---

#

Previously filed.

†

Indicates a management contract or compensatory plan.

+

Portions of this exhibit have been redacted in accordance with Item 601(b)(10)(iv) of Regulation S-K.

Exhibit 1.1

 

[·] Shares

 

AMERIHOME, INC.

 

Class A Common Stock

 

UNDERWRITING AGREEMENT

 

October [•], 2020

 

CREDIT SUISSE SECURITIES (USA) LLC
Eleven Madison Avenue
New York, NY 10010

 

GOLDMAN SACHS & CO. LLC
200 West Street
New York, NY 10282

 

J.P. MORGAN SECURITIES LLC
 383 Madison Avenue
New York, NY 10179

 

WELLS FARGO SECURITIES LLC
500 West 33rd Street
New York, NY 10001

 

As representatives (“Representatives”) of the several Underwriters

 

Ladies and Gentlemen:

 

1.     Introductory.  AmeriHome, Inc., a Delaware corporation (“Company”), agrees with the several Underwriters named in Schedule A hereto (“Underwriters”) to issue and sell to the several Underwriters [·] shares of its Class A Common Stock (“Securities”) (such [·] shares of Securities being hereinafter referred to as the “Firm Securities”), and, at the option of the Underwriters, an aggregate of not more than [·] additional outstanding shares (“Optional Securities”) of the Company’s Securities, as set forth below.  The Firm Securities and the Optional Securities are herein collectively called the “Offered Securities.”

 

On the date hereof the business of the Company is conducted through Aris Mortgage Holding Company, LLC, a Delaware limited liability company (“Aris Holding”), and its subsidiaries. In connection with the offering contemplated by this Agreement, the “Transactions” (as such term is defined in the Registration Statement and the Pricing Disclosure Package (each as defined below) under the caption titled “Our Organizational Structure”) were or will be effected prior to the delivery of the Offered Securities, pursuant to which, among other things, the Company will become the sole manager of Aris Holding. As the sole manager of Aris Holding, the Company will operate and control all of the business and affairs of Aris Holding and, through Aris Holding and its subsidiaries, conduct its business. The Company and Aris Holding are each referred to herein as a “AmeriHome Party” and, collectively, as the “AmeriHome Parties”.

 

2.     Representations and Warranties of the AmeriHome Parties.  (a) Each AmeriHome Party, jointly and severally, represents and warrants to, and agrees with, the several Underwriters that:

 

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(i)            Filing and Effectiveness of Registration Statement; Certain Defined Terms.  The Company has filed with the Commission a registration statement on Form S-1 (No. 333-249235) covering the registration of the Offered Securities under the Act, including a related preliminary prospectus or prospectuses.  At any particular time, this initial registration statement, in the form then on file with the Commission, including all information contained in the registration statement (if any) pursuant to Rule 462(b) and then deemed to be a part of the initial registration statement, and all 430A Information and all 430C Information, that in any case has not then been superseded or modified, shall be referred to as the “Initial Registration Statement.”  The Company may also have filed, or may file with the Commission, a Rule 462(b) registration statement covering the registration of the Offered Securities.  At any particular time, this Rule 462(b) registration statement, in the form then on file with the Commission, including the contents of the Initial Registration Statement incorporated by reference therein and including all 430A Information and all 430C Information, that in any case has not then been superseded or modified, shall be referred to as the “Additional Registration Statement.”

 

As of the time of execution and delivery of this Agreement, the Initial Registration Statement has been declared effective under the Act and is not proposed to be amended.  Any Additional Registration Statement has or will become effective upon filing with the Commission pursuant to Rule 462(b) and is not proposed to be amended.  The Offered Securities all have been or will be duly registered under the Act pursuant to the Initial Registration Statement and, if applicable, the Additional Registration Statement.

 

For purposes of this Agreement:

 

“430A Information”, with respect to any registration statement, means information included in a prospectus and retroactively deemed to be a part of such registration statement pursuant to Rule 430A(b).

 

“430C Information”, with respect to any registration statement, means information included in a prospectus then deemed to be a part of such registration statement pursuant to Rule 430C.

 

“Act” means the Securities Act of 1933, as amended.

 

“Applicable Time” means [·]:00 pm (New York time) on the date of this Agreement.

 

“Closing Date” has the meaning defined in Section 3 hereof.

 

“Commission” means the Securities and Exchange Commission.

 

“Effective Time” with respect to the Initial Registration Statement or, if filed prior to the execution and delivery of this Agreement, the Additional Registration Statement means the date and time as of which such Registration Statement was declared effective by the Commission or has become effective upon filing pursuant to Rule 462(c).  If an Additional Registration Statement has not been filed prior to the execution and delivery of this Agreement but the Company has advised the Representatives that it proposes to file one, “Effective Time” with respect to such Additional Registration Statement means the date and time as of which such Additional Registration Statement is filed and becomes effective pursuant to Rule 462(b).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Final Prospectus” means the Statutory Prospectus that discloses the public offering price, other 430A Information and other final terms of the Offered Securities and otherwise satisfies Section 10(a) of the Act.

 

“General Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being so specified in Schedule B to this Agreement.

 

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“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Offered Securities in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

 

“Limited Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not a General Use Issuer Free Writing Prospectus.

 

“Rules and Regulations” means the rules and regulations of the Commission.

 

“Securities Laws” means, collectively, the Sarbanes-Oxley Act of 2002, as amended and all rules and regulations promulgated thereunder or implementing the provisions thereof  (“Sarbanes-Oxley”), the Act, the Exchange Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers” (as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board and, as applicable, the rules of the New York Stock Exchange and The Nasdaq Global Market.

 

“Statutory Prospectus” with reference to a particular time means the prospectus included in a Registration Statement immediately prior to that time, including any 430A Information or 430C Information with respect to such Registration Statement.  For purposes of the foregoing definition, 430A Information shall be considered to be included in the Statutory Prospectus as of the actual time that form of prospectus is filed with the Commission pursuant to Rule 424(b) or Rule 462(c) and not retroactively.

 

“Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Rule 163B under the Act.

 

“Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Act.

 

Unless otherwise specified, a reference to a “rule” is to the indicated rule under the Act.  The Initial Registration Statement and any Additional Registration Statement, after the filing thereof, are referred to collectively as the “Registration Statements” and each is individually referred to as a “Registration Statement.”  A “Registration Statement” with reference to a particular time means the Initial Registration Statement and any Additional Registration Statement as of such time.  A “Registration Statement” without reference to a time means such Registration Statement as of its Effective Time.  For purposes of the foregoing definitions, 430A Information with respect to a Registration Statement shall be considered to be included in such Registration Statement as of the time specified in Rule 430A.

 

(ii)           Compliance with Securities Act Requirements.  (A) (1) At their respective Effective Times, (2) on the date of this Agreement and (3) on each Closing Date, each of the Initial Registration Statement and the Additional Registration Statement (if any) conformed and will conform in all material respects to the requirements of the Act and the Rules and Regulations, and did not and will not include any 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 (B) on its date, at the time of filing of the Final Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the Effective Time of the Additional Registration Statement in which the Final Prospectus is included, and on each Closing Date, the Final Prospectus will conform in all material respects to the requirements of the Act and the Rules and Regulations and will not include any 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.  The preceding sentence does not apply to statements in or omissions from any such document based upon written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 9(b) hereof.

 

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(iii)          Ineligible Issuer Status.  (A) At the time of the initial filing of the Initial Registration Statement and (B) at the date of this Agreement, the Company was not and is not an “ineligible issuer,” as defined in Rule 405.

 

(iv)          Emerging Growth Company Status.  From the time of the initial confidential submission of the Initial Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly or through any person authorized to act on its behalf in any Testing-the-Waters Communication) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Act (an “Emerging Growth Company”).

 

(v)           General Disclosure Package.  As of the Applicable Time, none of (A) the General Use Issuer Free Writing Prospectus(es), if any, issued at or prior to the Applicable Time, the preliminary prospectus, dated [·], 2020 (which is the most recent Statutory Prospectus distributed to investors generally) and the other information, if any, stated in Schedule B to this Agreement to be included in the General Disclosure Package, all considered together (collectively, the “General Disclosure Package”), (B) any individual Limited Use Issuer Free Writing Prospectus, when considered together with the General Disclosure Package or (C) any individual Written Testing-the-Waters Communication, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus or any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(b) hereof.

 

(vi)          Issuer Free Writing Prospectuses.  Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Offered Securities or until any earlier date that the Company notified or notifies the Representatives as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement.  If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information then contained in the Registration Statement or as a result of which such Issuer Free Writing Prospectus, if republished immediately following such event or development, would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (A) the Company has promptly notified or will promptly notify the Representatives and (B) the Company has promptly amended or will promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

 

(vii)         Testing-the-Waters Communication.  The Company (A) has not alone engaged in any Testing-the-Waters Communication and (B) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications.  The Company reconfirms that the Representatives has been authorized to act on the Company’s behalf in undertaking Testing-the-Waters Communication.  The Company has not distributed any Written Testing-the-Waters Communication.

 

(viii)        Good Standing of the AmeriHome Parties.  Each AmeriHome Party has been duly organized and is validly existing and in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Final Prospectus and to enter into and perform its obligations under this Agreement; and

 

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each AmeriHome Party is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below).

 

(ix)          Subsidiaries.  Each subsidiary of each AmeriHome Party has been duly incorporated or organized and is validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with power and authority (corporate and other) to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Final Prospectus; and each subsidiary of each AmeriHome Party is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not reasonably be expected to have a Material Adverse Effect; all of the issued and outstanding capital stock of each subsidiary of each AmeriHome Party has been duly authorized and validly issued and is fully paid and nonassessable; and the capital stock of each subsidiary owned by each AmeriHome Party, directly or through subsidiaries, is owned free from liens, encumbrances and defects.

 

(x)           Offered Securities.  The Offered Securities and all other outstanding shares of capital stock of the Company have been duly authorized; the authorized equity capitalization of the Company is as set forth in the Registration Statement, the General Disclosure Package and the Final Prospectus; all outstanding shares of capital stock of the Company are, and, when the Offered Securities have been delivered and paid for in accordance with this Agreement on each Closing Date, such Offered Securities will have been, validly issued, fully paid and nonassessable, will conform in all material respects to the information in the General Disclosure Package and to the description of such Offered Securities contained in the Final Prospectus; the stockholders of the Company have no preemptive rights with respect to the Offered Securities; and none of the outstanding shares of capital stock of the Company have been issued in violation of any preemptive or similar rights of any security holder of the Company.  Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, there are no outstanding (A) securities or obligations of the Company convertible into or exchangeable for any capital stock of the Company or any of its subsidiaries including, without limitation, Aris Holding, (B) warrants, rights or options to subscribe for or purchase from the Company any such capital stock or any such convertible or exchangeable securities or obligations or (C) obligations of the Company to issue or sell any shares of capital stock, any such convertible or exchangeable securities or obligations or any such warrants, rights or options.  The Company has not, directly or indirectly, offered or sold any of the Offered Securities by means of any “prospectus” (within the meaning of the Act and the Rules and Regulations) or used any “prospectus” or made any offer (within the meaning of the Act and the Rules and Regulations) in connection with the offer or sale of the Offered Securities, in each case other than the preliminary prospectus referred to in Section 2(v) hereof, the General Disclosure Package and the Final Prospectus.

 

(xi)          No Finder’s Fee. Except as disclosed in the Registration Statement, the General Disclosure Package, the Final Prospectus and as contemplated by this Agreement, there are no contracts, agreements or understandings between any of the AmeriHome Parties and any person that would give rise to a valid claim against the AmeriHome Parties or any Underwriter for a brokerage commission, finder’s fee or other like payment in connection with this offering.

 

(xii)         Registration Rights.  Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, there are no contracts, agreements or understandings between any AmeriHome Party and any person granting such person the right to require any AmeriHome Party to file a registration statement under the Act with respect to any securities of the Company or Aris Holding owned or to be owned by such person or to require any AmeriHome Party to include such securities in the securities registered pursuant to a Registration Statement or

 

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in any securities being registered pursuant to any other registration statement filed by any AmeriHome Party under the Act (collectively, “registration rights”).

 

(xiii)        Listing.  The Offered Securities have been approved for listing on the New York Stock Exchange, subject to official notice of issuance.

 

(xiv)        Absence of Further Requirements.  No consent, approval, authorization, or order of, or filing or registration with, any person (including any governmental agency or body or any court) is required to be obtained or made by any AmeriHome Party for the consummation of the transactions contemplated by this Agreement in connection with the offering, issuance and sale of the Offered Securities, except such as have been obtained, or made and such as may be required under state securities laws or by the Financial Industry Regulatory Authority, Inc. (“FINRA”).

 

(xv)         Title to Property.  Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus or as would not reasonably be expected to have a Material Adverse Effect, each AmeriHome Party and their respective subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from all liens, charges, mortgages, pledges, security interests, claims, restrictions or encumbrances of any kind and defects that would materially affect the value thereof or materially interfere with the use made or to be made thereof by them and, except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, each AmeriHome Party and their respective subsidiaries hold any leased real or personal property under valid and enforceable leases with no terms or provisions that would materially interfere with the use made or to be made thereof by them.

 

(xvi)        Absence of Defaults and Conflicts Resulting from Transaction.  The execution, delivery and performance of  this Agreement, and the issuance and sale of the Offered Securities will not result in a breach or violation of any of the terms and provisions of, or constitute a default or a Debt Repayment Triggering Event (as defined below) under, or result in the imposition of any lien, charge or encumbrance upon any property or assets of any AmeriHome Party or any of its subsidiaries pursuant to (A) the charter or by-laws or similar organizational documents of any AmeriHome Party or any of its subsidiaries, (B) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over any AmeriHome Party or any of its subsidiaries or any of their properties, or (C) any agreement or instrument to which any AmeriHome Party or any of its subsidiaries is a party or by which any AmeriHome Party or any of its subsidiaries is bound or to which any of the properties of any AmeriHome Party or any of its subsidiaries is subject; a “Debt Repayment Triggering Event” means any event or condition that gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture, or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by any AmeriHome Party or any of its subsidiaries, except in the case of clauses (B) and (C) above, for such breaches, violations, defaults or impositions would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(xvii)       Absence of Existing Defaults and Conflicts.  None of the AmeriHome Parties or any of their respective subsidiaries is (A) in violation of its respective charter or by-laws or similar organizational documents; (B) in default (or with the giving of notice or lapse of time would be in default) under any existing obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument to which any of them is a party or by which any of them is bound or to which any of the properties of any of them is subject; or (C) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except in the case of clauses (A), with respect to each AmeriHome Party’s subsidiaries only, (B) and (C) above, for any such defaults or violation that would not, individually or in the aggregate, reasonably be expected to result in a material adverse effect on the financial condition, results of operations, business, properties or

 

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prospects of each AmeriHome Party and their respective subsidiaries taken as a whole (“Material Adverse Effect”).

 

(xviii)      Authorization of Agreement.  This Agreement has been duly authorized, executed and delivered by each AmeriHome Party.

 

(xix)        Possession of Licenses and Permits.  Each AmeriHome Party and their respective subsidiaries possess, and are in compliance with the terms of, all adequate certificates, authorizations, franchises, licenses and permits issued by appropriate federal, state, local or foreign regulatory bodies (collectively, “Licenses”) necessary or material to the conduct of the business now conducted or proposed in the Registration Statement, the General Disclosure Package and the Final Prospectus to be conducted by them.  Each AmeriHome Party and each of its subsidiaries are in compliance with the terms and conditions of all such Licenses and have not received any written notice of proceedings relating to the revocation or modification of any Licenses that, in each case, if determined adversely to each AmeriHome Party or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

 

(xx)         Absence of Labor Dispute.  No labor dispute with the employees of any AmeriHome Party or any of its subsidiaries exists or, to the knowledge of each AmeriHome Party or any of its subsidiaries, is imminent that would reasonably be expected to have a Material Adverse Effect.

 

(xxi)        Possession of Intellectual Property.  Each AmeriHome Party and their respective subsidiaries own, possess or can acquire on commercially reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, “intellectual property rights”) necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to any AmeriHome Party or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

 

(xxii)       Environmental Laws.  Each AmeriHome Party and their respective subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances, wastes or materials, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses, (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect; and (iv) none of the AmeriHome Parties or any of their respective subsidiaries (x) is subject to any pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations or proceedings relating to any Environmental Law against the AmeriHome Parties or any of their respective subsidiaries, except for such actions, suits, demands, demand letters, claims, liens, notice of noncompliance or violation, investigations or proceedings which would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect, none of the AmeriHome Parties or any of their respective subsidiaries know any such proceeding is contemplated, or (y) is aware of any material effect on the capital expenditures, earnings or competitive position of the AmeriHome Parties and their respective subsidiaries resulting from compliance with Environmental Laws.

 

(xxiii)      Accurate Disclosure.  The statements in the General Disclosure Package and the Final Prospectus under the headings “Our Organizational Structure”, “Risk Factors—Regulatory Risks”, “Business—Federal, State and Local Laws and Regulations”, “Business—Legal Proceedings”, “Description of Capital Stock” and “Material U.S. Federal Income Tax Consequences to U.S. Holders of Our Class A Common Stock”, insofar as such statements

 

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summarize legal matters, agreements, documents or proceedings discussed therein, are, in all material respects, accurate and fair summaries of such legal matters, agreements, documents or proceedings and present the information required to be shown.

 

(xxiv)     Absence of Manipulation.  None of the AmeriHome Parties or any affiliates have taken, nor will any AmeriHome Party or any affiliate take, directly or indirectly, any action that is designed, or would be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities or to result in a violation of Regulation M under the Exchange Act.

 

(xxv)      Statistical and Market-Related Data.  Any third-party statistical and market-related data included in a Registration Statement, a Statutory Prospectus, the General Disclosure Package or any Written Testing-the-Waters Communication is based on or derived from sources that any AmeriHome Party believes to be reliable and accurate.

 

(xxvi)     Compliance with the Sarbanes-Oxley Act.  The Company has taken all necessary actions to ensure that, upon the effectiveness of the Registration Statement, it will be in compliance with all provisions of Sarbanes-Oxley that are then in effect and with which the Company is required to comply as of the effectiveness of the Registration Statement, and is actively taking steps to ensure that it will be in compliance with other provisions of the Sarbanes-Oxley Act not currently in effect, upon the effectiveness of such provisions, or which will become applicable to the Company at all times after the effectiveness of the Registration Statement.

 

(xxvii)    Internal Controls.  The AmeriHome Parties maintain a system of internal controls, including, but not limited to, disclosure controls and procedures, internal controls over accounting matters and financial reporting, an internal audit function and legal and regulatory compliance controls (collectively, “Internal Controls”) that comply with applicable Securities Laws and are sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorizations, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) and to maintain accountability for assets, (C) access to assets is permitted only in accordance with management’s general or specific authorization, and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  The AmeriHome Parties are not aware of any “significant deficiency” or “material weakness” (each, as defined in Rule 12b-2 of the Exchange Act), a change in internal controls over financial reporting or fraud involving management or other employees who have a significant role in internal controls over financial reporting. Since the date of the latest audited financial statements included in the General Disclosure Package, there has been no change in any AmeriHome Party’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, any AmeriHome Party’s internal control over financial reporting.

 

(xxviii)   [Reserved].

 

(xxix)     Litigation.  Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, there are no pending actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) against or affecting the AmeriHome Parties, any of their respective subsidiaries or any of their respective properties that, if determined adversely to the AmeriHome Parties or any of their respective subsidiaries, would individually or in the aggregate have a Material Adverse Effect, or would materially and adversely affect their respective properties or assets or the ability of the AmeriHome Parties to perform their obligations under this Agreement; and no such actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) are threatened or, to the knowledge of the AmeriHome Parties or any of their respective subsidiaries, contemplated.

 

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(xxx)      Financial Statements.  The financial statements included in each Registration Statement and the General Disclosure Package and the Final Prospectus, together with the related schedules and notes, present fairly in all material respects the financial position of each of the AmeriHome Parties and their respective consolidated subsidiaries as of the dates shown and their results of operations, stockholders’ equity and cash flows for the periods shown, and such financial statements have been prepared in conformity with GAAP applied on a consistent basis; the schedules included in each Registration Statement present fairly in all material respects the information required to be stated therein; and the assumptions used in preparing the pro forma financial statements included in each Registration Statement, the General Disclosure Package and the Final Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement amounts.

 

(xxxi)     No Material Adverse Change in Business.  Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, since the end of the period covered by the latest audited financial statements included in the Registration Statement, the General Disclosure Package and the Final Prospectus (A) there has been no change, nor any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, business, properties or prospects of the AmeriHome Parties and their respective subsidiaries, taken as a whole, that is material and adverse, (B) except as disclosed in or contemplated by the Registration Statement, the General Disclosure Package and the Final Prospectus, there has been no dividend or distribution of any kind declared, paid or made by the Company or Aris Holding on any class of its capital stock, (C) except as disclosed in or contemplated by the General Disclosure Package and the Final Prospectus, there has been no material adverse change in the capital stock, short-term indebtedness, long-term indebtedness, net current assets or net assets of any AmeriHome Party or any of its subsidiaries, (D) there has been no material transaction entered into and there is no material transaction that is probable of being entered into by any AmeriHome Party or any of its subsidiaries other than transactions in the ordinary course of business, (E) there has been no obligation, direct or contingent, that is material to any AmeriHome Party or any of its subsidiaries taken as a whole, incurred by any AmeriHome Party or any of its subsidiaries, except obligations incurred in the ordinary course of business and (F) none of the AmeriHome Parties or any of their respective subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority.

 

(xxxii)    Investment Company Act.  Each AmeriHome Party is not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Registration Statement, the General Disclosure Package and the Final Prospectus, will not be required to register as an “investment company” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).

 

(xxxiii)   Ratings.  No “nationally recognized statistical rating organization” as such term is defined in Section 3(a)(62) of the Exchange Act (A) has imposed (or has informed the AmeriHome Party that it is considering imposing) any condition (financial or otherwise) on any AmeriHome Party retaining any rating assigned to any AmeriHome Party or any securities of such AmeriHome Party or (B) has indicated to any AmeriHome Party that it is considering any of the actions described in Section 7(c)(ii) hereof.

 

(xxxiv)   Tax Compliance.  Each AmeriHome Party and their respective subsidiaries have filed all federal, state, local and non-U.S. tax returns that are required to be filed or have requested extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect); and, except as set forth in the General Disclosure Package, each AmeriHome Party and their respective subsidiaries have paid all taxes (including any assessments, fines or penalties) required to be paid by them, except for any such taxes, assessments, fines or penalties

 

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currently being contested in good faith or as would not, individually or in the aggregate, have a Material Adverse Effect.

 

(xxxv)    Insurance.  Each AmeriHome Party and their respective subsidiaries are insured by insurers with appropriately rated claims paying abilities against such losses and risks and in such amounts as are commercially reasonable and customary for the businesses in which they are engaged; each AmeriHome Party and their respective subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and there are no claims by any AmeriHome Party or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; None of the AmeriHome Parties or any of their respective subsidiaries has been refused any insurance coverage sought or applied for; none of the AmeriHome Parties or any of their respective subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect, except as set forth in or contemplated in the Registration Statement, the General Disclosure Package and the Final Prospectus; and the Company will obtain directors’ and officers’ insurance in such amounts as is customary for an initial public offering.

 

(xxxvi)   No Unlawful Payments.  None of the AmeriHome Parties or any director or officer, or, to the knowledge of the AmeriHome Parties, any agent, controlled affiliate or employee or other person acting on behalf of the AmeriHome Parties or of any of their respective subsidiaries, has (A) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (B) taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any government official, including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office (“Governmental Official”) to influence official action or secure an improper advantage; (C) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law; or (D) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit, to any Government Official or other person or entity. The AmeriHome Parties and their respective subsidiaries and affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintain and will continue to maintain policies and procedures designed to promote and achieve compliance with all applicable anti-bribery and anti-corruption laws and with the representation and warranty contained herein.

 

(xxxvii)  Compliance with Anti-Money Laundering Laws. The operations of each AmeriHome Party and their respective subsidiaries are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental or regulatory agency, authority or body or any arbitrator involving the any AmeriHome Party or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the AmeriHome Parties and their respective subsidiaries, threatened.

 

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(xxxviii) Economic Sanctions.  None of the AmeriHome Parties, any of their respective subsidiaries, any director or officer, or, to the knowledge of the AmeriHome Parties or any of their respective subsidiaries, any agent, controlled affiliate or employee or other person acting on behalf of any AmeriHome Party or any of its subsidiaries, is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is: the subject or target of any U.S. sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, Her Majesty’s Treasury, the Swiss Secretariat of Economic Affairs or other relevant sanctions authority (collectively, “Sanctions”), none of the AmeriHome Parties or any of their respective subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions including, without limitation, Cuba, Iran, North Korea, Sudan, Syria and Crimea (each a “Sanctioned Country”); and the AmeriHome Parties will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person: (A) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject or target of any Sanctions; (B) to fund or facilitate any activities of or business in any Sanctioned Country or (C) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).  For the past five years, the AmeriHome Parties and their respective subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject or target of Sanctions.

 

(xxxix)   Other Offerings.  Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, the AmeriHome Parties have not sold, issued or distributed any Securities during the six-month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulation D or Regulation S of, the Act, other than Securities issued pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans or pursuant to outstanding options, rights or warrants.

 

(xl)          Accuracy of Exhibits.  There are no contracts or documents which are required to be described in the Registration Statement, the General Disclosure Package or the Final Prospectus or to be filed as exhibits to the Registration Statement which have not been so described and filed as required.

 

(xli)         Lending Relationship. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, the AmeriHome Parties and their respective subsidiaries (A) do not have any material lending or other relationship with any bank or lending affiliate of any Underwriter and (B) does not intend to use any of the proceeds from the sale of the Securities to repay any outstanding debt owed to any affiliate of any Underwriter.

 

(xlii)        Margin Rules.  The application of the proceeds received by the Company from the issuance, sale and delivery of the Offered Securities as described in the Registration Statement, the General Disclosure Package and the Final Prospectus will not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

 

(xliii)       No Restrictions on Subsidiaries.  Except for restrictions imposed by the applicable regulatory authorities and applicable law or described in the General Disclosure Package and the Final Prospectus, no subsidiary of any AmeriHome Party is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to any AmeriHome Party, from making any other distribution on such subsidiary’s capital stock, from repaying to any AmeriHome Party any loans or advances to such subsidiary

 

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from any AmeriHome Party or from transferring any of such subsidiary’s properties or assets to any AmeriHome Party or any other subsidiary of any AmeriHome Party.

 

(xliv)       No Undisclosed Relationships.  No relationship, direct or indirect, exists between or among any AmeriHome Party or any of its subsidiaries, on the one hand, and the directors, officers, stockholders or other affiliates of any AmeriHome Party or any of its subsidiaries, on the other, which is material to the AmeriHome Parties or their respective subsidiaries, taken as a whole, that is not described, or incorporated by reference, in each of the General Disclosure Package and the Final Prospectus.

 

(xlv)        Cybersecurity.  Except as could not reasonably be expected to have a Material Adverse Effect, each AmeriHome Party’s and its subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform as required in connection with the operation of the business of each AmeriHome Party and their respective subsidiaries as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants.  Each AmeriHome Party and their respective subsidiaries have implemented and maintained commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with their businesses, and to each AmeriHome Party’s knowledge, there have been no material breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the duty to notify any other person, nor any incidents under internal review or investigations relating to the same.  Each AmeriHome Party’s and its subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification, except any violation thereof which would not, individually or in the aggregate, have a Material Adverse Effect.

 

3.     Purchase, Sale and Delivery of Offered Securities.  On the basis of the representations, warranties and agreements and subject to the terms and conditions set forth herein, the Company agrees to sell to the several Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price of $[·] per share, that number of Firm Securities set forth opposite the name of such Underwriter in Schedule A hereto.

 

The Company will deliver the Firm Securities to or as instructed by the Representatives for the accounts of the several Underwriters in a form reasonably acceptable to the Representatives against payment of the purchase price by the Underwriters in Federal (same day) funds by wire transfer to an account at a bank acceptable to the Representatives drawn to the order of the Company at the office of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, N.Y. 10017 at 9:00 A.M., (New York time), on [·], 2020, or at such other time not later than seven full business days thereafter as the Representatives and the Company determine, such time being herein referred to as the “First Closing Date.”  For purposes of Rule 15c6-1 under the Exchange Act, the First Closing Date (if later than the otherwise applicable settlement date) shall be the settlement date for payment of funds and delivery of securities for all the Offered Securities sold pursuant to the offering.  The Firm Securities so to be delivered or evidence of their issuance will be made available for checking at the above office of Davis Polk & Wardwell LLP at least 24 hours prior to the First Closing Date.

 

In addition, upon written notice from the Representatives given to the Company from time to time not more than 30 days subsequent to the date of the Final Prospectus, the Underwriters may purchase all or less than all of the Optional Securities at the purchase price per share to be paid for the Firm Securities.  Such Optional Securities shall be purchased for the account of each Underwriter in the same proportion as the number of shares of Firm Securities set forth opposite such Underwriter’s name bears to the total

 

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number of shares of Firm Securities (subject to adjustment by the Representatives to eliminate fractions) and may be purchased by the Underwriters only for the purpose of covering over-allotments made in connection with the sale of the Firm Securities.  No Optional Securities shall be sold or delivered unless the Firm Securities previously have been, or simultaneously are, sold and delivered.  The right to purchase the Optional Securities or any portion thereof may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by the Representatives to the Company.

 

Each time for the delivery of and payment for the Optional Securities, being herein referred to as an “Optional Closing Date”, which may be the First Closing Date (the First Closing Date and each Optional Closing Date, if any, being sometimes referred to as a “Closing Date”), shall be determined by the Representatives but shall be not later than five full business days after written notice of election to purchase Optional Securities is given.  The certificates for the Optional Securities being purchased on each Optional Closing Date or evidence of their issuance will be made available for checking at the above office of Davis Polk & Wardwell LLP at a reasonable time in advance of such Optional Closing Date.

 

4.     Offering by Underwriters.  It is understood that the several Underwriters propose to offer the Offered Securities for sale to the public as set forth in the Final Prospectus.

 

5.     Certain Agreements of the AmeriHome Parties.  Each AmeriHome party, jointly and severally, agrees with the several Underwriters that:

 

(a)       Additional Filings.  Unless filed pursuant to Rule 462(c) as part of the Additional Registration Statement in accordance with the next sentence, the Company will file the Final Prospectus, in a form approved by the Representatives, with the Commission pursuant to and in accordance with subparagraph (1) (or, if applicable and if consented to by the Representatives, subparagraph (4)) of Rule 424(b) not later than the second business day following the execution and delivery of this Agreement.  The Company will advise the Representatives promptly of any such filing pursuant to Rule 424(b) and provide satisfactory evidence to the Representatives of such timely filing.  If an Additional Registration Statement is necessary to register a portion of the Offered Securities under the Act but the Effective Time thereof has not occurred as of the execution and delivery of this Agreement, the Company will file the Additional Registration Statement or, if filed, will file a post-effective amendment thereto with the Commission pursuant to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on the date of this Agreement or, if earlier, on or prior to the time the Final Prospectus is finalized and distributed to any Underwriter, or will make such filing at such later date as shall have been consented to by the Representatives.

 

(b)       Filing of Amendments; Response to Commission Requests.  The Company will promptly advise the Representatives of any proposal to amend or supplement at any time the Initial Registration Statement, any Additional Registration Statement or any Statutory Prospectus and will not effect such amendment or supplementation without the Representatives’ consent; and the Company will also advise the Representatives promptly of (i) the effectiveness of any Additional Registration Statement (if its Effective Time is subsequent to the execution and delivery of this Agreement), (ii) any amendment or supplementation of a Registration Statement or any Statutory Prospectus, (iii) any request by the Commission or its staff for any amendment to any Registration Statement, for any supplement to any Statutory Prospectus or for any additional information, (iv) the institution by the Commission of any stop order proceedings in respect of a Registration Statement or the threatening of any proceeding for that purpose, and (v) the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Securities in any jurisdiction or the institution or threatening of any proceedings for such purpose.  The Company will use its reasonable best efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.

 

(c)       Continued Compliance with Securities Laws.  If, at any time when a prospectus relating to the Offered Securities is (or but for the exemption in Rule 172 would be) required to be delivered under the Act by any Underwriter or dealer, any event occurs as a result of which the Final

 

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Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Registration Statement or supplement the Final Prospectus to comply with the Act, the Company will promptly notify the Representatives of such event and will promptly prepare and file with the Commission and furnish, at its own expense, to the Underwriters and the dealers and any other dealers upon request of the Representatives, an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance.  Neither the Representatives’ consent to, nor the Underwriters’ delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 7 hereof.

 

(d)       Testing-the-Waters Communication.  If at any time following the distribution of any Written Testing-the-Waters Communication there occurred an event or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such statement or omission.

 

(e)       Rule 158.  As soon as practicable, but not later than the Availability Date (as defined below), the Company will make generally available to its security holders an earnings statement covering a period of at least 12 months beginning after the Effective Time of the Initial Registration Statement (or, if later, the Effective Time of the Additional Registration Statement) which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act, which may be satisfied by filing on the Commission’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system.  For the purpose of the preceding sentence, “Availability Date” means the day after the end of the fourth fiscal quarter following the fiscal quarter that includes such Effective Time on which the Company is required to file its Form 10-Q for such fiscal quarter except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the day after the end of such fourth fiscal quarter on which the Company is required to file its Form 10-K.

 

(f)        Furnishing of Prospectuses.  The Company will furnish to the Representatives copies of each Registration Statement (333-249235 of which will include all exhibits), each related Statutory Prospectus, and, so long as a prospectus relating to the Offered Securities is (or but for the exemption in Rule 172 would be) required to be delivered under the Act, the Final Prospectus and all amendments and supplements to such documents, in each case in such quantities as the Representatives reasonably requests.  The Final Prospectus shall be so furnished on or prior to 3:00 P.M., New York time, on the second business day following the execution and delivery of this Agreement.  All other documents shall be so furnished as soon as available.  The Company will pay the expenses of printing and distributing to the Underwriters all such documents.

 

(g)       Blue Sky Qualifications.  The Company will arrange for the qualification of the Offered Securities for sale under the laws of such jurisdictions as the Representatives designate and will continue such qualifications in effect so long as required for the distribution.

 

(h)       Reporting Requirements.  During the period of three years hereafter, the Company will furnish to the Representatives and, upon request, to each of the other Underwriters, as soon as practicable after the end of each fiscal year, a copy of its annual report to stockholders for such year; and the Company will furnish to the Representatives (i) as soon as available, a copy of each report and any definitive proxy statement of the Company filed with the Commission under the Exchange Act or mailed to stockholders, and (ii) from time to time, such other information concerning the Company as the Representatives may reasonably request.  However, so long as the Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the Exchange Act and is timely filing reports with the Commission on its EDGAR system, it is not required to furnish such reports or statements to the Underwriters.

 

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(i)        Payment of Expenses.  Each AmeriHome Party, jointly and severally, agrees with the several Underwriters that the Company will pay all expenses incident to the performance of the obligations of the Company under this Agreement, including but not limited to any filing fees and other expenses (including the reasonable and documented fees and disbursements of counsel to the Underwriters not to exceed $10,000) incurred in connection with qualification of the Offered Securities for sale under the laws of such jurisdictions as the Representatives designate and the preparation and printing of memoranda relating thereto, costs and expenses related to the review by FINRA of the Offered Securities (including filing fees and the reasonable and documented fees and expenses of counsel for the Underwriters relating to such review not to exceed $35,000), any stamp duties, similar taxes or duties or other taxes payable upon the sale, issuance or delivery of the Offered Securities to the Underwriters in the manner contemplated by this Agreement and the Final Prospectus, costs and expenses relating to investor presentations or any “road show” in connection with the offering and sale of the Offered Securities including, without limitation, any travel expenses of the Company’s officers and employees and any other expenses of the Company including the chartering of airplanes; provided, however that 50% of the cost of any aircraft not owned or leased by the Company or any affiliate of the Company that is chartered in connection with the roadshow shall be the responsibility of the Underwriters (it being understood that the other 50% shall be the responsibility of the Company), fees and expenses incident to listing the Offered Securities on the New York Stock Exchange, fees and expenses in connection with the registration of the Offered Securities under the Exchange Act, and expenses incurred in distributing preliminary prospectuses and the Final Prospectus (including any amendments and supplements thereto) to the Underwriters and for expenses incurred for preparing, printing and distributing any Issuer Free Writing Prospectuses to investors or prospective investors. It is understood, however, that, except as provided in this Section, and Sections 9 and 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees and disbursements of their counsel connected with any offers they may make.

 

(j)        Use of Proceeds.  The Company will use the net proceeds received by it in connection with this offering in the manner described in the “Use of Proceeds” section of the General Disclosure Package.

 

(k)       Absence of Manipulation.  The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Offered Securities.

 

(l)        Restriction on Sale of Securities by Company.  For the period specified below (the “Lock-Up Period”), the Company will not, directly or indirectly, take any of the following actions with respect to its Securities or any securities convertible into or exchangeable or exercisable for any of its Securities (“Lock-Up Securities”): (A) offer, sell, issue, contract to sell, pledge or otherwise dispose of Lock-Up Securities, (B) offer, sell, issue, contract to sell, contract to purchase or grant any option, right or warrant to purchase Lock-Up Securities, (C) enter into any swap, hedge or any other agreement that transfers, in whole or in part, the economic consequences of ownership of Lock-Up Securities, (D) establish or increase a put equivalent position or liquidate or decrease a call equivalent position in Lock-Up Securities within the meaning of Section 16 of the Exchange Act or (E) file with the Commission a registration statement under the Act relating to Lock-Up Securities, or publicly disclose the intention to take any such action, without the prior written consent of the Representatives, provided, however, that the restrictions in the foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B) Securities or any securities (including without limitation options, restricted stock or restricted stock units) convertible into, or exercisable for, Securities pursuant to any employee stock option plan, incentive plan, stock plan, dividend reinvestment plan or otherwise in equity compensation arrangements in place as of the First Closing Date and as described in the General Disclosure Package, (C) the grant of stock options or other equity awards pursuant to employee equity-based compensation plans, incentive plans, stock plans, or other arrangements in place as of the First Closing Date and as described in the General Disclosure Package, provided that any directors or officers who are the recipients thereof have provided to the Representatives a signed lock-up agreement substantially in the form of Exhibit D hereto, (D) the filing of a registration statement on Form S-8 in connection with the

 

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registration of Securities issuable under any employee equity-based compensation plan, incentive plan, stock plan, dividend reinvestment plan adopted and approved by the Company’s board of directors and (E) the issuance of up to 5% of the outstanding shares of the Securities in connection with the acquisition of the assets of, or a majority or controlling portion of the equity of, or a joint venture with another entity in connection with its acquisition by the Company or any of its subsidiaries of such entity; provided that each recipient of any Securities issued or sold pursuant to clause (E) above executes and delivers to the Representatives prior to such issuance or sale (as the case may be) an agreement having substantially the same terms as the lock-up letters described in this Agreement.  The Lock-Up Period will commence on the date hereof and continue for 180 days after the date hereof or such earlier date that the Representatives consent to in writing.

 

(m)      Agreement to announce lock-up waiver.  If any two of the four Representatives, in their sole discretion, agree to release or waive the restrictions set forth in a lock-up letter described in Section 7(g) hereof for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit A hereto through a major news service at least two business days before the effective date of the release or waiver.

 

(n)       Emerging Growth Company Status.  The Company will promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of the Offered Securities within the meaning of the Act and (ii) completion of the Lock-Up Period.

 

6.     Free Writing Prospectuses.  The Company represents and agrees that, unless it obtains the prior consent of Credit Suisse, and each Underwriter represents and agrees that, unless it obtains the prior consent of the Company and Credit Suisse, it has not made and will not make any offer relating to the Offered Securities that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission.  Any such free writing prospectus consented to by the Company and Credit Suisse is hereinafter referred to as a “Permitted Free Writing Prospectus.”  The Company represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping.  The Company represents that is has satisfied and agrees that it will satisfy the conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road show.

 

7.     Conditions of the Obligations of the Underwriters.  The obligations of the several Underwriters to purchase and pay for the Firm Securities on the First Closing Date and the Optional Securities to be purchased on each Optional Closing Date will be subject to the accuracy of the representations and warranties of the AmeriHome Parties herein (as though made on such Closing Date), to the accuracy of the statements of Company officers made pursuant to the provisions hereof, to the performance by the AmeriHome Parties of their obligations hereunder and to the following additional conditions precedent:

 

(a)       Accountants’ Comfort Letter.  The Representatives shall have received letters, dated, respectively, the date hereof and each Closing Date, of Ernst & Young LLP confirming that they are a registered public accounting firm and independent public accountants within the meaning of the Securities Laws and in the form and substance satisfactory to the Representatives (except that, in any letter dated a Closing Date, the specified date referred to in the comfort letters shall be a date no more than three days prior to such Closing Date).

 

(b)       Effectiveness of Registration Statement.  If the Effective Time of the Additional Registration Statement (if any) is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later than 10:00 P.M., New York time, on the date of this Agreement or, if earlier, the time the Final Prospectus is finalized and distributed to any Underwriter, or

 

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shall have occurred at such later time as shall have been consented to by the Representatives.  The Final Prospectus shall have been filed with the Commission in accordance with the Rules and Regulations and Section 5(a) hereof.  Prior to such Closing Date, no stop order suspending the effectiveness of a Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Company or the Representatives, shall be contemplated by the Commission.

 

(c)       No Material Adverse Change.  Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the financial condition, results of operations, business, properties or prospects of each AmeriHome Party and its subsidiaries taken as a whole, which, in the judgment of the Representatives, is material and adverse and makes it impractical or inadvisable to market the Offered Securities; (ii) any downgrading in the rating of any debt securities of each AmeriHome Party by any “nationally recognized statistical rating organization” (as defined in Section 3(a)(62) of the Exchange Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of each AmeriHome Party (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls the effect of which is such as to make it, in the judgment of the Representatives, impractical to market or to enforce contracts for the sale of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any suspension or material limitation of trading in securities generally on the New York Stock Exchange or the Nasdaq Stock Market, or any setting of minimum or maximum prices for trading on such exchange; (v) or any suspension of trading of any securities of the AmeriHome Parties on any exchange or in the over-the-counter market; (vi) any banking moratorium declared by any U.S. federal or New York authorities; (vii) any major disruption of settlements of securities, payment or clearance services in the United States or any other country where such securities are listed or (viii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of the Representatives, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency is such as to make it impractical or inadvisable to market the Offered Securities or to enforce contracts for the sale of the Offered Securities.

 

(d)       Opinion and 10b-5 Statement of Counsel for Company.  The Representatives shall have received an opinion (including certain negative assurance statements), dated the Closing Date, of Sidley Austin LLP, counsel for the Company, substantially in the form attached hereto as Exhibit B.

 

(e)       General Counsel Opinion. The Representatives shall have received an opinion, dated the Closing Date, of Jerry Hager, internal counsel of the Company, substantially in the form attached hereto as Exhibit C.

 

(f)        Opinion and 10b-5 Statement of Counsel for Underwriters.  The Representatives shall have received from Davis Polk & Wardwell LLP, counsel for the Underwriters, such opinion or opinions and negative assurance letter, dated such Closing Date, with respect to such matters as the Representatives may require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

 

(g)       Officers’ Certificate.  The Representatives shall have received a certificate, dated such Closing Date, of an executive officer of the Company and a principal financial or accounting officer of each AmeriHome Party in which such officers shall state that: the representations and warranties of such AmeriHome Party in this Agreement are true and correct; each AmeriHome Party has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date; no stop order suspending the effectiveness of any Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the their knowledge, are contemplated by the Commission; the Additional Registration Statement (if any) satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was timely filed pursuant to Rule 462(b), including payment of the applicable filing fee in accordance with Rule 111(a) or (b) of Regulation S-T of

 

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the Commission; and, subsequent to the date of the most recent financial statements in the General Disclosure Package, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the financial condition, results of operations, business, properties or prospects of each AmeriHome Party and its subsidiaries taken as a whole except as set forth in the General Disclosure Package or as described in such certificate.

 

(h)       Lock-Up Agreements.  On or prior to the date hereof, the Representatives shall have received lockup agreements in the form set forth on Exhibit C hereto from each executive officer, director, stockholder and other equity holder of the AmeriHome Parties specified in Schedule C to this Agreement.

 

(i)        FinCEN Certificate.  On or before the date of this Agreement, the Representatives shall have received a certificate satisfying the beneficial ownership due diligence requirements of the Financial Crimes Enforcement Network (“FinCEN”) from the Company in form and substance reasonably satisfactory to the Representatives, along with such additional supporting documentation as the Representatives have requested in connection with the verification of the foregoing certificate.

 

(j)        CFO Certificate.  The Company shall have furnished to the Representatives on the date hereof and as of each Closing Date certificates, dated, respectively, the date hereof and the Closing Date, of the Chief Financial Officer of the Company, certifying the accuracy of certain information in (a) the Registration Statement and (b) the Final Prospectus, respectively, in form and substance reasonably satisfactory to the Representatives.

 

(k)       Good Standing.  The Representatives shall have received on and as of the Closing Date satisfactory evidence of the good standing of each AmeriHome Party in their respective jurisdictions of organization, in writing or any standard form of telecommunication, from the appropriate governmental authorities of such jurisdictions.

 

(l)        Corporate Reorganization.  The corporate reorganization, as described in the Initial Registration Statement under the heading “Our Organizational Structure”, shall have been consummated prior to or on the Closing Date.

 

The AmeriHome Parties will furnish the Representatives with such conformed copies of such opinions, certificates, letters and documents as the Representatives reasonably request.  Credit Suisse may in its sole discretion waive on behalf of the Underwriters compliance with any conditions to the obligations of the Underwriters hereunder, whether in respect of an Optional Closing Date or otherwise.

 

8.     [Reserved].

 

9.     Indemnification and Contribution.  (a) Indemnification of Underwriters by the AmeriHome Parties.  The AmeriHome Parties, jointly and severally, will indemnify and hold harmless each Underwriter, its affiliates and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an “Indemnified Party”), against any and all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any part of the Registration Statement, the Statutory Prospectus, the General Disclosure Package, the Final Prospectus, any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication or (ii) arise out of or are based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending against any loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Indemnified Party is a party thereto), whether threatened or commenced, and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred; provided, however, that the AmeriHome Parties will not be liable in any such case to the

 

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extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (b) below.

 

(b)       Indemnification of the AmeriHome Parties.  Each Underwriter will severally and not jointly indemnify and hold harmless each AmeriHome Party, the directors of the Company and each officer of the Company who signs a Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an “Underwriter Indemnified Party”), against any losses, claims, damages or liabilities to which such Underwriter Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any part of the Registration Statement, the Statutory Prospectus, the Final Prospectus, any Written Testing-the-Waters Communication, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or the alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by such Underwriter Indemnified Party in connection with investigating or defending against any such loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Underwriter Indemnified Party is a party thereto), whether threatened or commenced, based upon any such untrue statement or omission, or any such alleged untrue statement or omission as such expenses are incurred, it being understood and agreed that the only such information furnished by any Underwriter consists of the following information in the Final Prospectus furnished on behalf of each Underwriter:  (i) the concession and reallowance figures appearing in the fifth paragraph under the caption “Underwriting (Conflict of Interest)” and (ii) the statements regarding stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids appearing in the thirteenth and fourteenth paragraphs under the caption “Underwriting (Conflict of Interest).”

 

(c)       Actions against Parties; Notification.  Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above.  In case any such action is brought against any indemnified party and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action 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 (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.

 

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(d)       Contribution.  If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the AmeriHome Parties on the one hand and the Underwriters on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the AmeriHome Parties on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations.  The relative benefits received by the AmeriHome Parties on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the AmeriHome Parties bear to the total underwriting discounts and commissions received by the Underwriters.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the AmeriHome Parties or the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.  The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d).  Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.  The AmeriHome Parties and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 9(d).

 

10.  Default of Underwriters.  If any Underwriter or Underwriters default in their obligations to purchase Offered Securities hereunder on either the First or any Optional Closing Date and the aggregate number of shares of Offered Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total number of shares of Offered Securities that the Underwriters are obligated to purchase on such Closing Date, Credit Suisse may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Underwriters agreed but failed to purchase on such Closing Date.  If any Underwriter or Underwriters so default and the aggregate number of shares of Offered Securities with respect to which such default or defaults occur exceeds 10% of the total number of shares of Offered Securities that the Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory to Credit Suisse, the Company for the purchase of such Offered Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the AmeriHome Parties, except as provided in Section 11 (provided that if such default occurs with respect to Optional Securities after the First Closing Date, this Agreement will not terminate as to the Firm Securities or any Optional Securities purchased prior to such termination).  As used in this Agreement, the term “Underwriter” includes any person substituted for an Underwriter under this Section.  Nothing herein will relieve a defaulting Underwriter from liability for its default.

 

11.  Survival of Certain Representations and Obligations.  The respective indemnities, agreements, representations, warranties and other statements of the AmeriHome Parties or their respective

 

20

 

officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the AmeriHome Parties or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities.  If the purchase of the Offered Securities by the Underwriters is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 10 hereof, the AmeriHome Parties, jointly and severally, agree to reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Offered Securities, and the respective obligations of the AmeriHome Parties and the Underwriters pursuant to Section 9 hereof shall remain in effect.  In addition, if any Offered Securities have been purchased hereunder, the representations and warranties in Section 2 and all obligations under Section 5 shall also remain in effect.

 

12.       Notices.  All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed to the Representatives, c/o Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Facsimile: (212) 325-4296, Attention: LBCM-Legal, c/o Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282, Attention: Registration Department, c/o J.P. Morgan Securities LLC, 383 Madison Avenue, New York, NY 10179, Attention: Syndication Department and c/o Wells Fargo Securities, LLC, 500 West 33rd Street, New York, New York 10001, Attention: Equity Syndicate or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at AmeriHome, Inc., 1 Baxter Way, Thousand Oaks, California 91362, Attention: Jerry Hager, provided, however, that any notice to an Underwriter pursuant to Section 9 will be mailed, delivered or telegraphed and confirmed to such Underwriter.

 

13.       Successors.  This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective personal representatives and successors and the officers and directors and controlling persons referred to in Section 9, and no other person will have any right or obligation hereunder.

 

14.       Representation of Underwriters.  The Representatives will act for the several Underwriters in connection with the transactions contemplated by this Agreement, and any action under this Agreement taken by the Representatives will be binding upon all the Underwriters.

 

15.       Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.  Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

16.       Absence of Fiduciary Relationship.  Each AmeriHome Party acknowledges and agrees that:

 

(a)                     No Other Relationship.  The Representatives have been retained solely to act as underwriters in connection with the sale of the Offered Securities and that no fiduciary, advisory or agency relationship between the AmeriHome Parties, on the one hand, and the Representatives, on the other, has been created in respect of any of the transactions contemplated by this Agreement or the Final Prospectus, irrespective of whether the Representatives have advised or are advising the AmeriHome Parties on other matters.  None of the activities of the Underwriters in connection with the transactions contemplated herein constitutes a recommendation, investment advice or solicitation of any action by the Underwriters with respect to any entity or natural person;

 

(b)                     Arms’ Length Negotiations.  The price of the Offered Securities set forth in this Agreement was established by the Company following discussions and arms-length negotiations with the Representatives and the Company are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Agreement;

 

21

 

(c)                      Absence of Obligation to Disclose.  Each AmeriHome Party has been advised that the Representatives and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the AmeriHome Parties and that the Representatives have no obligation to disclose such interests and transactions to the AmeriHome Parties by virtue of any fiduciary, advisory or agency relationship; and

 

(d)                     Waiver.  Each AmeriHome Party waives, to the fullest extent permitted by law, any claims they may have against the Representatives for breach of fiduciary duty or alleged breach of fiduciary duty and agree that the Representatives shall have no liability (whether direct or indirect) to the AmeriHome Parties in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the AmeriHome Parties, including stockholders, employees or creditors of the AmeriHome Parties.

 

17.       Applicable Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

Each AmeriHome Party hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.  Each AmeriHome Party irrevocably and unconditionally waives any objection to the laying of venue of any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in Federal and state courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum.

 

18.       Waiver of Jury Trial.  Each AmeriHome Party hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

19.       Compliance with USA Patriot Act.  In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the AmeriHome Parties, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.

 

20.       Recognition of U.S. Special Resolution Regimes.  (a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

 

(b)                     In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

 

As used in this Section 20:

 

“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k)

 

“Covered Entity” means any of the following:

 

22

 

(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

 

(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

 

(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

 

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

 

“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

 

[Remainder of the page intentionally left blank]

 

23

 

If the foregoing is in accordance with the Representatives’ understanding of our agreement, kindly sign and return to the AmeriHome Parties one of the counterparts hereof, whereupon it will become a binding agreement among the AmeriHome Parties and the several Underwriters in accordance with its terms.

 

	Very truly yours,
	AmeriHome, Inc.
	By:
		Name:
		Title:
	Aris Mortgage Holding Company, LLC
	By:
		Name:
		Title:

 

24

 

The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written.

 

CREDIT SUISSE SECURITIES (USA) LLC
By:
	Name:
	Title:
GOLDMAN SACHS & CO. LLC
By:
	Name:
	Title:
J.P. MORGAN SECURITIES LLC
By:
	Name:
	Title:
WELLS FARGO SECURITIES, LLC
By:
	Name:
	Title:
Acting on behalf of themselves and as the Representatives of the several Underwriters.

 

25

 

SCHEDULE A

 

Underwriter			Number of shares  of Firm Securities
Credit Suisse Securities (USA) LLC			$
Goldman Sachs & Co. LLC
J.P. Morgan Securities LLC
Wells Fargo Securities, LLC
Barclays Capital Inc.
BofA Securities, Inc.
RBC Capital Markets, LLC
UBS Securities LLC
Apollo Global Securities, LLC
Houlihan Lokey Capital, Inc.
Siebert Williams Shank & Co., LLC
Total			$

 

26

 

SCHEDULE B

 

1.                                      General Use Free Writing Prospectuses (included in the General Disclosure Package)

 

“General Use Issuer Free Writing Prospectus” includes each of the following documents:

 

1.              [None]

 

2.                                      Other Information Included in the General Disclosure Package

 

The following information is also included in the General Disclosure Package:

 

1.              The initial price to the public of the Offered Securities.

 

27

 

SCHEDULE C

 

Lock-Up Agreements

 

1.              A-A Mortgage Opportunities, L.P.

2.              James S. Furash

3.              Josh Adler

4.              John Hedlund

5.              Mark Miller

6.              Garrett Galati

7.              David Anderson

8.              Nancy De Liban

9.              Maxwell David

10.       Robert Ruberton

11.       Neil Mehta

12.       Frederick Khedouri

13.       Amar R. Patel

14.       Joseph D. Glatt

 

28

 

Exhibit A

 

Form of Press Release

 

AmeriHome Inc.

 

[Date]

 

AmeriHome Inc. (the “Company”) announced today that [Credit Suisse] [Goldman Sachs & Co. LLC] [J.P. Morgan] [Wells Fargo Securities] representing [  ] of the four lead book-running managers in the Company’s recent public sale of [·] shares of Class A common stock, is [waiving] [releasing] a lock-up restriction with respect to [·] shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of the Company.  The [waiver] [release] will take effect on [·], 202[·], and the shares may be sold on or after such date.

 

This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

 

29

 

Exhibit B

 

[Opinion of Sidley Austin LLP]

 

30

 

Exhibit C

 

[General Counsel Opinion]

 

31

 

Exhibit D

 

Form of Lock-Up Agreement

 

October [·], 2020

 

AmeriHome, Inc.

1 Baxter Way

Thousand Oaks, California 91362

 

Credit Suisse Securities (USA) LLC

Goldman Sachs & Co. LLC

J.P. Morgan Securities LLC

Wells Fargo Securities, LLC

 

c/o       Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, New York 10010-3629

 

c/o       Goldman Sachs & Co. LLC

200 West Street

New York, New York 10282

 

c/o       J.P. Morgan Securities LLC

383 Madison Avenue

New York, New York 10179

 

c/o       Wells Fargo Securities, LLC

500 West 33rd Street

New York, New York 10001

 

Ladies and Gentlemen:

 

The undersigned understands that Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities, LLC (collectively, the “Representatives”) propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with AmeriHome, Inc., a Delaware corporation (the “Company”), providing for the public offering (the “Public Offering”) by the several Underwriters listed in Schedule A therein (the “Underwriters”) of the Class A common stock, $0.01 per share par value (the “Common Stock”) of the Company.  In consideration of the Underwriters’ agreement to purchase and make the Public Offering of the Common Stock, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby irrevocably agrees that without the prior written consent of two of the four Representatives, on behalf of the Underwriters, the undersigned will not, directly or indirectly (or cause any direct or indirect affiliate to), during the period specified in the following paragraph (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, any Common Stock or securities convertible into or exchangeable or exercisable for any Common Stock (including, without limitation, Common Stock that may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), securities which may be issued upon exercise of a stock option or warrant and any Common Stock, options, warrants or securities now owned or hereafter acquired by the undersigned (collectively, the “Lock-Up Securities”)), (2) enter into any swap, hedge, option, derivative or other arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined) designed or intended to, or which could reasonably

 

32

 

be expected to lead to or result in, a sale, loan, pledge or other disposition (whether by the undersigned or someone other than the undersigned) or transfer of any economic consequences of ownership, in whole or in part, directly or indirectly, of any Lock-Up Securities, whether any such aforementioned transaction is to be settled by delivery of the Lock-Up Securities, in cash or otherwise, [or] (3) [exercise any right with respect to the registration of any Lock-Up Securities, or file, cause to be filed or cause to be confidentially submitted, any registration statement in connection therewith, under the Securities Act of 1933, as amended or (4)](1) publicly disclose the intention to do any of the foregoing.  Furthermore, the undersigned confirms that it has furnished the Representatives with the details of any transaction the undersigned, or any of its affiliates, is a party to as of the date hereof, which transaction would have been restricted by this Lock-Up Agreement if it had been entered into by the undersigned during the Lock-Up Period.

 

The foregoing shall not apply to:

 

(a)         transactions relating to Lock-Up Securities acquired in the open market after the completion of the Public Offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than on Form 5, if such Form 5 is filed after the expiration of the Lock-Up Period) shall be required or shall be voluntarily made in connection with subsequent sales of such Lock-Up Securities acquired in such open market transactions;

 

(b)         transfers of Lock-Up Securities as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, and provided further that any such transaction shall not involve a disposition for value and that no filing under Section 16(a) of the Exchange Act (other than on Form 5, if such Form 5 is filed after the expiration of the Lock-Up Period) reporting a reduction in beneficial ownership of shares of Common Stock shall be required or shall be voluntarily made during the Lock-Up Period;

 

(c)          transfers of Lock-Up Securities transferred to any beneficiary of the undersigned pursuant to a trust, will, other testamentary document or intestate succession to the legal representative, heirs, beneficiary or immediate family member of the undersigned, provided that the done or donees, beneficiary or beneficiaries, heir or heirs or legal representatives thereof agree to be bound in writing by the restrictions set forth herein and provided further that any such transaction shall not involve a disposition for value;

 

(d)         transfers of the Lock Up Securities pursuant to an order of a court or regulatory agency or to comply with any regulations related to the undersigned’s ownership of the Lock Up Securities, provided that any such transaction shall not involve a disposition for value and if required, any public report or filing under Section 16 of the Exchange Act shall indicate in the footnotes thereto the nature of the transaction;

 

(e)          transfers of Lock-Up Securities to any trust, partnership, limited liability company or other entity for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin), provided that the trustee of the trust or the partnership, limited liability company or other entity agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transaction shall not involve a disposition for value and that no filing under Section 16(a) of the Exchange Act (other than a Form 5, if such Form 5 is filed after the expiration of the Lock-Up Period), reporting a reduction in beneficial ownership of shares of Common Stock, shall be required or shall be voluntarily made during the Lock-Up Period;

 

(f)           distributions of Lock-Up Securities to limited partners, members or stockholders of the undersigned, provided that such transferee or transferees agrees to be bound in writing by the restrictions set forth herein and provided further that such transaction does not involve a disposition for value;

 

(g)          (A) the exercise of stock options solely with cash granted pursuant to equity incentive plans described in the Registration Statement, and the receipt by the undersigned from the Company of Lock-Up Securities upon such exercise; (B) transfers of Lock-Up Securities to the Company upon

 

(1)  To be included in all director and executive officer lock up agreements.

 

33

 

the “net” or “cashless” exercise of stock options or other equity awards granted pursuant to equity incentive plans described in the Prospectus used for the Public Offering; or (C) forfeitures of shares of Lock-Up Securities to the Company to satisfy tax withholding requirements of the undersigned or the Company upon the vesting, during the Lock-Up Period, of equity based awards granted under equity incentive plans or pursuant to other stock purchase arrangements, in each case described in the Prospectus used in the Public Offering; provided that, in each case, the Lock-Up Securities shall continue to be subject to the restrictions on transfer set forth in this Lock Up Agreement, and provided further that, if required, any public report or filing under Section 16(a) of the Exchange Act shall indicate in the footnotes thereto the nature of the transaction;

 

(h)         transfers to the Company in connection with the repurchase by the Company from the undersigned of Lock-Up Securities pursuant to a repurchase right arising upon the termination of the undersigned’s employment with the Company; provided that such repurchase right is pursuant to contractual agreements with the Company; and provided further that, if required, any public report or filing under Section 16(a) of the Exchange Act shall indicate in the footnotes thereto the nature of the transaction;

 

(i)             transfers of Lock-Up Securities pursuant to the Transactions described in the Prospectus used in the Public Offering;

 

(j)            exchanges of LLC Units and Class B common stock into shares of Common Stock, provided that the shares of Common Stock received upon such exchange shall remain subject to the provisions of this Lock-Up Agreement; and provided further that, if required, any public report or filing under Section 16(a) of the Exchange Act shall indicate in the footnotes thereto the nature of the transaction;

 

(k)         exchanges of LLC Units under the Exchange Agreement made during the Lock-Up Period, provided that no such sales of any Common Stock shall be made in violation of the provisions of this Lock-Up Agreement;

 

(l)             the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act; provided that (i) no transfers occur under such plan during the Lock-Up Period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of the undersigned’s Lock-Up Securities may be made under such plan during the Lock-Up Period; or

 

(m)     transfers pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to all holders of the Company’s capital stock after the consummation of the public offering, involving a change of control of the Company, provided that in the event that such tender offer, merger, consolidation or other such transaction is not completed, the undersigned’s Lock-Up Securities shall remain subject to the provisions of this Lock-Up Agreement.

 

[The foregoing restrictions shall not prohibit the undersigned from exercising any right with respect to, or the taking of any other action in preparation for, a registration by the Company of any Lock-Up Securities; provided that no transfer of the undersigned’s Lock-Up Securities proposed to be registered pursuant to the exercise of such rights under this sentence shall occur, and such exercise shall not result in any public announcement regarding the exercise of such right, in each case during the Lock-Up Period referred to above; and provided further that no registration statement shall be publicly filed until the date that is the second business day prior to the end of the Lock-Up Period. The undersigned agrees that, at least three business days before such exercise, the undersigned will notify the Representatives of any such exercise.](2)

 

For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin and “change of control” shall mean any bona fide third-party tender offer, merger, consolidation or other similar transaction approved by the board of directors of the Company the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, other than the Company, shall become, after the closing of the transaction, the beneficial

 

(2)  To be included in A-A Mortgage Opportunities, L.P. lock up agreement.

 

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owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of more than 50% of total voting power of the voting stock of the Company.

 

The Lock-Up Period will commence on the date of this Lock-Up Agreement and continue and include the date 180 days after the public offering date set forth on the final prospectus used to sell the Common Stock (the “Public Offering Date”) pursuant to the Underwriting Agreement.

 

If the undersigned is not a natural person, the undersigned represents and warrants that no single natural person, entity or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), other than a natural person, entity or “group” (as described above) that has executed a Lock-Up Agreement in substantially the same form as this Lock-Up Agreement, beneficially owns, directly or indirectly, 50% or more of the common equity interests, or 50% or more of the voting power, in the undersigned.

 

If the undersigned is an officer or director of the Company, (i) the undersigned further agrees that the foregoing restrictions in this Lock-Up Agreement shall be equally applicable to any issuer-directed Common Stock (as referred to in FINRA Rule 5131(d)(2)(A)) that the undersigned may purchase in the Public Offering pursuant to an allocation of Common Stock that is directed in writing by the Company, (ii) the Representatives agree that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of shares of Common Stock, the Representatives will notify the Company of the impending release or waiver, and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by issuing a press release through a major news service (as referred to in FINRA Rule 5131(d)(2)(B)) at least two business days before the effective date of the release of the waiver.  Any release or waiver granted by the Representatives hereunder to any such officer or director shall only be effective two business days after the publication date of such press release.  The provisions of this paragraph will not apply if both (a) the release or waiver is effected solely to permit a transfer not for consideration, and (b) the transferee has agreed in writing to be bound by the same terms described in this Lock-Up Agreement as are applicable to the transferor, to the extent and for the duration that such terms remain in effect at the time of the transfer.

 

In the event the undersigned seeks the prior written consent of any of the Representatives pursuant to this Lock-Up Agreement, the undersigned agrees to (i) request any written consent from each of the Representatives substantially currently and (y) provide notice of any consent to each of the Representatives reasonably promptly following receipt of such consent and, in any case, prior to the occurrence of the transaction for which such consent was sought.

 

In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of Lock-Up Securities if such transfer would constitute a violation or breach of this Lock-Up Agreement.

 

The undersigned understands that the Company and the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this Lock-Up Agreement.

 

It is understood that if (i) the Company notifies the Representatives that it does not intend to proceed with the Public Offering, (ii) the Underwriting Agreement does not become effective by February 28, 2021 or (iii) the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock, this Lock-Up Agreement shall become null and void and the undersigned will be released from its obligations under this Lock-Up Agreement.

 

Whether the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to the Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters.

 

The undersigned acknowledges and agrees that none of the Underwriters has made any recommendation or provided any investment or other advice to the undersigned with respect to this Lock-Up Agreement or the subject matter hereof, and the undersigned has consulted its own legal, accounting, financial, regulatory, tax and other advisors with respect to this Lock-Up Agreement and the subject matter hereof to the extent the undersigned has deemed appropriate.

 

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The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement and that, upon request, the undersigned will execute any additional documents reasonably necessary in connection with the enforcement thereof. This Lock-Up Agreement shall be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned.

 

This Lock-Up Agreement and any claim, controversy or dispute arising under or related to this Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

[Signature Page Follows]

 

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Very truly yours,

 

	[Name of stockholder]
	By:
		Name:
		Title:

 

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Exhibit 10.6

 

DIRECTOR AND OFFICER

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is entered into as of the [                                                                                        ] day of October, 2020, by and between AmeriHome, Inc., a Delaware corporation (the “Company”), and [                                                                                           ] (“Indemnitee”).

 

RECITALS

 

A.                                    The Company is aware that competent and experienced persons are increasingly reluctant to serve or continue serving as directors or officers of companies unless they are protected by comprehensive liability insurance and adequate indemnification due to the increased exposure to litigation costs and risks resulting from service to such companies that often bear no relationship to the compensation of such directors or officers.

 

B.                                    The statutes and judicial decisions regarding the duties of directors and officers are often insufficient to provide directors and officers with adequate, reliable knowledge of the legal risks to which they are exposed or the manner in which they are expected to execute their fiduciary duties and responsibilities.

 

C.                                    The Company and the Indemnitee recognize that plaintiffs often seek damages in such large amounts, and the costs of litigation may be so great (whether or not the claims are meritorious), that the defense and/or settlement of such litigation can create an extraordinary burden on the personal resources of directors and officers.

 

D.                                    The board of directors of the Company has concluded that, to attract and retain competent and experienced persons to serve as directors and officers of the Company, it is not only reasonable and prudent but necessary to promote the best interests of the Company and its stockholders for the Company to contractually indemnify its directors and certain of its officers in the manner set forth herein, and to assume for itself liability for expenses and damages in connection with claims against such directors and officers in connection with their service to the Company as provided herein.

 

E.                                   Section 145 of the General Corporation Law of Delaware (the “DGCL”) permits the Company to indemnify and advance defense costs to its officers and directors and to indemnify and advance expenses to persons who serve at the request of the Company as directors, officers, employees, or agents of other corporations or enterprises.

 

F.                                      The Company desires and has requested the Indemnitee to serve or continue to serve as a director and/or officer of the Company, and the Indemnitee is willing to serve, or to continue to serve, as  a director and/or officer of the Company if the Indemnitee is furnished the indemnity provided for herein by the Company.

 

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth below, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.                                      Definitions.  For purposes of this Agreement, the following terms shall have the corresponding meanings set forth below.

 

“Change in Control” means each of the following:

 

(i) The date any Person becomes the “Beneficial Owner,” as such term is defined in Rule 13d-3 promulgated under the Exchange Act, of 30% or more of the combined voting power of the Company’s outstanding shares, other than beneficial ownership by (A) the Company or any subsidiary of the Company, (B) any employee benefit plan of the Company or any subsidiary of the Company or (C) any entity of the Company for or pursuant to the terms of any such plan.  Notwithstanding the foregoing, a Change in Control shall not occur as the result of an acquisition of outstanding shares of the Company by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by a Person to 30% or more of the shares of the Company then outstanding; provided, however, that if a Person becomes the Beneficial Owner of 30% or more of the shares of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional shares of the Company, then a Change in Control shall be deemed to have occurred; or

 

(ii)  The date the Company consummates a merger or consolidation with another entity, or engages in a reorganization with or a statutory share exchange or an exchange offer for the Company’s outstanding voting stock of any class with another entity or acquires another entity by means of a statutory share exchange or an exchange offer, or engages in a similar transaction; provided that no Change in Control shall have occurred by reason of this paragraph unless either:

 

(A)  the stockholders of the Company immediately prior to the consummation of the transaction would not, immediately after such consummation, as a result of their beneficial ownership of voting stock of the Company immediately prior to such consummation (I) be the Beneficial Owners, directly or indirectly, of securities of the resulting or acquiring entity entitled to elect a majority of the members of the board of directors or other governing body of the resulting or acquiring entity; and (II) be the Beneficial Owners of the resulting or acquiring entity in substantially the same proportion as their beneficial ownership of the voting stock of the Company immediately prior to such transaction; or

 

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(B) those persons who were directors of the Company immediately prior to the consummation of the proposed transaction would not, immediately after such consummation, constitute a majority of the directors of the resulting entity.

 

(iii) The date of the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any Person (as defined in paragraph (i) above) other than an affiliate of the Company (meaning any corporation that is part of a controlled group within the meaning of the Internal Revenue Code of 1986, as amended, Section 414(b) or (c)); or

 

(iv) The date the number of duly elected and qualified directors of the Company who were not either elected by the Company’s Board or nominated by the Board or its Nominating and Corporate Governance Committee for election by the stockholders shall constitute a majority of the total number of directors of the Company as fixed by its By-Laws.

 

The Reviewing Party shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto.

 

“Claim” means a claim or action asserted by a Person in a Proceeding or any other written demand for relief in connection with or arising from an Indemnification Event.

 

“Covered Entity” means (i) the Company, (ii) any subsidiary of the Company or (iii) any other Person for which Indemnitee is or was or may be deemed to be serving, at the request of the Company or any subsidiary of the Company, as a director, officer, employee, controlling person, agent or fiduciary.

 

“Disinterested Director” means, with respect to any determination contemplated by this Agreement, any Person who, as of the time of such determination, is a member of the Company’s board of directors but is not a party to any Proceeding then pending with respect to any Indemnification Event.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Expenses” means any and all direct and indirect fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating, printing and binding costs, telephone charges, postage and delivery service fees and all other disbursements or expenses of any type or nature whatsoever reasonably incurred by Indemnitee (including, subject to the limitations set forth in Section 3(c) below, reasonable attorneys’ fees) in connection with or arising from an Indemnification Event,

 

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including, without limitation: (i) the investigation or defense of a Claim; (ii) being, or preparing to be, a witness or otherwise participating, or preparing to participate, in any Proceeding; (iii) furnishing, or preparing to furnish, documents in response to a subpoena or otherwise in connection with any Proceeding; (iv) any appeal of any judgment, outcome or determination in any Proceeding (including, without limitation, any premium, security for and other costs relating to any cost bond, supersedeas bond or any other appeal bond or its equivalent); (v) establishing or enforcing any right to indemnification under this Agreement (including, without limitation, pursuant to Section 2(c) below), the DGCL or otherwise, regardless of whether Indemnitee is ultimately successful in such action, unless as a part of such action, a court of competent jurisdiction over such action determines that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous; (vi) Indemnitee’s defense of any Proceeding instituted by or in the name of the Company under this Agreement to enforce, interpret or defend any of the terms of this Agreement or the Indemnitee’s rights under this Agreement or under any directors’ or officers’ liability insurance policies maintained by the Company (including, without limitation, costs and expenses incurred with respect to Indemnitee’s counterclaims and cross-claims made in such action); and (vii) any Federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including all interest, assessments and other charges paid or payable with respect to such payments.  For purposes of clarification, Expenses shall not include Losses.

 

An “Indemnification Event” shall be deemed to have occurred if Indemnitee was or is or becomes, or is threatened to be made, a party to or witness or other participant in, or was or is or becomes obligated to furnish or furnishes documents in response to a subpoena or otherwise in connection with, any Proceeding by reason of the fact that Indemnitee is or was or may be deemed a director, officer, employee, controlling person, agent or fiduciary of any Covered Entity, or by reason of any action or inaction on the part of Indemnitee in any such capacity.

 

“Independent Legal Counsel” means an attorney or firm of attorneys that is experienced in matters of corporate law and neither presently is, nor in the thirty-six (36) months prior to such designation has been, retained to represent:  (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.

 

“Losses” means any and all losses, claims, damages, liabilities, judgments, fines, penalties, settlement payments, awards and amounts of any type whatsoever incurred by Indemnitee in connection with or arising from an Indemnification Event.  For purposes of clarification, Losses shall not include Expenses.

 

“Organizational Documents” means any and all organizational documents, charters or similar agreements or governing documents, including, without limitation, (i) with respect to a corporation, its certificate of incorporation and bylaws, (ii) with respect to a limited liability company, its operating agreement, and (iii) with respect to a limited partnership, its partnership agreement.

 

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“Proceeding” means any threatened, pending or completed claim, action, suit, proceeding, arbitration or alternative dispute resolution mechanism, investigation, inquiry, administrative hearing or appeal, whether brought in the right of a Covered Entity or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative, internal or investigative nature, including any appeal therefrom and including without limitation any such Proceeding pending as of the date of this Agreement, in which Indemnitee was, is or will be involved as a party, a potential party, a non-party witness or otherwise by reason of (i) the fact that Indemnitee is or was a director or officer of the Company, (ii) any action taken by Indemnitee or any action or inaction on Indemnitee’s part while acting as a director or officer of the Company, or (iii) the fact that he or she is or was serving at the request of the Company as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of the Company or any other enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification or advancement of expenses can be provided under this Agreement.

 

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or other entity or government or agency or political subdivision thereof.

 

“Reviewing Party” means, with respect to any determination contemplated by this Agreement, any one of the following:  (i) a majority of the Disinterested Directors, even if such Persons would not constitute a quorum of the Company’s board of directors; (ii) a committee consisting solely of Disinterested Directors, even if such Persons would not constitute a quorum of the Company’s board of directors, so long as such committee was designated by a majority of the Disinterested Directors; (iii) Independent Legal Counsel designated by the Disinterested Directors (or, if there are no Disinterested Directors, the Company’s board of directors) (in which case, any determination shall be evidenced by the rendering of a written opinion); or (iv) in the absence of any Disinterested Directors, the Company’s stockholders; provided, that, in the event that  a  Change  in  Control  has  occurred,  the Reviewing Party shall be Independent Legal Counsel (selected by Indemnitee) in a written opinion to the board of directors of the Company, a copy of which shall be delivered to the Indemnitee.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

2.                                      Indemnification.

 

(a)                                 Indemnification of Losses and Expenses.  If an Indemnification Event has occurred, then, subject to Section 9 below, the Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by the DGCL, as such law may be amended from time to time (but in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than were permitted prior thereto), against any and all Losses and Expenses; provided that the Company’s commitment set forth in this Section 2(a) to indemnify the Indemnitee shall be subject to the limitations and procedural

 

5

 

requirements set forth in this Agreement. The parties hereto intend that this Agreement, to the fullest extent permitted by applicable law, shall provide for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the certificate of incorporation, the bylaws, vote of its stockholders or disinterested directors or applicable law.

 

(b)                                 Partial Indemnification.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Losses or Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

(c)                                  Indemnification for Expenses of a Witness. To the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his or her corporate status, a witness, is or was made (or asked) to respond to discovery requests in any Proceeding or otherwise asked to participate in any respect of a Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified to the extent permitted by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

 

(d)                                 Advancement of Expenses.  The Company shall advance Expenses incurred by or on behalf of Indemnitee to the fullest extent permitted by the DGCL, as such law may be amended from time to time (but in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than were permitted prior thereto), prior to its final disposition and as soon as practicable, but in any event not later than 30 days after written request therefor by Indemnitee, which request shall be accompanied by vouchers, invoices or similar evidence documenting in reasonable detail the Expenses incurred or to be incurred by Indemnitee; provided, however, that Indemnitee need not submit to the Company any information that counsel for Indemnitee reasonably deems is privileged and exempt from compulsory disclosure in any Proceeding. Execution and delivery of this Agreement by the Indemnitee constitutes an undertaking to repay such amounts advanced only if, and to the extent that, it shall finally be determined that Indemnitee is not entitled to be indemnified by the Company as authorized by this Agreement in accordance with the provisions of Section 4.  No other form of undertaking shall be required other than the execution of this Agreement. Advancement shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed.

 

(e)                                  Contribution.  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for Losses or Expenses, in connection with any Proceeding relating to an Indemnification Event under this Agreement, in such proportion as is deemed fair and reasonable by the Reviewing Party in light of all of the circumstances of such Proceeding in order to reflect (1) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving rise to such Proceeding; and (2) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

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3.                                      Indemnification Procedures.

 

(a)                                 Notice of Indemnification Event.  Indemnitee shall give the Company notice as soon as reasonably practicable of any Indemnification Event of which Indemnitee becomes aware and of any request for indemnification hereunder, provided that any failure to so notify the Company shall not relieve the Company of any of its obligations under this Agreement, except if, and then only to the extent that, such failure materially prejudices the Company under this Agreement.

 

(b)                                 Notice to Insurers.  The Company shall give prompt written notice of any Indemnification Event which may be covered by the Company’s liability insurance to the insurers in accordance with the procedures set forth in each of the applicable policies of insurance.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Indemnification Event in accordance with the terms of such policies; provided that nothing in this Section 3(b) shall affect the Company’s obligations under this Agreement or the Company’s obligations to comply with the provisions of this Agreement in a timely manner as provided. For the avoidance of doubt, nothing in this Section 3(b) or elsewhere in this Agreement shall be deemed to prohibit Indemnitee from giving notice of claims directly to the insurers.

 

(c)                                  Selection of Counsel.  If the Company shall be obligated hereunder to pay or advance Expenses or indemnify Indemnitee with respect to any Losses, the Company shall be entitled to assume the defense of any related Claims, with counsel selected by the Company.  After the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the defense of such Claims; provided that:  (i) Indemnitee shall have the right to employ counsel in connection with any such Claim at Indemnitee’s expense; and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) counsel for Indemnitee shall have provided the Company with written advice that there is a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company.

 

4.                                      Determination of Right to Indemnification.

 

(a)                                 Successful Proceeding.  To the extent Indemnitee has been successful, on the merits or otherwise, in defense of any Proceeding referred to in Section 2(a), the Company shall indemnify Indemnitee against Losses and Expenses incurred by him in connection therewith.  If Indemnitee is not wholly successful in such Proceeding, but is successful, on the merits or otherwise, as to one or more but less than all Claims in such Proceeding, the Company shall indemnify Indemnitee against all Losses and Expenses actually or reasonably incurred by Indemnitee in connection with each successfully resolved Claim to the fullest extent permitted by applicable law.  For purposes of this section, the termination of any Claim in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such Claim.

 

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(b)                                 Other Proceedings.  In the event that Section 4(a) is inapplicable, the Company shall nevertheless indemnify Indemnitee as provided in Section 2(a), 2(b) or 2(c), as applicable, or provide a contribution payment to the Indemnitee as provided in Section 2(e), to the extent determined by the Reviewing Party.

 

(c)                                  Reviewing Party Determination.  A Reviewing Party chosen by the Company’s board of directors shall determine whether Indemnitee is entitled to indemnification, subject to the following:

 

(i)                                     A Reviewing Party so chosen shall act in the utmost good faith to assure Indemnitee a complete opportunity to present to such Reviewing Party Indemnitee’s case that Indemnitee has met the applicable standard of conduct.

 

(ii)                                  Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of a Covered Entity, including, without limitation, its financial statements, or on information supplied to Indemnitee by the officers or employees of a Covered Entity in the course of their duties, or on the advice of legal counsel for a Covered Entity or on information or records given, or reports made, to a Covered Entity by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by a Covered Entity.  In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of a Covered Entity shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.  Whether or not the foregoing provisions of this Section 4(c)(ii) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company.  Any Person seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.

 

(iii)                               If a Reviewing Party chosen pursuant to this Section 4(c) shall not have made a determination whether Indemnitee is entitled to indemnification within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (A) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (B) a prohibition of such indemnification under applicable law; provided, however, that such 30 day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the Reviewing Party in good faith requires such additional time for obtaining or evaluating documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 4(c)(iii) shall not apply if (I) the determination of entitlement to indemnification is to be made by the stockholders of the Company, (II) a special meeting of stockholders is called by the board of directors of the Company for such purpose within thirty (30) days after the stockholders are chosen as the Reviewing Party, (III) such meeting is held for such purpose within sixty (60) days after having been so called, and (IV) such determination is made thereat.

 

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(d)                                 Appeal to Court.  Notwithstanding a determination by a Reviewing Party chosen pursuant to Section 4(c) that Indemnitee is not entitled to indemnification with respect to a specific Claim or Proceeding (an “Adverse Determination”), Indemnitee shall have the right to apply to the court in which that Claim or Proceeding is or was pending or any other court of competent jurisdiction for the purpose of enforcing Indemnitee’s right to indemnification pursuant to this Agreement, provided that Indemnitee shall commence any such Proceeding seeking to enforce Indemnitee’s right to indemnification within one (1) year following the date upon which Indemnitee is notified in writing by the Company of the Adverse Determination.  In the event of any dispute between the parties concerning their respective rights and obligations hereunder, the Company shall have the burden of proving that the Company is not obligated to make the payment or advance claimed by Indemnitee.

 

(e)                                  Presumption of Success.  The Company acknowledges that a settlement or other disposition short of final judgment shall be deemed a successful resolution for purposes of Section 4(a) if it permits a party to avoid expense, delay, distraction, disruption or uncertainty.  In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration), it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.

 

(f)                                   Settlement and Termination of Claims.  The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent.  The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent.  Neither the Company nor the Indemnitee will unreasonably withhold, delay or refuse their consent to any proposed settlement.  The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action; the Company’s liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

 

5.                                      Additional Indemnification Rights; Non-exclusivity.

 

(a)                                 Scope.  The Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, even if such indemnification is not specifically authorized by the other provisions of this Agreement or any other agreement, the Organizational Documents of any Covered Entity or by applicable law.  In the event of any change after the date of this Agreement in any applicable law, statute or rule that expands the right of a Delaware corporation to

 

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indemnify a member of its board of directors or an officer, employee, controlling person, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change.  In the event of any change in any applicable law, statute or rule that narrows the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee, controlling person, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties rights and obligations hereunder.

 

(b)                                 Non-exclusivity.  The rights to indemnification, contribution and advancement of Expenses provided in this Agreement shall not be deemed exclusive of, but shall be in addition to, any other rights to which Indemnitee may at any time be entitled under the Organizational Documents of any Covered Entity, any other agreement, any vote of stockholders or Disinterested Directors, the laws of the State of Delaware or otherwise and shall be interpreted independently of, and without reference to, any other such rights to which Indemnitee may at any time be entitled.  Furthermore, no right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion of any right or remedy hereunder or otherwise shall not prevent the concurrent assertion of any other right or remedy.  The rights to indemnification, contribution and advancement of Expenses provided in this Agreement shall continue as to Indemnitee for any action Indemnitee took or did not take while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity.

 

(c)                                  [Primary Responsibility. The Company acknowledges that Indemnitee has certain rights to indemnification and advancement of expenses provided by [      ] and certain of its affiliates (collectively, the “Secondary Indemnitors”). The Company agrees that, as between the Company and the Secondary Indemnitors, the Company is primarily responsible for amounts required to be indemnified or advanced under the Company’s Organizational Documents or this Agreement and any obligation of the Secondary Indemnitors to provide indemnification or advancement for the same amounts is secondary to those Company obligations. The Company waives any right of contribution or subrogation against the Secondary Indemnitors with respect to the liabilities for which the Company is primarily responsible under this Section 5(c).  In the event of any payment by the Secondary Indemnitors of amounts otherwise required to be indemnified or advanced by the Company under the Company’s Organizational Documents or this Agreement, the Secondary Indemnitors shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee for indemnification or advancement of expenses under the Company’s Organizational Documents or this Agreement or, to the extent such subrogation is unavailable and contribution is found to be the applicable remedy, shall have a right of contribution with respect to the amounts paid. The Secondary Indemnitors are express third-party beneficiaries of the terms of this Section 5(c).](1)

 

6.                                      No Duplication of Payments.  The Company shall not be liable under this Agreement to make any payment of any amount otherwise indemnifiable hereunder, or for which advancement is provided hereunder, if and to the extent Indemnitee has otherwise actually

 

(1)  [NTD: Only to be included for directors who are designees of a fund.]

 

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received such payment, whether pursuant to any insurance policy, the Organizational Documents of any Covered Entity or otherwise.

 

7.                                      Mutual Acknowledgment.  Both the Company and Indemnitee acknowledge that, in certain instances, Federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise.  For example, the Company and Indemnitee acknowledge that the SEC has taken the position that indemnification is not permissible for liabilities arising under certain Federal securities laws, and Federal legislation prohibits indemnification for certain violations of the Employee Retirement Income Security Act of 1979, as amended.  Indemnitee understands and acknowledges that the Company has undertaken, or may be required in the future to undertake, with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee, and any right to indemnification hereunder shall be subject to, and conditioned upon, any such required court determination.

 

8.                                      Liability Insurance.  The Company shall maintain liability insurance applicable to directors and officers of the Company and shall cause Indemnitee to be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s officers and directors (other than in the case of an independent director liability insurance policy if Indemnitee is not an independent or outside director).  The Company shall advise Indemnitee as to the general terms of, and the amounts of coverage provide by, any liability insurance policy described in this Section 8 and shall promptly notify Indemnitee if, at any time, any such insurance policy is terminated or expired without renewal or if the amount of coverage under any such insurance policy will be decreased.

 

9.                                      Exceptions.  Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee:

 

(a)                                 against any Losses or Expenses, or advance Expenses to Indemnitee, with respect to Claims initiated or brought voluntarily by Indemnitee, and not by way of defense (including, without limitation, affirmative defenses and counter-claims), except (i) Claims to establish or enforce a right to indemnification, contribution or advancement with respect to an Indemnification Event, whether under this Agreement, any other agreement or insurance policy, the Company’s Organizational Documents of any Covered Entity, the laws of the State of Delaware or otherwise, or (ii) if the Company’s board of directors has approved specifically the initiation or bringing of such Claim;

 

(b)                                 against any Losses or Expenses, or advance Expenses to Indemnitee, with respect to Claims arising (i) with respect to an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or (ii) pursuant to Section 304 or 306 of the Sarbanes-Oxley Act of 2002, as amended, or any rule or regulation promulgated pursuant thereto; provided that the Company shall be obligated to advance Expenses to Indemnitee for the purpose of defending of such Claims; or

 

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(c)                                  if, and to the extent, that a court of competent jurisdiction renders a final, unappealable decision that such indemnification is not lawful.

 

10.                               Miscellaneous.

 

(a)                                 Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

 

(b)                                 Binding Effect; Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns (including with respect to the Company, any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company) and with respect to Indemnitee, his or her spouse, heirs, and personal and legal representatives.  The Company shall require and cause any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession or assignment had taken place.  This Agreement shall continue in effect with respect to Claims relating to Indemnification Events regardless of whether Indemnitee continues to serve as a director, officer, employee, controlling person, agent or fiduciary of any Covered Entity.

 

(c)                                  Notice.  All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, or (c) one (1) business day after the business day of deposit with Federal Express or similar, nationally recognized overnight courier, freight prepaid, if to Indemnitee, to the Indemnitee’s address as set forth beneath the Indemnitee’s signature to this Agreement, or, if to the Company, at the address of its principal corporate offices (attention:  Secretary), or at such other address as such party may designate to the other party hereto.

 

(d)                                 Enforceability.  This Agreement is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

 

(e)                                  Consent to Jurisdiction.  The Company and Indemnitee each hereby irrevocably consent to the jurisdiction and venue of the courts of the State of Delaware for all purposes in connection with any Proceeding which arises out of or relates to this Agreement and agree that any Proceeding instituted under this Agreement shall be commenced, prosecuted and continued only in the courts of the State of Delaware.

 

(f)                                   Severability.  The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law.  Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the extent manifested by the provision held invalid, illegal or unenforceable.

 

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(g)                                  Choice of Law.  This Agreement shall be governed by and its provisions shall be construed and enforced in accordance with, the laws of the State of Delaware, without regard to the conflict of laws principles thereof.

 

(h)                                 Subrogation.  [Except as set forth in Section 5(c) herein,] in the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

 

(i)                                     Amendment and Termination.  No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in a writing signed by the party to be bound thereby.  Notice of same shall be provided to the other party hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

(j)                                    No Construction as Employment Agreement.  This Agreement is not an employment agreement between the Company and the Indemnitee and nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained or continue in the employ or service of any Covered Entity.

 

(k)                                 Supersedes Previous Agreements.  This Agreement supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.  All such prior agreements and understandings are hereby terminated and deemed of no further force or effect.

 

[remainder of page intentionally left blank; signature page follows]

 

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

 

	AMERIHOME, INC.:
	a Delaware corporation
	By:
	Name:
	Title:
	INDEMNITEE:

 

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Exhibit 10.7

 

AMERIHOME, INC.

2020 OMNIBUS INCENTIVE PLAN

 

I.  INTRODUCTION

 

1.1          Purposes.  The purposes of the AmeriHome, Inc. 2020 Omnibus Incentive Plan (this “Plan”) are (i) to align the interests of the Company’s stockholders and the recipients of awards under this Plan by increasing the proprietary interest of such recipients in the Company’s growth and success, (ii) to advance the interests of the Company by attracting and retaining Non-Employee Directors, officers, other employees, consultants, independent contractors and agents, and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders.

 

1.2          Certain Definitions.

 

“Affiliate” means any entity that, directly or indirectly, is controlled by, controls or is under common control with the Company and/or any entity in which the Company has a significant equity interest, in either case, as determined by the Board.

 

“Agreement” means the written or electronic agreement evidencing an award under this Plan between the Company and the recipient of such award.

 

“Board” means the Board of Directors of the Company.

 

“Change in Control” has the meaning set forth in Section 5.8(b).

 

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

 

“Committee” means the committee designated by the Board to administer this Plan, or a subcommittee thereof, in each case, consisting of two or more members of the Board, each of whom is intended to be (i) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act and (ii) “independent” within the meaning of the rules of the New York Stock Exchange, or if the Common Stock is not listed on the New York Stock Exchange, within the meaning of the rules of the principal stock exchange on which the Common Stock is then traded; provided, however, if no committee is designated by the Board to administer this Plan, then the Board shall serve as the Committee.

 

“Common Stock” means the Class A common stock, par value $0.01 per share, of the Company, and all rights appurtenant thereto.

 

“Company” means AmeriHome, Inc., a Delaware corporation, or any successor thereto.

 

“Delay Period” has the meaning set forth in Section 5.17.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” means the closing transaction price of a share of Common Stock as reported on the New York Stock Exchange on the date as of which such value is being

 

 

determined or, if the Common Stock is not listed on the New York Stock Exchange, the closing transaction price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined or, if there are no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if the Common Stock is not listed on a national stock exchange, or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate with due regard for Section 409A of the Code (to the extent applicable); provided, further, in the case of grants made at the time of pricing the Initial Public Offering, Fair Market Value shall mean the price per share at which the Common Stock is initially offered for sale to the public by the Company’s underwriters in the Initial Public Offering.   Notwithstanding the foregoing, the Committee may, in its sole discretion, determine for any purpose under this Plan that “Fair Market Value” shall be determined based on the opening, actual, high, low, or average selling prices of a share of Common Stock reported on the established securities exchange on which the shares are principally traded on the applicable date, the preceding trading day, the next succeeding trading day, or an average of trading days.

 

“Free-Standing SAR” means an SAR that is not granted in tandem with, or by reference to, an option, which entitles the holder of such SAR to receive, upon exercise, shares of Common Stock (which may be Restricted Stock), or to the extent set forth in the applicable Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs that are exercised.

 

“Incentive Stock Option” means an option to purchase shares of Common Stock that meets the requirements of Section 422 of the Code, or any successor provision, that is intended by the Committee to constitute an Incentive Stock Option.

 

“Initial Public Offering” means an initial public offering of the Company registered on Form S-1 (or any successor form under the Securities Act of 1933, as amended).

 

“Investor” means A-A Mortgage Opportunities, L.P., a Delaware limited partnership, and each of its affiliates, and any investment fund or other collective investment vehicle whose investment activities are managed, or which is advised as to its investment activities, directly or indirectly, by Apollo Global Management, Inc. or by one or more of Apollo Global Management, Inc.’s Affiliates and which invests in the Company (including any successors or assigns of any such manager).  For the avoidance of doubt, Athene Holding Ltd. and Athora Holdings, Ltd. and each of their respective subsidiaries and controlled affiliates shall be deemed Affiliates of the Company and A-A Mortgage Opportunities, L.P. for the purposes of this definition.

 

“IPO Date” has the meaning set forth in Section 5.8(b).

 

“Non-Employee Director” means any director of the Company who is not an officer or employee of the Company or any of its Affiliates.

 

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“Nonqualified Stock Option” means an option to purchase shares of Common Stock that is not an Incentive Stock Option.

 

“Other Constituent Companies” has the meaning set forth in Section 5.8(b).

 

“Other Stock Award” means an award granted pursuant to Section 3.4 of this Plan.

 

“Performance Award” means a right to receive an amount of cash, Common Stock, or a combination of both, contingent upon the attainment of specified Performance Measures within a specified Performance Period.

 

“Performance Measures” means the criteria and objectives, established by the Committee, that must be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the vesting of the holder’s interest, in the case of a Restricted Stock Award, of the shares of Common Stock subject to such award, or in the case of a Restricted Stock Unit Award, Other Stock Award, or Performance Award, to the holder’s receipt of the shares of Common Stock subject to such award or of payment with respect to such award.   Such criteria and objectives may include one or more of the following company-wide or Affiliate, division, operating unit, line of business, project, geographic or individual measures: the attainment by a share of Common Stock of a specified Fair Market Value for a specified period of time; increase in stockholder value; earnings per share; return on or net assets; return on equity; return on investments; return on capital or invested capital; total stockholder return; earnings or income before or after taxes and/or interest; earnings before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA margin; operating income; revenues; billings; operating expenses, attainment of expense levels or cost reduction goals; market share; cash flow, cash flow per share, cash flow margin or free cash flow; interest expense; economic value created; gross profit or margin (correspondent or consumer direct margins); operating profit or margin (correspondent or consumer direct margins); net cash provided by operations; price-to-earnings growth; mortgage servicing rights; loan sales; recapture rate and strategic business criteria, consisting of one or more objectives based on meeting specified goals relating to market penetration, customer acquisition, business expansion, cost targets, customer satisfaction, reductions in errors and omissions, reductions in lost business, management of employment practices and employee benefits, supervision of litigation, supervision of information technology, quality and quality audit scores, efficiency, and acquisitions or divestitures, any combination of the foregoing or any other goal selected by the Committee, whether or not listed herein.  Each such goal may be expressed on an absolute or relative basis and may include comparisons based on current internal targets, the past performance of the Company (including the performance of one or more Affiliates, divisions, or operating units) or the past or current performance of other companies or market indices (or a combination of such past and current performance). In addition to the ratios specifically enumerated above, performance goals may include comparisons relating to capital (including, but not limited to, the cost of capital), stockholders’ equity, shares outstanding, assets or net assets, sales, or any combination thereof.  The applicable performance measures may be applied on a pre- or post-tax basis and may be adjusted to include or exclude components of any performance measure, including, without limitation, foreign exchange gains and losses, asset writedowns, acquisitions and divestitures, change in fiscal year, unbudgeted capital expenditures, special charges such as

 

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restructuring or impairment charges, debt refinancing costs, extraordinary or noncash items, unusual, infrequently occurring, nonrecurring or one-time events affecting the Company or its financial statements or changes in law or accounting principles (“Adjustment Events”). In the sole discretion of the Committee, the Committee may amend or adjust the Performance Measures or other terms and conditions of an outstanding award in recognition of any Adjustment Events. Performance goals and measures shall be subject to such other special rules and conditions as the Committee may establish at any time.

 

“Performance Period” means any period designated by the Committee during which (i) the Performance Measures applicable to an award are measured and (ii) the conditions to vesting applicable to an award remain in effect.

 

“Restricted Stock” means shares of Common Stock that are subject to a Restriction Period and that may additionally be subject to the attainment of specified Performance Measures within a specified Performance Period.

 

“Restricted Stock Award” means an award of Restricted Stock under this Plan.

 

“Restricted Stock Unit” means a right to receive one share of Common Stock, or in lieu thereof and to the extent set forth in the applicable Agreement, the Fair Market Value of such Common Stock in cash, that is contingent upon the expiration of a specified Restriction Period and that may additionally be contingent upon the attainment of specified Performance Measures within a specified Performance Period.

 

“Restricted Stock Unit Award” means an award of Restricted Stock Units under this Plan.

 

“Restriction Period” means any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated, or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such award, or (ii) the conditions to vesting applicable to a Restricted Stock Unit Award or Other Stock Award remain in effect.

 

“SAR” means a stock appreciation right, which may be a Free-Standing SAR or a Tandem SAR.

 

“Stock Award” means a Restricted Stock Award, Restricted Stock Unit Award, or Other Stock Award.

 

“Stockholders Agreement” means the Stockholders Agreement, dated as of the closing of the Initial Public Offering, as amended from time to time.

 

“Substitute Award” means an award granted under this Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, including a merger, combination, consolidation, or acquisition of property or shares.

 

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“Tandem SAR” means an SAR that is granted in tandem with, or by reference to, an option (including a Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder of such SAR to receive, upon exercise of such SAR and surrender for cancellation of all or a portion of such option, shares of Common Stock (which may be Restricted Stock), or to the extent set forth in the applicable Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such option, or portion thereof, that is surrendered.

 

“Tax Date” has the meaning set forth in Section 5.5.

 

“Ten Percent Holder” has the meaning set forth in Section 2.1(a).

 

1.3          Administration.  This Plan shall be administered by the Committee.  Any one or a combination of the following awards may be made under this Plan to eligible persons: (i) options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options; (ii) SARs in the form of Tandem SARs or Free-Standing SARs; (iii) Stock Awards in the form of Restricted Stock, Restricted Stock Units or Other Stock Awards; and (iv) Performance Awards.  The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount, and timing of each award to such persons, and if applicable, the number of shares of Common Stock subject to an award, the number of SARs, the number of Restricted Stock Units, the dollar value subject to a Performance Award, the purchase price or base price associated with the award, the time and conditions of exercise or settlement of the award, and all other terms and conditions of the award, including without limitation the form of the Agreement evidencing the award.  The Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding options and SARs shall become exercisable in part or in full; (ii) all or a portion of the Restriction Period applicable to any outstanding awards shall lapse; (iii) all or a portion of the Performance Period applicable to any outstanding awards shall lapse; and (iv) the Performance Measures (if any) applicable to any outstanding awards shall be deemed to be satisfied at the target, maximum, or any other level.  The Committee shall have discretionary authority to, subject to the express terms of this Plan, interpret this Plan and any award, establish rules and regulations it deems necessary or desirable for the administration of this Plan or any award, and otherwise do all things necessary or desirable with respect to this Plan or any award.  Without limiting the foregoing, the Committee may impose, incidental to the grant of an award, terms and conditions with respect to the award, such as limitations or requirements in the event of competitive employment or other activities.  All interpretations, rules, regulations, and determinations made by the Committee with respect to this Plan or any award shall be conclusive and binding on all parties.

 

The Committee may delegate some or all of its power and authority under this Plan to the Board (or any members of the Board), or subject to applicable law, to a subcommittee of the Board or the Committee, a member of the Board or Committee, the Chief Executive Officer or other executive officer of the Company, or other persons, in each case, as the Committee deems appropriate; provided, however, that the Committee may not delegate its power and authority to a member of the Board, the Chief Executive Officer, or other executive officer of the Company

 

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with regard to the selection for participation in this Plan of an officer, director, or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing, or amount of an award to such an officer, director, or other person.

 

No member of the Board or Committee, and neither the Chief Executive Officer nor any other person to whom the Committee delegates any of its power and authority under this Plan, shall be liable for any act, omission, interpretation, construction, or determination made in connection with this Plan or any award, and the members of the Board and the Committee and the Chief Executive Officer or other executive officer shall be entitled to indemnification and reimbursement by the Company with respect to any claim, loss, damage, or expense (including attorneys’ fees) arising therefrom, including, without limitation, by reason of any acceleration of income, any additional tax, or any penalty, interest or other liability asserted by reason of the failure of an award to satisfy the requirements of Section 409A of the Code or by reason of Section 4999 of the Code, in each case, to the full extent permitted by law (except as otherwise may be provided in the Company’s Certificate of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time.

 

1.4          Eligibility.  Participants in this Plan shall consist of such officers, other employees, Non-Employee Directors, consultants, independent contractors, agents, and persons expected to become officers, other employees, Non-Employee Directors, consultants, independent contractors, and agents of the Company and its Affiliates as the Committee in its sole discretion may select from time to time.  Eligibility for Incentive Stock Options is limited to individuals described in the first sentence of this Section 1.4 who are employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code.  The Committee’s selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in this Plan at any other time.  Except as otherwise provided for in an Agreement, for purposes of this Plan, references to employment by the Company also mean employment by an Affiliate, and references to employment include service as a Non-Employee Director, consultant, independent contractor, or agent.  The Committee shall determine, in its sole discretion, the extent to which a participant shall be considered employed during an approved leave of absence.  Notwithstanding anything in this Plan to the contrary, the aggregate value of cash compensation and the grant date fair value of shares of Common Stock that may be paid or granted during any fiscal year of the Company to any Non-Employee Director in respect of his or her service as a director shall not exceed $1,000,000, determined without regard to any distributions of deferred compensation in accordance with any deferred compensation arrangement of the Company or any of its Affiliates; provided, however, for the first calendar year in which the Non-Employee Director joins the Board, the limit set forth in this sentence shall be multiplied by two.

 

1.5          Shares Available.  Subject to adjustment as provided in Section 5.7 and to all other limits set forth in this Plan, 10,000,000 shares of Common Stock shall initially be available for all awards under this Plan, other than Substitute Awards.  Subject to adjustment as provided in Section 5.7, no more than 10,000,000 shares of Common Stock in the aggregate may be issued under this Plan in connection with Incentive Stock Options.  The number of shares of Common Stock available under this Plan shall increase annually on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2021, and continuing until (and including) the fiscal year ending December 31, 2030, with such annual increase equal to the lesser of (i) 5%

 

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of the number of shares of Common Stock outstanding as of the last day of the preceding fiscal year and (ii) an amount determined by the Board.  The number of shares of Common Stock that remain available for future grants under this Plan at any given time shall be reduced by the sum of the aggregate number of shares of Common Stock which become subject to outstanding options, outstanding Free-Standing SARs, outstanding Stock Awards and outstanding Performance Awards denominated in Common Stock, in each case, assuming maximum payout levels and not including Substitute Awards.   For the avoidance of doubt, the number of shares available under the Plan shall not be reduced by shares of Common Stock granted in substitution for profits interests in Aris Mortgage Holding Company, LLC in connection with the transactions relating to the Initial Public Offering.

 

To the extent that shares of Common Stock subject to an outstanding option, SAR, Stock Award or Performance Award granted under this Plan, other than Substitute Awards, are not issued or delivered by reason of (i) the expiration, termination, cancellation, or forfeiture of such award (excluding shares subject to an option cancelled upon settlement in shares of a related Tandem SAR or shares subject to a Tandem SAR cancelled upon exercise of a related option) or (ii) the settlement of such award in cash, then such shares of Common Stock shall be made available under this Plan.  In addition, shares of Common Stock subject to an award under this Plan shall be made available for issuance under this Plan if such shares (or, if applicable, such units) are (x) shares that were subject to an option or stock-settled SAR to the extent not issued or delivered due to the net settlement or net exercise of such option or SAR or (y) shares (or such units) delivered to or withheld by the Company or one its Affiliates to pay the withholding taxes related to an outstanding award.   Shares of Common Stock subject to an award under this Plan shall not again be available for issuance under this Plan if such shares are repurchased by the Company on the open market with the proceeds of an option exercise.

 

The number of shares of Common Stock available for awards under this Plan shall not be reduced by (i) the number of shares of Common Stock subject to Substitute Awards or (ii) available shares under a stockholder-approved plan of a company or other entity that was a party to a corporate transaction with the Company (as appropriately adjusted to reflect such corporate transaction) that become subject to awards granted under this Plan (subject to applicable stock exchange requirements).

 

Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof.

 

II.  STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

 

2.1          Stock Options.  The Committee may grant options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee.  Each option, or portion thereof, that is not an Incentive Stock Option shall be a Nonqualified Stock Option.  To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company, or any parent or subsidiary) exceeds the amount (currently $100,000) established by and measured in accordance with the Code, such options shall constitute Nonqualified Stock Options.

 

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Options are subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee deems advisable:

 

(a)           Number of Shares and Purchase Price.  The number of shares of Common Stock subject to an option, and the purchase price per share of Common Stock purchasable upon exercise of the option shall be determined by the Committee; provided, however, that the purchase price per share of Common Stock purchasable upon exercise of an option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such option; provided further, that if an Incentive Stock Option shall be granted to any person who, at the time such option is granted, owns capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or subsidiary) (a “Ten Percent Holder”), the purchase price per share of Common Stock shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option.

 

Notwithstanding the foregoing, in the case of an option that is a Substitute Award, the purchase price per share of the shares subject to such option may be less than 100% of the Fair Market Value per share on the date of grant, provided that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate purchase price of the shares subject to the Substitute Award does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate purchase price of such shares.

 

(b)           Option Period and Exercisability.  The period during which an option may be exercised shall be determined by the Committee; provided, however, that no option shall be exercised later than 10 years after its date of grant; provided further, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such option shall not be exercised later than five years after its date of grant.  The Committee may, in its discretion, establish Performance Measures that must be satisfied or met as a condition to the grant of an option or to the exercisability of all or a portion of an option.  The Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time.  An exercisable option, or portion thereof, may be exercised only with respect to whole shares of Common Stock.

 

(c)           Method of Exercise.  An option may be exercised (i) by giving written notice to the Company specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Company’s satisfaction) either in cash (or cash equivalent) or, if permitted by the Committee and if legally permissible: (A) by delivery (either actual delivery or by attestation procedures established by the Company) of shares of Common Stock having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise; (B) authorizing the Company to withhold whole shares of Common Stock that would otherwise be delivered having an aggregate Fair Market Value, determined as

 

8

 

of the date of exercise, equal to the amount necessary to satisfy such obligation; (C) in cash by a broker-dealer acceptable to the Company to whom the participant has submitted an irrevocable notice of exercise; or (D) a combination of cash (or cash equivalents) and/or (A), (B), and (C), in each case to the extent set forth in the Agreement relating to the option; (ii) if applicable, by surrendering to the Company any Tandem SARs that are cancelled by reason of the exercise of the option; and (iii) by executing such documents as the Company may reasonably request.  The Committee may limit exercisability of any option at any time, including, without limitation, in connection with any blackout periods, market limitations or corporate transactions or events.  Any fraction of a share of Common Stock that would be required to pay such purchase price shall be disregarded, and the remaining amount due shall be paid in cash (or cash equivalent) by the participant.  No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).

 

2.2          Stock Appreciation Rights.  The Committee may grant SARs to such eligible persons as may be selected by the Committee.  The Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR.

 

SARs are subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee deems advisable:

 

(a)           Number of SARs and Base Price.  The number of SARs subject to an award shall be determined by the Committee.  Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted.  The base price of a Tandem SAR shall be the purchase price per share of Common Stock of the related option.  The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR (or if earlier, the date of grant of the option for which the SAR is exchanged or substituted).

 

Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the shares subject to such SAR may be less than 100% of the Fair Market Value per share on the date of grant, provided that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate base price of the shares subject to the Substitute Award does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate base price of such shares.

 

(b)           Exercise Period and Exercisability.  The period for the exercise of an SAR shall be determined by the Committee; provided, however, that (i) no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture, or other termination of the related option and (ii) no Free-Standing SAR shall be exercised later than 10 years after its date of grant.  The

 

9

 

Committee may, in its discretion, establish Performance Measures that must be satisfied or met as a condition to the grant of an SAR or to the exercisability of all or a portion of an SAR.  The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time.  An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock, and in the case of a Free-Standing SAR, only with respect to a whole number of SARs.  If an SAR is exercised for Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c), or such shares shall be transferred to the holder in book entry form with restrictions on the shares duly noted, and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.2(d).  Prior to the exercise of a stock-settled SAR, the holder of such SAR has no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such SAR.

 

(c)           Method of Exercise.  A Tandem SAR may be exercised by (i) giving written notice to the Company specifying the number of whole SARs that are being exercised, (ii) surrendering to the Company any options that are cancelled by reason of the exercise of the Tandem SAR, and (iii) executing such documents as the Company may reasonably request.  A Free-Standing SAR may be exercised by (A) giving written notice to the Company specifying the whole number of SARs that are being exercised and (B) executing such documents as the Company may reasonably request.  The Committee may limit exercisability of any SAR at any time, including, without limitation, in connection with any blackout periods, market limitations or corporate transactions or events.  No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).

 

2.3          Termination of Employment or Service.  All of the terms relating to the exercise, cancellation, or other disposition of an option or SAR (i) upon a termination of employment with or service to the Company of the holder of such option or SAR, as the case may be, whether by reason of disability, retirement, death, or any other reason; or (ii) during a paid or unpaid leave of absence, in each case, shall be determined by the Committee and set forth in the applicable Agreement.

 

2.4          Repricing.  The Committee may, at any time in its discretion and without stockholder approval, (i) reduce the purchase price or base price of any previously granted option or SAR, (ii) cancel any previously granted option or SAR in exchange for another option or SAR with a lower purchase price or base price, or (iii) cancel any previously granted option or SAR in exchange for cash or another award if the purchase price of such option or the base price of such SAR exceeds the Fair Market Value of a share of Common Stock on the date of such cancellation.

 

III.  STOCK AWARDS

 

3.1          Stock Awards.  The Committee may grant Stock Awards to such eligible persons as may be selected by the Committee.  The Agreement relating to a Stock Award shall specify whether

 

10

 

the Stock Award is a Restricted Stock Award, a Restricted Stock Unit Award, or in the case of an Other Stock Award, the type of award being granted.

 

3.2          Terms of Restricted Stock Awards.  Restricted Stock Awards are subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee deems advisable.

 

(a)           Number of Shares and Other Terms.  The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any), and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee.

 

(b)           Vesting and Forfeiture.  The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.

 

(c)           Stock Issuance.  During the Restriction Period, the Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted, or alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend that may be required pursuant to Section 5.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms, and conditions of this Plan and the Agreement relating to the Restricted Stock Award.  All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in part.  Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the requirement to pay any applicable taxes in accordance with Section 5.5, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award.

 

(d)           Rights with Respect to Restricted Stock Awards.  Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends, and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided, however, that (i) a distribution with respect to shares of Common Stock, other than a regular cash dividend, and (ii) a regular cash dividend with respect to shares of Common Stock that are subject to performance-based vesting conditions, in each case, shall be deposited with the

 

11

 

Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution was made.  In the case of a regular cash dividend, the applicable Agreement shall specify whether such dividend shall be paid on a current basis or shall be subject to the same restrictions as the shares of Common Stock with respect to which such dividend was made.

 

3.3          Terms of Restricted Stock Unit Awards.  Restricted Stock Unit Awards are subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee deems advisable.

 

(a)           Number of Shares and Other Terms.  The number of shares of Common Stock subject to a Restricted Stock Unit Award, including the number of shares that are earned upon the attainment of any specified Performance Measures, and the Restriction Period, Performance Period (if any), and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee.

 

(b)           Vesting and Forfeiture.  The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.

 

(c)           Settlement of Vested Restricted Stock Unit Awards.  The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder of such Restricted Stock Unit Award shall be entitled to receive, on a current or deferred basis, dividend equivalents, and if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award. Any dividend equivalents with respect to Restricted Stock Units that are subject to performance-based vesting conditions shall be subject to the same restrictions as such Restricted Stock Units.  Prior to the settlement of a Restricted Stock Unit Award, the holder of such award has no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such award.

 

3.4          Other Stock Awards.  Subject to the limitations set forth in this Plan, the Committee is authorized to grant other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock, including without limitation shares of Common Stock granted as a bonus and not subject to any vesting conditions, dividend equivalents, deferred stock units, stock purchase rights, and shares of Common Stock issued in lieu of obligations of the Company to pay cash under any compensatory plan or arrangement, subject to such terms as shall be determined by the Committee (“Other Stock Awards”).  The Committee shall determine the terms and conditions of such awards, which may include the right to elective deferral of such awards, subject to such

 

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terms and conditions as the Committee may specify in its discretion. Any dividends or dividend equivalents constituting or with respect to Other Stock Awards that are subject to performance-based vesting conditions shall be subject to the same restrictions as such Other Stock Awards.

 

3.5          Termination of Employment or Service.  All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or Performance Period relating to a Stock Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Company of the holder of such award, whether by reason of disability, retirement, death, or any other reason; or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable Agreement.

 

IV.  PERFORMANCE AWARDS

 

4.1          Performance Awards.  The Committee may grant Performance Awards to such eligible persons as may be selected by the Committee.

 

4.2          Terms of Performance Awards.  Performance Awards are subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee deems advisable.

 

(a)           Value of Performance Awards and Performance Measures.  The method of determining the value of the Performance Award and the Performance Measures and Performance Period applicable to a Performance Award shall be determined by the Committee.

 

(b)           Vesting and Forfeiture.  Except to the extent otherwise provided by the Agreement relating to a Performance Award, as determined by the Committee in its discretion, and subject to the provisions of this Plan, such Performance Award shall vest if the specified Performance Measures are satisfied during the specified Performance Period and such award shall be forfeited if the specified Performance Measures are not satisfied or met during the specified Performance Period.

 

(c)           Settlement of Vested Performance Awards.  The Agreement relating to a Performance Award shall specify whether such award may be settled in shares of Common Stock (including Restricted Stock) or cash or a combination thereof.  If a Performance Award is settled in Restricted Stock, such shares of Restricted Stock shall be issued to the holder in book entry form, or a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c), and the holder of such Restricted Stock shall have such rights as a stockholder of the Company as determined pursuant to Section 3.2(d).  Any dividends or dividend equivalents with respect to a Performance Award shall be subject to the same performance-based vesting restrictions as such Performance Award. Prior to the settlement of a Performance Award in shares of Common Stock, including Restricted Stock, the holder of such award has no rights as a stockholder of the Company.

 

4.3          Termination of Employment or Service.  All of the terms relating to the satisfaction of Performance Measures and the termination of the Performance Period relating to a Performance Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Company of the holder of such award, whether by reason of disability,

 

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retirement, death, or any other reason; or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable Agreement.

 

V.  GENERAL

 

5.1          Effective Date and Term of Plan.  This Plan shall be submitted to the stockholders of the Company for approval, and if approved, shall become effective as of the date on which this Plan was approved by stockholders.  This Plan shall terminate as of the tenth anniversary of the effective date, unless terminated earlier by the Board.  Termination of this Plan shall not affect the terms or conditions of any award granted prior to termination.

 

Awards under this Plan may be made at any time prior to the termination of this Plan, provided that no Incentive Stock Option may be granted later than 10 years after the date on which this Plan was approved by the Board.  In the event that this Plan is not approved by the stockholders of the Company, this Plan and any awards under this Plan shall be void and of no force or effect.

 

5.2          Amendments.  The Board may amend this Plan as it deems advisable; provided, however, that no amendment to this Plan shall be effective without the approval of the Company’s stockholders if (i) stockholder approval is required by applicable law, rule, or regulation, including any rule of the New York Stock Exchange or any other stock exchange on which the Common Stock is then traded or (ii) such amendment seeks to modify the Non-Employee Director compensation limit set forth in Section 1.4; provided further, that no amendment may materially impair the rights of a holder of an outstanding award without the consent of such holder.  For the avoidance of doubt, the exercise of any powers of the Committee under this Plan, including any adjustment under Section 5.7 or any action taken in connection with a Change in Control under Section 5.8, shall not be treated as an amendment that requires any holder’s consent.

 

5.3          Agreement.  Each award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions applicable to such award.  To the extent required by the Company, no award shall be valid until executed or electronically accepted by the recipient of such award.  Upon such execution or acceptance and delivery of the Agreement to the Company within the time period specified by the Company, such award shall be effective as of the effective date set forth in the Agreement.

 

5.4          Non-Transferability.  No award shall be transferable other than by will, the laws of descent and distribution, or pursuant to beneficiary designation procedures approved by the Company, or to the extent expressly permitted in the Agreement relating to such award, to the holder’s family members, a trust or entity established by the holder for estate planning purposes, a charitable organization designated by the holder, or pursuant to a domestic relations order, in each case without consideration.  Except to the extent permitted by the foregoing sentence or the Agreement relating to an award, each award may be exercised or settled during the holder’s lifetime by only the holder or the holder’s legal representative or similar person.  Except as permitted by the second preceding sentence, no award may be sold, transferred, assigned, pledged, hypothecated, encumbered, or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment, or similar process.  Upon any attempt to so

 

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sell, transfer, assign, pledge, hypothecate, encumber, or otherwise dispose of any award, such award and all rights under such award shall immediately become null and void.

 

5.5          Tax Withholding.  All awards and stock issued, and all payments made, under this Plan will be reduced by all tax and other amounts required to be withheld with respect to the payment (or, if determined by the Company, other satisfactory arrangements as described below will be made in order to satisfy such withholding requirements).  Any amounts withheld pursuant to this Section 5.5 will be treated as though such payment had been made directly to the applicable participant. In furtherance of the foregoing, the Company has the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash pursuant to an award made under this Plan, payment by the holder of such award of any federal, state, local, or other taxes that may be required to be withheld or paid in connection with such award.  An Agreement may provide that the Company shall withhold whole shares of Common Stock that would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with an award (the “Tax Date”), or withhold an amount of cash that would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation; or the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company (or, if directed by the Company or an Affiliate), including, if permitted by the Company, through an instruction to a broker-dealer acceptable to the Company to deliver proceeds following a sale of share of Common Stocks subject to or deliverable under an award on such terms and conditions as are specified by the Company; (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation; (C) authorizing the Company to withhold whole shares of Common Stock that would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash that would otherwise be payable to a holder, in either case equal to the amount necessary to satisfy any such obligation; (D) in the case of the exercise of an option or a SAR, a cash payment by a broker-dealer acceptable to the Company to whom the participant has submitted an irrevocable notice of exercise; or (E) any combination of (A), (B), and (C), in each case to the extent set forth in the Agreement relating to the award.  Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate (or if permitted by the Company, such other rate as will not cause adverse accounting consequences under the accounting rules then in effect).  Any fraction of a share of Common Stock that would be required to satisfy such an obligation shall be disregarded, and the remaining amount due shall be paid in cash by the holder.

 

5.6          Restrictions on Shares.  Each award made under this Plan shall be subject to the requirement that if at any time the Company determines that the listing, registration, or qualification of the shares of Common Stock subject to such award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares under such award, such shares shall not be delivered unless such listing, registration, qualification, consent, approval, or other action shall have been effected or obtained, free of any conditions not acceptable to the Company.  The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any award made under this Plan bear

 

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a legend indicating that the sale, transfer, or other disposition of such award by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

5.7          Adjustment.   In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation or any successor or replacement accounting standard), such as a stock dividend, stock split, spinoff, rights offering, or recapitalization through an extraordinary cash dividend, then the number and class of securities available under this Plan, the terms and conditions of any outstanding option and SAR (including the number and class of securities subject to any outstanding option or SAR and the purchase price or base price per share), the terms and conditions of any outstanding Stock Award (including the number and class of securities subject thereto) and the terms and conditions of any outstanding Performance Award (including the number and class of securities subject thereto, if applicable), shall be appropriately adjusted, as determined by the Committee in its discretion.  In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee in its discretion to prevent dilution or enlargement of rights of participants. In the event of an equity restructuring or change in corporate capitalization described herein, the Committee may, in its discretion, provide for such adjustments to the Performance Measures applicable to one or more awards as it deems appropriate. In any such case, the decision of the Committee regarding any such adjustment shall be final, binding, and conclusive.

 

5.8          Change in Control.

 

(a)           Subject to the terms of the applicable Agreements, in the event of a Change in Control, the Board, as constituted prior to the Change in Control, shall, in its discretion, determine the effect of the Change in Control on outstanding awards.  Without limiting the foregoing, the Board, as constituted prior to the Change in Control, may, in its discretion, with respect to some or all awards (which determination need not be uniform as to all awards of the same type):

 

(1)  require that (i) some or all outstanding options and SARs (or any portion thereof) shall become exercisable in full or in part, (ii) the Restriction Period applicable to some or all outstanding Stock Awards (or any portion thereof) shall lapse in full or in part, (iii) the Performance Period applicable to some or all outstanding awards shall lapse in full or in part, and (iv) the Performance Measures applicable to some or all outstanding awards shall be deemed to be satisfied at the target, maximum or any other level, in each case, on such terms and conditions and at such time or times as the Committee shall determine;

 

(2)  require that any outstanding award shall be assumed or continued or that shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, or other property be substituted for some or all of the

 

16

 

shares of Common Stock subject to any outstanding award (or any portion thereof), with such appropriate adjustments to such award as determined by the Board; and/or

 

(3)  require outstanding awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (i) a cash payment in an amount equal to (A) in the case of an option or an SAR, the aggregate number of shares of Common Stock then subject to the portion of such option or SAR surrendered, whether or not vested or exercisable, multiplied by the excess, if any, of the Fair Market Value of a share of Common Stock as of the date of the Change in Control, over the purchase price or base price per share of Common Stock subject to such option or SAR, (B) in the case of a Stock Award or a Performance Award denominated in shares of Common Stock, the number of shares of Common Stock then subject to the portion of such award surrendered to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 5.8(a)(1)(iv), whether or not vested, multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control, and (C) in the case of a Performance Award denominated in cash, the value of the Performance Award then subject to the portion of such award surrendered to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 5.8(a)(1)(iv); (ii) shares of capital stock, other securities of, or rights with respect to, the corporation (or an affiliate of such corporation) resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, or other property having a fair market value not less than the amount determined under clause (i) above; or (iii) a combination of the payment of cash pursuant to clause (i) above and the issuance of shares or other property pursuant to clause (ii) above, in each case, on such payment and other terms and conditions (which need not be the same as the terms and conditions applicable to holders of Common Stock generally) as the Committee determines, including that any amounts paid in respect of such award be placed in escrow or otherwise made subject to such restrictions as the Committee deems appropriate.  For the avoidance of doubt, if the per share purchase price, exercise price, or base price of an award or portion thereof is equal to or greater than the fair market value of one share of Common Stock, such award or portion may be cancelled with no payment due hereunder or otherwise in respect thereof.

 

(b)           For purposes of this Plan, “Change in Control” means the occurrence of any of the following events or series of related events after the date hereof:

 

(1)  any person, or group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act, or any successor provisions thereto, is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing more than 50% of the combined

 

17

 

voting power of the Company’s then-outstanding voting securities), but excluding any acquisition by the Company or any of its Affiliates, the Investor or any of its Affiliates, or by any employee benefit plan sponsored or maintained by the Company or any of its Affiliates;

 

(2)  there is consummated a merger, consolidation or similar business transaction involving the Company with any other person or persons, and, either (x) the members of the Board immediately prior to the merger or consolidation do not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (y) immediately after the consummation of such transaction, the voting securities of the Company immediately prior to such transaction do not continue to represent or are not converted into more than 50% of the combined voting power of the then-outstanding voting securities of the person resulting from such transaction or, if the surviving company is a subsidiary, the ultimate parent thereof;

 

(3)  there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Company of all or substantially all of the Company’s assets, other than such sale or other disposition by the Company of all or substantially all of the Company’s assets to an entity at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale; or

 

(4)  the following individuals cease for any reason to constitute a majority of the number of directors of the Board of the Company then serving: individuals who were directors of the Company on the date on which the Initial Public Offering is consummated (the “IPO Date”) and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election to the Board or nomination for election by the Company’s stockholders was made pursuant to the Stockholders Agreement or was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors of the Company on the IPO Date or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause (4).

 

Notwithstanding the foregoing, except with respect to clause (3) above, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the ultimate beneficial owners of the Class A Common Stock and Class B Common Stock of the Company 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 or equity of, an

 

18

 

entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.  In addition, with respect to any payment considered to be nonqualified deferred compensation under Section 409A of the Code, to the extent applicable, that is payable upon a Change in Control or other similar event, to the extent required to avoid the imposition of any additional tax, interest or penalty under Section 409A of the Code, no amount will be payable upon such Change in Control unless such Change in Control or other event constitutes a “change in control event” within the meaning of Section 1.409A-3(i)(5) of the Treasury Regulations.

 

5.9          Deferrals.  The Committee may determine that the delivery of shares of Common Stock, the payment of cash, or a combination thereof, upon the settlement of all or a portion of any award made under this Plan shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of awards.  Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion.

 

5.10        No Right of Participation, Employment or Service.  No person shall have any right to participate in this Plan.  Neither this Plan nor any award made under this Plan shall confer upon any person any right to continued employment by or service with the Company or any Affiliate or affect in any manner the right of the Company or any Affiliate to terminate the employment or service of any person at any time without liability under this Plan.

 

5.11        Rights as Stockholder.  No person has any right as a stockholder of the Company with respect to any shares of Common Stock or other equity security of the Company that is subject to an award under this Plan unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security.

 

5.12        Designation of Beneficiary.  To the extent permitted by the Company, a holder of an award may file with the Company a written designation of one or more persons as such holder’s beneficiary or beneficiaries (both primary and contingent) in the event of the holder’s death or incapacity.  To the extent an outstanding option or SAR granted under this Plan is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such option or SAR pursuant to procedures prescribed by the Company.  Each beneficiary designation shall become effective only when filed in writing with the Company during the holder’s lifetime on a form prescribed by the Company.  The spouse of a married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse.  The filing with the Company of a new beneficiary designation shall cancel all previously filed beneficiary designations.  If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding award held by such holder, to the extent vested or exercisable, shall be payable to or may be exercised by such holder’s executor, administrator, legal representative, or similar person.

 

5.13        Awards Subject to Clawback.  The awards granted under this Plan and any cash payment or shares of Common Stock delivered pursuant to such an award are subject to forfeiture, recovery by the Company, or other action, in each case pursuant to the applicable Agreement, or any clawback or recoupment policy that the Company may adopt from time to time, including without limitation any such policy that the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules

 

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and regulations thereunder, or as otherwise required by law or applicable stock exchange listing standards.

 

5.14        Governing Law.  This Plan, each award under this Plan and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws, except as otherwise expressly provided by any Agreement or applicable subplan.  By accepting (or being deemed to have accepted) an award, each participant agrees or will be deemed to have agreed to (i) submit irrevocably and unconditionally to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Plan or any award, (ii) not commence any suit, action or other proceeding arising out of or based upon this Plan or any award, except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware, and (iii) waive, and not assert, by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that he or she is not subject personally to the jurisdiction of the above-named courts that his or her property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Plan or any award or the subject matter thereof may not be enforced in or by such court.  Further, by accepting or being deemed to have accepted an award under this Plan, each participant waives (or will be deemed to have waived), to the maximum extent permitted under applicable law, any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under this Plan or any award, or under any amendment, subplan, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees (or will be deemed to have agreed) that any such action, proceedings or counterclaim will be tried before a court and not before a jury.  By accepting or being deemed to have accepted an award under this Plan, each participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding, or counterclaim, seek to enforce the foregoing waivers.  Notwithstanding anything to the contrary in this Plan, nothing herein is to be construed as limiting the ability (i) of the Company and a participant to agree to submit any dispute arising under the terms of this Plan or any award to binding arbitration or (ii) the Company to require any individual to agree to submit such disputes to binding arbitration as a condition of receiving an award hereunder.

 

5.15        Foreign Employees.  Without amending this Plan, the Committee may grant awards to eligible persons who are foreign nationals and/or reside outside of the United States on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan, and in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans, and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Affiliates operates or has employees.  Any such awards, amendments, procedures or subplans may contain such additional or different terms and conditions as the Committee deems necessary or desirable and will be deemed to be part of this Plan but will apply only to participants within the group to

 

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which the awards, amendments, procedures or subplans applies (as determined by the Committee).

 

5.16        Section 409A.  Each award under this Plan will be construed and administered in a manner such that the award either qualifies for an exemption from the applicable requirements of Section 409A or satisfies such requirements.  If a participant is determined on the date of the participant’s termination of employment to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then, with regard to any payment under this Plan or any award that is considered nonqualified deferred compensation under Section 409A, to the extent applicable, payable on account of a “separation from service”, such payment will be made or provided on the date that is the earlier of (i) the first business day following the expiration of the six-month period measured from the date of such “separation from service” and (ii) the date of the participant’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 5.16 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) will be paid, without interest, on the first business day following the expiration of the Delay Period in a lump sum and any remaining payments due under the award will be paid in accordance with the normal payment dates specified for them in the applicable Agreement.  For purposes of Section 409A, each payment made under this Plan or any award will be treated as a separate payment.

 

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Exhibit 10.48

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”), by and between Aris Mortgage Holding Company, LLC, a Delaware limited liability company (the “Parent”) and AmeriHome Mortgage Company, LLC, a Delaware limited liability company (the “Company”) (the Parent and the Company, together, the “Employers”), and [             ] (the “Executive”), is to be effective as of [             ], 2020 (the “Effective Date”).  Effective upon the initial public offering of the Company or any parent of the Company, references to Parent herein shall refer to the publicly-held parent of the Company.

 

W I T N E S S E T H:

 

WHEREAS, the Executive is employed by the Company; and

 

WHEREAS, the Employers and the Executive desire to enter into this Agreement to, among other things, set forth the benefits to be provided to the Executive in the event that his or her employment terminates under the circumstances described herein.

 

NOW, THEREFORE, in consideration of the foregoing, the parties agree as follows:

 

1.                                      Definitions.  For purposes of the Agreement, the following terms shall have the meanings set forth below:

 

(a)                                 Affiliate.  “Affiliate” shall mean, with respect to any Person, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Person.  For the avoidance of doubt, Athene Holding Ltd. and Athora Holdings, Ltd. and each of their respective subsidiaries and controlled affiliates shall be deemed affiliates of the Parent, the Company and A-A Mortgage Opportunities, L.P. for the purposes of this definition.

 

(b)                                 Board.  “Board” shall mean the Board of Managers of the Parent; provided, however, following the initial public offering of the Company or any parent of the Company, the Board shall mean the Board of Directors of the publicly held parent of the Company.

 

(c)                                  Cause.  “Cause” shall mean:

 

(i)                                     the Executive’s act(s) of gross negligence or willful misconduct in the course of the Executive’s employment that is or could reasonably be expected to be materially injurious to the business or assets of the Company or any of its Affiliates;

 

(ii)                                  the Executive’s willful failure or refusal by the Executive to perform in any material respect the Executive’s duties or responsibilities after written notice and a reasonable opportunity to cure (to the extent curable);

 

 

(iii)                               misappropriation, fraud or embezzlement by the Executive (or at his or her direction) of any assets or business opportunities of the Company or any of its Affiliates;

 

(iv)                              the Executive’s conviction of, indictment for, or pleading “guilty” or “no contest” to (x) a felony or a crime of moral turpitude, or (y) any misdemeanor charge, that has, or could be reasonably expected to have, an adverse impact on the performance of the Executive’s duties to the Company or any of its Affiliates or otherwise result in material injury to the reputation or business of the Company or any of its Affiliates;

 

(v)                                 the Executive’s breach in any material respect of any material agreement between the Company or any of its Affiliates and the Executive (after written notice and a reasonable opportunity to cure during the thirty (30) days after such notice, to the extent curable);

 

(vi)                              the Executive’s commission of a willful and material act of dishonesty involving the Company or its Affiliates;

 

(vii)                           the Executive’s breach of any of the Company’s material policies or procedures (or the material policies or procedures of its Affiliates which are applicable to the Executive) that causes material harm to the Company or its Affiliates or its or their business reputation (after written notice and a reasonable opportunity to cure during the thirty (30) days after such notice, to the extent curable);

 

(viii)                        the Executive’s violation of a fiduciary duty of loyalty to the Company or its Affiliates;

 

(ix)                              the Executive’s knowing attempt to obstruct or failure to cooperate with any investigation authorized by the Company or its Affiliates or any governmental or self-regulatory entity;

 

(x)                                 the Executive’s disqualification or bar by any governmental or self-regulatory authority or the Executive’s loss of any governmental or self-regulatory license that is reasonably necessary for the Executive to perform his duties to the Company or its Affiliates;

 

(xi)                              any directive has been made by any governmental or self-regulatory authority to terminate the Executive;

 

(xii)                           the Executive’s unlawful and habitual use (including being under the influence) or possession of illegal drugs, or habitual use or impairment under the influence of alcohol, in each case, on the premises of the Company or its Affiliates or while performing the Executive’s duties and responsibilities; or

 

(xiii)                        the Executive’s engaging in any act of sexual harassment.

 

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(d)                                 Change in Control.  A “Change in Control” shall mean the occurrence of any of the following events or series of related events after the Effective Date:

 

(i)                                     any person, or group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act, or any successor provisions thereto, is or becomes the beneficial owner, directly or indirectly, of securities of the Parent representing more than 50% of the combined voting power of the Parent’s then-outstanding voting securities), but excluding any acquisition by the Company or any of its Affiliates, the Investor or any of its Affiliates, or by any employee benefit plan sponsored or maintained by the Company or any of its Affiliates;

 

(ii)                                  there is consummated a merger, consolidation or similar business transaction involving the Parent with any other person or persons, and, either (x) the members of the Board immediately prior to the merger or consolidation do not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (y) immediately after the consummation of such transaction, the voting securities of the Parent immediately prior to such transaction do not continue to represent or are not converted into more than 50% of the combined voting power of the then-outstanding voting securities of the person resulting from such transaction or, if the surviving company is a subsidiary, the ultimate parent thereof;

 

(iii)                               there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Parent of all or substantially all of the Parent’s assets, other than such sale or other disposition by the Parent of all or substantially all of the Parent’s assets to an entity at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Parent in substantially the same proportions as their ownership of the Parent immediately prior to such sale; or

 

(iv)                              the following individuals cease for any reason to constitute a majority of the number of directors of the Board then serving: individuals who were directors of the Parent on the Effective Date and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Parent) whose appointment or election to the Board or nomination for election by the Parent’s stockholders was made pursuant to the Stockholders Agreement or was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors of the Parent on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause (iv).

 

Notwithstanding the foregoing, except with respect to clause (iii) above, a “Change in Control” shall not be deemed to have occurred by virtue of the

 

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consummation of any transaction or series of integrated transactions immediately following which the ultimate beneficial owners of the Class A Common Stock and Class B Common Stock of the Parent 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 or equity of, an entity which owns all or substantially all of the assets of the Parent immediately following such transaction or series of transactions.  In addition, with respect to any payment considered to be nonqualified deferred compensation under Section 409A of the Code, to the extent applicable, that is payable upon a Change in Control or other similar event, to the extent required to avoid the imposition of any additional tax, interest or penalty under Section 409A of the Code, no amount will be payable upon such Change in Control unless such Change in Control or other event constitutes a “change in control event” within the meaning of Section 1.409A-3(i)(5) of the Treasury Regulations.

 

(e)                                  Code.  “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(f)                                   Disability.  “Disability” shall mean a physical or mental impairment which, as reasonably determined by the Company, renders the Executive unable to perform the essential functions of his employment with the Company and its Affiliates, even with reasonable accommodation that does not impose an undue hardship on his or her employer, for more than ninety (90) days in any one hundred and eighty (180) day period, unless a longer period is required by federal or state law, in which case that longer period would apply.

 

(g)                                  Good Reason.  “Good Reason” shall mean, without the Executive’s consent:

 

(i)                                     a material diminution in the Executive’s title or duties or responsibilities;

 

(ii)                                  a material reduction in the Executive’s base salary or the Executive’s annual cash bonus opportunity (other than an across-the-board reduction of ten percent (10%) or less applicable to all similarly situated employees); or

 

(iii)                               a requirement by an Employer to relocate the Executive’s principal office to an office more than 50 miles from the Executive’s current principal office located in Thousand Oaks, California;

 

provided, further, that the Executive must provide written notice to the Employers of the existence of Good Reason no later than thirty (30) days after the initial occurrence of such event and the Company shall have a period of sixty (60) days following its receipt of such written notice during which it may remedy in all material respects the Good Reason condition identified in such written notice.  Notwithstanding the foregoing, (A) in the event that the Employers reasonably believe that the Executive may have engaged in conduct that could constitute Cause hereunder, the Employers may, in their sole and absolute discretion, suspend the Executive from

 

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performing the Executive’s duties with pay hereunder for a period of up to sixty (60) days, and in no event shall any such suspension constitute an event pursuant to which the Executive may terminate employment with Good Reason; provided, that, no such suspension shall alter the Employer’s obligations under this Agreement during such period of suspension and (B) the following shall not in and of themselves constitute “Good Reason”:  (I) the transactions contemplated by a definitive agreement entered into in order to consummate a Change in Control, (II) the Parent or any of its Affiliates becoming a subsidiary in connection with a Change in Control, (III) any changes pursuant to which “back office” functions or administrative support (such as human resources and finance) are provided by employees that are not dedicated solely to, not reporting directly to, or not reporting directly within the Employers or their respective subsidiaries, (IV) any changes in reporting structure that would require the Executive to report to a new supervisor (such as a committee or a general manager) in connection with a Change in Control, (V) changes to the Executive’s authority, reporting responsibilities, or duties arising solely by reason of the Parent or any of its Affiliates ceasing to be a public company in connection with a Change in Control, or (VI) changes resulting from the Executive’s acceptance in writing of new employment terms and conditions or compensation or benefits in connection with a Change in Control.

 

(h)                                 Investor. “Investor” shall mean A-A Mortgage Opportunities, L.P., a Delaware limited partnership, and each of its Affiliates, and any investment fund or other collective investment vehicle whose investment activities are managed, or which is advised as to its investment activities, directly or indirectly, by Apollo Global Management, Inc. or by one or more of Apollo Global Management, Inc.’s Affiliates and which invests in the Company (including any successors or assigns of any such manager).  For the avoidance of doubt, Athene Holding Ltd. and Athora Holdings, Ltd. and each of their respective subsidiaries and controlled affiliates shall be deemed Affiliates of the Company and A-A Mortgage Opportunities, L.P. for the purposes of this definition.

 

(i)                                     Notice of Termination.  “Notice of Termination” shall mean a written notice sent by the Executive or the Company to the other party, describing the reasons for the termination of the Executive’s employment and including specific reference to the provision(s) of this Agreement at issue.

 

(j)                                    Person.  “Person” shall be construed broadly and shall include, without limitation, an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

 

(k)                                 Termination Date.  “Termination Date” shall mean:

 

(i)                                     in the case of Disability, thirty (30) days after Notice of Termination is given, provided that the Executive shall not have returned to the performance of his or her duties on a full-time basis during such thirty (30) day period;

 

(ii)                                  in the case of Cause, the date on which Notice of Termination is given;

 

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(iii)                               in the case of Good Reason, the date on which the Executive ceases to perform his or her duties for the Company and its Affiliates, provided that the Executive has complied with the procedural requirements set forth in Section 1(g) of this Agreement and provided the Executive terminates employment no later than thirty (30) days following the end of the period during which the Company could have cured the Good Reason condition identified in the Executive’s written notice to the Company; and

 

(iv)                              in the event that employment is terminated for any other reason, the date on which the Executive ceases to perform his or her duties for the Company and its Affiliates.

 

(l)                                     “Stockholders Agreement” means the Stockholders Agreement, entered into between the publicly-held parent of the Company and A-A Mortgage Opportunities, L.P., as amended from time to time.

 

(m)                             “Transaction Bonus Agreement” means that certain transaction bonus agreement by and between Parent and the Executive, dated as of the date hereof, as amended from time to time.

 

(n)                                 “2015 PUP” means the Aris Mortgage Holding Company, LLC 2015 Profits Units Plan, as amended from time to time.

 

2.                                      Entitlement to Benefits.  The Executive shall be entitled to the benefits described in Section 3 below if:

 

(a)                                 during the eighteen (18) month period following a Change in Control, the Executive’s employment is terminated by (i) the Company or one of its Affiliates for reasons other than Disability, death or Cause or (ii) the Executive for Good Reason.

 

(b)                                 the Executive’s Termination Date occurs during the Term (as defined below); and

 

(c)                                  in the case of a termination by the Executive for Good Reason, a Notice of Termination is provided in a timely manner (as described in Section 1(g)) prior to the Executive’s Termination Date.

 

The Executive’s employment shall be deemed to have terminated for Cause if, after the Executive’s Termination Date, facts and circumstances are discovered that would have justified a termination for Cause.  In such event, the Company shall immediately cease any and all payments and benefits being paid or provided to the Executive under Section 3(b) and (c), and the Executive shall repay to the Company within thirty (30) days all amounts previously paid to him or her pursuant to Section 3(b) and 3(c) but net of any U.S. federal or state income tax liability of the Executive in respect of such amounts.

 

Nothing in this Agreement is intended to create or imply a promise or contract of employment for a specified term and either the Executive, the Company, the Parent or any of their respective Affiliates may terminate the employment relationship at any time, with or without Cause or

 

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Good Reason, and with or without notice; provided, however, that the Executive shall not be entitled to any benefits under this Agreement in the event his or her employment is terminated by Parent, the Company or any of their respective Affiliates for Disability or Cause, by the Executive other than for Good Reason or following the Executive’s death or the expiration of this Agreement.  This Agreement shall have no effect on any obligations that the Employers may have to the Executive if his or her employment terminates under circumstances not described herein.

 

3.                                      Benefits Upon Termination of Employment.  Notwithstanding the provisions of Section 2 above, in order to receive the benefits described in paragraphs (b) and (c) below, the Executive must timely deliver and not revoke an executed release of legal claims against the Employers and their Affiliates (in a form reasonably satisfactory to the Employers and which, for the avoidance of doubt, does not require the Executive to release any economic entitlement under, and which become payable, due or owing in accordance with the terms of, the Transaction Bonus Agreement, the 2015 PUP, any deferred bonuses arrangements or any other compensatory, equity incentive or other similar agreement or arrangement) within the timelines set forth therein.

 

(a)                                 Accrued Pay.  The Company shall pay to the Executive any base salary or vacation accrued but unpaid through his or her Termination Date.

 

(b)                                 Annual Incentive Compensation.  The following amounts shall become payable to the Executive following his or her Termination Date, as of the date that annual incentive awards are paid by the Company and its Affiliates to similarly situated active employees (in each case, during the year following the year to which such annual incentive compensation relates):

 

(i)                                     any unpaid amounts awarded to the Executive as incentive compensation under the annual incentive plan in which the Executive participates immediately prior to the Termination Date for the calendar year immediately preceding the year in which the Termination Date occurs; and

 

(ii)                                  an amount equal to the award the Executive would have received under the annual incentive plan in which the Executive participates immediately prior to the Termination Date based upon actual performance for the calendar year in which the Termination Date occurs, prorated for the portion of the calendar year during which the Executive was employed.

 

(c)                                  Severance Pay.  The Company shall pay severance benefits to the Executive as follows:

 

(i)                                     an amount equal to the product of two (2) times the sum of the following amounts: (x) the Executive’s annual base salary as in effect on the Termination Date plus (y) the Executive’s target annual bonus effect in the calendar year in which the Termination Date occurs; provided, however, that if the Executive’s annual base salary or target annual bonus were reduced and such reduction constituted “Good Reason” for purposes of this Agreement, the

 

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Executive’s annual base salary and target annual bonus, as applicable, for purposes of this Section (3)(c)(i) shall be the Executive’s annual base salary and target annual bonus in effect immediately prior to any such reduction; and

 

(ii)                                  if the Executive timely elects continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, the Executive shall pay and the Company shall reimburse the Executive for the cost of such health insurance coverage through the earlier of (x) the second anniversary of the Termination Date or (y) the Executive becoming eligible for health insurance coverage under another employer’s plan (whether through the Executive or as a dependent) at the same rate as it pays for health insurance coverage for its active employees (with the Executive required to pay for any employee-paid portion of such coverage).

 

Such severance amounts described above shall be paid to the Executive in regular installments for twenty-four (24) months through the Company’s or its Affiliate’s, as applicable, normal payroll process and on the Company’s or its Affiliate’s, as applicable, normal payroll dates commencing within sixty (60) days following his or her Termination Date; provided, however, that if the amounts payable hereunder constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and such sixty (60) day period begins in a first taxable year and ends in a second taxable year, such severance amounts shall commence no earlier than the first payroll date of the second taxable year.

 

(d)                                 Existing Arrangements.  To the extent required by such arrangements and in each case subject to and in accordance with the terms thereof, the Company or Parent, as applicable, shall pay to the Executive, following his or her Termination Date, any amounts which become due, payable, and owing to the Executive pursuant to the Transaction Bonus Agreement, the 2015 PUP, any deferred bonus arrangements and all other compensatory, equity incentive and other similar agreements and arrangements (if any) (including as any such payments relate to termination of the Executive’s employment).

 

(e)                                  Tax Withholding.  The Company or its Affiliates shall withhold from any benefits payable under this Agreement any applicable federal, state, city or other taxes as required by law.

 

(f)                                   No Other Severance Benefits.  This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of the Parent, Company, or their respective Affiliates or any of their predecessors, including but not limited to any severance pay program or other documents covering employees generally maintained by Parent, Company, or their respective Affiliates.  To the extent severance payments or benefits are required under any applicable local law or otherwise, benefits payable under this Agreement shall be reduced to the extent of any such severance payments or benefits (including, but not limited to, any laws requiring payment in lieu of notice upon the Executive’s termination of employment).

 

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4.                                      Section 280G.  Notwithstanding anything to the contrary in this Agreement, the Executive expressly agrees that if all or a portion of the payments and benefits provided for in this Agreement or any other payments and benefits which the Executive has the right to receive from the Employers and their Affiliates (collectively, the “Payments”), would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the Payments shall be either (a) reduced (but not below zero) so that the present value of the Payments will be one dollar ($1.00) less than three times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of the Payments received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to the Executive. The reduction of Payments, if any, shall be made by reducing first any Payments that are exempt from Section 409A of the Code and then reducing any Payments subject to Section 409A of the Code in the reverse order in which such Payments would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time). The determination as to whether any such reduction in the Payments is necessary shall be made by the Board in good faith. If a reduced Payment is made or provided and, through error or otherwise, that Payment, when aggregated with other payments and benefits from the Employers (or their Affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times the Executive’s base amount, then the Executive shall immediately repay such excess to the Company.

 

5.                                      Section 409A.  This Agreement is intended to comply with the requirements of Section 409A of the Code and shall be interpreted and construed consistently with such intent.  The payments to the Executive pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible, under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or as short-term deferrals pursuant to Treasury regulation §1.409A-1(b)(4), and for this purpose each payment shall constitute a “separately identified” amount within the meaning of Treasury Regulation §1.409A-2(b)(2).  Notwithstanding anything in this Agreement to the contrary, in the event that any amounts payable (or benefits provided) under this Agreement are subject to the provisions of Section 409A of the Code, to the extent determined necessary, the parties agree to amend this Agreement in the least restrictive manner necessary to avoid imposition of any additional tax or income recognition on the Executive under Section 409A of the Code, the final Treasury Regulations and other Internal Revenue Service guidance thereunder (“409A Penalties”); provided, that in no event shall the Company be responsible for any 409A Penalties that arise in connection with any amounts payable under this Agreement.  In addition, to the extent necessary to comply with Section 409A of the Code, references to termination of employment (and similar phrases) in this Agreement shall be interpreted in a manner that is consistent with the term “separation from service” under Section 409A(a)(2)(A)(i) of the Code and final Treasury Regulations and other Internal Revenue Service guidance thereunder. Notwithstanding any other provision in this Agreement, to the extent any payments made or contemplated hereunder constitute nonqualified deferred compensation, within the meaning of Section 409A of the Code, if the Executive is a specified employee (within the meaning of Section 409A of the Code) as of the date of the Executive’s separation from service, each such payment that is payable upon the Executive’s separation from service and would have been paid prior to the six-month anniversary of the Executive’s separation from service, shall be delayed until the earlier to occur of (A) the

 

9

 

first day of the seventh month following the Executive’s separation from service or (B) the date of the Executive’s death.

 

6.                                      Restrictive Covenants.

 

(a)                                 Subject to Section 7 below, the Executive shall treat all Confidential Information (as defined below) as strictly confidential and will not, except as required in the performance of the Executive’s authorized employment duties to the Employers and their Affiliates or with the written authorization of any of the Employers’ managers, in each instance, directly or indirectly, in whole or in part, access, use, copy, or remove (from the Company’s or its Affiliate’s premises or control), or disclose, publish, communicate, or make available to any entity or person other than to the Company’s and its Affiliates’ employees and consultants having a need to know and who have been authorized by the Company to receive and use, any Confidential Information.  Any authorized disclosure by the Executive of any Third Party Information (as defined below) shall comply with the terms of the Company’s or its Affiliate’s agreement with the applicable third party.  Subject to Section 7 below, the Executive shall promptly notify the Company, in writing, of any unauthorized disclosure, misappropriation, or misuse of Confidential Information that the Executive becomes aware of.  The Executive understands and acknowledges that Confidential Information and the Company’s and its Affiliates’ ability to reserve it for the exclusive knowledge and use of the Company and its Affiliates is of great competitive importance and commercial value to the Company and its Affiliates and improper access, use, copying, removal, or disclosure of Confidential Information or violation of any policy of the Company or any of its Affiliates by the Executive might cause the Company to incur financial costs, loss of business advantage, liability, civil damages, and criminal penalties and may lead to disciplinary action by the Company and its Affiliates, up to and including legal action and the Executive’s immediate termination.  The Executive’s obligations under this Agreement with respect to any particular Confidential Information shall commence immediately upon the Executive’s first access to such Confidential Information (whether before or after the beginning of the Executive’s employment by the Company and its Affiliates) and shall continue during and after the Executive’s employment by the Company and its Affiliates until such time as such Confidential Information has become public knowledge other than as a result of a breach of this Agreement by the Executive or by those acting in concert with the Executive or on the Executive’s behalf.  “Develop” means to create, prepare, produce, author, edit, amend, invent, conceive, develop, assemble, or reduce to practice or, in the case of works of authorship, to fix in a tangible medium of expression.  “Confidential Information” means any and all confidential, secret, proprietary, or otherwise nonpublic documents, materials, and other information, in tangible and intangible form, of and relating to the Company, its Affiliates and their business (including information Developed by the Executive in the course of the Executive’s employment) or third parties associated with the Company and its Affiliates (including existing and prospective customers, suppliers, investors, licensors, licensees, partners, collaborators, vendors, distributors, and buyers) (“Third Party Information”) and includes all information that would appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used; provided, however, that Confidential Information does not include any of the foregoing items to the extent the same became publicly known and made generally available through no wrongful act of the Executive or others nor does it include the Executive’s compensation.

 

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(b)                                 The Executive acknowledges that, Parent, the Company, Aris Mortgage Holding Company, and their respective subsidiaries (the “Protected Companies”) have a protectable interest in their respective trade secrets, Confidential Information and goodwill and that in the course of his or her service with the Protected Companies the Executive will or will have become familiar, with the Protected Companies’ trade secrets and with other Confidential Information concerning the Protected Companies and that the Executive’s services have been and will be of special, unique and extraordinary value to the Protected Companies.  The Executive agrees that if the Executive were to become employed by, or substantially involved in, the business of a competitor of the Protected Companies during the Restricted Period, it would be very difficult for the Executive not to rely on or use the Protected Companies’ trade secrets and Confidential Information.  To protect such trade secrets and Confidential Information and the Protected Companies’ relationships and goodwill with customers, during the Restricted Period, the Executive will not directly or indirectly through any other Person engage in, enter the employ of, render any services to, have any ownership interest in, or participate in the financing, operation, management or control of, any Competing Business.  Nothing herein shall prohibit the Executive from (i) being a passive owner of not more than 1% of the outstanding stock of any class of a corporation which is publicly traded, so long as the Executive has no active participation in the business of such corporation, or (ii) providing services to a subsidiary, division or Affiliate of a Competing Business if such subsidiary, division or Affiliate is not itself engaged in a Competing Business and the Executive does not provide services to, or have any responsibilities regarding, the Competing Business.

 

(c)                                  During the Restricted Period, the Executive shall not, directly or indirectly, whether through a third party or otherwise, recruit, solicit, induce, or otherwise encourage any employee of the Protected Companies who has up to the time of the Termination Date, or within the twelve (12) months prior to the Termination Date, been an employee of the Protected Companies to accept an employment or independent contractor or other business relationship with an employer or entity or Person other than the Protected Companies.

 

(d)                                 During the Restricted Period, the Executive shall not, for his or her own account, or for the account of any other Person, call upon any Person to whom any of the Protected Companies has sold, in the calendar year preceding the year in which the Termination Date occurs, $10,000,000 or more in loans secured by real estate on the secondary mortgage market during the Restricted Period for the purpose of soliciting or selling products or services in competition with the products or services provided by the Protected Companies within the Restricted Area.  In addition, during the Restricted Period, the Executive shall not induce any customer of the Protected Companies who has up to the time of the Termination Date been a customer of the Protected Companies because (i) such Person has purchased, in the calendar year preceding the year in which the Termination Date occurs, a mortgage from any of the Protected Companies, or (ii) any of the Protected Companies has sold, in the calendar year preceding the year in which the Termination Date occurs, $10,000,000 or more in loans secured by real estate on the secondary mortgage market to such Person, in each case, during the Restricted Period within the Restricted Area to cease or refrain from doing business in whole or in part with the Protected Companies.

 

(e)                                  Subject to Section 7 below, during the course of the Executive’s employment, the Executive shall not (i) make, publish, or communicate, to any entity or Person

 

11

 

or in any public forum, any defamatory or disparaging remarks, comments, or statements concerning the Company, its Affiliates or their businesses, products, services, or existing and prospective customers, suppliers, investors, and other associated third parties, (ii) make disparaging remarks which would violate the Executive’s fiduciary duties as an employee of the Company and its Affiliates, or (c) make any maliciously false statements about the officers or employees of the Company or its Affiliates.

 

(f)                                   For purposes of this Agreement, the following phrases and terms have the meanings set forth below:

 

(i)                                     “Competing Business” means a Person that at any time during the Executive’s period of service, or any time during the twelve (12) month period following the Termination Date anywhere in the Restricted Area (i) engages in the business of originating acquiring, holding, selling, transferring, securitizing or hedging loans secured by real estate, (ii) engages in the business of servicing such loans, or acquiring or holding the rights to service such loans, including engaging in such activities with respect to (A) loans transferred to, serviced for, holding servicing rights with respect to, or directly or indirectly insured by, an agency, (B) securitizations or other secondary market activity guaranteed by or otherwise involving a governmental body, including an agency, and (C) private label, non-conforming and other non-agency loans, securitizations and secondary market activity, (iii) engages in any significant business conducted by the Protected Companies as of the Termination Date, or (iv) engages in any significant business the Protected Companies conduct in the twelve (12) month period after the Termination Date (provided that as of the date of the Termination Date, to the Executive’s knowledge, such business has been discussed as a business that the Protected Companies reasonably contemplate engaging in within such twelve (12) month period).

 

(ii)                                  “directly or indirectly through any other Person engage in” shall include, without limitation, any direct or indirect ownership or profit participation interest in such enterprise, whether as an owner, stockholder, member, partner, joint venturer or otherwise, and shall include any direct or indirect participation in such enterprise as an employee, consultant, director, officer or licensor of technology.

 

(iii)                               “Restricted Area” means anywhere in the United States and elsewhere in the world where the Protected Companies carry on or engage in business or discussed and prepared to carry on or engage in business as of the Termination Date provided that as of the Termination Date, to the Executive’s knowledge, such area has been discussed as a market that the Protected Companies reasonably contemplate engaging in within the twelve (12) month period following the Termination Date) and provided a Protected Company carries on a like business there.

 

(iv)                              “Restricted Period” means the period beginning on the date the Executive’s employment or service commences and through and including the

 

12

 

date that occurs twelve (12) months following the Termination Date.  In the event that the Executive challenges the validity of the covenant in this Section 6, the Restricted Period shall be automatically extended for a number of days equal to the number of days elapsed during the pendency of litigation challenging the validity of the covenant, provided that the Protected Companies are successful on the merits in any such litigation.

 

(g)                                  The parties agree that in the event any of the prohibitions or restrictions set forth in this Section 6 are found by a court or arbitrator of competent jurisdiction to be unreasonable or otherwise unenforceable, it is the purpose and intent of the parties that any such prohibitions or restrictions be deemed modified or limited so that, as modified or limited, such prohibitions or restrictions may be enforced to the fullest extent possible.

 

7.                                      Protected Disclosures.

 

(a)                                 Notwithstanding anything in this Agreement to the contrary, Executive understands and agrees that nothing in this Agreement shall or shall be construed to:

 

(i)                                     prohibit the Executive, confidentially or otherwise, from communicating or filing a charge or complaint with, participating in, or giving other disclosures to a governmental or regulatory entity (including, without limitation, the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Department of Justice, the Congress, any Inspector General), in each case without receiving prior authorization from, or having to disclose any such conduct to, the Employers;

 

(ii)                                  prohibit Executive from responding if properly subpoenaed or otherwise required to do so under applicable law, provided that such disclosure does not exceed the extent required by such law and the Executive promptly provides written notice of any such order to the Employers within twenty-four (24) hours of receiving such order and allow the Company and its Affiliates, in their sole discretion, to seek a protective order or other appropriate remedy;

 

(iii)                               limit the Executive’s right to receive an award for information provided to any governmental agency, including under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010;

 

(iv)                              prohibit the Executive from testifying in an administrative, legislative, or judicial proceeding regarding alleged criminal conduct or sexual harassment when the Executive has been required or requested to attend a proceeding pursuant to court order, subpoena, or written request from an administrative agency or legislature;

 

(v)                                 prevent the disclosure of factual information relating to claims of sexual assault, sexual harassment, harassment or discrimination based on sex, failure to prevent harassment or discrimination based on sex, or retaliation against a person for reporting an act of harassment or discrimination based on sex, as

 

13

 

those claims are defined under the California Fair Employment and Housing Act, to the extent the claims are filed in a civil or administrative action and to the extent such disclosures are protected by law; or

 

(vi)                              restrict or impede the Executive from discussing the terms and conditions of the Executive’s employment or otherwise exercising the Executive’s rights under Section 8 of the National Labor Relations Act.

 

(b)                                 The Employers hereby notify the Executive that U.S. federal law provides that an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, State, or local government official (either directly or indirectly) or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Nothing in this Agreement limits or otherwise affects any such rights or creates liability for any such protected conduct.  An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—(A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

 

8.                                      Disputes.  In the event that the Executive prevails in any action to obtain or enforce any rights under this Agreement, the Company shall pay the cost of legal fees and expenses incurred by the Executive in such action, which payment shall be made directly to the provider of services within the time period required by Section 409A of the Code; provided, however that the Executive shall be required to deliver and not revoke an executed release of claims (in a form reasonably satisfactory to the Employers and which, for the avoidance of doubt, does not require the Executive to release any economic entitlement under the Transaction Bonus Agreement, the 2015 PUP, deferred bonus arrangements or any other compensatory, equity incentive or other similar agreement or arrangement).

 

9.                                      Successors; Binding Agreement.

 

(a)                                 Upon a Change in Control, the Employers shall require any successor to its business or assets (whether direct or indirect, by purchase, merger, consolidation or otherwise), that employs the Executive and any parent company thereof, to expressly assume and agree to perform the Employer’s obligations under this Agreement.

 

(b)                                 This Agreement shall not be assignable by the Executive except by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive and his or her personal or legal representatives and successors in interest.

 

10.                               Term.  Unless otherwise earlier terminated in writing by both parties, the term of this Agreement (the “Term”) shall be effective for the three (3) year period commencing on the Effective Date; provided, however, that if a Change in Control occurs during such period or the Company executes a definitive agreement which would lead to a Change in Control during such

 

14

 

period, then notwithstanding any other term or provision of this Agreement, this Agreement shall remain in effect through the later of (a) the end of the three (3) year period following the Effective Date and (b) the eighteen (18) month anniversary of the Change in Control (or the date on which such definitive agreement is terminated, if earlier).  The period during which this Agreement is effective shall be referred to herein as the “Term.”  Sections 8 through 12 of this Agreement shall survive and continue in full force and effect in accordance with their respective terms, notwithstanding any termination or expiration of this Agreement or the Term.

 

11.                               Notice.  Any notice, demand or other communication required or permitted under this Agreement shall be effective only if it is in writing and delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Parent:

 

AmeriHome Mortgage Holding Company, LLC

 

[           ]

 

If to the Company:

 

[           ]

 

If to the Executive:

 

At the address most recently on file with the Company

 

or to such other address as either party may designate by written notice to the other and shall be deemed to have been given as of the date so personally delivered or mailed.

 

12.                               No Conflict. The Executive represents and warrants that the Executive is not bound by any employment contract, restrictive covenant, or other restriction preventing the Executive from carrying out the Executive’s responsibilities for the Employers, or which is in any way inconsistent with the terms of this Agreement. The Executive further represents and warrants that the Executive shall not disclose to the Employers or induce the Employers to use any confidential or proprietary information or material belonging to any previous employer or others.

 

13.                               Clawbacks.  The Executive acknowledges that payments to the Executive from the Employers, including any payments pursuant to this Agreement, are subject to forfeiture or recovery by the Employers or other action pursuant to any clawback or recoupment policy, which (i) in connection with or following the initial public offering of the Company or any parent of the Company, the Employers may adopt from time to time, including without limitation any such policy or provision that the Employers may include in any compensation programs or plans or that they may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law or (ii) prior to the initial public offering of the Company or any parent of the Company, the Employers may adopt to the extent required under applicable law or pursuant to the terms of any settlement agreement, court order, judicial decree or similar document or

 

15

 

decision; provided, however, that in no event shall any amounts due to the Executive under the Transaction Bonus Agreement or the 2015 PUP be subject to such clawback or recoupment policy.

 

14.                               Compliance with Policies. The Executive acknowledges that he or she shall be subject to additional policies of the Employers as they may exist from time-to-time, including policies with regard to stock ownership by senior executives and policies regarding trading of securities.

 

15.                               Miscellaneous.

 

(a)                                 This Agreement cannot be modified or any term or condition waived in whole or in part except by a writing signed by the party against whom enforcement of the modification or waiver is sought or except as set forth in Section 6(g) above.

 

(b)                                 This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.  The Executive has been represented by counsel of his or her choice individually and has negotiated this provision regarding choice of law and venue and voluntarily agrees to these terms.

 

(c)                                  Except for any disputes, controversies, or claims under Section 6 or disputes, controversies or claims that are not arbitrable pursuant to applicable law, each party hereto agrees that any disputes, controversies or claims relating to this Agreement shall be submitted for final and binding arbitration in New York, New York and resolved by a single neutral with the American Arbitration Association (the “AAA”) then existing Employment Arbitration Rules and Mediation Procedures (the rules in effect as of the date of this Agreement can be found at this link:  https://www.adr.org/Rules).  Notwithstanding the foregoing, either party may in its, his, or her respective discretion pursue any and all claims arising under any provision of Section 6 in any court of competent jurisdiction in the State of Delaware, without being required to arbitrate such claims (whether they seek monetary damages, any form of injunctive relief or other remedies).

 

(d)                                 EXCEPT AS PROVIDED IN SECTION 11(c), THE COMPANY AND THE EXECUTIVE HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

(e)                                  Nothing in this Agreement alters the Executive’s status as an at-will employee which means that either the Executive or the Employers or any of their Affiliates may terminate the Executive’s employment for any or no reason with or without cause or notice.

 

(f)                                   No waiver by either party at any time of any breach of this Agreement by the other party shall be deemed a waiver of such provisions or conditions at any prior or subsequent time.

 

(g)                                  The headings in this Agreement are included for convenience and shall not affect the meaning or interpretation of this Agreement.

 

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(h)                                 Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law (after appropriate modification or limitation pursuant to Section 6(g)), such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision of the remaining provisions of this Agreement.

 

(i)                                     This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and such counterparts will together constitute one Agreement.

 

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IN WITNESS WHEREOF, the Employers have caused this Agreement to be executed by a duly authorized officer and attested to and the Executive acknowledges the Executive’s acceptance of the foregoing terms as of the date shown above.

 

 

AMERIHOME MORTGAGE HOLDING COMPANY, LLC

 

 

 

 

I HAVE BEEN INDIVIDUALLY REPRESENTED BY COUNSEL OF MY OWN PERSONAL CHOICE IN CONNECTION WITH THE NEGOTIATION OF THIS AGREEMENT AND IN PARTICULAR PARAGRAPHS 12(B) AND 12(C) AND I UNDERSTAND I AM AGREEING TO AN EXCEPTION TO CALIFORNIA LABOR CODE 925 WHICH OTHERWISE WOULD REQUIRE THAT CALIFORNIA LAW APPLY TO THIS AGREEMENT AND THE FORUM OF ANY DISPUTE WOULD BE CALIFORNIA.

 

 

[EXECUTIVE]

 

		Date

 

18

Exhibit 10.49

 

October [               ], 2020

 

Re: Transaction Bonus and Supplemental Bonus

 

Dear Jm:

 

Aris Mortgage Holding Company, LLC, a Delaware limited liability company (the “Company”), A-A Mortgage, and the Investor are pleased to inform you that, subject to the terms and conditions of this letter agreement (this “Agreement”), you will be entitled to receive a special bonus in an amount specified in Part I or Part II below (the “Transaction Bonus”) and an additional bonus in an amount specified in Part III below (the “Supplemental Bonus”), in each case, upon the first to occur of a Sale or an IPO on or before the Outside Date (the first to occur, a “Transaction”).  Certain terms used in this Agreement are defined in Part V of this Agreement.  Please indicate your acceptance of the terms and conditions of this Agreement by returning a signed copy to my attention no later than October [     ], 2020.  If this Agreement is not executed and returned by such date, it will automatically expire and will no longer be capable of acceptance.

 

You will be eligible to receive the Transaction Bonus only with respect to the first Transaction to occur after the date of this Agreement.  The occurrence of a Transaction is dependent upon numerous factors, some outside the control of the Company, and therefore there can be no guarantee that a Transaction will be consummated.  In the event that (i) a Transaction is an IPO, and the Transaction is not consummated on or before March 31, 2021 or (ii) a Transaction is a Sale, and (a) a definitive agreement (which, if consummated, would constitute a Sale) is not executed on or before March 31, 2021, (b) such Sale is not consummated prior to the termination date set forth in a definitive agreement, or (c) a definitive agreement is otherwise terminated prior to the consummation of a Sale (March 31, 2021, or such later prescribed date or termination date per the definitive agreement in connection with a Sale, the “Outside Date”), then, notwithstanding anything in this Agreement to the contrary, this Agreement (including Exhibit B) and all provisions herein will terminate automatically as of the Outside Date without further action, and accordingly all of your and the Company’s respective rights, obligations and interest hereunder (including all of your obligations, all of the Company’s rights under Exhibit B and the Company’s obligation to make any payment of the Transaction Bonus or the Supplemental Bonus) shall expire automatically; provided that the first sentence of Section 2 (solely with respect to breaches thereof prior to the Outside Date) and Sections 3 and 7-12 of Part IV, Part V and Exhibit B hereof (solely with respect to breaches thereof prior to the Outside Date) shall survive such termination and expiration.  In the event a Transaction is not consummated (or, in the case of a Sale, no definitive agreement (which, if consummated, would constitute a Sale) is executed) on or before December 31, 2020, the Investor agrees to present a long-term incentive plan or other similar arrangement (under which you would be expected to participate) to the Company’s management team by January 31, 2021.

 

To receive the Transaction Bonus, (i) unless your employment or engagement with the Company or one of its affiliates is earlier terminated by the Company or its affiliate, as applicable, without Cause or is earlier terminated due to your death or Disability, you must remain an active employee of the Company or an affiliate thereof in good standing through the date that a Transaction is consummated (and, as of such date, have not given notice of your intent to resign) and (ii) you (or your beneficiary or estate, in the event of your death) must execute and return (and not revoke, to the extent permitted by its terms) a waiver and general release (the “Release”) of the Company, the Investor, each of their respective affiliates, and certain other entities and persons in a form that is customary and reasonably satisfactory to the Company within forty-five (45) days (or such shorter period designated by the Company) following a Transaction and, to the extent requested by the Company, upon or in connection with each subsequent payment of any portion of the Transaction Bonus (including, for example, in respect of any contingent post-closing payments following a Sale (e.g., the payment of any earn-out, the release of any amount from escrow and the payment of any amount remaining from the members’ representative holdback).  If your employment with the Company or its affiliates terminates prior to the consummation of a Transaction for any reason other than due to death, Disability, or termination by the Company or its affiliate without Cause, or any of the other conditions set forth in this Agreement (including Exhibit B) have not been satisfied (other than a de minimis breach of Section 12 of Part IV hereof or Section 1(a) of Exhibit B, in each case as determined by the Board of Managers of the Company (or following the consummation of a Sale, A-A Mortgage or its designee) (the “Board”) in its sole, good faith discretion),

 

 

you acknowledge and agree that you will not receive any portion of the Transaction Bonus or any other compensation in lieu thereof.  For the avoidance of doubt, no termination of your employment after the date of the consummation of a Transaction shall disqualify you from receiving, or otherwise affect your right to receive, the Transaction Bonus.

 

I.                                        TRANSACTION IS SALE

 

In the event of the consummation of a Transaction on or prior to the Outside Date which is a Sale, you (or your beneficiary or estate, in the event of your death) will be entitled to a Transaction Bonus, subject to the terms and conditions contained herein (the “Sale Bonus”).  The amount of the Sale Bonus will be equal to the product of (i) thirty percent (30%) and (ii) the Gross Sale Proceeds Pool, minus the aggregate value (as determined in the Board’s sole discretion), as of the Sale, of any outstanding “Class T1 Units” and “Class P1 Units” of the Company awarded to you pursuant to that certain Aris Mortgage Holding Company, LLC 2015 Profits Units Plan.  Solely for illustrative purposes, Exhibit A-1 hereto includes an example of the amount of the Sale Bonus to which you (or your beneficiary or estate, in the event of your death) would become entitled under certain hypothetical facts enumerated therein.

 

The Sale Bonus will be paid by the Company or one of its subsidiaries in cash at or as soon as reasonably practicable after the date payment is made to equity holders generally, but in all events no later than sixty (60) days following the Sale (or, in the case of any post-closing payments in connection with a Sale (e.g., the payment of any earn-out, the release of any amount from escrow and the payment of any amount remaining from the members’ representative holdback), on the same schedule and subject to the same terms and conditions as the consideration payable in connection with the Sale to other equity holders); provided, that you (or your beneficiary or estate, in the event of your death) will not be entitled to payment of any amounts with respect to the Sale Bonus after the fifth (5th) anniversary of the Sale.  All payments to you of the Sale Bonus will be subject to applicable tax withholding (as provided in Section 5 of Part IV hereof), and the Company or the applicable subsidiary shall cause such tax withholding to be made.

 

Notwithstanding anything in this Agreement to the contrary, you acknowledge and agree that in the event that, following the payment to you of any portion of the Sale Bonus, (i) an adjustment is made to the value of Gross Sale Proceeds, Sale Proceeds, or any component(s) thereof to take into account finalized valuations or other determinations and (ii) as a result, you would be entitled to a lesser Sale Bonus hereunder under such adjusted Gross Sale Proceeds amount, you agree to pay A-A Mortgage or its designee as soon as practicable, but no later than sixty (60) days, after notice of such adjustment the difference between (a) the amount of the Sale Bonus you received based on the preliminary or initial Gross Sale Proceeds or Sale Proceeds amount, minus the amount of the Sale Bonus you should have received under this Agreement based on the adjusted Gross Sale Proceeds Amount.

 

II.                                   TRANSACTION IS IPO

 

In the event of the consummation of a Transaction on or prior to the Outside Date which is an IPO, you (or your beneficiary or estate, in the event of your death) will be entitled to a Transaction Bonus, subject to the terms and conditions contained herein (the “IPO Bonus”).  The amount of the IPO Bonus will be equal to the product of (i) thirty percent (30%) and (ii) the Gross IPO Pool, minus the aggregate value (as determined in the Board’s sole discretion), as of the IPO, of any outstanding “Class T1 Units” and “Class P1 Units” of the Company awarded to you pursuant to that certain Aris Mortgage Holding Company, LLC 2015 Profits Units Plan. In addition to the service-based vesting conditions described above, (i) eight and three-tenths percent (8.3%) of the IPO Bonus shall be subject to your continued active employment by the Company or an affiliate thereof in good standing through the first anniversary of the IPO (and, as of such date, not giving notice of your intent to resign other than notice of your intent to enter into Retirement) (the “First Tranche”), (ii) eight and three-tenths percent (8.3%) of the IPO Bonus shall be subject to your continued active employment by the Company or an affiliate thereof in good standing through the second anniversary of the IPO (and, as of such date, not giving notice of your intent to resign other than notice of your intent to enter into Retirement) (the “Second Tranche”), and (iii) eight and four-tenths percent (8.4%) of the IPO Bonus shall be subject to your continued active employment by the Company or an affiliate thereof in good standing through the third anniversary of the IPO (and, as of such date, not giving notice of your intent to resign other than notice of your intent to enter into Retirement) (the “Third Tranche”); provided, however, that if your employment or engagement with the Company or one of its affiliates is earlier terminated (x) by the Company or its affiliate, as

 

2

 

applicable, without Cause, (y) due to your death, Disability or Retirement or (z) due to your resignation for Good Reason, then you (or your beneficiary or estate, in the event of your death) will continue to remain eligible to receive the bonus in accordance with the payment schedule set forth below (the portions of the IPO Bonus paid pursuant to clauses (i), (ii), and (iii), the “Post-Closing IPO Bonus” and any portion of the IPO Bonus that is not a Post-Closing IPO Bonus, the “Closing IPO Bonus”); provided, further that you will execute any further agreements or documents reasonably requested to effectuate the payment or settlement of the Post-Closing IPO Bonus consistent with the schedule described herein. Solely for illustrative purposes, Exhibit A-2 hereto includes an example of the amount of the IPO Bonus to which you (or your beneficiary or estate, in the event of your death) would become entitled under certain hypothetical facts enumerated therein.

 

The Closing IPO Bonus will be paid or settled no later than sixty (60) days following the date of the IPO; provided, that in no event will the Closing IPO Bonus be paid or settled before January 1, 2021 or after December 31, 2021. The Post-Closing IPO Bonus will be paid or settled no later than sixty (60) days following the applicable vesting date; provided, that in no event will the First Tranche be paid or settled before January 1, 2022 or after December 31, 2022, or the Second Tranche be paid or settled before January 1, 2023 or after December 31, 2023, or the Third Tranche be paid or settled before January 1, 2024 or after December 31, 2024.  The Company reserves the right to settle such payments in cash or in the form of equity securities or equity-based awards of the Company (or its successor) or, if applicable, the Alternative Issuer, based on the initial price per equity security that such equity securities are sold to the public in the IPO, in each case, as the Company determines in its sole discretion and subject to applicable securities and tax regulations.

 

III.                              SUPPLEMENTAL BONUS

 

In addition to the Transaction Bonus, in the event of the consummation of a Transaction on or prior to the Outside Date which is an IPO or a Sale, you (or your beneficiary or estate, in the event of your death) will be eligible to receive the Supplemental Bonus in an amount equal to $2,000,000. You will be eligible to receive the Supplemental Bonus only with respect to the first Transaction to occur after the date of this Agreement.  To receive the Supplemental Bonus, (i) unless your employment or engagement with the Company or one of its affiliates is earlier terminated by the Company or its affiliate, as applicable, without Cause or is earlier terminated due to your death or Disability, you must remain an active employee of the Company or an affiliate thereof in good standing through the date that a Transaction is consummated (and, as of such date, have not given notice of your intent to resign) and (ii) you (or your beneficiary or estate, in the event of your death) must execute and return (and not revoke, to the extent permitted by its terms) a Release of the Company, the Investor, each of their respective affiliates, and certain other entities and persons in a form that is customary and reasonably satisfactory to the Company and A-A Mortgage within forty-five (45) days (or such shorter period designated therein) following a Transaction.  If your employment with the Company or its affiliates terminates prior to the consummation of a Transaction for any reason other than due to death, Disability, or termination by the Company or its affiliate without Cause, or any of the other conditions set forth in this Agreement (including Exhibit B) have not been satisfied (other than a de minimis breach of Section 12 of Part IV hereof or Section 1(a) of Exhibit B, in each case as determined by the Board in its sole, good faith discretion), you acknowledge and agree that you will not receive any portion of the Supplemental Bonus or any other compensation in lieu thereof.

 

If the Transaction is a Sale, the Supplemental Bonus will be paid by the Company or one of its subsidiaries in cash at or as soon as reasonably practicable, but in all events no later than sixty (60) days following, the Sale. If the Transaction is an IPO, the Supplemental Bonus will be paid or settled no later than sixty (60) days following the date of the IPO; provided, that in no event will the Supplemental Bonus be paid or settled before January 1, 2021 or after December 31, 2021; provided, further, that the Company reserves the right to settle such payments in cash or in the form of equity securities or equity-based awards of the Company (or its successor) or, if applicable, the Alternative Issuer, based on the initial price per equity security that such equity securities are sold to the public in the IPO, in each case, as the Company determines in its sole discretion and subject to applicable securities and tax regulations. All payments to you of the Supplemental Bonus will be subject to applicable tax withholding (as provided in Section 5 of Part IV hereof), and the Company or the applicable subsidiary shall cause such tax withholding to be made.

 

* * *

 

3

 

To the extent the IPO Bonus or the Supplemental Bonus is settled in equity securities or equity-based awards, the equity securities or equity-based awards will be subject to customary restrictions on the disposition of shares consistent with those imposed on the Investor (whether by the underwriter or otherwise).  In particular, you hereby agree as a condition of your receipt of the IPO Bonus and the Supplemental Bonus, that you (or your beneficiary or estate, in the event of your death) (i) will not affect any public sale or distribution of any equity securities of the Company, or, if applicable, the Alternative Issuer, or any securities convertible into or exchangeable or exercisable for such securities, during the seven (7) days prior to and the one hundred and eighty (180) days after the effectiveness of the IPO (or such longer or shorter period as may be requested in writing by the managing underwriter and agreed to in writing by the Company, the Alternative Issuer, or the Investor) (the “Market Standoff Period”), except as part of such underwritten registration or a secondary offering if otherwise permitted, and (ii) will execute any further letters, agreements and/or other documents reasonably requested by the Company or its underwriters.  You further acknowledge that the Company, the Alternative Issuer, or the Investor may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.  In addition, you (or your beneficiary or estate, in the event of your death) will be required to hold any equity securities received in settlement of the IPO Bonus or the Supplemental Bonus (including equity securities acquired upon the exercise or vesting of an equity-based award granted in settlement of the IPO Bonus or the Supplemental Bonus) so long as the Investor retains equity interests in the Company (or its successor) or, if applicable, the Alternative Issuer, and, following the Market Standoff Period, you (or your beneficiary or estate, in the event of your death) will be able to dispose of such equity securities commensurate with dispositions by the Investor of such Investor’s equity interests in the Company (or its successor) or, if applicable, the Alternative Issuer, as further described in the grant agreement to be received in connection with any equity settlement of the IPO Bonus or the Supplemental Bonus (the “Investor Transfer Restrictions”); provided; however, that such Investor Transfer Restrictions shall no longer be in effect commencing on the third anniversary of the IPO.

 

All payments to you of the IPO Bonus or the Supplemental Bonus will be subject to applicable tax withholding (as provided in Section 5 of Part IV hereof), and the Company or the applicable affiliate shall cause such withholding of shares that otherwise would be delivered to you to be made.  To the extent that the IPO Bonus or the Supplemental Bonus is settled in equity securities or equity-based awards, for purposes of calculating the amount of such withholding, (i) for U.S. federal income tax purposes, (a) if the amount of the IPO Bonus or the Supplemental Bonus (as applicable), together with other supplemental wage payments previously made to you during the calendar year in which the IPO Bonus or the Supplemental Bonus (as applicable) is paid, is greater than $1,000,000, then pursuant to Treasury Regulation Section 31.3402(g)-1(a)(4)(iv), the Company or the applicable affiliate shall subject the entire amount of such IPO Bonus or the Supplemental Bonus (as applicable) to “mandatory flat rate withholding” (as described in Treasury Regulation Section 31.3402(g)-1(a)(2)) at a rate equal to the highest rate of tax applicable under Section 1 of the Internal Revenue Code of 1986, as amended (the “Code”) for the tax year of such payment and (b) if the amount of the IPO Bonus or the Supplemental Bonus (as applicable), together with other supplemental wage payments previously made to you during the calendar year in which the IPO Bonus or the Supplemental Bonus (as applicable) is paid, is equal to or less than $1,000,000, then the Company or the applicable affiliate shall withhold an amount determined pursuant to Treasury Regulation Section 31.3402(g)-1(a)(6) and (ii) for California state income tax purposes, pursuant to California Unemployment Insurance Code Section 13043, to the extent such IPO Bonus or the Supplemental Bonus (as applicable) is not paid at the same time as regular wages, the Company or the applicable affiliate shall withhold an amount equal to the greater of the amount determined pursuant to California Unemployment Insurance Code Section 13043(d)(1) or California Unemployment Insurance Code Section 13043(d)(2), as reasonably determined by the Company or the applicable affiliate.  For the avoidance of doubt, except as required by applicable law, to the extent that the IPO Bonus or the Supplemental Bonus is settled in equity securities or equity-based awards, the Company or the applicable affiliate shall (i) determine the number of equity securities to be withheld to satisfy applicable tax obligations pursuant to this paragraph and (ii) determine and subsequently report to the applicable taxing authorities the amount of your taxable income with respect to such IPO Bonus or the Supplemental Bonus (as applicable), in each case, using the same price per equity security.

 

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IV.                               GENERAL PROVISIONS, TERMS, AND CONDITIONS

 

1.                                      Administration.  You may designate a beneficiary in writing to the Company to receive payments under this Agreement following your death.  Such designation shall be provided in a format deemed acceptable by the Company. All decisions, determinations and interpretations of the Board in respect of this Agreement shall be made by the Board in good faith and be conclusive, final, and binding on all parties in the absence of manifest error.

 

2.                                      Restrictive Covenants.  You acknowledge and agree that, in exchange for being provided access to Confidential Information (as defined in Exhibit B hereto) and for other good and valuable consideration (including the award of the Transaction Bonus and the Supplemental Bonus hereunder), you desire and agree to be bound by the covenants and restrictions enumerated in Exhibit B.  As a condition of the award of the Transaction Bonus hereunder, you shall execute and return Exhibit B to the Company contemporaneously with your execution and return of this Agreement; failure to do so shall render this Agreement and the grant of the Transaction Bonus hereunder null and void.

 

3.                                      No Right to Employment.  Your employment with the Company or its affiliates is at will and terminable at any time without notice for any reason or no reason.  The execution of this Agreement or the payment of the Transaction Bonus or the Supplemental Bonus shall not be construed as giving you the right to be retained in the employ of the Company or its affiliates.

 

4.                                      No Right to Assign, Alienate or Transfer Award.  Neither the Transaction Bonus or the Supplemental Bonus shall be assigned, alienated or transferred to any person voluntarily or by operation of any law, including any assignment, division or awarding of property under state domestic law (including community property law).  If you shall endeavor or purport to make any such assignment, alienation or transfer of any amount provided for hereunder that is the subject of such assignment, alienation or transfer, then such amount shall cease to be payable to any person.

 

5.                                      Withholding.  All payments made to you (or your beneficiary or estate, in the event of your death) under this Agreement shall be subject to applicable withholding and deductions.  You (or your beneficiary or estate, in the event of your death) are solely responsible for any and all taxes related to any compensation or benefits provided to you.

 

6.                                      Section 409A.  Payments and benefits provided hereunder are intended to comply with Section 409A of the Code.  To the maximum extent necessary to comply with, or be exempt from, Section 409A of the Code, payments hereunder shall be considered transaction-based compensation under Treasury regulation §1.409A-3(i)(5)(iv)(A).  This Agreement shall be interpreted and construed consistent with such intent.  Each payment hereunder shall constitute a “separately identified” amount within the meaning of Treasury regulation §1.409A-2(b)(2).  Any payment which is conditioned upon your execution of a release and which is to be paid during a designated period that begins in one taxable year and ends in a second taxable year shall be paid in the second taxable year.  In the event the terms of this Agreement would subject you to taxes, penalties or interest under Section 409A of the Code (“409A Penalties”), the parties may by mutual agreement amend the terms of this Agreement to avoid such 409A Penalties, to the extent possible; provided, that in no event shall the Company or any of its affiliates or its advisors be responsible for any 409A Penalties that arise in connection with this Agreement or any amounts payable under this Agreement.

 

7.                                      Governing Law; Venue.  This Agreement (including without limitation all exhibits hereto) is governed by and will be construed in accordance with the laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.  The parties irrevocably consent to, and agree not to challenge, the exclusive jurisdiction and exclusive venue of the state and federal courts in the State of Delaware, and agree that any claim under this Agreement shall be brought exclusively in any such court.  You acknowledge and agree that you have been represented by counsel of your choice individually and have negotiated this provision regarding choice of law and venue and voluntarily agree to these terms.

 

8.                                      Mutual Arbitration Agreement.  Except for any disputes, controversies, or claims under Section 2 of Part IV or Exhibit B or disputes, controversies or claims that are not arbitrable pursuant to applicable law, each party hereto agrees that any disputes, controversies or claims relating to this Agreement shall be submitted for final and binding arbitration in New York, New York and resolved by a single neutral with the American Arbitration

 

5

 

Association (the “AAA”) then existing Employment Arbitration Rules and Mediation Procedures (the rules in effect as of the date of this Agreement can be found at this link:  https://www.adr.org/Rules).  Notwithstanding the foregoing, either party may in its, his, or her respective discretion pursue any and all claims arising under any provision of Section 2 of Part IV or Exhibit B in any court of competent jurisdiction in the State of Delaware, without being required to arbitrate such claims (whether they seek monetary damages, any form of injunctive relief or other remedies).

 

9.                                      Severability.  If any provision of this Agreement is, becomes, or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or would disqualify the Agreement under any law deemed applicable by the Company, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Company, materially altering the intent of the Agreement, such provision shall be deemed void, stricken and the remainder of the Agreement shall remain in full force and effect.

 

10.                               Entire Agreement.  The arrangement described in this Agreement (including without limitation all exhibits hereto) contains the entire agreement between the parties hereto, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties, including in respect of any contemplated or promised grants to you of restricted stock units or similar awards. No amendment to this Agreement shall be effective unless the amendment is approved in writing by you, the Company and A-A Mortgage.

 

11.                               Counterparts.  This Agreement may be executed in several counterparts, each of which will be deemed an original, and each of which may be delivered by facsimile, e-mail, portable document format (.pdf) or any other functionally equivalent electronic means, but all of which together will constitute one and the same instrument.

 

12.                               Confidentiality.  You understand, acknowledge and agree that you will keep the existence of this Agreement and its terms and conditions set forth herein completely confidential, except that the foregoing will not limit your ability to discuss the terms and conditions with your immediate family members, legal advisors or personal tax or financial advisors, provided that you give to each such person to whom disclosure is made notice of the confidentiality provisions of this Agreement and each agrees to keep the existence, terms and conditions of this Agreement fully confidential.  If you breach this confidentiality obligation, you will immediately forfeit your eligibility to the Transaction Bonus.

 

V.                                    DEFINITIONS

 

For purposes of this Agreement, the following terms have the meanings specified below:

 

“A-A Mortgage” means A-A Mortgage Opportunities, L.P., a Delaware limited partnership.

 

“Alternative Issuer” means (i) a parent holding company whose primary assets consist of equity securities of the Company, or (ii) a subsidiary holding company or other vehicle formed to facilitate a public offering of equity securities.

 

“Cause” has the meaning assigned to it in the Aris Mortgage Holding Company, LLC 2015 Profits Units Plan.

 

“Disability” has the meaning assigned to it in the Aris Mortgage Holding Company, LLC 2015 Profits Units Plan.

 

“Good Reason” means, without your consent: (i) a material diminution in your title or duties or responsibilities; (ii) a material reduction in your base salary or your annual cash bonus opportunity (other than an across-the-board reduction of ten percent (10%) or less applicable to all similarly situated employees); or (iii) a requirement by the Company or its Affiliate to relocate your principal office to an office more than fifty (50) miles from your current principal office located in Thousand Oaks, California; provided, further, that you must provide written notice to the Company of the existence of Good Reason no later than thirty (30) days after the initial

 

6

 

occurrence of such event and the Company shall have a period of sixty (60) days following its receipt of such written notice during which it may remedy in all material respects the Good Reason condition identified in such written notice.  Notwithstanding the foregoing, (A) in the event that the Company reasonably believe that you may have engaged in conduct that could constitute Cause hereunder, the Company may, in its sole and absolute discretion, suspend you from performing your duties with pay hereunder for a period of up to sixty (60) days, and in no event shall any such suspension constitute an event pursuant to which you may terminate employment with Good Reason; provided, that, no such suspension shall alter the Company’s obligations under this Agreement during such period of suspension and (B) the following shall not in and of themselves constitute “Good Reason”: (I) a Sale; (II) the Company or any of its Affiliates becoming a subsidiary in connection with a Sale; (III) any changes pursuant to which “back office” functions or administrative support (such as human resources and finance) are provided by employees that are not dedicated solely to, not reporting directly to, or not reporting directly within the Company or their respective subsidiaries; (IV) any changes in reporting structure that would require you to report to a new supervisor (such as a committee or a general manager) in connection with a Sale; (V) changes to your authority, reporting responsibilities, or duties arising solely by reason of the Company or any of its Affiliates ceasing to be a public company in connection with a Sale; or (VI) changes resulting from your acceptance in writing of new employment terms and conditions or compensation or benefits in connection with a Sale.

 

“Gross IPO Pool” means the product of (i) ten percent (10%) and (ii) the Gross IPO Value.

 

“Gross IPO Value” means the IPO Implied Value, less any underwriting costs, discounts and commissions paid or payable in connection with the IPO assuming all of the Company’s or, if applicable, the Alternative Issuer’s equity securities are sold in the IPO or other costs or expenses (including taxes) incurred in connection with the IPO or distribution of the proceeds therefrom (including, for the avoidance of doubt, (i) closing, management, consulting, transaction, success, incentive or similar fees payable to the Investor or any of its affiliates or (ii) fees, payments or other amounts received in connection with transactions with the affiliates of the Investor), plus any distributions or dividends (other than tax distributions) paid by the Company prior to the IPO, less the aggregate value, as of the date of the IPO, of all Investor Investments.

 

“Gross Sale Proceeds” means the Sale Proceeds, less the aggregate amount of all fees and expenses (including taxes), incurred by the Company or the Investor or for or on behalf of the Company or the Investor, in connection with the negotiation, preparation, execution, and consummation of any Sale and distribution of related proceeds, plus any distributions or dividends (other than tax distributions) paid by the Company prior to the Sale, less the aggregate value, as of the date of the Sale, of all Investor Investments.

 

“Gross Sale Proceeds Pool” means the product of (i) ten percent (10%) and (ii) the Gross Sale Proceeds.

 

“Investor” means A-A Mortgage and each of its affiliates, and any investment fund or other collective investment vehicle whose investment activities are managed, or which is advised as to its investment activities, directly or indirectly, by Apollo Global Management, Inc. or by one or more of Apollo Global Management, Inc.’s affiliates and which invests in the Company (including any successors or assigns of any such manager).  For the avoidance of doubt, Athene Holding Ltd. and Athora Holdings, Ltd. and each of their respective subsidiaries and controlled affiliates shall be deemed affiliates of the Company and A-A Mortgage for the purposes of this definition.

 

“Investor Investments” means investments in an aggregate amount equal to $499,269,999.97 made by the Investor in the Company and any additional investment (whether in cash or in kind) in units hereafter made by the Investor in the Company, but excluding (i) any purchases or repurchases of units of the Company on any securities exchange or any national market system after an IPO and (ii) any investment, whether in cash or in kind, in units of the Company which is a reinvestment of a prior distribution to the Investor and is designated as a reinvestment by the Company, in each case as determined by the Board in its sole discretion.

 

“IPO” means the closing of the first underwritten public offering of and sale of the Company’s or the Alternative Issuer’s equity securities (other than on Forms S-4 or S-8 or their equivalent), pursuant to an effective registration statement under the Securities Act of 1933, as amended.

 

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“IPO Implied Value” means, as of the date of the IPO, the aggregate fair market value of the Company’s, equity securities, calculated based on the price at which equity securities of the Company or the Alternative Issuer’s equity securities, as applicable are initially offered for sale to the public by the underwriters in the IPO.

 

“Retirement” means a voluntary resignation from employment after attaining age sixty-five (65) and five (5) years of continuous service with the Company and its Affiliates.

 

“Sale” means (i) the Transfer of all or substantially all of the Company’ assets to a Third Party, (ii) the Transfer of outstanding Units to a Third Party, or (iii) a business combination involving the Company and one or more additional Persons by means of merger, consolidation, scheme of arrangement, amalgamation, share exchange or similar transaction, in each case in clauses (ii) and (iii) above under circumstances in which a Third Party, immediately after such transaction, holds fifty-one percent (51%) or more of the voting power of the outstanding Units of the Company or securities of the surviving or resulting Person, as the case may be, immediately following such transaction and in which the holders of the voting power of the outstanding Units, immediately prior to such transaction, hold less than fifty percent (50%) in voting power of the outstanding Units of the Company or securities of the surviving or resulting Person, as the case may be, immediately following such transaction.  A sale (or multiple related sales) of one or more Subsidiaries, if any, of the Company (whether by way of merger, consolidation, reorganization or sale of all or substantially all of the assets or securities or otherwise) which constitutes all or substantially all of the consolidated assets or revenues of the Company shall be deemed a Sale; provided, that such transaction constitutes a change in control event pursuant to Treasury regulation 1.409A-3(i)(5)(v), (vi), or (vii)).  For purposes of the definition of “Sale,” all terms used but not defined therein shall have the respective meanings assigned to them in the Amended and Restated Limited Partnership Agreement of the Company (as may be amended or restated from time to time).

 

“Sale Proceeds” means, in connection with the Sale, without double counting, the sum of (i) all amounts received by the members of the Company in respect of the units or other equity interests of the Company held by members of the Company, whether such amount is in cash, securities or otherwise, including, without limitation, all dividends and other distributions, including assets, all proceeds received from the sale of such units, and all proceeds otherwise received from the Sale including the amount of any contingent payments actually paid to members of the Company following the Sale (e.g., release of escrow, release of any holdback amount and earn-out payment) and (ii) the value of any units or other equity interests of the Company retained or held by members of the Company immediately after the Sale in respect of the units or other equity interests of the Company held by such members immediately prior to the Sale; provided that, in each case, the value of any non-cash consideration, or any units or other interests of the Company shall be the fair market value of such non-cash consideration or such units or other interests of the Company as reasonably determined by the Board (whose determination of fair market value will be deemed reasonable with respect to any consideration in the form of debt, promissory notes, coupons, or other instruments if valued based on the face amount of the applicable instrument); provided, further, that Sale Proceeds shall not include (i) closing, management, consulting, transaction, success, incentive or similar fees payable to the Investor or any of its affiliates, (ii) fees, payments or other amounts received in connection with transactions with the affiliates of the Investor, or (iii) any units or other equity or equity-based interests of the Company granted, awarded, or issued to any employee or other service provider in connection with or following the Sale.

 

8

 

	Very truly yours,
	ARIS MORTGAGE HOLDING COMPANY, LLC
	By:
		Name:
		Title:

 

	A-A MORTGAGE OPPORTUNITIES, L.P.
	By:
		Name:
		Title:

 

EMPLOYEE:
By signing in the space provide below, you hereby accept this Agreement and agree to the terms and provisions of this Agreement.
James Furash
Date

 

[Signature Page to Transaction Bonus and Supplemental Bonus Letter Agreement]

 

 

EXHIBIT A-1 / EXHIBIT A-2

 

[To Populate Individual-Specific Information]

 

 

EXHIBIT B

 

1.             Restrictive Covenants.

 

(a)           Subject to Section 2 below, you shall treat all Confidential Information (as defined below) as strictly confidential and will not, except as required in the performance of your authorized employment duties to the Company and its affiliates or with the written authorization of any of the Company’s managers in each instance, directly or indirectly, in whole or in part, access, use, copy, or remove (from the Company’s or its affiliate’s premises or control), or disclose, publish, communicate, or make available to any entity or Person other than to the Company’s and its affiliates’ employees and consultants having a need to know and who have been authorized by the Company to receive and use, any Confidential Information.  Any authorized disclosure by you of any Third Party Information (as defined below) shall comply with the terms of the Company’s or its affiliate’s agreement with the applicable third party.  Subject to Section 2 below, you shall promptly notify the Company, in writing, of any unauthorized disclosure, misappropriation, or misuse of Confidential Information that you become aware of.  You understand and acknowledge that Confidential Information and the Company’s and its affiliates’ ability to reserve it for the exclusive knowledge and use of the Company and its affiliates is of great competitive importance and commercial value to the Company and its affiliates and improper access, use, copying, removal, or disclosure of Confidential Information or violation of any policy of the Company or any of its affiliates by you might cause the Company to incur financial costs, loss of business advantage, liability, civil damages, and criminal penalties and may lead to disciplinary action by the Company and its affiliates, up to and including legal action and your immediate termination.  Your obligations hereunder with respect to any particular Confidential Information shall commence immediately upon your first access to such Confidential Information (whether before or after the beginning of your employment by the Company and its affiliates) and shall continue during and after your employment by the Company and its affiliates until such time as such Confidential Information has become public knowledge other than as a result of a breach of this Agreement by you or by those acting in concert with you or on your behalf.  “Develop” means to create, prepare, produce, author, edit, amend, invent, conceive, develop, assemble, or reduce to practice or, in the case of works of authorship, to fix in a tangible medium of expression. “Confidential Information” means any and all confidential, secret, proprietary, or otherwise nonpublic documents, materials, and other information, in tangible and intangible form, of and relating to the Company, its affiliates and their business (including information Developed by you in the course of your employment) or third parties associated with the Company and its affiliates (including existing and prospective customers, suppliers, investors, licensors, licensees, partners, collaborators, vendors, distributors, and buyers) (“Third Party Information”) and includes all information that would appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used; provided, however, that Confidential Information does not include any of the foregoing items to the extent the same became publicly known and made generally available through no wrongful act of you or others nor does it include your compensation.

 

(b)           You acknowledge that, the Company and its subsidiaries (the “Protected Companies”) have a protectable interest in their respective trade secrets, Confidential Information and goodwill and that in the course of your service with the Protected Companies you will or will have become familiar, with the Protected Companies’ trade secrets and with other Confidential Information concerning the Protected Companies and that your services have been and will be of special, unique and extraordinary value to the Protected Companies.  You agree that if you were to become employed by, or substantially involved in, the business of a competitor of the Protected Companies during the Restricted Period, it would be very difficult for you not to rely on or use the Protected Companies’ trade secrets and Confidential Information.  To protect such trade secrets and Confidential Information and the Protected Companies’ relationships and goodwill with customers, during the Restricted Period, you will not directly or indirectly through any other Person engage in, enter the employ of, render any services to, have any ownership interest in, or participate

 

 

in the financing, operation, management or control of, any Competing Business (as defined below).  Nothing herein shall prohibit you from (i) being a passive owner of not more than one percent (1%) of the outstanding stock of any class of a corporation which is publicly traded, so long as you have no active participation in the business of such corporation, or (ii) providing services to a subsidiary, division or affiliate of a Competing Business if such subsidiary, division or affiliate is not itself engaged in a Competing Business and you do not provide services to, or have any responsibilities regarding, the Competing Business.

 

(c)           During the Restricted Period (as defined below), you shall not, directly or indirectly, whether through any third party or otherwise, recruit, solicit, induce, or otherwise encourage any employee of the Protected Companies who has up to the time of the date of your termination of employment or engagement with the Company or an affiliate thereof, or within the twelve (12) months prior to such date,   been an employee of the Protected Companies to accept an employment or independent contractor or other business relationship with an employer or entity or Person other than the Protected Companies.

 

(d)           During the Restricted Period, you shall not, for your own account, or for the account of any other Person, call upon any Person to whom any of the Protected Companies has sold, in the calendar year preceding the year in which your termination of employment or engagement with the Company or an affiliate thereof occurs, $10,000,000 or more in loans secured by real estate on the secondary mortgage market during the Restricted Period for the purpose of soliciting or selling products or services in competition with the products or services provided by the Protected Companies within the Restricted Area (as defined below).  In addition, during the Restricted Period, you shall not induce any customer of the Protected Companies who has up to the time of the date of your termination of employment or engagement with the Company or an affiliate thereof been a customer of the Protected Companies because (i) such Person has purchased, in the calendar year preceding the year in which your termination of employment or engagement with the Company or an affiliate thereof occurs, a mortgage from any of the Protected Companies, or (ii) any of the Protected Companies has sold, in the calendar year preceding the year in which your termination of employment or engagement with the Company or an affiliate thereof occurs, $10,000,000 or more in loans secured by real estate on the secondary mortgage market to such Person, in each case, during the Restricted Period within the Restricted Area to cease or refrain from doing business in whole or in part with the Protected Companies.

 

(e)           Subject to Section 2 below, during the course of your employment, you shall not (i) make, publish, or communicate, to any entity or Person or in any public forum, any defamatory or disparaging remarks, comments, or statements concerning the Company, its affiliates or their businesses, products, services, or existing and prospective customers, suppliers, investors, and other associated third parties, (ii) make disparaging remarks which would violate your fiduciary duties as an employee of the Company and its affiliates, or (iii) make any maliciously false statements about the officers or employees of the Company or its affiliates.

 

(f)            For purposes hereof, the following phrases and terms have the meanings set forth below:

 

(i)            “Competing Business” means a Person that at any time during your period of service, or any time during the twelve (12) month period following the date of your termination of employment or engagement with the Company or an affiliate thereof anywhere in the Restricted Area (i) engages in the business of originating acquiring, holding, selling, transferring, securitizing or hedging loans secured by real estate, (ii) engages in the business of servicing such loans, or acquiring or holding the rights to service such loans, including engaging in such activities with respect to (A) loans transferred to, serviced for, holding servicing rights with respect to, or directly or indirectly insured by, an agency, (B) securitizations or other secondary market activity guaranteed by or otherwise involving a governmental body, including an agency, and (C) private

 

 

label, non-conforming and other non-agency loans, securitizations and secondary market activity, (iii) engages in any significant business conducted by the Protected Companies as of the date of your termination of employment or engagement with the Company or an affiliate thereof, or (iv) engages in any significant business the Protected Companies conduct in the twelve (12) month period after the date of your termination of employment or engagement with the Company or an affiliate thereof (provided that as of the date of your termination of employment or engagement with the Company or an affiliate thereof, to your knowledge, such business has been discussed as a business that the Protected Companies reasonably contemplate engaging in within such twelve (12) month period).

 

(ii)           “directly or indirectly through any other Person engage in” shall include, without limitation, any direct or indirect ownership or profit participation interest in such enterprise, whether as an owner, stockholder, member, partner, joint venturer or otherwise, and shall include any direct or indirect participation in such enterprise as an employee, consultant, director, officer or licensor of technology.

 

(iii)          “Person” shall be construed broadly and shall include, without limitation, an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

 

(iv)          “Restricted Area” means anywhere in the United States and elsewhere in the world where the Protected Companies carry on or engage in business or discussed and prepared to carry on or engage in business as of the date of your termination of employment or engagement with the Company or an affiliate thereof, provided that as of the date of your termination of employment or engagement with the Company or an affiliate thereof, to your knowledge, such area has been discussed as a market that the Protected Companies reasonably contemplate engaging in within the twelve (12) month period following the date of your termination of employment or engagement with the Company or an affiliate thereof and provided a Protected Company carries on a like business there.

 

(v)           “Restricted Period” means the period beginning on the date your employment or service commences and through and including the date that occurs twelve (12) months following the date of your termination of employment or engagement with the Company or an affiliate thereof, provided, however, that if this Agreement terminates on the Outside Date in accordance with its terms, then the Restricted Period shall end on the Outside Date.  Notwithstanding the foregoing, in the event that you challenge the validity of any of the covenants in this Section 1, the Restricted Period shall be automatically extended for a number of days equal to the number of days elapsed during the pendency of litigation challenging the validity of the covenant, provided that the Protected Companies are successful on the merits in any such litigation.

 

(g)           The parties agree that in the event any of the prohibitions or restrictions set forth in this Section 1 are found by a court or arbitrator of competent jurisdiction to be unreasonable or otherwise unenforceable, it is the purpose and intent of the parties that any such prohibitions or restrictions be deemed modified or limited so that, as modified or limited, such prohibitions or restrictions may be enforced to the fullest extent possible.

 

2.             Protected Disclosures.

 

(a)           Notwithstanding anything in this Agreement to the contrary, you understand and agree that nothing in this Agreement shall or shall be construed to:

 

 

(i)            prohibit you, confidentially or otherwise, from communicating or filing a charge or complaint with, participating in, or giving other disclosures to a governmental or regulatory entity (including, without limitation, the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Department of Justice, the Congress, any Inspector General), in each case without receiving prior authorization from, or having to disclose any such conduct to, the Company;

 

(ii)           prohibit you from responding if properly subpoenaed or otherwise required to do so under applicable law, provided that such disclosure does not exceed the extent required by such law and you promptly provides written notice of any such order to the Company within twenty-four (24) hours of receiving such order and allow the Company and its Affiliates, in their sole discretion, to seek a protective order or other appropriate remedy;

 

(iii)          limit your right to receive an award for information provided to any governmental agency, including under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010;

 

(iv)          prohibit you from testifying in an administrative, legislative, or judicial proceeding regarding alleged criminal conduct or sexual harassment when you have been required or requested to attend a proceeding pursuant to court order, subpoena, or written request from an administrative agency or legislature; prevent the disclosure of factual information relating to claims of sexual assault, sexual harassment, harassment or discrimination based on sex, failure to prevent harassment or discrimination based on sex, or retaliation against a person for reporting an act of harassment or discrimination based on sex, as those claims are defined under the California Fair Employment and Housing Act, to the extent the claims are filed in a civil or administrative action and to the extent such disclosures are protected by law; or

 

(v)           restrict or impede you from discussing the terms and conditions of your employment or otherwise exercising your rights under Section 7 of the National Labor Relations Act.

 

(b)           The Company hereby notifies you that U.S. federal law provides that an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, State, or local government official (either directly or indirectly) or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Nothing in this Agreement limits or otherwise affects any such rights or creates liability for any such protected conduct.  An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—(A) files any document containing the trade secret under seal, and (B) does not disclose the trade secret, except pursuant to court order.

 

 

EMPLOYEE:
By signing in the space provide below, you hereby accept the terms of this Exhibit B and agree to the terms and provisions of Exhibit B.
James Furash
Date

 

Exhibit 10.50

 

October [               ], 2020

 

Re: Transaction Bonus

 

Dear [Name]:

 

Aris Mortgage Holding Company, LLC, a Delaware limited liability company (the “Company”), A-A Mortgage, and the Investor are pleased to inform you that, subject to the terms and conditions of this letter agreement (this “Agreement”), you will be entitled to receive a special bonus in an amount specified below (the “Transaction Bonus”) upon the first to occur of a Sale or an IPO on or before the Outside Date (the first to occur, a “Transaction”).  Certain terms used in this Agreement are defined in Part IV of this Agreement.  Please indicate your acceptance of the terms and conditions of this Agreement by returning a signed copy to my attention no later than October [  ], 2020.  If this Agreement is not executed and returned by such date, it will automatically expire and will no longer be capable of acceptance.

 

You will be eligible to receive the Transaction Bonus only with respect to the first Transaction to occur after the date of this Agreement.  The occurrence of a Transaction is dependent upon numerous factors, some outside the control of the Company, and therefore there can be no guarantee that a Transaction will be consummated.  In the event that (i) a Transaction is an IPO, and the Transaction is not consummated on or before March 31, 2021 or (ii) a Transaction is a Sale, and (a) a definitive agreement (which, if consummated, would constitute a Sale) is not executed on or before March 31, 2021, (b) such Sale is not consummated prior to the termination date set forth in a definitive agreement, or (c) a definitive agreement is otherwise terminated prior to the consummation of a Sale (March 31, 2021, or such later prescribed date or termination date per the definitive agreement in connection with a Sale, the “Outside Date”), then, notwithstanding anything in this Agreement to the contrary, this Agreement (including Exhibit B) and all provisions herein will terminate automatically as of the Outside Date without further action, and accordingly all of your and the Company’s respective rights, obligations and interest hereunder (including all of your obligations, all of the Company’s rights under Exhibit B and the Company’s obligation to make any payment of the Transaction Bonus) shall expire automatically; provided that the first sentence of Section 2 (solely with respect to breaches thereof prior to the Outside Date) and Sections 3 and 7-12 of Part III, Part IV and Exhibit B hereof (solely with respect to breaches thereof prior to the Outside Date) shall survive such termination and expiration.  In the event a Transaction is not consummated (or, in the case of a Sale, no definitive agreement (which, if consummated, would constitute a Sale) is executed) on or before December 31, 2020, the Investor agrees to present a long-term incentive plan or other similar arrangement (under which you would be expected to participate) to the Company’s management team by January 31, 2021.

 

To receive the Transaction Bonus, (i) unless your employment or engagement with the Company or one of its affiliates is earlier terminated by the Company or its affiliate, as applicable, without Cause or is earlier terminated due to your death or Disability, you must remain an active employee of the Company or an affiliate thereof in good standing through the date that a Transaction is consummated (and, as of such date, have not given notice of your intent to resign) and (ii) you (or your beneficiary or estate, in the event of your death) must execute and return (and not revoke, to the extent permitted by its terms) a waiver and general release (the “Release”) of the Company, the Investor, each of their respective affiliates, and certain other entities and persons in a form that is customary and reasonably satisfactory to the Company within forty-five (45) days (or such shorter period designated by the Company) following a Transaction and, to the extent requested by the Company, upon or in connection with each subsequent payment of any portion of the Transaction Bonus (including, for example, in respect of any contingent post-closing payments following a Sale (e.g., the payment of any earn-out, the release of any amount from escrow and the payment of any amount remaining from the members’ representative holdback).  If your employment with the Company or its affiliates terminates prior to the consummation of a Transaction for any reason other than due to death, Disability, or termination by the Company or its affiliate without Cause, or any of the other conditions set forth in this Agreement (including Exhibit B) have not been satisfied (other than a de minimis breach of Section 12 of Part III hereof or Section 1(a) of Exhibit B, in each case as determined by the Board of Managers of the Company (or following the consummation of a Sale, A-A Mortgage or its designee) (the “Board”) in its sole, good faith discretion), you acknowledge and agree that you will not receive any portion of the Transaction Bonus or any other compensation

 

 

in lieu thereof.  For the avoidance of doubt, no termination of your employment after the date of the consummation of a Transaction shall disqualify you from receiving, or otherwise affect your right to receive, the Transaction Bonus.

 

I.                                        TRANSACTION IS SALE

 

In the event of the consummation of a Transaction on or prior to the Outside Date which is a Sale, you (or your beneficiary or estate, in the event of your death) will be entitled to a Transaction Bonus, subject to the terms and conditions contained herein (the “Sale Bonus”).  The amount of the Sale Bonus will be equal to the product of (i) [•] percent ([•]%) and (ii) the Gross Sale Proceeds Pool, minus the aggregate value (as determined in the Board’s sole discretion), as of the Sale, of any outstanding “Class T1 Units” and “Class P1 Units” of the Company awarded to you pursuant to that certain Aris Mortgage Holding Company, LLC 2015 Profits Units Plan.  Solely for illustrative purposes, Exhibit A-1 hereto includes an example of the amount of the Sale Bonus to which you (or your beneficiary or estate, in the event of your death) would become entitled under certain hypothetical facts enumerated therein.

 

The Sale Bonus will be paid by the Company or one of its subsidiaries in cash at or as soon as reasonably practicable after the date payment is made to equity holders generally, but in all events no later than sixty (60) days following the Sale (or, in the case of any post-closing payments in connection with a Sale (e.g., the payment of any earn-out, the release of any amount from escrow and the payment of any amount remaining from the members’ representative holdback), on the same schedule and subject to the same terms and conditions as the consideration payable in connection with the Sale to other equity holders); provided, that you (or your beneficiary or estate, in the event of your death) will not be entitled to payment of any amounts with respect to the Sale Bonus after the fifth (5th) anniversary of the Sale.  All payments to you of the Sale Bonus will be subject to applicable tax withholding (as provided in Section 5 of Part III hereof), and the Company or the applicable subsidiary shall cause such tax withholding to be made.

 

Notwithstanding anything in this Agreement to the contrary, you acknowledge and agree that in the event that, following the payment to you of any portion of the Sale Bonus, (i) an adjustment is made to the value of Gross Sale Proceeds, Sale Proceeds, or any component(s) thereof to take into account finalized valuations or other determinations and (ii) as a result, you would be entitled to a lesser Sale Bonus hereunder under such adjusted Gross Sale Proceeds amount, you agree to pay A-A Mortgage or its designee as soon as practicable, but no later than sixty (60) days, after notice of such adjustment the difference between (a) the amount of the Sale Bonus you received based on the preliminary or initial Gross Sale Proceeds or Sale Proceeds amount, minus the amount of the Sale Bonus you should have received under this Agreement based on the adjusted Gross Sale Proceeds Amount.

 

II.                                   TRANSACTION IS IPO

 

In the event of the consummation of a Transaction on or prior to the Outside Date which is an IPO, you (or your beneficiary or estate, in the event of your death) will be entitled to a Transaction Bonus, subject to the terms and conditions contained herein (the “IPO Bonus”).  The amount of the IPO Bonus will be equal to the product of (i) [•] percent ([•]%) and (ii) the Gross IPO Pool, minus the aggregate value (as determined in the Board’s sole discretion), as of the IPO, of any outstanding “Class T1 Units” and “Class P1 Units” of the Company awarded to you pursuant to that certain Aris Mortgage Holding Company, LLC 2015 Profits Units Plan. In addition to the service-based vesting conditions described above, (i) eight and three-tenths percent (8.3%) of the IPO Bonus shall be subject to your continued active employment by the Company or an affiliate thereof in good standing through the first anniversary of the IPO (and, as of such date, not giving notice of your intent to resign other than notice of your intent to enter into Retirement) (the “First Tranche”), (ii) eight and three-tenths percent (8.3%) of the IPO Bonus shall be subject to your continued active employment by the Company or an affiliate thereof in good standing through the second anniversary of the IPO (and, as of such date, not giving notice of your intent to resign other than notice of your intent to enter into Retirement) (the “Second Tranche”), and (iii) eight and four-tenths percent (8.4%) of the IPO Bonus shall be subject to your continued active employment by the Company or an affiliate thereof in good standing through the third anniversary of the IPO (and, as of such date, not giving notice of your intent to resign other than notice of your intent to enter into Retirement) (the “Third Tranche”); provided, however, that if your employment or engagement with the Company or one of its affiliates is earlier terminated (x) by the Company or its affiliate, as applicable, without Cause, (y) due to your death, Disability or Retirement or (z) due to your resignation for Good Reason, then you (or your

 

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beneficiary or estate, in the event of your death) will continue to remain eligible to receive the bonus in accordance with the payment schedule set forth below (the portions of the IPO Bonus paid pursuant to clauses (i), (ii), and (iii), the “Post-Closing IPO Bonus” and any portion of the IPO Bonus that is not a Post-Closing IPO Bonus, the “Closing IPO Bonus”); provided, further that you will execute any further agreements or documents reasonably requested to effectuate the payment or settlement of the Post-Closing IPO Bonus consistent with the schedule described herein. Solely for illustrative purposes, Exhibit A-2 hereto includes an example of the amount of the IPO Bonus to which you (or your beneficiary or estate, in the event of your death) would become entitled under certain hypothetical facts enumerated therein.

 

The Closing IPO Bonus will be paid or settled no later than sixty (60) days following the date of the IPO; provided, that in no event will the Closing IPO Bonus be paid or settled before January 1, 2021 or after December 31, 2021. The Post-Closing IPO Bonus will be paid or settled no later than sixty (60) days following the applicable vesting date; provided, that in no event will the First Tranche be paid or settled before January 1, 2022 or after December 31, 2022, or the Second Tranche be paid or settled before January 1, 2023 or after December 31, 2023, or the Third Tranche be paid or settled before January 1, 2024 or after December 31, 2024.  The Company reserves the right to settle such payments in cash or in the form of equity securities or equity-based awards of the Company (or its successor) or, if applicable, the Alternative Issuer, based on the initial price per equity security that such equity securities are sold to the public in the IPO, in each case, as the Company determines in its sole discretion and subject to applicable securities and tax regulations.

 

To the extent the IPO Bonus is settled in equity securities or equity-based awards, the equity securities or equity-based awards will be subject to customary restrictions on the disposition of shares consistent with those imposed on the Investor (whether by the underwriter or otherwise).  In particular, you hereby agree as a condition of your receipt of the IPO Bonus, that you (or your beneficiary or estate, in the event of your death) (i) will not affect any public sale or distribution of any equity securities of the Company, or, if applicable, the Alternative Issuer, or any securities convertible into or exchangeable or exercisable for such securities, during the seven (7) days prior to and the one hundred and eighty (180) days after the effectiveness of the IPO (or such longer or shorter period as may be requested in writing by the managing underwriter and agreed to in writing by the Company, the Alternative Issuer, or the Investor) (the “Market Standoff Period”), except as part of such underwritten registration or a secondary offering if otherwise permitted, and (ii) will execute any further letters, agreements and/or other documents reasonably requested by the Company or its underwriters.  You further acknowledge that the Company, the Alternative Issuer, or the Investor may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.  In addition, you (or your beneficiary or estate, in the event of your death) will be required to hold any equity securities received in settlement of the IPO Bonus (including equity securities acquired upon the exercise or vesting of an equity-based award granted in settlement of the IPO Bonus) so long as the Investor retains equity interests in the Company (or its successor) or, if applicable, the Alternative Issuer, and, following the Market Standoff Period, you (or your beneficiary or estate, in the event of your death) will be able to dispose of such equity securities commensurate with dispositions by the Investor of such Investor’s equity interests in the Company (or its successor) or, if applicable, the Alternative Issuer, as further described in the grant agreement to be received in connection with any equity settlement of the IPO Bonus (the “Investor Transfer Restrictions”); provided; however, that such Investor Transfer Restrictions shall no longer be in effect commencing on the third anniversary of the IPO.

 

All payments to you of the IPO Bonus will be subject to applicable tax withholding (as provided in Section 5 of Part III hereof), and the Company or the applicable affiliate shall cause such withholding of shares that otherwise would be delivered to you to be made.  To the extent that the IPO Bonus is settled in equity securities or equity-based awards, for purposes of calculating the amount of such withholding, (i) for U.S. federal income tax purposes, (a) if the amount of the IPO Bonus, together with other supplemental wage payments previously made to you during the calendar year in which the IPO Bonus is paid, is greater than $1,000,000, then pursuant to Treasury Regulation Section 31.3402(g)-1(a)(4)(iv), the Company or the applicable affiliate shall subject the entire amount of such IPO Bonus to “mandatory flat rate withholding” (as described in Treasury Regulation Section 31.3402(g)-1(a)(2)) at a rate equal to the highest rate of tax applicable under Section 1 of the Internal Revenue Code of 1986, as amended (the “Code”) for the tax year of such payment and (b) if the amount of the IPO Bonus, together with other supplemental wage payments previously made to you during the calendar year in which the IPO Bonus is paid, is equal to or less

 

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than $1,000,000, then the Company or the applicable affiliate shall withhold an amount determined pursuant to Treasury Regulation Section 31.3402(g)-1(a)(6) and (ii) for California state income tax purposes, pursuant to California Unemployment Insurance Code Section 13043, to the extent such IPO Bonus is not paid at the same time as regular wages, the Company or the applicable affiliate shall withhold an amount equal to the greater of the amount determined pursuant to California Unemployment Insurance Code Section 13043(d)(1) or California Unemployment Insurance Code Section 13043(d)(2), as reasonably determined by the Company or the applicable affiliate.  For the avoidance of doubt, except as required by applicable law, to the extent that the IPO Bonus is settled in equity securities or equity-based awards, the Company or the applicable affiliate shall (i) determine the number of equity securities to be withheld to satisfy applicable tax obligations pursuant to this paragraph and (ii) determine and subsequently report to the applicable taxing authorities the amount of your taxable income with respect to such IPO Bonus, in each case, using the same price per equity security.

 

III.                              GENERAL PROVISIONS, TERMS, AND CONDITIONS

 

1.                                      Administration.  You may designate a beneficiary in writing to the Company to receive payments under this Agreement following your death.  Such designation shall be provided in a format deemed acceptable by the Company. All decisions, determinations and interpretations of the Board in respect of this Agreement shall be made by the Board in good faith and be conclusive, final, and binding on all parties in the absence of manifest error.

 

2.                                      Restrictive Covenants.  You acknowledge and agree that, in exchange for being provided access to Confidential Information (as defined in Exhibit B hereto) and for other good and valuable consideration (including the award of the Transaction Bonus hereunder), you desire and agree to be bound by the covenants and restrictions enumerated in Exhibit B.  As a condition of the award of the Transaction Bonus hereunder, you shall execute and return Exhibit B to the Company contemporaneously with your execution and return of this Agreement; failure to do so shall render this Agreement and the grant of the Transaction Bonus hereunder null and void.

 

3.                                      No Right to Employment.  Your employment with the Company or its affiliates is at will and terminable at any time without notice for any reason or no reason.  The execution of this Agreement or the payment of the Transaction Bonus shall not be construed as giving you the right to be retained in the employ of the Company or its affiliates.

 

4.                                      No Right to Assign, Alienate or Transfer Award.  The Transaction Bonus shall not be assigned, alienated or transferred to any person voluntarily or by operation of any law, including any assignment, division or awarding of property under state domestic law (including community property law).  If you shall endeavor or purport to make any such assignment, alienation or transfer of any amount provided for hereunder that is the subject of such assignment, alienation or transfer, then such amount shall cease to be payable to any person.

 

5.                                      Withholding.  All payments made to you (or your beneficiary or estate, in the event of your death) under this Agreement shall be subject to applicable withholding and deductions.  You (or your beneficiary or estate, in the event of your death) are solely responsible for any and all taxes related to any compensation or benefits provided to you.

 

6.                                      Section 409A.  Payments and benefits provided hereunder are intended to comply with Section 409A of the Code.  To the maximum extent necessary to comply with, or be exempt from, Section 409A of the Code, payments hereunder shall be considered transaction-based compensation under Treasury regulation §1.409A-3(i)(5)(iv)(A).  This Agreement shall be interpreted and construed consistent with such intent.  Each payment hereunder shall constitute a “separately identified” amount within the meaning of Treasury regulation §1.409A-2(b)(2).  Any payment which is conditioned upon your execution of a release and which is to be paid during a designated period that begins in one taxable year and ends in a second taxable year shall be paid in the second taxable year.  In the event the terms of this Agreement would subject you to taxes, penalties or interest under Section 409A of the Code (“409A Penalties”), the parties may by mutual agreement amend the terms of this Agreement to avoid such 409A Penalties, to the extent possible; provided, that in no event shall the Company or any of its affiliates or its advisors be responsible for any 409A Penalties that arise in connection with this Agreement or any amounts payable under this Agreement.

 

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7.                                      Governing Law; Venue.  This Agreement (including without limitation all exhibits hereto) is governed by and will be construed in accordance with the laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.  The parties irrevocably consent to, and agree not to challenge, the exclusive jurisdiction and exclusive venue of the state and federal courts in the State of Delaware, and agree that any claim under this Agreement shall be brought exclusively in any such court.  You acknowledge and agree that you have been represented by counsel of your choice individually and have negotiated this provision regarding choice of law and venue and voluntarily agree to these terms.

 

8.                                      Mutual Arbitration Agreement.  Except for any disputes, controversies, or claims under Section 2 of Part III or Exhibit B or disputes, controversies or claims that are not arbitrable pursuant to applicable law, each party hereto agrees that any disputes, controversies or claims relating to this Agreement shall be submitted for final and binding arbitration in New York, New York and resolved by a single neutral with the American Arbitration Association (the “AAA”) then existing Employment Arbitration Rules and Mediation Procedures (the rules in effect as of the date of this Agreement can be found at this link:  https://www.adr.org/Rules).  Notwithstanding the foregoing, either party may in its, his, or her respective discretion pursue any and all claims arising under any provision of Section 2 of Part III or Exhibit B in any court of competent jurisdiction in the State of Delaware, without being required to arbitrate such claims (whether they seek monetary damages, any form of injunctive relief or other remedies).

 

9.                                      Severability.  If any provision of this Agreement is, becomes, or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or would disqualify the Agreement under any law deemed applicable by the Company, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Company, materially altering the intent of the Agreement, such provision shall be deemed void, stricken and the remainder of the Agreement shall remain in full force and effect.

 

10.                               Entire Agreement.  The arrangement described in this Agreement (including without limitation all exhibits hereto) contains the entire agreement between the parties hereto, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties. No amendment to this Agreement shall be effective unless the amendment is approved in writing by you, the Company and A-A Mortgage.

 

11.                               Counterparts.  This Agreement may be executed in several counterparts, each of which will be deemed an original, and each of which may be delivered by facsimile, e-mail, portable document format (.pdf) or any other functionally equivalent electronic means, but all of which together will constitute one and the same instrument.

 

12.                               Confidentiality.  You understand, acknowledge and agree that you will keep the existence of this Agreement and its terms and conditions set forth herein completely confidential, except that the foregoing will not limit your ability to discuss the terms and conditions with your immediate family members, legal advisors or personal tax or financial advisors, provided that you give to each such person to whom disclosure is made notice of the confidentiality provisions of this Agreement and each agrees to keep the existence, terms and conditions of this Agreement fully confidential.  If you breach this confidentiality obligation, you will immediately forfeit your eligibility to the Transaction Bonus.

 

IV.                               DEFINITIONS

 

For purposes of this Agreement, the following terms have the meanings specified below:

 

“A-A Mortgage” means A-A Mortgage Opportunities, L.P., a Delaware limited partnership.

 

“Alternative Issuer” means (i) a parent holding company whose primary assets consist of equity securities of the Company, or (ii) a subsidiary holding company or other vehicle formed to facilitate a public offering of equity securities.

 

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“Cause” has the meaning assigned to it in the Aris Mortgage Holding Company, LLC 2015 Profits Units Plan.

 

“Disability” has the meaning assigned to it in the Aris Mortgage Holding Company, LLC 2015 Profits Units Plan.

 

“Good Reason” means, without your consent: (i) a material diminution in your title or duties or responsibilities; (ii) a material reduction in your base salary or your annual cash bonus opportunity (other than an across-the-board reduction of ten percent (10%) or less applicable to all similarly situated employees); or (iii) a requirement by the Company or its Affiliate to relocate your principal office to an office more than fifty (50) miles from your current principal office located in Thousand Oaks, California; provided, further, that you must provide written notice to the Company of the existence of Good Reason no later than thirty (30) days after the initial occurrence of such event and the Company shall have a period of sixty (60) days following its receipt of such written notice during which it may remedy in all material respects the Good Reason condition identified in such written notice.  Notwithstanding the foregoing, (A) in the event that the Company reasonably believe that you may have engaged in conduct that could constitute Cause hereunder, the Company may, in its sole and absolute discretion, suspend you from performing your duties with pay hereunder for a period of up to sixty (60) days, and in no event shall any such suspension constitute an event pursuant to which you may terminate employment with Good Reason; provided, that, no such suspension shall alter the Company’s obligations under this Agreement during such period of suspension and (B) the following shall not in and of themselves constitute “Good Reason”: (I) a Sale; (II) the Company or any of its Affiliates becoming a subsidiary in connection with a Sale; (III) any changes pursuant to which “back office” functions or administrative support (such as human resources and finance) are provided by employees that are not dedicated solely to, not reporting directly to, or not reporting directly within the Company or their respective subsidiaries; (IV) any changes in reporting structure that would require you to report to a new supervisor (such as a committee or a general manager) in connection with a Sale; (V) changes to your authority, reporting responsibilities, or duties arising solely by reason of the Company or any of its Affiliates ceasing to be a public company in connection with a Sale; or (VI) changes resulting from your acceptance in writing of new employment terms and conditions or compensation or benefits in connection with a Sale.

 

“Gross IPO Pool” means the product of (i) ten percent (10%) and (ii) the Gross IPO Value.

 

“Gross IPO Value” means the IPO Implied Value, less any underwriting costs, discounts and commissions paid or payable in connection with the IPO assuming all of the Company’s or, if applicable, the Alternative Issuer’s equity securities are sold in the IPO or other costs or expenses (including taxes) incurred in connection with the IPO or distribution of the proceeds therefrom (including, for the avoidance of doubt, (i) closing, management, consulting, transaction, success, incentive or similar fees payable to the Investor or any of its affiliates or (ii) fees, payments or other amounts received in connection with transactions with the affiliates of the Investor), plus any distributions or dividends (other than tax distributions) paid by the Company prior to the IPO, less the aggregate value, as of the date of the IPO, of all Investor Investments.

 

“Gross Sale Proceeds” means the Sale Proceeds, less the aggregate amount of all fees and expenses (including taxes), incurred by the Company or the Investor or for or on behalf of the Company or the Investor, in connection with the negotiation, preparation, execution, and consummation of any Sale and distribution of related proceeds, plus any distributions or dividends (other than tax distributions) paid by the Company prior to the Sale, less the aggregate value, as of the date of the Sale, of all Investor Investments.

 

“Gross Sale Proceeds Pool” means the product of (i) ten percent (10%) and (ii) the Gross Sale Proceeds.

 

“Investor” means A-A Mortgage and each of its affiliates, and any investment fund or other collective investment vehicle whose investment activities are managed, or which is advised as to its investment activities, directly or indirectly, by Apollo Global Management, Inc. or by one or more of Apollo Global Management, Inc.’s affiliates and which invests in the Company (including any successors or assigns of any such manager).  For the avoidance of doubt, Athene Holding Ltd. and Athora Holdings, Ltd. and each of their respective subsidiaries and controlled affiliates shall be deemed affiliates of the Company and A-A Mortgage for the purposes of this definition.

 

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“Investor Investments” means investments in an aggregate amount equal to $499,269,999.97 made by the Investor in the Company and any additional investment (whether in cash or in kind) in units hereafter made by the Investor in the Company, but excluding (i) any purchases or repurchases of units of the Company on any securities exchange or any national market system after an IPO and (ii) any investment, whether in cash or in kind, in units of the Company which is a reinvestment of a prior distribution to the Investor and is designated as a reinvestment by the Company, in each case as determined by the Board in its sole discretion.

 

“IPO” means the closing of the first underwritten public offering of and sale of the Company’s or the Alternative Issuer’s equity securities (other than on Forms S-4 or S-8 or their equivalent), pursuant to an effective registration statement under the Securities Act of 1933, as amended.

 

“IPO Implied Value” means, as of the date of the IPO, the aggregate fair market value of the Company’s, equity securities, calculated based on the price at which equity securities of the Company or the Alternative Issuer’s equity securities, as applicable are initially offered for sale to the public by the underwriters in the IPO.

 

“Retirement” means a voluntary resignation from employment after attaining age sixty-five (65) and five (5) years of continuous service with the Company and its Affiliates.

 

“Sale” means (i) the Transfer of all or substantially all of the Company’ assets to a Third Party, (ii) the Transfer of outstanding Units to a Third Party, or (iii) a business combination involving the Company and one or more additional Persons by means of merger, consolidation, scheme of arrangement, amalgamation, share exchange or similar transaction, in each case in clauses (ii) and (iii) above under circumstances in which a Third Party, immediately after such transaction, holds fifty-one percent (51%) or more of the voting power of the outstanding Units of the Company or securities of the surviving or resulting Person, as the case may be, immediately following such transaction and in which the holders of the voting power of the outstanding Units, immediately prior to such transaction, hold less than fifty percent (50%) in voting power of the outstanding Units of the Company or securities of the surviving or resulting Person, as the case may be, immediately following such transaction.  A sale (or multiple related sales) of one or more Subsidiaries, if any, of the Company (whether by way of merger, consolidation, reorganization or sale of all or substantially all of the assets or securities or otherwise) which constitutes all or substantially all of the consolidated assets or revenues of the Company shall be deemed a Sale; provided, that such transaction constitutes a change in control event pursuant to Treasury regulation 1.409A-3(i)(5)(v), (vi), or (vii)).  For purposes of the definition of “Sale,” all terms used but not defined therein shall have the respective meanings assigned to them in the Amended and Restated Limited Partnership Agreement of the Company (as may be amended or restated from time to time).

 

“Sale Proceeds” means, in connection with the Sale, without double counting, the sum of (i) all amounts received by the members of the Company in respect of the units or other equity interests of the Company held by members of the Company, whether such amount is in cash, securities or otherwise, including, without limitation, all dividends and other distributions, including assets, all proceeds received from the sale of such units, and all proceeds otherwise received from the Sale including the amount of any contingent payments actually paid to members of the Company following the Sale (e.g., release of escrow, release of any holdback amount and earn-out payment) and (ii) the value of any units or other equity interests of the Company retained or held by members of the Company immediately after the Sale in respect of the units or other equity interests of the Company held by such members immediately prior to the Sale; provided that, in each case, the value of any non-cash consideration, or any units or other interests of the Company shall be the fair market value of such non-cash consideration or such units or other interests of the Company as reasonably determined by the Board (whose determination of fair market value will be deemed reasonable with respect to any consideration in the form of debt, promissory notes, coupons, or other instruments if valued based on the face amount of the applicable instrument); provided, further, that Sale Proceeds shall not include (i) closing, management, consulting, transaction, success, incentive or similar fees payable to the Investor or any of its affiliates, (ii) fees, payments or other amounts received in connection with transactions with the affiliates of the Investor, or (iii) any units or other equity or equity-based interests of the Company granted, awarded, or issued to any employee or other service provider in connection with or following the Sale.

 

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	Very truly yours,
	ARIS MORTGAGE HOLDING COMPANY, LLC
	By:
		Name:
		Title:

 

	A-A MORTGAGE OPPORTUNITIES, L.P.
	By:
		Name:
		Title:

 

EMPLOYEE:
By signing in the space provide below, you hereby accept this Agreement and agree to the terms and provisions of this Agreement.
[Name]
Date

 

[Signature Page to Transaction Bonus Letter Agreement]