment Plan (either or both, a “Post Nonqualified Plan”) shall cease December 31, 2019. All deferral elections under the Post Nonqualified Plans shall remain in effect for the year(s) to which they relate subject to all of the terms and conditions of the Post Nonqualified Plans.

(b)    Should BellRing Inc. or any member of the BellRing Group adopt a nonqualified deferred compensation plan for employees, BellRing Inc. (or the applicable member of the BellRing Group that adopted such plan) agrees to assume all Liabilities associated with payment of account balances attributable to BellRing Employees or Former BellRing Employees under the Post Nonqualified Plans, all in accordance with Code Section 409A.

(c)    BellRing Inc. shall establish and adopt, effective January 1, 2020, a non-qualified deferred compensation plan for eligible members of its Board of Directors (the “BellRing Directors Deferred Compensation Plan”), and shall ensure that the terms of the BellRing Brands, Inc. Directors’ Deferred Compensation Plan proposed to be adopted are largely based on those of the Post Holdings, Inc. Deferred Compensation Plan for Non-Management Directors. Upon the adoption of the BellRing Brands, Inc. Directors’ Deferred Compensation Plan, BellRing Inc. shall permit and facilitate the participation in such plan of eligible directors of BellRing Inc. BellRing Inc. shall be responsible for any payments due under or Liabilities associated with the BellRing Directors’ Deferred Compensation Plan.

3.2    Equity Compensation/SEC Registration.

(a)    BellRing Inc. agrees to use commercially reasonable efforts to maintain effective registration statements with the U.S. Securities and Exchange Commission (the “SEC”) with respect to the BellRing Brands, Inc. 2019 Long-Term Incentive Plan (the “BellRing LTIP”) and any successor plan and any equity awards issued under the BellRing LTIP and any successor plan, to the extent any such registration statement is required by applicable Law. BellRing Inc. shall be responsible for taking all appropriate action (i) to operate the BellRing LTIP and any successor plan so that they comply with applicable Law, including compliance with, and qualification under, Section 16 of the Securities Exchange Act of 1934, as amended; (ii) to the extent shares for issuance under the BellRing LTIP are not already registered as of the IPO Closing Date, to timely register shares for issuance under the BellRing LTIP, including the filing of a registration statement on an appropriate form with the SEC; and (iii) to timely register shares for issuance under any successor plan to the BellRing LTIP, including the filing of a registration statement on an appropriate form with the SEC.

(b)    With respect to restricted stock unit awards and nonqualified stock option awards issued to employees of BellRing LLC or any member of the BellRing Group (or such entities’ predecessors) under the Post 2012 Long-Term Incentive Plan, the Post 2016 Long-Term Incentive Plan and/or the Post 2019 Long-Term Incentive Plan (each or all, the “Post LTIP”) which awards remain unsettled or outstanding as of the IPO Closing Date and any awards made to employees of BellRing Inc., BellRing LLC or a member of the BellRing Group under the Post LTIP or its successor LTIP made after the IPO Closing Date (“Outstanding Post Awards”): (i) such Outstanding Post Awards shall vest or continue to vest and be settled or forfeited according to their terms, or (ii) later, following the Effective Time, if legally permissible as determined by Post, and in the determination of the Post Board of

 

4


Directors or its Corporate Governance and Compensation Committee, and agreed to by the BellRing Inc. Board of Directors, be converted (in whole or in part, as applicable) into awards issued under the BellRing LTIP or any successor thereto, all according to the terms of the applicable Post LTIP and award agreement and the applicable BellRing LTIP and award agreement, it being understood that all or any portion of such Outstanding Post Award that is elected to be converted into awards issued under the BellRing LTIP or any successor thereto shall be forfeited under the applicable Post LTIP in exchange for such awards issued under the BellRing LTIP. Notwithstanding anything to the contrary in the foregoing, Post’s Board of Directors or its Corporate Governance and Compensation Committee shall have the exclusive authority to determine the treatment of any Outstanding Post Awards in the event of a subsequent spin-off or sale of Post’s retained interest in BellRing Inc. and its Subsidiaries consistent with the terms of the Post LTIP or its successor LTIP and award agreements applicable thereunder.

ARTICLE IV

CANADIAN EMPLOYMENT MATTERS

4.1     Canadian Benefit Plans.

(a)    As of the IPO Closing Date, certain employees located in Canada employed by a Canadian Subsidiary of Post are performing work in Canada exclusively for the BellRing Group (the “Canadian Employees”). Post may determine, in its sole discretion, to cease the participation of the Canadian Employees in (i) the Post Foods Canada Inc. Retirement Plan for Canadian Employees maintained by Post or the Post Group (the “Post Canadian Defined Contribution Plan”) and/or (ii) the Canadian health and welfare plans maintained by Post or the Post Group (the “Post Canadian Health and Welfare Benefit Plan”) if (A) Post otherwise determines that it would be legally inadvisable with respect to Post, the Post Group or the Post Canadian Defined Contribution Plan or the Post Canadian Health and Welfare Benefit Plan to continue to permit such plan participation or (B) such Canadian Subsidiary of Post is no longer at least 50% owned or controlled by Post. Notwithstanding the foregoing, any continued participation of Canadian Employees in the Post Canadian Defined Contribution Plan or the Post Canadian Health and Welfare Plan is subject to the complete terms of the applicable plan.

(b)    Notwithstanding anything in this Agreement to the contrary, BellRing LLC shall be responsible for: (i) any and all claims and Liabilities attributable to the Canadian Employees’ (and their dependents’ and beneficiaries’) participation in the Post Canadian Health and Welfare Benefit Plan incurred prior to their ceasing participation, no matter when such claims are filed, reported or payable, and (ii) any and all claims or Liabilities attributable to the employment of the Canadian Employees.

4.2    Services of Canadian Employees. In the event that Post’s Canadian Subsidiary terminates the employment of the Canadian Employees (other than in connection with Section 4.1(a)(B) above), Post shall work with its Canadian Subsidiary to hire employee(s) in Canada in order to fulfill Post’s obligations as a Service Provider (as such term is defined under the Master Services Agreement) under the Master Services Agreement.

 

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ARTICLE V

COSTS AND LIABILITIES

5.1    Self-funded Workers Compensation and Benefits/Compensation Costs.

(a)    For so long as BellRing Inc. or any member of the BellRing Group continues to participate in, or the Canadian Employees participate in: (i) any workers compensation programs of Post or any member of the Post Group that are not insured, (ii) any health and welfare plans of Post or any member of the Post Group (whether self-funded or insured, and including but not necessarily limited to the Post H&W Plan and the Post Canadian Health and Welfare Benefit Plan, and for the sake of clarity, including any COBRA participation), (iii) severance plans or programs of Post or any member of the Post Group, (iv) the Post SIP, (v) the Post Nonqualified Plans or (vi) the Post Canadian Defined Contribution Plan, Post shall allocate or pass through, as applicable, the premiums, claims and other costs under any such program or plan, as applicable, to BellRing Inc. and members of the BellRing Group in the same manner that Post administers and allocates or passes through such premiums, claims and costs thereunder to members of the BellRing Group as of the date of this Agreement.

(b)    BellRing Inc. and BellRing LLC may elect to discontinue their and any member of the BellRing Group’s participation in Post’s workers compensation programs that are not insured, provided that BellRing Inc. or BellRing LLC gives Post written notice of such election at least ninety (90) days prior to such discontinuance. BellRing Inc. and BellRing LLC will provide Post with all information reasonably requested by Post as it relates to BellRing Inc. and its Subsidiaries’ participation in Post’s workers compensation insurance programs, its withdrawal therefrom or its participation in its own workers compensation insurance programs, subject to the terms of the Master Services Agreement.

(c)    As the Outstanding Post Awards are equity compensation for services rendered to BellRing LLC or member(s) of the BellRing Group (or their predecessors), the monthly actual expense and the employer-related payroll expense of the Outstanding Post Awards while outstanding and due to their settlement and/or exercise shall be borne by BellRing LLC or a member of the BellRing Group. The actual expense of the Outstanding Post Awards while outstanding will be allocated to BellRing LLC or one or more member(s) of the BellRing Group through a monthly cash settlement process via cash-settlement inter-company accounts or through any other applicable related-party accounts.

(d)    BellRing LLC or the applicable employer member of the BellRing Group shall remain responsible for payment of any short-term incentive/annual bonuses or any other bonuses, incentives, performance-based compensation, or other perquisites payable to employees employed by BellRing LLC or a member of the BellRing Group.

5.2     Liabilities.

(a)    As of the Effective Time, except as otherwise expressly provided for in this Agreement, BellRing LLC shall, or shall cause one or more members of the BellRing Group to, assume or retain, as applicable, and BellRing LLC shall, or shall cause one or more members of the BellRing Group, to pay, perform, fulfill and discharge, in due course in full (i) all Liabilities, whenever incurred, under all BellRing Benefit Plans and (ii) all Liabilities, whenever incurred, with respect to the employment, service, termination of employment or termination of service of all BellRing Employees and of all Former BellRing Employees, and the respective dependents and beneficiaries of such BellRing Employees and Former BellRing Employees; provided, however, that if the BellRing Employee or Former BellRing Employee to which any such Liability relates is or was an employee or service provider exclusively of BellRing Inc. at the time such Liability arose, BellRing Inc. shall pay, perform, fulfill and discharge, in due course in full, such Liability.

 

6


(b)    From time to time after the Effective Time, BellRing LLC (acting directly or through a member of the BellRing Group) shall promptly reimburse Post, upon Post’s reasonable request and the presentation by Post of such substantiating documentation as the payor may reasonably request, for the cost of any Liabilities satisfied by Post or any member of the Post Group that are, pursuant to this Agreement, the responsibility of BellRing Inc. or BellRing LLC or any member of the BellRing Group; provided, however, that if the BellRing Employee or Former BellRing Employee to which any such Liability relates is or was an employee or service provider exclusively of BellRing, Inc. at the time such Liability arose, BellRing Inc. shall reimburse Post for the cost of such Liabilities.

ARTICLE VI

MISCELLANEOUS

6.1    Sharing of Information. Subject to any limitations imposed by applicable Law, Post, BellRing Inc. and BellRing LLC (acting directly or through members of the Post Group or the BellRing Group, respectively) shall provide to the other and their respective representatives, agents and vendors all information relevant to the performance of the parties to this Agreement. Post, BellRing Inc. and BellRing LLC also hereby agree to enter into, or cause the applicable member of the BellRing Group to enter into, any business associate agreements that may be required for the sharing of any information pursuant to this Agreement to comply with the requirements of HIPAA.

6.2    Post Benefit Plans/Right to Amend. Nothing in this Agreement shall prohibit Post or any other member of the Post Group from amending, modifying or terminating any Post Benefit Plan at any time within its sole discretion, provided that any such amendment, modification or termination shall not relieve Post from any obligation herein.

6.3    Consent of Third Parties. If any provision of this Agreement is dependent on the consent of a third party and such consent is withheld, the parties to this Agreement shall use their commercially reasonable efforts to implement the applicable provisions of this Agreement to the fullest extent practicable. If any provision of this Agreement cannot be implemented due to the failure to obtain any such third party consent, the parties to this Agreement shall negotiate in good faith to implement the provision in a mutually satisfactory manner.

6.4    Regulatory Compliance. The parties to this Agreement shall, in connection with the actions taken pursuant to this Agreement, reasonably cooperate in making any and all appropriate filings required under the Code, ERISA and any applicable securities Laws.

6.5    Fiduciary Matters. It is acknowledged that actions required to be taken pursuant to this Agreement may be subject to fiduciary duties or standards of conduct under ERISA, and no party to this Agreement shall be deemed to be in violation of this Agreement if it fails to comply with any provisions hereof based upon its good faith determination that to do so would violate such a fiduciary duty or standard. Each party to this Agreement shall be responsible for taking such actions as are deemed necessary and appropriate to comply with its own fiduciary responsibilities and shall fully release and indemnify the other party hereto for any Liabilities caused by the failure to satisfy any such responsibility.

6.6    No Third Party Rights. The provisions of this Agreement are solely for the benefit of the parties hereto (and the other members of the Post Group and the BellRing Group) and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person or Persons any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement, including any employee, former employee or service provider (and each of the foregoing Person’s dependents and beneficiaries) of the Post Group, BellRing Inc. or the BellRing Group. Furthermore, nothing in this

 

7


Agreement is (a) intended to confer upon any employee or former employee of Post, BellRing Inc. or any member of the Post Group or the BellRing Group any right to continued employment, or any recall or similar rights to an individual on layoff or any type of leave, or (b) to be construed to relieve any insurance company of any responsibility for any employee benefit under any Benefit Plan or any other Liability. Nothing in this Agreement is intended as an amendment to any Benefit Plan or employment practice.

6.7    Relation to Other Transaction Documents. In the event of a conflict between this Agreement and the Transaction Agreement, this Agreement shall control. This Agreement, together with the applicable portions of the Transaction Agreement and the Master Services Agreement, constitute the entire agreement between the parties to this Agreement with respect to the subject matter of this Agreement.

6.8    Incorporation by Reference. This Agreement constitutes an “Ancillary Agreement” as defined by the Transaction Agreement, and any provision of the Transaction Agreement which applies to an Ancillary Agreement shall be deemed to be incorporated herein by reference as though set forth herein, mutatis mutandis, and made a part of this Agreement.

6.9    Effective Date of this Agreement. Once executed by Post, BellRing Inc. and BellRing LLC, this Agreement shall be effective upon the Effective Time.

6.10    Amendment. This Agreement shall not be amended, modified or supplemented except by a written instrument signed by an authorized representative of each of Post, BellRing Inc. and BellRing LLC. Notwithstanding the foregoing, in the event that BellRing Inc. directly or indirectly acquires or creates a subsidiary which is not otherwise a direct or indirect subsidiary of BellRing LLC and which employs employees, the parties to this Agreement agree to re-negotiate this Agreement in good faith in order to, among other items, reflect that BellRing Inc. or such new subsidiary shall be responsible for Liabilities associated with such employees, including but not limited to their (and their dependents’) participation in BellRing Benefit Plans and/or Post Benefit Plans.

6.11    Termination.

(a)    Except as provided in subsection (b) below, this Agreement may be terminated only by the mutual consent of each of the parties to this Agreement.

(b)    Upon the occurrence of a Change of Control (as defined in this Agreement) of BellRing Inc. or BellRing LLC, or upon the occurrence of a change in control (as defined in the Post Holdings, Inc. 2019 Long-Term Incentive Plan) of Post, Post or its successor, as applicable, shall have the right, upon delivery of written notice to BellRing Inc. and BellRing LLC, to terminate this Agreement.

6.12    Survival. Except as expressly set forth in this Agreement, the provisions contained in:

(a)    Sections 2.2(b) (Health and Welfare Liabilities), 3.1(b) (Nonqualified Deferred Compensation Liabilities), 3.2(b)(ii) (Outstanding Post Awards – Potential Later Conversion), 4.1(b) (Canadian Liabilities), 5.1(a), 5.1(c) and 5.1(d) (Certain Benefit and Program Costs), 5.2 (Liabilities), 6.5 (Fiduciary Matters) and 6.6 (No Third-Party Rights) of this Agreement any Liabilities for the breach of any obligations contained herein;

(b)    Article V (Mutual Releases; Indemnification), Article VIII (Dispute Resolution) and Sections 9.4 (Governing Law), 9.7 (Notices), and 9.17(b) (No Recourse) of the Transaction Agreement incorporated herein by reference (as set forth in Section 6.8 of this Agreement); and

 

8


(c)    any other provision of the Transaction Agreement incorporated herein by reference which survives the Formation Transactions and the IPO, or the termination or expiration of the Transaction Agreement,

shall survive the termination or expiration of this Agreement and shall remain in full force and effect.

[Remainder of page intentionally left blank]

 

9


IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement to be signed by their authorized representatives as of the date first above written.

 

POST HOLDINGS, INC.
By:  

/s/ Diedre J. Gray

Name:

  Diedre J. Gray

Title:

  Executive Vice President, General Counsel and Chief Administrative Officer, Secretary
BELLRING BRANDS, INC.
By:  

/s/ Darcy Horn Davenport

Name:

  Darcy Horn Davenport
Title:   President and Chief Executive Officer
BELLRING BRANDS, LLC
By:  

/s/ Darcy Horn Davenport

Name:   Darcy Horn Davenport
Title:   President and Chief Executive Officer

 

[Signature Page to Employee Matters Agreement]

EX-10.3

Exhibit 10.3

INVESTOR RIGHTS AGREEMENT

dated as of

October 21, 2019

among

BELLRING BRANDS, INC.

and

POST HOLDINGS, INC.


TABLE OF CONTENTS

 

          PAGE  
ARTICLE I. DEFINITIONS      1  

Section 1.01.

   Definitions      1  

Section 1.02.

   Other Definitional and Interpretative Provisions      5  
ARTICLE II. REGISTRATION RIGHTS      5  

Section 2.01.

   Demand Registration      5  

Section 2.02.

   Shelf and Piggyback Registration      8  

Section 2.03.

   Lock-Up Agreements      11  

Section 2.04.

   Registration Procedures      12  

Section 2.05.

   Indemnification by the Company      16  

Section 2.06.

   Indemnification by Registering Stockholders      16  

Section 2.07.

   Conduct of Indemnification Proceedings      17  

Section 2.08.

   Contribution      17  

Section 2.09.

   Participation in Public Offering      18  

Section 2.10.

   Other Indemnification      18  

Section 2.11.

   Cooperation by the Company      18  

Section 2.12.

   Transfer of Registration Rights      18  

Section 2.13.

   Limitations on Subsequent Registration Rights      19  

Section 2.14.

   Free Writing Prospectuses      19  

Section 2.15.

   Information from Registering Stockholders; Obligations of Registering Stockholders      19  
ARTICLE III. BOARD OF DIRECTORS      20  

Section 3.01.

   Board of Directors      20  

Section 3.02.

   Reduction of Post’s Board and Committee Rights      22  
ARTICLE IV. TERMINATION      23  

Section 4.01.

   Termination      23  
ARTICLE V. MISCELLANEOUS      23  

Section 5.01.

   Successors and Assigns      23  

Section 5.02.

   Notices      24  

Section 5.03.

   Amendments and Waivers      24  

Section 5.04.

   Governing Law      24  

Section 5.05.

   Jurisdiction      24  

Section 5.06.

   WAIVER OF JURY TRIAL      25  

Section 5.07.

   Specific Enforcement      25  

Section 5.08.

   Counterparts; Effectiveness; Third Party Beneficiaries      25  

Section 5.09.

   Entire Agreement      25  

Section 5.10.

   Severability      25  

 

Exhibit A

  

Joinder Agreement

 

i


INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT dated as of October 21, 2019 (this “Agreement”) is among (i) BellRing Brands, Inc., a Delaware corporation (the “Company”), (ii) Post Holdings, Inc., a Missouri corporation (“Post”), and (iii) other Persons (as defined below) party hereto from time to time.

RECITALS

WHEREAS, the parties hereto are entering into this Agreement to provide (i) certain registration rights under the Securities Act (as defined below) and applicable state securities laws to each Stockholder (as defined below) with respect to Registrable Securities (as defined below) each may hold and (ii) certain governance rights to Post.

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

ARTICLE I.

DEFINITIONS

Section 1.01. Definitions.

(a) As used herein, the following terms have the following meanings:

Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. For the purpose of this definition, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

Applicable Governance Rules” means applicable federal and Delaware laws and the rules of the NYSE relating to the Board and the corporate governance of the Company, including, without limitation, Rule 10A-3 of the Exchange Act and NYSE Rule 303A, in each case, subject to applicable phase-in periods.

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

BellRing LLC” means BellRing Brands, LLC, a Delaware limited liability company.

BellRing LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of BellRing LLC, dated as of the date hereof, as it may be amended from time to time.

BellRing LLC Units” means the Nonvoting Common Units of BellRing LLC as defined in the BellRing LLC Agreement.

beneficial ownership” and “beneficially own” and similar terms have the meaning set forth in Rule 13d-3 under the Exchange Act.

Board” means the board of directors of the Company.

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


Bylaws” means the Amended and Restated Bylaws of the Company, as the same may be amended, modified, supplemented and/or restated from time to time.

Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company, as the same may be amended, modified, supplemented and/or restated from time to time.

Class A Common Stock” means the Class A common stock, par value $0.01 per share, of the Company.

Class B Common Stock” means the Class B common stock, par value $0.01 per share, of the Company.

Company Securities” means (i) the Class A Common Stock, (ii) any securities of the Company or any successor or assign of the Company into which such Class A Common Stock is reclassified or reconstituted or into which such Class A Common Stock is converted or otherwise exchanged in connection with a split or combination of shares, recapitalization, merger, sale of assets, consolidation or other reorganization or otherwise or (iii) any securities received as a dividend or a distribution in respect of the securities described in clauses (i) or (ii) above.

Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder.

FINRA” means the Financial Industry Regulatory Authority.

Free Writing Prospectus” means any “free writing prospectus” as defined in Rule 405 under the Securities Act relating to the Registrable Securities included in the applicable Registration Statement.

Independent Director” means a director who qualifies as an “independent director” of the Company under the NYSE Listed Company Manual.

Initial Public Offering” means the initial underwritten public offering of the Class A Common Stock of the Company on October 21, 2019.

NYSE” means the New York Stock Exchange.

Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof, and shall include any successor (by merger or otherwise) thereto.

Post Party” means Post and its Affiliates (other than the Company and its Subsidiaries).

Post Nominee” means any individual nominated or designated by Post for election or appointment to the Board in accordance with, and subject to the terms and conditions of, Article III of this Agreement.

Post Stockholder” means each Post Party that is a Stockholder.

Public Offering” means an underwritten public offering of Company Securities pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form under the Securities Act.

Registering Stockholder” means, with respect to any Registration Statement, each Stockholder whose Registrable Securities are or are to be registered pursuant to such Registration Statement.

 

2


Registrable Class Securities” means the Registrable Securities and any other securities of the Company that are of the same class as the relevant Registrable Securities.

Registrable Securities” means, at any time, any Company Securities beneficially owned (whether beneficially owned as of the date hereof or hereinafter beneficially owned) by a Stockholder until (i) a registration statement covering such securities has been declared effective by the SEC and such securities have been disposed of pursuant to such effective registration statement, (ii) such securities are sold pursuant to Rule 144 (or any similar provisions then in force) under the Securities Act, (iii) such securities are otherwise transferred, assigned, sold, conveyed or otherwise disposed of and thereafter such securities may be resold without subsequent registration under the Securities Act or (iv) with respect to any such securities held by any single Stockholder (or group of Stockholders that are aggregated for purposes of Rule 144), all of such securities held by any Stockholder or group of Stockholders that are able to be sold in a single transaction pursuant to Rule 144 (or any similar provisions then in force) and such securities of such Stockholder (or group of Stockholders) represent no more than 2.5% of the relevant class of Company Securities.

Registration Expenses” means any and all expenses incident to the performance of or compliance with any registration or marketing of Registrable Securities, regardless of whether such Registration Statement is declared effective, including all (i) registration and filing fees, and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system, (ii) fees and expenses incurred in complying with any securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the Registrable Securities as may be set forth in any underwriting agreement), (iii) expenses in connection with the preparation, printing, mailing and delivery of any registration statements, prospectuses and other documents in connection therewith and any amendments or supplements thereto, (iv) security engraving and printing expenses, (v) internal expenses of the Company (including all salaries and expenses of its officers and employees performing legal or accounting duties), (vi) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of any “comfort” letters requested pursuant to Section 2.04(h) or any special audits incidental to or required by any registration or qualification), (vii) reasonable fees and expenses of any special experts retained by the Company in connection with such registration, (viii) reasonable fees, out-of-pocket costs and expenses of one firm of counsel selected by the holder(s) of a majority of the Registrable Securities covered by each Registration Statement (the “Holders’ Counsel”), (ix) fees and expenses in connection with any review by FINRA of the underwriting arrangements or other terms of the offering, and all fees and expenses of any qualified independent underwriter, including the reasonable fees and expenses of any counsel thereto, (x) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding any underwriting fees, discounts and commissions attributable to the sale of Registrable Securities, (xi) costs of printing and producing any agreements among underwriters, underwriting agreements, any “blue sky” or legal investment memoranda and any selling agreements and other documents in connection with the offering, sale or delivery of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering, (xiii) expenses relating to any analyst or investor presentations or any “road shows” undertaken in connection with the registration, marketing or selling of the Registrable Securities, (xiv) fees and expenses payable in connection with any ratings of the Registrable Securities, including expenses relating to any presentations to rating agencies, (xv) all out-of pocket costs and expenses incurred by the Company or its appropriate officers in connection with their compliance with Section 2.04(m) and (xvi) any liability insurance or other premiums for insurance obtained in connection with any Demand Registration, Piggyback Registration or Shelf Registration pursuant to the terms of this Agreement.

 

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Registration Statement” means any registration statement of the Company under the Securities Act that covers any of the Registrable Securities pursuant to the provisions of this Agreement.

Requesting Stockholder” means, with respect to any Demand Registration or Shelf Registration, any Stockholder holding any Registrable Securities initially making the request for such Demand Registration or Shelf Registration.

Rule 144” means Rule 144 under the Securities Act.

SEC” means the U.S. Securities and Exchange Commission or any successor governmental agency.

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Shares” means, collectively, the shares of Class A Common Stock and the share of Class B Common Stock.

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

Specified Period” means 90 days; provided that such period may be extended as may be reasonably requested by the managing or co-managing underwriter of a registered offering required hereunder to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA rules or any successor provisions or amendments thereto.

Stockholder” means, at any time, each Post Party or any transferee or assignee of a Post Party pursuant to Section 2.12 of this Agreement, beneficially owning Company Securities or BellRing LLC Units that shall be a party to or bound by this Agreement, so long as such Person shall beneficially own any Company Securities or BellRing LLC Units.

Subsidiary” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions at the time are directly or indirectly owned by such Person.

(b) Each of the following terms is defined in the Section set forth opposite such term:

 

Term

  

Section

Alternative Transaction

   Section 2.02(d)

Audit Committee Independent Directors

   Section 3.01(a)(iv)

Committees

   Section 3.01(c)

Company

   Preamble

Damages

   Section 2.05

Demand Registration

   Section 2.01(a)

Determination Date

   Section 2.02(f)

Holders’ Counsel

   Section 1.01(a)
   (Definition of “Registration Expenses”)

 

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Term

  

Section

Indemnified Party

   Section 2.07

Indemnifying Party

   Section 2.07

Inspectors

   Section 2.04(g)

Issuer Free Writing Prospectus

   Section 2.14

Maximum Offering Size

   Section 2.01(d)

Piggyback Registration

   Section 2.02(h)(i)

Post

   Preamble

Records

   Section 2.04(g)

Registration Actions

   Section 2.01(e)

Requested Shelf Registered Securities

   Section 2.02(b)

Shelf Public Offering

   Section 2.02(b)

Shelf Public Offering Notice

   Section 2.02(b)

Shelf Public Offering Request

   Section 2.02(b)

Shelf Public Offering Requesting Stockholder

   Section 2.02(b)

Shelf Registration

   Section 2.02(a)

Stockholder Parties

   Section 2.05

Suspension Notice

   Section 2.01(e)

Suspension Period

   Section 2.01(e)

Well-Known Seasoned Issuer

   Section 2.02(f)

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, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or 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 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 laws, rules, regulations and forms shall be deemed to be references to such laws, rules, regulations and forms as amended, succeeded or replaced.

ARTICLE II.

REGISTRATION RIGHTS

Section 2.01. Demand Registration.

(a) At any time following the Initial Public Offering, any Stockholder may give a written request to the Company to effect the registration under the Securities Act (other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form under the Securities Act) of all or any portion of such Requesting Stockholder’s Registrable Securities, which written request shall specify the number of Registrable Securities to be registered and the intended method of disposition thereof. Such registration may be for the offering of the Stockholder’s Registrable Securities on a delayed

 

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or continuous basis under Rule 415 under the Securities Act. At any time the Company is eligible to use Form S-3ASR, such registration shall occur on such form. Upon the receipt of such written request, the Company shall promptly give notice (via electronic transmission) of such requested registration (each such registration shall be referred to herein as a “Demand Registration”) at least 10 Business Days prior to the anticipated filing date of the Registration Statement relating to such Demand Registration to any other Stockholders. Thereafter, the Company shall use its commercially reasonable efforts to effect, as soon as possible, the registration under the Securities Act of:

(i) all Registrable Securities for which the Requesting Stockholder has requested registration under this Section 2.01;

(ii) all other Registrable Securities of the same class or series as those requested to be registered by the Requesting Stockholder that any other Stockholder has requested the Company register by request received by the Company and Post within 10 Business Days after such Stockholders receive the Company’s notice of the Demand Registration; and

(iii) any Company Securities to be offered or sold by the Company;

all to the extent necessary to permit the disposition (in accordance with the intended methods thereof as described in the Requesting Stockholder’s written request) of the Registrable Securities so to be registered; provided that the Company shall not be obligated to effect (1) any such Demand Registration (i) within the Specified Period after the effective date of any other registration statement of the Company in connection with which Stockholders were given Piggyback Registration rights (other than a registration statement filed in connection with an employee benefit plan or business combination transaction or a registration statement on Form S-8 or Form S-4) or (ii) in accordance with Section 2.01(e), or (2) any Demand Registration if the aggregate proceeds expected to be received from the sale of the Registrable Securities requested to be included in such Demand Registration is less than $25,000,000. A Requesting Stockholder may require any Demand Registration that involves a Public Offering of at least $25,000,000 to be conducted as an underwritten offering. Notwithstanding the foregoing, a Requesting Stockholder may request that a Demand Registration take the form of a primary offering by the Company of a number of shares of Class A Common Stock, the net proceeds of which shall be used by the Company and BellRing LLC, pursuant to and subject to the terms and conditions of the BellRing LLC Agreement, to acquire for cash the same number of BellRing LLC Units, in which case, (i) the Demand Registration shall cover the primary sale of the number of shares of Class A Common Stock requested by the Requesting Stockholder, (ii) the Requesting Stockholder shall exercise its right, pursuant to Article IX of the BellRing LLC Agreement, to submit for redemption, as provided under and subject to the terms and conditions of the BellRing LLC Agreement, the number of BellRing LLC Units that is equal to the number of shares of Class A Common Stock sold in such Public Offering, contingent on (among other things) the closing of such Public Offering and receipt by the Company of net proceeds therefrom, (iii) upon the Company’s receipt of the net proceeds from such Public Offering, BellRing LLC shall elect, pursuant to Article IX of the BellRing LLC Agreement, to acquire from the Requesting Stockholder the number of BellRing LLC Units equal to the number of shares of Class A Common Stock sold pursuant to such Public Offering in exchange for such net proceeds and (iv) except where the context otherwise requires, references to “Registrable Securities” with respect to such Demand Registration shall be to such shares of Class A Common Stock requested to be offered in such Public Offering.

(b) At any time prior to the effective date of the Registration Statement relating to such Demand Registration, the Requesting Stockholder may, upon notice to the Company, revoke such request in whole or in part with respect to the number of shares of Registrable Securities requested to be included in such Registration Statement, without liability to any of the other Registering Stockholders.

 

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(c) The Company shall be liable for and pay all Registration Expenses in connection with any Demand Registration, regardless of whether such Demand Registration becomes effective.

(d) If a Demand Registration involves a Public Offering and the lead managing underwriter advises the Company and the Requesting Stockholder that, in its view, the number of shares of Registrable Securities requested to be included in such registration (including any securities that the Company proposes to be included that are not Registrable Securities) exceeds the largest number of shares that can be sold without having a material and adverse effect on such offering, including the price at which such shares can be sold (the “Maximum Offering Size”), the Company shall include in such registration, in the priority listed below, up to the Maximum Offering Size:

(i) first, all Registrable Securities requested to be registered by the Requesting Stockholder and all other Registering Stockholders pro rata on the basis of the relative number of shares of Registrable Securities so requested to be included in such registration by each such Registering Stockholder;

(ii) second, any securities proposed to be registered by the Company; and

(iii) third, any securities proposed to be registered for the account of any other Persons, with such priorities among them as the Company shall determine.

(e) Notwithstanding anything to the contrary contained in this Agreement, but subject to the limitation set forth in the next succeeding paragraph, the Company shall be entitled to suspend its obligation to file (but not the preparation of) any Registration Statement in connection with a Demand Registration and any Shelf Registration, file any amendment to such a Registration Statement, furnish any supplement or amendment to a prospectus included in such a Registration Statement, make any other filing with the SEC, cause such a Registration Statement or other filing with the SEC to become or remain effective or take any similar action (collectively, “Registration Actions”) upon (i) the issuance by the SEC of a stop order suspending the effectiveness of any such Registration Statement or the initiation of proceedings with respect to such a Registration Statement under Section 8(d) or Section 8(e) of the Securities Act, (ii) the Board’s determination, in its good faith judgment, that any such Registration Action should not be taken because it would reasonably be expected to materially interfere with or require the public disclosure of any material corporate development or plan, including any material financing, securities offering, acquisition, disposition, corporate reorganization or merger or other transaction involving the Company or any of its Subsidiaries or (iii) the Company possessing material non-public information the disclosure of which the Board determines, in its good faith judgment, would reasonably be expected to not be in the best interests of the Company. Upon the occurrence of any of the conditions described in (i), (ii) or (iii) above, the Company shall give prompt notice of such suspension (and whether such action is being taken pursuant to (i), (ii) or (iii) above) (a “Suspension Notice”) to the Stockholders. Upon the termination of such condition, the Company shall give prompt notice thereof to the Stockholders and shall promptly proceed with all Registration Actions that were suspended pursuant to this paragraph.

The Company may only suspend Registration Actions pursuant to the preceding paragraph on two occasions during any one-year period for a reasonable time specified in the Suspension Notice but not exceeding an aggregate of 90 days (which period may not be extended or renewed) (each such occasion, a “Suspension Period”). Each Suspension Period shall be deemed to begin on the date the relevant Suspension Notice is given to the Stockholders and shall be deemed to end on the earlier to occur of (i) the date on which the Company gives the Stockholders a notice that the Suspension Period has terminated and (ii) the date on which the number of days during which a Suspension Period has been in effect exceeds the 90-day period. If the filing of any Demand Registration or Shelf Registration is suspended pursuant to this Section 2.01(e), once the Suspension Period ends, the Requesting Stockholder may

 

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request a new Demand Registration and a Stockholder that requested a Shelf Registration may request a new Shelf Registration. Notwithstanding anything to the contrary in this Agreement, the Company shall not be in breach of, or have failed to comply with, any obligation under this Agreement (including without limitation obligations under this Section 2.01(e)) where the Company acts or omits to take any action in order to comply with applicable law, any interpretation of the staff of the SEC or any order or decree of any court or governmental agency.

(f) The Company shall have no obligation to file a Registration Statement under this Section 2.01 or Section 2.02 or proceed with Registration Actions related thereto during any time such filing or Registration Actions are prohibited by any applicable underwriting or lock-up agreement to which the Company is a party relating to the Initial Public Offering or an offering pursuant to a Registration Statement.

Section 2.02. Shelf and Piggyback Registration.

(a) At any time when (i) the Company is eligible to use Form S-3 in connection with a secondary public offering of its equity securities and (ii) a Shelf Registration on a Form S-3 registering Registrable Securities for resale is not then effective (subject to any applicable Suspension Period), upon the written request of any Stockholder, the Company shall use its commercially reasonable efforts to register, under the Securities Act on Form S-3 for an offering on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (a “Shelf Registration”), the offer and sale of all or a portion of the Registrable Securities owned by such Requesting Stockholder. Upon the receipt of such written request, the Company shall promptly give notice (via electronic transmission) of such requested Shelf Registration at least 10 Business Days prior to the anticipated filing date of such Shelf Registration to any Stockholders, and such notice shall describe the proposed Shelf Registration, the intended method of disposition of such Registrable Securities and any other information that at the time would be appropriate to include in such notice, and offer such Stockholders the opportunity to register such number of Registrable Securities as each such Stockholder may request in writing to the Company, given within 10 Business Days after such Stockholders receive the Company’s notice of the Shelf Registration. The “Plan of Distribution” section of such Shelf Registration shall permit all lawful means of disposition of Registrable Securities, including firm-commitment underwritten public offerings, block trades, agented transactions, sales directly into the market, purchases or sales by brokers and sales not involving a public offering. With respect to each Shelf Registration, the Company shall, subject to any Suspension Period, (i) as promptly as practicable after the written request of the Requesting Stockholder, file a Registration Statement and (ii) use its commercially reasonable efforts to cause such Registration Statement to be declared effective as promptly as practicable, and remain effective until the date set forth in Section 2.04(a)(ii). No Stockholder shall be entitled to include any of its Registrable Securities in a Shelf Registration unless such Stockholder has complied with Section 2.15. The Company shall not be required to amend a Shelf Registration (or the related prospectus) to add or change the disclosure regarding selling security holders during any Suspension Period. The obligations set forth in this Section 2.02(a) shall not apply if the Company has a currently effective Automatic Shelf Registration Statement covering all Registrable Securities in accordance with Section 2.02(f) and has otherwise complied with its obligations pursuant to this Agreement.

(b) Upon written request by a Requesting Stockholder holding Shelf Registered Securities (such Stockholder, the “Shelf Public Offering Requesting Stockholder”), which request (the “Shelf Public Offering Request”) shall specify the class or series and amount of such Shelf Public Offering Requesting Stockholder’s Shelf Registered Securities to be sold (the “Requested Shelf Registered Securities”), the Company shall (subject to any Suspension Period) perform its obligations hereunder with respect to the sale of such Requested Shelf Registered Securities in the form of a firm commitment underwritten public offering (unless otherwise consented to by the Shelf Public Offering Requesting Stockholder) (a “Shelf

 

8


Public Offering”) if the aggregate proceeds expected to be received from the sale of the Requested Shelf Registered Securities equals or exceeds $25,000,000. Promptly upon receipt of a Shelf Public Offering Request, the Company shall provide notice (the “Shelf Public Offering Notice”) of such proposed Shelf Public Offering (which notice shall state the material terms of such proposed Shelf Public Offering, to the extent known, as well as the identity of the Shelf Public Offering Requesting Stockholder) to any other Stockholders holding Shelf Registered Securities. Such other Stockholders may, by written request to the Company and the Shelf Public Offering Requesting Stockholder, within two Business Days after receipt of such Shelf Public Offering Notice, include up to all of their Shelf Registered Securities of the same class or series as the Requested Shelf Registered Securities in such proposed Shelf Public Offering; provided, that any such Shelf Registered Securities shall be sold subject to the same terms as are applicable to the Shelf Registered Securities of the Shelf Public Offering Requesting Stockholder. No Stockholder shall be entitled to include any of its Registrable Securities in a Shelf Public Offering unless such Stockholder has complied with Section 2.15. The lead managing underwriter or underwriters selected for such Shelf Public Offering shall be selected in accordance with Section 2.04(f)(i).

(c) In a Shelf Public Offering, if the lead managing underwriter advises the Company and the Shelf Public Offering Requesting Stockholder that, in its view, the number of shares of Registrable Securities requested to be included in such Shelf Public Offering (including any securities that the Company proposes to be included that are not Registrable Securities) exceeds the Maximum Offering Size, the Company shall include in such Shelf Public Offering, in the priority listed below, up to the Maximum Offering Size:

(i) first, all Shelf Registered Securities requested to be included in the Shelf Public Offering by the Shelf Public Offering Requesting Stockholder and all other Stockholders, pro rata on the basis of the relative number of shares of Shelf Registered Securities so requested to be included in the Shelf Public Offering by each such Stockholder;

(ii) second, any securities proposed to be included in the Shelf Public Offering by the Company; and

(iii) third, any securities proposed to be included in the Shelf Public Offering for the account of any other Persons, with such priorities among them as the Company shall determine.

(d) The Company shall use its commercially reasonable efforts to cooperate in a timely manner with any request of the Stockholders in respect of any block trade, hedging transaction or other transaction that is registered pursuant to a Shelf Registration that is not a firm commitment underwritten offering (each, an “Alternative Transaction”), including, without limitation, entering into customary agreements with respect to such Alternative Transactions (and providing customary representations, warranties, covenants and indemnities in such agreements) as well as providing other reasonable assistance in respect of such Alternative Transactions of the type applicable to a Public Offering subject to Section 2.04, to the extent customary for such transactions. The Company shall bear all Registration Expenses in connection with any Shelf Registration, any Shelf Public Offering or any other transaction (including any Alternative Transaction) registered under a Shelf Registration pursuant to this Section 2.02, whether or not such Shelf Registration becomes effective or such Shelf Public Offering or other transaction is completed; provided, however, that if the Shelf Public Offering Requesting Stockholder revokes its request in whole with respect to a Shelf Public Offering, then the Shelf Public Offering Requesting Stockholder shall reimburse the Company for and/or pay directly all Registration Expenses incurred relating to such Shelf Public Offering.

 

9


(e) After the Registration Statement with respect to a Shelf Registration is declared effective but subject to the Suspension Period, upon written request by one or more Stockholders (which written request shall specify the amount of such Stockholders’ Registrable Securities to be registered), the Company shall, as promptly as practicable after receiving such request, (i) if it is eligible for use of Form S-3 in connection with a secondary public offering of its equity securities, or if such Registration Statement is an Automatic Shelf Registration Statement, file a prospectus supplement to include such Stockholders as selling stockholders in such Registration Statement or (ii) if it is not eligible for use of Form S-3 in connection with a secondary public offering of its equity securities, file a post-effective amendment to the Registration Statement to include such Stockholders in such Shelf Registration and use commercially reasonable efforts to have such post-effective amendment declared effective.

(f) Upon the Company becoming aware that it is a “Well-Known Seasoned Issuer” (as defined in Rule 405 under the Securities Act), (i) the Company shall give written notice to all of the Stockholders as promptly as practicable but in no event later than 10 Business Days thereafter, and such notice shall describe, in reasonable detail, the basis on which the Company has become a Well-Known Seasoned Issuer, and (ii) the Company shall, as promptly as practicable and subject to any Suspension Period, register, under an Automatic Shelf Registration Statement, the sale of all of the Registrable Securities in accordance with the terms of this Agreement. The Company shall use its commercially reasonable efforts to file such Automatic Shelf Registration Statement as promptly as practicable, but in no event later than 20 Business Days after it becomes a Well-Known Seasoned Issuer, and to cause such Automatic Shelf Registration Statement to remain effective thereafter until the date set forth in Section 2.04(a)(ii). The Company shall give written notice of filing such Registration Statement to all of the Stockholders as promptly as practicable thereafter. The Company shall not be required to include any Stockholder as a selling stockholder in any Registration Statement or prospectus unless such Stockholder has complied with Section 2.15. At any time after the filing of an Automatic Shelf Registration Statement by the Company, if it is reasonably likely that it will no longer be a Well-Known Seasoned Issuer as of a future determination date (the “Determination Date”), at least 20 Business Days prior to such Determination Date, the Company shall (A) give written notice thereof to all of the Stockholders as promptly as practicable but in no event later than 10 Business Days prior to such Determination Date and (B) if the Company is eligible to file a Registration Statement on Form S-3 with respect to a secondary public offering of its equity securities, file a Registration Statement on Form S-3 with respect to a Shelf Registration in accordance with Section 2.02(a), treating all selling Stockholders identified as such in the Automatic Shelf Registration Statement (and amendments or supplements thereto) as Requesting Stockholders and use all commercially reasonable efforts to have such Registration Statement declared effective prior to the Determination Date. Any registration pursuant to this Section 2.02(f) shall be deemed a Shelf Registration for purposes of this Agreement.

(g) Notwithstanding anything to the contrary, no Shelf Registration pursuant to this Section 2.02 shall be deemed a Demand Registration for purposes of Section 2.01.

(h) Piggyback Registration.

(i) If the Company proposes to register any Company Securities under the Securities Act (other than a registration on Form S-8 or Form S-4 relating to Shares or any other class of Company Securities issuable upon exercise of employee stock options or in connection with any employee benefit or similar plan of the Company or in connection with a direct or indirect acquisition by the Company of another Person) other than in connection with a rights offering, whether or not for sale for its own account, the Company shall each such time give prompt notice (via electronic transmission) at least 10 Business Days prior to the anticipated filing date of the registration statement relating to such registration to each Stockholder, which notice shall offer such Stockholder the opportunity to include in such registration statement the number of Registrable Securities of the same class or series as those proposed to be registered as each such Stockholder may request (a “Piggyback Registration”), subject to the provisions of Section 2.02(h)(ii). Upon the request of any such Stockholder made within 10 Business Days after the

 

10


receipt of notice from the Company regarding a Piggyback Registration (which request shall specify the number of Registrable Securities intended to be registered by such Stockholder), the Company shall use its commercially reasonable efforts to effect the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by all such Requesting Stockholders, to the extent requisite to permit the disposition of the Registrable Securities so to be registered in accordance with the plan of distribution intended by the Company for such registration statement; provided that (i) if such registration involves a Public Offering, all such Registering Stockholders requesting to be included in the Company’s registration must sell their Registrable Securities to the underwriters selected as provided in Section 2.04(f)(i) on the same terms and conditions as apply to the Company and (ii) if, at any time after giving notice of its intention to register any Company Securities pursuant to this Section 2.02(h) and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company shall give notice to all Registering Stockholders and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration. No registration effected under this Section 2.02(h) shall relieve the Company of its obligations to effect a Demand Registration to the extent required by Section 2.01 or a Shelf Registration to the extent required by Section 2.02. The Company shall pay all Registration Expenses in connection with each Piggyback Registration.

(ii) If a Piggyback Registration involves a Public Offering (other than any Demand Registration, in which case the provisions with respect to priority of inclusion in such offering set forth in Section 2.01(d) shall apply) and the lead managing underwriter advises the Company that, in its view, the number of Registrable Securities that the Company and such Registering Stockholders intend to include in such registration exceeds the Maximum Offering Size, the Company shall include in such registration, in the following priority, up to the Maximum Offering Size:

(A) first, so much of the Company Securities proposed to be registered for the account of the Company as would not cause the offering to exceed the Maximum Offering Size;

(B) second, all Registrable Securities requested to be included in such registration by any Registering Stockholders pursuant to this Section 2.02(h) (allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such Stockholders on the basis of the relative number of shares of Registrable Securities so requested to be included in such registration by each such Stockholder); and

(C) third, any securities proposed to be registered for the account of any other Persons with such priorities among them as the Company shall determine.

Section 2.03. Lock-Up Agreements.

(a) Each Stockholder hereby agrees that it will not effect any public sale or distribution (including sales pursuant to Rule 144) of Registrable Securities (i) during (A) the 10 days prior to and the 90-day period beginning on the effective date of the registration of such Registrable Securities in connection with a Public Offering (which period following the effective date may, in each case, be extended as reasonably requested by the underwriters participating in such Public Offering to accommodate regulatory restrictions on (I) the publication or other distribution of research reports and (II) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA rules or any successor provisions or amendments thereto) or (B) such shorter period as the underwriters participating in such Public Offering may require, and (ii) upon notice from the Company of the

 

11


commencement of a Public Offering in connection with any Shelf Registration, during (A) 10 days prior to and the 90-day period beginning on the date of commencement of such Public Offering or (B) such shorter period as the underwriters participating in such Public Offering may require, in each case except as part of such Public Offering. Each Stockholder agrees to execute a lock-up agreement in favor of the underwriters in form and substance reasonably acceptable to the Company and the underwriters to such effect and, in any event, that the underwriters in any relevant offering shall be third party beneficiaries of this Section 2.03(a). The lock-up agreement to be executed by each Stockholder pursuant to this Section 2.03(a) shall be no less favorable to such Stockholder than the lock-up agreements (or provisions in any underwriting agreement) executed by the Company or any of the executive officers or directors of the Company pursuant to Section 2.03(b).

(b) The Company shall not effect any public sale or distribution of securities of the same type and class as Registrable Securities (except pursuant to registrations on Form S-8 or Form S-4) (i) with respect to any Public Offering pursuant to a Demand Registration or any Piggyback Registration in which the holders of Registrable Securities are participating, during (A) the 10 days prior to and the 90-day period beginning on the effective date of such registration (which period following the effective date may, in each case, be extended as reasonably requested by the underwriters participating in such Public Offering to accommodate regulatory restrictions on (I) the publication or other distribution of research reports and (II) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA rules or any successor provisions or amendments thereto) or (B) such shorter period as the underwriters participating in such Public Offering may require, and (ii) upon notice from any holder(s) of Registrable Securities subject to a Shelf Registration that such holder(s) intend to effect a Public Offering of Registrable Securities pursuant to such Shelf Registration (upon receipt of which, the Company will promptly notify all other Stockholders of the date of commencement of such Public Offering), during (A) the 10 days prior to and the 90-day period beginning on the date of commencement of such Public Offering and (B) such shorter period as the underwriters participating in such Public Offering may require), in each case except as part of such Public Offering. To the extent required by any underwriter participating in such Public Offering, the Company shall use commercially reasonable efforts to cause its executive officers and directors to execute customary lock-up agreements in connection with such Public Offering, which lock-up agreements shall not have a duration shorter than that of the lock-up agreement or provisions applicable to the Company.

Section 2.04. Registration Procedures. Whenever a Stockholder requests that any Registrable Securities be registered pursuant to Section 2.01 or Section 2.02, subject to the provisions of such Sections, the Company shall use its commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof as soon as reasonably practicable and, in connection with any such request:

(a) The Company shall as soon as reasonably practicable prepare and file with the SEC a Registration Statement on any form for which the Company then qualifies or that counsel for the Company shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its commercially reasonable efforts to cause such filed Registration Statement to become and remain effective for a period of (i) not less than 180 days (or, if sooner, until all Registrable Securities have been sold under such Registration Statement), or (ii) in the case of a Shelf Registration, until the earlier of the date (x) on which all of the securities covered by such Shelf Registration are no longer Registrable Securities and (y) on which the Company cannot extend the effectiveness of such Shelf Registration because it is no longer eligible for use of Form S-3; subject in each case to any Suspension Period.

 

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(b) Prior to filing a Registration Statement or related prospectus or any amendment or supplement thereto, or before using any Free Writing Prospectus, the Company shall provide each Registering Stockholder, the Holders’ Counsel and each underwriter, if any, with an adequate and appropriate opportunity to review and comment on such Registration Statement, each prospectus included therein (and each amendment or supplement thereto) and each Free Writing Prospectus proposed to be filed with the SEC, and thereafter the Company shall furnish to such Registering Stockholder, the Holders’ Counsel and underwriter, if any, such number of copies of such Registration Statement, each amendment and supplement thereto filed with the SEC (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424, Rule 430A, Rule 430B or Rule 430C under the Securities Act, each Free Writing Prospectus and such other documents as such Registering Stockholder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Registering Stockholder. In addition, the Company shall, as expeditiously as practicable, keep Holders’ Counsel advised in writing as to the initiation and progress of any registration under Section 2.01 or Section 2.02 and provide Holders’ Counsel with copies of all correspondence (including any comment letter) with the SEC, any self-regulatory organization or other governmental agency in connection with any such Registration Statement. Each Registering Stockholder shall have the right to request that the Company modify any information pertaining to such Registering Stockholder contained in such Registration Statement, amendment and supplement thereto or any Free Writing Prospectus, and the Company shall use its commercially reasonable efforts to comply with such request; provided, however, that the Company shall not have any obligation to so modify any information if the Company reasonably expects that so doing would cause the prospectus to contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

(c) After the filing of the Registration Statement, the Company shall (i) cause the related prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act, (ii) comply with the provisions of the Securities Act applicable to the Company with respect to the disposition of all Registrable Securities covered by such Registration Statement during the applicable period in accordance with the intended methods of disposition by the Registering Stockholder thereof set forth in such Registration Statement or supplement to such prospectus and (iii) promptly notify each Registering Stockholder holding Registrable Securities covered by such Registration Statement and the Holders’ Counsel of any stop order issued or threatened by the SEC or any state securities commission and take all commercially reasonable actions required to prevent the entry of such stop order or to remove it if entered.

(d) The Company shall use its commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by such Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as any Registering Stockholder holding such Registrable Securities reasonably (in light of such Registering Stockholder’s intended plan of distribution) requests, and continue such registration or qualification in effect in such jurisdiction for the shortest of (A) as long as permissible pursuant to the laws of such jurisdiction, (B) as long as any such Registering Stockholder requests or (C) until all such Registrable Securities are sold and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable such Registering Stockholder to consummate the disposition of the Registrable Securities owned by such Registering Stockholder; provided that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 2.04(d), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.

 

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(e) The Company shall promptly notify each Registering Stockholder holding such Registrable Securities covered by such Registration Statement (i) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon the discovery that, or upon the occurrence of an event as a result of which, the preparation of a supplement or amendment to such prospectus is required so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and the Company shall promptly (subject to any applicable Suspension Period) prepare and make available to each Registering Stockholder and file with the SEC any such supplement or amendment, (ii) as soon as the Company becomes aware of any request by the SEC or any federal or state governmental authority for amendments or supplements to a Registration Statement or related prospectus covering Registrable Securities or for additional information relating thereto, (iii) as soon as the Company becomes aware of the issuance or threatened issuance by the SEC of any stop order suspending or threatening to suspend the effectiveness of a Registration Statement covering the Registrable Securities or (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose.

(f) (i) The Registering Stockholders holding a majority of the Registrable Securities to be included in a Demand Registration or intended to be sold pursuant to a Public Offering pursuant to a “take down” under a Shelf Registration shall have the right to select an underwriter or underwriters in connection with such Public Offering or “take down” (as the case may be) (which underwriter or underwriters may include any Affiliate of any Registering Stockholder so long as including such Affiliate would not require the separate engagement of a qualified independent underwriter with respect to such offering), subject to the Company’s approval (which shall not be unreasonably withheld, conditioned or delayed) and (ii) the Company shall select an underwriter or underwriters in connection with any other Public Offering. In connection with any Public Offering, the Company shall enter into customary agreements (including an underwriting agreement in customary form) and take all other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including, if required, the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with FINRA.

(g) Subject to confidentiality arrangements customarily applicable to underwriters and the Registering Stockholders, the Company shall make available for inspection by any Registering Stockholder and any underwriter participating in any disposition pursuant to a Registration Statement being filed by the Company pursuant to this Section 2.04 and any attorney, accountant or other professional retained by any such Stockholder or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company and its Subsidiaries (collectively, the “Records”) as shall be reasonably necessary or desirable to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors, managers and employees (and those of the Company’s Subsidiaries) to supply all information reasonably requested by any Inspectors in connection with such Registration Statement.

(h) The Company shall furnish to each Registering Stockholder and to each such underwriter, if any, a signed counterpart, addressed to such Registering Stockholder or underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’s independent public accountants, each in customary form and covering such matters of the kind customarily covered by opinions or comfort letters, as the case may be, any Registering Stockholder or the lead managing underwriter therefor reasonably requests.

 

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(i) The Company shall otherwise comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably available, an earnings statement or such other document that shall satisfy the provisions of Section 11(a) of the Securities Act and the requirements of Rule 158 thereunder.

(j) The Company may require each Registering Stockholder promptly to furnish in writing to the Company such information regarding the distribution of the Registrable Securities as the Company may from time to time reasonably request and such other information as may be reasonably required in connection with such registration.

(k) Each Registering Stockholder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.04(e), such Stockholder shall forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement (including any Shelf Registration) covering such Registrable Securities until such Stockholder’s receipt of (i) copies of the supplemented or amended prospectus from the Company or (ii) further notice from the Company that distribution can proceed without an amended or supplemented prospectus, and, in the circumstances described in clause (i), if so directed by the Company, such Stockholder shall deliver to the Company all copies, other than any permanent file copies then in such Stockholder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. If the Company shall give such notice, the Company shall extend the period during which such Registration Statement shall be maintained effective (including the period referred to in Section 2.04(a)) by the number of days during the period from and including the date of the giving of notice pursuant to Section 2.04(e) to the date when the Company shall (x) make available to such Stockholder a prospectus supplemented or amended to conform with the requirements of Section 2.04(e) or (y) deliver to such Stockholder the notice described in clause (ii).

(l) The Company shall use its commercially reasonable efforts to list all Registrable Securities of any class or series covered by such Registration Statement on any national securities exchange on which any of the Registrable Securities of such class or series are then listed or traded.

(m) Upon written request (which request shall be given with reasonable advance notice) to the Company by Registering Stockholders holding a majority of the Registrable Securities being sold in such offering, the Company shall have appropriate officers of the Company or its Subsidiaries (i) upon reasonable request and at reasonable times prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, (ii) take other actions to obtain ratings for any Registrable Securities and (iii) otherwise use its commercially reasonable efforts to cooperate as requested by the underwriters in the offering, marketing or selling of the Registrable Securities.

(n) The Company shall, as soon as possible following its actual knowledge thereof, notify each Registering Stockholder: (A) when a prospectus, any prospectus supplement, a Registration Statement or a post-effective amendment to a Registration Statement has been filed with the SEC, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (B) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement, a related prospectus (including a Free Writing Prospectus) or any other additional information; or (C) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose.

(o) The Company shall reasonably cooperate with each Registering Stockholder and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made by FINRA.

 

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(p) The Company shall take all other steps reasonably necessary to effect the registration of such Registrable Securities and reasonably cooperate with the holders of such Registrable Securities to facilitate the disposition of such Registrable Securities.

(q) The Company shall, within the deadlines specified by the Securities Act, make all required filings of all prospectuses (including any Free Writing Prospectus) with the SEC and make all required filing fee payments in respect of any Registration Statement or related prospectus used under this Agreement (and any offering covered hereby).

(r) The Company shall, if such registration is pursuant to a Registration Statement on Form S-3 or any similar short-form registration, include in such Registration Statement such additional information for marketing purposes as the managing underwriter with respect to an underwritten public offering reasonably requests.

Section 2.05. Indemnification by the Company. The Company agrees to indemnify and hold harmless each Registering Stockholder holding Registrable Securities covered by a Registration Statement, its Affiliates, stockholders, members, directors, officers, managers, employees, partners and agents, and each Person, if any, who controls such Registering Stockholder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, “Stockholder Parties”) from and against any and all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses) (“Damages”) caused by or relating to any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus or Free Writing Prospectus relating to the Registrable Securities (including any information that has been deemed to be a part of any prospectus under Rule 159 under the Securities Act), or caused by or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company shall not be liable to any Stockholder Party for any Damages that are caused by or related to any such untrue statement or omission or alleged untrue statement or omission so made based upon information furnished in writing to the Company by or on behalf of such Registering Stockholder expressly for use therein. The Company also agrees to indemnify and hold harmless any underwriters of the Registrable Securities, their respective officers and directors and each Person who controls any underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Registering Stockholders provided in this Section 2.05.

Section 2.06. Indemnification by Registering Stockholders. Each Registering Stockholder holding Registrable Securities included in any Registration Statement agrees, severally but not jointly, to indemnify and hold harmless (i) the Company, (ii) each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, (iii) each other Registering Stockholder participating in any offering of Registrable Securities and (iv) the respective Affiliates, stockholders, members, directors, officers, managers, employees, partners and agents of each of the Persons specified in clauses (i) through (iii) from and against all Damages to the same extent as the foregoing indemnity from the Company to such Registering Stockholder, but only with respect to information furnished in writing by or on behalf of such Registering Stockholder expressly for use in any Registration Statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus or Free Writing Prospectus relating to the Registrable Securities (including any information that has been deemed to be a part of any prospectus under Rule 159 under the Securities Act). Each Registering Stockholder also agrees to indemnify and hold harmless any underwriters of the Registrable Securities, their respective officers and directors and each Person who controls any underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the

 

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Exchange Act on substantially the same basis as that of the indemnification of the Company and the other Registering Stockholders provided in this Section 2.06. As a condition to including Registrable Securities in any Registration Statement filed in accordance with Article II, the Company may require that it shall have received an undertaking reasonably satisfactory to it from any underwriter to indemnify and hold the Company harmless to the extent customarily provided by underwriters with respect to similar securities and offerings. No Registering Stockholder shall be liable under this Section 2.06 for any Damages in excess of the net proceeds (after deducting the underwriters’ discounts and commissions) realized by such Registering Stockholder in the sale of Registrable Securities of such Registering Stockholder to which such Damages relate.

Section 2.07. Conduct of Indemnification Proceedings. If any proceeding (including any investigation by any governmental authority) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to Section 2.05 or Section 2.06, such Person (an “Indemnified Party”) shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all reasonable fees and expenses in connection therewith; provided that the failure of any Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel; (ii) in the reasonable judgment of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them; or (iii) the Indemnified Party shall have reasonably concluded (based on the advice of counsel) that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Party. It is understood that, in connection with any proceeding or related proceedings in the same jurisdiction, the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed promptly after receipt of an invoice setting forth such fees and expenses in reasonable detail. In the case of any such separate firm for any Indemnified Party, such firm shall be designated in writing by the Indemnified Party. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, or if there is a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless each Indemnified Party from and against any Damages (to the extent obligated herein) by reason of such settlement or judgment. Without the prior written consent of an Indemnified Party, no Indemnifying Party shall effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.

Section 2.08. Contribution. If the indemnification provided for in Section 2.05 or Section 2.06 is unavailable to an Indemnified Party or insufficient in respect of any Damages caused by or relating to any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus or Free Writing Prospectus relating to the Registrable Securities (including any information that has been deemed to be a part of any prospectus under Rule 159 under the Securities Act), or caused by or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified

 

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Party as a result of such Damages in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the Indemnified Party in connection with such actions which resulted in such Damages, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and the Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action.

The parties agree that it would not be just and equitable if contribution pursuant to this Section 2.08 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by a party as a result of the Damages referred to in the preceding paragraph shall be deemed to include, subject to the limitations set forth in Section 2.05 and Section 2.06, any legal or other expenses reasonably incurred by a party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 2.08, no Registering Stockholder shall be required to contribute any amount in excess of the net proceeds (after deducting the underwriters’ discounts and commissions) received by such Registering Stockholder in the applicable offering. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act), and no Person under the control, within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, of a Person guilty of such fraudulent misrepresentation, shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Each Registering Stockholder’s obligation to contribute pursuant to this Section 2.08 is several in the proportion that the net proceeds of the applicable offering received by such Registering Stockholder bears to the net total proceeds of the applicable offering received by all such Registering Stockholders and not joint.

Section 2.09. Participation in Public Offering. No Stockholder may participate in any Public Offering hereunder unless such Stockholder (i) agrees to sell such Stockholder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and the provisions of this Agreement in respect of registration rights.

Section 2.10. Other Indemnification. Indemnification similar to that specified herein (with appropriate modifications) shall be given by the Company and each Registering Stockholder participating therein with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.

Section 2.11. Cooperation by the Company. At any time following the Initial Public Offering, if any Stockholder shall transfer, assign, sell, convey or otherwise dispose of any Registrable Securities pursuant to Rule 144, the Company shall reasonably cooperate with such Stockholder, provide to such Stockholder such information as such Stockholder shall reasonably request and make publicly available information necessary to permit sales pursuant to Rule 144 for so long as necessary.

Section 2.12. Transfer of Registration Rights. The rights of a Stockholder under this Article II may be transferred or assigned in connection with a transfer of BellRing LLC Units or Registrable Securities, provided that all of the following additional conditions are satisfied: (x) such transfer or assignment is effected in accordance with applicable securities laws, (y) such transfer is effected in accordance with the Certificate of Incorporation and the BellRing LLC Agreement, as applicable, and (z) such transferee or assignee executes and delivers to the Company an agreement to be bound by this Agreement in the form of Exhibit A.

 

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Section 2.13. Limitations on Subsequent Registration Rights. The Company agrees that it shall not enter into any agreement with any holder or prospective holder of any securities of the Company (i) that would allow such holder or prospective holder to include such securities in any Demand Registration, Piggyback Registration or Shelf Registration unless, under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that their inclusion would not be on terms more favorable in the aggregate to such holder or prospective holder than this Agreement. The Company also represents and warrants to each Stockholder that it has not prior to the date of this Agreement entered into any agreement with respect to any of its securities granting any registration rights to any Person.

Section 2.14. Free Writing Prospectuses. Except for a prospectus relating to Registrable Securities included in a Registration Statement, an “Issuer Free Writing Prospectus” (as defined in Rule 433 under the Securities Act) or other materials prepared by or on behalf of the Company, each Registering Stockholder represents and agrees that it (i) shall not make any offer relating to the Registrable Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a Free Writing Prospectus, and (ii) has not distributed and will not distribute any written materials in connection with the offer or sale pursuant to a Registration Statement of Registrable Securities without the prior written consent of the Company and, in connection with any Public Offering, the underwriters.

Section 2.15. Information from Registering Stockholders; Obligations of Registering Stockholders.

(a) It shall be a condition precedent to the obligations of the Company to include the Registrable Securities of any Registering Stockholder that has requested inclusion of its Registrable Securities in any Registration Statement or related prospectus, as the case may be, that such Registering Stockholder shall take the actions described in this Section 2.15.

(b) Each Registering Stockholder that has requested inclusion of its Registrable Securities in any Registration Statement shall (i) furnish to the Company (as a condition precedent to such Registering Stockholder’s participation in such registration) in writing such information with respect to such Registering Stockholder, its ownership of Company Securities and the intended method of disposition of its Registrable Securities as the Company may reasonably request or as may be required by law or regulations for use in connection with any related Registration Statement or prospectus (or amendment or supplement thereto) and all information required to be disclosed in order to make the information previously furnished to the Company by such Registering Stockholder not contain a material misstatement of fact or necessary to cause such Registration Statement or prospectus (or amendment or supplement thereto) not to omit a material fact with respect to such Registering Stockholder necessary in order to make the statements therein not misleading and (ii) comply with the Securities Act and the Exchange Act and all applicable state securities laws and comply with all applicable regulations in connection with the registration and the disposition of Registrable Securities.

(c) Each Registering Stockholder shall promptly (i) following its actual knowledge thereof, notify the Company of the occurrence of any event that makes any statement made in a Registration Statement, prospectus, Issuer Free Writing Prospectus or other Free Writing Prospectus regarding such Registering Stockholder untrue in any material respect or that requires the making of any changes in a Registration Statement, prospectus, Issuer Free Writing Prospectus or other Free Writing Prospectus so that, in such regard, it shall not contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make the statements not misleading and (ii) provide the Company with such information as may be required to enable the Company to prepare a supplement or post-effective amendment to any such Registration Statement or a supplement to such prospectus or Free Writing Prospectus.

 

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(d) Each Registering Stockholder shall use commercially reasonable efforts to cooperate with the Company in preparing the applicable Registration Statement.

(e) Each Stockholder agrees that no Stockholder shall be entitled to sell any Registrable Securities pursuant to a Registration Statement or to receive a prospectus relating thereto unless such Stockholder has furnished the Company with all information required to be included in such Registration Statement by applicable securities laws in connection with the disposition of such Registrable Securities as reasonably requested by the Company.

(f) Notwithstanding anything to the contrary herein, no Registering Stockholder shall be required to make any representations or warranties to or agreements with the Company, the underwriters of any underwritten Public Offering, or any other Person in connection with a disposition of Registrable Securities other than representations, warranties or agreements regarding such Registering Stockholder, such Registering Stockholder’s ownership of Registrable Securities and such Registering Stockholder’s intended method of distribution of Registrable Securities.

ARTICLE III.

BOARD OF DIRECTORS

Section 3.01. Board of Directors.

(a) Board Size and Structure. The Board may increase or decrease the number of Directors, subject to the rights of Post under this Agreement and Applicable Governance Rules, in accordance with the Certificate of Incorporation and Bylaws. Upon consummation of the Initial Public Offering, the Board shall consist of five directors, and of such five directors:

(i) the number of Post Nominees shall be three;

(ii) the directors serving as Post Nominees shall be Darcy Horn Davenport, Thomas P. Erickson and Robert V. Vitale;

(iii) the terms of office of the initial Post Nominees shall be as follows:

(A) Darcy Horn Davenport shall serve for a term expiring at the Company’s annual meeting of stockholders in 2020;

(B) Thomas P. Erickson shall serve for a term expiring at the Company’s annual meeting of stockholders in 2021; and

(C) Robert V. Vitale shall serve for a term expiring at the Company’s annual meeting of stockholders in 2022; and

(iv) at least three directors shall be independent directors permitted by SEC rules to serve on the Company’s audit committee (such persons, the “Audit Committee Independent Directors”), at least one of whom shall be an audit committee financial expert as defined under Item 407(d)(5)(ii) of SEC Regulation S-K.

 

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(b) Post Nominees.

(i) For so long as the Company has a classified Board, each of the Post Nominees shall be assigned to a class of directors of the Company such that the number of Post Nominees in each class shall be as nearly equal in number as is reasonably possible.

(ii) Anything in the Bylaws to the contrary notwithstanding, with respect to any Post Nominees to be elected at any meeting of stockholders to be held after the date of the Initial Public Offering, Post shall designate the Post Nominees to be elected at such meeting by delivering to the Company written notice designating the Post Nominees to be elected at such meeting and setting forth such Post Nominees’ business address, telephone number and e-mail address, (A) in the case of an annual meeting, (1) within 10 days following its receipt of written notice from the Company notifying Post of the date of the first annual meeting after the date of the Initial Public Offering, in the case of the first annual meeting after the date of the Initial Public Offering, and (2) at least 120 days prior to the one year anniversary of the preceding annual meeting, in the case of subsequent annual meetings, and (B) in the case of a special meeting where directors will be elected, within 10 days following the date that Post receives written notice from the Company notifying Post of the special meeting; provided, that if Post shall fail to deliver such written notice, Post shall be deemed to have nominated the Post Nominees most recently designated for the applicable class of directors pursuant to this Section 3.01 if such Post Nominees are serving as directors of the Company at the time Post’s notice designating the Post Nominees is due.

(iii) Notwithstanding the foregoing, and subject to Section 6 of the Certificate of Incorporation, (A) if the Board or the Company determines to elect directors by written consent and not at a meeting of stockholders, including election by a consent in lieu of a meeting of stockholders as provided under Section 211(b) of the Delaware General Corporation Law, the Company shall so notify Post in writing (the “Consent Notice”), and Post shall designate the Post Nominees to be so elected by written consent, if any, by delivering to the Company written notice designating the Post Nominees, and setting forth such Post Nominees’ business address, telephone number and e-mail address, by the date that is 10 days following its receipt of the Consent Notice; provided, that if Post shall fail to timely deliver such written notice, Post shall be deemed to have nominated the Post Nominees most recently designated for the applicable class of directors pursuant to this Section 3.01 if such Post Nominees are serving as directors of the Company at the time Post’s notice designating the Post Nominees is due and (B) if Post determines to elect directors by written consent without action on the part of the Company or the Board, Post may effect by written consent the election of such Post Nominees and other directors as it deems necessary, appropriate or advisable, each director to serve for a term of office as provided in the Certificate of Incorporation and Bylaws of the Company.

(iv) The Company hereby agrees that (A) at each annual or special meeting of stockholders of the Company at which directors are to be elected and (B) in connection with any election of directors by written consent, in each case subject to any rights of the holders of shares of any class or series of preferred stock of the Company, the Company shall follow its applicable corporate governance policies and procedures to cause the Post Nominees to be nominated for election to the Board as nominees of the Company and the Board and otherwise shall ensure that the directors required to be nominated pursuant to this Article III shall be nominated for election and shall use its reasonable best efforts to cause the Post Nominees to be elected to the Board.

(v) For avoidance of doubt, the notice and other requirements set forth in Sections 1(d) through 1(h) of Article II of the Bylaws shall not apply to Post or any Post Nominee.

 

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(c) Committees. The Board shall have a corporate governance committee and compensation committee, an audit committee and such other committees as the Board may determine (collectively, the “Committees”). Subject to Section 3.02:

(i) the audit committee shall consist of at least three Audit Committee Independent Directors under Rule 10A-3 under the Exchange Act and the NYSE Listed Company Manual, and Post shall have the right to designate from the members of the Board the members of the Audit Committee subject to Section 3.02(b); and

(ii) each other Committee shall consist of at least three directors, and Post shall have the right to designate from the members of the Board the members of each such Committee subject to Section 3.02(b);

provided, however, that: (i) the membership of each Committee shall meet the requirements of Applicable Governance Rules, and (ii) subject to clause (i), each Committee shall have such number of directors as the Board may determine, which determination shall be made on the recommendation of the corporate governance and compensation committee. Each Committee shall have such powers and responsibilities as the Board may from time to time authorize.

(d) Removal and Replacement of Post Nominees. If a vacancy is created on the Board or a Committee as a result of the death, disability, retirement, resignation or removal of any Post Nominee, then Post shall have the right to designate such person’s replacement, and the person so designated shall be deemed to be a Post Nominee. If such vacancy shall be filled by the Board, the Company shall follow its applicable corporate governance policies and procedures to cause any such Post Nominee to be appointed to the Board. If such vacancy shall be filled at a meeting of stockholders or, subject to Section 6 of the Certificate of Incorporation, through written consents authorized or solicited by the Company, the Company shall follow its applicable corporate governance policies and procedures to cause the Post Nominees to be nominated for election to the Board as nominees of the Company and the Board and otherwise shall ensure that the directors required to be nominated pursuant to this Article III shall be nominated for election and shall use its reasonable best efforts to cause such Post Nominees to be elected to the Board. Subject to Section 6 of the Certificate of Incorporation, Post may fill the vacancy by written consent, and the person so elected by such written consent shall be deemed to be a Post Nominee. No Post Nominee shall be required to resign or be removed from the Board or any Committee as a result of a decrease in the size of the Board or any Committee, except as required by Applicable Governance Rules.

Section 3.02. Reduction of Posts Board and Committee Rights.

(a) Board Nominees. Notwithstanding anything to the contrary in this Agreement, after the Initial Public Offering, the number of Post Nominees that may be designated by Post pursuant to Section 3.01(a)(i) shall be determined based on the percentage of the votes that may be cast by the Post Stockholders under the Certificate of Incorporation on their own behalf without instructions or directions from Persons other than the Company or any of its Subsidiaries or the Post Stockholders, so that the Post Nominees constitute:

(i) a majority of the directors on the Board (and if the number of directors on the Board is even, one director more than 50% of the number of directors on the Board), if the votes that may be cast by the Post Stockholders on their own behalf are greater than 50% of the total voting power of all of the outstanding Shares of the Company;

 

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(ii) one less than a majority of the directors on the Board (and if the number of directors on the Board is even, 50% of the number of directors on the Board), if the votes that may be cast by the Post Stockholders on their own behalf are greater than 25% but 50% or less of the total voting power of all of the outstanding Shares of the Company;

(iii) one-third of the directors on the Board (rounded down to the nearest whole number), if the votes that may be cast by the Post Stockholders on their own behalf are greater than 10% but 25% or less of the total voting power of all of the outstanding Shares of the Company; and

(iv) no directors if the votes that may be cast by the Post Stockholders on their own behalf are 10% or less of the total voting power of all of the outstanding Shares of the Company.

Post shall cause the appropriate number of Post Nominees to resign as required to comply with this Section 3.02 upon the earlier to occur of (i) the date on which the current term of the resigning Post Nominee ends, and (ii) 12 months from the occurrence of an event resulting in the votes that may be cast by the Post Stockholders crossing a threshold described in Section 3.02(a)(i) through (iv). To the extent deemed reasonably necessary by the Board to comply with Applicable Governance Rules (including with respect to composition of committees), Post shall designate Independent Directors as Post Nominees; provided that directors who are affiliated with a Post Party shall not be automatically deemed not to be Independent Directors.

(b) Committees. Notwithstanding anything to the contrary in this Agreement, if the votes that may be cast by the Post Stockholders on their own behalf are less than 25% of the total voting power of all of the outstanding Shares of the Company, Post shall cease to have the rights to designate members of Committees pursuant to Section 3.01(c).

ARTICLE IV.

TERMINATION

Section 4.01. Termination. This Agreement shall terminate when the votes that may be cast by the Post Stockholders on their own behalf are less than 2.5% of the total voting power of all of the outstanding Shares; provided, however, that any Stockholder that ceases to own beneficially any Registrable Securities or BellRing LLC Units shall cease to be bound by the terms hereof other than (i) Section 2.05, Section 2.06, Section 2.07, Section 2.08 and Section 2.10 applicable to such Stockholder with respect to any offering of Registrable Securities completed before the date such Stockholder ceased to own any Registrable Securities or BellRing LLC Units and (ii) Section 5.01, Section 5.02 and Section 5.04 through Section 5.11.

ARTICLE V.

MISCELLANEOUS

Section 5.01. Successors and Assigns.

(a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and permitted assigns.

(b) Subject to Section 2.12, neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party.

(c) Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

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Section 5.02. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including electronic transmission) and shall be given,

if to the Company, to:

BellRing Brands, Inc.

Attn: President and CEO

2503 S. Hanley Rd.

St. Louis, MO 63144

E-mail:

if to Post, to:

Post Holdings, Inc.

2305 S. Hanley Rd.

St. Louis, MO 63144

Attention: General Counsel

Email:

if to any other party hereto, to the address (including electronic transmission) specified on the joinder to this Agreement signed by such party hereto,

or such other address as such party may hereafter specify for the purpose by notice to the other parties hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any Person that becomes a Stockholder shall provide its address and e-mail address to the Company, which shall promptly provide such information to each other Stockholder.

Section 5.03. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Company and Post. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 5.04. Governing Law. The corporate law of the State of Delaware shall govern all issues and questions concerning the relative rights of the Company and its stockholders pursuant to Article III hereto. All other issues and questions concerning the construction, validity, interpretation and enforcement of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law or conflicts of law provisions that would indicate the applicability of the laws of any other jurisdiction.

Section 5.05. Jurisdiction. The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal court located in the State of Delaware or any Delaware state court, 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 Delaware, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts

 

24


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.

Section 5.06. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 5.07. Specific Enforcement. Each party hereto acknowledges that the remedies at law of the other parties for a breach or threatened breach of this Agreement would be inadequate and, in recognition of this fact, any party to this Agreement, without posting any bond, and in addition to all other remedies that may be available, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may then be available.

Section 5.08. Counterparts; Effectiveness; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each initial party hereto shall have received a counterpart hereof signed by all of the other initial parties hereto. Until and unless each initial party has received a counterpart hereof signed by the other initial parties hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.

Section 5.09. Entire Agreement. This Agreement, together with the Exhibit hereto and any documents, instruments and writings that are delivered pursuant hereto, constitutes the entire agreement among the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, among the parties hereto with respect to the subject matter of this Agreement.

Section 5.10. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner so that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

Section 5.11. Certificate of Incorporation Supersedes. Nothing in this Agreement is intended to conflict with any provision of the Certificate of Incorporation or Bylaws, each in effect on the date hereof and, in the event of any such conflict, the applicable provisions of the Certificate of Incorporation or Bylaws shall supersede the conflicting provision of this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

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[remainder of page left blank; signature pages follow]

 

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BELLRING BRANDS, INC.
By:   /s/ Darcy Horn Davenport
  Name:  

Darcy Horn Davenport

  Title:  

President and Chief Executive Officer

SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT

[BELLRING BRANDS, INC.]


POST HOLDINGS, INC.
By:   /s/ Diedre J. Gray
  Name:  

Diedre J. Gray

  Title:  

Executive Vice President, General

Counsel and Chief Administrative Officer, Secretary

SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT

[POST HOLDINGS, INC.]


EXHIBIT A

JOINDER TO INVESTOR RIGHTS AGREEMENT

This Joinder Agreement (this “Joinder Agreement”) is made as of the date written below by the undersigned (the “Joining Party”) in accordance with the Investor Rights Agreement dated as of October 21, 2019 (the “Investor Rights Agreement”) among BellRing Brands, Inc. and the other parties thereto, as the same may be amended from time to time. Capitalized terms used, but not defined, herein shall have the meanings ascribed to such terms in the Investor Rights Agreement.

The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a party to the Investor Rights Agreement as of the date hereof and shall have all of the rights and obligations of a “Stockholder” thereunder as if it had executed the Investor Rights Agreement. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Investor Rights Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the date written below.

Date: ___________ ___, ______

 

[NAME OF JOINING PARTY]
By:  

 

  Name:  

 

  Title:  

 

Address for Notices:
Email Address:

 

EXHIBIT A - 1

EX-10.4

Exhibit 10.4

TAX MATTERS AGREEMENT

by and among

Post Holdings, Inc.,

BellRing Brands, Inc.

and

BellRing Brands, LLC

Dated as of October 21, 2019

 


ARTICLE I

 

Definitions

 

Section 1.01  

General

     1  
Section 1.02  

Rules of Interpretation

     5  
ARTICLE II

 

Preparation, Filing and Payment of Taxes Shown Due on Tax Returns

 

Section 2.01  

Post Consolidated Returns

     5  
Section 2.02  

Allocation of Taxes

     6  
Section 2.03  

Tax Treatment of Payments

     7  
ARTICLE III

 

Indemnification for Taxes

 

Section 3.01  

Indemnified Taxes

     7  
Section 3.02  

Refunds of Pre-Closing Taxes

     8  
Section 3.03  

Apportionment

     8  
Section 3.04  

Tax Treatment of Payments

     8  
Section 3.05  

Survival

     8  
ARTICLE IV

 

Cooperation

 

Section 4.01  

Cooperation for Spin-Off Transaction

     8  
Section 4.02  

Cooperation for Tax Audits

     8  
ARTICLE V

 

Miscellaneous

 

Section 5.01  

Governing Law

     9  
Section 5.02  

Dispute Resolution

     9  
Section 5.03  

Severability

     9  

 

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Section 5.04  

Entire Agreement

     10  
Section 5.05  

Assignment

     10  
Section 5.06  

Specific Performance

     10  
Section 5.07  

Amendments; Waivers

     11  
Section 5.08  

Counterparts

     11  
Section 5.09  

Waiver of Jury Trial

     11  
Section 5.10  

Jurisdiction; Service of Process

     11  
Section 5.11  

Notices

     12  

 

 

ii


TAX MATTERS AGREEMENT

THIS TAX MATTERS AGREEMENT (this “Agreement”), dated as of October 21, 2019 (the “Closing Date”) is entered into by and among Post Holdings, Inc., a Missouri corporation (“Post”), BellRing Brands, Inc., a Delaware corporation (“BellRing Inc.”), and BellRing Brands, LLC, a Delaware limited liability company (“BellRing LLC” and, together with Post and BellRing Inc., the “Parties”).

RECITALS

WHEREAS, pursuant to the terms of the Master Transaction Agreement (the “Master Transaction Agreement”), dated as of October 7, 2019 by and among Post, BellRing Inc. and BellRing LLC, the parties thereto have agreed to consummate the separation of BellRing LLC and its business from Post as contemplated thereby, and to take the other actions contemplated in such Master Transaction Agreement (collectively, the “Formation Transactions”);

WHEREAS, pursuant to the Formation Transactions, assets of Post and its applicable Subsidiaries shall be transferred to, and liabilities assumed by, BellRing LLC and its applicable Subsidiaries, and the Parties intend for such transfer to be treated for U.S. federal Income Tax purposes as a tax-free contribution of such assets to BellRing LLC by Post and its applicable Subsidiaries under Section 721 of the Code;

WHEREAS, following the Formation Transactions, Post and BellRing Inc. will own the common units in BellRing LLC; and

WHEREAS, the Parties wish to allocate the burden for Income Taxes (as defined below) imposed on Post and the BellRing LLC Entities (as defined below) in respect of their income in a fair and equitable manner.

NOW, THEREFORE, in consideration of these premises, and of the representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

Definitions

Section 1.01 General. As used in this Agreement, the following terms shall have the following meanings.

Accounting Firm” has the meaning set forth in Section 5.02.

Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person.

Agreement” has the meaning set forth in the preamble to this Agreement.

 

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BellRing Inc.” has the meaning set forth in the preamble to this Agreement.

BellRing LLC” has the meaning set forth in the preamble to this Agreement.

BellRing LLC Entity” means BellRing LLC and any other entity that is a member of the BellRing LLC Group.

BellRing LLC Group” means (a) BellRing LLC and each Person (including any Person treated as a disregarded entity for U.S. federal Income Tax purposes (or for purposes of any state, local, or foreign tax law)) in which BellRing LLC directly or indirectly has an interest, if such Person would be required to join in a Tax Return on a consolidated, combined or unitary basis with BellRing LLC if BellRing LLC or such Person, as applicable, were not required to join in a Tax Return on a consolidated, combined or unitary basis with Post, (b) any corporation (or other Person) that shall have merged or liquidated into any such Person and (c) any predecessor or successor to any Person otherwise described in this definition.

BellRing LLC Separate Tax Attribute” means Tax Attributes of BellRing LLC or the relevant members of the BellRing LLC Group, in each case, to the extent arising after the Closing Date, treating all such Tax Attributes as being subject to the limitations under applicable Tax law (including limitations on carrybacks and carryforwards) that would apply to the extent that any such members of the BellRing LLC Group would (but for their inclusion in a Post Consolidated Return) be entitled to file a Tax Return on a consolidated, combined or unitary basis solely with other members of the BellRing LLC Group.

BellRing LLC Taxes” means, in cases when any member of the BellRing LLC Group is included in a Post Consolidated Return, the hypothetical stand-alone Income Tax liability of the BellRing LLC Group or of any members of the BellRing LLC Group (as the case requires), for any taxable period (or portion thereof) beginning after the Closing Date, determined on the following basis: (i) to the extent that members of the BellRing LLC Group would (but for their inclusion in a Post Consolidated Return) be entitled to file a Tax Return on a consolidated, combined or unitary basis solely with other members of the BellRing LLC Group, such Income Tax liability shall be determined as though such members filed on a consolidated, combined or unitary basis, as applicable, solely with such other members of the BellRing LLC Group and (ii) taxable income of the BellRing LLC Group and/or any of its members shall be calculated by taking into account the BellRing LLC Separate Tax Attributes.

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.

Closing Date” has the meaning set forth in the preamble to this Agreement.

Closing of the Books Method” means the apportionment of items between portions of a taxable period based on a closing of the books and records on the close of the Closing Date (in the event that the Closing Date is not the last day of the taxable period, as if the Closing Date were the last day of the taxable period), subject to adjustment for items accrued on the Closing Date that are properly allocable to the Post-Closing Period, and subject to adjustment for Tax payments made after the Effective Time, which will be allocated to the Post-Closing Period under the principles of Treasury Regulations Section 1.1502-76; provided that any items not susceptible to such apportionment shall be apportioned on the basis of elapsed days during the relevant portion of the taxable period.

 

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

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.

Effective Time” means 11:59 pm on the Closing Date.

Formation Transactions” has the meaning set forth in the recitals to this Agreement.

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.

Income Tax Return” means any Tax Return on which Income Taxes are reflected or reported.

Income Taxes” means any U.S. federal, state, local, or foreign taxes, assessments or similar charges, in whole or in part, based upon, measured by, or calculated with respect to net income or profits, gross income, net worth or gross receipts (including any capital gains Tax, but not including sales, use, real or personal property, transfer, payroll or similar Taxes), and any interest, penalties, or additional amounts related thereto.

Indemnified Taxes” has the meaning set forth in Section 3.01 of this Agreement.

LLC Agreement” means that certain Amended and Restated Limited Liability Company Agreement of BellRing LLC, dated as of the date hereof, as such agreement may be further amended, restated, supplemented, and/or otherwise modified from time to time.

Master Transaction Agreement” has the meaning set forth in the recitals to this Agreement.

Parties” has the meaning set forth in the preamble to this Agreement.

Person” or “person” means a natural person, corporation, company, joint venture, individual business trust, trust association, partnership, limited partnership, limited liability company, association, unincorporated organization or other entity, including a Governmental Authority.

Post” has the meaning set forth in the preamble to this Agreement.

 

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Post-Closing Period” means any taxable period (or portion thereof) beginning after the Closing Date, including for the avoidance of doubt, the portion of any Straddle Period beginning after the Closing Date.

Post Consolidated Return” means any U.S. federal consolidated Income Tax Return required to be filed by Post or a member of the Post Group as the “common parent” of an “affiliated group” (in each case, within the meaning of Section 1504 of the Code), and any consolidated, combined, unitary or similar Income Tax Return required to be filed by Post or any member of the Post Group under a similar or analogous provision of state, local or non-U.S. law.

Post Group” means (a) Post and each Person (including any Person treated as a disregarded entity for U.S. federal Income Tax purposes (or for purposes of any state, local, or foreign tax law)) required to join in a Tax Return on a consolidated, combined, or unitary basis with Post, (b) any corporation (or other Person) that shall have merged or liquidated into Post or any such Person and (c) any predecessor or successor to any Person otherwise described in this definition, in each of (a), (b) and (c), other than BellRing LLC or any member of the BellRing LLC Group.

Post Separate Tax Attribute” means Tax Attributes of the Post Group excluding for this purpose the BellRing LLC Group and any members of the BellRing LLC Group (as the case requires), and treating all such Tax Attributes as being subject to the limitations under applicable Tax law (including limitations on carrybacks and carryforwards).

Post Separate Taxes” means the hypothetical stand-alone Income Tax liability of the Post Group excluding for this purpose the BellRing LLC Group and any members of the BellRing LLC Group (as the case requires) for any taxable period (or portion thereof) beginning after the Closing Date, determined under similar principles as used for the calculation of BellRing LLC Taxes.

Pre-Closing Period” means any taxable period (or portion thereof) ending on or before the Closing Date, including for the avoidance of doubt, the portion of any Straddle Period ending on the Closing Date.

Straddle Period” means any taxable period that begins on or before and ends after the Closing Date.

Subsidiary” means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities, (ii) the total combined equity interests, or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

Taxes” means any and all U.S. federal, state, local, or foreign taxes, assessments or similar charges, and any interest, penalties, or additional amounts related thereto.

 

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Tax Attributes” means net operating losses, capital losses, investment tax credit carryovers, section 163(j) carryovers, earnings and profits including those previously taxed, foreign tax credit carryovers, overall foreign losses, previously taxed income, separate limitation losses and any other losses, deductions, credits or other comparable items that could reduce a Tax liability for a past or future taxable period.

Tax Return” means any return, report, certificate, form, or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, or declaration of estimated Tax) supplied to, or filed with, or required to be supplied to, or filed with, a taxing authority in connection with the payment, determination, assessment or collection of any Tax or the administration of any laws relating to any Tax and any amended Tax return or claim for a refund (or credit in lieu thereof) of Taxes (including any overpayment of Taxes that can be refunded or, alternatively, applied to other Taxes payable), including any interest paid on or with respect to such refund of Taxes.

Treasury Regulations” means the proposed, final and temporary Income Tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

Section 1.02 Rules of Interpretation. The Parties agree that the Other Definitional and Interpretative Provisions provided in Section 1.02 of the LLC Agreement shall apply equally, mutatis mutandi, to this Agreement.

ARTICLE II

Preparation, Filing and Payment of Taxes Shown Due on Tax Returns

Section 2.01 Post Consolidated Returns.

(a) For so long as any BellRing LLC Entity is includible in a Post Consolidated Return, Post shall maintain separate calculations of BellRing LLC Taxes, BellRing LLC Separate Tax Attributes, Post Separate Taxes, and Post Separate Tax Attributes. To the extent BellRing LLC or any BellRing LLC Entity is required to be included in any Post Consolidated Return, Post shall prepare and file (or cause to be prepared and filed) each such Post Consolidated Return, and shall pay, or cause to be paid, to the applicable Governmental Authority all Taxes due in respect of any such Post Consolidated Return. Post may take (or fail to take) any position on or make (or fail to make) any elections or other determinations with respect to any Post Consolidated Return in its sole discretion; provided that Post will act reasonably and in good faith in balancing the competing interests between Post and the BellRing LLC Entities and maximizing the tax positions of the BellRing LLC Entities, on the one hand, and Post, on the other hand, in an equitable fashion.

 

5


(b) In the event that any Post Consolidated Return includes a BellRing LLC Entity, the following rules shall apply: (i) BellRing LLC will pay to Post an amount equal to any BellRing LLC Taxes that are actually paid by Post in respect of such return; (ii) if, as a result of the offset of a Tax liability with a Post Separate Tax Attribute, the BellRing LLC Taxes in respect of such return exceed the actual cash liability paid by Post, then BellRing LLC shall be required to pay Post an amount equal to such excess only at such time, and to the extent, that the cash liability for a later Tax period in respect of Post Separate Taxes is greater than it would have been had the Post Separate Tax Attribute not been used to create the excess (for the avoidance of doubt, even if such later Tax period occurs at a time when the applicable BellRing LLC Entity is no longer included in the applicable Post Consolidated Return); (iii) if, as a result of the offset of a Tax liability with a BellRing LLC Separate Tax Attribute, the Post Separate Taxes exceed the actual cash liability paid by Post in respect of the return, then Post shall be required to pay BellRing LLC an amount equal to such excess only at such time, and to the extent, that the cash Tax liability for a later Tax period in respect of BellRing LLC Taxes is greater than it would have been had the BellRing LLC Separate Tax Attribute not been used to create the excess (for the avoidance of doubt, even if such later Tax period occurs at a time when the applicable BellRing LLC Entity is no longer included in the applicable Post Consolidated Return); (iv) subject to clause (v) of this Section 2.01(b) each Party shall make, or cause to be made, any and all payments due under this Section 2.01(b) on or before the later of (x) ten (10) Business Days before the due date of the applicable Taxes (including estimated Tax payments) and (y) ten (10) Business Days after the Party required to make a payment is notified of such requirement (which such notice may be provided prior to the time the applicable Taxes are paid, and such notice may represent a reasonable estimate (provided that the amount of payments shall in all cases be based on the actual Tax liability and not on such reasonable estimate)); and (v) amounts owed between Post and BellRing LLC under clauses (i)-(iii) of this Section 2.01(b) that are due and payable in respect of the same Post Consolidated Return may be netted against each other. In the event that BellRing Inc. is included in a Post Consolidated Return, then to the extent (i) Post is required to pay Income Taxes attributable to BellRing Inc. that are not otherwise addressed in this Section 2.01(b), or (ii) any Post Separate Tax Attributes are used to offset such Income Taxes, then Post and Bellring Inc. shall make payments to each other using the procedures and principles contained in this Article II (without duplication for Income Taxes otherwise addressed in this Section 2.01(b)) as if Bellring Inc. were Bellring LLC.

Section 2.02 Allocation of Taxes. At least ten (10) Business Days prior to the filing of a Post Consolidated Return discussed in Section 2.01 (or, if earlier, on the date that a notice is provided by Post to BellRing LLC in respect of such Post Consolidated Return filing pursuant to Section 2.01), Post shall deliver to BellRing LLC, to be shared with BellRing Inc. at BellRing Inc.’s request, for BellRing LLC’s review and comment, Post’s calculation of the BellRing LLC Taxes, BellRing LLC Separate Tax Attributes, Post Separate Taxes, Post Separate Tax Attributes, and amounts due under Section 2.01(b), together with supporting documentation, to be included in any such Post Consolidated Return and acting in good faith shall incorporate all reasonable suggestions or comments made by BellRing LLC regarding such calculations, provided that nothing herein shall be interpreted to require the disclosure of (i) the Post Consolidated Return or items on the

 

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Post Consolidated Return that do not relate to the BellRing LLC Entities and Post may provide pro forma separate company Tax Returns or summaries of issues in lieu of any such disclosure, or (ii) anything that is privileged so long as sufficient information and calculations are provided in a form so that BellRing LLC can analyze and dispute any calculations pursuant to this Agreement. In the event of any dispute between Post, BellRing LLC and BellRing Inc. regarding a calculation of the amount of BellRing LLC Taxes, BellRing LLC Separate Tax Attributes, Post Separate Taxes, or Post Separate Tax Attributes, the relevant Parties shall work together in good faith to resolve such disagreement, and to the extent they are unable to do so within ninety (90) days, the dispute shall be resolved by an Accounting Firm in accordance with Section 5.02; provided that during the pendency of any such dispute, the Parties shall be obligated to make the payments as required by Section 2.01(b) consistent with the original determinations by Post and within the timeframe described in Section 2.01(b); provided further, that any payments necessary to reflect the resolution of any such dispute shall be made within ten (10) Business Days following such resolution.

Section 2.03 Tax Treatment of Payments. To the extent permitted by applicable law, all amounts paid pursuant to this Article II shall be treated as reimbursements for expenses, and shall not be treated as distributions by BellRing LLC in respect of its equity or as capital contributions to BellRing LLC.

ARTICLE III

Indemnification for Taxes

Section 3.01 Indemnified Taxes. Post shall pay (or cause to be paid), and shall indemnify and hold the BellRing LLC Entities harmless from and against, without duplication, any losses attributable to or relating to (i) all Taxes of the BellRing LLC Entities that are attributable to a Pre-Closing Period, (ii) all Tax liabilities of another Person imposed on any BellRing LLC Entity arising by law (including transferee or successor liability), equity, contract (for the avoidance of doubt, excluding this Agreement), or otherwise as a result of a transaction that occurred during the Pre-Closing Period, (iii) all Tax liabilities of Post and its Affiliates (other than the BellRing LLC Entities) imposed on any BellRing LLC Entity by a Governmental Authority as a result of being includible on a Post Consolidated Return (whether imposed for a Pre-Closing Period or a Post-Closing Period), but, with respect to any such Tax liabilities imposed for Post-Closing Periods in respect of BellRing LLC Taxes, only to the extent BellRing LLC has made a payment with respect to such Taxes to Post as required by Article II, (iv) any Tax liabilities assessed against a BellRing LLC Entity in its capacity as a withholding agent for a payment made to Post or its Affiliate (other than a BellRing LLC Entity), (v) all Tax liabilities under Section 965 of the Code (whether imposed for a Pre-Closing Period or a Post-Closing Period), and (vi) all Tax liabilities resulting from the Formation Transactions (whether imposed for a Pre-Closing Period or a Post-Closing Period) ((i) through (vi) collectively, “Indemnified Taxes”). To the extent Post cannot pay any such amounts directly to the relevant taxing authorities, Post shall timely pay, or cause to be timely paid, any such amounts to BellRing LLC.

 

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Section 3.02 Refunds of Pre-Closing Taxes. Any Tax refunds that are received by a BellRing LLC Entity shall be for the account of Post to the extent attributable to Indemnified Taxes that were actually paid, or caused to be paid, by Post. The relevant BellRing LLC Entity shall pay over to Post any such refund, net of Taxes and reasonable expenses attributable thereto, paid in cash within ten (10) Business Days after receipt thereof, and to the extent any refunds are applied against a future Tax liability, the relevant BellRing LLC Entity shall pay over to Post the amount of Tax savings at the time the Tax Return in which such savings are realized is required to be filed (taking into account applicable extensions). The relevant BellRing LLC Entities shall cooperate with Post in obtaining any such Tax refunds.

Section 3.03 Apportionment. For purposes of this Article III, any Taxes, refunds or credits attributable to a Straddle Period shall be apportioned between the Pre-Closing Period and the Post-Closing Period using the Closing of the Books Method.

Section 3.04 Tax Treatment of Payments. To the extent permitted by applicable law, all amounts paid pursuant to this Article III shall be treated as reimbursements for expenses, and shall not be treated as distributions by BellRing LLC in respect of its equity or as capital contributions to BellRing LLC.

Section 3.05 Survival. The indemnity obligations described in this Article III shall survive until the expiration of all applicable underlying statutes of limitations governing the applicable Taxes.

ARTICLE IV

Cooperation

Section 4.01 Cooperation for Spin-Off Transaction. As applicable, Post, BellRing Inc. and BellRing LLC shall cooperate and work together in good faith to ensure Post’s (or an Affiliate’s) ability to effect a spin-off, split-off or similar transaction (however evidenced or structured, including a subsequent merger of such Affiliate and BellRing Inc.) in a tax-free manner.

Section 4.02 Cooperation for Tax Audits. In the event of an audit by a Governmental Authority of Post, BellRing Inc., or a BellRing LLC Entity, the relevant entity shall promptly notify such other Parties of, and keep the other Parties reasonably informed with respect to, the portion of any such audit the outcome of which is reasonably expected to affect such Parties’ rights and obligations under this Agreement, and such Parties shall have the right to participate in and to monitor at its own expense (but not to control) any such portion of any such audit; provided that the relevant entity shall not settle or fail to contest any issue that is reasonably expected to materially affect such Parties’ rights or obligations under this Agreement without the prior written consent of such Parties, such consent not to be unreasonably withheld, conditioned or delayed.

 

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ARTICLE V

Miscellaneous

Section 5.01 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State.

Section 5.02 Dispute Resolution. In the event of any dispute between the Parties as to any matter covered by Article II or Article III, the parties to such dispute shall appoint a mutually acceptable independent accounting firm (the “Accounting Firm”) to resolve such dispute. The Parties acknowledge that any discussions between the Parties in connection with any such dispute are without prejudice communications made in confidence with the intent of attempting to resolve a potentially litigious dispute and are subject to settlement privilege. Each Party shall provide the other Parties with reasonable access to the working papers and other related information relating to any such dispute and any applicable calculations that are related to, or are the subject matter of, such dispute. The Parties shall make their respective submissions to the Accounting Firm within thirty (30) days after selecting such firm pursuant to this Section 5.02. The determination by such Accounting Firm applying the procedures described herein shall be final, binding, and conclusive on the Parties and judgment may be entered thereon in a court of competent jurisdiction pursuant to Section 5.10. In making its determination pursuant to this Section 5.02, the Accounting Firm (A) shall consider only the items that remain in dispute as of the time of such determination; and (B) shall not assign a value outside the range of the values provided by such Parties. The Parties shall use reasonable efforts to cause the Accounting Firm to make its determination within thirty (30) days after the Parties have made their respective submissions to the Accounting Firm. The Accounting Firm shall resolve all disputes in a manner consistent with this Agreement. The Parties shall require the Accounting Firm to render all determinations in writing and to set forth, in reasonable detail, the basis for such determination. The fees and expenses of the Accounting Firm shall be borne by BellRing LLC.

Section 5.03 Severability. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to in this Agreement shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement or any other such instrument. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

 

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Section 5.04 Entire Agreement. This Agreement and other documents to be entered into or executed by the Parties in connection with the Master Transaction Agreement, together with all exhibits and schedules hereto and thereto, constitute the entire agreement among the Parties pertaining to the subject matter of such agreements and supersede all prior agreements, understandings, negotiations, and discussions, whether oral or written, of the Parties.

Section 5.05 Assignment. This Agreement shall not be assigned by any Party (whether by operation of law or otherwise) without the prior written consent of the other Parties, not to be unreasonably withheld, conditioned or delayed. No assignment by any Party (including any assignments described in the parenthetical in the preceding sentence) shall relieve such Party of any of its obligations hereunder. Any attempted assignment in violation of this Section 5.05 shall be null and void. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties or their respective successors and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement.

Section 5.06 Specific Performance.

(a) The Parties agree that irreparable harm would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and that money damages or other legal remedies, even if available, would not be an adequate remedy for any such harm. The Parties agree that (i) each of the Parties shall be entitled to an injunction or injunctions from a court of competent jurisdiction as set forth in Section 5.10 to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, and (ii) the right of specific enforcement is an integral part of the transactions contemplated by this Agreement, and without that right, BellRing Inc., BellRing LLC, and Post would not have entered into this Agreement. Each of the Parties agrees that no Party or any other Person shall be required to obtain, furnish, or post any bond or similar instrument in connection with or as a condition to obtaining any remedy under this Section 5.06(a), and each Party irrevocably waives any right that it may have to require the obtaining, furnishing or posting of any such bond or similar instrument. Each of the Parties also agrees that it will not oppose the granting of an injunction, specific performance, or other equitable relief on the basis that the other Party has an adequate remedy at law or that any such injunction or award of specific performance or other equitable relief is not an appropriate remedy for any reason.

 

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(b) The Parties further agree that by seeking the remedies provided for in this Section 5.06, a Party shall not in any respect waive its right to seek any other form of relief that may be available to a Party under this Agreement (including monetary damages) for breach of any of the provisions of this Agreement.

Section 5.07 Amendments; Waivers. This Agreement may not be amended except by an instrument in writing signed by each of the Parties. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise expressly provided in this Agreement, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 5.08 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by facsimile transmission or by electronic mail, and a facsimile or electronic copy of this Agreement or of a signature of a Party shall be effective as an original.

Section 5.09 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH ABOVE.

Section 5.10 Jurisdiction; Service of Process. Each of the Parties irrevocably agrees that any legal action or proceeding brought by any Party with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by another Party or its successors or assigns, shall be brought and determined exclusively in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court. Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal

 

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jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts. Each of the Parties hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or proceeding brought by any Party with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 5.10, (b) any claim that it or its property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (c) waives, to the fullest extent permitted by law, any claim that (i) such suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper, or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Each of the Parties irrevocably agrees that, subject to any available appeal rights, any decision, order, or judgment issued by such above named courts shall be binding and enforceable, and irrevocably agrees to abide by any such decision, order, or judgment. Each of the Parties hereto agrees that service of process upon such Party in any such action or proceeding shall be effective if such process is given as a notice in accordance with Section 5.11. NOTWITHSTANDING THIS Section 5.10, ANY DISPUTE REGARDING A MATTER COVERED BY Section 5.02 SHALL BE RESOLVED IN ACCORDANCE WITH Section 5.02; PROVIDED THAT THE TERMS OF Section 5.02 MAY BE ENFORCED BY EITHER PARTY IN ACCORDANCE WITH THE TERMS OF THIS Section 5.10.

Section 5.11 Notices.

(a) All notices, requests, claims, demands, and other communications hereunder shall be in writing (including email, so long as a receipt of such email is requested and received) and shall be deemed duly given and received (i) on the date of delivery if delivered personally or via email, or (ii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

If to BellRing Inc., to:

BellRing Brands, Inc.

2503 S. Hanley Road

St. Louis, Missouri 63144

Attn: General Counsel

Email:

If to BellRing LLC, to:

BellRing Brands, LLC

2503 S. Hanley Road

St. Louis, Missouri 63144

Attn: General Counsel

Email:

 

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If to Post, to:

Post Holdings, Inc.

2503 S. Hanley Road

St. Louis, Missouri 63144

Attn: General Counsel

Email:

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

Post Holdings, Inc.

2503 S. Hanley Road

St. Louis, Missouri 63144

Attn: Randy Ridenhour

Email:

Any Party may change its contact information by giving the other Parties written notice of its new contact information in the manner set forth above.

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

 

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

 

Post Holdings, Inc.
By:  

/s/ Diedre J. Gray

Name:   Diedre J. Gray
Title:   Executive Vice President, General Counsel and Chief Administrative Officer, Secretary
BellRing Brands, Inc.
By:  

/s/ Darcy Horn Davenport

Name:   Darcy Horn Davenport
Title:   President and Chief Executive Officer
BellRing Brands, LLC
By:  

/s/ Darcy Horn Davenport

Name:   Darcy Horn Davenport
Title:   President and Chief Executive Officer

[SIGNATURE PAGE TO TAX MATTERS AGREEMENT]

EX-10.5

Exhibit 10.5

TAX RECEIVABLE AGREEMENT

by and among

BellRing Brands, Inc.

BellRing Brands, LLC

Post Holdings, Inc.

and

And Future Members of BellRing Brands, LLC

From Time to Time Party Hereto

Dated as of October 21, 2019


ARTICLE I

 

DEFINITIONS

 

Section 1.01.

  Definitions      2  

Section 1.02.

  Rules of Construction.      10  

ARTICLE II

 

DETERMINATION OF REALIZED TAX BENEFIT

 

Section 2.01.

  Basis Adjustments; 754 Election.      11  

Section 2.02.

  Basis Schedules      11  

Section 2.03.

  Tax Benefit Schedules.      12  

Section 2.04.

  Procedures, Amendments      13  

ARTICLE III

 

TAX BENEFIT PAYMENTS

 

Section 3.01.

  Payments      14  

Section 3.02.

  No Duplicative Payments      16  

Section 3.03.

  Pro-Ration of Payments as Among the Members.      16  

ARTICLE IV

 

TERMINATION

 

Section 4.01.

  Termination, Breach of Agreement, Change of Control      17  

Section 4.02.

  Early Termination Schedule      18  

Section 4.03.

  Payment upon Early Termination      18  

ARTICLE V

 

LATE PAYMENTS, ETC.

 

Section 5.01.

  Late Payments by the Corporation      19  

Section 5.02.

  Subordination      19  

ARTICLE VI

 

CONSISTENCY; COOPERATION

 

Section 6.01.

  The Member’s Participation in Corporation Tax Matters      19  

Section 6.02.

  Consistency      19  

Section 6.03.

  Cooperation      20  

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01.

  Notices      20  

Section 7.02.

  Counterparts      21  

Section 7.03.

  Entire Agreement; Third Party Beneficiaries      21  

Section 7.04.

  Governing Law      22  


Section 7.05.

  Severability      22  

Section 7.06.

  Successors; Assignment; Amendments; Waivers      22  

Section 7.07.

  Resolution of Disputes      23  

Section 7.08.

  Reconciliation      24  

Section 7.09.

  Withholding      25  

Section 7.10.

  Affiliated Corporations; Admission of the Corporation into a Consolidated Group; Transfers of Corporate Assets      25  

Section 7.11.

  Change in Law      26  

Section 7.12.

  Interest Rate Limitation      26  

Section 7.13.

  Independent Nature of Rights and Obligations      26  


This TAX RECEIVABLE AGREEMENT (as amended from time to time, this “Agreement”), dated as of October 21, 2019, is hereby entered into by and between BellRing Brands, Inc., a Delaware corporation (the “Corporation”), BellRing Brands, LLC, a Delaware limited liability company (“BellRing LLC”), Post Holdings, Inc., a Missouri corporation (“Post”), and each of the other Members (as defined herein) from time to time Party hereto.

RECITALS

WHEREAS, BellRing LLC is treated as a partnership for U.S. federal income tax purposes;

WHEREAS, Post and the Corporation are the only members of BellRing LLC as of the date hereof (as used herein, “Members” means each of the members of BellRing LLC other than the Corporation);

WHEREAS, Post owns nonvoting common units in BellRing LLC (the “Units”);

WHEREAS, on the date hereof, the Corporation issued shares of its Class A common stock, par value $0.01 per share (the “Class A Common Stock”), in an initial public offering of its Class A Common Stock (the “IPO”);

WHEREAS, immediately following the consummation of the IPO, the Corporation acquired newly issued Units from BellRing LLC using the net proceeds from the IPO;

WHEREAS, Article IX of the LLC Agreement (as defined herein) provides each Member a redemption right pursuant to which each Member may cause BellRing LLC to redeem all or a portion of its Units from time to time for shares of Class A Common Stock or, at BellRing LLC’s option (as determined by the Board of Managers), cash (a “Redemption”);

WHEREAS, BellRing LLC and each of its Subsidiaries (as defined herein) that is treated as a partnership for U.S. federal income tax purposes will have in effect an election under Section 754 of the Code (as defined herein) for the Taxable Year (as defined herein) in which any Basis Transaction (as defined herein) occurs, which election will cause certain Basis Transactions to result in an adjustment to the Corporation’s share of the tax basis of the assets owned by BellRing LLC or certain of its Subsidiaries; and

WHEREAS, the Parties to this Agreement desire to provide for certain payments and make certain arrangements with respect to any tax benefits to be derived by the Corporation as the result of Basis Transactions, disproportionate allocations of tax benefits to the Corporation under Section 704(c) of the Code resulting from the Contribution, and the making of payments under this Agreement.

 

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NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Definitions. As used in this Agreement, the terms set forth in this Article I shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

Actual Tax Liability” means, with respect to any Taxable Year, the sum of (i) the actual liability for Covered Taxes of the Corporation (a) appearing on the U.S. federal income Tax Return of the Corporation for such Taxable Year and (b) if applicable, determined in accordance with a Determination (including interest imposed in respect thereof under applicable law) and (ii) the product of (a) federal taxable income (not below zero) reported on the U.S. federal income Tax Return of the Corporation for such Taxable Year and (b) the Deemed Effective State Tax Rate.

Advisory Firm” means any law or accounting firm that is (A) nationally recognized as being an expert in tax matters and (B) agreed to by the Corporation and the Members.

Advisory Firm Report” shall mean (a) an attestation report from the Advisory Firm expressing an opinion on management’s assertion as to whether the Tax Benefit Schedule and/or the Early Termination Schedule has been prepared, in all material respects, in accordance with this Agreement, or (b) another type of report or letter from the Advisory Firm related to whether the information in the Tax Benefit Schedule and/or the Early Termination Schedule has been prepared in a manner consistent with the terms of this Agreement.

Affiliate” means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person.

Agreed Rate” means LIBOR plus 100 basis points.

Agreement” is defined in the preamble of this Agreement.

Amended Schedule” is defined in Section 2.04(b) of this Agreement.

Attributable” is defined in Section 3.01(b)(i) of this Agreement.

Bankruptcy Code” means Title 11 of the United States Code.

Basis Adjustment” means the increase or decrease to, or the Corporation’s share of, the tax basis of the Reference Assets under Section 732, 734(b), 743(b), 754, 755, or 1012 of the Code (or in each case, any similar provisions of state, local or foreign tax law) as a result of any Basis Transaction or payment made under this Agreement. As relevant, Basis Adjustments are to be calculated pursuant to Treasury Regulations Section 1.743-1. Notwithstanding any other provision of this Agreement, the amount of any Basis Adjustment resulting from a Basis Transaction is to be determined without regard to any Pre-Redemption Transaction and as if any Pre-Redemption Transaction had not occurred.

Basis Schedule” is defined in Section 2.02 of this Agreement.

 

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Basis Transaction” means any (i) Redemption, (ii) transaction characterized under Section 707(a)(2)(B) of the Code as a sale by a Member of Units or Reference Assets, (iii) distribution (including a deemed distribution) by a member of the BellRing LLC Group to a Member or another member of the BellRing LLC Group that results in a basis adjustment to a Reference Asset under Section 734(b) or 732 of the Code, or (iv) Reorganization.

Basis Transaction Date” means the date of any Basis Transaction.

BellRing LLC” is defined in the preamble of this Agreement.

BellRing LLC Group” means BellRing LLC, each of its direct or indirect Subsidiaries, and each of their predecessors, successors and assigns.

Board” means the board of directors of the Corporation.

Board of Managers” means the board of managers of BellRing LLC.

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.

Change of Control” means any of the following:

(i) the consummation of a reorganization, merger, share exchange or consolidation (a “Business Combination”) in which (x) the Corporation is a constituent party or (y) a Subsidiary of the Corporation is a constituent party, except any such Business Combination involving the Corporation or a Subsidiary of the Corporation in which the holders of shares of capital stock of the Corporation outstanding immediately prior to such Business Combination continue to hold, or whose shares of capital stock of the Corporation are converted into or exchanged for shares of capital stock that represent, immediately following such Business Combination, more than 50% of the combined voting power of the capital stock entitled to vote generally in the election of directors or other governing body, as the case may be, of (A) the surviving or resulting corporation or other entity or (B) if the surviving or resulting corporation or other entity is a wholly-owned subsidiary of another corporation or other entity immediately following such merger or consolidation, the parent corporation or other entity of such surviving or resulting corporation or other entity;

(ii) a sale, assignment, conveyance, transfer, lease or other disposition, in one transaction or a series of transactions, by the Corporation or any Subsidiary of the Corporation of all or substantially all of the assets of the Corporation and its Subsidiaries taken as a whole, or the sale or disposition (whether by merger, consolidation or otherwise) of one or more Subsidiaries of the Corporation if substantially all of the assets of the Corporation and its Subsidiaries taken as a whole are held by such Subsidiary or Subsidiaries, except where such sale, assignment, conveyance, transfer, lease or other disposition is to a wholly-owned Subsidiary of the Corporation;

 

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(iii) any Person or group of Persons acting together which would constitute a “group” for purposes of Section 13(d) or 14(d) of the Securities and Exchange Act of 1934, as amended, or any successor provisions thereto, other than Post or any Affiliate thereof (other than the Corporation or any of its Subsidiaries), acquiring, holding or otherwise controlling more than 50% of the combined voting power of the capital stock of the Corporation entitled to vote generally in the election of directors (including, for avoidance of doubt, acquiring, holding or otherwise controlling the right to cast all or a portion of the votes to which the Class B Common Stock is entitled pursuant to proxies, voting agreements or other voting arrangements from or with Post or any of its Affiliates (other than the Corporation or any of its Subsidiaries) in accordance with the LLC Agreement); or

(iv) the approval by the stockholders of the Corporation of any plan or proposal for the liquidation or dissolution of the Corporation.

Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred by virtue of (a) any indirect Change of Control of the Corporation resulting from a change of control of Post, (b) the consummation of any transaction or series of integrated transactions immediately following which the record holders of the Class A Common Stock and the Class B Common Stock immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in and voting control over, and own substantially all of the shares of, an entity which owns all or substantially all of the assets of the Corporation immediately following such transaction or series of transactions, (c) the consummation of any transaction or series of integrated transactions in which a Member or an Affiliate of such Member merges with the Corporation or (d) the distribution by Post of its retained beneficial interest in BellRing LLC by means of a spin-off or split-off to its shareholders (however evidenced or structured).

Class A Common Stock” is defined in the recitals of this Agreement.

Class B Common Stock” means the Class B common stock, par value $0.01 per share, of the Corporation.

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

Contribution” means the initial deemed contribution for U.S. federal income tax purposes by Post to BellRing LLC of all of the assets and liabilities of BellRing LLC as part of the formation of BellRing LLC, which occurs in connection with the Reorganization.

Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

Corporation” is defined in the preamble of this Agreement.

Corporation Return” means the U.S. federal income Tax Return of the Corporation filed with respect to any Taxable Year.

Covered Taxes” means any U.S. federal, state, local, or franchise taxes, assessments or similar charges that are based on or measured with respect to net income or profits, whether as an exclusive or an alternative basis, and any interest imposed in respect thereof under applicable law.

 

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Cumulative Net Realized Tax Benefit” is defined in Section 3.01(b)(iii) of this Agreement.

Deemed Effective State Tax Rate” means an assumed rate equal to 5%.

Default Rate” means LIBOR plus 500 basis points.

Default Rate Interest” is defined in Section 3.01(b)(viii) of this Agreement.

Determination” shall have the meaning ascribed to such term in Section 1313(a) of the Code or any other event (including the execution of a Form 870-AD) that finally and conclusively establishes the amount of any liability for tax.

Early Complete Termination” is defined in Section 4.01(b) of this Agreement.

Early Termination Effective Date” means (i) with respect to an early termination pursuant to Section 4.01(b), the date an Early Termination Notice is delivered, (ii) with respect to an early termination pursuant to Section 4.01(c), the date of the applicable Material Breach and (iii) with respect to an early termination pursuant to Section 4.01(d), the date of the applicable Change of Control.

Early Termination Reference Date” is defined in Section 4.02 of this Agreement.

Early Termination Event” means (i) an Early Complete Termination to which Section 4.01(b) applies, (ii) a breach of this Agreement to which Section 4.01(c) applies and (iii) a Change of Control to which Section 4.01(d) applies.

Early Termination Notice” is defined in Section 4.01(b) of this Agreement.

Early Termination Payment” is defined in Section 4.03(b) of this Agreement.

Early Termination Rate” means the lesser of (i) 6.5% per annum, compounded annually, and (ii) LIBOR plus 300 basis points.

Early Termination Schedule” is defined in Section 4.02 of this Agreement.

Expert” is defined in Section 7.08 of this Agreement.

Extension Rate Interest” is defined in Section 3.01(b)(vii) of this Agreement.

Final Payment Date” means any date on which a payment is required to be made pursuant to this Agreement. The Final Payment Date in respect of (i) a Tax Benefit Payment is determined pursuant to Section 3.01(a) of this Agreement and (ii) an Early Termination Payment is determined pursuant to Section 4.03(a) of this Agreement.

 

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Hypothetical Federal Tax Liability” means, with respect to any Taxable Year, the hypothetical liability of the Corporation that would arise in respect of U.S. federal Covered Taxes, using the same methods, elections, conventions and similar practices used on the actual relevant U.S. federal Tax Returns of the Corporation but (i) calculating depreciation, amortization, or other similar deductions, or otherwise calculating any items of income, gain, or loss, using the Corporation’s proportionate share of such items (without regard to the Section 704(c) Benefits) determined by reference to the Non-Adjusted Tax Basis as reflected on the Basis Schedule, including amendments thereto, for such Taxable Year, (ii) excluding any Section 707(c) Deductions or Imputed Interest for such Taxable Year and (iii) deducting the Hypothetical Other Tax Liability (rather than any amount for state and local tax liabilities) for such Taxable Year. For the avoidance of doubt, the Hypothetical Federal Tax Liability shall be determined without taking into account the carryover or carryback of any tax item (or portions thereof) that is attributable to any of the items described in clauses (i), (ii), or (iii) of the previous sentence.

Hypothetical Other Tax Liability” means, with respect to any Taxable Year, U.S. federal taxable income determined in connection with calculating the Hypothetical Federal Tax Liability for such Taxable Year (determined without regard to clause (iii) thereof) multiplied by the Deemed Effective State Tax Rate for such Taxable Year.

Hypothetical Tax Liability” means, with respect to any Taxable Year, the Hypothetical Federal Tax Liability for such Taxable Year, plus the Hypothetical Other Tax Liability for such Taxable Year.

Imputed Interest” is defined in Section 3.01(b)(vi) of this Agreement.

Independent Directors” means the members of the Board who are “independent” under the standards of the principal U.S. securities exchange on which the Class A Common Stock is traded or quoted.

IPO” shall mean the initial public offering of Class A Common Stock pursuant to the Registration Statement.

Joinder” means a joinder to this Agreement, in form and substance substantially similar to Exhibit A to this Agreement.

Joinder Requirement” is defined in Section 7.06(a) of this Agreement.

LIBOR” means for each month (or portion thereof) during any period, an interest rate per annum equal to the rate per annum reported, on the date two (2) days prior to the first day of such month, on the Telerate Page 3750 (or if such screen shall cease to be publicly available, as reported on Reuters Screen page “LIBO” or by any other publicly available source of such market rate) for London interbank offered rates for U.S. dollar deposits for such month (or portion thereof), provided that if (i) adequate and reasonable means do not exist for ascertaining LIBOR and such circumstances are unlikely to be temporary or (ii) the supervisor for the administrator of LIBOR or a governmental authority having jurisdiction over the Members or the Corporation has made a public statement identifying a specific date after which LIBOR shall no longer be used for determining interest rates for loans, then the Corporation and the Members shall designate an alternative rate of interest to LIBOR that gives due consideration to the then prevailing market convention for determining a comparable rate of interest in the United States at such time, and this alternative rate, once designated, shall be deemed to be LIBOR for purposes of this Agreement.

 

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LLC Agreement” means that certain Amended and Restated Limited Liability Company Agreement of BellRing LLC, dated as of the date hereof, as such agreement may be further amended, restated, supplemented and/or otherwise modified from time to time.

Market Value” means the Common Unit Redemption Price, as defined in the LLC Agreement.

Material Breach” is defined in Section 4.01(c) of this Agreement.

Maximum Rate” is defined in Section 7.12 of this Agreement.

Members” is defined in the recitals of this Agreement.

Net Tax Benefit” is defined in Section 3.01(b)(ii) of this Agreement.

Non-Adjusted Tax Basis” means, with respect to any Reference Asset at any time, the tax basis that such asset would have had at such time if no Basis Adjustments had been made.

Non-TRA Portion” is defined in Section 2.03(b) of this Agreement.

Objection Notice” is defined in Section 2.04(a)(i) of this Agreement.

Parties” means the parties named on the signature pages to this Agreement and each additional party that satisfies the Joinder Requirement, in each case with their respective successors and assigns.

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

Pre-Redemption Transaction” means any transfer of one or more Units (including from the exercise of an option to acquire such Units) that occurs after the IPO but prior to a Redemption of such Units and to which Section 743(b) of the Code applies

Realized Tax Benefit” is defined in Section 3.01(b)(iv) of this Agreement.

Realized Tax Detriment” is defined in Section 3.01(b)(v) of this Agreement.

Reconciliation Dispute” is defined in Section 7.08 of this Agreement.

Reconciliation Procedures” shall mean those procedures set forth in Section 7.08 of this Agreement.

Redemption” is defined in the recitals to this Agreement.

 

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Reference Asset” means any asset of any Member of the BellRing LLC Group, whether held directly by BellRing LLC or indirectly by BellRing LLC through a member of the BellRing LLC Group, at the time of, or immediately prior to, a Basis Transaction. A Reference Asset also includes any asset the tax basis of which is determined, in whole or in part, by reference to the tax basis of an asset that is described in the preceding sentence, including “substituted basis property” within the meaning of Section 7701(a)(42) of the Code.

Registration Statement” means the registration statement on Form S-1 of the Corporation.

Reorganization” means the transfers or deemed transfers (including Section 721 contributions) of Dymatize Enterprises, LLC units or of assets into Dymatize Enterprises, LLC by its former members and current members of the BellRing LLC Group, which occur in 2019, and that result in new Section 743(b) adjustments to the Dymatize Enterprises, LLC members.

Schedule” means any Tax Benefit Schedule and any Early Termination Schedule.

Section 704(c) Benefits” means the disproportionate allocation of tax items of income, gain, deduction and loss to, or away from, the Corporation pursuant to Section 704(c) of the Code in respect of any difference between the fair market value and the tax basis of the Reference Assets immediately following the Reorganization. For the avoidance of doubt, such amount would include disproportionate allocations of tax items of income and gain to a Member and away from the Corporation.

Section 707(c) Deductions” means the deduction that arises at BellRing LLC in respect of the characterization of certain payments under the Agreement as guaranteed payments for the use of capital under Section 707(c) of the Code by BellRing LLC to Members.

Senior Obligations” is defined in Section 5.02 of this Agreement.

Subsidiaries” means, with respect to any Person, as of any date of determination, any other Person as to which such Person owns, directly or indirectly, or otherwise Controls, more than 50% of the voting power or other similar interests or the sole general partner interest or managing member or similar interest of such other Person.

Tax Benefit Payment” is defined in Section 3.01(b) of this Agreement.

Tax Benefit Schedule” is defined in Section 2.03(a) of this Agreement.

Tax Return” means any return, declaration, report or similar statement filed or required to be filed with respect to taxes (including any attached schedules), including, without limitation, any information return, claim for refund, amended return and declaration of estimated tax.

Taxable Year” means a taxable year as defined in Section 441(b) of the Code or comparable section of U.S. state or local tax law (and, therefore, for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is made) ending on or after the date of the IPO.

 

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Taxing Authority” shall mean any domestic, foreign, federal, national, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising any regulatory or other authority with respect to tax matters.

Termination Objection Notice” is defined in Section 4.02 of this Agreement.

Transfer” means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, by operation of law or otherwise.

TRA Portion” is defined in Section 2.03(b) of this Agreement.

Treasury Regulations” means the final, temporary and proposed regulations under the Code promulgated from time to time (including corresponding provisions and succeeding provisions) as in effect for the relevant taxable period.

Units” is defined in the recitals of this Agreement.

Valuation Assumptions” means, as of an Early Termination Effective Date, the assumptions that:

(i) in each Taxable Year ending on or after such Early Termination Effective Date, the Corporation will have taxable income sufficient to use fully the deductions or other tax benefits available to it arising from any tax basis in any Reference Assets, Section 704(c) Benefits, Section 707(c) Deductions and the Imputed Interest during such Taxable Year or future Taxable Years (including, for the avoidance of doubt, any tax basis in any Reference Assets, Section 707(c) Deductions and Imputed Interest that would result from future Tax Benefit Payments that would be paid in accordance with the Valuation Assumptions) in which such deductions would become available;

(ii) the income tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code and other applicable law as in effect on the Early Termination Effective Date, except to the extent any change to such tax rates for such Taxable Year have already been enacted into law;

(iii) all taxable income of the Corporation will be subject to the maximum applicable tax rates for each Covered Tax throughout the relevant period;

(iv) any loss carryovers or carrybacks generated by any tax basis made available to the Corporation in any Reference Assets, Section 704(c) Benefits, Section 707(c) Deductions and Imputed Interest (including any such tax basis in any Reference Assets, Section 707(c) Deductions and Imputed Interest generated as a result of payments made under this Agreement) and available as of the date of the Early Termination Schedule will be used by the Corporation ratably in each Taxable Year from the date of the Early Termination Schedule through the scheduled expiration date of such loss carryovers or, if such carryovers or carrybacks do not have an expiration date, over the fifteen (15)-year period after such carryovers or carrybacks were generated;

 

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(v) any non-amortizable assets will be disposed of for book value on the fifteenth (15th) anniversary of the earlier of (i) the applicable Basis Adjustment and (ii) the Early Termination Effective Date;

(vi) if, on the Early Termination Effective Date, any Member has Units that have not been Redeemed, then such Units shall be deemed to be Redeemed for the Market Value of the shares of Class A Common Stock or the amount of cash that would be received by such Member had such Units actually been Redeemed on the Early Termination Effective Date;

(vii) any future payment obligations pursuant to this Agreement that are used to calculate the Early Termination Payment will be satisfied on the date that any Tax Return to which any such payment obligation relates is required to be filed excluding any extensions; and

(viii) with respect to Taxable Years ending prior to the Early Termination Effective Date, any unpaid Tax Benefit Payments and any applicable Default Rate Interest will be paid.

Section 1.02. Rules of Construction. Unless otherwise specified herein:

(a) The meanings of defined terms are equally applicable to both (i) the singular and plural forms and (ii) the active and passive forms of the defined terms.

(b) For purposes of interpretation of this Agreement:

(i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision thereof.

(ii) References in this Agreement to a Schedule, Article, Section, clause or sub-clause refer to the appropriate Schedule to, or Article, Section, clause or subclause in, this Agreement.

(iii) References in this Agreement to dollars or “$” refer to the lawful currency of the United States of America.

(iv) The term “including” is by way of example and not limitation.

(v) The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

(c) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

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(d) Section (and subsection) headings, titles and subtitles herein are included for convenience of reference only and are not to be considered in construing this Agreement.

(e) Unless otherwise expressly provided herein, (i) references to organization documents (including the LLC Agreement), agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto; and (ii) references to any law (including the Code and the Treasury Regulations) shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such law.

ARTICLE II

DETERMINATION OF REALIZED TAX BENEFIT

Section 2.01. Basis Adjustments; 754 Election.

(a) Basis Adjustments. The Parties acknowledge and agree that, except as otherwise required by applicable law, (i) each Redemption shall be treated as a direct purchase of Units by the Corporation from the applicable Member pursuant to Section 707(a)(2)(B) of the Code (or any similar provisions of applicable state, local or foreign tax law) and (ii) each Basis Transaction will give rise to Basis Adjustments. For the avoidance of doubt, payments made under this Agreement shall not be treated as resulting in a Basis Adjustment to the extent such payments are treated as Imputed Interest or giving rise to Section 707(c) Deductions.

(b) 754 Election. The Corporation shall cause BellRing LLC and each of its Subsidiaries that is treated as a partnership for U.S. federal income tax purposes to have in effect an election under Section 754 of the Code (or any similar provisions of applicable state, local or foreign tax law) for each Taxable Year. The Corporation shall take commercially reasonable efforts to cause each Person in which BellRing LLC owns a direct or indirect equity interest (other than a Subsidiary) that is so treated as a partnership to have in effect any such election for each Taxable Year.

Section 2.02. Basis Schedules. Within one hundred twenty (120) calendar days after the filing of the U.S. federal income Tax Return of the Corporation for each relevant Taxable Year, the Corporation shall prepare, at its own expense, and deliver to the Members a schedule showing, in reasonable detail, (a) the Non-Adjusted Tax Basis of the Reference Assets as of each applicable Basis Transaction Date, (b) the Basis Adjustments to the Reference Assets for such Taxable Year, calculated (i) in the aggregate and (ii) solely with respect to each applicable Member, (c) the periods over which the Reference Assets are amortizable or depreciable and (d) the period over which each Basis Adjustment is amortizable or depreciable (such schedule, a “Basis Schedule”). For the avoidance of doubt, the Basis Schedule shall reflect all changes in the bases of Reference Assets arising other than from a Basis Adjustment (e.g., as the result of an audit). A Basis Schedule will become final and binding on the Parties pursuant to the procedures set forth in Section 2.04(a) and may be amended by the Parties pursuant to the procedures set forth in Section 2.04(b).

 

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Section 2.03. Tax Benefit Schedules.

(a) Tax Benefit Schedule. Within one hundred twenty (120) calendar days after the filing of the Corporation Return for any Taxable Year for which there is a Realized Tax Benefit or Realized Tax Detriment, the Corporation shall provide to the Members a schedule showing, in reasonable detail, (i) the calculation of the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year, (ii) the calculation of any payment to be made to the Members pursuant to Article III with respect to such Taxable Year and (iii) all requested supporting information pursuant to Section 2.04(a) of this Agreement reasonably necessary to support the calculation of such payment (a “Tax Benefit Schedule”). The Tax Benefit Schedule will become final as provided in Section 2.04(a) and may be amended as provided in Section 2.04(b) (subject to the procedures set forth in Section 2.04(a)).

(b) Applicable Principles. Subject to the provisions hereunder, the Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the Actual Tax Liability of the Corporation for such Taxable Year attributable to the Basis Adjustments, Section 704(c) Benefits, Section 707(c) Deductions and Imputed Interest, as determined using a “with and without” methodology described in Section 2.04(a). Carryovers or carrybacks of any tax item attributable to any Basis Adjustment, Section 704(c) Benefits, Section 707(c) Deductions or Imputed Interest shall be considered to be subject to the rules of the Code and the Treasury Regulations, and the appropriate provisions of state, local and foreign tax law, governing the use, limitation or expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any tax item includes a portion that is attributable to a Basis Adjustment, Section 704(c) Benefits, Section 707(c) Deductions or Imputed Interest (a “TRA Portion”) and another portion that is not attributable to a Basis Adjustment, Section 704(c) Benefits, Section 707(c) Deductions or Imputed Interest (a “Non-TRA Portion”), such portions shall be considered to be used in accordance with the “with and without” methodology so that (i) the amount of any Non-TRA Portion is deemed utilized first, followed by the amount of any TRA Portion (with the TRA Portion being applied on a proportionate basis consistent with the provisions of Section 3.03(a)) and (ii) in the case of a carryback of a Non-TRA Portion, such carryback shall not affect the original “with and without” calculation made in the prior Taxable Year. Except with respect to the portion of any payment attributable to Imputed Interest or Section 707(c) Deductions, all Tax Benefit Payments and payments of Default Rate Interest (and including Extension Rate Interest) will be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments for the Corporation beginning in the Taxable Year of payment, and as a result, such additional Basis Adjustments will be incorporated into such Taxable Year and into future Taxable Years, as appropriate. Payments in respect of Section 704(c) Benefits shall be treated as additional capital contributions made to BellRing LLC by the Corporation and then paid to the relevant Members as a guaranteed payment for capital, within the meaning of Section 707(c) of the Code, and the resulting Section 707(c) deduction to BellRing LLC shall be specially allocated to the Corporation.

 

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Section 2.04. Procedures, Amendments.

(a) Procedure. Whenever the Corporation delivers to the Members an applicable Schedule under this Agreement, including any Amended Schedule delivered pursuant to Section 2.04(b), Early Termination Schedule or amended Early Termination Schedule, the Corporation shall also (x) deliver to the Members, at their request (and upon reasonable notice), any schedules, valuation reports and work papers providing reasonable detail regarding the preparation of the Schedule or an Advisory Firm Report with respect to such Schedule and (y) allow the Members and their respective advisors reasonable access at no cost to the appropriate representatives of each of the Corporation and/or the Advisory Firm in connection with a review of such Schedule. Without limiting the generality of the preceding sentence, the Corporation shall ensure that any Tax Benefit Schedule that is delivered to the Members, along with any supporting schedules and work papers, provides a reasonably detailed presentation of the calculation of the Actual Tax Liability of the Corporation for the relevant Taxable Year and the Hypothetical Tax Liability of the Corporation for such Taxable Year, and identifies any material assumptions or operating procedures or principles that were used for purposes of such calculations. The applicable Schedule shall become final and binding on all Parties on the thirtieth (30th) calendar day after the Members receive such Schedule, unless:

(i) a Member provides the Corporation with notice prior to such thirtieth (30th) calendar day after receipt of such Schedule of a material objection, made in good faith, to such Schedule (“Objection Notice”); or

(ii) each Member provides a written waiver of its right to deliver an Objection Notice within the time period described in clause (i) above, in which case such Schedule or amendment thereto becomes binding on the date the waiver from all Members is received by the Corporation.

If the Parties, for any reason, are unable to successfully resolve the issues raised in any Objection Notice within thirty (30) calendar days of receipt by the Corporation of such Objection Notice, the Corporation and the Members shall employ the Reconciliation Procedures.

(b) Amended Schedule. The applicable Schedule for any Taxable Year may be amended from time to time by the Corporation (i) in connection with a Determination affecting such Schedule, (ii) to correct material inaccuracies in the Schedule identified as a result of the receipt of additional factual information relating to a Taxable Year after the date the Schedule was provided to the Members, (iii) to comply with the Expert’s determination under the Reconciliation Procedures, (iv) to reflect a material change (relative to the amounts in the original Schedule) in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year, (v) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to a carryback or carryforward of a loss or other Tax item to such Taxable Year; or (vi) to adjust a Basis Schedule to take into account any Tax Benefit Payments made pursuant to this Agreement (such amended Schedule, an “Amended Schedule”). The Corporation shall provide any Amended Schedule to the Members within thirty (30) calendar days of the occurrence of an event referred to in clauses (i) through (vi) of the preceding sentence, and any such Amended Schedule shall be subject to the procedures set forth in Section 2.04(a).

(c) LLC Agreement. This Agreement shall be treated as part of the partnership agreement of BellRing LLC as described in Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.

 

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ARTICLE III

TAX BENEFIT PAYMENTS

Section 3.01. Payments.

(a) Except as provided in Section 3.02 and Section 3.03, within ten (10) Business Days of a Tax Benefit Schedule with respect to a Taxable Year becoming final in accordance with Section 2.04(a) (such date, the “Final Payment Date” in respect of any Tax Benefit Payment), the Corporation shall pay to each relevant Member the Tax Benefit Payment for such Taxable Year determined pursuant to Section 3.01(b). Each such Tax Benefit Payment shall be made by wire transfer of immediately available funds to a bank account previously designated by the applicable Member to the Corporation or as otherwise agreed by the Corporation and the applicable Member. For the avoidance of doubt, no Tax Benefit Payment shall be made in respect of estimated tax payments, including, without limitation, estimated U.S. federal income tax payments. The Members shall not be required under any circumstances to return any portion of any Tax Benefit Payment, Early Termination Payment or Default Rate Interest previously paid by the Corporation to the Members.

(b) Amount of Payments. A “Tax Benefit Payment” with respect to any Member shall be an amount equal to the sum of the Net Tax Benefit that is Attributable to such Member and the Extension Rate Interest.

(i) Attributable. A Net Tax Benefit is “Attributable” to a Member to the extent that it is derived from (A) any Basis Adjustment or Imputed Interest that is attributable to a Basis Transaction undertaken by or with respect to such Member, (B) any Section 704(c) Benefit to the Corporation to the extent such Section 704(c) Benefit increased the taxable income (or decreased the taxable loss or tax deductions) allocated to such Member, or (C) Section 707(c) Deductions resulting from payments made to such Member.

(ii) Net Tax Benefit. The “Net Tax Benefit” with respect to a Member for a Taxable Year equals the amount of the excess, if any, of (A) 85% of the Cumulative Net Realized Tax Benefit Attributable to such Member as of the end of such Taxable Year over (B) the aggregate amount of all Tax Benefit Payments previously made to such Member under this Section 3.01 (excluding payments attributable to Extension Rate Interest). For the avoidance of doubt, if the Cumulative Net Realized Tax Benefit that is Attributable to a Member as of the end of any Taxable Year is less than the aggregate amount of all Tax Benefit Payments previously made to such Member, such Member shall not be required to return any portion of any Tax Benefit Payment previously made by the Corporation to such Member.

(iii) Cumulative Net Realized Tax Benefit. The “Cumulative Net Realized Tax Benefit” for a Taxable Year equals the cumulative amount of Realized Tax Benefits for all Taxable Years of the Corporation, up to and including such Taxable Year, net of the cumulative amount of Realized Tax Detriments for the same period. The Realized Tax Benefit and Realized Tax Detriment for each Taxable Year shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination.

 

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(iv) Realized Tax Benefit. The “Realized Tax Benefit” for a Taxable Year equals the excess, if any, of the Hypothetical Tax Liability over the Actual Tax Liability for such Taxable Year. If all or a portion of the Actual Tax Liability for such Taxable Year arises as a result of an audit or similar proceeding by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination.

(v) Realized Tax Detriment. The “Realized Tax Detriment” for a Taxable Year equals the excess, if any, of the Actual Tax Liability over the Hypothetical Tax Liability for such Taxable Year. If all or a portion of the Actual Tax Liability for such Taxable Year arises as a result of an audit or similar proceeding by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination.

(vi) Imputed Interest. The principles of Sections 1272, 1274 or 483 of the Code, as applicable, and the principles of any similar provision of U.S. state, local or foreign law, will apply to cause a portion of any Net Tax Benefit payable by the Corporation to a Member under this Agreement to be treated as imputed interest (“Imputed Interest”). For the avoidance of doubt, the deduction for the amount of Imputed Interest as determined with respect to any Net Tax Benefit payable by the Corporation to a Member shall be excluded in determining the Hypothetical Tax Liability of the Corporation for purposes of calculating Realized Tax Benefits and Realized Tax Detriments pursuant to this Agreement.

(vii) Extension Rate Interest. The “Extension Rate Interest” calculated in respect of the Net Tax Benefit (including previously accrued Imputed Interest for a Taxable Year) will equal interest calculated at the Agreed Rate from the due date (without extensions) for filing the U.S. federal income Tax Return of the Corporation for such Taxable Year until the date on which the Corporation makes a timely Tax Benefit Payment to the Member on or before the Final Payment Date as determined pursuant to Section 3.01(a).

(viii) Default Rate Interest. In the event that the Corporation does not make timely payment of all or any portion of a Tax Benefit Payment to a Member on or before the Final Payment Date as determined pursuant to Section 3.01(a), the amount of “Default Rate Interest” calculated in respect of the Net Tax Benefit (including previously accrued Imputed Interest and the Extension Rate Interest) for a Taxable Year will equal interest calculated at the Default Rate from the Final Payment Date for a Tax Benefit Payment as determined pursuant to Section 3.01(a) until the date on which the Corporation makes such Tax Benefit Payment to such Member. For the avoidance of doubt, the amount of any Default Rate Interest as determined with respect to any Net Tax Benefit payable by the Corporation to a Member shall be included in determining the Hypothetical Tax Liability of the Corporation for purposes of calculating Realized Tax Benefits and Realized Tax Detriments pursuant to this Agreement.

 

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(c) Interest. The provisions of Section 3.01(b) are intended to operate so that interest will effectively accrue for any Taxable Year as follows:

(i) first, at the applicable rate used to determine the amount of Imputed Interest under the Code (from the relevant Basis Transaction Date until the due date (without extensions) for filing the U.S. federal income Tax Return of the Corporation for such Taxable Year);

(ii) second, at the Agreed Rate in respect of any Extension Rate Interest (from the due date (without extensions) for filing the U.S. federal income Tax Return of the Corporation for such Taxable Year until the Final Payment Date for a Tax Benefit Payment as determined pursuant to Section 3.01(a)); and

(iii) third, at the Default Rate in respect of any Default Rate Interest (from the Final Payment Date for a Tax Benefit Payment as determined pursuant to Section 3.01(a) until the date on which the Corporation makes the relevant Tax Benefit Payment to a Member).

(d) The Parties acknowledge and agree that, as of the date of this Agreement and as of the date of any future Basis Transaction that may be subject to this Agreement, the aggregate value of the Tax Benefit Payments cannot be reasonably ascertained for U.S. federal income or other applicable tax purposes.

Section 3.02. No Duplicative Payments. It is intended that the provisions of this Agreement will not result in duplicative payment of any amount (including interest) required under this Agreement.

Section 3.03. Pro-Ration of Payments as Among the Members.

(a) Insufficient Taxable Income. Notwithstanding anything in Section 3.01(b) to the contrary, if the aggregate potential Covered Tax benefit of the Corporation as calculated with respect to the Basis Adjustments, Section 704(c) Benefits, Section 707(c) Deductions and Imputed Interest (in each case, without regard to the Taxable Year of origination) is limited in a particular Taxable Year because the Corporation does not have sufficient actual taxable income to utilize available deductions fully, then the Covered Tax benefit for the Corporation actually utilized in such Taxable Year shall be allocated among the Members in proportion to the respective Tax Benefit Payment that would have been payable if the Corporation had sufficient taxable income such that there was no limitation.

(b) Late Payments. If for any reason the Corporation is not able to timely and fully satisfy its payment obligations under this Agreement in respect of a particular Taxable Year, then Default Rate Interest will begin to accrue pursuant to Section 5.01 and the Corporation and other Parties agree that (i) the Corporation shall pay the Tax Benefit Payments (and any applicable Default Rate Interest) due in respect of such Taxable Year to each Member pro rata in accordance with the principles of Section 3.03(a) and (ii) no Tax Benefit Payment shall be made in respect of any Taxable Year until all Tax Benefit Payments (and any applicable Default Rate Interest) to all Members in respect of all prior Taxable Years have been made in full.

 

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ARTICLE IV

TERMINATION

Section 4.01. Termination, Breach of Agreement, Change of Control.

(a) General. This Agreement shall terminate at the time that there is no potential for any future Tax Benefit Payments to be made to the Members under this Agreement.

(b) Early Complete Termination. With the written approval of a majority of the Independent Directors, the Corporation may elect to terminate this Agreement (an “Early Complete Termination”) by (i) delivering to the Members notice of its intention to exercise such right (“Early Termination Notice”) and (ii) paying to the Members (1) the Early Termination Payment, (2) any Tax Benefit Payment and Default Rate Interest agreed to by the Corporation and the Members as due and payable but unpaid as of the Early Termination Notice and (3) any Tax Benefit Payment due for the Taxable Year ending prior to, with or including the date of the Early Termination Effective Date (except to the extent that any amounts described in clauses (2) or (3) are included in the Early Termination Payment).

(c) Material Breach. In the event that the Corporation breaches any of its material obligations under this Agreement, whether as a result of failure to make any payment when due (as described below), failure to honor any other material obligation required hereunder or by operation of law as a result of the rejection of this Agreement in a case commenced under the Bankruptcy Code or otherwise (“Material Breach”), then all obligations hereunder shall be accelerated and the Corporation shall pay to the Members (i) the Early Termination Payment, (ii) any Tax Benefit Payment and Default Rate Interest agreed to by the Corporation and the Members as due and payable, but unpaid as of the Early Termination Notice and (iii) any Tax Benefit Payment due for the Taxable Year ending prior to, with or including the date of the Early Termination Effective Date (except to the extent that any amounts described in clauses (ii) or (iii) are included in the Early Termination Payment). Notwithstanding the foregoing, in the event that the Corporation breaches this Agreement and such breach is a Material Breach, the Members shall be entitled to elect to receive the amounts set forth in (i), (ii) and (iii) above or to seek specific performance of the terms hereof. The Parties agree that the failure to make any payment pursuant to this Agreement within three months of the date such payment is due shall be deemed a Material Breach for all purposes of this Agreement, and that it will not be considered to be a Material Breach to make a payment due pursuant to this Agreement within three months of the date such payment is due, provided that the interest provisions of Section 5.01 shall apply to such late payment (unless the Corporation does not have sufficient funds to make such payment as a result of limitations imposed by any Senior Obligations, in which case Section 5.01 shall apply, but the Default Rate shall be replaced by the Agreed Rate), provided further that in the event that payment is not made within three months of the date such payment is due, a Member shall be required to give written notice to the Corporation that the Corporation has breached its material obligations, and so long as such payment is made within ten (10) Business Days of the delivery of such notice to the Corporation, the Corporation shall no longer be deemed to be in Material Breach of its obligations under this Agreement.

 

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(d) Change of Control. In the event of a Change of Control, then all obligations hereunder shall be accelerated and the Corporation shall pay to the Members (i) the Early Termination Payment, (ii) any Tax Benefit Payment and Default Rate Interest agreed to by the Corporation and the Members as due and payable but unpaid as of the Early Termination Notice and (iii) any Tax Benefit Payment due for the Taxable Year ending prior to, with or including the date of the Early Termination Effective Date (except to the extent that any amounts described in clauses (ii) or (iii) are included in the Early Termination Payment).

Section 4.02. Early Termination Schedule. In the event of a Change of Control or a Material Breach, the Corporation shall deliver to the Members, as soon as reasonably practical, and in the case of an Early Complete Termination, contemporaneously with the Early Termination Notice, a Schedule (the “Early Termination Schedule”) showing in reasonable detail the information required or requested pursuant to the first sentence of Section 2.03 and the calculation of the Early Termination Payment. The Early Termination Schedule shall become final and binding on all Parties unless a Member, within thirty (30) calendar days after receiving the Early Termination Schedule, provides the Corporation with notice of a material objection to such Schedule made in good faith (“Termination Objection Notice”). If the Parties for any reason are unable to successfully resolve the issues raised in such notice within thirty (30) calendar days after receipt by the Corporation of the Termination Objection Notice, the Corporation and the Members shall employ the Reconciliation Procedures. The date on which such Early Termination Schedule becomes final shall be the “Early Termination Reference Date”.

Section 4.03. Payment upon Early Termination.

(a) Timing of Payment. Within ten (10) Business Days after the Early Termination Reference Date (such date, the “Final Payment Date” in respect of any Early Termination Payment), the Corporation shall pay to each relevant Member an amount equal to the Early Termination Payment for such Member and any other payment required to be made pursuant to Section 4.01(b), Section 4.01(c) and Section 4.01(d). Such payment shall be made by wire transfer of immediately available funds to a bank account designated by the applicable Member or as otherwise agreed by the Corporation and the Member.

(b) Amount of Payment. The “Early Termination Payment,” as of the Early Termination Effective Date, shall equal with respect to the relevant Member the present value, discounted at the Early Termination Rate as of the applicable Early Termination Reference Date, of all Tax Benefit Payments that would be required to be paid by the Corporation to such Member beginning from the Early Termination Effective Date, applying the Valuation Assumptions. For purposes of calculating the present value pursuant to this Section 4.03(b) of all Tax Benefit Payments that would be required to be paid, it shall be assumed that absent the Early Termination Event all Tax Benefit Payments would be paid on the due date (without extensions) for filing the Corporation Return with respect to Taxes for each Taxable Year. The computation of the Early Termination Payment is subject to the Reconciliation Procedures.

 

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ARTICLE V

LATE PAYMENTS, ETC.

Section 5.01. Late Payments by the Corporation. The amount of all or any portion of any Tax Benefit Payment or Early Termination Payment that is required to be made by the Corporation to the Members under this Agreement but is not made by the applicable Final Payment Date shall be payable together with any interest thereon, computed at the Default Rate and commencing from the applicable Final Payment Date.

Section 5.02. Subordination. Notwithstanding any other provision of this Agreement to the contrary, any payment required to be made by the Corporation to the Members under this Agreement shall rank subordinate and junior in right of payment to any principal, interest or other amounts due and payable in respect of any obligations owed in respect of indebtedness for borrowed money of the Corporation (“Senior Obligations”) and shall rank pari passu in right of payment with all current or future obligations of the Corporation that are not Senior Obligations.

ARTICLE VI

CONSISTENCY; COOPERATION

Section 6.01. The Members Participation in Corporation Tax Matters. Except as otherwise provided herein or in the LLC Agreement, the Corporation shall have full responsibility for, and sole discretion over, all Tax matters concerning the Corporation, including without limitation the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to Taxes, and certain Tax matters concerning BellRing LLC. Notwithstanding the foregoing, the Corporation shall promptly notify the Members of, and keep the Members reasonably informed with respect to, the portion of any audit of the Corporation or BellRing LLC by a Taxing Authority the outcome of which is reasonably expected to affect any Member’s rights and obligations under this Agreement, and any such Member shall have the right to participate in and to monitor at its own expense (but not to control) any such portion of any such audit; provided that the Corporation shall not settle or fail to contest any issue pertaining to Covered Taxes that is reasonably expected to materially affect any Member’s rights or obligations under this Agreement without the prior written consent of such Member, such consent not to be unreasonably withheld, conditioned or delayed.

Section 6.02. Consistency. Except upon the written advice of an Advisory Firm and except for items that are explicitly described as “deemed” or treated in a similar manner by the terms of this Agreement, the Corporation and the Members agree to report and cause to be reported for all purposes, including federal, state, local and foreign tax purposes and financial reporting purposes, all tax-related items (including without limitation the Tax Benefit Payment) in a manner consistent with that specified by the Corporation in any Schedule required to be provided by or on behalf of the Corporation under this Agreement and agreed to by the Members. Any dispute concerning such advice shall be subject to the Reconciliation Procedures. In the event the Advisory Firm is

 

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replaced with another firm acceptable to the Corporation and the Members pursuant to the definition of Advisory Firm, such replacement Advisory Firm shall be required to perform its services under this Agreement using procedures and methodologies consistent with those used by the previous Advisory Firm, unless otherwise required by law or the Corporation and the Members agree to the use of other procedures and methodologies.

Section 6.03. Cooperation. Each of the Corporation, BellRing LLC and the Members shall (i) furnish to the other Parties in a timely manner such information, documents and other materials as the other Parties may reasonably request for purposes of making or approving any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority, (ii) make itself available to the other Parties and their respective representatives to provide explanations of documents and materials and such other information as the requesting Parties or their respective representatives may reasonably request in connection with any of the matters described in clause (i) above, and (iii) reasonably cooperate in connection with any such matter, and the requesting Party shall reimburse the other Parties for any reasonable third party costs and expenses incurred pursuant to this Section 6.03.

ARTICLE VII

MISCELLANEOUS

Section 7.01. Notices.

(a) All notices, requests, claims, demands and other communications hereunder shall be in writing (including email, so long as a receipt of such email is requested and received) and shall be deemed duly given and received (i) on the date of delivery if delivered personally or via email or (ii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

If to the Corporation, to:

BellRing Brands, Inc.

2503 S. Hanley Road

St. Louis, Missouri 63144

Attn: General Counsel

Email:

If to BellRing LLC, to:

BellRing Brands, LLC

2503 S. Hanley Road

St. Louis, Missouri 63144

Attn: General Counsel

Email:

 

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If to Post, to:

Post Holdings, Inc.

2503 S. Hanley Road

St. Louis, Missouri 63144

Attn: General Counsel

Email:

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

Post Holdings, Inc.

2503 S. Hanley Road

St. Louis, Missouri 63144

Attn: Randy Ridenhour

Email:

If to any other Member, to the address and e-mail address specified on such Member’s signature page to the applicable Joinder.

Any Party may change its contact information by giving the other Parties written notice of its new contact information in the manner set forth above.

Section 7.02. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart. Delivery of an executed signature page to this Agreement by facsimile or electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

Section 7.03. Entire Agreement; Third Party Beneficiaries. This Agreement constitutes the entire agreement and supersedes prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof. This Agreement shall be binding upon and inure solely to the benefit of each Party hereto and its respective successors and permitted assigns. Other than as provided in the preceding sentence, nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

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Section 7.04. Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware.

Section 7.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

Section 7.06. Successors; Assignment; Amendments; Waivers.

(a) Assignment. No Member may assign, sell, pledge or otherwise alienate or transfer any interest in this Agreement, including the right to receive any payment under this Agreement, to any Person without the prior written consent of the Corporation, which consent shall not be unreasonably withheld, conditioned or delayed, and without such Person executing and delivering a Joinder agreeing to succeed to the applicable portion of such Member’s interest in this Agreement and to become a Party for all purposes of this Agreement (the “Joinder Requirement”); provided, however, that to the extent any Member sells, exchanges, distributes or otherwise transfers Units to any Person (other than the Corporation or BellRing LLC) in accordance with the terms of the LLC Agreement, such Member shall have the option to assign to the transferee of such Units its rights under this Agreement with respect to such transferred Units, so long as such transferee has satisfied the Joinder Requirement. For the avoidance of doubt, if a Member transfers Units in accordance with the terms of the LLC Agreement but does not assign to the transferee of such Units its rights under this Agreement with respect to such transferred Units, such Member shall continue to be entitled to receive the Tax Benefit Payments arising in respect of any subsequent Basis Transactions or Section 704(c) Benefits that are Attributable to the transferred Units. The Corporation may not assign any of its rights or obligations under this Agreement to any Person without approval by the Members (and any purported assignment without such consent shall be null and void). The transferee and transferor of any Transfer permitted under this Section 7.06 shall ensure that the Corporation is provided with a copy (which may be by PDF) of the fully executed instrument of Transfer, which instrument must clearly identify the name of the transferor and transferee and the number of Units being transferred, within five (5) days of the effective date of such Transfer. Any Transfer, or attempted Transfer in violation of this Agreement, including any failure of a purported transferee to enter into a Joinder to this Agreement or to provide any forms or other information to the extent required hereunder, shall be null and void, and shall not bind or be recognized by the Corporation or the Members. The Corporation shall be entitled to treat the record owner of any rights under this Agreement as the absolute owner thereof and shall incur no liability for payments made in good faith to such owner until such time as a written assignment of such rights is permitted pursuant to the terms and conditions of this Section 7.06 and has been recorded on the books of the Corporation.

 

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(b) Amendments. No provision of this Agreement may be amended unless such amendment is approved in writing by the Corporation and the Members, whereupon all Parties shall be bound; provided that amendment of the definition of Change of Control will also require the written approval of a majority of the Independent Directors.

(c) Successors. All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the Parties and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

(d) Waiver. 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. No failure by any Party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement, or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition.

Section 7.07. Resolution of Disputes.

(a) Except for Reconciliation Disputes subject to Section 7.08, any and all disputes which cannot be settled after good faith negotiation, including any ancillary claims of any Party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision), shall be finally settled by arbitration conducted in St. Louis, Missouri by a single arbitrator in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the Parties to the dispute fail to agree on the selection of an arbitrator within thirty (30) calendar days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.

(b) Notwithstanding the provisions of Section 7.07(a), any Party may bring an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a Party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this Section 7.07(b), each Party (i) expressly consents to the application of Section 7.07(c) to any such action or proceeding, and (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate.

 

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(c) Each Member hereby irrevocably submits to the jurisdiction of the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court for the purpose of any judicial proceeding brought in accordance with the provisions of Section 7.07(b), or any judicial proceeding ancillary to an arbitration or contemplated arbitration arising out of or relating to or concerning this Agreement. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration or to confirm an arbitration award. The Parties acknowledge that the forum designated by this Section 7.07(c) has a reasonable relation to this Agreement, and to the Parties’ relationship with one another.

(d) The Parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in Section 7.07(c) and the Parties agree not to plead or claim the same.

(e) Each Party irrevocably consents to service of process by means of notice in the manner provided for in Section 7.01. Nothing in this Agreement shall affect the right of any Party to serve process in any other manner permitted by law.

Section 7.08. Reconciliation. In the event that the Corporation and any of the Members are unable to resolve a disagreement with respect to a Schedule prepared in accordance with the procedures set forth in Section 2.04 or Section 4.02 within the relevant period designated in this Agreement, or any other disagreement regarding the calculation of Tax Benefit Payments, the treatment of transactions for tax purposes or any similar matter the resolution of which requires substantial tax expertise (a “Reconciliation Dispute”), the Reconciliation Dispute shall be submitted by the applicable Parties for determination to a nationally recognized expert (the “Expert”) in the particular area of disagreement mutually acceptable to the applicable Parties. The Expert shall be a partner in a nationally recognized accounting firm or a law firm (other than the Advisory Firm), and the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with the Corporation or the Members or other actual or potential conflict of interest. If the applicable Parties are unable to agree on an Expert within fifteen (15) calendar days after any of the applicable Parties have provided the other applicable Parties with written notice of a Reconciliation Dispute, the Expert shall be appointed by the International Chamber of Commerce Centre for Expertise. The Expert shall resolve any matter relating to the Early Termination Schedule or an amendment thereto within thirty (30) calendar days, and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within fifteen (15) calendar days, or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding sentence, if the matter is not resolved before any payment that is the subject of a disagreement is due or any Tax Return reflecting the subject of a disagreement is due, such payment shall be made on the date prescribed by this Agreement and such Tax Return may be filed as prepared by the Corporation, subject to adjustment or amendment upon resolution. The costs and expenses related to the engagement of such Expert or amending any Tax Return shall be borne by the Corporation, except as provided in the next sentence. Each of the Corporation and the applicable

 

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Members shall bear their own costs and expenses of such proceeding. Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.08 shall be decided by the Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.08 shall be binding on the Corporation and the applicable Members and may be entered and enforced in any court having jurisdiction.

Section 7.09. Withholding. The Corporation shall be entitled to deduct and withhold from any payment payable pursuant to this Agreement such amounts as the Corporation reasonably believes it is required to deduct and withhold as a result of the execution of this Agreement or with respect to the making of such payment, in each case, under the Code, or any provision of state, local or foreign tax law, provided that the Corporation shall have first notified the applicable Member of its intent to deduct or withhold, and the Corporation and the applicable Member shall have discussed in good faith whether such taxes can be mitigated to the extent permitted under applicable law. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority by the Corporation, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the relevant Member in respect of whom the deduction and withholding was made. The Corporation shall provide evidence of such payment to the Members to the extent that such evidence is available. Each Member shall promptly provide the Corporation with any applicable tax forms and certifications reasonably requested by the Corporation in connection with determining whether any such deductions and withholdings are required by applicable law.

Section 7.10. Affiliated Corporations; Admission of the Corporation into a Consolidated Group; Transfers of Corporate Assets.

(a) If the Corporation is or becomes a member of an affiliated or consolidated group of corporations that files a consolidated income tax return pursuant to Sections 1501 et seq. of the Code or a similar provision of state or local law (other than if the Corporation becomes a member of such a group as a result of a Change of Control, in which case the provisions of Article IV shall control), then: (i) the provisions of this Agreement shall be applied with respect to the group as a whole and (ii) Tax Benefit Payments and Early Termination Payments shall be computed with reference to the consolidated taxable income of the group as a whole.

(b) If any Person, the income of which is included in the income of the Corporation’s affiliated or consolidated group, transfers one or more assets to a corporation or any Person treated as such for tax purposes with which such entity does not file a consolidated tax return pursuant to Section 1501 et seq. of the Code, for purposes of calculating the amount of any Tax Benefit Payment (e.g., calculating the gross income of the Corporation’s affiliated or consolidated group and determining the Realized Tax Benefit) due hereunder, such Person shall be treated as having disposed of such asset in a fully taxable transaction on the date of such contribution. The consideration deemed to be received by such entity shall be determined as if such transfer occurred on an arm’s-length basis with an unrelated third party. For purposes of this Section 7.10, a transfer of a partnership interest shall be treated as a transfer of the

 

25


transferring partner’s applicable share of each of the assets and liabilities of that partnership. Notwithstanding anything to the contrary set forth herein, if the Corporation or any other entity that is obligated to make a Tax Benefit Payment or Early Termination Payment hereunder transfers its assets pursuant to a transaction that qualifies as a “reorganization” (within the meaning of Section 368(a) of the Code) in which such entity does not survive or pursuant to any other transaction to which Section 381(a) of the Code applies, the transfer will not cause such entity to be treated as having transferred any assets to a corporation (or a Person classified as a corporation for U.S. income tax purposes) pursuant to this Section 7.10(b).

Section 7.11. Change in Law. Notwithstanding anything herein to the contrary, if, in connection with an actual or proposed change in law, a Member reasonably believes that the existence of this Agreement could cause material adverse tax consequences to such Member or any direct or indirect owner of such Member, then at the written election of such Member in its sole discretion (in an instrument signed by such Member and delivered to the Corporation) and to the extent specified therein by such Member, this Agreement shall cease to have further effect and shall not apply to any Basis Transactions occurring after a date specified by such Member, or may be amended in a manner reasonably determined by such Member, provided that such amendment shall not result in an increase in any payments owed by the Corporation under this Agreement at any time as compared to the amounts and times of payments that would have been due in the absence of such amendment.

Section 7.12. Interest Rate Limitation. Notwithstanding anything to the contrary contained herein, the interest paid or agreed to be paid hereunder with respect to amounts due to any Member hereunder shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”). If any Member shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the Tax Benefit Payment or Early Termination Payment, as applicable (but in each case exclusive of any component thereof comprising interest) or, if it exceeds such unpaid non-interest amount, refunded to the Corporation. In determining whether the interest contracted for, charged or received by any Member exceeds the Maximum Rate, such Member may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the payment obligations owed by the Corporation to such Member hereunder. Notwithstanding the foregoing, it is the intention of the Parties to conform strictly to any applicable usury laws.

Section 7.13. Independent Nature of Rights and Obligations. The rights and obligations of each Member hereunder are several and not joint with the rights and obligations of any other Person. A Member shall not be responsible in any way for the performance of the obligations of any other Person hereunder, nor shall a Member have the right to enforce the rights or obligations of any other Person hereunder (other than the Corporation). The obligations of a Member hereunder are solely for the benefit of, and shall be enforceable

 

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solely by, the Corporation. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Member pursuant hereto or thereto, shall be deemed to constitute the Members acting as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Members are in any way acting in concert or as a group with respect to such rights or obligations or the transactions contemplated hereby, and the Corporation acknowledges that the Members are not acting in concert or as a group and will not assert any such claim with respect to such rights or obligations or the transactions contemplated hereby.

[Signatures pages follow]

 

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CORPORATION:

      

 

BELLRING BRANDS, INC.

 

By:

 

/s/ Darcy Horn Davenport

 

Name:

 

Darcy Horn Davenport

 

Title:

 

President and Chief Executive Officer

BELLRING LLC:

 

BELLRING BRANDS, LLC

 

By:

 

/s/ Darcy Horn Davenport

 

Name:

 

Darcy Horn Davenport

 

Title:

 

President and Chief Executive Officer

POST:

 
 

POST HOLDINGS, INC.

 

By:

 

/s/ Diedre J. Gray

 

Name:

 

Diedre J. Gray

 

Title:

  Executive Vice President, General Counsel and Chief Administrative Officer, Secretary

[Signature page to Tax Receivable Agreement]


Exhibit A

FORM OF JOINDER AGREEMENT

This JOINDER AGREEMENT, dated as of                     , 20         (this “Joinder”), is delivered pursuant to that certain Tax Receivable Agreement, dated as of October 21, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Tax Receivable Agreement”) by and among BellRing Brands, Inc., a Delaware corporation (the “Corporation”), BellRing Brands, LLC, a Delaware limited liability company, and each of the Members from time to time party thereto. Capitalized terms used but not otherwise defined herein have the respective meanings set forth in the Tax Receivable Agreement.

1. Joinder to the Tax Receivable Agreement. The undersigned hereby represents and warrants to the Corporation that, as of the date hereof, the undersigned has been assigned an interest in the Tax Receivable Agreement from a Member.

2. Joinder to the Tax Receivable Agreement. Upon the execution of this Joinder by the undersigned and delivery hereof to the Corporation, the undersigned hereby is and hereafter will be a Member under the Tax Receivable Agreement and a Party thereto, with all of the rights, privileges and responsibilities of a Member thereunder. The undersigned hereby agrees that it shall comply with and be fully bound by the terms of the Tax Receivable Agreement as if it had been a signatory thereto as of the date thereof.

3. Incorporation by Reference. All terms and conditions of the Tax Receivable Agreement are hereby incorporated by reference in this Joinder as if set forth herein in full.

4. Address. All notices under the Tax Receivable Agreement to the undersigned shall be directed to:

[Name]

[Address]

[City, State, Zip Code]

Attn:

E-mail:

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Joinder as of the day and year first above written.

[Exhibit A]

 

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[NAME OF NEW PARTY]
By:  

                                                  

Name:
Title:

 

Acknowledged and agreed

as of the date first set forth above:

BellRing Brands, Inc.
By:  

                                                          

Name:
Title:

[Exhibit A]

 

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EX-10.6

Exhibit 10.6

MASTER SERVICES AGREEMENT

This MASTER SERVICES AGREEMENT (this “Agreement”), dated as of October 21, 2019, is made by and among Post Holdings, Inc., a Missouri corporation, (“Post”), BellRing Brands, Inc., a Delaware corporation (“BellRing Inc.”) and BellRing Brands, LLC, a Delaware limited liability company (“BellRing, LLC”).

RECITALS

A. BellRing Inc., BellRing, LLC and Post are parties to that certain Master Transaction Agreement, dated as of October 7, 2019 (the “Transaction Agreement”).

B. As part of the transactions described in the Transaction Agreement, Post has agreed to provide or cause to be provided certain services to BellRing Inc., BellRing LLC or BellRing LLC’s Subsidiaries from and after the Effective Time on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby approve and adopt this Agreement and mutually covenant and agree with each other as follows:

ARTICLE I

DEFINITIONS; INTERPRETATION; CONSTRUCTION

Section 1.1 Certain Defined Terms. Unless otherwise provided herein, the capitalized terms used herein shall have the meanings given to them in the Transaction Agreement. In addition to the other terms defined elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the meaning set forth below:

Applicable Law” shall mean any Law(s) in any jurisdiction applicable to a given activity, service, situation, circumstance, Service Provider, Recipient, other Person or provider, this Agreement or the rights, obligations and benefits of the parties hereunder, including the performance or receipt of any Service hereunder.

Recipient Change of Control” of BellRing Inc., BellRing LLC and each of the other Recipients shall have occurred in the event any transaction or series of transactions (however structured or evidenced) is/are consummated:

(a) which result(s) in Post no longer controlling more than 50% of the combined voting power of the capital stock of BellRing Inc. entitled to vote generally in the election of directors of BellRing Inc. (including, for avoidance of doubt, (x) the granting or entry into by Post or any of its Affiliates (other than BellRing Inc. or any of its Subsidiaries) of proxies, voting agreements or other voting arrangements with third parties in accordance with the BellRing Limited Liability Company Agreement pursuant to which such third parties have the right to direct how Post or any of its Affiliates (other than BellRing Inc. or any of its Subsidiaries) shall cast all or a portion of the votes to which the Class B Common Stock of BellRing Inc. is entitled, or (y) the distribution by Post of its retained beneficial interest in BellRing Inc. by means of a tax-free spin-off or split-off to its shareholders (however structured)),


(b) involve(s) the sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the assets of BellRing Inc. and its Subsidiaries taken as a whole, or

(c) which (i) result(s) in such Recipient no longer being a direct or indirect Subsidiary of BellRing Inc. or (ii) involve(s) the sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the assets of such Recipient.

Post Change of Control” shall mean, with regard to Post, a “Change in Control” as defined in the Post Holdings, Inc. 2019 Long-Term Incentive Plan except that the requirement in such definition that an event described therein must also constitute a “change in control event” under Section 409A of the Code shall not apply to, or be required to be considered, a “Post Change of Control” for the purposes of this Agreement.

Recipient” shall mean, as applicable, BellRing LLC or one of its Subsidiaries and, with respect to its operation as a public holding company, BellRing Inc., to the extent any such entity is receiving Services pursuant to this Agreement.

Service Provider” shall mean Post or one of its Affiliates to the extent such entity is providing Services pursuant to this Agreement.

Services” shall mean the services described on the schedules forming Exhibit A, attached hereto and incorporated herein by this reference (collectively, the “Services Schedules” and each a “Services Schedule”).

Section 1.2 Interpretive Matters.

(a) Except as otherwise provided or unless the context otherwise requires, whenever used in this Agreement, (i) any noun or pronoun shall be deemed to include the plural and the singular, (ii) the use of masculine pronouns shall include the feminine and neuter, (iii) the terms “include” and “including” shall be deemed to be followed by the phrase “without limitation,” (iv) the word “or” shall be inclusive and not exclusive, (v) all references to Sections refer to the Sections of this Agreement, and all references to Exhibits refer to the Exhibits attached to this Agreement, (vi) each reference to “herein” means a reference to “in this Agreement,” (vii) each reference to “$” or “dollars” shall be to United States dollars, (viii) each reference to “days” shall be to calendar days, (ix) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if” (x) each reference to any contract or agreement shall be to such contract or agreement as amended, supplemented, waived or otherwise modified from time to time, (xi) unless expressly provided otherwise, the measure of a period of one month or year for purposes of this Agreement shall be that date of the following month or year corresponding to the starting date; provided that if no corresponding date exists, the measure shall be that date of the following month or year corresponding to the next day following the starting date (for example, one month following February 18 is March 18, and one month following March 31 is May 1), (xii) a reference to an entity includes any successor entity, whether by way of merger, amalgamation, consolidation or other business combination and (xiii) if any payment required to be made hereunder is required to be made on a day that is not a Business Day, then, instead of such day, such payment shall be made on the immediately succeeding Business Day.

(b) The headings contained in this Agreement and in any Exhibit hereto are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The provisions of this Agreement shall be construed according to their fair meaning and neither for nor against any party hereto irrespective of which party caused such provisions to be drafted. Each of the parties hereto acknowledges that it has been represented by an attorney in connection with the preparation and execution of this Agreement.

 

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ARTICLE II

SERVICES

Section 2.1 Services and Contracts.

(a) Services. Service Provider shall provide, or cause to be provided, to Recipient or its Subsidiaries, the Services. For each Service, Exhibit A sets forth, among other things, a description of the Service to be provided, the fees to be paid in respect thereof, and, if applicable, any other terms or standards applicable thereto. Service Provider shall perform, or cause to be performed, the Services (i) in a commercially reasonable manner with a degree of care, and at a level of quality, timeliness, efficacy, priority and service, at least consistent with that provided by Service Provider or its Affiliates to similarly-situated Affiliates of Post (i.e., Affiliates of Post that are of similar size and operations and are similarly relying on Service Provider or its Affiliates for such or similar services) and (ii) in accordance with applicable industry standards and any specific terms and/or performance standards set forth in this Agreement and the relevant Services Schedule. In providing the Services, Service Provider shall comply with all Applicable Laws.

(b) Contracts. Post and its Subsidiaries have certain contracts or agreements under which it and its Affiliates may purchase, procure, use or utilize goods and/or services as an Affiliate of Post and/or the given contracting Affiliate of Post (collectively the “Shared Contracts” and each individually a “Shared Contract”). Shared Contracts will change from time to time in the ordinary course of Post’s and the applicable Affiliate’s business, and none of Post or any of its Affiliates are obligated to have or maintain any, or any certain, Shared Contract(s) during the term of this Agreement. Pursuant to the terms of the given Shared Contract, Recipient, as an Affiliate of Post or the given contracting Post Subsidiary, may have the right to purchase, procure, use or utilize goods and/or services and/or to execute purchase orders or statements of work (jointly and/or separately from Service Provider) under such Shared Contract. Service Provider agrees to use commercially reasonable efforts to facilitate Recipient’s receipt of goods and/or services and/or execution of purchase orders or statements of work under the Shared Contracts. Service Provider further agrees to use commercially reasonable efforts to ensure that Recipient is treated on the same or substantially similar terms as similarly-situated Affiliates of Post. Service Provider shall notify Recipient of any material changes to Shared Contracts that could affect Recipient’s receipt of the Services. All fees, costs and expenses associated with Recipient’s receipt of any goods and/or services under the Shared Contracts that are incurred by Service Provider shall be reimbursable out-of-pocket expenses passed-through to and payable by Recipient pursuant to Section 4.1. Recipient and each of its Subsidiaries shall comply with each Shared Contract to the extent that such Shared Contract is applicable to Recipient or such Subsidiary and, upon Recipient’s request, either a copy of such Shared Contract shall be made available to Recipient (with any information reasonably considered by Service Provider to be proprietary or confidential redacted) or a summary of the substantive purchase or use terms of such Shared Contract that are applicable to Recipient or its Subsidiary shall be made available to Recipient. Service Provider and each of its Affiliates shall comply with each Shared Contract to the extent such Shared Contract is applicable to Service Provider or such Affiliate.

Section 2.2 Modification of Existing Services. From time to time, Recipient or Service Provider may desire to implement changes to the Services. Such party will notify the other party through its Service Manager (as defined below) of the desired change. The parties will discuss in good faith the nature of the modification to the Services and any resulting changes in fees, costs, specifications and scheduling. Changes to Services will only be effective upon the mutual written agreement of the parties.

 

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Section 2.3 Additional Services. If Recipient reasonably requests that Service Provider perform additional services not included within the scope of the Services specified in this Agreement that are necessary for, with respect to BellRing LLC, the operation of Recipient’s or one of its Subsidiaries’ business or, with respect to BellRing Inc., its operation as a public holding company, then the parties will promptly negotiate in good faith regarding whether such additional services should be added to this Agreement and any additional charges that will be paid by Recipient for such additional services. Service Provider will not be obligated to perform any additional services unless the parties so agree in writing.

Section 2.4 Subcontractors; Service Providers. The Services may, at Service Provider’s sole discretion, be provided in whole or in part by Affiliates of Service Provider or by third party subcontractors or service providers selected by Service Provider, provided that, Service Provider shall obtain Recipient’s prior written consent to subcontract any Service in whole to a third party subcontractor or service provider that is not an Affiliate of the Service Provider where such Service will be provided by such third party subcontractor or service provider solely to Recipient (i.e., consent is not required for Service Provider’s subcontracts where services are performed for Post or its other Affiliates along with Recipient, but consent is required for any subcontract to be dedicated to Recipient alone). Service Provider shall retain responsibility for the provision to Recipient of any Services regardless of whether such Service is performed by any such Affiliate, third party subcontractor or third party service provider.

Section 2.5 Personnel. All Service Provider’s (or its Affiliates’, third party contractors’ or service providers’) personnel providing Services under this Agreement will be under the direction, control, and supervision of Service Provider, and Service Provider will have the sole right to exercise all authority with respect to the employment, termination, assignment and compensation of Service Provider’s (or such Affiliates’, third party contractors’ or service providers’) personnel. Service Provider is not obligated to hire any additional employees or maintain the employment of any specific employee. All Service Provider’s (or such Affiliates’, third party contractors’ or service providers’) personnel providing Services under this Agreement will be deemed to be representatives solely of Service Provider (or such Affiliates, third party contractors or service providers) for purposes of all compensation and (as applicable) employee benefits and not to be employees or representatives of Recipient.

Section 2.6 Compliance with Policies; Safety of Personnel. Recipient acknowledges that Service Provider has instituted and may continue to institute and revise a variety of policies and procedures related to its operations and the provision of the Services. Service Provider shall perform all Services in a manner that is consistent with such policies and procedures of Service Provider and any reasonable policies and procedures of Recipient, including, in each case, those relating to anti-trust, health, safety and environmental laws, to the extent that (i) such policies and procedures of Recipient have been provided to Service Provider, (ii) such policies and procedures of Recipient do not conflict with Service Provider’s own policies and procedures and (iii) the subject Services are not also being jointly performed for Post or one or more of its Affiliates. Service Provider shall use reasonable efforts to provide Recipient with advance written notice in the event Service Provider believes any Service is not consistent with Recipient’s policies or procedures where the same would have a material adverse effect on the Services to be provided. To the extent Services are performed onsite at Recipient’s place(s) of business, Service Provider will be permitted to withdraw any personnel providing Services at that time if Service Provider has a reasonable opinion that such personnel face any risk to their personal safety.

Section 2.7 Third Party Costs and Consents. The parties will work together to obtain any consents required for the provision of the Services for Recipient by the applicable Service Provider hereunder (the “Required Consents”). Service Provider shall directly pay any amounts that are required to be paid to any licensors or third party providers in order to obtain the Required Consents that are necessary for the provision of the Services to Recipient, including without limitation, any consent or documentation fees; provided, however, that the costs associated with the purchase or maintenance of additional licenses or use rights required for Recipient to use or utilize a given product or service that is being provided as a Service hereunder will be reimbursable out-of-pocket expenses paid by Recipient pursuant to Section 4.1(a). For example, if a given Service involves providing Recipient (for its own use)

 

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40 licenses of “Software Product X,” the costs associated with purchasing and maintaining such 40 licenses will be reimbursed by Recipient, but the costs associated with obtaining the consent from the third party provider of “Software Product X” necessary for Recipient to use such 40 licenses under Post’s license agreement with such third party provider (if such consent is required) would be Service Provider’s responsibility. Notwithstanding anything contained in this Agreement or the Transaction Agreement, Service Provider shall not be required to provide any Services to the extent that a Required Consent is needed for such Services and such Required Consent has not been, or cannot be, obtained despite Service Provider’s commercially reasonable attempts to do so, or if providing such Services would otherwise violate the terms of any of Service Provider’s agreements with its third party providers. Notwithstanding the foregoing, if Service Provider is not able to obtain any such Required Consent, despite Service Provider’s commercially reasonable attempts to do so, Service Provider shall promptly notify Recipient thereof and the parties will work together to arrange an alternative means of providing such Service or for Recipient to receive the Service, which may include Recipient obtaining replacement services directly from a third party provider.

Section 2.8 Services Managers. Service Provider and Recipient shall select one or more service managers (each a “Service Manager”) to act as its primary contact person(s) for the provision or receipt, as applicable, of the Services. Communications relating to the provision of the particular Services shall be directed to the applicable Service Manager of the other party. A party may change a Service Manager upon prior written notice to the other party, provided, however, that, before assigning a new Service Manager, such party will notify the other of the proposed assignment, introduce the individual to the appropriate representatives of the other party and provide such party with any information regarding the individual that may be reasonably requested by the other party. Service Provider’s Service Manager shall initially be Bryan Schack. Recipient’s Service Manager shall initially be Paul Rode.

ARTICLE III

PROVISION OF SERVICES

Section 3.1 No Secondment. For the avoidance of doubt, Service Provider is not under any obligation to second or procure the secondment to Recipient of any employee or other personnel in connection with the provision of the Services.

Section 3.2 Access to and Use of Facilities. To the extent reasonably required to perform the Services hereunder, Recipient will provide (or as necessary will cause its Affiliates to provide) Service Provider with access to and use of such Recipient’s applicable facilities. Recipient shall provide all information reasonably required or requested by Service Provider to perform its obligations under this Agreement. Any visit to any of Recipient’s facilities required in connection with the Services will be provided at Recipient’s sole risk except with respect to any violation of Law, negligence or willful misconduct by Service Provider, its Affiliates or its or their respective Representatives. Recipient shall be liable for, and shall fully defend, indemnify and hold Service Provider and its Affiliates harmless from, any and all injuries or death suffered by any Service Provider personnel arising in connection with any visit by such personnel to Recipient’s facilities to the extent such injury or death is caused by Recipient’s violation of Law, negligence or willful misconduct.

Section 3.3 Dispute Resolution. In the event that the parties are unable to agree upon any matters related to the performance of Services under this Agreement, the disputed matter will be first referred to the Service Managers for resolution. If a mutually acceptable agreement is not reached within a reasonable time, the matter will then be referred to the applicable senior management at each party hereto for resolution. Thereafter, the parties may seek the other rights and remedies available to such party. This Section 3.3 in no way limits, delays or restricts a party’s ability to seek specific performance, injunctive relief or other equitable relief as provided under Section 12.12.

 

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ARTICLE IV

PAYMENT FOR SERVICES

Section 4.1 Payment Obligation.

(a) Recipient shall pay Service Provider or, to the extent specified on an invoice delivered to Recipient pursuant to Section 4.3, an applicable Affiliate thereof, the undisputed fees described on the applicable Services Schedule for the Services provided to Recipient by Service Provider plus Recipient shall reimburse Service Provider for all reasonable, documented, undisputed out-of-pocket expenses incurred by Service Provider during the rendering of the applicable Services for Recipient (including third party contractors or professional fees and any license, service or access fees, including any third party vendor fees and other third party supply costs). For avoidance of doubt, the monthly costs/fees set forth on Exhibit A do not include any third party costs or pass through expenses (whether separately billed to Recipient or amounts allocated to Recipient out of the overall bill to Service Provider) paid by Service Provider for goods and services used by Recipient, but Service Provider has provided in the footnotes to the Services Schedules estimates of what Service Provider believes, as of the Effective Time, the reimbursable expenses for certain given Services may be. All such third party costs and pass through expenses will be reimbursed by Recipient as provided above. For example, the monthly costs/fees on Exhibit A do not include any license fees paid for any software licenses or services purchased by Service Provider and used by Recipient.

(b) Monthly Cost/Fee Adjustments. Beginning on the anniversary of the Effective Time (starting the next term year), the monthly costs/fees for the given Services for which there has not been a monthly costs/fees adjustment shall automatically increase by two and 12 percent (2.5%) over the monthly costs/fees charged for such Services during the just completed term year. Such monthly costs shall continue in effect until the monthly costs/fees are again adjusted (whether automatically as provided above or upon mutual agreement of the parties).

Section 4.2 Certain Third Party Costs. Recipient acknowledges and agrees that the prices charged by third party suppliers for any goods (e.g., software, raw materials and packaging) and services (e.g., promotions) procured from third party service providers which Service Provider is procuring on Recipient’s behalf as part of the Services provided hereunder may be subject to fluctuation and, as such, Service Provider cannot guarantee that it will be able to maintain certain pricing levels for any such goods or services. Recipient shall reimburse Service Provider for the applicable amounts charged by such third parties to Service Provider to purchase such goods and services, regardless of any such fluctuation in price.

Section 4.3 Invoices; Payment Due Date. Unless otherwise agreed to by Service Provider and Recipient in accordance with past practice, Service Provider or an applicable Affiliate thereof shall provide Recipient with a monthly invoice reflecting in reasonable detail (a) the Services provided during the preceding month, (b) monthly costs/fees owed for such Services and (c) all reasonable out-of-pocket expenses incurred by Service Provider or its Affiliates. All amounts shall be due and payable within thirty (30) days of the date the invoice is received. In the event Recipient disputes the amounts reflected on an invoice, Recipient shall deliver a written statement to Service Provider or such Affiliate within ten (10) days following receipt of Service Provider’s or such Affiliate’s invoice listing all disputed items and providing a reasonably detailed description of each disputed item. Amounts not so disputed shall be deemed accepted and shall be paid, notwithstanding disputes on other items.

Section 4.4 Interest on Late Payment. Any amounts owed by Recipient under this Agreement that are not paid when due shall bear interest, from the time the payment was due until the time paid, at a rate per annum compounded annually, equal to the lesser of one and a half percent (1.5%) per month or the highest rate allowed by Applicable Law.

 

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Section 4.5 Taxes. The fees under this Agreement exclude all applicable excise, sales, use, value added, goods and services or similar tax imposed by any federal, state, provincial, local or foreign taxing authority (“Sales Tax” or “Sales Taxes”), and Recipient will be responsible for payment of all such Sales Taxes for which Recipient bears primary liability under applicable law and any related penalties and interest arising from the payment of fees and expenses to Service Provider or its Affiliates. Recipient shall be entitled to withhold from any payment hereunder all taxes as are required to be withheld under Applicable Law. Service Provider and Recipient shall reasonably cooperate to minimize any applicable withholding taxes. For the avoidance of doubt, all taxes levied on Services Provider’s income or gross receipts or any franchise taxes of Service Provider shall be Service Provider’s responsibility.

Section 4.6 Expenses. Except as otherwise specified in this Agreement (including Section 4.1), each party hereto shall pay its own legal, accounting, out-of-pocket and other expenses incident to this Agreement and to any action taken by such party in carrying this Agreement into effect.

ARTICLE V

SERVICE STANDARDS

Section 5.1 Standard of Service. Service Provider warrants that the Services will be provided in a workmanlike and professional manner by personnel of Service Provider or its Affiliates having a level of skill in the area commensurate with the requirements of the scope of Services to be performed as described in the Service Schedules.

Section 5.2 Remediation. Recipient agrees that the remedies available to it in the event of a failure of Service Provider to provide the Services in accordance with the applicable Services Schedule in breach of the warranty set forth in Section 5.1 should be limited to Service Provider using commercially reasonable efforts to correct the problems that resulted in such failure, and therefore no service credits, rebates or refunds will be awarded for a failure to provide the Services. In recognition of this, except with respect to Service Provider’s indemnification obligations in Section 8.2, Recipient’s sole and exclusive remedy, and Service Provider’s sole and exclusive obligation, for any breach of the warranty set forth in Section 5.1 shall be the remediation activities set forth in this Section 5.2. In the event Service Provider does not provide a Service as specified in the applicable Services Schedule, then Service Provider agrees that it will use its commercially reasonable efforts to re-perform the applicable Service as soon as reasonably practicable thereafter.

ARTICLE VI

CONFIDENTIALITY

Section 6.1 Definition. “Confidential Information” means, with regard to any party hereto disclosing such information (the “Disclosing Party”), the terms of this Agreement and any technical or non-technical confidential or proprietary information disclosed or otherwise made available in any manner by the Disclosing Party to the other party to this Agreement (the “Receiving Party”), or to which the Receiving Party may gain access because of this Agreement, whether disclosed orally, electronically, visually or in writing. “Confidential Information” shall not include information (a) which is or becomes generally known or available by publication without violation of this Agreement; (b) which was known by the Receiving Party before receipt from the Disclosing Party as shown by the Receiving Party’s written records; (c) which is independently developed by the Receiving Party without use of or access to the Disclosing Party’s Confidential Information as shown by the Receiving Party’s written records; or (d) which is lawfully obtained from a third party that has the right to make such disclosure as shown by the Receiving Party’s written records.

 

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Section 6.2 Obligations. The Receiving Party agrees that, except as otherwise required by Applicable Law or order, it will (a) not use, reproduce, or exploit the Confidential Information of the Disclosing Party for any purpose other than performing or receiving Services as specified in this Agreement; and (b) hold all Confidential Information of the Disclosing Party in strict confidence and will not disclose or otherwise make available such Confidential Information to any third party other than its Representatives, third party contractors, advisors, Affiliates, actual or potential investors or financing sources and their advisors and Representatives, and the employees of the Receiving Party or its Representatives, third party contractors, advisors and Affiliates (i) who have a need to know such information for purposes of fulfilling the Receiving Party’s obligations, utilizing or enforcing the Receiving Party’s rights, or utilizing the Services provided, under this Agreement and (ii) who are bound by confidentiality obligations at least as stringent as those contained in this Agreement.

Section 6.3 Compelled Disclosure. In the event that the Receiving Party is required by Law or court decision, order or judgment to disclose any Confidential Information, the Receiving Party shall (a) to the extent permitted, notify the Disclosing Party in writing as soon as reasonably practicable; (b) reasonably cooperate with the Disclosing Party to preserve the confidentiality of such Confidential Information consistent with Law and (c) use its reasonable efforts to limit any such disclosure to the minimum disclosure necessary to comply with such Law or court decision, order, or judgment.

Section 6.4 Termination. Upon termination of this Agreement in accordance with Article XI, the Receiving Party shall destroy all documents and materials in tangible form, and delete all data in electronic form, containing any Confidential Information of the Disclosing Party. Notwithstanding the foregoing, the parties hereto acknowledge that certain systems that may be utilized by a Receiving Party do not easily permit the true purging or deletion of data (e.g., email backup systems). In such cases, the Receiving Party shall be permitted to retain such data so long as such data is not readily available to end users and otherwise remains subject to the confidentiality provisions of Section 6.1 and Section 6.2. In addition, the Receiving Party shall be permitted to retain such copies of Confidential Information as required by Applicable Law or legitimate record retention policies, so long as such Confidential Information is not readily accessible and otherwise remains subject to the confidentiality provisions of Section 6.1 and Section 6.2.

Section 6.5 Data Security.

(a) The systems and security tools and processes utilized by Service Provider to perform the Services and to which Recipient is given access are either jointly operated and/or used systems (shared systems) or mutually dependent systems, and so both parties have joint obligations to protect the systems, environments and data used or utilized by the parties. Generally speaking, the data security duties are divided as follows:

(i) identification of security threats and vulnerabilities—Service Provider provides the security guidelines, policies, tool standards and timelines for security reviews (such as third party penetration testing and security assessments) and Recipient is responsible for timely and full participation in such identification efforts, with prompt response and commercially reasonable attempted remediation of any threat or issue found and for security (e.g., phishing) awareness and actions of users;

(ii) protection against threats or issues – Service Provider is responsible for protection of the shared services (services shared by Post, Recipient and other Affiliates) but Recipient is responsible for the host (e.g., PCs, laptops, servers, handhelds, and other end user devices), network and other protection of systems or services used or utilized by Recipient. Recipient’s protection responsibilities also include reasonable adherence to all security policies, guidelines, standards and processes, protection of devices connected to and accessing shared services and reasonably complete implementation and use of protection mechanisms involved in access/use of shared services under this Agreement, including multi-factor authentication and testing of user password strength;

 

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(iii) detection of threats or issues – Recipient is responsible for implementing at least the tools generally recommended by Service Provider to its Affiliates as necessary to detect the threats or issues within the systems and Service Provider is responsible for assisting in monitoring and notifying Recipient of issues detected; and

(iv) response to and recovery after, an incident or vulnerability has been detected or issues have arisen—Service Provider coordinates joint response and recovery with regard to shared systems and Recipient is responsible for the response and recovery for all other systems used or utilized by Recipient.

For avoidance of doubt and notwithstanding anything herein to the contrary, Recipient is exclusively responsible for the protection, privacy and security within the manufacturing facilities and the plant technical environments (e.g. industrial control systems and related network security). Thus, the parties agree to cooperate in matters related to data protection and security. As part of such cooperation, Service Provider will develop and maintain certain enterprise-wide policies, processes, guidelines and architecture for data protection and security, Service Provider will develop and institute projects to accomplish the forgoing and all parties shall implement and maintain commercially reasonable technical and organizational measures to protect against any loss, destruction and damage and unauthorized access, use, modification, disclosure and other misuse, of (A) data or information of Recipient that is collected, processed, generated, calculated, derived, stored by or transmitted to Service Provider, any of its Affiliates or any other Person on its or their behalf in connection with the Services (such data and information, “Recipient Data”) and (B) any data or information of Service Provider used, utilized or disclosed to Recipient in connection with the Services (“Service Provider Data”). Furthermore, Recipient shall use commercially reasonable efforts to (X) timely comply with, implement and participate in such policies, procedures and projects and all changes thereto throughout the term of this Agreement, (Y) timely deploy, implement and participate in the security assessments, penetration testing, security vulnerability and issue detection efforts and deployment of additional security tools as directed by Service Provider and (Z) promptly respond to and make a commercially reasonable attempt to remediate all threats, vulnerabilities, issues or harm found. It is understood that Service Provider’s ability to protect and/or secure the systems, environments and data is only as good, effective and efficient as the level of sophistication, implementation and maintenance of Recipient’s own protection and security efforts. Service Provider is not responsible for any harm or damage resulting from Recipient failing to implement and maintain the policies, processes, guidelines and architecture provided by Service Provider, from Recipient failing to adequately protect and secure its own systems or facilities or from Recipient failing to perform its own data security duties in a timely and adequate manner.

(b) Promptly upon discovery of (i) an actual or suspected breach of the privacy or security of any Recipient Data or any Service Provider Data or (ii) any violation of any privacy or data security Laws with respect to Recipient Data or Service Provider Data, the discovering party shall use commercially reasonable efforts to provide notice to the other parties explaining the nature and scope of the incident and reasonably cooperate with the other parties in any investigation and remediation that the parties mutually agree are reasonably necessary (including any forensic investigation).

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

Section 7.1 Mutual Representations. Each party represents and warrants to the other parties that it has the requisite corporate or other organizational power and authority to enter into and perform its obligations under this Agreement and has taken all corporate or other organizational action necessary to execute and deliver this Agreement, to consummate the transactions contemplated hereby and to perform its obligations hereunder.

 

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Section 7.2 Disclaimer. Except as expressly set forth in this Agreement, no party makes any representation or warranty to the other parties, express or implied, with respect to the provision or receipt of the Services and all information or other deliverables provided by any party pursuant to this Agreement, including any representation or warranty as to merchantability, fitness for a particular purpose or future results. Each party hereby acknowledges that, other than as expressly provided in this Agreement, the Services and all information or deliverables provided hereunder are being provided “AS IS WHERE IS,” and each party has relied on its own examination and investigation in electing to enter into, and consummate the transactions under, this Agreement.

ARTICLE VIII

INDEMNIFICATION

Section 8.1 Recipient Indemnity. Recipient shall indemnify, defend and hold Service Provider, Service Provider’s Affiliates and their respective Representatives harmless from and against any and all Losses resulting from any third party claims, actions, suits or proceedings or from any action, decision, order or judgment by any Governmental Authority (“Claims”) to the extent such Losses are caused by Recipient’s violation of Law, fraud, willful misconduct or gross negligence in connection with performing its duties, responsibilities and obligations under this Agreement or breach of Article VI, provided that (a) Service Provider notifies Recipient promptly in writing of the Claim once Service Provider becomes aware of such Claim; (b) Recipient has sole control of the defense and all related settlement negotiations, except that Service Provider must provide prior written consent to any settlement that does not expressly and unconditionally release Service Provider from all Liabilities with respect to such Claim without prejudice or that would be adverse to Service Provider, which consent will not be unreasonably withheld; and (c) Service Provider provides Recipient with all reasonably necessary assistance, information and authority, at Recipient’s reasonable expense, to perform these duties.

Section 8.2 Service Provider Indemnity. Service Provider shall indemnify, defend and hold Recipient, Recipient’s Affiliates and their respective Representatives harmless from and against any and all Losses resulting from any Claims to the extent such Losses are caused by Service Provider’s violation of Law, fraud, willful misconduct or gross negligence in connection with performing its duties, responsibilities and obligations under this Agreement or breach of Article VI, provided that (a) Recipient notifies Service Provider promptly in writing of the Claim; (b) Service Provider has sole control of the defense and all related settlement negotiations, except that Recipient must provide prior written consent to any settlement that does not expressly and unconditionally release Recipient from all Liabilities with respect to such Claim without prejudice or that would be adverse to Recipient, which consent will not be unreasonably withheld; and (c) Recipient provides Service Provider with all reasonably necessary assistance, information and authority, at Service Provider’s reasonable expense, to perform these duties.

ARTICLE IX

LIMITATION OF LIABILITY

Section 9.1 Limitations on Claims. No party shall have any liability to another party under this Agreement unless a