Exhibit 10.1

 

 

 

REORGANIZATION AGREEMENT

Dated as of April 26, 2018

 

 

 

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TABLE OF CONTENTS

 

 

 

          PAGE      ARTICLE 1         DEFINITIONS       

Section 1.01.

  

Certain Defined Terms

     3  

Section 1.02.

  

Terms Defined Elsewhere in this Reorganization Agreement

     4  

Section 1.03.

  

Other Definitional and Interpretative Provisions

     5      ARTICLE 2         THE REORGANIZATION       

Section 2.01.

  

Transactions

     6  

Section 2.02.

  

Consent to Reorganization Transactions; Power of Attorney

     9  

Section 2.03.

  

No Liabilities in Event of Termination; Certain Covenants

     10      ARTICLE 3         REPRESENTATIONS AND WARRANTIES       

Section 3.01.

  

Representations and Warranties

     11      ARTICLE 4         MISCELLANEOUS       

Section 4.01.

  

Amendments and Waivers

     11  

Section 4.02.

  

Successors and Assigns

     12  

Section 4.03.

  

Notices

     12  

Section 4.04.

  

Further Assurances

     12  

Section 4.05.

  

Entire Agreement

     12  

Section 4.06.

  

Governing Law

     13  

Section 4.07.

  

Jurisdiction

     13  

Section 4.08.

  

WAIVER OF JURY TRIAL

     13  

Section 4.09.

  

Severability

     13  

Section 4.10.

  

Enforcement

     13  

Section 4.11.

  

Counterparts; Facsimile Signatures

     14  

Section 4.12.

  

Expenses

     14  

Exhibits

Exhibit A

  

Form of Max and Dane, LLC Subscription Agreement

Exhibit B

  

Form of Max and Dane, LLC Contribution Agreement

Exhibit C

  

Form of Goosehead Management Merger Agreement

Exhibit D

  

Form of GHM Holdings, LLC Contribution Agreement

Exhibit E

  

Form of Amended and Restated New Goosehead Management LLC Agreement

Exhibit F

  

Form of Evan and Jake, LLC Subscription Agreement

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Exhibit G

  

Form of Evan and Jake, LLC Contribution Agreement

Exhibit H

  

Form of Texas Wasatch Insurance Holdings Group Merger Agreement

Exhibit I

  

Form of Evan and Jake, LLC Distribution Agreement

Exhibit J

  

Form of TWIHG Holdings, LLC Contribution Agreement

Exhibit K

  

Form of Amended and Restated Texas Wasatch Insurance Holdings Group LLC
Agreement

Exhibit L

  

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

Exhibit M

  

Form of Goosehead Insurance, Inc. Amended and Restated Bylaws

Exhibit N

  

Form of Class B Securities Purchase Agreement

Exhibit O

  

Form of Goosehead Management Note Transfer Agreement

Exhibit P

  

Form of Goosehead Management Note

Exhibit Q

  

Form of Texas Wasatch Note Transfer Agreement

Exhibit R

  

Form of Texas Wasatch Note

Exhibit S

  

Form of Goosehead Financial, LLC Amended and Restated LLC Agreement

Exhibit T

  

Form of First Goosehead Financial, LLC Contribution Agreement

Exhibit U

  

Form of Second Goosehead Financial, LLC Contribution Agreement

Exhibit V

  

Form of Registration Rights Agreement

Exhibit W

  

Form of Tax Receivable Agreement

Exhibit X

  

Form of Stockholders Agreement

 

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REORGANIZATION AGREEMENT (this “Reorganization Agreement”), dated as of
April 26, 2018, by and among Mark E. Jones, Robyn Jones, Michael C. Colby,
Jeffrey Saunders, The Mark and Robyn Jones Descendants Trust 2014, Lanni Elaine
Romney Family Trust 2014, Lindy Jean Langston Family Trust 2014, Camille LaVaun
Peterson Family Trust 2014, Desiree Robyn Coleman Family Trust 2014, Adrienne
Morgan Jones Family Trust 2014, Mark Evan Jones, Jr. Family Trust 2014, Serena
Jones, Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne
Jones, Mark E. Jones, Jr., Colby 2014 Family Trust, Preston Michael Colby 2014
Trust, Lyla Kate Colby 2014 Trust, and Texas Wasatch Insurance Partners, L.P.
(each, a “Post-IPO LLC Member” and, together, the “Post-IPO LLC Members”),
Goosehead Insurance, Inc., a Delaware corporation (“Pubco”), Goosehead
Financial, LLC (the “Company”), Texas Wasatch Insurance Holdings Group, LLC,
Goosehead Management, LLC, Max and Dane, LLC, Evan and Jake, LLC, GHM Holdings,
LLC, TWIHG Holdings, LLC, New Goosehead Management, LLC and Texas Wasatch
Insurance Holdings Group, LLC.

RECITALS

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

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

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

ARTICLE 1

DEFINITIONS

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

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

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

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

 

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

“Company” means Goosehead Financial, LLC.

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

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

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

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

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

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

 

Term

  

Section

Amended and Restated Certificate of Incorporation

   2.01(b)(i)

Amended and Restated LLC Agreement

   2.01(c)(iv)

Amended and Restated New Goosehead Management LLC Agreement

   2.01(a)(v)

Amended and Restated Texas Wasatch Insurance Holdings Group LLC Agreement

   2.01(a)(xi)

Attorney

   2.02(c)

Board

   Recitals

Class B Securities Purchase Agreement

   2.01(c)(i)

e-mail

   4.03

Evan and Jake, LLC Contribution Agreement

   2.01(a)(vii)

Evan and Jake, LLC Distribution Agreement

   2.01(a)(ix)

Evan and Jake, LLC Subscription Agreement

   2.01(a)(vi)

First Goosehead Financial, LLC Contribution Agreement

   2.01(c)(v)

GHM Holdings, LLC Contribution Agreement

   2.01(a)(iv)

Goosehead Insurance, Inc. Amended and Restated Bylaws

   2.01(b)(ii)

Goosehead Management Merger Agreement

   2.01(a)(iii)

Goosehead Management Note

   2.01(c)(ii)

Goosehead Management Note Transfer Agreement

   2.01(c)(ii)

IPO

   Recitals

LLC Units

   2.01(c)(iv)

Max and Dane, LLC Contribution Agreement

   2.01(a)(ii)

Max and Dane, LLC Subscription Agreement

   2.01(a)(i)

 

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Term

  

Section

Member

   Preamble

Post-IPO LLC Member

   Preamble

Pre-IPO LLC Member

   Preamble

Pubco

   Preamble

Registration Rights Agreement

   2.01(c)(vii)

Reorganization Agreement

   Preamble

Reorganization Transactions

   2.01

Second Goosehead Financial, LLC Contribution Agreement

   2.01(c)(vi)

Stockholders Agreement

   2.01(c)(ix)

Tax Receivables Agreement

   2.01(c)(viii)

Texas Wasatch Insurance Holdings Group Merger Agreement

   2.01(a)(viii)

Texas Wasatch Note

   2.01(c)(iii)

Texas Wasatch Note Transfer Agreement

   2.01(c)(iii)

TWIHG Holdings, LLC Contribution Agreement

   2.01(a)(x)

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

 

 

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ARTICLE 2

THE REORGANIZATION

Section 2.01. Transactions. Subject to the terms and conditions hereinafter set
forth, and on the basis of and in reliance upon the representations, warranties,
covenants and agreements set forth herein, the parties hereto shall take the
actions described in this Section 2.01, or cause such actions to take place
(each, a “Reorganization Transaction” and, collectively, the “Reorganization
Transactions”):

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

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

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

(iii) Immediately after the effectiveness of the Max and Dane, LLC Contribution
Agreement, Goosehead Management, LLC and New Goosehead Management, LLC, a
Delaware limited liability company, shall enter into the Merger Agreement
attached hereto as Exhibit C (the “Goosehead Management Merger Agreement”).

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

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

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

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

 

 

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(viii) Immediately after the effectiveness of the Evan and Jake, LLC
Distribution Agreement, Texas Wasatch Insurance Holdings Group, LLC and Texas
Wasatch Insurance Holdings Group, LLC, a Delaware limited liability company,
shall enter into the Merger Agreement attached hereto as Exhibit H (the “Texas
Wasatch Insurance Holdings Group Merger Agreement”).

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

(x) Immediately after the effectiveness of the Texas Wasatch Insurance Holdings
Group Merger Agreement, Evan and Jake, LLC and TWIHG Holdings, LLC, a Delaware
limited liability company, shall enter into the Contribution Agreement attached
hereto as Exhibit J (the “TWIHG Holdings, LLC Contribution Agreement”).

(xi) Immediately after the effectiveness of the TWIHG Holdings, LLC Contribution
Agreement, Texas Wasatch Insurance Holdings Group, LLC shall amend and restate
its limited liability company agreement in substantially the form attached
hereto as Exhibit K (the “Amended and Restated Texas Wasatch Insurance Holdings
Group LLC Agreement”), with such changes or modifications as approved by the
Board of Pubco.

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

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

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

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

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

 

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

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

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

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

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

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

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

 

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

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

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

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

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

(c) In connection with the foregoing, each Member hereby irrevocably constitutes
and appoints Mark E. Jones, Michael C. Colby. Mark S. Colby and P. Ryan Langston
as attorneys-in-fact (individually, an “Attorney” and collectively, the
“Attorneys”) of the undersigned, each with full power and authority to act
together or alone, including full power of substitution, in the name of and for
and on behalf of the undersigned with respect to all matters arising in
connection with the Reorganization Transactions including, but not limited to,
the power and authority to execute and deliver each Reorganization Document on
behalf of such Member and take any and all actions necessary to effectuate the
foregoing, including endorsing (in blank or otherwise) on behalf of such Member
any certificate or certificates representing LLC Units to be transferred by the
undersigned, or a stock power or powers attached to such certificate or
certificates and taking any other action that the Attorneys, or any one of them,
in their or his or her sole discretion may consider necessary or proper in
connection with or to carry out the foregoing, as fully as could such Member if
personally present and acting. This power of attorney and all authority
conferred hereby are granted and conferred subject to the interests of Pubco and
in consideration of those interests, and for the purpose of completing the
transactions contemplated by the Reorganization Documents. This power of
attorney and all authority conferred hereby shall be irrevocable and shall not
be terminated by a Member or by operation of law, whether by the dissolution or
liquidation of any corporation, limited liability company or partnership, or by
the occurrence of any other event. If any event described in the preceding
sentence shall occur before the completion of the Reorganization Transactions,
and all other actions required to be taken under the Reorganization Documents
shall be taken, and action taken by the Attorneys, or any one of

 

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them, pursuant to this power of attorney shall be as valid as if such event had
not occurred, whether or not the Attorneys, or any one of them, shall have
received notice of such event. Notwithstanding the foregoing, if this agreement
is terminated, then from and after such date the undersigned shall have the
power to revoke all authority hereby conferred by giving notice on or promptly
after such date to each of the Attorneys that this power of attorney has been
terminated; subject, however, to all lawful action done or performed by the
Attorneys or any one of them, pursuant to this power of attorney prior to the
actual receipt of such notice. Each Member agrees to hold the Attorneys free and
harmless from any and all loss, damage or liability that they, or either one of
them, may sustain as a result of any action taken in good faith hereunder. It is
understood that the Attorneys shall serve without compensation.

Section 2.03. No Liabilities in Event of Termination; Certain Covenants. (a) In
the event that the IPO is abandoned or the IPO Closing has not occurred by
May 1, 2018, (i) this Reorganization Agreement shall automatically terminate and
be of no further force or effect except for this Section 2.03 and Article 4 and
(ii) there shall be no liability on the part of any of the parties hereto,
except that such termination shall not preclude any party from pursuing judicial
remedies for damages and/or other relief as a result of the breach by the other
parties of any representation, warranty, covenant or agreement contained herein
prior to such termination.

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

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

 

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES

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

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

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

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

(d) Neither the execution, delivery and performance by such party of this
Reorganization Agreement and the applicable Reorganization Documents, to the
extent a party thereto, nor the consummation by such party of the transactions
contemplated hereby, nor compliance by such party with the terms and provisions
hereof, will, directly or indirectly (with or without notice or lapse of time or
both), (i) if such party is not an individual, contravene or conflict with, or
result in a breach or termination of, or constitute a default under (or with
notice or lapse of time or both, result in the breach or termination of or
constitute a default under) the organizational documents of such party, (ii)
constitute a violation by such party of any existing requirement of law
applicable to such party or any of its properties, rights or assets or
(iii) require the consent or approval of any Person, except, in the case of
clauses (ii) and (iii), as would not reasonably be expected to result in,
individually or in the aggregate, a material adverse effect on the ability of
such party to consummate the transactions contemplated by this Reorganization
Agreement.

ARTICLE 4

MISCELLANEOUS

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

 

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

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

If to Pubco or the Company:

Name: Goosehead Insurance, Inc.

Attn: Ryan Langston

Address: 1500 Solana Blvd

Building 4, Suite 4500

Westlake, Texas 76262

E-mail: [***]

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

Davis Polk & Wardwell LLP

Attention: Richard Truesdell

450 Lexington Avenue

New York, New York 10017

Facsimile No.: [***]

E-mail: [***]

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

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

 

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

Section 4.07. Jurisdiction. The parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in the United States District Court for the Southern
District of New York or any New York State court sitting in the Borough of
Manhattan, so long as one of such courts shall have subject matter jurisdiction
over such suit, action or proceeding, and that any cause of action arising out
of this Agreement shall be deemed to have arisen from a transaction of business
in the State of New York, and each of the parties hereby irrevocably consents to
the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 4.03
shall be deemed effective service of process on such party.

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

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

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

 

13

--------------------------------------------------------------------------------

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

Section 4.12. Expenses. Unless otherwise provided in the Reorganization
Documents, all costs and expenses incurred in connection with the negotiation
and execution of this Reorganization Agreement and the transactions contemplated
by this Reorganization Agreement shall be paid by the party incurring such cost
or expense.

[Signature page follows]

 

14

--------------------------------------------------------------------------------

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

 

GOOSEHEAD INSURANCE, INC. By:  

/s/ P. Ryan Langston

  Name:  P. Ryan Langston   Title:    Authorized Officer GOOSEHEAD FINANCIAL,
LLC By: its Managing Member By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones  

Title:    Managin Member, Goosehead

            Financial, LLC

GOOSEHEAD MANAGEMENT, LLC By: its Managing Member By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones  

Title:    Managing Member, Goosehead

             Management, LLC

TEXAS WASATCH INSURANCE HOLDINGS     GROUP, LLC By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones   Title:    Authorized Signatory

--------------------------------------------------------------------------------

TEXAS WASATCH INSURANCE PARTNERS,     L.P. By: Texas Wasatch Insurance Holdings
Group, LLC,   its General Partner   By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones  

Title:    Authorized Signatory, Texas Wasatch

            Insurance Holdings Group, LLC

MARK E. JONES By:  

/s/ Mark E. Jones

ROBYN JONES By:  

/s/ Robyn Jones

MICHAEL C. COLBY By:  

/s/ Michael C. Colby

JEFFREY SAUNDERS By:  

/s/ Jeffrey Saunders

--------------------------------------------------------------------------------

THE MARK AND ROBYN JONES

    DESCENDANTS TRUST 2014

By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones     Title:    Trustee   LANNI ELAINE ROMNEY FAMILY TRUST
2014 By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones     Title:    Trustee   LINDY JEAN LANGSTON FAMILY TRUST
2014 By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones     Title:    Trustee   CAMILLE LAVAUN PETERSON FAMILY
    TRUST 2014 By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones     Title:    Trustee  

DESIREE ROBYN COLEMAN FAMILY TRUST

    2014

By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones     Title:    Trustee  

--------------------------------------------------------------------------------

ADRIENNE MORGAN JONES FAMILY TRUST

    2014

By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones     Title:    Trustee   MARK EVAN JONES, JR. FAMILY TRUST
2014 By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones     Title:    Trustee   SERENA JONES By:  

/s/ Serena Jones

LANNI ROMNEY By:  

/s/ Lanni Romney

LINDY LANGSTON By:  

/s/ Lindy Langston

CAMILLE PETERSON By:  

/s/ Camille Peterson

--------------------------------------------------------------------------------

DESIREE COLEMAN By:  

/s/ Desiree Coleman

ADRIENNE JONES By:  

/s/ Adrienne Jones

MARK E. JONES, JR. By:  

/s/ Mark E. Jones, Jr.

COLBY 2014 FAMILY TRUST By:  

/s/ Michael C. Colby

  Name:   Michael C. Colby   Title:     Trustee PRESTON MICHAEL COLBY 2014 TRUST
By:  

/s/ Michael C. Colby

  Name:   Michael C. Colby   Title:     Trustee

--------------------------------------------------------------------------------

LYLA KATE COLBY 2014 TRUST By:  

/s/ Michael C. Colby

  Name:   Michael C. Colby   Title:     Trustee MAX AND DANE, LLC

By: The Mark and Robyn Jones Descendants Trust

        2014, as an authorized member

By:  

/s/ Mark E. Jones

  Name:   Mark E. Jones   Title:     Authorized Person EVAN AND JAKE, LLC By:
Mark E. Jones, as an authorized person By:  

/s/ Mark E. Jones

  Name:   Mark E. Jones   Title:     Authorized Person

--------------------------------------------------------------------------------

GHM HOLDINGS, LLC By: Max and Dane, LLC, Member By: The Mark and Robyn Jones
Descendants Trust  

2014, as an authorized member of Max and

Dane, LLC

By:  

/s/ Mark E. Jones

  Name: Mark E. Jones     Title:    Authorized Person   TWIHG HOLDINGS, LLC By:
Evan and Jake, LLC, Member By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones     Title:    Authorized Person, Evan and Jake, LLC NEW
GOOSEHEAD MANAGEMENT, LLC By: Max and Dane, LLC, its Managing Member

By: The Mark and Robyn Jones Descendants Trust

        2014, as an authorized member

 

By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones   Title:    Authorized Person

--------------------------------------------------------------------------------

TEXAS WASATCH INSURANCE HOLDINGS

    GROUP, LLC

By:  

/s/ Mark E. Jones

  Name:  Mark E. Jones   Title:    Authorized Signatory

 

--------------------------------------------------------------------------------

Exhibit A

--------------------------------------------------------------------------------

SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT, dated as of April 27, 2018 (this “Agreement”), is
being entered into between the new members of Max and Dane, LLC listed on the
signature pages hereto (each, a “New Member”, and together the “New Members”)
and Max and Dane, LLC, a Delaware limited liability company (the “Company”). The
New Members and the Company are sometimes referred to herein individually as a
“Party” and collectively as the “Parties”.

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

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

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

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

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

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

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

3. Private Placement.

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

--------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

--------------------------------------------------------------------------------

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

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

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

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

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

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

[Signature Page Follows]

--------------------------------------------------------------------------------

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

 

COMPANY: MAX AND DANE, LLC

By:  

 

Name: Title: NEW MEMBER:

THE MARK AND ROBYN JONES

    DESCENDANTS TRUST 2014

By:  

 

  Name:   Title: NEW MEMBER: THE COLBY 2014 FAMILY TRUST

By:  

 

  Name:   Title: NEW MEMBER: MARK COLBY

By:  

 

  Name:   Title:

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

--------------------------------------------------------------------------------

NEW MEMBER:

P. RYAN LANGSTON

By:

 

 

 

Name:

 

Title:

NEW MEMBER:

MICHAEL MOXLEY

By:

 

 

 

Name:

 

Title:

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

--------------------------------------------------------------------------------

Schedule A

 

New Member

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

The Mark and Robyn Jones Descendants Trust 2014

     8800.00        85.36 %      8800.00        85.36 % 

The Colby 2014 Family Trust

     1200.00        11.64 %      1200.00        11.64 % 

Mark Colby

     103.00        1.00 %      103.00        1.00 % 

P. Ryan Langston

     103.00        1.00 %      103.00        1.00 % 

Michael Moxley

     103.00        1.00 %      103.00        1.00 % 

--------------------------------------------------------------------------------

Exhibit B

--------------------------------------------------------------------------------

CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is entered into as of April 27,
2018 by and among Max and Dane, LLC, a Delaware limited liability company (the
“Company”), the members of Goosehead Management, LLC, a Delaware limited
liability company (“Goosehead Management”), listed on the signature pages hereto
(the “Contributing Parties”), Goosehead Management and Mark E. Jones, as
Managing Member of Goosehead Management.

W I T N E S S E T H:

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

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

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

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

WHEREAS, immediately after the effectiveness of this Agreement, Goosehead
Management will merge with and into New Goosehead Management, LLC, a Delaware
limited liability company (“New Goosehead Management”), pursuant to that certain
Merger Agreement between Goosehead Management and New Goosehead Management dated
as of the date hereof (the “Merger”);

WHEREAS, Goosehead Management has elected or will elect to be treated as a QSub
for U.S. federal income tax purposes, effective as of the date hereof (the
“Goosehead Management Tax Election”);

WHEREAS, New Goosehead Management will be disregarded as separate from its owner
for U.S. federal income tax purposes and will file a protective election to that
effect, effective as of one day after the date hereof; and

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

 

--------------------------------------------------------------------------------

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

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

Contributing Party’s right, title and interest in and to such Interests.

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

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

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

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

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

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

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

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

 

2

--------------------------------------------------------------------------------

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

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

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

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

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

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

5. General Provisions.

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

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

 

 

3

--------------------------------------------------------------------------------

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

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

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

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

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

 

4

--------------------------------------------------------------------------------

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

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

[Signature page follows]

 

5

--------------------------------------------------------------------------------

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

 

GOOSEHEAD MANAGEMENT, LLC By: its Managing Member By:  

 

  Name: Mark E. Jones  

Title:   Managing Member, Goosehead

            Management, LLC

  MAX AND DANE, LLC By:  

 

  Name:   Title: MARK E. JONES By:  

 

  Name:  

Title: Managing Member, Goosehead

          Management, LLC

THE MARK AND ROBYN JONES

    DESCENDANTS TRUST 2014

By:  

 

  Name:   Title: THE COLBY 2014 FAMILY TRUST By:  

 

  Name:   Title:

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

--------------------------------------------------------------------------------

MARK COLBY By:  

 

  Name:   Title: P. RYAN LANGSTON By:  

 

  Name:   Title: MICHAEL MOXLEY By:  

 

  Name:   Title:

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

--------------------------------------------------------------------------------

Schedule A

 

Name of Contributing Party

   Interests to be Contributed to the Company  

The Mark and Robyn Jones Descendants Trust 2014

     8800.00  

The Colby 2014 Family Trust

     1200.00  

Mark Colby

     103.00  

P Ryan Langston

     103.00  

Michael Moxley

     103.00  

--------------------------------------------------------------------------------

Exhibit C

--------------------------------------------------------------------------------

AGREEMENT AND PLAN OF MERGER

dated as of

April 27, 2018

between

GOOSEHEAD MANAGEMENT, LLC

and

NEW GOOSEHEAD MANAGEMENT, LLC

--------------------------------------------------------------------------------

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER dated as of April 27, 2018, between Goosehead
Management, LLC, a Delaware limited liability company (the “Disappearing LLC”),
and New Goosehead Management, LLC, a Delaware limited liability company (the
“Delaware LLC”).

WHEREAS, prior to the date hereof, Max and Dane, LLC, a Delaware limited
liability company, (“Max and Dane”) was formed for the purpose of facilitating
the transactions described in the Contribution Agreement (defined below);

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

WHEREAS, the members of Disappearing LLC have entered into a contribution
agreement to contribute Disappearing LLC to Max and Dane (the “Contribution
Agreement,” and such members, the “Contributing Parties”);

WHEREAS, Disappearing LLC has elected or will elect to be treated as a QSub for
U.S. federal income tax purposes, effective as of the date of the Contribution
Agreement (the “Disappearing LLC Tax Election”);

WHEREAS, Delaware LLC will be disregarded as separate from its owner for U.S.
federal income tax purposes and will file a protective election to that effect,
effective as of one day after the date of the Contribution Agreement; and

WHEREAS, Max and Dane, Disappearing LLC, Delaware LLC and the Contributing
Parties intend for (i) the formation of Max and Dane, (ii) the contribution of
Disappearing LLC to Max and Dane by the Contributing Parties pursuant to the
Contribution Agreement, (iii) the Max and Dane Tax Election, (iv) the Merger
(defined below) and (v) the Disappearing LLC Tax Election, taken together, to
qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (“Code”), and hereby adopt this
agreement as a “plan of reorganization” within the meaning of Section 368 of the
Code.

The parties hereto agree as follows:

ARTICLE 1

THE MERGER

Section 1.01. The Merger. (a) At the Effective Time, Disappearing LLC shall be
merged (the “Merger”) with and into the Delaware LLC in accordance with the
requirements of the Limited Liability Company Act of the State of Delaware
(“Delaware Law”) and in accordance with the terms and conditions hereof,
whereupon the separate existence of the Disappearing LLC shall cease in
accordance with Delaware Law, and the Delaware LLC shall be the surviving
limited liability company (the “Surviving LLC”) in accordance with Delaware Law.

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(b) As soon as practicable after satisfaction or, to the extent permitted
hereunder, waiver of all conditions to the Merger, the Disappearing LLC and
Delaware LLC will file a certificate of merger with the Delaware Secretary of
State and make all other filings or recordings required by Delaware Law in
connection with the Merger. The Merger shall become effective at such time (the
“Effective Time”) as the certificate of merger is duly filed with the Delaware
Secretary of State or at such later time as is specified in the certificate of
merger.

(c) From and after the Effective Time, the Surviving LLC shall possess all the
rights, powers, privileges and franchises and be subject to all of the
obligations, liabilities, restrictions and disabilities of the Disappearing LLC
and the Delaware LLC, all as provided under Delaware Law.

Section 1.02. Conversion of Interests. At the Effective Time, each limited
liability company interest of the Disappearing LLC outstanding immediately prior
to the Effective Time shall be converted into one limited liability company
interest of the Surviving LLC.

ARTICLE 2

THE SURVIVING LLC

Section 2.01. Managing Member. From and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the managing member of Delaware LLC at the Effective Time
shall be the managing member of the Surviving LLC and (ii) the officers of the
Delaware LLC at the Effective Time shall be the officers of the Surviving LLC.

Section 2.02. Name. From and after the Effective Time, the name of the name of
the Surviving LLC shall be “Goosehead Management, LLC,” as provided in the
certificate of merger filed with the Delaware Secretary of State.

ARTICLE 3

COVENANTS

The parties hereto agree that:

Section 3.01. Best Efforts. Subject to the terms and conditions of this
Agreement, Disappearing LLC and Delaware LLC will use their best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement.

 

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Section 3.02. Further Assurances. At and after the Effective Time, the officers
and directors of the Surviving LLC will be authorized to execute and deliver, in
the name and on behalf of the Disappearing LLC or Delaware LLC, any deeds, bills
of sale, assignments or assurances and to take and do, in the name and on behalf
of Disappearing LLC or Delaware LLC, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving LLC any and all
right, title and interest in, to and under any of the rights, properties or
assets of the Disappearing LLC acquired or to be acquired by the Surviving LLC
as a result of, or in connection with, the Merger.

ARTICLE 4

CONDITIONS TO THE MERGER

Section 4.01. Conditions to Obligations of Each Party. The obligations of the
parties to consummate the Merger are subject to the satisfaction of the
following conditions:

(a) this Agreement shall have been approved and adopted by the Managing Member
of the Disappearing LLC and by the Delaware LLC in accordance with Delaware Law;
and

(b) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Merger.

ARTICLE 5

TERMINATION

Section 5.01. Termination. This Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time by either the Delaware LLC
or the Disappearing LLC.

ARTICLE 6

MISCELLANEOUS

Section 6.01. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

Section 6.02. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware.

 

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Section 6.03. Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received the
counterpart hereof signed by the other party hereto.

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed.

 

GOOSEHEAD MANAGEMENT, LLC By: its Managing Member By:  

 

 

Name:   Mark E. Jones

 

Title:   Managing Member

NEW GOOSEHEAD MANAGEMENT, LLC By: Max and Dane, LLC, its Managing Member

By: The Mark and Robyn Jones Descendants Trust

        2014, as an authorized member

By:  

 

 

Name:   Mark E. Jones

 

Title:   Authorized Person

 

 

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Exhibit D

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CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is entered into as of April 27,
2018 by and between GHM Holdings, LLC, a Delaware limited liability company (the
“Company”) and Max and Dane, LLC, a Delaware limited liability company (the
“Contributing Party”).

W I T N E S S E T H:

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

WHEREAS, Old Goosehead Management has merged with New Goosehead Management, LLC,
a Delaware limited liability company (“Goosehead Management”);

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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5. General Provisions.

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

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

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

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

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

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

 

 

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

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

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

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

[Signature page follows]

 

 

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

 

MAX AND DANE, LLC By:  

 

  Name:   Title: GHM HOLDINGS, LLC By:  

 

  Name:   Title:

[Signature Page to GHM Holdings, LLC Contribution Agreement]

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Exhibit E

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LIMITED LIABILITY COMPANY AGREEMENT

OF

NEW GOOSEHEAD MANAGEMENT, LLC

This Limited Liability Company Agreement (this “Agreement”), dated as of
April 27, 2018, of New Goosehead Management, LLC (the “Company”) is entered into
by Max and Dane, LLC (the “Managing Member”) and GHM Holdings, LLC (the
“Subsidiary Member”), as the members of the Company (the Managing Member, the
Subsidiary Member and any other person who, at such time, is admitted to the
Company as a member in accordance with the terms of this Agreement, being a
“Member”).

R E C I T A L S

WHEREAS, the Company was formed as a Delaware limited liability company by
filing the certificate of formation of the Company (the “Certificate”) with the
Secretary of State of the State of Delaware on April 23, 2018, in accordance
with the Act;

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

ARTICLE 1

DEFINITIONS

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

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

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

 

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

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

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

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

“Certificate” has the meaning set forth in the Recitals.

“Code” means the Internal Revenue Code of 1986.

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

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

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

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

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

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

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

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

 

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“Units” has the meaning set forth in Section 3.01.

ARTICLE 2

THE COMPANY

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

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

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

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

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

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

 

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

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

ARTICLE 3

UNITS

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

Section 3.02. Capital Contributions. Each Member listed on Schedule A shall be
deemed for purposes of this Agreement to have made a Capital Contribution to the
Company on the date hereof with respect to such Member’s Units, in the amount
set forth opposite such Member’s name under the heading “Initial Capital” on
Schedule A. Except as expressly provided in the immediately preceding sentence
and as set forth on Schedule A, no Capital Contributions made with respect to
any Unit prior to the date hereof shall be treated as Capital Contributions for
purposes of this Agreement. No other Capital Contributions are required or
permitted, except in accordance with the terms of this Agreement.

 

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Section 3.03. Capital Accounts.

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

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

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

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

ARTICLE 4

DISTRIBUTIONS AND ALLOCATIONS

Section 4.01. Distributions.

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

Section 4.02. Allocations. (a) As long as the Company is treated as a
partnership for U.S. federal income tax purposes, except as otherwise provided
in this Agreement, each item of income, gain, loss, or deduction of the Company
(determined in accordance with U.S. federal income tax principles as applied to
the maintenance of capital accounts) for any Fiscal Year shall be allocated
among the Members in proportion to their respective Percentage Interests.

 

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

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

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

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

 

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ARTICLE 5

MANAGEMENT

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

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

Section 5.03. Officers.

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

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

 

Name    Office Mark E. Jones    President

P. Ryan Langston

   Secretary

 

7

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ARTICLE 6

INDEMNIFICATION; RIGHTS AND OBLIGATIONS OF MEMBERS

Section 6.01. Exculpation and Indemnification.

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

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

ARTICLE 7

BOOKS AND RECORDS

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

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

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

 

8

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ARTICLE 8

EXIT; TRANSFER RESTRICTIONS

Section 8.01. Transfers; Assignments.

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

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

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

 

9

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

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

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

ARTICLE 9

DISSOLUTION

Section 9.01. Dissolution.

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

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

 

10

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

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

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

ARTICLE 10

TAX MATTERS

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

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

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

ARTICLE 11

MISCELLANEOUS

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

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

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

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

 

11

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

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

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

 

12

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

 

MAX AND DANE, LLC

By: The Mark and Robyn Jones Descendants Trust

        2014, as an authorized member

By:  

 

 

Name:   Mark E. Jones

 

Title:   Authorized Person

GHM HOLDINGS, LLC

 

By: Max and Dane, LLC, Member

By: The Mark and Robyn Jones Descendants Trust

        2014, as an authorized member of Max and

        Dane, LLC

By:  

 

 

Name:   Mark E. Jones

 

Title:   Authorized Person

Signature Page to Limited Liability Company Agreement of

Goosehead Management, LLC

--------------------------------------------------------------------------------

Schedule A

 

Member

   Units  

Max and Dane, LLC

     999  

GHM Holdings, LLC

     1  

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Exhibit F

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SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT, dated as of April 27, 2018 (this “Agreement”), is
being entered into between the new members of Evan and Jake, LLC listed on the
signature pages hereto (each, a “New Member”, and together the “New Members”)
and Evan and Jake, LLC, a Delaware limited liability company (the “Company”).
The New Members and the Company are sometimes referred to herein individually as
a “Party” and collectively as the “Parties”.

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

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

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

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

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

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

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

3. Private Placement.

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

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

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

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

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

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

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

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

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

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

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

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

7. Costs and Expenses. Each Party to this Agreement shall be responsible for
such

Party’s own expenses in connection with the preparation and negotiation of this
Agreement and the consummation of the transactions contemplated hereby.

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

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

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

[Signature Page Follows]

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

 

COMPANY: TEXAS WASATCH INSURANCE HOLDINGS GROUP, LLC By:  

 

Name:   Title:   NEW MEMBER: MARK E. JONES

By:  

 

  Name:   Title: NEW MEMBER: ROBYN JONES By:  

 

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

 

  Name:   Title:

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

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NEW MEMBER: JEFFREY SAUNDERS By:  

 

  Name:   Title: NEW MEMBER: MARK COLBY By:  

 

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

 

  Name:   Title: NEW MEMBER: MICHAEL MOXLEY By:  

 

  Name:   Title:

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

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Schedule A

 

New Member

   Interests of Texas
Wasatch Insurance
Holdings Group,
LLC Owned      Historical
Ownership
Percentage of
Texas Wasatch
Insurance Holdings
Group, LLC     Interests of Evan
and Jake, LLC
to be Issued to
New Member      Ownership
Percentage of Evan
and Jake, LLC  

Mark E. Jones

     450.00        45.23 %      450.00        45.23 % 

Robyn Jones

     450.00        45.23 %      450.00        45.23 % 

Michael Colby

     55.00        5.53 %      55.00        5.53 % 

Jeff Saunders

     10.25        1.03 %      10.25        1.03 % 

Mark Colby

     9.90        1.00 %      9.90        1.00 % 

P. Ryan Langston

     9.90        1.00 %      9.90        1.00 % 

Michael Moxley

     9.90        1.00 %      9.90        1.00 % 

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Exhibit G

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CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is entered into as of April 27,
2018 by and among Evan and Jake, LLC, a Delaware limited liability company (the
“Company”), and the members of Texas Wasatch Insurance Holdings Group, LLC, a
Texas limited liability company (“TWIHG”), listed on the signature pages hereto
(the “Contributing Parties”).

W I T N E S S E T H:

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

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

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

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

WHEREAS, immediately after the effectiveness of that certain Distribution
Agreement between TWIHG and the Company dated as of the date hereof, TWIHG will
merge with an into Texas Wasatch Insurance Holdings Group, LLC, a Delaware
limited liability company (“New TWIHG”), pursuant to that certain Merger
Agreement between TWIHG and New TWIHG dated as of the date hereof (the
“Merger”);

WHEREAS, TWIHG has elected or will elect to be treated as a QSub for U.S.
federal income tax purposes, effective as of the date hereof (together, the
“TWIHG Tax Election”);

WHEREAS, New TWIHG will be disregarded as separate from its owner for U.S.
federal income tax purposes and will file a protective election to that effect,
effective as of one day after the date hereof; and

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

 

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

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

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

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

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

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

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

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

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

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

 

2

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

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

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

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

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

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

5. General Provisions.

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

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

 

3

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

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

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

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

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

 

 

4

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

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

[Signature page follows]

 

5

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

 

EVAN AND JAKE, LLC By:  

 

  Name:   Title: MARK E. JONES By:  

 

  Name:   Title: ROBYN JONES By:  

 

  Name:   Title: MICHAEL C. COLBY By:  

 

  Name:   Title: JEFFREY SAUNDERS By:  

 

  Name:   Title:

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

--------------------------------------------------------------------------------

MARK COLBY By:  

 

  Name:   Title: P. RYAN LANGSTON By:  

 

  Name:   Title: MICHAEL MOXLEY By:  

 

  Name:   Title:

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

--------------------------------------------------------------------------------

Schedule A

 

Name of Contributing Party

   Interests to be Contributed to the Company  

Mark Jones

     450.00  

Robyn Jones

     450.00  

Michael Colby

     55.00  

Jeff Saunders

     10.25  

Mark Colby

     9.90  

P. Ryan Langston

     9.90  

Michael Moxley

     9.90  

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Exhibit H

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AGREEMENT AND PLAN OF MERGER

dated as of

April 27, 2018

between

TEXAS WASATCH INSURANCE HOLDINGS GROUP, LLC

and

TEXAS WASATCH INSURANCE HOLDINGS GROUP, LLC

--------------------------------------------------------------------------------

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER dated as of April 27, 2018, between Texas Wasatch
Insurance Holdings Group, LLC, a Texas limited liability company (the
“Disappearing LLC”), and Texas Wasatch Insurance Holdings Group, LLC, a Delaware
limited liability company (the “Delaware LLC”).

WHEREAS, prior to the date hereof, Evan and Jake, LLC, a Delaware limited
liability company, (“Evan and Jake”) was formed for the purpose of facilitating
the transactions described in the Contribution Agreement (defined below);

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

WHEREAS, the members of Disappearing LLC have entered into a contribution
agreement to contribute Disappearing LLC to Evan and Jake (the “Contribution
Agreement,” and such members, the “Contributing Parties”);

WHEREAS, Disappearing LLC has elected or will elect to be treated as a QSub for
U.S. federal income tax purposes, effective as of the date of the Contribution
Agreement (the “Disappearing LLC Tax Election”);

WHEREAS, the Delaware LLC will be disregarded as separate from its owner for
U.S. federal income tax purposes and will file a protective election to that
effect, effective as of one day after the date of the Contribution Agreement;
and

WHEREAS, Evan and Jake, Disappearing LLC, Delaware LLC and the Contributing
Parties intend for (i) the formation of Evan and Jake, (ii) the contribution of
Disappearing LLC to Evan and Jake by the Contributing Parties pursuant to the
Contribution Agreement, (iii) the Evan and Jake Tax Election, (iv) the Merger
(defined below) and (v) the Disappearing LLC Tax Election, taken together, to
qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (“Code”), and hereby adopt this
agreement as a “plan of reorganization” within the meaning of Section 368 of the
Code.

The parties hereto agree as follows:

ARTICLE 1

THE MERGER

Section 1.01. The Merger. (a) At the Effective Time, Disappearing LLC shall be
merged (the “Merger”) with and into the Delaware LLC in accordance

 

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with the requirements of the Limited Liability Company Act of the State of
Delaware (“Delaware Law”) and the applicable laws of the state of incorporation
of Disappearing Corporation (the “Disappearing LLC’s Merger Laws”) and in
accordance with the terms and conditions hereof, whereupon the separate
existence of the Disappearing LLC shall cease in accordance with the
Disappearing LLC’s Merger Laws, and the Delaware LLC shall be the surviving
limited liability company (the “Surviving LLC”) in accordance with Delaware Law.

(b) As soon as practicable after satisfaction or, to the extent permitted
hereunder, waiver of all conditions to the Merger, the Disappearing LLC and
Delaware LLC will file a certificate of merger with the Delaware Secretary of
State and make all other filings or recordings required by Delaware Law and the
Disappearing Corporation’s Merger Laws in connection with the Merger. The Merger
shall become effective at such time (the “Effective Time”) as the certificate of
merger is duly filed with the Delaware Secretary of State or at such later time
as is specified in the certificate of merger.

(c) From and after the Effective Time, the Surviving LLC shall possess all the
rights, powers, privileges and franchises and be subject to all of the
obligations, liabilities, restrictions and disabilities of the Disappearing LLC
and the Delaware LLC, all as provided under Delaware Law.

Section 1.02. Conversion of Interests. At the Effective Time, each limited
liability company interest of the Disappearing LLC outstanding immediately prior
to the Effective Time shall be converted into one limited liability company
interest of the Surviving LLC.

ARTICLE 2

THE SURVIVING LLC

Section 2.01. Managing Member. From and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the managing member of Delaware LLC at the Effective Time
shall be the managing member of the Surviving LLC and (ii) the officers of the
Delaware LLC at the Effective Time shall be the officers of the Surviving LLC.

ARTICLE 3

COVENANTS

The parties hereto agree that:

Section 3.01. Best Efforts. Subject to the terms and conditions of this
Agreement, Disappearing LLC and Delaware LLC will use their best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement.

 

2

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Section 3.02. Further Assurances. At and after the Effective Time, the officers
and directors of the Surviving LLC will be authorized to execute and deliver, in
the name and on behalf of the Disappearing LLC or Delaware LLC, any deeds, bills
of sale, assignments or assurances and to take and do, in the name and on behalf
of Disappearing LLC or Delaware LLC, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving LLC any and all
right, title and interest in, to and under any of the rights, properties or
assets of the Disappearing LLC acquired or to be acquired by the Surviving LLC
as a result of, or in connection with, the Merger.

ARTICLE 4

CONDITIONS TO THE MERGER

Section 4.01. Conditions to Obligations of Each Party. The obligations of the
parties to consummate the Merger are subject to the satisfaction of the
following conditions:

(a) this Agreement shall have been approved and adopted by the Managing Member
of the Disappearing LLC in accordance with the Disappearing LLC’s Merger Laws
and by the Delaware LLC in accordance with Delaware Law; and

(b) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Merger.

ARTICLE 5

TERMINATION

Section 5.01. Termination. This Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time by either the Delaware LLC
or the Disappearing LLC.

ARTICLE 6

MISCELLANEOUS

Section 6.01. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

 

3

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Section 6.02. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware, without giving effect to
principles of conflicts of law.

Section 6.03. Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received the
counterpart hereof signed by the other party hereto.

 

4

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed.

 

TEXAS WASATCH INSURANCE HOLDINGS   GROUP, LLC By:       Name: Mark E. Jones  
Title:   Authorized Signatory TEXAS WASATCH INSURANCE HOLDINGS   GROUP, LLC By:
Evan and Jake, LLC, its Managing Member By:       Name: Mark E. Jones   Title:
  Authorized Person

 

5

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Exhibit I

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DISTRIBUTION AGREEMENT

This Distribution Agreement (this “Agreement”) is entered into as of April 27,
2018 by and between Evan and Jake, LLC, a Delaware limited liability company
(the “Company”) and Texas Wasatch Insurance Holdings Group, LLC, a Delaware
limited liability company (the “Distributing Party”).

W I T N E S S E T H:

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

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

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

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

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

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

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

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

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

--------------------------------------------------------------------------------

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

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

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

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

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

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

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

5. General Provisions.

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

 

2

--------------------------------------------------------------------------------

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

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

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

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

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

 

3

--------------------------------------------------------------------------------

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

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

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

[Signature page follows]

 

 

4

--------------------------------------------------------------------------------

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

 

EVAN AND JAKE, LLC

By:      

Name:

 

Title:

TEXAS WASATCH INSURANCE HOLDINGS GROUP, LLC

By:      

Name:

 

Title:

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

--------------------------------------------------------------------------------

Exhibit J

--------------------------------------------------------------------------------

CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is entered into as of April 27,
2018 by and between TWIHG Holdings, LLC, a Delaware limited liability company
(the “Company”) and Evan and Jake, LLC, a Delaware limited liability company
(the “Contributing Party”).

 

W I T N E S S E T H:

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

WHEREAS, Old TWIHG has merged with Texas Wasatch Insurance Holdings Group, LLC,
a Delaware limited liability company (“TWIHG”);

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

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

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

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

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

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

--------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

 

2

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5. General Provisions.

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

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

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

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

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

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

 

3

--------------------------------------------------------------------------------

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

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

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

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

[Signature page follows]

 

4

--------------------------------------------------------------------------------

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

 

EVAN AND JAKE, LLC

By:      

Name:

 

Title:

TWIHG HOLDINGS, LLC

By:      

Name:

 

Title:

[Signature Page to TWIHG Holdings, LLC Contribution Agreement]

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Exhibit K

--------------------------------------------------------------------------------

LIMITED LIABILITY COMPANY AGREEMENT

OF

TEXAS WASATCH INSURANCE HOLDINGS GROUP, LLC

This Limited Liability Company Agreement (this “Agreement”), dated as of
April 27, 2018, of Texas Wasatch Insurance Holdings Group, LLC (the “Company”)
is entered into by Evan and Jake, LLC (the “Managing Member”) and TWIHG
Holdings, LLC (the “Subsidiary Member”), as the members of the Company (the
Managing Member, the Subsidiary Member and any other person who, at such time,
is admitted to the Company as a member in accordance with the terms of this
Agreement, being a “Member”).

R E C I T A L S

WHEREAS, the Company was formed as a Delaware limited liability company by
filing the certificate of formation of the Company (the “Certificate”) with the
Secretary of State of the State of Delaware on April 23, 2018, in accordance
with the Act;

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

ARTICLE 1

DEFINITIONS

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

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

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

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

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

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

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

“Certificate” has the meaning set forth in the Recitals.

“Code” means the Internal Revenue Code of 1986.

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

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

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

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

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

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

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

 

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

“Units” has the meaning set forth in Section 3.01.

ARTICLE 2

THE COMPANY

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

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

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

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

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

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

 

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

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

 

ARTICLE 3

UNITS

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

Section 3.02. Capital Contributions. Each Member listed on Schedule A shall be
deemed for purposes of this Agreement to have made a Capital Contribution to the
Company on the date hereof with respect to such Member’s Units, in the amount
set forth opposite such Member’s name under the heading “Initial Capital” on
Schedule A. Except as expressly provided in the immediately preceding sentence
and as set forth on Schedule A, no Capital Contributions made with respect to
any Unit prior to the date hereof shall be treated as Capital Contributions for
purposes of this Agreement. No other Capital Contributions are required or
permitted, except in accordance with the terms of this Agreement.

 

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Section 3.03. Capital Accounts.

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

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

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

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

ARTICLE 4

DISTRIBUTIONS AND ALLOCATIONS

Section 4.01. Distributions.

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

Section 4.02. Allocations. (a) As long as the Company is treated as a
partnership for U.S. federal income tax purposes, except as otherwise provided
in this Agreement, each item of income, gain, loss, or deduction of the Company
(determined in accordance with U.S. federal income tax principles as applied to
the maintenance of capital accounts) for any Fiscal Year shall be allocated
among the Members in proportion to their respective Percentage Interests.

 

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

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

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

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

 

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ARTICLE 5

MANAGEMENT

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

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

Section 5.03. Officers.

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

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

 

Name    Office Mark E. Jones    President P. Ryan Langston    Secretary

 

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ARTICLE 6

INDEMNIFICATION; RIGHTS AND OBLIGATIONS OF MEMBERS

Section 6.01. Exculpation and Indemnification.

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

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

ARTICLE 7

BOOKS AND RECORDS

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

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

 

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

ARTICLE 8

EXIT; TRANSFER RESTRICTIONS

Section 8.01. Transfers; Assignments.

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

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

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

 

9

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

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

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

ARTICLE 9

DISSOLUTION

Section 9.01. Dissolution.

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

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

 

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

(i) first, to creditors of the Company, including Members and Affiliates of
Members who are creditors, to the extent otherwise permitted

by Law, in satisfaction of liabilities of the Company (whether by payment or the
making of reasonable provision for payment thereof) other than liabilities for
which reasonable provision has been made and distributions to Members under
Article 4; then

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

ARTICLE 10

TAX MATTERS

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

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

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

ARTICLE 11

MISCELLANEOUS

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

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

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

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

 

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

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

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

 

 

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

 

EVAN AND JAKE, LLC By: Mark E. Jones, as an authorized person By:       Name:
Mark E. Jones   Title:   Authorized Person TWIHG HOLDINGS, LLC By: Evan and
Jake, LLC, Member By:       Name: Mark E. Jones   Title:   Authorized Person,
Evan and Jake, LLC

Signature Page to Limited Liability Company Agreement of

Texas Wasatch Insurance Holdings Group, LLC

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Schedule A

 

Member

   Units  

Evan and Jake, LLC

     999  

TWIHG Holdings, LLC

     1  

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Exhibit L

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AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

of

GOOSEHEAD INSURANCE, INC.

(Pursuant to Section 242 and 245 of

the General Corporation Law of the State of Delaware)

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

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

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

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

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

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

3. Purposes. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law.

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4. Number of Shares.

4.1 The total number of shares of all classes of stock that the Corporation
shall have authority to issue is 400,000,000 shares, consisting of: (i)
350,000,000 shares of common stock, divided into (a) 300,000,000 shares of
Class A common stock, with the par value of $0.01 per share (the “Class A Common
Stock”) and (b) 50,000,000 shares of Class B common stock, with the par value of
$0.01 per share (the “Class B Common Stock” and, together with Class A Common
Stock, the “Common Stock”); and (ii) 50,000,000 shares of preferred stock, with
the par value of $0.01 per share (the “Preferred Stock”).

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

(i) in the case of Class A Common Stock, the number of shares of Class A Common
Stock issuable in connection with (x) the exchange of all outstanding shares of
Class B Common Stock, together with the corresponding LLC Units, pursuant to
Article 10 of the Amended and Restated Goosehead Financial, LLC Agreement and
(y) the exercise of outstanding options, warrants, exchange rights, conversion
rights or similar rights for Class A Common Stock;

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

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

5.1 Common Stock.

(i) Voting Rights.

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

 

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

(2) (a) The holders of the outstanding shares of Class A Common Stock shall be
entitled to vote separately upon any amendment to this Certificate of
Incorporation (including by merger, consolidation, reorganization or similar
event) that would alter or change the powers, preferences or special rights of
such class of Common Stock in a manner that is disproportionately adverse as
compared to the Class B Common Stock and (b) the holders of the outstanding
shares of Class B Common Stock shall be entitled to vote separately upon any
amendment to this Certificate of Incorporation (including by merger,
consolidation, reorganization or similar event) that would alter or change the
powers, preferences or special rights of such class of Common Stock in a manner
that is disproportionately adverse as compared to the Class A Common Stock, it
being understood that any merger, consolidation or other business combination
shall not be deemed an amendment hereof if such merger, consolidation or other
business combination (x) constitutes a Disposition Event in which holders of
Paired Interests are required to exchange such Paired Interests pursuant to
Section 10.04(b) of the Amended and Restated Goosehead Financial, LLC Agreement
in such Disposition Event and receive consideration in such Disposition Event in
accordance with the terms of the Amended and Restated Goosehead Financial, LLC
Agreement as in effect prior to such Disposition Event and (y) provides for
payments under or in respect of the tax receivable or similar agreement entered
by the Corporation from time to time with any holders of Common Stock and/or
securities of Goosehead Financial, LLC to be made in connection with any such
merger, consolidation or other business combination in accordance with the terms
of such tax receivable or similar agreement as in effect prior to such merger,
consolidation or other business combination.

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

(4) If at any time the ratio at which Paired Interests are redeemable or
exchangeable for shares of Class A Common Stock pursuant to Article 10 of the
Amended and Restated Goosehead Financial, LLC Agreement is amended, the number
of votes per share of Class B Common Stock to which holders of shares of Class B
Common Stock are entitled pursuant to Section 5.1(i)(1) shall be adjusted
accordingly.

 

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(ii) Dividends; Stock Splits or Combinations.

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

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

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

(iii) Liquidation. In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation, after payment or
provision for payment of the debts and other liabilities of the Corporation and
of the preferential and other amounts, if any, to which the holders of Preferred
Stock are entitled, if any, the holders of all outstanding shares of Class A
Common Stock will be entitled to receive, pari passu, an amount per share equal
to the par value thereof, and thereafter the holders of all outstanding shares
of Class A Common Stock will be entitled to receive the remaining assets of the
Corporation available for distribution ratably in proportion to the number of
shares of Class A Common Stock. Without limiting the rights of the holders of
Class B Common Stock to exchange their shares of Class B Common Stock, together
with the corresponding LLC Units constituting the remainder of any Paired
Interests in which such shares are included, for shares of Class A Common Stock
in accordance with Section 10.01 of the Amended and Restated Goosehead
Financial, LLC Agreement (or for the consideration payable in respect of shares
of Class A Common Stock in such voluntary or involuntary liquidation,
dissolution or winding-up), the holders of shares of Class B Common Stock, as
such, will not be entitled to receive, with respect to such shares, any assets
of the Corporation in excess of the par value thereof, in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation.

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

 

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

6. Class B Common Stock.

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

6.2 Reservation of Shares of Class A Common Stock. The Corporation will at all
times reserve and keep available out of its authorized and unissued shares of
Class A Common Stock, solely for the purpose of the issuance upon exchange of
Paired Interests, the number of shares of Class A Common Stock that are issuable
upon conversion of all outstanding Paired Interests, pursuant to Article 10 of
the Amended and Restated Goosehead Financial, LLC Agreement. The Corporation
covenants that all the shares of Class A Common Stock that are issued upon the
exchange of such Paired Interests will, upon issuance, be validly issued, fully
paid and non-assessable.

 

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6.3 Taxes. The issuance of shares of Class A Common Stock upon the exercise by
holders of shares of Class B Common Stock of their right under Section 10.01 of
the Amended and Restated Goosehead Financial, LLC Agreement to exchange Paired
Units will be made without charge to the holders of the shares of Class B Common
Stock for any transfer taxes, stamp taxes or duties or other similar tax in
respect of the issuance; provided, however, that if any such shares of Class A
Common Stock are to be issued in a name other than that of the then record
holder of the shares of Class B Common Stock being exchanged (or The Depository
Trust Company or its nominee for the account of a participant of The Depository
Trust Company that will hold the shares for the account of such holder), then
such holder and/or the Person in whose name such shares are to be delivered,
shall pay to the Corporation the amount of any tax that may be payable in
respect of any transfer involved in the issuance or shall establish to the
reasonable satisfaction of the Corporation that the tax has been paid or is not
payable.

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

7. Board of Directors.

7.1 Number of Directors.

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

 

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(ii) During any period when the holders of any series of Preferred Stock have
the right to elect additional Directors as provided for or fixed pursuant to the
provisions of Section 5.2 (“Preferred Stock Directors”), upon the commencement,
and for the duration, of the period during which such right continues: (i) the
then total authorized number of Directors shall automatically be increased by
such specified number of Preferred Stock Directors, and the holders of the
related Preferred Stock shall be entitled to elect the Preferred Stock Directors
pursuant to the provisions of the Board’s designation for the series of
Preferred Stock and (ii) each such Preferred Stock Director shall serve until
such Preferred Stock Director’s successor shall have been duly elected and
qualified, or until such Preferred Stock Director’s right to hold such office
terminates pursuant to such provisions, whichever occurs earlier, subject to his
or her earlier death, disqualification, resignation or removal. Except as
otherwise provided by the Board in the resolution or resolutions establishing
such series, whenever the holders of any series of Preferred Stock having such
right to elect Preferred Stock Directors are divested of such right pursuant to
the provisions of such stock, the terms of office of all such Preferred Stock
Directors elected by the holders of such Preferred Stock, or elected to fill any
vacancies resulting from the death, resignation, disqualification or removal of
such Preferred Stock Directors, shall forthwith terminate and the total and
authorized number of Directors shall be reduced accordingly.

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

 

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7.3 Vacancies and Newly Created Directorships. Subject to the rights of the
holders of any one or more series of Preferred Stock then outstanding and
subject to the terms of the Stockholders Agreement (as long as such agreement is
in effect), newly created directorships resulting from any increase in the
authorized number of Directors or any vacancies on the Board resulting from
death, resignation, retirement, disqualification, removal from office or other
cause shall be filled only by the affirmative vote of a majority of the
remaining Directors then in office, even if less than a quorum of the Board. Any
Director so chosen shall hold office until the next election of the class for
which such Director shall have been chosen and until his or her successor shall
be duly elected and qualified or until such Director’s earlier death,
disqualification, resignation or removal. No decrease in the number of Directors
shall shorten the term of any Director then in office.

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

8. Meetings of Stockholders.

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

8.2 Meetings of Stockholders. (i) An annual meeting of stockholders for the
election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting shall
be held at such place, on such date, and at such time as the Board shall
determine.

 

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

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

9. Business Combinations.

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

10. Limitation of Liability.

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

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

11. Indemnification.

11.1 Right to Indemnification. The Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any Person (a “Covered Person”) who was or
is a party or is threatened to be made a party to or otherwise involved any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (a “Proceeding”), by reason of the
fact that he or she, or a Person for whom he or she is the legal representative,
is or was a Director or officer of the Corporation or, while a Director or
officer of the Corporation, is or was serving at the request of the Corporation
as a director, officer, employee, agent or trustee of another entity or

 

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enterprise, including service with respect to employee benefit plans, against
all liability and loss suffered and expenses (including, without limitation,
attorneys’ fees and expenses, judgments, fines, excise taxes or penalties under
the Employee Retirement Income Security Act of 1974, as amended, and amounts
paid or to be paid in settlement) reasonably incurred by such Covered Person.
Notwithstanding the preceding sentence, except as otherwise provided in
Section 11.3 with respect to Proceedings to enforce rights to indemnification or
advancement of expenses or with respect to any compulsory counterclaim brought
by such indemnitee, the Corporation shall be required to indemnify a Covered
Person in connection with a Proceeding (or part thereof) commenced by such
Covered Person only if the commencement of such Proceeding (or part thereof) by
the Covered Person was authorized by the Board.

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

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

11.3 Claims. If a claim for indemnification or advancement of expenses under
this Article 11 is not paid in full within thirty (30) days after a written
claim therefor by the Covered Person has been received by the Corporation, the
Covered Person may file suit to recover the unpaid amount of such claim or to
obtain an advancement of expenses, as applicable. To the fullest extent
permitted by law, if successful in whole or in part in any such suit, or in a
suit brought by the Corporation to recover an advancement of expenses pursuant
to the terms of an undertaking, the Covered Person shall be entitled to be paid
the expense of prosecuting or defending such claim. In any such action the
Corporation shall have the burden of proving that the Covered Person is not
entitled to the requested indemnification or advancement of expenses under
applicable law. In (i) any suit brought by a Covered Person to enforce a right
to indemnification hereunder (but not in a suit brought by a Covered Person to
enforce a right to an advancement of expenses) it shall be a defense that, and
(ii) any suit brought

 

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by the Corporation to recover an advancement of expenses pursuant to the terms
of an undertaking, the Corporation shall be entitled to recover such expenses
upon a final adjudication that, such Person has not met any applicable standard
for indemnification set forth in the General Corporation Law. Neither the
failure of the Corporation (including by its Directors who are not parties to
such action, a committee of such Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the Covered Person is proper in the circumstances
because the Covered Person has met the applicable standard of conduct set forth
in the General Corporation Law, nor an actual determination by the Corporation
(including by its Directors who are not parties to such action, a committee of
such Directors, independent legal counsel or its stockholders) that the Covered
Person has not met such applicable standard of conduct, shall create a
presumption that such Person has not met the applicable standard of conduct or,
in the case of such a suit brought by the Covered Person, be a defense to such
suit.

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

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

11.6 Indemnitor of First Resort. In all events, (i) the Corporation hereby
agrees that it is the indemnitor of first resort (i.e., its obligation to a
Covered Person to provide advancement and/or indemnification to such Covered
Person is primary and any obligation of any Principal Stockholder (including any
Affiliate thereof other than the Corporation) to provide advancement or
indemnification hereunder or under any other indemnification agreement (whether
pursuant to contract, by-laws or charter), or any obligation of any insurer of
any Principal Stockholder to provide insurance coverage, for the same expenses,
liabilities, judgments, penalties, fines and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in
connection with or in respect of such expenses, liabilities, judgments,
penalties, fines and amounts paid in settlement) incurred by such Covered Person
are secondary) and (ii) if any Principal Stockholder (or any Affiliate thereof,
other than the Corporation) pays or causes to be paid, for any reason, any
amounts otherwise indemnifiable hereunder or under any other indemnification
agreement (whether pursuant to contract, by-laws or charter) with such Covered
Person, then (x) such Principal Stockholder (or such Affiliate, as the case may
be) shall be fully subrogated to all rights of such Covered Person with respect
to such payment, (y) the Covered Person shall execute all papers reasonably
required and shall do all things that may be reasonably necessary to secure such
rights, including the execution of such documents as may be necessary to enable
such Principal Stockholder (or such Affiliate) effectively to bring suit

 

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to enforce such rights and (z) the Corporation shall fully indemnify, reimburse
and hold harmless such Principal Stockholder (or such other Affiliate, as the
case may be) for all such payments actually made by such Principal Stockholder
(or such other Affiliate). Each of the Principal Stockholders (and any Affiliate
thereof) shall be third-party beneficiaries with respect to this Section 11.6,
entitled to enforce this Section 11.6.

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

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

11.9 Reliance. Covered Persons who after the date of the adoption of this
provision become or remain a Covered Person described in Article 11 will be
conclusively presumed to have relied on the rights to indemnity, advance of
expenses and other rights contained in this Article 11 in entering into or
continuing the service. The rights to indemnification and to the advance of
expenses conferred in this Article 11 will apply to claims made against any
Covered Person described in this Article 11 arising out of acts or omissions in
respect of the Corporation or one of its subsidiaries that occurred or occur
both prior and subsequent to the adoption hereof. The rights conferred upon
Covered Persons in this Article 11 shall be contract rights and such rights
shall continue as to a Covered Person who has ceased to be a Director or officer
and shall inure to the benefit of the Covered Person’s heirs, executors and
administrators. Any amendment, alteration or repeal of this Article 11 that
adversely affects any right of a Covered Person or its successors shall be
prospective only and shall not limit, eliminate or impair any such right with
respect to any proceeding involving any occurrence or alleged occurrence of any
action or omission to act that took place prior to such amendment or repeal.

11.10 Insurance. The Corporation may purchase and maintain insurance, at its
expense, to protect itself and any Director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the General Corporation Law.

12. Adoption, Amendment or Repeal of By-Laws. In furtherance and not in
limitation of the powers conferred by law, the Board is expressly authorized to
make, alter, amend or repeal the By-laws subject to the power of the
stockholders of the Corporation entitled to vote with respect thereto to make,
alter, amend or repeal the By-laws; provided, that with respect to the powers of
stockholders entitled to vote with respect thereto to make, alter, amend or
repeal the By-laws, from and after the date that the Majority Ownership
Requirement is no longer met, in addition to any other vote

 

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otherwise required by law, the affirmative vote of the holders of seventy-five
percent (75%) of the total voting power of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
Directors, voting together as a single class, shall be required to make, alter,
amend or repeal the By-laws.

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

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

15. Severability. If any provision or provisions of this Certificate of
Incorporation shall be held to be invalid, illegal or unenforceable as applied
to any circumstance for any reason whatsoever: (i) the validity, legality and
enforceability of such provisions in any other circumstance and of the remaining
provisions of this Certificate of Incorporation (including, without limitation,
each portion of any paragraph of this Certificate of Incorporation containing
any such provision held to be invalid,

 

13

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

16. Corporate Opportunity. The Corporation waives, to the maximum extent
permitted by law, the application of the doctrine of corporate opportunity, or
any other analogous doctrine, with respect to the Corporation, any Directors or
officers or any of their respective Affiliates, except as related to insurance
brokerage activities.

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

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

(b) “Amended and Restated Goosehead Financial, LLC Agreement” means the Amended
and Restated Goosehead Financial, LLC Limited Liability Company Agreement, dated
as of May 1, 2018, by and among the Corporation, The Mark and Robyn Jones
Descendants Trust 2014, Lanni Elaine Romney Family Trust 2014, Lindy Jean
Langston Family Trust 2014, Camille LaVaun Peterson Family Trust 2014, Desiree
Robyn Coleman Family Trust 2014, Adrienne Morgan Jones Family Trust 2014, Mark
Evan Jones, Jr. Family Trust 2014, Mark E. Jones, Robyn Jones, Michael C. Colby,
Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne Jones,
Mark E. Jones, Jr., Colby 2014 Family Trust, Preston Michael Colby 2014 Trust,
Lyla Kate Colby 2014 Trust, Jeffrey Saunders, Serena Jones, Texas Wasatch
Insurance Partners, L.P., Max and Dane, LLC and Evan and Jake, LLC and the other
Persons that may become parties thereto from time to time, as the same may be
amended, restated, supplemented and/or otherwise modified, from time to time.

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

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

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

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

 

14

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

15

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

(v) “Paired Interest” means one LLC Unit together with one share of Class B
Common Stock, subject to adjustment pursuant to Article 10 of the Amended and
Restated Goosehead Financial, LLC Agreement.

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

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

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

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

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

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

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

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

 

16

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(ee) “Stockholder Agreement” means the Stockholders Agreement, dated as of
May 1, 2018, by and among the Corporation, Mark E. Jones, Robyn Jones, Michael
C. Colby, Jeffrey Saunders, The Mark and Robyn Jones Descendants Trust 2014, The
Lanni Elaine Romney Family Trust 2014, The Lindy Jean Langston Family Trust
2014, The Camille LaVaun Peterson Family Trust 2014, The Desiree Robyn Coleman
Family Trust 2014, The Adrienne Morgan Jones Family Trust 2014, The Mark Evan
Jones, Jr. Family Trust 2014, Serena Jones, Lanni Romney, Lindy Langston,
Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., The Colby
2014 Family Trust, The Preston Michael Colby 2014 Trust, The Lyla Kate Colby
2014 Trust, Texas Wasatch Insurance Partners, L.P. and the other Persons who may
become parties thereto from time to time, as they same may be amended, restated,
supplemented and/or otherwise modified, from time to time.

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

(gg) “Transfer” of a share of Class B Common Stock means, directly or
indirectly, any sale, assignment, transfer, exchange, gift, bequest, pledge,
hypothecation or other disposition or encumbrance of such share or any legal or
beneficial interest in such share, in whole or in part, whether or not for value
and whether voluntary or involuntary or by operation of law; provided, however,
that the following shall not be considered a “Transfer”: (i) the granting of a
revocable proxy pursuant to the Stockholder Agreement or to officers or
directors of the Corporation at the request of the Board in connection with
actions to be taken at annual or special meetings of stockholders or in
connection with any action by written consent of the stockholders solicited by
the Board (at such times as action by written consent of stockholders is
permitted under this Certificate of Incorporation); (ii) entering into a voting
trust, agreement or arrangement (with or without granting a proxy) solely with
the Corporation and/or its stockholders that (x) is disclosed either in a
Schedule 13D filed with the Securities and Exchange Commission or in writing to
the Secretary of the Corporation, (y) either has a term not exceeding one
(1) year or is terminable by the holder of the shares subject thereto at any
time and (z) does not involve any payment of cash, securities, property or other
consideration to the holder of the shares subject thereto other than the mutual
promise to vote shares in a designated manner; (iii) entering into a customary
voting or support agreement (with or without granting a proxy) in connection
with any merger, consolidation or other business combination of the Corporation,
whether effectuated through one transaction or series of related transactions
(including a tender offer followed by a merger in which holders of Class A
Common Stock receive the same consideration per share paid in the tender offer);
(iv) the pledge of shares of capital stock of the Corporation by a stockholder
that creates a mere security interest in such shares pursuant to a bona fide
loan or indebtedness transaction so long as such stockholder continues to
exercise sole voting control over such pledged shares; provided, however, that a
foreclosure on such shares or other similar action by the pledgee shall
constitute a “Transfer”; or (v) the fact that the spouse of any holder of
Class B Common Stock possesses or obtains an interest in such holder’s shares of
Class B Common Stock arising solely by reason of the application of the
community property laws of any jurisdiction, so long as no other event or
circumstance shall exist or have occurred that constitutes a “Transfer” of such
shares of Class B Common Stock.

 

17

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

[Remainder of page intentionally left blank.]

 

18

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IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation of
Goosehead Insurance, Inc. has been duly executed by the officer below this 1st
day of May, 2018.

 

By:  

 

Name:   Mark E. Jones Title:   Chairman and Chief Executive Officer

[Signature Page to Amended and Restated Certificate of Incorporation]

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Exhibit M

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AMENDED AND RESTATED BY-LAWS

of

GOOSEHEAD INSURANCE, INC.

(A Delaware Corporation)

 

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TABLE OF CONTENTS

 

 

 

          PAGE        ARTICLE 1             Definitions             ARTICLE 2   
         Stockholders       

Section 2.01.

  

Place of Meetings

     3  

Section 2.02.

  

Annual Meetings; Stockholder Proposals

     3  

Section 2.03.

  

Special Meetings

     6  

Section 2.04.

  

Record Date

     6  

Section 2.05.

  

Notice of Meetings of Stockholders

     7  

Section 2.06.

  

Waivers of Notice

     8  

Section 2.07.

  

List of Stockholders

     8  

Section 2.08.

  

Quorum of Stockholders; Adjournment

     8  

Section 2.09.

  

Voting; Proxies

     9  

Section 2.10.

  

Voting Procedures and Inspectors at Meetings of Stockholders

     9  

Section 2.11.

  

Conduct of Meetings; Adjournment

     10  

Section 2.12.

  

Order of Business

     10  

Section 2.13.

  

Written Consent of Stockholders Without a Meeting

     10        ARTICLE 3             Directors       

Section 3.01.

  

General Powers

     11  

Section 3.02.

  

Term of Office

     11  

Section 3.03.

  

Nominations of Directors

     11  

Section 3.04.

  

Nominee and Director Qualifications

     14  

Section 3.05.

  

Resignation

     15  

Section 3.06.

  

Compensation

     15  

Section 3.07.

  

Regular Meetings

     15  

Section 3.08.

  

Special Meetings

     15  

Section 3.09.

  

Telephone Meetings

     15  

Section 3.10.

  

Adjourned Meetings

     15  

Section 3.11.

  

Notice Procedure

     16  

Section 3.12.

  

Waiver of Notice

     16  

Section 3.13.

  

Organization

     16  

Section 3.14.

  

Quorum of Directors

     16  

Section 3.15.

  

Action by Majority Vote

     16  

Section 3.16.

  

Action Without Meeting

     16  

 

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     ARTICLE 4             Committees of the Board             ARTICLE 5       
     Officers       

Section 5.01.

  

Positions; Election

     17  

Section 5.02.

  

Term of Office

     17  

Section 5.03.

  

Chairman

     18  

Section 5.04.

  

Vice Chairman

     18  

Section 5.05.

  

Chief Executive Officer

     18  

Section 5.06.

  

President

     18  

Section 5.07.

  

Vice Presidents

     19  

Section 5.08.

  

Secretary

     19  

Section 5.09.

  

Treasurer

     19  

Section 5.10.

  

Assistant Secretaries and Assistant Treasurers

     20        ARTICLE 6             General Provisions       

Section 6.01.

  

Certificates Representing Shares

     20  

Section 6.02.

  

Transfer and Registry Agents

     20  

Section 6.03.

  

Lost, Stolen or Destroyed Certificates

     20  

Section 6.04.

  

Form of Records

     20  

Section 6.05.

  

Seal

     20  

Section 6.06.

  

Fiscal Year

     21  

Section 6.07.

  

Amendments

     21  

Section 6.08.

  

Conflict with Applicable Law or Certificate of Incorporation

     21  

 

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ARTICLE 1

DEFINITIONS

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

“Assistant Secretary” means an Assistant Secretary of the Corporation.

“Assistant Treasurer” means an Assistant Treasurer of the Corporation.

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

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

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

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

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

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

“Corporation” means Goosehead Insurance, Inc.

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

“Directors” means the directors of the Corporation.

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

“Executive Chairman” means the Executive Chairman of the Board.

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

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

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

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

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

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

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

“President” means the President of the Corporation.

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

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

“SEC” means the Securities and Exchange Commission.

“Secretary” means the Secretary of the Corporation.

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

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

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

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

“Stockholders” means the stockholders of the Corporation.

“Stockholders Agreement” means the Stockholders Agreement, dated as of May 1,
2018, by and among the Corporation, Mark E. Jones, Robyn Jones, Michael C.
Colby, Jeffrey Saunders, The Mark and Robyn Jones Descendants Trust 2014, The
Lanni Elaine Romney Family Trust 2014, The Lindy Jean Langston Family Trust
2014, The Camille LaVaun Peterson Family Trust 2014, The Desiree Robyn Coleman
Family Trust 2014, The Adrienne Morgan Jones Family Trust 2014, The Mark Evan
Jones, Jr. Family Trust 2014, The Estate of Doug Jones, Lanni Romney, Lindy
Langston, Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr.,
The Colby 2014 Family Trust, The Preston Michael Colby 2014 Trust, The Lyla Kate
Colby 2014 Trust and the other Persons who may become parties thereto from time
to time, as it may be amended, supplemented or modified.

“Treasurer” means the Treasurer of the Corporation.

“Vice Chairman” means the Vice Chairman of the Board.

“Vice President” means a Vice President of the Corporation.

“Voting Commitment” is defined in Section 3.04.

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

 

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ARTICLE 2

STOCKHOLDERS

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

Section 2.02. Annual Meetings; Stockholder Proposals.

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

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

(c) Subject to Section 2.02(k), at any annual meeting of Stockholders, all
proposals of Stockholder Business must be made by timely written notice given by
or on behalf of a Stockholder of record of the Corporation (the “Notice of
Business”) and must otherwise be a proper matter for Stockholder action. To be
timely, the Notice of Business must be delivered personally or mailed to, and
received at, the Office of the Corporation, addressed to the Secretary, by no
earlier than one hundred and twenty (120) days and no later than ninety
(90) days before the first anniversary of the date of the prior year’s annual
meeting of Stockholders; provided, however, that if (i) the annual meeting of
Stockholders is advanced by more than thirty (30) days, or delayed by more than
sixty (60) days, from the first anniversary of the prior year’s annual meeting
of Stockholders or (ii) no annual meeting was held during the prior year, the
notice by the Stockholder to be timely must be received (A) no earlier than one
hundred and twenty (120) days before such annual meeting and (B) no later than
the later of ninety (90) days before such annual meeting and the tenth day after
the day on which the notice of such annual meeting was made by mail or Public
Disclosure; provided, further, that, solely for the purposes of the notice
requirements under this Section 2.02(c), with respect to the annual meeting of
stockholders of the Corporation for 2019, the date of the preceding year’s
annual meeting of stockholders shall be deemed to be May 1, 2018. In no event
shall an adjournment, postponement or deferral, or Public Disclosure of an
adjournment, postponement or deferral, of a Stockholder meeting commence a new
time period (or extend any time period) for the giving of the Notice of
Business.

 

3

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  (d) The Notice of Business must set forth:

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

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

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

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

 

4

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

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

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

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

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

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

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

(f) In addition, the Proponent shall further update and supplement the
information provided to the Corporation in the Notice of Business or upon the
Corporation’s request pursuant to Section 2.02(e) as needed, so that such
information shall be true and correct as of the record date for the meeting and
as of the date that is the later of ten (10) business days before the meeting or
any adjournment or postponement thereof. Such update and supplement must be
delivered personally or mailed to, and received at, the Office of the
Corporation, addressed to the Secretary, by no later than five (5) business days
after the record date for the meeting (in the case of the update and supplement
required to be made as of the record date), and not later than seven (7)
business days before the date for the meeting (in the case of the update and
supplement required to be made as of ten (10) business days before the meeting
or any adjournment or postponement thereof).

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

 

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

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

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

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

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

Section 2.04. Record Date.

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

 

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

(b) If no such record date is fixed:

(i) the record date for determining Stockholders entitled to notice of, and to
vote at, a meeting of Stockholders shall be at the close of business on the day
next preceding the day on which notice is given or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held;

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

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

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

 

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

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

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

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

 

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if a majority of the shares entitled to vote in the election of Directors of
such other corporation is held, directly or indirectly, by the Corporation,
shall neither be entitled to vote nor be counted for quorum purposes; provided,
however, that the foregoing shall not limit the right of the Corporation to vote
stock, including but not limited to its own stock, held by it in a fiduciary
capacity.

Section 2.09. Voting; Proxies. Unless otherwise provided by the General
Corporation Law or in the Certificate of Incorporation, every Stockholder
entitled to vote at any meeting of Stockholders shall be entitled to one vote
for each share of stock (and 10 votes for each share of Class B Common Stock
until the Substantial Ownership Requirement is no longer met (each as defined in
the Certificate of Incorporation)) held by such Stockholder which has voting
power upon the matter in question. At any meeting of Stockholders, all matters
other than the election of Directors, except as otherwise provided by the
Certificate of Incorporation, these By-laws or any applicable law, shall be
decided by the affirmative vote of a majority in voting power of shares of stock
present in person or represented by proxy and entitled to vote thereon. At all
meetings of Stockholders for the election of Directors, a plurality of the votes
cast shall be sufficient to elect Directors. Each Stockholder entitled to vote
at a meeting of Stockholders or to express consent or dissent to corporate
action in writing without a meeting may authorize another person or persons to
act for such Stockholder by proxy, but no such proxy shall be voted or acted
upon after three years from its date, unless the proxy expressly provides for a
longer period. A proxy shall be irrevocable if it states that it is irrevocable
and if, and only so long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A Stockholder may revoke any proxy that is not
irrevocable by attending the meeting and voting in person or by delivering to
the Secretary a revocation of the proxy or by delivering a new proxy bearing a
later date.

Section 2.10. Voting Procedures and Inspectors at Meetings of Stockholders. The
Board, in advance of any meeting of Stockholders, shall appoint one or more
inspectors, who may be employees of the Corporation, to act at the meeting and
make a written report thereof. The Board may designate one or more persons as
alternate inspectors to replace any inspector who fails to act. If no inspector
or alternate is able to act at a meeting, the person presiding at the meeting
shall appoint one or more inspectors to act at the meeting. Each inspector,
before entering upon the discharge of his or her duties, shall take and sign an
oath faithfully to execute the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspectors shall (a) ascertain
the number of shares outstanding and the voting power of each, (b) determine the
shares represented at the meeting and the validity of proxies and ballots, (c)
count all votes and ballots, (d) determine and retain for a reasonable period a
record of the disposition of any challenges made to any determination by the
inspectors and (e) certify their determination of the number of shares
represented at the meeting and their count of all votes and ballots. The
inspectors may appoint or retain other persons or entities to assist the
inspectors in the performance of their duties. Unless otherwise provided by the
Board, the date and time of the opening and the closing of the polls for each
matter upon which the Stockholders will vote at a meeting shall be determined by
the person presiding at the meeting and shall be announced at the meeting. No
ballot, proxies, votes or any revocation thereof or change thereto, shall be
accepted by the inspectors after the closing of the polls unless the Court of
Chancery of the State of Delaware upon application by a Stockholder shall
determine otherwise. In determining the validity and counting of proxies and
ballots cast at any meeting of Stockholders, the inspectors may consider such
information as is permitted by applicable law. No person who is a candidate for
office at an election may serve as an inspector at such election.

 

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

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

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

 

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

ARTICLE 3

DIRECTORS

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

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

Section 3.03. Nominations of Directors.

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

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

 

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

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

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

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

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

 

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(f) The Notice of Nomination shall set forth:

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

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

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

(iv) a description of all direct and indirect compensation and other material
monetary agreements, arrangements and understandings during the past three
years, and any other material relationships, between or among a Nominating
Stockholder, Stockholder Associated Person or their respective associates, or
others acting in concert therewith, including all information that would be
required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K
if the Nominating Stockholder, Stockholder Associated Person or any person
acting in concert therewith were the “registrant” for purposes of such rule and
the Stockholder Nominee were a director or executive of such registrant;

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

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

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

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

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

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

 

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meeting or any adjournment or postponement thereof. Such update and supplement
must be delivered personally or mailed to, and received at, the Office of the
Corporation, addressed to the Secretary, by no later than five (5) business days
after the record date for the meeting (in the case of the update and supplement
required to be made as of the record date), and not later than seven (7)
business days before the date for the meeting (in the case of the update and
supplement required to be made as of ten (10) business days before the meeting
or any adjournment or postponement thereof).

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

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

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

Section 3.04. Nominee and Director Qualifications. Unless the Board determines
otherwise or the Stockholders Agreement provides otherwise (as long as such
agreement is in effect), to be eligible to be a nominee for election or
reelection as a Director, a person must deliver (in accordance with the time
periods prescribed for delivery of notice by the Board) to the Secretary at the
Office of the Corporation a written questionnaire with respect to the background
and qualification of such person and the background of any other person or
entity on whose behalf the nomination is being made (which questionnaire shall
be provided by the Secretary upon written request) and a written representation
and agreement (in the form provided by the Secretary upon written request) that
such person (a) is not and will not become a party to (i) any agreement,
arrangement or understanding with, and has not given any commitment or assurance
to, any person or entity as to how such person will act or vote as a Director on
any issue or question (a “Voting Commitment”) that has not been disclosed to the
Corporation or (ii) any Voting Commitment that could limit or interfere with
such person’s ability to comply with such person’s fiduciary duties as a
Director under applicable law, (b) is not and will not become a party to any
agreement, arrangement or understanding with any person or entity other than the
Corporation with respect to any direct or indirect compensation, reimbursement
or indemnification in connection with service or action as a Director that has
not been disclosed therein, and (c) in such person’s individual capacity and on
behalf of any person or entity on whose behalf the nomination is being made,
would be in compliance, and will comply with all applicable publicly disclosed
corporate governance, conflict of interest, confidentiality and stock ownership
and trading and other policies and guidelines of the Corporation that are
applicable to Directors.

 

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

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

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

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

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

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

 

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

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

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

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

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

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

 

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ARTICLE 4

COMMITTEES OF THE BOARD

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

ARTICLE 5

OFFICERS

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

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

 

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

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

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

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

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

 

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

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

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

 

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

ARTICLE 6

GENERAL PROVISIONS

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

Section 6.02. Transfer and Registry Agents. The Corporation may from time to
time maintain one or more transfer offices or agents and registry offices or
agents at such place or places as may be determined from time to time by the
Board.

Section 6.03. Lost, Stolen or Destroyed Certificates. The Corporation may issue
a new certificate of stock in the place of any certificate theretofore issued by
it, alleged to have been lost, stolen or destroyed, and the Corporation may
require the owner of the lost, stolen or destroyed certificate or his legal
representative to give the Corporation a bond sufficient to indemnify it against
any claim that may be made against it on account of the alleged loss, theft or
destruction of any such certificate or the issuance of such new certificate.

Section 6.04. Form of Records. Any records maintained by the Corporation in the
regular course of its business, including its stock ledger, books of account and
minute books, may be maintained on any information storage device or method;
provided that the records so kept can be converted into clearly legible paper
form within a reasonable time. The Corporation shall so convert any records so
kept upon the request of any person entitled to inspect such records pursuant to
applicable law.

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

 

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

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

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

 

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Exhibit N

 

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SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is entered into as of
May 1, 2018 by and among Goosehead Insurance, Inc., a Delaware corporation
(“Pubco”), and certain owners of the limited liability company interests of
Goosehead Financial, LLC, a Delaware limited liability company (“Goosehead
Financial”), listed on the signature pages hereto (the “Post-IPO LLC Members”).

W I T N E S S E T H:

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

 

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

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

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

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

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

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

5. General Provisions.

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

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

 

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

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

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

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

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

 

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

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

(j) IPO Closing. This Agreement will automatically terminate and be of no force
and effect if the Effective Time does not occur on or before May 1, 2018.

[Signature page follows]

 

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

 

GOOSEHEAD INSURANCE, INC. By:  

                                                                               

       Name:        Title: TEXAS WASATCH INSURANCE PARTNERS, L.P. By its General
Partner By:  

                                                                               

       Name:        Title: MARK E. JONES By:  

                                                                               

       Name:        Title: ROBYN JONES By:  

                                                                               

       Name:        Title: MICHAEL C. COLBY By:  

                                                                               

       Name:        Title:

[Signature Page to Class B Securities Purchase Agreement]

 

--------------------------------------------------------------------------------

JEFFREY SAUNDERS

By:  

                                                                               

       Name:        Title:

THE MARK AND ROBYN JONES DESCENDANTS TRUST 2014

By:  

                                                                               

       Name:        Title: LANNI ELAINE ROMNEY FAMILY TRUST 2014 By:  

                                                                               

       Name:        Title:

LINDY JEAN LANGSTON FAMILY TRUST 2014

By:  

                                                                               

       Name:        Title:

CAMILLE LAVAUN PETERSON FAMILY TRUST 2014

By:  

                                                                               

       Name:        Title:

[Signature Page to Securities Purchase Agreement]

 

--------------------------------------------------------------------------------

DESIREE ROBYN COLEMAN FAMILY TRUST 2014

By:  

                                                                               

       Name:        Title:

ADRIENNE MORGAN JONES FAMILY TRUST 2014

By:  

                                                                               

       Name:        Title:

MARK EVAN JONES, JR. FAMILY TRUST 2014

By:  

                                                                               

       Name:        Title:

SERENA JONES

By:  

                                                                               

       Name:        Title:

LANNI ROMNEY

By:  

                                                                               

       Name:        Title:

[Signature Page to Securities Purchase Agreement]

 

--------------------------------------------------------------------------------

LINDY LANGSTON

By:  

                                                                               

       Name:        Title:

CAMILLE PETERSON

By:  

                                                                               

       Name:        Title:

DESIREE COLEMAN

By:  

                                                                               

       Name:        Title:

ADRIENNE JONES

By:  

                                                                               

       Name:        Title:

MARK E. JONES, JR.

By:  

                                                                               

       Name:        Title:

COLBY 2014 FAMILY TRUST

By:  

                                                                               

       Name:        Title:

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

PRESTON MICHAEL COLBY 2014 TRUST

By:  

                                                                               

       Name:        Title:

LYLA KATE COLBY 2014 TRUST

By:  

                                                                               

       Name:        Title:

[Signature Page to Securities Purchase Agreement]

 

--------------------------------------------------------------------------------

Schedule A

 

Name of Post-IPO LLC Member

   Interests owned by Post-IPO
LLC Member      Class B Shares to
be Issued to
Post-IPO LLC
Member  

The Mark and Robyn Jones Descendants Trust 2014

     61,332.8        13,404,339  

Lanni Elaine Romney Family Trust 2014

     1,362.3        297,734  

Lindy Jean Langston Family Trust 2014

     1,362.3        297,734  

Camille LaVaun Peterson Family Trust 2014

     1,362.3        297,734  

Desiree Robyn Coleman Family Trust 2014

     1,362.3        297,734  

Adrienne Morgan Jones Family Trust 2014

     1,362.3        297,734  

Mark Evan Jones, Jr. Family Trust 2014

     1,362.3        297,734  

Mark Jones

     785.3        171,632  

Robyn Jones

     785.3        171,633  

Serena Jones

     5,110.8        1,116,974  

Lanni Romney

     2,281.2        498,557  

Lindy Langston

     2,281.2        498,557  

Camille Peterson

     2,281.2        498,557  

Desiree Coleman

     2,281.2        498,557  

Adrienne Jones

     2,281.2        498,557  

Mark E. Jones, Jr.

     2,281.2        498,557  

Texas Wasatch Insurance Partners, L.P.

     4,852.3        1,060,480  

Colby 2014 Family Trust

     3,531.1        771,732  

Preston Michael Colby 2014 Trust

     197.7        43,217  

Lyla Kate Colby 2014 Trust

     197.7        43,217  

Michael C. Colby

     4,425.0        967,085  

Jeffrey Saunders

     1,000.3        218,613  

--------------------------------------------------------------------------------

Exhibit O

--------------------------------------------------------------------------------

TRANSFER AGREEMENT

This Transfer Agreement (this “Agreement”) is entered into as of May 1, 2018 by
and among Goosehead Insurance, Inc., a Delaware corporation (“Pubco”), and the
holders of limited liability company interests of Max and Dane, LLC, a Delaware
limited liability company (“Max and Dane, LLC”), listed on the signature pages
hereto (the “Transferring Parties”).

W I T N E S S E T H:

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

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

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

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

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

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

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

--------------------------------------------------------------------------------

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

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

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

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

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

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

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

 

2

--------------------------------------------------------------------------------

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

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

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

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

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

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

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

 

3

--------------------------------------------------------------------------------

5. General Provisions.

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

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

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

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

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

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

 

4

--------------------------------------------------------------------------------

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

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

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

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

[Signature page follows]

 

5

--------------------------------------------------------------------------------

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

 

GOOSEHEAD INSURANCE, INC. By:  

 

  Name:   Title:

THE MARK AND ROBYN JONES DESCENDANTS TRUST 2014

By:  

 

  Name:   Title: THE COLBY 2014 FAMILY TRUST By:  

 

  Name:   Title: MARK COLBY By:  

 

  Name:   Title: P. RYAN LANGSTON By:  

 

  Name:   Title:

[Signature Page to Goosehead Management Note Transfer Agreement]

--------------------------------------------------------------------------------

MICHAEL MOXLEY By:  

 

  Name:   Title:

[Signature Page to Goosehead Management Note Transfer Agreement]

--------------------------------------------------------------------------------

SCHEDULE A

 

Holder

   Number of Units of
Max and Dane, LLC
Owned  

The Mark and Robyn Jones Descendants Trust 2014

     8800.00  

The Colby 2014 Family Trust

     1200.00  

Mark Colby

     103.00  

Ryan Langston

     103.00  

Michael Moxley

     103.00  

--------------------------------------------------------------------------------

EXHIBIT A

Goosehead Management Note

[Attached]

--------------------------------------------------------------------------------

Exhibit P

--------------------------------------------------------------------------------

GOOSEHEAD MANAGEMENT PROMISSORY NOTE

U.S. $62,553,336.67

For value received, GOOSEHEAD INSURANCE, INC. (“Maker”) promises to pay on
May 1, 2018, to the owners of limited liability company interests of Max and
Dane, LLC, a Delaware limited liability company, listed on Schedule A hereto
(each, a “Holder”, and together, the “Holders”) at the respective addresses
listed on Schedule A with respect to each Holder, or to a bank account
designated by any Holder, the principal sum of U.S. Dollars and Cents listed on
Schedule A with respect to each Holder. The note can be prepaid at any time
without penalty. The note is payable in a combination of U.S. Dollars and shares
of Class A common stock of the Maker in the amounts set forth on Schedule A. It
is expressly provided that in the event default is made in the prompt payment of
this note when due, and the same is placed in the hands of an attorney for
collection, or suit is brought on same, or the same is collected through
bankruptcy or other judicial proceedings, then the Maker agrees and promises to
pay a reasonable attorney’s fee for collection, which in no event shall be less
than the principal then owing.

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

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

--------------------------------------------------------------------------------

Westlake, May 1, 2018

 

GOOSEHEAD INSURANCE, INC. By:                                     
                                             Name: Title:

 

2

--------------------------------------------------------------------------------

SCHEDULE A

 

Holder

   Principal Sum      Amount to be
Repaid in U.S.
Dollars      Number of Shares of
Class A Common
Stock to be Issued in
Repayment  

The Mark and Robyn Jones Descendants Trust 2014

   $ 53,396,965.27      $ 35,914,155.27        1,748,281  

The Colby 2014 Family Trust

   $ 7,281,404.81      $ 4,897,384.81        238,402  

Mark Colby

   $ 624,988.86      $ 420,358.86        20,463  

Ryan Langston

   $ 624,988.86      $ 420,358.86        20,463  

Michael Moxley

   $ 624,988.86      $ 420,358.86        20,463  

 

3

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Exhibit Q

--------------------------------------------------------------------------------

TRANSFER AGREEMENT

This Transfer Agreement (this “Agreement”) is entered into as of May 1, 2018 by
and among Goosehead Insurance, Inc., a Delaware corporation (“Pubco”), and the
holders of limited liability company interests of Evan and Jake, LLC, a Delaware
limited liability company (“Evan and Jake, LLC”), listed on the signature pages
hereto (the “Transferring Parties”).

W I T N E S S E T H:

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

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

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

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

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

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

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

--------------------------------------------------------------------------------

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

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

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

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

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

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

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

 

2

--------------------------------------------------------------------------------

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

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

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

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

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

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

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

5. General Provisions.

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

 

3

--------------------------------------------------------------------------------

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

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

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

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

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

 

4

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

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

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

[Signature page follows]

 

5

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

 

GOOSEHEAD INSURANCE, INC. By:  

 

  Name:   Title: MARK E. JONES By:  

 

  Name:   Title: ROBYN JONES By:  

 

  Name:   Title: MICHAEL C. COLBY By:  

 

  Name:   Title: JEFFREY SAUNDERS By:  

 

  Name:   Title:

[Signature Page to Texas Wasatch Note Transfer Agreement]

--------------------------------------------------------------------------------

MARK COLBY By:  

 

  Name:   Title: P. RYAN LANGSTON By:  

 

  Name:   Title: MICHAEL MOXLEY By:  

 

  Name:   Title:

[Signature Page to Texas Wasatch Note Transfer Agreement]

--------------------------------------------------------------------------------

SCHEDULE A

 

Holder

   Number of Units of
Evan and Jake, LLC
Owned  

Mark Jones

     450.00  

Robyn Jones

     450.00  

Michael Colby

     55.00  

Jeff Saunders

     10.25  

Mark Colby

     9.90  

Ryan Langston

     9.90  

Michael Moxley

     9.90  

--------------------------------------------------------------------------------

EXHIBIT A

Texas Wasatch Note

[Attached]

--------------------------------------------------------------------------------

Exhibit R

--------------------------------------------------------------------------------

TEXAS WASATCH PROMISSORY NOTE

U.S. $51,180,000.00

For value received, GOOSEHEAD INSURANCE, INC. (“Maker”) promises to pay on
May 1, 2018, to the owners of limited liability company interests of Evan and
Jake, LLC, a Delaware limited liability company, listed on Schedule A hereto
(each, a “Holder”, and together, the “Holders”) at the respective addresses
listed on Schedule A with respect to each Holder, or to a bank account
designated by any Holder, the principal sum of U.S. Dollars and Cents listed on
Schedule A with respect to each Holder. The note can be prepaid at any time
without penalty. The note is payable in a combination of U.S. Dollars and shares
of Class A common stock of the Maker in the amounts set forth on Schedule A. It
is expressly provided that in the event default is made in the prompt payment of
this note when due, and the same is placed in the hands of an attorney for
collection, or suit is brought on same, or the same is collected through
bankruptcy or other judicial proceedings, then the Maker agrees and promises to
pay a reasonable attorney’s fee for collection, which in no event shall be less
than the principal then owing.

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

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

--------------------------------------------------------------------------------

Westlake, May 1, 2018

 

GOOSEHEAD INSURANCE, INC. By:                                     
                                             Name: Title:

 

2

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SCHEDULE A

 

Holder

   Principal Sum      Amount to be
Repaid in U.S.
Dollars      Number of Shares of
Class A Common
Stock to be Issued in
Repayment  

Mark Jones

   $ 23,147,895.93      $ 15,568,995.93        757,890  

Robyn Jones

   $ 23,147,895.93      $ 15,568,995.93        757,890  

Michael Colby

   $ 2,829,187.28      $ 1,902,877.28        92,631  

Jeff Saunders

   $ 527,247.13      $ 354,627.13        17,262  

Mark Colby

   $ 509,257.91      $ 342,517.91        16,674  

Ryan Langston

   $ 509,257.91      $ 342,517.91        16,674  

Michael Moxley

   $ 509,257.91      $ 342,517.91        16,674  

 

3

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Exhibit S

--------------------------------------------------------------------------------

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

of

GOOSEHEAD FINANCIAL, LLC

Dated as of May 1, 2018

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

 

 

          PAGE      ARTICLE 1         Definitions and Usage       

Section 1.01.

  

Definitions

     2  

Section 1.02.

  

Other Definitional and Interpretative Provisions

     14      ARTICLE 2         The Company       

Section 2.01.

  

Formation

     15  

Section 2.02.

  

Name

     15  

Section 2.03.

  

Term

     15  

Section 2.04.

  

Registered Agent and Registered Office

     16  

Section 2.05.

  

Purposes

     16  

Section 2.06.

  

Powers of the Company

     16  

Section 2.07.

  

Partnership Tax Status

     16  

Section 2.08.

  

Regulation of Internal Affairs

     16  

Section 2.09.

  

Ownership of Property

     16  

Section 2.10.

  

Subsidiaries

     16  

Section 2.11.

  

Qualification in Other Jurisdictions

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

Section 3.01.

  

Units; Admission of Members

     17  

Section 3.02.

  

Substitute Members and Additional Members

     17  

Section 3.03.

  

Tax and Accounting Information

     19  

Section 3.04.

  

Books and Records

     21      ARTICLE 4         Pubco Ownership; Restrictions On Pubco Stock     
 

Section 4.01.

  

Pubco Ownership

     21  

Section 4.02.

  

Restrictions on Pubco Common Stock

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

Section 5.01.

  

Capital Contributions

     24  

Section 5.02.

  

Capital Accounts

     25  

Section 5.03.

  

Amounts and Priority of Distributions

     26  

Section 5.04.

  

Allocations

     28  

Section 5.05.

  

Other Allocation Rules

     31  

 

i

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Section 5.06.

  

Tax Withholding; Withholding Advances

     32      ARTICLE 6         Certain Tax Matters       

Section 6.01.

  

Tax Matters Representative

     33  

Section 6.02.

  

Section 754 Election

     33  

Section 6.03.

  

Debt Allocation

     33      ARTICLE 7         Management of the Company       

Section 7.01.

  

Management by the Managing Member

     34  

Section 7.02.

  

Withdrawal of the Managing Member

     34  

Section 7.03.

  

Decisions by the Members

     34  

Section 7.04.

  

Duties

     35  

Section 7.05.

  

Officers

     35      ARTICLE 8         Transfers of Interests       

Section 8.01.

  

Restrictions on Transfers

     36  

Section 8.02.

  

Certain Permitted Transfers

     37  

Section 8.03.

  

Distributions

     37  

Section 8.04.

  

Registration of Transfers

     37      ARTICLE 9         Certain Other Agreements       

Section 9.01.

  

Non-Compete; Non-Disparagement

     38  

Section 9.02.

  

Company Call Right

     38  

Section 9.03.

  

Preemptive Rights

     39        ARTICLE 10             Redemption and Exchange Rights       

Section 10.01.

  

Redemption Right of a Member

     39  

Section 10.02.

  

Election and Contribution of Pubco

     42  

Section 10.03.

  

Exchange Right of Pubco

     42  

Section 10.04.

  

Tender Offers and Other Events with Respect to Pubco

     43  

Section 10.05.

  

Reservation of Shares of Class A Common Stock;

     

Certificate of Pubco

     44  

Section 10.06.

  

Effect of Exercise of Redemption or Exchange Right

     44  

Section 10.07.

  

Tax Treatment

     44  

 

ii

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     ARTICLE 11             Limitation on Liability, Exculpation and
Indemnification       

Section 11.01.

  

Limitation on Liability

     45  

Section 11.02.

  

Exculpation and Indemnification

     45      ARTICLE 12         Dissolution and Termination       

Section 12.01.

  

Dissolution

     48  

Section 12.02.

  

Winding Up of the Company

     48  

Section 12.03.

  

Termination

     49  

Section 12.04.

  

Survival

     49      ARTICLE 13         Miscellaneous       

Section 13.01.

  

Expenses

     49  

Section 13.02.

  

Further Assurances

     50  

Section 13.03.

  

Notices

     50  

Section 13.04.

  

Binding Effect; Benefit; Assignment

     51  

Section 13.05.

  

Jurisdiction

     51  

Section 13.06.

  

WAIVER OF JURY TRIAL

     52  

Section 13.07.

  

Counterparts

     52  

Section 13.08.

  

Entire Agreement

     52  

Section 13.09.

  

Severability

     52  

Section 13.10.

  

Amendment

     53  

Section 13.11.

  

Confidentiality

     53  

Section 13.12.

  

Governing Law

     55      ARTICLE 14         Arbitration       

Section 14.01.

  

Title

     55      ARTICLE 15         Representations of Members       

Section 15.01.

  

Representations of Members

     56  

Schedule A

  

Member Schedule

  

 

iii

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AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) OF
GOOSEHEAD FINANCIAL, LLC, a Delaware limited liability company (the “Company”),
dated as of May 1, 2018, by and among the Company, Goosehead Insurance, Inc., a
Delaware corporation (“Pubco”), and the other Persons listed on the signature
pages hereto.

W I T N E S S E T H:

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

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

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

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

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

--------------------------------------------------------------------------------

ARTICLE 1

DEFINITIONS AND USAGE

Section 1.01. Definitions.

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

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

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

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

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

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

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

“Affiliated Transferee” means (i) in the case of any Member that is an
individual, any Transferee of such Member that is (x) an immediate family member
of such Member, (y) a trust, family-partnership or estate-planning vehicle for
the benefit of such Member and/or any of its immediate family members or
(z) otherwise an Affiliate of such Member or (ii) in the case of any Member that
is a limited liability company or other entity, any Transferee of such Member
that is (x) an immediate family member of the individual that controls a
majority of the voting or economic interest in such Member, (y) a trust,
family-partnership or estate-planning vehicle for the benefit of such individual
and/or any of its immediate family members or (z) otherwise an Affiliate of such
Member. For the purposes of this definition, none of Pubco, the Company or any
of their respective Controlled Affiliates shall be deemed to be an “Affiliate”
of any Member and vice versa.

“Applicable Law” means, with respect to any Person, any federal, state or local
law (statutory, common or otherwise), constitution, treaty, convention,
ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling
or other similar requirement enacted, adopted, promulgated or applied by a
Governmental Authority that is binding upon or applicable to such Person or its
assets, as amended unless expressly specified otherwise.

 

2

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“Business” means the business of distributing, and franchising the distribution
of, personal lines insurance products and services as conducted by the Company
and its Subsidiaries.

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

“Capital Account” means the capital account established and maintained for each
Member pursuant to Section 5.02.

“Capital Contribution” means, with respect to any Member, the amount of money
and the initial Carrying Value of any Property (other than money) contributed to
the Company.

“Carrying Value” means with respect to any Property (other than money), such
Property’s adjusted basis for federal income tax purposes, except as follows:

(i) The initial Carrying Value of any such Property contributed by a Member to
the Company shall be the gross fair market value of such Property, as reasonably
determined by the Managing Member;

(ii) The Carrying Values of all such Properties shall be adjusted to equal their
respective gross fair market values (taking Section 7701(g) of the Code into
account), as reasonably determined by the Managing Member, at the time of any
Revaluation pursuant to Section 5.02(c);

(iii) The Carrying Value of any item of such Properties distributed to any
Member shall be adjusted to equal the gross fair market value (taking
Section 7701(g) of the Code into account) of such Property on the date of
distribution as reasonably determined by the Managing Member; and

(iv) The Carrying Values of such Properties shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such Properties pursuant to
Code Section 734(b) or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph

(vi) of the definition of “Net Income” and “Net Loss” or Section 5.04(b)(vi);
provided, however, that Carrying Values shall not be adjusted pursuant to this
subparagraph (iv) to the extent that an adjustment pursuant to subparagraph
(ii) is required in connection with a transaction that would otherwise result in
an adjustment pursuant to this subparagraph (iv). If the Carrying Value of such
Property has been determined or adjusted pursuant to subparagraph (i), (ii) or
(iv), such Carrying Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset, for purposes of computing Net Income
and Net Loss.

 

3

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

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

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

“Common Equivalents” means (i) with respect to Units, the number of Units,
(ii) with respect to any Equity Securities that are convertible into or
exchangeable for Units, the number of Units issuable in respect of the
conversion or exchange of such securities into Units.

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

“Competitive Activity” means (i) any business that competes with the business of
the Company or any of its subsidiaries, or (ii) acquiring directly or through an
Affiliate in the aggregate directly or beneficially, whether as a shareholder,
partner, member or otherwise, any equity (including stock options or warrants,
whether or not exercisable), voting or profit participation interests
(collectively, “Ownership Interests”) in a Competitive Enterprise (it being
understood that this clause (ii) shall not apply to prohibit the holding of an
Ownership Interest if (a) at the time of acquisition of such Ownership Interest,
the Person in which such direct or indirect Ownership Interest is acquired is
not a Competitive Enterprise and the Member is not aware at the time of such
acquisition, after reasonable inquiry, that such Person has any plans to become
a Competitive Enterprise or (b) such Ownership Interest is a passive ownership
position of less than five percent (5%) in any company whose shares are publicly
traded).

“Competitive Enterprise” means any Person or business enterprise (in any form,
including without limitation as a corporation, partnership, limited liability
company or other Person), or subsidiary, division, unit, group or portion
thereof, whose primary business is engaging in a Competitive Activity (as
reasonably determined by the Managing Member). For the sake of clarity, in the
case of a subsidiary, division, unit, group or portion whose primary business is
described above: (1) the larger business enterprise or Person owning such
subsidiary, division, unit, group or portion shall not be deemed to be a
Competitive Enterprise unless the primary business of such larger business
enterprise or Person is engaged in a Competitive Activity and (2) the
subsidiary, division, unit, group or portion whose primary business is engaging
in a Competitive Activity shall be deemed a Competitive Enterprise.

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

 

4

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“Covered Person” means (i) each Member or an Affiliate thereof, in each case in
such capacity, (ii) each officer, director, shareholder, member, partner,
employee, representative, agent or trustee of a Member or an Affiliate thereof,
in all cases in such capacity, and (iii) each officer, director, shareholder
(other than any public shareholder of Pubco that is not a Member), member,
partner, employee, representative, agent or trustee of the Managing Member,
Pubco (in the event Pubco is not the Managing Member), the Company or an
Affiliate controlled thereby, in all cases in such capacity.

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

“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation,
amortization, or other cost recovery deduction allowable with respect to an
asset for such Fiscal Year, except that if the Carrying Value of an asset
differs from its adjusted basis for federal income tax purposes at the beginning
of such Fiscal Year, Depreciation shall be an amount that bears the same ratio
to such beginning Carrying Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such Fiscal Year bears to
such beginning adjusted tax basis; provided, however, that if the adjusted basis
for federal income tax purposes of an asset at the beginning of such Fiscal Year
is zero, Depreciation shall be determined with reference to such beginning
Carrying Value using any reasonable method selected by the Managing Member.

“DGCL” means the State of Delaware General Corporation Law, as amended from time
to time.

“Equity Securities” means, with respect to any Person, any (i) membership
interests or shares of capital stock, (ii) equity, ownership, voting, profit or
participation interests or (iii) similar rights or securities in such Person or
any of its Subsidiaries, or any rights or securities convertible into or
exchangeable for, options or other rights to acquire from such Person or any of
its Subsidiaries, or obligation on the part of such Person or any of its
Subsidiaries to issue, any of the foregoing.

“Family Member” shall mean with respect to any natural person, the spouse,
parents, grandparents, lineal descendants, siblings of such person or such
person’s spouse, and lineal descendants of siblings of such person or such
person’s spouse. Lineal descendants shall include adopted persons, but only so
long as they are adopted during minority.

“Fiscal Year” means the Company’s fiscal year, which shall initially be the
calendar year and which may be changed from time to time as determined by the
Managing Member.

“Governmental Authority” means any transnational, domestic or foreign federal,
state or local governmental, regulatory or administrative authority, department,
court, agency or official, including any political subdivision thereof.

 

5

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“Indebtedness” means (a) all indebtedness for borrowed money (including
capitalized lease obligations, sale-leaseback transactions or other similar
transactions, however evidenced), (b) any other indebtedness that is evidenced
by a note, bond, debenture, draft or similar instrument, (c) notes payable and
(d) lines of credit and any other agreements relating to the borrowing of money
or extension of credit.

“Involuntary Transfer” means any Transfer of Units by a Member resulting from
(i) any seizure under levy of attachment or execution, (ii) any bankruptcy
(whether voluntary or involuntary), (iii) any Transfer to a state or to a public
officer or agency pursuant to any statute pertaining to escheat or abandoned
property, (iv) any divorce or separation agreement or a final decree of a court
in a divorce action or (v) death or permanent disability.

“IPO” means the initial underwritten public offering of Pubco.

“IRS” means the Internal Revenue Service of the United States.

“Liens” means any pledge, encumbrance, security interest, purchase option,
conditional sale agreement, call or similar right.

“LLC Unit” means a common limited liability interest in the Company.

“Managing Member” means (i) Pubco so long as Pubco has not withdrawn as the
Managing Member pursuant to Section 7.02 and (ii) any successor thereof
appointed as Managing Member in accordance with Section 7.02.

“Member” means any Person named as a Member of the Company on the Member
Schedule and the books and records of the Company, as the same may be amended
from time to time to reflect any Person admitted as an Additional Member or a
Substitute Member, for so long as such Person continues to be a Member of the
Company.

“Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse
debt” in Treasury Regulations Section 1.704-2(b)(4).

“Member Nonrecourse Debt Minimum Gain” means an amount with respect to each
“partner nonrecourse debt” (as defined in Treasury Regulation
Section 1.704-2(b)(4)) equal to the Company Minimum Gain that would result if
such partner nonrecourse debt were treated as a nonrecourse liability (as
defined in Treasury Regulation Section 1.752-1(a)(2)) determined in accordance
with Treasury Regulation Section 1.704-2(i)(3).

“Member Nonrecourse Deductions” has the same meaning as the term “partner
nonrecourse deductions” in Treasury Regulations Sections 1.704-2(i)(1) and
1.704-2(i)(2).

“Net Income” and “Net Loss” mean, for each Fiscal Year or other period, an
amount equal to the Company’s taxable income or loss for such Fiscal Year or
period, determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Section 703(a)(1) of the Code shall be included in
taxable income or loss), with the following adjustments (without duplication):

 

6

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(i) Any income of the Company that is exempt from federal income tax and not
otherwise taken into account in computing Net Income or Net Loss pursuant to
this definition of “Net Income” and “Net Loss” shall be added to such taxable
income or loss;

(ii) Any expenditures of the Company described in Section 705(a)(2)(B) of the
Code or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Net Income and Net Loss pursuant to this definition of “Net
Income” and “Net Loss,” shall be treated as deductible items;

(iii) In the event the Carrying Value of any Company asset is adjusted pursuant
to subparagraphs (ii) or (iii) of the definition of “Carrying Value,” the amount
of such adjustment shall be treated as an item of gain (if the adjustment
increases the Carrying Value of the asset) or an item of loss (if the adjustment
decreases the Carrying Value of the asset) from the disposition of such asset
and shall be taken into account, immediately prior to the event giving rise to
such adjustment, for purposes of computing Net Income and/or Net Loss;

(iv) Gain or loss resulting from any disposition of Property with respect to
which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Carrying Value of the Property disposed of,
notwithstanding that the adjusted tax basis of such Property differs from its
Carrying Value;

(v) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such Fiscal Year, computed in
accordance with the definition of Depreciation;

(vi) To the extent an adjustment to the adjusted tax basis of any Company asset
pursuant to Section 734(b) of the Code is required, pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as a result of a distribution other than in
liquidation of a Member’s interest in the Company, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases such basis) from the disposition
of such asset and shall be taken into account for purposes of computing Net
Income or Net Loss; and

(vii) Notwithstanding any other provision of this definition, any items that are
specially allocated pursuant to Section 5.04(b), Section 5.04(c) and
Section 5.04(d) shall not be taken into account in computing Net Income and Net
Loss.

 

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The amounts of the items of Company income, gain, loss, or deduction available
to be specially allocated pursuant to Section 5.04(b), Section 5.04(c) and
Section 5.04(d) shall be determined by applying rules analogous to those set
forth in subparagraphs (i) through (vi) above.

“Non-Pubco Member” means any Member that is not a Pubco Member.

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

“Owned Shares” with respect to each of the Members, as the case may be, the
total number of shares of Class A Common Stock beneficially owned (as such term
is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) by such Member,
in the aggregate and without duplication, as of the date of such calculation
(determined on an “as-converted” basis taking into account any and all
securities then convertible into, or exercisable or exchangeable for, shares of
Class A Common Stock (including LLC Units and shares of Class B Common Stock
exchangeable pursuant to Section 10.03 of this Agreement).

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

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

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

“Prime Rate” means the rate of interest from time to time identified by JP
Morgan Chase, N.A. as being its “prime” or “reference” rate.

“Property” means an interest of any kind in any real, personal or intellectual
(or mixed) property, including cash, and any improvements thereto, and shall
include both tangible and intangible property.

 

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“Pubco Common Stock” means all classes and series of common stock of Pubco,
including the Class A Common Stock and Class B Common Stock.

“Pubco Member” means (i) Pubco and (ii) any Subsidiary of Pubco (other than the
Company and its Subsidiaries) that is a Member.

“Redeemed Units Equivalent” means the product of (a) the Share Settlement, times
(b) the Unit Redemption Price.

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the date hereof, by and among Pubco and each of the Non-Pubco Members.

“Relative Percentage Interest” means, with respect to any Member relative to
another Member or Members, a fractional amount, expressed as a percentage, the
numerator of which is the Percentage Interest of such Member; and the
denominator of which is (x) the Percentage Interest of such Member plus (y) the
aggregate Percentage Interest of such other Member or Members.

“Reorganization Date Capital Account Balance” means, with respect to any Member,
the positive Capital Account balance of such Member as of immediately following
the Reorganization, the amount or deemed value of which is set forth on the
Member Schedule.

“Reorganization Agreement” means the Reorganization Agreement, dated as of
April 26, by and among Pubco, the Company and each of the Non-Pubco Members.

“Reorganization Documents” means the Reorganization Agreement; the Max and Dane,
LLC Contribution Agreement; the First Evan and Jake, LLC Contribution Agreement;
the Second Evan and Jake, LLC Contribution Agreement; the GHM Holdings, LLC
Contribution Agreement; the TWIHG Holdings, LLC Contribution Agreement; the
Class B Securities Purchase Agreement; the Goosehead Management Note Exchange
Agreement; the Goosehead Management Note; the Texas Wasatch Note Exchange
Agreement; the Texas Wasatch Note; the Max and Dane, LLC Exchange Agreement; the
Evan and Jake, LLC Exchange Agreement; this Agreement the Tax Receivable
Agreement; the Registration Rights Agreement; the Securities Purchase Agreement
and the Stockholders Agreement.

“Reserves” means, as of any date of determination, amounts allocated by the
Managing Member, in its reasonable judgment, to reserves maintained for working
capital of the Company, for contingencies of the Company, for operating expenses
and debt reduction of the Company.

“SEC” means the United States Securities and Exchange Commission.

“Stockholders Agreement” means the Stockholders Agreement, dated as of the date
hereof, by and among Mark E. Jones, Robyn Jones, Michael C. Colby, Jeffrey
Saunders, The Mark and Robyn Jones Descendants Trust 2014, The Lanni Elaine
Romney Family Trust 2014, The Lindy Jean Langston Family Trust 2014, The Camille

 

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LaVaun Peterson Family Trust 2014, The Desiree Robyn Coleman Family Trust 2014,
The Adrienne Morgan Jones Family Trust 2014, The Mark Evan Jones, Jr. Family
Trust 2014, Serena Jones, Lanni Romney, Lindy Langston, Camille Peterson,
Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., The Colby 2014 Family
Trust, The Preston Michael Colby 2014 Trust, The Lyla Kate Colby 2014 Trust,
Texas Wasatch Insurance Partners, L.P. and Goosehead Insurance, Inc.

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, association, joint venture or other business entity
of which more than 50% of the total voting power of Equity Securities or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.

“Substantial Ownership Requirement” means the beneficial ownership (as such term
is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) by Mark E.
Jones, Robyn Jones, Michael C. Colby, Jeffrey Saunders, The Mark and Robyn Jones
Descendants Trust 2014, The Lanni Elaine Romney Family Trust 2014, The Lindy
Jean Langston Family Trust 2014, The Camille LaVaun Peterson Family Trust 2014,
The Desiree Robyn Coleman Family Trust 2014, The Adrienne Morgan Jones Family
Trust 2014, The Mark Evan Jones, Jr. Family Trust 2014, Serena Jones, Lanni
Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne Jones, Mark
E. Jones, Jr., The Colby 2014 Family Trust, The Preston Michael Colby 2014
Trust, The Lyla Kate Colby 2014 Trust, Texas Wasatch Insurance Partners, L.P.
and any Permitted Transferees, collectively, of shares of common stock of Pubco
representing at least ten percent (10%) of the issued and outstanding shares of
the common stock of Pubco.

“Substitute Member” means any Person admitted as a Member of the Company
pursuant to Section 3.02 in connection with the Transfer of then-existing Units
to such Person.

“Tax Distribution” means a distribution made by the Company pursuant to
Section 5.03(e)(i) or Section 5.03(e)(iii) or a distribution made by the Company
pursuant to another provision of Section 5.03 but designated as a Tax
Distribution pursuant to Section 5.03(e)(ii).

“Tax Distribution Amount” means, with respect to a Member’s Units, whichever of
the following applies with respect to the applicable Tax Distribution, in each
case in amount not less than zero:

(i) With respect to a Tax Distribution pursuant to Section 5.03(e)(i), the
excess, if any, of (A) such Member’s required annualized income installment for
such estimated payment date under Section 6655(e) of the Code, assuming that
(w) such Member is a corporation (which assumption, for the avoidance of doubt,
shall not affect the determination of the Tax Rate), (x) Section

 

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6655(e)(2)(C)(ii) is in effect, (y) such Member’s only income is from the
Company, and (z) the Tax Rate applies, which amount shall be calculated based on
the projections believed by the Managing Member in good faith to be, reasonable
projections of the net taxable income to be allocated to such Units pursuant to
this Agreement and without regard to any adjustments pursuant to Section 704(c),
734, 743, or 754 of the Code over (B) the aggregate amount of Tax Distributions
designated by the Company pursuant to Section 5.03(e)(ii) with respect to such
Units since the date of the previous Tax Distribution pursuant to
Section 5.03(e)(i) (or if no such Tax Distribution was required to be made, the
date such Tax Distribution would have been made pursuant to Section 5.03(e)(i)).

(ii) With respect to the designation of an amount as a Tax Distribution pursuant
to Section 5.03(e)(ii), the product of (x) the net taxable income, determined
without regard to any adjustments pursuant to Section 704(c), 734, 743, or 754
of the Code projected, in the good faith belief of the Managing Member, to be
allocated to such Units pursuant to this Agreement during the period since the
date of the previous Tax Distribution (or, if more recent, the date that the
previous Tax Distribution pursuant to Section 5.03(e)(i) would have been made
or, in the case of the first distribution pursuant to Section 5.03(e)(i)Section
5.03(b), the date of this Agreement), and (y) the Tax Rate.

(iii) With respect to an entire Fiscal Year to be calculated for purposes of
Section 5.03(e)(iii), the excess, if any, of (A) the product of (x) the net
taxable income, determined without regard to any adjustments pursuant to
Section 704(c), 734, 743, or 754 of the Code, allocated to such Units pursuant
to this Agreement for the relevant Fiscal Year, and (y) the Tax Rate, over
(B) the aggregate amount of Tax Distributions (other than Tax Distributions
under Section 5.03(e)(iii) with respect to a prior Fiscal Year) with respect to
such Units made with respect to such Fiscal Year.

For purposes of this Agreement, in determining the Tax Distribution Amount of a
Member, the taxable income allocated to such Member’s Units shall be offset by
any taxable losses (determined without regard to any adjustments pursuant to
Section 704(c), 734, 743, or 754 of the Code) previously allocated to such Units
to the extent such losses were not allocated in the same proportion as the
Member’s Percentage Interests and have not previously offset taxable income in
the determination of the Tax Distribution Amount.

“Tax Rate” means the highest marginal tax rates for an individual or corporation
that is resident in the State of Texas applicable to ordinary income, qualified
dividend income or capital gains, as appropriate, taking into account the
holding period of the assets disposed of and the year in which the taxable net
income is recognized by the Company, and taking into account the deductibility
of state and local income taxes as applicable at the time for federal income tax
purposes and any limitations thereon including pursuant to Section 68 of the
Code, which Tax Rate shall be the same for all Members.

 

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“Tax Receivable Agreement” means the Tax Receivable Agreement, dated as of the
date hereof, by and among Pubco and each of the Non-Pubco Members.

“Trading Day” means a day on which the principal U.S. securities exchange on
which the Class A Common Stock is listed or admitted to trading is open for the
transaction of business (unless such trading shall have been suspended for the
entire day).

“Transfer” means any sale, assignment, transfer, exchange, gift, bequest,
pledge, hypothecation or other disposition or encumbrance, direct or indirect,
in whole or in part, by operation of law or otherwise, and shall include all
matters deemed to constitute a Transfer under Article 8. The terms
“Transferred”, “Transferring”, “Transferor”, “Transferee” and “Transferable”
have meanings correlative to the foregoing.

“Treasury Regulations” mean the regulations promulgated under the Code, as
amended from time to time.

“Units” means LLC Units or any other class of limited liability interests in the
Company designated by the Company after the date hereof in accordance with this
Agreement; provided that any type, class or series of Units shall have the
designations, preferences and/or special rights set forth or referenced in this
Agreement, and the membership interests of the Company represented by such type,
class or series of Units shall be determined in accordance with such
designations, preferences and/or special rights.

“Unit Redemption Price” means the arithmetic average of the volume weighted
average prices for a share of Class A Common Stock on the principal U.S.
securities exchange or automated or electronic quotation system on which the
Class A Common Stock trades, as reported by The Wall Street Journal or its
successor, for each of the three (3) consecutive full Trading Days ending on and
including the last full Trading Day immediately prior to the date of Redemption,
subject to appropriate and equitable adjustment for any stock splits, reverse
splits, stock dividends or similar events affecting the Class A Common Stock. If
the Class A Common Stock no longer trades on a securities exchange or automated
or electronic quotation system, then the Unit Redemption Price shall be
determined in good faith by a committee of the Board composed of a majority of
the directors of Pubco that do not have an interest in the LLC Units being
redeemed.

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

 

“Agreement”    Preamble “Call Member”    9.02(a) “Call Notice”    9.02(a) “Call
Units”    9.02(a)

 

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“Cash Settlement”    Section 10.01(b) “Company”    Preamble “Company Parties”   
9.01(b) “Confidential Information”    13.11(b) “Contribution Notice”    10.01(b)
“Controlled Entities”    11.02(e) “Direct Exchange”    10.03(a) “Dispute”   
14.01 “Dissolution Event”    12.01(c) “Economic Pubco Security”    4.01(a)
“e-mail”    13.03 “Exchange Election Notice”    10.03(b) “Expenses”    11.02(e)
“GAAP”    3.03(b) “Indemnification Sources”    11.02(e) “Indemnitee-Related
Entities”    11.02(e)(i) “Initial LLC Agreement”    Recitals “Initiating Party”
   14.01 “Jointly Indemnifiable Claims”    11.02(e)(ii) “Member Parties”   
13.11 “Member Schedule”    3.01(b) “Officers”    7.05(a) “Panel”    14.01
“Pubco”    Preamble “Pubco Offer”    10.04(a)

 

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“Redeemed Units”    10.01(a) “Redeeming Member”    10.01(a) “Redemption”   
10.01(a) “Redemption Date”    10.01(a) “Redemption Notice”    10.01(a)
“Redemption Right”    10.01(a) “Regulatory Allocations”    5.04(c)
“Reorganization”    Recitals “Reorganization Agreement”    Recitals “Responding
Party”    14.01 “Retraction Notice”    10.01(b) “Revaluation”    5.02(c) “Share
Settlement”    Section 10.01(b) “Tax Matters Partner”    6.01 “Tax Matters
Representative”    6.01 “Transferor Member”    5.02(b) “Withholding Advances”   
5.06(b)

Section 1.02. Other Definitional and Interpretative Provisions. The words
“hereof”, “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof. References to Articles, Sections and Schedules are to Articles, Sections
and Schedules of this Agreement unless otherwise specified. All Schedules
annexed hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein. Any capitalized terms used in
any Schedule but not otherwise defined therein, shall have the meaning as
defined in this Agreement. Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the singular. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation”, whether or not they are
in fact followed by those words or words of like import. “Writing”, “written”
and comparable terms refer to printing, typing and other means of reproducing
words (including electronic media) in a visible form. References to

 

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any statute shall be deemed to refer to such statute as amended from time to
time and to any rules or regulations promulgated thereunder. References to any
agreement or contract are to that agreement or contract as amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.
References to any Person include the successors and permitted assigns of that
Person. References from or through any date mean, unless otherwise specified,
from and including or through and including, respectively. References to “law”,
“laws” or to a particular statute or law shall be deemed also to include any
Applicable Law. As used in this Agreement, all references to “majority in
interest” and phrases of similar import shall be deemed to refer to such
percentage or fraction of interest based on the Relative Percentage Interests of
the Members subject to such determination. Unless otherwise expressly provided
herein, when any approval, consent or other matter requires any action or
approval of any group of Members, including any holders of any class of Units,
such approval, consent or other matter shall require the approval of a majority
in interest of such group of Members. Except to the extent otherwise expressly
provided herein, all references to any Member shall be deemed to refer solely to
such Person in its capacity as such Member and not in any other capacity.

ARTICLE 2

THE COMPANY

Section 2.01. Formation. The Company was formed upon the filing of the
certificate of formation of the Company with the Secretary of State of the State
of Delaware on December 22, 2015. The authorized officer or representative, as
an “authorized person” within the meaning of the Delaware Act, shall file and
record any amendments and/or restatements to the certificate of formation of the
Company and such other certificates and documents (and any amendments or
restatements thereof) as may be required under the laws of the State of Delaware
and of any other jurisdiction in which the Company may conduct business. The
authorized officer or representative shall, on request, provide any Member with
copies of each such document as filed and recorded. The Members hereby agree
that the Company and its Subsidiaries shall be governed by the terms and
conditions of this Agreement and, except as provided herein, the Delaware Act.

Section 2.02. Name. The name of the Company shall be Goosehead Financial, LLC;
provided that the Managing Member may change the name of the Company to such
other name as the Managing Member shall determine in its sole discretion, and
shall have the authority to execute, acknowledge, deliver, file and record such
further certificates, amendments, instruments and documents, and to do all such
other acts and things, as may be required by Applicable Law or as, in the
reasonable judgment of the Managing Member, may be necessary or advisable to
effect such change.

Section 2.03. Term. The Company shall have perpetual existence unless sooner
dissolved and its affairs wound up as provided in Article 11.

 

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Section 2.04. Registered Agent and Registered Office. The name of the registered
agent of the Company for service of process on the Company in the State of
Delaware shall be Corporation Service Company, and the address of such
registered agent and the address of the registered office of the Company in the
State of Delaware shall be Corporation Service Company, 251 Little Falls Drive,
Wilmington, New Castle County, Delaware 19808. Such office and such agent may be
changed to such place within the State of Delaware and any successor registered
agent, respectively, as may be determined from time to time by the Managing
Member in accordance with the Delaware Act.

Section 2.05. Purposes. The Company has been formed for the object and purpose
of, and the nature of the business to be conducted and promoted by the Company
is to engage in the Business and to carry on any other lawful act or activities
for which limited liability companies may be organized under the Delaware Act.

Section 2.06. Powers of the Company. The Company shall have the power and
authority to take any and all actions necessary, appropriate or advisable to or
for the furtherance of the purposes set forth in Section 2.05.

Section 2.07. Partnership Tax Status. The Members intend that the Company shall
be treated as a partnership for federal, state and local income tax purposes to
the extent such treatment is available, and agree to take (or refrain from
taking) such actions as may be necessary to receive and maintain such treatment
and refrain from taking any actions inconsistent thereof.

Section 2.08. Regulation of Internal Affairs. The internal affairs of the
Company and the conduct of its business shall be regulated by this Agreement,
and to the extent not provided for herein, shall be determined by the Managing
Member.

Section 2.09. Ownership of Property. Legal title to all Property, conveyed to,
or held by the Company or its Subsidiaries shall reside in the Company or its
Subsidiaries and shall be conveyed only in the name of the Company or its
Subsidiaries and no Member or any other Person, individually, shall have any
ownership of such Property.

Section 2.10. Subsidiaries. The Company shall cause the business and affairs of
each of the Subsidiaries to be managed by the Managing Member in accordance with
and in a manner consistent with this Agreement.

Section 2.11. Qualification in Other Jurisdictions. The Managing Member shall
execute, deliver and file certificates (and any amendments and/or restatements
thereof) necessary for the Company to qualify to do business in the
jurisdictions in which the Company may wish to conduct business. In those
jurisdictions in which the Company may wish to conduct business in which
qualification or registration under assumed or fictitious names is required or
desirable, the Managing Member shall cause the Company to be so qualified or
registered in compliance with Applicable Law.

 

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ARTICLE 3

UNITS; MEMBERS; BOOKS AND RECORDS; REPORTS

Section 3.01. Units; Admission of Members. (a) Each Member’s interest in the
Company, including such Member’s interest, if any, in the capital, income, gain,
loss, deduction and expense of the Company and the right to vote, if any, on
certain Company matters as provided in this Agreement, shall be represented by
Units. The ownership by a Member of Units shall entitle such Member to
allocations of profits and losses and other items and distributions of cash and
other property as is set forth in Article 5. Units shall be issued in
non-certificated form.

(b) Effective upon the Reorganization, pursuant to Section 2.01(a)(iii) of the
Reorganization Agreement, (i) Pubco has been admitted to the Company as the
Managing Member and (ii) the Company has hereby reclassified all of its
outstanding equity interests outstanding into an aggregate of 22,766,889 LLC
Units. After giving effect to the reclassification described in clause
(ii) above and the Reorganization , each of the Persons listed on Schedule A
(the “Member Schedule”) owns the number of LLC Units set forth opposite such
Member’s name on the Member Schedule. The Member Schedule shall be maintained by
the Managing Member on behalf of the Company in accordance with this Agreement
and, upon any subsequent update to the Member Schedule, the Managing Member
shall promptly deliver a copy of such updated Member Schedule to each of the
Members. When any Units or other Equity Securities of the Company are issued,
repurchased, redeemed, converted or Transferred in accordance with this
Agreement, the Member Schedule shall be amended by the Managing Member to
reflect such issuance, repurchase, redemption or Transfer, the admission of
additional or substitute Members and the resulting Percentage Interest of each
Member. Following the date hereof, no Person shall be admitted as a Member and
no additional Units shall be issued except as expressly provided herein.

(c) The Managing Member may cause the Company to authorize and issue from time
to time such other Units or other Equity Securities of any type, class or series
and having the designations, preferences and/or special rights as may be
determined by the Managing Member. Such Units or other Equity Securities may be
issued pursuant to such agreements as the Managing Member shall approve with
respect to Persons employed by or otherwise performing services for the Company
or any of its Subsidiaries, other equity compensation agreements, options or
warrants. When any such other Units or other Equity Securities are authorized
and issued, the Member Schedule and this Agreement shall be amended by the
Managing Member to reflect such additional issuances and resulting dilution,
which shall be borne pro rata by all Members based on their LLC Units.

Section 3.02. Substitute Members and Additional Members. (a) No Transferee of
any Units or Person to whom any Units are issued pursuant to this Agreement
shall be admitted as a Member hereunder or acquire any rights hereunder,
including any voting rights or the right to receive distributions and
allocations in respect of the Transferred or issued Units, as applicable, unless
(i) such Units are Transferred or issued in compliance with the provisions of
this Agreement (including Article 8), (ii) such Transferee or

 

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recipient shall have executed and delivered to the Company such instruments as
the Managing Member deems necessary or desirable, in its reasonable discretion,
to effectuate the admission of such Transferee or recipient as a Member and to
confirm the agreement of such Transferee or recipient to be bound by all the
terms and provisions of this Agreement, (iii) the Managing Member shall have
received the opinion of counsel, if any, required by Section 3.02(b) in
connection with such Transfer and (iv) all necessary instruments reflecting such
Transfer and/or admission shall have been filed in each jurisdiction in which
such filling is necessary in order to qualify the company to conduct business or
to preserve the limited liability of the Members. Upon complying with the
immediately preceding sentence, without the need for any further action of any
Person, a Transferee or recipient shall be deemed admitted to the Company as a
Member. A Substitute Member shall enjoy the same rights, and be subject to the
same obligations, as the Transferor; provided that such Transferor shall not be
relieved of any obligation or liability hereunder arising prior to the
consummation of such Transfer but shall be relieved of all future obligations
with respect to the Units so Transferred. As promptly as practicable after the
admission of any Person as a Member, the books and records of the Company shall
be changed to reflect such admission of a Substitute Member or Additional
Member. In the event of any admission of a Substitute Member or Additional
Member pursuant to this Section 3.02(a), this Agreement shall be deemed amended
to reflect such admission, and any formal amendment of this Agreement (including
the Member Schedule) in connection therewith shall only require execution by the
Company and such Substitute Member or Additional Member, as applicable, to be
effective.

(b) As a further condition to any Transfer of all or any part of a Member’s
Units, the Managing Member may, in its discretion, require a written opinion of
counsel to the transferring Member reasonably satisfactory to the Managing
Member, obtained at the sole expense of the transferring Member, reasonably
satisfactory in form and substance to the Managing Member, as to such matters as
are customary and appropriate in transactions of this type, including, without
limitation (or, in the case of any Transfer made to a Permitted Transferee,
limited to an opinion) to the effect that such Transfer will not result in a
violation of the registration or other requirements of the Securities Act or any
other federal or state securities laws. No such opinion, however, shall be
required in connection with a Transfer made pursuant to Article 10 of this
Agreement.

(c) If a Member shall Transfer all (but not less than all) its Units, the Member
shall thereupon cease to be a Member of the Company.

(d) All reasonable costs and expenses incurred by the Managing Member and the
Company in connection with any Transfer of a Member’s Units, including any
filing and recording costs and the reasonable fees and disbursements of counsel
for the Company, shall be paid by the transferring Member. In addition, the
transferring Member hereby indemnifies the Managing Member and the Company
against any losses, claims, damages or liabilities to which the Managing Member,
the Company, or any of their Affiliates may become subject arising out of or
based upon any false representation or warranty made by, or breach or failure to
comply with any covenant or agreement of, such transferring Member or such
transferee in connection with such Transfer.

 

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(e) In connection with any Transfer of any portion of a Member’s Units pursuant
to Article 10 of this Agreement, the Managing Member shall cause the Company to
take any action as may be required under Article 10of this Agreement or
requested by any party thereto to effect such Transfer promptly.

Section 3.03. Tax and Accounting Information. (a) Accounting Decisions and
Reliance on Others. All decisions as to accounting matters, except as otherwise
specifically set forth herein, shall be made by the Managing Member in
accordance with Applicable Law and with accounting methods followed for federal
income tax purposes. In making such decisions, the Managing Member may rely upon
the advice of the independent accountants of the Company.

(b) Records and Accounting Maintained. The books and records of the Company
shall be kept, and the financial position and the results of its operations
recorded, in all material respects in accordance with United States generally
accepted accounting principles as in effect from time to time (“GAAP”). The
Fiscal Year of the Company shall be used for financial reporting and for federal
income tax purposes.

(c) Financial Reports.

(i) The books and records of the Company shall be audited as of the end of each
Fiscal Year by the same accounting firm that audits the books and records of
Pubco (or, if such firm declines to perform such audit, by an accounting firm
selected by the Managing Member).

(ii) In the event neither Pubco nor the Company is required to file an annual
report on Form 10-K or quarterly report on Form 10-Q, the Company shall deliver,
or cause to be delivered, the following to Pubco and each of the Non-Pubco
Members, in each case for so long as the Substantial Ownership Requirement is
met:

(A) not later than ninety (90) days after the end of each Fiscal Year of the
Company, a copy of the audited consolidated balance sheet of the Company and its
Subsidiaries as of the end of such Fiscal Year and the related statements of
operations and cash flows for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous year, all in reasonable detail;
and

(B) not later than forty five (45) days or such later time as permitted under
applicable securities law after the end of each of the first three fiscal
quarters of each Fiscal Year, the unaudited consolidated balance sheet of the
Company and its Subsidiaries, and the related statements of operations and cash
flows for such quarter and for the period commencing on the first day of the
Fiscal Year and ending on the last day of such quarter.

 

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(d) Tax Returns.

(i) The Company shall timely prepare or cause to be prepared by an accounting
firm selected by the Managing Member all federal, state, local and foreign tax
returns (including information returns) of the Company and its Subsidiaries,
which may be required by a jurisdiction in which the Company and its
Subsidiaries operate or conduct business for each year or period for which such
returns are required to be filed and shall cause such returns to be timely
filed. Upon request of any Member, the Company shall furnish to such Member a
copy of each such tax return;

(ii) The Company shall furnish to each Member (a) as soon as reasonably
practical after the end of each Fiscal Year and in any event by April 30, all
information concerning the Company and its Subsidiaries required for the
preparation of tax returns of such Members (or any beneficial owner(s) of such
Member), including a report (including Schedule K-1), indicating each Member’s
share of the Company’s taxable income, gain, credits, losses and deductions for
such year, in sufficient detail to enable such Member to prepare its federal,
state and other tax returns; provided that estimates of such information
believed by the Managing Member in good faith to be reasonable shall be provided
by March 10, (b) as soon as reasonably possible after the close of the relevant
fiscal period, but in no event later than ten days prior to the date an
estimated tax payment is due, such information concerning the Company as is
required to enable such Member (or any beneficial owner of such Member) to pay
estimated taxes and (c) as soon as reasonably possible after a request by such
Member, such other information concerning the Company and its Subsidiaries that
is reasonably requested by such Member for compliance with its tax obligations
(or the tax obligations of any beneficial owner(s) of such Member) or for tax
planning purposes; and

(iii) For so long as the Substantial Ownership Requirement is met, each
Non-Pubco Member shall be entitled to review and comment on any tax returns or
reports to be prepared pursuant to this Section 3.03(d) at least 60 days prior
to the due date for the applicable tax return or report (including extensions).
Each Non-Pubco Member shall notify the Company no later than 30 days after
receipt of a tax return or report of any changes recommended thereby to such
return or report. The Company shall consider in good faith all reasonable
comments of the Non-Pubco Members to such tax returns or reports. If the Company
does not accept any such comment, the Company shall notify the such Non-Pubco
Member of that fact. If within five (5) days of such notification, a Non-Pubco
Member request in writing a review of a rejected comment, the Company shall
cause its regular tax advisors to review the comment and consult with such
Non-Pubco Member. The determination of the tax advisors following such review
and consultation shall definitively determine the position taken on the
Company’s tax return or report.

(e) Inconsistent Positions. No Member shall take a position on its income tax
return with respect to any item of Company income, gain, deduction, loss or
credit that is different from the position taken on the Company’s income tax
return with respect to such item unless such Member notifies the Company of the
different position the Member desires to take and the Company’s regular tax
advisors, after consulting with the Member, are unable to provide an opinion
that (after taking into account all of the relevant facts and circumstances) the
arguments in favor of the Company’s position outweigh the arguments in favor of
the Member’s position.

 

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Section 3.04. Books and Records. The Company shall keep full and accurate books
of account and other records of the Company at its principal place of business.
For so long as the Substantial Ownership Requirement is met, each Non-Pubco
Member shall have any right to inspect the books and records of Pubco, the
Company or any of its Subsidiaries; provided that (i) such inspection shall be
at reasonable times and upon reasonable prior notice to the Company, but not
more frequently than once per calendar quarter and (ii) neither Pubco, the
Company nor any of its Subsidiaries shall be required to disclose (x) any
information the Managing Member determines to be competitively sensitive or
(y) any privileged information of Pubco, the Company or any of its Subsidiaries
so long as the Company has used commercially reasonable efforts to enter into an
arrangement pursuant to which it may provide such information to the Non-Pubco
Members, as the case may be, without the loss of any such privilege.

ARTICLE 4

PUBCO OWNERSHIP; RESTRICTIONS ON PUBCO STOCK

Section 4.01. Pubco Ownership. (a) Except as otherwise determined by Pubco, if
at any time Pubco issues a share of Class A Common Stock any other Equity
Security of Pubco entitled to any economic rights (including in the IPO) (an
“Economic Pubco Security”) with regard thereto (other than Class B Common Stock,
or other Equity Security of Pubco not entitled to any economic rights with
respect thereto), (i) the Company shall issue to Pubco one LLC Unit (if Pubco
issues a share of Class A Common Stock) or such other Equity Security of the
Company (if Pubco issues an Economic Pubco Security other than Class A Common
Stock) corresponding to the Economic Pubco Security, and with substantially the
same rights to dividends and distributions (including distributions upon
liquidation) and other economic rights as those of such Economic Pubco Security
and (ii) the net proceeds received by Pubco with respect to the corresponding
Economic Pubco Security, if any, shall be concurrently contributed to the
Company; provided, however, that if Pubco issues any Economic Pubco Securities,
some or all of the net proceeds of which are to be used to fund expenses or
other obligations of Pubco for which Pubco would be permitted a distribution
pursuant to Section 5.03(c), then Pubco shall not be required to transfer such
net proceeds to the Company which are used or will be used to fund such expenses
or obligations and provided, further, that if Pubco issues any shares of Class A
Common Stock (including in the IPO) in order to purchase or fund the purchase
from a Non-Pubco Member of a number of LLC Units (and shares of Class B Common
Stock) or to purchase or fund the purchase of shares of Class A Common Stock, in
each case equal to the number of shares of Class A Common Stock issued, then the
Company shall not issue any new LLC Units in connection therewith and Pubco
shall not be required to transfer such net proceeds to the Company (it being
understood that such net proceeds shall instead be transferred to such Non-Pubco
Member as consideration for such purchase).

 

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(b) For the avoidance of doubt, this Article 4 shall apply to the issuance and
distribution to holders of shares of Pubco Common Stock of rights to purchase
Equity Securities of Pubco under a “poison pill” or similar shareholders rights
plan (it also being understood that upon redemption or exchange of LLC Units
(including any such right to purchase LLC Units in the Company) for shares of
Class A Common Stock, such Class A Common Stock will be issued together with a
corresponding right to purchase Equity Securities of Pubco).

(c) If at any time Pubco issues one or more shares of Class A Common Stock in
connection with an equity incentive program, whether such share or shares are
issued upon exercise of an option, settlement of a restricted stock unit, as
restricted stock or otherwise, the Company shall issue to Pubco a corresponding
number of LLC Units; provided that Pubco shall be required to concurrently
contribute the net proceeds (if any) received by Pubco from or otherwise in
connection with such corresponding issuance of one or more shares of Class A
Common Stock, including the exercise price of any option exercised, to the
Company. If any such shares of Class A Common Stock so issued by Pubco in
connection with an equity incentive program are subject to vesting or forfeiture
provisions, then the LLC Units that are issued by the Company to Pubco in
connection therewith in accordance with the preceding provisions of this
Section 4.01(c) shall be subject to vesting or forfeiture on the same basis; if
any, of such shares of Class A Common Stock vest or are forfeited, then a
corresponding number of the LLC Units issued by the Company in accordance with
the preceding provisions of this Section 4.01(c) shall automatically vest or be
forfeited. Any cash or property held by either Pubco or the Company or on
either’s behalf in respect of dividends paid on restricted Class A Common Stock
that fails to vest shall be returned to the Company upon the forfeiture of such
restricted Class A Common Stock.

Section 4.02. Restrictions on Pubco Common Stock. (a) Except as otherwise
determined by the Managing Member in accordance with Section 4.02(d), (i) the
Company may not issue any additional LLC Units to Pubco or any of its
Subsidiaries unless substantially simultaneously therewith Pubco or such
Subsidiary issues or sells an equal number of shares of Class A Common Stock to
another Person, (ii) the Company may not issue any additional LLC Units to any
Person (other than Pubco or any of its Subsidiaries) unless simultaneously
therewith Pubco issues or sells an equal number of shares of Class B Common
Stock to such Person and (iii) the Company may not issue any other Equity
Securities of the Company to Pubco or any of its Subsidiaries unless
substantially simultaneously therewith, Pubco or such Subsidiary issues or
sells, to another Person, an equal number of shares of a new class or series of
Equity Securities of Pubco or such Subsidiary with substantially the same rights
to dividends and distributions (including distributions upon liquidation) and
other economic rights as those of such Equity Securities of the Company.

(b) Except as otherwise determined by the Managing Member in accordance with
Section 4.02(d), (i) Pubco or any of its Subsidiaries may not redeem, repurchase
or otherwise acquire any shares of Class A Common Stock unless substantially
simultaneously therewith the Company redeems, repurchases or otherwise acquires
from Pubco or any of its Subsidiaries an equal number of LLC Units for the same
price per

 

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security (or, if Pubco uses funds received from distributions from the Company
or the net proceeds from an issuance of Class A Common Stock to fund such
redemption, repurchase or acquisition, then the Company shall cancel an equal
number of LLC Units for no consideration) and (ii) Pubco or any of its
Subsidiaries may not redeem or repurchase any other Equity Securities of Pubco
unless substantially simultaneously therewith the Company redeems or repurchases
from Pubco or any of its Subsidiaries an equal number of Equity Securities of
the Company of a corresponding class or series with substantially the same
rights to dividends and distributions (including distributions upon liquidation)
or other economic rights as those of such Equity Securities of Pubco for the
same price per security (or, if Pubco uses funds received from distributions
from the Company or the net proceeds from an issuance of Equity Securities other
than Class A Common Stock to fund such redemption, repurchase or acquisition,
then the Company shall cancel an equal number of its corresponding Equity
Securities for no consideration). Except as otherwise determined by the Managing
Member in accordance with Section 4.02(d), (x) the Company may not redeem,
repurchase or otherwise acquire LLC Units from Pubco or any of its Subsidiaries
unless substantially simultaneously Pubco or such Subsidiary redeems,
repurchases or otherwise acquires an equal number of Class A Common Stock for
the same price per security from holders thereof (except that if the Company
cancels LLC Units for no consideration as described in Section 4.02(b)(i), then
the price per security need not be the same) and (y) the Company may not redeem,
repurchase or otherwise acquire any other Equity Securities of the Company from
Pubco or any of its Subsidiaries unless substantially simultaneously Pubco or
such Subsidiary redeems, repurchases or otherwise acquires for the same price
per security an equal number of Equity Securities of Pubco of a corresponding
class or series with substantially the same rights to dividends and
distributions (including dividends and distributions upon liquidation) and other
economic rights as those of such Equity Securities of Pubco (except that if the
Company cancels Equity Securities for no consideration as described in
Section 4.02(b)(ii), then the price per security need not be the same).
Notwithstanding the immediately preceding sentence, to the extent that any
consideration payable to Pubco in connection with the redemption or repurchase
of any shares or other Equity Securities of Pubco or any of its Subsidiaries
consists (in whole or in part) of shares or such other Equity Securities
(including, for the avoidance of doubt, in connection with the cashless exercise
of an option or warrant), then redemption or repurchase of the corresponding LLC
Units or other Equity Securities of the Company shall be effectuated in an
equivalent manner (except if the Company cancels LLC Units or other Equity
Securities for no consideration as described in this Section 4.02(b)).

(c) The Company shall not in any manner effect any subdivision (by any stock or
unit split, stock or unit dividend or distribution, reclassification,
reorganization, recapitalization or otherwise) or combination (by reverse stock
or unit split, reclassification, reorganization, recapitalization or otherwise)
of the outstanding LLC Units unless accompanied by a substantively identical
subdivision or combination, as applicable, of the outstanding Pubco Common
Stock, with corresponding changes made with respect to any other exchangeable or
convertible securities. Pubco shall not in any manner effect any subdivision (by
any stock or unit split, stock or unit dividend or distribution,
reclassification, reorganization, recapitalization or otherwise) or combination
(by reverse stock or unit split, reclassification, reorganization,
recapitalization or otherwise) of the outstanding Pubco Common Stock unless
accompanied by a substantively identical subdivision or combination, as
applicable, of the outstanding LLC Units, with corresponding changes made with
respect to any other exchangeable or convertible securities.

 

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(d) Notwithstanding anything to the contrary in this Article 4:

(i) if at any time the Managing Member shall determine that any debt instrument
of Pubco, the Company or its Subsidiaries shall not permit Pubco or the Company
to comply with the provisions of Section 4.02(a) or Section 4.02(b) in
connection with the issuance, redemption or repurchase of any shares of Class A
Common Stock or other Equity Securities of Pubco or any of its Subsidiaries or
any Units or other Equity Securities of the Company, then the Managing Member
may in good faith implement an economically equivalent alternative arrangement
without complying with such provisions; provided that, in the case that any such
alternative arrangement is implemented because of restrictions in any debt
instrument, such arrangement shall also be subject to the prior written consent
(not to be unreasonably withheld) of each of the Non-Pubco Members, in each case
for so long as the Substantial Ownership Requirement is met; and

(ii) if (x) Pubco incurs any indebtedness and desires to transfer the proceeds
of such indebtedness to the Company and (y) Pubco is unable to lend the proceeds
of such indebtedness to the Company on an equivalent basis because of
restrictions in any debt instrument of Pubco, the Company or its Subsidiaries,
then notwithstanding Section 4.02(a) or Section 4.02(b), the Managing Member may
in good faith implement an economically equivalent alternative arrangement in
connection with the transfer of proceeds to the Company using non-participating
preferred Equity Securities of the Company without complying with such
provisions; provided that, in the case that any such alternative arrangement is
implemented because of restrictions in any debt instrument, such arrangement
shall also be subject to the prior written consent (not to be unreasonably
withheld) of each of the Non-Pubco Members, in each case for so long as the
Substantial Ownership Requirement is met.

ARTICLE 5

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS;

DISTRIBUTIONS; ALLOCATIONS

Section 5.01. Capital Contributions. (a) From and after the date hereof, no
Member shall have any obligation to the Company, to any other Member or to any
creditor of the Company to make any further Capital Contribution, except as
expressly provided in Section 4.01(a).

(b) Except as expressly provided herein, no Member, in its capacity as a Member,
shall have the right to receive any cash or any other property of the Company.

 

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Section 5.02. Capital Accounts.

(a) Maintenance of Capital Accounts. The Company shall maintain a Capital
Account for each Member on the books of the Company in accordance with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and, to the extent
consistent with such provisions, the following provisions:

(i) Each Member listed on the Member Schedule shall be credited with the
Reorganization Date Capital Account Balance set forth on the Member Schedule.
The Member Schedule shall be amended by the Managing Member after the closing of
the IPO and from time to time to reflect adjustments to the Members’ Capital
Accounts made in accordance with Sections 5.02(a)(ii), 5.02(a)(iii),
5.02(a)(iv), 5.02(c) or otherwise.

(ii) To each Member’s Capital Account there shall be credited: (A) such Member’s
Capital Contributions, (B) such Member’s distributive share of Net Income and
any item in the nature of income or gain that is allocated pursuant to
Section 5.04 and (C) the amount of any Company liabilities assumed by such
Member or that are secured by any Property distributed to such Member.

(iii) To each Member’s Capital Account there shall be debited: (A) the amount of
money and the Carrying Value of any Property distributed to such Member pursuant
to any provision of this Agreement, (B) such Member’s distributive share of Net
Loss and any items in the nature of expenses or losses that are allocated to
such Member pursuant to Section 5.04 and (C) the amount of any liabilities of
such Member assumed by the Company or that are secured by any Property
contributed by such Member to the Company.

(iv) In determining the amount of any liability for purposes of subparagraphs
(ii) and (iii) above there shall be taken into account Section 752(c) of the
Code and any other applicable provisions of the Code and the Treasury
Regulations.

The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Treasury
Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner
consistent with such Treasury Regulations. In the event that the Managing Member
shall reasonably determine that it is prudent to modify the manner in which the
Capital Accounts or any debits or credits thereto are maintained (including
debits or credits relating to liabilities that are secured by contributed or
distributed Property or that are assumed by the Company or the Members), the
Managing Member may make such modification so long as such modification will not
have any effect on the amounts distributed to any Person pursuant to Article 11
upon the dissolution of the Company. The Managing Member also shall (i) make any
adjustments that are necessary or appropriate to maintain equality between
Capital Accounts of the Members and the amount of capital reflected on the
Company’s balance sheet, as computed for book purposes, in accordance with
Treasury Regulations Section 1.704-1(b)(2)(iv)(g), and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Treasury Regulations Section 1.704-1(b).

 

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

(c) Adjustments of Capital Accounts. The Company shall revalue the Capital
Accounts of the Members in accordance with Treasury Regulations Section 1.704-
1(b)(2)(iv)(f) (a “Revaluation”) at the following times: (i) immediately prior
to the contribution of more than a de minimis amount of money or other property
to the Company by a new or existing Member as consideration for one or more
Units; (ii) the distribution by the Company to a Member of more than a de
minimis amount of property in respect of one or more Units; (iii) the issuance
by the Company of more than a de minimis amount of Units as consideration for
the provision of services to or for the benefit of the Company (as described in
Treasury Regulations Section 1.704- 1(b)(2)(iv)(f)(5)(iii)); and (iv) the
liquidation of the Company within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g) (other than a liquidation pursuant to
Section 708(b)(1)(B) of the Code); provided, however, that adjustments pursuant
to clauses (i), (ii) and (iii) above shall be made only if the Managing Member
reasonably determines that such adjustments are necessary or appropriate to
reflect the relative economic interest of the Members.

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

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

(f) Notwithstanding anything to the contrary in this Section 5.02, it is
intended that each Member’s Capital Account per Unit be equal to each of the
other Member’s Capital Account per Unit. If at any time there is a difference
between a Member’s Capital Account per Unit and the other Members’ Capital
Accounts per Unit, the Company shall make appropriate adjustments with respect
to the Members’ Capital Accounts to eliminate or minimize such difference.

Section 5.03. Amounts and Priority of Distributions. (a) Distributions
Generally. Except as otherwise provided in Section 11.02, distributions shall be
made to the Members as set forth in this Section 5.03, at such times and in such
amounts as the Managing Member, in its sole discretion, shall determine.

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

 

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(c) Pubco Distributions. Notwithstanding the provisions of Section 5.03(b), the
Managing Member, in its sole discretion, may authorize that (i) cash be paid to
Pubco or any of its Subsidiaries (which payment shall be made without pro rata
distributions to the other Members) in exchange for the redemption, repurchase
or other acquisition of Units held by Pubco or any of its Subsidiaries to the
extent that such cash payment is used to redeem, repurchase or otherwise acquire
an equal number of shares of Class A Common Stock in accordance with
Section 4.02(b) in accordance with Section 12.01.

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

(e) Tax Distributions.

(i) Notwithstanding any other provision of this Section 5.03 to the contrary, to
the extent permitted by Applicable Law and consistent with the Company’s
obligations to its creditors as reasonably determined by the Managing Member,
the Company shall make cash distributions by wire transfer of immediately
available funds pursuant to this Section 5.03(e)(i) to each Member with respect
to its Units at least two (2) Business Days prior to the date on which any U.S.
federal corporate estimated tax payments are due, in an amount equal to such
Member’s Tax Distribution Amount, if any; provided that the Managing Member
shall have no liability to any Member in connection with any underpayment of
estimated taxes, so long as cash distributions are made in accordance with this
Section 5.03(e)(i) and the Tax Distribution Amounts are determined as provided
in paragraph (i) of the definition of Tax Distribution Amount.

(ii) On any date that the Company makes a distribution to the Members with
respect to their Units under a provision of Section 5.03 other than this
Section 5.03(e), if the Tax Distribution Amount is greater than zero, the
Company shall designate all or a portion of such distribution as a Tax
Distribution with respect to a Member’s Units to the extent of the Tax
Distribution Amount with respect to such Member’s Units as of such date (but not
to exceed the amount of such distribution). For the avoidance of doubt, such
designation shall be performed with respect to all Members with respect to which
there is a Tax Distribution Amount as of such date.

 

 

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(iii) Notwithstanding any other provision of this Section 5.03 to the contrary,
if the Tax Distribution Amount for such Fiscal Year is greater than zero, to the
extent permitted by Applicable Law and consistent with the Company’s obligations
to its creditors as reasonably determined by the Managing Member, the Company
shall make additional distributions under this Section 5.03(e)(iii) to the
extent of such Tax Distribution Amount for such Fiscal Year as soon as
reasonably practicable after the end of such Fiscal Year (or as soon as
reasonably practicable after any event that subsequently adjusts the taxable
income of such Fiscal Year).

(iv) Under no circumstances shall Tax Distributions reduce the amount otherwise
distributable to any Member pursuant to this Section 5.03 (other than this
Section 5.03(e)) after taking into account the effect of Tax Distributions on
the amount of cash or other assets available for distribution by the Company.

(v) For the avoidance of doubt, Tax Distributions shall be made to all Members
on a pro rata basis in accordance with their Percentage Interests,
notwithstanding the differing amount of tax liabilities of such Members.

(f) Assignment. Each Member and its Affiliated Transferees shall have the right
to assign to any Transferee of LLC Units, pursuant to a Transfer made in
compliance with this Agreement, the right to receive any portion of the amounts
distributable or otherwise payable to such Member pursuant to Section 5.03(b).

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

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

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

 

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Allocations pursuant to the immediately preceding sentence shall be made in
proportion to the respective amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated shall be determined in accordance
with Treasury Regulations Section 1.704-2(f)(6) and 1.704-2(j)(2). This
Section 5.04(b)(i) is intended to comply with the minimum gain chargeback
requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted
consistently therewith.

(ii) Member Minimum Gain Chargeback. Except as otherwise provided in Treasury
Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this
Article 5, if there is a net decrease in Member Nonrecourse Debt Minimum Gain
attributable to a Member Nonrecourse Debt during any Fiscal Year, each Member
who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such
Member Nonrecourse Debt, determined in accordance with Treasury Regulations
Section 1.704-2(i)(5), shall be specially allocated items of Company income and
gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an
amount equal to such Member’s share of the net decrease in Member Nonrecourse
Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant
to the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto. The items to be so
allocated shall be determined in accordance with Treasury Regulations Sections
1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.04(b)(ii) is intended to comply
with the minimum gain chargeback requirement in Treasury Regulations
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

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

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

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

 

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

(c) Curative Allocations. The allocations set forth in Section 5.04(b)(i)
through Section 5.04(b)(vi) and Section 5.04(d) (the “Regulatory Allocations”)
are intended to comply with certain requirements of the Treasury Regulations. It
is the intent of the Members that, to the extent possible, all Regulatory
Allocations shall be offset either with other Regulatory Allocations or with
special allocations of other items of Company income, gain, loss, or deduction
pursuant to this Section 5.04(c). Therefore, notwithstanding any other provision
of this Article 5 (other than the Regulatory Allocations), the Managing Member
shall make such offsetting special allocations of Company income, gain, loss, or
deduction in whatever manner it determines appropriate so that, after such
offsetting allocations are made, each Member’s Capital Account balance is, to
the extent possible, equal to the Capital Account balance such Member would have
had if the Regulatory Allocations were not part of the Agreement and all Company
items were allocated pursuant to Section 5.04.

(d) Loss Limitation. Net Loss (or individual items of loss or deduction)
allocated pursuant to Section 5.04 hereof shall not exceed the maximum amount of
Net Loss (or individual items of loss or deduction) that can be allocated
without causing any Member to have an Adjusted Capital Account Deficit at the
end of any Fiscal Year. In the event some but not all of the Members would have
Adjusted Capital Account Deficits as a consequence of an allocation of Net Loss
(or individual items of loss or deduction) pursuant to Section 5.04 hereof, the
limitation set forth in this Section 5.04(d) shall be

 

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applied on a Member by Member basis and Net Loss (or individual items of loss or
deduction) not allocable to any Member as a result of such limitation shall be
allocated to the other Members in accordance with the positive balances in such
Member’s Capital Accounts so as to allocate the maximum permissible Net Loss to
each Member under Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Any
reallocation of Net Loss pursuant to this (d) shall be subject to chargeback
pursuant to the curative allocation provision of Section 5.04(c).

Section 5.05. Other Allocation Rules. (a) Interim Allocations Due to Percentage
Adjustment. If a Percentage Interest is the subject of a Transfer or the
Members’ interests in the Company change pursuant to the terms of the Agreement
during any Fiscal Year, the amount of Net Income and Net Loss (or items thereof)
to be allocated to the Members for such entire Fiscal Year shall be allocated to
the portion of such Fiscal Year which precedes the date of such Transfer or
change (and if there shall have been a prior Transfer or change in such Fiscal
Year, which commences on the date of such prior Transfer or change) and to the
portion of such Fiscal Year which occurs on and after the date of such Transfer
or change (and if there shall be a subsequent Transfer or change in such Fiscal
Year, which precedes the date of such subsequent Transfer or change), in
accordance with an interim closing of the books, and the amounts of the items so
allocated to each such portion shall be credited or charged to the Members in
accordance with Section 5.04 as in effect during each such portion of the Fiscal
Year in question. Such allocation shall be in accordance with Section 706 of the
Code and the regulations thereunder and made without regard to the date, amount
or receipt of any distributions that may have been made with respect to the
transferred Percentage Interest to the extent consistent with Section 706 of the
Code and the regulations thereunder. As of the date of such Transfer, the
Transferee Member shall succeed to the Capital Account of the Transferor Member
with respect to the transferred Units.

(b) Tax Allocations: Code Section 704(c). In accordance with Section 704(c) of
the Code and the Treasury Regulations thereunder, income, gain, loss, and
deduction with respect to any Property contributed to the capital of the Company
and with respect to reverse Code Section 704(c) allocations described in
Treasury Regulations 1.704-3(a)(6) shall, solely for tax purposes, be allocated
among the Members so as to take account of any variation between the adjusted
basis of such Property to the Company for federal income tax purposes and its
initial Carrying Value or its Carrying Value determined pursuant to Treasury
Regulation 1.704-1(b)(2)(iv)(f) (computed in accordance with the definition of
Carrying Value) using the traditional allocation method without curative
allocations under Treasury Regulation 1.704-3(b). Any elections or other
decisions relating to such allocations shall be made by the Managing Member in
any manner that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section 5.05(b), Section 704(c) of the Code (and
the principles thereof), and Treasury Regulation 1.704-1(b)(4)(i) are solely for
purposes of federal, state, and local taxes and shall not affect, or in any way
be taken into account in computing, any Member’s Capital Account or share of Net
Income, Net Loss, other items, or distributions pursuant to any provision of
this Agreement.

 

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Section 5.06. Tax Withholding; Withholding Advances. (a) Tax Withholding.

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

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

(b) Withholding Advances. To the extent the Company is required by Applicable
Law to withhold or to make tax payments on behalf of or with respect to any
Member (including backup withholding and any tax payment made by the Company
pursuant to Section 6225 of the Code that is attributable to such Member)
(“Withholding Advances”), the Company may withhold such amounts and make such
tax payments as so required.

(c) Repayment of Withholding Advances. All Withholding Advances made on behalf
of a Member, plus interest thereon at a rate equal to the Prime Rate as of the
date of such Withholding Advances plus 2.0% per annum, shall (i) be paid on
demand by the Member on whose behalf such Withholding Advances were made (it
being understood that no such payment shall increase such Member’s Capital
Account), or (ii) with the consent of the Managing Member and the affected
Member be repaid by reducing the amount of the current or next succeeding
distribution or distributions that would otherwise have been made to such Member
or, if such distributions are not sufficient for that purpose, by so reducing
the proceeds of liquidation otherwise payable to such Member. Whenever repayment
of a Withholding Advance by a Member is made as described in clause (ii) of this
Section 5.06(c), for all other purposes of this Agreement such Member shall be
treated as having received all distributions (whether before or upon any
Dissolution Event) unreduced by the amount of such Withholding Advance and
interest thereon.

 

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(d) Withholding Advances — Reimbursement of Liabilities. Each Member hereby
agrees to reimburse the Company for any liability with respect to Withholding
Advances (including interest thereon) required or made on behalf of or with
respect to such Member (including penalties imposed with respect thereto). The
obligation of a Member to reimburse the Company for taxes pursuant to this
Section 5.06 shall continue after such Member Transfers its LLC Units with
respect to all payments or allocations to such Member were made prior to the
date of such Transfer.

ARTICLE 6

CERTAIN TAX MATTERS

Section 6.01. Tax Matters Representative. Pubco is hereby appointed the “tax
matters partner” or the “partnership representative,” as the case may be (in
each case, the “Tax Matters Representative”), of the Company under Section 6231
of the Code prior to the enactment of U.S. Public Law 114-74 or Section 6223 of
the Code, as applicable. The Company shall not be obligated to pay any fees or
other compensation to the Tax Matters Representative in its capacity as such,
but the Company shall reimburse the Tax Matters Representative for all
reasonable out-of-pocket costs and expenses (including attorneys’ and other
professional fees) incurred by it in its capacity as Tax Matters Representative.
The Company shall defend, indemnify, and hold harmless the Tax Matters
Representative against any and all liabilities sustained or incurred as a result
of any act or decision concerning Company tax matters and within the scope of
such Member’s responsibilities as Tax Matters Representative, so long as such
act or decision was done or made in good faith and does not constitute gross
negligence or willful misconduct. The Members acknowledge that the Company shall
make the election described in Section 6226 of the Code, unless the Tax Matter
Representative determines not to make such election in its sole discretion.

Section 6.02. Section 754 Elections. The Company shall make, and shall cause any
Subsidiary of the Company that is treated as a partnership for U.S. federal
income tax purposes to make, a timely election under Section 754 of the Code
(and a corresponding election under state and local law) effective starting with
the taxable year ended December 31, 2018, and the Managing Member shall not take
any action to revoke such elections.

Section 6.03. Debt Allocation. Indebtedness of the Company treated as “excess
nonrecourse liabilities” (as defined in Treasury Regulation
Section 1.752-3(a)(3)) shall be allocated among the Members based on their
Percentage Interests.

 

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ARTICLE 7

MANAGEMENT OF THE COMPANY

Section 7.01. Management by the Managing Member. Except as otherwise
specifically set forth in this Agreement, the Managing Member shall be deemed to
be a “manager” for purposes of applying the Delaware Act. Except as expressly
provided in this Agreement or the Delaware Act, the day-to-day business and
affairs of the Company and its Subsidiaries shall be managed, operated and
controlled by the Managing Member in accordance with the terms of this Agreement
and no other Members shall have management authority or rights over the Company
or its Subsidiaries. The Managing Member is, to the extent of its rights and
powers set forth in this Agreement, an agent of the Company for the purpose of
the Company’s and its Subsidiaries’ business, and the actions of the Managing
Member taken in accordance with such rights and powers, shall bind the Company
(and no other Members shall have such right). Except as expressly provided in
this Agreement, the Managing Member shall have all necessary powers to carry out
the purposes, business, and objectives of the Company and its Subsidiaries. The
Managing Member shall have the power and authority to delegate to one or more
other Persons the Managing Member’s rights and powers to manage and control the
business and affairs of the Company, including to delegate to agents and
employees of a Member or the Company (including any officers or Subsidiary
thereof), and to delegate by a management agreement or another agreement with,
or otherwise to, other Persons. The Managing Member may authorize any Person
(including any Member or officer of the Company) to enter into and perform any
document on behalf of the Company or any Subsidiary.

Section 7.02. Withdrawal of the Managing Member. Pubco may withdraw as the
Managing Member and appoint as its successor at any time upon written notice to
the Company (i) any wholly-owned Subsidiary of Pubco, (ii) any Person of which
Pubco is a wholly-owned Subsidiary, (iii) any Person into which Pubco is merged
or consolidated or (iv) any transferee of all or substantially all of the assets
of Pubco, which withdrawal and replacement shall be effective upon the delivery
of such notice. No appointment of a Person other than Pubco (or its successor,
as applicable) as Managing Member shall be effective unless Pubco (or its
successor, as applicable) and the new Managing Member (as applicable) provide
all other Members with contractual rights, directly enforceable by such other
Members against the new Managing Member, to cause the new Managing Member to
comply with all the Managing Member’s obligations under this Agreement and the
Reorganization Documents.

Section 7.03. Decisions by the Members. (a) Other than the Managing Member, the
Members shall take no part in the management of the Company’s business and shall
transact no business for the Company and shall have no power to act for or to
bind the Company. The Managing Member shall not (i) engage in any non-Business
activity or (ii) own any material assets other than Units and/or any cash or
other property or assets distributed by, or otherwise received from, the
Company, without the prior written consent of each of the Members, unless the
Managing Member determines in good faith that such actions or ownership are in
the best interest of the Company; provided, however, that the Company may engage
any Member or principal, partner, member, shareholder or interest holder thereof
as an employee, independent contractor or consultant to the Company, in which
event the duties and liabilities of such individual or firm with respect to the
Company as an employee, independent contractor or consultant shall be governed
by the terms of such engagement with the Company.

 

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(b) Except as expressly provided herein, the Members shall not have the power or
authority to vote, approve or consent to any matter or action taken by the
Company. Except as otherwise provided herein, any proposed matter or action
subject to the vote, approval or consent of the Members shall require the
approval of (i) a majority in interest of the Members or such class of Members,
as the case may be (by (x) resolution at a duly convened meeting of the Members,
or (y) written consent of the Members). Except as expressly provided herein, all
Members shall vote together as a single class on any matter subject to the vote,
approval or consent of the Members. In the case of any such approval, a majority
in interest of the Members may call a meeting of the Members at such time and
place or by means of telephone or other communications facility that permits all
persons participating in such meeting to hear and speak to each other for the
purpose of a vote thereon. Notice of any such meeting shall be required, which
notice shall include a brief description of the action or actions to be
considered by the Members. Unless waived by any such Member in writing, notice
of any such meeting shall be given to each Member at least four (4) days prior
thereto. Attendance or participation of a Member at a meeting shall constitute a
waiver of notice of such meeting, except when such Member attends or
participates in the meeting for the express purpose of objecting at the
beginning thereof to the transaction of any business because the meeting is not
properly called or convened. Any action required or permitted to be taken at any
meeting of the Members may be taken without a meeting, if a consent in writing,
setting forth the actions so taken, shall be signed by Members sufficient to
approve such action pursuant to this Section 7.03(b). A copy of any such consent
in writing will be provided to the Members promptly thereafter.

Section 7.04. Duties. (a) The parties acknowledge that the Managing Member will
take action through its board of directors, and that the members of the Managing
Member’s board of directors will owe fiduciary duties to the stockholders of the
Managing Member. The Managing Member will use all commercially reasonable and
appropriate efforts and means, as determined in good faith by the Managing
Member, to minimize any conflict of interest between the Members, on the one
hand, and the stockholders of the Managing Member, on the other hand, and to
effectuate any transaction that involves or affects any of the Company, the
Managing Member, the Members and/or the stockholders of the Managing Member in a
manner that does not (i) disadvantage the Members or their interests relative to
the stockholders of the Managing Member, (ii) advantage the stockholders of the
Managing Member relative to the Members or (iii) treats the Members and the
stockholders of the Managing Member differently; provided that in the event of a
conflict between the interests of the stockholders of the Managing Member and
the interests of the Members other than the Managing Member, such other Members
agree that the Managing Member shall discharge its fiduciary duties to such
other Members by acting in the best interests of the Managing Member’s
stockholders.

Section 7.05. Officers. (a) Appointment of Officers. The Managing Member may
appoint individuals as officers (“Officers”) of the Company, which may include
such officers as the Managing Member determines are necessary and appropriate.
No Officer need be a Member. An individual may be appointed to more than one
office.

 

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(b) Authority of Officers. The Officers shall have the duties, rights, powers
and authority as may be prescribed by the Managing Member from time to time.

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

ARTICLE 8

TRANSFERS OF INTERESTS

Section 8.01. Restrictions on Transfers. (a) Except as expressly permitted by
Section 8.02, and subject to Section 8.01(b), Section 8.01(c), Section 8.01(d)
and Section 8.01(e), any underwriter lock-up agreement applicable to such Member
and/or any other agreement between such Member and the Company, Pubco or any of
their controlled Affiliates, without the prior written approval of the Managing
Member, no Member shall directly or indirectly Transfer all or any part of its
Units or any right or economic interest pertaining thereto, including the right
to vote or consent on any matter or to receive or have any economic interest in
distributions or advances from the Company pursuant thereto, to any Person that
is not a Permitted Transferee. Any such Transfer which is not in compliance with
the provisions of this Agreement shall be deemed a Transfer by such Member of
Units in violation of this Agreement (and a breach of this Agreement by such
Member) and shall be null and void ab initio. Notwithstanding anything to the
contrary in this Article 8, (i) Section 10.03 of this Agreement shall govern the
exchange of LLC Units for shares of Class A Common Stock, and an exchange
pursuant to, and in accordance with, Section 10.03 of this Agreement shall not
be considered a “Transfer” for purposes of this Agreement, and (ii) t any other
Transfer of shares of Class A Common Stock shall not be considered a “Transfer”
for purposes of this Agreement.

(b) Except as otherwise expressly provided herein, it shall be a condition
precedent to any Transfer otherwise permitted or approved pursuant to this
Article 8 that:

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

(ii) the Transfer shall comply with all Applicable Laws and the Managing Member
shall be reasonably satisfied that such Transfer will not result in a violation
of the Securities Act.

 

 

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

(d) Any Transfer of Units pursuant to this Agreement, including this Article 8,
shall be subject to the provisions of Section 3.01 and Section 3.02.

(e) If there is a Transfer of Units to Permitted Transferees pursuant to this
Agreement, the Units held by each such Permitted Transferee shall be included in
calculating the Substantial Ownership Requirement.

Section 8.02. Certain Permitted Transfers. Notwithstanding anything to the
contrary herein but subject to Section 8.01(b) and Section 8.01(c), the
following Transfers shall be permitted:

(a) Any Transfer by any Member of its Units pursuant to a Disposition Event (as
such term is defined in the certificate of incorporation of Pubco);

(b) At any time, any Transfer by any Member of Units to any Transferee approved
in writing by the Managing Member (not to be unreasonably withheld), it being
understood that it shall be reasonable for the Managing Member to withhold such
consent if the Managing Member reasonably determines that such Transfer would
materially increase the risk that the Company would be classified as a “publicly
traded partnership” as that term is defined in Section 7704 of the Code and
Regulations promulgated thereunder; and

(c) The Transfer of all or any portion of a Member’s Units to a Permitted
Transferee of such Member.

Section 8.03. Distributions. Notwithstanding anything in this Article 8 or
elsewhere in this Agreement to the contrary, if a Member Transfers all or any
portion of its Units after the designation of a record date and declaration of a
distribution pursuant to Article 5 and before the payment date of such
distribution, the transferring Member (and not the Person acquiring all or any
portion of its LLC Units) shall be entitled to receive such distribution in
respect of such transferred LLC Units.

Section 8.04. Registration of Transfers. When any Units are Transferred in
accordance with the terms of this Agreement, the Company shall cause such
Transfer to be registered on the books of the Company.

 

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ARTICLE 9

CERTAIN OTHER AGREEMENTS

Section 9.01. Non-Compete; Non-Disparagement. Each Non-Pubco Member agrees for
the benefit of the Company and Pubco that:

(a) No Member shall directly or indirectly engage in any Competitive Activity
from and after the date hereof until the date on which such Member no longer
holds any LLC Units.

(b) No Member shall take, and each Member shall take reasonable steps to cause
its Affiliates not to take, any action or make any public statement, whether or
not in writing, that disparages or denigrates the Company or any of its
Subsidiaries (the “Company Parties”) or their respective directors, officers,
employees, members, representatives and agents.

(c) Each Member agrees that (i) the agreements and covenants contained in this
Section 9.01 are reasonable in scope and duration, an integral part of the
transactions contemplated by this Agreement and the Reorganization Documents,
and necessary to protect and preserve the Members’ and Company Parties’
legitimate business interests and to prevent any unfair advantage conferred on
such Member taking into account and in specific consideration of the
undertakings and obligations of the parties under the Agreement and the
Reorganization Documents, (ii) but for each Member’s agreement to be bound by
the agreements and covenants contained under this Section 9.01, the Members and
the Company Parties would not have entered into or consummated those
transactions contemplated the Agreement and the Reorganization Documents and
(iii) that irreparable harm would result to the Members and the Company Parties
as a result of a violation or breach (or potential violation or breach) by such
Member (or its Affiliates) of this Section 9.01. In addition, each Member agrees
that each Member shall have the right to specifically enforce the provisions of
this Section 9.01 in any federal court located in the State of Delaware or any
Delaware state court, in addition to any other remedy to which such parties are
entitled at law or in equity. If a final judgment of a court of competent
jurisdiction or other Governmental Authority determines that any term,
provision, covenant or restriction contained in this Section 9.01 is invalid or
unenforceable, then the parties hereto agree that the court of competent
jurisdiction or other Governmental Authority will have the power to modify this
Section 9.01 (including by reducing the scope, duration or geographic area of
the term or provision, deleting specific words or phrases or replacing any
invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision) so as to effect the original
intention of the invalid or unenforceable term or provision. To the fullest
extent permitted by law, in the event that any proceeding is brought under or in
connection with this Section 9.01, the prevailing party in such proceeding
(whether at final or on appeal) shall be entitled to recover from the other
party all costs, expenses, and reasonable attorneys’ fees incident to any such
proceeding. The term “prevailing party” as used herein means the party in whose
favor the final judgment or award is entered in any such proceeding.

Section 9.02. Company Call Right. (a) In connection with any Involuntary
Transfer by any Non-Pubco Member, the Company or the Managing Member may, in the
Managing Member’s sole discretion, elect to purchase from such Member and/or
such Transferee(s) in such Involuntary Transfer (each, a “Call Member”) any or
all of Units so Transferred (“Call Units”), at any time by delivery of a written
notice (a “Call

 

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Notice”) to such Call Member. The Call Notice shall set forth the Unit
Redemption Price and the proposed closing date of such purchase of such Call
Units; provided that such closing date shall occur within ninety (90) days
following the date of such Call Notice. At the closing of any such sale, in
exchange for the payment by the Company or the Managing Member to such Call
Members of the Unit Redemption Price in cash, (i) each Call Member shall deliver
its Call Units, duly endorsed, or accompanied by written instruments of transfer
in form satisfactory to the Company or the Managing Member, as applicable, duly
executed by such Call Member and accompanied by all requisite transfer taxes, if
any, (ii) such Call Units shall be free and clear of any Liens and (iii) each
Call Member shall so represent and warrant and further represent and warrant
that it is the sole beneficial and record owner of such Call Units. Following
such closing, any such Call Member shall no longer be entitled to any rights in
respect of its Call Units, including any distributions of the Company or Pubco
thereupon (other than the payment of the Unit Redemption Price at such closing),
and, to the extent any such Call Member does not hold any Units thereafter,
shall thereupon cease to be a Member of the Company and, to the extent any such
Call Member does not hold any shares of Pubco Common Stock thereafter, shall
thereupon cease to be a stockholder of Pubco.

Section 9.03. Preemptive Rights.

(a) No Person shall have any preemptive, preferential or other similar right
with respect to (i) additional Capital Contributions; (ii) issuances or sales by
the Company of any class or series of Interests, whether unissued or hereafter
created; (iii) issuances of any obligations, evidences of indebtedness or other
securities of the Company convertible into or exchangeable for, or carrying or
accompanied by any rights to receive, purchase or subscribe to, any Interests;
(iv) issuances of any right of subscription to or right to receive, or any
warrant or option for the purchase of, any Interests; or (v) issuances or sales
of any other securities that may be issued or sold by the Company.

ARTICLE 10

REDEMPTION AND EXCHANGE RIGHTS

Section 10.01. Redemption Right of a Member

(a) Notwithstanding any provision to the contrary in the Agreement and without
the need for approval by the Managing Member or consent by any other Members,
each Member (other than the Pubco Members) shall be entitled to cause the
Company to redeem (a “Redemption”) its Units (the “Redemption Right”) at any
time following the expiration of any contractual lock-up period relating to the
shares of Pubco that may be applicable to such Member. A Member desiring to
exercise its Redemption Right (the “Redeeming Member”) shall exercise such right
by giving written notice (the “Redemption Notice”) to the Company with a copy to
Pubco. The Redemption Notice shall specify the number of Units (the “Redeemed
Units”) that the Redeeming Member intends to have the Company redeem and a date,
not less than seven (7) Business Days nor more than ten (10) Business Days after
delivery of such Redemption Notice (unless and to the extent that the Managing
Member in its sole discretion agrees in writing to

 

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waive such time periods), on which exercise of the Redemption Right shall be
completed (the “Redemption Date”); provided that the Company, Pubco and the
Redeeming Member may change the number of Redeemed Units and/or the Redemption
Date specified in such Redemption Notice to another number and/or date by mutual
agreement signed in writing by each of them; provided further that a Redemption
Notice may be conditioned by the Redeeming Member on the closing of an
underwritten distribution of the shares of Class A Common Stock that may be
issued in connection with such proposed Redemption. Unless the Redeeming Member
timely has delivered a Retraction Notice as provided in Section 10.01(b) or has
revoked or delayed a Redemption as provided in Section 10.01(c), on the
Redemption Date (to be effective immediately prior to the close of business on
the Redemption Date) (i) the Redeeming Member shall transfer and surrender the
Redeemed Units to the Company, free and clear of all liens and encumbrances, and
(ii) the Company shall (x) cancel the Redeemed Units, (y) transfer to the
Redeeming Member the consideration to which the Redeeming Member is entitled
under Section 10.01(b), and (z), if the Units are certificated, issue to the
Redeeming Member a certificate for a number of Units equal to the difference (if
any) between the number of Units evidenced by the certificate surrendered by the
Redeeming Member pursuant to clause (i) of this Section 10.01(a) and the
Redeemed Units.

(b) In exercising its Redemption Right, a Redeeming Member shall be entitled to
receive the number of shares of Class A Common Stock equal to the number of
Redeemed Units (the “Share Settlement”) or the immediately available funds in
U.S. dollars in an amount equal to the Redeemed Units Equivalent (the “Cash
Settlement”); provided that Pubco shall have the option as provided in
Section 10.02 and subject to Section 10.01(d) to select whether the redemption
payment is made by means of a Share Settlement or a Cash Settlement. Within
three (3) Business Days of delivery of the Redemption Notice, Pubco shall give
written notice (the “Contribution Notice”) to the Company (with a copy to the
Redeeming Member) of its intended settlement method; provided that if Pubco does
not timely deliver a Contribution Notice, Pubco shall be deemed to have elected
the Share Settlement method. If Pubco elects the Cash Settlement method, the
Redeeming Member may retract its Redemption Notice by giving written notice (the
“Retraction Notice”) to the Company (with a copy to Pubco) within two
(2) Business Days of delivery of the Contribution Notice. The timely delivery of
a Retraction Notice shall terminate all of the Redeeming Member’s, Company’s and
Pubco’s rights and obligations under this Section 10.01 arising from the
Redemption Notice.

(c) In the event Pubco elects a Share Settlement in connection with a
Redemption, a Redeeming Member shall be entitled to revoke its Redemption Notice
or delay the consummation of a Redemption if any of the following conditions
exists: (i) any registration statement pursuant to which the resale of the
Class A Common Stock to be registered for such Redeeming Member at or
immediately following the consummation of the Redemption shall have ceased to be
effective pursuant to any action or inaction by the SEC or no such resale
registration statement has yet become effective; (ii) Pubco shall have failed to
cause any related prospectus to be supplemented by any required prospectus
supplement necessary to effect such Redemption; (iii) Pubco shall have exercised
its right to defer, delay or suspend the filing or effectiveness of a

 

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registration statement and such deferral, delay or suspension shall affect the
ability of such Redeeming Member to have its Class A Common Stock registered at
or immediately following the consummation of the Redemption; (iv) Pubco shall
have disclosed to such Redeeming Member any material non-public information
concerning Pubco, the receipt of which results in such Redeeming Member being
prohibited or restricted from selling Class A Common Stock at or immediately
following the Redemption without disclosure of such information (and Pubco does
not permit disclosure); (v) any stop order relating to the registration
statement pursuant to which the Class A Common Stock was to be registered by
such Redeeming Member at or immediately following the Redemption shall have been
issued by the SEC; (vi) there shall have occurred a material disruption in the
securities markets generally or in the market or markets in which the Class A
Common Stock is then traded; (vii) there shall be in effect an injunction, a
restraining order or a decree of any nature of any Governmental Entity that
restrains or prohibits the Redemption; (viii) Pubco shall have failed to comply
in all material respects with its obligations under the Registration Rights
Agreement, and such failure shall have affected the ability of such Redeeming
Member to consummate the resale of Class A Common Stock to be received upon such
redemption pursuant to an effective registration statement; (ix) the Redemption
Date would occur three (3) Business Days or less prior to, or during, any
“black-out” or similar period under the Corporation’s policies covering trading
in the Pubco’s securities to which the applicable Redeeming Member is subject,
which period restricts the ability of such Redeeming Member to immediately
resell shares of Class A Common Stock to be delivered to such Redeeming Member
in connection with a Share Settlement; provided further, that in no event shall
the Redeeming Member seeking to revoke its Redemption Notice or delay the
consummation of such Redemption and relying on any of the matters contemplated
in clauses (i) through (ix) above have controlled or intentionally materially
influenced any facts, circumstances, or Persons in connection therewith (except
in the good faith performance of his or her duties as an officer or director of
Pubco) in order to provide such Redeeming Member with a basis for such delay or
revocation. If a Redeeming Member delays the consummation of a Redemption
pursuant to this Section 10.01(c), the Redemption Date shall occur on the fifth
Business Day following the date on which the conditions giving rise to such
delay cease to exist (or such earlier day as Pubco, the Company and such
Redeeming Member may agree in writing).

(d) The number of shares of Class A Common Stock or the Redeemed Units
Equivalent that a Redeeming Member is entitled to receive under Section 10.01(b)
(whether through a Share Settlement or Cash Settlement) shall not be adjusted on
account of any Distributions previously made with respect to the Redeemed Units
or dividends previously paid with respect to Class A Common Stock; provided,
however, that if a Redeeming Member causes the Company to redeem Redeemed Units
and the Redemption Date occurs subsequent to the record date for any
Distribution with respect to the Redeemed Units but prior to payment of such
Distribution, the Redeeming Member shall be entitled to receive such
Distribution with respect to the Redeemed Units on the date that it is made
notwithstanding that the Redeeming Member transferred and surrendered the
Redeemed Units to the Company prior to such date.

 

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(e) In the event of a reclassification or other similar transaction as a result
of which the shares of Class A Common Stock are converted into another security,
then in exercising its Redemption Right a Redeeming Member shall be entitled to
receive the amount of such security that the Redeeming Member would have
received if such Redemption Right had been exercised and the Redemption Date had
occurred immediately prior to the record date of such reclassification or other
similar transaction.

Section 10.02. Election and Contribution of Pubco. In connection with the
exercise of a Redeeming Member’s Redemption Rights under Section 10.01(a), Pubco
shall contribute to the Company the consideration the Redeeming Member is
entitled to receive under Section 10.01(b). Pubco, at its option, shall
determine whether to contribute, pursuant to Section 10.01(b), the Share
Settlement or the Cash Settlement. Unless the Redeeming Member has timely
delivered a Retraction Notice as provided in Section 10.01(b), or has revoked or
delayed a Redemption as provided in Section 10.01(c), on the Redemption Date (to
be effective immediately prior to the close of business on the Redemption
Date) (i) Pubco shall make its Capital Contribution to the Company (in the form
of the Share Settlement or the Cash Settlement) required under this
Section 10.02, and (ii) the Company shall issue to Pubco a number of Units equal
to the number of Redeemed Units surrendered by the Redeeming Member.
Notwithstanding any other provisions of this Agreement to the contrary, in the
event that Pubco elects a Cash Settlement, Pubco shall only be obligated to
contribute to the Company an amount in respect of such Cash Settlement equal to
the net proceeds (after deduction of any underwriters’ discounts or commissions
and brokers’ fees or commissions) from the sale by Pubco of a number of shares
of Class A Common Stock equal to the number of Redeemed Units to be redeemed
with such Cash Settlement provided that Pubco’s Capital Account shall be
increased by an amount equal to any discount relating to such sale of shares of
Class A Common Stock in accordance with Section 6.06. The timely delivery of a
Retraction Notice shall terminate all of the Company’s and Pubco’ rights and
obligations under this Section 10.02 arising from the Redemption Notice.

Section 10.03. Exchange Right of Pubco

(a) Notwithstanding anything to the contrary in this Article 10, Pubco may, in
its sole and absolute discretion, elect to effect on the Redemption Date the
exchange of Redeemed Units for the Share Settlement or Cash Settlement, as the
case may be, through a direct exchange of such Redeemed Units and such
consideration between the Redeeming Member and Pubco (a “Direct Exchange”). Upon
such Direct Exchange pursuant to this Section 10.03, Pubco shall acquire the
Redeemed Units and shall be treated for all purposes of this Agreement as the
owner of such Units.

(b) Pubco may, at any time prior to a Redemption Date, deliver written notice
(an “Exchange Election Notice”) to the Company and the Redeeming Member setting
forth its election to exercise its right to consummate a Direct Exchange;
provided that such election does not prejudice the ability of the parties to
consummate a Redemption or Direct Exchange on the Redemption Date. An Exchange
Election Notice may be revoked

 

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by Pubco at any time; provided that any such revocation does not prejudice the
ability of the parties to consummate a Redemption or Direct Exchange on the
Redemption Date. The right to consummate a Direct Exchange in all events shall
be exercisable for all the Redeemed Units that would have otherwise been subject
to a Redemption. Except as otherwise provided by this Section 10.03, a Direct
Exchange shall be consummated pursuant to the same timeframe and in the same
manner as the relevant Redemption would have been consummated if Pubco had not
delivered an Exchange Election Notice.

Section 10.04. Tender Offers and Other Events with Respect to Pubco

(a) In the event that a tender offer, share exchange offer, issuer bid,
take-over bid, recapitalization or similar transaction with respect to Class A
Common Stock (a “Pubco Offer”) is proposed by Pubco or is proposed to Pubco or
its stockholders and approved by the board of directors of Pubco or is otherwise
effected or to be effected with the consent or approval of the board of
directors of Pubco, the holders of LLC Units (other than the Pubco Members)
shall be permitted to participate in such Pubco Offer by delivery of a notice of
exchange (which notice of exchange shall be effective immediately prior to the
consummation of such Pubco Offer (and, for the avoidance of doubt, shall be
contingent upon such Pubco Offer and not be effective if such Pubco Offer is not
consummated)). In the case of a Pubco Offer proposed by Pubco, Pubco will use
its reasonable efforts expeditiously and in good faith to take all such actions
and do all such things as are necessary or desirable to enable and permit the
holders of LLC Units (other than the Pubco Members) to participate in such Pubco
Offer to the same extent or on an economically equivalent basis as the holders
of shares of Class A Common Stock without discrimination; provided, that without
limiting the generality of this sentence, Pubco will use its reasonable efforts
expeditiously and in good faith to ensure that such holders may participate in
each such Pubco Offer without being required to exchange LLC Units to the extent
such participation is practicable. For the avoidance of doubt (but subject to
Section 10.04(c)), in no event shall the holders of LLC Units be entitled to
receive in such Pubco Offer aggregate consideration for each LLC Unit that is
greater than the consideration payable in respect of each share of Class A
Common Stock in connection with a Pubco Offer.

(b) Notwithstanding any other provision of this Agreement, if a Disposition
Event (as such term is defined in the Pubco Certificate of Incorporation) is
approved by the board of directors of Pubco and consummated in accordance with
Applicable Law, at the request of the Company (or following such Disposition
Event, its successor) or Pubco (or following such Disposition Event, its
successor), each of the holders shall be required to exchange with Pubco, at any
time and from time to time after, or simultaneously with, the consummation of
such Disposition Event, all of such holder’s LLC Units for aggregate
consideration for each LLC Unit that is equivalent to the consideration payable
in respect of each share of Class A Common Stock in connection with the
Disposition Event, provided, however, that in the event of a Disposition Event
intended to qualify as a reorganization within the meaning of Section 368(a) of
the Code or as a transfer described in Section 351(a) or Section 721 of the
Code, a holder shall not be required to exchange LLC Unit pursuant to this
Section 10.04(b) unless, as a part of such transaction, the holders are
permitted to exchange their LLC Units for securities in a transaction that

 

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is expected to permit such exchange without current recognition of gain or loss,
for U.S. and non-U.S. tax purposes, for the direct and indirect holders of LLC
Units (except to the extent that property other than securities is received in
such exchange), based on a “should” or “will” level opinion from independent tax
counsel of recognized standing and expertise.

(c) Notwithstanding any other provision of this Agreement, (i) in a Disposition
Event where the consideration payable in connection therewith includes Equity
Securities, the aggregate consideration for any LLC Unit shall be deemed to be
equivalent to the consideration payable in respect of each share of Class A
Common Stock if the only difference in the per share distribution to the holders
of LLC Units is that the Equity Securities distributed to such holders have not
more than ten times the voting power of any Equity Securities distributed to the
holder of a share of Class A Common Stock (so long as such Equity Securities
issued to the holders of the LLC Units remain subject to automatic conversion on
terms substantially comparable to those set forth in Section 6.2 of the Pubco
Certificate of Incorporation) and (ii) in a Disposition Event, payments under or
in respect of the Tax Receivable Agreement shall not be considered part of the
consideration payable in respect of any LLC Unit or share of Class A Common
Stock in connection with such Disposition Event for the purposes of
Section 10.04(a) and Section 10.04(b).

Section 10.05. Reservation of Shares of Class A Common Stock; Certificate of
Pubco. At all times Pubco shall reserve and keep available out of its authorized
but unissued Class A Common Stock, solely for the purpose of issuance upon a
Redemption or Direct Exchange, such number of shares of Class A Common Stock as
shall be issuable upon any such Redemption or Direct Exchange pursuant to Share
Settlements; provided that nothing contained herein shall be construed to
preclude Pubco from satisfying its obligations in respect of any such Redemption
or Direct Exchange by delivery of purchased Class A Common Stock (which may or
may not be held in the treasury of Pubco) or the delivery of cash pursuant to a
Cash Settlement. Pubco shall deliver Class A Common Stock that has been
registered under the Securities Act with respect to any Redemption or Direct
Exchange to the extent a registration statement is effective and available for
such shares. Pubco covenants that all Class A Common Stock issued upon a
Redemption or Direct Exchange will, upon issuance, be validly issued, fully paid
and non-assessable. The provisions of this Article 10 shall be interpreted and
applied in a manner consistent with the corresponding provisions of Pubco’s
certificate of incorporation.

Section 10.06. Effect of Exercise of Redemption or Exchange Right. This
Agreement shall continue notwithstanding the consummation of a Redemption or
Direct Exchange and all governance or other rights set forth herein shall be
exercised by the remaining Members and the Redeeming Member (to the extent of
such Redeeming Member’s remaining interest in the Company). No Redemption or
Direct Exchange shall relieve such Redeeming Member of any prior breach of this
Agreement.

Section 10.07. Tax Treatment. Unless otherwise required by applicable Law, the
parties hereto acknowledge and agree a Redemption or a Direct Exchange, as the
case may be, shall be treated as a direct exchange between Pubco and the
Redeeming Member for U.S. federal and applicable state and local income tax
purposes.

 

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ARTICLE 11

LIMITATION ON LIABILITY, EXCULPATION AND INDEMNIFICATION

Section 11.01. Limitation on Liability. The debts, obligations and liabilities
of the Company, whether arising in contract, tort or otherwise, shall be solely
the debts, obligations and liabilities of the Company, and no Covered Person
shall be obligated personally for any such debt, obligation or liability of the
Company; provided that the foregoing shall not alter a Member’s obligation to
return funds wrongfully distributed to it.

Section 11.02. Exculpation and Indemnification. (a) Subject to the duties of the
Managing Member and Officers set forth in Section 7.01, neither the Managing
Member nor any other Covered Person described in clause (iii) of the definition
thereof shall be liable, including under any legal or equitable theory of
fiduciary duty or other theory of liability, to the Company or to any other
Covered Person for any losses, claims, damages or liabilities incurred by reason
of any act or omission performed or omitted by such Covered Person in good faith
on behalf of the Company. There shall be, and each Covered Person shall be
entitled to, a presumption that such Covered Person acted in good faith.

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

(c) The Company shall indemnify, defend and hold harmless each Covered Person
against any losses, claims, damages, liabilities, expenses (including all
reasonable out-of-pocket fees and expenses of counsel and other advisors),
judgments, fines, settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings, in which such Covered Person may be
involved or become subject to, in connection with any matter arising out of or
in connection with the Company’s business or affairs, or this Agreement or any
related document, unless such loss, claim, damage, liability, expense, judgment,
fine, settlement or other amount (i) is a result of a Covered Person not acting
in good faith on behalf of the Company or arose as a result of the willful
commission by such Covered Person of any act that is dishonest and materially
injurious to the Company, (ii) results from its contractual obligations under
any Reorganization Document to be performed in a capacity other than as a
Covered Person or from the breach by such Covered Person of Section 9.04 or
(iii) results from the breach by any Member (in such capacity) of its
contractual obligations under this Agreement. If any Covered Person becomes
involved in any capacity in any action, suit, proceeding or investigation in
connection with any matter arising out of or in connection with the Company’s
business or affairs, or this Agreement or any related document (other than any
Reorganization Document), other than (x) by reason of any act or omission
performed or omitted by such Covered Person that was not in good faith on behalf
of the

 

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Company or constituted a willful commission by such Covered Person of an act
that is dishonest and materially injurious to the Company or (y) as a result of
any breach by such Covered Person of Section 9.04, the Company shall reimburse
such Covered Person for its reasonable legal and other reasonable out-of-pocket
expenses (including the cost of any investigation and preparation) as they are
incurred in connection therewith; provided that such Covered Person shall
promptly repay to the Company the amount of any such reimbursed expenses paid to
it if it shall be finally judicially determined that such Covered Person was not
entitled to indemnification by, or contribution from, the Company in connection
with such action, suit, proceeding or investigation. If for any reason (other
than the bad faith of a Covered Person or the willful commission by such Covered
Person of an act that is dishonest and materially injurious to the Company) the
foregoing indemnification is unavailable to such Covered Person, or insufficient
to hold it harmless, then the Company shall contribute to the amount paid or
payable by such Covered Person as a result of such loss, claim, damage,
liability, expense, judgment, fine, settlement or other amount in such
proportion as is appropriate to reflect any relevant equitable considerations.
There shall be, and each Covered Person shall be entitled to, a rebuttable
presumption that such Covered Person acted in good faith.

(d) The obligations of the Company under Section 11.02(c) shall be satisfied
solely out of and to the extent of the Company’s assets, and no Covered Person
shall have any personal liability on account thereof.

(e) Given that certain Jointly Indemnifiable Claims may arise by reason of the
service of a Covered Person to the Company and/or as a director, trustee,
officer, partner, member, manager, employee, consultant, fiduciary or agent of
other corporations, limited liability companies, partnerships, joint ventures,
trusts, employee benefit plans or other enterprises controlled by the Company
(collectively, the “Controlled Entities”), or by reason of any action alleged to
have been taken or omitted in any such capacity, the Company acknowledges and
agrees that the Company shall, and to the extent applicable shall cause the
Controlled Entities to, be fully and primarily responsible for the payment to
the Covered Person in respect of indemnification or advancement of all
out-of-pocket costs of any type or nature whatsoever (including, without
limitation, all attorneys’ fees and related disbursements) in each case,
actually and reasonably incurred by or on behalf of a Covered Person in
connection with either the investigation, defense or appeal of a claim, demand,
action, suit or proceeding or establishing or enforcing a right to
indemnification under this Agreement or otherwise incurred in connection with a
claim that is indemnifiable hereunder (collectively, “Expenses”) in connection
with any such Jointly Indemnifiable Claim, pursuant to and in accordance with
(as applicable) the terms of (i) the Delaware Act, (ii) this Agreement,
(iii) any other agreement between the Company or any Controlled Entity and the
Covered Person pursuant to which the Covered Person is indemnified, (iv) the
laws of the jurisdiction of incorporation or organization of any Controlled
Entity and/or (v) the certificate of incorporation, certificate of organization,
bylaws, partnership agreement, operating agreement, certificate of formation,
certificate of limited partnership, certificate of qualification or other
organizational or governing documents of any Controlled Entity ((i) through
(v) collectively, the “Indemnification Sources”), irrespective of any right of
recovery the Covered Person may have from the Indemnitee-Related Entities. Under
no circumstance

 

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shall the Company or any Controlled Entity be entitled to any right of
subrogation or contribution by the Indemnitee-Related Entities and no right of
advancement or recovery the Covered Person may have from the Indemnitee-Related
Entities shall reduce or otherwise alter the rights of the Covered Person or the
obligations of the Company or any Controlled Entity under the Indemnification
Sources. In the event that any of the Indemnitee-Related Entities shall make any
payment to the Covered Person in respect of indemnification or advancement of
Expenses with respect to any Jointly Indemnifiable Claim, (i) the Company shall,
and to the extent applicable shall cause the Controlled Entities to, reimburse
the Indemnitee-Related Entity making such payment to the extent of such payment
promptly upon written demand from such Indemnitee-Related Entity, (ii) to the
extent not previously and fully reimbursed by the Company and/or any Controlled
Entity pursuant to clause (i), the Indemnitee-Related Entity making such payment
shall be subrogated to the extent of the outstanding balance of such payment to
all of the rights of recovery of the Covered Person against the Company and/or
any Controlled Entity, as applicable, and (iii) the Covered Person shall execute
all papers reasonably required and shall do all things that may be reasonably
necessary to secure such rights, including the execution of such documents as
may be necessary to enable the Indemnitee-Related Entities effectively to bring
suit to enforce such rights. The Company and the Covered Person agree that each
of the Indemnitee-Related Entities shall be third-party beneficiaries with
respect to this Section 11.02(e), entitled to enforce this Section 11.02(e) as
though each such Indemnitee-Related Entity were a party to this Agreement. The
Company shall cause each of the Controlled Entities to perform the terms and
obligations of this Section 11.02(e) as though each such Controlled Entity was
the “Company” under this Agreement. For purposes of this Section 11.02(e), the
following terms shall have the following meanings:

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

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

 

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ARTICLE 12

DISSOLUTION AND TERMINATION

Section 12.01. Dissolution. (a) The Company shall not be dissolved by the
admission of Additional Members or Substitute Members pursuant to Section 3.02.

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

(c) The Company shall be dissolved and its business wound up only upon the
earliest to occur of any one of the following events (each a “Dissolution
Event”):

(i) The expiration of forty-five (45) days after the sale or other disposition
of all or substantially all the assets of the Company;

(ii) upon the approval of the Managing Member;

(iii) the entry of a decree of dissolution of the Company under §18-802 of the
Delaware Act; or

(iv) at any time there are no members of the Company, unless the Company is
continued in accordance with the Delaware Act.

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

Section 12.02. Winding Up of the Company. (a) The Managing Member shall promptly
notify the other Members of any Dissolution Event. Upon dissolution, the
Company’s business shall be liquidated in an orderly manner. The Managing Member
shall appoint a liquidating trustee to wind up the affairs of the Company
pursuant to this Agreement. In performing its duties, the liquidating trustee is
authorized to sell, distribute, exchange or otherwise dispose of the assets of
the Company in accordance with the Delaware Act and in any reasonable manner
that the liquidating trustee shall determine to be in the best interest of the
Members.

 

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

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

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

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

(d) In the event of a dissolution pursuant to Section 12.01(c), the relative
economic rights of each class of Units immediately prior to such dissolution
shall be preserved to the greatest extent practicable with respect to
distributions made to Members pursuant to Section 10.01(b) in connection with
such dissolution, taking into consideration tax and other legal constraints that
may adversely affect one or more parties to such dissolution and subject to
compliance with Applicable Laws.

Section 12.03. Termination. The Company shall terminate when all of the assets
of the Company, after payment of or reasonable provision for the payment of all
debts and liabilities of the Company, shall have been distributed to the Members
in the manner provided for in this Article 11, and the certificate of formation
of the Company shall have been cancelled in the manner required by the Delaware
Act.

Section 12.04. Survival. Termination, dissolution, liquidation or winding up of
the Company for any reason shall not release any party from any liability which
at the time of such termination, dissolution, liquidation or winding up already
had accrued to any other party or which thereafter may accrue in respect to any
act or omission prior to such termination, dissolution, liquidation or winding
up.

ARTICLE 13

MISCELLANEOUS

Section 13.01. Expenses. Other than as set forth in Section 4.12 of the
Reorganization Agreement or as provided for in the Tax Receivable Agreement, the
Company shall (a) pay, or cause to be paid, all costs, fees, operating expenses,
administrative expenses and other expenses of the Company (including the costs,
fees and expenses of attorneys, accountants or other professionals and the
compensation of all personnel providing services to the Company) incurred in
pursuing and conducting, or otherwise related to, the business of the Company
and (b) in the sole discretion of the

 

49

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Managing Member, reimburse the Managing Member for any out-of-pocket costs, fees
and expenses incurred by it or its Subsidiaries in connection therewith. To the
extent that the Managing Member reasonably determines in good faith that its
expenses are related to the business conducted by the Company and/or its
subsidiaries, then the Managing Member may cause the Company to pay or bear all
such expenses of the Managing Member or its Subsidiaries, including, (i) costs
of any securities offerings (including any underwriters discounts and
commissions), investment or acquisition transaction (whether or not successful)
not borne directly by Members, (ii) compensation and meeting costs of its board
of directors, (iii) cost of periodic reports to its stockholders, (iv) any
judgments, settlements, penalties, fines or other costs and expenses in respect
of any claims against, or any litigation or proceedings involving, Pubco,
(v) accounting and legal costs, (vi) franchise taxes (which are not based on, or
measured by, income), (vii) payments in respect of Indebtedness and preferred
stock, to the extent the proceeds are used or will be used by Pubco or its
Subsidiaries to pay expenses or other obligations described in this
Section 13.01 (in either case only to the extent economically equivalent
Indebtedness or Equity Securities of the Company were not issued to Pubco or its
Subsidiaries), (viii) payments representing interest with respect to payments
not made when due under the terms of the Tax Receivable Agreement and (ix) other
fees and expenses in connection with the maintenance of the existence of Pubco
and its Subsidiaries (including any costs or expenses associated with being a
public company listed on a national securities exchange), provided that the
Company shall not pay or bear any income tax obligations of the Managing Member
or its Subsidiaries pursuant to this provision. Payments under this
Section 13.01 are intended to constitute reasonable compensation for past or
present services and are not “distributions” within the meaning of §18-607 of
the Delaware Act.

Section 13.02. Further Assurances. Each Member agrees to execute, acknowledge,
deliver, file and record such further certificates, amendments, instruments and
documents, and to do all such other acts and things, as may be required by
Applicable Law or as, in the reasonable judgment of the Managing Member, may be
necessary or advisable to carry out the intent and purposes of this Agreement.

Section 13.03. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission and
electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is
requested and received) and shall be given to such party at the address,
facsimile number or e-mail address specified for such party on the Member
Schedule hereto or, or to such other address or facsimile number as such party
may hereafter specify for the purpose by notice to the other parties hereto. All
such notices, requests and other communications shall be deemed received on the
date of receipt by the recipient thereof if received prior to 5:00 p.m. on a
Business Day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed to have been received on the next succeeding
Business Day in the place of receipt. All such notices, requests and other
communications to any party hereunder shall be given to such party as follows:

 

50

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If to Pubco or the Company:

1500 Solana Blvd

Building 4, Suite 4500

Westlake, Texas 76262

Telephone:     [***]

Attention:       Ryan Langston

E-mail:           [***]

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

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Attention: Richard D. Truesdell, Jr.

Facsimile:     [***]

E-mail:          [***]

Section 13.04. Binding Effect; Benefit; Assignment. (a) The provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. No provision of this
Agreement is intended to confer any rights, benefits, remedies, obligations or
liabilities hereunder upon any Person other than the parties hereto and their
respective successors and assigns.

(b) Except as provided in Article 8, no Member may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of the Managing Member.

Section 13.05. Jurisdiction. (a) The parties hereto agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby (whether brought by any party or any of its Affiliates or
against any party or any of its Affiliates) shall be brought in the Delaware
Chancery Court or, if such court shall not have jurisdiction, any federal court
located in the State of Delaware or other Delaware state court, and each of the
parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 12.03 shall be deemed effective service of
process on such party.

(b) EACH OF THE COMPANY AND THE MEMBERS HEREBY IRREVOCABLY DESIGNATES
CORPORATION SERVICE COMPANY (IN SUCH CAPACITY, THE “PROCESS AGENT”), WITH AN
OFFICE AT CORPORATION SERVICE COMPANY, 251 LITTLE FALLS DRIVE, CITY OF
WILMINGTON, COUNTY OF NEW CASTLE, DELAWARE 19808, AS ITS DESIGNEE, APPOINTEE

 

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AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF SERVICE OF PROCESS IN SUCH
JURISDICTION IN ANY LEGAL ACTION OR PROCEEDINGS WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER AGREEMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT, AND SUCH
SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY THEREOF TO THE PROCESS AGENT;
PROVIDED THAT IN THE CASE OF ANY SUCH SERVICE UPON THE PROCESS AGENT, THE PARTY
EFFECTING SUCH SERVICE SHALL ALSO DELIVER A COPY THEREOF TO EACH OTHER SUCH
PARTY IN THE MANNER PROVIDED IN SECTION 12.03 OF THIS AGREEMENT. EACH PARTY
SHALL TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO CONTINUE SAID APPOINTMENT IN
FULL FORCE AND EFFECT OR TO APPOINT ANOTHER AGENT SO THAT SUCH PARTY SHALL AT
ALL TIMES HAVE AN AGENT FOR SERVICE OF PROCESS FOR THE ABOVE PURPOSES IN
WILMINGTON, DELAWARE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO
SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW. EACH PARTY EXPRESSLY
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS INTENDED TO BE IRREVOCABLE UNDER THE
LAWS OF THE STATE OF DELAWARE AND OF THE UNITED STATES OF AMERICA.

Section 13.06. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

Section 13.07. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. Until and unless
each party has received a counterpart hereof signed by the other party hereto,
this Agreement shall have no effect and no party shall have any right or
obligation hereunder (whether by virtue of any other oral or written agreement
or other communication).

Section 13.08. Entire Agreement. This Agreement and the Reorganization Documents
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersede all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter of
this Agreement. Nothing in this Agreement shall create any third-party
beneficiary rights in favor of any Person or other party, except to the extent
provided herein with respect to Indemnitee Related Entities, each of whom are
intended third-party beneficiaries of those provisions that specifically related
to them with the right to enforce such provisions as if they were a party
hereto.

Section 13.09. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
Governmental Authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any

 

52

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party. Upon such a determination, the parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the fullest
extent possible.

Section 13.10. Amendment. (a) This Agreement can be amended at any time and from
time to time by written instrument signed by each of the Members who together
own a majority in interest of the Units then outstanding, provided that no
amendment to this Agreement may adversely modify in any material respect the
Units (or the rights, preferences or privileges of the Units) then held by any
Members in any materially disproportionate manner to those then held by any
other Members without the prior written consent of a majority in interest of
such disproportionately affected Member or Members.

(b) For the avoidance of doubt: (i) the Managing Member, acting alone, may amend
this Agreement, including the Member Schedule, (x) to reflect the admission of
new Members or Transfers of Units, each as provided by and in accordance with,
the terms of this Agreement and (y) to effect any subdivisions or combinations
of Units made in compliance with Section 4.02(c) and (z) to issue additional LLC
Units or any new class of Units (whether or not pari passu with the LLC Units)
in accordance with the terms of this Agreement and to provide that the Members
being issued such new Units be entitled to the rights provided to Members; and
(ii) any merger, consolidation or other business combination that constitutes a
Disposition Event (as such term is defined in the certificate of incorporation
of Pubco) in which the Non-Pubco Members are required to exchange all of their
LLC Units pursuant to Section 10.04(b) of this Agreement and receive
consideration in such Disposition Event in accordance with the terms of this
Agreement and Section 10.04(b) of this Agreement shall not be deemed an
amendment hereof; provided, that such amendment is only effective upon
consummation of such Disposition Event.

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

Section 13.11. Confidentiality. (a) Each Member shall, and shall direct those of
its Affiliates and their respective directors, officers, members, stockholders,
partners, employees, attorneys, accountants, consultants, trustees and other
advisors (the “Member Parties”) who have access to Confidential Information to,
keep confidential and not disclose any Confidential Information to any Person
other than a Member Party who agrees to keep such Confidential Information
confidential in accordance with this Section 13.11, in each case without the
express consent, in the case of Confidential Information acquired from the
Company, of the Managing Member or, in the case of Confidential Information
acquired from another Member, such other Member, unless:

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

 

53

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

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

(iv) such disclosure is reasonably required in connection with any proposed
Transfer of all or any part of such Member’s Units in the Company; provided that
with respect to any such use of any Confidential Information referred to in this
clause (iv), advance notice must be given to the Managing Member so that it may
require any proposed Transferee that is not a Member to enter into a
confidentiality agreement with terms substantially similar to the terms of this
Section 13.11 (excluding this clause (iv)) prior to the disclosure of such
Confidential Information.

(v) such disclosure is of financial and other information of the type typically
disclosed to limited partners and limited liability company members (and
prospective transferees or investors thereof) and is made to the partners or
members of, and/or prospective investors in, Affiliates of the Members and such
partner, Member or prospective investor is bound by the confidentiality
provisions of a customary non-disclosure agreement entered into with the
disclosing party that covers the Confidential Information so disclosed.

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

(c) In the event that any Member or any Member Parties of such Member is
required to disclose any of the Confidential Information, such Member shall use
reasonable efforts to provide the Company with prompt written notice so that the
Company may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement, and such Member shall use
reasonable efforts to cooperate with the Company in any effort any such Person
undertakes to obtain a protective order or other remedy. In the event that such
protective order or other remedy is not obtained, or that the Company waives
compliance with the provisions of this Section 13.11, such Member and its Member
Parties shall furnish only that portion of the Confidential Information that is
legally required and shall exercise all reasonable efforts to obtain reasonably
reliable assurance that the Confidential Information shall be accorded
confidential treatment.

 

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

Section 13.12. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to the
conflicts of law rules of such State that would result in the application of the
laws of any other State.

ARTICLE 14

ARBITRATION

Section 14.01. Title. The Members shall attempt in good faith to resolve all
claims, disputes and other disagreements arising hereunder (each, a “Dispute”)
by negotiation. If a Dispute between Members cannot be resolved in such manner,
such Dispute shall, at the request of any Member, after providing written notice
to the other Members party to the Dispute, be submitted to arbitration in The
City of New York in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect. The proceeding shall be
confidential. The party initially asserting the Dispute (the “Initiating Party”)
shall notify the other party (the “Responding Party”) of the name and address of
the arbitrator chosen by the Initiating Party and shall specifically describe
the Dispute in issue to be submitted to arbitration. Within 30 days of receipt
of such notification, the Responding Party shall notify the Initiating Party of
its answer to the Dispute, any counterclaim which it wishes to assert in the
arbitration and the name and address of the arbitrator chosen by the Responding
Party. If the Responding Party does not appoint an arbitrator during such 30-day
period, appointment of the second arbitrator shall be made by the American
Arbitration Association upon request of the Initiating Party. The two
arbitrators so chosen or appointed shall choose a third arbitrator, who shall
serve as president of the panel of arbitrators (the “Panel”) thus composed. If
the two arbitrators so chosen or appointed fail to agree upon the choice of a
third arbitrator within 30 days from the appointment of the second arbitrator,
the third arbitrator will be appointed by the American Arbitration Association
upon the request of the arbitrators or either of the parties. In all cases, the
arbitrators must be persons who are knowledgeable about, and have recognized
ability and experience in dealing with, the subject matter of the Dispute. The
arbitrators will act by majority decisions. Any decision of the arbitrators
shall (a) be rendered in writing and shall bear the signatures of at least two
arbitrators, and (b) identify the members of the Panel. Absent fraud or manifest
error, any such decision of the Panel shall be final, conclusive and binding on
the parties to the arbitration and enforceable by a court of competent
jurisdiction. The expenses of the arbitration shall be borne equally by the
parties to the arbitration; provided, however, that each party shall pay for and
bear the

 

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costs of its own experts, evidence and legal counsel, unless the arbitrator
rules otherwise in the arbitration. The parties shall complete all discovery
within 30 days after the Panel is composed, shall complete the presentation of
evidence to the Panel within 15 days after the completion of discovery, and a
final decision with respect to the matter submitted to arbitration shall be
rendered within 15 days after the completion of presentation of evidence. The
Members shall cause to be kept a record of the proceedings of any matter
submitted to arbitration hereunder.

ARTICLE 15

REPRESENTATIONS OF MEMBERS

Section 15.01. Representations of Members. Each Member (unless otherwise noted)
to which a Unit is issued as of the date of this Agreement represents and
warrants to the Company as follows:

(a) The Units issued to such Member, if any, are being acquired for investment
for such Member’s own account, not as a nominee or agent, and not with a view to
or for sale in connection with the distribution thereof.

(b) Such Member has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the Member’s
investment in the Units; such Member has the ability to bear the economic risks
of such investment; such Member has the capacity to protect its own interests in
connection with the transactions contemplated by this Agreement; and such Member
has had an opportunity to ask questions and to obtain such financial and other
information regarding the Company as such Member deems necessary or appropriate
in connection with evaluating the merits of the investment in the Units. Such
Member acknowledges that the Units have not been and will not be registered
under the Securities Act or under any state securities act and may not be
transferred except in compliance with the Securities Act and all applicable
state laws.

(c) Each Member qualifies as an Accredited Investor within the meaning of
Regulation D promulgated under the Securities Act or the acquisition of its
interest otherwise qualifies under an applicable exemption from registration
under the Securities Act.

[Signature pages follow]

 

56

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

 

GOOSEHEAD INSURANCE, INC.

By:

 

 

 

Name:

 

Title:

EVAN AND JAKE, LLC

By:

 

 

 

Name:

 

Title:

TEXAS WASATCH INSURANCE PARTNERS, L.P.

By its General Partner

By:  

 

 

Name:

 

Title:

MARK E. JONES

By:  

 

 

Name:

 

Title:

ROBYN JONES

By:  

 

 

Name:

 

Title:

[Signature Page to the Amended and Restated LLC Agreement of

Goosehead Financial, LLC]

--------------------------------------------------------------------------------

MICHAEL C. COLBY

By:  

 

 

Name:

 

Title:

JEFFREY SAUNDERS

By:  

 

 

Name:

 

Title:

THE MARK AND ROBYN JONES DESCENDANTS TRUST 2014

By:  

 

 

Name:

 

Title:

LANNI ELAINE ROMNEY FAMILY TRUST 2014

By:  

 

 

Name:

 

Title:

LINDY JEAN LANGSTON FAMILY TRUST 2014

By:  

 

 

Name:

 

Title:

 

58

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CAMILLE LAVAUN PETERSON FAMILY

    TRUST 2014

By:  

 

  Name:   Title:

DESIREE ROBYN COLEMAN FAMILY TRUST

    2014

By:  

 

  Name:   Title:

ADRIENNE MORGAN JONES FAMILY TRUST

    2014

By:  

 

  Name:   Title: MARK EVAN JONES, JR. FAMILY TRUST 2014 By:  

 

  Name:   Title: SERENA JONES By:  

 

  Name:   Title:

 

59

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LANNI ROMNEY By:  

 

  Name:   Title: LINDY LANGSTON By:  

 

  Name:   Title: CAMILLE PETERSON By:  

 

  Name:   Title: DESIREE COLEMAN By:  

 

  Name:   Title: ADRIENNE JONES By:  

 

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

 

  Name:   Title:

 

60

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COLBY 2014 FAMILY TRUST By:  

 

 

Name:

 

Title:

PRESTON MICHAEL COLBY 2014 TRUST

By:

 

 

 

Name:

 

Title:

LYLA KATE COLBY 2014 TRUST

By:

 

 

 

Name:

 

Title:

 

61

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SCHEDULE A – MEMBER SCHEDULE

 

Member

   LLC Units  

Goosehead Insurance, Inc., as Managing Member

     N/A  

Mark E. Jones

     171,633  

Robyn Jones

     171,633  

Michael C. Colby

     967,085  

Jeffrey Saunders

     218,613  

The Mark and Robyn Jones Descendants Trust 2014

     13,404,339  

Lanni Elaine Romney Family Trust 2014

     297,734  

Lindy Jean Langston Family Trust 2014

     297,734  

Camille LaVaun Peterson Family Trust 2014

     297,734  

Desiree Robyn Coleman Family Trust 2014

     297,734  

Adrienne Morgan Jones Family Trust 2014

     297,734  

Mark Evan Jones, Jr. Family Trust 2014

     297,734  

Serena Jones

     1,116,974  

Lanni Romney

     498,557  

Lindy Langston

     498,557  

Camille Peterson

     498,557  

Desiree Coleman

     498,557  

Adrienne Jones

     498,557  

Mark E. Jones, Jr.

     498,557  

 

62

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Colby 2014 Family Trust

     771,732  

Preston Michael Colby 2014 Trust

     43,217  

Lyla Kate Colby 2014 Trust

     43,217  

Texas Wasatch Insurance Partners, L.P.

     1,060,480  

Evan and Jake, LLC

     20,218  

 

63

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Exhibit T

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CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is entered into as of May 1, 2018
by and between Goosehead Financial, LLC, a Delaware limited liability company
(the “Company”) and Max and Dane, LLC, a Delaware limited liability company (the
“Contributing Party”).

W I T N E S S E T H:

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

WHEREAS, the Contributing Party owns 99.9% of the limited liability company
interests of Goosehead Management, LLC, a Delaware limited liability company
(“Goosehead Management”), (the “Goosehead Management Interests”) and 100% of the
limited liability company interests of GHM Holdings, LLC, a Delaware limited
liability company (the “GHM Holdings, LLC Interests, and together with the
Goosehead Management Interests, the “Interests”), and the Contributing Party
desires to contribute the Interests to the Company in exchange for 6,126,883
limited liability company units of the Company (the “LLC Units”), with the
rights, privileges and obligations set forth in the Amended and Restated Limited
Liability Company Agreement of the Company as in effect on the date hereof; and

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

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

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

3. Transfer of GHM Holdings, LLC Interests. The Company, in its capacity as
transferee hereunder, hereby agrees to be bound by the terms and conditions of
the Limited Liability Company Agreement of GHM Holdings, LLC, as amended,
supplemented or restated, pursuant to Section 16 thereof.

4. Issuance of LLC Units. As consideration for the contribution to the Company
by the Contributing Party of such consideration pursuant to the terms of this
Agreement, the Company hereby issues 6,126,883 LLC Units to the Contributing
Party.

--------------------------------------------------------------------------------

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

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

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

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

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

(e) The LLC Units are being acquired for the Contributing Party’s own account
and without a view to the public distribution of such LLC Units or any interest
therein other than as permitted under applicable law.

(f) The Contributing Party is an “accredited investor” as such term is defined
in Regulation D under the Securities Act. The Contributing Party has sufficient
knowledge and experience in financial and business matters so as to be capable
of evaluating the merits and risks of its investment in the LLC Units and the
Contributing Party is capable of bearing the economic risks of such investment,
including a complete loss of its investment in the LLC Units.

 

2

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(g) The Contributing Party has been given the opportunity to ask questions of,
and receive answers from, the Company concerning the Company, the terms and
conditions of the LLC Units and other related matters. The Contributing Party
further represents and warrants to the Company that the Company has made
available to the Contributing Party or its agents all documents and information
relating to an investment in the LLC Units that the Contributing Party believed
to be necessary or appropriate for its investment in the Company.

(h) The Contributing Party understands that its investment in the Company and
the LLC Units involves a high degree of risk and is therefore a speculative
investment, and the Contributing Party is able to bear the economic risk of such
investment for an indefinite period of time, and is presently able to afford the
complete loss of such investment.

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

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

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

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

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

(d) The LLC Units to be issued to the Contributing Party are (i) validly issued,
and (ii) duly authorized, fully paid and nonassessable, free and clear of any
and all Liens except for any restrictions set forth in the organizational
documents of the Company and transfer restrictions under applicable securities
laws.

 

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7. General Provisions.

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

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

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

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

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

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

 

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

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

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

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

[Signature page follows]

 

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

 

MAX AND DANE, LLC

By:  

                 

  Name:   Title: GOOSEHEAD FINANCIAL, LLC

By:  

 

  Name:   Title:

[Signature Page to First Goosehead Financial, LLC Contribution Agreement]

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Exhibit U

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CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is entered into as of May 1, 2018
by and between Goosehead Financial, LLC, a Delaware limited liability company
(the “Company”) and Evan and Jake, LLC, a Delaware limited liability company
(the “Contributing Party”).

W I T N E S S E T H:

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

WHEREAS, the Contributing Party owns 99.9% of the limited liability company
interests of Texas Wasatch Insurance Holdings Group, LLC, a Delaware limited
liability company (“TWIHG”), (the “Texas Wasatch Interests”) and 100% of the
limited liability company interests of TWIHG Holdings, LLC, a Delaware limited
liability company (the “TWIHG Holdings, LLC Interests, and together with the
Texas Wasatch Interests, the “Interests”), and the Contributing Party desires to
contribute the Interests to the Company in exchange for 6,106,666 limited
liability company units of the Company (the “LLC Units”), with the rights,
privileges and obligations set forth in the Amended and Restated Limited
Liability Company Agreement of the Company as in effect on the date hereof; and

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

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

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

3. Transfer of TWIHG Holdings, LLC Interests. The Company, in its capacity as
transferee hereunder, hereby agrees to be bound by the terms and conditions of
the Limited Liability Company Agreement of TWIHG Holdings, LLC, as amended,
supplemented or restated, pursuant to Section 16 thereof.

4. Issuance of LLC Units. As consideration for the contribution to the Company
by the Contributing Party of such consideration pursuant to the terms of this
Agreement, the Company hereby issues 6,106,666 LLC Units to the Contributing
Party.

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

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

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

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

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

(e) The LLC Units are being acquired for the Contributing Party’s own account
and without a view to the public distribution of such LLC Units or any interest
therein other than as permitted under applicable law.

(f) The Contributing Party is an “accredited investor” as such term is defined
in Regulation D under the Securities Act. The Contributing Party has sufficient
knowledge and experience in financial and business matters so as to be capable
of evaluating the merits and risks of its investment in the LLC Units and the
Contributing Party is capable of bearing the economic risks of such investment,
including a complete loss of its investment in the LLC Units.

 

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(g) The Contributing Party has been given the opportunity to ask questions of,
and receive answers from, the Company concerning the Company, the terms and
conditions of the LLC Units and other related matters. The Contributing Party
further represents and warrants to the Company that the Company has made
available to the Contributing Party or its agents all documents and information
relating to an investment in the LLC Units that the Contributing Party believed
to be necessary or appropriate for its investment in the Company.

(h) The Contributing Party understands that its investment in the Company and
the LLC Units involves a high degree of risk and is therefore a speculative
investment, and the Contributing Party is able to bear the economic risk of such
investment for an indefinite period of time, and is presently able to afford the
complete loss of such investment.

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

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

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

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

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

(d) The LLC Units to be issued to the Contributing Party are (i) validly issued,
and (ii) duly authorized, fully paid and nonassessable, free and clear of any
and all Liens except for any restrictions set forth in the organizational
documents of the Company and transfer restrictions under applicable securities
laws.

 

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7. General Provisions.

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

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

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

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

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

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

 

4

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

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

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

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

[Signature page follows]

 

5

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

 

EVAN AND JAKE, LLC

By:  

                                      

  Name:   Title: GOOSEHEAD FINANCIAL, LLC

By:  

 

  Name:   Title:

[Signature Page to Second Goosehead Financial, LLC Contribution Agreement]

--------------------------------------------------------------------------------

Exhibit V

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REGISTRATION RIGHTS AGREEMENT

by and among

the Persons listed on Schedule A hereto

and

GOOSEHEAD INSURANCE, INC.

Dated as of May 1, 2018

--------------------------------------------------------------------------------

This REGISTRATION RIGHTS AGREEMENT, dated as of May 1, 2018 (as it may be
amended from time to time, this “Agreement”), is made among Goosehead Insurance,
Inc., a Delaware corporation (the “Company”); the shareholders listed on
Schedule A hereto and any transferee of Registrable Securities to whom any
Person who is a party to this Agreement shall Assign any rights hereunder in
accordance with Section 4.5 (each such Person, a “Holder”). Capitalized terms
used in this Agreement without definition have the meaning set forth in
Section 1.

1. Certain Definitions. As used herein, the following terms shall have the
following meanings:

“Additional Piggyback Rights” has the meaning set forth in Section 2.2(c).

“Affiliate” means with respect to any Person, any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person.

“Agreement” has the meaning set forth in the preamble.

“Assign” means to directly or indirectly sell, transfer, assign, distribute,
exchange, pledge, hypothecate, mortgage, grant a security interest in, encumber
or otherwise dispose of Registrable Securities, whether voluntarily or by
operation of law, including by way of a merger. “Assignor,” “Assignee,”
“Assigning” and “Assignment” have meanings corresponding to the foregoing.

“automatic shelf registration statement” has the meaning set forth in Section
2.4.

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

“Business Day” means any day other than a Saturday, Sunday or day on which
banking institutions in New York, New York are authorized or obligated by law or
executive order to close.

“Carryover Amount” for any Holder means, with respect to any registered offering
in which such Holder elected not to participate after receipt of a notice under
Section 2.2(a), a number of Registrable Securities equal to the number of
Registrable Securities then held by such Holder, multiplied by a fraction
(expressed as a percentage), the numerator of which is equal to the number of
Registrable Securities sold by the Holder that sold the most Registrable
Securities in such offering and the denominator of which is the number of
Registrable Securities held by such Holder immediately prior to such offering.

“Claims” has the meaning set forth in Section 2.9(a).

“Company Shares” means Class A common stock of the Company, par value $0.01 per
share, and any and all securities of any kind whatsoever of the Company that may
be issued by the Company after the date hereof in respect of, in exchange for,
or in substitution of, Company Shares, pursuant to any stock dividends, splits,
reverse splits, combinations, reclassifications, recapitalizations,
reorganizations and the like occurring after the date hereof.

--------------------------------------------------------------------------------

“Company Shares Equivalents” means all options, warrants and other securities
convertible into, or exchangeable or exercisable for (at any time or upon the
occurrence of any event or contingency and without regard to any vesting or
other conditions to which such securities may be subject) Company Shares or
other equity securities of the Company (including, without limitation, any note
or debt security convertible into or exchangeable for Company Shares or other
equity securities of the Company) and any LLC Units.

“Company” has the meaning set forth in the preamble.

“Demand Exercise Notice” has the meaning set forth in Section 2.1(a).

“Demand Registration” has the meaning set forth in Section 2.1(a).

“Demand Registration Request” has the meaning set forth in Section 2.1(a).

“Exchange” means the exchange of shares of Class B Common Stock, par value $0.01
per share, of the Company (together with LLC Units) for shares of Class A Common
Stock, par value $0.01 per share of the Company, pursuant to the LLC Agreement.

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

“Expenses” means any and all fees and expenses incident to the Company’s
performance of or compliance with Article 2, including, without limitation:
(i) SEC, stock exchange or FINRA registration and filing fees and all listing
fees and fees with respect to the inclusion of securities on the Nasdaq Global
Market or on any other securities market on which the Company Shares are listed
or quoted, (ii) fees and expenses of compliance with state securities or “blue
sky” laws and in connection with the preparation of a “blue sky” survey,
including, without limitation, reasonable fees and expenses of outside “blue
sky” counsel, (iii) printing and copying expenses, (iv) messenger and delivery
expenses, (v) expenses incurred in connection with any road show, (vi) fees and
disbursements of counsel for the Company, (vii) with respect to each
registration, the fees and disbursements of one counsel for the Participating
Holder(s) (selected by the Majority Participating Holders), (viii) fees and
disbursements of all independent public accountants (including the expenses of
any audit and/or comfort letter and updates thereof) and fees and expenses of
other Persons, including special experts, retained by the Company, (ix) fees and
expenses payable to any Qualified Independent Underwriter, (x) any other fees
and disbursements of underwriters, if any, customarily paid by issuers or
sellers of securities (excluding, for the avoidance of doubt, any underwriting
discount or spread) and (xi) expenses for securities law liability insurance and
any rating agency fees.

“FINRA” means the Financial Industry Regulatory Authority.

 

 

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“Fully-Diluted Basis” means, with respect to the Company Shares, all issued and
outstanding Company Shares and all Company Shares issuable in respect of
securities convertible into or exchangeable for such Company Shares, all stock
appreciation rights, options, warrants and other rights to purchase or subscribe
for such Company Shares or securities convertible into or exchangeable for such
Company Shares, including any of the foregoing stock appreciation rights,
options, warrants or other rights to purchase or subscribe for such Company
Shares that are subject to vesting.

“Holder” or “Holders” has the meaning set forth in the preamble.

“Initiating Holder(s)” has the meaning set forth in Section 2.1(a).

“IPO” means the first underwritten public offering of the common stock of the
Company to the general public pursuant to a registration statement filed with
the SEC completed on or about the date of this Agreement.

“LLC” means Goosehead Financial, LLC, a Delaware limited liability company and
its successors.

“LLC Agreement” means the Limited Liability Agreement of Goosehead Financial,
LLC, a Delaware limited liability company.

“LLC Unit” means a common limited liability interest in the LLC or any other
class of limited liability interests in the LLC.

“Litigation” means any action, proceeding or investigation in any court or
before any governmental authority.

“Lock-Up Agreement” means any agreement entered into by a Holder that provides
for restrictions on the transfer of Registrable Securities held by such Holder.

“Majority Participating Holders” means the Participating Holders holding more
than 50% of the Registrable Securities proposed to be included in such offering.

“Manager” has the meaning set forth in Section 2.1(c).

“Participating Holders” means all Holders of Registrable Securities which are
proposed to be included in any registration or offering of Registrable
Securities pursuant to Section 2.1 or Section 2.2.

“Person” means any individual, corporation (including not-for-profit), general
or limited partnership, limited liability company, joint venture, estate, trust,
association, organization, governmental entity or agency or other entity of any
kind or nature.

“Piggyback Shares” has the meaning set forth in Section 2.3(a)(iv).

“Qualified Independent Underwriter” means a “qualified independent underwriter”
within the meaning of FINRA Rule 5121.

 

 

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“Registrable Securities” means any Company Shares held by the Holders at any
time (including those held as a result of the conversion or exercise of Company
Shares Equivalents) and any Company Shares issuable upon an Exchange; provided
that, as to any Registrable Securities held by a particular Holder, such
securities shall cease to be Registrable Securities when (A) a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, or (B) such securities are
eligible to be sold by such Holder in a single transaction in compliance with
the requirements of Rule 144 under the Securities Act, as such Rule 144 may be
amended (or any successor provision thereto). For the avoidance of doubt, it
being understood that any Company Share issuable upon an Exchange shall be
considered a Registrable Security and held by the Holder of the LLC Unit with
respect to which it is issuable for all purposes hereunder prior to its
issuance.

“Rule 144” and “Rule 144A” have the meaning set forth in Section 4.2.

“SEC” means the U.S. Securities and Exchange Commission.

“Section 2.3(a) Sale Number” has the meaning set forth in Section 2.3(a).

“Section 2.3(b) Sale Number” has the meaning set forth in Section 2.3(b).

“Section 2.3(c) Sale Number” has the meaning set forth in Section 2.3(c).

“Securities Act” means the United States Securities Act of 1933, as amended, and
any successor thereto, and any rules and regulations promulgated thereunder, all
as the same shall be in effect from time to time.

“Stockholders Agreement” means the Stockholders Agreement, dated as of the date
hereof, by and among the Company and the other parties thereto.

“Subsidiary” means any direct or indirect subsidiary of the Company on the date
hereof and any direct or indirect subsidiary of the Company organized or
acquired after the date hereof.

“Transfer” means, with respect to any Company Shares, (i) when used as a verb,
to sell, assign, dispose of, exchange, pledge, mortgage, encumber, hypothecate
or otherwise transfer, in whole or in part, any of the economic consequences of
ownership of such Company Shares, whether directly or indirectly, or agree or
commit to do any of the foregoing and (ii) when used as a noun, a direct or
indirect sale, assignment, disposition, exchange, pledge, mortgage, encumbrance,
hypothecation or other transfer, in whole or in part, of any of the economic
consequences of ownership of such Company Shares or any agreement or commitment
to do any of the foregoing. For the avoidance of doubt, a transfer, sale,
exchange, assignment, pledge, hypothecation or other encumbrance or other
disposition of an interest in any Holder, or direct or indirect parent thereof,
all or substantially all of whose assets are, directly or indirectly, Company
Shares shall constitute a “Transfer” of Company Shares for purposes of this
Agreement. For the avoidance of doubt, a transfer, sale, exchange, assignment,
pledge, hypothecation or other

 

 

5

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encumbrance or other disposition of an interest in any Holder, or direct or
indirect parent thereof, which has substantial assets in addition to Company
Shares shall not constitute a “Transfer” of Company Shares for purposes of this
Agreement.

“Valid Business Reason” has the meaning set forth in Section 2.1(a)(iii).

“WKSI” has the meaning set forth in Section 2.4.

2. Registration Rights.

2.1. Demand Registrations. (a) If the Company shall receive from any Holder or
group of Holders holding at least 50% of the Registrable Securities, in either
case at any time beginning 180 days after the closing of the IPO, a written
request that the Company file a registration statement with respect to
Registrable Securities (a “Demand Registration Request,” and the registration so
requested is referred to herein as a “Demand Registration,” and the sender(s) of
such request pursuant to this Agreement shall be known as the “Initiating
Holder(s)”), then the Company shall, within five Business Days of the receipt
thereof, give written notice (the “Demand Exercise Notice”) of such request to
all other Holders, and subject to the limitations of this Section 2.1, use its
reasonable best efforts to effect, as soon as practicable, the registration
under the Securities Act (including, without limitation, by means of a shelf
registration pursuant to Rule 415 thereunder if so requested and if the Company
is then eligible to use such a registration) of all Registrable Securities that
the Holders request to be registered. There is no limitation on the number of
Demand Registrations pursuant to this Section 2.1 which the Company is obligated
to effect. However, the Company shall not be obligated to take any action to
effect any Demand Registration:

(i) within three months after a Demand Registration pursuant to this Section 2.1
that has been declared or ordered effective;

(ii) during the period starting with the date 15 days prior to its good faith
estimate of the date of filing of, and ending on a date 90 days after the
effective date of, a Company-initiated registration (other than a registration
relating solely to the sale of securities to employees of the Company pursuant
to a stock option, stock purchase or similar plan or to an SEC Rule 145
transaction), provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective;

(iii) where the anticipated offering price, before any underwriting discounts or
commissions and any offering-related expenses, is equal to or less than
$25,000,000;

(iv) if the Company shall furnish to such Holders a certificate signed by the
Chief Executive Officer of the Company stating that in the good faith judgment
of the Board, any registration of Registrable Securities should not be made or
continued (or sales under a shelf registration statement should be suspended)
because (i) such registration (or continued sales under a shelf registration
statement) would materially interfere with a material financing, acquisition,
corporate reorganization or merger or

 

 

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other material transaction or event involving the Company or any of its
subsidiaries or (ii) the Company is in possession of material non-public
information, the disclosure of which has been determined by the Board to not be
in the Company’s best interests (in either case, a “Valid Business Reason”),
then (x) the Company may postpone filing a registration statement relating to a
Demand Registration Request or suspend sales under an existing shelf
registration statement until five Business Days after such Valid Business Reason
no longer exists, but in no event for more than 90 days after the date the Board
determines a Valid Business Reason exists and (y) in case a registration
statement has been filed relating to a Demand Registration Request, if the Valid
Business Reason has not resulted from actions taken by the Company, the Company
may cause such registration statement to be withdrawn and its effectiveness
terminated or may postpone amending or supplementing such registration statement
until five Business Days after such Valid Business Reason no longer exists, but
in no event for more than 90 days after the date the Board determines a Valid
Business Reason exists; and the Company shall give written notice to the
Participating Holders of its determination to postpone or withdraw a
registration statement or suspend sales under a shelf registration statement and
of the fact that the Valid Business Reason for such postponement, withdrawal or
suspension no longer exists, in each case, promptly after the occurrence
thereof; provided, however, that the Company shall not defer its obligation in
this manner for more than 90 days in any 12 month period; or

(v) in any particular jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.

If the Company shall give any notice of postponement, withdrawal or suspension
of any registration statement pursuant to clause (iv) of this Section 2.1(a),
the Company shall not, during the period of postponement, withdrawal or
suspension, register any Company Shares, other than pursuant to a registration
statement on Form S-4 or S-8 (or an equivalent registration form then in
effect). Each Holder of Registrable Securities agrees that, upon receipt of any
notice from the Company that the Company has determined to withdraw any
registration statement pursuant to clause (iv) of this Section 2.1(a), such
Holder will discontinue its disposition of Registrable Securities pursuant to
such registration statement and, if so directed by the Company, will deliver to
the Company (at the Company’s expense) all copies, other than permanent file
copies, then in such Holder’s possession of the prospectus covering such
Registrable Securities that was in effect at the time of receipt of such notice.
If the Company shall have withdrawn or prematurely terminated a registration
statement filed pursuant to a Demand Registration (whether pursuant to clause
(iv) of this Section 2.1(a) or as a result of any stop order, injunction or
other order or requirement of the SEC or any other governmental agency or
court), the Company shall not be considered to have effected an effective
registration for the purposes of this Agreement until the Company shall have
filed a new registration statement covering the Registrable Securities covered
by the withdrawn registration statement and such registration statement shall
have been declared effective and shall not have been withdrawn. If the Company
shall give any notice of withdrawal or postponement of a registration statement,
the Company shall, not later than five Business

 

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Days after the Valid Business Reason that caused such withdrawal or postponement
no longer exists (but in no event later than 90 days after the date of the
postponement or withdrawal), use its reasonable best efforts to effect the
registration under the Securities Act of the Registrable Securities covered by
the withdrawn or postponed registration statement in accordance with Section 2.1
(unless the Initiating Holders shall have withdrawn such request, in which case
the Company shall not be considered to have effected an effective registration
for the purposes of this Agreement), and such registration shall not be
withdrawn or postponed pursuant to clause (iv) of this Section 2.1(a).

(b)

(i) The Company, subject to Sections 2.3 and 2.6, shall include in a Demand
Registration (x) the Registrable Securities of the Initiating Holders and
(y) the Registrable Securities of any other Holder of Registrable Securities,
which shall have made a written request to the Company for inclusion in such
registration pursuant to Section 2.2 (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by such
Participating Holder) within ten Business Days after the receipt of the Demand
Exercise Notice.

(ii) The Company shall, as expeditiously as possible, but subject to the
limitations set forth in this Section 2.1, use its reasonable best efforts to
(x) effect such registration under the Securities Act (including, without
limitation, by means of a shelf registration pursuant to Rule 415 under the
Securities Act if so requested and if the Company is then eligible to use such a
registration) of the Registrable Securities which the Company has been so
requested to register, for distribution in accordance with such intended method
of distribution and (y) if requested by the Majority Participating Holders,
obtain acceleration of the effective date of the registration statement relating
to such registration.

(c) In connection with any Demand Registration, the Majority Participating
Holders shall have the right to designate the lead managing underwriter (any
lead managing underwriter for the purposes of this Agreement, the “Manager”) in
connection with such registration and each other managing underwriter for such
registration, in each case subject to consent of the Company, not be
unreasonably withheld.

(d) If so requested by the Initiating Holder(s), the Company (together with all
Holders proposing to distribute their securities through such underwriting)
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company in its
sole discretion.

(e) Any Holder that intends to sell Registrable Securities by means of a shelf
registration pursuant to Rule 415 thereunder, shall give the Company two days’
prior notice of any such sale.

 

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2.2. Piggyback Registrations.

(a) If, at any time or from time to time the Company will register or commence
an offering of any of its securities for its own account or otherwise (other
than pursuant to registrations on Form S-4 or Form S-8 or any similar successor
forms thereto) (including but not limited to the registrations or offerings
pursuant to Section 2.1), the Company will:

(i) promptly give to each Holder written notice thereof (in any event within
five Business Days); and

(ii) include in such registration and in any underwriting involved therein (if
any), all the Registrable Securities specified in a written request or requests,
made within 10 Business Days after mailing or personal delivery of such written
notice from the Company, by any of the Holders, except as set forth in Sections
2.2(b) and 2.2(f), with the securities which the Company at the time proposes to
register or sell to permit the sale or other disposition by the Holders (in
accordance with the intended method of distribution thereof) of the Registrable
Securities to be so registered or sold, including, if necessary, by filing with
the SEC a post-effective amendment or a supplement to the registration statement
filed by the Company or the prospectus related thereto. There is no limitation
on the number of such piggyback registrations pursuant to the preceding sentence
which the Company is obligated to effect. No registration of Registrable
Securities effected under this Section 2.2(a) shall relieve the Company of its
obligations to effect Demand Registrations under Section 2.1 hereof.

(b) If the registration in this Section 2.2 involves an underwritten offering,
the right of any Holder to include its Registrable Securities in a registration
or offering pursuant to this Section 2.2 shall be conditioned upon such Holder’s
participation in the underwriting and the inclusion of such Holder’s Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their Registrable Securities through such underwriting
shall (together with the Company) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company.

(c) The Company, subject to 2.3 and 2.6, may elect to include in any
registration statement and offering pursuant to demand registration rights by
any Person, (i) authorized but unissued shares of Company Shares or Company
Shares held by the Company as treasury shares and (ii) any other Company Shares
which are requested to be included in such registration pursuant to the exercise
of piggyback registration rights granted by the Company after the date hereof
and which are not inconsistent with the rights granted in, or otherwise conflict
with the terms of, this Agreement (“Additional Piggyback Rights”); provided,
however, that such inclusion shall be permitted only to the extent that it is
pursuant to, and subject to, the terms of the underwriting agreement or
arrangements, if any, entered into by the Initiating Holders.

(d) If, at any time after giving written notice of its intention to register or
sell any equity securities and prior to the effective date of the registration
statement filed in connection with such registration or sale of such equity
securities, the Company shall

 

 

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determine for any reason not to register or sell or to delay registration or
sale of such equity securities, the Company may, at its election, give written
notice of such determination to all Holders of record of Registrable Securities
and (i) in the case of a determination not to register or sell, shall be
relieved of its obligation to register or sell any Registrable Securities in
connection with such abandoned registration or sale, without prejudice, however,
to the rights of Holders under Section 2.1, and (ii) in the case of a
determination to delay such registration or sale of its equity securities, shall
be permitted to delay the registration or sale of such Registrable Securities
for the same period as the delay in registering such other equity securities.

(e) Notwithstanding anything contained herein to the contrary, the Company
shall, at the request of any Holder, file any prospectus supplement or
post-effective amendments and otherwise take any action necessary to include
therein all disclosure and language deemed necessary or advisable by such Holder
if such disclosure or language was not included in the initial registration
statement, or revise such disclosure or language if deemed necessary or
advisable by such Holder including filing a prospectus supplement naming the
Holders, partners, members and shareholders to the extent required by law.

(f) Notwithstanding anything in this Agreement to the contrary, the rights of
any Holder set forth in this Agreement shall be subject to any Lock-Up Agreement
that such Holder has entered into.

2.3. Allocation of Securities Included in Registration Statement or Offering.

(a) Notwithstanding any other provision of this Agreement, in connection with an
underwritten offering initiated by a Demand Registration Request, if the Manager
advises the Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten (such number, the
“Section 2.3(a) Sale Number”) within a price range acceptable to the Majority
Participating Holders, the Initiating Holders shall so advise all Holders of
Registrable Securities that would otherwise be underwritten pursuant hereto, and
the Company shall use its reasonable best efforts to include in such
registration or offering, as applicable, the number of shares of Registrable
Securities in the registration and underwriting as follows:

(i) first, all Registrable Securities requested to be included in such
registration or offering by the Holders thereof (including pursuant to the
exercise of piggyback rights pursuant to Section 2.2); provided, however, that
if such number of Registrable Securities exceeds the Section 2.3(a) Sale Number,
the number of such Registrable Securities (not to exceed the Section 2.3(a) Sale
Number) to be included in such registration shall be allocated among all such
Holders requesting inclusion thereof in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by such Holders at the
time of filing of the registration statement or the time of the offering, as
applicable, as adjusted to give effect to any Carryover Amount(s) for any such
Holder;

 

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(ii) second, if by the withdrawal of Registrable Securities by a Participating
Holder, a greater number of Registrable Securities held by other Holders, may be
included in such registration or offering (up to the Section 2.3(a) Sale
Number), then the Company shall offer to all Holders who have included
Registrable Securities in the registration or offering the right to include
additional Registrable Securities in the same proportions as set forth in
Section 2.3(a)(i).

(iii) third, to the extent that the number of Registrable Securities to be
included pursuant to clause (i) and (ii) of this Section 2.3(a) is less than the
Section 2.3(a) Sale Number, and if the underwriter so agrees, any securities
that the Company proposes to register or sell, up to the Section 2.3(a) Sale
Number; and

(iv) fourth, to the extent that the number of securities to be included pursuant
to clauses (i), (ii) and (iii) of this Section 2.3(a) is less than the
Section 2.3(a) Sale Number, the remaining securities to be included in such
registration or offering shall be allocated on a pro rata basis among all
Persons requesting that securities be included in such registration or offering
pursuant to the exercise of Additional Piggyback Rights (“Piggyback Shares”),
based on the aggregate number of Piggyback Shares then owned by each Person
requesting inclusion in relation to the aggregate number of Piggyback Shares
owned by all Persons requesting inclusion, up to the Section 2.3(a) Sale Number.

(b) Subject to subsection (e) of this Section 2.3, but notwithstanding any other
provision of this Agreement, in a registration involving an underwritten
offering on behalf of the Company, which was initiated by the Company, if the
Manager determines that marketing factors require a limitation of the number of
shares to be underwritten (such number, the “Section 2.3(b) Sale Number”) the
Company shall so advise all Holders whose securities would otherwise be
registered and underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated as follows:

(i) first, all equity securities that the Company proposes to register for its
own account;

(ii) second, to the extent that the number of securities to be included pursuant
to clause (i) of this Section 2.3(b) is less than the Section 2.3(b) Sale
Number, among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities requested for inclusion in such
registration by Holders pursuant to Section 2.2 up to the Section 2.3(b) Sale
Number, as adjusted to give effect to any Carryover Amount(s) for any such
Holder; and

(iii) third, to the extent that the number of securities to be included pursuant
to clauses (i) and (ii) of this Section 2.3(b) is less than the Section 2.3(b)
Sale Number, the remaining securities to be included in such registration shall
be allocated on a pro rata basis among all Persons requesting that securities be
included in such registration pursuant to the exercise of Additional Piggyback
Rights, based on the aggregate number of Piggyback Shares then owned by each
Person requesting inclusion in relation to the aggregate number of Piggyback
Shares owned by all Persons requesting inclusion, up to the Section 2.3(b) Sale
Number.

 

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(c) Subject to subsection (e) of this Section 2.3, if any registration pursuant
to Section 2.2 involves an underwritten offering by any Person(s) other than a
Holder to whom the Company has granted registration rights which are not
inconsistent with the rights granted in, or otherwise conflict with the terms
of, this Agreement, the Manager (as selected by the Company or such other
Person) shall advise the Company that, in its view, the number of securities
requested to be included in such registration exceeds the number (the
“Section 2.3(c) Sale Number”) that can be sold in an orderly manner in such
registration within a price range acceptable to the Company, the Company shall
include shares in such registration as follows:

(i) first, the shares requested to be included in such registration shall be
allocated on a pro rata basis among such Person(s) requesting the registration
and all Holders requesting that Registrable Securities be included in such
registration pursuant to the exercise of piggyback rights pursuant to
Section 2.2, based on the aggregate number of securities or Registrable
Securities, as applicable, then owned by each of the foregoing requesting
inclusion in relation to the aggregate number of securities or Registrable
Securities, as applicable, owned by all such Holders and Persons requesting
inclusion, up to the Section 2.3(c) Sale Number, as adjusted to give effect to
any Carryover Amount(s) for any such Holder;

(ii) second, to the extent that the number of securities to be included pursuant
to clause (i) of this Section 2.3(c) is less than the Section 2.3(c) Sale
Number, the remaining shares to be included in such registration shall be
allocated on a pro rata basis among all Persons requesting that securities be
included in such registration pursuant to the exercise of Additional Piggyback
Rights, based on the aggregate number of Piggyback Shares then owned by each
Person requesting inclusion in relation to the aggregate number of Piggyback
Shares owned by all Persons requesting inclusion, up to the Section 2.3(c) Sale
Number; and

(iii) third, to the extent that the number of securities to be included pursuant
to clauses (i) and (ii) of this Section 2.3(c) is less than the Section 2.3(c)
Sale Number, the remaining shares to be included in such registration shall be
allocated to shares the Company proposes to register for its own account, up to
the Section 2.3(c) Sale Number.

(d) If any Holder of Registrable Securities disapproves of the terms of the
underwriting, or if, as a result of the proration provisions set forth in
clauses (a), (b) or (c) of this Section 2.3, any Holder shall not be entitled to
include all Registrable Securities in a registration or offering that such
Holder has requested be included, such Holder may elect to withdraw such
Holder’s request to include Registrable Securities in such registration or
offering or may reduce the number requested to be included; provided, however,
that (x) such request must be made in writing, to the Company, Manager and, if
applicable, the Initiating Holder(s), prior to the execution of the underwriting
agreement with respect to such registration and (y) such withdrawal or reduction
shall be irrevocable

 

 

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and, after making such withdrawal or reduction, such Holder shall no longer have
any right to include such withdrawn Registrable Securities in the registration
as to which such withdrawal or reduction was made to the extent of the
Registrable Securities so withdrawn or reduced.

2.4. Registration Procedures. If and whenever the Company is required by the
provisions of this Agreement to use its reasonable best efforts to effect or
cause the registration of any Registrable Securities under the Securities Act as
provided in this Agreement, the Company shall, as expeditiously as possible
(but, in any event, within 60 days after a Demand Registration Request in the
case of Section 2.4(a) below), in connection with the Registration of the
Registrable Securities and, where applicable, a takedown off of a shelf
registration statement:

(a) prepare and file with the SEC a registration statement on an appropriate
registration form of the SEC for the disposition of such Registrable Securities
in accordance with the intended method of disposition thereof, which
registration form (i) shall be selected by the Company and (ii) shall, in the
case of a shelf registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and such registration statement shall
comply as to form in all material respects with the requirements of the
applicable registration form and include all financial statements required by
the SEC to be filed therewith, and the Company shall use its reasonable best
efforts to cause such registration statement to become effective and remain
continuously effective from the date such registration statement is declared
effective until the earliest to occur (i) the first date as of which all of the
Registrable Securities included in the registration statement have been sold or
(ii) a period of 90 days in the case of an underwritten offering effected
pursuant to a registration statement other than a shelf registration statement
and a period of three years in the case of a shelf registration statement
(provided, however, that before filing a registration statement or prospectus or
any amendments or supplements thereto, or comparable statements under securities
or state “blue sky” laws of any jurisdiction, or any free writing prospectus
related thereto, the Company will furnish to one counsel for the Holders
participating in the planned offering (selected by the Majority Participating
Holders) and to one counsel for the Manager, if any, copies of all such
documents proposed to be filed (including all exhibits thereto), which documents
will be subject to the reasonable review and reasonable comment of such counsel
(provided that the Company shall be under no obligation to make any changes
suggested by the Holders), and the Company shall not file any registration
statement or amendment thereto, any prospectus or supplement thereto or any free
writing prospectus related thereto to which the Majority Participating Holders
or the underwriters, if any, shall reasonably object);

(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement continuously effective for the
period set forth in Section 2.4(a) and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all Registrable
Securities covered by such registration statement in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement (and, in connection with any shelf registration
statement, file one or more prospectus supplements covering Registrable
Securities upon the request of one or more Holders wishing to offer or sell
Registrable Securities whether in an underwritten offering or otherwise);

 

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(c) in the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the Manager of such offering;

(d) furnish, without charge, to each Participating Holder and each underwriter,
if any, of the securities covered by such registration statement such number of
copies of such registration statement, each amendment and supplement thereto (in
each case including all exhibits), the prospectus included in such registration
statement (including each preliminary prospectus and any summary prospectus),
any other prospectus filed under Rule 424 under the Securities Act and each free
writing prospectus utilized in connection therewith, in each case, in conformity
with the requirements of the Securities Act, and other documents, as such seller
and underwriter may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities owned by such seller (the
Company hereby consenting to the use in accordance with all applicable law of
each such registration statement (or amendment or post-effective amendment
thereto) and each such prospectus (or preliminary prospectus or supplement
thereto) or free writing prospectus by each such Participating Holder and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such registration statement or prospectus);

(e) use its reasonable best efforts to register or qualify the Registrable
Securities covered by such registration statement under such other securities or
state “blue sky” laws of such jurisdictions as any sellers of Registrable
Securities or any managing underwriter, if any, shall reasonably request in
writing, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such sellers or underwriter, if any, to
consummate the disposition of the Registrable Securities in such jurisdictions
(including keeping such registration or qualification in effect for so long as
such registration statement remains in effect), except that in no event shall
the Company be required to qualify to do business as a foreign corporation in
any jurisdiction where it would not, but for the requirements of this paragraph
(e), be required to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;

(f) promptly notify each Participating Holder and each managing underwriter, if
any: (i) when the registration statement, any pre-effective amendment, the
prospectus or any prospectus supplement related thereto, any post-effective
amendment to the registration statement or any free writing prospectus has been
filed and, with respect to the registration statement or any post-effective
amendment, when the same has become effective; (ii) of any request by the SEC or
state securities authority for amendments or supplements to the registration
statement or the prospectus related thereto or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of the registration statement or the initiation of any proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the

 

 

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suspension of the qualification of any Registrable Securities for sale under the
securities or state “blue sky” laws of any jurisdiction or the initiation of any
proceeding for such purpose; (v) of the existence of any fact of which the
Company becomes aware which results in the registration statement or any
amendment thereto, the prospectus related thereto or any supplement thereto, any
document incorporated therein by reference, any free writing prospectus or the
information conveyed to any purchaser at the time of sale to such purchaser
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make any statement
therein not misleading; and (vi) if at any time the representations and
warranties contemplated by any underwriting agreement, securities sale
agreement, or other similar agreement, relating to the offering shall cease to
be true and correct in all material respects; and, if the notification relates
to an event described in clause (v), the Company shall promptly prepare and
furnish to each such seller and each underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein in the
light of the circumstances under which they were made not misleading;

(g) comply (and continue to comply) with all applicable rules and regulations of
the SEC (including, without limitation, maintaining disclosure controls and
procedures (as defined in Exchange Act Rule 13a-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rule 13a-15(f)) in accordance
with the Exchange Act), and make generally available to its security holders, as
soon as reasonably practicable after the effective date of the registration
statement (and in any event within 45 days, or 90 days if it is a fiscal year,
after the end of such 12 month period described hereafter), an earnings
statement (which need not be audited) covering the period of at least 12
consecutive months beginning with the first day of the Company’s first fiscal
quarter after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder;

(h) (i) (A) cause all such Registrable Securities covered by such registration
statement to be listed on the principal securities exchange on which similar
securities issued by the Company are then listed (if any), if the listing of
such Registrable Securities is then permitted under the rules of such exchange,
or (B) if no similar securities are then so listed, to cause all such
Registrable Securities to be listed on a national securities exchange and,
without limiting the generality of the foregoing, take all actions that may be
required by the Company as the issuer of such Registrable Securities in order to
facilitate the managing underwriter’s arranging for the registration of at least
two market makers as such with respect to such shares with FINRA, and
(ii) comply (and continue to comply) with the requirements of any
self-regulatory organization applicable to the Company, including without
limitation all corporate governance requirements;

(i) provide and cause to be maintained a transfer agent and registrar for all
such Registrable Securities covered by such registration statement not later
than the effective date of such registration statement;

 

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(j) enter into such customary agreements (including, if applicable, an
underwriting agreement) and take such other actions as the Majority
Participating Holders or the underwriters shall reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities (it being
understood that the Holders of the Registrable Securities which are to be
distributed by any underwriters shall be parties to any such underwriting
agreement and may, at their option, require that the Company make to and for the
benefit of such Holders the representations, warranties and covenants of the
Company which are being made to and for the benefit of such underwriters);

(k) use its reasonable best efforts (i) to obtain an opinion from the Company’s
counsel and a comfort letter and updates thereof from the Company’s independent
public accountants who have certified the Company’s financial statements
included or incorporated by reference in such registration statement, in each
case, in customary form and covering such matters as are customarily covered by
such opinions and comfort letters (including, in the case of such comfort
letter, events subsequent to the date of such financial statements) delivered to
underwriters in underwritten public offerings, which opinion and letter shall be
dated the dates such opinions and comfort letters are customarily dated and
otherwise reasonably satisfactory to the underwriters, if any, and to the
Majority Participating Holders, and (ii) furnish to each Holder participating in
the offering and to each underwriter, if any, a copy of such opinion and letter
addressed to such underwriter;

(l) deliver promptly to counsel for each Participating Holder and to each
managing underwriter, if any, copies of all correspondence between the SEC and
the Company, its counsel or auditors and all memoranda relating to discussions
with the SEC or its staff with respect to the registration statement, and, upon
receipt of such confidentiality agreements as the Company may reasonably
request, make reasonably available for inspection by counsel for each
Participating Holder, by counsel for any underwriter, participating in any
disposition to be effected pursuant to such registration statement and by any
accountant or other agent retained by any Participating Holder or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company’s
officers, directors and employees to supply all information reasonably requested
by any such counsel for a Participating Holder, counsel for an underwriter,
accountant or agent in connection with such registration statement;

(m) use its reasonable best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness of the registration statement, or the prompt
lifting of any suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction;

(n) provide a CUSIP number for all Registrable Securities, not later than the
effective date of the registration statement;

(o) use its best efforts to make available its employees and personnel for
participation in “road shows” and other marketing efforts and otherwise provide
reasonable assistance to the underwriters (taking into account the needs of the
Company’s businesses and the requirements of the marketing process) in marketing
the Registrable Securities in any underwritten offering;

 

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(p) prior to the filing of any document which is to be incorporated by reference
into the registration statement or the prospectus (after the initial filing of
such registration statement), and prior to the filing of any free writing
prospectus, provide copies of such document to counsel for each Participating
Holder and to each managing underwriter, if any, and make the Company’s
representatives reasonably available for discussion of such document and make
such changes in such document concerning the Participating Holders prior to the
filing thereof as counsel for the Participating Holders or underwriters may
reasonably request;

(q) furnish to counsel for each Participating Holder and to each managing
underwriter, without charge, at least one signed copy of the registration
statement and any post-effective amendments or supplements thereto, including
financial statements and schedules, all documents incorporated therein by
reference, the prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus), any other prospectus
filed under Rule 424 under the Securities Act and all exhibits (including those
incorporated by reference) and any free writing prospectus utilized in
connection therewith;

(r) cooperate with the Participating Holders and the managing underwriter, if
any, to facilitate the timely preparation and delivery of certificates not
bearing any restrictive legends representing the Registrable Securities to be
sold, and cause such Registrable Securities to be issued in such denominations
and registered in such names in accordance with the underwriting agreement at
least three Business Days prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the Participating Holders at least three Business Days prior to
any sale of Registrable Securities and instruct any transfer agent and registrar
of Registrable Securities to release any stop transfer orders in respect
thereof;

(s) cooperate with any due diligence investigation by any Manager, underwriter
or Participating Holder and make available such documents and records of the
Company and its Subsidiaries that they reasonably request (which, in the case of
the Participating Holder, may be subject to the execution by the Participating
Holder of a customary confidentiality agreement in a form which is reasonably
satisfactory to the Company);

(t) take no direct or indirect action prohibited by Regulation M under the
Exchange Act;

(u) take all such other commercially reasonable actions as are necessary or
advisable in order to expedite or facilitate the disposition of such Registrable
Securities;

 

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(v) take all reasonable action to ensure that any free writing prospectus
utilized in connection with any registration covered by Section 2.1 or 2.2
complies in all material respects with the Securities Act, is filed in
accordance with the Securities Act to the extent required thereby, is retained
in accordance with the Securities Act to the extent required thereby and, when
taken together with the related prospectus, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and

(w) in connection with any underwritten offering, if at any time the information
conveyed to a purchaser at the time of sale includes any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, promptly file with the SEC such amendments or supplements to
such information as may be necessary so that the statements as so amended or
supplemented will not, in light of the circumstances, be misleading.

To the extent the Company is a well-known seasoned issuer (as defined in Rule
405 under the Securities Act) (a “WKSI”) at the time any Demand Registration
Request is submitted to the Company, and such Demand Registration Request
requests that the Company file an automatic shelf registration statement (as
defined in Rule 405 under the Securities Act) (an “automatic shelf registration
statement”) on Form S-3, the Company shall file an automatic shelf registration
statement which covers those Registrable Securities which are requested to be
registered. The Company shall use its reasonable best efforts to remain a WKSI
(and not become an ineligible issuer (as defined in Rule 405 under the
Securities Act)) during the period during which the Registrable Securities
remain Registrable Securities. If the Company does not pay the filing fee
covering the Registrable Securities at the time the automatic shelf registration
statement is filed, the Company agrees to pay such fee at such time or times as
the Registrable Securities are to be sold. If the automatic shelf registration
statement has been outstanding for at least three years, at the end of the third
year the Company shall refile a new automatic shelf registration statement
covering the Registrable Securities. If at any time when the Company is required
to re-evaluate its WKSI status the Company determines that it is not a WKSI, the
Company shall use its reasonable best efforts to refile the shelf registration
statement on Form S-3 and, if such form is not available, Form S-1 and keep such
registration statement effective during the period during which such
registration statement is required to be kept effective.

If the Company files any shelf registration statement for the benefit of the
holders of any of its securities other than the Holders, the Company agrees that
it shall include in such registration statement such disclosures as may be
required by Rule 430B under the Securities Act (referring to the unnamed selling
security holders in a generic manner by identifying the initial offering of the
securities to the Holders) in order to ensure that the Holders may be added to
such shelf registration statement at a later time through the filing of a
prospectus supplement rather than a post-effective amendment.

It shall be a condition precedent to the obligations of the Company to take any
action pursuant to Sections 2.1, 2.2, or 2.4 that each Participating Holder
shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them, and the intended method of disposition of
such securities as the Company may from time to time reasonably request so long
as such information is necessary for the Company to consummate such registration
and shall be used only in connection with such registration.

 

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If any such registration statement or comparable statement under state “blue
sky” laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory to
such Holder and the Company, to the effect that the holding by such Holder of
such securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company’s securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state “blue sky” or securities law then in force, the deletion of
the reference to such Holder.

2.5. Registration Expenses. All Expenses incurred in connection with any
registration, filing, qualification or compliance pursuant to Article 2 shall be
borne by the Company, whether or not a registration statement becomes effective.
All underwriting discounts and all selling commissions relating to securities
registered by the Holders shall be borne by the holders of such securities pro
rata in accordance with the number of shares sold in the offering by such
Participating Holder.

2.6. Certain Limitations on Registration Rights. In the case of any registration
under Section 2.1 pursuant to an underwritten offering, or, in the case of a
registration under Section 2.2, all securities to be included in such
registration shall be subject to the underwriting agreement and no Person may
participate in such registration or offering unless such Person (i) agrees to
sell such Person’s securities on the basis provided therein and completes and
executes all reasonable questionnaires, and other documents (including custody
agreements and powers of attorney) which must be executed in connection
therewith; provided, however, that all such documents shall be consistent with
the provisions hereof, and (ii) provides such other information to the Company
or the underwriter as may be necessary to register such Person’s securities.

2.7. Limitations on Sale or Distribution of Other Securities.

(a) Each Holder agrees, (i) to the extent requested in writing by a managing
underwriter, if any, of any registration effected pursuant to Section 2.1, not
to sell, transfer or otherwise dispose of, including any sale pursuant to Rule
144 under the Securities Act, any Company Shares, or any other equity security
of the Company or any security convertible into or exchangeable or exercisable
for any equity security of the Company (other than as part of such underwritten
public offering) during the time period reasonably requested by the managing
underwriter, not to exceed 90 days and (ii) to the extent requested in writing
by a managing underwriter of any underwritten public offering effected by the
Company for its own account, not to sell any Company Shares (other than as part
of such underwritten public offering) during the time period

 

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reasonably requested by the managing underwriter, which period shall not exceed
90 days subject to the same exceptions as provided in the lock-up provisions
contained in the underwriting agreement for the IPO; and, if so requested, each
Holder agrees to enter into a customary lock-up agreement with such managing
underwriter.

(b) The Company hereby agrees that, if it shall previously have received a
request for registration pursuant to Section 2.1 or 2.2, and if such previous
registration shall not have been withdrawn or abandoned, the Company shall not
sell, transfer, or otherwise dispose of, any Company Shares, or any other equity
security of the Company or any security convertible into or exchangeable or
exercisable for any equity security of the Company (other than as part of such
underwritten public offering, a registration on Form S-4 or Form S-8 or any
successor or similar form which is (x) then in effect or (y) shall become
effective upon the conversion, exchange or exercise of any then outstanding
Company Shares Equivalent), until a period of 90 days shall have elapsed from
the effective date of such previous registration.

2.8. No Required Sale. Nothing in this Agreement shall be deemed to create an
independent obligation on the part of any Holder to sell any Registrable
Securities pursuant to any effective registration statement.

2.9. Indemnification.

(a) In the event of any registration and/or offering of any securities of the
Company under the Securities Act pursuant to this Article 2, the Company will,
and hereby agrees to, and hereby does, indemnify and hold harmless, to the
fullest extent permitted by law, each Holder, its directors, officers,
fiduciaries, trustees, employees, shareholders, members or general and limited
partners (and the directors, officers, fiduciaries, employees, shareholders,
members, beneficiaries or general and limited partners thereof), any underwriter
(as defined in the Securities Act) for such Holder and each Person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or
Exchange Act, from and against any and all losses, claims, damages or
liabilities, joint or several, actions or proceedings (whether commenced or
threatened) and expenses (including reasonable fees of counsel and any amounts
paid in any settlement effected with the Company’s consent, which consent shall
not be unreasonably withheld or delayed) to which each such indemnified party
may become subject under the Securities Act or otherwise in respect thereof
(collectively, “Claims”), insofar as such Claims arise out of or are based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such securities were
registered under the Securities Act or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary or final prospectus or
any amendment or supplement thereto, together with the documents incorporated by
reference therein, or any free writing prospectus utilized in connection
therewith, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (iii) any untrue statement or alleged untrue statement of a
material fact in

 

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the information conveyed by the Company to any purchaser at the time of the sale
to such purchaser, or the omission or alleged omission to state therein a
material fact required to be stated therein, or (iv) any violation by the
Company of any federal, state or common law rule or regulation applicable to the
Company and relating to action required of or inaction by the Company in
connection with any such registration, and the Company will reimburse any such
indemnified party for any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such Claim
as such expenses are incurred; provided, however, that the Company shall not be
liable to any such indemnified party in any such case to the extent such Claim
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact made in
such registration statement or amendment thereof or supplement thereto or in any
such prospectus or any preliminary or final prospectus or free writing
prospectus in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such indemnified party specifically for use
therein. Such indemnity and reimbursement of expenses shall remain in full force
and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
seller.

(b) Each Participating Holder shall, severally and not jointly, indemnify and
hold harmless (in the same manner and to the same extent as set forth in
paragraph (a) of this Section 2.9) to the extent permitted by law the Company,
its officers and directors, each Person controlling the Company within the
meaning of the Securities Act, each underwriter (within the meaning of the
Securities Act) of the Company’s securities covered by such a registration
statement, any Person who controls such underwriter, and any other Holder
selling securities in such registration statement and each of its directors,
officers, partners or agents or any Person who controls such Holder with respect
to any untrue statement or alleged untrue statement of any material fact in, or
omission or alleged omission of any material fact from, such registration
statement, any preliminary or final prospectus contained therein, or any
amendment or supplement thereto, or any free writing prospectus utilized in
connection therewith, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company or its representatives by or on behalf of
such Participating Holder, specifically for use therein and reimburse such
indemnified party for any legal or other expenses reasonably incurred in
connection with investigating or defending any such Claim as such expenses are
incurred; provided, however, that the aggregate amount which any such
Participating Holder shall be required to pay pursuant to this Section 2.9(b)
and 2.9(c) and (e) shall in no case be greater than the amount of the net
proceeds actually received by such Participating Holder upon the sale of the
Registrable Securities pursuant to the registration statement giving rise to
such Claim. The Company and each Participating Holder hereby acknowledge and
agree that, unless otherwise expressly agreed to in writing by such
Participating Holders to the contrary, for all purposes of this Agreement, the
only information furnished or to be furnished to the Company for use in any such
registration statement, preliminary or final prospectus or amendment or
supplement thereto or any free writing prospectus are statements specifically
relating to (a) the beneficial ownership of Company Shares by such Participating
Holder and its Affiliates and (b) the name and address of such Participating
Holder. Such indemnity and reimbursement of expenses shall remain in full force
and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
Holder.

 

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(c) Indemnification similar to that specified in the preceding paragraphs
(a) and (b) of this Section 2.9 (with appropriate modifications) shall be given
by the Company and each Participating Holder with respect to any required
registration or other qualification of securities under any applicable
securities and state “blue sky” laws.

(d) Any Person entitled to indemnification under this Agreement shall notify
promptly the indemnifying party in writing of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 2.9, but the failure of any indemnified party to
provide such notice shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this Section 2.9, except to the extent the
indemnifying party is materially and actually prejudiced thereby and shall not
relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Article 2. In case any action or
proceeding is brought against an indemnified party, the indemnifying party shall
be entitled to (x) participate in such action or proceeding and (y) unless, in
the reasonable opinion of outside counsel to the indemnified party, a conflict
of interest between such indemnified and indemnifying parties may exist in
respect of such claim, assume the defense thereof jointly with any other
indemnifying party similarly notified, with counsel reasonably satisfactory to
such indemnified party. The indemnifying party shall promptly notify the
indemnified party of its decision to assume the defense of such action or
proceeding. If, and after, the indemnified party has received such notice from
the indemnifying party, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense of such action or proceeding
other than reasonable costs of investigation; provided, however, that (i) if the
indemnifying party fails to take reasonable steps necessary to defend diligently
the action or proceeding within 20 days after receiving notice from such
indemnified party that the indemnified party believes it has failed to do so; or
(ii) if such indemnified party who is a defendant in any action or proceeding
which is also brought against the indemnifying party reasonably shall have
concluded that there may be one or more legal or equitable defenses available to
such indemnified party which are not available to the indemnifying party or
which may conflict with those available to another indemnified party with
respect to such Claim; or (iii) if representation of both parties by the same
counsel is otherwise inappropriate under applicable standards of professional
conduct, then, in any such case, the indemnified party shall have the right to
assume or continue its own defense as set forth above (but with no more than one
firm of counsel for all indemnified parties in each jurisdiction, except to the
extent any indemnified party or parties reasonably shall have made a conclusion
described in clause (ii) or (iii) above) and the indemnifying party shall be
liable for any expenses therefor. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim), unless such settlement or compromise
(i) includes an unconditional release of such indemnified party

 

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from all liability on any claims that are the subject matter of such action or
claim 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. The
indemnity obligations contained in Sections 2.9(a) and 2.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the indemnified party
which consent shall not be unreasonably withheld.

(e) If for any reason the foregoing indemnity is held by a court of competent
jurisdiction to be unavailable to an indemnified party under Section 2.9(a), (b)
or (c), then each applicable indemnifying party shall contribute to the amount
paid or payable to such indemnified party as a result of any Claim in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and the indemnified party, on the other hand, with
respect to such Claim as well as any other relevant equitable considerations.
The relative fault shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. If, however, the
allocation provided in the second preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults but also the relative benefits of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The parties hereto agree that it would not be just and
equitable if any contribution pursuant to this Section 2.9(e) were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
preceding sentences of this Section 2.9(e). The amount paid or payable in
respect of any Claim shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such Claim. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11 (f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation. Notwithstanding anything in this Section 2.9(e) to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 2.9(e) to contribute any amount greater than the amount
of the net proceeds actually received by such indemnifying party upon the sale
of the Registrable Securities pursuant to the registration statement giving rise
to such Claim, less the amount of any indemnification payment made by such
indemnifying party pursuant to Section 2.9(b) and (c).

(f) The indemnity and contribution agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract (except as set forth in
subsection (h) below) and shall remain operative and in full force and effect
regardless of any investigation made or omitted by or on behalf of any
indemnified party and shall survive the transfer of the Registrable Securities
by any such party and the completion of any offering of Registrable Securities
in a registration statement.

 

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(g) The indemnification and contribution required by this Section 2.9 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred; provided, however, that the recipient thereof
hereby undertakes to repay such payments if and to the extent it shall be
determined by a court of competent jurisdiction that such recipient is not
entitled to such payment hereunder.

(h) If a customary underwriting agreement shall be entered into in connection
with any registration pursuant to Section 2.1 or 2.2, the indemnity,
contribution and related provisions set forth therein shall supersede the
indemnification and contribution provisions set forth in this Section 2.9.

3. Underwritten Offerings.

3.1. Requested Underwritten Offerings. If the Initiating Holders request an
underwritten offering pursuant to a registration under Section 2.1 (pursuant to
a request for a registration statement to be filed in connection with a specific
underwritten offering or a request for a shelf takedown in the form of an
underwritten offering), the Company shall enter into a customary underwriting
agreement with the underwriters. Such underwriting agreement shall (i) be
satisfactory in form and substance to the Majority Participating Holders,
(ii) contain terms not inconsistent with the provisions of this Agreement and
(iii) contain such representations and warranties by, and such other agreements
on the part of, the Company and such other terms as are generally prevailing in
agreements of that type, including, without limitation, indemnities and
contribution agreements on substantially the same terms as those contained
herein (it being understood that an underwriting agreement in substantially the
form of the underwriting agreement for the IPO shall be deemed to satisfy the
foregoing requirements). Any Participating Holder shall be a party to such
underwriting agreement and may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Participating Holder and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Participating Holder; provided, however, that the Company shall not be required
to make any representations or warranties with respect to written information
specifically provided by a Participating Holder for inclusion in the
registration statement. Each such Participating Holder shall not be required to
make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Participating Holder, its ownership of and title to the Registrable Securities,
any written information specifically provided by such Participating Holder for
inclusion in the registration statement and its intended method of distribution;
and any liability of such Participating Holder to any underwriter or other
Person under such underwriting agreement shall be limited to the amount of the
net proceeds received by such Holder upon the sale of the Registrable Securities
pursuant to the registration statement and shall be limited to liability for
written information specifically provided by such Participating Holder.

 

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3.2. Piggyback Underwritten Offerings. In the case of a registration pursuant to
Section 2.2 which involves an underwritten offering, the Company shall enter
into an underwriting agreement in connection therewith and all of the
Participating Holders’ Registrable Securities to be included in such
registration shall be subject to such underwriting agreement. Any Participating
Holder may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such Participating Holder and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such Participating Holder; provided, however,
that the Company shall not be required to make any representations or warranties
with respect to written information specifically provided by a Participating
Holder for inclusion in the registration statement. Each such Participating
Holder shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Participating Holder, its ownership of
and title to the Registrable Securities, any written information specifically
provided by such Participating Holder for inclusion in the registration
statement and its intended method of distribution; and any liability of such
Participating Holder to any underwriter or other Person under such underwriting
agreement shall be limited to the amount of the net proceeds received by such
Participating Holder upon the sale of the Registrable Securities pursuant to the
registration statement and shall be limited to liability for written information
specifically provided by such Participating Holder.

4. General.

4.1. Adjustments Affecting Registrable Securities. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the
Registrable Securities, to any and all shares of capital stock of the Company or
any successor or assign of the Company (whether by merger, share exchange,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for or in substitution of, Registrable Securities and shall be
appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date hereof.

4.2. Rule 144 and Rule 144A. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act in
respect of the Company Shares or Company Shares Equivalents, the Company
covenants that (i) so long as it remains subject to the reporting provisions of
the Exchange Act, it will timely file the reports required to be filed by it
under the Securities Act or the Exchange Act (including, but not limited to, the
reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144 under the Securities Act, as such Rule may be
amended (“Rule 144”)) or, if the Company is not required to file such reports,
it will, upon the request of any Holder, make publicly available other
information so long as necessary to permit sales by such Holder under Rule 144,
Rule 144A under the Securities Act, as such Rule may be amended (“Rule 144A”),
or any similar rules or regulations hereafter adopted by the SEC, and (ii) it
will take such further action as any

 

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Holder may reasonably request, all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (A) Rule 144,
(B) Rule 144A or (C) any similar rule or regulation hereafter adopted by the
SEC. Upon the request of any Holder of Registrable Securities, the Company will
deliver to such Holder a written statement by the Company that it has complied
with the reporting requirements of Rule 144, the Securities Act and the Exchange
Act (at any time after it has become subject to such reporting requirements), or
that it qualifies as a registrant whose securities may be resold pursuant to
Form S-3 (at any time after it so qualifies), a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so filed
by the Company and such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.

4.3. Amendments and Waivers; Termination. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and the Holders of a majority of the Registrable
Securities. Any amendment or waiver effected in accordance with this Section 4.3
shall be binding upon each Holder and the Company. Any waiver of any breach or
default by any other party of any of the terms of this Agreement effected in
accordance with this Section 4.3 shall not operate as a waiver of any other
breach or default, whether similar to or different from the breach or default
waived. No waiver of any provision of this Agreement shall be implied from any
course of dealing between the parties hereto or from any failure by any party to
assert its or his or her rights hereunder on any occasion or series of
occasions. This Agreement will terminate as to any Holder when it no longer
holds any Registrable Securities.

4.4. Notices. Unless otherwise specified herein, all notices, consents,
approvals, reports, designations, requests, waivers, elections and other
communications authorized or required to be given pursuant to this Agreement
shall be in writing and shall be given, made or delivered (and shall be deemed
to have been duly given, made or delivered upon receipt) by personal
hand-delivery, by facsimile transmission, by electronic mail, by mailing the
same in a sealed envelope, registered first-class mail, postage prepaid, return
receipt requested, or by air courier guaranteeing overnight delivery, addressed
to the Company at the address set forth below or to the applicable Holder at the
address indicated on Schedule A hereto (or at such other address for a Holder as
shall be specified by like notice):

if to the Company, to it at:

Goosehead Insurance, Inc.

1500 Solana Blvd

Building 4, Suite 4500

Westlake, Texas 76262

Telephone: [***]

Attention:   Ryan Langston

E-mail:       [***]

 

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

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Attention: Richard D. Truesdell, Jr.

Facsimile: [***]

E-mail:      [***]

4.5. Successors and Assigns.

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

(b) A Holder may Assign his, her or its rights under this Agreement without the
Company’s consent to an Assignee of Registrable Securities which (i) is with
respect to any Holder, the spouse, parent, sibling, child, step-child or
grandchild of such Holder, or the spouse thereof and any trust, limited
liability company, limited partnership, private foundation or other estate
planning vehicle for such Holder or for the benefit of any of the foregoing or
other persons pursuant to the laws of descent and distribution, or (ii) is a
legatee, executor or other fiduciary pursuant to a last will and testament of
the Holder or pursuant to the terms of any trust which take effect upon the
death of the Holder. In addition, any Holder may Assign his, her or its rights
under this Agreement without the Company’s prior written consent so long as such
Assignment (i) occurs in connection with the transfer of all, but not less than
all, of such Holder’s Registrable Securities in a single transaction in the case
of such an Assignment by a Holder and (ii) results in the Assignee holding not
less than 5% of the outstanding shares of Company Shares at the time of such
transfer. Subject to subsection (c) below, any Assignment shall be conditioned
upon prior written notice to the Company identifying the name and address of
such Assignee and any other material information as to the identity of such
Assignee as may be reasonably requested, and Schedule A hereto shall be updated
to reflect such Assignment.

(c) Notwithstanding anything to the contrary contained in this Section 0, any
Holder may elect to transfer all or a portion of its Registrable Securities to
any third party without Assigning its rights hereunder with respect thereto,
provided that in any such event all rights under this Agreement with respect to
the Registrable Securities so transferred shall cease and terminate.

4.6. Limitations on Subsequent Registration Rights. From and after the effective
date of the first registration statement filed by the Company for the offering
of its securities to the general public, the Company may, without the prior
written consent of the Holders, enter into any agreement with any holder or
prospective holder of any securities of the Company which provides such holder
or prospective holder of securities of the Company comparable, but not
conflicting, registration rights granted to the Holders hereby.

 

27

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4.7. Entire Agreement. This Agreement, the Stockholders Agreement and the other
agreements referenced herein and therein constitute the entire agreement among
the parties hereto with respect to the subject matter hereof, and supersede any
prior agreement or understanding among them with respect to the matters referred
to herein.

4.8. Governing Law; Waiver of Jury Trial; Jurisdiction.

(a) Governing Law. This Agreement is governed by and will be construed in
accordance with the laws of the State of New York, excluding any
conflict-of-laws rule or principle (whether of New York or any other
jurisdiction) that might refer the governance or the construction of this
Agreement to the law of another jurisdiction.

(b) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE ACTIONS OF THE PARTIES HERETO IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. The Company or any Holder
may file an original counterpart or a copy of this Section 4.8(b) with any court
as written evidence of the consent of any of the parties hereto to the waiver of
their rights to trial by jury.

(c) Jurisdiction. Each of the parties hereto (i) consents to submit itself to
the personal jurisdiction of the courts of the State of New York located in the
county and city of New York in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from such court, (iii) agrees that it will not bring
any action relating to this Agreement or any of the transactions contemplated by
this Agreement in any court other than the courts of the State of New York
located in the county and city of New York and (iv) to the fullest extent
permitted by law, consents to service being made through the notice procedures
set forth in Section 4.4. Each party hereto hereby agrees that, to the fullest
extent permitted by law, service of any process, summons, notice or document by
U.S. registered mail to the respective addresses set forth in Section 4.4 shall
be effective service of process for any suit or proceeding in connection with
this Agreement or the transactions contemplated hereby

4.9. Interpretation; Construction.

(a) The headings herein are for convenience of reference only, do not constitute
part of this Agreement and shall not be deemed to limit or otherwise affect any
of the provisions hereof. Where a reference in this Agreement is made to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.”

 

28

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(b) The parties have participated jointly in negotiating and drafting this
Agreement. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.

4.10. Counterparts. This Agreement may be executed in any number of separate
counterparts each of which when so executed shall be deemed to be an original
and all of which together shall constitute one and the same agreement.

4.11. Severability. In the event that any provision of this Agreement shall be
invalid, illegal or unenforceable, such provision shall be construed by limiting
it so as to be valid, legal and enforceable to the maximum extent provided by
law and the validity, legality and enforceability of the remaining provisions of
this Agreement shall not in any way be affected or impaired thereby.

4.12. Specific Performance. It is hereby agreed and acknowledged that it will be
impossible to measure the money damages that would be suffered if the parties
fail to comply with any of the obligations imposed on them by this Agreement and
that, in the event of any such failure, an aggrieved party will be irreparably
damaged and will not have an adequate remedy at law. Each party hereto shall,
therefore, be entitled (in addition to any other remedy to which such party may
be entitled at law or in equity) to injunctive relief, including specific
performance, to enforce such obligations, without the posting of any bond, and
if any action should be brought in equity to enforce any of the provisions of
this Agreement, none of the parties hereto shall raise the defense that there is
an adequate remedy at law.

4.13. Further Assurances. Each party hereto shall do and perform or cause to be
done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments, and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

29

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COMPANY GOOSEHEAD INSURANCE, INC.

By:  

 

--------------------------------------------------------------------------------

MARK E. JONES

By:  

 

  Name:   Title:

ROBYN JONES

By:  

 

  Name:   Title:

MICHAEL C. COLBY

By:  

 

  Name:   Title:

JEFFREY SAUNDERS

By:  

 

  Name:   Title:

THE MARK AND ROBYN JONES     DESCENDANTS TRUST 2014

By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

LANNI ELAINE ROMNEY FAMILY     TRUST 2014 By:  

 

  Name:   Title: LINDY JEAN LANGSTON FAMILY     TRUST 2014 By:  

 

  Name:   Title: CAMILLE LAVAUN PETERSON     FAMILY TRUST 2014 By:  

 

  Name:   Title: DESIREE ROBYN COLEMAN     FAMILY TRUST 2014 By:  

 

  Name:   Title: ADRIENNE MORGAN JONES     FAMILY TRUST 2014 By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

MARK EVAN JONES, JR. FAMILY     TRUST 2014 By:  

 

  Name:   Title: SERENA JONES By:  

 

  Name:   Title: LANNI ROMNEY By:  

 

  Name:   Title: LINDY LANGSTON By:  

 

  Name:   Title: CAMILLE PETERSON By:  

 

  Name:   Title: DESIREE COLEMAN By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

ADRIENNE JONES

By:  

 

  Name:   Title:

MARK E. JONES, JR.

By:  

 

  Name:   Title:

COLBY 2014 FAMILY TRUST

By:  

 

  Name:   Title:

PRESTON MICHAEL COLBY 2014     TRUST

By:  

 

  Name:   Title:

LYLA KATE COLBY 2014 TRUST

By:  

 

  Name:   Title:

TEXAS WASATCH INSURANCE     PARTNERS, L.P.

By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

SCHEDULE A

 

Party

  

Address

Mark E. Jones   

[***]

Robyn Jones   

[***]

Michael C. Colby   

[***]

Jeffrey Saunders   

[***]

The Mark and Robyn Jones Descendants Trust 2014   

[***]

Lanni Elaine Romney Family Trust 2014   

[***]

Lindy Jean Langston Family Trust 2014   

[***]

Camille LaVaun Peterson Family Trust 2014   

[***]

Desiree Robyn Coleman Family Trust 2014   

[***]

Adrienne Morgan Jones Family Trust 2014   

[***]

Mark Evan Jones, Jr. Family Trust 2014   

[***]

Serena Jones   

[***]

Lanni Romney   

[***]

Lindy Langston   

[***]

Camille Peterson   

[***]

Desiree Coleman   

[***]

Adrienne Jones   

[***]

Mark E. Jones, Jr.   

[***]

Colby 2014 Family Trust   

[***]

Preston Michael Colby 2014 Trust   

[***]

Lyla Kate Colby 2014 Trust   

[***]

Mark Colby   

[***]

P. Ryan Langston   

[***]

Michael Moxley   

[***]

Texas Wasatch Insurance Partners, L.P.   

[***]

--------------------------------------------------------------------------------

Exhibit W

--------------------------------------------------------------------------------

 

 

TAX RECEIVABLE AGREEMENT

among

GOOSEHEAD INSURANCE, INC.,

GOOSEHEAD FINANCIAL, LLC,

and

THE PERSONS NAMED HEREIN

 

 

Dated as of May 1, 2018

 

 

 

 

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

     Page  

ARTICLE I DEFINITIONS

     2  

Section 1.01 Definitions

     2  

ARTICLE II DETERMINATION OF REALIZED TAX BENEFIT

     10  

Section 2.01 Basis Adjustment

     10  

Section 2.02 Realized Tax Benefit and Realized Tax Detriment

     11  

Section 2.03 Procedures, Amendments

     11  

ARTICLE III TAX BENEFIT PAYMENTS

     12  

Section 3.01 Payments

     12  

Section 3.02 No Duplicative Payments

     13  

Section 3.03 Pro Rata Payments

     14  

ARTICLE IV TERMINATION

     14  

Section 4.01 Termination, Early Termination and Breach of Agreement

     14  

Section 4.02 Early Termination Notice

     16  

Section 4.03 Payment upon Early Termination

     16  

ARTICLE V SUBORDINATION AND LATE PAYMENTS

     17  

Section 5.01 Subordination

     17  

Section 5.02 Late Payments by the Corporate Taxpayer

     17  

ARTICLE VI NO DISPUTES; CONSISTENCY; COOPERATION

     17  

Section 6.01 Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters

     17  

Section 6.02 Consistency

     17  

Section 6.03 Cooperation

     17  

ARTICLE VII MISCELLANEOUS

     18  

Section 7.01 Notices

     18  

Section 7.02 Binding Effect; Benefit; Assignment

     18  

Section 7.03 Resolution of Disputes

     19  

Section 7.04 Counterparts

     20  

Section 7.05 Entire Agreement

     20  

Section 7.06 Severability

     20  

Section 7.07 Amendment

     20  

Section 7.08 Governing Law

     21  

Section 7.09 Reconciliation

     21  

Section 7.10 Withholding

     22  

 

i

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Section 7.11 Admission of the Corporate Taxpayer into a Consolidated Group;
Transfers of Corporate Assets

     22  

Section 7.12 Confidentiality

     22  

Section 7.13 Change in Law

     22  

Section 7.14 Partnership Agreement

     23  

 

ii

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TAX RECEIVABLE AGREEMENT

This TAX RECEIVABLE AGREEMENT (as amended from time to time, this “Agreement”),
dated as of May 1, 2018, is hereby entered into by and among Goosehead
Insurance, Inc., a Delaware corporation (the “Corporate Taxpayer”), Goosehead
Financial, LLC, a Delaware limited liability company (“OpCo”), each of the
Members (as defined below) from time to time party thereto, and each of the
successors and assigns thereto.

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

WHEREAS, the Corporate Taxpayer is classified as an association taxable as a
corporation, and is the common parent of an affiliated group of corporations
filing a consolidated return, for U.S. federal income tax purposes;

WHEREAS, Mark E. Jones, Robyn Jones, Michael C. Colby, Jeffrey Saunders, The
Mark and Robyn Jones Descendants Trust 2014, Lanni Elaine Romney Family Trust
2014, Lindy Jean Langston Family Trust 2014, Camille LaVaun Peterson Family
Trust 2014, Desiree Robyn Coleman Family Trust 2014, Adrienne Morgan Jones
Family Trust 2014, Mark Evan Jones, Jr. Family Trust 2014, the Estate of Doug
Jones, Lanni Romney, Lindy Langston, Camille Peterson, Desiree Coleman, Adrienne
Jones, Mark E. Jones, Jr., Colby 2014 Family Trust, Preston Michael Colby 2014
Trust, Lyla Kate Colby 2014 Trust, Texas Wasatch Insurance Partners, L.P., Max
and Dane, LLC and Evan and Jake, LLC (the “Members”) holds common interest units
in OpCo (the “Common Units”), and following certain reorganization transactions,
the Corporate Taxpayer will be the managing member of OpCo and will hold,
directly and/or indirectly, Common Units;

WHEREAS, on and after the date hereof, pursuant to Section 10.01 of the LLC
Agreement, each Member has the right, in its sole discretion, from time to time
to require OpCo to redeem (a “Redemption”) all or a portion of such Member’s
Common Units for cash or, at the Corporate Taxpayer’s option, shares of Class A
common stock, $0.01 par value per share, of the Corporate Taxpayer (the “Class A
Common Stock”); provided that, pursuant to Section 10.03 of the LLC Agreement
and at the election of the Corporate Taxpayer, the Corporate Taxpayer may effect
a direct exchange (a “Direct Exchange,” and together with a Redemption, an
“Exchange”) of such cash or shares of Class A Common Stock for such Common
Units;

WHEREAS, OpCo and each of its direct and indirect subsidiaries, if any, treated
as a partnership for U.S. federal income tax purposes will have in effect an
election under Section 754 of the Internal Revenue Code of 1986, as amended (the
“Code”), for each Taxable Year (as defined below) in which an Exchange occurs,
which elections are intended generally to result in an adjustment to the tax
basis of the assets owned by OpCo (solely with respect to the Corporate
Taxpayer) at the time of an Exchange (such time, the “Exchange Date”) by reason
of the Exchange and the receipt of payments under this Agreement;

WHEREAS, the income, gain, loss, expense and other Tax (as defined below) items
of the Corporate Taxpayer may be affected by (i) the Basis Adjustment (as
defined below) and (ii) Imputed Interest (as defined below); and

--------------------------------------------------------------------------------

WHEREAS, the parties to this Agreement desire to make certain arrangements with
respect to the effect of the Basis Adjustment and Imputed Interest on the actual
liability for Taxes of the Corporate Taxpayer.

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

ARTICLE I

DEFINITIONS

Section 1.01 Definitions.

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

“Actual Tax Liability” means, with respect to any Taxable Year, the actual
liability for U.S. federal, state and local income Taxes of (i) the Corporate
Taxpayer and (ii) without duplication, OpCo, but only with respect to Taxes
imposed on OpCo and allocable to the Corporate Taxpayer (or to the other members
of the consolidated group of which the Corporate Taxpayer is the parent) for
such Taxable Year.

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

“Agreed Rate” means a per annum rate of LIBOR plus 100 basis points.

“Applicable Member” means any Member to whom any portion of a Realized Tax
Benefit may be Attributable under this Agreement.

“Attributable” means, with respect to any Applicable Member, the portion of any
Realized Tax Benefit of the Corporate Taxpayer that is “attributable” to such
Applicable Member, which shall be determined by reference to the assets from
which arise the depreciation, amortization or other similar deductions for
recovery of cost or basis (“Depreciation”) and with respect to increased basis
upon a disposition of an asset or Imputed Interest that produce the Realized Tax
Benefit, under the following principles:

(i) A portion of any Realized Tax Benefit arising from a deduction to the
Corporate Taxpayer with respect to a Taxable Year for Depreciation arising in
respect of a Basis Adjustment to a Reference Asset resulting from an Exchange is
Attributable to the Applicable Member to the extent that the ratio of all
Depreciation for the Taxable Year in respect of Basis Adjustments resulting from
all Exchanges by the Applicable Member bears to the aggregate of all
Depreciation for the Taxable Year in respect of Basis Adjustments resulting from
all Exchanges by the Applicable Members (in each case, other than with respect
to the portion of the Basis Adjustment described in clause (ii) below).

 

2

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(ii) A portion of any Realized Tax Benefit arising from a deduction to the
Corporate Taxpayer with respect to a Taxable Year for Depreciation arising in
respect of a Basis Adjustment to a Reference Asset resulting from a payment
hereunder is Attributable to the Applicable Member that receives such payment.

(iii) A portion of any Realized Tax Benefit arising from the disposition of a
Reference Asset is Attributable to the Applicable Member to the extent that the
ratio of all Basis Adjustments (to the extent not previously taken into account
in the calculation of Realized Tax Benefits) resulting from all Exchanges by the
Applicable Member with respect to such Reference Asset bears to the aggregate of
all Basis Adjustments (to the extent not previously taken into account in the
calculation of Realized Tax Benefits) with respect to such Reference Asset.

(iv) A portion of any Realized Tax Benefit arising from a deduction to the
Corporate Taxpayer with respect to a Taxable Year in respect of Imputed Interest
is Attributable to the Applicable Member to the extent corresponding to amounts
that such Member is required to include in income in respect of Imputed Interest
(without regard to whether such Member is actually subject to tax thereon).

(v) A portion of any Realized Tax Benefit arising from a carryover or carryback
of any Tax item is Attributable to such Member to the extent such carryover or
carryback is attributable to or available for use because of the prior use of
the Basis Adjustments or Imputed Interest with respect to which a Realized Tax
Benefit would be Attributable to such Member pursuant to clauses (i)–(iv) above.

Portions of any Realized Tax Detriment shall be Attributed to Members under
principles similar to those described in clauses (i)–(v) above.

“Basis Adjustment” means the adjustment to the tax basis of a Reference Asset
under Sections 732, 755 and 1012 of the Code and the Treasury Regulations
promulgated thereunder (in situations where, as a result of one or more
Exchanges, OpCo becomes an entity that is disregarded as separate from its owner
for U.S. federal income tax purposes) or under Sections 743(b) and 755 of the
Code and the Treasury Regulations promulgated thereunder (in situations where,
following an Exchange, OpCo remains in existence as an entity for U.S. federal
income tax purposes) and, in each case, comparable sections of state and local
tax laws, as a result of (i) an Exchange and (iii) the payments made pursuant to
the Tax Receivable Agreements. For the avoidance of doubt, the amount of any
Basis Adjustment resulting from an Exchange of one or more Common Units shall be
determined without regard to any Pre-Exchange Transfer of such Common Units and
as if any such Pre-Exchange Transfer had not occurred.

A “Beneficial Owner” of a security is a Person who directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares: (i) voting power, which includes the power to vote, or to direct the
voting of, such security and/or (ii) investment power, which includes the power
to dispose of, or to direct the disposition of, such security.

 

3

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“Blended Rate” means, with respect to any Taxable Year, the sum of the effective
rates of tax imposed on the aggregate net income of the Corporate Taxpayer in
each state or local jurisdiction in which the Corporate Taxpayer files Tax
Returns for such Taxable Year, with the maximum effective rate in any state or
local jurisdiction being equal to the product of: (i) the apportionment factor
on the income or franchise Tax Return filed by the Corporate Taxpayer in such
jurisdiction for such Taxable Year, and (ii) the maximum applicable corporate
tax rate in effect in such jurisdiction in such Taxable Year. As an illustration
of the calculation of Blended Rate for a Taxable Year, if the Corporate Taxpayer
solely files Tax Returns in State 1 and State 2 in a Taxable Year, the maximum
applicable corporate tax rates in effect in such states in such Taxable Year are
6% and 5%, respectively and the apportionment factors for such states in such
Taxable Year are 60% and 40%, respectively, then the Blended Rate for such
Taxable Year is equal to 5.6% (i.e., 6% times 60% plus 5% times 40%).

“Board” means the board of directors of the Corporate Taxpayer.

“Business Day” shall have the meaning ascribed to such term in the LLC
Agreement.

“Change of Control” means the occurrence of any of the following events:

(i) any Person or any group of Persons acting together which would constitute a
“group” for purposes of Section 13(d) of the Securities and Exchange Act of
1934, or any successor provisions thereto, excluding (x) a corporation or other
entity owned, directly or indirectly, by the stockholders of the Corporate
Taxpayer in substantially the same proportions as their ownership of stock in
the Corporate Taxpayer and (y) any Member or any of its Affiliates who is or
becomes the Beneficial Owner, directly or indirectly, of securities of the
Corporate Taxpayer representing more than 50% of the combined voting power of
the Corporate Taxpayer’s then outstanding voting securities; or

(ii) the following individuals cease to constitute a majority of the number of
directors of the Corporate Taxpayer then serving: individuals who, on the IPO
Date, constitute the Board and any new director whose appointment or election by
the Board or nomination for election by the Corporate Taxpayer’s shareholders
was approved or recommended by a vote of at least a majority of the directors
then still in office who either were directors 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 (ii); or

(iii) there is consummated a merger or consolidation of the Corporate Taxpayer
with any other corporation or other entity, and, immediately after the
consummation of such merger or consolidation, either (x) the Board immediately
prior to the merger or consolidation does 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) the voting
securities of the Corporate Taxpayer immediately prior to such merger or
consolidation 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 merger or consolidation or, if the surviving
company is a Subsidiary, the ultimate parent thereof; or

 

4

--------------------------------------------------------------------------------

(iv) the shareholders of the Corporate Taxpayer approve a plan of complete
liquidation or dissolution of the Corporate Taxpayer or there is consummated an
agreement or series of related agreements for the sale or other disposition,
directly or indirectly, by the Corporate Taxpayer of all or substantially all of
the Corporate Taxpayer’s assets, other than such sale or other disposition by
the Corporate Taxpayer of all or substantially all of the Corporate Taxpayer’s
assets to an entity, at least 50% of the combined voting power of the voting
securities of which are owned by shareholders of the Corporate Taxpayer in
substantially the same proportions as their ownership of the Corporate Taxpayer
immediately prior to such sale.

Notwithstanding the foregoing, except with respect to clause (ii) and clause
(iii)(x) above, a “Change of 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 record holders of the shares of the
Corporate Taxpayer immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in,
and own substantially all of the shares of, an entity which owns all or
substantially all of the assets of the Corporate Taxpayer immediately following
such transaction or series of transactions.

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

“Corporate Taxpayer Return” means the U.S. federal and/or state and/or local Tax
Return, as applicable, of the Corporate Taxpayer filed with respect to Taxes of
any Taxable Year.

“Cumulative Net Realized Tax Benefit” for a Taxable Year means the cumulative
amount of Realized Tax Benefits for all Taxable Years of the Corporate Taxpayer,
up to and including such Taxable Year, net of the cumulative amount of Realized
Tax Detriments for the same period. The Realized Tax Benefit and Realized Tax
Detriment for each Taxable Year shall be determined based on the most recent Tax
Benefit Schedule or Amended Schedule, if any, in existence at the time of such
determination.

“Default Rate” means a per annum rate of LIBOR plus 500 basis points.

“Determination” shall have the meaning ascribed to such term in Section 1313(a)
of the Code or similar provision of state and local tax law, as applicable, or
any other event (including the execution of IRS Form 870-AD) that finally and
conclusively establishes the amount of any liability for Tax and shall also
include the acquiescence of the Corporate Taxpayer to the amount of any assessed
liability for Tax.

“Direct Exchange” is defined in the recitals to this Agreement.

“Early Termination Date” means the date of an Early Termination Notice for
purposes of determining the Early Termination Payment.

 

5

--------------------------------------------------------------------------------

“Early Termination Rate” means a per annum rate of the lesser of (i) 6.5% per
annum, compounded annually, and (ii) LIBOR plus 100 basis points.

“Exchange” is defined in the recitals to this Agreement.

“Governmental Authority” has the meaning set forth in the LLC Agreement.

“Hypothetical Federal Tax Liability” means, with respect to any Taxable Year,
the liability for U.S. federal income Taxes of (i) the Corporate Taxpayer and
(ii) without duplication, OpCo, but only with respect to U.S. federal income
Taxes imposed on OpCo and allocable to the Corporate Taxpayer (or to the other
members of the consolidated group of which the Corporate Taxpayer is the
parent), in each case using the same methods, elections, conventions and similar
practices used on the relevant Corporate Taxpayer Return, but (w) using the
Non-Stepped Up Tax Basis as reflected on the applicable Exchange Basis Schedule,
including amendments thereto for the Taxable Year, (x) excluding any deduction
attributable to Imputed Interest for the Taxable Year, (y) deducting the
Hypothetical Other Tax Liability (rather than any amount for state, local or
foreign tax liabilities) for such Taxable Year and (z) without taking into
account the carryover or carryback of any Tax item (or portions thereof) that is
attributable to or (without duplication) available for use because of the prior
use of any of the Basis Adjustments or Imputed Interest.

“Hypothetical Other Tax Liability” means, with respect to any Taxable Year, U.S.
federal taxable income determined in connection with calculating the
Hypothetical Federal Tax Liability for such Taxable Year (determined without
regard to clause (y) thereof) multiplied by the Blended Rate for such Taxable
Year.

“Hypothetical Tax Liability” means, with respect to any Taxable Year, the
Hypothetical Federal Tax Liability for such Taxable Year, plus the Hypothetical
Other Tax Liability for such Taxable Year.

“Imputed Interest” shall mean any interest imputed under Section 1272, 1274 or
483 or other provision of the Code and any similar provision of state and local
tax law with respect to the Corporate Taxpayer’s payment obligations under this
Agreement.

“IPO” means the initial public offering of Class A Common Stock of the Corporate
Taxpayer.

“IPO Date” means the closing date of the IPO.

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

“LIBOR” means during any period, the rate which appears on the Bloomberg Page
BBAM1 (or on such other substitute Bloomberg page that displays rates at which
U.S. dollar deposits are offered by leading banks in the London interbank
deposit market), or the rate which is quoted by another source selected by the
Corporation as an authorized information vendor for the purpose of displaying
rates at which U.S. dollar deposits are offered by leading banks in the London
interbank deposit market (a “Alternate Source”), at approximately 11:00

 

6

--------------------------------------------------------------------------------

a.m., London time, two (2) Business Days prior to the first day of such period
as the London interbank offered rate for U.S. dollars having a borrowing date
and a maturity comparable to such period (or if there shall at any time, for any
reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any
LIBOR Alternate Source, a comparable replacement rate determined by the
Corporation at such time, which determination shall be conclusive absent
manifest error; provided, that at no time shall LIBOR be less than 0%

“LLC Agreement” means the Amended and Restated Limited Liability Company
Agreement of OpCo, dated as of the date hereof.

“Market Value” shall mean the closing price of the Class A Common Stock on the
applicable Exchange Date on the national securities exchange or interdealer
quotation system on which such Class A Common Stock is then traded or listed, as
reported by the Wall Street Journal; provided, that if the closing price is not
reported by the Wall Street Journal for the applicable Exchange Date, then the
Market Value shall mean the closing price of the Class A Common Stock on the
Business Day immediately preceding such Exchange Date on the national securities
exchange or interdealer quotation system on which such Class A Common Stock is
then traded or listed, as reported by the Wall Street Journal; provided,
further, that if the Class A Common Stock is not then listed on a national
securities exchange or interdealer quotation system, the Market Value shall mean
the cash consideration paid for Class A Common Stock, or the fair market value
of the other property delivered for Class A Common Stock, as determined by the
Board in good faith.

“Non-Stepped Up Tax Basis” means, with respect to any Reference Asset at any
time, the Tax basis that such asset would have had at such time if no Basis
Adjustments had been made.

“Payment Date” means any date on which a payment is required to be made pursuant
to this Agreement.

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

“Pre-Exchange Transfer” means any transfer or distribution in respect of one or
more Common Units (i) that occurs prior to an Exchange of such Common Units, and
(ii) to which Section 743(b) or 734(b) of the Code applies.

“Realized Tax Benefit” means, for a Taxable Year, the excess, if any, of the
Hypothetical Tax Liability over the Actual Tax Liability. If all or a portion of
the Actual Tax Liability for such Taxable Year arises as a result of an audit or
similar proceeding by a Taxing Authority of any Taxable Year, such liability
shall not be included in determining the Realized Tax Benefit unless and until
there has been a Determination with respect to such Actual Tax Liability.

“Realized Tax Detriment” means, for a Taxable Year, the excess, if any, of the
Actual Tax Liability over the Hypothetical Tax Liability. If all or a portion of
the Actual Tax

 

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Liability for such Taxable Year arises as a result of an audit or similar
proceeding by a Taxing Authority of any Taxable Year, such liability shall not
be included in determining the Realized Tax Detriment unless and until there has
been a Determination with respect to such Actual Tax Liability.

“Redemption” has the meaning in the recitals to this Agreement.

“Reference Asset” means an asset that is held by OpCo, or by any of its direct
or indirect subsidiaries, if any, treated as a partnership or disregarded entity
for purposes of the applicable Tax, at the time of an Exchange. A Reference
Asset also includes any asset that is “substituted basis property” under
Section 7701(a)(42) of the Code with respect to a Reference Asset.

“Schedule” means any of the following: (i) an Exchange Basis Schedule, (ii) a
Tax Benefit Schedule, or (iii) the Early Termination Schedule.

“Subsidiaries” shall have the meaning ascribed to such term in the LLC
Agreement.

“Subsidiary Stock” means any stock or other equity interest in any Subsidiary of
the Corporate Taxpayer that is (i) treated as a corporation for U.S. federal
income tax purposes and (ii) a member of an affiliated or consolidated group of
corporations that files a consolidated income tax return pursuant to Sections
1501 et seq. of the Code with respect to which the Corporate Taxpayer is a
member.

“Tax Return” means any return, declaration, report or similar statement required
to be filed with respect to Taxes (including any attached schedules), including
any information return, claim for refund, amended return and declaration of
estimated Tax.

“Taxable Year” means a taxable year of the Corporate Taxpayer as defined in
Section 441(b) of the Code or comparable section of state or local tax law, as
applicable (and, therefore, for the avoidance of doubt, may include a period of
less than 12 months for which a Tax Return is made), ending on or after the IPO
Date.

“Taxes” means any and all taxes, assessments or similar charges that are based
on or measured with respect to net income or profits, and any interest related
to such Tax.

“Taxing Authority” shall mean any domestic, federal, national, state, county or
municipal or other local government, any subdivision, agency, commission or
authority thereof, or any quasi-governmental body exercising any taxing
authority or any other authority exercising Tax regulatory authority.

“Treasury Regulations” means the final, temporary and proposed regulations under
the Code promulgated from time to time (including corresponding provisions and
succeeding provisions) as in effect for the relevant taxable period.

 

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“Valuation Assumptions” shall mean, as of an Early Termination Date, the
assumptions that (1) in each Taxable Year ending on or after such Early
Termination Date, the Corporate Taxpayer will have taxable income sufficient to
fully utilize the deductions arising from the Basis Adjustments and Imputed
Interest during such Taxable Year or future Taxable Years (including, for the
avoidance of doubt, Basis Adjustments and Imputed Interest that would result
from future Tax Benefit Payments that would be paid in accordance with the
Valuation Assumptions) in which such deductions would become available, (2) the
U.S. federal income tax rates and state and local income tax rates that will be
in effect for each such Taxable Year will be those specified for each such
Taxable Year by the Code and other law as in effect on the Early Termination
Date, (3) any loss or credit carryovers generated by deductions arising from
Basis Adjustments or Imputed Interest that are available as of such Early
Termination Date will be utilized by the Corporate Taxpayer on a pro rata basis
from the Early Termination Date through the scheduled expiration date or, if
there is no scheduled expiration date, the twentieth anniversary of the
generation of such loss or credit carryovers, (4) any non-amortizable assets
(other than Subsidiary Stock) will be disposed of on the fifteenth anniversary
of the applicable Basis Adjustment; provided, that in the event of a Change of
Control, such non-amortizable assets shall be deemed disposed of at the time of
sale of the relevant asset (if earlier than such fifteenth anniversary), (5) any
Subsidiary Stock will be deemed never to be disposed of and (6) if, at the Early
Termination Date, there are Common Units that have not been Exchanged, then each
such Common Unit shall be deemed to be Exchanged for the product of (i) the
Market Value of the Class A Common Stock on the Early Termination Date and
(ii) the number of shares of Class A Common Stock that would be transferred in
respect of such Common Unit if the Exchange occurred on the Early Termination
Date.

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

 

Term

  

Section

Agreement

   Preamble

Amended Schedule

   2.03(b)

Class A Common Stock

   Recitals

Code

   Recitals

Common Units

   Recitals

Corporate Taxpayer

   Preamble

Dispute

   7.03(a)

Early Termination Effective Date

   4.02

Early Termination Notice

   4.02

Early Termination Payment

   4.03(b)

Early Termination Schedule

   4.02

e-mail

   7.01

Exchange Basis Schedule

   2.01

Exchange Date

   Recitals

Expert

   7.09

Interest Amount

   3.01(b)

Material Objection Notice

   4.02

Members

   Preamble

Net Tax Benefit

   3.01(b)

Objection Notice

   2.03(a)

OpCo

   Recitals

 

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Term

  

Section

Reconciliation Dispute

   7.09

Reconciliation Procedures

   2.03(a)

Senior Obligations

   5.01

Tax Benefit Payment

   3.01(b)

Tax Benefit Schedule

   2.02(a)

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

ARTICLE II

DETERMINATION OF REALIZED TAX BENEFIT

Section 2.01 Basis Adjustment. Within 120 calendar days after the filing of the
U.S. federal income tax return of the Corporate Taxpayer for each Taxable Year
in which any Exchange has been effected by any Member, the Corporate Taxpayer
shall deliver to each such Member a schedule (the “Exchange Basis Schedule”)
that shows, in reasonable detail necessary to perform the calculations required
by this Agreement, including with respect to each Exchanging party, (i) the
Non-Stepped Up Tax Basis of the Reference Assets as of each applicable Exchange
Date, (ii) the Basis Adjustments with respect to the Reference Assets as a
result of each Exchange effected in such Taxable Year, calculated (x) in the
aggregate, and (y) solely with respect to Exchanges by such Member, (iii) the
period (or periods) over which the Reference Assets are amortizable and/or
depreciable and (iv) the period (or periods) over which each Basis Adjustment is
amortizable and/or depreciable. For the avoidance of doubt, payments made under
this Agreement shall not be treated as resulting in a Basis Adjustment to the
extent such payments are treated as Imputed Interest.

 

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Section 2.02 Realized Tax Benefit and Realized Tax Detriment.

(a) Tax Benefit Schedule. Within 120 calendar days after the filing of the U.S.
federal income tax return of the Corporate Taxpayer for any Taxable Year in
which any Exchange has been effected by a Member or which is subsequent to any
Taxable Year in which any Exchange has been effected by a Member, the Corporate
Taxpayer shall provide to such Member a schedule showing, in reasonable detail,
the calculation of the Realized Tax Benefit or Realized Tax Detriment and the
portion Attributable to such Member for such Taxable Year (a “Tax Benefit
Schedule”). The Tax Benefit Schedule will become final as provided in Section
2.03(a) and may be amended as provided in Section 2.03(b) (subject to the
procedures set forth in Section 2.03(b)).

(b) Applicable Principles. The Realized Tax Benefit or Realized Tax Detriment
for each Taxable Year is intended to measure the decrease or increase in the
Actual Tax Liability of the Corporate Taxpayer for such Taxable Year
attributable to the Basis Adjustments and Imputed Interest, determined using a
“with and without” methodology. For the avoidance of doubt, the Actual Tax
Liability will take into account the deduction of the portion of the Tax Benefit
Payment that must be accounted for as interest under the Code based upon the
characterization of Tax Benefit Payments as additional consideration payable by
the Corporate Taxpayer for the Common Units acquired in an Exchange. Carryovers
or carrybacks of any Tax item attributable to the Basis Adjustment or Imputed
Interest shall be considered to be subject to the rules of the Code and the
Treasury Regulations or the appropriate provisions of U.S. state and local
income and franchise tax law, as applicable, governing the use, limitation and
expiration of carryovers or carrybacks of the relevant type. If a carryover or
carryback of any Tax item includes a portion that is attributable to the Basis
Adjustment or Imputed Interest and another portion that is not, such portions
shall be considered to be used in accordance with the “with and without”
methodology. The parties agree that (i) all Tax Benefit Payments attributable to
the Basis Adjustments (other than amounts accounted for as interest under the
Code) will (A) be treated as subsequent upward purchase price adjustments that
give rise to further Basis Adjustments to Reference Assets for the Corporate
Taxpayer and (B) have the effect of creating additional Basis Adjustments to
Reference Assets for the Corporate Taxpayer in the year of payment, and (ii) as
a result, such additional Basis Adjustments will be incorporated into the
current year calculation and into future year calculations, as appropriate.

Section 2.03 Procedures, Amendments.

(a) Procedure. Every time the Corporate Taxpayer delivers to a Member an
applicable Schedule under this Agreement, including any Amended Schedule
delivered pursuant to Section 2.03(b) and any Early Termination Schedule or
amended Early Termination Schedule, the Corporate Taxpayer shall also
(x) deliver to such Member schedules and work papers, as determined by the
Corporate Taxpayer or requested by such Member, providing reasonable detail
regarding the preparation of the Schedule and (y) allow such Member reasonable
access to the appropriate representatives at the Corporate Taxpayer, as
determined by the Corporate Taxpayer, in connection with a review of such
Schedule. Without limiting the application of the preceding sentence, each time
the Corporate Taxpayer delivers to a Member a Tax Benefit Schedule, in addition
to the Tax Benefit Schedule duly completed, the Corporate Taxpayer shall deliver
to such Member the Corporate Taxpayer Return, the reasonably detailed
calculation by the Corporate Taxpayer of the Hypothetical Tax Liability, the
reasonably detailed calculation by the Corporate Taxpayer of the Actual Tax
Liability, as well as any other

 

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work papers as determined by the Corporate Taxpayer or requested by such Member,
provided that the Corporate Taxpayer shall be entitled to redact any information
that it reasonably believes is unnecessary for purposes of determining the items
in the applicable Schedule or amendment thereto. An applicable Schedule or
amendment thereto shall become final and binding on the applicable Member and
the Corporate Taxpayer thirty (30) calendar days from the first date on which
the Member has received the applicable Schedule or amendment thereto unless such
Member (i) within thirty (30) calendar days after receiving an applicable
Schedule or amendment thereto, provides the Corporate Taxpayer with notice of a
material objection to such Schedule (“Objection Notice”) made in good faith or
(ii) provides a written waiver of such right of any Objection Notice within the
period described in clause (i) above, in which case such Schedule or amendment
thereto becomes binding on the date the waiver is received by the Corporate
Taxpayer. If the applicable Member and the Corporate Taxpayer for any reason,
are unable to successfully resolve the issues raised in the Objection Notice
within thirty (30) calendar days after receipt by the Corporate Taxpayer of an
Objection Notice, the Corporate Taxpayer and the applicable Member shall employ
the reconciliation procedures as described in Section 7.09 (the “Reconciliation
Procedures”).

(b) Amended Schedule. The applicable Schedule for any Taxable Year may be
amended from time to time by the Corporate Taxpayer (i) in connection with a
Determination affecting such Schedule, (ii) to correct inaccuracies in the
Schedule identified as a result of the receipt of additional factual information
relating to a Taxable Year after the date the Schedule was provided to the
applicable Member, (iii) to comply with the Expert’s determination under the
Reconciliation Procedures, (iv) to reflect a change in the Realized Tax Benefit
or Realized Tax Detriment for such Taxable Year attributable to a carryback or
carryforward of a loss or other tax item to such Taxable Year, (v) to reflect a
change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable
Year attributable to an amended Tax Return filed for such Taxable Year, or
(vi) to adjust the Exchange Basis Schedule to take into account payments made
pursuant to this Agreement (any such Schedule, an “Amended Schedule”). The
Corporate Taxpayer shall provide an Amended Schedule to each relevant Member
within thirty (30) calendar days of the occurrence of an event referenced in
clauses (i) through (vi) of the preceding sentence.

ARTICLE III

TAX BENEFIT PAYMENTS

Section 3.01 Payments.

(a) Within five (5) Business Days after all of the Tax Benefit Schedules (as
defined in each of the Tax Receivable Agreements) with respect to a Taxable Year
delivered to any Member become final in accordance with Section 2.03(a), the
Corporate Taxpayer shall pay to each Member for such Taxable Year the Tax
Benefit Payment in the amount determined pursuant to Section 3.01(b). Each such
Tax Benefit Payment to a Member shall be made by wire transfer of immediately
available funds to the bank account previously designated by such Member to the
Corporate Taxpayer or as otherwise agreed by the Corporate Taxpayer and such
Member. For the avoidance of doubt, no Tax Benefit Payment shall be made in
respect of estimated tax payments, including federal estimated income tax
payments.

 

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Notwithstanding any provision of this Agreement to the contrary, any Member may
elect with respect to any Exchange to limit the aggregate Tax Benefit Payments
made to such Member in respect of any such Exchange to a specified percentage of
the amount equal to the sum of (A) the cash, excluding any Tax Benefit Payments,
and (B) the Market Value of the Class A Shares received by such Member on such
Exchange (or such other limitation selected by the Member and consented to by
the Corporate Taxpayer, which consent shall not be unreasonably withheld). The
Member shall exercise its rights under the preceding sentence by notifying the
Corporate Taxpayer in writing of its desire to impose such a limit and the
specified percentage (or such other limitation selected by the Member) and such
other details as may be necessary (including whether such limit includes the
Imputed Interest in respect of any such Exchange) in such manner and at such
time (but in no event later than the date of any such Exchange) as reasonably
directed by the Corporate Taxpayer; provided, however, that, in the absence of
such direction, the Member shall give such written notice in the same manner as
is required by Section 7.01 of this Agreement contemporaneously with Member’s
notice to the Corporate Taxpayer of the applicable Exchange.

(b) A “Tax Benefit Payment” means, with respect to a Member, an amount, not less
than zero, equal to the sum of the amount of the Net Tax Benefit Attributable to
such Member and the related Interest Amount. For the avoidance of doubt, for Tax
purposes, the Interest Amount shall not be treated as interest but instead shall
be treated as additional consideration for the acquisition of Common Units in
Exchanges, unless otherwise required by law. Subject to Section 3.03(a), the
“Net Tax Benefit” for a Taxable Year shall be an amount equal to the excess, if
any, of 85% of the Cumulative Net Realized Tax Benefit as of the end of such
Taxable Year over the total amount of Tax Benefit Payments previously made under
this Section 3.01 (excluding payments attributable to Interest Amounts);
provided, for the avoidance of doubt, that such Member shall not be required to
return any portion of any previously made Tax Benefit Payment. The “Interest
Amount” shall equal the interest on the amount of the Net Tax Benefit
Attributable to such Member calculated at the Agreed Rate from the due date
(without extensions) for filing the Corporate Taxpayer Return with respect to
Taxes for such Taxable Year until the Payment Date of the applicable Tax Benefit
Payment. Notwithstanding the foregoing, for each Taxable Year ending on or after
the date of a Change of Control, all Tax Benefit Payments, whether paid with
respect to the Common Units that were Exchanged (i) prior to the date of such
Change of Control or (ii) on or after the date of such Change of Control, shall
be calculated by utilizing Valuation Assumptions (1), (3), (4) and (5),
substituting in each case the terms “the closing date of a Change of Control”
for an “Early Termination Date.” Notwithstanding anything to the contrary in
this Agreement, after any lump-sum payment under Article IV of this Agreement in
respect of present or future Tax attributes subject to this Agreement, the Tax
Benefit Payment, Net Tax Benefit and components thereof shall be calculated
without taking into account any such attributes or any such lump-sum payment.

Section 3.02 No Duplicative Payments. It is intended that the provisions of this
Agreement will not result in duplicative payment of any amount (including
interest) required under this Agreement. The provisions of this Agreement shall
be construed in the appropriate manner to ensure such intentions are realized.

 

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Section 3.03 Pro Rata Payments.

(a) Notwithstanding anything in Section 3.01 to the contrary, to the extent that
the aggregate tax benefit of the Corporate Taxpayer’s reduction in Tax liability
as a result of the Basis Adjustments and Imputed Interest under this Agreement
is limited in a particular Taxable Year because the Corporate Taxpayer does not
have sufficient taxable income to fully utilize available deductions and other
attributes, the limitation on the tax benefit for the Corporate Taxpayer shall
be allocated among the Members in proportion to the respective amounts of Tax
Benefit Payments that would have been determined under this Agreement if the
Corporate Taxpayer had sufficient taxable income so that there were no such
limitation; provided, that for purposes of allocating among the Members the
aggregate Tax Benefit Payments under this Agreement with respect to any Taxable
Year, the operation of this Section 3.03(a) with respect to any prior Taxable
Year shall be taken into account, it being the intention of the Corporate
Taxpayer and the Members for each Member to receive, in the aggregate, Tax
Benefit Payments in proportion to the aggregate Net Tax Benefits Attributable to
such Member had this Section 3.03(a) never operated.

(b) After taking into account Section 3.03(a), if for any reason the Corporate
Taxpayer does not fully satisfy its payment obligations to make all Tax Benefit
Payments due under this Agreement in respect of a particular Taxable Year, then
the Corporate Taxpayer and the Members agree that (i) the Corporate Taxpayer
shall pay the same proportion of each Tax Benefit Payment due under this
Agreement in respect of such Taxable Year, without favoring one obligation over
the other, and (ii) no Tax Benefit Payment shall be made in respect of any
Taxable Year until all Tax Benefit Payments in respect of prior Taxable Years
have been made in full.

(c) To the extent the Corporate Taxpayer makes a payment to a Member in respect
of a particular Taxable Year under Section 3.01(a) of this Agreement (taking
into account Section 3.03(a) and (b), but excluding payments attributable to
Interest Amounts) in excess of the amount of such payment that should have been
made to such Member in respect of such Taxable Year, then (i) such Member shall
not receive further payments under Section 3.01(a) until such Member has
foregone an amount of payments equal to such excess and (ii) the Corporate
Taxpayer shall pay the amount of such Member’s foregone payments to the other
Members in a manner such that each of the other Members, to the maximum extent
possible, shall have received aggregate payments under Section 3.01(a) of this
Agreement (excluding payments attributable to Interest Amounts) in the amount it
would have received if there had been no excess payment to such Member.

ARTICLE IV

TERMINATION

Section 4.01 Termination, Early Termination and Breach of Agreement.

(a) Unless terminated earlier pursuant to Section 4.01(b) or Section 4.01(c),
this Agreement will terminate when there is no further potential for a Tax
Benefit Payment pursuant to this Agreement. Tax Benefit Payments under this
Agreement are not conditioned on any Member retaining an interest in the
Corporate Taxpayer or OpCo (or any successor thereto).

 

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(b) The Corporate Taxpayer may terminate this Agreement with respect to all
amounts payable to the Members and with respect to all of the Common Units held
(or previously held and Exchanged) by all Members at any time by paying to each
Member the Early Termination Payment in respect of such Member; provided,
however, that this Agreement shall only terminate pursuant to this
Section 4.01(b) upon the receipt of the Early Termination Payment by all
Members; and provided, further, that the Corporate Taxpayer may withdraw any
notice to exercise its termination rights under this Section 4.01(b) prior to
the time at which any Early Termination Payment has been paid. Upon payment of
the Early Termination Payment by the Corporate Taxpayer in accordance with this
Section 4.01(b), neither the Members nor the Corporate Taxpayer shall have any
further payment obligations under this Agreement, other than for any (1) Tax
Benefit Payment agreed to by the Corporate Taxpayer and a Member as due and
payable but unpaid as of the Early Termination Notice and (2) Tax Benefit
Payment due for the Taxable Year ending with or including the date of the Early
Termination Notice (except to the extent that the amount described in clause
(2) is included in the Early Termination Payment). If an Exchange occurs after
the Corporate Taxpayer makes the Early Termination Payment pursuant to this
Section 4.01(b), the Corporate Taxpayer shall have no obligations under this
Agreement with respect to such Exchange.

(c) In the event that the Corporate Taxpayer breaches any of its material
obligations under this Agreement, whether as a result of failure to make any
payment when due, failure to honor any other material obligation required
hereunder or by operation of law as a result of the rejection of this Agreement
in a case commenced under the Bankruptcy Code or otherwise, then all obligations
hereunder shall be accelerated and such obligations shall be calculated as if an
Early Termination Notice had been delivered on the date of such breach and shall
include, but not be limited to, (1) the Early Termination Payment calculated as
if an Early Termination Notice had been delivered on the date of a breach,
(2) any Tax Benefit Payment agreed to by the Corporate Taxpayer and any Members
as due and payable but unpaid as of the date of a breach, and (3) any Tax
Benefit Payment due for the Taxable Year ending with or including the date of a
breach; provided that procedures similar to the procedures of Section 4.02 shall
apply with respect to the determination of the amount payable by the Corporate
Taxpayer pursuant to this sentence. Notwithstanding the foregoing, in the event
that the Corporate Taxpayer breaches this Agreement, each Member shall be
entitled to elect to receive the amounts set forth in clauses (1), (2) and
(3) above or to seek specific performance of the terms hereof. The parties agree
that the failure to make any payment due pursuant to this Agreement within three
months of the date such payment is due shall be deemed to be a breach of a
material obligation under this Agreement for all purposes of this Agreement, and
that it will not be considered to be a breach of a material obligation under
this Agreement to make a payment due pursuant to this Agreement within three
months of the date such payment is due. Notwithstanding anything in this
Agreement to the contrary, it shall not be a breach of this Agreement if the
Corporate Taxpayer fails to make any payment due pursuant to this Agreement when
due to the extent the Corporate Taxpayer has insufficient funds to make such
payment despite using reasonable best efforts to obtain funds to make such
payment (including by causing OpCo or any other Subsidiaries to distribute or
lend funds for such payment); provided that the interest provisions of
Section 5.02 shall apply to such late payment (unless the Corporate Taxpayer
does not have sufficient cash to make such payment as a result of limitations
imposed by debt agreements to which the Corporate Taxpayer or any of its
Subsidiaries is a party, in which case Section 5.02 shall apply, but the Default
Rate shall be replaced by the Agreed Rate);

 

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provided, further, that the Corporate Taxpayer shall promptly (and in any event,
within two (2) Business Days), pay all such unpaid payments, together with
accrued and unpaid interest thereon, immediately following such time that the
Corporate Taxpayer has, and to the extent the Corporate Taxpayer has, sufficient
funds to make such payment, and the failure of the Corporate Taxpayer to do so
shall constitute a breach of this Agreement. For the avoidance of doubt, all
cash and cash equivalents used or to be used to pay dividends by, or repurchase
equity securities of, the Corporate Taxpayer shall be deemed to be funds
sufficient and available to pay such unpaid payments, together with any accrued
and unpaid interest thereon.

Section 4.02 Early Termination Notice. If the Corporate Taxpayer chooses to
exercise its right of early termination under Section 4.01(b) above, the
Corporate Taxpayer shall deliver to each Member notice of such intention to
exercise such right (“Early Termination Notice”) and a schedule (the “Early
Termination Schedule”) specifying the Corporate Taxpayer’s intention to exercise
such right and showing in reasonable detail the calculation of the Early
Termination Payment for such Member. The Early Termination Schedule shall become
final and binding on such Member thirty (30) calendar days from the first date
on which such Member has received such Schedule or amendment thereto unless such
Member (i) within thirty (30) calendar days after receiving the Early
Termination Schedule, provides the Corporate Taxpayer with notice of a material
objection to such Schedule made in good faith (“Material Objection Notice”) or
(ii) provides a written waiver of such right of a Material Objection Notice
within the period described in clause (i) above, in which case such Schedule
becomes binding on the date the waiver is received by the Corporate Taxpayer
(such thirty (30) calendar day date as modified, if at all, by clauses (i) or
(ii), the “Early Termination Effective Date”). If the Corporate Taxpayer and
such Member, for any reason, are unable to successfully resolve the issues
raised in such notice within thirty (30) calendar days after receipt by the
Corporate Taxpayer of the Material Objection Notice, the Corporate Taxpayer and
such Member shall employ the Reconciliation Procedures.

Section 4.03 Payment upon Early Termination.

(a) Within three (3) Business Days after the Early Termination Effective Date,
the Corporate Taxpayer shall pay to each Member an amount equal to the Early
Termination Payment in respect of such Member. Such payment shall be made by
wire transfer of immediately available funds to a bank account or accounts
designated by such Member or as otherwise agreed by the Corporate Taxpayer and
such Member.

(b) “Early Termination Payment” in respect of a Member shall equal the present
value, discounted at the Early Termination Rate as of the Early Termination
Effective Date, of all Tax Benefit Payments in respect of such Member that would
be required to be paid by the Corporate Taxpayer beginning from the Early
Termination Date and assuming that the Valuation Assumptions are applied.

 

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ARTICLE V

SUBORDINATION AND LATE PAYMENTS

Section 5.01 Subordination. Notwithstanding any other provision of this
Agreement to the contrary, any Tax Benefit Payment or Early Termination Payment
required to be made by the Corporate Taxpayer to any Member under this Agreement
shall rank subordinate and junior in right of payment to any principal, interest
or other amounts due and payable in respect of any obligations in respect of
indebtedness for borrowed money of the Corporate Taxpayer and its Subsidiaries
(“Senior Obligations”) and shall rank pari passu with all current or future
unsecured obligations of the Corporate Taxpayer that are not Senior Obligations.

Section 5.02 Late Payments by the Corporate Taxpayer. The amount of all or any
portion of any Tax Benefit Payment or Early Termination Payment not made to the
applicable Member when due under the terms of this Agreement shall be payable
together with any interest thereon, computed at the Default Rate and commencing
from the date on which such Tax Benefit Payment or Early Termination Payment was
due and payable, subject to Section 4.01(c).

ARTICLE VI

NO DISPUTES; CONSISTENCY; COOPERATION

Section 6.01 Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters.
Except as otherwise provided herein, the Corporate Taxpayer shall have full
responsibility for, and sole discretion over, all Tax matters concerning the
Corporate Taxpayer and OpCo, including the preparation, filing or amending of
any Tax Return and defending, contesting or settling any issue pertaining to
Taxes. Notwithstanding the foregoing, the Corporate Taxpayer shall notify a
Member of, and keep such Member reasonably informed with respect to, the portion
of any audit of the Corporate Taxpayer and OpCo by a Taxing Authority the
outcome of which is reasonably expected to affect the rights and obligations of
such Member under this Agreement, and shall provide to such Member reasonable
opportunity to provide information and other input (at such Member’s own
expense) to the Corporate Taxpayer, OpCo and their respective advisors
concerning the conduct of (but, for the avoidance of doubt such Member may not
control) any such portion of such audit; provided, however, that the Corporate
Taxpayer and OpCo shall not be required to take any action that is inconsistent
with any provision of the LLC Agreement.

Section 6.02 Consistency. The Corporate Taxpayer and the Members agree to report
and cause to be reported for all purposes, including federal, state and local
Tax purposes and financial reporting purposes, all Tax-related items (including
the Basis Adjustments and each Tax Benefit Payment) in a manner consistent with
that specified by the Corporate Taxpayer in any Schedule required to be provided
by or on behalf of the Corporate Taxpayer under this Agreement unless otherwise
required by law. Any dispute as to required Tax or financial reporting shall be
subject to Section 7.09.

Section 6.03 Cooperation. Each of the Corporate Taxpayer and each Member shall
(a) furnish to the other party in a timely manner such information, documents
and other materials as the other party may reasonably request for purposes of
making any determination or computation necessary or appropriate under this
Agreement, preparing any Tax Return or contesting or defending any audit,
examination or controversy with any Taxing Authority, (b) make itself available
to the other party and its representatives to provide explanations of documents
and materials and such other information as the other party or its
representatives may reasonably request in connection with any of the matters
described in clause (a) above, and (c) reasonably cooperate in connection with
any such matter, and the Corporate Taxpayer shall reimburse the applicable
Member for any reasonable third-party costs and expenses incurred pursuant to
this Section 6.03.

 

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ARTICLE VII

MISCELLANEOUS

Section 7.01 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission and
electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is
requested and received) and shall be given to such party as set forth below, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice:

If to the Corporate Taxpayer, to:

Goosehead Insurance, Inc.

1500 Solana Blvd

Building 4, Suite 4500

Westlake, Texas 76262

Attention: Ryan Langston

E-mail: [***]

With copies (which shall not constitute notice) to:

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY 10017

Attention:      Richard D. Truesdell, Jr.

                       Michael Mollerus

E-mail:          [***]

                       [***]

If to the applicable Member, to the address, facsimile number or e-mail address
specified for such party on the Member Schedule to the LLC Agreement.

All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a
Business Day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed to have been received on the next succeeding
Business Day in the place of receipt.

Section 7.02 Binding Effect; Benefit; Assignment.

(a) The provisions of this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.
No provision of this Agreement is intended to confer any rights, benefits,
remedies, obligations or liabilities hereunder upon any Person other than the
parties hereto and their respective successors and assigns. The Corporate
Taxpayer shall require and cause any direct or indirect successor

 

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(whether by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporate Taxpayer, by
written agreement, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Corporate Taxpayer would be
required to perform if no such succession had taken place.

(b) A Member may assign any of its rights under this Agreement to any Person as
long as such transferee has executed and delivered, or, in connection with such
transfer, executes and delivers, a joinder to this Agreement, in form of Exhibit
A, agreeing to become a “Member” for all purposes of this Agreement, except as
otherwise provided in such joinder; provided, that a Member’s rights under this
Agreement shall be assignable by such Member under the procedure in this
Section 7.02(b) regardless of whether such Member continues to hold any
interests in OpCo or the Corporate Taxpayer or has fully transferred any such
interests.

Section 7.03 Resolution of Disputes.

(a) Except for Reconciliation Disputes subject to Section 7.09, any and all
disputes which cannot be settled amicably, including any ancillary claims of any
party, arising out of, relating to or in connection with the validity,
negotiation, execution, interpretation, performance or non-performance of this
Agreement (including the validity, scope and enforceability of this arbitration
provision) (each a “Dispute”) shall be finally settled by arbitration conducted
by a single arbitrator in Delaware in accordance with the then-existing Rules of
Arbitration of the International Chamber of Commerce. If the parties to the
Dispute fail to agree on the selection of an arbitrator within ten (10) days of
the receipt of the request for arbitration, the International Chamber of
Commerce shall make the appointment. The arbitrator shall be a lawyer admitted
to the practice of law in the State of Delaware and shall conduct the
proceedings in the English language. Performance under this Agreement shall
continue if reasonably possible during any arbitration proceedings.

(b) Notwithstanding the provisions of paragraph (a), the Corporate Taxpayer may
bring an action or special proceeding in any court of competent jurisdiction for
the purpose of compelling a party to arbitrate, seeking temporary or preliminary
relief in aid of an arbitration hereunder, and/or enforcing an arbitration award
and, for the purposes of this paragraph (b), each Member (i) expressly consents
to the application of paragraph (c) of this Section 7.03 to any such action or
proceeding, (ii) agrees that proof shall not be required that monetary damages
for breach of the provisions of this Agreement would be difficult to calculate
and that remedies at law would be inadequate, and (iii) irrevocably appoints the
Corporate Taxpayer as agent of such Member for service of process in connection
with any such action or proceeding and agrees that service of process upon such
agent, who shall promptly advise such Member of any such service of process,
shall be deemed in every respect effective service of process upon such Member
in any such action or proceeding.

(c) EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE CHANCERY
COURT OF THE STATE OF DELAWARE OR, IF SUCH COURT DECLINES JURISDICTION, THE
COURTS OF THE STATE OF DELAWARE SITTING IN WILMINGTON, DELAWARE, AND OF THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE SITTING IN WILMINGTON,

 

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DELAWARE, AND ANY APPELLATE COURT FROM ANY THEREOF, FOR THE PURPOSE OF ANY
JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION
7.03, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED
ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such
ancillary judicial proceedings include any suit, action or proceeding to compel
arbitration, to obtain temporary or preliminary judicial relief in aid of
arbitration, or to confirm an arbitration award. The parties acknowledge that
the fora designated by this paragraph (c) have a reasonable relation to this
Agreement, and to the parties’ relationship with one another.

(d) The parties hereby waive, to the fullest extent permitted by applicable law,
any objection which they now or hereafter may have to personal jurisdiction or
to the laying of venue of any such ancillary suit, action or proceeding brought
in any court referred to in the preceding paragraph of this Section 7.03 and
such parties agree not to plead or claim the same.

Section 7.04 Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. Until and unless
each party has received a counterpart hereof signed by the other party hereto,
this Agreement shall have no effect and no party shall have any right or
obligation hereunder (whether by virtue of any other oral or written agreement
or other communication).

Section 7.05 Entire Agreement. This Agreement and the other Reorganization
Documents (as such term is defined in the LLC Agreement) constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement. Nothing in this Agreement shall create any third-party beneficiary
rights in favor of any Person or other party hereto.

Section 7.06 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
Governmental Authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a determination, the parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the fullest
extent possible.

Section 7.07 Amendment. No provision of this Agreement may be amended unless
such amendment is approved in writing by the Corporate Taxpayer and by Persons
who would be entitled to receive at least two-thirds of the Early Termination
Payments payable to all Persons entitled to Early Termination Payments under
this Agreement if the Corporate Taxpayer had exercised its right of early
termination on the date of the most recent Exchange prior to such amendment
(excluding, for purposes of this sentence, all payments made to any Persons
pursuant to this Agreement since the date of such most recent Exchange);
provided, that no such amendment shall be effective if such amendment will have
a disproportionate effect on the payments certain Persons will or may receive
under the Tax Receivable Agreements unless all such Persons disproportionately
affected consent in writing to such amendment. No provision of this Agreement
may be waived unless such waiver is in writing and signed by the party against
whom the waiver is to be effective.

 

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Section 7.08 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of law rules of such State that would result in the application of the
laws of any other State.

Section 7.09 Reconciliation. In the event that the Corporate Taxpayer and a
Member are unable to resolve a disagreement with respect to the matters governed
by Sections 2.03, 3.01(b), 4.02 and 6.02 within the relevant period designated
in this Agreement (“Reconciliation Dispute”), the Reconciliation Dispute shall
be submitted for determination to a nationally recognized expert (the “Expert”)
in the particular area of disagreement mutually acceptable to both parties. The
Expert shall be a partner or principal in a nationally recognized accounting or
law firm, and unless the Corporate Taxpayer and such Member agree otherwise, the
Expert shall not, and the firm that employs the Expert shall not, have any
material relationship with the Corporate Taxpayer or such Member or other actual
or potential conflict of interest. If the parties are unable to agree on an
Expert within fifteen (15) calendar days of receipt by the respondent(s) of
written notice of a Reconciliation Dispute, the Expert shall be appointed by the
International Chamber of Commerce Centre for Expertise. The Expert shall resolve
any matter relating to the Exchange Basis Schedule or an amendment thereto or
the Early Termination Schedule or an amendment thereto within thirty
(30) calendar days and shall resolve any matter relating to a Tax Benefit
Schedule or an amendment thereto within fifteen (15) calendar days or as soon
thereafter as is reasonably practicable, in each case after the matter has been
submitted to the Expert for resolution. Notwithstanding the preceding sentence,
if the matter is not resolved before any payment that is the subject of a
disagreement would be due (in the absence of such disagreement) or any Tax
Return reflecting the subject of a disagreement is due, the undisputed amount
shall be paid on the date prescribed by this Agreement and such Tax Return may
be filed as prepared by the Corporate Taxpayer, subject to adjustment or
amendment upon resolution. The costs and expenses relating to the engagement of
such Expert or amending any Tax Return shall be borne by the Corporate Taxpayer,
except as provided in the next sentence. The Corporate Taxpayer and such Member
shall bear their own costs and expenses of such proceeding, unless (i) the
Expert substantially adopts such Member’s position, in which case the Corporate
Taxpayer shall reimburse such Member for any reasonable out-of-pocket costs and
expenses in such proceeding, or (ii) the Expert substantially adopts the
Corporate Taxpayer’s position, in which case such Member shall reimburse the
Corporate Taxpayer for any reasonable out-of-pocket costs and expenses in such
proceeding. Any dispute as to whether a dispute is a Reconciliation Dispute
within the meaning of this Section 7.09 shall be decided by the Expert. The
Expert shall finally determine any Reconciliation Dispute and the determinations
of the Expert pursuant to this Section 7.09 shall be binding on the Corporate
Taxpayer and such Member and may be entered and enforced in any court having
jurisdiction.

 

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Section 7.10 Withholding. The Corporate Taxpayer shall be entitled to deduct and
withhold from any payment payable pursuant to this Agreement such amounts as the
Corporate Taxpayer is required to deduct and withhold with respect to the making
of such payment under the Code or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld and paid over to the appropriate
Taxing Authority by the Corporate Taxpayer, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the applicable
Member.

Section 7.11 Admission of the Corporate Taxpayer into a Consolidated Group;
Transfers of Corporate Assets.

(a) If the Corporate Taxpayer is or becomes a member of an affiliated or
consolidated group of corporations that files a consolidated income tax return
pursuant to Sections 1501 et seq. of the Code or any corresponding provisions of
state or local law, then: (i) the provisions of this Agreement shall be applied
with respect to the group as a whole; and (ii) Tax Benefit Payments, Early
Termination Payments and other applicable items hereunder shall be computed with
reference to the consolidated taxable income of the group as a whole.

(b) If any entity that is obligated to make a Tax Benefit Payment or Early
Termination Payment hereunder transfers one or more assets to a corporation (or
a Person classified as a corporation for U.S. federal income tax purposes) with
which such entity does not file a consolidated tax return pursuant to
Section 1501 of the Code, such entity, for purposes of calculating the amount of
any Tax Benefit Payment or Early Termination Payment (e.g., calculating the
gross income of the entity and determining the Realized Tax Benefit of such
entity) due hereunder, shall be treated as having disposed of such asset in a
fully taxable transaction on the date of such contribution. The consideration
deemed to be received by such entity shall be equal to the fair market value of
the contributed asset. For purposes of this Section 7.11, a transfer of a
partnership interest shall be treated as a transfer of the transferring
partner’s share of each of the assets and liabilities of that partnership.

Section 7.12 Confidentiality. Section 12.11 (Confidentiality) of the LLC
Agreement as of the date of this Agreement shall apply to any information of the
Corporate Taxpayer provided to the Members and their assignees pursuant to this
Agreement.

Section 7.13 Change in Law. Notwithstanding anything herein to the contrary, if,
in connection with an actual or proposed change in law, a Member reasonably
believes that the existence of this Agreement could cause income (other than
income arising from receipt of a payment under this Agreement) recognized by
such Member (or direct or indirect equity holders in such Member) upon an
Exchange to be treated as ordinary income rather than capital gain (or otherwise
taxed at ordinary income rates) for U.S. federal income tax purposes or would
have other material adverse tax consequences to the Corporate Taxpayer or such
Member or any direct or indirect owner of a Member, then at the election of such
Member and to the extent specified by such Member, this Agreement (i) shall
cease to have further effect with respect to such Member, (ii) shall not apply
to an Exchange occurring after a date specified by such Member, or (iii) shall
otherwise be amended in a manner determined by such Member; provided, that such
amendment shall not result in an increase in payments under this Agreement to
such Member at any time as compared to the amounts and times of payments that
would have been due to such Member in the absence of such amendment.

 

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Section 7.14 Partnership Agreement. This Agreement shall be treated as part of
the partnership agreement of OpCo as described in Section 761(c) of the Code,
and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Corporate Taxpayer, OpCo, and each Member set forth
below have duly executed this Agreement as of the date first written above.

 

CORPORATE TAXPAYER: GOOSEHEAD INSURANCE, INC. By:  

 

  Name:   Title: OPCO: GOOSEHEAD FINANCIAL, LLC By:  

 

  Name:   Title:

[Signature Page to Tax Receivable Agreement]

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MEMBERS: MARK E. JONES By:  

 

  Name:   Title: ROBYN JONES By:  

 

  Name:   Title: MICHAEL C. COLBY By:  

 

  Name:   Title: JEFFREY SAUNDERS By:  

 

  Name:   Title:

THE MARK AND ROBYN JONES

DESCENDANTS TRUST 2014

By:  

 

  Name:   Title:

[Signature Page to Tax Receivable Agreement]

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LANNI ELAINE ROMNEY FAMILY TRUST 2014

By:  

 

  Name:   Title:

LINDY JEAN LANGSTON FAMILY TRUST 2014

By:  

 

  Name:   Title:

CAMILLE LAVAUN PETERSON FAMILY

TRUST 2014

By:  

 

  Name:   Title:

DESIREE ROBYN COLEMAN FAMILY TRUST 2014

By:  

 

  Name:   Title:

ADRIENNE MORGAN JONES FAMILY TRUST

2014

By:  

 

  Name:   Title:

[Signature Page to Tax Receivable Agreement]

--------------------------------------------------------------------------------

MARK EVAN JONES, JR. FAMILY TRUST 2014 By:  

 

  Name:   Title: THE ESTATE OF DOUG JONES By:  

 

  Name:   Title: LANNI ROMNEY By:  

 

  Name:   Title: LINDY LANGSTON By:  

 

  Name:   Title: CAMILLE PETERSON By:  

 

  Name:   Title: DESIREE COLEMAN By:  

 

  Name:   Title:

[Signature Page to Tax Receivable Agreement]

--------------------------------------------------------------------------------

ADRIENNE JONES By:  

 

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

 

  Name:   Title: COLBY 2014 FAMILY TRUST By:  

 

  Name:   Title: PRESTON MICHAEL COLBY 2014 TRUST By:  

 

  Name:   Title: LYLA KATE COLBY 2014 TRUST By:  

 

  Name:   Title:

[Signature Page to Tax Receivable Agreement]

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TEXAS WASATCH INSURANCE PARTNERS, L.P.

By its General Partner

By:  

 

  Name:   Title:

MAX AND DANE, LLC By:  

 

  Name:   Title:

EVAN AND JAKE, LLC

By:  

 

  Name:   Title:

[Signature Page to Tax Receivable Agreement]

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Exhibit A

Form of Joinder

This JOINDER (this “Joinder”) to the Tax Receivable Agreement (as defined
below), dated as of                     , by and among Goosehead Insurance,
Inc., a Delaware corporation (the “Corporate Taxpayer”), and
                     (“Permitted Transferee”).

WHEREAS, on                     , Permitted Transferee acquired (the
“Acquisition”) the right to receive any and all payments that may become due and
payable under the Tax Receivable Agreement with respect to      Common Units and
the corresponding shares of Class B Common Stock that were previously, or may in
the future be, Exchanged and are described in greater detail in Annex A to this
Joinder (collectively, “Interests” and, together with all other interests
hereinafter acquired by the Permitted Transferee from Transferor, the “Acquired
Interests”) from                      (“Transferor”); and

WHEREAS, Transferor, in connection with the Acquisition, has required Permitted
Transferee to execute and deliver this Joinder pursuant to Section 7.02(b) of
the Tax Receivable Agreement, dated as of [ ], 2018, by and among the Corporate
Taxpayer and each Member (as defined therein) (the “Tax Receivable Agreement”).

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

Section 1.01 Definitions. To the extent capitalized words used in this Joinder
are not defined in this Joinder, such words shall have the respective meanings
set forth in the Tax Receivable Agreement.

Section 1.02 Joinder. Permitted Transferee hereby acknowledges and agrees to
become a “Member” (as defined in the Tax Receivable Agreement) for all purposes
of the Tax Receivable Agreement. Permitted Transferee hereby acknowledges the
terms of Section 7.02(b) of the Tax Receivable Agreement and agrees to be bound
by Section 7.12 of the Tax Receivable Agreement.

Section 1.03 Notice. Any notice, request, consent, claim, demand, approval,
waiver or other communication hereunder to Permitted Transferee shall be
delivered or sent to Permitted Transferee at the address set forth on the
signature page hereto in accordance with Section 7.01 of the Tax Receivable
Agreement.

Section 1.04 Governing Law. This Joinder shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of law rules of such State that would result in the application of the
laws of any other State.

IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by
Permitted Transferee as of the date first above written.

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[PERMITTED TRANSFEREE] By:  

 

  Name:   Title: Address for notices:

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Exhibit X

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STOCKHOLDERS AGREEMENT

AGREEMENT, dated as of May 1, 2018 among Mark E. Jones, Robyn Jones, Michael C.
Colby, Jeffrey Saunders, The Mark and Robyn Jones Descendants Trust 2014, The
Lanni Elaine Romney Family Trust 2014, The Lindy Jean Langston Family Trust
2014, The Camille LaVaun Peterson Family Trust 2014, The Desiree Robyn Coleman
Family Trust 2014, The Adrienne Morgan Jones Family Trust 2014, The Mark Evan
Jones, Jr. Family Trust 2014, Serena Jones, Lanni Romney, Lindy Langston,
Camille Peterson, Desiree Coleman, Adrienne Jones, Mark E. Jones, Jr., The Colby
2014 Family Trust, The Preston Michael Colby 2014 Trust, The Lyla Kate Colby
2014 Trust and Texas Wasatch Insurance Partners, L.P. (each, together with his,
her or its permitted transferees pursuant to Section 8.02(c) of the Amended and
Restated Limited Liability Company Agreement of Goosehead Financial, LLC, a
“Holder,” and together, the “Holders”) and Goosehead Insurance, Inc. (“Pubco”).

WHEREAS, Pubco intends to consummate an initial public offering (the “IPO”) of
its Class A Common Stock, par value $0.01 per share (“Class A Common Stock”);

WHEREAS, in connection with the IPO, Pubco will become the managing member of
Goosehead Financial, LLC (the “Company”) and, pursuant to a reorganization
agreement, immediately prior to the IPO, the Holders and the other holders of
equity in the Company will receive new units (the “LLC Units”) in the Company,
with the exception of Pubco and its wholly-owned subsidiaries, and an equivalent
number of shares of Class B Common Stock, par value $0.01 per share, of Pubco
(the “Class B Common Stock,” and together with the Class A Common Stock, the
“Common Stock”); and

WHEREAS, the Holders desire to effect an agreement that during any period
following the completion of the IPO where the Holders meet the Substantial
Ownership Requirement (as defined below), approval by the Holders will be
required for certain corporate actions.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE 1

STOCKHOLDER RIGHTS AND RESTRICTIONS

Section 1.01. Approval for Certain Corporate Actions. Until the Substantial
Ownership Requirement is no longer met, Pubco shall not permit the occurrence of
the following matters relating to Pubco without first receiving the approval of
the Holders holding a majority of the shares of Class B Common Stock held by the
Holders as evidenced by a written resolution or consent in lieu thereof:

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(a) any transaction or series of related transactions resulting in the merger,
consolidation or sale of all, or substantially all, of the assets of the Company
and its subsidiaries, or any acquisition or disposition of any asset for
consideration in excess of 15% of the Total Assets (as defined below) of Pubco
and its subsidiaries;

(b) any issuance of equity securities, or any other ownership interests, of
Pubco or any of its subsidiaries, other than under any equity incentive plan
that has received the prior approval of the Board of Directors (as defined
below), for consideration exceeding $50 million;

(c) any amendments to the certificate of incorporation or bylaws of Pubco;

(d) entering into any material new line of business (other than natural
extensions of the business of Pubco and its subsidiaries) or making any material
modification to the scope of Pubco’s business;

(e) any change in the size of the Board of Directors;

(f) any hiring, termination, replacement, compensation, benefits or other
significant decisions relating to the Chief Executive Officer, Chief Financial
Officer, Chief Operating Officer, General Counsel or Controller, including
entering into new employment agreements or modifying existing employment
agreements, adopting or modifying any plans relating to any incentive securities
or employee benefit plans or granting incentive securities or benefits to any
such individuals under any existing plans; or

(g) any agreement or commitment with respect to any of the foregoing.

Section 1.02. Transfers. No Holder shall sell, transfer or otherwise dispose of
Class B Common Stock, except for transfers (i) pursuant to a Disposition Event
(as such term is defined in the certificate of incorporation of Pubco) pursuant
to Section 8.02(a) of the Amended and Restated Limited Liability Company
Agreement of the Company; (ii) as approved in writing pursuant to
Section 8.02(b) of the Amended and Restated Limited Liability Company Agreement
of the Company or (iii) to a permitted transferee pursuant to Section 8.02(c) of
the Amended and Restated Limited Liability Company Agreement of the Company.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE HOLDERS

Section 2.01. Corporation Authorization. Each Holder that is not a natural
person represents and warrants to each of the other Holders and Pubco that such
Holder is validly organized and existing under the laws of its state of

 

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organization and has all requisite power and authority to execute and deliver
this Agreement, to perform fully its obligations hereunder and to consummate the
transactions contemplated hereby, and that this Agreement constitutes the valid
and binding agreement of such Holder.

Section 2.02. Non-Contravention. Each Holder represents and warrants to each of
the other Holders and Pubco that the execution, delivery and performance by such
Holder of this Agreement and the consummation of the transactions contemplated
hereby do not and will not (i) if such Holder is not a natural person,
contravene or conflict with, or constitute a violation of, any organizational
documents of such Holder; (ii) contravene or conflict with, or constitute a
violation of, any material applicable law or any material agreement or order
binding on such Holder; or (iii) result in the imposition of any Lien (as
defined below) on any asset of such Holder.

Section 2.03. Ownership of Shares of Common Stock. Each Holder represents and
warrants to each of the other Holders and Pubco that such Holder is the record
and beneficial owner of all of the shares of Common Stock owned by them on the
date hereof, and that the shares of Common Stock owned by them on the date
hereof are owned free of any and all liens, charges, security interests,
options, claims, mortgages, pledges, proxies, voting trusts or agreements,
obligations, understandings or arrangements or other restrictions on title or
transfer of any nature whatsoever (collectively, “Liens”) and any other
limitation or restriction (including any restriction on the right to vote or
otherwise dispose of the shares of Common Stock), other than transfer
restrictions under applicable securities laws. None of the shares of Common
Stock is subject to any voting trust or other agreement or arrangement with
respect to the voting of such shares of Common Stock.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF PUBCO

Pubco represents and warrants to each Holder that:

Section 3.01. Corporation Authorization. Pubco has been duly incorporated and is
validly existing under the laws of its state of incorporation and has all
requisite corporate power and authority to execute and deliver this Agreement,
to perform fully its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement constitutes the valid and binding agreement
of Pubco.

Section 3.02. Non-Contravention. The execution, delivery and performance by
Pubco of this Agreement and the consummation of the transactions contemplated
hereby do not and will not (i) contravene or conflict with, or constitute a
violation of, the organizational documents of Pubco; (ii) contravene or conflict
with, or constitute a violation of, any material applicable law or any material
agreement or order binding on Pubco; or (iii) result in the imposition of any
Lien on any asset of Pubco.

 

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ARTICLE 4

MISCELLANEOUS

Section 4.01. Other Definitional and Interpretative Provisions. Unless specified
otherwise, in this Agreement the obligations of any party consisting of more
than one person are joint and several. The words “hereof”, “herein” and
“hereunder” and words of like import used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof. References to Articles,
Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and
Schedules of this Agreement unless otherwise specified. All Exhibits and
Schedules annexed hereto or referred to herein are hereby incorporated in and
made a part of this Agreement as if set forth in full herein. Any capitalized
terms used in any Exhibit or Schedule but not otherwise defined therein, shall
have the meaning as defined in this Agreement. Any singular term in this
Agreement shall be deemed to include the plural, and any plural term the
singular. Whenever the words “include”, “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation”, whether or not they are in fact followed by those words or words of
like import. “Writing”, “written” and comparable terms refer to printing, typing
and other means of reproducing words (including electronic media) in a visible
form. References to any agreement or contract are to that agreement or contract
as amended, modified or supplemented from time to time in accordance with the
terms hereof and thereof. References to any Person (as defined below) include
the successors and permitted assigns of that Person. References from or through
any date mean, unless otherwise specified, from and including or through and
including, respectively.

Section 4.02. Additional Definitions.

(a) “Board of Directors” means the Board of Directors of Pubco.

(b) “Organization” means any corporation, partnership, joint venture or
enterprise, limited liability company, unincorporated association, trust,
estate, governmental entity or other entity or organization, and shall include
the successor (by merger or otherwise) of any entity or organization.

(c) “Person” means any natural person or Organization.

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

 

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(e) “Total Assets” of any Person means the consolidated total assets of such
Person and its subsidiaries, as determined in accordance with U.S. generally
accepted accounting principles, as shown on such Person’s most recent balance
sheet.

Section 4.03. Further Assurances. Each party to this Agreement, at any time and
from time to time upon the reasonable request of another party to this
Agreement, shall promptly execute and deliver, or cause to be executed and
delivered, all such further instruments and take all such further actions as may
be reasonably necessary or appropriate to confirm or carry out the purposes and
intent of this Agreement.

Section 4.04. Expenses. All costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense.

Section 4.05. Assignment. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided that no party may assign, delegate or otherwise transfer
any of its rights or obligations under this Agreement without the consent of the
other parties hereto, other than a transfer to (i) in the case of any Holder
that is not a natural person, any Person that is an affiliate of such Holder,
and (ii) in the case of any Holder that is a natural person, (A) any Person to
whom Class B Common Stock are Transferred from such Holder (1) by will or the
laws of descent and distribution or (2) by gift without consideration of any
kind; provided that, in the case of clause (2), such transferee is the spouse,
the lineal descendant, sibling, parent, heir, executor, administrator,
testamentary trustee, legatee or beneficiary of such Holder, (B) a trust that is
for the exclusive benefit of such Holder or its permitted transferees under
(A) above or (C) any institution qualified as tax-exempt under Section 501(c)(3)
of the Code.

Section 4.06. Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the law of the State of Delaware, without regard to
the conflicts of law rules of such state.

Section 4.07. Consent to Jurisdiction. The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the Delaware Chancery Court, and that
any cause of action arising out of this Agreement shall be deemed to have arisen
from a transaction of business in the State of Delaware, and each of the parties
hereby irrevocably consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any such suit,
action or

 

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proceeding in any such court or that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court.

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

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

Section 4.10. Counterparts. This Agreement may be executed (including by
facsimile transmission) with counterpart pages or in one or more counterparts,
each of which shall be deemed an original and all of which shall, taken
together, be considered one and the same agreement, it being understood that
both parties need not sign the same counterpart.

Section 4.11. Entire Agreement. This Agreement constitutes the entire agreement
and understanding among the parties hereto and supersedes all prior and
contemporaneous agreements and understanding, both oral and written, among the
parties hereto with respect to the subject matter hereof

Section 4.12. Amendments; Waiver Any provision of this Agreement may be amended
or waived if, but only if, such amendment or waiver is in writing and is signed,
in the case of an amendment, by each party to this Agreement or in the case of a
waiver, by the party against whom the waiver is to be effective.

Section 4.13. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement is not performed
in accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof in addition to any other remedy to
which they are entitled at law or in equity.

 

 

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Section 4.14. IPO Closing; Termination. This Agreement will automatically
terminate and be of no force and effect if the closing of the IPO does not occur
on or before May 1, 2018. This agreement will automatically terminate and be of
no force and effect when the Substantial Ownership Requirement is no longer met.

 

 

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

 

GOOSEHEAD INSURANCE, INC. By:  

 

  Name:   Title: MARK E. JONES By:  

 

  Name:   Title: ROBYN JONES By:  

 

  Name:   Title: MICHAEL C. COLBY By:  

 

  Name:   Title: JEFFREY SAUNDERS By:  

 

  Name:   Title:

[Signature Page to the Stockholders Agreement]

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THE MARK AND ROBYN JONES DESCENDANTS TRUST 2014

By:  

 

  Name:   Title:

LANNI ELAINE ROMNEY FAMILY TRUST 2014

By:  

 

  Name:   Title:

LINDY JEAN LANGSTON FAMILY TRUST 2014

By:  

 

  Name:   Title:

CAMILLE LAVAUN PETERSON FAMILY TRUST 2014

By:  

 

  Name:   Title:

DESIREE ROBYN COLEMAN FAMILY TRUST 2014

By:  

 

  Name:   Title:

[Signature Page to the Stockholders Agreement]

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ADRIENNE MORGAN JONES FAMILY TRUST 2014

By:  

 

  Name:   Title:

MARK EVAN JONES, JR. FAMILY TRUST 2014

By:  

 

  Name:   Title: SERENA JONES By:  

 

  Name:   Title: LANNI ROMNEY By:  

 

  Name:   Title: LINDY LANGSTON By:  

 

  Name:   Title:

[Signature Page to the Stockholders Agreement]

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CAMILLE PETERSON By:  

 

  Name:   Title: DESIREE COLEMAN By:  

 

  Name:   Title: ADRIENNE JONES By:  

 

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

 

  Name:   Title: COLBY 2014 FAMILY TRUST By:  

 

  Name:   Title:

[Signature Page to the Stockholders Agreement]

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PRESTON MICHAEL COLBY 2014 TRUST By:  

 

  Name:   Title: LYLA KATE COLBY 2014 TRUST By:  

 

  Name:   Title:

TEXAS WASATCH INSURANCE PARTNERS, L.P.

By its General Partner By:  

 

  Name:   Title:

[Signature Page to the Stockholders Agreement]