Document:

Filed by Bowne Pure Compliance

Exhibit 10.5

NONQUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

COVERING OFFICER-EMPLOYEES OF

CSS INDUSTRIES, INC. AND ITS AFFILIATES

(Amended and Restated, Effective as of January 1, 2009)

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE I HISTORY AND PURPOSE OF THE PLAN
	 	 	1	 
	 
	 	 	 	 
	Section 1.01 History
	 	 	1	 
	 
	 	 	 	 
	Section 1.02 Purpose
	 	 	1	 
	 
	 	 	 	 
	Section 1.03 Employer Contributions Covered by the Plan
	 	 	1	 
	 
	 	 	 	 
	Section 1.04 Definitions
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II DEFINITIONS
	 	 	2	 
	 
	 	 		 
	Section 2.01 “Account(s)”
	 	 	2	 
	 
	 	 	 	 
	Section 2.02 “Beneficiary”
	 	 	2	 
	 
	 	 	 	 
	Section 2.03 “Beneficiary Designation Agreement”
	 	 	2	 
	 
	 	 	 	 
	Section 2.04 “Board”
	 	 	2	 
	 
	 	 	 	 
	Section 2.05 “Code”
	 	 	2	 
	 
	 	 	 	 
	Section 2.06 “Committee”
	 	 	2	 
	 
	 	 	 	 
	Section 2.07 “Compensation”
	 	 	2	 
	 
	 	 	 	 
	Section 2.08 “CSS”
	 	 	2	 
	 
	 	 	 	 
	Section 2.09 “Discretionary Contribution”
	 	 	2	 
	 
	 	 	 	 
	Section 2.10 “Discretionary Contribution Account”
	 	 	2	 
	 
	 	 	 	 
	Section 2.11 “Effective Date”
	 	 	2	 
	 
	 	 	 	 
	Section 2.12 “Eligible Employee”
	 	 	3	 
	 
	 	 	 	 
	Section 2.13 “Employee”
	 	 	3	 
	 
	 	 	 	 
	Section 2.14 “Employer”
	 	 	3	 
	 
	 	 	 	 
	Section 2.15 “Employer Contribution”
	 	 	3	 
	 
	 	 	 	 
	Section 2.16 “Employer Contribution Account”
	 	 	3	 
	 
	 	 		 
	Section 2.17 “ERISA”
	 	 	3	 
	 
	 	 	 	 
	Section 2.18 “Investment Funds”
	 	 	3	 
	 
	 	 	 	 
	Section 2.19 “Participant”
	 	 	3	 
	 
	 	 	 	 
	Section 2.20 “Plan”
	 	 	3	 
	 
	 	 	 	 
	Section 2.21 “Plan Year”
	 	 	4	 
	 
	 	 	 	 
	Section 2.22 “Prior CSS Contribution Account”
	 	 	4	 
	 
	 	 	 	 
	Section 2.23 “Prior CSS Contributions”
	 	 	4	 
	 
	 	 	 	 
	Section 2.24 “Prior Grandfathered CSS Contribution Account”
	 	 	4	 
	 
	 	 	 	 
	Section 2.25 “Prior Grandfathered CSS Contributions”
	 	 	4	 
	 
	 	 	 	 
	Section 2.26 “Prior CSS Plan”
	 	 	4	 
	 
	 	 		 

 

i

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 2.27 “Prior Subsidiary Contribution Account”
	 	 	4	 
	 
	 	 	 	 
	Section 2.28 “Prior Subsidiary Contributions”
	 	 	4	 
	 
	 	 	 	 
	Section 2.29 “Prior Grandfathered Subsidiary Contribution Account”
	 	 	4	 
	 
	 	 	 	 
	Section 2.30 “Prior Grandfathered Subsidiary Contributions”
	 	 	4	 
	 
	 	 	 	 
	Section 2.31 “Prior Subsidiary Plan”
	 	 	4	 
	 
	 	 	 	 
	Section 2.32 “Qualified Plan”
	 	 	5	 
	 
	 	 	 	 
	Section 2.33 “Qualified Plan Contribution”
	 	 	5	 
	 
	 	 	 	 
	Section 2.34 “Qualified Plan Contribution Percentage”
	 	 	5	 
	 
	 	 	 	 
	Section 2.35 “Release”
	 	 	5	 
	 
	 	 	 	 
	Section 2.36 “Separation Date”
	 	 	5	 
	 
	 	 	 	 
	Section 2.37 “Separation From Service”
	 	 	5	 
	 
	 	 	 	 
	Section 2.38 “Specified Employee”
	 	 	5	 
	 
	 	 	 	 
	Section 2.39 “Subsidiary”
	 	 	5	 
	 
	 	 	 	 
	ARTICLE III ADMINISTRATION OF THE PLAN AND DISCRETION
	 	 	6	 
	 
	 	 	 	 
	Section 3.01 Committee Authority
	 	 	6	 
	 
	 	 	 	 
	Section 3.02 Compensation and Expenses
	 	 	6	 
	 
	 	 	 	 
	Section 3.03 Indemnification
	 	 	6	 
	 
	 	 	 	 
	Section 3.04 Decisions of the Committee
	 	 	6	 
	 
	 	 	 	 
	ARTICLE IV PARTICIPATION
	 	 	6	 
	 
	 	 	 	 
	Section 4.01 Eligibility to Participate
	 	 	6	 
	 
	 	 	 	 
	Section 4.02 Procedure for and Effect of Admission
	 	 	7	 
	 
	 	 	 	 
	Section 4.03 Change in Status
	 	 	7	 
	 
	 	 	 	 
	ARTICLE V CONTRIBUTIONS
	 	 	7	 
	 
	 	 	 	 
	Section 5.01 Employer Contributions
	 	 	7	 
	 
	 	 	 	 
	Section 5.02 Discretionary Contributions
	 	 	7	 
	 
	 	 	 	 
	Section 5.03 Timing of Employer Contributions and Discretionary Contributions
	 	 	8	 
	 
	 	 	 	 
	ARTICLE VI ACCOUNTS
	 	 	8	 
	 
	 	 	 	 
	Section 6.01 Accounts
	 	 	8	 
	 
	 	 	 	 
	Section 6.02 Earnings (or Losses) on Accounts
	 	 	8	 
	 
	 	 	 	 
	Section 6.03 Investment Funds
	 	 	8	 
	 
	 	 	 	 
	Section 6.04 Change in Investment Funds
	 	 	8	 
	 
	 	 	 	 
	Section 6.05 Valuation of Account(s)
	 	 	9	 
	 
	 	 	 	 

 

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TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 6.06 Statement of Accounts
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VII VESTING
	 	 	9	 
	 
	 	 	 	 
	Section 7.01 Vesting of Employer Contributions
	 	 	9	 
	 
	 	 	 	 
	Section 7.02 Vesting of Discretionary Contributions
	 	 	9	 
	 
	 	 	 	 
	Section 7.03 Vesting of Prior CSS Contributions and Prior Subsidiary Contributions
	 	 	9	 
	 
	 	 	 	 
	Section 7.04 Vesting of Prior Grandfathered CSS Contributions and Prior
Grandfathered Subsidiary Contributions
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VIII DISTRIBUTIONS 
	 	 	10	 
	 
	 	 	 	 
	Section 8.01 Distribution from Employer Contribution Account, Discretionary
Contribution Account, Prior CSS Contribution Account and Prior Subsidiary
Account for Participants Who Are Not Deemed Specified Employees
	 	 	10	 
	 
	 	 	 	 
	Section 8.02 Distribution for Participants from Employer Contribution Account,
Discretionary Contribution Account, Prior CSS Contribution Account and Prior
Subsidiary Account Who Are Deemed Specified Employees
	 	 	10	 
	 
	 	 	 	 
	Section 8.03 Distribution for Participants from Prior Grandfathered CSS Contribution
Account and Prior Grandfathered Subsidiary Contribution Account
	 	 	10	 
	 
	 	 	 	 
	Section 8.04 Other Distribution Forms or Time
	 	 	10	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	11	 
	 
	 	 	 	 
	Section 9.01 Amendment and Termination
	 	 	11	 
	 
	 	 	 	 
	Section 9.02 Claims Procedures
	 	 	11	 
	 
	 	 	 	 
	Section 9.03 Designation of Beneficiary
	 	 	12	 
	 
	 	 	 	 
	Section 9.04 Limitation of Participant’s Right
	 	 	12	 
	 
	 	 	 	 
	Section 9.05 No Limitation on Employer Actions
	 	 	12	 
	 
	 	 	 	 
	Section 9.06 Obligations to Employer
	 	 	13	 
	 
	 	 	 	 
	Section 9.07 Nonalienation of Benefits
	 	 	13	 
	 
	 	 	 	 
	Section 9.08 Protective Provisions
	 	 	13	 
	 
	 	 	 	 
	Section 9.09 Withholding Taxes
	 	 	13	 
	 
	 	 	 	 
	Section 9.10 Unfunded Status of Plan
	 	 	13	 
	 
	 	 	 	 
	Section 9.11 Trust Fund
	 	 	13	 
	 
	 	 	 	 
	Section 9.12 Severability
	 	 	14	 
	 
	 	 	 	 
	Section 9.13 Successors
	 	 	14	 
	 
	 	 	 	 

 

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TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 9.14 Governing Law
	 	 	14	 
	 
	 	 	 	 
	Section 9.15 Headings
	 	 	14	 
	 
	 	 	 	 
	Section 9.16 Gender, Singular and Plural
	 	 	14	 
	 
	 	 	 	 
	Section 9.17 Notice
	 	 	14	 
	 
	 	 	 	 
	Section 9.18 Incapacity
	 	 	14	 
	 
	 	 	 	 
	Section 9.19 Section 409A
	 	 	14	 
	 
	 	 	 	 
	EXHIBIT A ELIGIBLE EMPLOYEES
	 	 	A-1	 
	 
	 	 	 	 
	EXHIBIT B PRIOR PLANS
	 	 	B-1	 
	 
	 	 	 	 

 

iv

 

NONQUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

COVERING OFFICER-EMPLOYEES OF

CSS INDUSTRIES, INC. AND ITS SUBSIDIARIES

ARTICLE I

HISTORY AND PURPOSE OF THE PLAN

Section 1.01 History. CSS previously adopted the Prior CSS Plan. In addition,
certain Subsidiaries of CSS previously adopted the Prior Subsidiary Plans. CSS has determined to
merge the Prior Subsidiary Plans with and into the Prior CSS Plan, effective as of January 1, 2009,
so that CSS sponsors one plan for itself and its participating Subsidiaries. The Prior CSS Plan
will be the surviving plan. In addition, CSS has determined to amend and restate the surviving
Prior CSS Plan, as merged with the Prior Subsidiary Plans, to incorporate the requirements of
section 409A of the Code and its corresponding regulations with respect to that portion of each
Participant’s Account that is subject to the requirements of section 409A of the Code, as well as
to make certain design changes that will be reflected in the surviving CSS Plan. This Plan
document shall reflect the terms and conditions of the surviving Prior CSS Plan, as amended and
restated, effective as of January 1, 2009. This Plan document covers any Participant who was
entitled to receive a benefit from the Prior CSS Plan or a Prior Subsidiary Plan as of December 31,
2008, but did not receive payment of his benefit under such plans as of such date, as well as any
individual who becomes a Participant in the Plan on or after January 1, 2009. Benefit payments
commencing prior to January 1, 2009 are governed by the terms of the Prior CSS Plan or Prior
Subsidiary Plans as they existed prior to January 1, 2009 and are either grandfathered from the
requirements of section 409A of the Code or payable pursuant to a fixed scheduled as required by,
and in compliance with, section 409A of the Code, with payments made between January 1, 2005 and
December 31, 2008 that are subject to the requirements of section 409A of the Code, such plans have
been operated in accordance with the transition relief established by the Treasury Department and
Internal Revenue Service pursuant to section 409A of the Code.

Section 1.02 Purpose. The purpose of the Plan, as amended and restated effective as
of the Effective Date, is to recognize the services provided by certain key employees and officers
of CSS and its Subsidiaries. The Plan is intended to make additional retirement benefits and
increased financial security available to the Participant’s on a tax-favored basis by providing
additional Employer contributions that cannot be made under the Qualified Plans of CSS and its
Subsidiaries due to certain restrictions applicable under the Code. CSS intends that the Plan
shall at all times be maintained on an unfunded basis for federal income tax purposes under the
Code and administered as a non-qualified “top-hat” plan exempt from the substantive requirements of
ERISA. CSS also intends that the Plan shall be maintained and operated in accordance with the
requirements of section 409A of the Code and its corresponding regulations, with respect to amounts
subject to such requirements.

Section 1.03 Employer Contributions Covered by the Plan. The Plan covers amounts
credited to Accounts on behalf of Participants that have not been fully distributed to Participants
prior to January 1, 2009.

Section 1.04 Definitions. All capitalized terms in this Article I shall have the
meanings ascribed to them in Article II below.

 

1

 

ARTICLE II

DEFINITIONS

For the purpose of this Plan, the following terms shall have the meanings indicated, unless the
context clearly indicates otherwise:

Section 2.01 “Account(s)” means the Employer Contribution Account, the Discretionary
Contribution Account, the Prior CSS Contribution Account, the Prior Subsidiary Contribution
Account, the Prior Grandfathered CSS Contribution Account and the Prior Grandfathered Subsidiary
Contribution Account, as applicable, maintained for a Participant pursuant to Article VI.

Section 2.02 “Beneficiary” means the person or persons designated as such in
accordance with Section 9.03.

Section 2.03 “Beneficiary Designation Agreement” means the agreement that the
Participant completes to designate his Beneficiary.

Section 2.04 “Board” means the Board of Directors of CSS.

Section 2.05 “Code” means the Internal Revenue Code of 1986, as amended from time to
time (or a successor law of comparable intent).

Section 2.06 “Committee” means the Human Resources Committee of the Board or its
delegate, or such other committee appointed by the Board to administer the Plan.

Section 2.07 “Compensation” means, for each Participant, compensation as defined by
the Qualified Plan to which such Participant participates and for which the Participant’s Qualified
Plan Contribution under such Qualified Plan is based, without regard to the compensation limitation
under section 401(a)(17)(A) of the Code, as adjusted in accordance with section 401(a)(17)(B) of
the Code.

Section 2.08 “CSS” means CSS Industries, Inc.

Section 2.09 “Discretionary Contribution” means an amount credited to a Participant’s
Discretionary Contribution Account in accordance with Section 5.02.

Section 2.10 “Discretionary Contribution Account” means the Account maintained for a
Participant to which Discretionary Contributions are credited pursuant to Section 5.02 for each
Plan Year on and after the Effective Date.

Section 2.11 “Effective Date” means January 1, 2009, the effective date of this
amendment and restatement of the Plan.

 

2

 

Section 2.12 “Eligible Employee” means an Employee who is a member of a group of “key
management or other highly compensated employees” of the Employer within the meaning of sections
201, 301 and 401 of ERISA, and who is designated by the Committee, based on recommendations from
the respective Employer, as eligible to participate in the Plan. Exhibit A lists those Employees
who are Eligible Employees as of the Effective Date and will be updated by the Committee to reflect
those Employees who become Eligible Employees after the Effective Date. The Committee may
prospectively determine that an Eligible Employee is no longer eligible to participate.

Section 2.13 “Employee” means any individual employed by the Employer on a full-time
basis as an employee.

Section 2.14 “Employer” means CSS and any Subsidiary which is authorized by the Board
to adopt the Plan as a participating employer and cover its Eligible Employees and whose
designation as such has become effective upon acceptance of such status by the Subsidiary. A
Subsidiary may revoke its acceptance as a participating employer in the Plan at any time, but until
such acceptance has been revoked, all of the provisions of the Plan and amendments thereto shall
apply to the Eligible Employees of the Subsidiary. In the event the designation is revoked by a
Subsidiary, the Plan shall be deemed terminated only with respect to such Subsidiary. The duties
and responsibilities of the “Employer” as they relate to a particular Participant shall be
satisfied by the Employer in the manner determined by CSS in accordance with the terms of the Plan.

Section 2.15 “Employer Contribution” means an amount credited to a Participant’s
Employer Contribution Account in accordance with Section 5.01.

Section 2.16 “Employer Contribution Account” means the Account maintained for a
Participant to which Employer Contributions are credited pursuant to Section 5.01 for each Plan
Year on and after the Effective Date.

Section 2.17 “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time (or a successor law of comparable intent).

Section 2.18 “Investment Funds” means the deemed investment options designated by the
Committee. Each Participant shall designate the Investment Funds pursuant to which deemed earnings
(losses) shall be credited to the Participant’s Account(s) in accordance with Article VI.

Section 2.19 “Participant” means each Eligible Employee who is designated as
participating in the Plan by the Committee or its designee and is participating in the Plan in
accordance with the provisions of Article IV. In the event of the death or incompetency of a
Participant, the term shall mean his Beneficiary, personal representative or guardian, as
applicable. An individual shall remain a Participant until that individual has received full
distribution of any amount credited to the Participant’s Account(s) under the Plan.

Section 2.20 “Plan” means this Nonqualified Supplemental Executive Retirement Plan
Covering Officer-Employees of CSS Industries, Inc. and Its Affiliates, as may be amended from time
to time.

 

3

 

Section 2.21 “Plan Year” means the twelve month period beginning on each January 1 and
ending on the following December 31.

Section 2.22 “Prior CSS Contribution Account” means the Account maintained for a
Participant to which were credited Prior CSS Contributions under the Prior CSS Plan.

Section 2.23 “Prior CSS Contributions” means any CSS contributions, plus deemed
earnings (and losses), credited pursuant to the Prior CSS Plan to a Participant’s account under
such plan that were not earned and vested as of December 31, 2004, and are now subject to this
Plan.

Section 2.24 “Prior Grandfathered CSS Contribution Account” means the Account
maintained for a Participant to which were credited Prior Grandfathered CSS Contributions under the
Prior CSS Plan.

Section 2.25 “Prior Grandfathered CSS Contributions” means any CSS contributions, plus
deemed earnings (and losses), credited pursuant to the Prior CSS Plan to a Participant’s account
under such plan that were earned and vested as of December 31, 2004, and are now subject to this
Plan.

Section 2.26 “Prior CSS Plan” means the Non-qualified Supplemental Executive
Retirement Plan covering Officers-Employees of CSS Industries, Inc. adopted pursuant to the prior
Policy Memorandum, as amended from time to time, and for which Prior CSS Contributions and Prior
Grandfathered CSS Contributions were made prior to the Effective Date.

Section 2.27 “Prior Subsidiary Contribution Account” means the Account maintained for
a Participant to which were credited Prior Subsidiary Contributions under the Prior Subsidiary
Plan.

Section 2.28 “Prior Subsidiary Contributions” means any Subsidiary contributions, plus
deemed earnings (and losses), credited pursuant to a Prior Subsidiary Plan to a Participant’s
account under such plan that were not earned and vested as of December 31, 2004, and are now
subject to this Plan.

Section 2.29 “Prior Grandfathered Subsidiary Contribution Account” means the Account
maintained for a Participant to which were credited Prior Grandfathered Subsidiary Contributions
under the Prior Subsidiary Plan.

Section 2.30 “Prior Grandfathered Subsidiary Contributions” means any CSS
contributions, plus deemed earnings (and losses), credited pursuant to a Prior Subsidiary Plan to a
Participant’s account under such plan that were earned and vested as of December 31, 2004, and are
now subject to this Plan.

Section 2.31 “Prior Subsidiary Plan” means each nonqualified deferred compensation
plan maintained by a Subsidiary pursuant to a Policy Memorandum, as amended from time to time, that
is listed on the attached Exhibit B and for which Prior Subsidiary Contributions and Prior
Grandfathered Subsidiary Contributions were made prior to the Effective Date.

 

4

 

Section 2.32 “Qualified Plan” means the qualified plan maintained by an Employer that
is intended to meet the requirements of section 401(k) of the Code and provides for discretionary
Employer contributions.

Section 2.33 “Qualified Plan Contribution” means the Employer’s discretionary
contribution to a Qualified Plan that is based solely on a percentage of the Participant’s eligible
compensation for purposes of the Qualified Plan and is not intended as either a matching
contribution or a qualified non-elective contribution under such Qualified Plan. For each Plan
Year, the Qualified Plan Contribution shall be equal to the percentage then used in deriving the
dollar amount approved by the Employer’s Board of Directors as the Employer’s Qualified Plan
Contribution to the Qualified Plan for such Plan Year.

Section 2.34 “Qualified Plan Contribution Percentage” means the percentage of the
Qualified Plan Contribution made by the Employer to the Qualified Plan for the Plan Year.

Section 2.35 “Release” means the release and discharge of the Employer and all
affiliated persons and entities from any and all claims, demands and causes of action relating to
the Participant’s employment with the Employer, other than as to any vested benefits to which the
Participant may be entitled under any Employer benefit plan, which will be in such form as may be
proscribed by the Employer, acting as plan sponsor and as a fiduciary, from time to time and with
such modifications as the Employer deems appropriate for a Participant’s individual situation.

Section 2.36 “Separation Date” means the date on which a Participant incurs a
Separation From Service.

Section 2.37 “Separation From Service” means a Participant’s separation from service
with the Employer within the meaning of section 409A of the Code and the regulations issued
thereunder.

Section 2.38 “Specified Employee” means any Participant who, at any time during the
twelve month period ending on the identification date (as determined by CSS or its delegate), is a
specified employee under section 409A of the Code, as determined by CSS (or its delegate). The
determination of “specified employees,” including the number and identity of persons considered
“specified employees” and identification date, shall be made by CSS (or its delegate) in accordance
with the provisions of sections 416(i) and 409A of the Code and the regulations issued thereunder.

Section 2.39 “Subsidiary” means any directly or indirectly affiliated subsidiary
corporation of CSS.

 

5

 

ARTICLE III

ADMINISTRATION OF THE PLAN AND DISCRETION

Section 3.01 Committee Authority. The Committee shall have full power and authority
to interpret the Plan, to prescribe, amend and rescind any rules, forms and procedures as it deems
necessary or appropriate for the proper administration of the Plan and to make any other
determinations, including factual determinations, and to take any other such actions as it deems
necessary or advisable in carrying out its duties under the Plan. All actions taken by the
Committee arising out of, or in connection with, the administration of the Plan or any rules
adopted thereunder, shall, in each case, lie within its sole discretion, and shall be final,
conclusive and binding upon the Employers, the Employees, the Participants, the Beneficiaries and
all other persons and entities having an interest therein.

Section 3.02 Compensation and Expenses. Members of the Committee shall serve without
compensation for their services unless otherwise determined by CSS. All expenses of administering
the Plan shall be paid by the Employer.

Section 3.03 Indemnification. CSS shall indemnify and hold harmless each member of
the Committee from any and all claims, losses, damages, expenses (including counsel fees) and
liability (including any amounts paid in settlement of any claim or any other matter with the
consent of CSS) arising from any act or omission of such member, except when the same is due to
gross negligence or willful misconduct.

Section 3.04 Decisions of the Committee. Any decisions, actions or interpretations to
be made under the Plan by the Committee acting on behalf of an Employer shall be made in its sole
discretion, not as a fiduciary and need not be uniformly applied to similarly situated individuals
and shall be final, binding and conclusive on all persons interested in the Plan. As a condition
of participating in the Plan, each Participant expressly acknowledges, through his participation in
the Plan, that all decisions and determinations of the Committee shall be final and binding on the
Participant, his Beneficiaries and any other person having or claiming an interest on behalf of a
Participant under the Plan.

ARTICLE IV

PARTICIPATION

Section 4.01 Eligibility to Participate. The rights of a Participant whose
participation in the Plan commenced prior to the Effective Date and who is entitled to receive a
benefit under the Prior CSS Plan and/or Prior Subsidiary Plan on December 31, 2008, but did not
receive payment of his benefit prior to the Effective Date, shall be a Participant in the Plan as
of the Effective Date and such Participant’s benefit shall be governed by the terms of the Plan as
set forth herein. Each other Employee shall become an Eligible Employee and therefore a
Participant on the date the Committee determines such Employee shall be an Eligible Employee for
purposes of the Plan; provided, however, that the effective date on which such Employee shall
become an Eligible Employee shall be the first Plan Year that follows the date on which the
individual is designated as an Eligible Employee for purposes of the Plan.

 

6

 

Section 4.02 Procedure for and Effect of Admission. Each Eligible Employee who
becomes eligible for admission to participation in the Plan shall be notified by the Committee as
soon as administratively practicable following the date the Committee has determined that the
Employee shall become an Eligible Employee but, in any event, prior to the Plan Year in which such
individual may first participate in the Plan. By becoming a Participant, each Eligible Employee
shall for all purposes be deemed conclusively to have assented to the terms of the Plan and to all
amendments thereto.

Section 4.03 Change in Status. A Participant who ceases to be employed as an Eligible
Employee (whether or not he is still employed in another capacity by the Employer or a
non-participating Subsidiary) shall no longer be eligible to participate in the Plan as an active
Participant for purposes of eligibility to receive Employer Contributions and Discretionary
Contributions until he again becomes an Eligible Employee, at which time he will again become an
active Participant for purposes of eligibility to receive Employer Contributions and Discretionary
Contributions, commencing with the first Plan Year that follows the date on which he again becomes
an Eligible Employee.

Section 4.04 Employer Contributions. Each Plan Year in which an Employer makes a
Qualified Plan Contribution to a Qualified Plan on behalf of a Participant, CSS shall credit to
such Participant’s Employer Contribution Account an amount that is equal to the product of (x) and
(y), where “(x)” is the sum of (i) Qualified Plan Contribution Percentage and (ii) the lesser of
(A) the Qualified Plan Contribution Percentage or (B) the greater of (I) 6.2% or (II) the old-age
insurance portion of the employer OASDI tax rate in effect at the beginning of the Plan Year
pursuant to section 3111(a) of the Code; and “(y)” is the difference between (a) such Participant’s
total Compensation for such Plan Year and (b) the compensation limit under section 401(a)(17)(A) of
the Code (for 2009, the limit is $245,000), as adjusted in accordance with section 401(a)(17)(B) of
the Code. Notwithstanding the immediately preceding sentence, if the Participant’s Compensation
for any Plan Year is equal to or less than the compensation limit under section 401(a)(17)(A) of
the Code, as adjusted in accordance with section 401(a)(17)(B) of the Code, for such Plan Year, no
Employer Contribution shall be made to the Participant’s Employer Contribution Account for such
Plan Year. For the avoidance of doubt, the amount, if any, that will be contributed to the
Participant’s Employer Contribution Account for a Plan Year pursuant to this Section will be solely
dependent on the Qualified Plan for which Participant participates in for the relevant Plan Year.
If no Qualified Plan Contribution is made to the Qualified Plan in which the Participant
participates during the Plan Year, the Participant shall not be eligible to receive an Employer
Contribution under this Plan for the Plan Year.

Section 4.05 Discretionary Contributions. After the end of each Plan Year, CSS may
credit, in its sole discretion, to each Participant’s Discretionary Contribution Account who CSS
has determined to credit a Discretionary Contribution an amount that will be based on a percentage
of such Participant’s Compensation that exceeds the contribution limitation (subject to applicable
COLA) imposed by section 401(a)(17) of the Code. An amount credited to a Participant’s
Discretionary Contribution Account pursuant to this Section 5.02 is purely discretionary and is in
the sole discretion of the Committee and is independent of any Employer Contribution, if any,
credited to a Participant pursuant to Section 5.01. If a Discretionary Contribution will be
credited for a Plan Year, the Committee shall determine, in its sole
discretion, which Participants shall be eligible for such Discretionary Contribution and the
relevant percentage for such Participant, which percentages need not be uniform among Participants.

 

7

 

Section 4.06 Timing of Employer Contributions and Discretionary Contributions.
Employer Contributions shall be credited to the Participant’s Employer Contribution Account at the
same time as Qualified Plan Contributions are credited to the Participant’s account under the
Qualified Plan. Discretionary Contributions shall be credited to the Participant’s Discretionary
Contribution Account at the time determined by the Committee in its sole discretion.

ARTICLE V

ACCOUNTS

Section 5.01 Accounts. CSS shall establish and maintain on behalf of each Employer
separate Accounts with respect to each Participant. A Participant’s Account(s) shall consist of
one or more of the following subaccounts: Employer Contribution Account, Discretionary
Contribution Account, Prior CSS Contribution Account, Prior Subsidiary Contribution Account, Prior
Grandfathered CSS Contribution Account and Prior Grandfathered Subsidiary Contribution Account.
The Participant’s Account(s) shall be reduced by the amount of any payments made by the Employer to
the Participant or the Participant’s Beneficiary pursuant to this Plan.

Section 5.02 Earnings (or Losses) on Accounts. A Participant’s Account(s) shall be
credited with all deemed earnings (or losses) generated by the Investment Funds elected by the
Participant from time to time. Participants may allocate the amounts credited to their Account(s)
among the Investment Funds available under the Plan only in whole percentages. The deemed rate of
return, positive or negative, credited under each Investment Fund is based upon the actual
investment performance of the corresponding investment portfolios that the Committee may designate
from time to time, and shall equal the total return of each such Investment Fund net of asset based
charges, including, without limitation, money management fees and fund expenses. The Committee
may, on a prospective basis, add to or delete any of the Investment Funds.

Section 5.03 Investment Funds. Notwithstanding that the rates of return credited to
Participants’ Account(s) are based upon the actual performance of the corresponding Investment
Funds as the Committee may designate, neither CSS nor any other Employer shall be obligated to
actually invest any amounts credited under this Plan in such Investment Funds or any other
Investment Funds.

Section 5.04 Change in Investment Funds. A Participant may change the Investment
Funds in which the amounts credited to his Account(s) are deemed to be allocated with whatever
frequency is determined by the Committee. Each such change may include (a) reallocation of the
amounts credited to the Participant’s existing Account(s) in whole percentages, and/or (b) change
in investment allocation of amounts to be credited to the Participant’s Account(s) in the future,
as the Participant may elect.

 

8

 

Section 5.05 Valuation of Account(s). The value of a Participant’s Accounts as of any
date shall equal the amounts theretofore credited to such Account(s), including any earnings
(positive or negative) deemed to be earned on each such Account(s) in accordance with Section
6.02, through the day preceding such date, less the amounts theretofore deducted from such
Accounts.

Section 5.06 Statement of Accounts. The Committee shall provide to each Participant,
not less frequently than annually, a statement in such form as the Committee deems desirable
setting forth the balance standing to the credit of each Participant in each Account.

ARTICLE VI

VESTING

Section 6.01 Vesting of Employer Contributions. A Participant shall become vested in
the Employer Contributions credited to his Employer Contribution Account for a Plan Year at the
same time he becomes vested in the Qualified Plan Contributions made to the Qualified Plan on his
behalf for such Plan Year.

Section 6.02 Vesting of Discretionary Contributions. A Participant shall be fully
vested in the Discretionary Contributions credited to his Discretionary Contribution Account for a
Plan Year.

Section 6.03 Vesting of Prior CSS Contributions and Prior Subsidiary Contributions. A
Participant shall become vested in the Prior CSS Contributions and the Prior Subsidiary
Contributions credited to his Prior CSS Contribution Account and Prior Subsidiary Contribution
Account for periods prior to the Effective Date at the time(s) such amounts would have become
vested under the terms of the Prior CSS Plan and Prior Subsidiary Plan, as applicable, immediately
prior to the Effective Date.

Section 6.04 Vesting of Prior Grandfathered CSS Contributions and Prior Grandfathered
Subsidiary Contributions. A Participant is fully vested in the Prior CSS Grandfathered
Contributions and the Prior Grandfathered Subsidiary Contributions credited to his Prior
Grandfathered CSS Contribution Account and Prior Grandfathered Subsidiary Contribution Account.

 

9

 

ARTICLE VII

DISTRIBUTIONS

Section 7.01 Distribution from Employer Contribution Account, Discretionary Contribution
Account, Prior CSS Contribution Account and Prior Subsidiary Account for Participants Who Are Not
Deemed Specified Employees. Any Participant who is not a Specified Employee at the time of his
Separation From Service shall receive a single sum distribution of the entire value of the vested
amounts credited to his Employer Contribution Account, Discretionary Contribution Account, Prior
CSS Contribution Account, and Prior Subsidiary Contribution Account, as applicable, under the Plan
within sixty (60) days following the Participant’s Separation Date. A distribution paid pursuant
to this Section 8.01 shall be paid by the Participant’s Employer and shall be made entirely in
cash.

Section 7.02 Distribution for Participants from Employer Contribution Account,
Discretionary Contribution Account, Prior CSS Contribution Account and Prior Subsidiary Account Who
Are Deemed Specified Employees. Any Participant who is a Specified Employee at the time of his
Separation From Service shall receive a single sum distribution of the entire value of the vested
amounts credited to his Employer Contribution Account, Discretionary Contribution Account, Prior
CSS Contribution Account, and Prior Subsidiary Contribution Account, as applicable, under the Plan
within sixty (60) days following the first day of the seventh month of the Participant’s Separation
Date. Notwithstanding the immediately preceding sentence, if a Participant has a Separation From
Service on account of his death or dies prior to the date the distribution would otherwise be made
in accordance with the immediately preceding sentence, the Participant’s Beneficiary shall receive
a single sum distribution of the entire value of the vested amount credited to the Participant’s
Employer Contribution Account, Discretionary Contribution Account, Prior CSS Contribution Account,
and Prior Subsidiary Contribution Account under the Plan within sixty (60) days following the date
of the Participant’s death. A distribution paid pursuant to this Section 8.02 shall be paid by the
Participant’s Employer and shall be made entirely in cash.

Section 7.03 Distribution for Participants from Prior Grandfathered CSS Contribution
Account and Prior Grandfathered Subsidiary Contribution Account. Any Participant who is
entitled to receive a distribution of the amounts credited to his Prior Grandfathered CSS
Contribution Account and Prior Grandfathered Subsidiary Contribution Account, as applicable, under
the Plan shall receive such distribution at the time(s) and in the form(s) as permitted under the
Prior CSS Plan and Prior Subsidiary Plan, as applicable; provided, however, that if the Participant
elects to receive his benefit in the form of a lump sum, such Participant must execute, and not
revoke, the Release. A distribution paid pursuant to this Section 8.03 shall be paid by the
Participant’s Employer and shall be made entirely in cash.

Section 7.04 Other Distribution Forms or Time. Except as provided in Section 8.03, no
other form(s) and/or time(s) of distribution are permitted under this Plan.

 

10

 

ARTICLE VIII

MISCELLANEOUS

Section 8.01 Amendment and Termination. The Plan may be amended, suspended,
discontinued or terminated at any time by the Committee; provided, however, that no such amendment,
suspension, discontinuance or termination shall reduce or in any manner adversely affect the rights
of any Participant with respect to benefits that are payable or may become payable under the Plan
based upon the balance of the Participant’s Account(s) as of the effective date of such amendment,
suspension, discontinuance or termination. Notwithstanding the foregoing, the Committee may make
all technical, administrative, regulatory and compliance amendments to the Plan that the Committee
deems necessary and appropriate so that the Plan meets the requirements of section 409A of the Code
and its corresponding regulations.

Section 8.02 Claims Procedures.

(a) Claim. A person who believes that he is being denied a benefit to which he is
entitled under the Plan (hereinafter referred to as a “Claimant”) may file a written
request for such benefit with the Committee, setting forth the claim.

(b) Claim Decision. Upon receipt of a claim, the Committee shall advise the Claimant
that a reply shall be forthcoming within 90 days and shall, in fact, deliver such reply within such
period. The Committee may, however, extend the reply period for an additional 90 days for
reasonable cause. If the claim is denied in whole or in part, the Claimant shall be provided a
written opinion, using language calculated to be understood by the Claimant, setting forth:

(i) The specific reason or reasons for such denial;

(ii) The specific reference to pertinent provisions of this Plan on which such denial is
based;

(iii) A description of any additional material or information necessary for the Claimant to
perfect his claim and an explanation why such material or such information is necessary;

(iv) Appropriate information as to the steps to be taken if the Claimant wishes to submit the
claim for review, including the time limits for requesting a review under subsection (c) and for
review under subsection (d) hereof; and

(v) The Claimant’s right to bring a civil action under section 502(a) of ERISA following an
adverse benefit determination on review.

(c) Request for Review. Within 60 days after the receipt by the Claimant of the
written opinion described above, the Claimant may request in writing that the Committee review the
determination of the Committee. The Claimant or his duly authorized representative
may, but need not, review the pertinent documents and submit issues and comments in writing
for consideration by the Committee. If the Claimant does not request a review of the initial
determination within such 60-day period, the Claimant shall be barred and stopped from challenging
the determination.

 

11

 

(d) Review of Decision. Within 60 days after the Committee’s receipt of a request for
review, it shall review the initial determination. After considering all materials presented by
the Claimant, the Committee shall render a written opinion, written in a manner calculated to be
understood by the Claimant, setting forth (i) the specific reason or reasons for the decision, (ii)
the specific references to the pertinent provisions of this Plan on which the decision is based,
(iii) a statement that the Claimant is entitled to receive upon request and free of charge, access
to and copies of all documents and other information relevant to the claim, and (iv) the Claimant’s
right to bring a civil action under section 502(a) of ERISA following an adverse benefit
determination on review. If special circumstances require that the 60 day time period be extended,
the Committee shall so notify the Claimant and shall render the decision as soon as possible, but
no later than 120 days after receipt of the request for review.

Section 8.03 Designation of Beneficiary. In the Beneficiary Designation Agreement,
each Participant may designate a Beneficiary or Beneficiaries to receive any payments that may be
made following the Participant’s death. Such designation may be changed or canceled by the
Participant at any time without the consent of any such Beneficiary. Any such designation, change
or cancellation must be made in the Beneficiary Designation Agreement, which may be subsequently
changed, and shall not be effective until received by the Committee, or its designee. If no
Beneficiary has been named in the Beneficiary Designation Agreement, or the designated Beneficiary
or Beneficiaries shall have predeceased the Participant, the Beneficiary shall be the Participant’s
designated Beneficiary under the Qualified Plan in which the Participant last actively
participated, and if no Beneficiary has been designated under such Qualified Plan, the Beneficiary
shall be the Participant’s estate. If a Participant designates more than one Beneficiary, the
interests of such Beneficiaries shall be paid in equal shares, unless the Participant has
specifically designated otherwise.

Section 8.04 Limitation of Participant’s Right. Nothing in this Plan shall be
construed as conferring upon any Participant any right to continue in the employment of the
Employer, nor shall it interfere with the rights of the Employer to terminate the employment of any
Participant and/or to take any personnel action affecting any Participant without regard to the
effect that such action may have upon such Participant as a recipient or prospective recipient of
benefits under the Plan. Any amounts payable hereunder shall not be deemed salary or other
compensation to a Participant for the purposes of computing benefits to which the Participant may
be entitled under any qualified retirement arrangement established by the Employer for the benefit
of its employees.

Section 8.05 No Limitation on Employer Actions. Nothing contained in the Plan shall
be construed to prevent the Employer from taking any action that is deemed by it to be appropriate
or in its best interest. No Participant, Beneficiary, or other person shall have any claim against
the Employer as a result of such action.

 

12

 

Section 8.06 Obligations to Employer. To the extent permitted under section 409A of
the Code, if the Committee acting on the Employer’s behalf determines that any Participant has
outstanding any debt, obligation, or other liability representing an amount owing to or guaranteed
by the Employer, that Participant’s benefits shall be calculated in accordance with all other
applicable provisions of this Plan, then reduced by the amount of such debt, obligation, or other
liability prior to payment of benefits to the Participant pursuant to Article VIII above.

Section 8.07 Nonalienation of Benefits. Except as expressly provided herein, no
Participant or Beneficiary shall have the power or right to transfer (otherwise than by the laws of
descent and distribution), alienate, or otherwise encumber the Participant’s interest under the
Plan. The Employer’s obligations under this Plan are not assignable or transferable except to (a)
any corporation or partnership that acquires all or substantially all of the Employer’s assets or
(b) any corporation or partnership into which the Employer may be merged or consolidated. The
provisions of the Plan shall inure to the benefit of each Participant and the Participant’s
Beneficiaries, heirs, executors, administrators or successors in interest.

Section 8.08 Protective Provisions. Each Participant shall cooperate with the
Employer by furnishing any and all information requested by the Employer in order to facilitate the
payment of benefits hereunder, and taking such other relevant action as may be requested by the
Employer. If a Participant refuses to cooperate, the Employer shall have no further obligation to
the Participant under the Plan, other than payment to such Participant of the then current vested
balance of the Participant’s Account in accordance with the Plan.

Section 8.09 Withholding Taxes. The Employer may make such provisions and take such
actions as it may deem necessary or appropriate for the withholding of any taxes that the Employer
is required to withhold by any law or regulation of any governmental authority, whether Federal,
state or local, to withhold in connection with any benefits under the Plan, including, but not
limited to, the withholding of appropriate sums from any amount otherwise payable to the
Participant (or his Beneficiary). Each Participant (or his Beneficiary), however, shall be
responsible for the payment of all individual tax liabilities relating to any such benefits.

Section 8.10 Unfunded Status of Plan. The Plan is intended to constitute an
“unfunded” plan of deferred compensation for Participants. Benefits payable hereunder shall be
payable out of the general assets of the Employer, and no segregation of any assets whatsoever for
such benefits shall be made. Notwithstanding any segregation of assets or transfer to a grantor
trust, with respect to any payments not yet made to a Participant, nothing contained herein shall
give any such Participant any rights to assets that are greater than those of a general creditor of
the Employer.

Section 8.11 Trust Fund. The Employer shall be responsible for the payment of all
benefits provided under the Plan. At its discretion, the Employer may establish one or more
trusts, with such trustees as the Board may approve, for the purpose of assisting in the payment of
such benefits. Although such a trust shall be irrevocable, its assets shall be held for payment to
all of the Employer’s general creditors in the event of insolvency. To the extent any benefits
provided under the Plan are paid from any such trust, the Employer shall have no further obligation
to pay them. If not paid from the trust, such benefits shall remain the obligation of the
Employer.

 

13

 

Section 8.12 Severability. If any provision of this Plan is held unenforceable, the
remainder of the Plan shall continue in full force and effect without regard to such unenforceable
provision and shall be applied as though the unenforceable provision were not contained in the
Plan.

Section 8.13 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Employer and its successors and assigns. The term successors as used herein shall
include any corporate or other business entity which shall, whether by merger, consolidation,
purchase or otherwise acquire all or substantially all of the business and assets of the Employer,
and successors of any such corporation or other business entity.

Section 8.14 Governing Law. The Plan shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania, without reference to the principles of
conflict of laws.

Section 8.15 Headings. Headings are inserted in this Plan for convenience of
reference only and are to be ignored in the construction of the provisions of the Plan.

Section 8.16 Gender, Singular and Plural. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or
persons may require. As the context may require, the singular may read as the plural and the
plural as the singular.

Section 8.17 Notice. Any notice required or permitted under the Plan shall be
sufficient if in writing and hand delivered or sent by registered or certified mail. Such notice
shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date
shown on the postmark on the receipt for registration or certification. Mailed notice to the
Committee shall be directed to CSS’ address. Mailed notice to a Participant or Beneficiary shall
be directed to the individual’s last known address in the Employer’s records.

Section 8.18 Incapacity. In the event that any amount becomes payable under the Plan
to a person who, in the sole judgment of the Committee, is considered by reason of physical or
mental condition to be unable to give a valid receipt therefore, the Committee may direct that such
payment be made to any person found by the Committee, in its sole judgment, to have assumed the
care of such person. Any payment made pursuant to such determination shall constitute a full
release and discharge of the Committee and the Employer.

Section 8.19 Section 409A. The Plan is intended to comply with the applicable
requirements of section 409A of the Code and its corresponding regulations and related guidance
with respect to all amounts subject to such requirements, and shall be maintained in accordance
with such requirements with respect to those amounts that are subject to such requirements.
Notwithstanding anything in the Plan to the contrary, distributions from the Plan with respect to
amounts subject to the requirements of section 409A of the Code may only be made in a manner, and
upon an event, permitted by section 409A of the Code. To the extent that any provision of the Plan
would cause a conflict with the requirements of section 409A of the Code, or would cause the
administration of the Plan to fail to satisfy the requirements of Section 409A of the
Code, such provision shall be deemed null and void to the extent permitted by applicable law.
In no event shall a Participant, directly or indirectly, designate the calendar year of payment.

 

14

 

EXHIBIT A

ELIGIBLE EMPLOYEES

CSS Industies, Inc.

Jack Farber

Christopher Munyan

Clifford Pietrafitta

John Nucero

Steven Cohen

William Kiesling

Lois Karpinski

Denise Andahazy

Keith Foley

Berwick Offray LLC 

Scott Shea

Bruce Kerr

Chris Antonopoulos

Russell Hager

Barry Sokol

Denis Pesante

Lee Boy

Julie Pajic

Steven Lerman

Marla O’Dell

Carey Edwards

Paper Magic Group, Inc.

Paul Quick

William Brock

Ken VanArtsdalen

John S. Wentworth

Edward Robertson

Robert Kilbourne

Donald Post

Joseph O’Brien

C.R. Gibson LLC

Donald French

George Panagiotis

Randy Rock

Steve Wash

 

A-1

 

EXHIBIT B

PRIOR PLANS

Policy Memorandum, dated January 25, 1994, from Jack Farber to the file, relating to the establishment of the SERP, as amended by Amendment 1998-1, effective October 1, 1998, and by Amendment 2006-1, effective as of March 31, 2005.

 

B-1Waitlist's Operating Agreement

 Exhibit 4.1 
 LIMITED LIABILITY COMPANY AGREEMENT 
 OF 
  Waitlist, LLC 
 THIS LIMITED LIABILITY COMPANY AGREEMENT OF WAITLIST, LLC (this “Agreement”) is

made as of September 3, 2008 by IndieShares Management, LLC (as the Manager (as defined below) and Common Member (as defined below)). Additional Members (as defined below) may be added to this Agreement by becoming a party to a Subscription

Agreement (as defined below), purchasing Class A Shares (as defined below), and upon Waitlist meeting the minimum raise requirement. The parties hereto agree as follows: 
  

	 	1.	DEFINITIONS. The following terms shall have the following meanings in this Agreement: 

  

	 	1.1.	The term “Affiliate” means, when used with reference to the Manager or Waitlist: 

  

	 	(a)	the principals of companies affiliated with Manager or Waitlist; 

  

	 	(b)	persons directly or indirectly controlling, controlled by or under common control with such companies, including LLCs; 

  

	 	(c)	any persons owning or controlling ten percent (10%) or more of the outstanding units of such company, including LLCs; and 

  

	 	(d)	any successor-in-interest following a merger or similar transfer when such successor-in-interest is owned by the same persons who own such company or LLC; and

  

	 	1.2.	The term “Agreement” means this Limited Liability Company Agreement of Waitlist, LLC, as originally executed and as amended from time to time. 

  

	 	1.3.	The term “Articles” means the Certificate of Formation with the Washington State Secretary of State for the purpose of forming Waitlist, in the form prescribed by the LLC Act

and the Washington Secretary of State. 

  

	 	1.4.	The term “Board Of Directors” means the board of directors of Waitlist (Jay T. Schwartz, Julie Chase, and George Brumder) who collectively own 100% of the outstanding units of

Manager. 

  

	 	1.5.	The term “Capital Contribution” means the total amount of cash and the fair market value of any other assets contributed (or deemed contributed to Waitlist by a Member, net of

liabilities assumed by Waitlist or to which the assets are subject, as further described in Paragraph 9. 

  

	 	1.6.	The term “Capital Account” means the account to be maintained by Waitlist for each Member in accordance with the provisions of this Agreement and the Code. It is intended that

the Capital Accounts of all Members shall be maintained in compliance with the applicable provisions of the Code. 

	 	1.7.	The term “Class A Shares” means the class of limited liability company units held by Members of Waitlist as further described in Paragraph 11. 

  

	 	1.8.	The term “Code” means the Internal Revenue Code of 1986, as amended (or any corresponding provision or provisions of any succeeding law). 

  

	 	1.9.	The term “Common Member” means that class of shareholder owning the Common Share. The Manager will be the sole Common Member. 

  

	 	1.10.	The term “Common Share” means the class of Share held by the Manager of Waitlist as further described in Paragraph 11. 

  

	 	1.11.	The term “Depreciation” means, for each taxable year, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset

of Waitlist for such taxable year, or as otherwise determined using any reasonable method selected by the Manager. 

  

	 	1.12.	The term “Director” means the individual directors comprising the Board Of Directors. 

  

	 	1.13.	The term “Distributable Cash” means all cash funds derived from Waitlist attributable to the operations of Waitlist, including proceeds of insurance to compensate for covered losses,

less the sum of: 

  

	 	(a)	debt service; 

  

	 	(b)	current operating expenditures; 

  

	 	(c)	capital improvements and replacements, as determined by Manager; and 

  

	 	(d)	a reasonable reserve for the operation of the business of Waitlist, as determined by the Manager; 

 provided, however, that in no event shall Distributable Cash be less than each Member’s respective tax liability associated with a Net Profit

allocation in a given year. 
  

	 	1.14.	The term “Economic Interest” means a person’s right to share in the Net Profits, Net Losses or similar items, and to receive distributions of Distributable Cash from Waitlist, but does not include any other rights of a Member. 

  

	 	1.15.	The term, “Film” means the motion picture “Waitlist”. 

  

	 	1.16.	The term “LLC Act” means the limited liability company laws of the state of Washington, specifically RCW 25.15, as now in effect and as hereafter amended or revised.

	 	1.17.	The term “Manager” means IndieShares Management, LLC. The Manager is also the sole Common Member. 

  

	 	1.18.	The term “Member” means a person who: 

  

	 	(a)	has been admitted to Waitlist as a Member after the purchase of Class A Shares, and in accordance with this Agreement; and 

  

	 	(b)	has not resigned, withdrawn, or been expelled as a Member. 

 The term “Member” does not include the Manager, except to the extent the Manager or its members purchase Class A Shares. 
  

	 	1.19.	The terms “Net Profits” and “Net Losses” mean, for each taxable year of Waitlist, Waitlist’s income, gain, loss, deductions, and credits, in the aggregate or separately

stated, as appropriate, determined in accordance with standard accounting principles. 

  

	 	1.20.	The term “Production Management Fee” means $300,000 out of the offering proceeds to be paid by Waitlist immediately to Manager upon the successful capitalization of Waitlist. Since

the subject offering is “all or none”, Manager shall only be paid such fee if all of the Class A Shares are sold and the offering proceeds are released, upon receipt of a letter of direction from the Washington Department of Financial

Institutions, or other similar state regulatory agency, from Waitlist’s impound account. 

  

	 	1.21.	The term “Special Meetings” means those meetings, which may be called by the Members as further described in Paragraph 4.4. 

   

	 	1.22.	The term “Subscription Agreement” means the agreement executed by Members pursuant to which they agree to make their Capital Contributions, acquire Class A Shares,

agree to be bound to this Agreement, and are admitted as Members of Waitlist. 

  

	 	1.23.	The term “Waitlist” means Waitlist, LLC, a Washington limited liability company. 

  

	 	2.	FORMATION. 

 The Manager formed Waitlist as a limited

liability company pursuant to the provisions of the LLC Act by filing the Certificate of Formation with the Washington State Secretary of State on May 7, 2008. The rights, duties, and liabilities of the Members and the Common Member shall be as

provided in the LLC Act, except as otherwise expressly stated in this Agreement. 
  

	 	3.	NAME. 

 The name of the company shall be Waitlist, LLC

(“Waitlist”). 

	 	4.	COMMENCEMENT; ADMISSION OF MEMBERS; NO MEETINGS; MEETINGS; NO OFFICERS. 

   

	 	4.1.	 Waitlist commenced its existence upon the filing of the Articles with the Washington State Secretary of State. Waitlist shall continue its existence until it is dissolved pursuant to the

provisions of the LLC Act and this Agreement. 

  

	 	4.2.	Each Member shall be admitted into Waitlist as a Member for tax, book, accounting, and other applicable purposes upon completion of the subscription agreement and payment via credit/debit

card for his shares, unless the Manager in its discretion selects a different admission policy that is reasonable and consistent with applicable law and regulation. As soon as practicable after the execution of this Agreement with respect to each

new Member, the Manager shall make available an electronic unit certificate to each Member representing the newly admitted Member’s Class A Shares acknowledging his status as a Member. 

  

	 	4.3.	Annual Meetings. The Members shall meet annually, by telephone conference call, to review the business of Waitlist with the Manager and to take any and all actions requiring the

consent and approval of the Members, including voting on the retention or replacement of the directors and Manager. Notice of the annual meeting, including proxies, will be distributed to the Members via electronic mail not less than thirty

(30) days prior to the meeting. Member proposed resolutions must be sent back to the Manager not less than ten (10) days before the meeting. Notice of the meeting will also include an agenda and reservation of sufficient time to address

any Member proposed resolutions. 

  

	 	4.4.	Special Meetings. Special Meetings of the Members, for any bona fide purpose, unless otherwise proscribed by statute, may be called at the request of the Members holding not

less than ten percent (10%) of all the outstanding Class A Shares of Waitlist or by the Manager. Should Manager, in its reasonable and good faith discretion, determine that the Member proposed purpose for a Special Meeting is not bona fide, then

the Manager shall be under no obligation to notify the remaining Members. For clarity, replacement of the Manager or directors would be considered a bona fide reason for a Special Meeting. 

  

	 	(a)	Place of Special Meeting. Special Meetings shall be conducted via telephone conference call. 

  

	 	(b)	Notice of Special Meeting. Notice stating the place, day, and hour of the Special Meeting, and the purposes for which the Special Meeting is called, shall be delivered not

less than ten (10) nor more than sixty (60) days before the date of the Special Meeting by electronic mail to each Member of record. The notice is given and effective on the date received by the Member. Waitlist shall be responsible for

delivering the electronic mail notices for Special Meetings to the Members. Any Member may submit to Manager a bona fide reason for which they believe a Special Meeting should be called. 

  

	 	(c)	Quorum. A simple majority of the Class A Shareholders of Waitlist, represented in person, by proxy, or participating via electronic proxy shall constitute a quorum at a

Special Meeting of Members. 

  

	 	(d)	Proxies. At all Special Meetings of Members, a Member may vote by proxy executed either electronically or in writing by the Member or his duly authorized attorney in fact.

Such proxy shall be filed with the Manager before or at the time of the Special Meeting. Manager will file each proxy with the SEC. 

	 	4.5.	The Manager will be solely responsible for appointing officers of Waitlist. Initially, Waitlist will have only one officer, George Brumder, its “Controller”. 

  

	 	5.	STATUTORY AGENT FOR SERVICE OF PROCESS; PRINCIPAL OFFICE. 

  

	 	5.1.	The initial statutory agent for the service of process and the initial principal office shall be Corporation Service Company 6500 Harbour Heights Parkway, Suite 400, Mukilteo, WA

98275. The Manager may, from time to time, change the statutory agent or registered office through appropriate filings with the Washington State Secretary of State. In the event the statutory agent ceases to act as such for any reason or the

registered office shall change, the Manager shall promptly designate a replacement statutory agent or file a notice of change of address, as the case may be, in accordance with the LLC Act. 

  

	 	5.2.	The principal office of Waitlist shall be at 2311 N 45th Street Suite 310, Seattle, Washington 98103 or such other place as the Manager may from time to time designate.

  

	 	6.	TERM. 

  Waitlist shall have perpetual existence, unless

it is dissolved in accordance with the provisions of this Agreement or the terms of the LLC Act. 
  

	 	7.	PURPOSES. Waitlist has been formed for the following purposes: 

  

	 	7.1.	To accomplish any lawful purpose whatsoever or which shall at any time appear conducive to or expedient for the protection or benefit of Waitlist and its assets, including but not limited

to the production of the Film. 

  

	 	7.2.	To exercise all other powers necessary to or reasonably connected with Waitlist’s business, which may be legally exercised by limited liability companies under the LLC Act.

  

	 	7.3.	To engage in all activities necessary, customary, convenient, or incident to any of the foregoing. 

   

	 	8.	POWERS, RIGHTS AND DUTIES OF THE BOARD OF DIRECTORS AND MANAGER. 

  

	 	8.1.	 The Company shall have a Board of Directors, which shall have the power to form the committees and perform the duties described in Section 8.3. Such committees

shall have the powers granted to them in their charters and such charters shall be approved by the Manager. The term “Board of Directors” is 

	 	 

used for convenience only and is not intended by the parties to confer to the Board Of Directors any additional power or authority other than that expressly

and specifically conferred pursuant to and in accordance with the terms of this Agreement. The Board of Directors of Waitlist — Jay T. Schwartz, Julie Chase, and George Brumder — collectively own 100% of the outstanding units of Manager.

  

	 	8.2.	The Board of Directors is not compensated in exchange for their service on the Board Of Directors and will not be reimbursed for expenses in connection with attendance at Board of

Directors or any committee meetings.

  

	 	8.3.	The Board of Directors plans to form an audit committee, a corporate governance committee, and a compensation committee and to adopt charters (approved by the Manager) relative to

these committees, and the Members hereby agree to such actions. Until such committees are formed, the Board of Directors will perform the duties of the audit committee, the corporate governance committee, and the compensation committee, which

means that members of the Board of Directors, who are the officers of Manager, will be involved in these matters. 

  

	 	8.4.	Subject to the provisions of Paragraph 8.6 and the other applicable provisions of this Agreement, the Manager shall have the full, exclusive and complete authority and discretion in

the management and control of the business of Waitlist for the purposes stated herein and shall have the right to make any and all decisions affecting the business of Waitlist. Subject to the provisions of this Agreement, the Manager, including any of its

officers, on behalf of Waitlist, shall have full and exclusive authority to execute and acknowledge any and all contracts, agreements, licenses and other documents, and to make withdrawals from Waitlist’s checking, savings and similar accounts. Without

limiting the generality of the foregoing, the Manager shall have the following rights and powers which it may exercise at the cost, expense and risk of Waitlist: 

  

	 	(a)	To expend the capital and income of Waitlist, if any, in the furtherance of Waitlist’s business, including, but not limited to, financing, developing, producing, licensing, selling,

distributing and exhibiting the Film, which includes, but is not limited to, causing Waitlist to pay compensation to, and to reimburse expenses incurred by, third parties providing services to Waitlist; 

  

	 	(b)	To cause Waitlist to incur borrowings, whether secured or unsecured by Waitlist’s assets, without the consent of the Members, and to execute and deliver all documents and instruments in

connection with the financing, development, production, editing, filming, licensing, distribution and exhibition of the Film; 

  

	 	(c)	 To cause Waitlist to pledge and sell some or all of the assets of Waitlist on such terms and conditions as determined by the Manager without the 

	 	 

consent of the Members, and to execute and deliver assignments, licenses, and other transfers and conveyances in connection with Waitlist’s properties and

operations; 

  

	 	(d)	To execute and deliver promissory notes, checks, drafts, and other negotiable instruments on behalf of Waitlist; 

  

	 	(e)	To hire or engage on behalf of Waitlist such employees, independent contractors and personnel as the Manager deems necessary or appropriate in order to conduct Waitlist’s business and

participate in Film, including but not limited to Affiliates of Waitlist; 

  

	 	(f)	To employ such attorneys, accountants and other persons, subject to the terms otherwise stated herein, as the Manager deems necessary or advisable to carry out the purposes of Waitlist;

  

	 	(g)	To purchase from or through others, contracts of liability, casualty and other insurance which the Manager deems advisable, appropriate, convenient or beneficial to Waitlist;

  

	 	(h)	To invest Waitlist’s funds in government securities, certificates of deposit, banker’s acceptances or similar investments; 

  

	 	(i)	To enter into such agreements and contracts with such parties and to give such receipts, releases and discharges with respect to all of the foregoing and any matters incident

thereto as the Manager deems advisable, appropriate or convenient; 

  

	 	(j)	To delegate or assign all or any of its duties, rights, or obligations hereunder, and in furtherance of any such delegation, to appoint, employ, or contract with any person deemed

in its discretion necessary or desirable for the transaction of the business of Waitlist, including persons, firms or entities (i) which employ or are affiliated with or subject to the control of the Manager, and (ii) in which it has a

proprietary interest. Such persons may, under the supervision of the Manager, (i) administer the day-to-day operations of Waitlist, (ii) serve as Waitlist’s advisors and consultants in connection with policy decisions made by the Manager,

(iii) act as consultants, accountants, correspondents, attorneys, brokers, escrow agents, or in any other capacity deemed by the Manager necessary or desirable, (iv) perform or assist in the performance of administrative or managerial

functions necessary for the management of Waitlist, and (v) perform such other acts or services for Waitlist as the Manager in its sole and absolute discretion may approve; 

  

	 	(k)	To admit new Members into Waitlist on such terms and conditions as determined by the Manager in its sole discretion; and 

	 	(l)	To execute and deliver any and all other instruments to carry out the purposes hereof. 

  

	 	8.5.	Only Members will have voting rights, one vote per Class A Share. Set forth below in (a) through (g) of this Section 8.5 are the matters which Waitlist or the Manager are

required to submit to a vote of the Class A Shares. All other actions and matters and are left to the Manager’s discretion. The following matters will require a simple majority in interest approval by the Class A Shares as described

in Paragraph 4.3 and 4.4: 

  

	 	(a)	Amendments to this Agreement; 

   

	 	(b)	The approval of a merger of Waitlist into another entity; 

  

	 	(c)	Any additional sales of equity securities of in Waitlist; 

  

	 	(d)	An election to dissolve Waitlist or cessation of all or a substantial part of Waitlist’s business; 

  

	 	(e)	The power to approve and make all final decisions and determinations regarding the selling, exchanging, or otherwise disposing of substantially all of Waitlist’s assets, including

distribution arrangements; 

  

	 	(f)	Election and removal of any director or the Manager; and 

  

	 	(g)	Purchase of the Film for fair market value by the Manager in accordance with Section 19.4 

 In the event a Member vote is required, proxies will be conducted in accordance with the process described in Paragraph 4.3 and 4.4. 
   

	 	8.6.	The Manager shall possess and may enjoy and exercise all of the rights and powers of members and managers as provided by the LLC Act, except to the extent any of such rights may be

limited or restricted by the express provisions of this Agreement. The Manager shall devote such time to Waitlist and its business as shall be necessary to conduct Waitlist’s business, to operate and manage Waitlist in an efficient manner and to carry out the

Manager’s responsibilities as herein provided. The Manager shall have the right to elect or appoint officers of Waitlist. 

  

	 	8.7.	No Member shall have any right, power or authority to: 

  

	 	(a)	Do any act in contravention of this Agreement without first obtaining the written consent thereto of the Manager. 

  

	 	(b)	 Do any act which would (i) make it impossible to carry on the 

	 	 

ordinary business of Waitlist, or (ii) change the nature of Waitlist’s business, without first obtaining the written consent thereto of the Manager.

  

	 	(c)	Confess a judgment against Waitlist, without first obtaining the written consent thereto of the Manager. 

  

	 	(d)	Possess Waitlist’s property, or assign Waitlist’s right in such property, for other than a company purpose without first obtaining the written consent thereto of the Manager.

  

	 	(e)	Amend this Agreement without first obtaining the written consent thereto of the Manager. 

  

	 	8.8.	Any person not a party to this Agreement who shall deal with Waitlist shall be entitled to rely conclusively upon the power and authority of the Manager as set forth herein.

  

	 	8.9.	 Waitlist shall reimburse the Manager for all out-of-pocket expenses and all direct and indirect disbursements to third parties made and obligations incurred on behalf of Waitlist to third

parties, including items such as Waitlist’s legal expenses and other costs and expenses incurred in the operation of Waitlist’s business. None of Waitlist’s Affiliates will earn compensation for their services to Waitlist. Notwithstanding the foregoing,

Manager shall be paid, (i) the Production Management Fee, which equals $300,000 out of the offering proceeds to be paid by Waitlist immediately to Manager upon the successful capitalization of Waitlist. Since the subject offering is “all or

none”, Manager shall only be paid such fee if all of the Class A Shares are sold and the offering proceeds are released, upon receipt of a letter of permission from the Washington Department of Financial Institutions, from Waitlist’s impound account. The Manager will earn the Production Management Fee by (1) managing the day-to-day activities related to production of the Film, such as (a) disbursement of production funds to third parties, (b) daily review of Film

project deliverables and milestones, (c) approving any changes to the shooting schedule or budget, (d) engaging and contracting with necessary third parties in addition to the production company (e.g., graphic artists or web developers),

(e) managing third parties to ensure company’s contractual requirements are met, and (f) negotiating contract amendments or resolving disputes with third parties; (2) corresponding with Members providing updates on the progress

of the Film project, (3) marketing of the Film for eventual sale or distribution; (4) drafting and negotiation of sale or distribution terms and conditions; (5) distribution of proceeds from sale or distribution Members. , and

(ii) Manager’s contingent compensation in the form of its share of the Net Profits. Affiliates shall not earn compensation for services in connection with Waitlist’s business and Film. 

  

	 	8.10.	Any consent, approval or decision to be made by the Manager under this Agreement for Waitlist must be approved by a majority of the individual officers comprising the Manager.

	 	9.	CAPITAL CONTRIBUTIONS. 

  

	 	9.1.	The Common Member, also the Manager, may but shall not be obligated to contribute capital to Waitlist other than an initial Capital Contribution of $10.00 in cash made upon the formation

of Waitlist. Any Capital Contributions made by the Common Member for the purchase of Class A Shares (not including the initial $10.00 cash Capital Contribution) and by the other Members pursuant to Section 9.2 hereof shall be referred to as the

“Capital Contributions.” 

  

	 	9.2.	The aggregate Capital Contribution that Waitlist will accept shall be determined by the Manager. The price per Class A Share is $10.00. Concurrently with the execution and delivery

to the Manager of the Subscription Agreement, each Member shall deliver in cash to the Manager the amount of his respective Capital Contribution, all as set forth on the Subscription Agreement for each such Member. 

  

	 	9.3.	Subject to the provisions of Paragraph 13.3 below, no Member shall be personally liable for any obligations or debts of Waitlist or any of its losses beyond the total amount the Member

has agreed to contribute to the capital of Waitlist and to the Member’s share, if any, of the undistributed Distributable Cash attributable to the Member. Except as provided in this Paragraph 9, and in Paragraph 13.3 below, no Member shall have any

obligation to make additional Capital Contributions to Waitlist. 

  

	 	9.4.	Except as specifically provided in this Agreement, no Common Member or Member shall be entitled to interest on his Capital Contributions. 

  

	 	10.	ADVANCES. 

  

	 	10.1.	If any funds are required by Waitlist for the operation of its business in excess of the Capital Contributions made by the Members required pursuant to Section 9 above and loans

obtained from third parties, then any Member and Manager shall have the right, but not the obligation, upon the approval of the Manager, to advance such funds (the “Advances”) to Waitlist. 

  

	 	10.2.	If Manager or any Member makes an Advance pursuant to Section 10.1 above, such Advance shall constitute an unsecured loan to Waitlist. 

  

	 	10.3.	The terms and conditions of an Advance by Manager shall be determined by the Manager pursuant to its best business judgment. The Advance shall be evidenced by a promissory note and

shall be repaid to the Manager or Member making the Advance pursuant to Section 12 of this Agreement. 

  

	 	10.4.	If any Member or Manager lends money to Waitlist for any purpose, whether as an Advance or otherwise, in connection with such loan the Member or Manager shall be deemed an unsecured

creditor of Waitlist, and not a Member, for the purpose of determining his right and priority to the payment of interest on and the repayment of the principal of such loan. 

	 	11.	OWNERSHIP; DISTRIBUTIONS BY THE COMPANY. 

  

	 	11.1.	The ownership of Waitlist shall be in the form of a Common Share and Class A Shares, each such class of shares having the rights and preferences as described herein. The total shares

that Waitlist shall be authorized to issue is 350,001, comprised of 1 Common Share and 350,000 Class A Shares. The holder of the Common Share shall be referred to herein as the Common Member, and such entity is also the Manager, and the holders of

Class A Shares shall be referred to herein as the Members. Waitlist may issue authorized shares at such times, in such amounts, and to such purchasers as determined by the Manager and as further described in a Subscription Agreement.

   

	 	11.2.	Subject to all of the provisions of this Agreement, Distributable Cash shall be distributed to the Common Member and Members at such times and in such amounts as are determined in

the sole and absolute discretion of the Manager. 

  

	 	11.3.	Distributable Cash and Net Profits, if any, shall be distributed as follows: 

  

	 	(a)	One hundred percent (100%) of the Distributable Cash to the Members, pro rata in accordance with their respective holdings, until the Members have received their Class A

Priority Return (as defined in Section 11(d) below), then 

  

	 	(b)	Fifty percent (50%) of the Net Profits, if any, to the Members pro rata in accordance with their respective holdings, and 

  

	 	(c)	Fifty percent (50%) of the Net Profits to the Common Member. 

  

	 	(d)	Class A Priority Return: For purposes of this Agreement, the term Class A Priority Return shall mean that amount equal to the aggregate capital contributions made by all

of the Members, plus five percent (5%). For example, if the Members have collectively contributed $3,500,000.00 of capital to Waitlist, the first $3,675,000.00 of Distributable Cash would be allocated to the Members (pro-rata amongst the Class); once the

Class A Priority Return was met, every dollar of Net Profit would be allocated 50% to the Members and 50% to the Common Member. 

  

	 	11.4.	Regulatory Allocations. The allocations set forth in this Agreement are intended to comply with the economic arrangements of the Members. Nothing in this Agreement or specifically

in this Section 11 is intended to contravene the Code or the regulations thereto. The Manager is hereby authorized without notice to the Members to amend this Paragraph 11 to comply with the Code including the regulations promulgated

thereunder. 

  

	 	12.	RIGHTS AND OBLIGATIONS OF THE MEMBERS. 

  

	 	12.1.	Except as expressly provided in this Agreement to the contrary, the Members shall take no part in the operation, management or control of Waitlist’s business.

	 	12.2.	The Members shall have no power to sign for or to bind Waitlist to any agreements or arrangements. All authority to act on behalf of Waitlist is vested in the Manager. Any Member who takes any

action to bind Waitlist in contravention of this Agreement shall indemnify Waitlist for any costs, expenses, claims or liabilities incurred by Waitlist as a result of the unauthorized action of such Member. Without limiting the foregoing, the exercise by a Member of

any rights granted by this Agreement, or serving as a third-party contractor, consultant or surety of Waitlist, shall not be deemed to be taking part in the execution, management or control of Waitlist’s business. 

  

	 	12.3.	Subject to the provisions of Paragraph 12.2 of this Agreement, Members shall not be personally liable for any obligations or debts of Waitlist or any of its losses beyond the total amount

the Members have agreed to contribute to the capital of Waitlist and to the Members’ share, if any, of the undistributed Distributable Cash attributable to the Members. 

  

	 	13.	ADDITIONAL MANAGERS; WITHDRAWAL; REMOVAL. 

  

	 	13.1.	Persons may be admitted to Waitlist as additional or substitute Managers upon election of the Members in accordance with Paragraph 8.5. 

   

	 	13.2.	The Manager shall have the right to withdraw or resign from Waitlist upon 90 days prior written notice to the Members. 

  

	 	14.	INSURANCE. 

  Waitlist may procure liability insurance (or

shall be designated as an additional insured, if appropriate) which will protect it from liability to others because of personal injury (including death) and property damage which may arise from operations under this Agreement, and such other

insurance as is customary, desirable or required for the conduct of Waitlist’s business, as determined by the Manager in its sole discretion. 
  

	 	15.	FISCAL YEAR, BOOKS AND RECORDS AND BANK ACCOUNTS. 

  

	 	15.1.	 Waitlist, for accounting and income tax purposes, shall operate on a fiscal year ending September 30 and shall utilize such accounting principles and income tax elections and

determinations as shall be determined by the Manager. The Manager shall serve as the “Tax Matters Partner” for Waitlist. 

  

	 	15.2.	As required by the Securities Exchange Act of 1934, as amended, the books and records of, and other information pertaining to, Waitlist shall be made electronically available to any

Member at Waitlist’s website. 

  

	 	15.3.	All funds of Waitlist shall be deposited in a separate bank account or accounts as shall be determined by the Manager and the Manager shall be entitled to sign on all such accounts.

	 	15.4.	The Manager shall maintain the books and records for Waitlist. 

  

	 	16.	REPORTS BY WAITLIST.  

  

	 	16.1.	The Manager shall make electronically available to the Members all information required by federal and state regulations for preparation of the Members’ federal and state

income tax returns within sixty (60) days after the end of Waitlist’s fiscal year. 

  

	 	16.2.	The Manager shall make electronically available to the Members a balance sheet and an income statement prepared by the Manager as soon as is reasonably practicable after the end of

each fiscal year of Waitlist. 

  

	 	17.	RESTRICTIONS ON TRANSFER; ASSIGNEES. 

  

	 	17.1.	Except as provided in Section 17.3, below, and notwithstanding anything to the contrary contained in the LLC Act, the Members shall not sell, transfer, assign, pledge,

hypothecate, encumber, subject to a security interest or otherwise dispose (“Transfer”) of their Class A Shares, or any part thereof. 

  

	 	17.2.	Notwithstanding anything contained in Paragraph 17.1 to the contrary, a Member’s Class A Shares, or a portion thereof, may be Transferred to persons or entities entitled

thereto pursuant and limited to any operation of law; provided, however, the transferee in such case shall only become an Economic Interest holder with respect to such Class A Shares transferred, and shall in no event become a Member. It shall

be the sole responsibility of the Economic Interest holder to contact the Manager, via Waitlist’s website, so that Waitlist’s records may be updated accordingly. 

  

	 	17.3.	A Manager shall have a right to assign its interest in Net Profits, Net Losses and Distributable Cash without the consent of any Member. 

  

	 	18.	INDEMNIFICATION AND LIABILITY OF MANAGER, DIRECTORS AND OFFICERS.  

  

	 	18.1.	 Waitlist, its receiver or its trustee, shall indemnify, save harmless and pay all judgments and claims against (a) the Manager, or any officers or directors of Waitlist, from any liability or damage incurred by reason of any

act performed or omitted to be performed by it in connection with the business of Waitlist, except as provided in Section 18.3 of this Agreement or (b) the Members for any act performed by them which is expressly permitted by this Agreement,

including attorneys’ fees and costs incurred by them in connection with the defense of any action based on any such act or omission, which attorneys’ fees and costs may be paid as incurred, including all such liabilities under federal and

state securities laws as permitted by law. All judgments against Waitlist and its Members on which any Member is entitled to indemnification must first be satisfied from Waitlist assets before the Member in question is responsible for such obligations.

  

	 	18.2.	 In the event of any action by a Member against the Manager, directors, or officers of Waitlist, including a 

	 	 

company derivative suit, Waitlist will indemnify, save harmless and pay all expenses of the Manager, including attorneys’ fees and costs incurred in the

defense of such action. 

  

	 	18.3.	The Manager, directors, or officers of Waitlist shall not be relieved from any liability for any acts or omissions resulting from a material breach of its obligations hereunder or from bad faith. Indemnification to

which the Manager, directors, or officers of Waitlist are entitled under this Section 18 shall be recoverable out of the assets of Waitlist but not from the Members. 

  

	 	18.4.	The Manager, directors, or officers of Waitlist shall not be liable to the Members or to Waitlist for any loss resulting from errors made by the Manager, directors, or officers of Waitlist in the reasonable exercise of business judgment, unless such errors

result from a material breach of this Agreement or bad faith by the Manager, directors, or officers of Waitlist. 

  

	 	19.	DISSOLUTION AND LIQUIDATION. 

  

	 	19.1.	 Waitlist shall be dissolved upon the earlier of: 

  

	 	(a)	Failing to meet Waitlist’s minimum capital requirements by the close of the offering. This is an all or none offering, meaning that if all of the Class A Shares are not sold

within 90 days after commencement of the offering, sales of Class A Shares shall cease and all subscriptions funds will be promptly returned, less applicable payment processing charges; provided, however, that Waitlist may choose to extend the

offering for up to an additional 60 days (the “Offering Period”). For clarity, the Offering Period shall commence upon the sale of the Class A Shares, not upon the prospectus being declared effective. 

  

	 	(b)	An election by the Members, in accordance with Paragraph 8.5, to dissolve Waitlist. 

  

	 	(c)	An election by the Members, in accordance with Paragraph 8.5, to sell, exchange or otherwise dispose of all or substantially all of the assets of Waitlist; provided, however, that if Waitlist receives a purchase money note upon such sale, Waitlist shall continue in existence until such note is satisfied, sold or otherwise conveyed. 

   

	 	(d)	The entry of a judgment of dissolution under the LLC Act. 

  

	 	(e)	Acquisition by a single person of all outstanding Shares in Waitlist upon election by the Members in accordance with Paragraph 8.5. 

   

	 	19.2.	 Upon the dissolution of Waitlist, the Manager (which term, for the purpose of this Section 19.2, shall include the trustees, receivers or other persons required by

law to wind-up the affairs of Waitlist) shall wind up the affairs of Waitlist as provided in the LLC Act. Waitlist shall engage in no further business thereafter other than that necessary to wind up the business in accordance with the LLC Act and distribute the

assets in accordance with this Agreement. The Members shall 

	 	 

continue to allocate Net Profits and Net Losses during the winding up period in the same manner as such amounts were divided before dissolution. The parties

responsible for winding up shall be entitled to reasonable compensation for their services in connection therewith, which compensation shall be considered an expense of Waitlist. The Manager may, from time to time and at any time, have the assets or any

one or more of them appraised at the expense of Waitlist for distribution in kind, subject to existing liens and encumbrances. 

  

	 	19.3.	From and after the dissolution of Waitlist, the proceeds from the liquidation of Waitlist’s property and from the operation of Waitlist’s business shall, in accordance with Section 11

of this Agreement, be applied and distributed in the following order; 

  

	 	(a)	First, to creditors, including (to the extent permitted by law) Members who are creditors, in satisfaction of liabilities of Waitlist other than liabilities for distributions to Members

under Section 11 of this Agreement. 

  

	 	(b)	Second, to Members that have not yet received their full allocation and distribution of their Class A Priority Return, to Members, pro-rata, up to, but not more than, that

amount necessary to satisfy the Class A Priority Return. 

  

	 	(c)	Third, any remaining assets shall be distributed to the Members and Manager as follows: fifty percent (50%) to the Members pro-rata in accordance with their respective

Class A Share holdings, and fifty percent (50%) to the Manager in its capacity as the Common Share Holder. 

  

	 	19.4.	In the event of a winding up and liquidation of Waitlist, the Manager may have the right to purchase any assets of Waitlist (including the Film, or any part thereof, produced by Waitlist and any

rights thereto or associated therewith), provided that the Manager pays Waitlist the fair market value of any such assets, as determined below, and such sale is approved by a simple majority of the Class A Shareholders as described in Paragraph 4.5.

   

	 	19.5.	Fair market value will be determined on the basis of, and will be equal to, the amount which would be obtained between an informed and willing buyer under no compulsion to buy and

an informed and willing seller under no compulsion to sell. Manager will bid the Film assets to those who might desire to purchase the assets. This in no way means that there will be such interested parties. It is entirely possible that the

Film’s assets are worthless and that the fair market value of such assets is zero. 

  

	 	19.6.	Subject to this Section 19, the business and affairs of Waitlist shall be wound up in the manner provided in the LLC Act. 

  

	 	19.7.	As soon as practicable after the dissolution of Waitlist, a final statement of its assets and liabilities shall be prepared by Waitlist and electronically made available to the Members.

	 	19.8.	As soon as possible after any of the events specified in this Section 19 affecting the dissolution of Waitlist occurs, the Manager shall file a written notice of winding up with the

Washington Secretary of State signed on behalf of Waitlist containing such information as is required by the LLC Act. 

  

	 	19.9.	Provided all of the known property and assets of Waitlist have been applied and distributed pursuant to the LLC Act and this Agreement, written articles of termination shall be signed on

behalf of Waitlist by the Manager. The Manager shall file the articles of termination with the Washington Secretary of State containing such information as is required by the LLC Act. 

  

	 	20.	INVESTMENT REPRESENTATIONS. 

 Each Member, by

executing a copy of this Agreement, hereby represents and warrants to each other Member and Waitlist as follows: 
  

	 	20.1.	The Class A Shares are being acquired for his own account for investment. 

  

	 	20.2.	The Member has been fully advised of the facts respecting the organization and business of Waitlist and has been given the opportunity to consult his legal counsel with respect to Waitlist.

  

	 	21.	SPECIAL AND LIMITED POWER OF ATTORNEY. 

 Each

Member hereby grants to the Manager a special and limited power of attorney, as set forth below: 
  

	 	21.1.	The Manager acting alone shall at all times during the term of Waitlist have a special and limited power of attorney as the attorney-in-fact for each Member, with power and authority to

act in the name and on the behalf of each such Member to execute, acknowledge, and swear to in the execution, acknowledgment and filing of documents, which shall include by way of illustration but not of limitation the following:

  

	 	(a)	The Articles, this Agreement and any amendments to the foregoing which, under the laws of the State of Washington or the laws of any other state, are required to be executed or

filed or which the Manager shall deem it advisable to have executed or to file: 

  

	 	(b)	Any other instrument or document which may be required to be executed or filed by Waitlist under the laws of any state or by any governmental agency or which the Manager shall deem it

advisable to have executed or to file; and 

  

	 	(c)	 Any instrument or document which may be required to effect the 

	 	 

continuation of Waitlist or the dissolution and termination of Waitlist (provided such continuation, admission or dissolution and termination are in accordance with the

terms of the Articles and this Agreement), or to reflect any reductions in amount of contributions of Members. 

  

	 	21.2.	The special and limited power of attorney of the Manager: 

  

	 	(a)	Is a special power of attorney coupled with an interest, is irrevocable, shall survive the death of the granting Member, and is limited to those matters herein set forth;

  

	 	(b)	May be exercised by the Manager acting alone for each of the Members by the signature of the Manager acting as attorney-in-fact for all of the Members, together with a list of all

Members executing such instrument by their attorney-in-fact; and 

  

	 	(c)	Shall survive a Transfer by a Member of all or any portion of his Class A Shares. 

  

	 	22.	MISCELLANEOUS. 

  

	 	22.1.	Notices. Any notice, request, demand, instruction or other document to be given hereunder or pursuant hereto to any party shall be in writing and delivered by email. Notices

so emailed shall be deemed to have been given twenty four (24) hours after sending. The addresses and addressees, for the purpose of this Section 22.1, may be changed by giving written notice of such change in the manner herein provided

for giving notice. Unless and until such written notice is received, the last address and addressee stated by written notice, or as provided herein if no written notice of change has been sent or received, shall be deemed to continue in effect for

all purposes hereunder. 

  

	 	22.2.	Binding Effect. This Agreement shall be binding upon all of the Members and their executors, administrators, successors and permitted assignees. 

  

	 	22.3.	Regulations and Laws. Nothing contained in this Agreement shall be construed to require the commission of any act contrary to law. If there is a conflict between any

provision of this Agreement and any present or future statute, law, ordinance or regulation contrary to which the parties have no legal right to contract, the after shall prevail, but in such event the provisions of this Agreement affected shall be

curtailed and limited only to the extent necessary to bring it within the requirement of the law. This Agreement is made under and shall be construed pursuant to the laws of the State of Washington. 

  

	 	22.4.	Attorneys’ Fees. In the event of any action for breach of or to enforce or declare rights under any provision of this Agreement, the prevailing party shall be entitled

to reasonable attorneys’ fees and costs, to be paid by the losing party. 

	 	22.5.	Counterparts. This Agreement may be executed in several counterparts, including electronic forms, and all so executed shall constitute one agreement, binding upon all of the

parties hereto, notwithstanding that all of the parties are not signatories to the original or the same counterparts. 

  

	 	22.6.	No Other Agreement. The entire agreement of the parties with respect to Waitlist is contained and referred to herein. 

  

	 	22.7.	Headings. The Section headings of the various provisions hereof are intended solely for convenience of reference and shall not in any manner amplify, limit or modify, or

otherwise be used in the interpretation of, any of said provisions. 

  

	 	22.8.	Competitive Activities. Nothing herein contained shall preclude any Manager or Member from owning, purchasing, selling, or otherwise dealing in any manner with any property

or engaging in any business whatsoever without notice to any other Manager or Member, without participation of any other Manager or Member, and without liability to any other Manager or Member. It is understood that any Manager or Member may now or

hereafter engage in any business or possess any property of any type, whether or not such business or such property competes with the business or property of Waitlist. Each Manager and Member hereby waives any right which he may have against others who

may capitalize on or take advantage of information learned as a result of an association with Waitlist. 

  

	 	22.9.	Gender and Tense. As used in this Agreement, the masculine, feminine or neuter gender, and the singular or plural number, shall be deemed to include the others whenever the

context so indicates. 

  

	 	22.10.	Remedies. If any party to this Agreement shall fail to observe or perform any term, covenant, condition or other obligation on his part to be observed or performed pursuant

to this Agreement or in connection with this Agreement (the ‘Defaulting Party”), any other party to this Agreement, in addition to and not in lieu or in limitation of, any of his other remedies under this Agreement, under any statute or at

law, shall be entitled to apply to, and obtain from, any court of equity having jurisdiction over the Defaulting Party: 

  

	 	(a)	An injunction, temporary restraining order and any other prohibitory decree to prevent any further such failure to observe or perform on the part of the Defaulting Party; and

  

	 	(b)	A decree for specific performance of any such term, covenant, condition or other obligation. 

  

	 	22.11.	Waiver. The waiver by one party of the performance of any covenant, condition or promise shall not invalidate this Agreement nor shall it be considered a waiver by such party

of any other covenant, condition or promise hereunder. The waiver by any party of the time for performing any act shall not constitute a waiver of the time for performing any other act or an identical act required to be performed at a later time.

The exercise of any remedy shall not exclude other consistent remedies. 

	 	22.12.	No Third-Party Benefit. Nothing contained in this Agreement shall be deemed to confer any right or benefit on any person or entity who is not a party to this Agreement.

  

	 	22.13.	Section 754 Election. The Manager may, in its sole and absolute discretion, make the election provided for in Section 754 of the Code. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 
 “MANAGER” 
 INDIESHARES MANAGEMENT, LLC 

 

			
	By:	 	 /s/ JAY T. SCHWARTZ

		
	Name:	 	Jay T Schwartz, President
	Address for Manager:
	2311 N 45th Street
	Suite 310
	Seattle, Washington 98103

 “MEMBERS” 
  

			
	By:	 	  

 IndieShares Management, LLC, as Attorney-in-Fact for all of the 
 Members who have executed Subscription Agreements

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