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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2008 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER : 333-137359 Hampden Bancorp, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 20-5714154 (IRS Employer Identification No.) 19 Harrison Ave. Springfield, Massachusetts 01102 (Address of principal executive offices) (Zip Code) (413)736-1812 (Registrant’s telephone number, including area code) Indicate by check mark whether the registrant (1)has filed all reports required to be filed by Section13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90days. Yes þ No o. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule12b-2 of the Exchange Act (check one): Large accelerated filer oAccelerated Filer o Non-accelerated filer oSmaller reporting company þ (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule12(b)-2 of the Exchange Act). Yes o No þ As of February 5, 2009, there were 7,540,456 shares of the registrant’s common stock outstanding. HAMPDEN BANCORP, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTSOF HAMPDEN BANCORP, INC. AND SUBSIDIARIES Page No. PART I — FINANCIAL INFORMATION Item1 Financial Statements of Hampden Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets (unaudited) as of December 31, 2008 and June 30, 2008 3 Consolidated Statements of Operations (unaudited) for the three and six months endedDecember 31, 2008 andDecember31, 2007 4 Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the six months ended December 31, 2008 and December 31, 2007 5 Consolidated Statements of Cash Flows (unaudited) for the six months ended December 31, 2008 and December 31, 2007 6-7 Notes to Consolidated Financial Statements 8 I Item2 Management’s Discussion and Analysis of Financial Condition and Results ofOperations 11 Item3 Quantitative and Qualitative Disclosures About Market Risks 26 Item4 Controls and Procedures 26 PART II — OTHER INFORMATION Item1 Legal Proceedings 26 Item1A Risk Factors 26 Item2 Unregistered Sales of Equity Securities and Use of Proceeds 26 ItItem3 Defaults Upon Senior Securities 27 It Item4 Submission of Matters to a Vote of Security Holders 27 It Item5 Other Information 27 Item6 Exhibits 27 SIGNATURES 29 2 PART 1 – FINANCIAL INFORMATION Item1: Financial Statements of Hampden Bancorp, Inc. and Subsidiaries HAMPDEN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) ASSETS December 31, June 30, 2008 2008 (Unaudited) Cash and due from banks $7,262 $5,090 Federal funds sold and other short-term investments 10,261 28,460 Cash and cash equivalents 17,523 33,550 Securities available for sale, at fair value 115,445 123,892 Federal Home Loan Bank of Boston stock, at cost 5,233 5,233 Loans held for sale 987 895 Loans, net of allowance for loan losses of $3,912 at December 31, 2008 and $3,453 at June 30, 2008 387,480 359,878 Premises and equipment, net 4,359 4,330 Accrued interest receivable 2,029 2,093 Deferred tax asset 2,906 2,853 Bank-owned life insurance 9,705 9,475 Other assets 1,567 1,633 $547,234 $543,832 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits $346,623 $331,441 Securities sold under agreements to repurchase 13,216 13,223 Short-term borrowings 10,000 - Long-term debt 77,766 95,477 Mortgagors' escrow accounts 831 741 Accrued expenses and other liabilities 2,316 2,502 Total liabilities 450,752 443,384 Commitments and contingencies (Note 5) Preferred Stock ($.01 par value, 5,000,000 shares authorized, none issued or outstanding) - - Common Stock ($.01 par value, 25,000,000 shares authorized and 7,949,879 shares issued at December 31, 2008 and June 30, 2008; 7,552,386 outstanding at December 31, 2008 and 7,949,879 outstanding at June 30, 2008) 79 79 Additional paid-in-capital 77,479 77,276 Unearned Compensation - ESOP (551,192 shares unallocated at December 31, 2008 and 572,391 shares unallocated at June 30, 2008) (5,512) (5,759) Unearned Compensation - equity incentive plan (2,567) (2,902) Retained Earnings 31,477 32,131 Accumulated other comprehensive loss (487) (377) Treasury Stock (397,493 shares at December 31, 2008) (3,987) - Total stockholders' equity 96,482 100,448 $547,234 $543,832 See accompanying notes to unaudited consolidated financial statements. 3 HAMPDEN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) Three Months Ended December 31, Six Months Ended December 31, 2008 2007 2008 2007 (Unaudited) (Unaudited) Interest and dividend income: Loans, including fees $5,734 $5,649 $11,304 $11,222 Debt securities 1,404 1,448 2,821 2,885 Dividends 38 160 86 425 Federal funds sold and other short-term investments 19 159 94 233 Total interest and dividend income 7,195 7,416 14,305 14,765 Interest expense: Deposits 2,203 2,494 4,495 5,309 Borrowings 954 1,158 2,024 2,183 Total interest expense 3,157 3,652 6,519 7,492 Net interest income 4,038 3,764 7,786 7,273 Provision for loan losses 308 84 812 166 Net interest income, after provision for loan losses 3,730 3,680 6,974 7,107 Non-interest income: Customer service fees 399 384 804 805 Gain (loss) on sales/write-downs of securities, net (63) 58 (151) 58 Gain on sales of loans, net 31 29 50 45 Increase in cash surrender value of life insurance 114 79 230 156 Other 90 63 178 104 Total non-interest income 571 613 1,111 1,168 Non-interest expense: Salaries and employee benefits 2,309 1,938 4,640 3,828 Occupancy and equipment 395 349 767 676 Data processing services 208 187 416 371 Advertising 219 334 411 582 Other general and administrative 897 719 1,509 1,345 Total non-interest expense 4,028 3,527 7,743 6,802 Income before income taxes 273 766 342 1,473 Income tax expense 83 613 105 798 Net income $190 $153 $237 $675 Earnings per share Basic $0.03 $0.02 $0.03 $0.09 Diluted $0.03 $0.02 $0.03 $0.09 Weighted average shares outstanding Basic 6,804,992 7,349,337 6,929,432 7,344,018 Diluted 6,850,086 7,349,337 6,970,692 7,344,018 See accompanying notes to unaudited consolidated financial statements. 4 HAMPDEN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Dollars in thousands) Unearned Accumulated Additional Unearned Compensation- Other Common Stock Paid-in Compensation Equity Retained Comprehensive Treasury Shares Amount Capital ESOP Incentive Plan Earnings Loss Stock Total (Unaudited) Balance at June 30, 2007 7,949,879 $79 $77,156 $(6,148) $- $31,933 $(1,002) $- $102,018 Culmulative effect of change to initially apply FASB Statement No. 156, netof tax effect - 133 - - 133 Comprehensive income: Net income - 675 - - 675 Change in net unrealized loss on securities available for sale, net of tax effects - 1,177 - 1,177 Total comprehensive income 1,852 Cash dividends paid ($0.06 per share) - (420) - - (420) ESOP shares committed to be allocated(21,200 shares) - - 10 212 - 222 Balance at December 31, 2007 7,949,879 $79 $77,166 $(5,936) $- $32,321 $175 $- $103,805 Balance at June 30, 2008 7,949,879 $79 $77,276 $(5,759) $(2,902) $32,131 $(377) $- $100,448 Culmulative effect of change to initiallyapply EITF 06-10, net oftax effect - (457) - - (457) Comprehensive income: Net income - 237 - - 237 Change in net unrealized loss on securities available for sale, net of reclassification adjustment and tax effects - (110) - (110) Total comprehensive income 127 Cash dividends paid ($0.06 per share) - (434) - - (434) Common stock repurchased (397,493) - (3,987) (3,987) Stock-based compensation - - 178 - 335 - - - 513 ESOP shares committed to be allocated(21,200 shares) - - 25 247 - 272 Balance at December 31, 2008 7,552,386 $79 $77,479 $(5,512) $(2,567) $31,477 $(487) $(3,987) $96,482 See accompanying notes to unaudited consolidated financial statements. 5 HAMPDEN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Six Months Ended December 31, 2008 2007 (Unaudited) Cash flows from operating activities: Net income $237 $675 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 812 166 Net accretion of securities (31) (22) Loss on impairment of securities 204 - Depreciation and amortization 327 308 Gain on sales of securities, net (53) (58) Loans originated for sale (5,622) (8,944) Proceeds from loan sales 5,580 8,856 Gain on sales of loans, net (50) (45) Increase in cash surrender value of bank-owned life insurance (230) (156) Deferred tax provision - 418 Employee Stock Ownership Plan expense 272 222 Stock-based compensation 513 - Net change in: Accrued interest receivable 64 209 Other assets 66 (190) Accrued expenses and other liabilities (643) 272 Net cash provided by operating activities 1,446 1,711 Cash flows from investing activities: Activity in available-for-sale securities: Sales 484 20,800 Maturities and calls 16,493 30,638 Principal payments 10,166 7,507 Purchases (18,979) (33,354) Purchase of Federal Home Loan Bank stock - (626) Loan originations, net (28,414) (15,856) Premiums paid on bank-owned life insurance - (287) Purchase of premises and equipment (356) (424) Net cash provided (used) by investing activities (20,606) 8,398 (continued) See accompanying notes to unaudited consolidated financial statements. 6 HAMPDEN BANCORP, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Concluded) (Dollars in thousands) Six Months Ended December 31, 2008 2007 (Unaudited) Cash flows from financing activities: Net change in deposits 15,182 (18,622) Net change in repurchase agreements (7) 587 Net change in short-term borrowings 10,000 1,000 Proceeds from long-term debt 2,655 26,720 Repayment of long-term debt (20,366) (7,000) Repurchase of common stock (3,987) - Payment of dividends on common stock (434) (420) Net change in mortgagors' escrow accounts 90 101 Net cash provided by financing activities 3,133 2,366 Net change in cash and cash equivalents (16,027) 12,475 Cash and cash equivalents at beginning of period 33,550 20,525 Cash and cash equivalents at end of period $17,523 $33,000 Supplemental cash flow information: Interest paid on deposits $4,495 $5,309 Interest paid on borrowings 2,024 1,846 Income taxes paid 18 7 See accompanying notes to unaudited consolidated financial statements. 7 HAMPDEN BANCORP, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of presentation and consolidation The consolidated financial statements include the accounts of Hampden Bancorp, Inc. (the “Company”) and its wholly-owned subsidiaries, Hampden Bank (the “Bank”) and Hampden LS, Inc.Hampden Bank is a Massachusetts chartered stock savings bank. Hampden Bancorp, Inc. contributed funds to Hampden LS, Inc. to enable it to make a 15-year loan to the employee stock ownership plan (the “ESOP”) to allow it to purchase shares of the Company’s common stock as part of the completion of the initial public offering.Hampden Bank has two wholly-owned subsidiaries, Hampden Investment Corporation, which engages in buying, selling, holding and otherwise dealing in securities, and Hampden
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO §240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO §240.13d-2(a) (Amendment No. 6)1 Vitesse Semiconductor Corporation (Name of Issuer) Common Stock, $0.01 par value (Title of Class of Securities) (CUSIP Number) STEVE WOLOSKY, ESQ. OLSHAN FROMEWOLOSKY LLP Park Avenue Tower 65 East 55th Street New York, New York 10022 (212) 451-2300 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 15, 2013 (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box x. Note:Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.See §240.13d-7 for other parties to whom copies are to be sent. 1 The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 928 1 NAME OF REPORTING PERSON Raging Capital Master Fund, Ltd. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)x (b)o 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) ¨ 6 CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7 SOLE VOTING POWER - 0 - 8 SHAREDVOTING POWER 6,491,127* 9 SOLE DISPOSITIVE POWER - 0 - 10 SHAREDDISPOSITIVE POWER 6,491,127* 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,491,127* 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.6%* 14 TYPE OF REPORTING PERSON CO * Does not include shares of Common Stock underlying 8.00% Convertible Second Lien Debentures due 2014.See Item 5. 2 CUSIP NO. 928 1 NAME OF REPORTING PERSON Raging Capital Management, LLC 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)x (b)o 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) ¨ 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7 SOLE VOTING POWER - 0 - 8 SHAREDVOTING POWER 6,491,127* 9 SOLE DISPOSITIVE POWER - 0 - 10 SHAREDDISPOSITIVE POWER 6,491,127* 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,491,127* 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.6%* 14 TYPE OF REPORTING PERSON OO * Does not include shares of Common Stock underlying 8.00% Convertible Second Lien Debentures due 2014.See Item 5. 3 CUSIP NO. 928 1 NAME OF REPORTING PERSON William C. Martin 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)x (b)o 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) ¨ 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7 SOLE VOTING POWER - 0 - 8 SHAREDVOTING POWER 6,491,127* 9 SOLE DISPOSITIVE POWER - 0 - 10 SHAREDDISPOSITIVE POWER 6,491,127* 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,491,127* 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.6%* 14 TYPE OF REPORTING PERSON IN * Does not include shares of Common Stock underlying 8.00% Convertible Second Lien Debentures due 2014.See Item 5. 4 CUSIP NO. 928 1 NAME OF REPORTING PERSON Paul K. McWilliams 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)x (b)o 3 SEC USE ONLY 4 SOURCE OF FUNDS PF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) ¨ 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7 SOLE VOTING POWER 8 SHAREDVOTING POWER - 0 - 9 SOLE DISPOSITIVE POWER 10 SHAREDDISPOSITIVE POWER - 0 - 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% 14 TYPE OF REPORTING PERSON IN 5 CUSIP NO. 928 1 NAME OF REPORTING PERSON Kenneth H. Traub 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)x (b)o 3 SEC USE ONLY 4 SOURCE OF FUNDS 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) ¨ 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7 SOLE VOTING POWER - 0 - 8 SHAREDVOTING POWER - 0 - 9 SOLE DISPOSITIVE POWER - 0 - 10 SHAREDDISPOSITIVE POWER - 0 - 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 - 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0% 14 TYPE OF REPORTING PERSON IN 6 CUSIP NO. 928 The following constitutes Amendment No. 6 to the Schedule 13D filed by the undersigned (“Amendment No. 6”).This Amendment No. 6 amends the Schedule 13D as specifically set forth herein. Item 2. Identity and Background. Item 2 is hereby amended to add the following: As discussed below, Raging Capital has withdrawn its letter to the Issuer, dated November 20, 2012, nominating Paul K. McWilliams and Kenneth H. Traub for election to the Board of Directors of the Issuer (the “Board”) at the Issuer’s 2013 annual meeting of stockholders (the “Annual Meeting”).Accordingly, Messrs. McWilliams and Traub are no longer members of a Section 13(d) group with the other Reporting Persons and shall cease to be Reporting Persons immediately after the filing of this Amendment No. 6.The remaining Reporting Persons will continue filing as a group statements on Schedule 13D with respect to their beneficial ownership of securities of the Issuer to the extent required by applicable law. Item 4. Purpose of Transaction. Item 4 is hereby amended to add the following: On January 15, 2013, the Issuer filed with the Securities and Exchange Commission its proxy statement with respect to the Annual Meeting identifying Kenneth H. Traub as a member of management’s slate of director candidates up for election at the Annual Meeting.As a result, Raging Capital has withdrawn its letter to the Issuer, dated November 20, 2012, nominating Kenneth H. Traub and Paul K. McWilliams for election to the Board at the Annual Meeting. Item 5. Interest in Securities of the Issuer. Item 5(a) is hereby amended and restated to read as follows: (a)The aggregate percentage of Shares reported owned by each person named herein is based upon 36,869,855 Shares outstanding as of January 11, 2013, which is the total number of Shares outstanding as reported in the Issuer’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on January 15, 2013. As of the close of business on January 16, 2013,Raging Master directly owned 6,491,127 Shares, constituting approximately 17.6% of the Shares outstanding.By virtue of their relationships with Raging Master discussed in further detail in Item 2, each of Raging Capital and William C. Martin may be deemed to beneficially own the Shares directly owned by Raging Master. As of the close of business on January 16, 2013, Raging Master directly owned an aggregate of $6,492,000 principal amount of the Debentures.Such Debentures are convertible into an aggregate of 1,442,666 Shares, provided, however, that a holder of Debentures will only be entitled to exercise its conversion rights to the extent (and only to the extent) that the receipt of Shares upon exercise of the conversion right would not cause such holder (including its affiliates) to become, directly or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder) of more than 9.99% of the Shares outstanding at such time.Raging Master currently directly owns in excess of 9.99% of the Shares outstanding. 7 CUSIP NO. 928 As of the close of business on January 16, 2013, Paul K. McWilliams owned 3,656 Shares, constituting less than 1% of the Shares outstanding. As of the close of business on January 16, 2013, Kenneth H. Traub did not own any Shares. The filing of this Schedule 13D shall not be deemed an admission that Raging Master, Raging Capital and Mr. Martin are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any securities of the Issuer he or it does not directly own.Each of Raging Master, Raging Capital and Mr. Martin specifically disclaims beneficial ownership of the securities of the Issuer reported herein that he or it does not directly own. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Item 6 is hereby amended to add the following: The Reporting Persons have terminated the Joint Filing and Solicitation Agreement dated November 20, 2012. On January 17, 2013, Raging Master, Raging Capital and Mr. Martin entered into a Joint Filing Agreement in which they agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer.A copy of this agreement is attached as an exhibit hereto and is incorporated herein by reference. Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer. Item 7. Material to be Filed as Exhibits. Item 7 is hereby amended to add the following exhibit: Joint Filing Agreement by and among Raging Capital Master Fund, Ltd., Raging Capital Management, LLC and William C. Martin, dated January 17, 2013. 8 CUSIP NO. 928 SIGNATURES After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated:January 17, 2013 Raging Capital Master Fund, Ltd. By: Raging Capital Management, LLC Investment Manager By: /s/ Frederick C. Wasch Name: Frederick C. Wasch Title: Chief Financial Officer Raging Capital Management, LLC By: /s/ Frederick C. Wasch Name: Frederick C. Wasch Title: Chief Financial Officer /s/ Frederick C. Wasch Frederick C. Wasch as attorney-in-fact for William C. Martin /s/ Paul K. McWilliams Paul K. McWilliams /s/ Kenneth H. Traub Kenneth H. Traub 9
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Exhibit 10.21
EMPLOYMENT AGREEMENT
This Agreement is entered into effective as of the 21st day of April, 2010, by
and between Sonic Industries Services Inc. (the “Corporation”), an Oklahoma
corporation, and Craig J. Miller (the “Employee”).
RECITALS
Whereas, the Employee is currently serving as the Senior Vice President and
Chief Information Officer of the Corporation and is an integral part of its
management; and
Whereas, the Corporation’s Board of Directors (the “Board”) has determined that
it is appropriate to support and encourage the attention and dedication of
certain key members of the Corporation’s management, including Employee, to
their assigned duties without distraction and potentially disturbing
circumstances arising from the possibility of a Change in Control (herein
defined) of Sonic Corp., the parent of the Corporation; and
Whereas, the Board of Directors of Sonic Corp., on the 21st day of April, 2010,
ratified and approved this Agreement; and
Whereas, the Corporation desires to continue the services of Employee, whose
experience, knowledge and abilities with respect to the business and affairs of
the Corporation will be extremely valuable to the Corporation; and
Whereas, the parties hereto desire to enter into this Agreement setting forth
the terms and conditions of the employment relationship of the Corporation and
Employee.
Now, therefore, it is agreed as follows:
ARTICLE I
Term of Employment
1.1 Term of Employment. The Corporation shall employ Employee for a period of
one year from the date hereof (the “Initial Term”).
1.2 Extension of Initial Term. Upon each annual anniversary date of this
Agreement, this Agreement shall be extended automatically for successive terms
of one year each, unless either the Corporation or the Employee gives contrary
written notice to the other not later than the annual anniversary date. As used
herein, “Term” shall mean the Initial Term together with any renewal term(s)
pursuant to this Section 1.2.
1.3 Termination of Agreement and Employment. The Corporation may terminate this
Agreement and the Employee’s employment at any time effective upon written
notice to the Employee. The Employee may terminate this Agreement and the
Employee’s employment only after at least 30 days’ written notice to the
Corporation, unless otherwise agreed by the Corporation.
ARTICLE II
Duties of the Employee
Employee shall serve as the Senior Vice President and Chief Information Officer
of the Corporation. Employee shall do and perform all services, acts, or things
necessary or advisable to manage and conduct the business of the Corporation
consistent with such position subject to such policies and procedures as may be
established by the Board.
ARTICLE III
Compensation
3.1 Salary. For Employee’s services to the Corporation as the Senior Vice
President and Chief Information Officer, Employee shall be paid a salary at the
annual rate of $250,000 (herein referred to as “Salary”),
payable in 24 equal installments on the 1st and 15th day of each month. On the
1st day of each calendar year during the term of this Agreement with the
Corporation, Employee shall be eligible for an increase in Salary based on an
evaluation of Employee’s performance during the past year with the Corporation.
During the term of this Agreement, the Salary of the Employee shall not be
decreased at any time from the Salary then in effect unless agreed to in writing
by the Employee.
3.2 Bonus. The Employee shall be entitled to participate in an equitable manner
with other officers of the Corporation in discretionary cash bonuses as
authorized by the Board. Such bonuses shall be paid not later than the 15th day
of the third month following the later of the end of the Corporation’s tax year
or the Employee’s tax year in which the bonuses are no longer subject to a
substantial risk of forfeiture (within the meaning of Section 409A of the
ARTICLE IV
Employee Benefits
4.1 Use of Automobile. The Corporation shall provide Employee with either the
use of an automobile for business and personal use or a cash car allowance in
accordance with the established company car policy of the Corporation. The
Corporation shall pay all expenses of operating, maintaining and repairing the
automobile provided by the Corporation and shall procure and maintain automobile
liability insurance in respect thereof, with such coverage insuring each
Employee for bodily injury and property damage. Reimbursement of
automobile-related expenses shall be made as soon as practicable after the
request for reimbursement is submitted, but in no event later than the last day
of the calendar year next following the calendar year in which such expense was
incurred. Additionally, neither the provision of in-kind benefits nor the
reimbursement of expenses in any one calendar year shall affect the level or
amount of in-kind benefits to be provided, or the expenses eligible for
reimbursement, in any other calendar year. The Employee’s right to reimbursement
or in-kind benefits under this Section 4.1 is not subject to liquidation or
exchange for another benefit.
4.2 Medical, Life and Disability Insurance Benefits. The Corporation shall
provide Employee with medical, life and disability insurance benefits in
accordance with the established benefit policies of the Corporation.
4.3 Working Facilities. Employee shall be provided adequate office space,
secretarial assistance, and such other facilities and services suitable to
Employee’s position and adequate for the performance of Employee’s duties.
4.4 Business Expenses. Employee shall be authorized to incur reasonable expenses
for promoting the business of the Corporation, including expenses for
entertainment, travel, and similar items. The Corporation shall reimburse
Employee for all such expenses upon the presentation by Employee, from time to
time, of an itemized account of such expenditures. Reimbursement shall be made
as soon as practicable after the request for reimbursement is submitted, but in
no event later than the last day of the calendar year next following the
calendar year in which such expense was incurred. Additionally, the
reimbursement of expenses in any one calendar year shall not affect the expenses
eligible for reimbursement in any other calendar year. The Employee’s right to
reimbursement under this Section 4.4 is not subject to liquidation or exchange
for another benefit.
4.5 Vacations. Employee shall be entitled to an annual paid vacation
commensurate with the Corporation’s established vacation policy for officers.
The timing of paid vacations shall be scheduled in a reasonable manner by the
Employee.
4.6 Disability Benefit. Upon disability (as defined herein) of the Employee, the
Employee shall be entitled to receive up to six months’ of Employee’s Salary
(less any deductions required by law) payable in 12 equal installments of 1/24
of the Salary, with the first installment occurring on the first regularly
scheduled payroll date following the determination of disability and the
remaining installments occurring on a semi-monthly basis thereafter, provided
that such disability payments shall continue only so long as the disability
continues, and provided further that each such disability payment shall be
reduced by any benefit payment the Employee is entitled to receive under the
Corporation’s group disability insurance plans during the corresponding payroll
period.
2
4.7 Term Life Insurance. The Corporation shall purchase term life insurance on
the life of the Employee having a face value of four times the Employee’s Salary
(to be changed as salary adjustments are made) or the face value of life
insurance that can be purchased based upon the Employee’s health history with
the Corporation paying the standard premium rate for term insurance under its
then current insurance program at the Employee’s age and assuming good health,
whichever amount is lesser, provided that such insurance can be obtained by the
Corporation in a manner which meets the requirements for deductibility by the
Corporation under Section 79 of the Code.
4.8 Compensation Defined. Compensation shall be defined as all monetary
compensation and all benefits described in Articles III and IV hereunder (as
adjusted during the term hereof).
ARTICLE V
Termination
5.1 Separation from Service. For purposes of this Agreement, the terms
“terminate,” “terminated” and “termination” with respect to the Employee’s
employment mean a termination of the Employee’s employment that constitutes a
“separation from service” within the meaning of the default rules of
5.2 Death. Employee’s employment hereunder shall be terminated upon the
Employee’s death.
5.3 Disability. The Corporation may terminate Employee’s employment hereunder in
the event Employee is disabled and such disability continues for more than 180
days. “Disability” shall be defined as the inability of Employee to render the
services required of him under this Agreement, with or without a reasonable
accommodation, as a result of physical or mental incapacity.
5.4 Cause.
(a) The Corporation may terminate Employee’s employment hereunder for Cause. For
the purpose of this Agreement, “Cause” shall mean (i) the willful and
intentional failure by Employee to substantially perform Employee’s duties
hereunder, other than any failure resulting from Employee’s incapacity due to
physical or mental incapacity, or (ii) commission by Employee, in connection
with Employee’s employment by the Corporation, of an illegal act or any act
(though not illegal) which is not in the ordinary course of the Employee’s
responsibilities and exposes the Corporation to a significant level of undue
liability. For purposes of this paragraph, no act or failure to act on
Employee’s part shall be considered to have met either of the preceding tests
unless done or omitted to be done by Employee without a reasonable belief that
Employee’s action or omission was in the best interest of the Corporation.
(b) Notwithstanding the foregoing, Employee shall not be deemed to have been
terminated for cause unless such action is ratified by the affirmative vote of
not less than two-thirds of the entire membership of the Board at a meeting held
within 30 days of such termination (after reasonable notice to Employee and an
opportunity for Employee to be heard by members of the Board) confirming that
Employee was guilty of the conduct set forth in this Section 5.4. Ratification
by the Board will be effective as of the original date of termination of
Employee.
5.5 Compensation Upon Termination for Cause or Upon Resignation By Employee.
Except as otherwise set forth in Section 5.8 hereof, if Employee’s employment
shall be terminated for Cause or if Employee shall resign Employee’s position
with the Corporation, the Corporation shall pay Employee’s Compensation only
through the last day of Employee’s employment by the Corporation. The
Corporation shall then have no further obligation to Employee under this
Agreement. If the Board, pursuant to Section 5.4(b), votes to classify
Employee’s termination as “not for cause,” then Employee shall be compensated
pursuant to Section 5.6 below.
5.6 Compensation Upon Termination Other Than For Cause Or Disability. Except as
otherwise set forth in Section 5.8 hereof, if the Corporation shall terminate
Employee’s employment other than for Cause or Disability, the Corporation shall
continue to be obligated to pay 12 months’ of Employee’s Salary (payable in 24
equal installments, with the first installment occurring on the first regularly
scheduled payroll date following the date of termination, and the remaining
installments occurring on a semi-monthly basis thereafter), but shall not be
obligated to provide any other benefits described in Articles III and IV hereof,
except to the extent required by law.
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5.7 Compensation Upon Non-Renewal of Agreement. Except as otherwise set forth in
Section 5.8 hereof, if the Corporation shall give notice to Employee in
accordance with Section 1.2 hereof that this Agreement will not be renewed but
Employee’s employment is not terminated, the Corporation shall continue to be
obligated to pay Employee’s Salary for a period of 12 months beginning on the
date notice of non-renewal is given, on regularly scheduled payroll dates, but
shall not be obligated to provide any other benefits described in Articles III
and IV hereof, except to the extent required by law.
5.8 Termination of Employee or Resignation by Employee for Good Reason Following
a Change in Control. If at any time within the first 12 months subsequent to a
Change in Control, the Employee’s employment with the Corporation is terminated
other than as provided for in Section 5.2, 5.3 or 5.4 hereof, or the Corporation
violates any provision of this Agreement or Employee shall resign his or her
employment for Good Reason (as defined herein), the Corporation shall be
obligated to pay to Employee a severance payment in an amount equal to two times
the Employee’s compensation payable under paragraph 5.6 above, but in no event
to exceed an amount equal to $1.00 less than three times the mean average annual
compensation paid to Employee by the Corporation and any of its subsidiaries
during the five calendar years ending before the date on which the Change in
Control occurred (or if Employee was not employed for that entire five year
period, then the mean average annual compensation paid to employee during such
shorter period, with the Employee’s compensation annualized for any calendar
year during which the employee was not employed for the entire calendar year);
provided, however, that if the severance payment under this Section 5.8, either
alone or together with any other payments or compensation which Employee has a
right to receive from the Corporation, would constitute a “parachute payment”
(as defined in Section 280G (or any equivalent term defined in any successor or
equivalent provision) of the Code), then such severance payment shall be reduced
to the largest amount as will result in no portion of the severance payment
under this Section 5.8 being subject to the excise tax imposed by Section 4999
(or any successor or equivalent provision) of the Code. For the purpose of this
Section 5.8, the Employee’s annual compensation from the Corporation and its
subsidiaries for a given year shall equal Employee’s compensation as reflected
on Employee’s Form W-2 for that year (unless the Employee was not employed for
the entire calendar year, in which case Employee’s Form W-2 compensation for
such year shall be annualized). The determination of any reduction in severance
payment under this Section 5.8 pursuant to the foregoing provision shall be
conclusive and binding on the Corporation.
If the Change in Control implicated by this Section 5.8 is also a “change in
control event” within the meaning of the default rules of the final regulations
promulgated under Section 409A(a)(2)(A)(v) of the Code, then the severance
payment due under this Section 5.8 shall be made in a lump sum, payable no later
than the 15th day of the third month following the later of the end of the
Corporation’s tax year or the Employee’s tax year in which occurs the Employee’s
effective date of termination under this Section 5.8. If the Change in Control
is not a “change in control event” within the meaning of the default rules of
the final regulations promulgated under Section 409A(a)(2)(A)(v) of the Code,
the severance payment contemplated by this Section 5.8 shall be made in 12
semi-monthly installment payments, beginning on the first regularly scheduled
payroll date following the Employee’s effective date of termination under this
Section 5.8. For purposes of this Section 5.8, the Employee’s effective date of
termination shall mean, as applicable, (x) the effective date of such
termination of employment by the Corporation or (y) the effective date of the
Employee’s resignation for Good Reason, which date shall be stated in the
Employee’s written notice to the Corporation of his resignation for Good Reason
and shall be no later than 60 days following the date of such notice.
“Good Reason” shall mean any of the following which occur during the term of
this Agreement without Employee’s express written consent:
In the Event of a Change in Control:
(a) the assignment to Employee of duties inconsistent with Employee’s position,
office, duties, responsibilities and status with the Corporation immediately
prior to a Change in Control; or, a change in Employee’s titles or offices as in
effect immediately prior to a Change in Control; or, any removal of Employee
from or any failure to reelect Employee to any such position or office, except
in connection with the termination of Employee’s employment by the Corporation
for Disability or Cause or as a result of Employee’s death or by Employee other
than for Good Reason as set forth in this Section 5.8(a); or
4
(b) a reduction by the Corporation in Employee’s Salary as in effect as of the
date of this Agreement or as the same may be increased from time-to-time during
the term of this Agreement or the Corporation’s failure to increase (within 12
months of the Employee’s last increase in Salary) Employee’s Salary after a
Change in Control in an amount which at least equals, on a percentage basis, the
highest percentage increase in salary for all officers of the Corporation or any
parent or affiliated company effected in the preceding 12 months; or
(c) the failure of the Corporation to provide Employee with the same fringe
benefits (including, without limitation, life insurance plans, medical or
disability plans, retirement plans, incentive plans, stock option plans, stock
purchase plans, stock ownership plans, or bonus plans) that were provided to
Employee immediately prior to the Change in Control, or with a package of fringe
benefits that, if one or more of such benefits varies from those in effect
immediately prior to such Change in Control, is in Employee’s sole judgment
substantially comparable in all material respects to such fringe benefits taken
as a whole; or
(d) relocation of the Corporation’s principal executive offices to a location
outside of Oklahoma City, Oklahoma, or Employee’s relocation to any place other
than the location at which Employee performed Employee’s duties prior to a
Change in Control, except for required travel by Employee on the Corporation’s
business to an extent substantially consistent with Employee’s business travel
obligations at the time of the Change in Control; or
(e) any failure by the Corporation to provide Employee with the same number of
paid vacation days to which Employee is entitled at the time of the Change in
Control; or
(f) the failure of a successor to the Corporation to assume the obligation of
this Agreement as set forth in Section 7.1 herein.
5.9 Change in Control. For the purposes of this Agreement, the phrase “change in
control” shall mean any of the following events:
(a) Any consolidation or merger of Sonic Corp., in which Sonic Corp. is not the
continuing or surviving corporation or pursuant to which shares of Sonic Corp.’s
capital stock would convert into cash, securities or other property, other than
a merger of Sonic Corp. in which the holders of Sonic Corp.’s capital stock
immediately prior to the merger have the same proportionate ownership of capital
stock of the surviving corporation immediately after the merger;
(b) Any sale, lease, exchange or other transfer (whether in one transaction or a
series of related transactions) of all or substantially all of the assets of
Sonic Corp.;
(c) The stockholders of Sonic Corp. approve any plan or proposal for the
liquidation or dissolution of Sonic Corp.;
(d) Any person (as used in Section 13(d) and 14(d)(2) of the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the beneficial
owner (within the meaning of Rule 13D-3 under the Exchange Act) of 50% or more
of Sonic Corp.’s outstanding capital stock;
(e) During any period of two consecutive years, individuals who at the beginning
of that period constitute the entire Board of Directors of Sonic Corp. cease for
any reason to constitute a majority of the Board of Directors unless the
election or the nomination for election by Sonic Corp.’s stockholders of each
new director received the approval of the Board of Directors by a vote of at
least two-thirds of the directors then and still in office and who served as
directors at the beginning of the period; or
(f) Sonic Corp. becomes a subsidiary of any other corporation.
5
ARTICLE VI
Obligation to Mitigate Damages;
No Effect on Other Contractual Rights
6.1 Mitigation. The Employee shall not have any obligation to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise. However, all payments required under the terms of this
Agreement shall cease 30 days after the acceptance by the Employee of employment
by another employer; provided that, this limitation shall not apply to payments
due under paragraph 5.8, above.
6.2 Other Contractual Rights. The provisions of this Agreement, and any payment
provided for hereunder shall not reduce any amount otherwise payable, or in any
way diminish Employee’s existing rights, or rights which would accrue solely as
a result of passage of time under any employee benefit plan or other contract,
plan or arrangement of which Employee is a beneficiary or in which Employee
participates.
ARTICLE VII
Successors to the Corporation
7.1 Assumption. The Corporation will require any successor or assignee (whether
direct or indirect, by purchase, merger, consolidation or otherwise) of all or
substantially all of the business and/or assets of the Corporation, by agreement
in form and substance reasonably satisfactory to Employee, to expressly,
absolutely and unconditionally assume and agree to perform this Agreement in the
same manner and to the same extent that the Corporation would be required to
perform it if no such succession or assignment had taken place. Any failure by
the Corporation to obtain such agreement prior to the effectiveness of any such
succession or assignment shall be a material breach of this Agreement.
7.2 Employee’s Successors and Assigns. This Agreement shall inure to the benefit
of and be enforceable by Employee’s personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Employee should die while any amounts are still payable to Employee
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Employee’s devisee, legatee or
other designee or, if there is no such designee, to Employee’s estate.
ARTICLE VIII
Restrictions on Employee
8.1 Confidential Information. During the term of the Employee’s employment and
for a period of 12 months thereafter, the Employee shall not divulge or make
accessible to any party any Confidential Information, as defined below, of Sonic
Corp. or any of its subsidiaries, except to the extent authorized in writing by
the Corporation or otherwise required by law. The phrase “Confidential
Information” shall mean the unique, proprietary and confidential information of
Sonic Corp. and its subsidiaries, consisting of: (1) confidential financial
information regarding Sonic Corp. or its subsidiaries, (2) confidential recipes
for food products; (3) confidential and copyrighted plans and specifications for
interior and exterior signs, designs, layouts and color schemes;
(4) confidential methods, techniques, formats, systems, specifications,
procedures, information, trade secrets, sales and marketing programs;
(5) knowledge and experience regarding the operation and franchising of Sonic
drive-in restaurants; (6) the identities and locations of Sonic’s franchisees,
Sonic drive-in restaurants, and suppliers to Sonic’s franchisees and drive-in
restaurants; (7) knowledge, financial information, and other information
regarding the development of franchised and company-store restaurants;
(8) knowledge, financial information, and other information regarding potential
acquisitions and dispositions; and (9) any other confidential business
information of Sonic Corp. or any of its subsidiaries. The Employee shall give
the Corporation written notice of any circumstances in which Employee has actual
notice of any access, possession or use of the Confidential Information not
authorized by this Agreement.
8.2 Restrictive Covenant. During the term of Employee’s employment, the Employee
shall not retain in or have any interest, directly or indirectly, in any
business competing with the business being conducted by Sonic Corp. or any of
its subsidiaries, without the Corporation’s prior written consent. For the six
month period immediately following the termination of Employee’s employment, the
Employee shall not engage in or have any
6
interest, directly or indirectly, in any fast food restaurant business that has
a menu similar to that of a Sonic drive-in restaurant (such as hamburgers, hot
dogs, onion rings and similar items customarily sold by Sonic drive-in
restaurants), or which has an appearance similar to that of a Sonic drive-in
restaurant (such as color pattern, use of canopies, use of speakers and menu
housings for ordering food, or other items that are customarily used by a Sonic
drive-in restaurant), and which operates such restaurants within a three mile
radius of any Sonic drive-in restaurant.
ARTICLE IX
Miscellaneous
9.1 Indemnification. To the full extent permitted by law, the Board shall
authorize the payment of expenses incurred by or shall satisfy judgments or
fines rendered or levied against Employee in any action brought by a third-party
against Employee (whether or not the Corporation is joined as a party defendant)
to impose any liability or penalty on Employee for any act alleged to have been
committed by Employee while employed by the Corporation unless Employee was
acting with gross negligence or willful misconduct. Payments authorized
hereunder shall include amounts paid and expenses incurred in settling any such
action or threatened action.
9.2 Resolution of Disputes. The following provisions shall apply to any
controversy between the Employee and Sonic Corp. and its subsidiaries and the
Employee (including any director, officer, employee, agent or affiliate of Sonic
Corp. and its subsidiaries) whether or not relating to this Agreement.
(a) Arbitration. The parties shall resolve all controversies by final and
binding arbitration in accordance with the Rules for Commercial Arbitration (the
“Rules”) of the American Arbitration Association in effect at the time of the
execution of this Agreement and pursuant to the following additional provisions:
(1) Applicable Law. The Federal Arbitration Act (the “Federal Act”), as
supplemented by the Oklahoma Arbitration Act (to the extent not inconsistent
with the Federal Act), shall apply to the arbitration and all procedural matters
relating to the arbitration.
(2) Selection of Arbitrators. The parties shall select one arbitrator within 10
days after the filing of a demand and submission in accordance with the Rules.
If the parties fail to agree on an arbitrator within that 10-day period or fail
to agree to an extension of that period, the arbitration shall take place before
an arbitrator selected in accordance with the Rules.
(3) Location of Arbitration. The arbitration shall take place in Oklahoma City,
Oklahoma, and the arbitrator shall issue any award at the place of arbitration.
The arbitrator may conduct hearings and meetings at any other place agreeable to
the parties or, upon the motion of a party, determined by the arbitrator as
necessary to obtain significant testimony or evidence.
(4) Enforcement of Award. The prevailing party shall have the right to enter the
award of the arbitrator in any court having jurisdiction over one or more of the
parties or their assets. The parties specifically waive any right they may have
to apply to any court for relief from the provisions of this Agreement or from
any decision of the arbitrator made prior to the award.
(b) Attorneys’ Fees and Costs. The prevailing party to the arbitration shall
have the right to an award of its reasonable attorneys’ fees and costs
(including the cost of the arbitrator) incurred after the filing of the demand
and submission. If the Corporation or any of its subsidiaries prevails, the
award shall include an amount for that portion of the administrative overhead
reasonably allocable to the time devoted by the in-house legal staff of Sonic
Corp. or any subsidiary.
(c) Excluded Controversies. At the election of the Corporation or its
subsidiaries, the provisions of this Section 9.2 shall not apply to any
controversies relating to the enforcement of the covenant not to compete or the
use and protection of the trademarks, service marks, trade names, copyrights,
patents, confidential information and trade secrets of Sonic Corp. or its
subsidiaries, including (without limitation) the right of the Corporation or its
subsidiaries to apply to any court of competent
7
jurisdiction for appropriate injunctive relief for the infringement of the
rights of Sonic Corp. or its subsidiaries.
(d) Other Rights. The provisions of this Section 9.2 shall not prevent the
Corporation, its subsidiaries, or the Employee from exercising any of their
rights under this agreement, any other agreement, or under the common law,
including (without limitation) the right to terminate any agreement between the
parties or to end or change the party’s legal relationship.
9.3 Entire Agreement. This Agreement constitutes the entire agreement of the
parties with regard to the subject matter of this Agreement and replaces and
supersedes all other written and oral agreements and statements of the parties
relating to the subject matter of this Agreement.
9.4 Notices. Any notices required or permitted to be given under this Agreement
shall be sufficient if in writing and sent by mail to Employee’s residence, in
the case of Employee, or to its principal office, in the case of the
Corporation.
9.5 Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any party.
9.6 Amendment. No amendment or modification of this Agreement shall be deemed
effective unless or until executed in writing by the parties hereto.
9.7 Validity. This Agreement, having been executed and delivered in the State of
Oklahoma, its validity, interpretation, performance and enforcement will be
governed by the laws of that state.
9.8 Section Headings. Section and other headings contained in this Agreement are
interpretation of this Agreement.
9.9 Counterpart Execution. This Agreement may be executed in two or more
together shall constitute but one and the same instrument.
9.10 Exclusivity. Specific arrangements referred to in this Agreement are not
intended to exclude Employee’s participation in any other benefits available to
executive personnel generally or to preclude other compensation or benefits as
may be authorized by the Board from time to time.
9.11 Partial Invalidity. If any provision in this Agreement is held by a court
of competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
9.12
(a) Notwithstanding anything herein to the contrary, if, at the time of the
Employee’s termination of employment with the Corporation, the Employee is a
“specified employee” within the meaning of Section 409A of the Code, as
determined under the Corporation’s established methodology for determining
specified employees, then, solely to the extent necessary to avoid the
imposition of additional taxes, penalties or interest under Section 409A of the
Code, any payments to the Employee hereunder which provide for the deferral of
compensation, within the meaning of Section 409A of the Code (which shall not
include any compensation that is exempt from Section 409A of the Code), and
which are scheduled to be made as a result of the Employee’s termination of
employment during the period beginning on the date of the Employee’s date of
termination and ending on the six-month anniversary of such date shall be
delayed and not paid to the Participant until the first business day following
such sixth month anniversary date, at which time such delayed amounts will be
paid to the Employee in a cash lump sum. If the Employee dies on or after the
date of the Employee’s date of termination and prior to the payment of the
delayed amounts pursuant to this Section 9.12, any amount delayed pursuant to
this Section 9.12 shall be paid to the Employee’s estate within 30 days
following the Employee’s death.
8
(b) To the extent this Agreement is subject to Section 409A of the Code, the
Corporation and Employee intend all payments under this Agreement to comply with
the requirements of such section, and this Agreement shall, to the extent
reasonably practicable, be operated and administered to effectuate such intent.
In witness whereof, the Corporation has caused this Agreement to be executed and
its seal affixed hereto by its officers thereunto duly authorized; and the
Employee has executed this Agreement, as of the day and year first above
written.
The Corporation:
Sonic Industries Services Inc.
By:
/s/ W. Scott McLain
W. Scott McLain, President
The Employee:
/s/ Craig J. Miller
Craig J. Miller
9 |
As filed with the Securities and Exchange Commission on May 21, 2010 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number811 - 03758 MATRIX ADVISORS VALUE FUND, INC. 747 Third Avenue, 31st Floor, New York, NY 10017 David A. Katz 747 Third Avenue, 31st Floor New York, NY 10017 1 (800) 366-6223 Copies to: Carol Gehl Godfrey & Kahn, S.C. 708 N. Water St. Milwaukee, WI 53202 Date of fiscal year end: June 30 Date of reporting period:March 31, 2010 Item 1. Schedule of Investments. Matrix Advisors Value Fund, Inc. Schedule of Investments March 31, 2010 (Unaudited) Shares Value COMMON STOCKS - 99.5% Auto Components: 1.9% Johnson Controls, Inc. $ Bank (Money Center): 3.5% JPMorgan Chase &Co. Bank (Processing): 6.3% Bank of New York Mellon Corp. State Street Corp. Bank (Super Regional): 3.5% Bank of America Corp. Beverages: 1.0% The Coca-Cola Co. Commercial Services: 0.9% Dun & Bradstreet Corp. Computer Software and Services: 3.0% Microsoft Corp. Computers and Peripherals: 3.3% Dell, Inc.* Diversified Operations: 3.2% Tyco International Ltd. Drug: 3.2% Bristol-Myers Squibb Co. Drug Store: 3.3% Walgreen Co. Electrical Components: 5.5% Corning, Inc. Tyco Electronics Ltd. Financial Services: 5.8% American Express Co. Western UnionCo. Hotels/Gaming/Cruise Lines: 3.0% Carnival Corp. Household Products: 1.4% The Procter & Gamble Co. Human Resources: 3.3% Monster Worldwide, Inc.* Hypermarkets & Supercenters: 2.0% Wal-Mart Stores, Inc. Internet: 3.7% eBay, Inc.* Yahoo!Inc.* Medical-Biotechnology: 1.4% Genzyme Corp.* Matrix Advisors Value Fund, Inc. Schedule of Investments March 31, 2010 (Unaudited) Shares Value Medical Supplies: 5.4% Covidien PLC $ Medtronic, Inc. St. Jude Medical, Inc.* Zimmer Holdings, Inc.* Metals and Mining: 2.8% Alcoa, Inc. Oilfield Services/Equipment: 1.9% Tidewater, Inc. Oil/Gas (Domestic): 3.3% Devon Energy Corp. Petroleum (Integrated): 6.0% Chevron Corp. ConocoPhillips Petroleum (Refining): 2.6% Valero Energy Corp. Printing & Publishing: 3.4% The McGraw-Hill Companies, Inc. Retail (Special Lines): 3.2% Staples, Inc. Securities Brokerage: 2.9% Morgan Stanley Semiconductor: 2.7% Analog Devices, Inc. Semiconductor (Capital Equipment): 2.7% Novellus Systems, Inc.* Telecommunications (Equipment): 3.4% Cisco Systems, Inc.* TOTAL COMMON STOCKS (Cost $95,024,069) $ SHORT TERM INVESTMENTS: 0.6% Fidelity Institutional Money Market Portfolio $ TOTAL SHORT TERM INVESTMENTS (Cost $620,800) $ TOTAL INVESTMENTS (Cost $95,644,869): 100.1% LIABILITIES IN EXCESS OF OTHER ASSETS: (0.1)% TOTAL NET ASSETS: 100.0% $ *Non-Income Producing. The cost basis of investment for federal income tax purposes at March 31, 2010, was as follows+: Cost of investments $ Gross unrealized appreciation Gross unrealized depreciation Net unrealized depreciation $ Matrix Advisors Value Fund, Inc. Schedule of Investments March 31, 2010 (Unaudited) +Because tax adjustments are calculated annually, the above table does not reflect tax adjustments.For the previous fiscal year's federal income tax information, please refer to the Notes to Financial Statements section in the Fund's most recent semi-annual or annual report. Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (SFAS 157) establishes an authoritative definition of fair value and sets out a hierarchy for measuring fair value.SFAS 157 requires additional disclosures about the various i Level 1 - Quoted prices in active markets for identical securities. Level 2 - Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 - Significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.The following is a summary of the inputs used to value the Fund's net assets as of March 31, 2010: Level 1 Level 2 Level 3 Total Equity Common Stock $ $ - - $ Total Equity - - Short-Term Investments - - Total Investments in Securities $ $ - - $ Item 2. Controls and Procedures. (a) The Registrant’s President and Treasurer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) (17 CFR 270.30a-3(c)) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or Rule15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(d)). (b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) (17 CFR 270.30a-3(d)) that occurred during the Registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. Item 3. Exhibits. Separate certifications for each principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)).Filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Matrix Advisors Value Fund, Inc. By/s/David A. Katz David A. Katz, President and Treasurer Date5/19/10 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By/s/David A. Katz David A. Katz, President and Treasurer Date5/19/10
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Exhibit 10.07
BLUE SHIELD
CONTROLLED AFFILIATE LICENSE AGREEMENT
(Includes revisions adopted by Member Plans through their June 12, 2003 meeting)
This Agreement by and among Blue Cross and Blue Shield Association (“BCBSA”) and
Compcare Health Services Insurance Corporation (“Controlled Affiliate”), a
Controlled Affiliate of the Blue Shield Plan(s), known as WellPoint Health
Networks, Inc. (“Plan”), which is also a Party signatory hereto.
WHEREAS, BCBSA is the owner of the BLUE SHIELD and BLUE SHIELD Design service
marks;
WHEREAS, Plan and Controlled Affiliate desire that the latter be entitled to use
the BLUE SHIELD and BLUE SHIELD Design service marks (collectively the “Licensed
Marks”) as service marks and be entitled to use the term BLUE SHIELD in a trade
name (“Licensed Name”);
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
Subject to the terms and conditions of this Agreement, BCBSA hereby grants to
Controlled Affiliate the right to use the Licensed Marks and Name in connection
with, and only in connection with: (i) health care plans and related services,
as defined in BCBSA’s License Agreement with Plan, and administering the
non-health portion of workers’ compensation insurance, and (ii) underwriting the
indemnity portion of workers’ compensation insurance, provided that Controlled
Affiliate’s total premium revenue comprises less than 15 percent of the
sponsoring Plan’s net subscription revenue.
This grant of rights is non-exclusive and is limited to the Service Area served
by the Plan. Controlled Affiliate may use the Licensed Marks and Name in its
legal name on the following conditions: (i) the legal name must be approved in
advance, in writing, by BCBSA; (ii) Controlled Affiliate shall not do business
outside the Service Area under any name or mark; and (iii) Controlled Affiliate
shall not use the Licensed Marks and Name, or any derivative thereof, as part of
any name or symbol used to identify itself in any securities market. Controlled
Affiliate may use the Licensed Marks and Name in its Trade Name only with the
prior, written, consent of BCBSA.
2. QUALITY CONTROL
A. Controlled Affiliate agrees to use the
Licensed Marks and Name only in connection with the licensed services and
further agrees to be bound by the conditions regarding quality control shown in
attached Exhibit A as they may be amended by BCBSA from time-to-time.
Amended as of November 16, 2000
B. Controlled Affiliate agrees to comply
with all applicable federal, state and local laws.
C. Controlled Affiliate agrees that it will
provide on an annual basis (or more often if reasonably required by Plan or by
BCBSA) a report or reports to Plan and BCBSA demonstrating Controlled
Affiliate’s compliance with the requirements of this Agreement including but not
limited to the quality control provisions of this paragraph and the attached
Exhibit A.
D. Controlled Affiliate agrees that Plan
and/or BCBSA may, from time-to-time, upon reasonable notice, review and inspect
the manner and method of Controlled Affiliate’s rendering of service and use of
the Licensed Marks and Name.
E. As used herein, a Controlled Affiliate
is defined as an entity organized and operated in such a manner, that it meets
the following requirements:
(1) A Plan or Plans authorized to use the
Licensed Marks in the Service Area of the Controlled Affiliate pursuant to
separate License Agreement(s) with BCBSA, other than such Controlled Affiliate’s
License Agreement(s), (the “Controlling Plan(s)”), must have the legal
authority directly or indirectly through wholly-owned subsidiaries to select
members of the Controlled Affiliate’s governing body having not less than 50%
voting control thereof and to:
(a) prevent any change in the articles of
incorporation, bylaws or other establishing or governing documents of the
Controlled Affiliate with which the Controlling Plan(s) do(es) not concur;
(b) exercise control over the policy and
operations of the Controlled Affiliate at least equal to that exercised by
persons or entities (jointly or individually) other than the Controlling
Plan(s); and
Notwithstanding anything to the contrary in (a) through (b) hereof, the
Controlled Affiliate’s establishing or governing documents must also require
written approval by the Controlling Plan(s) before the Controlled Affiliate can:
(i) change its legal and/or trade names;
(ii) change the geographic area in which it
operates;
(iii) change any of the type(s) of businesses in
which it engages;
2
(iv) create, or become liable for by way of
guarantee, any indebtedness, other than indebtedness arising in the ordinary
course of business;
(v) sell any assets, except for sales in the
ordinary course of business or sales of equipment no longer useful or being
replaced;
(vi) make any loans or advances except in the
ordinary course of business;
(vii) enter into any arrangement or agreement with any
party directly or indirectly affiliated with any of the owners or persons or
entities with the authority to select or appoint members or board members of the
Controlled Affiliate, other than the Plan or Plans (excluding owners of stock
holdings of under 5% in a publicly traded Controlled Affiliate);
(viii) conduct any business other than under the Licensed
Marks and Name;
(ix) take any action that any Controlling Plan or
BCBSA reasonably believes will adversely affect the Licensed Marks and Name.
In addition, a Plan or Plans directly or indirectly through wholly owned
subsidiaries shall own at least 50% of any for-profit Controlled Affiliate.
Or
(2) A Plan or Plans authorized to use the
License Agreement(s), (the “Controlling Plan(s)”), have the legal authority
directly or indirectly through wholly-owned subsidiaries to select members of
the Controlled Affiliate’s governing body having more than 50% voting control
thereof and to:
operations of the Controlled Affiliate.
3
In addition, a Plan or Plans directly or indirectly through wholly-owned
subsidiaries shall own more than 50% of any for-profit Controlled Affiliate.
3. SERVICE MARK USE
A. Controlled Affiliate recognizes the
importance of a comprehensive national network of independent BCBSA licensees
which are committed to strengthening the Licensed Marks and Name. The
Controlled Affiliate further recognizes that its actions within its Service Area
may affect the value of the Licensed Marks and Name nationwide.
B. Controlled Affiliate shall at all times
make proper service mark use of the Licensed Marks and Name, including but not
limited to use of such symbols or words as BCBSA shall specify to protect the
Licensed Marks and Name and shall comply with such rules (generally applicable
to Controlled Affiliates licensed to use the Licensed Marks and Name) relative
to service mark use, as are issued from time-to-time by BCBSA. Controlled
Affiliate recognizes and agrees that all use of the Licensed Marks and Name by
Controlled Affiliate shall inure to the benefit of BCBSA.
C. Controlled Affiliate may not directly or
indirectly use the Licensed Marks and Name in a manner that transfers or is
intended to transfer in the Service Area the goodwill associated therewith to
another mark or name, nor may Controlled Affiliate engage in activity that may
dilute or tarnish the unique value of the Licensed Marks and Name.
D. If Controlled Affiliate meets the
standards of 2E(1) but not 2E(2) above and any of Controlled Affiliate’s
advertising or promotional material is reasonably determined by BCBSA and/or the
Plan to be in contravention of rules and regulations governing the use of the
Licensed Marks and Name, Controlled Affiliate shall for ninety (90) days
thereafter obtain prior approval from BCBSA of advertising and promotional
efforts using the Licensed Marks and Name, approval or disapproval thereof to be
forthcoming within five (5) business days of receipt of same by BCBSA or its
designee. In all advertising and promotional efforts, Controlled Affiliate
shall observe the Service Area limitations applicable to Plan.
E. Controlled Affiliate shall use its best
efforts in the Service Area to promote and build the value of the Licensed Marks
and Name.
4
4. SUBLICENSING AND ASSIGNMENT
Controlled Affiliate shall not, directly or indirectly, sublicense, transfer,
hypothecate, sell, encumber or mortgage, by operation of law or otherwise, the
rights granted hereunder and any such act shall be voidable at the sole option
of Plan or BCBSA. This Agreement and all rights and duties hereunder are
personal to Controlled Affiliate.
5. INFRINGEMENT
Controlled Affiliate shall promptly notify Plan and Plan shall promptly notify
BCBSA of any suspected acts of infringement, unfair competition or passing off
that may occur in relation to the Licensed Marks and Name. Controlled Affiliate
shall not be entitled to require Plan or BCBSA to take any actions or institute
any proceedings to prevent infringement, unfair competition or passing off by
third parties. Controlled Affiliate agrees to render to Plan and BCBSA, without
charge, all reasonable assistance in connection with any matter pertaining to
the protection of the Licensed Marks and Name by BCBSA.
6. LIABILITY INDEMNIFICATION
Controlled Affiliate and Plan hereby agree to save, defend, indemnify and hold
BCBSA harmless from and against all claims, damages, liabilities and costs of
every kind, nature and description (except those arising solely as a result of
BCBSA’s negligence) that may arise as a result of or related to Controlled
Affiliate’s rendering of services under the Licensed Marks and Name.
7. LICENSE TERM
A. Except as otherwise provided herein, the
license granted by this Agreement shall remain in effect for a period of one (1)
year and shall be automatically extended for additional one (1) year periods
unless terminated pursuant to the provisions herein.
B. This Agreement and all of Controlled
Affiliate’s rights hereunder shall immediately terminate without any further
action by any party or entity in the event that Plan ceases to be authorized to
use the Licensed Marks and Name.
C. Notwithstanding any other provision of
this Agreement, this license to use the Licensed Marks and Name may be forthwith
terminated by the Plan or the affirmative vote of the majority of the Board of
Directors of BCBSA present and voting at a special meeting expressly called by
BCBSA for the purpose on ten (10) days written notice to the Plan advising of
the specific matters at issue and granting the Plan an opportunity to be heard
and to present its response to
5
the Board for: (1) failure to comply with any applicable minimum capital or
liquidity requirement under the quality control standards of this Agreement; or
(2) failure to comply with the “Organization and Governance” quality control
standard of this Agreement; or (3) impending financial insolvency; or (4) for a
Smaller Controlled Affiliate (as defined in Exhibit A), failure to comply with
any of the applicable requirements of Standards 2, 3, 4, 5 or 7 of attached
Exhibit A; or (5) the pendency of any action instituted against the Controlled
Affiliate seeking its dissolution or liquidation of its assets or seeking
appointment of a trustee, interim trustee, receiver or other custodian for any
of its property or business or seeking the declaration or establishment of a
trust for any of its property or business, unless this Controlled Affiliate
License Agreement has been earlier terminated under paragraph 7(e); or (6)
failure by a Controlled Affiliate that meets the standards of 2E(1) but not
2E(2) above to obtain BCBSA’s written consent to a change in the identity of any
owner, in the extent of ownership, or in the identity of any person or entity
with the authority to select or appoint members or board members, provided that
as to publicly traded Controlled Affiliates this provision shall apply only if
the change affects a person or entity that owns at least 5% of the Controlled
Affiliate’s stock before or after the change; or (7) such other reason as is
determined in good faith immediately and irreparably to threaten the integrity
and reputation of BCBSA, the Plans, any other licensee including Controlled
Affiliate and/or the Licensed Marks and Name.
D. Except as otherwise provided in Paragraphs
7(B), 7(C) or 7(E) herein, should Controlled Affiliate fail to comply with the
provisions of this Agreement and not cure such failure within thirty (30) days
of receiving written notice thereof (or commence a cure within such thirty day
period and continue diligent efforts to complete the cure if such curing cannot
reasonably be completed within such thirty day period) BCBSA or the Plan shall
have the right to issue a notice that the Controlled Affiliate is in a state of
noncompliance. If a state of noncompliance as aforesaid is undisputed by the
Controlled Affiliate or is found to exist by a mandatory dispute resolution
panel and is uncured as provided above, BCBSA shall have the right to seek
judicial enforcement of the Agreement or to issue a notice of termination
thereof. Notwithstanding any other provisions of this Agreement, any disputes
as to the termination of this License pursuant to Paragraphs 7(B), 7(C) or 7(E)
of this Agreement shall not be subject to mediation and mandatory dispute
resolution. All other disputes between BCBSA, the Plan and/or Controlled
Affiliate shall be submitted promptly to mediation and mandatory dispute
resolution. The mandatory dispute resolution panel shall have authority to
issue orders for specific performance and assess monetary penalties. Except,
however, as provided in Paragraphs 7(B) and 7(E) of this Agreement, this license
to use the Licensed Marks and Name may not be finally terminated for any reason
without the affirmative vote of a majority of the present and voting members of
the Board of Directors of BCBSA.
6
E. This Agreement and all of Controlled
action by any party or entity in the event that:
(1) Controlled Affiliate shall no longer comply
with item 2(E) above;
(2) Appropriate dues, royalties and other
payments for Controlled Affiliate pursuant to paragraph 9 hereof, which are the
royalties for this License Agreement, are more than sixty (60) days in arrears
to BCBSA; or
(3) Any of the following events occur: (i) a
voluntary petition shall be filed by Controlled Affiliate seeking bankruptcy,
reorganization, arrangement with creditors or other relief under the bankruptcy
laws of the United States or any other law governing insolvency or debtor
relief, or (ii) an involuntary petition or proceeding shall be filed against
Controlled Affiliate seeking bankruptcy, reorganization, arrangement with
creditors or other relief under the bankruptcy laws of the United States or any
other law governing insolvency or debtor relief and such petition or proceeding
is consented to or acquiesced in by Controlled Affiliate or is not dismissed
within sixty (60) days of the date upon which the petition or other document
commencing the proceeding is served upon the Controlled Affiliate, or (iii) an
order for relief is entered against Controlled Affiliate in any case under the
bankruptcy laws of the United States, or Controlled Affiliate is adjudged
bankrupt or insolvent as those terms are defined in the Uniform Commercial Code
as enacted in the State of Illinois by any court of competent jurisdiction, or
(iv) Controlled Affiliate makes a general assignment of its assets for the
benefit of creditors, or (v) the Department of Insurance or other regulatory
agency assumes control of Controlled Affiliate or delinquency proceedings
(voluntary or involuntary) are instituted, or (vi) an action is brought by
Controlled Affiliate seeking its dissolution or liquidation of its assets or
seeking the appointment of a trustee, interim trustee, receiver or other
custodian for any of its property or business, or (vii) an action is instituted
by any governmental entity or officer against Controlled Affiliate seeking its
dissolution or liquidation of its assets or seeking the appointment of a
trustee, interim trustee, receiver or other custodian for any of its property or
business and such action is consented to or acquiesced in by Controlled
Affiliate or is not dismissed within one hundred thirty (130) days of the date
upon which the pleading or other document commencing the action is served upon
the Controlled Affiliate, provided that if the action is stayed or its
prosecution is enjoined, the one hundred thirty (130) day period is tolled for
the duration of the stay or injunction, and provided further, that the
Association’s Board of Directors may toll or extend the 130 day period at any
time prior to its expiration, or (viii) a trustee, interim trustee, receiver or
other custodian for any of Controlled Affiliate’s property or business is
appointed or the Controlled Affiliate is ordered dissolved or liquidated.
Notwithstanding any other provision of this Agreement,
7
a declaration or a request for declaration of the existence of a trust over any
of the Controlled Affiliate’s property or business shall not in itself be deemed
to constitute or seek appointment of a trustee, interim trustee, receiver or
other custodian for purposes of subparagraphs 7(e)(3)(vii) and (viii) of this
Agreement.
F. Upon termination of this Agreement for
cause or otherwise, Controlled Affiliate agrees that it shall immediately
discontinue all use of the Licensed Marks and Name, including any use in its
trade name.
G. Upon termination of this Agreement,
Controlled Affiliate shall immediately notify all of its customers that it is no
longer a licensee of BCBSA and, if directed by the Association’s Board of
Directors, shall provide instruction on how the customer can contact BCBSA or a
designated licensee to obtain further information on securing coverage. The
notification required by this paragraph shall be in writing and in a form
approved by BCBSA. The BCBSA shall have the right to audit the terminated
entity’s books and records to verify compliance with this paragraph.
H. In the event this Agreement terminates
pursuant to 7(b) hereof, or in the event the Controlled Affiliate is a Larger
Controlled Affiliate (as defined in Exhibit A), upon termination of this
Agreement, the provisions of Paragraph 7.G. shall not apply and the following
provisions shall apply:
(1) The Controlled Affiliate shall send a
notice through the U.S. mails, with first class postage affixed, to all
individual and group customers, providers, brokers and agents of products or
services sold, marketed, underwritten or administered by the Controlled
Affiliate under the Licensed Marks and Name. The form and content of the notice
shall be specified by BCBSA and shall, at a minimum, notify the recipient of the
termination of the license, the consequences thereof, and instructions for
obtaining alternate products or services licensed by BCBSA. This notice shall
be mailed within 15 days after termination.
(2) The Controlled Affiliate shall deliver to
BCBSA within five days of a request by BCBSA a listing of national accounts in
which the Controlled Affiliate is involved (in a control, participating or
servicing capacity), identifying the national account and the Controlled
Affiliate’s role therein.
(3) Unless the cause of termination is an event
respecting BCBSA stated in paragraph 15(a) or (b) of the Plan’s license
agreement with BCBSA to use the Licensed Marks and Name, the Controlled
Affiliate, the Plan, and any other Licensed Controlled Affiliates of the Plan
shall be jointly liable for payment to BCBSA of an amount equal to $25
multiplied by the number of Licensed Enrollees of the Controlled Affiliate;
provided that if any other Plan is permitted by BCBSA to use marks or names
licensed by BCBSA in the Service Area
8
established by this Agreement, the payment shall be multiplied by a fraction,
the numerator of which is the number of Licensed Enrollees of the Controlled
Affiliate, the Plan, and any other Licensed Controlled Affiliates and the
denominator of which is the total number of Licensed Enrollees in the Service
Area. Licensed Enrollee means each and every person and covered dependent who
is enrolled as an individual or member of a group receiving products or services
sold, marketed or administered under marks or names licensed by BCBSA as
determined at the earlier of (i) the end of the last fiscal year of the
terminated entity which ended prior to termination or (ii) the fiscal year which
ended before any transactions causing the termination began. Notwithstanding
the foregoing, the amount payable pursuant to this subparagraph H. (3) shall be
due only to the extent that, in BCBSA’s opinion, it does not cause the net worth
of the Controlled Affiliate, the Plan or any other Licensed Controlled
Affiliates of the Plan to fall below 100% of the capital benchmark formula, or
its equivalent under any successor formula, as set forth in the applicable
financial responsibility standards established by BCBSA (provided such
equivalent is approved for purposes of this sub paragraph by the affirmative
vote of three-fourths of the Plans and three-fourths of the total then current
weighted vote of all the Plans); measured as of the date of termination, and
adjusted for the value of any transactions not made in the ordinary course of
business. This payment shall not be due in connection with transactions
exclusively by or among Plans or their affiliates, including reorganizations,
combinations or mergers, where the BCBSA Board of Directors determines that the
license termination does not result in a material diminution in the number of
Licensed Enrollees or the extent of their coverage.
(4) BCBSA shall have the right to audit the
books and records of the Controlled Affiliate, the Plan, and any other Licensed
Controlled Affiliates of the Plan to verify compliance with this paragraph 7.H.
(5) As to a breach of 7.H.(1), (2), (3) or (4),
the parties agree that the obligations are immediately enforceable in a court of
competent jurisdiction. As to a breach of 7.H.(1), (2) or (4) by the Controlled
Affiliate, the parties agree there is no adequate remedy at law and BCBSA is
entitled to obtain specific performance.
I. In the event the Controlled Affiliate
is a Smaller Controlled Affiliate (as defined in Exhibit A), the Controlled
Affiliate agrees to be jointly liable for the amount described in H.3. hereof
upon termination of the BCBSA license agreement of any Larger Controlled
Affiliate of the Plan.
J. BCBSA shall be entitled to enjoin the
Controlled Affiliate or any related party in a court of competent jurisdiction
from entry into any transaction which would result in a termination of this
Agreement unless the Plan’s license from BCBSA to use the Licensed Marks and
Names has been terminated
9
pursuant to 10(d) of the Plan’s license agreement upon the required 6 month
written notice.
K. BCBSA acknowledges that it is not the
owner of assets of the Controlled Affiliate.
L. In the event that the Plan has more than
50 percent voting control of the Controlled Affiliate under Paragraph 2(E)(2)
above and is a Larger Controlled Affiliate (as defined in Exhibit A), then the
vote called for in Paragraphs 7(C) and 7(D) above shall require the affirmative
weighted vote of all the Plans.
8. DISPUTE RESOLUTION
The parties agree that any disputes between them or between or among either of
them and one or more Plans or Controlled Affiliates of Plans that use in any
manner the Blue Shield and Blue Shield Marks and Name are subject to the
Mediation and Mandatory Dispute Resolution process attached to and made a part
of Plan’s License from BCBSA to use the Licensed Marks and Name as Exhibits 5,
5A and 5B as amended from time-to-time, which documents are incorporated herein
by reference as though fully set forth herein.
9. LICENSE FEE
Controlled Affiliate will pay to BCBSA a fee for this License determined
pursuant to the formula(s) set forth in Exhibit B.
10. JOINT VENTURE
Nothing contained in the Agreement shall be construed as creating a joint
venture, partnership, agency or employment relationship between Plan and
Controlled Affiliate or between either and BCBSA.
Amended as of March 11, 1999
10
11. NOTICES AND CORRESPONDENCE
Notices regarding the subject matter of this Agreement or breach or termination
thereof shall be in writing and shall be addressed in duplicate to the last
known address of each other party, marked respectively to the attention of its
President and, if any, its General Counsel.
12. COMPLETE AGREEMENT
This Agreement contains the complete understandings of the parties in relation
to the subject matter hereof. This Agreement may only be amended by the
affirmative vote of three-fourths of the Plans and three-fourths of the total
then current weighted vote of all the Plans as officially recorded by the BCBSA
Corporate Secretary.
13. SEVERABILITY
If any term of this Agreement is held to be unlawful by a court of competent
jurisdiction, such findings shall in no way affect the remaining obligations of
the parties hereunder and the court may substitute a lawful term or condition
for any unlawful term or condition so long as the effect of such substitution is
to provide the parties with the benefits of this Agreement.
14. NONWAIVER
No waiver by BCBSA of any breach or default in performance on the part of
Controlled Affiliate or any other licensee of any of the terms, covenants or
conditions of this Agreement shall constitute a waiver of any subsequent breach
or default in performance of said terms, covenants or conditions.
14A. VOTING
For all provisions of this Agreement referring to voting, the term ‘Plans’ shall
mean all entities licensed under the Blue Cross License Agreement and/or the
Blue Shield License Agreement, and in all votes of the Plans under this
Agreement the Plans shall vote together. For weighted votes of the Plans, the
Plan shall have a number of votes equal to the number of weighted votes (if any)
that it holds as a Blue Cross Plan plus the number of weighted votes (if any)
that it holds as a Blue Shield Plan. For all other votes of the Plans, the Plan
shall have one vote. For all questions requiring an affirmative three-fourths
weighted vote of the Plans, the requirement shall be deemed satisfied with a
lesser weighted vote unless six (6) or more Plans fail to cast weighted votes in
favor of the question.
Amended as of June 16, 2000
11
THIS PAGE IS INTENTIONALLY BLANK.
12
15. GOVERNING LAW
This Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Illinois.
16. HEADINGS
The headings inserted in this agreement are for convenience only and shall have
no bearing on the interpretation hereof.
IN WITNESS WHEREOF, the parties have caused this License Agreement to be
executed and effective as of the date of last signature written below.
Compcare Health Services Insurance Corporation:
By:
/s/ Stephen E. Bablitch
Date:
9/24/03
WellPoint Health Networks, Inc.:
By:
/s/ Leonard Schaeffer
Date:
BLUE CROSS AND BLUE SHIELD ASSOCIATION
By:
/s/ Roger G. Wilson
Date:
13
EXHIBIT A
CONTROLLED AFFILIATE LICENSE STANDARDS
June 2003
PREAMBLE
The standards for licensing Controlled Affiliates are established by BCBSA and
are subject to change from time-to-time upon the affirmative vote of
three-fourths (3/4) of the Plans and three-fourths (3/4) of the total weighted
vote. Each licensed Plan is required to use a standard Controlled Affiliate
license form provided by BCBSA and to cooperate fully in assuring that the
licensed Controlled Affiliate maintains compliance with the license standards.
The Controlled Affiliate License provides a flexible vehicle to accommodate the
potential range of health and workers’ compensation related products and
services Plan Controlled Affiliates provide. The Controlled Affiliate License
collapses former health Controlled Affiliate licenses (HCC, HMO, PPO, TPA, and
IDS) into a single license using the following business-based criteria to
provide a framework for license standards:
• Percent of Controlled Affiliate controlled by parent:
Greater than 50 percent or 50 percent?
• Risk assumption: yes or no?
• Medical care delivery: yes or no?
• Size of the Controlled Affiliate: If the Controlled Affiliate
has health or workers’ compensation administration business, does such business
constitute 15 percent or more of the parent’s and other licensed health
subsidiaries’ member enrollment?
Amended September 19, 2002
14
For purposes of definition:
• A “smaller Controlled Affiliate:” (1) comprises less than
fifteen percent (15%) of Plan’s and its licensed Controlled Affiliates’ total
member enrollment (as reported on the BCBSA Quarterly Enrollment Report,
excluding rider and freestanding coverage, and treating an entity seeking
licensure as licensed); * or (2) underwrites the indemnity portion of workers’
compensation insurance and has total premium revenue less than 15 percent of the
• A “larger Controlled Affiliate” comprises fifteen percent
(15%) or more of Plan’s and its licensed Controlled Affiliates’ total member
enrollment (as reported on the BCBSA Quarterly Enrollment Report, excluding
rider and freestanding coverage, and treating an entity seeking licensure as
licensed.)*
Changes in Controlled Affiliate status:
If any Controlled Affiliate’s status changes regarding: its Plan ownership
level, its risk acceptance or direct delivery of medical care, the Controlled
Affiliate shall notify BCBSA within thirty (30) days of such occurrence in
writing and come into compliance with the applicable standards within six (6)
months.
If a smaller Controlled Affiliate’s health and workers’ compensation
administration business reaches or surpasses fifteen percent (15%) of the total
member enrollment of the Plan and licensed Controlled Affiliates, the Controlled
Affiliate shall:
15
1. Within thirty (30) days, notify BCBSA of this fact in writing,
including evidence that the Controlled Affiliate meets the minimum liquidity and
capital (BCBSA “Health Risk-Based Capital (HRBC)” as defined by the NAIC and
state-established minimum reserve) requirements of the larger Controlled
Affiliate Financial Responsibility standard; and
2. Within six (6) months after reaching or surpassing the fifteen
percent (15%) threshold, demonstrate compliance with all license requirements
for a larger Controlled Affiliate.
If a Controlled Affiliate that underwrites the indemnity portion of workers’
compensation insurance receives a change in rating or proposed change in rating,
the Controlled Affiliate shall notify BCBSA within 30 days of notification by
the external rating agency.
*For purposes of this calculation,
The numerator equals:
Applicant Controlled Affiliate’s member enrollment, as defined in BCBSA’s
Quarterly Enrollment Report (excluding rider and freestanding coverage).
The denominator equals:
Numerator PLUS Plan and all other licensed Controlled Affiliates’ member
enrollment, as reported in BCBSA’s Quarterly Enrollment Report (excluding rider
and freestanding coverage).
16
STANDARDS FOR LICENSED CONTROLLED AFFILIATES
As described in Preamble section of Exhibit A to the Affiliate License
Agreement, each controlled affiliate seeking licensure must answer four
questions. Depending on the controlled affiliate’s answers, certain standards
apply:
1. What percent of the controlled
affiliate is controlled by the parent Plan?
More than 50%
50%
100% and Primary Business is
Government Non-Risk
[g50061khimage002.gif]
[g50061khimage003.gif]
[g50061khimage004.gif]
Standard 1A, 4
Standard 1B, 4
Standard 4*,10A
* Applicable only if using the names and marks.
IN ADDITION,
2. Is risk being assumed?
Yes
No
[g50061khimage006.gif]
[g50061khimage007.gif]
[g50061khimage009.gif]
[g50061khimage010.gif]
[g50061khimage011.gif]
[g50061khimage012.gif]
Controlled Affiliate underwrites any indemnity portion of workers’ compensation
insurance
[g50061khimage013.gif]
Standards 7A-7E, 12
Controlled Affiliate comprises < 15% of total member enrollment of Plan and its
licensed affiliates, and does not underwrite the indemnity portion of workers’
compensation insurance
Controlled Affiliate comprises > 15% of total member enrollment of Plan and its
compensation insurance
licensed affiliates
[g50061khimage014.gif]
licensed affiliates
[g50061khimage015.gif]
Standard 6H
Controlled Affiliate’s Primary Business is Government Non-Risk
[g50061khimage016.gif]
Standard 10B
[g50061khimage017.gif]
[g50061khimage018.gif]
Standard 2 (Guidelines 1.1,1.2) and Standard 11
Standard 6H
Standard 2 (Guidelines 1.1,1.3) and Standard 11
IN ADDITION,
3. Is medical care being directly
provided?
Yes
No
[g50061khimage019.gif]
[g50061khimage020.gif]
Standard 3A
Standard 3B
IN ADDITION,
4. If the controlled affiliate has health
or workers’ compensation administration business, does such business comprise
15% or more of the total member enrollment of Plan and its licensed controlled
affiliates?
Yes
No
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Standards 6A-6J
Controlled Affiliate is not a former primary licensee and elects to participate
in BCBSA national programs
Controlled Affiliate is a former primary licensee
Controlled Affiliate is not a former primary licensee and does not elect to
participate in BCBSA national programs
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Standards 5,8,9B,12
Standards 5,8,9A,11, 12
Standards 5,8,12
Standards 8, 10(C), 12
17
Standard 1 - Organization and Governance
1A.) The Standard for more than 50% Plan control is:
A Controlled Affiliate shall be organized and operated in such a manner that a
licensed Plan or Plans authorized to use the Licensed Marks in the Service Area
of the Controlled Affiliate pursuant to separate License Agreement(s) with
BCBSA, other than such Controlled Affiliate’s License Agreement(s), (the
“Controlling Plan(s)”), have the legal authority, directly or indirectly through
wholly-owned subsidiaries: 1) to select members of the Controlled Affiliate’s
governing body having more than 50% voting control thereof; and 2) to prevent
any change in the articles of incorporation, bylaws or other establishing or
governing documents of the Controlled Affiliate with which the Controlling
Plan(s) do(es) not concur; and 3) to exercise control over the policy and
operations of the Controlled Affiliate. In addition, a Plan or Plans directly or
indirectly through wholly-owned subsidiaries shall own more than 50% of any
for-profit Controlled Affiliate.
1B.) The Standard for 50% Plan control is:
wholly-owned subsidiaries:
1) to select members of the Controlled
Affiliate’s governing body having not less than 50% voting control thereof ;
and
2) to prevent any change in the articles of
3) to exercise control over the policy and
Plan(s).
18
Notwithstanding anything to the contrary in 1) through 3) hereof, the Controlled
Affiliate’s establishing or governing documents must also require written
• change the geographic area in which
it operates
• change its legal and/or trade names
• change any of the types of businesses
in which it engages
• create, or become liable for by way
of guarantee, any indebtedness, other than indebtedness arising in the ordinary
course of business
• sell any assets, except for sales in
the ordinary course of business or sales of equipment no longer useful or being
replaced
• make any loans or advances except in
the ordinary course of business
• enter into any arrangement or
agreement with any party directly or indirectly affiliated with any of the
owners or persons or entities with the authority to select or appoint members or
board members of the Controlled Affiliate, other than the Plan or Plans
(excluding owners of stock holdings of under 5% in a publicly traded Controlled
Affiliate)
• conduct any business other than under
the Licensed Marks and Name
• take any action that any Controlling
Plan or BCBSA reasonably believes will adversely affect the Licensed Marks and
Name.
19
Standard 2 - Financial Responsibility
A Controlled Affiliate shall be operated in a manner that provides reasonable
financial assurance that it can fulfill all of its contractual obligations to
its customers. If a risk-assuming Controlled Affiliate ceases operations for
any reason, Blue Cross and/or Blue Cross Plan coverage will be offered to all
Controlled Affiliate subscribers without exclusions, limitations or conditions
based on health status. If a nonrisk-assuming Controlled Affiliate ceases
operations for any reason, sponsoring Plan(s) will provide for services to its
(their) customers.
Standard 3 - State Licensure/Certification
3A.) The Standard for a Controlled Affiliate that
employs, owns or contracts on a substantially exclusive basis for medical
services is:
A Controlled Affiliate shall maintain unimpaired licensure or certification for
its medical care providers to operate under applicable state laws.
3B.) The Standard for a Controlled Affiliate that does
not employ, own or contract on a substantially exclusive basis for medical
services is:
A Controlled Affiliate shall maintain unimpaired licensure or certification to
operate under applicable state laws.
Standard 4 - Certain Disclosures
A Controlled Affiliate shall make adequate disclosure in contracting with third
parties and in disseminating public statements of 1) the structure of the Blue
Cross and Blue Shield System; and 2) the independent nature of every licensee;
and 3) the Controlled Affiliate’s financial condition.
Standard 5 - Reports and Records for Certain Smaller Controlled Affiliates
For a smaller Controlled Affiliate that does not underwrite the indemnity
portion of workers’ compensation insurance, the Standard is:
20
A Controlled Affiliate and/or its licensed Plan(s) shall furnish, on a timely
and accurate basis, reports and records relating to these Standards and the
License Agreements between BCBSA and Controlled Affiliate.
Standard 6 - Other Standards for Larger Controlled Affiliates
Standards 6(A) - (I) that follow apply to larger Controlled Affiliates.
Standard 6(A): Board of Directors
A Controlled Affiliate Governing Board shall act in the interest of its
Corporation in providing cost-effective health care services to its customers.
A Controlled Affiliate shall maintain a governing Board, which shall control the
Controlled Affiliate, composed of a majority of persons other than providers of
health care services, who shall be known as public members. A public member
shall not be an employee of or have a financial interest in a health care
provider, nor be a member of a profession which provides health care services.
Standard 6(B): Responsiveness to Customers
A Controlled Affiliate shall be operated in a manner responsive to customer
needs and requirements.
Standard 6(C): Participation in National Programs
A Controlled Affiliate shall effectively and efficiently participate in each
national program as from time to time may be adopted by the Member Plans for the
purposes of providing portability of membership between the licensees and ease
of claims processing for customers receiving benefits outside of the Controlled
Affiliate’s Service Area.
Such programs are applicable to licensees, and include:
1. Transfer Program;
2. BlueCard Program;
21
3. Inter-Plan Teleprocessing System (ITS)
4. Electronic Claims Routing Process;
5. National Account Programs, effective January 1, 2002; and
6. Business Associate Agreement for Blue Cross and Blue Shield
Licensees, effective April 14, 2003.
Standard 6(D): Financial Performance Requirements
In addition to requirements under the national programs listed in Standard 6C:
Participation in National Programs, a Controlled Affiliate shall take such
action as required to ensure its financial performance in programs and contracts
of an inter-licensee nature or where BCBSA is a party.
Standard 6(E): Cooperation with Plan Performance Response Process
A Controlled Affiliate shall cooperate with BCBSA’s Board of Directors and its
Plan Performance and Financial Standards Committee in the administration of the
Plan Performance Response Process and in addressing Controlled Affiliate
performance problems identified thereunder.
Standard 6(F): Independent Financial Rating
A Controlled Affiliate shall obtain a rating of its financial strength from an
independent rating agency approved by BCBSA’s Board of Directors for such
purpose.
Standard 6(G): Best Efforts
During each year, a Controlled Affiliate shall use its best efforts in the
designated Service Area to promote and build the value of the Blue Cross Mark.
Standard 6(H): Financial Responsibility
its customers.
22
Standard 6(I): Reports and Records
A Controlled Affiliate shall furnish to BCBSA on a timely and accurate basis
reports and records relating to compliance with these Standards and the License
Agreements between BCBSA and Controlled Affiliate. Such reports and records are
the following:
A) CBSA Controlled Affiliate Licensure Information
Request; and
B) Biennial trade name and service mark usage
material, including disclosure material; and
C) Changes in the ownership and governance of the
Controlled Affiliate, including changes in its charter, articles of
incorporation, or bylaws, changes in a Controlled Affiliate’s Board composition,
or changes in the identity of the Controlled Affiliate’s Principal Officers, and
changes in risk acceptance, contract growth, or direct delivery of medical care;
and
D) Quarterly Financial Report, Semi-annual “Health
Risk-Based Capital (HRBC) Report” as defined by the NAIC, Annual Financial
Forecast, Annual Certified Audit Report, Insurance Department Examination
Report, Annual Statement filed with State Insurance Department (with all
attachments), and
E) Quarterly Enrollment Report.
Amended March 14, 2002
23
Standard 6(J): Control by Unlicensed Entities Prohibited
No Controlled Affiliate shall cause or permit an entity other than a Plan or a
Licensed Controlled Affiliate thereof to obtain control of the Controlled
Affiliate or to acquire a substantial portion of its assets related to
licensable services.
Standard 7 - Other Standards for Risk-Assuming Workers’ Compensation Controlled
Affiliates
Standards 7(A) - (E) that follow apply to Controlled Affiliates that underwrite
the indemnity portion of workers’ compensation insurance.
Standard 7 (A): Financial Responsibility
its customers.
Standard 7(B): Reports and Records
A Controlled Affiliate shall furnish, on a timely and accurate basis, reports
and records relating to compliance with these Standards and the License
Agreements between BCBSA and the Controlled Affiliate. Such reports and records
are the following:
A. BCBSA Controlled Affiliate Licensure Information Request; and
B. Biennial trade name and service mark usage materials, including
disclosure materials; and
C. Annual Certified Audit Report, Annual Statement as filed with the
State Insurance Department (with all attachments), Annual NAIC’s Risk-Based
Capital Worksheets for Property and Casualty Insurers, Annual Financial
Forecast; and
D. Quarterly Financial Report, Quarterly Estimated Risk-Based Capital
for Property and Casualty Insurers, Insurance Department Examination Report,
Quarterly Enrollment Report; and
24
E. Notification of all changes and proposed changes to independent
ratings within 30 days of receipt and submission of a copy of all rating
reports; and
F. Changes in the ownership and governance of the Controlled
Affiliate including changes in its charter, articles of incorporation, or
bylaws, changes in a Controlled Affiliate’s Board composition, Plan control,
state license status, operating area, the Controlled Affiliate’s Principal
Officers or direct delivery of medical care.
Standard 7(C): Loss Prevention
A Controlled Affiliate shall apply loss prevention protocol to both new and
existing business.
Standard 7(D): Claims Administration
A Controlled Affiliate shall maintain an effective claims administration process
that includes all the necessary functions to assure prompt and proper resolution
of medical and indemnity claims.
Standard 7(E): Disability and Provider Management
A Controlled Affiliate shall arrange for the provision of appropriate and
necessary medical and rehabilitative services to facilitate early intervention
by medical professionals and timely and appropriate return to work.
Amended November 16, 2000
25
Standard 8 - Cooperation with Controlled Affiliate License Performance Response
Process Protocol
A Controlled Affiliate and its Sponsoring Plan(s) shall cooperate with BCBSA’s
Board of Directors and its Plan Performance and Financial Standards Committee in
the administration of the Controlled Affiliate License Performance Response
Process Protocol (ALPRPP) and in addressing Controlled Affiliate compliance
problems identified thereunder.
Standard 9(A) - Participation in National Programs by Smaller Controlled
Affiliates that were former Primary Licensees
A smaller controlled affiliate that formerly was a Primary Licensee shall
effectively and efficiently participate in certain national programs from time
to time as may be adopted by Member Plans for the purposes of providing ease of
claims processing for customers receiving benefits outside of the Controlled
Affiliate’s service area and be subject to certain relevant financial and
reporting requirements.
A. National program requirements include:
• BlueCard Program;
• Inter-Plan Teleprocessing System
(ITS);
• Transfer Program;
• Electronic Claims Routing Process,
effective until October 16, 2003; and
• National Account Programs, effective
January 1, 2002
B. Financial Requirements include:
• Standard 6(D): Financial Performance
Requirements and Standard 6(H): Financial Responsibility; or
• A financial guarantee covering the
Controlled Affiliate’s BlueCard Program obligations in a form, and from a
guarantor, acceptable to BCBSA.
26
C. Reporting requirements include:
• The Semi-annual Health Risk-Based
Capital (HRBC) Report.
AMENDED JUNE 13, 2002
27
Standard 9(B) - Participation in National Programs by Smaller Controlled
Affiliates
A smaller controlled affiliate that voluntarily elects to participate in
national programs in accordance with BlueCard and other relevant Policies and
Provisions shall effectively and efficiently participate in national programs
from time to time as may be adopted by Member Plans for the purposes of
providing ease of claims processing for customers receiving benefits outside of
the controlled affiliate’s service area and be subject to certain relevant
financial and reporting requirements.
• BlueCard Program;
• Inter-Plan Teleprocessing System (ITS);
• Electronic Claims Routing Process, effective until
October 16, 2003; and
• National Account Programs, effective January 1, 2002.
• Standard 6(D): Financial Performance Requirements and
Standard 6(H): Financial Responsibility; or
• A financial guarantee covering the Controlled Affiliate’s
BlueCard Program obligations in a form, and from a guarantor, acceptable to
BCBSA.
Amended June 13, 2002
28
Standard 10 - Other Standards for Controlled Affiliates Whose Primary Business
is Government Non-Risk
Standards 10(A) - (C) that follow apply to Controlled Affiliates whose primary
business is government non-risk.
Standard 10(A) - Organization and Governance
A Controlled Affiliate shall be organized and operated in such a manner that it
is 1) wholly owned by a licensed Plan or Plans and 2) the sponsoring licensed
Plan or Plans have the legal ability to prevent any change in the articles of
Controlled Affiliate with which it does not concur.
29
Standard 10(B) - Financial Responsibility
its customers.
Standard 10(C):- Reports and Records
are the following:
A. BCBSA Affiliate Licensure Information
Request; and
B. Biennial trade name and service mark
usage materials, including disclosure material; and
C. Annual Certified Audit Report, Annual
Statement (if required) as filed with the State Insurance Department (with all
attachments), Annual NAIC Risk-Based Capital Worksheets (if required) as filed
with the State Insurance Department (with all attachments), and Insurance
Department Examination Report (if applicable)*; and
D. Changes in the ownership and governance of
the Controlled Affiliate, including changes in its charter, articles of
incorporation, or bylaws, changes in the Controlled Affiliate’s Board
composition, Plan control, state license status, operating area, the Controlled
Affiliate’s Principal Officers or direct delivery of medical care.
30
Standard 11- Participation in Electronic Claims Routing Process
A smaller controlled affiliate for which this standard applies pursuant to the
Preamble section of Exihibit A of the Controlled Affiliate License Agreement
shall effectively and efficiently participate in certain national programs from
ease of claims processing for customers receiving benefits outside of the
controlled affiliate’s service area.
National program requirements include:
A. Electronic Claims Routing Process effective upon
October 16, 2003.
31
Standard 12: Participation in Master Business Associate Agreement by Smaller
Controlled Affiliate Licensees
Effective April 14, 2003, all smaller controlled affiliates shall comply with
the terms of the Business Associate Agreement for Blue Cross and Blue Shield
Licensees to the extent they perform the functions of a business associate or
subcontractor to a business associate, as defined by the Business Associate
Agreement.
32
EXHIBIT B
ROYALTY FORMULA FOR SECTION 9 OF THE
CONTROLLED AFFILIATE LICENSE AGREEMENT
Controlled Affiliate will pay BCBSA a fee for this license in accordance with
the following formula:
FOR RISK AND GOVERNMENT NON-RISK PRODUCTS:
For Controlled Affiliates not underwriting the indemnity portion of workers’
compensation insurance:
An amount equal to its pro rata share of each sponsoring Plan’s dues payable to
BCBSA computed with the addition of the Controlled Affiliate’s subscription
revenue and contracts arising from products using the marks. The payment by
each sponsoring Plan of its dues to BCBSA, including that portion described in
this paragraph, will satisfy the requirement of this paragraph, and no separate
payment will be necessary.
For Controlled Affiliates underwriting the indemnity portion of workers’
compensation insurance:
An amount equal to 0.35 percent of the gross revenue per annum of Controlled
Affiliate arising from products using the marks; plus, an annual fee of $5,000
per license for a Controlled Affiliate subject to Standard 7.
For Controlled Affiliates whose primary business is government non-risk:
An amount equal to its pro-rata share of each sponsoring Plan’s dues payable to
BCBSA computed with the addition of the Controlled Affiliate’s government
non-risk beneficiaries.
33
FOR NONRISK PRODUCTS:
An amount equal to 0.24 percent of the gross revenue per annum of Controlled
Affiliate arising from products using the marks; plus:
1) An annual fee of $5,000 per license for
a Controlled Affiliate subject to Standard 6 D.
2) An annual fee of $2,000 per license for
all other Controlled Affiliates.
The foregoing shall be reduced by one-half where both a BLUE CROSS® and BLUE
SHIELD® License are issued to the same Controlled Affiliate. In the event that
any license period is greater or less than one (1) year, any amounts due shall
be prorated. Royalties under this formula will be calculated, billed and paid
in arrears.
34
|
Name: Commission Regulation (EEC) No 3489/80 of 23 December 1980 amending Regulation (EEC) No 2518/70 as regards the list of representative wholesale markets and ports for fishery products
Type: Regulation
Date Published: nan
31 . 12 . 80 Official Journal of the European Communities No L 365/ 11 COMMISSION REGULATION (EEC) No 3489/80 of 23 December 1980 amending Regulation (EEC) No 2518 /70 as regards the list of representative wholesale markets and ports for fishery products THE COMMISSION OF THE EUROPEAN COMMUNITIES , Having regard to the Treaty establishing the European Economic Community , Having regard to the Act of Accession of Greece , and in particular Article 146 (2) thereof, Having regard to Council Regulation (EEC) No 100/76 of 19 January 1976 on the common organiza tion of the market in fishery products ('), as last amended by Regulation (EEC) No 3443/80 (*), and in particular Articles 10 (3 ), 14 (4) and 16 (6 ) thereof, Whereas the representative wholesale markets and ports for Greece must be added to the Annex to Commission Regulation (EEC) No 2518 /70 of 10 December 1970 on price recording and fixing the list of representative wholesale markets or ports for fishery products ( 3 ), as last amended by Regulation ( EEC) No 390/80 (4 ) ; Whereas the trend recorded in respect of hake on Community markets makes it necessary to add the port of Mallaig to the list of representative wholesale markets and ports and to delete from that list the ports of Bremerhaven , Cuxhaven and Hamburg ; Whereas the measures provided for in this Regulation are in accordance with the opinion of the Manage ment Committee for Fishery Products , HAS ADOPTED THIS REGULATION : Article 1 The Annex to Regulation (EEC) No 2518 /70 is hereby replaced by the Annex to this Regulation . Article 2 This Regulation shall enter into force on 1 January 1981 . This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels , 23 December 1980 . For the Commission Finn GUNDELACH Vice-President ( ¢) OJ No L 20 , 28 . 1 . 1976 , p. 1 . (-') OJ No L 359 , 31 . 12 . 1980 . ( 3 ) OJ No L 271 , 15 . 12 . 1970 , p . 15 . C ) OJ No L 45 , 20 . 2 . 1980 , p. 10 . No L 365/ 12 Official Journal of the European Communities 31 . 12. 80 ANNEX REPRESENTATIVE WHOLESALE MARKETS AND PORTS FOR FISHERY PRODUCTS I. Products listed in Annex I (A) to Regulation (EEC) No 100/76 1 . Herrings the combined markets of the combined markets of the combined markets of Boulogne-sur-Mer Bremerhaven/Cuxhaven Dunmore East/Cobh Hirtshals/Skagen Killybegs Lerwick Mallaig/Oban/Ullapool/Stornoway Scheveningen/IJmuiden the combined markets of the combined markets of the combined markets of the combined markets of 2 . Sardines Ancona/Cesenatico Chioggia/Porto Garibaldi Kavala La Turballe Marseille Patras Port-Vendres Saint-Guà ©nolà © Salerno Salonika Sete Trapani Viareggio 3 . Redfish 4. Cod the combined markets of the combined markets of the combined markets of the combined markets of the combined markets of 5 . Saithe the combined markets of the combined markets of the combined markets of Boulogne-sur-Mer Bremerhaven/Cuxhaven Ostende Aberdeen/Peterhead Boulogne-sur-Mer Bremerhaven/Cuxhaven Esbjerg/Thyborà ¸n Grimsby/Hull IJmuiden Ostende Aberdeen Boulogne-sur-Mer Bremerhaven/Cuxhaven Grimsby/Hull Hirtshals/Skagen IJmuiden Lorient Aberdeen/Peterhead Boulogne-sur-Mer Bremerhaven/Cuxhaven Grimsby/Hull Hanstholm/Thyborà ¸n IJmuiden Killybegs Lorient Ostende 6 . Haddock the combined markets of the combined markets of the combined markets of the combined markets of 7 . whiting the combined markets of Aberdeen/Peterhead Boulogne-sur-Mer IJmuiden Lorient 8 . Mackerel Boulogne-sur-Mer Concarneau Douarnenez Falmouth Hirtshals/Skagen IJmuiden Killybegs the combined markets of 31 . 12. 80 Official Journal of the European Communities No L 365/ 13 the combined markets of Mallaig/Ullapool Newlyn Piraeus Plymouth 9 . Anchovies Ancona/Cesenaticothe combined markets of the combined markets of Chioggia/Porto Garibaldi Kavala Patras Piraeus Port-Vendres Pozzuoli Saint-Jean-de-Luz Salerno Salonika Trapani Viareggio 10 . Plaice the combined markets of Esbjerg/Thyboron Lowestoft Hamburg IJmuiden Zeebrugge La Rochelle Lorient Mallaig 1 1 . Hake II . Products listed in Annex I (C) to Regulation (EEC) No 100/76 Shrimps of the genus Crangon spp the combined markets of Cuxhaven/Dorum/Spieka/Wremen Den Oever Husum Zeebrugge III . Products listed in Annex II to Regulation (EEC) No 100/76 1 . Sardines the combined markets of the combined markets of 2 . Sea-beam of the species Dentex dentex and Pagellus 3 . Squid (Loligo spp) Concarneau/Douarnenez Bayonne/Saint-Jean-de-Luz Kavala Salonika Anzio Bari Piraeus San Benedetto del Tronto Anzo Bari Piraeus San Benedetto del Tronto Anzio Bari Piraeus San Benedetto del Tronto Anzio Bari Piraeus San Benedetto del Tronto Anzio Bari Piraeus San Benedetto del Tronto 4 . Squid (Ommastrephes sagittatus, Todarodes sagittatus, Illex spp) 5 . Cuttlefish of the species Sepia officinalis , Rossia macrosoma, Sepiola rondeleti 6 . Octopus IV. Products listed in Annex III (A) of Regulation (EEC) No 100/76 All species of tunny Audierne Cagliari Camaret Concarneau Douarnenez Saint-Jean-de-Luz Trapani |
Name: Council Directive (EU) 2015/2060 of 10 November 2015 repealing Directive 2003/48/EC on taxation of savings income in the form of interest payments
Type: Directive
Subject Matter: financial institutions and credit; criminal law; free movement of capital; taxation; information and information processing; national accounts; communications
Date Published: 2015-11-18
18.11.2015 EN Official Journal of the European Union L 301/1 COUNCIL DIRECTIVE (EU) 2015/2060 of 10 November 2015 repealing Directive 2003/48/EC on taxation of savings income in the form of interest payments THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 115 thereof, Having regard to the proposal from the European Commission, After transmission of the draft legislative act to the national parliaments, Having regard to the opinion of the European Parliament, Having regard to the opinion of the European Economic and Social Committee, Acting in accordance with a special legislative procedure, Whereas: (1) Building on the consensus reached at the European Council of 20 June 2000 that relevant information should be exchanged for tax purposes on as wide a basis as possible, Council Directive 2003/48/EC (1) has been applied in the Member States since 1 July 2005 with the aim of enabling savings income in the form of interest payments made in one Member State to beneficial owners who are individuals resident in another Member State to be made subject to effective taxation in accordance with the laws of the latter Member State, thus eliminating distortions in capital movements between Member States, which would be incompatible with the internal market. (2) The worldwide aspect of the challenges posed by cross-border tax fraud and evasion is a major concern at a global level and within the Union. Unreported and untaxed income considerably reduces national tax revenues. On 22 May 2013, the European Council welcomed ongoing efforts made in the G8, G20 and the Organisation for Economic Cooperation and Development (OECD) to develop a global standard. (3) Council Directive 2011/16/EU (2) provides for the mandatory automatic exchange of certain information between Member States. It also provides for the step-by-step extension of its scope into new categories of income and capital, for the purpose of combating cross-border tax fraud and evasion. (4) On 9 December 2014, the Council adopted Directive 2014/107/EU (3) which amended Directive 2011/16/EU to extend the mandatory automatic exchange of information to a wider range of income in accordance with the Global Standard released by the OECD Council in July 2014 and ensured a coherent, consistent and comprehensive Union-wide approach to the automatic exchange of financial account information in the internal market. (5) Directive 2014/107/EU is generally broader in scope than Directive 2003/48/EC and provides that in cases of overlap of scope, Directive 2014/107/EU is to prevail. There are still residual cases in which only Directive 2003/48/EC applies. Those residual cases are the consequence of slight differences in approach between the two Directives and of different specific exemptions. In those limited instances, the application of Directive 2003/48/EC would result in dual reporting standards within the Union. The minor benefits of retaining such dual reporting would be outweighed by the costs. (6) On 21 March 2014, the European Council invited the Council to ensure that relevant Union law is fully aligned with the new single Global Standard of automatic exchange of information developed by the OECD. In addition, when adopting Directive 2014/107/EU, the Council invited the Commission to present a proposal to repeal Directive 2003/48/EC and to coordinate the repeal of that Directive with the date of application set down in Directive 2014/107/EU, having regard to the derogation provided therein for Austria. Therefore, Directive 2003/48/EC should continue to apply to Austria for an additional one-year period. In the light of the position taken by the Council, the repeal of Directive 2003/48/EC is needed in order to avoid dual reporting obligations and to save costs both for tax authorities and economic operators. (7) Under Council Directive 2014/48/EU (4), Member States are to adopt and publish, by 1 January 2016, the laws, regulations and administrative provisions necessary to comply with that Directive. Member States are to apply those provisions as of 1 January 2017. With the repeal of Directive 2003/48/EC, Directive 2014/48/EU would no longer have to be transposed. (8) To ensure the seamless continuation of automatic reporting of financial account information, the repeal of Directive 2003/48/EC should apply on the same day as the date of application of the measures set down in Directive 2014/107/EU. (9) Notwithstanding the repeal of Directive 2003/48/EC, information gathered by paying agents, economic operators and by Member States before the date of the repeal should be processed and transferred as originally envisaged, and obligations arising before that date should be met. (10) In relation to withholding tax levied under the transitional period referred to in Directive 2003/48/EC, in order to protect the acquired rights of beneficial owners, Member States should continue to give credit or refunds as originally envisaged and should issue certificates on request to enable beneficial owners to ensure that withholding tax is not levied. (11) Account should be taken of the fact that, in view of structural differences, Austria has been allowed a derogation under Directive 2014/107/EU which allows it to delay the application of that Directive by one year until 1 January 2017. However, on the adoption of Directive 2014/107/EU, Austria announced that it would not make full use of the derogation. Instead, Austria is to exchange information by September 2017, albeit on a limited set of accounts, while retaining the derogation in other cases. Therefore, specific provision should be made to ensure that Austria, and the paying agents and economic operators established therein, continue to apply the provisions of Directive 2003/48/EC during the period of derogation, except for those accounts to which Directive 2014/107/EU applies. (12) This Directive respects the fundamental rights and observes the principles which are recognised in particular by the Charter of Fundamental Rights of the European Union, including the right to the protection of personal data, and nothing in this Directive shall reduce or eliminate those rights. (13) Since the objective of this Directive, namely the repeal of Directive 2003/48/EC with the temporary exceptions necessary to protect the acquired rights and to take account of the derogation allowed to Austria under Directive 2014/107/EU, cannot be sufficiently achieved by the Member States but can rather, by reason of the uniformity and effectiveness required, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective. (14) Directive 2003/48/EC should therefore be repealed, HAS ADOPTED THIS DIRECTIVE: Article 1 1. Subject to paragraphs 2 and 3, Directive 2003/48/EC is repealed with effect from 1 January 2016. 2. Without prejudice to paragraph 3, the following obligations of Directive 2003/48/EC, as amended by Council Directive 2006/98/EC (5), shall continue to apply: (a) the obligations of Member States and economic operators established therein under the second subparagraph of Article 4(2) of Directive 2003/48/EC shall continue to apply until 5 October 2016 or until those obligations have been fulfilled; (b) the obligations of paying agents under Article 8 of Directive 2003/48/EC and of Member States of paying agents under Article 9 of Directive 2003/48/EC shall continue to apply until 5 October 2016 or until those obligations have been fulfilled; (c) the obligations of Member States of residence for tax purposes of the beneficial owners under Article 13(2) of Directive 2003/48/EC shall continue to apply until 31 December 2016; (d) the obligations of Member States of residence for tax purposes of the beneficial owners under Article 14 of Directive 2003/48/EC, with regard to withholding tax levied during 2016 and previous years, shall continue to apply until those obligations have been fulfilled. 3. Directive 2003/48/EC, as amended by Directive 2006/98/EC, shall continue to apply with regard to Austria until 31 December 2016, with the exception of the following obligations: (a) the obligations of Austria and the underlying obligations of the paying agents and economic operators established therein under Article 12 of Directive 2003/48/EC, which shall continue to apply until 30 June 2017 or until those obligations have been fulfilled; (b) the obligations of Austria and economic operators established therein under the second subparagraph of Article 4(2) of Directive 2003/48/EC, which shall continue to apply until 30 June 2017 or until those obligations have been fulfilled; (c) any obligations of Austria and the underlying obligations of the paying agents established therein arising directly or indirectly from the procedures referred to in Article 13 of Directive 2003/48/EC, which shall continue to apply until 30 June 2017 or until those obligations have been fulfilled. Notwithstanding the first subparagraph, Directive 2003/48/EC, as amended by Directive 2006/98/EC, shall not apply after 1 October 2016 to interest payments with regard to accounts for which the reporting and due diligence obligations included in Annexes I and II to Directive 2011/16/EU have been fulfilled and for which Austria has communicated by automatic exchange the information referred to in Article 8(3a) of Directive 2011/16/EU within the deadline laid down in point (b) of Article 8(6) of Directive 2011/16/EU. Article 2 This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. Article 3 This Directive is addressed to the Member States. Done at Brussels, 10 November 2015. For the Council The President P. GRAMEGNA (1) Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments (OJ L 157, 26.6.2003, p. 38). (2) Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, p. 1). (3) Council Directive 2014/107/EU of 9 December 2014 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (OJ L 359, 16.12.2014, p. 1). (4) Council Directive 2014/48/EU of 24 March 2014 amending Directive 2003/48/EC on taxation of savings income in the form of interest payments (OJ L 111, 15.4.2014, p. 50). (5) Council Directive 2006/98/EC of 20 November 2006 adapting certain Directives in the field of taxation, by reason of the accession of Bulgaria and Romania (OJ L 363, 20.12.2006, p. 129). |
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of October 23, 2019 (“Effective Date”), is by and
between CUSTOMERS BANCORP, INC., a Pennsylvania corporation, with its main
office located at 1015 Penn Avenue, Wyomissing, PA 19610 (“Company”) and Carla
Leibold (“Executive”).
Background
A. Company wishes to secure the continued services of Executive
as the Company’s Chief Financial Officer on the terms and conditions set forth
herein.
B. Subject to the terms and conditions hereinafter, Executive is
willing to enter into this Employment Agreement (this “Agreement”) upon the
terms and conditions set forth.
C. The Company’s Board of Directors has approved this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth
herein, the parties agree as follows:
1. Employment. Company agrees to employ Executive as its Chief
Financial Officer during the “Term” defined in Section 2 of this Agreement.
Executive shall report to and be subject to the direction of the Chief Executive
Officer and Board of Directors of the Company. Executive shall have the powers
and authority ordinarily given to the position described above as provided under
the Bylaws of the Company. Executive will have such duties as normally apply to
such position. Executive shall devote all of her working time, abilities and
attention to the business of the Company, and will fulfill all of the duties
required of her as Chief Financial Officer. The services of Executive shall be
rendered principally in Wyomissing, PA, but Executive shall undertake such
traveling on behalf of Company as may be reasonably required.
2. Term of Employment. Subject to the terms and conditions of
this Agreement, the initial term of employment hereunder shall be for the two
(2)-year period commencing on the Effective Date and ending on the day preceding
the two (2)-year anniversary of the Effective Date. As of each one (1)-year
anniversary of the Effective Date, the term of employment hereunder shall be
extended for another one (1) year, automatically, unless either party delivers
notice to the contrary to the other party at least sixty (60) days prior to such
one (1)-year anniversary, in which case the term of employment hereunder shall
expire as of the date to which it was last extended pursuant to this sentence.
Such notice shall be delivered in a manner consistent with the requirements of
Section 12. References in this Agreement to the “Term” shall refer both to such
initial term and any successive terms.
3. Compensation. In consideration of the services to be
rendered by Executive, Company shall pay to Executive during the initial Term:
(a) A base salary of not less than four hundred thousand dollars
($400,000) per annum for each year of the Term, payable in equal installments
over such payroll cycles as the Company pays its executive officers generally,
with any salary for initial or final partial months or other payroll periods
being prorated based on the number of calendar days in question. It is
understood that the Board of Directors of the Company shall review Executive’s
1
performance and make a determination regarding increases in her salary at least
once in every calendar year during the Term.
(b) Incentive Compensation in an amount, in such form, and at such
time as is provided in such executive incentive plan for Executive, either alone
or for Executive and other officers and management employees of the Company, as
shall be approved by the Board of Directors of the Company and in effect from
time to time. Such incentive compensation may take the form of cash payments
(“Cash Bonus”), transfers of stock, stock appreciation awards, restricted stock
units or stock options (collectively, “Equity Awards”). Equity Awards shall be
subject to such restrictions, vesting and other conditions and limitations as
set forth in such executive incentive plan.
4. Reimbursement of Expenses.
4.1 Reimbursement of Expenses. During the Term, Company shall
reimburse Executive for reasonable expenses incurred by her in the performance
of her duties, as well as those incurred in furtherance of or in connection with
the business of Company, including but not limited to traveling, entertainment,
dining and other expenses.
5. Termination of Employment.
5.1 Termination by Company; “Cause.” Company shall have the right
to terminate Executive’s employment hereunder at any time, with or without
“Cause” (as defined below). In the event of any termination by Company, Company
shall give Executive forty-five (45) days prior notice of any termination
without Cause, but shall not be obligated to give Executive prior notice of a
termination with Cause. Company shall nevertheless be obligated to pay Executive
such compensation and severance, if any, as may be provided for in this
Agreement under the applicable circumstances. Company will give Executive notice
of termination of her employment pursuant to a “Notice of Termination” (as
defined below).
5.2 No Right to Compensation or Benefits Except as Stated. If the
Company terminates Executive’s employment for Cause, Executive shall have no
right to severance compensation of any kind, or any right to salary or other
benefits for any period after such date of termination. If Executive is
terminated by Company other than for Cause, Executive’s rights to compensation
and benefits under this Agreement shall be as set forth in Section 5.5.
5.3 Termination by Executive. Executive shall have the right to
terminate her employment, whether or not for “Good Reason” (as hereinafter
defined), but, in all events, Executive shall give Company notice pursuant to a
written “Notice of Termination” (as defined below). If the termination by
Executive is other than for Good Reason: (i) Executive must give Company a
Notice of Termination not less than forty five (45) days prior to the date her
termination of employment will be effective, and (ii) Executive shall have no
benefits for any period after such date of termination. If termination is by
Executive for Good Reason, Executive’s rights to compensation and benefits under
this Agreement shall be as set forth in Section 5.5.
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5.4 Certain Definitions.
(a) In connection with a termination of Executive’s employment by
the Company, “Cause” shall mean any one or more of the following reasons: (l)
the willful material failure by the Executive to perform the duties required of
her hereunder (other than any such failure resulting from incapacity due to
physical or mental illness of the Executive or material changes in the direction
and policies of the Board of Directors of Company), if such failure continues
for fifteen (15) days after a written demand for substantial performance is
delivered to the Executive by the Company which specifically identifies the
manner in which it is believed that the Executive has failed to attempt to
perform her duties hereunder; (2) the willful engaging by the Executive in
willful misconduct materially injurious to the Company; (3) receipt by the
Company of a notice (which shall not have been appealed by Executive or shall
have become final and non-appealable) of any governmental body or entity having
jurisdiction over the Company requiring termination or removal of the Executive
from her then present position, or receipt of a written directive or order of
any governmental body or entity having jurisdiction over the Company (which
shall not have been appealed by Executive or shall have become final and
non-appealable) requiring termination or removal of the Executive from her then
present position; (4) personal dishonesty, incompetence, willful misconduct,
willful breach of fiduciary duty involving personal profit or conviction of a
felony; or (5) material breach of any provision set forth in Sections 6, 7, 8 or
9, to the extent applicable. For purposes of this section, no act, or failure to
act, on the Executive’s part shall be considered ‘‘willful’’ unless done or
omitted to be done by Executive in bad faith and without reasonable belief that
her action or omission was in the best interest of Company. Any act or omission
to act by the Executive in reliance upon a written opinion of counsel to Company
shall not be deemed to be willful.
(b) Good Reason. For purposes of this Agreement, “Good Reason”
shall mean (1) a material breach by Company of the provisions of this Agreement,
which failure has not been cured within 30 days after a written notice of such
noncompliance has been given by Executive to Company; (2) any purported
termination of Executive’s employment which is not effected in compliance with
the requirements of this Agreement; (3) any reduction in title or a material
adverse change in Executive’s responsibilities or authority which are
inconsistent with, or the assignment to Executive of duties inconsistent with,
Executive’s status as Chief Financial Officer of Company; or (4) any reduction
in Executive’s annual base salary as in effect on the date hereof or as the same
may be increased from time to time.
(c) Notice of Termination. Any termination of Executive’s
employment by Company or by Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a “Notice
of Termination” shall mean a dated notice which shall (1) indicate the specific
termination provision in this Agreement relied upon; (2) set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated; and (3) be given in a
manner consistent with the requirements of Section 12.
5.5 Compensation Upon Certain Types of Termination. If Executive
shall terminate her employment for Good Reason during the Term, or if
Executive’s Employment is terminated by the Company other than for Cause during
the Term, or if Executive’s Employment is terminated for any reason other than
Cause upon expiration of the Term, then in lieu of any
3
salary or damages payments to Executive for periods subsequent to the date of
termination, Company shall pay as “Severance Compensation” to Executive, in lieu
of all other damages, compensation and benefits other than any benefits the
right to which shall have previously vested, an amount (the “Severance
Compensation”) equal to the following, depending upon whether a “Change in
Control” (as defined below) shall have occurred at the time of termination of
employment:
(a) If a Change in Control shall not have occurred within twelve
(12) months prior to the date of termination of Executive’s employment with the
Company, the Company shall pay Executive the following Severance Compensation,
payable at the respective times and on the respective conditions set forth in
this subsection for each type of Severance Compensation:
(i) Cash Severance Compensation. Notwithstanding anything to the
contrary elsewhere in this Agreement, Executive shall be entitled to receive a
dollar amount equal to the sum of Executive’s then current base salary plus the
average of the annual performance bonus (consisting of both cash and other
incentive compensation, but excluding the Company match of any deferred
compensation) provided to her with respect to the three (3) fiscal years of the
Company immediately preceding the fiscal year of termination, for the greater of
two (2) years or the period of time remaining in the Term. This element of
Severance Compensation shall be payable in equal installments on the normal pay
dates following Executive’s separation from service with the Company within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the Treasury Regulations promulgated thereunder (such Section and
regulations are sometimes referred to in this Agreement as “Section 409A”). If,
as of the date of the Executive’s separation from service, stock of the Company
or a holding company or other parent entity with respect to the Company is
publicly traded on an established securities market or otherwise, and if
necessary to comply with Section 409A, payments otherwise due during the six
(6)-month period following her separation from service shall be suspended and
paid in a lump sum upon completion of such six (6)-month period, at which time
the balance of the payments shall commence in installments as described in the
preceding sentence. Payments shall be subject to deduction for such tax
withholdings as Company may be obligated to make;
(ii) Equity Awards. All Equity Awards shall be vested in full;
(iii) Cash Bonus. Executive shall be entitled to a fraction of any
Cash Bonus for the fiscal year of the Company within which Executive’s
termination of employment occurs which, based upon the criteria established for
such Cash Bonus, would have been payable to Executive had she remained employed
through the date of payment, the numerator of which is the number of days of
such fiscal year prior to her termination of employment and the denominator of
which is three hundred and sixty-five (365); and
4
(iv) Insurance. Company shall continue to provide health insurance
(including dental if applicable) and any life insurance benefits for the shorter
of (i) the length of the severance measurement period set forth in Section
5.5(a)(i) above, or (ii) the maximum period the Company is then permitted to
extend each individual benefit under the applicable plan or policy or applicable
law.
(b) If a Change in Control shall have occurred within twelve (12)
months prior to the date of termination of Executive’s employment with the
Company, the Company shall pay Executive Severance Compensation equal to three
hundred percent (300%) of the sum of Executive’s then current base salary plus
the average of the annual performance bonus (consisting of both cash and other
Company immediately preceding the fiscal year of termination. The Severance
Compensation shall be payable in a single lump sum within thirty (30) days
following Executive’s separation from service within the meaning of Section
409A. If, as of the date of the Executive’s separation from service, stock of
the Company or a holding company or other parent entity with respect to the
Company is publicly traded on an established securities market or otherwise, and
if necessary to comply with Section 409A, payment of the lump sum shall be
suspended and paid within the thirty (30)-day period following the close of the
six (6)-month period following her separation from service. Payments shall be
subject to deduction for such tax withholdings as Company may be obligated to
make. In addition to the aforesaid Executive Severance Compensation, additional
Executive Severance Compensation shall be provided as set forth below.
(i) Equity Awards. All Equity Awards shall be vested in full;
(ii) Cash Bonus. Executive shall be entitled to a fraction of any
which is three hundred and sixty-five (365);
(iii) Insurance. Company shall continue to provide health insurance
of (i) the length of the severance measurement period set forth in above in this
Section 5.5(b), or (ii) the maximum period the Company is then permitted to
law; and
(iv) Golden Parachute Limitation. Notwithstanding any provision of
this Agreement to the contrary, if, as a result of a payment provided for under
or pursuant to this Agreement, together with all other payments in the nature of
compensation provided to or for the benefit of the Executive under any other
plans or agreements in connection with a Change in Control, the Executive
becomes subject to excise taxes under Section 4999 of the Code, then the amount
of severance to be paid pursuant to this Agreement shall be reduced to the
maximum amount allowable without causing Executive to become subject to such
excise taxes. Such maximum amount shall be determined by a registered public
accounting firm selected by the Compensation Committee of the Board of Directors
of the Company, whose determination, absent
5
manifest error, shall be treated as conclusive and binding.
(c) For purposes of this Agreement, “Change in Control” means the
occurrence of any one or more of the following events:
(i) There occurs a merger, consolidation or other business
combination or reorganization to which the Company is a party, whether or not
approved in advance by the Board of Directors of the Company, in which (A) the
members of the Board of Directors of the Company immediately preceding the
consummation of such transaction do not constitute a majority of the members of
the Board of Directors of the resulting corporation and of any parent
corporation thereof immediately after the consummation of such transaction, and
(B) the shareholders of the Company immediately before such transaction do not
hold more than fifty percent (50%) of the voting power of securities of the
resulting corporation;
(ii) There occurs a sale, exchange, transfer, or other disposition
of substantially all of the assets of the Company to another entity, whether or
not approved in advance by the Board of Directors of the Company (for purpose of
this Agreement, a sale of more than one-half of the branches of Customers Bank,
a wholly owned subsidiary of the Company, would constitute a Change in Control,
but for purposes of this section, no branches or assets will be deemed to have
been sold if they are leased back contemporaneously with or promptly after their
sale);
(iii) A plan of liquidation or dissolution is adopted for the
Company; or
(iv) Any individual, firm, corporation, partnership or other entity
(“Person”) (except Company, any subsidiary of Company, any employee benefit plan
of Company, any Person or entity organized, appointed or established by Company
or any subsidiary of Company for or pursuant to the terms of any such employee
benefit plan), together with all Affiliates and Associates of such Person is or
shall become the “beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934 (the “Exchange Act”) of securities of the
Company representing 50% or more of the combined voting power of the Company’s
then outstanding securities. For purposes of this subsection, “Affiliate” and
“Associate” shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations issued under the Exchange Act.
(d) In the event that the Executive’s employment is terminated
during the Term as a result of her death or disability, she (or her estate, as
the case may be) shall not be entitled to any payments or other benefits
pursuant to this Section 5.5 or otherwise.
5.6 Release. The Company’s obligation to pay Severance Compensation
under Section 5.5 hereof is expressly conditioned upon Executive’s execution of
and delivery to the Company (and non-revocation) of a release (as drafted at the
time of Executive’s termination of employment, and which will include, but not
be limited to: (a) an unconditional release of all rights to any claims,
charges, complaints, grievances, known or unknown to Executive, against the
Company, its affiliates or assigns, or any of their officers, directors,
employees and agents, through to the date of Executive’s termination from
employment, and (b) a representation and warranty
6
that Executive has not filed or assigned any claims, charges, complaints, or
grievances against the Company, its affiliates or assigns, or any of their
officers, directors, employees and agents.
5.7 Mitigation by Executive. Executive shall not be required to
mitigate the amount of any payment provided for in Section 5.5 by seeking other
employment or otherwise.
6. Non-Disclosure. The Executive covenants and agrees that
Executive will not at any time, either during the Term or thereafter, use,
disclose or make accessible to any other person, firm, partnership, corporation
or any other entity any Confidential and Proprietary Information (as defined
herein), other than to (a) Executive’s attorney or spouse in confidence, (b)
while employed by the Company, in the business and for the benefit of the
Company, or (c) when required to do so by a court of competent jurisdiction, any
government agency having supervisory authority over the business of the
Executive or the Company or any administrative body or legislative body,
including a committee thereof, with jurisdiction.
For purposes of this Agreement, “Confidential and Proprietary Information” shall
mean non-public, confidential, and proprietary information provided to the
Executive concerning, without limitation, the Company’s financial condition
and/or results of operations, statistical data, products, ideas and concepts,
strategic business plans, lists of customers or customer information,
information relating to marketing plans, management development reviews,
including information regarding the capabilities and experience of the Company’s
employees, compensation, recruiting and training, and human resource policies
and procedures, policy and procedure manuals, together with all materials and
documents in any form or medium (including oral, written, tangible, intangible,
or electronic) concerning any of the above, and other non-public, proprietary
and confidential information of the Company; provided, however, that
Confidential and Proprietary Information shall not include any information that
is known generally to the public or within the industry other than as a result
of unauthorized disclosure by the Executive. It is specifically understood and
agreed by the Executive that any non-public information received by the
Executive during Executive’s employment by the Company is deemed Confidential
and Proprietary Information for purposes of this Agreement. In the event the
Executive’s employment is terminated for any reason, the Executive shall
immediately return to the Company upon request all Confidential and Proprietary
Information in Executive’s possession or control.
7. Non-Solicitation. Executive agrees that during the Term and
for a period of twelve (12) months thereafter, unless the Executive obtains the
Company’s prior written permission, which may be granted or denied at the
Company’s sole and absolute discretion, the Executive shall not:
(a) solicit or divert to any competitor of the Company or, upon
termination of the Executive’s employment with the Company, accept any business
from any individual or entity that is a customer or a prospective customer of
the Company, to the extent that such prospective customer was identifiable as
such prior to the date of the Executive’s termination, except that this covenant
of non-solicitation shall not apply with respect to anyone who, while having
previously been a customer or prospect of the Company, is no longer a customer
or prospect of the Company at the time of the solicitation; and/or
(b) induce or encourage any officer and/or employee of the Company
7
to leave the employ of the Company, hire any individual who was an employee of
the Company as of the date of the termination of the Executive’s, or induce or
encourage any customer, vendor, participant, agent or other business relation of
the Company to cease or reduce doing business with the Company or in any way
interfere with the relationship between any such customer, vendor, participant,
agent or other business relation and the Company.
8. Noncompete Agreement. For a period of twelve (12) months
after any resignation or termination of Executive’s employment for any reason,
Executive shall not, directly or indirectly, within 10 miles of any office of
the Company, enter into or engage directly or indirectly in competition with the
Company or any subsidiary or other company under common control with the
Company, in any financial services business conducted by the Company or any such
subsidiary at the time of such resignation or termination, either as an
individual on her own or as a partner or joint venturer, or as a director,
officer, shareholder, employee, agent, independent contractor, nor shall
Executive assist any other person or entity in engaging directly or indirectly
in such competition.
9. Non-Disparagement. During the Term, after its expiration and
following the termination of this Agreement by the Company or the Executive for
any reason, each party agrees not to make any statements, in writing or
otherwise, that disparage the reputation or character of the other party or, in
the case of the Company, any subsidiaries or affiliates of the Company or any of
their respective managers, directors, officers, stockholders, partners, members
or employees, at any time for any reason whatsoever, except that nothing in this
section shall prohibit any party from giving truthful testimony in any
litigation or administrative proceedings either between the Executive and the
Company or in connection with which such party is subpoenaed and required by law
to give testimony, including without limitation, any action by the Executive to
enforce Executive’s rights hereunder.
10. Severance Compensation Conditional; Remedies for Breach of
Sections 6, 7, 8 and 9; Independence of Covenants; Notice to Others; Savings
Clause.
10.1 Severance Compensation Independent. Company’s obligation to pay
Severance Compensation is conditioned on Executive’s compliance with Sections 6,
7, 8 and 9 of this Agreement and Company shall not be obligated to pay such
Severance Compensation in the event of any breach by Executive of such sections.
10.2 Remedies for Breach of Sections 6, 7, 8 and 9. Executive and
Company agree that the covenants in Sections 6, 7, 8 and 9 are reasonable
covenants under the circumstances. Executive agrees that any breach of the
covenants set forth in Sections 6, 7, 8 and 9 of this Agreement will irreparably
harm the Company. The Executive and the Company agree that in the event of any
breach by the Executive of the provisions set forth in Sections 6, 7, 8 and 9 of
this Agreement, the Company shall be entitled to all rights and remedies
available at law or in equity, including without limitation, the following
cumulative and not alternative rights:
(a) the right to obtain injunctive or other equitable relief to
restrain any breach or threatened breach or otherwise to specifically enforce
the provisions of this Agreement, it being agreed that monetary damages alone
would be inadequate to compensate the Company, the amount of such damages will
be difficult (if not impossible) to prove precisely, and would be
8
an inadequate remedy for such breach;
(b) the right to institute civil suit to recover damages suffered
by the Company;
(c) the right to recover actual reasonable attorneys’ fees and
other costs incurred by the Company in connection with pursuing remedies
hereunder; and
(d) the right to seek an equitable accounting of all earnings,
profits and other benefits arising from any such violation.
10.3 Independence of Covenants. The existence of any claim or cause of
action of the Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of the provisions of Sections 6, 7, 8 and 9.
10.4 Notice to Others. Executive agrees to notify any future
prospective employers and future employers, and any future joint venturers,
partners and contracting parties of Executive, whose activities may be deemed to
compete with Company of the existence of each of the covenants contained in
Sections 6, 7, 8 and 9 of this Agreement.
10.5 Savings Clause. In the event that any provision or provisions of
any of the covenants in Section 6, 7, 8 and 9 would otherwise be determined by
any court of competent jurisdiction to be unenforceable in whole or in part by
reason of being for too great a period of time or covering too great a
geographical area or too broad a product market, or for any other reason, each
such covenant shall nevertheless remain in full force and effect and be
construed so as to be enforceable as to that period of time and geographical
area and product market, and on such other conditions, as may be determined to
be reasonable by the court.
11. Amendments. No amendments to this Agreement shall be binding
unless in writing and signed by both parties.
12. Notices. All notices under this Agreement shall be in writing
and shall be deemed effective (i) when delivered in person or by fax or other
electronic means capable of being embodied in written form, or (ii) forty-eight
(48) hours after deposit thereof in the U.S. mails by certified or registered
mail, return receipt requested, postage prepaid, addressed, in the case of
Executive, to her last known address as carried on the personnel records of
Company and, in the case of Company, to the corporate headquarters, attention of
the Chairman of the Board of Directors, or to such other address as the party to
be notified may specify by notice to the other party.
13. Entire Agreement. This Agreement is the entire agreement of the
parties with respect to its subject matter and supersedes and replaces all other
negotiations, discussions and prior or contemporaneous agreements between the
parties, whether oral or written, with respect to the subject matter of
Executive’s employment with Company. For avoidance of doubt, this Agreement
supersedes and replaces Executive’s Change of Control Agreement with the Company
dated August 14, 2017.
9
14. Binding Effect and Benefits. The rights and obligations of
Company and Executive under this Agreement shall inure to the benefit of and
shall be binding upon the respective heirs, personal representatives, successors
and assigns of Company and Executive.
15. Construction. This Agreement shall be construed under the laws
of the Commonwealth of Pennsylvania, as they may be preempted by federal laws
and regulations. Section headings are for convenience only and shall not be
considered a part of the terms and provisions of the Agreement.
16. Governing Law; Jurisdiction; Venue. The validity,
interpretation, construction, performance and enforcement of this Agreement
shall be governed by the internal laws of the Commonwealth of Pennsylvania,
without regard to its conflicts of law rules, and by federal law to the extent
it pre-empts state law. For purposes of any action or proceeding, the Executive
irrevocably submits to the exclusive jurisdiction of the courts of the
Commonwealth Pennsylvania and the courts of the United States of America located
in Pennsylvania for the purpose of any judicial proceeding arising out of or
relating to this Agreement or otherwise. The Executive irrevocably agrees to
service of process by certified mail, return receipt requested, to the Executive
at the addressed listed in the records of the Company. The proper venue for all
such disputes, actions or proceedings shall be Chester County. The parties agree
that in any action or proceeds arising under this Agreement, attorneys’ fees and
costs shall be awarded to the prevailing party.
Counsel. Executive acknowledges that she has read this Agreement fully and
carefully, understands its terms and that it has been entered into by Executive
voluntarily. Executive further acknowledges that Executive has had sufficient
opportunity to consider this Agreement and discuss it with Executive’s own
advisors, including Executive’s attorney and accountants and that Executive has
made Executive’s own free decision whether and to what extent to do so.
18. Legal Expenses. Company shall pay to Executive all reasonable
legal fees and expenses incurred by her in seeking to obtain or enforce any
rights or benefits provided by this Agreement to the extent she prevails in such
efforts.
19. Indemnification of Executive. Company shall indemnify Executive
against any liability incurred in connection with any proceeding in which the
Executive may be involved as a party or otherwise by reason of the fact that
Executive is or was serving as Chief Financial Officer to the extent permitted
by the Company’s articles of incorporation, bylaws and applicable law. To
further effect, satisfy or secure the indemnification obligations provided
herein or otherwise, the Company shall cause its director and officer liability
insurance to cover Executive during the Term and for such period thereafter as
the Company’s liability insurance policy permits coverage for actions or
omissions of former directors or officers.
10
IN WITNESS WHEREOF, the parties hereto have caused the due execution of this
Agreement as of the date first set forth above.
Attest:
/s/ Michael DeTommaso
CUSTOMERS BANCORP, INC.
By: /s/ Jay S. Sidhu
For the Board of Directors
Witness:
/s/ Alan Kidd
CARLA LEIBOLD
/s/ Carla Leibold
|
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 or 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF For the month of March, 2008 GRUPO TELEVISA, S.A.B. (Translation of registrant’s name into English) Av. Vasco de Quiroga No. 2000, Colonia Santa Fe 01210 Mexico, D.F. (Address of principal executive offices) (Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.) Form 20-F x Form 40-F (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.) Yes No x (If “Yes” is marked indicate below the file number assigned to the registrant in connection with Rule 12g-3-2(b): 82.) NBC UNIVERSAL'S TELEMUNDO AND GRUPO TELEVISA SIGN STRATEGIC ALLIANCE AGREEMENT FOR MEXICO Televisa and Telemundo sign an exclusive programming license agreement to distribute Telemundo content in Mexico across multiple platforms New York and Mexico City, Mexico - March 17, 2008 - NBC Universal's Telemundo, a United States-based producer of innovative Spanish-language content for Hispanics in the U.S. and around the world, and Grupo Televisa, S.A.B ("Televisa"; NYSE:TV; BMV:TLEVISA CPO), entered into a strategic alliance agreement to distribute Telemundo content in Mexico across multiple platforms including broadcast TV, PayTV and emerging digital platforms. The deal was announced by Jeff Zucker, President and Chief Executive Officer, NBC Universal; Don Browne, President, Telemundo Communications Group; and Alfonso de Angoitia, Executive Vice President, Grupo Televisa.Financial terms were not disclosed. Beginning in April, Televisa's Channel 9 will broadcast more than 1,000 hours a year of Telemundo's original programming. This agreement will allow Televisa's Channel 9 to broaden its viewership in Mexico as it redefines its offerings to include first-run high-quality programming, anchored by Telemundo content. In addition to the broadcast platform, Televisa will distribute a new PayTV channel to be launched later this year by Telemundo featuring Telemundo branded entertainment and news content. Televisa will provide distribution for the PayTV channel in Mexico, including its DBS platform Sky and cable system Cablevision, reaching over 2 million households at launch. The license agreements for Televisa's Channel 9 and the new PayTV channel will have an initial term of 10 years, respectively. Televisa and Telemundo also expect to sign agreements to distribute Telemundo’s content in Mexico through emerging platforms including Internet, mobile phones, home video and VOD. Mr. de Angoitia said: "This agreement enhances our ability to offer a compelling value proposition by enabling us to bring together exciting content with extensive distribution options.By using Telemundo's high-quality, popular programming, Televisa's Channel 9 will have the opportunity to achieve substantially enhanced revenues and profitability over the long term in a highly cost efficient manner. Telemundo’s new PayTV channel will be a great addition to Televisa’s current PayTV channel offering. We look forward to building a solid relationship with NBC Universal and Telemundo and are excited about the opportunities our companies can realize in Mexico working together.” Mr.
|
Exhibit 10.63
[ENGLISH TRANSLATION]
JOSÉ MANUEL GÓMEZ DEL CAMPO LÓPEZ, ESQ.
ADRIÁN R. ITURBIDE GALINDO, ESQ.
NOTARÍAS ASOCIADAS 136 Y 139
DEL DISTRITO FEDERAL
INSTRUMENT No. 53,360
BOOK No. 1696
IN MEXICO CITY, FEDERAL DISTRICT, on the 13th day of the month of October of the
year 2006, before me, ADRIÁN ROGELIO ITURBIDE GALINDO, Esq., head of Civil Law
Notary Public’s Office No. 139 in this Federal District, acting by association
agreement in the Notarial Record Book of Civil Law Notary Public’s Office
No. 136 headed by Mr. José Manuel Gómez del Campo López, Esq., appeared on one
part, Mr. LIÉBANO SÁENZ ORTIZ and on the other part, “COMPAÑÍA MINERA DOLORES”,
SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, represented by its attorney-in-fact,
Mr. VÍCTOR GARCÍA JIMÉNEZ.
The appearing parties presented to the undersigned Civil Law Notary Public, five
counterparts of a Mining Rights Purchase Agreement dated October 13, 2006,
entered into by and between Mr. LIÉBANO SÁENZ ORTIZ (“SELLER”) and “COMPAÑÍA
MINERA DOLORES”, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, herein represented by its
attorney-in-fact Mr. VÍCTOR GARCÍA JIMÉNEZ (“PURCHASER”), with respect to the
existing mining concession on the lot called “UNIFICACIÓN REAL CANANEA”, Title
No. 227,028 with a surface area of one thousand nine hundred [sic] hectares,
zero ares, zero centiares (1920.0000 hectares) [sic] located in the Madera
Municipality, State of Chihuahua, and that substituted the following mining
concessions:
“ALMA DE MARÍA”, Title No. 191,728.
“REAL CANANEA UNO” Title No. 184,982.
“REAL CANANEA” Title No. 184,981.
“SAN JUDAS TADEO” Title No. 184, 983.
“AMPL. REAL CANANEA UNO” Title No. 184,985.
“AMPL. REAL CANANEA DOS”, Title No. 184,986, and
“AMPL. REAL CANANEA”, Title No. 184,984, under the terms and conditions
specified in the same Agreement.
The representative of “COMPAÑÍA MINERA DOLORES”, SOCIEDAD ANÓNIMA DE CAPITAL
VARIABLE, stated that he has made certain that the concessions subject matter of
the agreement being ratified are in effect and that its titleholder is up to
date in the performance of its obligations
The appearing parties hereby recognize the signatures on such instruments as
their own because they were set with their own hands and RATIFY THE CONTENTS OF
THE FULL DOCUMENT, same documents that were annotated with the pertaining
certification and of them I return four counterparts to the concerned parties
and I add one counterpart to the appendix of the Notarial Record Book marked
with letter “A” and the number of this instrument.
LEGAL CAPACITY
Mr. VÍCTOR GARCÍA JIMÉNEZ evidences the powers and authorities conferred upon
him by “COMPAÑÍA MINERA DOLORES” SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE”, with
Legal Instrument 38,590 dated March 10, 1997, witnessed and certified by the
undersigned Notary and recorded in the Notarial Record Book of Civil Law Notary
Public’s Office No. 136 where I act as an Associate and headed by Mr. José
Manuel Gómez del Campo López, Esq., registered in the Public Commercial Registry
in this capital city, under Mercantile Folio No. 220,279, on May 16, 1997,
wherein prior permit from the Ministry of Foreign Affairs (Secretaría de
Relaciones Exteriores), “COMPAÑÍA MINERA DOLORES”, SOCIEDAD ANÓNIMA DE CAPITAL
VARIABLE, domiciled in Mexico City, Federal District, was incorporated with a
99-year duration, with a fixed minimum variable capital of FIFTY THOUSAND
MEXICAN PESOS, National Currency, unlimited maximum amount, including the
foreigner participation clause. From such legal instrument I copy the relevant
text as follows
“…….2. The purpose of the corporation is: I. To purchase, sell, lease,
acquire, transfer, assign, explore, apply for registration of a mining claim,
operate, manage, exploit a mine and process minerals and in general to trade or
do business, in any other manner, with mining enterprises or properties of any
type, and with mines of all kinds of metals, metalloids and non-metallic
minerals, including exploitation of tailings and dumping areas. II. To acquire,
own, lease, assign or transfer, manage and sell all kinds of mining concessions
and applications for mining concessions, licenses, authorizations, franchises,
easements, leases, rights and interests of all kinds and nature, and also the
personal and real property required for the achievement of the purposes of the
corporation. III: To purchase, sell, import, export and in general to do
business and trade with all kinds of metals, metalloids and non-metallic
minerals. IV. To establish, acquire, own, operate and manage mills,
beneficiation plants, plants in general, smelting sites, energy and power
production plants, warehouses, storehouses and in general the real estate,
buildings, establishments, facilities and equipment required, or convenient for
the accomplishment of the corporate purposes. V. To give or take loans, secured
or unsecured, issue bonds, stock, obligations, securities and other negotiable
instruments, with the intervention, if that is the case, of the institutions set
forth in the Law and also to lawfully acquire and trade with all kinds of
merchandise and goods and grant the securities required to achieve the purposes
of the corporation. VI. To provide mining companies, mining/metallurgical
companies and in general industrial and commercial enterprises, with all kinds
of technical, management or supervision services, whether in Mexico or abroad
and to receive such services. VII. In general, to carry out any transactions
arising from or related to the above mentioned corporate purposes and to that
effect to carry out all kinds of commercial and industrial transactions and
execute all kinds of agreements whether of a civil or commercial nature
permitted by the Law. --------24. POWERS AND AUTHORITIES. The Sole Administrator
or the Board of Directors, as the case may be, shall have the following powers
and authorities…… X. In general and without detriment to the preceding powers
and authorities, it shall have all the POWERS AND AUTHORITIES indicated below:
............ b). MANAGE
2
PROPERTY, with all the general and special powers and authorities that require a
power-of-attorney or a special clause according to the Law, under the terms of
second paragraph of Article 2,554 of the Civil Code in effect for the Federal
District, including any relevant Articles of the Civil Codes of the States of
the Mexican Republic. c). FOR LITIGATIONS AND COLLECTIONS with all the general
and special powers and authorities that require a special power-of-attorney or
clause according to the Law under the terms of the first paragraph of
Article 2,554 of the Civil Code for the Federal District, including those in
Articles 2,582 and 2,587 of the same Code and any relevant articles of the Civil
Codes of the States of the Mexican Republic. Without limitation, they shall
have the following powers and authorities, among others: to file and withdraw
all kinds of actions, remedies, litigations and proceedings, even amparo
proceedings; to settle, challenge jurisdiction, receive payments, submit to
arbitration, submit and answer interrogatories, file actions and complaints on
criminal matters and to withdraw them, grant pardons and assist the Attorney
General as coadjutor, demand the performance of all the obligations assumed on
behalf of the principal. The power may be exercised before individuals and
before all kinds of federal or local authorities, whether administrative, labor
or judicial and before the Conciliation and Arbitration Board (Junta de
Conciliación y Arbitraje).
………g)…..To confer general or special powers-of-attorney and to revoke
them………..TRANSITORY………2. By unanimous vote the shareholders’ meeting agreed on
the following:………….D. Messrs. VÍCTOR GARCÍA JIMÉNEZ, Esq. and ……… are granted
in order for them to exercise it jointly or individually a GENERAL
POWER-OF-ATTORNEY with the powers and authorities referred to in paragraphs b),
c) and f) of Section X (Roman numeral) of Clause 24 of the Bylaws. Also, a
special power-of-attorney is conferred upon them to open bank accounts, draw
checks or designate the person who may draw checks on such accounts, being
empowered to carry out all the actions and sign and collect all the documents
required to achieve the purpose of this power-of-attorney.. ………….”
I, THE NOTARY HEREBY CERTIFY AND ATTEST:
I. That I identified myself with the
appearing parties as Civil Law Notary Public in the Federal District and let
them know the penalties applicable to those who make misrepresentations.
II: That I am well acquainted with the
appearing parties who based on their personal information stated the following:
Mr. VÍCTOR GARCÍA JIMÉNEZ, Esq., of Mexican nationality, from this city where he
was born on January 11, 1942, married, attorney-at-law, domiciled at San
Francisco No. 656, Despacho 601, Colonia del Valle, Delegación Benito Juárez,
Código Postal 03100, Distrito Federal. Registered in the Federal Taxpayers’
Registry with No. GAJV-420111-M53.
Mr. LIÉBANO SÁENZ ORTIZ, Esq., of Mexican nationality, born in Casas Grandes,
State of Chihuahua, where he was born on July 22, 1949, married under the
separation of property marital system, attorney-at-law and public servant,
domiciled at Gutenberg No. 147, Colonia Anzures, Código Postal No. 11590,
Delegación Miguel Hidalgo, Distrito Federal. Registered in the Federal
Taxpayers’ Registry with No. SAOL-490722-2WA.
3
III: That to the best of my knowledge the
appearing parties have legal capacity since I did not notice any signs of
natural disability and have not heard that they are subject to civil disability,
adding Mr. Víctor García Jiménez, Esq., that the corporation he represents is
fully qualified and that the representation conferred upon him and whereby he
acts, is in effect in all its terms.
IV. That Mr. Víctor García Jiménez, Esq., hereby declares that there is foreign
participation in the company he represents, evidencing such statement with a
Certificate of Temporary Renewal of Registration in the National Registry of
Foreign Investments filed with the Ministry of Economy (Secretaría de Economía)
at its Federal Office in Chihuahua, on June 23, 2007, and that a true copy of
the original document was shown to me and added by me to the appendix of the
Notarial Record Book marked with letter B and the number of this legal
instrument.
V. That Mr. Víctor García Jiménez, Esq.,
hereby declares that the company he represents will carry out the registration
of the ratified agreement with the Mining Public Registry (Registro Público de
Minería).
VI. That everything listed and inserted truly
agrees with the documents I have been shown and have seen.
VII. That I informed the appearing parties of the
right they have to personally read this instrument and to have its contents
explained by me.
VIII: That this instrument was read to the appearing
parties and after I informed them of the value, consequences and legal scope of
its contents they expressed their full comprehension and agreement and signed it
on this date, I HEREBY DEFINITELY AUTHORIZE IMMEDIATELY AFTERWARDS ON THE
INDICATED PLACE AND DATE. I HEREBY ATTEST.
SIGNATURES. SIGNATURE OF THE NOTARY. AUTHORIZATION SEAL
DOCUMENTS IN THE APPENDIX.
A, DOCUMENT RATIFIED.
B. RENEWAL OF REGISTRATION IN THE NATIONAL
REGISTRY OF FOREIGN INVESTMENTS.
THIS IS THE SECOND OFFICIAL TRANSCRIPT, THIRD IN ORDER, TAKEN FROM THE ORIGINAL
DOCUMENT THAT I ISSUE FOR “COMPAÑÍA MINERA DOLORES” SOCIEDAD ANÓNIMA DE CAPITAL
VARIABLE, AS THE INTERESTED PARTY. IT IS PRESENTED IN SIX PAGES THAT HAVE BEEN
DULY COMPARED AND PROTECTED BY KINEGRAMS WITH NUMBERING THAT MAY NOT BE
PROGRESSIVE, ADHERED TO THE OBVERSE OF EACH PAGE AND ALSO NEXT TO MY SIGNATURE
AND SEAL. IT IS AN INTEGRAL PART OF THIS OFFICIAL TRANSCRIPT, SAME DOCUMENT THAT
IS RATIFIED AND THE RENEWAL OF REGISTRATION IN THE NATIONAL REGISTRY OF FOREIGN
INVESTMENTS, IN EIGHT PAGES ATTACHED AT THE END. I HEREBY ATTEST. MEXICO CITY,
* * *
4
MINING RIGHTS PURCHASE AGREEMENT ENTERED INTO BY AND BETWEEN MR. LIÉBANO SÁENZ
ORTIZ (HEREINAFTER, “SELLER”), ON ITS OWN RIGHT AND COMPAÑÍA MINERA DOLORES,
S.A. DE C.V. (HEREINAFTER “PURCHASER”), REPRESENTED HEREIN BY ITS ATTORNEY IN
FACT MR. VICTOR GARCÍA JIMÉNEZ, PURSUANT TO THE FOLLOWING RECITALS AND CLAUSES
RECITALS
I. SELLER declares:
a) To be a Mexican citizen, of age, married
by the separation of property system, legally able to be bound and to be holder
of mining concessions;
b) That he is the legitimate owner of the
rights deriving from the mining concession existing on the lot (“THE LOT”)
UNIFICACIÓN REAL CANANEA, Title 227028, with a surface area of 1,920.0000
hectares, located in the Municipality of Madera, State of Chihuahua that
replaced the following previous mining concessions:
NAME OF THE LOT
TITLE No.
ALMA DE MARÍA
191728
REAL CANANEA UNO
184982
REAL CANANEA
184981
SAN JUDAS TADEO
184983
AMPL. REAL CANANEA UNO
184985
AMPL. REAL CANANEA DOS
184986
AMPL. REAL CANANEA
184984
Copy of the aforementioned Concession Title is attached hereto as Attachment
“A”.
c) That with respect to the mining
concession existing on THE LOT, it is up to date in the compliance with its
obligations according to the Mining Law, its Regulations and other applicable
legal provisions. Furthermore, that the rights deriving from such concession are
free from any encumbrance, charge or limitation of title;
d) That on March 25, 1994, he entered into an
Exploration, Exploitation and Unilateral Promise to Sell with Minera
Minefinders, S.A. de C. V. (hereinafter “MINERA”), granting to MINERA the rights
to explore and exploit the lots mentioned in Recital I b) above, as well as a
unilateral promise to sell the rights deriving from the mining concessions
existing at that time thereon, should MINERA be willing to purchase them;
e) That in an Assignment of Rights Agreement
entered into on July 25, 1997, with his consent, MINERA assigned to Compañía
Minera Dolores, S.A. de C.V. (hereinafter “PURCHASER”) the rights deriving from
the Exploration,
5
Exploitation and Unilateral Promise to Sell mentioned in the preceding paragraph
d), and that both, MINERA and DOLORES have timely complied with all the
contractual obligations in such Agreements, and
f) That on January 27, 2005, with his
consent and signature, MINERA filed the applications to verify the metes, bounds
and perimeters of the aforementioned lots, as well as to correct the pertaining
concession titles and, also requested the unification of all the surface area
covered by such titles. In view thereof, on April 11, 2006, the mining
concession of UNIFICACIÓN REAL DE CANANEA, Title No. 227028 was issued, and
g) In view that PURCHASER has formally
notified its wish to exercise its option rights to purchase the rights deriving
from the existing mining concession on THE LOT, to comply with his promise, in
this Agreement he is willing to sell the aforementioned rights to PURCHASER, in
the terms and conditions set forth herein below.
II. PURCHASER declares:
a) To be a mining corporation legally established and existing
pursuant to the laws of the Republic of Mexico, legally able to enter into this
agreement and to be the holder of mining concessions;
b) That its attorney in fact, Mr. Víctor García Jiménez is duly
authorized to represent the corporation and to enter into this agreement, and
c) That in accordance with provisions in the Exploration,
Exploitation and Unilateral Promise to Sell Agreement mentioned in sub-paragraph
e) of Recital I above, in its capacity of assignee of the rights deriving from
such Agreement and exercising its option right to purchase, in this agreement is
willing to purchase the rights deriving from the mining concession existing on
THE LOT, in the terms and conditions agreed upon and stated herein below.
Pursuant to the preceding Recitals, the parties bind themselves pursuant to the
following:
CLAUSES
ONE. Purchase
of the Mining Concession. SELLER hereby sells to PURCHASER the rights deriving
from the mining concession existing on THE LOT, at a purchase price of TWENTY
FIVE THOUSAND US DOLLARS (US$25,000.00) plus VAT, payable in cash at the
execution of this Agreement.
TWO. Subrogation of
rights and obligations. By entering into this agreement for the purchase of
rights, PURCHASER substitutes SELLER with respect to all the rights and
obligations held thereby as holder of the rights deriving from the mining
concession existing on THE LOT pursuant to that set forth by the Mining Law, its
Regulations, the Federal Rights Law and other applicable legal provisions.
6
THREE. Acceptance of price
and warranty of title. The parties hereby agree that the price paid is the price
of THE LOT mentioned herein, as described, without taking into account its
parts, size or mineral content, and therefore, rescission shall not proceed,
notwithstanding a deficit or surplus may result in its parts, size or content at
the time of surrender. Furthermore, the parties hereby accept all the terms and
conditions in this Agreement and in view of its commercial nature they shall not
presume injury or bad faith.
SELLER undertakes to provide warranty of title to PURCHASER.
FOUR. Discovery Fees.
PURCHASER undertakes to pay SELLER as Discovery Fees a two percent (2%) royalty
fee from the net amount of smelting settlements or first-hand purchase invoices
paid to PURCHASER for the sale of mineral extracted from THE LOT, payable once
the commercial production has started at THE LOT, to be paid pursuant to
provisions in this clause.
In the event that in the future PURCHASER may transfer THE LOT or the exploiting
rights to third parties, PURCHASER undertakes to obtain a commitment from such
third party to pay to SELLER the royalty mentioned in this Clause, and to ensure
that all subsequent buyers thereof shall pay such royalty to SELLER. Failure to
do so shall cause the party transferring THE LOT or the exploitation rights
without obtaining the commitment of buyer to pay such royalty, to continue
paying such royalty to SELLER.
For the purpose of the preceding, it is hereby understood:
1. That PURCHASER or whoever is producing (“PRODUCER”) in THE LOT,
shall be in commercial production when the site or plant is producing at seventy
five per cent (75%) of installed capacity, according to the feasibility survey,
for a three month period.
2. “The two percent (2%) royalty of the net amount of smelting
settlements or first-hand purchase invoices paid to PURCHASER for the sale of
mineral extracted from THE LOT” shall mean: the net amount directly received by
PURCHASER, or if applicable, PRODUCER, for the sale of mineral, ore concentrates
or any other type of product obtained from THE LOT, and sent to the smelting or
refining site, or to any other buyer of the mineral after deducting smelting or
refining expenses, pertaining rates and all and every expenses incurred by the
buyer of the mineral and ore concentrates, deducting all the expenses incurred
for transporting them to the smelting or refining sites, and also deducting
arbitration expenses incurred by PURCHASER or PRODUCER. The milling,
concentration and transportation costs from the mine to the mill, and the
mineral extraction costs shall not be deducted when estimating the final amount
of the royalty.
3. The payment of the royalty to SELLER by PURCHASER or PRODUCER
shall be made within forty five (45) days following the date of termination of
every quarter, attaching to such payment the financial statements of the
transactions carried out by PURCHASER or PRODUCER in THE LOT. Within ninety (90)
days following the closing of the fiscal year of PURCHASER or PRODUCER, in which
year royalties had been paid to SELLER, all the accounting records
7
related [illegible] to royalty payment for that year shall be audited by a
competent auditor. In the event of a difference, such amount shall be
immediately paid to SELLER. A copy of the Audit shall be delivered to SELLER
within thirty (30) days following the end of the aforementioned ninety (90) day
term.
4. Every annual audit shall be final and shall not be subject to
adjustments or changes unless SELLER gives PURCHASER or PRODUCER detailed
exceptions within six (6) months following the date SELLER receives such report.
SELLER or its representatives duly authorized in writing shall have the right,
on their own account, to review the books and records of PURCHASER or PRODUCER.
The audit shall be carried out by a renowned independent Auditor or Public
Accountant. PURCHASER or PRODUCER shall have the right to condition the access
to its books and records asking the auditor to undertake in writing to keep all
the information strictly confidential and to use it solely for the purposes of
the audit and to solve any dispute related to the report.
5. A copy of the Audit report requested by SELLER shall be
delivered to PURCHASER or PRODUCER at the completion of the audit, and any
difference between the amount paid by PURCHASER or PRODUCER and the amount that
should have been paid according to the report of the Audit commissioned by
SELLER, shall be immediately paid thereto. In the event such difference is for
the benefit of SELLER and exceeds (five percent) 5% of the amount originally
paid by PURCHASER or PRODUCER, PURCHASER or PRODUCER shall pay the total cost of
the Audit commissioned by SELLER.
6. Under the terms of this agreement, no accounting error or
agreement interpretation error shall be the basis to claim a breach of
contractual or similar obligations, or reason to claim payment of damages or
liquidated damages, or for the termination or rescission of the agreement or of
the rights, or restitution of property acquired thereby and owned by PURCHASER
or PRODUCER.
FIVE. Fees,
rights, taxes and expenses. All fees, rights, taxes and expenses resulting from
the execution of this agreement shall be paid by PURCHASER, but not the taxes
resulting on the income obtained by SELLER which shall be paid by SELLER.
SIX.
Surrender of THE LOT. SELLER shall transfer to PURCHASER the ownership and title
of THE LOT at the time of execution of this agreement. Consequently, from that
moment, PURCHASER may use THE LOT at will, performing any exploration,
exploitation and development works it may deem convenient.
SEVEN. Full agreement of the
parties. This Agreement encompasses the full agreement of the parties with
respect to its purpose. Therefore, this Agreement supersedes and cancels any
other agreement or letter of intent executed before this Agreement with respect
to the same purpose. Furthermore, the parties acknowledge that in view that this
agreement is of a commercial nature, there is no injury or fraud from any of the
parties.
8
This agreement shall bind in all of its terms and conditions to the heirs,
assignees and successors of the parties.
The parties agree to ratify this agreement before Notary Public or Public
Commercial Attestor and to record it at the Public Registry of Mining pursuant
to provisions in the Mining Law and its Regulations.
EIGHT. Applicable Law and
Courts. For everything not expressly provided for in this Agreement, the parties
submit to the legal provisions applicable in Mexico City, Federal District,
specifically to the Mining Law, its Regulations, the Federal Law of Duties, the
Code of Commerce and the Federal Civil Code, agreeing to submit in the event of
any dispute to the jurisdiction of the competent courts in Mexico City, Federal
District, waiving the jurisdiction of any other court they may correspond in
view of their current or future domicile.
This Agreement is signed in four counterparts in Mexico City, Federal District,
on September , 2006.
SELLER
PURCHASER
COMPAÑÍA MINERA DOLORES, S.A. DE C.V.
[Illegible signature]
[Illegible signature]
Liébano Saenz Ortiz
Víctor García Jiménez
9
I, ADRIAN ROGELIO ITURBIDE GALINDO, NOTARY PUBLIC NUMBER ONE HUNDRED AND THIRTY
NINE IN AND FOR THE FEDERAL DISTRICT HEREBY CERTIFY: That in Instrument Number
53,360, dated October 13, 2006, drafted in the Notarial Record Book of Notary
Public Office Number 136, in which I act as Associate, and the Holder thereof is
José Manuel Gómez del Campo López on this date Mr. VÍCTOR GARCÍA JIMÉNEZ,
attorney in fact of COMPAÑÍA MINERA DOLORES, SOCIEDAD ANÓNIMA DE CAPITAL
VARIABLE, whose capacity was duly substantiated in such instrument, and
Mr. LIEBANO SAENZ ORTIZ, on its own right, both of whom I know and have legal
capacity, acknowledged as theirs the signatures below, since they are their hand
and they ratify such document in all of its parts, signing again for the record.
I HEREBY CERTIFY. Mexico City, Federal District, October 13, 2006.
[Illegible signature]
LIÉBANO SAENZ ORTIZ
[Illegible signature]
COMPAÑÍA MINERA DOLORES, SOCIEDAD
ANONIMA DE CAPITAL VARIABLE, REPRESENTED
HEREIN BY MR. VICTOR GARCIA JIMENEZ
[Illegible signature]
ADRIAN ROGELIO ITURBIDE GALINDO, Esq.
NOTARY PUBLIC 139 IN AND FOR THE FEDERAL DISTRICT
* * *
10
[MEXICAN EMBLEM]
MINISTRY OF THE ECONOMY
GENERAL DIRECTORSHIP OF MINES
PUBLIC REGISTRY OF MINING
642/2006
Recorded under number 196, page 12 obverse of volume 20 of the Book of MINING
DEEDS, AGREEMENTS AND CONTRACTS of the Public Registry of Mining. It is hereby
advised that in addition to the consideration set forth for the purchase,
purchaser undertakes to pay a 2% royalty on the net amount of smelting
settlements or purchase invoices, as a discovery fee, according to provisions in
clause four herein. Furthermore, it is hereby advised that in this agreement
Compañía Minera Dolores, S.A. de C.V., exercises the purchase option right it
had deriving from the exploration and exploitation agreement with purchase
option dated March 25, 1994, recorded under number 148 of volume 1 in this same
book.
Mexico City, Federal District, November 30, 2006.
RECORDER
[Illegible signature]
MA. OLGA GALLARDO MONTOYA
[SEAL IMPRINT WITH THE MEXICAN EMBLEM, READING:]
MINISTRY OF THE ECONOMY, GENERAL DIRECTORSHIP OF MINES
MEXICO CITY, FEDERAL DISTRICT
* * *
11
[ON PAGE 26, AFTER THE ASSIGNMENT AGREEMENT]
I, JORGE ANTONIO FRANCOZ GARATE, NOTARY PUBLIC NUMBER FORTY IN AND FOR THE STATE
OF MEXICO
I HEREBY CERTIFY AND ATTEST
THAT MR. LIEBANO SAENZ ORTIZ APPEARED BEFORE ME, ON HIS OWN RIGHT AND
SUBSTANTIATED HIS IDENTITY, AND I CONSIDER HIM WITH LEGAL CAPACITY FOR THIS ACT,
AND BEFORE ME HE SIGNED THIS ASSIGNMENT OF RIGHTS AGREEMENT CONSISTING OF THREE
PAGES WRITTEN ONLY ON THE OBVERSE, AND ITS PERTAINING TRANSLATION INTO ENGLISH,
AND THE APOSTILLE ISSUED BY THE STATE OF NEVADA, UNITED STATES OF AMERICA, WITH
RESPECT TO THE SIGNATURE OF NOTARY PUBLIC MICHEL J. MORRISON, WHO BEFORE THIS
ACT RATIFIED IN THE AFOREMENTIONED AGREEMENT THE SIGNATURE OF MARK KUCHER.
THIS IS SPREAD UPON THE RECORD IN INSTRUMENT NUMBER 39,014, VOLUMEN 1077, DATED
MARCH 28, 2007, DRAFTED IN THE NOTARIAL RECORD BOOK UNDER MY CUSTODY. I HEREBY
CERTIFY.
[Illegible signature]
[SEAL IMPRINT WITH THE MEXICAN EMBLEM READING:]
JORGE ANTONIO FRANCOZ GARATE, NOTARY OFFICE NUMBER 40 IN AND FOR THE STATE OF
MEXICO, NAUCALPAN.
* * *
12
|
Exhibit 10.7
EXAR CORPORATION
2006 EQUITY INCENTIVE PLAN
DIRECTOR RESTRICTED STOCK UNIT AWARD AGREEMENT
THIS DIRECTOR RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) is dated
as of [—] by and between Exar Corporation, a Delaware corporation (the
“Corporation”), and [—] (the “Director”).
W I T N E S S E T H
WHEREAS, pursuant to the Exar Corporation 2006 Equity Incentive Plan (the
“Plan”), the Corporation has granted to the Director effective as of the date
hereof (the “Award Date”), a credit of restricted stock units under the Plan
(the “Award”), upon the terms and conditions set forth herein and in the Plan.
NOW THEREFORE, in consideration of services rendered and to be rendered by the
Director, and the mutual promises made herein and the mutual benefits to be
derived therefrom, the parties agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise defined herein
shall have the meaning assigned to such terms in the Plan.
2. Grant. Subject to the terms of this Agreement, the Corporation hereby grants
to the Director an Award with respect to an aggregate of [—] stock units
(subject to adjustment as provided in Section 7.1 of the Plan) (the “Stock
Units”). As used herein, the term “stock unit” shall mean a non-voting unit of
measurement which is deemed for bookkeeping purposes to be equivalent to one
outstanding share of the Corporation’s Common Stock (subject to adjustment as
provided in Section 7.1 of the Plan) solely for purposes of the Plan and this
Agreement. The Stock Units shall be used solely as a device for the
determination of the payment to eventually be made to the Director if such Stock
Units vest pursuant to Section 3. The Stock Units shall not be treated as
property or as a trust fund of any kind.
3. Vesting.
(a) Vesting in General. [—]
(b) Change in Control Event. [Notwithstanding any other provision to the
contrary contained herein or in the Plan, upon the occurrence of a Change in
Control Event (as defined in Exhibit A attached hereto), the portion of the
Award that is outstanding and unvested immediately prior to the Change in
Control Event shall accelerate and become fully vested and nonforfeitable as of
(or, as may be necessary to effectuate the purposes of this acceleration,
immediately prior to) the date of the Change in Control Event.]
4. Continuance of Services. The vesting schedule requires continued service
through each applicable vesting date as a condition to the vesting of the
applicable installment of the Award and the rights and benefits under this
Agreement. Partial service, even if substantial, during any vesting period will
not entitle the Director to any proportionate vesting or avoid or mitigate a
termination of rights and benefits upon or following a termination of services
as provided in Section 8 below or under the Plan. Nothing contained in this
Agreement or the Plan constitutes a continued service commitment by the
Corporation or interferes with the right of the Corporation to increase or
decrease the compensation of the Director from the rate in existence at any
time.
5. Dividend and Voting Rights.
(a) Limitations on Rights Associated with Units. The Director shall have no
rights as a stockholder of the Corporation, no dividend rights (except as
expressly provided in Section 5(b) with respect to Dividend Equivalent Rights)
and no voting rights, with respect to the Stock Units and any shares of Common
Stock underlying or issuable in respect of such Stock Units until such shares of
Common Stock are actually issued to and held of record by the Director. No
adjustments will be made for dividends or other rights of a holder for which the
record date is prior to the date of issuance of the stock certificate.
(b) Dividend Equivalent Rights. As of any date that the Corporation pays an
ordinary cash dividend on its Common Stock, the Corporation shall credit the
Director with an additional number of Stock Units equal to (i) the per share
cash dividend paid by the Corporation on its Common Stock on such date,
multiplied by (ii) the total number of Stock Units (including any dividend
equivalents previously credited hereunder) (with such total number adjusted
pursuant to Section 7.1 of the Plan) subject to the Award as of the related
dividend payment record date, divided by (iii) the fair market value of a share
of Common Stock on the date of payment of such dividend. Any Stock Units
credited pursuant to the foregoing provisions of this Section 5(b) shall be
subject to the same vesting, payment and other terms, conditions and
restrictions as the original Stock Units to which they relate. No crediting of
Stock Units shall be made pursuant to this Section 5(b) with respect to any
Stock Units which, as of such record date, have either been paid pursuant to
Section 7 or terminated pursuant to Section 8.
6. Restrictions on Transfer. Neither the Award, nor any interest therein or
amount or shares payable in respect thereof may be sold, assigned, transferred,
pledged or otherwise disposed of, alienated or encumbered, either voluntarily or
involuntarily. The transfer restrictions in the preceding sentence shall not
apply to (a) transfers to the Corporation, or (b) transfers by will or the laws
of descent and distribution.
7. Timing and Manner of Payment of Stock Units. On or as soon as
administratively practical following vesting of the Award pursuant to Section 3
or Section 7 of the Plan (and in all events not later than two and one-half
months after the applicable vesting date), the Corporation shall deliver to the
Director a number of shares of Common Stock (either by delivering one or more
certificates for such shares or by entering such shares in book entry form, as
determined by the Corporation in its discretion) equal to the number of Stock
Units subject to this Award that vest on the applicable vesting date, unless
such Stock Units terminate prior to the given vesting date pursuant to
Section 8. The Corporation’s obligation to deliver shares of Common Stock or
otherwise make payment with respect to vested Stock Units is subject to the
condition precedent that the Director or other person entitled under the Plan to
receive any shares with respect to the vested Stock Units deliver to the
Corporation any representations or other documents or assurances required
pursuant to Section 8.1 of the Plan. The Director shall have no further rights
with respect to any Stock Units that are paid or that terminate pursuant to
Section 8.
8. Effect of Termination of Service. The Director’s Stock Units shall terminate
to the extent such units have not become vested prior to the first date the
Director is no longer a member of the Board, regardless of the reason for the
termination of the Director’s service as Board member (whether voluntarily or
involuntarily, including a termination due to death or disability). If any
unvested Stock Units are terminated hereunder, such Stock Units shall
automatically terminate and be cancelled as of the applicable termination date
without payment of any consideration by the Corporation and without any other
action by the Director, or the Director’s beneficiary or personal
representative, as the case may be.
9. Adjustments Upon Specified Events. Upon the occurrence of certain events
relating to the Corporation’s stock contemplated by Section 7.1 of the Plan
(including, without limitation, an extraordinary cash dividend on such stock),
the Administrator shall make adjustments if appropriate in the number of Stock
Units then outstanding and the number and kind of securities that may be issued
in respect of the Award. No such adjustment shall be made with respect to any
ordinary cash dividend for which Dividend Equivalent Rights may be credited
pursuant to Section 5(b).
10. Tax Withholding. Subject to Section 8.1 of the Plan, upon any distribution
of shares of Common Stock in respect of the Stock Units, the Corporation shall
automatically reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of whole shares, valued at their then fair
market value (with the “fair market value” of such shares determined in
accordance with the applicable provisions of the Plan), to satisfy any
withholding obligations of the Corporation with respect to such distribution of
shares at the minimum applicable withholding rates. In the event that the
Corporation cannot legally satisfy such withholding obligations by such
reduction of shares, or in the event of a cash payment or any other withholding
event in respect of the Stock Units, the Corporation shall be entitled to
require a cash payment by or on behalf of the Director and/or to deduct from
other compensation payable to the Director any sums required by federal, state
or local tax law to be withheld with respect to such distribution or payment.
11. Notices. Any notice to be given under the terms of this Agreement shall be
in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Director at the Director’s last address
reflected on the Corporation’s records, or at such other address as either party
may hereafter designate in writing to the other. Any such notice shall be given
only when received, but if the Director is no longer a member of the Board,
shall be deemed to have been duly given by the Corporation when enclosed in a
properly sealed envelope addressed as aforesaid, registered or certified, and
deposited (postage and registry or certification fee prepaid) in a post office
or branch post office regularly maintained by the United States Government.
12. Plan. The Award and all rights of the Director under this Agreement are
subject to, and the Director agrees to be bound by, all of the terms and
conditions of the provisions of the Plan, incorporated herein by reference. In
the event of a conflict or inconsistency between the terms and conditions of
this Agreement and of the Plan, the terms and conditions of the Plan shall
govern. The Director agrees to be bound by the terms of the Plan and this
Agreement. The Director acknowledges having read and understanding the Plan, the
Prospectus for the Plan, and this Agreement. Unless otherwise expressly provided
in other sections of this Agreement, provisions of the Plan that confer
discretionary authority on the Administrator do not (and shall not be deemed to)
create any rights in the Director unless such rights are expressly set forth
herein or are otherwise in the sole discretion of the Administrator so conferred
by appropriate action of the Administrator under the Plan after the date hereof.
13. Entire Agreement. This Agreement and the Plan together constitute the entire
agreement and supersede all prior understandings and agreements, written or
oral, of the parties hereto with respect to the subject matter hereof. The Plan
and this Agreement may be amended pursuant to Section 8.6 of the Plan. Such
amendment must be in writing and signed by the Corporation. The Corporation may,
however, unilaterally waive any provision hereof in writing to the extent such
waiver does not adversely affect the interests of the Director hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the
same provision or a waiver of any other provision hereof.
14. Limitation on Director’s Rights. Participation in the Plan confers no rights
or interests other than as herein provided. This Agreement creates only a
contractual obligation on the part of the Corporation as to amounts payable and
shall not be construed as creating a trust. Neither the Plan nor any underlying
program, in and of itself, has any assets. The Director shall have only the
rights of a general unsecured creditor of the Corporation with respect to
amounts credited and benefits payable, if any, with respect to the Stock Units,
and rights no greater than the right to receive the Common Stock as a general
unsecured creditor with respect to Stock Units, as and when payable hereunder.
15. Counterparts. This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which
16. Section Headings. The section headings of this Agreement are for convenience
of reference only and shall not be deemed to alter or affect any provision
hereof.
17. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
conflict of law principles thereunder.
18. Construction. It is intended that the terms of the Award will not result in
the imposition of any tax liability pursuant to Section 409A of the Code. This
Agreement shall be construed and interpreted consistent with that intent.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on
its behalf by a duly authorized officer and the Director has hereunto set his or
her hand as of the date and year first above written.
EXAR CORPORATION, DIRECTOR a Delaware corporation By:
Signature Print Name:
Its:
Print Name
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Director Restricted Stock
Unit Award Agreement by Exar Corporation, I,
, the spouse of the Director therein
named, do hereby join with my spouse in executing the foregoing Director
Restricted Stock Unit Award Agreement and do hereby agree to be bound by all of
the terms and provisions thereof and of the Plan.
Dated:
Signature of Spouse
Print Name
EXHIBIT A
DEFINITION OF CHANGE IN CONTROL EVENT
For purposes of this Agreement, “Change in Control Event” means the occurrence
of any of the following after the Effective Date:
(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of beneficial
of more than 30% of either (1) the then-outstanding shares of Common Stock (the
“Outstanding Company Common Stock”) or (2) the combined voting power of the
then-outstanding voting securities of the Corporation entitled to vote generally
in the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that, for purposes of this clause (a), the following
acquisitions shall not constitute a Change in Control Event; (A) any acquisition
directly from the Corporation, (B) any acquisition by the Corporation, (C) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any affiliate of the Corporation or a
successor, (D) any acquisition by any entity pursuant to a transaction that
complies with clauses (c)(1), (2) and (3) below, and (E) any acquisition by a
Person who owned more than 30% of either the Outstanding Company Common Stock or
the Outstanding Company Voting Securities as of the Effective Date or an
affiliate of any such Person;
(b) A change in the Board or its members such that individuals who, as of the
later of the Effective Date or the date that is two years prior to such change
(the later of such two dates is referred to as the “Measurement Date”),
constitute the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the Measurement Date whose election, or
nomination for election by the Corporation’s stockholders, was approved by a
vote of at least two-thirds of the directors then comprising the Incumbent Board
(including for these purposes, the new members whose election or nomination was
so approved, without counting the member and his predecessor twice) shall be
considered as though such individual were a member of the Incumbent Board, but
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;
(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Corporation or any
of its Subsidiaries, a sale or other disposition of all or substantially all of
the assets of the Corporation, or the acquisition of assets or stock of another
entity by the Corporation or any of its Subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (1) all
or substantially all of the individuals and entities that were the beneficial
owners of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns the
Corporation or all or substantially all of the Corporation’s assets directly or
through one or more subsidiaries (a “Parent”)) in substantially the same
proportions as their ownership immediately prior to such Business Combination of
the Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (2) no Person (excluding any entity resulting
from such Business Combination or a Parent or any employee benefit plan (or
related trust) of the Corporation or such entity resulting from such Business
Combination or Parent) beneficially owns, directly or indirectly, more than 30%
of, respectively, the then-outstanding shares of common stock of the entity
resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such entity, except to the extent that the
ownership in excess of 30% existed prior to the Business Combination, and (3) at
least a majority of the members of the board of directors or trustees of the
entity resulting from such Business Combination or a Parent were members of the
Incumbent Board (determined pursuant to clause (b) above using the date that is
the later of the Effective Date or the date that is two years prior to the
Business Combination as the Measurement Date) at the time of the execution of
Combination; or
(d) Approval by the stockholders of the Corporation of a complete liquidation
or dissolution of the Corporation other than in the context of a transaction
that does not constitute a Change in Control Event under clause (c) above. |
Name: Commission Implementing Regulation (EU) 2015/1553 of 17 September 2015 establishing the allocation coefficient to be applied to the quantities covered by the applications for import licences lodged from 1 to 7 September 2015 under the tariff quotas opened by Regulation (EC) No 1385/2007 in the poultrymeat sector
Type: Implementing Regulation
Subject Matter: tariff policy; trade; animal product; agricultural policy
Date Published: nan
18.9.2015 EN Official Journal of the European Union L 242/46 COMMISSION IMPLEMENTING REGULATION (EU) 2015/1553 of 17 September 2015 establishing the allocation coefficient to be applied to the quantities covered by the applications for import licences lodged from 1 to 7 September 2015 under the tariff quotas opened by Regulation (EC) No 1385/2007 in the poultrymeat sector THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (1), and in particular Article 188(1) and (3) thereof, Whereas: (1) Commission Regulation (EC) No 1385/2007 (2) opened annual tariff quotas for imports of poultrymeat products. (2) The quantities covered by the applications for import licences lodged from 1 to 7 September 2015 for the subperiod from 1 October to 31 December 2015 exceed those available. The extent to which import licences may be issued should therefore be determined by establishing the allocation coefficient to be applied to the quantities requested, calculated in accordance with Article 7(2) of Commission Regulation (EC) No 1301/2006 (3). (3) In order to ensure the efficient management of the measure, this Regulation should enter into force on the day of its publication in the Official Journal of the European Union, HAS ADOPTED THIS REGULATION: Article 1 The quantities covered by the applications for import licences lodged under Regulation (EC) No 1385/2007 for the subperiod from 1 October to 31 December 2015 shall be multiplied by the allocation coefficient set out in the Annex to this Regulation. Article 2 This Regulation shall enter into force on the day of its publication in the Official Journal of the European Union. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 17 September 2015. For the Commission, On behalf of the President, Jerzy PLEWA Director-General for Agriculture and Rural Development (1) OJ L 347, 20.12.2013, p. 671. (2) Commission Regulation (EC) No 1385/2007 of 26 November 2007 laying down detailed rules for the application of Council Regulation (EC) No 774/94 as regards opening and providing for the administration of certain Community tariff quotas for poultrymeat (OJ L 309, 27.11.2007, p. 47). (3) Commission Regulation (EC) No 1301/2006 of 31 August 2006 laying down common rules for the administration of import tariff quotas for agricultural products managed by a system of import licences (OJ L 238, 1.9.2006, p. 13). ANNEX Order No Allocation coefficient applications lodged for the subperiod from 1 October to 31 December 2015 (%) 09.4410 0,182755 09.4411 0,185414 09.4412 0,19305 09.4420 0,214407 09.4421 09.4422 0,214368 |
Exhibit TIB BANK SALARY CONTINUATION AGREEMENT As Amended and Restated This Salary Continuation Agreement (this “Agreement”) is adopted this 16th day of December, 2008, by and between TIB Bank, a state-chartered commercial bank located in Monroe County, Florida (the “Company”), and Stephen J. Gilhooly (the “Executive”). Certain revisions to the Agreement are necessary in order to conform such Agreement to the requirements of Section 409A of the Code and related regulations and notices promulgated thereunder, with such revisions to be effective as of December 31, The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Company.This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time. Article 1 Definitions Whenever used in this Agreement, the following words and phrases shall have the meanings specified: 1.1 “Accrual Balance” means the liability that should be accrued by the Company, under Generally Accepted Accounting Principles (“GAAP”), for the Company’s obligation to the Executive under this Agreement, by applying Accounting Principles Board Opinion Number 12 as amended by Statement of Financial Accounting Standards Number 106 and the Discount Rate.Any one of a variety of amortization methods may be used to determine the Accrual Balance.However, once chosen, the method must be consistently applied. 1.2 “Beneficiary” means each designated person or entity, or the estate of the deceased Executive, entitled to any benefits upon the death of the Executive pursuant to Article 4. 1.3 “Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries. 1.4 “Benefit Basis” means the Executive's highest annualized Compensation from the three (3) years prior to Separation from Service, including the year such Separation from Service occurs. 1.5 “Board” means the Board of Directors of the Company as from time to time constituted. 1.6 “Change in Control” means the acquisition by any person, or persons acting as a group within the meaning of Section 13(d) of the Securities Exchange Act of 1934, of fifty one percent (51%) or more of the voting securities of the Company or its parent, TIB Financial Corp., a Florida corporation (the “Holding Company”). The term “person” as used herein includes an individual, corporation, bank holding company or other legal entity. 1.7 “Code” means the Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder, including such regulations and guidance as may be promulgated after the Effective Date. 1.8 “Compensation” means the annual cash compensation relating to services performed during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, and other fees, and automobile and other allowances paid to the Executive for employment rendered (whether or not such allowances are included in the Executive’s gross income).Compensation shall be calculated before reduction for compensation voluntarily deferred or contributed by the Executive pursuant to all qualified or non-qualified plans of the Company and shall be calculated to include amounts not otherwise included in the Executive's gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by the Company; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Executive. 1.9 “Disability” means the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Company.Medical determination of Disability may be made by either the Social Security Administration or by the provider of disability insurance covering employees or directors of the Company provided that the definition of “disability” applied under such insurance program complies with the requirements of the preceding sentence.Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or the provider’s determination. 1.10 “Discount Rate” means the rate used by the Plan Administrator for determining the Accrual Balance.The initial Discount Rate is seven percent (7%).However, the Plan Administrator, in its discretion, may adjust the Discount Rate to maintain the rate within reasonable standards according to GAAP and/or applicable bank regulatory guidance. 1.11 “Early Termination” means Separation from Service before attainment of Normal Retirement Age except when such Separation from Service occurs following a Change in Control or due to death, Disability or Termination for Cause. 1.12 “Effective Date” means the initial effective date of January 2, 2008 with respect to the Agreement and December 31, 2008 with respect to the Agreement as amended and restated for the amendment and restatement. 1.13 “Inflated Compensation” means Benefit Basis increased by four percent (4%) annually from Separation from Service to Normal Retirement Age. 1.14 “Normal Retirement Age” means the Executive’s age sixty-five (65). 1.15 “Normal Retirement Date” means the later of Normal Retirement Age or Separation from Service. 2 1.16 “Plan Administrator” means the Board or such committee or person as the Board shall appoint. 1.17 “Plan Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year.The initial Plan Year shall commence on the Effective Date of this Plan and end on the following December 31. 1.18 “Projected Benefit” means forty percent (40%) of Inflated Compensation. 1.19 “Separation from Service” means termination of the Executive’s employmentwith the Company for reasons other than death.Whether a Separation from Service has occurred is determined in accordance with the requirements of Code Section 409Abased on whether the facts and circumstances indicate that the Company and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Company if the Executive has been providing services to the Company less than thirty-six (36) months). 1.20 “Specified Employee” means an employee who at the time of Separation from Service is a key employee of the Company, if any stock of the Company is publicly traded on an established securities market or otherwise.For purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the twelve (12) month period ending on December 31 (the “identification period”).If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of April following the close of the identification period. 1.21 “Termination for Cause” means Separation from Service for: (a) Gross negligence or gross neglect of duties to the Company; (b) Conviction of a felony or of a gross misdemeanor involving moral turpitude; (c) Fraud, disloyalty, dishonesty or willful violation of any law or significant Company policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Company; or (d) Any termination of employment for “cause” pursuant to any employment agreement between the Executive and the Company. Article 2 Distributions During Lifetime 2.1 Normal Retirement Benefit.Upon Separation from Service after attaining Normal Retirement Age, the Company shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article. 3 2.1.1 Amount of Benefit.The annual benefit under this Section 2.1 is forty percent (40%) of Benefit Basis. 2.1.2 Distribution of Benefit.The Company shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Normal Retirement Date.The annual benefit shall be distributed to the Executive for ten (10) years. 2.2 Early Termination Benefit.If Early Termination occurs, the Company shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article. 2.2.1 Amount of Benefit.The benefit under this Section 2.2 is the vested Accrual Balance determined as of the end of the Plan Year preceding Separation from Service subject to the Vesting Percentage. Interest shall be credited from Separation from Service to Normal Retirement Age at a rate equal to the Discount Rate in effect at the time of Separation from Service. Date in Which Separation from Service Occurs Vesting Percentage 01/01/08 - 12/30/08 0% 12/31/08 - 12/30/09 10% 12/31/09 - 12/30/10 20% 12/31/10 - 12/30/11 30% 12/31/11 - 12/30/12 40% 12/31/12 - 12/30/13 50% 12/31/13 - 12/30/14 60% 12/31/14 - 12/30/15 70% 12/31/15 - 12/30/16 80% 12/31/16 - 12/30/17 90% On or After 12/31/17 100% 2.2.2 Distribution of Benefit.The Company shall distribute the benefit to the Executive in one hundred twenty (120) equal monthly installments commencing on the first day of the month following Normal Retirement Age.Interest shall be credited from during the installment period at a rate equal to the Discount Rate in effect at the time of Separation from Service. 2.3 Disability Benefit.If the Executive experiences a Disability prior to Normal Retirement Age which results in Separation from Service, the Company shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article. 2.3.1 Amount of Benefit.The benefit under this Section 2.3 is one hundred percent (100%) of the Accrual Balance determined as of the end of the Plan Year preceding Separation from Service. Interest shall be credited from Separation from Service to Normal Retirement Age at a rate equal to the Discount Rate in effect at the time of Separation from Service. 2.3.2 Distribution of Benefit.The Company shall distribute the benefit to the Executive in one hundred twenty (120) equal monthly installments commencing on the first day of the month following Normal Retirement Age.Interest shall be credited from during the installment period at a rate equal to the Discount Rate in effect at the time of Separation from Service. 2.4 Change in Control Benefit.If a Change in Control occurs, followed by Separation from Service prior to Normal Retirement Age, the Company shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article. 4 2.4.1 Amount of Benefit.The annual benefit under this Section 2.4 is one hundred percent (100%) of the Projected Benefit. 2.4.2 Distribution of Benefit.The Company shall pay to the Executive in a lump-sum payment payable within 60 days following the date of Termination of Employment an amount equal to thepresent value of the benefit calculated at Section 2.5 Restriction on Commencement of Distributions. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee, the provisions of this Section 2.5 shall govern all distributions hereunder.If benefit distributions which would otherwise be made to the Executive due to Separation from Service are limited because the Executive is a Specified Employee, then such distributions shall not be made during the first six (6) months following Separation from Service.Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service.All subsequent distributions shall be paid in the manner specified. 2.6 Distributions Upon Taxation of Amounts Deferred. If, pursuant to Code Section 409A, the Federal Insurance Contributions Act or other state, local or foreign tax, the Executive becomes subject to tax on the amounts deferred hereunder, then the Company may make a limited distribution to the Executive in a manner that conforms to the requirements of Code section 409A.Any such distribution will decrease the Executive’s benefits distributable under this Agreement. 2.7 Subsequent Changes to Time and Form of Payment. The Company may permit a subsequent change to the time and form of benefit distributions.Any such change must be submitted in writing by the Executive to the Company and shall be considered made only when it becomes irrevocable under the terms of the Agreement. Any change will be considered irrevocable not later than thirty (30) days following acceptance of the change by the Plan Administrator, subject to the following rules: (1)the subsequent deferral election may not take effect until at least twelve (12) months after the date on which the election is made; (2)the payment (except in the case of death, Disability, or unforeseeable emergency) upon which the subsequent deferral election is made is deferred for a period of not less than five (5) years from the date such payment would otherwise have been paid; and (3)in the case of a payment made at a specified time, the election to make a change must be made not less than twelve (12) months before the date the payment is scheduled to be paid. 2.8 De Minimus Lump Sum Payment.Notwithstanding the foregoing, the Company may, in its sole discretion, commence pay-out of a Executive’s accrued benefit at any time, provided that such pay-out amount shall be in an amount equal to not less than the lump sum value of such accrued benefit determined on the date of such pay-out; provided that such pay-out (1)accompanies the termination of the Executive’s entire interest under the Agreement and all similar arrangements that constitute a non-account balance plan under Regulations at Section1.409A-1(c)(2) applicable to Section 409A of the Code; and (2) the payment is not greater than the applicable dollar amount under Section 402(g)(1)(B) of the Code. 5 Article 3 Distribution at Death 3.1 Death During Active Service.If the Executive dies prior to Separation from Service, the Company shall distribute to the Beneficiary the benefit described in this Section 3.1.This benefit shall be distributed in lieu of any benefit under Article 2. 3.1.1 Amount of Benefit.The benefit under this Section 3.1 is one hundred percent (100%) of the Accrual Balance determined as of the end of the Plan Year prior to the Executive’s death. 3.1.2 Distribution of Benefit.The Company shall distribute the benefit to the Beneficiary in one hundred twenty (120) equal monthly installments commencing on the first day of the third month following the Executive’s death. Interest shall be credited from the date of death and during the installment period at a rate equal to the Discount Rate in effect at the time of the Executive’s death. The Beneficiary shall be required to provide to the Company the Executive’s death certificate. 3.2 Death During Distribution of a Benefit.If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Company shall distribute to the Beneficiary the remaining benefits at the same time and in the same amounts they would have been distributed to the Executive had the Executive survived. 3.3 Death Before Benefit Distributions Commence.If the Executive is entitled to benefit distributions under this Agreement but dies prior to the date that commencement of said benefit distributions are scheduled to be made under this Agreement, the Company shall distribute to the Beneficiary the same benefits to which the Executive was entitled prior to death, except that the benefit distributions shall commence on the first day of the third month following the Executive’s death. The Beneficiary shall be required to provide to the Company the Executive’s death certificate. Article 4 Beneficiaries 4.1 In General.The Executive shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death of the Executive.The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designated under any other plan of the Company in which the Executive participates. 4.2 Designation.The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent.If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Plan Administrator, executed by the Executive’s spouse and returned to the Plan Administrator.The Executive's beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved.The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures.Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled.The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executive’s death. 6 4.3 Acknowledgment.No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent. 4.4 No Beneficiary Designation.If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary.If the Executive has no surviving spouse, any benefit shall be paid to the Executive's estate. 4.5 Facility of Distribution.If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall completely discharge any liability under this Agreement for such distribution amount. Article 5 General Limitations 5.1 Termination for Cause.Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement if the Executive’s employment with the Company is terminated by the Company or an applicable regulator due to a Termination for Cause. 5.2 Suicide or Misstatement.No benefit shall be distributed if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Company denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason. 5.3 Removal.Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act. 5.4 Regulatory Restrictions.Notwithstanding anything herein to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, shall be subject upon compliance with 12 U.S.C. 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments and any other regulations or guidance promulgated thereunder. 5.5 Forfeiture Provision.The Company shall not pay any benefit under this Agreement if the Executive, without the prior written consent of the Company, engages in, becomes interested in, directly or indirectly, as a sole proprietor, as a partner in a partnership, or as a substantial shareholder in a corporation, or becomes associated with, in the capacity of employee, director, officer, principal, agent, trustee or in any other capacity whatsoever, any enterprise conducted in the trading area (a fifty (50) mile radius) of the business of the Company, which enterprise is, or may deemed to be, competitive with any business carried on by the Company for a period of two (2) years following Separation from Service. 7 5.6 Change in Control.The forfeiture provision detailed in Section 5.5 hereof shall not be enforceable following a Change in Control. Article 6 Administration of Agreement 6.1 Plan Administrator Duties.The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions, including interpretations of this Agreement, as may arise in connection with this Agreement to the extent the exercise of such discretion and authority does not conflict with Code Section 409A. 6.2 Agents.In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as the Plan Administrator sees fit, including acting through a duly appointed representative, and may from time to time consult with counsel who may be counsel to the Company. 6.3 Binding Effect of Decisions.Any decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement. 6.4 Indemnity of Plan Administrator.The Company shall indemnify and hold harmless the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator. 6.5 Company Information.To enable the Plan Administrator to perform its functions, the Company shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the Executive’s death, Disability or Separation from Service, and such other pertinent information as the Plan Administrator may reasonably require. 6.6 Annual Statement. The Plan Administrator shall provide to the Executive, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement. Article 7 Claims And Review Procedures 7.1 Claims Procedure.An Executive or Beneficiary (“claimant”) who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows: 8 7.1.1 Initiation – Written Claim.The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits.If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60)days after such notice was received by the claimant.All other claims must be made within one hundred eighty (180)days of the date on which the event that caused the claim to arise occurred.The claim must state with particularity the determination desired by the claimant. 7.1.2 Timing of Plan Administrator Response.The Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim.If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days by notifying the claimant in writing, prior to the end of the initial ninety (90) day period that an additional period is required.The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. 7.1.3 Notice of Decision.If the Plan Administrator denies part or the entire claim, the Plan Administrator shall notify the claimant in writing of such denial.The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant.The notification shall set forth: (a) The specific reasons for the denial; (b) A reference to the specific provisions of this Agreement on which the denial is based; (c) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; (d) An explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and (e) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. 7.2 Review Procedure.If the Plan Administrator denies part or the entire claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial as follows: 7.2.1 Initiation – Written Request.To initiate the review, the claimant, within sixty (60) days after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review. 7.2.2 Additional Submissions – Information Access.The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim.The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits. 7.2.3 Considerations on Review.In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. 7.2.4 Timing of Plan Administrator Response.The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review.If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60) day period that an additional period is required.The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. 9 7.2.5 Notice of Decision.The Plan Administrator shall notify the claimant in writing of its decision on review.The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant.The notification shall set forth: (a) The specific reasons for the denial; (b) A reference to the specific provisions of this Agreement on which the denial is based; (c) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits; and (d) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a). Article 8 Amendments and Termination 8.1 Amendments.This Agreement may be amended only by a written agreement signed by the Company and the Executive.However, the Company may unilaterally amend this Agreement to conform to written directives to the Company from its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Code Section 409A. 8.2 Plan Termination Generally.This Agreement may be terminated only by a written agreement signed by the Company and the Executive.The benefit shall be the Accrual Balance as of the date this Agreement is terminated.Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement.Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3. 8.3 Plan Terminations Under Code Section 409A.Notwithstanding anything to the contrary in Section 8.2, if the Company terminates this Agreement in the following circumstances: (a) Within thirty (30) days before or twelve (12) months after a change in the ownership or effective control of the Company or the Holding Company, or in the ownership of a substantial portion of the assets of the Company or the Holding Company as described in Code Section 409A(a)(2)(A)(v), provided that all distributions are made no later than twelve (12) months following such termination of this Agreement and further provided that allthe Company'sarrangements which are substantially similar to this Agreement are terminatedsothe Executive and all participants in the similararrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of such termination; (b) Upon the Company’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under this Agreement are included in the Executive's gross income in the latest of (i) the calendar year in which this Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or 10 (c) Upon the Company’s termination of this and all other arrangements that would be aggregated with this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Executive participated in such arrangements (“Similar Arrangements”), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Company, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and (iii) the Company does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years following the date the Company takes all necessary action to irrevocably terminate and liquidate the Agreement; the Company may distribute the Accrual Balance, determined as of the date of the termination of this Agreement, to the Executive in a lump sum subject to the above terms. Article 9 Miscellaneous 9.1 Binding Effect.This Agreement shall bind the Executive and the Company and their beneficiaries, survivors, executors, administrators and transferees. 9.2 No Guarantee of Employment.This Agreement is not a contract for employment.It does not give the Executive the right to remain as an employee of the Company nor interfere with the Company's right to discharge the Executive.It does not require the Executive to remain an employee nor interfere with the Executive's right to terminate employment at any time. 9.3 Non-Transferability.Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner. 9.4 Tax Withholding and Reporting.The Company shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Code Section 409A from the benefits provided under this Agreement.The Executive acknowledges that the Company’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities.The Company shall satisfy all applicable reporting requirements, including those under Code Section 409A. 9.5 Applicable Law.This Agreement and all rights hereunder shall be governed by the laws of the State of Florida, except to the extent preempted by the laws of the United States of America. 9.6 Unfunded Arrangement.The Executive and the Beneficiary are general unsecured creditors of the Company for the distribution of benefits under this Agreement.The benefits represent the mere promise by the Company to distribute such benefits.The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors.Any insurance on the Executive's life or other informal funding asset is a general asset of the Company to which the Executive and Beneficiary have no preferred or secured claim. 9.7 Reorganization.The Company shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm or person unless such succeeding or continuing bank, firm or person agrees to assume and discharge the obligations of the Company under this Agreement.Upon the occurrence of such an event, the term “Company” as used in this Agreement shall be deemed to refer to the successor or survivor entity. 11 9.8 Entire Agreement.This Agreement constitutes the entire agreement between the Company and the Executive as to the subject matter hereof.No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein. 9.9 Interpretation.Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural. 9.10 Alternative Action.In the event it shall become impossible for the Company or the Plan Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Company or Plan Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Company, provided that such alternative act does not violate Code Section 409A. 9.11 Headings.Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any provision herein. 9.12 Validity.If any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been included herein. 9.13 Notice.Any notice or filing required or permitted to be given to the Company or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the address below: 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. Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive. 9.14 Compliance with Section 409A.This Agreement shall be interpreted and administered consistent with Code Section 409A. 12 IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Company have signed this Agreement. EXECUTIVE COMPANY By: Title: ¨ New Designation ¨ Change in Designation I, , designate the following as Beneficiary under this Agreement: Primary: % % Contingent: % % Notes: · Please PRINT CLEARLY or TYPE the names of the beneficiaries. · To name a trust as Beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement. · To name your estate as Beneficiary, please write “Estate of [your name]”. · Be aware that none of the contingent beneficiaries will receive anything unless ALL of the primary beneficiaries predecease you. I understand that I may change these beneficiary designations by delivering a new written designation to the Plan Administrator, which shall be effective only upon receipt and acknowledgment by the Plan Administrator prior to my death.I further understand that the designations will be automatically revoked if the Beneficiary predeceases me, or, if I have named my spouse as Beneficiary and our marriage is subsequently dissolved. Name: Signature: Date: Received by the Plan Administrator this day of , 200 By: Title: 13
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 March 25, 2013 Date of report (Date of earliest event reported) SUPPORT.COM, INC. (Exact Name of Registrant as Specified in Charter) Delaware (State or Other Jurisdiction of Incorporation) 000-30901 (Commission File No.) 94-3282005 (I.R.S. Employer Identification No.) 900 Chesapeake Dr., Second Floor, Redwood City, CA 94063 (Address of Principal Executive Offices) (Zip Code) (650) 556-9440 (Registrant’s telephone number, including area code) N/A (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: q Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) q Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) q Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) q Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Grants of Restricted Stock Units On March 25, 2013, the Compensation Committee of the Board of Directors of Support.com, Inc. (the “Compensation Committee”) approved, as part of an annual review of executive compensation, the following Restricted Stock Unit (“RSU”) grants to the Company’s Chief Financial Officer, Shelly Schaffer, under the 2010 Equity and Performance Incentive Plan (the “2010 Plan”): (a) a time-based grant of 83,250 RSUs, of which 1/3rd of such RSUs under this grant shall vest on the first anniversary of the grant date, and 1/6th of the shares subject to each grant shall vest on each six-month anniversary thereafter over the next two years, through March 25, 2016, until fully vested (the “Three-Year Vest Schedule”); (b) a performance-based grant of up to 49,950 RSUs based on achievement against the existing Board-approved revenue target for calendar 2013, specifically, if the Company achieves 90% or more of its Board-approved target revenue for fiscal year 2013, then 50% to 100% of the shares subject to this grantbased on a straight-line sliding scale of revenue achieved between 90% and 100% of planshall be considered achieved, and then the achieved number of RSUs shall vest using the Three-Year Vest Schedule;no shares subject to this grant vest if the Company achieves less than 90% of such target; if a Change of Control occurs prior to the date performance targets are actually met as determined by the Compensation Committee of the Board of Directors, this grant will be eligible for full acceleration at the 100% target level; (c) a performance-based grant of up to 33,300 RSUs based on achievement against the existing Board-approved adjusted non-GAAP net income target for calendar 2013, specifically, if the Company achieves 90% or more of its Board-approved target adjusted non-GAAP net income for calendar year 2013, then 50% to 100% of the shares subject to this grantbased on a straight-line sliding scale of the target achieved between 90% and 100% of planshall vest using the Three-Year Vest Schedule; no shares subject to this grant vest if the Company achieves less than 90% of such target; if a Change of Control occurs prior to the date performance targets are actually met as determined by the Compensation Committee of the Board of Directors, this grant will be eligible for full acceleration at the 100% target level; Changes in Cash Compensation On March 25, 2013, the Compensation Committee approved the following changes to cash compensation for Shelly Schaffer: (a) an increase in annual base salary from $285,000 to $302,100 effective in the next full bi-weekly pay period, and (b) an increase in annual target cash incentive compensation from $116,850 to $123,861, effective April 1, 2013. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: March 27, 2013 SUPPORT.COM, INC. By: /s/ Shelly Schaffer Name: Shelly Schaffer Title: Executive Vice President and Chief Financial Officer
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EXHIBIT 32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER Pursuant to 18 U.S.C. § 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Getty Realty Corp.(the “Company”) hereby certifies, to such officer’s knowledge, that: (i)the Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2008 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (subject to the Company's position prevailing in regard to the remaining unresolved SEC comment, as more fully described in the Report); and (ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: May 12, 2008 BY: /s/ Thomas J.
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Exhibit 10.4
ORCHID ISLAND CAPITAL, INC.
Stock Award Agreement
THIS STOCK AWARD AGREEMENT (the “Agreement”), dated as of the ____ day of
_______, ____, governs the Stock Award granted by ORCHID ISLAND CAPITAL, INC., a
Maryland corporation (the “Company”), to ____________________ (the
“Participant”), in accordance with and subject to the provisions of the Orchid
Island Capital, Inc. 2012 Equity Incentive Plan (the “Plan”). A copy of the
Plan has been made available to the Participant. All terms used in this
Agreement that are defined in the Plan have the same meaning given them in the
Plan.
1. Grant of Stock Award. In accordance with the Plan, and effective
as of _____ __, ____ (the “Date of Grant”), the Company granted to the
Participant, subject to the terms and conditions of the Plan and this Agreement,
a Stock Award of ______ shares of Common Stock (the “Stock Award”).
2. Vesting. The Participant’s interest in the shares of Common Stock
covered by the Stock Award shall become vested and nonforfeitable to the extent
provided in paragraphs (a), (b) and (c) below.
(a) Continued Service. The Participant’s interest in one-third of the
shares of Common Stock covered by the Stock Award shall become vested and
nonforfeitable on the first anniversary of the Date of Grant if the Participant
continues to serve as a member of the Board from the Date of Grant until such
date. The Participant’s interest in an additional one-third of the shares of
Common Stock covered by the Stock Award shall become vested and nonforfeitable
on the second anniversary of the Date of Grant if the Participant continues to
serve as a member of the Board from the Date of Grant until such date. The
Participant’s interest in the remaining shares of Common Stock covered by the
Stock Award shall become vested and nonforfeitable on the third anniversary of
the Date of Grant if the Participant continues to serve as a member of the Board
from the Date of Grant until such date.
(b) Change in Control. The Participant’s interest in all of the
shares of Common Stock covered by the Stock Award (if not sooner vested), shall
become vested and nonforfeitable on a Control Change Date if the Participant
date.
(c) Death or Disability. The Participant’s interest in all of the
become vested and nonforfeitable on the date that the Participant’s service as a
member of the Board ends if (i) such service ends on account of the
Participant’s death or permanent and total disability (as defined in Section
22(e)(3) of the Code) and (ii) the Participant continues to serve as a member of
the Board from the Date of Grant until the date such cessation of service as a
member of the Board.
Except as provided in this Section 2, any shares of Common Stock covered by the
Stock Award that are not vested and nonforfeitable on or before the date that
the Participant’s service as a member of the Board ends shall be forfeited on
the date that such service terminates.
3. Transferability. Shares of Common Stock covered by the Stock Award
that have not become vested and nonforfeitable as provided in Section 2 cannot
be transferred. Shares of Common Stock covered by the Stock Award may be
transferred, subject to the requirements of applicable securities laws, after
they become vested and nonforfeitable as provided in Section 2.
4. Stockholder Rights. On and after the Date of Grant and prior to
their forfeiture, the Participant shall have all of the rights of a stockholder
of the Company with respect to the shares of Common Stock covered by the Stock
Award, including the right to vote the shares and to receive, free of all
restrictions, all dividends declared and paid on the shares. Notwithstanding
the preceding sentence, the Company shall retain custody of any certificates
evidencing the shares of Common Stock covered by the Stock Award until the date
that the shares of Common Stock become vested and nonforfeitable as provided in
Section 2 and the Participant hereby appoints the Company’s Secretary as the
Participant’s attorney in fact, with full power of substitution, with the power
to transfer to the Company and cancel any shares of Common Stock covered by the
Stock Award that are forfeited under Section 2.
5. Fractional Share. The Participant may become vested and have a
nonforfeitable right under the Stock Award only to whole shares of Common
Stock. If the terms of the Stock Award would entitle the Participant to become
vested or have a nonforfeitable right in a fractional share of Common Stock,
such fractional share shall be disregarded or forfeited.
6. No Right to Continued Service. This Agreement and the grant of the
Stock Award does not give the Participant any rights with respect to continued
service as a member of the Board.
7. Governing Law. This Agreement shall be governed by the laws of the
State of Maryland except to the extent that Maryland law would require the
application of the laws of another state.
8. Conflicts. In the event of any conflict between the provisions of
the Plan as in effect on the Date of Grant and this Agreement, the provisions of
the Plan shall govern. All references herein to the Plan shall mean the Plan as
in effect on the Date of Grant.
9. Participant Bound by Plan. The Participant hereby acknowledges
that a copy of the Plan has been made available to the Participant and the
Participant agrees to be bound by all the terms and provisions of the Plan.
10. Binding Effect. Subject to the limitations stated above and in
the Plan, this Agreement shall be binding upon the Participant and the
Participant’s successors in interest and the Company and any successors of the
Company.
IN WITNESS WHEREOF, the Company and the Participant have executed
this Agreement as of the date first set forth above.
ORCHID ISLAND CAPITAL,
INC. [NAME
OF PARTICIPANT]
By:__________________________ ______________________________
Title:________________________
|
EXHIBIT 10.8
FIRST HORIZON NATIONAL CORPORATION
SURVIVOR BENEFITS PLAN
(As Amended and Restated 7-18-06)
I. PURPOSE
The purpose of this plan is to advance the interests of First Horizon National
Corporation and any successor thereto and its subsidiaries (hereinafter
collectively referred to as the “Company”) by encouraging and enabling the
Company to attract, motivate and retain key executives.
II. EFFECTIVE DATE
The effective date of this Survivor Benefits Plan (hereinafter referred to as
the “Plan”) is January 1, 1984.
III. ADMINISTRATION AND ELIGIBILITY
A.
The Plan will be administered by the Administration Committee (hereinafter
referred to as the “Committee”) consisting of the Executive Vice President,
Personnel Division Manager, who shall act as the Chairman, and the Vice
President, Manager Compensation. The executives of the Company who will
participate will occupy a position in salary grades 1 through 14, as determined
by the Compensation Committee of the Board of Directors, and will receive
benefits in accordance with the provisions of the Plan. Notwithstanding the
foregoing, executives who occupy a position in salary grades 15 through 18 and
who were participants in the Plan on the effective date of this amendment and
restatement will continue to participate in the Plan and to receive benefits in
accordance with the provisions of the Plan. The Committee may, in its
discretion, add additional qualifications to participation, including the
execution of consents to be insured under bank-owned life insurance policies
even though such policies are not used to fund benefits under the Plan.
B.
The Committee will have the authority and responsibility (1) of interpreting the
Plan and any agreement evidencing benefits granted hereunder, and (2) making all
other determinations in connection with the administration of the Plan, all of
which shall be final and conclusive.
IV. PRE-RETIREMENT SURVIVOR BENEFITS
A. Computation of Survivor Benefits
In the event of death of a participant in the Plan while he is employed, a
survivor benefit equivalent to 2½ times the participant’s base salary as of
January 1 of the year of death (exclusive of incentive or bonus compensation)
shall be paid to the beneficiary designated by the participant on Exhibit “A”
attached hereto.
B. Alternative Benefit
In lieu of the benefit provided in Paragraph A., above, the participant may
elect for his designated beneficiary to receive a lump sum insurance benefit,
payable pursuant to an insurance policy or arrangement selected by the Company.
Said benefit shall be equivalent to 2½ times the participant’s base salary as of
January 1 of the year of death (exclusive of incentive or bonus compensation).
The Company may provide the lump sum insurance benefit at its discretion through
(a) term life insurance policies, (b) a split dollar life insurance agreement in
form substantially similar to that attached as Exhibit “B” or (c) any similar
life insurance policies or arrangements. In order to elect this alternative
benefit, the participant must execute such forms or agreements as the Company or
the life insurance company may require (the “Life Insurance Documentation”) and
be insurable within the designated carrier’s normal range of premium rates. The
payment of benefits under this option shall be governed by the terms of the Life
Insurance Documentation.
C. Qualification to Receive Survivor Benefits
In order to qualify to receive the survivor benefits set forth above, a
participant must be in the employ of the Company at the time of his death.
V. POST-RETIREMENT SURVIVOR BENEFITS
A.
In the event of death of a Participant in the Plan following retirement, a
survivor benefit equivalent to 2 times the Participant’s final year’s base
salary (exclusive of incentive or bonus compensation) shall be paid to the
Participant’s designated beneficiary.
B.
In order to qualify to receive the post-retirement survivor benefits payable
hereunder, a Participant must remain employed until age 65, or until age 55 and
completion of at least 15 years of vesting service for purposes of the Company’s
pension plan, or have a sum of their age and such years of vesting service that
totals 75, unless an early retirement date is approved by the Compensation
Committee of the Board of Directors. Provided, however, a Participant whose
employment is involuntarily terminated for Cause prior to a Change in Control
(as defined in Section X.(C)) or more than two years after a Change in Control
shall be ineligible for the post-retirement survivor benefit described in
paragraph A of this Section V. Notwithstanding the foregoing, a Participant who
is terminated for Cause and a Participant whose employment is involuntarily
terminated without Cause (as hereinafter defined), or who voluntarily terminates
his employment for Good Reason (as hereinafter defined), within two years after
the date on which a Change in Control (as defined in Section X.C.) occurs and
who had attained age 50 at the time of such termination of employment shall be
deemed to have retired for purposes of the Plan and shall be eligible for the
post-retirement survivor benefit described in Paragraph A of this Section V. For
purposes of this Paragraph, termination by the Company of a Participant’s
employment for “Cause” shall mean termination upon (a) the willful continued
failure by a Participant to perform substantially his or her duties with the
Company (other than any such failure resulting from his or her incapacity due to
physical or mental illness), after a demand for substantial performance is
delivered to the Participant by the Chairman of the Board or President of the
Company which specifically identifies the manner in which such executive
believes that the Participant has not substantially performed his or her duties,
or (b) in the case of a Participant described in the third sentence of this
Section V.B., the willful engaging by a Participant in illegal conduct which is
materially and demonstrably injurious to the Company. For purposes of this
Paragraph, no act, or failure to act, on a Participant’s part shall be
considered “willful” unless done, or omitted to be done, by the Participant in
bad faith and without reasonable belief that the Participant’s action or
omission was in, or not opposed to, the best interests of the Company. Any act,
or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by a Participant in
good faith and in the best interests of the Company. It is also expressly
understood that a Participant’s attention to matters not directly related to the
business of the Company shall not provide a basis for termination for Cause so
long as the Board has approved the Participant’s engagement in such activities.
Notwithstanding the foregoing, in the case of a Participant described in the
third sentence of this Section V.B, a Participant shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
the Participant a copy of a resolution duly adopted by the affirmative vote of
not less than three quarters of the entire membership of the Board at a meeting
of the Board called and held for the purpose (after reasonable notice to the
Participant and an opportunity for the Participant, together with his or her
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board the Participant was guilty of the conduct set forth above in (a) or
(b) of this Paragraph and specifying the particulars thereof in detail. For
purposes of this Paragraph, termination by the Participant of his or her
employment for “Good Reason” shall mean termination based on:
(A) a determination by the Participant, in his or her reasonable judgment, that
there has been an adverse change in his or her status or position(s) as an
executive officer of the Company as in effect immediately prior to the Change in
Control, including, without limitation, any adverse change in his or her status
or position(s) as a result of a diminution in his or her duties or
responsibilities (other than, if applicable, any such change directly
attributable to the fact that the Company is no longer publicly owned) or the
assignment to the Participant of any duties or responsibilities which are
inconsistent with such status or position(s), or any removal of the Participant
from or any failure to reappoint or reelect the Participant to such position(s)
(except in connection with the termination of his or her employment for Cause,
disability or retirement or as a result of death or by the Participant other
than for Good Reason);
(B) a reduction by the Company in a Participant’s base salary as in effect
immediately prior to the Change in Control;
(C) the failure by the Company to continue in effect any Plan (as hereinafter
defined) in which a Participant is participating at the time of the Change in
Control of the Company (or Plans providing the Participant with at least
substantially similar benefits) other than as a result of the normal expiration
of any such Plan in accordance with its terms as in effect at the time of the
Change in Control, or the taking of any action, or the failure to act, by the
Company which would adversely affect a Participant’s continued participation in
any of such Plans on at least as favorable a basis to the Participant as is the
case on the date of the Change in Control or which would materially reduce a
Participant’s benefits in the future under any of such Plans or deprive a
Participant of any material benefit enjoyed by the Participant at the time of
the Change in Control;
(D) the failure by the Company to provide and credit a Participant with the
number of paid vacation days to which the Participant is then entitled in
accordance with the Company’s normal vacation policy as in effect immediately
prior to the Change in Control;
(E) the Company’s requiring a Participant to be based at an office that is
greater than 25 miles from where the Participant’s office is located immediately
prior to the Change in Control except for required travel on the Company’s
business to an extent substantially consistent with the business travel
obligations which the Participant undertook on behalf of the Company prior to
(F) the failure by the Company to obtain the assumption of its obligations by a
successor or assign in a manner satisfactory to Participant, as contemplated by
Section X(E);
(G) any purported termination by the Company of a Participant’s employment which
is not effected pursuant to a written notice of termination; which, if
applicable, satisfies the requirements of subsection V(B) above; or
(H) any refusal by the Company to continue to allow Participant to attend to
matters or engage in activities not directly related to the business of the
Company which, prior to the Change in Control, the Participant was permitted by
the Board to attend to or engage in.
VI.
PAYMENT OF PRE AND POST-RETIREMENT SURVIVOR BENEFITS
A.
In the event that a participant fails to make a written election prior to his
death to have the pre-retirement survivor benefits, payable under Paragraph
IV.A., above, and post-retirement survivor benefits, payable in installments,
the survivor benefits shall be payable in a lump sum within sixty (60) days
following the participant’s death. Should the participant make a timely written
election to have the survivor benefits payable in installments, the survivor
benefits shall be payable in installments over a period not to exceed ten (10)
years. An additional payment of interest shall be payable on the unpaid balance
of the survivor benefits at a rate of interest defined to be equivalent to the
average 90-day Treasury Bill rate for the prior year plus 50 “basis points”,
adjusted on an annual basis. Any installment payments made pursuant to a timely
election shall be paid no less frequently than on a quarterly basis.
B.
Notwithstanding the fact that a participant makes a timely election to have the
post-retirement survivor benefits payable in installments, the Company reserves
the right to make a lump sum distribution to the participant’s beneficiary.
C.
Benefits payable pursuant to the terms of the Plan shall be paid directly from
the general assets of the Company. Should the Company establish any advance
reserve, such reserve or fund shall not under any circumstances be deemed to be
an asset of the Plan nor a source of payment of any claims under the Plan but,
at all times, shall remain a part of the general assets of the Company.
VII. DISQUALIFYING EVENTS AND LOSS OF BENEFITS
No benefits will be paid to a participant under the Plan in the event of the
following circumstances:
A.
Resignation or termination of a participant’s employment, without satisfaction
of the conditions described in Paragraph B of Section V hereof, unless such
benefits are approved by the Compensation Committee of the Board of Directors.
B.
Termination, available at the Company’s discretion except as otherwise provided
in Paragraph C of Section X hereof, of the Plan, or an individual’s withdrawal
from participation in the Plan. Termination of the plan shall be effective
thirty (30) days following the date on which the participants are sent
notification that the Plan has been terminated. Furthermore, those benefits
which have accrued to participants under the provisions of Paragraphs IV. or V.
as a result of death or retirement may not be terminated and the company shall
be responsible for the payment of such benefits, notwithstanding termination of
the Plan.
C.
Death of the participant by suicide within twenty-four (24) months following
execution of the adoption agreement attached hereto as Exhibit “A”.
VIII. ADMISSION TO THE PLAN
Admission to the Plan will be evidenced by a letter from the Company to the
participant advising him of his right to participate in the Plan and the
execution by the participant of the adoption agreement attached hereto as
Exhibit “A”. In addition, those participants electing the alternative benefit
provided in Paragraph IV.B. will be required to execute the Life Insurance
Documentation.
IX. CLAIMS PROCEDURES
A.
All claims for the benefits under the Plan shall be submitted in writing to the
Chairman of the Committee. The Chairman shall review the claim when filed and
advise the claimant as to whether the claim is approved or denied. If the claim
is wholly or partially denied, the Chairman shall furnish a written denial
within 90 days after receipt of the filed claim unless special circumstances
require an extension of time for processing the claim, in which case the
Chairman shall furnish the written denial within 180 days after receipt of the
filed claim.
The written denial shall contain (a) the specific reason or reasons for denial;
(b) specific reference to pertinent Plan provisions on which the denial is
based; (c) a description of any additional information necessary for the
information is necessary; and (d) appropriate information as to the steps to be
taken if the claimant wishes to appeal the denial of the claim.
B.
The claimant may appeal the denial of the claim to the Committee within 90 days
after receipt of such decision. The appeal shall be in writing addressed to the
Committee and shall state the reason why it should grant the appeal. The
Committee shall conduct a full and fair review of the claim and shall issue its
decision within 60 days of the receipt of the appeal unless there are special
circumstances, in which case a decision shall be rendered within 120 days of the
receipt of the appeal. The Committee’s decision shall be in writing, stating the
reasons therefore and shall make specific references to the pertinent Plan
provisions on which the decision is based.
C.
The Committee’s decision upon appeal, or the Chairman’s initial decision if no
appeal is taken, shall be final, conclusive and binding on all parties.
D.
Notwithstanding anything in Section III(B) or this section IX to the contrary,
after a Change in Control:
1.
Subsection (C) shall be inoperative;
2.
the “90" and “180" days periods in subsection (A) shall be changed to “15" and
“30" day periods, respectively;
3.
the “90", “60" and “120" day periods in subsection (B) shall be changed to “30",
“15", and “30" day periods, respectively; and
4.
if the claim has not been wholly approved within 90 days after receipt by the
Administrator, then the claimant may bring a lawsuit in a court of competent
jurisdiction to enforce claimant’s rights under the Plan. All attorneys’ fees
and all other costs and expenses incurred by claimant in connection with such
litigation shall be the obligation of and shall be paid on a timely basis by the
Company regardless of whether claimant prevails in such litigation.
X. MISCELLANEOUS
A.
Nonalienability. No benefit payable at any time hereunder shall be subject in
any manner to alienation, sale, transfer, assignment, pledge, attachment or
other legal process, or encumbrances of any kind. Any attempt to alienate, sell,
transfer, assign, pledge or otherwise encumber any other benefit, whether
currently or hereafter payable, shall be void. Except as otherwise specifically
provided by law, no benefit payable hereunder shall, in any manner, be liable
for or subject to the debts or liabilities of any participant or any other
person entitled to such benefit.
B.
No Rights to Employment. The Plan shall not be construed as providing any
participant with the right to be retained in the Company’s employ or to receive
any benefit not specifically provided hereunder.
C.
Amendment and Termination. The Company shall have the right, at any time and
from time to time, to amend in whole or in part, or to terminate any of the
provisions of the plan, subject to the provisions of Paragraph VII.B. and such
amendment or termination shall be binding upon all participants and parties in
interest. Notwithstanding the foregoing, no amendment or termination of the Plan
occurring on or after the date on which a Change in Control (as defined herein)
occurs shall reduce or eliminate any benefit payable hereunder to any employee
who had qualified for participation in the Plan prior to the date of such Change
in Control. For purposes of this Paragraph C, a "Change in Control" means the
occurrence of any one of the following events:
(i) individuals who, on January 21, 1997, constitute the Board (the "Incumbent
Directors") cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to January 21, 1997,
whose election or nomination for election was approved by a vote of at least
three-fourths (3/4) of the Incumbent Directors then on the Board (either by a
specific vote or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however, that no
individual elected or nominated as a director of the Company initially as a
result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed to
be an Incumbent Director;
(ii) any “Person” (as defined under Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and as used in Section 13(d) or
Section 14(d) of the Exchange Act) is or becomes a "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company’s then outstanding securities eligible to vote for the election
of the Board (the “Company Voting Securities”); provided, however, that the
event described in this paragraph (ii) shall not be deemed to be a change in
control by virtue of any of the following acquisitions: (A) by the Company or
any entity in which the Company directly or indirectly beneficially owns more
than 50% of the voting securities or interests (a “Subsidiary”), (B) by an
employee stock ownership or employee benefit plan or trust sponsored or
maintained by the Company or any Subsidiary, (C) by any underwriter temporarily
holding securities pursuant to an offering of such securities, or (D) pursuant
to a Non-Qualifying Transaction (as defined in paragraph (iii));
(iii) consummation of a merger, consolidation, share exchange or similar form of
corporate transaction involving the Company or any of its Subsidiaries that
requires the approval of the Company's shareholders, whether for such
transaction or the issuance of securities in the transaction (a "Business
Combination"), unless immediately following such Business Combination: (A) more
than 50% of the total voting power of (x) the corporation resulting from such
Business Combination (the "Surviving Corporation"), or (y) if applicable, the
ultimate parent corporation that directly or indirectly has beneficial ownership
of 100% of the voting securities eligible to elect directors of the Surviving
Corporation (the "Parent Corporation"), is represented by Company Voting
Securities that were outstanding immediately prior to the consummation of such
Business Combination (or, if applicable, is represented by shares into which
such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Business
Combination, (B) no person (other than any employee benefit plan sponsored or
maintained by the Surviving Corporation or the Parent Corporation), is or
becomes the beneficial owner, directly or indirectly, of 20% or more of the
total voting power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) and (C) at least a majority of the members of the board
of directors of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation) were Incumbent Directors at the time of the Board's
approval of the execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a "Non-Qualifying
Transaction"); or
(iv) the shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company or a sale of all or substantially all of the
Company's assets.
Notwithstanding the foregoing, a change in control of the Company shall not be
deemed to occur solely because any person acquires beneficial ownership of more
than 20% of the Company Voting Securities as a result of the acquisition of
Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a change in control of the Company
shall then occur.
D.
Governing Law. The Plan shall be governed by and construed in accordance with
the laws of the State of Tennessee.
E.
Successors. This Plan shall bind any successor of the Company, its assets or its
businesses (whether direct or indirect, by purchase, merger, consolidation or
otherwise), in the same manner and to the same extent that the Company would be
obligated under this Plan if no succession had taken place. In the case of any
transaction in which a successor would not by the foregoing provision or by
operation of law be bound by this Plan, the Company shall require such successor
expressly and unconditionally to assume and agree to perform the Company's
obligations under this Plan, in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. The
term "Company," as used in the Plan, shall mean the Company as hereinbefore
defined and any successor or assignee to the business or assets which by reason
hereof becomes bound by this Plan. |
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Exhibit 10.6
EXECUTION COPY
RECEIVABLES FUNDING AGREEMENT
Dated as of November 6, 2002
by and among
SUPERIOR ESSEX FUNDING LLC,
as Borrower,
SUPERIOR TELECOMMUNICATIONS INC.,
as Servicer,
THE FINANCIAL INSTITUTIONS SIGNATORY HERETO FROM TIME TO TIME,
as Lenders
and
as a Lender and as Administrative Agent
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND INTERPRETATION 1 Section 1.01. Definitions 1
Section 1.02. Rules of Construction 1
ARTICLE II. AMOUNTS AND TERMS OF ADVANCES
1 Section 2.01. Advances 1 Section 2.02. Optional Changes in Maximum
Facility Amount 2 Section 2.03. Procedures for Making Advances 3 Section
2.04. Pledge and Release of Transferred Receivables 5 Section 2.05.
Commitment Termination Date 5 Section 2.06. Interest; Charges 5 Section
2.07. Fees 6 Section 2.08. Application of Funds in Collection Account;
Time and Method of Payments 7 Section 2.09. Capital Requirements; Additional
Costs 8 Section 2.10. Breakage Costs 9 Section 2.11. Funding Excess 10
ARTICLE III. CONDITIONS PRECEDENT
10 Section 3.01. Conditions to Effectiveness of Agreement 10 Section 3.02.
Conditions Precedent to All Advances 11
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
12 Section 4.01. Representations and Warranties of the Borrower 12
ARTICLE V. GENERAL COVENANTS OF THE BORROWER
18 Section 5.01. Affirmative Covenants of the Borrower 18 Section 5.02.
Reporting Requirements of the Borrower 20 Section 5.03. Negative Covenants
of the Borrower 20
ARTICLE VI. ACCOUNTS
23 Section 6.01. Establishment of Accounts 23
ARTICLE VII. SERVICER PROVISIONS
24 Section 7.01. Appointment of the Servicer 24 Section 7.02. Duties and
Responsibilities of the Servicer 25 Section 7.03. Collections on Receivables
25 Section 7.04. Authorization of the Servicer 25 Section 7.05.
Servicing Fees 26 Section 7.06. Representations and Warranties of the
Servicer 26 Section 7.07. Covenants of the Servicer 28 Section 7.08.
Reporting Requirements of the Servicer 29
ARTICLE VIII. GRANT OF SECURITY INTERESTS
30 Section 8.01. Borrower's Grant of Security Interest 30 Section 8.02.
Borrower's Agreements 31 Section 8.03. Delivery of Collateral 31 Section
8.04. Borrower Remains Liable 31 Section 8.05. Covenants of the Borrower
and the Servicer Regarding the Borrower Collateral 31
ARTICLE IX. TERMINATION EVENTS
34 Section 9.01. Termination Events 34 Section 9.02. Events of Servicer
Termination 37
i
ARTICLE X. REMEDIES
38 Section 10.01. Actions Upon Termination Event 38 Section 10.02.
Exercise of Remedies 39 Section 10.03. Power of Attorney 40 Section 10.04.
Continuing Security Interest 40
ARTICLE XI. SUCCESSOR SERVICER PROVISIONS
40 Section 11.01. Servicer Not to Resign 40 Section 11.02. Appointment of
the Successor Servicer 41 Section 11.03. Duties of the Servicer 41 Section
11.04. Effect of Termination or Resignation 41
ARTICLE XII. INDEMNIFICATION
41 Section 12.01. Indemnities by the Borrower 41 Section 12.02.
Indemnities by the Servicer 43
ARTICLE XIII. ADMINISTRATIVE AGENT
43 Section 13.01. Authorization and Action 43 Section 13.02. Reliance 43
Section 13.03. GE Capital and Affiliates 44 Section 13.04. Lender Credit
Decision 44 Section 13.05. Indemnification 44 Section 13.06. Successor
Administrative Agent 45 Section 13.07. Setoff and Sharing of Payments 45
ARTICLE XIV. MISCELLANEOUS
46 Section 14.01. Notices 46 Section 14.02. Binding Effect; Assignability
47 Section 14.03. Termination; Survival of Borrower Obligations Upon
Commitment Termination Date 48 Section 14.04. Costs, Expenses and Taxes 49
ii
Section 14.05. Confidentiality 50 Section 14.06. Complete Agreement;
Modification of Agreement 51 Section 14.07. Amendments and Waivers 51
Section 14.08. No Waiver; Remedies 52 Section 14.09. GOVERNING LAW;
CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL 52 Section 14.10. Counterparts
53 Section 14.11. Severability 53 Section 14.12. Section Titles 53
Section 14.13. Further Assurances 54
EXHIBITS
Exhibit 2.01(b) Form of Revolving Note Exhibit 2.02(a) Form of Commitment
Reduction Notice Exhibit 2.02(b) Form of Commitment Termination Notice Exhibit
2.03(a) Form of Borrowing Request Exhibit 2.03(h) Form of Repayment Notice
Exhibit 2.06(c) Notice of Conversion/Continuation Exhibit 5.02(b) Form of
Borrowing Base Certificate Exhibit 10.03 Form of Power of Attorney Exhibit
14.02(b) Form of Assignment Agreement Exhibit A Credit and Collection Policy
Schedule 2.02
Asset Sales Schedule 3.01(h) Amendment No. 9 to Credit Agreement Schedule
4.01(b) Jurisdiction of organization/organizational number; Executive Offices;
Collateral Locations; Corporate or Other Names; Schedule 4.01(d) Litigation
Schedule 4.01(i) Tax Matters/Borrower Schedule 4.01(q) Deposit and
Disbursement Accounts/Borrower Schedule 5.01(b) Trade Names/Borrower Schedule
5.03(b) Existing Liens Schedule 7.06(c) Servicer Litigation Schedule 7.06(e)
Servicer Taxes Schedule 7.07(b) Servicer Trade Names
Annex 5.02(a)
Reporting Requirements of the Borrower (including Form of Monthly Report) Annex
W Administrative Agent's Account/Lenders' Accounts Annex X Definitions Annex
Y Schedule of Documents Annex Z Special Concentration Percentages
iii
THIS RECEIVABLES FUNDING AGREEMENT (as amended, supplemented or
otherwise modified and in effect from time to time, the "Agreement") is entered
into as of November 6, 2002 by and among SUPERIOR ESSEX FUNDING LLC, a Delaware
limited liability company (the "Borrower"), Superior Telecommunications Inc., a
Delaware corporation, in its capacity as servicer hereunder (in such capacity,
the "Servicer"), the financial institutions signatory hereto from time to time
as lenders (the "Lenders"), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, as a Lender and as administrative agent for the Lenders hereunder
(in such capacity, the "Administrative Agent").
RECITALS
A. The Borrower is a special purpose limited liability company the
sole member of which is Essex Group, Inc., a Michigan corporation (in such
capacity, the "Member").
B. The Borrower has been formed for the purpose of purchasing, or
otherwise acquiring by capital contribution, Receivables of the Originators
party to the Sale Agreement.
C. The Borrower intends to fund its purchases of the Receivables, in
part, by borrowing Advances hereunder and pledging all of its right, title and
interest in and to the Receivables as security therefor, and, subject to the
terms and conditions hereof, the Lenders intend to make such Advances, from time
to time, as described herein.
D. The Administrative Agent has been requested and is willing to act
as administrative agent on behalf of each of the Lenders in connection with the
making and financing of such Advances.
E. In order to effectuate the purposes of this Agreement, each of the
Lenders desires to appoint Superior Telecommunications Inc. to service,
administer and collect the Receivables securing the Advances pursuant to this
Agreement and Superior Telecommunications Inc. is willing to act in such
capacity as Servicer hereunder on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
agree as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in Annex X.
Section 1.02. Rules of Construction. For purposes of this
Agreement, the rules of construction set forth in Annex X shall govern. All
Appendices hereto, or expressly identified to this Agreement, are incorporated
herein by reference and, taken together with this Agreement, shall constitute
but a single agreement.
ARTICLE II.
AMOUNTS AND TERMS OF ADVANCES
Section 2.01. Advances.
(a) From and after the Effective Date and until the Commitment
Termination Date and subject to the terms and conditions hereof, each Lender
severally agrees to make its Pro Rata Share of advances (each such advance
hereunder, an "Advance" and the Advance of the Lenders collectively made at any
time, and as thereafter converted or continued, being a "Borrowing") to the
Borrower from time to time. The Outstanding Principal Amount of any Lender shall
not at any time exceed its separate Commitment. Under no circumstances shall a
Lender make any Advances if, after giving effect thereto,
a Funding Excess would exist. The aggregate amount of Borrowings outstanding
shall not exceed at any time the Borrowing Base, as determined by the most
recent Borrowing Base Certificate or Borrowing Request delivered by the Borrower
hereunder. The Borrower may from time to time borrow, repay and reborrow
Advances hereunder on the terms and conditions set forth herein.
(b) The Borrower shall execute and deliver to each Lender a note to
evidence the Advances which may be made hereunder from time to time by such
Lender. Each such note shall be in the principal amount of the Commitment of the
applicable Lender, dated the Closing Date and substantially in the form of
Exhibit 2.01(b) (each, a "Revolving Note"). Each Revolving Note shall represent
the obligation of Borrower to pay the amount of each Lender's Commitment or, if
less, the Lender's Pro Rata Share of the aggregate unpaid principal amount of
all outstanding Advances made to the Borrower, together with interest thereon as
prescribed in Section 2.06. The Outstanding Principal Amount of Advances and all
other accrued and unpaid Borrower Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date.
Section 2.02. Optional Changes in Maximum Facility Amount.
(a) So long as no Incipient Termination Event or Termination Event
shall have occurred and be continuing, the Borrower may, not more than twice
during each calendar year, reduce the Aggregate Commitment permanently (provided
that any such reduction resulting from the transaction described on
Schedule 2.02 shall not be counted for this purpose); provided, that (i) the
Borrower shall give ten Business Days' prior written notice of any such
reduction to the Administrative Agent substantially in the form of
Exhibit 2.02(a) (each such notice, a "Commitment Reduction Notice"), (ii) any
partial reduction of the Aggregate Commitment shall be in a minimum amount of
$5,000,000 or an integral multiple thereof, (iii) no such partial reduction
shall reduce the Aggregate Commitment below the greater of (x) the Outstanding
Principal Amount at such time and (y) $50,000,000 and (iv) the Borrower shall
pay the Prepayment Premium with respect to such reduction if such reduction
occurs prior to the third anniversary of the Closing Date; provided, however,
that the Borrower shall not have to pay a Prepayment Premium with respect to a
single reduction of the Aggregate Commitment, at the Borrower's option, to an
amount not less than $110,000,000, but only if such reduction is in connection
with the sale of the assets of the Originators described on Schedule 2.02 made
on or before December 31, 2002. Any such reduction in the Aggregate Commitment
shall result in a reduction in each Lender's Commitment in an amount equal to
such Lender's Pro Rata Share of the amount by which the Aggregate Commitment is
being reduced.
(b) The Borrower may, at any time, on at least 20 days' prior written
notice, by the Borrower to the Administrative Agent irrevocably terminate the
Aggregate Commitment; provided, that (i) such notice of termination shall be
substantially in the form of Exhibit 2.02(b) (the "Commitment Termination
Notice"), (ii) the Borrower shall reduce the Outstanding Principal Amount to
zero and make all payments required by Section 2.03(h) at the time and in the
manner specified therein and (iii) the Borrower shall pay the Prepayment Premium
if such termination occurs prior to the third anniversary of the Closing Date.
Upon such termination, the Borrower's right to request that any Lender make
Advances hereunder shall simultaneously terminate and the Commitment Termination
Date shall automatically occur. In addition to the foregoing, the Borrower
hereby agrees to pay the Prepayment Premium if it voluntarily causes a
Termination Event to occur prior to the third anniversary of the Closing Date.
(c) Each written notice required to be delivered pursuant to Sections
2.02(a) and (b) shall be irrevocable and shall be effective (i) on the day of
receipt if received by the Administrative Agent and the Lenders not later than
4:00 p.m. (New York time) on any Business Day and (ii) on the immediately
succeeding Business Day if received by the Administrative Agent and the Lenders
after such time on such Business Day or if any such notice is received on a day
other than a Business Day (regardless of
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the time of day such notice is received). Each such notice of termination or
reduction shall specify, respectively, the amount of, or the amount of the
proposed reduction in, the Aggregate Commitment.
Section 2.03. Procedures for Making Advances.
(a) Borrowing Requests. Each Borrowing shall be made upon notice by the
Borrower to the Administrative Agent in the manner provided herein. Any such
notice must be given in writing so that it is received no later than (1) 12:00
Noon (New York time) on the Business Day of the proposed Advance Date set forth
therein in the case of an Index Rate Advance or (2) 12:00 Noon (New York time)
on the date which is three (3) Business Days prior to the proposed Advance Date
set forth therein in the case of a LIBOR Rate Advance. Each such notice (a
"Borrowing Request") shall (i) be substantially in the form of Exhibit 2.03(a),
(ii) be irrevocable and (iii) specify the amount of the requested Borrowing
(which shall be in a minimum amount of $250,000) and the proposed Advance Date
(which shall be a Business Day), and shall include such other information as may
be required by the Lenders and the Administrative Agent. If the Borrower
requests LIBOR Rate Advances it must comply with Section 2.06(c).
(b) Advances; Payments.
(i) Except as otherwise provided in Section 2.03(b)(ii) below,
(A) the Administrative Agent shall notify the Lenders, promptly after receipt of
a Borrowing Request and in any event prior to 12:00 noon (New York time) on the
date such Borrowing Request is deemed received, by telecopy, telephone or other
similar form of communication and (B) each Lender shall make the amount of such
Lender's Pro Rata Share of the requested Borrowing available to the
Administrative Agent in same day funds by wire transfer to the Administrative
Agent's account as set forth in Annex W not later than 2:00 p.m. (New York time)
on the requested Advance Date, in the case of an Index Rate Advance and not
later than 12:00 noon (New York time) on the requested Advance Date in the case
of a LIBOR Rate Advance. After receipt of such wire transfers (or, in the
Administrative Agent's sole discretion, before receipt of such wire transfers),
subject to the terms hereof (including, without limitation, the satisfaction of
the conditions precedent set forth in Section 3.02), the Administrative Agent
shall make available to the Borrower by deposit into the Borrower Account on the
Advance Date therefor, the lesser of (x) the amount of the requested Borrowing
and (y) the Funding Availability. All payments by each Lender under this
Section 2.03(b)(i) shall be made without setoff, counterclaim or deduction of
any kind.
(ii) On each Interest Payment Date, the Administrative Agent will
advise each Lender by telephone or telecopy of the amount of such Lender's Pro
Rata Share of principal, interest and Fees (to the extent payable to all
Lenders) paid for the benefit of Lenders with respect to each applicable
Advance. Provided that such Lender has made all payments required to be made by
it and purchased all participations required to be purchased by it under this
Agreement and the other Related Documents as of such Interest Payment Date, the
Administrative Agent will pay to each Lender such Lender's Pro Rata Share of
principal, interest and Fees (to the extent payable to all Lenders) paid by the
Borrower since the previous Interest Payment Date for the benefit of that
Lender. Such payments shall be made by wire transfer to such Lender's account
(as specified by such Lender in Annex W or the applicable Assignment Agreement)
not later than 2:00 p.m. (New York time) on each Interest Payment Date.
(c) Availability of Lenders' Advances. The Administrative Agent may
assume that each Lender will make its Pro Rata Share of each Borrowing available
to the Administrative Agent on each Advance Date. If the Administrative Agent
has made available to the Borrower such Lender's Pro Rata Share of a Borrowing
but such Pro Rata Share is not, in fact, paid to the Administrative Agent by
such Lender when due, the Administrative Agent will be entitled to recover such
amount on demand from such Lender without set-off, counterclaim or deduction of
any kind. If any Lender fails to pay the amount of its Pro Rata Share forthwith
upon the Administrative Agent's demand, the Administrative Agent shall
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promptly notify the Borrower and the Borrower shall immediately repay such
amount to the Administrative Agent; any such prepayment shall be without any
prepayment or penalty, including any payment of Breakage Costs described in
Section 2.10.Nothing in this Section 2.03(c) or elsewhere in this Agreement or
the other Related Documents shall be deemed to require the Administrative Agent
to advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its Commitment hereunder or to prejudice any rights that
the Borrower may have against any Lender as a result of any default by such
Lender hereunder. To the extent that the Administrative Agent advances funds to
the Borrower on behalf of any Lender and is not reimbursed therefor on the same
Business Day as such Advance is made, the Administrative Agent shall be entitled
to retain for its account all interest accrued on such Advance from the date of
such Advance to the date such Advance is reimbursed by the applicable Lender.
(d) Return of Payments. (i) If the Administrative Agent pays an amount
to a Lender under this Agreement in the belief or expectation that a related
payment has been or will be received by the Administrative Agent from the
Borrower and such related payment is not received by the Administrative Agent,
then the Administrative Agent will be entitled to recover such amount from such
Lender on demand without set-off, counterclaim or deduction of any kind.
(ii) If the Administrative Agent determines at any time that any amount
received by the Administrative Agent under this Agreement must be returned to
the Borrower or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement
or any other Related Document, the Administrative Agent will not be required to
distribute any portion thereof to any Lender. In addition, each Lender will
repay to the Administrative Agent on demand any portion of such amount that the
Administrative Agent has distributed to such Lender, together with interest at
such rate, if any, as the Administrative Agent is required to pay to the
Borrower or such other Person, without set-off, counterclaim or deduction of any
kind.
(e) Non-Funding Lenders. The failure of any Lender (such Lender, a
"Non-Funding Lender") to make any Advance to be made by it on the date specified
therefor shall not relieve any other Lender (each such other Lender, an "Other
Lender") of its obligations to make the Advance to be made by it, but neither
any Other Lender nor the Administrative Agent shall be responsible for the
failure of any Non-Funding Lender to make an Advance to be made by such
Non-Funding Lender. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Related Document or constitute a "Lender" (or be included in the
calculation of "Requisite Lenders" hereunder) for any voting or consent rights
under or with respect to any Related Document unless and until such Non-Funding
Lender shall have cured in full its failures to make Advances hereunder.
(f) Dissemination of Information. The Administrative Agent will use
reasonable efforts to provide Lenders with (i) copies of all notices and other
documents provided to the Administrative Agent pursuant to Section 5.02,
(ii) any notice of an Incipient Termination Event or Termination Event received
by the Administrative Agent from, or delivered by the Administrative Agent to,
the Borrower, (iii) notice of any Termination Event of which the Administrative
Agent has actually become aware and (iv) notice of any action taken by the
Administrative Agent following any Termination Event; provided, however, that
the Administrative Agent shall not be liable to any Lender for any failure to do
so.
(g) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Revolving Notes (including exercising any rights of set-off)
without first obtaining the prior written consent of the Administrative Agent or
the Requisite Lenders, it being the intent of the Lenders that any such action
to protect or enforce rights under this
4
Agreement and the Revolving Notes shall be taken in concert and at the direction
or with the consent of the Administrative Agent.
(h) Principal Repayments. The Borrower may at any time repay
outstanding Advances hereunder; provided that (i) the Borrower shall give one
Business Day's prior written notice of any such repayment to the Administrative
Agent substantially in the form of Exhibit 2.03(h) (each such notice, a
"Repayment Notice"), (ii) each such notice shall be irrevocable, (iii) each such
notice shall specify the amount of the requested repayment and the proposed date
of such repayment (which shall be a Business Day) and (iv) any such repayment
must be accompanied by payment of (A) all interest accrued and unpaid on the
portion of the Outstanding Principal Amount being repaid through but excluding
the date of such repayment and (B) any amounts required to be paid in accordance
with Section 2.10, if any. Any such notice of repayment must be received by the
Administrative Agent no later than 4:00 p.m. (New York time) on the Business Day
immediately preceding the date of the proposed repayment; provided, further,
that the foregoing requirements shall not apply to repayment of the outstanding
principal amount of Advances as a result of the application of amounts on
deposit in the Collection Account pursuant to Section 2.08.
Section 2.04. Pledge and Release of Transferred Receivables.
(a) Pledge. The Borrower shall indicate in its Records that the
Transferred Receivables have been pledged hereunder and that the Administrative
Agent has a lien on and security interest in all such Transferred Receivables
for the benefit of the Lenders. The Borrower and the Servicer shall hold all
Contracts and other documents relating to such Transferred Receivables in trust
for the benefit of the Administrative Agent on behalf of the Lenders in
accordance with their interests hereunder. The Borrower and the Servicer hereby
acknowledge that their retention and possession of such Contracts and documents
shall at all times be at the sole discretion of the Administrative Agent and in
a custodial capacity for the Administrative Agent's (on behalf of the Lenders)
benefit only.
(b) Repurchases of Transferred Receivables. If an Originator is
required to repurchase Transferred Receivables from the Borrower pursuant to
Section 4.04 of the Sale Agreement, upon payment by such Originator to the
Collection Account of the applicable repurchase price thereof (which repurchase
price shall not be less than an amount equal to the Billed Amount of such
Transferred Receivable minus the sum of (A) Collections received in respect
thereof and (B) the amount of any Dilution Factors taken into account in the
calculation of the Sale Price therefor), the Administrative Agent and the
Lenders shall release their liens on and security interests in the Transferred
Receivables being so repurchased.
Section 2.05. Commitment Termination Date. Notwithstanding
anything to the contrary set forth herein, no Lender shall have any obligation
to make any Advances from and after the Commitment Termination Date.
Section 2.06. Interest; Charges.
(a) The Borrower shall pay interest to the Administrative Agent, for
the ratable benefit of the Lenders, with respect to each Advance made or
maintained by each Lender, in arrears on each applicable Interest Payment Date,
(i) for each LIBOR Rate Advance, at the applicable LIBOR Rate for the relevant
LIBOR Period then ending, and (ii) for all of the Index Rate Advances
outstanding from time to time, at the applicable Index Rate as in effect from
time to time during the immediately preceding calendar month, based on the
aggregate outstanding amount of Index Rate Advances outstanding from time to
time during such month. Interest for each LIBOR Rate Advance or Index Rate
Advance shall be calculated based upon actual days elapsed during the related
LIBOR Period, with respect to each LIBOR Rate Advance, or during the applicable
calendar month, with respect to each Index Rate Advance, for a 360 day year
based upon actual days elapsed since the last Interest Payment Date.
5
(b) So long as any Termination Event shall have occurred and be
continuing, the interest rates applicable to each Advance and any other unpaid
Borrower Obligation hereunder shall be increased by two percent (2.0%) per annum
(such increased rate, the "Default Rate"), and all outstanding Borrowing
Obligations shall bear interest at the applicable Default Rate from the date of
such Termination Event until such Termination Event is waived.
(c) So long as no Incipient Termination Event or Termination Event
shall have occurred and be continuing, and subject to the additional conditions
precedent set forth in Section 3.02, the Borrower shall have the option to
(i) request that any Borrowing be made as Index Rate Advances or as LIBOR Rate
Advances, (ii) convert at any time all or any part of the outstanding Advances
of a Borrowing from Index Rate Advances to LIBOR Rate Advances, (iii) convert
all or any part of LIBOR Rate Advances of a Borrowing to Index Rate Advances,
subject to payment of Breakage Costs in accordance with Section 2.10 if such
conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iv) continue all or any portion of the LIBOR Rate Advances of a
Borrowing upon the expiration of the applicable LIBOR Period and the succeeding
LIBOR Period of those continued LIBOR Rate Advances shall commence on the last
day of the LIBOR Period of the LIBOR Rate Advances to be continued; provided
that except as provided in Section 2.09(d), all Advances comprising a Borrowing
shall be either Index Rate Advances or LIBOR Rate Advances, as the case may be.
Any Advances of a Borrowing to be made or continued as, or converted into, LIBOR
Rate Advances must be in an aggregate amount equal to $1,000,000 or an integral
multiple of $500,000 in excess of $1,000,000. Any such election must be made by
11:00 a.m. (New York time) on (A) the third (3rd) Business Day prior to (1) the
date of any proposed LIBOR Rate Advances, (2) the end of each LIBOR Period with
respect to any LIBOR Rate Advances to be continued as such, or (3) the date on
which Borrower wishes to convert any Index Rate Advances to LIBOR Rate Advances
for a LIBOR Period designated by the Borrower in such election, or (B) the
Business Day of any proposed Advances which are to bear interest at the Index
Rate. If no election is received with respect to any LIBOR Rate Advances by
11:00 a.m. (New York time) on the third (3rd) Business Day prior to the end of
the LIBOR Period with respect thereto (or if an Incipient Termination Event or a
Termination Event shall have occurred and be continuing or the additional
conditions precedent set forth in Section 3.02 shall not have been satisfied),
those LIBOR Rate Advances shall be converted to Index Rate Advances at the end
of the applicable LIBOR Period. The Borrower must make each such election by
notice to the Administrative Agent in writing, by telecopy or overnight courier.
In the case of any conversion or continuation, such election must be made
pursuant to a written notice (a "Notice of Conversion/Continuation") in the form
of Exhibit 2.06(c).
(d) The Administrative Agent is authorized to, and at its sole election
may, charge to the Borrower as Advances and cause to be paid all Fees, expenses,
charges, costs, interest and principal, other than principal of the Advances,
owing by the Borrower under this Agreement or any of the other Related Documents
if and to the extent the Borrower fails to pay any such amounts as and when due,
and any charges so made shall constitute part of the Outstanding Principal
Amount hereunder even if such charges would cause the aggregate balance of the
Outstanding Principal Amount to exceed the Borrowing Base.
Section 2.07. Fees.
(a) On the Effective Date, the Borrower shall pay to the Administrative
Agent, for the account of itself and the Lenders, the fees set forth in the Fee
Letter that are payable on the Effective Date.
(b) From and after the Closing Date, as additional compensation for the
Lenders, the Borrower agrees to pay to Administrative Agent, for the ratable
benefit of such Lenders, monthly in arrears, on the first Business Day of each
month prior to the Commitment Termination Date and on the Commitment Termination
Date, the Unused Commitment Fee.
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(c) On each Settlement Date, the Borrower shall pay to the Servicer or
to the Successor Servicer, as applicable, the Servicing Fee or the Successor
Servicing Fees and Expenses, respectively, in each case to the extent of
available funds therefor.
Section 2.08. Application of Funds in Collection Account; Time and
Method of Payments.
(a) Each Index Rate Advance shall mature, and be payable, on the
earlier of (i) the date funds are allocated to such Index Rate Advance pursuant
to clause (iii) of the following subsection (b) (and in such case only to the
extent of the funds so allocated), and (ii) the Commitment Termination Date (in
which case such Index Rate Advance shall be payable in full). Each LIBOR Rate
Advance shall mature, and be payable in full, on the earliest of (1) the date on
which funds are allocated therefor pursuant to clause (iv) of the following
subsection (b), (2) the last day of the LIBOR Period with respect thereto
(unless such LIBOR Rate Advance is converted or continued in compliance with the
terms hereof) and (3) the Commitment Termination Date (in which case such LIBOR
Rate Advance shall be payable in full).
(b) On each Business Day, the Administrative Agent shall allocate
amounts on deposit in the Collection Account on such day as follows:
(i) first, to the extent then due and payable, pro rata, to the
payment of all Fees accrued and unpaid through such date and all unreimbursed
expenses of the Administrative Agent which are reimbursable pursuant to the
terms hereof;
(ii) second, if such Business Day is an Interest Payment Date for any
Advances, pro rata, to the payment of interest accrued through such date with
respect to such Advances;
(iii) third, pro rata, to the payment of the outstanding principal
balance of the Advances which constitute Index Rate Advances;
(iv) fourth, pro rata, to the payment of the outstanding principal
balance of Advances which constitute LIBOR Rate Advances together with amounts
payable with respect thereto under Section 2.10; and
(v) fifth, to the extent then due and payable, pro rata, to the payment
of all other obligations of the Borrower accrued and unpaid hereunder,
including, without limitation, the expenses of the Lenders reimbursable under
Section 14.04.
On any such Business Day on which funds on deposit in the Collection Account are
allocated pursuant to the foregoing, the Administrative Agent shall withdraw the
funds so allocated and pay the same to the parties entitled thereto. To the
extent that on any Business Day funds remain in the Collection Account
unallocated after application of the foregoing clauses (i) through (v), such
remaining funds shall be remitted to the Borrower Account.
(c) On each Interest Payment Date with respect to Index Rate Advances,
the Administrative Agent shall withdraw funds allocated on such Interest Payment
Date pursuant to clause (ii) of the foregoing subsection (b), and pay the same
to the Lenders, pro rata, in payment of accrued and unpaid interest on the Index
Rate Advances. On each Interest Payment Date with respect to LIBOR Rate
Advances, the Administrative Agent shall withdraw funds allocated on such
Interest Payment Date pursuant to clause (ii) of the foregoing subsection (b),
and pay the same to the Lenders pro rata, in payment of accrued and unpaid
interest on such LIBOR Rate Advances. On each Business Day on which any other
amounts are payable hereunder or under any other Related Document, the
Administrative Agent shall withdraw funds allocated on such Business Day
pursuant to clause (i) or clause (v) of the foregoing subsection (b), and pay
the same, pro rata, to such Persons as may be entitled to receive such amounts
pursuant to the terms hereof or of any other Related Document. To the extent
that amounts on deposit in the Collection Account on any day are insufficient to
pay amounts due on such day in respect of the matured portion of any Advances or
any interest, Fees or
7
any other amounts due and payable by the Borrower hereunder, the Borrower shall
pay, upon notice from the Administrative Agent, the amount of such insufficiency
to the Administrative Agent in Dollars, in immediately available funds (for the
account of the Administrative Agent, the applicable Lenders, Affected Parties or
Indemnified Persons) not later than 11:00 a.m. (New York time) on such day. Any
such payment made on such date but after such time shall be deemed to have been
made on, and interest shall continue to accrue and be payable thereon at the
LIBOR Rate (in the case of LIBOR Rate Advances) or the Index Rate (in all other
cases), until the next succeeding Business Day.
(d) The Borrower hereby irrevocably waives the right to direct the
application of any and all payments received from or on behalf of the Borrower,
and the Borrower hereby irrevocably agrees that any and all such payments shall
be applied by the Administrative Agent in accordance with this Section 2.08.
(e) All payments of principal of the Advances and all payments of
interest, Fees and other amounts payable by the Borrower hereunder shall be made
in Dollars, in immediately available funds. If any such payment becomes due on a
day other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and interest thereon at the LIBOR Rate (in the case of LIBOR Rate Advances) or
Index Rate (in all other cases) shall be payable during such extension. Payments
received prior to 12:00 Noon (New York time) on any Business Day shall be deemed
to have been received on such Business Day. Payments received after 12:00 Noon
(New York time) on any Business Day or on a day that is not a Business Day shall
be deemed to have been received on the following Business Day.
(f) Any and all payments by the Borrower hereunder shall be made in
accordance with this Section 2.08 without setoff or counterclaim and free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, Charges or withholdings, excluding taxes imposed on or
measured by the net income, gross receipts or franchise taxes of any Affected
Party by the jurisdictions under the laws of which such Affected Party is
organized or by any political subdivisions thereof (such non-excluded taxes,
levies, imposts, deductions, Charges and withholdings being "Indemnified
Taxes"). If the Borrower shall be required by law to deduct any Indemnified
Taxes from or in respect of any sum payable hereunder, (i) the sum payable shall
be increased as much as shall be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.08) the Affected Party entitled to receive any such payment
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, and
(iii) the Borrower shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law. Within 30 days after the date
of any payment of Indemnified Taxes, the Borrower shall furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof. The Borrower shall indemnify any Affected Party from and
against, and, within ten days of demand therefor, pay any Affected Party for,
the full amount of Indemnified Taxes (together with any taxes imposed by any
jurisdiction on amounts payable under this Section 2.08) paid by such Affected
Party and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally asserted.
Section 2.09. Capital Requirements; Additional Costs.
(a) If any Affected Party shall have determined that the adoption after
the date hereof of any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy, reserve requirements
or similar requirements or compliance by such Affected Party with any request or
directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law) from any central bank or
other Governmental Authority increases or would have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by such
Affected Party against commitments made by it under this Agreement or any other
8
Related Document and thereby reducing the rate of return on such Affected
Party's capital as a consequence of its commitments hereunder or thereunder,
then the Borrower shall from time to time upon demand by the Administrative
Agent pay to the Administrative Agent on behalf of such Affected Party
additional amounts sufficient to compensate such Affected Party for such
reduction together with interest thereon from the date of any such demand until
payment in full at the applicable Index Rate. A certificate as to the amount of
that reduction and showing the basis of the computation thereof submitted by the
Affected Party to the Borrower shall be final, binding and conclusive on the
parties hereto (absent manifest error) for all purposes.
(b) If, due to any Regulatory Change, there shall be any increase in
the cost to any Affected Party of agreeing to make or making, funding or
maintaining any commitment hereunder or under any other Related Document,
including with respect to any Advances or Outstanding Principal Amount, or any
reduction in any amount receivable by such Affected Party hereunder or
thereunder, including with respect to any Advances or Outstanding Principal
Amount (any such increase in cost or reduction in amounts receivable are
hereinafter referred to as "Additional Costs"), then the Borrower shall, from
time to time upon demand by the Administrative Agent, pay to the Administrative
Agent on behalf of such Affected Party additional amounts sufficient to
compensate such Affected Party for such Additional Costs together with interest
thereon from the date demanded until payment in full thereof at the applicable
Index Rate. Each Affected Party agrees that, as promptly as practicable after it
becomes aware of any circumstance referred to above that would result in any
such Additional Costs, it shall, to the extent not inconsistent with its
internal policies of general application, use reasonable commercial efforts to
minimize costs and expenses incurred by it and payable to it by the Borrower
pursuant to this Section 2.09(b).
(c) Determinations by any Affected Party for purposes of this
Section 2.09 of the effect of any Regulatory Change on its costs of making,
funding or maintaining any commitments hereunder or under any other Related
Document or on amounts payable to it hereunder or thereunder or of the
additional amounts required to compensate such Affected Party in respect of any
Additional Costs shall be set forth in a written notice to the Borrower in
reasonable detail and which is calculated the same as for comparable claims with
respect to similarly situated sellers or borrowers of the Affected Party and
shall be final, binding and conclusive on the Borrower (absent manifest error)
for all purposes.
(d) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Rate Advance,
then, unless that Lender is able to make or to continue to fund or to maintain
such LIBOR Rate Advance at another branch or office of that Lender without, in
that Lender's good faith opinion, adversely affecting it or its Advances or the
income obtained therefrom, on notice thereof and demand therefor by such Lender
to the Borrower through the Administrative Agent, (i) the obligation of such
Lender to agree to make or to make or to continue to fund or maintain LIBOR Rate
Advances shall terminate and (ii) Borrower shall forthwith prepay in full all
outstanding LIBOR Rate Advances owing to such Lender, together with interest
accrued thereon, unless Borrower, within five (5) Business Days after the
delivery of such notice and demand, converts all such LIBOR Rate Advances into
Index Rate Loans.
Section 2.10. Breakage Costs. To induce the Lenders to provide the
LIBOR Rate option on the terms provided herein, if (i) any LIBOR Rate Advances
are, except by reason of the requirements in Section 2.03(c), repaid in whole or
in part prior to the last day of any applicable LIBOR Period (whether that
repayment is made pursuant to any other provision of this Agreement or any other
Related Document or is the result of acceleration, by operation of law or
otherwise); (ii) the Borrower shall default in payment when due of the principal
amount of or interest on any LIBOR Rate Advance; (iii) the Borrower shall
default in making any borrowing of, conversion into or continuation of LIBOR
Rate Advances after the Borrower has given notice requesting the same in
accordance herewith
9
(including any failure to satisfy conditions precedent to the making of, or
conversion or continuation of, any LIBOR Rate Advances); or (iv) the Borrower
shall fail to make any prepayment of a LIBOR Rate Advance after the Borrower has
given a notice thereof in accordance herewith, then, in any such case, the
Borrower shall indemnify and hold harmless each Lender from and against all
losses, costs and expenses resulting from or arising from any of the foregoing
(any such loss, cost or expense, "Breakage Costs"). Such indemnification shall
include any loss (including loss of margin) or expense arising from the
reemployment of funds obtained by it or from fees payable to terminate deposits
from which such funds were obtained (if any). Each Lender shall make a good
faith effort to reinvest any repayment proceeds received from the Borrower in
order to mitigate the losses which would otherwise be reimbursable under this
Section 2.10. For the purpose of calculating amounts payable to a Lender under
this subsection, each Lender shall be deemed to have actually funded its
relevant LIBOR Rate Advance through the purchase of a deposit bearing interest
at the LIBOR Rate in an amount equal to the amount of that LIBOR Rate Advance
and having a maturity comparable to the relevant LIBOR Period; provided,
however, that each Lender may fund each of its LIBOR Rate Advances in any manner
it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection. This covenant shall
survive the termination of this Agreement and the payment of the Revolving Notes
and all other amounts payable hereunder. The determination by any Lender of the
amount of any such loss or expense shall be set forth in a written notice to the
Borrower in reasonable detail and shall be final, binding and conclusive on the
Borrower (absent manifest error) for all purposes.
Section 2.11. Funding Excess. On each Business Day during the
Revolving Period, the Administrative Agent shall notify the Borrower and the
Servicer of any Funding Excess on such day, and the Borrower shall deposit the
amount of such Funding Excess in the Collection Account by 11:00 a.m. (New York
time) on the immediately succeeding Business Day.
ARTICLE III.
CONDITIONS PRECEDENT
Section 3.01. Conditions to Effectiveness of Agreement. This
Agreement shall not be effective until the date on which each of the following
conditions have been satisfied, in the sole discretion of, or waived in writing
by, the Lenders and the Administrative Agent (such date, the "Effective Date"):
(a) Funding Agreement; Other Related Documents. This Agreement and
the Revolving Notes shall have been duly executed by, and delivered to, the
parties hereto and the Lenders and the Administrative Agent shall have received
such other documents, instruments, agreements and legal opinions as each Lender
and the Administrative Agent shall request in connection with the transactions
contemplated by this Agreement, including all those listed in the Schedule of
Documents, each in form and substance satisfactory to each Lender and the
Administrative Agent.
(b) Governmental Approvals. The Lenders and the Administrative
Agent shall have received (i) satisfactory evidence that the Borrower and the
Servicer have obtained all required consents and approvals of all Persons,
including all requisite Governmental Authorities, to the execution, delivery and
performance of this Agreement and the other Related Documents and the
consummation of the transactions contemplated hereby or thereby or (ii) an
Officer's Certificate from each of the Borrower and the Servicer in form and
substance satisfactory to the Lenders and the Administrative Agent affirming
that no such consents or approvals are required.
(c) Compliance with Laws. The Borrower and the Servicer shall be
in compliance with all applicable foreign, federal, state and local laws and
regulations, including those specifically referenced in Section 5.01(a), except
to the extent noncompliance could not reasonably be expected to have a Material
Adverse Effect.
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(d) Payment of Fees. The Borrower shall have paid all fees
required to be paid by it on the Effective Date, including all fees required
hereunder and under the Fee Letter, and shall have reimbursed the Administrative
Agent for all fees, costs and expenses of closing the transactions contemplated
hereunder and under the other Related Documents, including the Administrative
Agent's reasonable legal and audit expenses, and other document preparation
costs.
(e) Representations and Warranties. Each representation and
warranty by the Borrower contained herein and in each other Related Document
shall be true and correct as of the Effective Date, except to the extent that
such representation or warranty expressly relates solely to an earlier date.
(f) No Termination Event. No Incipient Termination Event or
Termination Event hereunder or any "Event of Default" or "Default" (each as
defined in the Credit Agreement) shall have occurred and be continuing or would
result after giving effect to any of the transactions contemplated on the
Closing Date.
(g) Audit. The Administrative Agent shall have completed a
prefunding audit of the Receivables as of the Closing Date, the scope and
results of which are satisfactory to the Administrative Agent and each Lender in
its sole discretion.
(h) Credit Agreement. Amendment No. 9 to the Credit Agreement
attached hereto as Schedule 3.01(h) shall have been executed and delivered by
each of the parties thereto and shall have become effective in accordance with
its terms, and no subsequent amendments to or waivers or modifications of the
Credit Agreement shall have become effective or been signed.
(i) Material Adverse Change. There will have been (i) no material
adverse change, individually or in the aggregate, (x) in the business, the
industry which the Parent or any Originator operates, the financial or other
condition or prospects of the Parent, the Servicer, or any Originator, or (y) in
the Receivables, (ii) no litigation commenced which, if successful, would have a
Material Adverse Effect on the Parent, the Servicer, the Originators, their
business, or which would challenge the transactions contemplated under this
Agreement, the Sale Agreement and the other Related Documents, and (iii) since
the Parent's last audited financial statements (other than as disclosed in the
Parent's filings on Form 10-Q with the Securities and Exchange Commission for
the quarters ended March 31, 2002 and June 30, 2002) and as otherwise disclosed
in the financial projections provided to the Administrative Agent in the revised
business plan delivered on September 9, 2002, no material increase in the
liabilities, liquidated or contingent, of the Parent or the Originators, or
material decrease in the assets of the Parent or the Originators.
(j) Existing Securitization. Evidence satisfactory to the
Administrative Agent that the Existing Securitization has been paid in full and
all liens associated therewith have been released.
(k) Syndication. No change shall have occurred in loan
syndication, financial or capital market conditions generally that, in the
reasonable judgment of GECC Capital Markets Group, Inc., would materially impair
the ability to syndicate the Aggregate Commitment to financial institutions
after the Closing Date.
(l) Waiver of Set-Off Rights. Each Originator shall have waived
its rights of set-off with respect to the Receivables.
Section 3.02. Conditions Precedent to All Advances. No Lender
shall be obligated to make any Advances hereunder (including the initial
Advance) on any date if, as of the date thereof:
(a) any representation or warranty of the Borrower or the Servicer
contained herein or in any of the other Related Documents shall be untrue or
incorrect as of such date, either before or after giving effect to the Advances
on such date and to the application of the proceeds therefrom,
11
except to the extent that such representation or warranty expressly relates to
an earlier date and except for changes therein expressly permitted by this
Agreement;
(b) any event shall have occurred, or would result from such Advances
or from the application of the proceeds therefrom, that constitutes an Incipient
Termination Event, a Termination Event, an Incipient Servicer Termination Event
or an Event of Servicer Termination;
(c) the Borrower shall not be in compliance with any of its covenants
or other agreements set forth herein;
(d) the Commitment Termination Date shall have occurred;
(e) either before or after giving effect to such Advance and to the
application of the proceeds therefrom, a Funding Excess would exist;
(f) any Originator, the Borrower or the Servicer shall fail to have
taken such other action, including delivery of approvals, consents, opinions,
documents and instruments to the Lenders and the Administrative Agent, as any
Lender or the Administrative Agent may reasonably request;
(g) on or prior to such date, the Borrower or the Servicer shall have
failed to deliver any Monthly Report or Borrowing Base Certificate required to
be delivered in accordance with Section 5.02 hereof; or
(h) the Administrative Agent shall have determined that any event or
condition has occurred that has had, or could reasonably be expected to have or
result in, a Material Adverse Effect.
Notwithstanding a failure to satisfy clause (b) above solely as a result of an
Incipient Termination Event (and not a Termination Event) under Section 9.01(c)
with respect to a breach of a covenant under the Credit Agreement (provided that
such breach has not continued for more than 30 days and that no enforcement or
remedies have been sought under the Credit Agreement), the Borrower shall be
permitted to repay Borrowings and request additional Borrowings so long as the
Outstanding Principal Amount does not exceed the Outstanding Principal Amount as
of the Business Day immediately preceding the day such breach occurred.
The delivery by the Borrower of a Borrowing Request and the acceptance by the
Borrower of the funds from the related Borrowing on any Advance Date shall be
deemed to constitute, as of any such Advance Date, a representation and warranty
by the Borrower that the conditions in this Section 3.02 have been satisfied.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Borrower. To
induce each Lender to make Advances from time to time and the Administrative
Agent to take any action required to be performed by it hereunder, the Borrower
makes the following representations and warranties to each Lender and the
Administrative Agent on the Effective Date and each Advance Date, each and all
of which shall survive the execution and delivery of this Agreement.
(a) Existence; Compliance with Law. The Borrower (i) is a limited
liability company duly formed, validly existing and in good standing under the
laws of its jurisdiction of incorporation and is a "registered organization" as
defined in the UCC of such jurisdiction; (ii) is duly qualified to conduct
business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification;
(iii) has the requisite power and authority and the legal right to own, pledge,
mortgage or otherwise encumber and operate its properties, to lease the property
it operates under lease, and to conduct its business, in each case, as now,
heretofore and proposed to be conducted; (iv) has all licenses, permits,
consents or approvals from or by, and has
12
made all filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (v) is in compliance with its limited liability company
agreement; and (vi) subject to specific representations set forth herein
regarding ERISA, tax and other laws, is in compliance with all applicable
provisions of law, except where the failure to so comply would not have an
adverse effect on (1) the business, assets, liabilities, operations, prospects
or financial or other condition of the Borrower, or (2) the Borrower Collateral.
(b) Executive Offices; Collateral Locations; Corporate or Other Names;
FEIN. The state of organization and the organization identification number of
the Borrower and current location of the Borrower's chief executive office,
principal place of business, other offices, the premises within which any
Borrower Collateral is stored or located, and the locations of its records
concerning the Borrower Collateral (including originals of the Borrower Assigned
Agreements) are set forth in Schedule 4.01(b) and none of such locations has
changed within the past 12 months (or such shorter time as the Borrower has been
in existence). During the prior five years (or such shorter time as the Borrower
has been in existence), except as set forth in Schedule 4.01(b), the Borrower
has not been known as or used any fictitious or trade name. In addition,
Schedule 4.01(b) lists the federal employer identification number of the
Borrower.
(c) Power, Authorization, Enforceable Obligations. The execution,
delivery and performance by the Borrower of this Agreement and the other Related
Documents to which it is a party, and the creation and perfection of all Liens
and ownership interests provided for herein and therein: (i) are within the
Borrower's limited liability company power; (ii) have been duly authorized by
all necessary or proper actions; (iii) do not contravene any provision of the
Borrower's certificate of formation or limited liability company agreement;
(iv) do not violate any law or regulation, or any order or decree of any court
or Governmental Authority; (v) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which the Borrower or any
Originator is a party or by which the Borrower or any Originator or any of the
property of the Borrower or any Originator is bound; (vi) do not result in the
creation or imposition of any Adverse Claim upon any of the property of the
Borrower or any Originator; and (vii) do not require the consent or approval of
any Governmental Authority or any other Person, except those which have been
duly obtained, made or complied with prior to the Effective Date as provided in
Section 3.01(b). The exercise by each of the Borrower, the Lenders or the
Administrative Agent of any of its rights and remedies under any Related
Document to which it is a party do not require the consent or approval of any
Governmental Authority or any other Person (other than consents or approvals
solely relating to or required to be obtained by a Lender or the Administrative
Agent as to which Borrower makes no representation hereunder), except those
which will have been duly obtained, made or complied with prior to the Closing
Date as provided in Section 3.01(b). On or prior to the Effective Date, each of
the Related Documents to which the Borrower is a party shall have been duly
executed and delivered by the Borrower and each such Related Document shall then
constitute a legal, valid and binding obligation of the Borrower enforceable
against it in accordance with its terms.
(d) No Litigation. No Litigation is now pending or, to the knowledge of
the Borrower, threatened against the Borrower that (i) challenges the Borrower's
right or power to enter into or perform any of its obligations under the Related
Documents to which it is a party, or the validity or enforceability of any
Related Document or any action taken thereunder, (ii) seeks to prevent the
transfer, sale, pledge or contribution of any Receivable or the consummation of
any of the transactions contemplated under this Agreement or the other Related
Documents, or (iii) except as set forth on Schedule 4.01(d), that, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
Except as set forth on Schedule 4.01(d), as of the Effective Date there is no
Litigation pending or threatened that seeks damages or injunctive relief
against, or alleges criminal misconduct by, the Borrower.
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(e) Solvency. No insolvency proceedings of any nature are now pending
or threatened against any of the Borrower, Superior, the Member or any
Originator. After giving effect to (i) the transactions contemplated by this
Agreement and the other Related Documents and (ii) the payment and accrual of
all transaction costs in connection with the foregoing (1) the fair value of the
property of the Borrower is greater than the total amount of its liabilities,
including contingent liabilities, (2) the present fair salable value of the
assets of the Borrower is not less than the amount that will be required to pay
the probable liability on its debts as they become absolute and matured, (3) the
Borrower has not incurred nor intends to incur, and does not believe that it
will incur, debts or liabilities beyond its ability to pay as such debts and
liabilities mature, (4) the Borrower is not engaged in a business or
transaction, nor is about to engage in a business or transaction, for which its
property would constitute an unreasonably small capital and (5) none of the
Borrower, Superior, the Member or any Originator is generally not paying its
debts as they become due.
(f) Material Adverse Effect. Since the date of the Borrower's
organization, (i) the Borrower has not incurred any obligations, contingent or
non-contingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments, other than in connection with the Related
Documents, (ii) no contract, lease or other agreement or instrument has been
entered into by the Borrower or has become binding upon the Borrower's assets,
other than in connection with the Related Documents, and no law or regulation
applicable to the Borrower has been adopted that has had or could reasonably be
expected to have a Material Adverse Effect and (iii) the Borrower is not in
default and no third party is in default under any material contract, lease or
other agreement or instrument to which the Borrower is a party. Since the date
of the Borrower's organization, no event has occurred with respect to the
Borrower that alone or together with other events could reasonably be expected
to have a Material Adverse Effect.
(g) Ownership of Property; Liens. None of the properties and assets
(including the Transferred Receivables) of the Borrower are subject to any
Adverse Claims other than Permitted Encumbrances not attaching to Transferred
Receivables, and there are no facts, circumstances or conditions known to the
Borrower that may result in (i) with respect to the Transferred Receivables, any
Adverse Claims (including Adverse Claims arising under environmental laws) and
(ii) with respect to its other properties and assets, any Adverse Claims
(including Adverse Claims arising under environmental laws) other than Permitted
Encumbrances. The Borrower has received all assignments, bills of sale and other
documents, and has duly effected all recordings, filings and other actions
necessary to establish, protect and perfect the Borrower's right, title and
interest in and to the Transferred Receivables and its other properties and
assets. The Liens granted to the Lender pursuant to Section 8.01 will at all
times be fully perfected first priority Liens in and to the Borrower Collateral.
(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. The Borrower has no Subsidiaries, and is not engaged in any joint
venture or partnership with any other Person. The Member is the sole member of
the Borrower. There are no outstanding rights to purchase or options, warrants
or similar rights or agreements pursuant to which the Borrower may be required
to issue, sell, repurchase or redeem some or all of its membership interests.
All outstanding Debt of the Borrower as of the Effective Date is described in
Section 5.03(i).
(i) Taxes. All material tax returns, reports and statements,
including information returns, required by any Governmental Authority to be
filed by the Borrower and each of its Affiliates included in the Parent Group
have been filed with the appropriate Governmental Authority and all Charges have
been paid prior to the date on which any fine, penalty, interest or late charge
may be added thereto for nonpayment thereof (or any such fine, penalty,
interest, late charge or loss has been paid), excluding Charges or other amounts
being contested in accordance with Section 5.01(e). Proper and accurate amounts
have been withheld by the Borrower or such Affiliate from its respective
employees for all periods in compliance in all material respects with all
applicable federal, state, local and foreign laws and such withholdings have
been timely paid to the respective Governmental Authorities.
14
Schedule 4.01(i) sets forth as of the Effective Date (i) those taxable years for
which the Borrower's or such Affiliates' tax returns are currently being audited
by the IRS or any other applicable Governmental Authority and (ii) any
assessments or threatened assessments in connection with any such audit or
otherwise currently outstanding. Except as described on Schedule 4.01(i),
neither the Borrower nor any such Affiliate has executed or filed with the IRS
or any other Governmental Authority any agreement or other document extending,
or having the effect of extending, the period for assessment or collection of
any Charges. The Borrower is not liable for any Charges: (A) under any agreement
(including any tax sharing agreements) or (B) to the best of the Borrower's
knowledge, as a transferee.
(j) Full Disclosure. All information contained in this Agreement, any
Borrowing Base Certificate or any of the other Related Documents, or any written
statement furnished by or on behalf of the Borrower to any Lender or the
Administrative Agent pursuant to the terms of this Agreement or any of the other
Related Documents, in each case, taken as a whole (which shall not include any
projections or pro forma information), is true and accurate in every material
respect, and none of this Agreement, any Borrowing Base Certificate or any of
the other Related Documents, or any written statement furnished by or on behalf
of the Borrower to any Lender or the Administrative Agent pursuant to the terms
of this Agreement or any of the other Related Documents, in each case, taken as
a whole, is misleading as a result of the failure to include therein a material
fact. All information contained in this Agreement, any Borrowing Base
Certificate or any of the other Related Documents, or any written statement
furnished to any Lender or the Administrative Agent has been prepared in good
faith by the management of the Borrower with the exercise of reasonable
diligence.
(k) ERISA. The Borrower is in compliance with ERISA and has not
incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) payable to the PBGC under
ERISA.
(l) Brokers. No broker or finder acting on behalf of the Borrower was
employed or utilized in connection with this Agreement or the other Related
Documents or the transactions contemplated hereby or thereby and the Borrower
has no obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
(m) Margin Regulations. The Borrower is not engaged in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
security," as such terms are defined in Regulation U of the Federal Reserve
Board as now and from time to time hereafter in effect (such securities being
referred to herein as "Margin Stock"). The Borrower owns no Margin Stock, and no
portion of the proceeds of the Advances made hereunder will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any Debt that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that might cause any
portion of such proceeds to be considered a "purpose credit" within the meaning
of Regulations T, U or X of the Federal Reserve Board. The Borrower will not
take or permit to be taken any action that might cause any Related Document to
violate any regulation of the Federal Reserve Board.
(n) Nonapplicability of Bulk Sales Laws. No transaction contemplated by
this Agreement or any of the Related Documents requires compliance with any bulk
sales act or similar law.
(o) Government Regulation. The Borrower is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act.
The making of Advances by the Lenders hereunder, the application of the proceeds
thereof and the consummation of the transactions contemplated by this Agreement
and the other Related Documents will not violate any provision of any such
statute or any rule, regulation or order issued by the Securities and Exchange
Commission.
15
(p) Nonconsolidation. The Borrower is operated in such a manner that
the separate corporate existence of the Borrower, on the one hand, and any
member of the Parent Group, on the other hand, would not be disregarded in the
event of the bankruptcy or insolvency of any member of the Parent Group and,
without limiting the generality of the foregoing:
(i) the Borrower is a limited purpose limited liability company whose
activities are restricted in its limited liability company agreement to those
activities expressly permitted hereunder and under the other Related Documents
and the Borrower has not engaged, and does not presently engage, in any activity
other than those activities expressly permitted hereunder and under the other
Related Documents, nor has the Borrower entered into any agreement other than
this Agreement, the other Related Documents to which it is a party and, with the
prior written consent of the Lenders and the Administrative Agent, any other
agreement necessary to carry out more effectively the provisions and purposes
hereof or thereof;
(ii) the Borrower's business is managed solely by its own officers and
directors, each of whom when acting for the Borrower shall be acting solely in
his or her capacity as an officer or director of the Borrower and not as an
officer, director, employee or agent of any member of the Parent Group;
(iii) Borrower shall compensate all employees, consultants and agents
directly or indirectly through reimbursement of the Parent, from the Borrower's
bank accounts, for services provided to the Borrower by such employees,
consultants and agents and, to the extent any employee, consultant or agent of
the Borrower is also an employee, consultant or agent of such member of the
Parent Group on a basis which reflects the respective services rendered to the
Borrower and such member of the Parent Group and in accordance with the terms of
the Administrative Services Agreement;
(iv) Borrower shall pay its own incidental administrative costs and
expenses not covered under the terms of the Administrative Services Agreement
from its own funds, and shall allocate all other shared overhead expenses
(including, without limitation, telephone and other utility charges, the
services of shared employees, consultants and agents, and reasonable legal and
auditing expenses) which are not reflected in the Servicing Fee, and other items
of cost and expense shared between the Borrower and the Parent, pursuant to the
terms of the Administrative Services Agreement, on the basis of actual use to
the extent practicable and, to the extent such allocation is not practicable, on
a basis reasonably related to actual use or the value of services rendered;
(v) other than the purchase and acceptance through capital contribution
of Transferred Receivables, the acceptance of Subordinated Loans pursuant to the
Subordinated Notes, the payment of distributions and the return of capital to
the Member, the payment of Servicing Fees to the Servicer under this Agreement
and the transactions contemplated under the Administrative Services Agreement,
the Borrower engages and has engaged in no intercorporate transactions with any
member of the Parent Group;
(vi) the Borrower maintains records and books of account separate from
that of each member of the Parent Group, holds regular meetings and otherwise
observes limited liability company formalities;
(vii) (A) the financial statements (other than consolidated financial
statements) and books and records of the Borrower and each member of the Parent
Group reflect the separate existence of the Borrower and (B) the consolidated
financial statements of the Parent Group shall contain disclosure to the effect
that the Borrower's assets are not available to the creditors of any member of
the Parent Group;
(viii) (A) the Borrower maintains its assets separately from the assets
of each member of the Parent Group (including through the maintenance of
separate bank accounts and except for any
16
Records to the extent necessary to assist the Servicer in connection with the
servicing of the Transferred Receivables), (B) except as contemplated by the
Administrative Services Agreement the Borrower's funds (including all money,
checks and other cash proceeds) and assets, and records relating thereto, have
not been and are not commingled with those of any member of the Parent Group and
(C) the separate creditors of the Borrower will be entitled to be satisfied out
of the Borrower's assets prior to any value in the Borrower becoming available
to the Member;
(ix) except as otherwise expressly permitted hereunder, under the other
Related Documents and under the Borrower's organizational documents, no member
of the Parent Group (A) pays the Borrower's expenses, (B) guarantees the
Borrower's obligations, or (C) advances funds to the Borrower for the payment of
expenses or otherwise;
(x) all business correspondence and other communications of the
Borrower are conducted in the Borrower's own name, on its own stationery and
through a separately-listed telephone number;
(xi) Borrower shall maintain separate office space from the offices of
any member of the Parent Group and identify such office by a sign in its own
name;
(xii) Borrower shall respond to any inquiries with respect to ownership
of a Transferred Receivable by stating that it is the owner of such Transferred
Receivable, and that such Transferred Receivable is pledged to the
Administrative Agent for the benefit of the Lenders;
(xiii) the Borrower does not act as agent for any member of the Parent
Group, but instead presents itself to the public as a legal entity separate from
each such member and independently engaged in the business of purchasing and
financing Receivables;
(xiv) the Borrower maintains at least two independent directors each of
whom (A) is not a Stockholder, director, officer, employee or associate, or any
relative of the foregoing, of any member of the Parent Group (other than the
Borrower), all as provided in its limited liability company agreement, (B) has
(1) prior experience as an independent director for an entity whose
organizational documents required the unanimous consent of all independent
directors thereof before such corporation could consent to the institution of
bankruptcy or insolvency proceedings against it or could file a petition seeking
relief under any applicable federal or state law relating to bankruptcy and
(2) at least two years of employment experience with one or more entities that
provide, in the ordinary course of their respective businesses, advisory,
management, independent director services or placement services to issuers of
securitization or structured finance instruments, agreements or securities, and
(C) is otherwise acceptable to the Lenders and the Administrative Agent; and
(xv) the limited liability company agreement of the Borrower requires
(A) the affirmative vote of each independent director before a voluntary
petition under Section 301 of the Bankruptcy Code may be filed by the Borrower,
and (B) the Borrower to maintain (1) correct and complete books and records of
account and (2) minutes of the meetings and other proceedings of its members and
board of directors.
(q) Deposit and Disbursement Accounts. Schedule 4.01(q) lists all banks
and other financial institutions at which the Borrower maintains deposit or
other bank accounts as of the Closing Date, including any Lockbox Accounts and
the Borrower Account, and such schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number
therefor. The Borrower Account and each Lockbox Account constitute deposit
accounts within the meaning of the UCC. The Borrower (or the Servicer on its
behalf) has delivered to the Administrative Agent a fully executed agreement
pursuant to which the Borrower Account Bank (with respect to the Borrower
Account) and each Lockbox Account Bank (with respect to each Lockbox Account)
has agreed to comply with all instructions originated by the Administrative
Agent directing the disposition of funds in the Borrower
17
Account and each Lockbox Account without further consent by the Borrower, the
Servicer or any Originator. None of the Borrower Account or any Lockbox Account
is in the name of any person other than the Borrower or the Administrative
Agent, and the Borrower has not consented to the Borrower Account Bank or any
Lockbox Account Bank following the instructions of any Person other than the
Administrative Agent. Accordingly, the Administrative Agent has a first priority
perfected security interest in the Borrower Account and each Lockbox Account,
and all funds on deposit therein.
(r) Transferred Receivables.
(i) Transfers. Each Transferred Receivable was purchased by or
contributed to the Borrower on the relevant Transfer Date pursuant to the Sale
Agreement.
(ii) Eligibility. Each Transferred Receivable designated as an Eligible
Receivable in each Borrowing Base Certificate constitutes an Eligible Receivable
as of the date specified in such Borrowing Base Certificate.
(iii) No Material Adverse Effect. The Borrower has no actual knowledge
of any fact (including any defaults by the Obligor thereunder on any other
Receivable) that would cause it or should have caused it to expect that any
payments on any Transferred Receivable designated as an Eligible Receivable in
any Borrowing Base Certificate will not be paid in full when due or that has
caused it to expect any material adverse effect on any such Transferred
Receivable.
(iv) Nonavoidability of Transfers. The Borrower shall (A) have received
each Contributed Receivable as a contribution to the capital of the Borrower by
the Member and (B) (1) have purchased each Sold Receivable from the applicable
Originator for cash consideration or with the proceeds of a Subordinated Loan
and (2) have accepted assignment of any Eligible Receivables transferred
pursuant to clause (b) of Section 4.04 of the Sale Agreement, in each case in an
amount that constitutes fair consideration and reasonably equivalent value
therefor. Each Sale of a Sold Receivable effected pursuant to the terms of the
Sale Agreement shall not have been made for or on account of an antecedent debt
owed by any Originator to the Borrower and no such Sale is or may be avoidable
or subject to avoidance under any bankruptcy laws, rules or regulations.
(s) Assignment of Interest in Related Documents. The Borrower's
interests in, to and under the Receivables Sale Agreement and the Parent
Agreement have been assigned by the Borrower to the Administrative Agent (for
the benefit of itself and the Lenders).
(t) Representations and Warranties in Other Related Documents. Each
of the representations and warranties of the Borrower contained in the Related
Documents (other than this Agreement) is true and correct in all respects and
the Borrower hereby makes each such representation and warranty to, and for the
benefit of, the Lenders and the Administrative Agent as if the same were set
forth in full herein.
ARTICLE V.
GENERAL COVENANTS OF THE BORROWER
Section 5.01. Affirmative Covenants of the Borrower. The Borrower
covenants and agrees that from and after the Effective Date and until the
Termination Date:
(a) Compliance with Agreements and Applicable Laws. The Borrower shall
(i) perform each of its obligations under this Agreement and the other Related
Documents and (ii) comply with all federal, state and local laws and regulations
applicable to it and the Transferred Receivables, including those relating to
truth in lending, retail installment sales, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices, privacy,
licensing, taxation, ERISA and labor matters and environmental laws and
environmental permits, except, solely with respect to this clause (ii), where
the failure to so comply would not have an adverse effect on
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(1) the business, assets, liabilities, operations, prospects or financial or
(b) Maintenance of Existence and Conduct of Business. The Borrower
shall: (i) do or cause to be done all things necessary to preserve and keep in
full force and effect its limited liability company existence and its rights and
franchises; (ii) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder and in accordance with (1) the terms of its
limited liability company agreement, (2) Section 4.01(p) and (3) the assumptions
set forth in each legal opinion of Proskauer Rose LLP and Stikeman, Elliott or
other counsel to the Borrower from time to time delivered pursuant to
Section 3.02(d) of the Sale Agreement with respect to issues of substantive
consolidation and true sale and absolute transfer; (iii) at all times maintain,
preserve and protect all of its assets and properties used or useful in the
conduct of its business, including all licenses, permits, charters and
registrations, and keep the same in good repair, working order and condition in
all material respects (taking into consideration ordinary wear and tear) and
from time to time make, or cause to be made, all necessary or appropriate
repairs, replacements and improvements thereto consistent with industry
practices; and (iv) transact business only in the name of Superior Essex Funding
LLC or such trade names as are set forth in Schedule 5.01(b).
(c) Lockboxes; Deposit of Collections. The Borrower shall deposit or
cause to be deposited promptly into a Lockbox Account, and in any event no later
than the first Business Day after receipt thereof, all Collections it may
receive with respect to any Transferred Receivable.
(d) Use of Proceeds. The Borrower shall utilize the proceeds of the
Advances made hereunder solely for (i) the repayment of Advances made hereunder
and the payment of any fees due hereunder, (ii) the purchase of Receivables from
the Originators pursuant to the Sale Agreement, (iii) the payment of
distributions to the Member, (iv) the repayment of Subordinated Loans, and
(v) the payment of administrative fees or Servicing Fees or expenses to the
Servicer or routine administrative or operating expenses, in each case only as
expressly permitted by and in accordance with the terms of this Agreement and
the other Related Documents.
(e) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 5.01(e)(ii), the Borrower shall pay, perform
and discharge or cause to be paid, performed and discharged promptly all charges
and claims payable by it, including (A) Charges imposed upon it, its income and
profits, or any of its property (real, personal or mixed) and all Charges with
respect to tax, social security and unemployment withholding with respect to its
employees, and (B) lawful claims for labor, materials, supplies and services or
otherwise before any thereof shall become past due.
(ii) The Borrower may in good faith contest, by appropriate
proceedings, the validity or amount of any charges or claims described in
Section 5.01(e)(i); provided, that (A) adequate reserves with respect to such
contest are maintained on the books of the Borrower, in accordance with GAAP,
(B) such contest is maintained and prosecuted continuously and with diligence,
(C) none of the Borrower Collateral becomes subject to forfeiture or loss as a
result of such contest, (D) no Lien shall be imposed to secure payment of such
charges or claims other than inchoate tax liens and (E) none of the Lenders or
the Administrative Agent has advised the Borrower in writing that such Affected
Party reasonably believes that failure to pay or to discharge such claims or
charges could have or result in a Material Adverse Effect.
(f) ERISA. The Borrower shall give the Administrative Agent prompt
written notice of any event that (i) could reasonably be expected to result in
the imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA, or (ii) could reasonably be expected to result in the incurrence by
Borrower of any liabilities under Title IV of ERISA (other than premium payments
arising in the ordinary course of business).
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Section 5.02. Reporting Requirements of the Borrower. The Borrower
hereby agrees that from and after the Effective Date until the Termination Date,
it shall furnish or cause to be furnished to the Administrative Agent and the
Lenders:
(a) The financial statements, notices and other information at the
times, to the Persons and in the manner set forth in Annex 5.02(a).
(b) As soon as available, and in any event no later than 12:00 Noon
(New York time) on the third Business Day of each week, a completed certificate
in the form attached hereto as Exhibit 5.02(b) (each, a "Borrowing Base
Certificate"), each of which shall be prepared by the Borrower or the Servicer
as of the last day of the previous week; provided, that if (i) an Incipient
Termination Event or a Termination Event shall have occurred and be continuing
or (ii) the Administrative Agent, in good faith, believes that an Incipient
Termination Event or a Termination Event is imminent or deems the Lender's
rights or interests in the Transferred Receivables or the Borrower Collateral
insecure, then such reports shall be delivered daily.
(c) Such other reports, statements and reconciliations with respect to
the Borrowing Base or Borrower Collateral as any Lender or the Administrative
Agent shall from time to time request in its reasonable discretion.
Section 5.03. Negative Covenants of the Borrower. The Borrower
covenants and agrees that, without the prior written consent of the Requisite
Lenders and the Administrative Agent, from and after the Effective Date until
the Termination Date:
(a) Sale of Membership Interests and Assets. The Borrower shall not
sell, transfer, convey, assign or otherwise dispose of, or assign any right to
receive income in respect of, any of its properties or other assets or any of
its membership interests (whether in a public or a private offering or
otherwise), any Transferred Receivable or Contract therefor or any of its rights
with respect to any Lockbox or any Lockbox Account, the Collection Account or
any other deposit account in which any Collections of any Transferred Receivable
are deposited except as otherwise expressly permitted by this Agreement or any
of the other Related Documents.
(b) Liens. The Borrower shall not create, incur, assume or permit to
exist (i) any Adverse Claim on or with respect to its Transferred Receivables or
(ii) any Adverse Claim on or with respect to its other properties or assets
(whether now owned or hereafter acquired) except for the Liens set forth in
Schedule 5.03(b) and other Permitted Encumbrances. In addition, the Borrower
shall not become a party to any agreement, note, indenture or instrument or take
any other action that would prohibit the creation of a Lien on any of its
properties or other assets in favor of the Lenders as additional collateral for
the Borrower Obligations, except as otherwise expressly permitted by this
Agreement or any of the other Related Documents.
(c) Modifications of Receivables, Contracts or Credit and Collection
Policies. The Borrower shall not, without the prior written consent of the
Administrative Agent, (i) extend, amend, forgive, discharge, compromise, waive,
cancel or otherwise modify the terms of any Transferred Receivable or amend,
modify or waive any term or condition of any Contract related thereto, provided,
that the Borrower may authorize the Servicer to take such actions as are
expressly permitted by the terms of any Related Document or the Credit and
Collection Policies, or (ii) amend, modify or waive any term or provision of the
Credit and Collection Policies.
(d) Changes in Instructions to Obligors. The Borrower shall not make
any change in its instructions to Obligors regarding the deposit of Collections
with respect to the Transferred Receivables, except to the extent the
Administrative Agent directs the Borrower to change such instructions to
Obligors or the Administrative Agent consents in writing to such change.
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(e) Capital Structure and Business. The Borrower shall not (i) make any
changes in any of its business objectives, purposes or operations, (ii) make any
change in its capital structure, including the issuance of any membership
interests, warrants or other securities convertible into membership interests or
any revision of the terms of its outstanding membership interests, (iii) amend,
waive or modify any term or provision of its certificate of formation or limited
liability company agreement, (iv) make any change to its name indicated on the
public records of its jurisdiction of organization or (v) change its
jurisdiction of organization. The Borrower shall not engage in any business
other than as provided in its certificate of formation, limited liability
company agreement and the Related Documents.
(f) Mergers, Subsidiaries, Etc. The Borrower shall not directly or
indirectly, by operation of law or otherwise, (i) form or acquire any
Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially
all of the assets or capital Stock of, or otherwise combine with or acquire, any
Person.
(g) Sale Characterization; Receivables Sale Agreement. The Borrower
shall not make statements or disclosures, prepare any financial statements or in
any other respect account for or treat the transactions contemplated by the Sale
Agreement (including for accounting, tax and reporting purposes) in any manner
other than (i) with respect to each Sale of each Sold Receivable effected
pursuant to the Sale Agreement, as a true sale and absolute assignment of the
title to and sole record and beneficial ownership interest of the Transferred
Receivables by the Originators to the Borrower and (ii) with respect to each
contribution of Contributed Receivables thereunder, as an increase in the stated
capital of the Borrower.
(h) Restricted Payments. Except for the Subordinated Loans, the
Borrower shall not enter into any lending transaction with any other Person. The
Borrower shall not at any time (i) advance credit to any Person or (ii) declare
any distributions, repurchase any membership interest, return any capital, or
make any other payment or distribution of cash or other property or assets in
respect of the Borrower's membership interest or make a repayment with respect
to any Subordinated Loans if, after giving effect to any such advance or
distribution, a Funding Excess, Incipient Termination Event or Termination Event
would exist or otherwise result therefrom.
(i) Indebtedness. The Borrower shall not create, incur, assume or
permit to exist any Debt, except (i) Debt of the Borrower to any Affected Party,
Indemnified Person, the Servicer or any other Person expressly permitted by this
Agreement or any other Related Document, (ii) Subordinated Loans pursuant to the
Subordinated Notes, (iii) deferred taxes, (iv) unfunded pension fund and other
employee benefit plan obligations and liabilities to the extent they are
permitted to remain unfunded under applicable law, and (v) endorser liability in
connection with the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business.
(j) Prohibited Transactions. The Borrower shall not enter into, or be
a party to, any transaction with any Person except as expressly permitted
hereunder or under any other Related Document.
(k) Investments. Except as otherwise expressly permitted hereunder or
under the other Related Documents, the Borrower shall not make any investment
in, or make or accrue loans or advances of money to, any Person, including the
Member, any director, officer or employee of the Borrower, the Parent or any of
the Parent's other Subsidiaries, through the direct or indirect lending of
money, holding of securities or otherwise, except with respect to Transferred
Receivables, Permitted Investments and investments received in connection with
the bankruptcy or reorganization of any Obligor of a Transferred Receivable.
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(l) Commingling. The Borrower shall not deposit or permit the deposit
of any funds that do not constitute Collections of Transferred Receivables into
any Lockbox Account. If funds that are not Collections are deposited into a
Lockbox Account and the Servicer has so notified the Administrative Agent in
writing, the Administrative Agent shall promptly remit (or direct the applicable
Lockbox Account Bank to remit) any such amounts that are not Collections to the
applicable Originator or other Person designated in such notice from the
Servicer.
(m) ERISA. The Borrower shall not, and shall not cause or permit any of
its ERISA Affiliates to, cause or permit to occur an event that (i) could
reasonably be expected to result in the imposition of a Lien under Section 412
of the IRC or Section 302 or 4068 of ERISA, or (ii) could reasonably be expected
to result in the incurrence by Borrower of any liabilities under Title IV of
ERISA (other than premium payments arising in the ordinary course of business).
(n) Related Documents. The Borrower shall not amend, modify or waive
any term or provision of any Related Document without the prior written consent
of the Administrative Agent.
(o) Board Policies. The Borrower shall not modify the terms of any
policy or resolutions of its board of directors if such modification could
reasonably be expected to have or result in a Material Adverse Effect.
(p) Additional Members of Borrower. The Borrower shall not admit any
additional member without the prior written consent of the Administrative Agent
and the Requisite Lenders other than a "Special Member" as such term is defined
in the Borrower's limited liability company agreement as of the date hereof.
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ARTICLE VI.
ACCOUNTS
Section 6.01. Establishment of Accounts.
(a) The Lockbox Accounts.
(i) The Borrower has established with each Lockbox Bank one or more
Lockbox Accounts. The Borrower agrees that the Administrative Agent shall have
exclusive dominion and control of each Lockbox Account and all monies,
instruments and other property from time to time on deposit therein. The
Borrower shall not make or cause to be made, or have any ability to make or
cause to be made, any withdrawals from any Lockbox Account except as provided in
Section 6.01(b)(ii).
(ii) The Borrower and the Servicer have instructed all existing
Obligors of Transferred Receivables, and shall instruct all future Obligors of
such Receivables, to make payments in respect thereof only (A) by check or money
order mailed to one or more lockboxes or post office boxes under the control of
the Administrative Agent (each a "Lockbox" and collectively the "Lockboxes") or
(B) by wire transfer or moneygram directly to a Lockbox Account.
Schedule 4.01(q) lists all Lockboxes and all Lockbox Banks at which the Borrower
maintains Lockbox Accounts as of the Effective Date, and such schedule correctly
identifies (1) with respect to each such Lockbox Bank, the name, address and
telephone number thereof, (2) with respect to each Lockbox Account, the name in
which such account is held and the complete account number therefor, and
(3) with respect to each Lockbox, the lockbox number and address thereof. The
Borrower and the Servicer shall endorse, to the extent necessary, all checks or
other instruments received in any Lockbox so that the same can be deposited in
the Lockbox Account, in the form so received (with all necessary endorsements),
on the first Business Day after the date of receipt thereof. In addition, each
of the Borrower and the Servicer shall deposit or cause to be deposited into a
Lockbox Account all cash, checks, money orders or other proceeds of Transferred
Receivables or Borrower Collateral received by it other than in a Lockbox or a
Lockbox Account, in the form so received (with all necessary endorsements), not
later than the close of business on the first Business Day following the date of
receipt thereof, and until so deposited all such items or other proceeds shall
be held in trust for the benefit of the Administrative Agent. Neither the
Borrower nor the Servicer shall make any deposits into a Lockbox or any Lockbox
Account except in accordance with the terms of this Agreement or any other
Related Document.
(iii) If, for any reason, a Lockbox Account Agreement terminates or any
Lockbox Bank fails to comply with its obligations under the Lockbox Account
Agreement to which it is a party, then the Borrower shall promptly notify all
Obligors of Transferred Receivables who had previously been instructed to make
wire payments to a Lockbox Account maintained at any such Lockbox Bank to make
all future payments to a new Lockbox Account in accordance with this
Section 6.01(a)(iii). The Borrower shall not close any such Lockbox Account
unless it shall have (A) received the prior written consent of the
Administrative Agent, (B) established a new account with the same Lockbox Bank
or with a new depositary institution satisfactory to the Administrative Agent,
(C) entered into an agreement covering such new account with such Lockbox Bank
or with such new depositary institution substantially in the form of such
Lockbox Account Agreement or that is satisfactory in all respects to the
Administrative Agent (whereupon, for all purposes of this Agreement and the
other Related Documents, such new account shall become a Lockbox Account, such
new agreement shall become a Lockbox Account Agreement and any new depositary
institution shall become a Lockbox Bank), and (D) taken all such action as the
Administrative Agent shall require to grant and perfect a first priority Lien in
such new Lockbox Account to the Lender under Section 8.01 of this Agreement.
Except as permitted by this Section 6.01(a), neither
23
the Borrower nor the Servicer shall open any new Lockbox or Lockbox Account
without the prior written consent of the Administrative Agent.
(b) Collection Account.
(i) The Lenders have established and shall maintain the Collection
Account with Deutsche Bank Trust Company Americas (the "Depositary"). The
Collection Account shall be registered in the name of the Administrative Agent
and the Administrative Agent shall, subject to the terms of this Agreement, have
exclusive dominion and control thereof and of all monies, instruments and other
property from time to time on deposit therein.
(ii) The Borrower shall instruct each Lockbox Bank to transfer, and the
Borrower hereby grants the Administrative Agent the authority to instruct each
such Lockbox Bank to transfer, on each Business Day in same day funds, all
available funds in each Lockbox Account to the Collection Account. The Lenders
and the Administrative Agent may deposit into the Collection Account from time
to time all monies, instruments and other property received by any of them as
proceeds of the Transferred Receivables.
(iii) If, for any reason, the Depositary wishes to resign as depositary
of the Collection Account or fails to carry out the instructions of the
Administrative Agent, then the Administrative Agent shall promptly notify the
Lenders. Neither the Lenders nor the Administrative Agent shall close the
Collection Account unless (A) a new deposit account has been established with a
new depositary institution, (B) the Lenders and the Administrative Agent have
entered into an agreement covering such new account with such new depositary
institution satisfactory in all respects to the Administrative Agent (whereupon
such new account shall become the Collection Account and such new depositary
institution shall become the Depositary for all purposes of this Agreement and
the other Related Documents), and (C) the Lenders and the Administrative Agent
have taken all such action as the Administrative Agent shall require to grant
and perfect a first priority Lien in such new Collection Account to the
Administrative Agent on behalf of the Lenders.
(c) Borrower Account.
(i) The Borrower has established the Borrower Account and agrees that
the Administrative Agent shall have exclusive dominion and control of such
Borrower Account and all monies, instruments and other property from time to
time on deposit therein.
(ii) The Administrative Agent hereby agrees that until such time as it
instructs the Borrower Account Bank otherwise, the Borrower shall have the right
to give instruction for the withdrawal, transfer or payment of funds on deposit
in the Borrower Account. The Administrative Agent further agrees that it shall
not instruct the Borrower Account Bank to no longer accept instructions from the
Borrower unless an Incipient Termination Event or a Termination Event shall have
occurred and be continuing.
ARTICLE VII.
SERVICER PROVISIONS
Section 7.01. Appointment of the Servicer. Each of the Lenders
hereby appoints the Servicer as its agent, and the Borrower hereby acknowledges
and agrees to such appointment, to service the Transferred Receivables and
enforce the Borrower's, the Lenders' and the Administrative Agent's rights and
interests in and under each Transferred Receivable and Contract therefor and to
serve in such capacity until the termination of its responsibilities pursuant to
Sections 9.02 or 11.01. In connection therewith, the Servicer hereby accepts
such appointment and agrees to perform the duties and obligations set forth
herein. The Servicer may, with the prior written consent of the Requisite
Lenders
24
and the Administrative Agent, subcontract with a Sub-Servicer for the
collection, servicing or administration of the Transferred Receivables;
provided, that (a) the Servicer shall remain liable for the performance of the
duties and obligations of such Sub-Servicer pursuant to the terms hereof,
(b) any Sub-Servicing Agreement that may be entered into and any other
transactions or services relating to the Transferred Receivables involving a
Sub-Servicer shall be deemed to be between the Sub-Servicer and the Servicer
alone, and the Lenders and the Administrative Agent shall not be deemed parties
thereto and shall have no obligations, duties or liabilities with respect to the
Sub-Servicer and (c) each Sub-Servicing Agreement shall expressly provide that
it shall automatically terminate upon the termination of the Servicer's
responsibilities hereunder in accordance with the terms hereof.
Section 7.02. Duties and Responsibilities of the Servicer. Subject
to the provisions of this Agreement, the Servicer shall conduct the servicing,
administration and collection of the Transferred Receivables and shall take, or
cause to be taken, all actions that (i) may be necessary or advisable to
service, administer and collect each Transferred Receivable from time to time,
(ii) the Servicer would take if the Transferred Receivables were owned by the
Servicer, and (iii) are consistent with industry practice for the servicing of
such Transferred Receivables.
Section 7.03. Collections on Receivables.
(a) In the event that the Servicer is unable to determine the specific
Transferred Receivables on which Collections have been received from the Obligor
thereunder, the parties agree for purposes of this Agreement only that such
Collections shall be deemed to have been received on such Receivables in the
order in which they were originated with respect to such Obligor. In the event
that the Servicer is unable to determine the specific Transferred Receivables on
which discounts, offsets or other non-cash reductions have been granted or made
with respect to the Obligor thereunder, the parties agree for purposes of this
Agreement only that such reductions shall be deemed to have been granted or made
(i) prior to a Termination Event, on such Receivables as determined by the
Servicer, and (ii) from and after the occurrence of a Termination Event, in the
reverse order in which they were originated with respect to such Obligor.
(b) If the Servicer determines that amounts unrelated to the
Transferred Receivables (the "Unrelated Amounts") have been deposited in the
Collection Account, then the Servicer shall provide written evidence thereof to
the Lenders and the Administrative Agent no later than the first Business Day
following the day on which the Servicer had actual knowledge thereof, which
evidence shall be provided in writing and shall be otherwise reasonably
satisfactory to each such Affected Party. Upon receipt of any such notice, the
Administrative Agent shall, if such amounts have not been applied to the
Borrower Obligations, segregate the Unrelated Amounts and the same shall not be
deemed to constitute Collections on Transferred Receivables.
Section 7.04. Authorization of the Servicer. Each of the Lenders
hereby authorizes the Servicer, and the Borrower acknowledges and agrees to such
authorization, to take any and all reasonable steps in its name and on its
behalf necessary or desirable and not inconsistent with the rights of the
Administrative Agent and the Lenders hereunder, in the determination of the
Servicer, to (a) collect all amounts due under any Transferred Receivable,
including endorsing the applicable name on checks and other instruments
representing Collections on such Receivable, and execute and deliver any and all
instruments of satisfaction or cancellation or of partial or full release or
discharge and all other comparable instruments with respect to any such
Receivable and (b) after any Transferred Receivable becomes a Delinquent
Receivable or a Defaulted Receivable and to the extent permitted under and in
compliance with applicable law and regulations, commence proceedings with
respect to the enforcement of payment of any such Receivable and the Contract
therefor and adjust, settle or compromise any payments due thereunder, in each
case to the same extent as the applicable Originator could have done if it had
continued to own such Receivable. The Borrower, the Administrative Agent and
each Lender shall furnish the Servicer with any powers of attorney and other
documents necessary or appropriate to
25
enable the Servicer to carry out its servicing and administrative duties
hereunder. Notwithstanding anything to the contrary contained herein, the
Lenders and the Administrative Agent shall have the absolute and unlimited right
to direct the Servicer (at the Servicer's expense) (i) to commence or settle any
legal action to enforce collection of any Transferred Receivable or (ii) to
foreclose upon, repossess or take any other action that the Administrative Agent
deems necessary or advisable with respect thereto. In no event shall the
Servicer be entitled to make any Affected Party a party to any Litigation
without such Affected Party's express prior written consent, or to make the
Borrower a party to any Litigation without the Administrative Agent's consent.
Section 7.05. Servicing Fees. As compensation for its servicing
activities and as reimbursement for its reasonable expenses in connection
therewith, the Servicer shall be entitled to receive the Servicing Fees in
accordance with Section 2.07. The Servicer shall be required to pay for all
expenses incurred by it in connection with its activities hereunder (including
any payments to accountants, counsel or any other Person) and shall not be
entitled to any payment therefor other than the Servicing Fees.
Section 7.06. Representations and Warranties of the Servicer. To
induce the Lenders to make Advances from time to time and the Administrative
Agent to take any action required to be performed by it hereunder, the Servicer
Administrative Agent on the Effective Date and each Advance Date, which shall
survive the execution and delivery of this Agreement:
(a) Corporate Existence; Compliance with Law. The Servicer (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation; (ii) is duly qualified to conduct business
and is in good standing in each other jurisdiction where its ownership or lease
of property or the conduct of its business requires such qualification, except
where the failure to so qualify could not reasonably be expected to result in a
Material Adverse Effect; (iii) has the requisite corporate power and authority
and the legal right to own, pledge, mortgage or otherwise encumber and operate
its properties, to lease the property it operates under lease, and to conduct
its business, in each case, as now, heretofore and proposed to be conducted;
(iv) has all licenses, permits, consents or approvals from or by, and has made
all filings with, and has given all notices to, all Governmental Authorities
having jurisdiction, to the extent required for such ownership, operation and
conduct, except where the failure to do any of the foregoing could not
reasonably be expected to result in a Material Adverse Effect; (v) is in
compliance with its charter and bylaws; and (vi) subject to specific
representations set forth herein regarding ERISA, tax and other laws, is in
compliance with all applicable provisions of law, except where the failure to so
comply could not reasonably be expected to result in a Material Adverse Effect.
(b) Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by the Servicer of this Agreement and the
other Related Documents to which it is a party and, solely with respect to
clause (vii) below, the exercise by each of the Borrower, the Lenders or the
Document to which it is a party (i) are within the Servicer's corporate power;
(ii) have been duly authorized by all necessary or proper corporate and
shareholder action; (iii) do not contravene any provision of the Servicer's
certificate or articles of incorporation or bylaws; (iv) do not violate any law
or regulation, or any order or decree of any court or Governmental Authority
applicable to Servicer; (v) do not conflict with or result in the breach or
trust, lease, agreement or other instrument to which the Servicer is a party or
by which the Servicer or any of the property of the Servicer is bound; (vi) do
not result in the creation or imposition of any Adverse Claim upon any of the
property of the Servicer; and (vii) do not require the consent or approval of
duly obtained, made or complied with prior to the Closing Date as
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Related Documents to which the Servicer is a party shall have been duly executed
and delivered by the Servicer and each such Related Document shall then
constitute a legal, valid and binding obligation of the Servicer enforceable
(c) No Litigation. No Litigation is now pending or, to the knowledge of
the Servicer, threatened against the Servicer that (i) challenges the Servicer's
Documents, or (iii) except as set forth on Schedule 7.06(c), that, if adversely
(d) Solvency. (i) No insolvency proceedings of any nature are now
pending or threatened against the Servicer, and (ii) the Servicer is generally
paying its debts as they become due.
(e) Taxes. All material tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by the
Servicer and each of its Affiliates included in the Parent Group have been filed
with the appropriate Governmental Authority and all Charges have been paid prior
to the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof (or any such fine, penalty, interest, late charge
or loss has been paid), excluding Charges or other amounts being contested in
accordance with Section 7.07(g). Proper and accurate amounts have been withheld
by the Servicer or such Affiliate from its respective employees for all periods
in compliance in all material respects with all applicable federal, state, local
and foreign laws and such withholdings have been timely paid to the respective
Governmental Authorities. Schedule 7.06(e) sets forth as of the Closing Date
(i) those taxable years for which the Servicer's or such Affiliates' tax returns
are currently being audited by the IRS or any other applicable Governmental
Authority and (ii) any assessments or threatened assessments in connection with
any such audit or otherwise currently outstanding. Except as described on
Schedule 7.06(e), neither the Servicer nor any such Affiliate has executed or
filed with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for assessment
or collection of any Charges. Except as described in Schedule 7.06(e), the
Servicer is not liable for any Charges: (A) under any agreement (including any
tax sharing agreements) or (B) to the best of the Servicer's knowledge, as a
transferee.
(f) Full Disclosure. To the extent prepared by or based upon
information provided by the Servicer, all information contained in this
Agreement, any Borrowing Base Certificate or any of the other Related Documents,
or any written statement furnished to any Lender or the Administrative Agent
pursuant to the terms of this Agreement or any of the other Related Documents
(which shall not include any projections or pro forma financial information), in
each case, taken as a whole, is true and accurate in every material respect, and
none of this Agreement, any Borrowing Base Certificate or any of the other
Related Documents, or any written statement furnished to any Lender or the
Related Documents in each case, taken as whole, is misleading as a result of the
failure to include therein a material fact. All information contained in this
or any written statement furnished to any Lender or the Administrative Agent has
been prepared in good faith by the management of the Servicer with the exercise
of reasonable diligence.
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(g) ERISA. The Servicer is in compliance with ERISA and has not
ERISA.
(h) Brokers. No broker or finder acting on behalf of the Servicer was
Documents or the transactions contemplated hereby or thereby and the Servicer
connection therewith.
(i) Margin Regulations. The Servicer is not engaged in the business
of extending credit for the purpose of "purchasing" or "carrying" any "margin
referred to herein as "Margin Stock"). The Servicer owns no Margin Stock, and no
of Regulations T, U or X of the Federal Reserve Board. The Servicer will not
(j) Government Regulation. The Servicer is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act.
(k) No Material Adverse Effect. The Servicer has no actual knowledge of
Receivable.
(l) Representations and Warranties in Other Related Documents. Each
of the representations and warranties of the Servicer contained in the Related
the Servicer hereby makes each such representation and warranty to, and for the
Section 7.07. Covenants of the Servicer. The Servicer covenants
and agrees that from and after the Effective Date and until the Termination
Date:
(a) Compliance with Agreements and Applicable Laws. The Servicer shall
perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state and local laws and regulations
environmental permits, except where the failure to so comply could not
reasonably be expected to result in a Material Adverse Effect.
(b) Maintenance of Existence and Conduct of Business. The Servicer
full force and effect its corporate existence and its rights and franchises;
(ii) continue to conduct its business substantially as now conducted or as
otherwise permitted hereunder and in accordance with the terms of its
certificate or articles of incorporation and bylaws; (iii) at all times
maintain, preserve and protect all of its assets and properties used or useful
in the conduct of its business, including all licenses, permits, charters and
all material
28
respects (taking into consideration ordinary wear and tear) and from time to
time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices; and
(iv) without notifying the Administrative Agent in writing at least thirty
(30) days prior thereto, and subject to satisfaction of all actions requested by
the Administrative Agent pursuant to Section 14.14, transact business only in
such corporate and trade names as are set forth in Schedule 7.07(b).
(c) Deposit of Collections. The Servicer shall deposit or cause to be
deposited promptly into a Lockbox Account, and in any event no later than the
first Business Day after receipt thereof, all Collections it may receive with
respect to any Transferred Receivable.
(d) ERISA. The Servicer shall give the Administrative Agent prompt
Servicer of any liabilities under Title IV of ERISA (other than premium payments
(e) Compliance with Credit and Collection Policies. The Servicer shall
comply in all material respects with the Credit and Collection Policies with
respect to each Transferred Receivable and the Contract therefor. The Servicer
shall not amend, waive or modify any term or provision of the Credit and
Collection Policies without the prior written consent of the Administrative
Agent.
(f) Ownership of Transferred Receivables. The Servicer shall identify
the Transferred Receivables clearly and unambiguously in its Servicing Records
to reflect that a Lien on such Transferred Receivables has been granted to the
Administrative Agent for the benefit of the Lenders.
(g) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 7.07(g)(ii), the Servicer shall pay, perform
(ii) The Servicer may in good faith contest, by appropriate
Section 7.07(g)(i); provided that (A) adequate reserves with respect to such
contest are maintained on the books of the Servicer, in accordance with GAAP,
the Administrative Agent has advised the Servicer in writing that such Affected
Section 7.08. Reporting Requirements of the Servicer. The Servicer
hereby agrees that, from and after the Effective Date and until the Termination
Date, it shall deliver or cause to be delivered to the Lenders and the
Administrative Agent the financial statements, notices, and other information at
the times, to the Persons and in the manner set forth in Section 5.02 and Annex
5.02(a).
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ARTICLE VIII
GRANT OF SECURITY INTERESTS
Section 8.01. Borrower's Grant of Security Interest. To secure the
prompt and complete payment, performance and observance of all Borrower
Obligations, and to induce the Administrative Agent and the Lenders to enter
into this Agreement and perform the obligations required to be performed by them
hereunder in accordance with the terms and conditions hereof, the Borrower
hereby grants, assigns, conveys, pledges, hypothecates and transfers to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, a Lien upon and security interest in all of the Borrower's right, title
and interest in, to and under, but none of its obligations arising from, the
following property, whether now owned by or owing to, or hereafter acquired by
or arising in favor of, the Borrower (including under any trade names, styles or
derivations of the Borrower), and regardless of where located (all of which
being hereinafter collectively referred to as the "Borrower Collateral"):
(a) all Receivables;
(b) the Sale Agreement, all Lockbox Account Agreements and all other
Related Documents now or hereafter in effect relating to the purchase, servicing
or processing of Receivables (collectively, the "Borrower Assigned Agreements"),
including (i) all rights of the Borrower to receive moneys due and to become due
thereunder or pursuant thereto, (ii) all rights of the Borrower to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect thereto,
(iii) all claims of the Borrower for damages or breach with respect thereto or
for default thereunder and (iv) the right of the Borrower to amend, waive or
terminate the same and to perform and to compel performance and otherwise
exercise all remedies thereunder;
(c) all of the following (collectively, the "Borrower Account
Collateral"):
(i) the Lockbox Accounts, the Lockboxes, and all funds on deposit
therein and all certificates and instruments, if any, from time to time
representing or evidencing the Lockbox Accounts, the Lockboxes or such funds,
(ii) the Collection Account and all funds on deposit therein and all
certificates and instruments, if any, from time to time representing or
evidencing the Collection Account or such funds,
(iii) the Borrower Account and all funds on deposit therein and all
evidencing the Borrower Account or such funds,
(iv) all notes, certificates of deposit and other instruments from time
to time delivered to or otherwise possessed by any Lender or any assignee or
agent on behalf of any Lender in substitution for or in addition to any of the
then existing Borrower Account Collateral, and
(v) all interest, dividends, cash, instruments, investment property and
other property from time to time received, receivable or otherwise distributed
with respect to or in exchange for any and all of the then existing Borrower
Account Collateral;
(d) all other property relating to the Receivables that may from time
to time hereafter be granted and pledged by the Borrower or by any Person on its
behalf whether under this Agreement or otherwise, including any deposit with any
Lender or the Administrative Agent of additional funds by the Borrower; and
(e) to the extent not otherwise included, all proceeds and products of
the foregoing and all accessions to, substitutions and replacements for, and
profits of, each of the foregoing Borrower Collateral (including proceeds that
constitute property of the types described in Sections 8.01(a) through (d)).
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Section 8.02. Borrower's Agreements. The Borrower hereby
(a) assigns, transfer and conveys the benefits of the representations,
warranties and covenants of each Originator made to the Borrower under the Sale
Agreement to the Administrative Agent for the benefit of the Lenders hereunder;
(b) acknowledges and agrees that the rights of the Borrower to require a capital
contribution from the Member or to require payment of a Rejected Amount from an
Originator under the Sale Agreement may be enforced by the Lenders and the
Administrative Agent; and (c) certifies that the Sale Agreement provides that
the representations, warranties and covenants described in Sections 4.01, 4.02
and 4.03 thereof, the indemnification and payment provisions of Article V
thereof and the provisions of Sections 4.03(j), 8.03 and 8.14 thereof shall
survive the sale of the Transferred Receivables (and undivided percentage
ownership interests therein) and the termination of the Sale Agreement and this
Agreement.
Section 8.03. Delivery of Collateral. All certificates or
instruments representing or evidencing all or any portion of the Borrower
Collateral shall be delivered to and held by or on behalf of the Administrative
Agent and shall be in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance reasonably satisfactory to the Administrative Agent. The
Administrative Agent shall have the right (a) at any time to exchange
certificates or instruments representing or evidencing Borrower Collateral for
certificates or instruments of smaller or larger denominations and (b) at any
time in its discretion following the occurrence and during the continuation of a
Termination Event and without notice to the Borrower, to transfer to or to
register in the name of the Administrative Agent or its nominee any or all of
the Borrower Collateral.
Section 8.04. Borrower Remains Liable. It is expressly agreed by
the Borrower that, anything herein to the contrary notwithstanding, the Borrower
shall remain liable under any and all of the Transferred Receivables, the
Contracts therefor, the Borrower Assigned Agreements and any other agreements
constituting the Borrower Collateral to which it is a party to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder. The Lenders and the Administrative Agent shall not have any
obligation or liability under any such Receivables, Contracts or agreements by
reason of or arising out of this Agreement or the granting herein or therein of
a Lien thereon or the receipt by the Administrative Agent or the Lenders of any
payment relating thereto pursuant hereto or thereto. The exercise by any Lender
or the Administrative Agent of any of its respective rights under this Agreement
shall not release any Originator, the Borrower or the Servicer from any of their
respective duties or obligations under any such Receivables, Contracts or
agreements. None of the Lenders or the Administrative Agent shall be required or
obligated in any manner to perform or fulfill any of the obligations of any
Originator, the Borrower or the Servicer under or pursuant to any such
Receivable, Contract or agreement, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any such Receivable, Contract
or agreement, or to present or file any claims, or to take any action to collect
or enforce any performance or the payment of any amounts that may have been
assigned to it or to which it may be entitled at any time or times.
Section 8.05. Covenants of the Borrower and the Servicer Regarding
the Borrower Collateral.
(a) Offices and Records. The Borrower shall maintain its principal
place of business and chief executive office and the office at which it stores
its Records at the respective locations specified in Schedule 4.01(b) or, upon
30 days' prior written notice to the Administrative Agent, at such other
location in a jurisdiction where all action requested by the Administrative
Agent pursuant to Section 14.14 shall have been taken with respect to the
Borrower Collateral. Each of the Borrower and the Servicer shall, at its own
cost and expense, maintain adequate and complete records of the Transferred
Receivables and the Borrower Collateral, including records of any and all
payments received, credits granted and merchandise returned with respect thereto
and all other dealings therewith. Each of the Borrower and the Servicer shall,
by no later than the Effective Date, mark
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conspicuously with a legend, in form and substance satisfactory to the
Administrative Agent, its books and records (including computer records) and
credit files pertaining to the Borrower Collateral, and its file cabinets or
other storage facilities where it maintains information pertaining thereto, to
evidence this Agreement and the assignment and Liens granted pursuant to this
Article VIII. Upon the occurrence and during the continuance of a Termination
Event, the Borrower and the Servicer shall deliver and turn over such books and
records to the Administrative Agent or its representatives at any time on demand
of the Administrative Agent. Prior to the occurrence of a Termination Event and
upon notice from the Administrative Agent, the Borrower and the Servicer shall
permit any representative of the Administrative Agent to inspect such books and
records and shall provide photocopies thereof to the Administrative Agent as
more specifically set forth in Section 8.05(b).
(b) Access. Each of the Borrower and the Servicer shall, at its own
expense, during normal business hours, from time to time upon one Business Day's
prior notice as frequently as the Administrative Agent determines to be
appropriate: (i) provide the Lenders, the Administrative Agent and any of their
respective officers, employees and agents access to its properties (including
properties utilized in connection with the collection, processing or servicing
of the Transferred Receivables), facilities, advisors and employees (including
officers) and to the Borrower Collateral, (ii) permit the Lenders, the
Administrative Agent and any of their respective officers, employees and agents
to inspect, audit and make extracts from its books and records, including all
Records, (iii) permit the Lenders or the Administrative Agent and their
respective officers, employees and agents to inspect, review and evaluate the
Transferred Receivables and the Borrower Collateral and (iv) permit the Lenders
or the Administrative Agent and their respective officers, employees and agents
to discuss matters relating to the Transferred Receivables or its performance
under this Agreement or the other Related Documents or its affairs, finances and
accounts with any of its officers, directors, employees, representatives or
agents (in each case, with those persons having knowledge of such matters) and
with its independent certified public accountants. If (i) the Administrative
Agent in good faith deems any Lender's rights or interests in the Transferred
Receivables, the Borrower Assigned Agreements or any other Borrower Collateral
insecure or the Administrative Agent, in good faith believes that an Incipient
Termination Event or a Termination Event is imminent or (ii) an Incipient
Termination Event or a Termination Event shall have occurred and be continuing,
then each of the Borrower and the Servicer shall, at its own expense, provide
such access at all times without prior notice from the Administrative Agent and
provide the Lenders or the Administrative Agent with access to its suppliers and
customers. Each of the Borrower and the Servicer shall make available to the
Administrative Agent and its counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records, including Records,
that the Administrative Agent may request. Each of the Borrower and the Servicer
shall deliver any document or instrument necessary for the Administrative Agent,
as the Administrative Agent may from time to time request, to obtain records
from any service bureau or other Person that maintains records for the Borrower
or the Servicer, and shall maintain duplicate records or supporting
documentation on media, including computer tapes and discs owned by the Borrower
or the Servicer. For the avoidance of doubt, the Lenders and Administrative
Agent and their respective officers, employees and agents shall only have the
right to make environmental inspections once during any twelve (12) month period
unless any Lender or the Administrative Agent has reason to believe that a
condition exists or an event has occurred which could reasonably give rise to
liability under environmental laws.
(c) Communication with Accountants. Each of the Borrower and the
Servicer authorizes the Lenders and the Administrative Agent to communicate
directly with its independent certified public accountants and authorizes and
shall instruct those accountants and advisors to disclose and make available to
the Lenders and the Administrative Agent any and all financial statements and
other supporting financial documents, schedules and information relating to the
Borrower or the Servicer (including copies of any issued management letters) and
to discuss matters with respect to its business, financial condition and other
affairs.
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(d) Collection of Transferred Receivables. Except as otherwise provided
in this Section 8.05(d), the Servicer shall continue to collect or cause to be
collected, at its sole cost and expense, all amounts due or to become due to the
Borrower under the Transferred Receivables, the Borrower Assigned Agreements and
any other Borrower Collateral. In connection therewith, the Borrower and the
Servicer shall take such action as it, and from and after the occurrence and
during the continuance of a Termination Event, the Administrative Agent, may
deem necessary or desirable to enforce collection of the Transferred
Receivables, the Borrower Assigned Agreements and the other Borrower Collateral;
provided that the Borrower or the Servicer may, rather than commencing any such
action or taking any other enforcement action, at its option, elect to pay to
the Administrative Agent, for deposit into the Collection Account, an amount
equal to the Outstanding Balance of any such Transferred Receivable; provided,
further, that if (i) an Incipient Termination Event or a Termination Event shall
have occurred and be continuing or (ii) the Administrative Agent, in good faith
believes that an Incipient Termination Event or a Termination Event is imminent,
then the Administrative Agent may, without prior notice to the Seller or the
Servicer, notify any Obligor under any Transferred Receivable or obligors under
the Borrower Assigned Agreements of the pledge of such Transferred Receivables
or Borrower Assigned Agreements, as the case may be, to the Administrative Agent
on behalf of the Lenders hereunder and direct that payments of all amounts due
or to become due to the Borrower thereunder be made directly to the
Administrative Agent or any servicer, collection agent or lockbox or other
account designated by the Administrative Agent and, upon such notification and
at the sole cost and expense of the Borrower, the Administrative Agent may
enforce collection of any such Transferred Receivable or the Borrower Assigned
Agreements and adjust, settle or compromise the amount or payment thereof. The
Administrative Agent shall provide prompt notice to the Borrower and the
Servicer of any such notification of pledge or direction of payment to the
Obligors under any Transferred Receivables.
(e) Performance of Borrower Assigned Agreements. Each of the Borrower
and the Servicer shall (i) perform and observe all the terms and provisions of
the Borrower Assigned Agreements to be performed or observed by it, maintain the
Borrower Assigned Agreements in full force and effect, enforce the Borrower
Assigned Agreements in accordance with their terms and take all action as may
from time to time be requested by the Administrative Agent in order to
accomplish the foregoing, and (ii) upon the request of and as directed by the
Administrative Agent, make such demands and requests to any other party to the
Borrower Assigned Agreements as are permitted to be made by the Borrower or the
Servicer thereunder.
(f) License for Use of Software and Other Intellectual Property.
Unless expressly prohibited by the licensor thereof or any provision of
applicable law, if any, each of the Borrower and the Servicer hereby grants to
the Administrative Agent on behalf of the Lenders a limited license to use,
without charge, the Borrower's and the Servicer's computer programs, software,
printouts and other computer materials, technical knowledge or processes, data
bases, materials, trademarks, registered trademarks, trademark applications,
service marks, registered service marks, service mark applications, patents,
patent applications, trade names, rights of use of any name, labels, fictitious
names, inventions, designs, trade secrets, goodwill, registrations, copyrights,
copyright applications, permits, licenses, franchises, customer lists, credit
files, correspondence, and advertising materials or any property of a similar
nature, as it pertains to the Borrower Collateral, or any rights to any of the
foregoing, only as reasonably required in connection with the advertising for
sale, and selling any of the Borrower Collateral, or exercising of any other
remedies hereto, and each of the Borrower and the Servicer agrees that its
rights under all licenses and franchise agreements shall inure to the
Administrative Agent's benefit (on behalf of the Lenders) for purposes of the
license granted herein. Except upon the occurrence and during the continuation
of a Termination Event, the Administrative Agent and the Lenders agree not to
use any such license without giving the Borrower and the Servicer prior written
notice.
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ARTICLE IX.
TERMINATION EVENTS
Section 9.01. Termination Events. If any of the following events
(each, a "Termination Event") shall occur (regardless of the reason therefor):
(a) the Borrower shall fail to make any payment of any monetary
Borrower Obligation when due and payable and the same shall remain unremedied
for one Business Day or more; or
(b) the Borrower, any Originator or Superior shall fail or neglect to
perform, keep or observe any covenant or other provision of this Agreement or
the other Related Documents (other than any provision embodied in or covered by
any other clause of this Section 9.01) and the same shall remain unremedied for
two (2) Business Days or more after written notice thereof shall have been given
by the Administrative Agent to the Borrower; or
(c) (i) an Originator, the Borrower or the Parent or any of the
Parent's Subsidiaries shall fail to make any payment with respect to any of its
Debts which, except with respect to the Borrower, is in an aggregate principal
amount in excess of $500,000 (other than Borrower Obligations) when due, and the
same shall remain unremedied after any applicable grace period with respect
thereto; or (ii) a default or breach shall occur under any agreement, document
or instrument to which an Originator, the Borrower or the Parent or any of the
Parent's Subsidiaries is a party or by which any such Person or its property is
bound (other than a Related Document), and such default or breach has not been
waived or shall remain unremedied after any applicable grace period with respect
thereto and involves a Debt which, except with respect to the Borrower, is in an
aggregate principal amount in excess of $500,000; or
(d) a case or proceeding shall have been commenced against the
Borrower, the Member, the Parent or any of the Parent's Subsidiaries or any
Originator seeking a decree or order in respect of any such Person under the
Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or
other similar law, (i) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for any such Person or for any
substantial part of such Person's assets, or (ii) ordering the winding-up or
liquidation of the affairs of any such Person, and such case or proceeding
continues for 60 days unless dismissed or discharged; provided, however, that
such 60-day period shall be deemed terminated immediately if (x) a decree or
order is entered by a court of competent jurisdiction with respect to a case or
proceeding described in this subsection (d) or (y) any of the events described
in Section 9.01(e) shall have occurred; or
(e) the Borrower, the Parent, the Member, any Subsidiary of the Parent
or any Originator shall (i) file a petition seeking relief under the Bankruptcy
Code or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) consent or fail to object in a timely and appropriate manner
to the institution of any proceedings under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or similar law or to the filing
of any petition thereunder or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for any such Person or for any substantial part of such Person's
assets, (iii) make an assignment for the benefit of creditors, or (iv) take any
corporate action in furtherance of any of the foregoing; or
(f) (i) the fair value of the property of the Borrower or the Member
is less than the total amount of its liabilities, including contingent
liabilities, (ii) the present fair salable value of the assets of the Borrower
or the Member is less than the amount that will be required to pay the probable
liability on its debts as they become absolute and matured, (iii) either the
Borrower or the Member has incurred debts or liabilities beyond its ability to
pay as such debts and liabilities mature, (iv) either the Borrower or the Member
is engaged in a business or transaction for which its property constitutes
unreasonably small capital, or (v) any of the Borrower, the Parent, the
34
Member, any Originator or any other Subsidiary of the Parent is generally not
paying its debts as they become due or admits in writing its inability to, or is
generally unable to, pay its debts as such debts become due; or
(g) the Credit Agreement in effect as of the date hereof shall
(i) terminate or (ii) fail to be refinanced on terms acceptable to
Administrative Agent in its sole discretion, at least ninety (90) days prior to
the maturity date thereunder on terms and conditions no less favorable to the
Parent, and in connection with which the lenders providing such refinancing
shall have entered into an intercreditor agreement on terms and conditions no
less favorable to the Administrative Agent and the Lenders than the
Intercreditor Agreement; or
(h) a final judgment or judgments for the payment of money in excess of
$1,000,000 in the aggregate (net of insurance proceeds) at any time outstanding
shall be rendered against any Originator, the Parent or any Subsidiary of the
Parent (other than the Borrower or the Member) and either (i) enforcement
proceedings shall have been commenced upon any such judgment or (ii) the same
shall not, within 30 days after the entry thereof, have been discharged or
execution thereof stayed or bonded pending appeal, or shall not have been
discharged prior to the expiration of any such stay; or
(i) a judgment or order for the payment of money shall be rendered
against the Borrower or the Member; or
(j) (i) any information contained in any Borrowing Base Certificate
or any Borrowing Request is untrue or incorrect in any respect, or (ii) any
representation or warranty of any Originator or the Borrower herein or in any
other Related Document or in any written statement, report, financial statement
or certificate (other than a Borrowing Base Certificate or any Borrowing
Request) made or delivered by or on behalf of such Originator or the Borrower to
any Affected Party hereto or thereto is untrue or incorrect in any material
respect as of the date when made or deemed made; or
(k) any Governmental Authority (including the IRS or the PBGC) shall
file notice of a Lien with regard to any assets of any Originator, the Parent or
any of the Parent's Subsidiaries (other than the Borrower or the Member) and the
amount claimed by such Governmental Authority (other than a Lien (i) limited by
its terms to assets other than Receivables and (ii) not materially adversely
affecting the financial condition of such Originator, the Parent or such
Subsidiary of the Parent or the ability of the Servicer to perform its duties
hereunder); or
(l) any Governmental Authority (including the IRS or the PBGC) shall
file notice of a Lien with regard to any of the assets of the Borrower or the
Member; or
(m) (1) there shall have occurred any event which in the reasonable
judgment of the Administrative Agent, materially adversely impairs (i) the
ability of any Originator to originate Receivables of a credit quality which are
at least of the credit quality of the Receivables as of the date of the initial
Advance hereunder, (ii) the financial condition or operations of any Originator,
the Borrower or the Parent, or (iii) the collectibility of Receivables, or
(2) the Administrative Agent shall have determined (and so notified the
Borrower) that any event or condition that has had or could reasonably be
expected to have or result in a Material Adverse Effect has occurred; or
(n) (i) a default or breach shall occur under any provision of the Sale
Agreement and the same shall remain unremedied for two (2) Business Days or more
after written notice thereof shall have been given by the Administrative Agent
to the Borrower or (ii) the Sale Agreement shall for any reason cease to
evidence the transfer to the Borrower of the legal and equitable title to, and
ownership of, the Transferred Receivables; or
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(o) except as otherwise expressly provided herein, any Lockbox Account
Agreement or the Sale Agreement shall have been modified, amended or terminated
without the prior written consent of the Lenders and the Administrative Agent;
or
(p) an Event of Servicer Termination shall have occurred; or
(q) (A) the Borrower shall cease to hold valid and properly perfected
title to and sole record and beneficial ownership in the Transferred Receivables
and the other Borrower Collateral or (B) the Administrative Agent (on behalf of
the Lenders) shall cease to hold a first priority, perfected Lien in the
Transferred Receivables or any of the Borrower Collateral; or
(r) a Change of Control shall occur; or
(s) the Borrower shall amend its certificate of formation or limited
liability company agreement without the express prior written consent of the
Requisite Lenders and the Administrative Agent; or
(t) the Borrower shall have received an Election Notice pursuant to
Section 2.01(d) of the Sale Agreement; or
(u) (i) the Default Ratio shall exceed 3.50%; (ii) the Delinquency
Ratio shall exceed 2.00%; (iii) the Dilution Trigger Ratio shall exceed 5.50%;
or (iv) the Receivables Collection Turnover shall exceed 54.0 days; or
(v) a default or breach shall occur of any of the financial covenants
of Superior and its Subsidiaries set forth in Sections 8.08 and 8.09 of the
Credit Agreement as in effect on the Closing Date, each of which is hereby
incorporated by reference together with all corresponding defined terms,
provided that no modification to such covenants or defined terms used in such
financial covenants (or any embedded defined term used or referred to in such
definitions) shall be effective to amend such covenants and defined terms for
purposes of this Agreement without the prior written consent of the
Administrative Agent; to the extent such written consent is not obtained with
respect to an amendment, the financial covenants (and any relevant defined
terms) contained in the Credit Agreement without giving effect to such amendment
shall remain in effect for purposes of this Agreement; or
(w) any material provision of any Related Document shall for any reason
cease to be valid, binding and enforceable in accordance with its terms (or any
Originator or the Borrower shall challenge the enforceability of any Related
Document or shall assert in writing, or engage in any action or inaction based
on any such assertion, that any provision of any of the Related Documents has
ceased to be or otherwise is not valid, binding and enforceable in accordance
with its terms); or
(x) the incurrence of a liability to the PBGC under ERISA by the
Parent, any Originator or the Servicer (except for premium payments arising in
the ordinary course of business), in excess of $1,000,000; or
(y) a Funding Excess exists at any time and the Borrower has not repaid
the amount of such Funding Excess within one (1) Business Day in accordance with
Section 2.11 hereof; or
(z) at any time, the amount which can then be borrowed (in excess of
all then outstanding borrowings) under the Credit Agreement shall be less than
$3,000,000;
then, and in any such event, the Administrative Agent, may, with the consent of
the Requisite Lenders, and shall, at the request of the Requisite Lenders, by
notice to the Borrower, declare the Commitment Termination Date to have occurred
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, that the Commitment Termination Date
shall automatically occur (i) upon the occurrence of any of the Termination
Events described in Sections
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9.01(c), (d), (f) or (t) or (ii) three days after the occurrence of the
Termination Event described in Section 9.01(a) if the same shall not have been
remedied by such time, in each case without demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower. Upon the
occurrence of the Commitment Termination Date, all Borrower Obligations shall
automatically be and become due and payable in full, without any action to be
taken on the part of any Person.
Section 9.02. Events of Servicer Termination. If any of the
following events (each, an "Event of Servicer Termination") shall occur
(regardless of the reason therefor):
(a) the Servicer shall (i) fail to make any payment or deposit
hereunder when due and payable, (ii) fail to deliver when due any of the reports
required to be delivered pursuant to Section 5.02 and 7.08 or any other report
related to the Receivables as required by the other Related Documents and the
same shall remain unremedied for two (2) Business Days or more after written
notice thereof shall have been given by the Lenders or the Administrative Agent
to the Servicer or (iii) fail or neglect to perform, keep or observe any other
provision of this Agreement or the other Related Documents (other than any
provision embodied in or covered by any other clause of this Section 9.02) and
the same shall remain unremedied for five (5) Business Days or more after
written notice thereof shall have been given by the Administrative Agent to the
Borrower; or
(b) (i) the Servicer shall fail to make any payment with respect to any
of its Debts which is in an aggregate principal amount of $500,000 when due, and
the same shall remain unremedied for any applicable grace period with respect
or instrument to which the Servicer is a party or by which the Servicer or its
property is bound (other than a Related Document), and such default or breach
has not been waived or shall remain unremedied after any applicable grace period
with respect thereto and which involves a Debt which is in an aggregate
principal amount of $500,000; or
(c) a case or proceeding shall have been commenced against the Servicer
or any Affiliate which acts as a Sub-Servicer seeking a decree or order in
respect of any such Person (i) under the Bankruptcy Code or any other applicable
federal, state or foreign bankruptcy or other similar law, (ii) appointing a
assets, or (iii) ordering the winding-up or liquidation of the affairs of any
such Person, and such case or proceeding continues for 60 days unless dismissed
or discharged; provided, however, that such 60-day period shall be deemed
terminated immediately if (x) a decree or order is entered by a court of
competent jurisdiction with respect to a case or proceeding described in this
subsection (c), or (y) any of the events described in Section 9.02(d) shall have
occurred; or
(d) the Servicer or any Affiliate which acts as a Sub-Servicer shall
(i) file a petition seeking relief under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or other similar law,
(ii) consent or fail to object in a timely and appropriate manner to the
institution of any proceedings under the Bankruptcy Code or any other applicable
federal, state or foreign bankruptcy or similar law or to the filing of any
petition thereunder or to the appointment of or taking possession by a
(e) the Servicer or any Affiliate which acts as a Sub-Servicer
generally does not pay its debts as such debts become due or admits in writing
its inability to, or is generally unable to, pay its debts as such debts become
due; or
37
(f) a final judgment or judgments for the payment of money in excess
of $1,000,000 in the aggregate (net of insurance proceeds) at any time
outstanding shall be rendered against the Servicer or any other Subsidiary of
Superior which acts as a Sub-Servicer and either (i) enforcement proceedings
shall have been commenced upon any such judgment or (ii) the same shall not,
within 30 days after the entry thereof, have been discharged or execution
thereof stayed or bonded pending appeal, or shall not have been discharged prior
to the expiration of any such stay; or
(g) (i) any information contained in any Borrowing Base Certificate is
untrue or incorrect in any respect or (ii) any representation or warranty of the
Servicer herein or in any other Related Document or in any written statement,
report, financial statement or certificate (other than a Borrowing Base
Certificate) made or delivered by the Servicer to any Affected Party hereto or
thereto is untrue or incorrect in any material respect as of the date when made
or deemed made and such representation and warranty, if relating to any
Transferred Receivable, has not been cured by the repurchase of any such
Transferred Receivable pursuant to Section 4.04 of the Sale Agreement; or
condition that materially adversely affects the ability of the Servicer to
collect the Transferred Receivables or to otherwise perform hereunder has
occurred; or
(i) a Termination Event shall have occurred or this Agreement shall
have been terminated; or
(j) a deterioration has taken place in the quality of servicing of
Transferred Receivables or other Receivables serviced by the Servicer that the
Administrative Agent, in its sole discretion, determines to be material, and
such material deterioration has not been eliminated within 30 days after written
notice thereof shall have been given by the Administrative Agent to the
Servicer; or
(k) the Servicer shall assign or purport to assign any of its
obligations hereunder without the prior written consent of the Administrative
Agent; or
(l) a Change of Control shall occur with respect to the Servicer;
then, and in any such event, the Administrative Agent may, with the consent of
delivery of a Servicer Termination Notice to the Borrower and the Servicer,
terminate the servicing responsibilities of the Servicer hereunder, without
demand, protest or further notice of any kind, all of which are hereby waived by
the Servicer. Upon the delivery of any such notice, all authority and power of
the Servicer under this Agreement and the Sale Agreement shall pass to and be
vested in the Successor Servicer acting pursuant to Section 11.02; provided,
that notwithstanding anything to the contrary herein, the Servicer agrees to
continue to follow the procedures set forth in Section 7.02 with respect to
Collections on the Transferred Receivables until a Successor Servicer has
assumed the responsibilities and obligations of the Servicer in accordance with
Section 11.02.
ARTICLE X.
REMEDIES
Section 10.01. Actions Upon Termination Event. If any Termination
Event shall have occurred and be continuing and the Administrative Agent shall
have declared the Commitment Termination Date to have occurred or the Commitment
Termination Date shall be deemed to have occurred pursuant to Section 9.01, then
the Administrative Agent may exercise in respect of the Borrower Collateral, in
addition to any and all other rights and remedies granted to it hereunder, under
any other Related Document or under any other instrument or agreement securing,
evidencing or relating
38
to the Borrower Obligations or otherwise available to it, all of the rights and
remedies of a secured party upon default under the UCC (such rights and remedies
to be cumulative and nonexclusive), and, in addition, may take the following
actions:
(a) The Administrative Agent may, without notice to the Borrower except
as required by law and at any time or from time to time, charge, offset or
otherwise apply amounts payable to the Borrower from the Collection Account, the
Borrower Account or any Lockbox Account against all or any part of the Borrower
Obligations.
(b) The Administrative Agent may, without notice except as specified
below, solicit and accept bids for and sell the Borrower Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or any of the Lenders', or Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. The Administrative Agent
shall have the right to conduct such sales on the Borrower's premises or
elsewhere and shall have the right to use any of the Borrower's premises without
charge for such sales at such time or times as the Administrative Agent deems
necessary or advisable. The Borrower agrees that, to the extent notice of sale
shall be required by law, at least ten Business Days' notice to the Borrower of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. The Administrative Agent
shall not be obligated to make any sale of Borrower Collateral regardless of
notice of sale having been given. The Administrative Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed for such sale, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Every such sale shall operate to
divest all right, title, interest, claim and demand whatsoever of the Borrower
in and to the Borrower Collateral so sold, and shall be a perpetual bar, both at
law and in equity, against each Originator, the Borrower, any Person claiming
the Borrower Collateral sold through any Originator or the Borrower, and their
respective successors or assigns. The Administrative Agent shall deposit the net
proceeds of any such sale in the Collection Account and such proceeds shall be
applied against all or any part of the Borrower Obligations.
(c) Upon the completion of any sale under Section 10.01(b), the
Borrower or the Servicer shall deliver or cause to be delivered to the purchaser
or purchasers at such sale on the date thereof, or within a reasonable time
thereafter if it shall be impracticable to make immediate delivery, all of the
Borrower Collateral sold on such date, but in any event full title and right of
possession to such property shall vest in such purchaser or purchasers upon the
completion of such sale. Nevertheless, if so requested by the Administrative
Agent or by any such purchaser, the Borrower shall confirm any such sale or
transfer by executing and delivering to such purchaser all proper instruments of
conveyance and transfer and releases as may be designated in any such request.
(d) At any sale under Section 10.01(b), any Lender or the
Administrative Agent may bid for and purchase the property offered for sale and,
upon compliance with the terms of sale, may hold, retain and dispose of such
property without further accountability therefor.
(e) The Administrative Agent may (but in no event shall be obligated
to) exercise, at the sole cost and expense of the Borrower, any and all rights
and remedies of the Borrower under or in connection with the Borrower Assigned
Agreements or the other Borrower Collateral, including any and all rights of the
Borrower to demand or otherwise require payment of any amount under, or
performance of any provisions of, the Borrower Assigned Agreements.
Section 10.02. Exercise of Remedies. No failure or delay on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege under this Agreement and no course of dealing between any Originator,
the Borrower or the Servicer, on the one hand, and the Administrative
39
Agent or any Lender, on the other hand, shall operate as a waiver of such right,
power or privilege, nor shall any single or partial exercise of any right, power
or privilege under this Agreement preclude any other or further exercise of such
right, power or privilege or the exercise of any other right, power or
privilege. The rights and remedies under this Agreement are cumulative, may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies that the Administrative Agent or any Lender would otherwise have at law
or in equity. No notice to or demand on any party hereto shall entitle such
party to any other or further notice or demand in similar or other
circumstances, or constitute a waiver of the right of the party providing such
notice or making such demand to any other or further action in any circumstances
without notice or demand.
Section 10.03. Power of Attorney. On the Closing Date, each of the
Borrower and the Servicer shall execute and deliver a power of attorney
substantially in the form attached hereto as Exhibit 10.03 (each, a "Power of
Attorney"). The power of attorney granted pursuant to each Power of Attorney is
a power coupled with an interest and shall be irrevocable until this Agreement
has terminated in accordance with its terms and all of the Borrower Obligations
are indefeasibly paid or otherwise satisfied in full. The powers conferred on
the Administrative Agent under each Power of Attorney are solely to protect the
Liens of the Administrative Agent and the Lenders upon and interests in the
Borrower Collateral and shall not impose any duty upon the Administrative Agent
to exercise any such powers. The Administrative Agent shall not be accountable
for any amount other than amounts that it actually receives as a result of the
exercise of such powers and none of the Administrative Agent's officers,
directors, employees, agents or representatives shall be responsible to the
Borrower, any Originator, the Servicer or any other Person for any act or
failure to act, except to the extent of damages attributable to their own gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.
Section 10.04. Continuing Security Interest. This Agreement shall
create a continuing Lien in the Borrower Collateral until the Termination Date.
ARTICLE XI.
SUCCESSOR SERVICER PROVISIONS
Section 11.01. Servicer Not to Resign. The Servicer shall not
resign from the obligations and duties hereby imposed on it except upon a
determination that (a) the performance of its duties hereunder has become
impermissible under applicable law or regulation and (b) there is no reasonable
action that the Servicer could take to make the performance of its duties
hereunder become permissible under applicable law. Any such determination shall
(i) with respect to clause (a) above, be evidenced by an opinion of counsel to
such effect and (ii) with respect to clause (b) above, be evidenced by an
Officer's Certificate to such effect, in each case delivered to the
Administrative Agent. No such resignation shall become effective until a
Successor Servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 11.02.
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Section 11.02. Appointment of the Successor Servicer. In
connection with the termination of the Servicer's responsibilities or the
resignation by the Servicer under this Agreement pursuant to Sections 9.02 or
11.01, the Administrative Agent (a) shall succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations as Servicer (but not
in any other capacity, including specifically not the obligations of the
Servicer set forth in Section 12.02) under this Agreement (and except that the
Administrative Agent makes no representations and warranties pursuant to
Section 4.02) and (b) may at any time appoint a successor servicer to the
Servicer that shall be acceptable to the Administrative Agent and shall succeed
to all rights and assume all of the responsibilities, duties and liabilities of
the Servicer under this Agreement (the Administrative Agent, in such capacity,
or such successor servicer being referred to as the "Successor Servicer");
provided, that the Successor Servicer shall have no responsibility for any
actions of the Servicer prior to the date of its appointment or assumption of
duties as Successor Servicer. In selecting a Successor Servicer, the
Administrative Agent may obtain bids from any potential Successor Servicer and
may agree to any bid it deems appropriate. The Successor Servicer shall accept
its appointment by executing, acknowledging and delivering to the Administrative
Agent an instrument in form and substance acceptable to the Administrative
Agent.
Section 11.03. Duties of the Servicer. The Servicer covenants and
agrees that, following the appointment of, or assumption of duties by, a
Successor Servicer:
(a) The Servicer shall terminate its activities as Servicer hereunder
in a manner that facilitates the transfer of servicing duties to the Successor
Servicer and is otherwise acceptable to the Administrative Agent and, without
limiting the generality of the foregoing, shall timely deliver (i) any funds to
the Administrative Agent that were required to be remitted to the Administrative
Agent for deposit in the Collection Account and (ii) all Servicing Records and
other information with respect to the Transferred Receivables to the Successor
Servicer at a place selected by the Successor Servicer. The Servicer shall
account for all funds and shall execute and deliver such instruments and do such
other things as may be reasonably required to vest and confirm in the Successor
Servicer all rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.
(b) The Servicer shall terminate each existing Sub-Servicing Agreement
and the Successor Servicer shall not be deemed to have assumed any of the
Servicer's interests therein or to have replaced the Servicer as a party
thereto.
Section 11.04. Effect of Termination or Resignation. Any
termination of or resignation by the Servicer hereunder shall not affect any
claims that the Borrower, the Lenders or the Administrative Agent may have
against the Servicer for events or actions taken or not taken by the Servicer
arising prior to any such termination or resignation.
ARTICLE XII.
INDEMNIFICATION
Section 12.01. Indemnities by the Borrower.
(a) Without limiting any other rights that the Lenders or the
Administrative Agent or any of their respective officers, directors, employees,
attorneys, agents or representatives (each, an "Indemnified Person") may have
hereunder or under applicable law, the Borrower hereby agrees to indemnify and
hold harmless each Indemnified Person from and against any and all Indemnified
Amounts that may be claimed or asserted against or incurred by any such
Indemnified Person in connection with or arising out of the transactions
contemplated under this Agreement or under any other Related Document or any
actions or failures to act in connection therewith, including any and all
reasonable legal costs and reasonable expenses arising out of or incurred in
connection with disputes between or among any parties to any of the Related
Documents; provided, that the Borrower shall not be liable for any
41
indemnification to an Indemnified Person to the extent that any such Indemnified
Amount (x) results from such Indemnified Person's gross negligence or willful
misconduct, in each case as finally determined by a court of competent
jurisdiction or (y) constitutes recourse for uncollectible or uncollected
Transferred Receivables as a result of the insolvency, bankruptcy or the failure
(without cause or justification) or inability on the part of the related Obligor
to perform its obligations thereunder. Without limiting the generality of the
foregoing, the Borrower shall pay on demand to each Indemnified Person any and
all Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty made or deemed made by
the Borrower (or any of its officers) under or in connection with this Agreement
or any other Related Document or on any other information delivered by the
Borrower pursuant hereto or thereto that shall have been incorrect when made or
deemed made or delivered;
(ii) the failure by the Borrower to comply with any term, provision or
covenant contained in this Agreement, any other Related Document or any
agreement executed in connection herewith or therewith, any applicable law, rule
or regulation with respect to any Transferred Receivable or the Contract
therefor, or the nonconformity of any Transferred Receivable or the Contract
therefor with any such applicable law, rule or regulation; or
(iii) (1) the failure to vest and maintain vested in the Borrower valid
and properly perfected title to and sole record and beneficial ownership of the
Receivables that constitute Transferred Receivables, together with all
Collections in respect thereof and all other Borrower Collateral, free and clear
of any Adverse Claim and (2) the failure to maintain or transfer to the
Administrative Agent, for the benefit of itself and the Lenders, a first
priority, perfected Lien in any portion of the Borrower Collateral;
(iv) any dispute, claim, offset or defense of any Obligor (other than
its discharge in bankruptcy) to the payment of any Transferred Receivable or
which would constitute recourse for uncollectible or uncollected Transferred
Receivables (including a defense based on such Receivable or the Contract
therefor not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or services giving rise to such
Receivable or the furnishing of or failure to furnish such merchandise or
services or relating to collection activities with respect to such Receivable
(if such collection activities were performed by any of its Affiliates acting as
Servicer), except to the extent that such dispute, claim, offset or defense
results solely from any action or inaction on the part of any Indemnified
Person;
(v) any products liability claim or other claim arising out of or in
connection with merchandise, insurance or services that is the subject of any
Contract with respect to any Transferred Receivable;
(vi) the commingling of Collections with respect to Transferred
Receivables by the Borrower at any time with its other funds or the funds of any
other Person;
(vii) any failure by the Borrower to cause the filing of, or any delay
in filing, financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or any other applicable laws with respect
to any Transferred Receivable hereunder or any other Borrower Collateral,
whether at the time of the Borrower's acquisition thereof or any Advance made
hereunder or at any subsequent time; or
(viii) any failure of a Lockbox Bank to comply with the terms of the
applicable Lockbox Account Agreement; or
(ix) any withholding, deduction or Charge imposed upon any payments
with respect to any Transferred Receivable, any Borrower Assigned Agreement or
any other Borrower Collateral.
42
(b)Any Indemnified Amounts subject to the indemnification provisions of this
Section 12.01 not paid in accordance with Section 2.08 shall be paid by the
Borrower to the Indemnified Person entitled thereto within five Business Days
following demand therefor.
Section 12.02. Indemnities by the Servicer.
(a) Without limiting any other rights that an Indemnified Person may
have hereunder or under applicable law, the Servicer hereby agrees to indemnify
and hold harmless each Indemnified Person from and against any and all
Indemnified Amounts that may be claimed or asserted against or incurred by any
such Indemnified Person in connection with or arising out of any breach by the
Servicer of its obligations hereunder or under any other Related Document;
provided, that the Servicer shall not be liable for any indemnification to an
Indemnified Person to the extent that any such Indemnified Amount (x) results
from such Indemnified Person's gross negligence or willful misconduct, in each
case as finally determined by a court of competent jurisdiction, or
(y) constitutes recourse for uncollectible or uncollected Transferred
Receivables as a result of the insolvency, bankruptcy or lack of
creditworthiness of any Obligor. Without limiting the generality of the
foregoing, the Servicer shall pay on demand to each Indemnified Person any and
the Servicer (or any of its officers) under or in connection with this Agreement
Servicer pursuant hereto or thereto that shall have been incorrect when made or
(ii) the failure by the Servicer to comply with any term, provision or
therefor with any such applicable law, rule or regulation;
(iii) the imposition of any Adverse Claim with respect to any
Transferred Receivable or the Borrower Collateral as a result of any action
taken by the Servicer; or
(iv) the commingling of Collections with respect to Transferred
Receivables by the Servicer at any time with its other funds or the funds of any
other Person.
(b) Any Indemnified Amounts subject to the indemnification provisions
of this Section 12.02 shall be paid by the Servicer to the Indemnified Person
entitled thereto within five Business Days following demand therefor.
ARTICLE XIII.
ADMINISTRATIVE AGENT
Section 13.01. Authorization and Action.
(a) The Administrative Agent may take such action and carry out such
functions under this Agreement as are authorized to be performed by it pursuant
to the terms of this Agreement, any other Related Document or otherwise
contemplated hereby or thereby or are reasonably incidental thereto; provided,
that the duties of the Administrative Agent hereunder shall be determined solely
by the express provisions of this Agreement, and, other than the duties set
forth in Section 13.02, any permissive right of the Administrative Agent
hereunder shall not be construed as a duty.
Section 13.02. Reliance. None of the Administrative Agent, any of
its Affiliates or any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or the other Related Documents,
except for damages solely caused by its or their own gross negligence or willful
misconduct as finally
43
determined by a court of competent jurisdiction. Without limiting the generality
of the foregoing, and notwithstanding any term or provision hereof to the
contrary, the Borrower, the Servicer, and each Lender hereby acknowledge and
agree that the Administrative Agent as such (a) has no duties or obligations
other than as set forth expressly herein, and has no fiduciary obligations to
any person, (b) acts as a representative hereunder for the Lenders and has no
duties or obligations to, shall incur no liabilities or obligations to, and does
not act as an agent in any capacity for, the Borrower (other than, with respect
to the Administrative Agent, under the Power of Attorney with respect to
remedial actions) or the Originators, (c) may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts, (d) makes no
representation or warranty hereunder to any Affected Party and shall not be
responsible to any such Person for any statements, representations or warranties
made in or in connection with this Agreement or the other Related Documents,
(e) shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or the
other Related Documents on the part of the Borrower, the Servicer, any
Originator, Superior or any Lender, or to inspect the property (including the
books and records) of the Borrower, the Servicer, any Originator, Superior or
any Lender, (f) shall not be responsible to the Borrower, the Servicer, any
Lender or any other Person for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Related Documents or any other instrument or document furnished pursuant hereto
or thereto, (g) shall incur no liability under or in respect of this Agreement
or the other Related Documents by acting upon any notice, consent, certificate
or other instrument or writing believed by it to be genuine and signed, sent or
communicated by the proper party or parties and (h) shall not be bound to make
any investigation into the facts or matters stated in any notice or other
communication hereunder and may conclusively rely on the accuracy of such facts
or matters.
Section 13.03. GE Capital and Affiliates. GE Capital and its
Affiliates may generally engage in any kind of business with any Obligor, the
Parent, the Originators, the Borrower, the Servicer, any Lender, any of their
respective Affiliates and any Person who may do business with or own securities
of such Persons or any of their respective Affiliates, all as if GE Capital were
not the Administrative Agent and without the duty to account therefor to any
Obligor, the Parent, any Originator, the Borrower, the Servicer, any Lender or
any other Person.
Section 13.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any other Lender, and based upon such documents and information as it has deemed
appropriate, made its own credit and financial analysis of Borrower and its own
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
Section 13.05. Indemnification. Each of the Lenders severally
agrees to indemnify the Administrative Agent (to the extent not reimbursed by
the Borrower and without limiting the obligations of the Borrower hereunder),
ratably according to their respective Pro Rata Shares, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Administrative Agent in
any way relating to or arising out of this Agreement or any other Related
Document or any action taken or omitted by the Administrative Agent in
connection herewith or therewith; provided, however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the Administrative Agent's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction. Without limiting the
foregoing, each Lender
44
agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement and each other
Related Document, to the extent that the Administrative Agent is not reimbursed
for such expenses by the Borrower.
Section 13.06. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving not less than thirty (30) days' prior
written notice thereof to each of the Lenders and the Borrower. Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within 30 days after the resigning the Administrative Agent's giving notice of
resignation, then the resigning Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which shall be a Lender, if a
Lender is willing to accept such appointment, or otherwise shall be a commercial
bank or financial institution or a subsidiary of a commercial bank or financial
institution which commercial bank or financial institution is organized under
the laws of the United States of America or of any State thereof which has a
long-term debt rating from S&P of "A—" or better and has a combined capital and
surplus of at least $300,000,000. If no successor Administrative Agent has been
appointed pursuant to the foregoing, by the 30th day after the date such notice
of resignation was given by the resigning Administrative Agent, such resignation
shall become effective and the Requisite Lenders shall thereafter perform all
the duties of the Administrative Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Administrative Agent as provided above.
Upon the acceptance of any appointment as the Administrative Agent hereunder by
a successor Administrative Agent, such successor Administrative Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Administrative Agent. Upon the earlier of the acceptance of any
appointment as the Administrative Agent hereunder by a successor Administrative
Agent or the effective date of the resigning Administrative Agent's resignation,
the resigning Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Related Documents, except that
any indemnity rights or other rights in favor of such resigning Agent shall
continue. After any resigning Administrative Agent's resignation hereunder, the
provisions of this Article XIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Administrative Agent under
this Agreement and the other Related Documents.
Section 13.07. Setoff and Sharing of Payments. In addition to any
rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Termination Event, each Lender and each holder of any Revolving Note is
hereby authorized at any time or from time to time, without notice to the
Borrower or to any other Person, any such notice being hereby expressly waived
(but subject to Section 2.03(b)(i)), to set off and to appropriate and to apply
any and all balances held by it at any of its offices for the account of the
Borrower (regardless of whether such balances are then due to the Borrower) and
any other properties or assets any time held or owing by that Lender or that
holder to or for the credit or for the account of the Borrower against and on
account of any of the Borrower Obligations which are not paid when due. Any
Lender or holder of any Revolving Note exercising a right to set off or
otherwise receiving any payment on account of the Borrower Obligations in excess
of its Pro Rata Share thereof shall purchase for cash (and the other Lenders or
holders shall sell) such participations in each such other Lender's or holder's
Pro Rata Share of the Borrower Obligations as would be necessary to cause such
Lender to share the amount so set off or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares. The
Borrower agrees, to the fullest extent permitted by law, that (a) any Lender or
holder may exercise its right to set off with respect to amounts in excess of
its Pro Rata Share of the Borrower Obligations and may sell participations in
such amount so set off to other Lenders and holders and (b) any Lender or
holders so purchasing a participation in the
45
Advances made or other Borrower Obligations held by other Lenders or holders may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender or holder were a
direct holder of the Advances and the other Borrower Obligations in the amount
of such participation. Notwithstanding the foregoing, if all or any portion of
the set-off amount or payment otherwise received is thereafter recovered from
the Lender that has exercised the right of set-off, the purchase of
participations by that Lender shall be rescinded and the purchase price restored
without interest.
ARTICLE XIV.
MISCELLANEOUS
Section 14.01. Notices. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by any other parties, or whenever any of the parties
desires to give or serve upon any other parties any communication with respect
to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be deemed to
have been validly served, given or delivered (a) upon the earlier of actual
receipt and three Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (b) upon transmission, when sent by facsimile (with such facsimile
promptly confirmed by delivery of a copy by personal delivery or United States
Mail as otherwise provided in this Section 14.01), (c) one Business Day after
deposit with a reputable overnight courier with all charges prepaid or (d) when
delivered, if hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile number set forth
below or to such other address (or facsimile number) as may be substituted by
notice given as herein provided. The giving of any notice required hereunder may
be waived in writing by the party entitled to receive such notice. Failure or
delay in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than any Lender and the
Administrative Agent) designated in any written notice provided hereunder to
receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
Notwithstanding the foregoing, whenever it is provided herein that a notice is
to be given to any other party hereto by a specific time, such notice shall only
be effective if actually received by such party prior to such time, and if such
notice is received after such time or on a day other than a Business Day, such
notice shall only be effective on the immediately succeeding Business Day.
Borrower:
1403 Foulk Rd.
Suite 106-J
Wilmington, Delaware 19803
Attention: Craig Badyna
Telephone: (302) 651-8332
Facsimile: (302) 651-8423
Servicer:
150 North Interstate Parkway
Suite 300
Atlanta, Georgia 30339
Attention: Chief Financial Officer
Telephone: (770) 953-8338
Facsimile: (770) 303-8890
46
Administrative Agent:
201 High Ridge Road
Stamford, Connecticut 06927
Attention: Senior Vice President—Portfolio/Underwriting
Telephone: (203) 357-4065
Facsimile: (203) 316-7821
Section 14.02. Binding Effect; Assignability.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Servicer, each Lender and the Administrative Agent and their
respective successors and permitted assigns. Neither the Borrower nor the
Servicer may assign, transfer, hypothecate or otherwise convey any of their
respective rights or obligations hereunder or interests herein without the
express prior written consent of the Requisite Lenders and the Administrative
Agent. Any such purported assignment, transfer, hypothecation or other
conveyance by the Borrower or the Servicer without the prior express written
consent of the Requisite Lenders and the Administrative Agent shall be void.
(b) The Borrower hereby consents to any Lender's assignment of, and/or
sale of participations in, at any time or times after the Effective Date, the
Related Documents, Advances, and any Commitment or of any portion thereof or
interest therein, including any Lender's rights, title, interests, remedies,
powers or duties thereunder, whether evidenced by a writing or not, made in
accordance with this Section 14.02(b). Any assignment by a Lender shall
(i) require the consent of (A) the Administrative Agent and the execution of an
assignment agreement (an "Assignment Agreement") substantially in the form
attached hereto as Exhibit 14.02(b) and otherwise in form and substance
satisfactory to, and acknowledged by, the Administrative Agent and (B) so long
as no Termination Event has occurred and is continuing, the Borrower (which
consent shall not be unreasonably withheld or delayed); (ii) if a partial
assignment, be in an amount at least equal to $5,000,000 and, after giving
effect to any such partial assignment, the assigning Lender shall have retained
Commitments in an amount at least equal to $5,000,000; and (iv) include a
payment to the Administrative Agent by the assignor or assignee Lender of an
assignment fee of $3,500. In the case of an assignment by a Lender under this
Section 14.02, the assignee shall have, to the extent of such assignment, the
same rights, benefits and obligations as it would if it were a Lender hereunder.
The assigning Lender shall be relieved of its obligations hereunder with respect
to its Commitments or assigned portion thereof from and after the date of such
assignment. The Borrower hereby acknowledges and agrees that any assignment made
in accordance with this Section 14.02(b) will give rise to a direct obligation
of the Borrower to the assignee and that the assignee shall thereupon be a
"Lender" for all purposes. In all instances, each Lender's liability to make
Advances hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event any Lender
assigns or otherwise transfers all or any part of a Revolving Note, such Lender
shall so notify the Borrower and the Borrower shall, upon the request of such
Lender, execute new Revolving Notes in exchange for the Revolving Notes being
assigned. Notwithstanding the foregoing provisions of this Section 14.02(b), any
Lender may at any time pledge or assign all or any portion of such Lender's
rights under this Agreement and the other Related Documents to a Federal Reserve
Bank; provided, however, that no such pledge or assignment shall release such
Lender from such Lender's obligations hereunder or under any other Related
Document.
(c) Any participation by a Lender of all or any part of its Commitments
shall be in an amount at least equal to $5,000,000, and with the understanding
that all amounts payable by the Borrower hereunder shall be determined as if
that Lender had not sold such participation, and that the holder of any such
participation shall not be entitled to require such Lender to take or omit to
take any action hereunder except actions directly affecting (i) any reduction in
the principal amount of, or interest rate or Fees payable with respect to, any
Advance in which such holder participates, (ii) any extension of
47
any scheduled payment of the principal amount of any Advance in which such
holder participates or the final maturity date thereof, and (iii) any release of
all or substantially all of the Borrower Collateral (other than in accordance
with the terms of this Agreement or the other Related Documents). Solely for
purposes of Sections 2.08, 2.09, 2.10, 12.01, Borrower acknowledges and agrees
that a participation shall give rise to a direct obligation of the Borrower to
the participant and the participant shall be considered to be a "Lender" for
purposes of such sections (except that, unless the Borrower otherwise consents,
no amounts shall be payable to such participant under Section 2.09 or 2.10 to
the extent that such amounts would have been required to have been paid under
the circumstances in existence on the effective date of such participation).
Except as set forth in the preceding sentence the Borrower shall have no
obligation or duty to any participant. Neither the Administrative Agent nor any
Lender (other than the Lender selling a participation) shall have any duty to
any participant and may continue to deal solely with the Lender selling a
participation as if no such sale had occurred.
(d) Except as expressly provided in this Section 14.02, no Lender
shall, as between the Borrower and that Lender, or between the Administrative
Agent and that Lender, be relieved of any of its obligations hereunder as a
result of any sale, assignment, transfer or negotiation of, or granting of
participation in, all or any part of the Advances, the Revolving Notes or other
Borrower Obligations owed to such Lender.
(e) The Borrower shall assist any Lender permitted to sell assignments
or participations under this Section 14.02 as reasonably required to enable the
assigning or selling Lender to effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be reasonably requested and the participation
of management in meetings with, potential assignees or participants. The
Borrower shall, if the Administrative Agent so requests in connection with an
initial syndication of the Advances hereunder, assist in the preparation of
informational materials for such syndication.
(f) A Lender may furnish any information concerning the Borrower in
the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants). Each Lender shall obtain
from all prospective and actual assignees or participants confidentiality
covenants substantially equivalent to those contained in Section 14.05.
Section 14.03. Termination; Survival of Borrower Obligations Upon
Commitment Termination Date.
(a) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until the Termination Date.
(b) Except as otherwise expressly provided herein or in any other
Related Document, no termination or cancellation (regardless of cause or
procedure) of any commitment made by any Affected Party under this Agreement
shall in any way affect or impair the obligations, duties and liabilities of the
Borrower or the Servicer or the rights of any Affected Party relating to any
unpaid portion of the Borrower Obligations, due or not due, liquidated,
contingent or unliquidated or any transaction or event occurring prior to such
termination, or any transaction or event, the performance of which is required
after the Commitment Termination Date. Except as otherwise expressly provided
herein or in any other Related Document, all undertakings, agreements,
covenants, warranties and representations of or binding upon the Borrower or the
Servicer, and all rights of any Affected Party hereunder, all as contained in
the Related Documents, shall not terminate or expire, but rather shall survive
any such termination or cancellation and shall continue in full force and effect
until the Termination Date; provided, that the rights and remedies provided for
herein with respect to any breach of any representation or warranty made by the
Borrower or the Servicer pursuant to Article IV, the indemnification and payment
provisions of Article XII and Sections 14.04, 14.05 and 14.06 shall be
continuing and shall survive the Termination Date.
48
Section 14.04. Costs, Expenses and Taxes. (a) The Borrower shall
reimburse each Lender and the Administrative Agent for all reasonable
out-of-pocket expenses incurred in connection with the negotiation and
preparation of this Agreement and the other Related Documents (including the
reasonable fees and expenses of all of its special counsel, advisors,
consultants and auditors retained in connection with the transactions
contemplated thereby and advice in connection therewith). The Borrower shall
reimburse each Lender and the Administrative Agent for all fees, costs and
expenses, including the reasonable fees, costs and expenses of counsel or other
advisors (including management consultants and appraisers) for advice,
assistance, or other representation in connection with:
(i) the forwarding to the Borrower or any other Person on behalf of
the Borrower by any Lender of any proceeds of Advances made by such Lender
hereunder;
(ii) any amendment, modification or waiver of, consent with respect to,
or termination of this Agreement or any of the other Related Documents or advice
in connection with the administration hereof or thereof or their respective
rights hereunder or thereunder;
(iii) any Litigation, contest or dispute (whether instituted by the
Borrower, any Lender, the Administrative Agent or any other Person as a party,
witness, or otherwise) in any way relating to the Borrower Collateral, any of
the Related Documents or any other agreement to be executed or delivered in
connection herewith or therewith, including any Litigation, contest, dispute,
suit, case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against the Borrower, the Servicer or any
other Person that may be obligated to any Lender or the Administrative Agent by
virtue of the Related Documents, including any such Litigation, contest,
dispute, suit, proceeding or action arising in connection with any work-out or
restructuring of the transactions contemplated hereby during the pendency of one
or more Termination Events;
(iv) any attempt to enforce any remedies of a Lender or the
Administrative Agent against the Borrower, the Servicer or any other Person that
may be obligated to them by virtue of any of the Related Documents, including
any such attempt to enforce any such remedies in the course of any work-out or
(v) any work-out or restructuring of the transactions contemplated
hereby during the pendency of one or more Termination Events; and
(vi) efforts to (A) monitor the Advances or any of the Borrower
Obligations, (B) evaluate, observe or assess the Originators, the Parent, the
Borrower, the Member or the Servicer or their respective affairs, and
(C) verify, protect, evaluate, assess, appraise, collect, sell, liquidate or
otherwise dispose of any of the Borrower Collateral;
including all reasonable attorneys' and other professional and service
providers' fees arising from such services, including those in connection with
any appellate proceedings, and all reasonable expenses, costs, charges and other
fees incurred by such counsel and others in connection with or relating to any
of the events or actions described in this Section 14.04, all of which shall be
payable, on demand, by the Borrower to the applicable Lender or the
Administrative Agent, as applicable. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: fees, costs and
expenses of accountants, environmental advisors, appraisers, investment bankers,
management and other consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram or facsimile
charges; secretarial overtime charges; and expenses for travel, lodging and food
paid or incurred in connection with the performance of such legal or other
advisory services.
(b) In addition, the Borrower shall pay on demand any and all stamp,
sales, excise and other taxes (excluding income taxes), gross receipts or
franchise taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing or recording of this Agreement or any other
49
Related Document, and the Borrower agrees to indemnify and save each Indemnified
Person harmless from and against any and all liabilities with respect to or
resulting from any delay or failure to pay such taxes and fees.
Section 14.05. Confidentiality.
(a) Except to the extent otherwise required by applicable law or as
required to be filed publicly with the Securities and Exchange Commission, or
unless the Administrative Agent shall otherwise consent in writing, the Borrower
and the Servicer each agrees to maintain the confidentiality of this Agreement
(and all drafts hereof and documents ancillary hereto), in its communications
with third parties other than any Affected Party or any Indemnified Person and
otherwise and not to disclose, deliver or otherwise make available to any third
party (other than its directors, officers, employees, accountants or counsel)
the original or any copy of all or any part of this Agreement (or any draft
hereof and documents ancillary hereto) except to an Affected Party or an
Indemnified Person or any financial institution party to the Credit Agreement.
(b) The Borrower and the Servicer each agrees that it shall not (and
shall not permit any of its Subsidiaries to) issue any news release or make any
public announcement pertaining to the transactions contemplated by this
Agreement and the other Related Documents without the prior written consent of
the Requisite Lenders and the Administrative Agent (which consent shall not be
unreasonably withheld) unless such news release or public announcement is
required by law, in which case the Borrower or the Servicer, as applicable,
shall consult with the Lenders and the Administrative Agent prior to the
issuance of such news release or public announcement. The Borrower may, however,
(i) disclose the general terms of the transactions contemplated by this
Agreement and the other Related Documents to trade creditors, suppliers and
other similarly-situated Persons so long as such disclosure is not in the form
of a news release or public announcement and (ii) give copies of this Agreement
and the other Related Documents to the lenders party to the Credit Agreement.
(c) The Administrative Agent and each Lender agrees to maintain the
confidentiality of the Information (as defined below), and will not use such
confidential Information for any purpose or in any matter except in connection
with this Agreement, except that Information may be disclosed (1) to (i) each
Affected Party and (ii) its and each Affected Party's and their respective
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential and to not
disclose or use such Information in violation of Regulation FD (17 C.F.R. §
243.100-243.103)), (2) any regulatory authority (it being understood that it
will to the extent reasonably practicable provide the Borrower with an
opportunity to request confidential treatment from such regulatory authority),
(3) to the extent required by applicable laws or regulations or by any subpoena
or similar legal process, (4) to any other party to this Agreement, (5) to the
extent required in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or any other Related
Document or the enforcement of rights hereunder or thereunder, (6) subject to an
agreement containing provisions substantially the same as those of this Section,
to any assignee of (or participant in), or any prospective assignee of (or
participant in), any of its rights or obligations under this Agreement, (7) with
the consent of the Borrower or (8) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or any
other confidentiality agreement to which it is party with the Borrower or the
Parent or any subsidiary thereof or (ii) becomes available to the Administrative
Agent, or any Lender on a nonconfidential basis from a source other than the
Parent or any subsidiary thereof. For the purposes of this Section,
"Information" means all information received from the Borrower and Servicer
relating to the Borrower, the Servicer, the Parent or any subsidiary thereof or
their businesses, or any Obligor, other than any such information that is
available to Administrative Agent, or any Lender on a nonconfidential basis
prior to disclosure by Borrower or Servicer. Any Person required to maintain the
confidentiality of Information as provided in this Section
50
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Section 14.06. Complete Agreement; Modification of Agreement. This
Agreement and the other Related Documents constitute the complete agreement
among the parties hereto with respect to the subject matter hereof and thereof,
supersede all prior agreements and understandings relating to the subject matter
hereof and thereof, and may not be modified, altered or amended except as set
forth in Section 14.07.
Section 14.07. Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by the
Administrative Agent, no amendment, modification, termination or waiver of any
provision of this Agreement or any of the Revolving Notes, or any consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Borrower and by the Requisite Lenders
or, to the extent required under clause (b) below, by all affected Lenders, and,
to the extent required under clause (b) or clause (c) below, by the
Administrative Agent. Except as set forth in clause (b) below, all amendments,
modifications, terminations or waivers requiring the consent of any Lenders
without specifying the required percentage of Lenders shall require the written
consent of the Requisite Lenders.
(b) No amendment, modification, termination or waiver shall, unless in
writing and signed by each Lender directly affected thereby, do any of the
following: (i) increase the principal amount of any Lender's Commitment;
(ii) reduce the principal of, rate of interest on or Fees payable with respect
to any Advance of any affected Lender; (iii) extend any scheduled payment date
or final maturity date of the principal amount of any Advance of any affected
Lender; (iv) waive, forgive, defer, extend or postpone any payment of interest
or Fees as to any affected Lender; (v) change the percentage of the Aggregate
Commitments or of the aggregate unpaid principal amount of the Advances which
shall be required for Lenders or any of them to take any action hereunder;
(vi) release all or substantially all of the Borrower Collateral; or (vii) amend
or waive this Section 14.07 or the definition of the term "Requisite Lenders"
insofar as such definition affects the substance of this Section 14.07.
Furthermore, no amendment, modification, termination or waiver affecting the
rights or duties of the Administrative Agent under this Agreement or any other
Related Document shall be effective unless in writing and signed by the
Administrative Agent. Each amendment, modification, termination or waiver shall
be effective only in the specific instance and for the specific purpose for
which it was given. No amendment, modification, termination or waiver shall be
required for the Administrative Agent to take additional Borrower Collateral
pursuant to any Related Document. No amendment, modification, termination or
waiver of any provision of any Revolving Note shall be effective without the
written concurrence of the holder of that Revolving Note. No notice to or demand
on the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 14.07
shall be binding upon each holder of the Revolving Notes at the time outstanding
and each future holder of the Revolving Notes.
(c) If, in connection with any proposed amendment, modification, waiver
or termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders, the consent of
Requisite Lenders is obtained, but the consent of other Lenders whose consent is
required is not obtained (any such Lender whose consent is not obtained as
described this clause (i) or in clause (ii) below being referred to as a
"Non-Consenting Lender"), or
51
(ii) requiring the consent of Requisite Lenders, the consent of Lenders
holding 51% or more of the Aggregate Commitments is obtained, but the consent of
Requisite Lenders is not obtained,
then, so long as the Administrative Agent is not a Non-Consenting Lender, at the
Borrower's request the Administrative Agent, or a Person acceptable to the
Administrative Agent, shall have the right with the Administrative Agent's
consent and in the Administrative Agent's sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon the Administrative Agent's
request, sell and assign to the Administrative Agent or such Person, all of the
Commitments of such Non-Consenting Lender for an amount equal to the principal
balance of all Advances held by the Non-Consenting Lender and all accrued
interest and Fees with respect thereto through the date of sale, such purchase
and sale to be consummated pursuant to an executed Assignment Agreement.
(d) Upon indefeasible payment in full in cash and performance of all of
the Borrower Obligations (other than indemnification Borrower Obligations under
Section 12.01), termination of the Aggregate Commitment and a release of all
claims against the Administrative Agent and Lenders, and so long as no suits,
actions, proceedings or claims are pending or threatened against any Indemnified
Person asserting any damages, losses or liabilities that are Indemnified
Liabilities, the Administrative Agent shall deliver to the Borrower termination
statements and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Borrower Obligations.
Section 14.08. No Waiver; Remedies. The failure by any Lender or
the Administrative Agent, at any time or times, to require strict performance by
the Borrower or the Servicer of any provision of this Agreement, any Receivables
Assignment or any other Related Document shall not waive, affect or diminish any
right of any Lender or the Administrative Agent thereafter to demand strict
compliance and performance herewith or therewith. Any suspension or waiver of
any breach or default hereunder shall not suspend, waive or affect any other
breach or default whether the same is prior or subsequent thereto and whether
the same or of a different type. None of the undertakings, agreements,
warranties, covenants and representations of the Borrower or the Servicer
contained in this Agreement, any Receivables Assignment or any other Related
Document, and no breach or default by the Borrower or the Servicer hereunder or
thereunder, shall be deemed to have been suspended or waived by any Lender or
the Administrative Agent unless such waiver or suspension is by an instrument in
writing signed by an officer of or other duly authorized signatory of the
applicable Lenders and the Administrative Agent and directed to the Borrower or
the Servicer, as applicable, specifying such suspension or waiver. The rights
and remedies of the Lenders and the Administrative Agent under this Agreement
and the other Related Documents shall be cumulative and nonexclusive of any
other rights and remedies that the Lenders and the Administrative Agent may have
hereunder, thereunder, under any other agreement, by operation of law or
otherwise. Recourse to the Borrower Collateral shall not be required.
Section 14.09. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL.
(a) THIS AGREEMENT AND EACH OTHER RELATED DOCUMENT (EXCEPT TO THE
EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE
(WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES) EXCEPT TO THE EXTENT THAT THE
PERFECTION, EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE
ADMINISTRATIVE AGENT IN THE RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN
RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF DELAWARE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
52
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN DELAWARE SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR TO
ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER RELATED
DOCUMENT; PROVIDED, THAT EACH PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF DELAWARE;
PROVIDED FURTHER THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE ANY LENDER OR THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE BORROWER
COLLATERAL OR ANY OTHER SECURITY FOR THE BORROWER OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE LENDERS OR THE ADMINISTRATIVE
AGENT. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY
WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS PROVIDED FOR IN SECTION
14.01 HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER
OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED
STATES MAIL, PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 14.10. Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and separately
constitute one agreement.
Section 14.11. Severability. Wherever possible, each provision of
this Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
Section 14.12. Section Titles. The section, titles and table of
contents contained in this Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.
53
Section 14.13. Further Assurances.
(a) Each of the Borrower and the Servicer shall, at its sole cost and
expense, upon request of any of the Lenders or the Administrative Agent,
promptly and duly execute and deliver any and all further instruments and
documents and take such further action that may be necessary or desirable or
that any of the Lenders or the Administrative Agent may request to (i) perfect,
protect, preserve, continue and maintain fully the Liens granted to the
Administrative Agent for the benefit of itself and the Lenders under this
Agreement, (ii) enable the Lenders or the Administrative Agent to exercise and
enforce its rights under this Agreement or any of the other Related Documents or
(iii) otherwise carry out more effectively the provisions and purposes of this
Agreement or any other Related Document. Without limiting the generality of the
foregoing, the Borrower shall, upon request of any of the Lenders or the
Administrative Agent, (A) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices that may be necessary or desirable or that any of the
Lenders or the Administrative Agent may request to perfect, protect and preserve
the Liens granted pursuant to this Agreement, free and clear of all Adverse
Claims, (B) mark, or cause the Servicer to mark, each Contract (other than
invoices) evidencing each Transferred Receivable with a legend, acceptable to
each Lender and the Administrative Agent evidencing that the Borrower has
purchased such Transferred Receivables and that the Administrative Agent, for
the benefit of the Lenders, has a security interest in and lien thereon,
(C) mark, or cause the Servicer to mark, its master data processing records
evidencing such Transferred Receivables with such a legend and (D) from and
after the occurrence of a Termination Event, notify or cause the Servicer to
notify Obligors of the Liens on the Transferred Receivables granted hereunder.
(b) Without limiting the generality of the foregoing, the Borrower
hereby authorizes the Lenders and the Administrative Agent, and each of the
Lenders hereby authorizes the Administrative Agent, to file one or more
financing or continuation statements, or amendments thereto or assignments
thereof, relating to all or any part of the Transferred Receivables, including
Collections with respect thereto, or the Borrower Collateral without the
signature of the Borrower or, as applicable, the Lenders, as applicable, to the
extent permitted by applicable law. A carbon, photographic or other reproduction
of this Agreement or of any notice or financing statement covering the
Transferred Receivables, the Borrower Collateral or any part thereof shall be
sufficient as a notice or financing statement where permitted by law.
54
IN WITNESS WHEREOF, the parties have caused this Receivables Funding
Agreement to be executed by their respective officers thereunto duly authorized,
SUPERIOR ESSEX FUNDING LLC, as the Borrower
By
Name
Title
SUPERIOR TELECOMMUNICATIONS INC., as the Servicer By Name Title
By
Name
Title
GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender
By
Name
Duly Authorized Signatory
GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent
By
Name
Duly Authorized Signatory
55
Exhibit 2.01(b) to Funding Agreement
FORM OF REVOLVING NOTE
$ [ , 20 ]
FOR VALUE RECEIVED, the undersigned, SUPERIOR ESSEX FUNDING LLC, a
Delaware limited liability company (the "Borrower"), HEREBY PROMISES TO PAY to
the order of [ ] (the "Lender"), at the offices of
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as agent for the
Lender (the "Administrative Agent"), at its address at 201 High Ridge Road,
Stamford, CT 06927, or at such other place as the Administrative Agent may
designate from time to time in writing, in lawful money of the United States of
America and in immediately available funds, the amount of
DOLLARS AND CENTS
($ ) or, if less, the aggregate unpaid amount of all
Advances made to the undersigned under the "Funding Agreement" (as hereinafter
defined). All capitalized terms used but not otherwise defined herein have the
meanings given to them in the Funding Agreement or in Annex X thereto.
This Revolving Note is one of the Revolving Notes issued pursuant to
that certain Receivables Funding Agreement dated as of November 6, 2002 by and
among the Borrower, the Lender (and any other "Lender" party thereto), Superior
Telecommunications Inc., as servicer, and the Administrative Agent (including
all annexes, exhibits and schedules thereto, and as from time to time amended,
restated, supplemented or otherwise modified, the "Funding Agreement"), and is
entitled to the benefit and security of the Funding Agreement and all of the
other Related Documents referred to therein. Reference is hereby made to the
Funding Agreement for a statement of all of the terms and conditions under which
the Advances evidenced hereby are made and are to be repaid. The date and amount
of each Advance made by the Lender to the Borrower, the rates of interest
applicable thereto and each payment made on account of the principal thereof,
shall be recorded by the Administrative Agent on its books; provided that the
failure of the Administrative Agent to make any such recordation shall not
affect the obligations of the Borrower to make a payment when due of any amount
owing under the Funding Agreement or this Revolving Note in respect of the
Advances actually made by the Lender to the Borrower.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Funding Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Funding Agreement.
If any payment on this Revolving Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
Upon and after the occurrence of any Termination Event, this Revolving
Note may, as provided in the Funding Agreement, and without demand, notice or
legal process of any kind, be declared, and immediately shall become, due and
payable.
Time is of the essence of this Revolving Note. Demand, presentment,
protest and notice of nonpayment and protest are hereby waived by the Borrower.
Except as provided in the Funding Agreement, this Revolving Note may not
be assigned by the Lender to any Person.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE.
SUPERIOR ESSEX FUNDING LLC
By:
Name: Title:
1
Exhibit 2.02(a) to Funding Agreement
FORM OF COMMITMENT REDUCTION NOTICE
[Insert Date]
General Electric Capital Corporation,
as Administrative Agent
201 High Ridge Road
Stamford, Connecticut 06927
Attention: Vice President—Portfolio/Underwriting
Re:Receivables Funding Agreement
dated as of November 6, 2002
Ladies and Gentlemen:
This notice is given pursuant to Section 2.02(a) of that certain Receivables
Funding Agreement dated as of November 6, 2002 (the "Funding Agreement"), by and
among Superior Essex Funding LLC (the "Borrower"), Superior
Telecommunications Inc. (the "Servicer"), the financial institutions party
thereto as lenders (the "Lenders") and General Electric Capital Corporation, as
Lender and as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"). Capitalized terms used and not otherwise defined herein
shall have the respective meanings ascribed to them in the Funding Agreement.
Pursuant to Section 2.02(a) of the Funding Agreement, the Borrower
hereby irrevocably notifies the Lenders and the Administrative Agent of its
election to permanently reduce the Maximum Facility Amount to [$ ],
effective as of [ ], [ ] (which is a Business Day).
[[This reduction is the [first/second] reduction [for the current calendar year]
permitted by Section 2.02(a) of the Funding Agreement.]] After such reduction,
the Maximum Facility Amount will not be less than the Outstanding Principal
Amount.
Very truly yours,
SUPERIOR ESSEX FUNDING LLC
By:
Name:
Title:
2
Exhibit 2.02(b) to Funding Agreement
FORM OF COMMITMENT TERMINATION NOTICE
[Insert Date]
as Administrative Agent
201 High Ridge Road
Stamford, Connecticut 06927
Re:Receivables Funding Agreement
Ladies and Gentlemen:
This notice is given pursuant to Section 2.02(b) of that certain
Receivables Funding Agreement dated as of November 6, 2002 (the "Funding
Agreement"), by and among Superior Essex Funding LLC (the "Borrower"), Superior
a Lender and as administrative agent for the Lenders (in such capacity, the
Pursuant to Section 2.02(b) of the Funding Agreement, the Borrower
election to terminate the Maximum Facility Amount effective as of
[ ], [ ]1. In connection therewith, the
Borrower shall reduce Outstanding Principal Amount to zero on or prior to such
date and make all other payments required by Section 2.03(h) and pay any other
fees that are due and payable pursuant to the Fee Letter at the time and in the
manner specified therein.
Very truly yours,
SUPERIOR ESSEX FUNDING LLC
By:
Name:
Title:
1Which day shall be a Business Day at least 20 days after the date this notice
is given
3
Exhibit 2.03(a) to Funding Agreement
FORM OF BORROWING REQUEST
[Insert Date]
as Administrative Agent
201 High Ridge Road
Stamford, Connecticut 06927
Re:Receivables Funding Agreement
Ladies and Gentlemen:
This notice is given pursuant to Section 2.03(a) of that certain
thereto as lenders (the "Lender") and General Electric Capital Corporation, as a
lender and as administrative agent for the Lenders (in such capacity, the
Pursuant to Section 2.01 of the Funding Agreement, the Borrower hereby
requests that a Borrowing be made to the Borrower on [ ],
[ ], in the amount of [$ ] which shall consist of [Index
Rate Advances] [LIBOR Rate Advances with a LIBOR Period of [1][2][3] months], to
be disbursed to the Borrower in accordance with Section 2.04(a) of the Funding
Agreement. The Borrower hereby represents and warrants that the conditions set
forth in Section 3.02 of the Funding Agreement have been satisfied. Attached
hereto is a certificate setting forth a pro forma calculation of the Borrowing
Base after giving effect to the acquisition by the Borrower of new Transferred
Receivables and the receipt of Collections since the date of the most recent
Borrowing Base Certificate, and the making of such Borrowing.
Very truly yours, SUPERIOR ESSEX FUNDING LLC
By:
Name:
Title:
4
Exhibit 2.03(h) to Funding Agreement
FORM OF REPAYMENT NOTICE
[Insert Date]
as Administrative Agent
201 High Ridge Road
Stamford, Connecticut 06927
Re:Receivables Funding Agreement
Ladies and Gentlemen:
This notice is given pursuant to Section 2.03(h) of that certain
thereto as lenders (the "Lenders"), and General Electric Capital Corporation, as
a lender (in such capacity, the "Lender") and as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"). Capitalized terms used
and not otherwise defined herein shall have the respective meanings ascribed to
them in the Funding Agreement.
Pursuant to Section 2.03(h) of the Funding Agreement, the Borrower
hereby notifies the Lenders and the Administrative Agent of its request to repay
the principal amount of outstanding Advances in an amount equal to
[$ ] on [ ], [ ] (which is a Business Day),
from [Collections/other sources]. In connection therewith, the Borrower will pay
to the Administrative Agent (1) all interest accrued on the outstanding
principal balance of Advances being repaid through but excluding the date of
such repayment and (2) any and all Breakage Costs payable under Section 2.10 of
the Funding Agreement by virtue thereof.
Very truly yours,
SUPERIOR ESSEX FUNDING LLC
By:
Name:
Title:
5
Exhibit 2.06(c) to Funding Agreement
FORM OF CONVERSION/CONTINUATION NOTICE
TO:General Electric Capital Corporation, in its capacity as administrative agent
for the Lenders (the "Administrative Agent") under that certain Receivables
Funding Agreement dated as of November 6, 2002 (the "Funding Agreement") by and
Telecommunications Inc., as Servicer, the financial institutions from time to
time parties thereto and the Agent (such Funding Agreement, as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"Funding Agreement")
The Borrower hereby gives to the Administrative Agent a notice of
Conversion/Continuation pursuant to Section 2.06(c) of the Funding Agreement,
and the Borrower hereby requests to [convert] [continue] on
, (the "[Conversion][Continuation] Date") from
the Lenders on a pro rata basis an aggregate principal amount of:
$ in Advances [identify as necessary] as a(n)
Index Rate Advances
LIBOR Rate Advances (which Advances shall be (a) in an aggregate amount
equal to $1,000,000 or an integral multiple of $500,000 in excess thereof, and
(b) for a LIBOR Period equal to [1][2]][3] months
The undersigned hereby certifies that (i) the representations and
warranties of the undersigned contained in Article IV of the Funding Agreement
are and shall be true and correct in all respects on and as of the date hereof
and on and as of the [Conversion][Continuation] Date; (ii) no Termination Event
or Incipient Termination event has occurred and is continuing on the date hereof
or on the [Conversion][Continuation] Date or will result from the [conversion]
[continuation] of the Advances; and (iii) the conditions set forth in
Section 3.02 of the Funding Agreement have been satisfied.
Unless otherwise defined herein, terms defined in Annex X to the Funding
Agreement shall have the same meanings in this [Conversion][Continuation]
Notice.
Dated: , 20
Very truly yours,
SUPERIOR ESSEX FUNDING LLC
By:
Name:
Title:
6
Exhibit 5.02(b) to Funding Agreement
Form of
BORROWING BASE CERTIFICATE
Attached
7
Exhibit 10.03 to Funding Agreement
Form of
POWER OF ATTORNEY
This Power of Attorney is executed and delivered by [Superior Essex
Funding LLC, as Borrower] [Superior Telecommunications Inc., as Servicer]
("Grantor") under the Funding Agreement (as defined below), to General Electric
Capital Corporation, as Administrative Agent under the Funding Agreement
(hereinafter referred to as "Attorney"), pursuant to that certain Receivables
among Grantor, the other parties thereto and Attorney and the other Related
Documents. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Funding Agreement. No person to whom this
Power of Attorney is presented, as authority for Attorney to take any action or
actions contemplated hereby, shall be required to inquire into or seek
confirmation from Grantor as to the authority of Attorney to take any action
described below, or as to the existence of or fulfillment of any condition to
this Power of Attorney, which is intended to grant to Attorney unconditionally
the authority to take and perform the actions contemplated herein, and Grantor
irrevocably waives any right to commence any suit or action, in law or equity,
against any person or entity that acts in reliance upon or acknowledges the
authority granted under this Power of Attorney. The power of attorney granted
hereby is coupled with an interest and may not be revoked or cancelled by
Grantor until all Borrower Obligations under the Related Documents have been
indefeasibly paid in full and Attorney has provided its written consent thereto.
Grantor hereby irrevocably constitutes and appoints Attorney (and all
officers, employees or agents designated by Attorney), with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in its place and stead and in its name or in Attorney's own
name, from time to time in Attorney's discretion, to take any and all
instruments that may be necessary or desirable to accomplish the purposes of the
Funding Agreement, and, without limiting the generality of the foregoing, hereby
grants to Attorney the power and right, on its behalf, without notice to or
assent by it, upon the occurrence and during the continuance of any Termination
Event, to do the following: (a) open mail for it, and ask, demand, collect, give
acquittances and receipts for, take possession of, or endorse and receive
payment of, any checks, drafts, notes, acceptances, or other instruments for the
payment of moneys due in respect of Transferred Receivables, and sign and
endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications, and
notices in connection with any Borrower Collateral; (b) effect any repairs to
any Borrower Collateral, or continue or obtain any insurance in respect of any
Borrower Collateral and pay all or any part of the premiums therefor and costs
thereof, and make, settle and adjust all claims under such policies of
insurance, and make all determinations and decisions with respect to such
policies; (c) pay or discharge any taxes, Liens, or other encumbrances levied or
placed on or threatened against any Borrower Collateral; (d) defend any suit,
action or proceeding brought against it or any Borrower Collateral if the
Grantor does not defend such suit, action or proceeding or if Attorney believes
that it is not pursuing such defense in a manner that will maximize the recovery
to Attorney, and settle, compromise or adjust any suit, action, or proceeding
described above and, in connection therewith, give such discharges or releases
as Attorney may deem appropriate; (e) file or prosecute any claim, Litigation,
suit or proceeding in any court of competent jurisdiction or before any
arbitrator, or take any other action otherwise deemed appropriate by Attorney
for the purpose of collecting any and all such moneys due with respect to any
Borrower Collateral or otherwise with respect to the Related Documents whenever
payable and to enforce any other right in respect of its property; (f) sell,
transfer, pledge, make any agreement with respect to, or otherwise deal with,
any Borrower Collateral, and execute, in connection with such sale or action,
any endorsements, assignments or other instruments of conveyance or transfer in
connection therewith; and (g) cause the certified public accountants then
engaged by it to prepare
8
and deliver to Attorney at any time and from time to time, promptly upon
Attorney's request, any and all financial statements or other reports required
to be delivered by or on behalf of Grantor under the Related Documents, all as
though Attorney were the absolute owner of its property for all purposes, and to
do, at Attorney's option and its expense, at any time or from time to time, all
acts and other things that Attorney reasonably deems necessary to perfect,
preserve, or realize upon the Borrower Collateral and the Lenders' Liens
thereon, all as fully and effectively as it might do. Grantor hereby ratifies,
to the extent permitted by law, all that said attorneys shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor, and
Grantor has caused its seal to be affixed pursuant to the authority of its board
of directors this day of November, 2002.
Grantor
ATTEST:
By: (SEAL)
Title:
[Notarization in appropriate form for the state of execution is required.]
9
Exhibit 14.02(b) to Funding Agreement
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Agreement") is made as of
, by and between
("Assignor Lender") and
("Assignee Lender") and
acknowledged and consented to by GENERAL ELECTRIC CAPITAL CORPORATION, as
administrative agent ("Administrative Agent"). All capitalized terms used in
this Agreement and not otherwise defined herein will have the respective
meanings set forth in the Funding Agreement as hereinafter defined.
RECITALS:
WHEREAS, Superior Essex Funding LLC, a Delaware limited liability
company (the "Borrower"), Superior Telecommunications Inc., a Delaware
corporation (the "Servicer"), the financial institutions signatory thereto from
time to time as lenders (the "Lenders"), and the Administrative Agent have
entered into that certain Receivables Funding Agreement dated as of November 6,
2002 (as amended, restated, supplemented or otherwise modified from time to
time, the "Funding Agreement") pursuant to which the Lenders (including the
Assignor Lender) have agreed to make certain Advances to Borrower;
WHEREAS, Assignor Lender desires to assign to Assignee Lender [all/a
portion] of its interest in the Advances (as described below) and the Borrower
Collateral and to delegate to Assignee Lender [all/a portion] of its Commitment
and other duties with respect to such Advances and Borrower Collateral;
WHEREAS, Assignee Lender desires to become a Lender under the Funding
Agreement and to accept such assignment and delegation from Assignor Lender; and
WHEREAS, Assignee Lender desires to appoint the Administrative Agent to
serve as agent for Assignee Lender under the Funding Agreement;
provisions, and covenants herein contained, Assignor Lender and Assignee Lender
agree as follows:
1. ASSIGNMENT, DELEGATION, AND ACCEPTANCE
1.1 Assignment. Assignor Lender hereby transfers and assigns to
Assignee Lender, without recourse and without representations or warranties of
any kind (except as set forth in Section 3.2 below), [all/such percentage] of
Assignor Lender's right, title, and interest in the Advances, Related Documents
and Borrower Collateral as will result in Assignee Lender having as of the
Effective Date (as hereinafter defined) a Pro Rata Share thereof, as follows:
Assignee Lender's Loans Principal Amount Pro Rata Share
Advances
$
%
1.2 Delegation. Assignor Lender hereby irrevocably assigns and
delegates to Assignee Lender [all/a portion]of its Commitments and its other
[100%/ %] of Assignor Lender's Commitment (such percentage representing a
commitment of $ ).
1.3 Acceptance by Assignee Lender. By its execution of this
Agreement, Assignee Lender irrevocably purchases, assumes and accepts such
assignment and delegation and agrees to be a Lender with respect to the
delegated interest under the Related Documents and to be bound by the terms and
conditions thereof. By its execution of this Agreement, Assignor Lender agrees,
to the extent provided
herein, to relinquish its rights and be released from its obligations and duties
under the Funding Agreement.
1.4 Effective Date. Such assignment and delegation by Assignor
Lender and acceptance by Assignee Lender will be effective and Assignee Lender
will become a Lender under the Related Documents as of the date of this
Agreement ("Effective Date") and upon payment of the Assigned Amount and the
Assignment Fee (as each term is defined below).
2. INITIAL PAYMENT AND DELIVERY OF NOTES
2.1 Payment of the Assigned Amount. Assignee Lender will pay to
Assignor Lender, in immediately available funds, not later than 12:00 noon (New
York City time) on the Effective Date, an amount equal to its Pro Rata Share of
the then outstanding principal amount of the Advances as set forth above in
Section 1.1 together with accrued interest, fees and other amounts as set forth
on Schedule 2.1 (the "Assigned Amount").
2.2 Payment of Assignment Fee. [Assignor Lender] [Assignee Lender]
will pay to the Administrative Agent, for its own account in immediately
available funds, not later than 12:00 noon (New York City time) on the Effective
Date, an assignment fee in the amount of $3,500 (the "Assignment Fee") as
required pursuant to Section 14.02(b) of the Funding Agreement.
2.3Execution and Delivery of Notes. Following payment of the Assigned Amount and
the Assignment Fee, Assignor Lender will deliver to the Administrative Agent the
Revolving Notes previously delivered to Assignor Lender for redelivery to
Borrower and the Administrative Agent will obtain from Borrower for delivery to
[Assignor Lender and] Assignee Lender, new executed Revolving Notes evidencing
Assignee Lender's [and Assignor Lender's respective] Pro Rata Share[s] in the
Advances after giving effect to the assignment described in Section 1. Each new
Revolving Note will be issued in the aggregate maximum principal amount of the
Commitment of [the Assignee Lender] [and the Assignor Lender].
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 Assignee Lender's Representations, Warranties and
Covenants. Assignee Lender hereby represents, warrants, and covenants the
following to Assignor Lender and the Administrative Agent:
(a) This Agreement is a legal, valid, and binding agreement of Assignee
Lender, enforceable according to its terms;
(b) The execution and performance by Assignee Lender of its duties and
obligations under this Agreement and the Related Documents will not require any
registration with, notice to, or consent or approval by any Governmental
Authority;
(c) Assignee Lender is familiar with transactions of the kind and scope
reflected in the Related Documents and in this Agreement;
(d) Assignee Lender has made its own independent investigation and
appraisal of the financial condition and affairs of the Borrower and its
Affiliates, has conducted its own evaluation of the Advances, the Related
Documents and the Borrower's and its Affiliate's creditworthiness, has made its
decision to become a Lender to Borrower under the Funding Agreement
independently and without reliance upon Assignor Lender, any other Lender or the
Administrative Agent, and will continue to do so;
(e) Assignee Lender is entering into this Agreement in the ordinary
course of its business, and is acquiring its interest in the Advances for its
own account and not with a view to or for sale in connection with any subsequent
distribution; provided, however, that at all times the distribution of Assignee
Lender's property shall, subject to the terms of the Funding Agreement, be and
remain within its control;
(f) No future assignment or participation granted by Assignee Lender
pursuant to Section 14.02 of the Funding Agreement will require Assignor Lender,
the Administrative Agent, or Borrower to file any registration statement with
the Securities and Exchange Commission or to apply to qualify under the blue sky
laws of any state;
(g) Assignee Lender will not enter into any written or oral agreement
with, or acquire any equity or other ownership interest in, the Borrower or any
of its Affiliates without the prior written consent of the Administrative Agent;
and
(h) As of the Effective Date, Assignee Lender is entitled to receive
payments of principal and interest under the Funding Agreement without deduction
for or on account of any taxes imposed by the United States of America or any
political subdivision thereof and Assignee Lender will indemnify the
Administrative Agent from and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, or expenses that are not
paid by the Borrower pursuant to the terms of the Funding Agreement.
3.2 Assignor Lender's Representations, Warranties and
Covenants. Assignor Lender hereby represents, warrants and covenants the
following to Assignee Lender:
(a) Assignor Lender is the legal and beneficial owner of the Assigned
Amount;
(b) This Agreement is a legal, valid and binding agreement of Assignor
(c) The execution and performance by Assignor Lender of its duties and
obligations under this Agreement will not require any registration with, notice
to or consent or approval by any Governmental Authority;
(d) Assignor Lender has full power and authority, and has taken all
action necessary to execute and deliver this Agreement and to fulfill the
obligations hereunder and to consummate the transactions contemplated hereby;
(e) Assignor Lender is the legal and beneficial owner of the interests
being assigned hereby, free and clear of any adverse claim, lien, encumbrance,
security interest, restriction on transfer, purchase option, call or similar
right of a third party; and
(f) This Agreement complies, in all material respects, with the terms
of the Related Documents.
4. LIMITATIONS OF LIABILITY
Neither Assignor Lender (except as provided in Section 3.2) nor the
Administrative Agent makes any representations or warranties of any kind, nor
assumes any responsibility or liability whatsoever, with regard to (a) the
Related Documents or any other document or instrument furnished pursuant thereto
or the Advances or other Borrower Obligations, (b) the creation, validity,
genuineness, enforceability, sufficiency, value or collectibility of any of
them, (c) the amount, value or existence of the Borrower Collateral, (d) the
perfection or priority of any Lien upon the Borrower Collateral, or (e) the
financial condition of Borrower or any of its Affiliates or other obligor or the
performance or observance by Borrower or any of its Affiliates of its
obligations under any of the Related Documents. Neither Assignor Lender nor the
Administrative Agent has or will have any duty, either initially or on a
continuing basis, to make any investigation, evaluation, appraisal of, or any
responsibility or liability with respect to the accuracy or completeness of, any
information provided to Assignee Lender which has been provided to Assignor
Lender or the Administrative Agent by Borrower or any of its Affiliates. Nothing
in this Agreement or in the Related Documents shall impose upon the Assignor
Lender or the Administrative Agent any fiduciary relationship in respect of the
Assignee Lender.
5. FAILURE TO ENFORCE
No failure or delay on the part of the Administrative Agent or Assignor
Lender in the exercise of any power, right, or privilege hereunder or under any
Related Document will impair such power, right, or privilege or be construed to
be a waiver of any default or acquiescence therein. No single or partial
exercise of any such power, right, or privilege will preclude further exercise
thereof or of any other right, power, or privilege. All rights and remedies
existing under this Agreement are cumulative with, and not exclusive of, any
rights or remedies otherwise available.
6. NOTICES
Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given will be in writing and addressed
to the respective party as set forth below its signature hereunder, or to such
other address as the party may designate in writing to the other.
7. AMENDMENTS AND WAIVERS
No amendment, modification, termination, or waiver of any provision of
this Agreement will be effective without the written concurrence of Assignor
Lender, the Administrative Agent and Assignee Lender.
8. SEVERABILITY
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law. In the event
any provision of this Agreement is or is held to be invalid, illegal, or
unenforceable under applicable law, such provision will be ineffective only to
the extent of such invalidity, illegality, or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of the
Agreement. In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations in any other jurisdictions will not in any way be
affected or impaired thereby.
9. SECTION TITLES
Section and Subsection titles in this Agreement are included for
convenience of reference only, do not constitute a part of this Agreement for
any other purpose, and have no substantive effect.
10. SUCCESSORS AND ASSIGNS
parties hereto and their respective successors and assigns.
11. APPLICABLE LAW
THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT
STATE, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
12. COUNTERPARTS
This Agreement and any amendments, waivers, consents, or supplements may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, will be
deemed an original and all of which shall together constitute one and the same
instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
Assignee Lender Assignor Lender
By:
By:
Title:
Title:
Notice Address
Notice Address Account Information: Account Information
Acknowledged and Consented to:
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Its Duly Authorized Signatory
SUPERIOR ESSEX FUNDING LLC
By:
Name:
Title:
SCHEDULE 2.1
Assignor Lender's Loans
Principal Amount
Revolving Loans
$
Accrued Interest
$
Unused Line Fee
$
Other + or-
$
Total $
All determined as of the Effective Date
ANNEX 5.02(a)
to
FUNDING AGREEMENT
REPORTING REQUIREMENTS OF THE BORROWER
The Borrower shall furnish, or cause to be furnished, to each Lender and
the Administrative Agent:
(a) Monthly Report. As soon as available, and in any event no later
than 11:00 a.m. (New York time) on the fifteenth day of each fiscal month, a
Monthly Report in the form attached hereto prepared by the Borrower as of the
last day of the previous fiscal month, together with an unaudited monthly
balance sheet of the Borrower certified by an officer of the Borrower.
(b) Annual Audited Financials. As soon as available, and in any event
within 90 days after the end of each fiscal year, a copy of (1) the audited
consolidated financial statements for such year for each of the Borrower and the
Parent and its Subsidiaries, certified in each case without qualification in a
manner satisfactory to the Administrative Agent by Deloitte & Touche (or its
successor) or other nationally recognized independent public accountants
reasonably acceptable to the Administrative Agent, with such financial
statements being prepared in accordance with GAAP applied consistently
throughout the period involved (except as approved by such accountants and
disclosed therein) and (2) the unaudited consolidating financial statements for
the Parent and its Subsidiaries.
(c) Quarterly Financials. As soon as available, and in any event within
45 days after the end of each fiscal quarter (other than the last quarter of
such fiscal year), financial information regarding the Parent and its
Subsidiaries, certified by the Chief Financial Officer of the Parent, consisting
of consolidated unaudited balance sheets as of the close of such fiscal quarter
and the related statements of income and cash flows for that portion of the
fiscal year ending as of the close of such fiscal quarter, all prepared in
accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes. Such financial information shall be accompanied by the
certification of the Chief Financial Officer of the Parent that (A) such
financial information presents fairly in accordance with GAAP the financial
position and results of operations of the Parent and its Subsidiaries, on a
consolidated and consolidating basis, in each case as at the end of such quarter
and for the period then ended and (B) any other information presented is true,
correct and complete in all material respects and that there was no Incipient
Termination Event or Termination Event in existence as of such time or, if an
Incipient Termination Event or Termination Event shall have occurred and be
continuing, describing the nature thereof and all efforts undertaken to cure
such Incipient Termination Event or Termination Event. In addition, the Borrower
shall furnish, or cause to be furnished, to the Administrative Agent and the
Lenders, within 50 days after the end of each fiscal quarter, (y) a statement in
reasonable detail (each, a "Compliance Certificate") showing the calculations
used in determining compliance with each financial covenant described in
Sections 9.01(v) and (x) of the Funding Agreement and (z) a management
discussion and analysis that includes a comparison of performance for the fiscal
year to date as of the end of that fiscal quarter to the corresponding period in
the prior year, as set forth in the quarterly filings made by the Parent with
the Securities and Exchange Commission.
(d) Monthly Financials. As soon as available, and in any event within
30 days after the end of each fiscal month (unless such month is also the end of
a calendar quarter), financial information regarding the Borrower and the Parent
and its Subsidiaries, certified by the Chief Financial Officer of the Parent,
consisting of consolidated unaudited balance sheets as of the close of such
fiscal month and the related statements of income and cash flows for that
portion of the fiscal year ending as of the close of such fiscal month, all
prepared in accordance with GAAP, subject to normal year-end audit adjustments
and the absence of footnotes. Such financial information shall be accompanied by
the certification of the Chief Financial Officer of the Parent that (A) such
position and results of operations of the Borrower, the Parent and its
Subsidiaries, on a consolidated and consolidating
basis, in each case as at the end of such month and for the period then ended
and (B) any other information presented is true, correct and complete in all
material respects and that there was no Incipient Termination Event or
Termination Event in existence as of such time or, if an Incipient Termination
Event or Termination Event shall have occurred and be continuing, describing the
nature thereof and all efforts undertaken to cure such Incipient Termination
Event or Termination Event.
(e) Operating Plan. As soon as available, but not later than 30 days
after the end of each fiscal year, an annual operating plan for such fiscal year
for the Parent, which will (i) include a statement of the material assumptions
on which such plan is based, (ii) include monthly balance sheets and monthly
projections for such year and (iii) integrate sales, gross profits, operating
expenses, operating profit, cash flow projections and Borrowing Base
projections, all prepared on the same basis and in similar detail as that on
which operating results are reported (and in the case of cash flow projections,
representing management's good faith estimates of future financial performance
based on historical performance), and including plans for personnel, capital
expenditures and facilities.
(f) Management Letters. Within 10 Business Days after receipt thereof
by the Borrower, copies of all management letters, exception reports or similar
letters or reports received by the Borrower from its independent certified
public accountants.
(g) Default Notices. As soon as practicable, and in any event within
five Business Days after an Authorized Officer of the Borrower has actual
knowledge of the existence thereof, telephonic or telecopied notice of each of
the following events, in each case specifying the nature and anticipated effect
thereof and what action, if any, the Borrower proposes to take with respect
thereto, which notice, if given telephonically, shall be promptly confirmed in
writing on the next Business Day:
(i) any Incipient Termination Event or Termination Event;
(ii) any Adverse Claim made or asserted against any of the Borrower
Collateral of which it becomes aware;
(iii) the occurrence of any event that would have a material adverse
effect on the aggregate value of the Borrower Collateral or on the assignments
(iv) the occurrence of any event of the type described in Sections
4.02(h)(i), (ii) or (iii) of the Sale Agreement involving any Obligor obligated
under Transferred Receivables with an aggregate Outstanding Balance at such time
of $500,000 or more;
(v) the commencement of a case or proceeding by or against the
Borrower, the Parent, the Servicer, any Originator, any other Subsidiary of the
Parent or any Obligor seeking a decree or order in respect of the Borrower, the
Parent, the Servicer, any Originator, any other Subsidiary of the Parent or any
Obligor (A) under the Bankruptcy Code or any other applicable federal, state or
foreign bankruptcy or other similar law, (B) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for the
Parent or any Obligor or for any substantial part of its respective assets, or
(C) ordering the winding-up or liquidation of the affairs of the Borrower, the
Obligor;
(vi) the receipt of notice that (A) the Borrower, the Parent, the
Servicer, any Originator, any other Subsidiary of the Parent or any Obligor is
being placed under regulatory supervision, (B) any license, permit, charter,
registration or approval necessary for the conduct of the business of the
Parent or any Obligor is to be, or may be, suspended or revoked, or (C) the
Parent or any Obligor is
to cease and desist any practice, procedure or policy employed by it in the
conduct of its business if such cessation could reasonably be expected to have a
Material Adverse Effect;
(vii) the commencement of litigation against the Parent or any
Subsidiary of the Parent alleging infringement or interference with any
intellectual property of another Person; or
(viii) any other event, circumstance or condition that has had or could
reasonably be expected to have a Material Adverse Effect.
(h) SEC Filings and Press Releases. Promptly upon their becoming
available, copies of: (i) all financial statements, reports, notices and proxy
statements made publicly available by the Borrower, the Parent or any Originator
to its security holders; (ii) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by the Borrower, the
Parent or any Originator with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority; and
(iii) all press releases and other statements made available by the Borrower,
the Parent or any Originator to the public concerning material adverse changes
or developments in the business of any such Person.
(i) Litigation. Promptly upon learning thereof, written notice of any
Litigation affecting the Borrower, the Transferred Receivables or the Borrower
Collateral, whether or not fully covered by insurance, and regardless of the
subject matter thereof that (i) seeks damages in excess of $250,000, (ii) seeks
injunctive relief, (iii) is asserted or instituted against any Plan, its
fiduciaries (in their capacity as a fiduciary of any such Plan) or its assets or
against the Borrower or any ERISA Affiliate of the Borrower in connection with
any Plan, (iv) alleges criminal misconduct by the Borrower or (v) would, if
determined adversely, have a Material Adverse Effect.
(j) Other Documents. Such other financial and other information
respecting the Transferred Receivables, the Contracts therefor or the condition
or operations, financial or otherwise, of the Borrower, any Originator, the
Parent or any of its other Subsidiaries as any Lender or Administrative Agent
shall, from time to time, reasonably request.
(k) Credit Agreement Reports. As soon as available, and in any event
when the same shall be required to be delivered in accordance with the terms of
the Credit Agreement, copies of each of the reports described in Section 7.01 of
the Credit Agreement.
(l) Miscellaneous Certifications. As soon as available, and in any
event within 90 days after the end of each fiscal year, (i) a Bringdown
Certificate in the form attached hereto, (ii) a Servicer's Certificate in the
form attached hereto, and (iii) if requested, an opinion or opinions of counsel,
in form and substance satisfactory to the Lenders and the Administrative Agent,
reaffirming as of the date of such opinion the opinions of counsel with respect
to the Borrower and the Originators delivered to the Lenders and the
Administrative Agent on the Closing Date.
Form of Monthly Report
[See attached]
ANNEX W
ADMINISTRATIVE AGENT'S ACCOUNT/
LENDERS' ACCOUNTS
Deutsche Bank Trust Company Americas
130 Liberty Street
New York, New York 10006
ABA# 021-001-033
Account Name: GECC CAF Depository
Account # 50-232-854
Reference: Superior Essex Funding LLC
ANNEX X
to
RECEIVABLES SALE AGREEMENT
and
RECEIVABLES FUNDING AGREEMENT
each dated as of
November 6, 2002
Definitions and Interpretation
SECTION 1. Definitions and Conventions. Capitalized terms used in
the Sale Agreement and the Funding Agreement shall have (unless otherwise
provided elsewhere therein) the following respective meanings:
"Accounting Changes" shall mean, with respect to any Person, (a)changes
in accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion of the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants (or any successor thereto or
any agency with similar functions); (b)changes in accounting principles
concurred in by such Person's certified public accountants; (c)purchase
accounting adjustments under A.P.B. 16 or 17 and EITF 88-16, and the application
of the accounting principles set forth in FASB 109, including the establishment
of reserves pursuant thereto and any subsequent reversal (in whole or in part)
of such reserves; and (d)the reversal of any reserves established as a result of
purchase accounting adjustments.
"Additional Amounts" shall mean any amounts payable to any Affected
Party under Sections 2.09 or 2.10 of the Funding Agreement.
"Additional Costs" shall have the meaning assigned to it in
Section 2.09(b) of the Funding Agreement.
"Administrative Agent" shall have the meaning set forth in the Preamble
of the Funding Agreement.
"Administrative Services Agreement" shall mean that certain
Administrative Services Agreement dated as of the date hereof between the
Borrower and the Parent, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Advance" shall have the meaning assigned to it in Section 2.01 of the
Funding Agreement.
"Advance Date" shall mean each day on which any Advance is made.
"Adverse Claim" shall mean any claim of ownership or any Lien, other
than any ownership interest or Lien created under the Sale Agreement or the
Funding Agreement.
"Affected Party" shall mean each of the following Persons: each Lender,
the Administrative Agent, the Depositary and each Affiliate of the foregoing
Persons.
"Affiliate" shall mean, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, five percent (5%) or more of the Stock
having ordinary voting power in the election of directors of such Person,
(b) each Person that controls, is controlled by or is under common control with
such Person, or (c) each of such Person's officers, directors, joint venturers
and partners. For the purposes of this definition, "control" of a Person shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
"Aggregate Commitment" shall mean as to all Lenders, the aggregate
commitment of all Lenders to make Advances, which aggregate commitment shall be
One Hundred Sixty Million Dollars ($160,000,000) on the Closing Date, as such
amount may be adjusted, if at all, from time to time in accordance with the
Funding Agreement.
"ANICOM" shall mean ANICOM, Inc.
"Appendices" shall mean, with respect to any Related Document, all
exhibits, schedules, annexes and other attachments thereto, or expressly
identified thereto.
"Assignment Agreement" shall mean an assignment agreement in the form of
Exhibit 14.02 attached to the Funding Agreement.
"Authorized Officer" shall mean, with respect to any corporation or
limited liability company, the Chairman or Vice-Chairman of the Board, the
President, any Vice President, the General
Counsel, the Secretary, the Treasurer, the Controller any Assistant Secretary,
any Assistant Treasurer, any manager or managing member and each other officer
of such corporation or limited liability company specifically authorized to sign
agreements, instruments or other documents on behalf of such corporation or
limited liability company in connection with the transactions contemplated by
the Sale Agreement, the Funding Agreement and the other Related Documents.
"Availability Block" shall mean $5,000,000.
"Bankruptcy Code" shall mean the provisions of title 11 of the United
States Code, 11 U.S.C. § § 101 et seq.
"Billed Amount" shall mean, with respect to any Receivable, the amount
billed on the Billing Date to the Obligor thereunder.
"Billing Date" shall mean, with respect to any Receivable, the date on
which the invoice with respect thereto was generated.
"Borrower" shall mean Superior Essex Funding LLC, a Delaware limited
liability company, in its capacity as Borrower under the Funding Agreement.
"Borrower Account" shall mean account number 00-424-794 maintained by
the Borrower at the Borrower Account Bank, which account shall be subject to a
blocked account agreement pursuant to which the Administrative Agent shall have
control of such account.
"Borrower Account Bank" shall mean the bank or other financial
institution at which the Borrower Account is maintained.
"Borrower Account Collateral" shall have the meaning assigned to it in
Section 8.01(c) of the Funding Agreement.
"Borrower Assigned Agreements" shall have the meaning assigned to it in
Section 8.01(b) of the Funding Agreement.
"Borrower Collateral" shall have the meaning assigned to it in
Section 8.01 of the Funding Agreement.
"Borrower Obligations" shall mean all loans, advances, debts,
liabilities, indemnities and obligations for the performance of covenants, tasks
or duties or for payment of monetary amounts (whether or not such performance is
then required or contingent, or such amounts are liquidated or determinable)
owing by the Borrower to any Affected Party under the Funding Agreement and any
document or instrument delivered pursuant thereto, and all amendments,
extensions or renewals thereof, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising thereunder, including the
Outstanding Principal Amount, interest, Unused Facility Fees, amounts in
reduction of Funding Excess, Successor Servicing Fees and Expenses, Additional
Amounts and Indemnified Amounts. This term includes all principal, interest
(including all interest that accrues after the commencement of any case or
proceeding by or against the Borrower in bankruptcy, whether or not allowed in
such case or proceeding), fees, charges, expenses, reasonable attorneys' fees
and any other sum chargeable to the Borrower under any of the foregoing, whether
now existing or hereafter arising, voluntary or involuntary, whether or not
jointly owed with others, direct or indirect, absolute or contingent, liquidated
or unliquidated, and whether or not from time to time decreased or extinguished
and later increased, created or incurred, and all or any portion of such
obligations that are paid to the extent all or any portion of such payment is
avoided or recovered directly or indirectly from any Lender or the
Administrative Agent or any assignee of any Lender or the Administrative Agent
as a preference, fraudulent transfer or otherwise.
"Borrowing" shall have the meaning assigned to it in Section 2.01(a) of
the Funding Agreement.
"Borrowing Base" means, as of any date of determination, the amount
equal to
the lesser of:
(a) the Maximum Facility Amount,
and
(b) an amount equal to the positive difference, if any, of:
(i) the product of (1) the Dynamic Advance Rate multiplied by (2) the Net
Receivables Balance,
minus
(ii) the sum of (W) an amount equal to the Availability Block, plus (X) the
Interest Reserve, plus (Y) $250,000, plus (Z) such other reserves as the
Administrative Agent may determine from time to time based upon its reasonable
credit judgment;
in each case as disclosed in the most recently submitted Borrowing Base
Certificate or Borrowing Request or as otherwise determined by the
Administrative Agent based on Borrower Collateral information available to it,
including any information obtained from any audit or from any other reports with
respect to the Borrower Collateral, which determination shall be final, binding
and conclusive on all parties to the Funding Agreement (absent manifest error).
"Borrowing Base Certificate" shall have the meaning assigned to it in
Section 5.02(b) of the Funding Agreement.
"Borrowing Request" shall have the meaning assigned to it in
Section 2.03(a) of the Funding Agreement.
"Breakage Costs" shall have the meaning assigned to it in Section 2.10
"Business Day" shall mean any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in the State of New
York, the State of Georgia or, with respect to any remittances to be made by a
Lockbox Account Bank or to any related Lockbox Account, in the jurisdiction(s)
in which the Lockbox Account(s) maintained by such Lockbox Account Bank is
located.
"Buyer" shall mean Superior Essex Funding LLC a Delaware limited
liability company, in its capacity as Buyer under the Sale Agreement.
"Buyer Indemnified Person" shall have the meaning assigned to it in
Section 5.01 of the Sale Agreement.
"Capital Lease" shall mean, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" shall mean, with respect to any Capital Lease
of any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Change of Control" shall mean any event, transaction or occurrence as a
result of which (a) any person or group of persons (within the meaning of the
Securities Exchange Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities
Exchange Commission under the Securities Exchange Act of 1934, as amended) of
20% or more of the issued and outstanding shares of capital Stock of the Parent
having the right to vote for the election of directors of the respective entity
under ordinary circumstances; (b) during any twelve (12) consecutive calendar
months ending after the Closing Date, individuals who at the beginning of such
twelve-month period constituted the board of directors of the Parent (together
with any new directors whose election by such board or whose nomination for
election by the shareholders of the Parent was approved by a vote of a majority
of the directors still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) shall cease for any reason
to constitute a majority of the board of directors of the Parent then in office;
(c) the Parent shall cease to own and control all of the economic and voting
rights associated with all of the outstanding Stock of any Originator (other
than as a result of the sale of the capital Stock of any Originator in
accordance with the terms of the Funding Agreement) or, directly or indirectly,
of the Borrower; (d) the Member shall cease to own directly or indirectly and
control all of the economic and voting rights associated with the outstanding
Stock of the Borrower; (e) the Parent has sold, transferred, conveyed, assigned
or otherwise disposed of all or substantially all of the assets of the Parent;
or (f) any Person or group acquires direct or indirect control of the Parent.
"Charges" shall mean (i) all federal, state, provincial, county, city,
municipal, local, foreign or other governmental taxes (including taxes owed to
the PBGC at the time due and payable); (ii) all levies, assessments, charges, or
claims of any governmental entity or any claims of statutory lienholders, the
nonpayment of which could give rise by operation of law to a Lien on Borrower
Collateral or any other property of the Borrower or any Originator and (iii) any
such taxes, levies, assessment, charges or claims which constitute a lien or
encumbrance on any property of the Borrower or any Originator.
"Closing Date" shall mean November 6, 2002.
"Collection Account" shall mean account number 50-232-854 with the
Depositary in the name of the Administrative Agent.
"Collections" shall mean, with respect to any Receivable, all cash
collections and other proceeds of such Receivable (including late charges, fees
and interest arising thereon, and all recoveries with respect thereto that have
been written off as uncollectible).
"Commitment" shall mean as to any Lender, the aggregate commitment of
such Lender to make Advances as set forth in the signature page to the Funding
Agreement or in the most recent Assignment Agreement executed by such Lender, as
Funding Agreement.
"Commitment Reduction Notice" shall have the meaning assigned to it in
Section 2.02(a) of the Funding Agreement.
"Commitment Termination Date" shall mean the earliest of (a) the date so
designated pursuant to Section 9.01 of the Funding Agreement, (b) the Final
Advance Date, and (c) the date of termination of the Maximum Facility Amount
specified in a notice from the Borrower to the Lenders delivered pursuant to and
in accordance with Section 2.02(b) of the Funding Agreement.
"Commitment Termination Notice" shall have the meaning assigned to it in
Section 2.02(b) of the Funding Agreement.
"Concentration Percentage" shall mean, with respect to an Obligor as of
any date of determination, the General Concentration Percentage or, if
applicable, the Special Concentration Percentage for such Obligor at such date
of determination.
"Contract" shall mean any agreement or invoice pursuant to, or under
which, an Obligor shall be obligated to make payments with respect to any
Receivable.
"Contributed Receivables" shall have the meaning assigned to it in
Section 2.01(d) of the Sale Agreement.
"Credit Agreement" shall mean that certain Credit Agreement, dated as of
November 27, 1998, among Superior/Essex Corp., Essex Group, Inc., the guarantors
named therein, the lending institutions party thereto, Merrill Lynch & Co, as
documentation agent, Fleet National Bank, as syndication agent and Deutsche Bank
Trust Company Americas, as administrative agent and collateral agent, and as in
effect on Closing Date together with, subject to Section 4.03(m) of the
Sale Agreement, such amendments, restatements, supplements or modifications
thereto, or any refinancings, replacements or refundings thereof.
"Credit and Collection Policies" shall mean the written credit,
collection, customer relations and service policies of the Originators in effect
on the Closing Date and attached as Exhibit A to the Funding Agreement, as the
same may from time to time be amended, restated, supplemented or otherwise
modified with the written consent of the Administrative Agent.
"Debt" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services payment for which is deferred 90 days or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than 90 days unless being contested in
good faith, (b) all reimbursement and other obligations with respect to letters
of credit, bankers' acceptances and surety bonds, whether or not matured,
(c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Guaranteed Indebtedness of such Person, (i) all indebtedness
referred to in clauses (a) through (i) above secured by (or for which the holder
of such indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in property or other assets (including accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such indebtedness; provided, however, that
in the event that the liability of such Person is non-recourse to such Person
and is recourse only to specific assets of such Person and so long as no other
Person has guaranteed such debt or otherwise provided support for such debt, for
purposes of this definition, the amount of such debt shall not exceed the
greater of the market value of such assets and the book value of such assets,
(j) all "Indebtedness" as such term is defined in the Credit Agreement, (k) all
"Loans" and other obligations of the Parent under the Credit Agreement, and
(l) the Borrower Obligations.
"Defaulted Receivable" shall mean any Receivable (a) with respect to
which any payment, or part thereof, remains unpaid for more than 90 days after
its Maturity Date, (b) with respect to which the Obligor thereunder has taken
any action, or suffered any event to occur, of the type described in
Sections 9.01(d) or 9.01(e) of the Funding Agreement or (c) that otherwise has
been or should be written off in accordance with the Credit and Collection
Policies.
"Default Ratio" shall mean, as of any date of determination, the ratio
(expressed as a percentage) of:
(a) the aggregate Outstanding Balance of all Defaulted Receivables
(other than the Receivables owing by Grand Eagle and ANICOM as of the Closing
Date) as of the last day of the three Settlement Periods immediately preceding
such date;
to
(b) the aggregate Outstanding Balance of all Transferred Receivables
such date.
"Delinquency Ratio" shall mean, as of any date of determination, the
ratio (expressed as a percentage) of:
(a) the aggregate Outstanding Balance of all Receivables with respect
to which any payment, or part thereof, is between 61 and 90 days past due as of
the last day of the three Settlement Periods immediately preceding such date
to
(b) the aggregate Outstanding Balance of all Transferred Receivables as
of the last day of the three Settlement Periods immediately preceding such date.
"Depositary" has the meaning given such term in Section 6.01(b)(i) of
the Funding Agreement.
"Dilution Factors" shall mean, with respect to any Receivable (other
than Receivables owing by Grand Eagle and ANICOM as of the Closing Date), any
portion of which (a) was reduced, canceled or written-off as a result of (i) any
credits, rebates, freight charges, cash discounts, volume discounts, cooperative
advertising expenses, royalty payments, warranties, cost of parts required to be
maintained by agreement (either express or implied), allowances for early
payment, warehouse and other allowances, defective, rejected, returned or
repossessed merchandise or services, or any failure by any Originator to deliver
any merchandise or services or otherwise perform under the underlying Contract
or invoice, or (ii) any setoff in respect of any claim by the Obligor thereof
(whether such claim arises out of the same or a related transaction or an
unrelated transaction) or (b) is subject to any specific dispute, offset,
counterclaim or defense whatsoever (except discharge in bankruptcy of the
Obligor thereof); provided, that, in respect of any Receivable the full amount
of which is credited and then rebilled for a lesser amount but otherwise on the
same terms, including the original invoice date, the "Dilution Factors" for such
Receivable in connection for such "credit-rebills" shall be, if such credit and
rebill occurs within one Business Day, zero, and otherwise the difference, if
positive, between the original balance of such Receivable minus the balance of
the re-billed Receivable.
"Dilution Ratio" shall mean, as of any date of determination, the ratio
(a) the aggregate Dilution Factors for all Transferred Receivables
during the Settlement Period immediately preceding such date
to
(b) the aggregate Billed Amount of all Transferred Receivables (other
than the Receivables owing by Grand Eagle and ANICOM as of the Closing Date)
originated during the Settlement Period immediately preceding such date.
"Dilution Reserve Ratio" shall mean, as of any date of determination,
the ratio (expressed as a percentage) equal to the sum of (i) two times the
average of the Dilution Ratios as of the last day of each of the three
Settlement Periods immediately preceding such date, plus (ii) 5%.
"Dilution Trigger Ratio" shall mean, as of any date of determination,
the average of the Dilution Ratios for the three most recently ended Settlement
Periods.
"Dollars" or "$" shall mean lawful currency of the United States of
America.
"Dynamic Advance Rate" shall mean, as of any date of determination, the
lesser of (i) 85% and (ii) a percentage equal to 100% minus the Dilution Reserve
Ratio as of such date.
"Effective Date" shall have the meaning given to such term in
Section 3.01 of the Funding Agreement.
"Election Notice" shall have the meaning assigned to it in
"Eligible Receivable" shall mean, as of any date of determination, a
Transferred Receivable:
F. (i) that is due and payable within 120 days of the Billing Date
thereof and does not have cash on delivery or C.O.D. payment terms and (ii) with
respect to which no payment or part thereof remains unpaid for more than 60 days
after its Maturity Date or more than 121 days after its Billing Date;
G. that is not a liability of an Excluded Obligor or an Obligor with
respect to which more than 50% of the aggregate Outstanding Balance of all
Receivables owing by such Obligor are more than 60 days past due from the
Maturity Date thereof or more than 121 days past due from the Billing Date
thereof;
H. that is not a liability of an Obligor organized under the laws of any
jurisdiction outside of the United States of America (including the District of
Columbia but otherwise excluding its territories and possessions), Canada or
Mexico; provided, however, that if it is organized under the laws of Mexico,
such Obligor's parent must be organized under the laws of a State in the United
States of America;
I. that is denominated and payable in Dollars in the United States of
America or Canadian dollars and is not represented by a note or other negotiable
instrument or by chattel paper;
J. that is not subject to any right of rescission, dispute, offset
(including, without limitation, as a result of customer promotional allowances,
discounts, rebates, or claims for damages), hold back defense, adverse claim or
other claim (with only the portion of any such Receivable subject to any such
right of rescission, dispute, offset (including, without limitation, as a result
of customer promotional allowances, discounts, rebates, or claims for damages),
hold back defense, adverse claim or other claim being considered an Ineligible
Receivable by virtue of this clause (e)), whether arising out of transactions
concerning the Contract therefor or otherwise;
K. with respect to which the Obligor thereunder is not: (i) bankrupt or
insolvent, (ii) unable to make payment of its obligations when due, (iii) a
debtor in a voluntary or involuntary bankruptcy proceeding, or (iv) the subject
of a comparable receivership or insolvency proceeding; provided, however, that
if a Receivable is not eligible as a result of this clause (f) but would
otherwise constitute an Eligible Receivable hereunder, such Receivable shall be
an Eligible Receivable so long as it arose post-petition and the Obligor thereof
has designated the applicable Originator as a "critical vendor" and obtained the
requisite court approval to pay the post-petition claims of such Originator on
an administrative priority basis;
L. that is not an Unapproved Receivable;
M. that does not represent "billed but not yet shipped" goods or
merchandise, partially performed or unperformed services, consigned goods or
"sale or return" goods and does not arise from a transaction for which any
additional performance by the Originator thereof, or acceptance by or other act
of the Obligor thereunder, including any required submission of documentation,
remains to be performed as a condition to any payments on such Receivable or the
enforceability of such Receivable under applicable law;
N. as to which the representations and warranties of Sections
4.01(v)(ii) through (iv) of the Sale Agreement are true and correct in all
respects as of the Transfer Date therefor;
O. that is not the liability of an Obligor that has any claim of a
material nature against or affecting the Originator thereof or the property of
such Originator (with only that portion of Receivables owing by such Obligor
equal to the amount of such claim being an Ineligible Receivable);
P. that was originated in accordance with and satisfies in all material
respects all applicable requirements of the Credit and Collection Policies;
Q. that represents the genuine, legal, valid and binding obligation of
the Obligor thereunder enforceable by the holder thereof in accordance with its
terms;
R. that is entitled to be paid pursuant to the terms of the Contract
therefor, has not been paid in full or been compromised, adjusted, extended,
satisfied, subordinated, rescinded or modified (except for adjustments to the
Outstanding Balance thereof to reflect Dilution Factors made in accordance with
the Credit and Collection Policies);
S. that does not contravene in any material respect any laws, rules or
regulations applicable thereto (including laws, rules and regulations relating
to usury, consumer protection, truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no party to the Contract therefor is in
violation of any such law, rule or regulation that could reasonably be expected
to have a material adverse effect on the collectibility, value or payment terms
of such Receivable;
T. with respect to which no proceedings or investigations are pending or
threatened before any Governmental Authority (i) asserting the invalidity of
such Receivable or the Contract therefor, (ii) asserting the bankruptcy or
insolvency of the Obligor thereunder; provided, however, that if a Receivable is
not eligible as a result of this clause (ii) but would otherwise constitute an
Eligible Receivable hereunder, such Receivable shall be an Eligible Receivable
so long as it arose post-petition and the Obligor thereof has designated the
applicable Originator as a "critical vendor" and obtained the requisite court
approval to pay the post-petition claims of such Originator on an administrative
priority basis, (iii) seeking payment of such Receivable or payment and
performance of such Contract or (iv) seeking any determination or ruling that
could reasonably be expected to materially and adversely affect the validity or
enforceability of such Receivable or such Contract;
U. (i) that is an "account" within the meaning of the UCC (or any other
applicable legislation) of the jurisdictions in which the each of the
Originators, the Parent and the Borrower are organized and in which chief
executive offices of each of the Originators, the Parent and the Borrower are
located and (ii) under the terms of the related Contract, the right to payment
thereof may be freely assigned (or with respect to which, the prohibition on the
assignment of rights to payment are made fully ineffective under applicable
law);
V. that is payable solely and directly to an Originator and not to any
other Person (including any shipper of the merchandise or goods that gave rise
to such Receivable), except to the extent that payment thereof may be made to a
Lockbox or otherwise as directed pursuant to Article VI of the Funding
Agreement;
W. with respect to which all material consents, licenses, approvals or
authorizations of, or registrations with, any Governmental Authority required to
be obtained, effected or given in connection with the creation of such
Receivable or the Contract therefor have been duly obtained, effected or given
and are in full force and effect;
X. that is created through the provision of merchandise, goods or
services by the Originator thereof in the ordinary course of its business in a
current transaction;
Y. that is not the liability of an Obligor that, under the terms of the
Credit and Collection Policies, is receiving or should receive merchandise,
goods or services on a "cash on delivery" basis;
Z. that does not constitute a rebilled amount arising from a deduction
taken by an Obligor with respect to a previously arising Receivable;
AA. that is not subject to any Lien, right, claim, security interest or
other interest of any other Person, other than Liens in favor of the
A. to the extent such Transferred Receivable represents sales tax such
portion of such Receivable shall not be an Eligible Receivable;
BB. that does not represent the balance owed by an Obligor on a
Receivable in respect of which the Obligor has made partial payment;
B. with respect to which no check, draft or other item of payment was
previously received that was returned unpaid or otherwise; and
CC. that complies with such other criteria and requirements as the
Administrative Agent, using its good faith and commercially reasonable credit
judgment following a detailed analysis of the Transferred Receivables (or upon
receipt of additional information with respect thereto), may from time to time
specify to the Borrower or the Originator thereof upon not less than three
(3) Business Days prior written notice; provided that, as long as no Termination
Event has occurred, the Administrative Agent shall give advance written notice
to the Seller with respect to such modification.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974
and any regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to any Originator, any trade
or business (whether or not incorporated) that, together with such Originator,
are treated as a single employer within the meaning of Sections 414(b), (c),
(m) or (o) of the IRC.
"ERISA Event" shall mean, with respect to any Originator or any ERISA
Affiliate, the occurrence of one or more of the following events: (a) any event
described in Section 4043(c) of ERISA with respect to a Title IV Plan unless the
30-day notice requirement with respect therto has been waived pursuant to the
regulations under Section 4043 of ERISA; (b) the withdrawal of any Originator or
ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a
plan year in which it was a "substantial employer," as defined in
Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any
Originator or any ERISA Affiliate from any Multiemployer Plan; (d) the filing of
a notice of intent to terminate a Title IV Plan or the treatment of a plan
amendment as a termination under Section 4041 of ERISA; (e) the institution of
proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC;
(f) the failure by any Originator or ERISA Affiliate to make when due required
contributions to a Multiemployer Plan or Title IV Plan unless such failure is
cured within 30 days; (g) any other event or condition that might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Title IV Plan or
Multiemployer Plan or for the imposition of liability under Section 4069 or
4212(c) of ERISA; (h) the termination of a Multiemployer Plan under
Section 4041A of ERISA or the reorganization or insolvency of a Multiemployer
Plan under Section 4241 of ERISA; or (i) the loss of a Qualified Plan's
qualification or tax exempt status.
"ESOP" shall mean a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"Event of Servicer Termination" shall have the meaning assigned to it in
Section 9.02 of the Funding Agreement.
"Excess Concentration Amount" shall mean, with respect to any Obligor of
a Receivable and as of any date of determination after giving effect to all
Eligible Receivables to be transferred on such date, the amount by which the
Outstanding Balance of Eligible Receivables owing by such Obligor exceeds
(i) the Concentration Percentage for such Obligor multiplied by (ii) the
Outstanding Balance of all Eligible Receivables on such date.
"Excluded Obligor" shall mean any Obligor (a) that is an Affiliate of
any Originator, the Parent or the Borrower, (b) that is a Governmental Authority
(unless approved by the Administrative Agent as a result of satisfactory
compliance with all assignment of claims statutes and regulations applicable to
such Governmental Authority's Receivables or such other agreements
have been entered into which are satisfactory to the Administrative Agent in its
absolute discretion), or (c) that is designated as an Excluded Obligor upon ten
(10) Business Days' prior written notice from the Administrative Agent to the
Borrower, the Servicer and the Parent.
"Existing Securitization" shall mean that certain Loan and Security
Agreement dated as of April 29, 1998, as amended, between Essex Funding, Inc.
and Three Rivers Funding Corporation.
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by the Administrative
Agent.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System.
"Fees" shall mean any and all fees payable to the Administrative Agent
or any Lender pursuant to the Funding Agreement or any other Related Document.
"Fee Letter" shall mean that certain letter agreement dated the
November 6, 2002 between the Parent and the Administrative Agent.
"Final Advance Date" shall mean February 27, 2004.
"Funding Agreement" shall mean that certain Receivables Funding
Agreement dated as of November 6, 2002, among the Borrower, the Lenders, the
Servicer and the Administrative Agent as amended, supplemented, restated or
"Funding Availability" shall mean, as of any date of determination, the
amount, if any, by which the Borrowing Base exceeds the Outstanding Principal
Amount, in each case as of the end of the immediately preceding day.
"Funding Excess" shall mean, as of any date of determination, the extent
to which the Outstanding Principal Amount exceeds the Borrowing Base, in each
case as disclosed in the most recently submitted Borrowing Base Certificate or
Borrowing Request or as otherwise determined by the Administrative Agent based
on Borrower Collateral information available to it, including any information
obtained from any audit or from any other reports with respect to the Borrower
Collateral, which determination shall be final, binding and conclusive on all
parties to the Funding Agreement (absent manifest error).
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect from time to time, consistently applied as such
term is further defined in Section 2(a) of this Annex X.
"GE Capital" shall mean General Electric Capital Corporation, a Delaware
corporation, and its successors and assigns.
"General Concentration Percentage" shall mean at any time of
determination with respect to any Obligor, the percentage corresponding to such
Obligor based upon the Obligor Rating of such Obligor by S&P and Moody's at the
time of such determination, as set forth below; provided, that, (i) in the case
of any split Obligor Rating between S&P and Moody's, the General Concentration
Percentage for the lower Obligor Rating shall be used to determine the
applicable General Concentration Percentage, and (ii) an Obligor may be deemed
to have the long term unsecured
debt rating of its parent so long as the Administrative Agent has received
evidence that the debts of such Obligor are guaranteed by its parent:
Obligor Rating of Such Obligor
General Concentration Percentage
AA- and Aa3 or higher 10%
At least A and A2 but less than AA- and Aa3
8%
At least BBB and Baa2 but less than A and A2
6%
Less than BBB or Baa2 (or Obligors without an Obligor Rating from S&P or
Moody's)
5%
"General Trial Balance" shall mean, with respect to any Originator and
as of any date of determination, such Originator's accounts receivable trial
balance (whether in the form of a computer printout, magnetic tape or diskette)
as of such date, listing Obligors and the Receivables owing by such Obligors as
of such date together with the aged Outstanding Balances of such Receivables, in
form and substance reasonably satisfactory to the Borrower and the
Administrative Agent.
"Governmental Authority" shall mean any nation or government, any state,
province or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Grand Eagle" shall mean Grand Eagle Corporation.
"Guaranteed Indebtedness" shall mean, as to any Person, any obligation
of such Person guaranteeing any indebtedness, lease, dividend, or other
obligation ("primary obligation") of any other Person (the "primary obligor") in
any manner, including any obligation or arrangement of such Person to
(a) purchase or repurchase any such primary obligation, (b) advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (d) indemnify
the owner of such primary obligation against loss in respect thereof. The amount
of any Guaranteed Indebtedness at any time shall be deemed to be the amount
equal to the lesser at such time of (x) the stated or determinable amount of the
primary obligation in respect of which such Guaranteed Indebtedness is incurred
and (y) the maximum amount for which such Person may be liable pursuant to the
terms of the instrument embodying such Guaranteed Indebtedness; or, if not
stated or determinable, the maximum reasonably anticipated liability (assuming
full performance) in respect thereof.
"Incipient Servicer Termination Event" shall mean any event that, with
the passage of time or notice or both, would, unless cured or waived, become an
Event of Servicer Termination.
"Incipient Termination Event" shall mean any event that, with the
passage of time or notice or both, would, unless cured or waived, become a
Termination Event.
"Indemnified Amounts" shall mean, with respect to any Person, any and
all suits, actions, proceedings, claims, damages, losses, liabilities and
reasonable expenses (including, but not limited to, reasonable attorneys' fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal).
"Indemnified Person" shall have the meaning assigned to it in
Section 12.01(a) of the Funding Agreement.
"Indemnified Taxes" shall have the meaning assigned to it in
Section 2.08(b) of the Funding Agreement.
"Index Rate" shall mean, for any day, a floating rate equal to the sum
of (a) the higher of (i) the rate publicly quoted from time to time by The Wall
Street Journal as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if The Wall Street Journal ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus fifty (50) basis points per annum, plus
(b) 0.75% per annum. Each change in any interest rate provided for in the
Funding Agreement based upon the Index Rate shall take effect at the time of
such change in the Index Rate.
"Index Rate Advance" shall mean an Advance or portion thereof bearing
interest by reference to the Index Rate.
"Ineligible Receivable" shall mean any Receivable (or portion thereof)
which fails to satisfy all of the requirements of an "Eligible Receivable" set
forth in the definition thereof.
"Interest Payment Date" shall mean (a) as to any Index Rate Advance, the
first Business Day of each month to occur while such Index Rate Advance is
outstanding, (b) as to any LIBOR Rate Advance, the last day of the applicable
LIBOR Period; provided, further, that, in addition to the foregoing, each of
(x) the date upon which all of the Commitments have been terminated and the
aggregate Outstanding Principal Amount has been paid in full and (y) the
Commitment Termination Date shall be deemed to be an "Interest Payment Date"
with respect to any interest which is then accrued under the Funding Agreement.
"Interest Reserve" shall mean, as of any date of determination, the
greater of (1) the product of (a) the Index Rate as of such date, (b) the
Outstanding Principal Amount as of such date and (c) a fraction, the numerator
of which is equal to the higher of (i) 30 and (ii) the Receivable Collection
Turnover as of such date, and the denominator of which is 360, and
(2) $1,000,000.
"Investment Company Act" shall mean the provisions of the Investment
Company Act of 1940, 15 U.S.C. § § 80a et seq., and any regulations promulgated
thereunder.
"Investments" shall mean, with respect to any Borrower Account
Collateral, the certificates, instruments, investment property or other
investments in which amounts constituting such collateral are invested from time
to time.
"IRC" shall mean the Internal Revenue Code of 1986 and any regulations
promulgated thereunder.
"IRS" shall mean the Internal Revenue Service.
"Lender" shall mean each financial institution party to the Funding
Agreement in the capacity as a lender together with the successors and assigns
of any of the foregoing.
"LIBOR Business Day" shall mean a Business Day on which banks in the
city of London are generally open for interbank or foreign exchange
transactions.
"LIBOR Period" shall mean, with respect to any LIBOR Rate Advance, each
period commencing on a LIBOR Business Day selected by the Borrower pursuant to
the Funding Agreement and ending one, two or three months thereafter, as
selected by Borrower's irrevocable notice to the Administrative Agent in a
Borrowing Request as set forth in Section 2.03(a) of the Funding Agreement or a
Notice of Continuation/Conversion as set forth in Section 2.06(c) of the
Funding Agreement; provided that the foregoing provision relating to LIBOR
Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a LIBOR
Business Day, such LIBOR Period shall be extended to the next succeeding LIBOR
Business Day unless the result of such extension would be to carry such LIBOR
Period into another calendar month in which event such LIBOR Period shall end on
the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Commitment
Termination Date shall end two (2) LIBOR Business Days prior to such date;
(c) any LIBOR Period pertaining to a LIBOR Rate Advance that begins on the last
LIBOR Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month during which such LIBOR
Period would otherwise end) shall end on the last LIBOR Business Day of the
calendar month during which such LIBOR Period would otherwise end;
(d) Borrower shall select LIBOR Periods so as not to require a payment or
prepayment of any LIBOR Rate Advance during a LIBOR Period for such Revolving
Advance; and
(e) Borrower shall select LIBOR Periods so that there shall be no more than ten
(10) Borrowings consisting of LIBOR Rate Advances in existence at any one time.
"LIBOR Rate" shall mean for each LIBOR Period, a rate of interest
determined by the Administrative Agent equal to the sum of 2.50% plus:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on the second full LIBOR Business Day next preceding the first day
of each LIBOR Period (unless the first day of such Settlement Period is not a
Business Day, in which event the next succeeding Business Day will be used);
divided by
(b) a number equal to 1.0 minus the aggregate (but without duplication)
of the rates (expressed as a decimal fraction) of reserve requirements in effect
on the day which is two (2) LIBOR Business Days prior to the beginning of such
LIBOR Period (including basic, supplemental, marginal and emergency reserves
under any regulations of the Board of Governors of the Federal Reserve system or
other governmental authority having jurisdiction with respect thereto, as now
and from time to time in effect) for Eurocurrency funding (currently referred to
as "Eurocurrency liabilities" in Regulation D of such Board) which are required
to be maintained by a member bank of the Federal Reserve System;
provided, that if the introduction of or any change in any law or regulation (or
any change in the interpretation thereof) shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for a
Advances at the LIBOR Rate, then, unless that Lender is able to make or to
continue to fund or to maintain such Advances at another branch or office of
such Lender without, in such Lender's good faith opinion, adversely affecting it
or its Outstanding Principal Amount or the income obtained therefrom, the LIBOR
Rate shall in all such cases be equal to the Index Rate.
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to the
Administrative Agent and the Borrower.
"LIBOR Rate Advance" shall mean an Advance or portion thereof bearing
interest by reference to the LIBOR Rate.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the UCC or comparable law of any jurisdiction).
"Litigation" shall mean, with respect to any Person, any action, claim,
lawsuit, demand, investigation or proceeding pending or threatened against such
Person before any court, board, commission, agency or instrumentality of any
federal, state, local or foreign government or of any agency or subdivision
thereof or before any arbitrator or panel of arbitrators.
"Lockbox" shall have the meaning assigned to it in Section 6.01(a)(ii)
"Lockbox Account" shall mean any deposit account established by or
assigned to the Borrower for the deposit of Collections pursuant to and in
accordance with Section 6.01(a) of the Funding Agreement.
"Lockbox Account Agreement" shall mean any agreement among an
Originator, the Borrower, GE Capital, as Administrative Agent, and a Lockbox
Account Bank with respect to a Lockbox and Lockbox Account that provides, among
other things, that (a) all items of payment deposited in such Lockbox and
Lockbox Account are held by such Lockbox Account Bank as custodian for GE
Capital, as Administrative Agent, (b) such Lockbox Account Bank has no rights of
setoff or recoupment or any other claim against such Lockbox Account, as the
case may be, other than for payment of its service fees and other charges
directly related to the administration of such Lockbox Account and for returned
checks or other items of payment and (c) such Lockbox Account Bank agrees to
forward all Collections received in such Lockbox Account to the Collection
Account within one Business Day of receipt (other than with respect to Lockbox
Accounts maintained in Canada, with respect to which Collections received
therein must be forwarded to the Collection Account within two Business Days of
receipt), and is otherwise in form and substance acceptable to the
Administrative Agent.
"Lockbox Account Bank" shall mean any bank or other financial
institution at which one or more Lockbox Accounts are maintained.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, assets, liabilities, operations, prospects or financial or
other condition of (i) any Originator or the Originators considered as a whole,
(ii) the Borrower, (iii) the Servicer or (iv) the Parent and its Subsidiaries
considered as a whole, (b) the ability of any Originator, the Borrower, the
Parent or the Servicer to perform any of its obligations under the Related
Documents in accordance with the terms thereof, (c) the validity or
enforceability of any Related Document or the rights and remedies of the
Borrower, the Lenders or the Administrative Agent under any Related Document,
(d) the federal income tax attributes of the sale, contribution or pledge of the
Transferred Receivables pursuant to any Related Document or (e) the Transferred
Receivables, the Contracts therefor, the Borrower Collateral or the ownership
interests or Liens of the Borrower or the Lenders or the Administrative Agent
thereon or the priority of such interests or Liens.
"Maturity Date" shall mean, with respect to any Receivable, the due date
for payment therefor specified in the Contract therefor, or, if no date is so
specified, 30 days from the Billing Date.
"Maximum Facility Amount" shall mean $160,000,000, as such amount may be
reduced in accordance with Section 2.02(a) of the Funding Agreement.
"Member" shall have the meaning given to such term in the Recitals to
the Funding Agreement.
"Monthly Report" shall have the meaning assigned to it in paragraph (a)
of Annex 5.02(a) to the Funding Agreement.
"Moody's" shall mean Moody's Investors Service, Inc. or any successor
thereto.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA with respect to which any Originator or ERISA
Affiliate is making, is obligated to make, or has made or been obligated to
make, contributions on behalf of participants who are or were employed by any of
them.
"Net Receivables Balance" means, as of any date of determination, the
amount equal to:
(a) the Outstanding Balance of Eligible Receivables,
minus
(b) the sum of (i) the Excess Concentration Amount, plus (ii) the
Specified Reserves;
"Notice of Continuation/Conversion" shall have the meaning assigned to
such term in Section 2.06(c) of the Funding Agreement.
"Obligor" shall mean, with respect to any Receivable, the Person
primarily obligated to make payments in respect thereof.
"Obligor Rating" shall mean, with respect to any Rating Agency for an
Obligor, if available, the long term unsecured and unguaranteed debt rating of
such Obligor by such Rating Agency.
"Officer's Certificate" shall mean, with respect to any Person, a
certificate signed by an Authorized Officer of such Person.
"Originator" shall mean each of the Subsidiaries of Parent which is a
party to the Sale Agreement and any other Person approved by the Administrative
Agent in writing.
"Outstanding Balance" shall mean, with respect to any Receivable, as of
any date of determination, the amount (which amount shall not be less than zero)
equal to (a) the Billed Amount thereof, minus (b) all Collections received from
the Obligor thereunder, minus (c) all discounts to, or any other modifications
by, the Originator, the Borrower or the Servicer that reduce such Billed Amount;
provided, that if the Administrative Agent or the Servicer makes a good faith
determination that all payments by such Obligor with respect to such Billed
Amount have been made, the Outstanding Balance shall be zero.
"Outstanding Principal Amount" shall mean, as of any date of
determination, the amount equal to (a) the aggregate Advances made by the
Lenders under the Funding Agreement on or before such date, minus (b) the
aggregate amounts disbursed to any Lender in reduction of the principal of such
Advances pursuant to the Funding Agreement on or before such date; provided,
that references to the Outstanding Principal Amount of any Lender shall mean an
amount equal to (x) the aggregate Advances made by such Lender pursuant to the
Funding Agreement on or before such date, minus (b) the aggregate amounts
disbursed to such Lender in reduction of the principal of such Advances pursuant
to the Funding Agreement on or before such date.
"Parent" shall mean Superior Telecom Inc., a Delaware corporation.
"Parent Agreement" shall mean certain Parent Agreement dated as of
November 6, 2002 between the Parent and the Administrative Agent, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
"Parent Group" shall mean the Parent and each of its Affiliates other
than The Alpine Group, Inc. and the Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Plan" shall mean a Plan described in Section 3(2) of ERISA.
"Permitted Encumbrances" shall mean the following encumbrances:
(a) Liens for taxes or assessments or other governmental charges or levies not
yet due and payable; (b) pledges or deposits securing obligations under
workmen's compensation, unemployment insurance, social security or public
liability laws or similar legislation; (c) pledges or deposits securing bids,
tenders, government contracts, contracts (other than contracts for the payment
of money) or leases to which any Originator, the Borrower or the Servicer is a
party as lessee made in the ordinary course of business; (d) deposits securing
statutory obligations of any Originator, the Borrower or the Servicer;
(e) inchoate and unperfected workers', mechanics', suppliers' or similar Liens
arising in the ordinary course of business; (f) carriers', warehousemen's or
other similar possessory Liens arising in the ordinary course of business;
(g) deposits securing, or in lieu of, surety, appeal or customs bonds in
proceedings to which any Originator, the Borrower or the Servicer is a party;
(h) any attachment or judgment Lien not constituting a Termination Event under
Section 9.01(f) of the Funding Agreement; (i) licenses, leases or subleases
granted to third Persons not interfering in any material respect with the
business of Superior Telecom, the Parent, the Borrower, any Originator or any
other Subsidiary of the Parent, (j) easements, zoning restrictions,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect with the
other Subsidiary of the Parent, (k) Liens arising as a result of the filing of
precautionary UCC financing statements in connection with operating leases,
(l) any interest or title of a licensor, lessor or sublessor under any license
or lease, (m) Liens created in connection with Capital Leases to the extent such
Capital Leases are permitted pursuant to the terms of the Funding Agreement,
(n) Liens arising pursuant to purchase money mortgages or security interests
securing Debt representing the purchase price (or financing of the purchase
price within 90 days after the applicable purchase) of assets acquired after the
Closing Date; provided that (i) any such Liens attach only to the assets so
purchased, (ii) the Debt secured by such Lien (including refinancings thereof)
does not exceed 100% of the lesser of fair market value of such assets and the
purchase price of such assets, in each case, at the time of the incurrence of
such Debt and (iii) the Debt secured thereby is permitted pursuant to the terms
of the Funding Agreement, (o) Liens arising as a result of the filing of
precautionary UCC financing statements in connection with consigned goods,
(p) Liens arising as a result of the pre-filing of UCC financing statements
against DNE Systems, Inc. and its Subsidiaries by the lender or lenders
financing the transaction described on Schedule 2.02 to the Funding Agreement so
long as such Liens do not cover any Borrower Collateral, (q) Liens existing on
the Closing Date and listed on Schedule 4.03(b) of the Sale Agreement or
Schedule 5.03(b) of the Funding Agreement; and (r) presently existing or
hereinafter created Liens in favor of the Buyer, the Borrower, the Lenders or
the Administrative Agent or the Collateral Agent.
"Permitted Investments" shall mean any of the following:
(a) obligations of, or guaranteed as to the full and timely payment of
principal and interest by, the United States of America or obligations of any
agency or instrumentality thereof if such obligations are backed by the full
faith and credit of the United States of America, in each case with maturities
of not more than 90 days from the date acquired;
(b) repurchase agreements on obligations of the type specified in
clause (a) of this definition; provided, that the short-term debt obligations of
the party agreeing to repurchase are rated at least A-1+ or the equivalent by
S&P and P-1 or the equivalent by Moody's;
(c) federal funds, certificates of deposit, time deposits and bankers'
acceptances of any depository institution or trust company incorporated under
the laws of the United States of America or any state, in each case with
original maturities of not more than 90 days or, in the case of bankers'
acceptances, original maturities of not more than 365 days; provided, that the
short-term obligations of such depository institution or trust company are rated
at least A-1+ or the equivalent by S&P and P-1 or the equivalent by Moody's;
(d) commercial paper of any corporation incorporated under the laws of
the United States of America or any state thereof with original maturities of
not more than 30 days that on the date of acquisition are rated at least A-1+ or
the equivalent by S&P and P-1 or the equivalent by Moody's; and
(e) securities of money market funds rated at least Aam or the
equivalent by S&P and P-1 or the equivalent by Moody's.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, unincorporated organization, trust, association, corporation
(including a business trust), limited liability company, institution, public
benefit corporation, joint stock company, Governmental Authority or any other
entity of whatever nature.
"Plan" shall mean, at any time during the preceding five years, an
"employee benefit plan," as defined in Section 3(3) of ERISA, that any
Originator or ERISA Affiliate maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any
Originator or ERISA Affiliate.
"Prepayment Premium" shall mean (I) with respect to any reduction of the
Aggregate Commitment by the Borrower pursuant to Section 2.02(a) of the Funding
Agreement, an amount equal to the product of (x) the amount by which the
Borrower elects to reduce the Aggregate Commitment and (y) (i) 2%, if such
reduction of the Aggregate Commitment occurs during the first year following the
Closing Date, (ii) 1% if such reduction of the Aggregate Commitment occurs
during the second year following the Closing Date, and (iii) 1/2%, if such
reduction in the Aggregate Commitment occurs during the third year following the
Closing Date, and (II) in the event the Borrower terminates the Aggregate
Commitment pursuant to Section 2.02(b) of the Funding Agreement or voluntarily
causes a Termination Event to occur, an amount equal to the product of (a) the
Maximum Facility Amount as of the date the Borrower delivers a Commitment
Termination Notice in accordance with Section 2.02(b) of the Funding Agreement
or as of the date such Termination Event occurs, as the case may be, and (b) (i)
2%, if the Aggregate Commitment is so terminated during the first year following
the Closing Date; provided that the percentage set forth in this clause (i)
shall be 1% if the Aggregate Commitment is terminated in connection with a
debtor-in-possession financing, (ii) 1% if the Aggregate Commitment is so
terminated or such Termination Event occurs during the second year following the
Closing Date, and (iii) 1/2%, if the Aggregate Commitment is so terminated or
such Termination Event occurs during the third year following the Closing Date.
"Pro Rata Share" shall mean with respect to all matters relating to any
Lender, the percentage obtained by dividing (i) the Commitment of that Lender by
(ii) the Aggregate Commitment, as such percentage may be adjusted by assignments
permitted pursuant to Section 14.02 of the Funding Agreement.
"Projections" shall mean the Parent's forecasted consolidated:
(a) balance sheets; (b) profit and loss statements; (c) cash flow statements;
and (d) capitalization statements, all prepared on a Subsidiary-by-Subsidiary or
division-by-division basis, if applicable, and otherwise consistent with the
historical financial statements of the Parent, together with appropriate
supporting details and a statement of underlying assumptions.
"Qualified Plan" shall mean a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Rating Agency" shall mean Moody's or S&P.
"Ratios" shall mean, collectively, the Default Ratio, the Delinquency
Ratio, the Dilution Ratio, the Receivables Collection Turnover and the Dilution
Reserve Ratio.
"Receivable" shall mean, with respect to any Obligor:
(a) indebtedness of such Obligor (whether constituting an account,
chattel paper, document, instrument or general intangible (under which the
Obligor's principal obligation is a monetary obligation)) arising from the
provision of merchandise, goods or services by an Originator, or other Person
approved by the Administrative Agent in its sole discretion, to such Obligor,
including the right to payment of any interest or finance charges and other
obligations of such Obligor with respect thereto;
(b) all Liens and property subject thereto from time to time securing
or purporting to secure any such indebtedness of such Obligor;
(c) all guaranties, indemnities and warranties, insurance policies,
financing statements and other agreements or arrangements of whatever character
from time to time supporting or securing payment of any such indebtedness;
(d) all right, title and interest of any Originator, the Parent or the
Borrower in and to any goods (including returned, repossessed or foreclosed
goods) the sale of which gave rise to a Receivable; provided, that "Receivable"
will not include returned goods to the extent that all amounts required to be
paid pursuant to the Sale Agreement in respect of such returned goods have been
paid;
(e) all Collections with respect to any of the foregoing;
(f) all Records with respect to any of the foregoing; and
(g) all proceeds with respect to any of the foregoing.
"Receivables Assignment" shall have the meaning assigned to such term in
Section 2.01(a) of the Sale Agreement.
"Receivables Collection Turnover" shall mean, as of any date of
determination, the amount (expressed in days) equal to:
(a) a fraction, (i) the numerator of which is equal to the aggregate
Outstanding Balance of Transferred Receivables on the first day of the three
(3) Settlement Periods immediately preceding such date and (ii) the denominator
of which is equal to aggregate Collections received during such three
(3) Settlement Periods with respect to all Transferred Receivables,
multiplied by
(b) the average number of days contained in such three (3) Settlement
Periods.
"Records" shall mean all Contracts and other documents, books, records
and other information (including customer lists, credit files, computer
programs, tapes, disks, data processing software and related property and
rights) prepared and maintained by any Originator, the Servicer, any
Sub-Servicer or the Borrower with respect to the Receivables and the Obligors
thereunder and the Borrower Collateral.
"Regulatory Change" shall mean any change after the Closing Date in any
federal, state or foreign law or regulation (including Regulation D of the
Federal Reserve Board) or the adoption or making after such date of any
interpretation, directive or request under any federal, state or foreign law or
regulation (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof that, in
each case, is applicable to any Affected Party.
"Rejected Amount" shall have the meaning assigned to it in Section 4.04
of the Sale Agreement.
"Related Documents" shall mean each Lockbox Account Agreement, the Sale
Agreement, the Funding Agreement, each Receivables Assignment, the Subordinated
Notes, the Parent Agreement and all other agreements, instruments, documents and
certificates identified in the Schedule of
Documents and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Person, or any
employee of any Person, and delivered in connection with the Sale Agreement, the
Funding Agreement or the transactions contemplated thereby. Any reference in the
Sale Agreement, the Funding Agreement or any other Related Document to a Related
Document shall include all Appendices thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to such Related
Document as the same may be in effect at any and all times such reference
becomes operative.
"Repayment Notice" shall have the meaning assigned to it in
Section 2.03(h) of the Funding Agreement.
"Reportable Event" shall mean any of the events set forth in
Section 4043(c) of ERISA.
"Requisite Lenders" shall mean (a) Lenders having more than sixty-six
and two-thirds percent (662/3%) of the Aggregate Commitment, or (b) if the
Commitments have been terminated, Lenders having more than sixty-six and
two-thirds percent (662/3%) aggregate Outstanding Principal Amount.
"Retiree Welfare Plan" shall mean, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"Revolving Note" shall have the meaning assigned to such term in
Section 2.01(b) of the Funding Agreement.
"Revolving Period" shall mean the period from and including the Closing
Date through and including the day immediately preceding the Commitment
Termination Date.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.
"Sale" shall mean with respect to a sale of receivables under the Sale
Agreement, a sale of Receivables by an Originator to the Borrower in accordance
with the terms of the Sale Agreement.
"Sale Agreement" shall mean that certain Receivables Sale Agreement
dated as of November 6, 2002, among each Originator, the Parent and the
Borrower, as the Buyer thereunder, as the same may be amended, restated,
supplemented, or otherwise modified from time to time.
"Sale Price" shall mean, with respect to any Sale of Sold Receivables, a
price calculated by the Borrower and approved from time to time by the
Administrative Agent equal to:
(a) the Outstanding Balance of such Sold Receivables, minus
(b) the expected costs to be incurred by the Borrower in financing the
purchase of such Sold Receivables until the Outstanding Balance of such Sold
Receivables is paid in full, minus
(c) the portion of such Sold Receivables that are reasonably expected
by such Originator on the Transfer Date to become Defaulted Receivables by
reason of clause (b) of the definition thereof, minus
(d) the portion of such Sold Receivables that are reasonably expected
by such Originator on the Transfer Date to be reduced by means other than the
receipt of Collections thereon or pursuant to clause (c) above, minus
(e) amounts expected to be paid to the Servicer with respect to the
servicing, administration and collection of such Sold Receivables;
provided, that such calculations shall be determined based on the historical
experience of (y) such Originator, with respect to the calculations required in
each of clauses (c) and (d) above, and (z) the Borrower, with respect to the
calculations required in clauses (b) and (e) above.
"Schedule of Documents" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Sale Agreement, the Funding
Agreement and the other Related Documents and the transactions contemplated
thereunder, substantially in the form attached as Annex Y to the Funding
Agreement and the Sale Agreement.
"Securities Act" shall mean the provisions of the Securities Act of
1933, 15 U.S.C. Sections 77a et seq., and any regulations promulgated
thereunder.
"Securities Exchange Act" shall mean the provisions of the Securities
Exchange Act of 1934, 15 U.S.C. Sections 78a et seq., and any regulations
promulgated thereunder.
"Servicer" shall mean Superior Telecommunications Inc., a Delaware
corporation, in its capacity as the Servicer under the Funding Agreement, or any
other Person designated as a Successor Servicer in accordance with the terms of
the Funding Agreement.
"Servicer Termination Notice" shall mean any notice by the
Administrative Agent to the Servicer that (a) an Event of Servicer Termination
has occurred and (b) the Servicer's appointment under the Funding Agreement has
been terminated.
"Servicing Fee" shall mean, for any day within a Settlement Period, the
amount equal to (a) (i) the Servicing Fee Rate divided by (ii) 360, multiplied
by (b) the Outstanding Principal Amount on such day.
"Servicing Fee Rate" shall mean 1.00%.
"Servicing Officer" shall mean any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Transferred
Receivables and whose name appears on any Officer's Certificate listing
servicing officers furnished to the Administrative Agent by the Servicer, as
such certificate may be amended from time to time.
"Servicing Records" shall mean all Records prepared and maintained by
the Servicer with respect to the Transferred Receivables and the Obligors
thereunder.
"Settlement Date" shall mean the tenth Business Day following the end of
each Settlement Period.
"Settlement Period" shall mean (a) solely for purposes of determining
the Ratios, (i) with respect to all Settlement Periods other than the final
Settlement Period, each calendar month, whether occurring before or after the
Closing Date, and (ii) with respect to the final Settlement Period, the period
ending on the Termination Date and beginning with the first day of the calendar
month in which the Termination Date occurs, and (b) for all other purposes,
(i) with respect to the initial Settlement Period, the period from and including
the Closing Date through and including the last day of the calendar month in
which the Closing Date occurs, (ii) with respect to the final Settlement Period,
the period ending on the Termination Date and beginning with the first day of
the calendar month in which the Termination Date occurs, and (iii) with respect
to all other Settlement Periods, each calendar month.
"Sold Receivable" shall have the meaning assigned to it in
Section 2.01(b) of the Sale Agreement.
"Special Concentration Percentage" shall mean, with respect to any
Obligor, that percentage, if any, designated by the Administrative Agent in its
sole discretion with respect to such Obligor in Annex Z to the Funding Agreement
or otherwise in a written notification to the Borrower (provided that the
Administrative Agent retains the discretion to change or eliminate any such
Special Concentration Percentage at any time).
"Specified Reserves" shall mean, at any time, the sum of (a) the excess,
if any, of the aggregate Outstanding Balance of Eligible Receivables which are
due and payable more than 90 days (but less than 121 days) after the Billing
Date therefor, over fifteen percent (15%) of the aggregate
Outstanding Balance of all Eligible Receivables, plus (b) the excess, if any, of
the aggregate Outstanding Balance of Eligible Receivables the Obligor with
respect thereto is organized under the laws of Canada or any province thereof,
over five percent (5%) of the aggregate Outstanding Balance of all Eligible
Receivables, plus (c) the excess, if any, of the aggregate Outstanding Balance
of Eligible Receivables which are payable in Canadian dollars, over five percent
(5%) of the aggregate Outstanding Balance of all Eligible Receivables, plus
(d) the excess, if any, of the aggregate Outstanding Balance of Eligible
Receivables the Obligor with respect thereto is organized under the laws of
Mexico, over $1,000,000.
"Stock" shall mean all shares, options, warrants, member interests,
general or limited partnership interests or other equivalents (regardless of how
designated) of or in a corporation, limited liability company, partnership or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock or any other "equity security" (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act).
"Stockholder" shall mean, with respect to any Person, each holder of
Stock of such Person.
"Subordinated Loan" shall have the meaning given such term in
Section 2.01(c) of Sale Agreement.
"Subordinated Note" shall have the meaning given such term in
"Sub-Servicer" shall mean any Person with whom the Servicer enters into
a Sub-Servicing Agreement.
"Sub-Servicing Agreement" shall mean any written contract entered into
between the Servicer and any Sub-Servicer pursuant to and in accordance with
Section 7.01 of the Funding Agreement relating to the servicing, administration
or collection of the Transferred Receivables.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other entity (a) of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
Persons performing similar functions are at the time directly or indirectly
owned by such Person or (b) that is directly or indirectly controlled by such
Person within the meaning of control under Section 15 of the Securities Act.
"Successor Servicer" shall have the meaning assigned to it in
Section 11.02 of the Funding Agreement.
"Successor Servicing Fees and Expenses" shall mean the fees and expenses
payable to the Successor Servicer as agreed to by the Borrower, the Lenders and
the Administrative Agent.
"Superior" shall mean Superior Telecommunications Inc., a Delaware
corporation.
"Termination Date" shall mean the date on which (a) the Outstanding
Principal Amount has been permanently reduced to zero, (b) all other Borrower
Obligations under the Funding Agreement and the other Related Documents have
been indefeasibly repaid in full and completely discharged and (c) the Aggregate
Commitment has been irrevocably terminated in accordance with the provisions of
"Termination Event" shall have the meaning assigned to it in
Section 9.01 of the Funding Agreement.
"Title IV Plan" shall mean a Pension Plan (other than a Multiemployer
Plan) that is covered by Title IV of ERISA and that any Originator or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"Transfer" shall mean any Sale or contribution of Transferred
Receivables by any Originator to the Borrower pursuant to the terms of the Sale
Agreement.
"Transfer Date" shall have the meaning assigned to it in Section 2.01(a)
"Transferred Receivable" shall mean any Sold Receivable or Contributed
Receivable; provided, that any Receivable repurchased by an Originator thereof
pursuant to Section 4.04 of the Sale Agreement shall not be deemed to be a
Transferred Receivable from and after the date of such repurchase unless such
Receivable has subsequently been repurchased by or contributed to the Borrower.
"UCC" shall mean, with respect to any jurisdiction, the Uniform
Commercial Code as the same may, from time to time, be enacted and in effect in
such jurisdiction.
"Unapproved Receivable" shall mean any receivable (a) with respect to
which the obligor thereunder is not an Obligor on any Transferred Receivable and
whose customer relationship with an Originator arises as a result of the
acquisition by such Originator of another Person or (b) that was originated in
accordance with standards established by another Person acquired by an
Originator, in each case, solely with respect to any such acquisitions that have
not been approved in writing by the Administrative Agent and then only for the
period prior to any such approval.
"Underfunded Plan" shall mean any Plan that has an Underfunding.
"Underfunding" shall mean, with respect to any Title IV Plan, the
excess, if any, of (a) the present value of all benefits under the Title IV Plan
(based on the assumptions used to fund the Title IV Plan pursuant to Section 412
of the IRC) as of the most recent valuation date over (b) the fair market value
of the assets of such Title IV Plan as of such valuation date.
"Unfunded Pension Liability" shall mean, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five years following a
transaction that might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Originator or any ERISA Affiliate as a result of such transaction.
"Unused Commitment Fee" shall mean a fee equal to the product of (i) the
amount by which the Maximum Facility Amount exceeds the Outstanding Principal
Amount (in each case, as of any date of determination) and (ii) 0.50%.
"Welfare Plan" shall mean a Plan described in Section 3(1) of ERISA.
SECTION 2. Other Terms and Rules of Construction.
(a) Accounting Terms. Unless otherwise specifically provided therein,
any accounting term used in any Related Document shall have the meaning
customarily given such term in accordance with GAAP, and all financial
computations thereunder shall be computed in accordance with GAAP consistently
applied. That certain items or computations are explicitly modified by the
phrase "in accordance with GAAP" shall in no way be construed to limit the
foregoing.
(b) Other Terms. All other undefined terms contained in any of the
Related Documents shall, unless the context indicates otherwise, have the
meanings provided for by the UCC as in effect in the State of New York to the
extent the same are used or defined therein.
(c) Rules of Construction. Unless otherwise specified, references in
any Related Document or any of the Appendices thereto to a Section, subsection
or clause refer to such Section, subsection or clause as contained in such
Related Document. The words "herein," "hereof" and "hereunder" and other words
of similar import used in any Related Document refer to such Related Document as
a whole, including all annexes, exhibits and schedules, as the same may from
time to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in such Related Document or
any such annex, exhibit or schedule. Any reference to or definition of any
document, instrument or agreement shall, unless expressly noted otherwise,
include the same as amended, restated, supplemented or otherwise modified from
time to time. Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Related Documents) or, in the case of Governmental Authorities, Persons
succeeding to the relevant functions of such Persons; and all references to
statutes and related regulations shall include any amendments of the same and
any successor statutes and regulations.
(d) Rules of Construction for Determination of Ratios. The Ratios as of
the last day of the Settlement Period immediately preceding the Closing Date
shall be established by the Administrative Agent on or prior to the Closing Date
and the underlying calculations for periods immediately preceding the Closing
Date to be used in future calculations of the Ratios shall be established by the
Administrative Agent on or prior to the Closing Date in accordance with the form
of Monthly Report. For purposes of calculating the Ratios, (i) averages shall be
computed by rounding to the second decimal place and (ii) the Settlement Period
in which the date of determination thereof occurs shall not be included in the
computation thereof and the first Settlement Period immediately preceding such
date of determination shall be deemed to be the Settlement Period immediately
preceding the Settlement Period in which such date of determination occurs.
ANNEX Y
SCHEDULE OF DOCUMENTS
Attached
ANNEX Z
SPECIAL CONCENTRATION PERCENTAGES
OBLIGOR PERCENTAGE
Obligor Special Concentration Percentage
Graybar Electric Company 8.0%
A. O. Smith 8.0%
Sprint North Supply Inc.
Sprint Products Group Inc. 8.0% in the aggregate, so long as Sprint
Corporation's long-term unsecured debt is rated at least BBB- by S&P and Baa3 by
Moody's
QuickLinks
Exhibit 10.6
TABLE OF CONTENTS
|
Exhibit 10.2
EXECUTION COPY
NORTECH SYSTEMS INCORPORATED
EMPLOYMENT AGREEMENT
This Agreement (“Agreement”), effective as of May 15, 2017 (the “Effective
Date”), is made by and between Nortech Systems Incorporated, a Minnesota
corporation (the “Company”) and Matt Mahmood (“Executive”).
Recitals
WHEREAS, the Company desires to employ Executive as Chief Operating Officer, and
Executive desires to accept employment upon the terms and conditions set forth
herein;
WHEREAS, Executive acknowledges that during the course of his employment,
Executive will have access to and be provided with confidential and proprietary
information and trade secrets of the Company which are invaluable to the Company
and vital to the success of the Company’s business;
WHEREAS, the Company and Executive desire to protect such proprietary and
confidential information and trade secrets from disclosure to third parties or
unauthorized use to the detriment of the Company; and
WHEREAS, the Company and Executive desire to set forth in this Agreement, the
terms, conditions, and obligations of the parties with respect to such
employment.
NOW, THEREFORE, in consideration of the foregoing recitals, premises and mutual
covenants herein contained, and intending to be legally bound hereby, the
Company and Executive hereby agree as follows:
1. Definitions.
1.1 “Accountants” means an accounting firm
selected by the Company, which is reasonably acceptable to Executive and whose
consent shall not be unreasonably withheld.
1.2 “Board” means the Board of Directors of the
Company.
1.3 “Cause” means (a) Executive engages in gross
and intentional misconduct in the performance of Executive’s duties for the
Company or any of its subsidiaries, (b) Executive embezzles or willfully
misappropriates for his personal use, assets of the Company or any of its
subsidiaries, (c) Executive is convicted of, or enters a plea of guilty or nolo
contendere with respect to, a felony involving moral turpitude, or
(d) Executive’s engaging in business activities in violation of Executive’s
obligations in Section 4, violation of Executive’s obligations in Section 10,
and/or breach of any restrictive covenant set forth in Section 11 of this
Agreement; that in the case of the actions in (a) and (d), is not cured within
30 calendar days after Executive’s receipt of written notice from the Company of
the alleged Cause.
1.4 “Change of Control” means (a) (1) any person
or group other than the group consisting of Curtis Squire, Inc. and members of
the Kunin family (together, the “Kunin Group”) is at any time the beneficial
owner of thirty percent (30%) or more of the equity securities of the Company
entitled to vote for the election of directors (the “Voting Securities”), and
(2) such other person or group then owns a greater percentage of the Voting
Securities than the Kunin Group; (b) Individuals who, as of the Effective Date,
constitute the Board of Directors of the Company (the “Incumbent Board”) cease
for any reason to
constitute at least a majority of the Board, provided, that any person becoming
a director subsequent to the Effective Date whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or (c) the sale or disposition of all or substantially all
of the Company’s assets (including a plan of liquidation) or a merger or
consolidation of the Company with or into another corporation except for a
merger whereby the shareholders of the Company prior to the merger own more than
fifty percent (50%) of the equity securities entitled to vote for the election
of directors of the surviving corporation immediately following the transaction.
1.5 “Code” means the Internal Revenue Code of
1986, as amended.
1.6 “Covered Payments” means the payments or
benefits provided or to be provided by the Company or its affiliates to
Executive or for Executive’s benefit pursuant to the terms of this Agreement or
otherwise.
1.7 “Disability” or “Disabled” means if by reason
of any mental, sensory, or physical impairment, Executive is unable to perform
the essential functions of Executive’s duties hereunder with reasonable
accommodations, unless any such accommodations would impose an undue hardship on
the Company’s business. The written medical opinion of an independent medical
physician mutually acceptable to Executive and the Company will determine if
Executive has a Disability.
1.8 “Excise Tax” means the excise tax imposed
under Section 4999 of the Code (or any successor provision thereto) or any
similar tax imposed by state or local law or any interest or penalties with
respect to such taxes.
1.9 “Good Reason” means (a) any material reduction
in the amount or type of compensation paid to the Executive or material
reduction in benefits inconsistent with benefit reductions taken by other
members of Company’s senior management; (b) any material diminution of
Executive’s duties, responsibility or authority; (c) the Board requests
Executive to engage in actions that would constitute illegal or unethical acts;
(d) the Board requiring the Executive to be based at any office or location
other than facilities within 50 miles of Minneapolis, Minnesota; or (e) any
material breach of any contract entered into between the Executive and the
Company or an affiliate of the Company, including this Agreement, which in any
such event is not remedied by Company within 30 days after receipt of notice
thereof given by the Executive within 90 days after such event occurs; provided,
that any refusal of the Company to agree to other business activities of
Executive pursuant to Section 4.3 will not constitute Good Reason.
1.10 “Parachute Payments” means parachute payments within
the meaning of Section 280G of the Code.
2. Employment. Subject to the terms and
provisions set forth in this Agreement, the Company hereby employs Executive as
the Chief Operating Officer of the Company.
3. Agreement Term. This Agreement shall
commence on the Effective Date, and shall continue, unless sooner terminated in
accordance with this Agreement, until May 15, 2019 (the “Initial Period”);
provided, however, this Agreement may be extended for an additional period of up
to one year by the Parties’ mutual written agreement at least ninety (90) days
prior to expiration of the Initial Period (the “Extended Period” and together
with the Initial Term, the “Agreement Period”). During the Agreement Period,
Executive’s employment may be terminated by the Company with or without Cause,
subject to the provisions of Section 6 of this Agreement, and Executive may
resign or otherwise terminate his
2
employment with the Company at any time, with or without notice. Notwithstanding
the provisions of this Section, the provisions of Sections 8, 9, 10, 11 and 12
shall survive the termination of Executive’s employment and remain in full force
and effect thereafter.
4. Positions, Responsibilities and Duties.
4.1 Positions. During the period of Executive’s
employment with the Company, Executive shall be employed and serve as the Chief
Operating Officer and Senior Vice President of the Company. In such positions,
Executive shall have the duties, responsibilities and authority normally
associated with the offices and positions of Chief Operating Officer as set
forth in Exhibit A and as otherwise established by the Company’s Board from time
to time. Executive shall report to the Chief Executive Officer. At any time
during the Agreement Period, the Board may promote Executive to Chief Executive
Officer (“CEO”).
4.2 Duties. During the Agreement Period, subject
to the provisions of Section 4.3, Executive shall devote substantially all of
his business time, during normal business hours, to the business and affairs of
the Company and Executive shall use his reasonable best efforts to perform
faithfully and efficiently the duties and responsibilities contemplated by this
Agreement.
4.3 Permitted Activities. Notwithstanding the
provisions of Section 4.2, Executive shall be allowed, to the extent such
activities do not substantially interfere with the performance by Executive of
his duties and responsibilities hereunder, to serve on corporate, civic or
charitable boards or committees. Further, from the Effective Date through
September 30, 2017, Executive may continue consulting and business activities on
a transitional basis that are generally consistent with his activities with
Marabek, LLC immediately before the Effective Date, as long as such activities
(a) do not substantially interfere with Executive’s duties for the Company on a
full-time basis and (b) are in compliance with the other provisions of this
Agreement, including Section 9 (Confidential Information) and Section 10
(Restrictive Covenants). For such business activities from October 1, 2017
through the end of the Agreement Period, Executive will notify the Chief
Executive Officer of the Company in advance of the extent and nature of any such
activities, and any such activities will be permitted only upon the approval of
the Company, which will not be unreasonably withheld.
5. Compensation and Other Benefits.
5.1 Annualized Base Salary. During the Agreement
Period, Executive shall receive an annualized base salary payable in accordance
with the Company’s normal payroll practices of $250,000 through the first
anniversary of the Effective Date and thereafter at $275,000 per year, subject
to adjustment as provided in this Section 5.1 (the “Base Salary”). The Board
may, in its sole discretion, increase the Base Salary at any time and may not
decrease the Base Salary without Executive’s written consent. If Executive is
appointed as CEO, Executive shall receive an annualized Base Salary payable in
accordance with the Company’s executive compensation review process and subject
to approval by the Company’s Compensation Committee, subject to adjustment only
as provided in this Section 5.1. The Board may, in its sole discretion,
increase the CEO Base Salary at any time, but may not decrease it without
Executive’s written consent.
5.2 Incentive Bonus. During the Agreement Period,
Executive shall be eligible to participate in the Incentive Bonus Plan in effect
for officers and executives of the Company (the “Incentive Bonus Plan”), under
which Executive will receive a performance-based bonus the amount of which, if
any, will be determined and paid based upon satisfaction of criteria determined
for each calendar year for officers and executives by the Compensation
Committee. During the Agreement Period, Executive’s stated payout percentage
under the Incentive Bonus Plan will be up to 50% of Base Salary, prorated for
the portion of
3
fiscal 2017 during which Executive is employed by the Company. Any bonus amounts
payable to Executive under the Incentive Bonus Plan shall be paid at the same
time as annual bonuses are paid to the Company’s other executive officers after
the end of the year in which the bonus was earned, but no later than 180 days
following the end of that year.
5.3 Equity Incentive Plans. During the Agreement
Period, Executive shall be eligible to participate in the Company’s equity
incentive plans maintained by the Company from time to time (the “Company Equity
Plans”). On the Effective Date, Executive shall receive (a) a grant of 100,000
Equity Appreciation Right Units under the Company’s Restated Equity Appreciation
Rights Plan, and (b) a non-qualified stock option to purchase 75,000 shares
under the 2017 Stock Incentive Plan, with an exercise price per share equal to
the fair market value of the Common Stock on the Effective Date, a term of ten
years and vesting in equal annual installments over three years. Executive shall
be eligible to receive further incentive grants under the Company Equity Plans
as determined in the Board’s sole discretion and pursuant to the terms and
conditions as determined in the Board’s sole discretion. Notwithstanding
anything stated in any other agreement between the Company and Executive that
may be construed to the contrary, upon a Change of Control, (x) any incentive
grants under the Company Equity Plans will immediately vest, and (y) any stock
options held by Executive under the Company Equity Plans will be exercisable for
the remainder of their term.
5.4 Benefit Plans. During the Agreement Period,
Executive shall be eligible to participate in all pension, 401(k) and other
employee benefit plans, policies and programs for the benefit of senior
executive officers, including the Executive Life Insurance Plan to the extent in
effect for executives (together, the “Benefit Plans”). The Company reserves the
right to modify, suspend or discontinue any Benefit Plans at any time without
notice to or recourse by Executive, so long as such action is taken generally
with respect to other similarly situated executives employed by the Company.
5.5 Perquisites. During the Agreement Period,
Executive shall receive the perquisites described in Exhibit B.
5.6 Expense Reimbursement. During and in respect
of the Agreement Period, Executive shall be entitled to receive reimbursement
for reasonable business expenses incurred by Executive in performing his duties
and responsibilities hereunder, including travel, parking, business meetings and
professional dues, incurred and substantiated in accordance with the policies
and procedures established from time to time by the Company for senior
executives of the Company.
6. Termination
6.1 Termination Due to Death. Upon Executive’s
death, Executive’s estate or his legal representative, as the case may be, shall
be entitled to: (a) any Base Salary earned but unpaid as of the date of death;
(b) any other payments and/or benefits which Executive or Executive’s legal
representative is entitled to receive under any of the Benefit Plans; and
(c) the bonus earned under the Incentive Bonus Plan for the fiscal year in which
Executive’s death occurred, prorated for the portion of such fiscal year through
the date of death and payable at the same time as annual bonuses are paid to the
Company’s other executive officers, but no later than 180 days following the end
of year in which the bonus was earned.
6.2 Termination Due to Executive’s Disability. If
Executive’s condition meets the definition of Disability above, the Company may
terminate Executive’s employment upon written notice. If terminated by the
Company as herein provided, the Company shall pay to Executive: (a) any Base
Salary earned but unpaid as of the date of Executive’s termination due to
Disability; (b) Base Salary in effect at the time of the termination for a
period of twelve (12) months or the remaining term under this Agreement,
whichever is shorter, (c) any other payments and/or benefits which Executive or
Executive’s
4
legal representative is entitled to receive under any of the Benefit Plans; and
(d) vesting of any unvested incentive grants granted under the Company Equity
Plans otherwise scheduled to vest within twelve (12) months following the date
of Disability.
6.3 Termination by the Company Without Cause or by
Executive with Good Reason. The Company may terminate Executive’s employment
without Cause, or Executive may terminate his employment for Good Reason. In
either such event, Executive shall be entitled to the following compensation:
(a) Executive shall be entitled to receive Base Salary earned but unpaid as of
the date of Executive’s termination, and any other payments and/or benefits
which Executive is entitled to receive under any of the Benefit Plans. These
payments will be made within fourteen (14) days after termination.
(b) Upon execution of a general release of claims against the Company in a form
reasonably acceptable to the Company and after the expiration of any applicable
rescission or revocation period, all before the end of the sixty (60) day period
following Executive’s termination of employment, he will receive: (i) Base
Salary in effect at the time of the termination for the longer of (a) the
remainder of the Agreement Period or (b) a period of twelve (12) months
following the termination of Executive’s employment with the Company (the
“Without Cause Continuation Period”), in the manner and at such times as the
Base Salary otherwise would have been payable to Executive; (ii) the total
amount of the bonus earned under the Incentive Bonus Plan for the full fiscal
year in which the termination occurred, as if Executive had been employed on the
last day of the fiscal year, payable at the same time as annual bonuses are paid
to the Company’s other executive officers after the end of the year in which the
bonus was earned, but no later than 180 days following the end of that year; and
(iii) continuation at the Company’s then share of the expense for the lesser of
(A) the Without Cause Continuation Period, or (B) until Executive obtains
comparable replacement coverage, of medical and dental benefits in effect under
COBRA as of the date of termination of employment. Notwithstanding the
foregoing, certain payments under this paragraph (b) may be delayed pursuant to
Section 7.2.
(c) Notwithstanding anything stated in any other agreement between the Company
and Executive that may be construed to the contrary, (i) the Company will cause
any unvested portion of Executive’s stock options to immediately vest in full to
the extent not already vested, and any such stock options will be exercisable
for the full remaining portion of their term, and (ii) Executive’s Equity
Appreciation Right Units will vest and be payable in full on the redemption date
according to the terms thereof.
(d) If the termination results in a loss of unvested benefits for Executive
under any pension or profit sharing plan and/or the Executive Life Insurance
Plan, the Company will use its best efforts to provide benefits of comparable
value to Executive during the Without Cause Continuation Period.
6.4 Termination in Connection with Change of
Control. If Executive is an active and full-time employee at the time of a
Change of Control and within twelve (12) months after the Change of Control,
(i) Executive’s employment is involuntarily terminated by the Company or any
successor employer resulting from the Change in Control for any reason other
than death, Disability or Cause, or (ii) Executive resigns from the Company or
any such successor for Good Reason, then Executive shall be entitled to the
following compensation:
5
remainder of the Agreement Period or (b) a period of eighteen (18) months
following the termination of Executive’s employment (the “COC Continuation
Period”), in the manner and at such times as the Base Salary otherwise would
have been payable to Executive; (ii) the maximum bonus payable under the
Incentive Bonus Plan for the fiscal year in which the termination occurred,
prorated for the portion of such fiscal year through the date of termination and
payable within thirty (30) days after the date of termination of employment; and
(A) the COC Continuation Period, or (B) until Executive obtains comparable
replacement coverage, of medical and dental benefits in effect under COBRA as of
the date of termination of employment. Notwithstanding the foregoing, certain
payments under this paragraph (b) may be delayed pursuant to Section 7.2.
(c) If the termination results in a loss of unvested benefits for Executive
value to Executive during the COC Continuation Period.
6.5 No Extension at the End of the Initial Period.
If at the end of the Initial Period, the Company declines to extend the
Agreement, then Executive shall be entitled to the following compensation:
the end of the Initial Period, and any other payments and/or benefits which
Executive is entitled to receive under any of the Benefit Plans. These payments
will be made within fourteen (14) days after termination.
reasonably acceptable to the Company and after the expiration of the Initial
Period, but before the end of the sixty (60) day period following the Initial
Period, he will receive: (i) Base Salary in effect at the end of the Initial
Period for a period of six (6) months following the Initial Period (the “No
Extension Period”); (ii) the total amount of the bonus earned under the
Incentive Bonus Plan for the 2019 year; and (iii) continuation at the Company’s
then share of the expense for the lesser of (A) the No Extension Period, or
(B) until Executive obtains comparable replacement coverage, of medical and
dental benefits in effect under COBRA as of the end of the Initial Period.
value to Executive during the No Extension Period.
6.6 Termination by the Company for Cause. The
Company may terminate Executive’s employment hereunder for Cause. In such event,
Executive shall be entitled only to: (a) any Base Salary earned but unpaid
through the date of such termination and (b) any other earned and vested
payments and/or benefits that Executive is entitled to receive under any of the
Benefit Plans.
6
6.7 Voluntary Resignation Without Good Reason. If
Executive voluntarily resigns during the Agreement Term without Good Reason,
then Executive shall be entitled to: (a) Base Salary earned but unpaid as of the
date of Executive’s termination; and (b) any other payments and/or benefits
7. Severance Payment Limitations or
Possible Delay Under Code Section 409A.
7.1 Notwithstanding any other provision of this
Agreement, the Company and Executive intend that any payments, benefits or other
provisions applicable to this Agreement comply with the payout and other
limitations and restrictions imposed under Section 409A of the Code
(“Section 409A”), as clarified or modified by guidance from the U.S. Department
of Treasury or the Internal Revenue Service—in each case if and to the extent
Section 409A is otherwise applicable to this Agreement and such compliance is
necessary to avoid the penalties otherwise imposed under Section 409A. In this
regard, the Company and Executive agree that the payments, benefits and other
provisions applicable to this Agreement, and the terms of any deferral and other
rights regarding this Agreement, shall be interpreted and deemed modified if and
to the extent necessary to comply with the payout and other limitations and
restrictions imposed under Section 409A, as clarified or supplemented by
guidance from the U.S. Department of Treasury or the Internal Revenue Service—in
each case if and to the extent Section 409A is otherwise applicable to this
Agreement and such compliance is necessary to avoid the penalties otherwise
imposed under Section 409A.
7.2 In the event any portion of any payments due
under Section 6.3(b) (in the event of termination by the Company without Cause
or by Executive for Good Reason) or Section 6.4(b) (in the event of certain
terminations after a Change of Control) would exceed the sum of the applicable
limited separation pay exclusions as determined pursuant to Code Section 409A,
then payment of the excess amount shall be delayed until the first regular
payroll date of the Company following the six (6) month anniversary of the
Executive’s date of termination (or the date of his death, if earlier), and
shall include a lump sum equal to the aggregate amounts that Executive would
have received had payment of this excess amount commenced as provided above
following the date of termination. If Executive continues to perform any
services for Employer (as an employee or otherwise) after the date of
termination, such six month period shall be measured from the date of
Executive’s “separation from service” as defined pursuant to Code Section 409A.
7.3 Executive does not have any right to make any
election regarding the time or form of any payment due under Sections 6.3 or 6.4
or any other provision of this Agreement.
7.4 The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes, and other
amounts required by applicable law to be withheld by the Company.
8. Limitation on Parachute Payments.
8.1 Limitation. Notwithstanding anything stated
in this Agreement, or any other plan, arrangement or agreement to the contrary
(including without limitation the Company’s 2017 Stock Incentive Plan), if any
of the Covered Payments constitute Parachute Payments and would, but for this
Section 8 be subject to the Excise Tax, then the Covered Payments shall be
payable either (i) in full or (ii) reduced to the minimum extent necessary to
ensure that no portion of the Covered Payments is subject to the Excise Tax,
whichever of the foregoing (i) or (ii) results in Executive’s receipt on an
after-tax basis of the greatest amount of benefits after taking into account the
applicable federal, state, local and foreign income, employment and excise taxes
(including the Excise Tax).
8.2 Possible Reduction. If necessary, the Covered
Payments shall be reduced in a manner
7
that maximizes Executive’s economic position. In applying this principle, the
reduction shall be made in a manner consistent with the requirements of
Section 409A of the Code, and where two economically equivalent amounts are
subject to reduction but are payable at different times, such amounts shall be
reduced on a pro rata basis but not below zero.
8.3 Accountants. Any determination required under
this Section 8 shall be made in writing in good faith by the Accountants, which
shall provide detailed supporting calculations to the Company and Executive as
required by the Company or Executive. The Company and Executive shall provide
the Accountants with such information and documents as the Accountants may
reasonably request in order to make a determination under this Section 8. The
Company shall be responsible for all fees and expenses of the Accountants.
8.4 Overpayment or Underpayment. It is possible
that after the determinations and selections made pursuant to this Section 8
Executive will receive Covered Payments that are in the aggregate more than the
amount provided under this Section 8 (“Overpayment”) or less than the amount
provided under this Section 8.4 (“Underpayment”).
(a) In the event that: (A) the Accountants determine, based upon the assertion
of a deficiency by the Internal Revenue Service against either the Company or
Executive which the Accountants believe has a high probability of success, that
an Overpayment has been made or (B) it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding that has been
finally and conclusively resolved that an Overpayment has been made, then
Executive shall pay any such Overpayment to the Company.
(b) In the event that: (A) the Accountants, based upon controlling precedent or
substantial authority, determine that an Underpayment has occurred or (B) a
court of competent jurisdiction determines that an Underpayment has occurred,
any such Underpayment will be paid promptly by the Company to or for the benefit
of Executive.
9. Successors.
9.1 The Executive. This Agreement is personal to
Executive and, without the prior express written consent of the Company, shall
not be assignable by Executive, except that Executive’s rights to receive any
compensation or benefits under this Agreement may be transferred or disposed of
pursuant to testamentary disposition, intestate succession or pursuant to a
domestic relations order. This Agreement shall inure to the benefit of and be
enforceable by Executive’s heirs, beneficiaries and/or legal representatives.
9.2 The Company. This Agreement shall inure to
the benefit of and be binding upon the Company and its respective successors and
assigns.
10. Confidential Information.
10.1 Non-Disclosure. Executive acknowledges that the
Company continually develops Confidential Information (as defined below), that
Executive will obtain Confidential Information during employment with the
Company, that Executive may develop Confidential Information for the Company,
and that Executive may learn of Confidential Information during the course of
employment. Executive will comply with the policies and procedures of the
Company for protecting Confidential Information obtained from the Company and
shall not use or disclose to any person, corporation or other entity (except as
required by applicable law or for the proper performance of the regular duties
and responsibilities of Executive for the Company) any Confidential Information
obtained by Executive
8
during employment with the Company, or other association with the Company.
Executive understands that this restriction shall continue to apply to
Confidential Information following termination of Executive’s employment,
regardless of the reason for such termination.
10.2 “Confidential Information.” For purposes of this
Agreement, “Confidential Information” means any and all information of the
Company or concerning the business or affairs of the Company that is not
generally known by others with whom any of them compete or do business, or with
whom any of them plan to compete or do business. Confidential Information
includes, without limitation, such information relating to: (i) the development,
research, testing, marketing, strategies, and financial activities of the
Company, (ii) the products and services, present and in contemplation, of the
Company, (iii) inventions, processes, operations, administrative procedures,
databases, programs, systems, flow charts, software, firmware and equipment used
in the business of the Company, (iv) the costs, financial performance and
strategic plans of the Company, (v) the people and organizations with whom the
Company has or had business relationships and the substance of those
relationships. Confidential Information also includes all information that the
Company received belonging to others with any understanding, express or implied,
that it would not be disclosed.
10.3 Documents. All documents, records, tapes and other
media of every kind and description relating to the business, present or
otherwise, of the Company and any copies, in whole or in part, thereof
(“Documents”), whether or not prepared by Executive, shall be the sole and
exclusive property of the Company. Executive shall safeguard all Documents and
shall surrender to the Company at the time Executive’s employment terminates, or
at such earlier time or times as the President or Chief Executive Officer, Board
or their designees may specify, all Documents then in Executive’s possession or
control.
10.4 Former Employer Information. Executive agrees that
Executive will not, during Executive’s employment with the Company, improperly
use or disclose any proprietary information or trade secrets of any former or
concurrent employer or other person or entity with whom Executive has an
agreement or duty to keep such information or secretes confidential, and that
will Executive will not bring onto the premises of the Company any proprietary
information belong to any such employer, person or entity unless consented to by
such employer, person or entity.
11. Restrictive Covenants. In return for the
Company’s (i) promise to grant Executive access to certain of the Company’s
Confidential Information, and (ii) the Company’s actual grant to Executive of
access to certain of its Confidential Information, (iii) the opportunity for
employment as the Company’s Chief Operating Officer, and (iv) the valuable pay
and benefits in this Agreement that are intended, in part, to reward Executive
for developing and protecting the Company’s Confidential Information, Executive
makes the following commitments.
11.1 Non-Solicitation. During the Agreement Period and
for a period of two years after any termination of employment hereunder for any
reason, Executive will not, directly or indirectly, (i) induce or attempt to
induce any employee of the Company to leave the employ of the Company, (ii) in
any way interfere with the relationships between the Company and any such
employee of the Company, (iii) employ or otherwise engage as an employee,
independent contractor or otherwise any such employee of the Company, or
(iv) induce or attempt to induce any customer, supplier, licensee or other
person or entity that has done business with the Company to cease doing
business with the Company or in any way interfere with the relationship between
any such customer, supplier, licensee or other business entity and the Company.
11.2 Non-Competition. During the Agreement Period and for
reason, Executive will not engage in, manage, operate, or
9
participate in the management or operation of, be employed by or render services
or advice, or guarantee any obligation of, any person or entity operating in the
United States, China, or Mexico that engages in, or is actively planning to
become engaged in, researching, inventing, designing, manufacturing, developing,
producing, marketing, promoting, selling, soliciting the sales of, supporting,
or providing a product or service that competes with any product or service that
the Company researched, invented, designed, manufactured, developed, produced,
marketed, promoted, sold, supported, provided, or serviced in the course of its
business during the 24-month period prior to the termination of Executive’s
employment. Executive agrees that this covenant is reasonable with respect to
its duration, geographical area and scope.
11.3 Notification of Restrictive Covenants. Executive
acknowledges that the Company may serve notice upon any party in the electronic
manufacturing services or engineering services industries with whom Executive
accepts employment, a consulting engagement, engagement as an independent
contractor, partnership, joint venture or other association if the Company
reasonably believes that Executive’s activities may constitute a violation of
Executive’s obligations under Section 11.1 or 11.2 above. Such notice may inform
the recipient that Executive is party to this Agreement and may include a copy
of this Agreement or relevant portions thereof.
11.4 Injunctive Relief. Executive acknowledges and
agrees that the Company will have no adequate remedy at law, and would be
irreparably harmed, if Executive breaches or threatens to breach any of the
provisions of this Section 11 . Executive agrees that the Company shall be
entitled to equitable and/or injunctive relief to prevent any breach or
threatened breach of this Section 11, and to specific performance of each of the
terms of such Section in addition to any other legal or equitable remedies that
the Company may have. Executive further agrees that he shall not, in any equity
proceeding relating to the enforcement of the terms of this Section 11, raise
the defense that the Company has an adequate remedy at law.
11.5 Special Severability. The terms and provisions of
this Section 11 are intended to be separate and divisible provisions and if, for
any reason, any one or more of them is held to be invalid or unenforceable,
neither the validity nor the enforceability of any other provision of this
Agreement shall thereby be affected. It is the intention of the parties to this
Agreement that the potential restrictions on Executive’s future employment
imposed by this Section 11 be reasonable in both duration and geographic scope
and in all other respects. If for any reason any court of competent jurisdiction
shall find any provisions of this Section 11 unreasonable in duration or
geographic scope or otherwise, Executive and the Company agree that the
restrictions and prohibitions contained herein shall be effective to the fullest
extent allowed under applicable law in such jurisdiction.
12. Miscellaneous.
12.1 Applicable Law & Venue. This Agreement shall be
governed by and construed in accordance with the laws of the state of Minnesota,
applied without reference to principles of conflict of laws. The venue for any
dispute relating to this Agreement shall be in the state and/or federal courts
in Hennepin County, Minnesota.
12.2 Amendments. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
12.3 Indemnification. The Company agrees that if
Executive is made a party or is threatened to be made a party, or is required to
appear as a witness to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that he
is or was an officer of the Company, whether or not the basis of such Proceeding
is alleged action in an official capacity as an
10
officer, employee or agent while serving as an officer, employee or agent, he
shall be indemnified and held harmless by the Company (unless Executive’s
actions or omissions constitute gross negligence or willful misconduct) to the
fullest extent authorized by law, as the same exists or may hereafter be
amended, against all costs and expenses incurred or suffered by Executive in
connection therewith, and such indemnification shall continue as to Executive
even if Executive has ceased to be an officer or agent, or is no longer employed
by the Company and shall inure to the benefit of his heirs, executors and
administrators. Executive agrees to fully cooperate with the Company should any
Proceeding commence and for the duration of such Proceeding. On the Effective
Date, the Company will cause Executive to be covered and named as an insured on
its Director and Officer Liability Insurance policy, which the Company
represents to be in force and in good standing at the time this Agreement is
executed.
12.4 Notices. All notices and other communications
hereunder shall be in writing and shall be given by hand-delivery to the other
parties or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
To the Company:
Nortech Systems Incorporated
7550 Meridian Circle N.
Suite # 150, Maple Grove, MN 55369
Attn: Chief Executive Officer
If to Executive:
Matt Mahmood
or to such other address as (a) indicated in the Company’s employment records,
or (b) any party shall have furnished to the others in writing in accordance
herewith. Notices and communications shall be effective when actually received
by the addressee.
12.5 Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
12.6 Captions. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect.
12.7 Counterparts. This Agreement may be executed in one
or more counterparts each of which shall be deemed an original instrument, but
all of which together shall constitute but one and the same Agreement.
12.8 Entire Agreement; Previous Agreements Superseded.
This Agreement contains the entire agreement between the parties concerning the
subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between the
parties with respect thereto. There are no representations, understandings, or
agreements by or between the parties which are not contained within the four
corners of this Agreement.
12.9 Survivorship. The respective rights and obligations
of the parties hereunder shall survive any termination of Executive’s employment
under this Agreement for any reason to the extent necessary to the intended
provision of such rights and the intended performance of such obligations.
11
12.10 Attorneys’ Fees and Costs. In the event of any claim,
controversy, or dispute arising out of or relating to this Agreement, or breach
hereof, the prevailing party shall be entitled to recover reasonable attorneys’
fees and costs in connection with any court proceeding.
12
[Signature Page to Employment Agreement]
IN WITNESS WHEREOF, the parties have executed this Employment Agreement to be
effective as of the date first set forth above.
NORTECH SYSTEMS INCORPORATED
/s/ Richard Wasielewski
By: Richard Wasielewski
Its: CEO
EXECUTIVE:
By:
/s/ Matt Mahmood
Matt Mahmood
13
Exhibit A
Duties of Chief Operating Officer
Essential Duties and Responsibilities
· Reports directly to the Board on a regular basis, and as
needed, to keep the Board informed of progress and issues related to planning,
implementation of programs to enhance profitability, and progress toward
articulated goals.
· Makes recommendations directly to the Board regarding
termination of employees, modification of employees’ job descriptions, demotion
of employees, and hiring of new personnel, all subject to approval by the Board.
· Plans, coordinates and controls the daily operation of the
organization through the organization’s management.
· Establishes current and long range goals, objectives and
plans.
· Dispenses advice, guidance, direction, and authorization to
carry out major plans, standards and procedures, consistent with established
policies.
· Meets with organization’s other executives to ensure that
operations are being executed in accordance with the Company policies.
· Oversees the adequacy and soundness of the businesses and
operations financial structure and results.
· Reviews operating results , compares them to established
objectives, and takes steps to ensure that appropriate measures are taken to
correct unsatisfactory results.
· Supports mergers, joint ventures, the acquisition of
businesses, or the sale of major assets.
· Establishes and maintains an effective system of
communications throughout the organization.
· Represents the organization with major customers, local
communities and the public.
· Proactively seeks and consistently embodies the Company’s
mission & core values; inspiring & demonstrating motivated behaviors of Respect,
being Customer-Focused & Committed to Success, providing Great Communication & a
Sense of Urgency, and being One Nortech where No One Does It Alone.
· Supports the Company’s corporative initiative for Continuous
Improvement “FOCUS” lean initiatives by promoting the relentless pursuit of
eliminating waste, participating in process improvement, and showing the courage
to take action and advocate change.
· Observes safety and security procedures, including
maintaining confidentially, using equipment / materials properly, reporting
potentially unsafe conditions, and acting upon appropriate actions.
· Supports the Company’s policies and procedures and conducts
departmental and Company activities in accordance with these policies.
Supervisory Responsibilities
Directly supervises employees. Carries out supervisory responsibilities in
accordance with the organization’s policies and applicable laws.
Responsibilities include interviewing, hiring, and training employees; planning,
assigning, and directing work; appraising performance; rewarding and
disciplining employees; addressing complaints and resolving problems.
14
Exhibit B
Perquisites
· Club dues (up to annual cap of $1,500)
· Tax planning and return preparation (up to $2,500 annually)
· Annual Physical at the Mayo Clinic
· Auto Allowance of $650 per month
· Auto insurance reimbursement
· Cell phone provided by Company, or allowance of $90 per month
· Home office internet expense
· Term life insurance in the amount of $1 million, in addition
to any insurance awarded as part of Employee Benefits
15
|
AMENDED.
Exhibit 10.110
December 21, 2006
Dr. Kurt Konopitzky
Head Division Biopharmaceutical Operations
Boehringer Ingelheim Austria GmbH
Dr. Boehringer-Gasse 5 — 11
A-1121 Vienna, Austria
Re: Amendment No. 4 to the Data Transfer, Clinical Trial and Market Supply
Agreement, dated as of January 27, 2000
Dear Mr. Konopitzky;
As you know, InterMune, Inc. (“InterMune”) and Boehringer Ingelheim Austria GmbH
(“BI Austria”) are parties to that certain Data Transfer, Clinical Trial and
Market Supply Agreement effective January 27, 2000, as amended effective
June 19, 2002, September 18, 2003 and July 26, 2005 (the “Agreement”). This
letter (this “Amendment”) will confirm our agreement to amend the Agreement as
follows, effective as of the date first set forth above:
1. The parties hereby agree to replace Section 2 of Amendment No. 3 to the
Agreement dated July 26, 2005 in its entirety as follows: “The parties
hereby agree that InterMune’s obligation to purchase [ * ] of [ * ] of the
PRODUCT for [ * ] pursuant to Section 3.2.1 of the Agreement shall be [ * ] for
such [ * ] without liability or penalty to InterMune with regard to the
aforementioned [ * ]; provided, however that InterMune shall also pay to BI
Austria a sum of Three Million Three Hundred Ninety-Four Thousand Fifty Euros
(3,394,050€) for such [ * ] before the end of 2006 as consideration for a price
reduction per vial for purchases of PRODUCT by InterMune in 2007 and 2008 (as
set forth in detail in Section 4.1 of the Agreement). The parties further hereby
agree that with respect to such [ * ] that InterMune is required[ * ] to
purchase in [ * ] pursuant to Section 3.2.1 of the Agreement after giving effect
to the modification thereto as set forth in this Section 3 of this Amendment, [
* ] will be produced by BI Austria in the [ * ] for delivery to InterMune in the
[ * ] and [ * ] will have [ * ] of in the [ * ] of [ * ].” 2. The
Agreement is hereby amended by adding at the end of Section 4.1 the following:
“Notwithstanding the foregoing, the per unit price (i.e., [ * ] price) to
be paid by InterMune for purchases of PRODUCT for each of the [ * ] shall be [ *
] the amount derived by [ * ] Euros ([ * ]€) by the total number of units (i.e.,
number [ * ]) of PRODUCT purchased and received by InterMune for each [ * ]
(“Per Unit [ * ] Calculation”). The Parties understand and agree that
since purchases of PRODUCT and payment therefor will occur periodically
throughout the course of each [ * ], the Parties will cooperate with one another
in good faith to first estimate the total number of units of PRODUCT InterMune
will purchase and receive for [ * ] at the [ * ] (“Projected Units”). The
Parties will use the Projected Units in the Per Unit [ * ] Calculation for
purposes of BI Austria’s charges and invoices to InterMune and InterMune’s
payments for PRODUCTS purchased during the course of the [ * ]. At the [ * ], a
reconciliation will be conducted by the Parties by comparing the Per Unit [ * ]
Calculation using the Projected Units with the Per Unit [ * ] Calculation using
the total number of units of PRODUCTS actually purchased and received by
InterMune for the [ * ]. If InterMune has underpaid because the total number of
units of PRODUCTS actually purchased and received by InterMune for the [ * ] is
more than the Projected Units, then InterMune will pay to BI Austria the amount
of the difference. If InterMune has overpaid because the total number of units
of Products actually purchased and received by InterMune for the [ * ] is less
than the Projected Units, then BI Austria shall reimburse InterMune for the
amount of such overpayment. By way of example, assume that the Parties
estimate [ * ]. [ * ], BI Austria would be charging InterMune a per unit price
for PRODUCTS purchased by InterMune that will take into account a per unit [ * ]
of [ * ]€ (derived by [ * ]). Assume further that at [ * ], InterMune has
actually purchased [ * ] of PRODUCT in total such that the [ * ] price InterMune
owes BI Austria for [ * ] should have been [ * ] (i.e., derived by [ * ]) rather
than [ * ]. Consequently, InterMune would have been overpaying BI Austria for
the purchases of PRODUCT [ * ] and BI Austria would be obligated to reimburse
InterMune the amount for which InterMune overpaid. [ * ], in the event
InterMune does not purchase [ * ] as defined in the second (2nd) paragraph of
Section 3.2.1 of this Agreement and the total number of units of PRODUCT
actually purchased and received by InterMune [ * ] does not result in [ * ]
equal to [ * ] Euros ([ * ]€), then InterMune shall be entitled to apply the
difference between [ * ] Euros ([ * ]€) and the [ * ] for the total number of
units of PRODUCTS purchased and received by InterMune [ * ] to offset that
amount InterMune is required to pay to BI Austria under the second (2nd)
paragraph of Section 3.2.1 as a result of [ * ] (i.e., that amount equal to [ *
] and that amount of PRODUCT actually purchased and received by InterMune [ *
]).”
AMENDED.
Except as set forth above, all terms and conditions of the Agreement will remain
in full force and effect. Any capitalized term used herein and not otherwise
defined will have the same meaning as set forth in the Agreement. In the event
of any conflict between this Amendment and the Agreement, the terms of this
Amendment shall govern to the extent of such conflict.
Please acknowledge your agreement to the above by countersigning both enclosed
copies of this letter where indicated below, and returning one original to the
attention of Lucinda Y. Quan, Director, Legal Affairs at InterMune, Tel:
(415) 466-2223, Fax: (415) 466-2323. We would be happy to proceed based on
receipt of a facsimile copy while awaiting the original.
Sincerely, InterMune, Inc.
Accepted and Agreed: Boehringer Ingelheim Austria GmbH
By:
/s/ Daniel G. Welch
Daniel G. Welch,
President and Chief Executive Officer By: /s/ Kurt Konopitzky
Dr. Kurt Konopitzky
Head Division Biopharmaceuticals
Date:
December 21, 2006 Division
Date: December 22, 2006
Boehringer Ingelheim Austria GmbH
By: /s/ Monika Henninger
Dr. Monika Henninger
Head, Customer Relations & Projects
amended.
|
FORM OF VOTING AGREEMENT
This Voting Agreement (this “Agreement”), is made and entered into as of
July 21, 2007, by and between ev3 Inc., a Delaware corporation (“Parent”), and
the undersigned stockholder (“Stockholder”) of FoxHollow Technologies, Inc., a
Delaware corporation (the “Company”).
Recitals
A. Concurrently with the execution of this Agreement, Parent, Foreigner
Merger Sub, Inc., a Delaware corporation and a wholly owned first-tier
subsidiary of Parent (“Merger Sub”), and the Company are entering into an
Agreement and Plan of Merger (as may be amended from time to time, the “Merger
Agreement”), pursuant to which Merger Sub will be merged with and into the
Company (the “Merger”). Capitalized terms used but not defined herein shall have
the meanings given to them in the Merger Agreement.
B. Stockholder is the record and beneficial owner of such number of
outstanding shares of Company Common Stock as is indicated on the signature
pages to this Agreement.
C. As a material inducement to enter into the Merger Agreement, Parent
desires Stockholder to agree, and Stockholder is willing to agree, to vote the
Shares (as defined in Section 1.1 below), and such other shares of capital stock
of the Company over which Stockholder has voting power, so as to facilitate
consummation of the Merger.
In consideration of the foregoing and the representations, warranties,
covenants and agreements set forth in this Agreement, the parties agree as
follows:
1. Voting of Shares.
1.1 Shares. The term “Shares” shall mean all issued and outstanding shares
of Company Common Stock owned of record and beneficially owned by Stockholder or
over which Stockholder exercises sole voting power, in each case, as of the date
of this Agreement. Stockholder agrees that any shares of capital stock of the
Company that Stockholder purchases or with respect to which Stockholder
otherwise acquires beneficial ownership or over which Stockholder exercises sole
voting power after the date of this Agreement and prior to the termination of
this Agreement pursuant to Section 4 below shall be subject to the terms and
conditions of this Agreement to the same extent as if they constituted Shares as
of the date hereof.
1.2 Agreement to Vote Shares. Stockholder hereby covenants and agrees that
during the period commencing on the date hereof and continuing until this
Agreement terminates pursuant to Section 4 hereof, at any meeting (whether
annual or special and whether or not an adjourned or postponed meeting) of the
stockholders of the Company, however called, and in any action by written
consent of the stockholders of the Company, Stockholder shall appear at the
meeting or otherwise cause any and all Shares to be counted as present thereat
for purposes of establishing a quorum and vote (or cause to be voted) any and
all Shares: (i) in favor of the Company Stockholder Proposal (which includes
approval of the Merger and the Merger Agreement); and (ii) against any of the
following (or any agreement to enter into, effect, facilitate or support any of
the following): (A) any Acquisition Proposal; (B) any merger
agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the Company;
or (C) any amendment of the Company’s Certificate of Incorporation or Bylaws or
any other proposal or transaction involving the Company, the purpose of which
amendment or other proposal or transaction is to delay, prevent or nullify the
Merger or the transaction contemplated by the Merger Agreement or change in any
manner the voting rights of any capital stock of the Company (collectively,
“Frustrating Transactions”). Stockholder further agrees not to enter into any
agreement or understanding with any person or entity the effect of which would
be inconsistent with or violative of any provision contained in this
Section 1.2. Any vote by the Stockholder that is not in accordance with this
Section 1.2 shall be considered null and void, and the provisions of Section 1.3
shall be deemed to take immediate effect. Notwithstanding anything to the
contrary contained herein, nothing in this Agreement shall be construed to limit
or restrict Stockholder from acting in his or her capacity as a director of the
Company or voting in Stockholder’s sole discretion on any matter other than
those matters referred to in the first sentence of this Section 1.2.
1.3 Irrevocable Proxy. The Stockholder hereby irrevocably grants to, and
appoints, Parent and any designee of Parent, and each of them individually, as
the Stockholder’s proxy and attorney-in-fact (with full power of substitution
and resubstitution), for and in the name, place and stead of the Stockholder, to
vote the Shares of the Stockholder, or grant a consent or approval in respect of
the Shares of the Stockholder in a manner consistent with Section 1.2. The
Stockholder understands and acknowledges that Parent is entering into the Merger
Agreement in reliance upon the Stockholder’s execution and delivery of this
Agreement. The Stockholder hereby affirms that the irrevocable proxy set forth
in this Section 1.3 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of the Stockholder under this Agreement. The Stockholder agrees that
this proxy shall be irrevocable during the term of this Agreement and is coupled
with an interest sufficient at law to support an irrevocable proxy and given to
Parent as an inducement to enter into the Merger Agreement and, to the extent
permitted under applicable law, shall be valid and binding on any person to whom
a Stockholder may transfer any of his, her or its Shares in breach of this
Agreement. The Stockholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. All
authority herein conferred or agreed to be conferred shall survive the death or
incapacity of the Stockholder and any obligation of the Stockholder under this
Agreement shall be binding upon the heirs, personal representatives, successors
and assigns of the Stockholder. Notwithstanding anything to the contrary herein,
the irrevocable proxy granted hereunder shall automatically terminate upon the
termination of this Agreement pursuant to Section 4 hereof.
1.4 Adjustments Upon Changes in Capitalization. In the event of any change
in the number of issued and outstanding shares of Company Common Stock by reason
of any stock split, reverse split, stock dividend (including any dividend or
distribution of securities convertible into Company Common Stock), combination,
reorganization, recapitalization or other like change, conversion or exchange of
shares, or any other change in the corporate or capital structure of the
Company, the term “Shares” shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged.
2
2. Other Restrictions.
2.1 Transfers and Other Restrictions. Stockholder represents, covenants and
agrees that, except as contemplated by this Agreement: (i) Stockholder shall
not, directly or indirectly, during the period commencing on the date hereof and
continuing until this Agreement terminates pursuant to Section 4 hereof,
(A) offer for sale or agree to sell, transfer, tender, assign, pledge,
hypothecate or otherwise dispose of or enter into any contract, option or other
arrangement or understanding with respect to, or consent to, the offer for sale,
sale, transfer, tender, pledge, hypothecation, encumbrance, assignment or other
disposition of, or create any Lien of any nature whatsoever with respect to, any
or all of the Shares or any interest therein (each such transaction, a
“Transfer”); provided, however, that nothing in this Section 2.1 shall prevent
or prohibit Stockholder from a Transfer or Transfers of Shares pursuant to
Rule 144 of the Securities Act of 1933, as amended, during the period commencing
on the date hereof and continuing until this Agreement terminates pursuant to
Section 4 hereof; provided further, that with respect to Shares held by John B.
Simpson and his affiliates (“Simpson”), nothing in this Section 2.1 shall
prevent or prohibit Simpson from a Transfer or Transfers of Shares pursuant to
the 10b5-1 trading plans (the “Plans”) in effect on the date hereof and
provided that any such Transfer is made pursuant to Rule 144 and that Simpson
does not modify or amend the Plans as a part of a plan or scheme to evade the
prohibitions set forth in this Agreement; or (B) take any action that could make
any of its representations or warranties contained herein untrue or incorrect or
could have the effect of preventing or disabling the Stockholder from performing
any of its obligations hereunder; (ii) Stockholder shall not grant any proxy or
power of attorney, or deposit any Shares into a voting trust or enter into a
voting agreement or other arrangement, with respect to the voting of Shares
(each a “Voting Proxy”) except as provided by this Agreement; and
(iii) Stockholder has not granted, entered into or otherwise created any Voting
Proxy which is currently (or which will hereafter become) effective, and if any
Voting Proxy has been created, such Voting Proxy is hereby revoked.
2.2 No Appraisal Rights. The Stockholder hereby waives, and agrees not to
exercise or assent to, any appraisal rights under Section 262 in connection with
the Merger.
3. Representations and Warranties of Stockholder. Stockholder represents and
warrants to Parent that:
3.1 Authority; Validity. Stockholder has all requisite capacity, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Stockholder
and the consummation by Stockholder of the transactions contemplated hereby have
been duly and validly authorized by all necessary action on the part of
Stockholder. This Agreement has been duly executed and delivered by Stockholder
and, assuming the due authorization, execution and delivery of this Agreement by
Parent, this Agreement constitutes the legal, valid and binding obligation of
the Stockholder, enforceable against the Stockholder in accordance with its
terms subject, as to enforcement of remedies, to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights and remedies of
creditors generally and to the effect of general principles of equity. No
consent, approval, order, authorization or permit of, or registration,
declaration or filing with, or notification to, any Governmental Entity is
required to be obtained or made by or with respect to
3
the Stockholder in connection with the execution, delivery and performance of
this Agreement or the consummation of the transactions contemplated hereby,
other than (i) compliance with and filings under the HSR Act, if applicable to
the Stockholder’s receipt in the Merger of Parent Common Stock, and (ii) such
reports under Sections 13(d) and 16 of the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby. If this
Agreement is being executed in a representative or fiduciary capacity with
respect to Stockholder, the person signing this Agreement has full power and
authority to enter into and perform this Agreement.
3.2 Non-Contravention. The execution, delivery and performance of this
Agreement does not, and the consummation of the transactions contemplated hereby
and compliance with the provisions hereof will not, contravene, conflict with,
or result in any violation of, breach of or default by (with or without notice
or lapse of time, or both) Stockholder under, or give rise to a right of
termination, cancellation or acceleration of any obligation under, or result in
the creation of any Lien (other than pursuant to this Agreement) upon any of the
properties or assets of Stockholder under, any provision of (i) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Stockholder
or (ii) any judgment, order, decree, statute, law, ordinance, injunction, rule
or regulation applicable to Stockholder or any of Stockholder’s properties or
assets, other than any such conflicts, violations, defaults, rights, or Liens
that, individually or in the aggregate, would not impair the ability of
Stockholder to perform Stockholder’s obligations hereunder or prevent, limit or
restrict in any respect the consummation of any of the transactions contemplated
hereby. There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which Stockholder is settlor or trustee or any other
person or entity, including any Governmental Entity, whose consent, approval,
order or authorization is required by or with respect to Stockholder for the
execution, delivery and performance of this Agreement by Stockholder or the
consummation by Stockholder of the transactions contemplated hereby.
3.3 Title. As of the date hereof, Stockholder is the record and beneficial
owner of and has good and marketable title to the shares of Company Common Stock
indicated on the signature pages hereto, free and clear of any Liens. The number
of Shares set forth on the signature pages hereto are the only Shares owned of
record or beneficially owned by Stockholder or over which Stockholder exercises
sole voting power and, except as set forth on such signature pages, Stockholder
holds no options or warrants to purchase or rights to subscribe for or otherwise
acquire any securities of the Company and has no other interest in or voting
rights with respect to any securities of the Company.
3.4 Power. Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Section 1 and Section 2
hereof and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of the Shares, with no limitations,
qualifications or restrictions on such rights.
3.5 Absence of Litigation. As of the date hereof, there is no litigation,
suit, claim, action, proceeding or investigation pending or, to the knowledge of
the Stockholder, threatened against the Stockholder, or any property or asset of
the Stockholder, before any Governmental Entity that seeks to delay or prevent
the consummation of the Merger or of the transactions contemplated by the Merger
Agreement.
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4. Effectiveness; Termination; No Survival. This Agreement shall become
effective upon its execution by Stockholder and Parent. This Agreement may be
terminated at any time by mutual written consent of Stockholder and Parent. This
Agreement, and the obligations of Stockholder hereunder, including, without
limitation, Stockholder’s obligations under Section 1 and Section 2 above, shall
terminate, without any action by the parties hereto, upon the earlier to occur
of the following: (i) the Effective Time; and (ii) such date and time as the
Merger Agreement shall have been validly terminated pursuant to Article VII
thereof. Nothing in this Section 4 shall relieve any party of liability for
breach of this Agreement.
5. Further Assurances. Subject to the terms of this Agreement, from time to
time, Stockholder shall execute and deliver such additional documents and use
commercially reasonable efforts to take, or cause to be taken, all such further
actions, and to do or cause to be done, all things reasonably necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement.
6. Miscellaneous.
6.1 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, void or unenforceable, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
6.2 Binding Effect and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but, except as otherwise
specifically provided herein, neither this Agreement nor any of the rights,
interests or obligations of the parties hereto may be assigned by either of the
parties without the prior written consent of the other. Any purported assignment
in violation of this Section 6.2 shall be void.
6.3 Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
6.4 Specific Performance; Injunctive Relief; Attorneys Fees. The parties
hereto acknowledge that Parent will be irreparably harmed and that there will be
no adequate remedy at law for a violation of any of the covenants or agreements
of Stockholder set forth herein. Therefore, it is agreed that, in addition to
any other remedies that may be available to Parent upon any such violation,
Parent shall have the right to enforce such covenants and agreements by specific
performance, injunctive relief or by any other means available to Parent at law
or in equity and Stockholder hereby irrevocably and unconditionally waives any
objection to Parent seeking so to enforce such covenants and agreements by
specific performance, injunctive relief and other means. If any action, suit or
other proceeding (whether at law, in equity or otherwise)
5
is instituted concerning or arising out of this Agreement or any transaction
contemplated hereunder, the prevailing party shall recover, in addition to any
other remedy granted to such party therein, all such party’s costs and attorneys
fees incurred in connection with the prosecution or defense of such action, suit
or other proceeding.
6.5 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given upon delivery either personally or by
commercial delivery service, or sent via facsimile (receipt confirmed) to the
parties at the following addresses or facsimile numbers (or at such other
address or facsimile numbers for a party as shall be specified by like notice):
if to Parent, to:
ev3 Inc.
9600 54th Avenue North, Suite 100
Plymouth, MN 55442
Facsimile: (763) 398-7200
Attention: Kevin Klemz
with copies to:
Oppenheimer Wolff & Donnelly LLP
Plaza VII, Suite 3300
45 South Seventh Street
Minneapolis, MN 55402
Facsimile: (612) 607-7100
Attention: Bruce A. Machmeier, Esq.
if to Stockholder, at its address set forth on the signature pages hereto, with
a copy (which shall not constitute notice) to each of:
FoxHollow Technologies, Inc.
740 Bay Road
Redwood City, CA 94063
Facsimile: (650) 839-7920
Attention: John Simpson, M.D.
and
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
Facsimile: (650) 493-6811
Attention: Martin W. Korman, Esq.
Robert T. Ishii, Esq.
Philip Oettinger, Esq.
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6.6 Governing Law; Submission to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of law thereof. The parties hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the United
States of America located in the State of Delaware for any actions, suits or
proceedings arising out of or relating to this Agreement (and the parties agree
not to commence any action, suit or proceeding relating thereto except in such
courts), and further agree that service of any process, summons, notice or
document by U.S. certified mail shall be effective service of process for any
action, suit or proceeding brought against the parties in any such court. The
parties hereby irrevocably and unconditionally waive any objection to the laying
of venue of any action, suit or proceeding arising out of this Agreement in the
courts of the United States of America located in the State of Delaware, and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
6.7 Entire Agreement. The Merger Agreement and this Agreement constitute
to the subject matter hereof and supersede any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties respecting the subject matter hereof.
6.8 Counterparts. This Agreement may be executed in counterparts, each of
6.9 Captions. The captions to sections of this Agreement have been inserted
only for identification and reference purposes and shall not be used to construe
or interpret this Agreement.
6.10 Stockholder Capacity. Stockholder has executed this Agreement solely
in its capacity as the record and/or beneficial holder of Shares.
7
In Witness Whereof, the parties hereto have caused this Voting Agreement to
be executed as of the date first above written.
ev3 Inc.
By:
Name:
Title:
Stockholder:
(Stockholder Name)
By:
Name:
Title:
Stockholder’s Address for Notice:
Attention:
Outstanding Shares of Company Common Stock Beneficially
Owned by Stockholder:
Options, Warrants or Rights to purchase Company Common Stock
Beneficially Owned by Stockholder:
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Exhibit 10.15
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT is made and entered into this 29th day of
December, 2011 (“Agreement”), by and between Cornerstone Core Properties REIT,
Inc., a Maryland corporation (the “Company”), and Jody Fouch (“Indemnitee”).
WHEREAS, at the request of the Company, Indemnitee currently serves as a
director or officer of the Company and may, therefore, be subjected to claims,
suits or proceedings arising as a result of his or her service; and
WHEREAS, as an inducement to Indemnitee to continue to serve as such director or
officer, the Company has agreed to indemnify and to advance expenses and costs
incurred by Indemnitee in connection with any such claims, suits or proceedings,
subject to certain limitations set forth herein; and
WHEREAS, the parties by this Agreement desire to set forth their agreement
regarding indemnification and advance of expenses;
NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Definitions. For purposes of this Agreement:
(a) “Applicable Legal Rate” means a fixed rate of interest equal to the
applicable federal rate for mid-term debt instruments as of the day that it is
determined that Indemnitee must repay any advanced expenses.
(b) “Change in Control” means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar
item on any similar schedule or form) promulgated under the Securities Exchange
Act of 1934, as amended (the “Act”), whether or not the Company is then subject
to such reporting requirement; provided, however, that, without limitation, such
a Change in Control shall be deemed to have occurred if after the Effective Date
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Act)
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 15% or more of
the combined voting power of all of the Company’s then outstanding securities
entitled to vote generally in the election of directors without the prior
approval of at least two-thirds of the members of the Board of Directors in
office immediately prior to such person’s attaining such percentage interest;
(ii) the Company is a party to a merger, consolidation, sale of assets, plan of
liquidation or other reorganization not approved by at least two-thirds of the
members of the Board of Directors then in office, as a consequence of which
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iii) at any time, a majority of the members of the Board of
Directors are not individuals (A) who were directors as of the Effective Date or
(B) whose election by the Board of Directors or nomination for election by the
Company’s stockholders was approved by the affirmative vote of at least
two-thirds of the directors then in office who were directors as of the
Effective Date or whose election for nomination for election was previously so
approved.
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(c) “Corporate Status” means the status of a person as a present or former
director, officer, employee or agent of the Company or as a director, trustee,
officer, partner, manager, managing member, fiduciary, employee or agent of any
other foreign or domestic corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other enterprise that such person
is or was serving in such capacity at the request of the Company. As a
clarification and without limiting the circumstances in which Indemnitee may be
serving at the request of the Company, service by Indemnitee shall be deemed to
be at the request of the Company if Indemnitee serves or served as a director,
trustee, officer, partner, manager, managing member, fiduciary, employee or
agent of any corporation, partnership, limited liability company, joint venture,
trust, employee benefit plan or other enterprise (i) of which a majority of the
voting power or equity interest is owned directly or indirectly by the Company
or (ii) the management of which is controlled directly or indirectly by the
Company.
(d) “Disinterested Director” means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification and/or advance
of Expenses is sought by Indemnitee.
(e) “Effective Date” means the date of this Agreement.
(f) “Expenses” means any and all reasonable and out-of-pocket attorneys’ fees
and costs, retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, federal, state, local or foreign taxes
payments under this Agreement, ERISA excise taxes and penalties and any other
disbursements or expenses incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a
witness in or otherwise participating in a Proceeding. Expenses shall also
include Expenses incurred in connection with any appeal resulting from any
Proceeding including, without limitation, the premium for, security for and
other costs relating to any cost bond supersedeas bond or other appeal bond or
its equivalent.
(g) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither is, nor in the past five
years has been, retained to represent: (i) the Company or Indemnitee in any
matter material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement or of other indemnitees under similar
indemnification agreements), or (ii) any other party to or participant or
witness in the Proceeding giving rise to a claim for indemnification or advance
of Expenses hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
(h) “Proceeding” means any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other proceeding, whether brought by or in the
right of the Company or otherwise and whether of a civil (including intentional
or unintentional tort claims), criminal, administrative or investigative (formal
or informal) nature, including any appeal therefrom, except one pending or
completed on or before the Effective Date, unless otherwise specifically agreed
in writing by the Company and Indemnitee. If Indemnitee reasonably believes that
a given situation may lead to or culminate in the institution of a Proceeding,
such situation shall also be considered a Proceeding.
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Section 2. Services by Indemnitee. Indemnitee will serve as a director or
officer of the Company. However, this Agreement shall not impose any independent
obligation on Indemnitee or the Company to continue Indemnitee’s service to the
Company. This Agreement shall not be deemed an employment contract between the
Company (or any other entity) and Indemnitee.
Section 3. Indemnification — General. Subject to the limitations in Section 7,
the Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided
in this Agreement and (b) as otherwise permitted by Maryland law in effect on
the Effective Date and as amended from time to time; provided, however, that no
change in Maryland law shall have the effect of reducing the benefits available
to Indemnitee hereunder based on Maryland law as in effect on the Effective
Date. Subject to the limitations in Section 7, the rights of Indemnitee provided
in this Section 3 shall include, without limitation, the rights set forth in the
other sections of this Agreement, including any additional indemnification
permitted by Section 2-418(g) of the Maryland General Corporation Law (the
“MGCL”).
Section 4. Rights to Indemnification. Subject to the limitations in Section 7,
if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened
to be, made a party to any Proceeding, the Company shall indemnify Indemnitee
against all judgments, penalties, fines and amounts paid in settlement and all
Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with any such Proceeding unless it is established by clear
and convincing evidence that (i) the act or omission of Indemnitee was material
to the matter giving rise to the Proceeding and (a) was committed in bad faith
or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee
actually received an improper personal benefit in money, property or services or
(iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to
believe that his or her conduct was unlawful.
Section 5. Court-Ordered Indemnification. Subject to the limitations in
Section 7(a) and (b), a court of appropriate jurisdiction, upon application of
Indemnitee and such notice as the court shall require, may order indemnification
of Indemnitee in the following circumstances:
(a) if such court determines that Indemnitee is entitled to reimbursement under
Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which
case Indemnitee shall be entitled to recover the Expenses of securing such
reimbursement; or
(b) if such court determines that Indemnitee is fairly and reasonably entitled
to indemnification in view of all the relevant circumstances, whether or not
Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of
the MGCL or (ii) has been adjudged liable for receipt of an improper personal
benefit under Section 2-418(c) of the MGCL, the court may order such
indemnification as the court shall deem proper. However, indemnification with
respect to any Proceeding by or in the right of the Company or in which
liability shall have been adjudged in the circumstances described in
Section 2-418(c) of the MGCL shall be limited to Expenses.
Section 6. Indemnification for Expenses of an Indemnitee Who is Wholly or Partly
Successful. Subject to the limitations in Section 7, to the extent that
Indemnitee was or is, by reason of his or her Corporate Status, made a party to
(or otherwise becomes a participant in) any
3
Proceeding and is successful, on the merits or otherwise, in the defense of such
Proceeding, he or she shall be indemnified for all Expenses actually and
reasonably incurred by him or her or on his or her behalf in connection
therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee under this Section 6 for all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection with each such
claim, issue or matter, allocated on a reasonable and proportionate basis. For
purposes of this Section and without limitation, the termination of any claim,
issue or matter in such a Proceeding by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or matter.
Section 7. Limitations on Indemnification. Notwithstanding any other provision
of this Agreement (other than Section 5), Indemnitee shall not be entitled to:
(a) indemnification for any loss or liability unless all of the following
conditions are met: (i) Indemnitee has determined, in good faith, that the
course of conduct that caused the loss or liability was in the best interests of
the Company; (ii) Indemnitee was acting on behalf of or performing services for
the Company; (iii) such loss or liability was not the result of negligence or
misconduct, or, if Indemnitee is an independent director, gross negligence or
willful misconduct; and (iv) such indemnification is recoverable only out of the
Company’s net assets and not from the Company’s stockholders, investors or
stakeholders;
(b) indemnification for any loss or liability arising from an alleged violation
of federal or state securities laws unless one or more of the following
conditions are met: (i) there has been a successful adjudication on the merits
of each count involving alleged material securities law violations as to
Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by
a court of competent jurisdiction as to Indemnitee; or (iii) a court of
competent jurisdiction approves a settlement of the claims against Indemnitee
and finds that indemnification of the settlement and the related costs should be
made, and the court considering the request for indemnification has been advised
of the position of the Securities and Exchange Commission and of the published
position of any state securities regulatory authority in which securities of the
Company were offered or sold as to indemnification for violations of securities
laws;
(c) indemnification hereunder if the Proceeding was one by or in the right of
the Company and Indemnitee is adjudged to be liable to the Company;
(d) indemnification hereunder if Indemnitee is adjudged to be liable on the
basis that personal benefit was improperly received in any Proceeding charging
improper personal benefit to Indemnitee, whether or not involving action in the
Indemnitee’s Corporate Status; or
(e) indemnification or advance of Expenses hereunder if the Proceeding was
brought by Indemnitee, unless: (i) the Proceeding was brought to enforce
indemnification under this Agreement, and then only to the extent in accordance
with and as authorized by Section 12 of this Agreement, or (ii) the Company’s
charter or Bylaws, a resolution of the stockholders entitled to vote generally
in the election of directors or of the Board of Directors or an agreement
approved by the Board of Directors to which the Company is a party expressly
provide otherwise.
4
Section 8. Advance of Expenses for an Indemnitee. If, by reason of Indemnitee’s
Corporate Status, Indemnitee is, or is threatened to be, made a party to any
Proceeding, the Company shall, without requiring a preliminary determination of
Indemnitee’s ultimate entitlement to indemnification hereunder and except as set
forth in the following sentence, advance all reasonable Expenses incurred by or
on behalf of Indemnitee in connection with such Proceeding within ten days after
the receipt by the Company of a statement or statements requesting such advance
or advances from time to time, whether prior to or after final disposition of
such Proceeding. The Company may not advance Expenses incurred by or on behalf
of Indemnitee in connection with a Proceeding unless (a) such Proceeding is
initiated by a third party who is not a stockholder of the Company or, if such
Proceeding is initiated by a stockholder of the Company acting in his or her
capacity as such, a court of competent jurisdiction specifically approves such
advancement, and (b) such Proceeding relates to acts or omissions with respect
to the performance of duties or services on behalf of the Company. The statement
or statements requesting advance or advances shall reasonably evidence the
Expenses incurred by Indemnitee and shall include or be preceded or accompanied
by a written affirmation by Indemnitee of Indemnitee’s good faith belief that
the standard of conduct necessary for indemnification by the Company as
authorized by law and by this Agreement has been met and a written undertaking
by or on behalf of Indemnitee, in substantially the form attached hereto as
Exhibit A or in such form as may be required under applicable law as in effect
at the time of the execution thereof, to reimburse the portion of any Expenses
advanced to Indemnitee, together with the Applicable Legal Rate of interest
thereon, relating to claims, issues or matters in the Proceeding as to which it
shall ultimately be established, by clear and convincing evidence, that the
standard of conduct has not been met by Indemnitee and which have not been
successfully resolved as described in Section 6 of this Agreement. To the extent
that Expenses advanced to Indemnitee do not relate to a specific claim, issue or
matter in the Proceeding, such Expenses shall be allocated on a reasonable and
proportionate basis. The undertaking required by this Section 8 shall be an
unlimited general obligation by or on behalf of Indemnitee and shall be accepted
without reference to Indemnitee’s financial ability to repay such advanced
Expenses and without any requirement to post security therefor.
Section 9. Indemnification and Advance of Expenses as a Witness or Other
Participant. Subject to the limitations in Section 7, to the extent that
Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a
witness or otherwise asked to participate in any Proceeding, whether instituted
by the Company or any other party, and to which Indemnitee is not a party,
Indemnitee shall be advanced all reasonable Expenses and indemnified against all
behalf in connection therewith within ten days after the receipt by the Company
of a statement or statements requesting any such advance or indemnification from
time to time, whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee.
Section 10. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to
the Company a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification. Indemnitee may submit one or more such
5
requests from time to time and at such time(s) as Indemnitee deems appropriate
in Indemnitee’s sole discretion. The officer of the Company receiving any such
request from Indemnitee shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee has
requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
Section 10(a) above, a determination, if required by applicable law, with
respect to Indemnitee’s entitlement thereto shall promptly be made in the
specific case: (i) if a Change in Control shall have occurred, by Independent
Counsel, in a written opinion to the Board of Directors, a copy of which shall
be delivered to Indemnitee, which Independent Counsel shall be selected by
Indemnitee and approved by the Board of Directors in accordance with
Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably
withheld; or (ii) if a Change in Control shall not have occurred, (A) by the
Board of Directors by a majority vote of a quorum consisting of Disinterested
Directors or, if such a quorum cannot be obtained, then by a majority vote of a
duly authorized committee of the Board of Directors consisting solely of one or
more Disinterested Directors, (B) if Independent Counsel has been selected by
the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL
and approved by Indemnitee, which approval shall not be unreasonably withheld,
by Independent Counsel, in a written opinion to the Board of Directors, a copy
of which shall be delivered to Indemnitee or (C) if so directed by a majority of
the members of the Board of Directors, by the stockholders of the Company. If it
is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten days after such determination. Indemnitee
shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing
to such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination in the discretion of the Board of Directors or
Independent Counsel if retained pursuant to clause (ii)(B) of this
Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the
person, persons or entity making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company shall indemnify and hold Indemnitee harmless
therefrom.
(c) The Company shall pay the reasonable fees and expenses of Independent
Counsel, if one is appointed.
Section 11. Presumptions and Effect of Certain Proceedings.
(a) In making any determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with
Section 10(a) of this Agreement, and the Company shall have the burden of proof
to overcome that presumption in connection with the making of any determination
contrary to that presumption.
(b) The termination of any Proceeding or of any claim, issue or matter therein,
by judgment, order, settlement or conviction, upon a plea of nolo contendere or
its equivalent, or entry of an order of probation prior to judgment, does not
create a presumption that Indemnitee did not meet the requisite standard of
conduct described herein for indemnification.
6
(c) The knowledge and/or actions, or failure to act, of any other director,
officer, employee or agent of the Company or any other director, trustee,
joint venture, trust, employee benefit plan or other enterprise shall not be
imputed to Indemnitee for purposes of determining any other right to
indemnification under this Agreement.
Section 12. Remedies of Indemnitee.
(a) If (i) a determination is made pursuant to Section 10(b) of this Agreement
that Indemnitee is not entitled to indemnification under this Agreement,
(ii) advance of Expenses is not timely made pursuant to Section 8 or 9 of this
Agreement, (iii) no determination of entitlement to indemnification shall have
been made pursuant to Section 10(b) of this Agreement within 60 days after
receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 6 or 9 of this Agreement within
ten days after receipt by the Company of a written request therefor, or
(v) payment of indemnification pursuant to any other section of this Agreement
or the charter or Bylaws of the Company is not made within ten days after a
determination has been made that Indemnitee is entitled to indemnification,
Indemnitee shall be entitled to an adjudication in an appropriate court located
in the State of Maryland, or in any other court of competent jurisdiction, of
his or her entitlement to such indemnification or advance of Expenses.
Alternatively, Indemnitee, at his or her option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association. Indemnitee shall
commence a proceeding seeking an adjudication or an award in arbitration within
180 days following the date on which Indemnitee first has the right to commence
such proceeding pursuant to this Section 12(a); provided, however, that the
foregoing clause shall not apply to a proceeding brought by Indemnitee to
enforce his or her rights under Section 6 of this Agreement. Except as set forth
herein, the provisions of Maryland law (without regard to its conflicts of laws
rules) shall apply to any such arbitration. The Company shall not oppose
Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In any judicial proceeding or arbitration commenced pursuant to this
Section 12, Indemnitee shall be presumed to be entitled to indemnification or
advance of Expenses, as the case may be, under this Agreement and the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advance of Expenses, as the case may be. If Indemnitee
commences a judicial proceeding or arbitration pursuant to this Section 12,
Indemnitee shall not be required to reimburse the Company for any advances
pursuant to Section 8 of this Agreement until a final determination is made with
respect to Indemnitee’s entitlement to indemnification (as to which all rights
of appeal have been exhausted or lapsed). The Company shall, to the fullest
extent not prohibited by law, be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 12 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all of the provisions of this Agreement.
(c) If a determination shall have been made pursuant to Section 10(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in
7
any judicial proceeding or arbitration commenced pursuant to this Section 12,
absent a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification.
(d) In the event that Indemnitee is successful in seeking, pursuant to this
Section 12, a judicial adjudication of or an award in arbitration to enforce his
or her rights under, or to recover damages for breach of, this Agreement,
Indemnitee shall be entitled to recover from the Company, and shall be
indemnified by the Company for, any and all Expenses actually and reasonably
incurred by him or her in such judicial adjudication or arbitration. If it shall
be determined in such judicial adjudication or arbitration that Indemnitee is
entitled to receive part but not all of the indemnification or advance of
Expenses sought, the Expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration shall be appropriately prorated.
(e) Interest shall be paid by the Company to Indemnitee at the maximum rate
allowed to be charged for judgments under the Courts and Judicial Proceedings
Article of the Annotated Code of Maryland for amounts which the Company pays or
is obligated to pay for the period (i) commencing with either the tenth day
after the date on which the Company was requested to advance Expenses in
accordance with Section 8 or 9 of this Agreement or the 60 th day after the date
on which the Company was requested to make the determination of entitlement to
indemnification under Section 10(b) of this Agreement, as applicable, and
(ii) ending on the date such payment is made to Indemnitee by the Company.
Section 13. Defense of the Underlying Proceeding.
(a) Indemnitee shall notify the Company promptly in writing upon being served
with any summons, citation, subpoena, complaint, indictment, request or other
document relating to any Proceeding which may result in the right to
indemnification or the advance of Expenses hereunder and shall include with such
notice a description of the nature of the Proceeding and a summary of the facts
underlying the Proceeding. The failure to give any such notice shall not
disqualify Indemnitee from the right, or otherwise affect in any manner any
right of Indemnitee, to indemnification or the advance of Expenses under this
Agreement unless the Company’s ability to defend in such Proceeding or to obtain
proceeds under any insurance policy is materially and adversely prejudiced
thereby, and then only to the extent the Company is thereby actually so
prejudiced.
(b) Subject to the provisions of the last sentence of this Section 13(b) and of
Section 13(c) below, the Company shall have the right to defend Indemnitee in
any Proceeding which may give rise to indemnification hereunder; provided,
however, that the Company shall notify Indemnitee of any such decision to defend
within 15 calendar days following receipt of notice of any such Proceeding under
Section 13(a) above. The Company shall not, without the prior written consent of
Indemnitee, which shall not be unreasonably withheld or delayed, consent to the
entry of any judgment against Indemnitee or enter into any settlement or
compromise which (i) includes an admission of fault of Indemnitee, (ii) does not
include, as an unconditional term thereof, the full release of Indemnitee from
all liability in respect of such Proceeding, which release shall be in form and
substance reasonably satisfactory to Indemnitee or (iii) would impose any
Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b)
shall not apply to a Proceeding brought by Indemnitee under Section 12 above.
8
(c) Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to
which Indemnitee is a party by reason of Indemnitee’s Corporate Status,
(i) Indemnitee reasonably concludes, based upon an opinion of counsel approved
by the Company, which approval shall not be unreasonably withheld, that he or
she may have separate defenses or counterclaims to assert with respect to any
issue which may not be consistent with other defendants in such Proceeding,
(ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved
by the Company, which approval shall not be unreasonably withheld, that an
actual or apparent conflict of interest or potential conflict of interest exists
between Indemnitee and the Company, or (iii) if the Company fails to assume the
defense of such Proceeding in a timely manner, Indemnitee shall be entitled to
be represented by separate legal counsel of Indemnitee’s choice, subject to the
prior approval of the Company, which approval shall not be unreasonably
withheld, at the expense of the Company. In addition, if the Company fails to
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any Proceeding to deny or to recover from
Indemnitee the benefits intended to be provided to Indemnitee hereunder,
Indemnitee shall have the right to retain counsel of Indemnitee’s choice,
subject to the prior approval of the Company, which approval shall not be
unreasonably withheld, at the expense of the Company (subject to Section 12(d)),
to represent Indemnitee in connection with any such matter.
Section 14. Non-Exclusivity; Survival of Rights; Subrogation; Coordination of
Payments.
(a) The rights of indemnification and advance of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the charter or Bylaws of the
Company, any agreement or a resolution of the stockholders entitled to vote
generally in the election of directors or of the Board of Directors, or
otherwise. Unless consented to in writing by Indemnitee, no amendment,
alteration or repeal of this Agreement or of any provision hereof shall limit or
restrict any right of Indemnitee under this Agreement in respect of any action
taken or omitted by such Indemnitee in his or her Corporate Status prior to such
amendment, alteration or repeal, regardless of whether a claim with respect to
such action or inaction is raised prior or subsequent to such amendment,
alteration or repeal. No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, and every other right or remedy shall be
cumulative and in addition to every other right or remedy given hereunder or now
or hereafter existing at law or in equity or otherwise. The assertion of any
right or remedy hereunder, or otherwise, shall not prohibit the concurrent
assertion or employment of any other right or remedy.
(b) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and take all action necessary
to secure such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(c) The Company shall not be liable under this Agreement to make any payment of
amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder
if and to the extent that Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise.
9
Section 15. Insurance. The Company will use its reasonable best efforts to
acquire directors and officers liability insurance, on terms and conditions
deemed appropriate by the Board of Directors, with the advice of counsel,
covering Indemnitee or any claim made against Indemnitee by reason of his or her
Corporate Status and covering the Company for any indemnification or advance of
Expenses made by the Company to Indemnitee for any claims made against
Indemnitee by reason of his or her Corporate Status. Without in any way limiting
any other obligation under this Agreement, the Company shall indemnify
Indemnitee for any payment by Indemnitee arising out of the amount of any
deductible or retention and the amount of any excess of the aggregate of all
judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in
connection with a Proceeding over the coverage of any insurance referred to in
the previous sentence. The purchase, establishment and maintenance of any such
insurance shall not in any way limit or affect the rights or obligations of the
Company or Indemnitee under this Agreement except as expressly provided herein,
and the execution and delivery of this Agreement by the Company and Indemnitee
shall not in any way limit or affect the rights or obligations of the Company
under any such insurance policies. If, at the time the Company receives notice
from any source of a Proceeding to which Indemnitee is a party or a participant
(as a witness or otherwise), the Company has director and officer liability
insurance in effect, the Company shall give prompt notice of such Proceeding to
the insurers in accordance with the procedures set forth in the respective
policies.
Section 16. Reports to Stockholders, Investors and Stakeholders. To the extent
required by the MGCL, the Company shall report in writing to its stockholders,
investors or stakeholders the payment of any amounts for indemnification of, or
advance of Expenses to, Indemnitee under this Agreement arising out of a
Proceeding by or in the right of the Company with the notice of the meeting of
investors of the Company next following the date of the payment of any such
indemnification or advance of Expenses or prior to such meeting.
Section 17. Duration of Agreement; Binding Effect.
(a) This Agreement shall continue until and terminate ten years after the date
that Indemnitee’s Corporate Status shall have ceased; provided, that the rights
of Indemnitee hereunder shall continue until the final termination of any
Proceeding then pending or threatened in respect of which Indemnitee is granted
rights of indemnification or advance of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Section 12 of this Agreement relating
thereto.
(b) The indemnification and advance of Expenses provided by, or granted pursuant
to, this Agreement shall be binding upon and be enforceable by the parties
hereto and their respective successors and assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), shall continue as
to an Indemnitee who has ceased to be a director, officer, employee or agent of
the Company or a director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any other foreign or domestic corporation,
partnership, limited liability company, joint venture, trust, employee benefit
plan or other enterprise which such person is or was serving in such capacity at
the request of the Company, and shall inure to the benefit of Indemnitee and his
or her spouse, assigns, heirs, devisees, executors and administrators and other
legal representatives.
10
(c) The Company shall require and cause any successor (whether direct or
indirect by purchase, merger, consolidation or otherwise) to all, substantially
all or a substantial part, of the business and/or assets of the Company, by
written agreement in form and substance satisfactory to Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.
(d) The Company and Indemnitee agree that a monetary remedy for breach of this
Agreement, at some later date, may be inadequate, impracticable and difficult of
proof, and further agree that such breach may cause Indemnitee irreparable harm.
Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement
by seeking injunctive relief and/or specific performance hereof, without any
necessity of showing actual damage or irreparable harm and that by seeking
injunctive relief and/or specific performance, Indemnitee shall not be precluded
from seeking or obtaining any other relief to which Indemnitee may be entitled.
Indemnitee shall further be entitled to such specific performance and injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions, without the necessity of posting bonds or other
undertakings in connection therewith. The Company acknowledges that, in the
absence of a waiver, a bond or undertaking may be required of Indemnitee by a
court, and the Company hereby waives any such requirement of such a bond or
undertaking.
Section 18. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including, without limitation, each portion of any section,
paragraph or sentence of this Agreement containing any such provision held to be
invalid, illegal or unenforceable that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and shall
remain enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any section, paragraph or
sentence of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby.
Section 19. Identical Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
One such counterpart signed by the party against whom enforceability is sought
shall be sufficient to evidence the existence of this Agreement.
Section 20. Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
11
Section 21. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
Section 22. Notices. All notices, requests, demands and other communications
(i) delivered by hand and receipted for by the party to whom said notice or
other communication shall have been directed, on the day of such delivery, or
(ii) mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
(a) If to Indemnitee, to the address set forth on the signature page hereto.
(b) If to the Company to:
Cornerstone Core Properties REIT, Inc.
1920 Main Street
Suite 400
Irvine, California 92614
and Chief Financial Officer
or to such other address as may have been furnished in writing to Indemnitee by
the Company or to the Company by Indemnitee, as the case may be.
Section 23. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Maryland, without
regard to its conflicts of laws rules.
12
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement on the day and year first above written.
ATTEST: CORNERSTONE CORE PROPERTIES REIT, INC. By:
/s/ Terry G. Roussel
(SEAL) Name: Terry G. Roussel Title: CEO WITNESS: INDEMNITEE
/s/ Jody Fouch
JODY FOUCH Address:
13
EXHIBIT A
AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED
To: The Board of Directors of Cornerstone Core Properties REIT, Inc.
Re: Affirmation and Undertaking
Ladies and Gentlemen:
This Affirmation and Undertaking is being provided pursuant to that certain
Indemnification Agreement, dated the 29th day of December, 2011, by and between
Cornerstone Core Properties REIT, Inc., a Maryland corporation (the “Company”),
and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to
which I am entitled to advance of Expenses in connection with [Description of
Proceeding] (the “Proceeding”).
Terms used herein and not otherwise defined shall have the meanings specified in
the Indemnification Agreement.
I am subject to the Proceeding by reason of my Corporate Status or by reason of
alleged actions or omissions by me in such capacity. I hereby affirm my good
faith belief that at all times, insofar as I was involved as a director or
officer of the Company, in any of the facts or events giving rise to the
Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty,
(2) did not receive any improper personal benefit in money, property or services
and (3) in the case of any criminal proceeding, had no reasonable cause to
believe that any act or omission by me was unlawful.
In consideration of the advance of Expenses by the Company for reasonable
attorneys’ fees and related Expenses incurred by me in connection with the
Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with
the Proceeding, it is established that (1) an act or omission by me was material
or (b) was the result of active and deliberate dishonesty or (2) I actually
received an improper personal benefit in money, property or services or (3) in
the case of any criminal proceeding, I had reasonable cause to believe that the
act or omission was unlawful, then I shall promptly reimburse the portion of the
Advanced Expenses, together with the Applicable Legal Rate of interest thereon,
relating to the claims, issues or matters in the Proceeding as to which the
foregoing findings have been established.
IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this
day of , 20 .
Name:
14 |
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (the “Amended
Agreement”), is made and entered into as of July 30, 2015 (the “Effective Date”)
by and between Diebold, Incorporated, an Ohio corporation (together with its
successors and assigns permitted under this Amended Agreement, the “Company”),
and Andreas W. Mattes (the “Executive” and, together with the Company, the
“Parties”).
WHEREAS, the Company and the Executive entered into that certain Executive
Employment Agreement, dated as of June 6, 2013, to set forth the terms and
conditions upon which the Executive agreed to serve as an officer of the Company
(the “Original Agreement”);
WHEREAS, the Company and the Executive desire to amend and restate the Original
Agreement; and
WHEREAS, Section 18 of the Original Agreement requires that an amendment be in
writing and signed by both parties.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
mutually acknowledged, the Company and the Executive (individually a “Party” and
together the “Parties”) agree as follows:
1.Definitions.
(a)“Base Salary” shall mean the salary provided for in Section 4 below.
(b)“Board” shall mean the Board of Directors of the Company.
(c)(i) “Cause” shall mean, at all times other than during the two-year
period following a Change in Control, the Executive’s:
(A) Willful failure to substantially perform his duties with the Company
(other than any such failure resulting from the Executive’s Disability), after a
written demand for substantial performance is delivered to the Executive that
specifically identifies the manner in which the Company believes that the
Executive has not substantially performed his duties, and the Executive has
failed to remedy the situation within fifteen (15) business days of such written
notice from the Company;
(B) Willful gross negligence in the performance of the Executive’s duties;
(C) Conviction of, or plea of guilty or nolo contendere to, any felony or a
lesser crime or offense which, in the reasonable opinion of the Company, could
adversely affect the business or reputation of the Company;
(D) Willful engagement in conduct that is demonstrably and materially
injurious to the Company, monetarily or otherwise;
(E) Willful violation of any provision of the Company’s Code of Business
Ethics, as amended from time to time;
(F) Willful violation of any of the covenants contained in Sections 11
through 13 of this Amended Agreement, as applicable;
1
(G) Engaging in any act of dishonesty resulting in, or intended to result in,
material personal gain at the expense of the Company; or
(H) Engaging in any act that is intended to harm the reputation, business
prospects, or operations of the Company.
For purposes of Section 1(c)(i), no act or omission by the Executive shall be
considered “willful” unless it is done or omitted in bad faith or without
reasonable belief that the Executive’s action or omission was in the best
interests of the Company. Any act or failure to act based upon: (i) authority
given pursuant to a resolution duly adopted by the Board; or (ii) advice of
counsel for the Company, shall be conclusively presumed to be done or omitted to
be done by the Executive in good faith and in the best interests of the Company.
There shall be no termination for Cause pursuant to subsections 1(c)(i)(B)
through (H) unless a written notice, containing a detailed description of the
grounds constituting Cause hereunder, is delivered to the Executive stating the
basis for the termination. Upon receipt of such notice, the Executive shall be
given 30 days to fully cure (if such violation, neglect, or conduct is capable
of cure) the violation, neglect, or conduct that is the basis of such claim. If,
in the Board’s opinion, cure has not been accomplished by the Executive at the
conclusion of such 30-day period, the Executive will be given a reasonable
opportunity to be heard before termination.
(ii) “Cause” shall mean, only during the two-year period following any
Change in Control, the Executive’s:
(A) Intentional act of fraud, embezzlement or theft in connection with his
duties or in the course of his employment with the Company or any Subsidiary;
(B) Intentional wrongful damage to property of the Company or any Subsidiary;
(C) Intentional wrongful disclosure of secret processes or confidential
information of the Company or any Subsidiary; or
(D) Intentional wrongful engagement in any competitive activity which would
constitute a material breach of the duty of loyalty;
and any such act shall have been materially harmful to the Company and its
Subsidiaries taken as a whole. For purposes of Section 1(c)(ii), no act, or
failure to act, on the part of the Executive shall be deemed “intentional” if it
was due primarily to an error in judgment or negligence, but shall be deemed
“intentional” only if done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that his action or omission was in or not
opposed to the best interest of the Company and its Subsidiaries.
The Executive shall not be deemed to have been terminated for “Cause” under
Section 1(c)(ii) unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the Board then in office at a meeting of the Board
called and held for such purpose (after reasonable notice to the Executive and
an opportunity for the Executive, together with his counsel, to be heard before
the Board), finding that, in the good faith opinion of the Board, the Executive
had committed an act set forth above in this Section 1(c)(ii) and specifying the
particulars thereof in detail. Nothing herein shall limit the right of the
Executive or his beneficiaries to contest the validity or propriety of any such
determination.
(d) “Change in Control” means the occurrence of any of the following:
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or
more of either: (A) the then-outstanding shares of common stock of the Company
(the “Company
2
Common Stock”) or (B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of
directors (“Voting Stock”); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a Change in
Control: (1) any acquisition directly from the Company, (2) any acquisition by
the Company, (3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary, or (4) any acquisition
by any Person pursuant to a transaction which complies with clauses (A), (B) and
(C) of subsection (iii) below; or
(ii) individuals who, as of the date hereof, constitute the Board (as
modified by this subsection (ii), the “Incumbent Board”), cease for any reason
(other than death or disability) to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board (either by a specific vote or by approval of
the proxy statement of the Company in which such person is named as a nominee
for director, without objection to such nomination) shall be considered as
though such individual were a member of the Incumbent Board, but excluding for
this purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(iii) consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Company Common Stock and Voting
Stock immediately prior to such Business Combination beneficially own, directly
or indirectly, more than fifty percent (50%) of, respectively, the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in substantially the same
proportions relative to each other as their ownership, immediately prior to such
Business Combination, of the Company Common Stock and Voting Stock of the
Company, as the case may be, (B) no Person (excluding any entity resulting from
such Business Combination or any Executive benefit plan (or related trust)
sponsored or maintained by the Company or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, thirty percent
(30%) or more of, respectively, the then-outstanding shares of common stock of
the entity resulting from such Business Combination, or the combined voting
power of the then-outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and (C)
at least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board providing for such Business Combination; or
(iv) approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
A “Change in Control” will be deemed to occur (A) with respect to a Change in
Control pursuant to subsection (i) above, on the date that any Person becomes
the beneficial owner of thirty percent (30%) or more of either the Company
Common Stock or the Voting Stock, (B) with respect to a Change in Control
pursuant to subsection (ii) above, on the date the members of the Incumbent
Board first cease for any reason (other than death or disability) to constitute
at least a majority of the Board, (C) with respect to a Change in Control
pursuant to subsection (iii) above, on the date the applicable transaction
closes and (D) with respect to a Change in Control pursuant to subsection (iv)
above, on the date of the shareholder approval. Notwithstanding the foregoing
provisions, a “Change in Control” shall not be deemed to have occurred for
purposes of this Amended Agreement solely because of a change in control of any
Subsidiary by which the Executive may be employed.
(e) “Code” means the Internal Revenue Code of 1986, as amended.
3
(f) “Compensation Committee” shall mean the Compensation Committee of the
Board or any other committee appointed by the Board to perform the functions of
the Compensation Committee.
(g) “Date of Termination” shall mean the date on which the Executive incurs a
“separation from service” within the meaning of Section 409A of the Code.
(h) “Disability” shall mean the Executive’s permanent and total disability as
defined by the long-term disability plan in effect for senior executives of the
Company.
(i) “Effective Date” shall be [July 30], 2015.
(j) “Equity Incentive Plan” shall mean the Amended and Restated 1991 Equity
Performance and Incentive Plan, as it may be amended from time to time, and/or
any successor plan(s) providing for the issuance of time-based or
performance-based equity to executives.
(k) “Good Reason” shall mean the occurrence of any one or more of the
following without the Executive’s express written consent:
(i)The Company changes the Executive’s title or material job duties such that it
results in material diminution in Executive’s authority, duties, or
responsibilities; or
(ii)The Company materially reduces the amount of the Executive’s then current
Base Salary or the target opportunity for his annual incentive award; or
(iii)The Company requires the Executive to be based at a location in excess of
fifty (50) miles from the location of the Executive’s principal job location or
office as of the Effective Date, which the Parties acknowledge to be the
Company’s North Canton, Ohio corporate headquarters; or
(iv)Executive is removed by the Board of its own volition from his position on
the Board; or
(v)The failure of the Company to obtain in writing the obligation to perform or
be bound by the terms of this Amended Agreement by any successor to the Company
or a purchaser of all or substantially all of the assets of the Company; or
(vi)Any other action or inaction by the Company that constitutes a material
breach by the Company of the terms and conditions of this Amended Agreement.
The Executive is not entitled to assert that his termination is for Good Reason,
unless the Executive gives the Company written notice of the event or events
that are the basis for such claim within 30 days after the event or events
occur, describing such claim in reasonably sufficient detail to allow the
Company to address the event or events and a period of not less than 30 days
after to cure the alleged condition.
(l) “Pro Rata” shall mean a fraction, the numerator of which is the number of
days that the Executive was employed in the applicable performance period (the
performance period in the case of an annual incentive award and a performance
cycle in the case of an award under the Equity Incentive Plan) and the
denominator of which shall be the number of days in the applicable performance
period or cycle.
(m) “Protected Information” shall mean trade secrets, confidential and
proprietary business information of the Company, and any other information of
the Company, including, but not limited to, customer lists (including potential
customers), sources of supply, processes, plans, materials, pricing information,
internal memoranda, marketing plans, internal policies, and products and
services that may be developed from time to time by the Company and its agents
or employees, including the Executive; provided, however, that information that
is in the public domain (other than as a result of a breach of this Amended
Agreement), approved for release by the Company or lawfully obtained from third
parties who are not bound by a confidentiality agreement with the Company, is
not Protected Information.
4
(n) “Shares” shall mean the Common Shares of the Company.
(o) “Subsidiary” means a corporation, company or other entity (i) more than
50 percent of whose outstanding shares or securities (representing the right to
vote for the election of directors or other managing authority) are, or (ii)
which does not have outstanding shares or securities (as may be the case in a
partnership, joint venture or unincorporated association), but more than 50
percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter owned or controlled,
directly or indirectly, by the Company, but such corporation, company or other
entity shall be deemed to be a Subsidiary only so long as such ownership or
control exists.
(p) “Term of Employment” shall mean the period specified in Section 2 below
(including any extension as provided therein).
2.Term of Employment.
The Term of Employment shall begin on the Effective Date, and shall extend until
the second anniversary of the Effective Date, with automatic one-year renewals
thereafter unless either Party notifies the other at least 6 months before the
scheduled expiration date that the Amended Agreement is not to renew.
Notwithstanding the foregoing, the Term of Employment may be earlier terminated
by either Party in accordance with the provisions of Section 10.
3.Position, Duties and Responsibilities.
(a)Commencing on the Effective Date and continuing for the remainder of the Term
of Employment, the Executive shall be employed as the Chief Executive Officer
and President of the Company and be responsible for the general management of
the affairs of the Company. The Executive shall continue to serve on the Board
and shall be re-nominated as applicable so that he continues to serve as a
member of the Board during the Term of Employment. The Executive, in carrying
out his duties under this Amended Agreement, shall report to the Board. During
the term of this Amended Agreement, the Executive shall devote substantially all
of his business time and attention to the business and affairs of the Company
and shall use his best efforts, skills and abilities to promote its interests.
(b)Nothing herein shall preclude the Executive from (i) serving on the boards of
directors of a reasonable number of other corporations with the concurrence of
the Board, (ii) serving on the boards of a reasonable number of trade
associations and/or charitable organizations, (iii) engaging in charitable
activities and community affairs, and (iv) managing his personal investments and
affairs, provided that such activities set forth in this Section 3(b) do not
conflict or interfere with the effective discharge of his duties and
responsibilities under Section 3(a).
4.Base Salary.
The Executive shall be paid an annualized Base Salary, payable in accordance
with the regular payroll practices of the Company, of not less than $937,500.
The Base Salary shall be reviewed annually for increase in the discretion of the
Board.
5.Annual Incentive Award.
During the Term of Employment, the Executive shall be eligible for an annual
incentive award with payout opportunities that are commensurate with his
position and duties, as determined by the Company in its sole discretion. The
Executive’s annual incentive award opportunities shall be based on Company and
individual performance goals determined, and subject to change, by the Company
in the Company’s sole discretion. The Executive shall be paid his annual
incentive award no later than other senior executives of the Company are paid
their annual incentive award.
5
6.Long-Term Incentive Awards.
During the Term of Employment, the Executive shall be eligible to participate in
the Company’s Long-Term Incentive Plan (LTIP) on terms commensurate with his
Program design including performance measures and weighting is at the sole
discretion of the Board.
7.Employee Benefit Programs.
During the Term of Employment, the Executive shall be entitled to participate in
any employee benefit plans and programs made available to the Company’s senior
level executives (other than the Diebold, Incorporated Senior Leadership
Severance Plan (For Tier I, Tier II, and Tier III Executives), subject to
Section 10(f) below, or any defined benefit plan, under any circumstances), as
such plans or programs may be in effect from time to time, including, without
limitation, 401(k) savings and other plans or programs, medical, dental,
hospitalization, short-term and long-term disability and life insurance plans,
accidental death and dismemberment protection, travel accident insurance, and
any retirement plans or programs and any other employee welfare benefit plans or
programs that may be sponsored by the Company in the future from time to time,
including any plans that supplement the above-listed types of plans or programs,
whether funded or unfunded. The Executive’s participation shall be based on, and
the calculation of all benefits shall be based on, the assumptions that the
Executive has met all service-period or other requirements for such
participation. The Executive shall be entitled to four weeks of paid vacation
during each year of employment, which shall be subject to the Company’s vacation
policy for senior executives.
8.Reimbursement of Business and Other Expenses.
The Executive is authorized to incur reasonable expenses in carrying out his
duties and responsibilities under this Amended Agreement and the Company shall
promptly reimburse him for all reasonable business expenses incurred in
connection with carrying out the business of the Company, subject to
documentation in accordance with the Company’s policy.
9.Perquisites.
The Executive shall receive the following Company executive perquisites:
(a)The Company shall reimburse the Executive for reasonable financial planning
and tax preparation fees up to an annual maximum of $12,000.
(b)The Executive shall be entitled to the annual Executive Physical Program at
the Company’s expense at the Cleveland Clinic.
(c)The Executive shall be entitled to benefits provided under the Company’s
applicable relocation policy, and the Company shall reimburse certain additional
expenses as may be approved by the Chairman of the Board.
All reimbursements under Section 8 or Section 9, or otherwise under this Amended
Agreement, shall be for expenses incurred by the Executive during the Term of
Employment. In all events such reimbursement will be made no later than the end
of the year following the year in which the expense was incurred. Each provision
of reimbursements shall be considered a separate payment and not one of a series
of payments for purposes of Section 409A of the Code. In addition, no
reimbursement or in-kind benefit shall be subject to liquidation or exchange for
another benefit and the amount available for reimbursement, or in-kind benefits
provided, during one calendar year in no event will affect the amount of
expenses required to be reimbursed or in-kind benefits required to be provided
by the Company in any other calendar year.
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10.
Termination of Employment.
(a)Termination Due to Death. In the event that the Executive’s employment is
terminated due to his death, his estate or his beneficiaries, as the case may
be, shall be entitled to the following benefits:
(i)a lump sum amount, paid within 60 days following the Date of Termination,
equal to the Executive’s unpaid Base Salary through and including the Date of
Termination, as well as accrued, unused vacation and unreimbursed business
expenses as of the Date of Termination, consistent with the regular payroll
practices of the Company;
(ii)a lump sum amount, paid within 60 days following the Date of Termination, of
the annual incentive at target for the calendar year that includes the Date of
Termination; provided however, that such amount shall be adjusted on a Pro Rata
basis.
(iii)all outstanding options and stock appreciation rights (“SARs”), whether or
not then vested, shall vest and shall remain exercisable for a period of one
year or until their stated expiration date, if earlier; and
(iv)Pro Rata long-term incentives shall be payable when scheduled to be paid
(if, and to the extent, such awards are payable).
(b)Termination Due to Disability. In the event that the Executive’s employment
is terminated due to his Disability, and conditioned upon, no later than 60 days
after the Date of Termination, the Executive’s effective execution of a general
release of claims against the Company (without revocation), the terms of such
release to be agreed upon by the Company and the Executive, as well as the
Executive’s acknowledgement of, and the Executive’s compliance with, the
Executive’s obligations under the restrictive covenants set forth in Sections 11
through 13, he shall be entitled to the following benefits:
Termination, as well as for any accrued, unused vacation and unreimbursed
business expenses as of the Date of Termination, consistent with the regular
payroll practices of the Company;
basis;
(iii)all outstanding options and SARs, whether or not then vested, shall vest
and shall remain exercisable for a period of one year or until their stated
expiration date, if earlier;
(iv)Pro Rata long-term incentives shall be payable, when scheduled to be paid
(if, and to the extent, such awards are payable); and
(v)continuation of the Executive’s medical, dental, vision, and Company-paid
basic life insurance coverage for 24 months. These benefits shall be provided by
the Company to the Executive beginning immediately upon the Date of Termination.
Such benefits shall be provided to the Executive at the same coverage level and
cost to the Executive as in effect immediately prior to the Executive’s Date of
Termination. Notwithstanding the above, these medical, dental, vision and
Company-paid basic life insurance benefits shall be discontinued prior to the
end of the stated continuation period in the event the Executive receives
substantially similar benefits from a subsequent employer, as determined solely
by the Company in good faith. For purposes of enforcing this offset provision,
the Executive shall be deemed to have a duty to keep the Company informed as to
the terms and conditions of any subsequent employment and the corresponding
benefits earned from such employment, and shall provide, or cause to provide, to
the Company in writing correct, complete, and timely information concerning the
same.
7
In no event shall a termination of the Executive’s employment due to Disability
occur until the Party terminating Executive’s employment gives written notice to
the other Party in accordance with Section 26 below.
(c)Termination by the Company for Cause. In the event the Company terminates the
Executive’s employment for Cause, he shall be entitled to the following
benefits:
practices of the Company; and
(ii)all outstanding options and SARs which are not then vested shall be
forfeited; vested options and SARs shall remain exercisable until the earlier of
the thirtieth day after the Date of Termination or the originally scheduled
expiration date of the options and SARs, unless the Compensation Committee
determines otherwise.
(d)Termination by Company without Cause, Non-Renewal by the Company and
Discontinuation of Service, or Termination by the Executive for Good Reason. In
the event the Executive’s employment is terminated by the Company without Cause
(i.e., on a basis other than specified in Subsections 10(a), 10(b), 10(c),
10(e), or 10(f)), the Company chooses not to renew this Amended Agreement and
discontinues Executive’s service, or in the event Executive’s employment is
terminated by Executive for Good Reason, at any time other than during the
two-year period following a Change in Control, and conditioned upon, no later
than 60 days after the Date of Termination or non-renewal and discontinuation of
service, the Executive’s effective execution of a general release of claims
against the Company (without revocation), the terms of such release to be agreed
upon by the Company and Executive, as well as Executive’s acknowledgement of,
and Executive’s compliance with, Executive’s obligations under the restrictive
covenants set forth in Sections 11 through 13, the Executive shall be entitled
to the following benefits:
Termination, as well as accrued vacation pay and unreimbursed business expenses;
equal to two (2) times (A) the Executive’s Base Salary, and (B) the Executive’s
annual incentive award at target for the calendar year that includes the Date of
Termination;
(iii)a lump sum amount, if any, paid within two and one-half (2 ½) months after
the end of the calendar year that includes the Date of Termination, equal to the
actual annual incentive that would have been payable to the Executive for the
calendar year that includes the Date of Termination based on the Company’s
actual performance against applicable goals and for Executive’s personal goals/
key initiatives, based on Executive’s assumed target level performance, if the
Executive had remained employed through the end of such calendar year; provided
however, that such amount shall be adjusted on a Pro Rata basis.
(iv)Continuation of the Executive’s medical, dental, vision, and Company-paid
same;
8
(v)All outstanding and unvested stock options and SARs shall immediately vest
and shall remain exercisable for a period of twelve (12) months from the Date of
Termination or the last day of the option term, whichever occurs first.
Additionally, from time to time, the Company may declare “blackout” periods with
respect to Executive and/or designated employees of the Company during which
Executive and/or such employees are prohibited from engaging in certain
transactions in Company securities. The scheduled expiration date of stock
options and SARs pursuant to this subsection shall automatically, and without
further notice to the option/SAR holder, be extended by one business day for
each business day of the blackout period applied to the option/SAR holder (but
in no case longer than the option term);
(vi)All restrictions on unvested shares of restricted stock and unvested
restricted stock units shall immediately lapse, with such shares and units
becoming non-forfeitable on a pro rata basis, as determined under this
subparagraph (vi). The pro rata award shall equal the product of (A) and (B)
where (A) is the number of restricted stock shares or units subject to the
award, and (B) is a fraction, the numerator of which is the number of calendar
months that the Executive was employed by the Company during the restriction
period (with any partial months counting as a full month for this purpose) and
the denominator of which is the number of months in the restriction period. The
timing of the delivery of any shares on account of the vesting of any restricted
share units will be determined under the terms of the Equity Incentive Plan (as
most recently amended and/or restated) and the award agreements (or comparable
documentation) thereunder;
(vii)Unearned performance shares and performance units shall be paid out on a
pro rata basis, as determined under this subparagraph (vii). The pro rata award
shall equal the product of (A) and (B) where (A) is the award the Executive
would have earned based on actual performance measured as of the end of the
respective performance period and (B) is a fraction, the numerator of which is
the number of calendar months that the Executive was employed by the Company
during the performance period (with any partial month counting as a full month
for this purpose) and the denominator of which is the number of months in the
performance period. Any such awards will be paid to Executive at the same time
eligible participants are paid; and
(viii)The Company will assist the Executive in finding other employment
opportunities by providing to him, at the Company’s limited expense, reasonable
professional outplacement services through the provider of the Company’s choice.
Such outplacement services shall terminate when the Executive finds other
employment. However, in no event shall such outplacement services continue for
more than 24 months following the Date of Termination.
(e)Voluntary Termination. A termination of employment by the Executive on his
own initiative, other than a termination due to Disability or a termination for
Good Reason, shall have the same consequences as provided in Section 10(c) for a
termination for Cause. A voluntary termination under this Section 10(e) shall be
effective on the date specified in the Executive’s written notice, unless such
voluntary termination is earlier accepted by the Company, such early acceptance
still to be treated as a voluntary termination by the Executive.
(f)Non-Renewal by the Company. During the Term of Employment, the Executive
shall not be entitled to participate in the Diebold, Incorporated Senior
Leadership Severance Plan (For Tier I, Tier II, and Tier III Executives), or any
similar or successor plans or arrangements (the “Severance Plan”), but shall
instead (except as may be otherwise determined by the Board), be entitled to
receive payments and benefits in connection with the termination of the
Executive’s employment pursuant to this Amended Agreement. The rights and
obligations under this Section 10(f) shall survive any termination of this
Amended Agreement or termination of the Executive’s employment with the Company.
(g)No Mitigation; No Offset. In the event of any termination of employment under
this Section 10, the Executive shall be under no obligation to seek other
employment and there shall be no offset against amounts due the Executive under
this Amended Agreement on account of any remuneration attributable to any
subsequent employment that he may obtain.
9
(h)Nature of Payments. Any amounts due under this Section 10 are in the nature
of severance payments considered to be reasonable by the Company and are not in
the nature of a penalty.
(i)Timing of Payments. Notwithstanding any provision in this Amended Agreement
to the contrary, if the Executive is a “specified employee” (within the meaning
of Treasury Regulation Section 1.409A-1(i) and using the identification
methodology selected by the Company from time to time) on the Date of
Termination, to the extent payments or benefits made hereunder (as well as any
other payment or benefit that the Executive is entitled to receive upon his
separation from service) constitute deferred compensation (after taking account
any applicable exceptions under Section 409A of the Code), and to the extent
required by Section 409A of the Code, payments or benefits payable upon
separation from service which otherwise would be payable during the six-month
period immediately following the Date of Termination will instead be paid or
made available on the earlier of (i) the first day following the six month
anniversary of the Executive’s Date of Termination and (ii) the Executive’s
death.
11.Non-Competition.
(a) The Executive agrees that during the Executive’s employment with the Company
and for a period of two (2) years following the termination of such employment,
whether termination is by the Executive or the Company, and regardless of the
reasons therefore, the Executive shall not: (A) directly, or indirectly act in
concert or conspire with any person employed by the Company in order to, engage
in or prepare to engage in or to have a financial or other interest in any
business or any activity that he knows (or reasonably should have known) to be
directly competitive with the business of the Company as then being carried on
(or with any product, service, or business activity which was under active
development while the Executive was employed by Company if such development is
being actively pursued by the Company during such two-year period); or (B) serve
as an employee, agent, partner, shareholder, director, or consultant for, or in
any other capacity participate, engage, or have a financial or other interest in
any business or any activity that he knows (or reasonably should have known) to
be directly competitive with the business of the Company as then being carried
on (or with any product, service, or business activity which was under active
being actively pursued by the Company during such two-year period), provided,
however, that notwithstanding anything to the contrary contained in this Amended
Agreement, the Executive may own up to two percent (2%) of the outstanding
shares of the capital stock of a company whose securities are registered under
Section 12 of the Exchange Act. Further, notwithstanding anything to the
contrary in this Section 11(a), provided that the Company is given reasonable
opportunity to consult with the Executive and the Executive consults with the
Company in good faith, the Company may opt, in its sole discretion, to consent
to the Executive’s accepting employment with a competitive business on the
condition that Executive will not be involved, directly or indirectly, in any
manner, with any competitive product or service.
(b)The Executive further acknowledges and agrees that, in the event of the
termination of his employment with the Company, the Executive’s experience and
capabilities are such that the Executive can obtain employment in business
activities which do not compete with the Company, and that the enforcement of
this Amended Agreement by way of injunction shall not prevent the Executive from
earning a reasonable livelihood. The Executive further acknowledges and agrees
that the covenants contained herein are necessary for the protection of the
Company’s legitimate business interests and are reasonable in scope and
duration.
12.No Solicitation of Employees.
The Executive agrees that during his employment with the Company and for a
period of three (3) years following the termination of such employment, whether
termination is by the Executive or by the Company, regardless of the reasons
therefore, the Executive will not directly or indirectly, (a) employ or retain
or solicit for employment or arrange to have any other person, firm, or other
entity employ or retain or solicit for employment or otherwise participate in
the employment or retention of any person who is an employee or consultant of
the Company; or (b) solicit suppliers or customers of the Company or induce any
such person to terminate his, her, or its relationship with the Company. In the
event that the scope of the restrictions in Section 11 or 12 are found overly
broad, Executive agrees that a court should reform the restrictions by limiting
them to the maximum reasonable scope.
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13.Confidentiality.
The Company has advised the Executive and the Executive acknowledges that it is
the policy of the Company to maintain as secret and confidential all Protected
Information, and that Protected Information has been and will be developed at
substantial cost and effort to the Company. The Executive shall not at any time,
directly or indirectly, divulge, furnish, or make accessible to any person,
firm, corporation, association, or other entity (otherwise than as may be
required in the regular course of the Executive’s employment), nor use in any
manner, either during the Executive’s employment or after termination for any
reason, any Protected Information, or cause any such Protected Information of
the Company to enter the public domain.
14.Effect of a Change in Control. The Executive’s entitlements relating to a
Change in Control of the Company shall be determined in accordance with this
Section 14 and there shall be no duplication of the benefits provided in this
Section 14.
(a)Extension of Amended Agreement. Subject to Section 16 below, upon a Change in
Control, the Term of Employment shall be extended to the second anniversary of
such Change in Control, with automatic one (1) year renewals thereafter unless
either party notifies the other at least six (6) months before the scheduled
expiration date that the Amended Agreement is not to renew. Notwithstanding the
foregoing, the Term of Employment may be earlier terminated by either party in
accordance with the provisions of Section 10, except as modified by this Section
14.
(b)Obligations of the Company upon Certain Terminations Following a Change in
Control.
(i)Good Reason; Other Than for Cause. If, during the two (2) year period
following a Change in Control, the Executive’s employment is terminated by the
Company without Cause (i.e., on a basis other than specified in Subsections
10(a), 10(b), 10(c), 10(e), or 10(f)), or the Executive’s employment is
terminated by Executive for Good Reason, and conditioned upon Executive’s
compliance with Executive’s obligations under the restrictive covenants set
forth in Sections 11 through 13, the Executive shall be entitled to the
following benefits:
(A)a lump sum amount, paid within sixty (60) days following the Date of
Termination, equal to the Executive’s unpaid Base Salary through and including
the Date of Termination, as well as accrued vacation pay and unreimbursed
business expenses;
(B)a lump sum amount, paid within sixty (60) days following the Date of
Termination, equal to two (2) times (A) the Executive’s Base Salary, and (B) the
Executive’s annual incentive award at target for the calendar year that includes
the Date of Termination;
however, that such amount shall be adjusted on a Pro Rata basis;
(D)continuation of the Executive’s medical, dental, vision, and Company-paid
basic life insurance coverage for twenty four (24) months. These benefits shall
be provided by the Company to the Executive beginning immediately upon the Date
of Termination. Such benefits shall be provided to the Executive at the same
coverage level and cost to the Executive as in effect immediately prior to the
Executive’s Date of Termination. Notwithstanding the above, these medical,
dental, vision and Company-paid basic life insurance benefits shall be
discontinued prior to the end of the stated continuation period in the event the
Executive receives substantially similar benefits from a subsequent employer, as
determined solely by the Company in good faith. For purposes of enforcing this
offset provision, the Executive shall be deemed to have a duty to keep the
Company informed as to the terms and conditions of any subsequent employment and
the corresponding benefits earned from such
11
employment, and shall provide, or cause to provide, to the Company in writing
correct, complete, and timely information concerning the same;
(E)all outstanding and unvested stock options and SARs shall immediately vest
(F)all restrictions on unvested shares of restricted stock and unvested
restricted stock units or deferred shares shall immediately lapse, with such
shares and units becoming non-forfeitable. The timing of the delivery of any
shares on account of the vesting of any restricted share units will be
determined under the terms of the Equity Incentive Plan (as most recently
amended and/or restated) and the award agreements thereunder;
(G)unearned performance shares and performance units shall become
non-forfeitable at one hundred percent of target; the timing of the delivery of
any shares or cash on account of the vesting of performance shares or
performance units will be determined under the terms of the Equity Incentive
Plan (as most recently amended and/or restated) and the award agreements
thereunder; and
(H)the Company will assist the Executive in finding other employment
(c)Indemnification of Legal Fees. Effective only upon a Change in Control, it is
the intent of the Company that the Executive not be required to incur the
expenses associated with the enforcement of his rights under this Amended
Agreement following such a Change in Control by litigation or other legal action
because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Executive hereunder following a Change
in Control. Accordingly, following a Change in Control if it should appear to
the Executive that the Company has failed to comply with any of its obligations
under this Amended Agreement which arose following a Change in Control or in the
event that the Company or any other person takes any action to declare this
Amended Agreement void or unenforceable, or institutes any litigation designed
to deny, or to recover from, the Executive the benefits intended to be provided
to the Executive hereunder, the Company irrevocably authorizes the Executive
from time to time to retain counsel of his choice, at the expense of the Company
as hereafter provided, to represent the Executive in connection with the
initiation or defense of any litigation or other legal action, whether by or
against the Company, or any Subsidiary, Director, officer, stockholder or other
person affiliated with the Company, in any jurisdiction. Notwithstanding any
existing or prior attorney-client relationship between the Company and such
counsel, the Company irrevocably consents to the Executive’s entering into an
attorney-client relationship with such counsel, and in that connection the
Company and the Executive agree that a confidential relationship shall exist
between the Executive and such counsel. Following a Change in Control, the
Company shall pay or cause to be paid and shall be solely responsible for any
and all attorneys’ and related fees and expenses incurred by the Executive as a
result of the Company’s failure to perform this Amended Agreement or any
provision hereof or as a result of the Company or any person contesting the
validity or enforceability of this Amended Agreement or any provision hereof as
aforesaid, provided any such reimbursement of attorneys’ and related fees and
expenses shall be made not later than December 31 of the year following the year
in which the Executive incurred the expense.
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15.Resolution of Disputes.
Any disputes arising under or in connection with this Amended Agreement shall be
resolved by third party mediation of the dispute and, failing that, by binding
arbitration, to be held in Cleveland, Ohio, in accordance with the rules and
procedures of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. The Company will pay the direct costs and expenses of such arbitration.
The Company will also reimburse the Executive for reasonable fees and expenses,
including reasonable attorney’s fees, incurred by the Executive in connection
with such arbitration, such reimbursement to be made monthly as such fees and
expenses are incurred. In the event Executive does not prevail at arbitration,
however, Executive will re-pay to the Company any and all expenses and fees
previously reimbursed by the Company.
Notwithstanding the provisions of this Section 15, the Parties agree that in the
event of any dispute between the Executive and the Company as to any of the
Executive’s obligations under Sections 11, 12, or 13, then the arbitration
requirements of this Section 15 shall not apply, and that instead, the Parties
must seek relief as to that dispute in a court of general jurisdiction in the
State of Ohio to be docketed, if available, on the commercial docket of that
court. The Parties hereby consent to the exclusive specific and general
jurisdiction of such court. The Executive hereby agrees that, by virtue of his
work for the Company, he has purposely availed himself of the benefits and
protections of the laws of the State of Ohio. In addition, in connection with
any such court action, the Executive acknowledges and agrees that the remedy at
law available to the Company for breach by Executive of any of his obligations
under Sections 11, 12, or 13 of this Agreement would be inadequate and that
damages flowing from such a breach would not readily be susceptible to being
measured in monetary terms. Accordingly, the Executive acknowledges, consents
and agrees that, in addition to any other rights or remedies which the Company
may have at law, in equity or under this Amended Agreement, upon adequate proof
of the Executive’s violation of any provision of Sections 11, 12, or 13 of this
Amended Agreement, the Company shall be entitled to immediate injunctive relief
and may obtain a temporary order restraining any threatened or further breach,
without the necessity of proof of actual damage.
16.Assignability; Binding Nature.
This Amended Agreement shall be binding upon and inure to the benefit of the
Company and any successor to the Company, including without limitation any
persons acquiring directly or indirectly all or substantially all of the
business and/or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor shall thereafter
be deemed the “Company” for the purposes of this Amended Agreement), but shall
not otherwise be assignable, transferable or delegable by the Company.
The Company shall require any successor (whether direct or indirect, by
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Amended Agreement in the same manner and to the same extent the
Company would be required to perform if no such succession had taken place. No
rights or obligations of the Executive under this Amended Agreement may be
assigned or transferred by the Executive other than his rights to compensation
and benefits, which may be transferred only by will or operation of law. This
Amended Agreement shall inure to the benefit of and be enforceable by the
successors, heirs, distributees and/or legatees. This Amended Agreement is
personal in nature and neither of the parties hereto shall, without the consent
of the other, assign, transfer or delegate this Amended Agreement or any rights
or obligations hereunder except as expressly provided in Section 16 hereof.
Without limiting the generality of the foregoing, the Executive’s right to
receive payments hereunder shall not be assignable, transferable or delegable,
whether by pledge, creation of a security interest or otherwise, other than by a
transfer by his will or by the laws of descent and distribution and, in the
event of any attempted assignment or transfer contrary to this Section 16, the
Company shall have no liability to pay any amount so attempted to be assigned,
transferred or delegated.
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17.Entire Agreement.
This Amended Agreement contains the entire understanding and agreement between
the Parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the Parties with respect thereto.
18.Amendment or Waiver.
No provision in this Amended Agreement may be amended unless such amendment is
agreed to in writing and signed by the Executive and an authorized officer of
the Company. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Amended Agreement to be performed by
such other Party shall be deemed a waiver of a similar or dissimilar condition
or provision at the same or any prior or subsequent time. Any waiver must be in
writing and signed by the Executive or an authorized officer of the Company, as
19.Withholding.
The Company may withhold from any amounts payable under this Amended Agreement
all federal, state, city or other taxes as shall be required pursuant to any law
or government regulation or ruling.
20.Severability.
In the event that any provision or portion of this Amended Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Amended Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by law
so as to achieve the purposes of this Amended Agreement.
21.Survivorship.
Except as otherwise expressly set forth in this Amended Agreement, the
respective rights and obligations of the Parties hereunder shall survive any
termination of the Executive’s employment. Except as otherwise expressly
provided by this Amended Agreement, this Amended Agreement itself (as
distinguished from the Executive’s employment) may not be terminated by either
Party without the written consent of the other Party. Upon the expiration of the
term of the Amended Agreement, the respective rights and obligations of the
intentions of the Parties an embodied in the rights (such as vested rights) and
obligations of the Parties under this Amended Agreement.
22.References.
In the event of the Executive’s death or a judicial determination of his
incompetence, reference in this Amended Agreement to the Executive shall be
deemed, where appropriate, to refer to his beneficiary, estate or other legal
representative.
23.Governing Law.
This Amended Agreement shall be governed in accordance with the laws of Ohio
without reference to principles of conflict of laws.
24.Attorneys’ Fees.
Executive will be reimbursed his reasonable attorneys’ fees incurred with
respect to the negotiation of this Amended Agreement, provided that Executive
delivers to the Company proper documentation of the fees incurred no later than
September 1, 2015. The Company will make such reimbursement (or directly pay the
fees) no later than December 31, 2015.
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25.Section 280G.
(a)In the event that any payment or benefit received or to be received by the
Executive (including any payment or benefit received in connection with a Change
in Control or the termination of the Executive’s employment pursuant to the
terms of this Amended Agreement) (all such payments and benefits, together, the
“Total Payments”) would be subject (in whole or part), to any excise tax imposed
under Section 4999 of the Code, or any successor provision thereto (the “Excise
Tax”), then, after taking into account any reduction in the Total Payments
provided by reason of Section 280G of the Code in such other plan, program,
arrangement or agreement, the Company will reduce the Total Payments to the
extent necessary so that no portion of the Total Payments is subject to the
Excise Tax (but in no event to less than zero); provided, however, that the
Total Payments will only be reduced if (i) the net amount of such Total
Payments, as so reduced (and after subtracting the net amount of federal, state,
municipal and local income taxes on such reduced Total Payments and after taking
into account the phase out of itemized deductions and personal exemptions
attributable to such reduced Total Payments), is greater than or equal to (ii)
the net amount of such Total Payments without such reduction (but after
subtracting the net amount of federal, state, municipal and local income taxes
on such Total Payments and the amount of Excise Tax to which the Executive would
be subject in respect of such unreduced Total Payments and after taking into
account the phase out of itemized deductions and personal exemptions
attributable to such unreduced Total Payments.
(b)In the case of a reduction in the Total Payments, the Total Payments will be
reduced in the following order: (i) payments that are payable in cash that are
valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will
be reduced (if necessary, to zero), with amounts that are payable last reduced
first; (ii) payments and benefits due in respect of any equity valued at full
value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest
values reduced first (as such values are determined under Treasury Regulation
Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable
in cash that are valued at less than full value under Treasury Regulation
Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will
next be reduced; (iv) payments and benefits due in respect of any equity valued
at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with
the highest values reduced first (as such values are determined under Treasury
Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other
non-cash benefits not otherwise described in clauses (ii) or (iv) will be next
reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above
will be made in the following manner: first, a pro-rata reduction of cash
payment and payments and benefits due in respect of any equity not subject to
Section 409A of the Code, and second, a pro-rata reduction of cash payments and
payments and benefits due in respect of any equity subject to Section 409A of
the Code as deferred compensation.
(c)For purposes of determining whether and the extent to which the Total
Payments will be subject to the Excise Tax: (i) no portion of the Total Payments
the receipt or enjoyment of which the Executive shall have waived at such time
and in such manner as not to constitute a “payment” within the meaning of
Section 280G(b) of the Code will be taken into account; (ii) no portion of the
Total Payments will be taken into account which, in the opinion of tax counsel
(“Tax Counsel”) reasonably acceptable to the Executive and selected by the
accounting firm which was, immediately prior to the Change of Control, the
Company’s independent auditor (the “Auditor”), does not constitute a “parachute
payment” within the meaning of Section 280G(b)(2) of the Code (including by
reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax,
no portion of such Total Payments will be taken into account which, in the
opinion of Tax Counsel, constitutes reasonable compensation for services
actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in
excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code)
that is allocable to such reasonable compensation; and (iii) the value of any
non-cash benefit or any deferred payment or benefit included in the Total
Payments will be determined by the Auditor in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.
(d)At the time that payments are made under this Amended Agreement, the Company
will provide the Executive with a written statement setting forth the manner in
which such payments were calculated and the basis for such calculations,
including any opinions or other advice the Company received from Tax Counsel,
the Auditor, or other advisors or consultants (and any such opinions or advice
which are in writing will be attached to the statement). All such calculations
and opinions shall be binding on the Company and the Executive.
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26.Notices.
All notices and other communications required or permitted hereunder shall be in
writing and shall be deemed given when (a) delivered personally, (b) delivered
by certified or registered mail, postage prepaid, return receipt requested or
(c) delivered by overnight courier (provided that a written acknowledgment of
receipt is obtained by the overnight courier) to the Party concerned at the
address indicated below or to such changed address as such Party may
subsequently give such notice of:
Diebold, Incorporated
5995 Mayfair Road
Attention: Vice President and Chief Human Resources Officer
At the last residential address known by the Company
With a Copy to:
Jonathan Cohen, Esq.
Joseph & Cohen, P.C.
1855 Market Street
27.Headings.
The headings of the sections contained in this Amended Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Amended Agreement.
28.Counterparts.
This Amended Agreement may be executed in two or more counterparts.
29.Code Section 409A Compliance.
To the extent applicable, it is intended that this Amended Agreement comply with
the provisions of Section 409A of the Code. This Amended Agreement will be
administered in a manner consistent with this intent. References to Section 409A
of the Code will include any proposed, temporary or final regulation, or any
other formal guidance, promulgated with respect to such section by the U.S.
Department of Treasury or the Internal Revenue Service. Each payment or benefit
to be made or provided to the Executive under the provisions of this Amended
Agreement will be considered to be a separate payment and not one of a series of
payments for purposes of Section 409A of the Code.
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IN WITNESS WHEREOF, the undersigned have executed this Amended Agreement as of
the date first written above.
The Company
By: /s/ Sheila Rutt
By: /s/ Andreas W. Mattes
Sheila Rutt
Vice President,
Chief Human Resources Officer
Andreas W. Mattes
17
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EXHIBIT 4.2 Easement Agreement dated June 10, 2013 between Sociedad Contractual Minera Eton Chile (Exeter Resource Corporation) and the Chilean Government. The following constitutes a summary of the material terms for the above noted agreement, as derived from the executed Spanish version attached. – Easement Agreement is for the surface rights, excluding certain areas owned by indigenous communities,that correspond to surfaces that may be required for the development of Exeter Resource Corporation’s (the “Company”) Caspiche property; – The easement is valid for 25 years; – To maintain the easement the Company is required to pay an upfront fee of US$1.5 million and 10 further annual payments of approximately US$600,000.
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BYLAWS OF THE GOLF ALLIANCE CORPORATION A Nevada Corporation As of July 2, 2007 ARTICLE I Meetings of Stockholders Section 1.1Time and Place. Any meeting of the stockholders may be held at such time and such place, either within or without the State of Nevada, as shall be designated from time to time by resolution of the board of directors or as shall be stated in a duly authorized notice of the meeting. Section 1.2Annual Meeting. The annual meeting of the stockholders shall be held on the date and at the time fixed, from time to time, by the board of directors. The annual meeting shall be for the purpose of electing a board of directors and transacting such other business as may properly be brought before the meeting. Section 1.3Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the articles of incorporation, may be called by the presidentand shall be called by the president or secretary if requested in writing by the holders of not less than one-tenth (1/10) of all the shares entitled to vote at the meeting. Such request shall state the purpose or purposes of the proposed meeting. Section 1.4Notices. Written notice stating the place, date and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, except as otherwise required by statute or the articles of incorporation, either personally, by mail or by a form of electronic transmission consented to by the stockholder, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the official government mail of the United States or any other country, postage prepaid, addressed to the stockholder at his address as it appears on the stock records of the Corporation. If given personally or otherwise than by mail, such notice shall be deemed to be given when either handed to the stockholder or delivered to the stockholder’s address as it appears on the records of the Corporation. Section 1.5Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting, or at any adjournment of a meeting, of stockholders; or entitled to receive payment of any dividend or other distribution or allotment of any rights; or entitled to exercise any rights in respect of any change, conversion, or exchange of stock; or for the purpose of any other lawful action; the board of directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors. The record date for determining the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof shall not be more than sixty nor less than ten days before the date of such meeting. The record date for determining the stockholders entitled to consent to corporate action in writing without a meeting shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. The record date for any other action shall not be more than sixty days prior to such action. If no record date is fixed, (i) the record date for determining stockholders entitled to notice of or to vote at any meeting shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived by all stockholders, at the close of business on the day next preceding the day on which the meeting is held; (ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the board of directors is required, shall be the first date on which a signed written consent setting forth the action taken or to be taken is delivered to the Corporation and, when prior action by the board of directors is required, shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action; and (iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating to such other purpose. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. 1 Section 1.6Voting List. If the Corporation shall have more than five (5) shareholders, the secretary shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, at the Corporation’s principal offices. The list shall be produced and kept at the place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. Section 1.7Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute or by the articles of incorporation. If, however, such a quorum shall not be present at any meeting of stockholders, the stockholders entitled to vote, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice if the time and place are announced at the meeting, until a quorum shall be present. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the original meeting. If the adjournment is for more than thirty days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 1.8Voting and Proxies. At every meeting of the stockholders, each stockholder shall be entitled to one vote, in person or by proxy, for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after six months from its date unless the proxy provides for a longer period, which may not exceed seven years. When a specified item of business is required to be voted on by a class or series of stock, the holders of a majority of the shares of such class or series shall constitute a quorum for the transaction of such item of business by that class or series. If a quorum is present at a properly held meeting of the shareholders, the affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote on the subject matter under consideration, shall be the act of the shareholders, unless the vote of a greater number or voting by classes (i) is required by the articles of incorporation, or (ii) has been provided for in an agreement among all shareholders entered into pursuant to and enforceable under Nevada Revised Statutes §78.365. Section 1.9Waiver. Attendance of a stockholder of the Corporation, either in person or by proxy, at any meeting, whether annual or special, shall constitute a waiver of notice of such meeting, except where a stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. A written waiver of notice of any such meeting signed by a stockholder or stockholders entitled to such notice, whether before, at or after the time for notice or the time of the meeting, shall be equivalent to notice. Neither the business to be transacted at, nor the purpose of, any meeting need be specified in any written waiver of notice. Section 1.10Stockholder Action Without a Meeting.Except as may otherwise be provided by any applicable provision of the Nevada Revised Statutes, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent thereto is signed by stockholders holding at least a majority of the voting power; provided that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required.In no instance where action is authorized by written consent need a meeting of stockholders be called or noticed. 2 ARTICLE II Directors Section 2.1Number. The number of directors shall be one or more, as fixed from time to time by resolution of the board of directors; provided, however, that the number of directors shall not be reduced so as to shorten the tenure of any director at the time in office. The initial number of directors shall be one. Section 2.2Elections. Except as provided in Section 2.3 of this Article II, the board of directors shall be elected at the annual meeting of the stockholders or at a special meeting called for that purpose. Each director shall hold such office until his successor is elected and qualified or until his earlier resignation or removal. Section 2.3Vacancies. Any vacancy occurring on the board of directors and any directorship to be filled by reason of an increase in the board of directors may be filled by the affirmative vote of a majority of the remaining directors, although less than a quorum, or by a sole remaining director. Such newly elected director shall hold such office until his successor is elected and qualified or until his earlier resignation or removal. Section 2.4Meetings. The board of directors may, by resolution, establish a place and time for regular meetings which may be held without call or notice. Section 2.5Notice of Special Meetings. Special meetings may be called by the chairman, the presidentor any two members of the board of directors. Notice of special meetings shall be given to each member of the board of directors: (i) by mail by the secretary, the chairman or the members of the board calling the meeting by depositing the same in the official government mail of the United States or any other country, postage prepaid, at least seven days before the meeting, addressed to the director at the last address he has furnished to the Corporation for this purpose, and any notice so mailed shall be deemed to have been given at the time when mailed; or (ii) in person, by telephone or by electronic transmission addressed as stated above at least forty-eight hours before the meeting, and such notice shall be deemed to have been given when such personal or telephone conversation occurs or at the time when such electronic transmission is delivered to such address. Section 2.6Quorum. At all meetings of the board, a majority of the total number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the board of directors, except as otherwise specifically required by statute, the articles of incorporation or these bylaws. If less than a quorum is present, the director or directors present may adjourn the meeting from time to time without further notice. Voting by proxy is not permitted at meetings of the board of directors. Section 2.7Waiver. Attendance of a director at a meeting of the board of directors shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. A written waiver of notice signed by a director or directors entitled to such notice, whether before, at or after the time for notice or the time of the meeting, shall be equivalent to the giving of such notice. Section 2.8Action Without Meeting. Any action required or permitted to be taken at a meeting of the board of directors may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all of the directors and filed with the minutes of proceedings of the board of directors. Any such consent may be in counterparts and shall be effective on the date of the last signature thereon unless otherwise provided therein. Section 2.9Attendance by Telephone. Members of the board of directors may participate in a meeting of such board by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting. 3 ARTICLE III Officers Section 3.1Election. The Corporation shall have such officers, with such titles and duties, as the board of directors may determine by resolution, which must include a chairman of the board, a president, a secretary and a treasurer and may include one or more vice presidents and one or more assistants to such officers. The officers shall in any event have such titles and duties as shall enable the Corporation to sign instruments and stock certificates complying with Section 6.1 of these bylaws, and one of the officers shall have the duty to record the proceedings of the stockholders and the directors in a book to be kept for that purpose. The officers shall be elected by the board of directors; provided, however, that the chairman may appoint one or more assistant secretaries and assistant treasurers and such other subordinate officers as he deems necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as are prescribed in the bylaws or as may be determined from time to time by the board of directors or the chairman. Any two or more offices may be held by the same person. Section 3.2Removal and Resignation. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any officer appointed by the chairman may be removed at any time by the board of directors or the chairman. Any officer may resign at any time by giving written notice of his resignation to the chairman or to the secretary, and acceptance of such resignation shall not be necessary to make it effective unless the notice so provides. Any vacancy occurring in any office of chairman of the board, president, vice president, secretary or treasurer shall be filled by the board of directors. Any vacancy occurring in any other office may be filled by the chairman. Section 3.3Chairman of the Board. The chairman of the board shall preside at all meetings of shareholders and of the board of directors, and shall have the powers andperform the duties usually pertaining to such office, and shall have such other powers and perform such other duties as may be from time to time prescribed by the board of directors Section 3.4President. The president shall be the chief executive officer of the Corporation, and shall have general and active management of the business and affairs of the Corporation, under the direction of the board of directors. Unless the board of directors has appointed another presiding officer, the president shall preside at all meetings of the shareholders. Section 3.5Vice President. The vice president or, if there is more than one, the vice presidents in the order determined by the board of directors or, in lieu of such determination, in the order determined by the president, shall be the officer or officers next in seniority after the president. Each vice president shall also perform such duties and exercise such powers as are appropriate and such as are prescribed by the board of directors or, in lieu of or in addition to such prescription, such as are prescribed by the president from time to time. Upon the death, absence or disability of the president, the vice president or, if there is more than one, the vice presidents in the order determined by the board of directors or, in lieu of such determination, in the order determined by the president, or, in lieu of such determination, in the order determined by the chairman, shall be the officer or officers next in seniority after the president. in the order determined by the andshall perform the duties and exercise the powers of the president. Section 3.6Assistant Vice President. The assistant vice president, if any, or, if there is more than one, the assistant vice presidents shall, under the supervision of the president or a vice president, perform such duties and have such powers as are prescribed by the board of directors, the president or a vice president from time to time. Section 3.7Secretary. The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, keep the minutes of such meetings, have charge of the corporate seal and stock records, be responsible for the maintenance of all corporate files and records and the preparation and filing of reports to governmental agencies (other than tax returns), have authority to affix the corporate seal to any instrument requiring it (and, when so affixed, attest it by his signature), and perform such other duties and have such other powers as are appropriate and such as are prescribed by the board of directors or the president from time to time. 4 Section 3.8Assistant Secretary. The assistant secretary, if any, or, if there is more than one, the assistant secretaries in the order determined by the board of directors or, in lieu of such determination, by the president or the secretary shall, in the absence or disability of the secretary or in case such duties are specifically delegated to him by the board of directors, the chairman, or the secretary, perform the duties and exercise the powers of the secretary and shall, under the supervision of the secretary, perform such other duties and have such other powers as are prescribed by the board of directors, the chairman, or the secretary from time to time. Section 3.9Treasurer. The treasurer shall have control of the funds and the care and custody of all the stocks, bonds and other securities of the Corporation and shall be responsible for the preparation and filing of tax returns. He shall receive all moneys paid to the Corporation and shall have authority to give receipts and vouchers, to sign and endorse checks and warrants in its name and on its behalf, and give full discharge for the same. He shall also have charge of the disbursement of the funds of the Corporation and shall keep full and accurate records of the receipts and disbursements. He shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as shall be designated by the board of directors and shall perform such other duties and have such other powers as are appropriate and such as are prescribed by the board of directors or the president from time to time. Section 3.10Assistant Treasurer. The assistant treasurer, if any, or, if there is more than one, the assistant treasurers in the order determined by the board of directors or, in lieu of such determination, by the chairman or the treasurer shall, in the absence or disability of the treasurer or in case such duties are specifically delegated to him by the board of directors, the chairman or the treasurer, perform the duties and exercise the powers of the treasurer and shall, under the supervision of the treasurer, perform such other duties and have such other powers as are prescribed by the board of directors, the president or the treasurer from time to time. Section 3.11Compensation. Officers shall receive such compensation, if any, for their services as may be authorized or ratified by the board of directors. Election or appointment as an officer shall not of itself create a right to compensation for services performed as such officer. ARTICLE IV Committees Section 4.1Designation of Committees. The board of directors may establish committees for the performance of delegated or designated functions to the extent permitted by law, each committee to consist of one or more directors of the Corporation, and if the board of directors so determines, one or more persons who are not directors of the Corporation. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of such absent or disqualified member. Section 4.2Committee Powers and Authority. The board of directors may provide, by resolution or by amendment to these bylaws, for an Executive Committee to consist of one or more directors of the Corporation (but no persons who are not directors of the Corporation) that may exercise all the power and authority of the board of directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that an Executive Committee may not exercise the power or authority of the board of directors in reference to amending the articles of incorporation (except that an Executive Committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors, pursuant to Article 3(3) of the articles of incorporation, fix the designations and any of the preferences or rights of shares of preferred stock relating to dividends, redemption, dissolution, any distribution of property or assets of the Corporation, or the conversion into, or the exchange of shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series), adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease, or exchange of all or substantially all of the Corporation’s property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending these bylaws; and, unless the resolution expressly so provides, no an Executive Committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. 5 Section 4.3Committee Procedures. To the extent the board of directors or the committee does not establish other procedures for the committee, each committee shall be governed by the procedures established in Section 2.4 (except as they relate to an annual meeting of the board of directors) and Sections 2.5, 2.6, 2.7, 2.8 and 2.9 of these bylaws, as if the committee were the board of directors. ARTICLE V Indemnification Section 5.1Expenses for Actions Other Than By or In the Right of the Corporation. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director or officer of the Corporation, or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, association or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with which action, suit or proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, that he had reasonable cause to believe that his conduct was unlawful. Section 5.2Expenses for Actions By or In the Right of the Corporation. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the Corporation, or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, association or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 5.3Successful Defense. To the extent that any person referred to in the preceding two sections of this Article V has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in such sections, or in defense of any claim issue, or matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith. 6 Section 5.4Determination to Indemnify. Any indemnification under the first two sections of this Article V (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he has met the applicable standard of conduct set forth therein. Such determination shall be made (i) by the stockholders, (ii) by the board of directors by majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (iii) if such quorum is not obtainable or, if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion. Section 5.5Expense Advances. Expenses incurred by an officer or director in defending any civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article V. Section 5.6Provisions Nonexclusive. The indemnification and advancement of expenses provided by, or granted pursuant to, the other sections of this Article V shall not be deemed exclusive of any other rights to which any person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or under any other bylaw, agreement, insurance policy, vote of stockholders or disinterested directors, statute or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. Section 5.7Insurance. By action of the board of directors, notwithstanding any interest of the directors in the action, the Corporation shall have power to purchase and maintain insurance, in such amounts as the board of directors deems appropriate, on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, association or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not he is indemnified against such liability or expense under the provisions of this Article V and whether or not the Corporation would have the power or would be required to indemnify him against such liability under the provisions of this Article V or of the Nevada Revised Statutes §78.7502; §78.751 or §78.752 or by any other applicable law. Section 5.8Surviving Corporation. The board of directors may provide by resolution that references to “the Corporation” in this Article V shall include, in addition to this Corporation, all constituent corporations absorbed in a merger with this Corporation so that any person who was a director or officer of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, employee or agent of another corporation, partnership, joint venture, trust, association or other entity shall stand in the same position under the provisions of this Article V with respect to this Corporation as he would if he had served this Corporation in the same capacity or is or was so serving such other entity at the request of this Corporation, as the case may be. Section 5.9Inurement. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article V shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors, and administrators of such person. Section 5.10Employees and Agents. To the same extent as it may do for a director or officer, the Corporation may indemnify and advance expenses to a person who is not and was not a director or officer of the Corporation but who is or was an employee or agent of the Corporation or who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, association or other enterprise. 7 ARTICLE VI Stock Section 6.1Certificates. Every holder of stock in the Corporation represented by certificates and, upon request, every holder of uncertificated shares shall be entitled to have a certificate, signed by or in the name of the Corporation by the President or chairman of the board of directors, or a vice president, and by the secretary or an assistant secretary, or the treasurer or an assistant treasurer of the Corporation, certifying the number of shares owned by him in the Corporation. Section 6.2Facsimile Signatures. Where a certificate of stock is countersigned (i) by a transfer agent other than the Corporation or its employee or (ii) by a registrar other than the Corporation or its employee, any other signature on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature or signatures have been placed upon, any such certificate shall cease to be such officer, transfer agent or registrar, whether because of death, resignation or otherwise, before such certificate is issued, the certificate may nevertheless be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. Section 6.3Transfer of Stock. Transfers of shares of stock of the Corporation shall be made on the books of the Corporation only upon presentation of the certificate or certificates representing such shares properly endorsed or accompanied by a proper instrument of assignment, except as may otherwise be expressly provided by the laws of the State of Nevada or by order by a court of competent jurisdiction. The officers or transfer agents of the Corporation may, in their discretion, require a signature guaranty before making any transfer. Section 6.4Lost Certificates. The board of directors may direct that a new certificate of stock be issued in place of any certificate issued by the Corporation that is alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, stolen, or destroyed. When authorizing such issue of a new certificate, the board of directors may, in its discretion and as a condition precedent to the issuance of a new certificate, require the owner of such lost, stolen, or destroyed certificate, or his legal representative, to give the Corporation a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. ARTICLE VII Seal The board of directors may, but are not required to, adopt and provide a common seal or stamp which, when adopted, shall constitute the corporate seal of the Corporation. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or manually reproduced. ARTICLE VIII Fiscal Year The board of directors, by resolution, may adopt a fiscal year for the Corporation. ARTICLE IX Amendment These bylaws may at any time and from time to time be amended, altered or repealed exclusively by the board of directors, as provided in the articles of incorporation. 8
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Exhibit 10.18
Confidential
FORD AND BSQUARE
SYNC Generation 2
Hardware Design and Systems Integration Services
Global Terms and Conditions
Agreement Summary
The documents listed below, in order of precedence, and their respective
attachments comprise this Agreement (“Agreement”) made by and between Ford Motor
Company, a Delaware corporation with its principal office at One American Road,
Dearborn, Michigan 48126, on behalf of itself and the Ford Related Companies
(“Buyer” or “Ford”), and BSQUARE Corporation, a Delaware corporation with its
principal office at 110 110th Ave. NE, Suite 200, Bellevue, WA, 98004, on behalf
of itself and the BSquare Related Companies (“Supplier” or “BSquare”). This
Agreement is effective as of December 30, 2009 (“Effective Date”).
1. Ford / BSQUARE Purchase Order
2. Ford-BSQUARE SYNC Generation 2 Hardware Design and Systems Integration
Services Global Terms and Conditions (Version 2.3 dated December 30, 2009)
3. Statements of Work (SoW) (Both Version 2.3 dated December 30, 2009)
This Agreement covers goods and services under a Purchase Order issued by Ford.
Entire Agreement
Unless specifically set forth herein, this Agreement is the entire agreement
between the parties with respect to the subject matter herein, and supersedes
all prior agreements, proposals, representations, statements, and
understandings, whether written or oral. No change, modifications or wavier of
any of the terms of this Agreement shall be binding unless made in a writing
signed by both parties. If the terms contained in this Agreement conflict or are
inconsistent with the terms of any Purchase Order or other document provided by
Buyer, the terms of this Agreement shall control. Language that is shown in the
Agreement as “stricken” (e.g., stricken) is not part of this Agreement and is
included solely for Buyer’s internal reference in order to determine deviations
from its standard terms.
Authorized Signatures
FORD MOTOR COMPANY BSQUARE CORPORATION
/s/ Jason Rodriguez
/s/ Brian Crowley
Signature Signature
Jason Rodriguez
Brian Crowley
Print Name Print Name
Buyer – Global Purchasing
President & CEO
Title Title
12/30/09
Date: Date:
Confidential treatment has been requested for portions of this agreement. This
agreement omits the information subject to the confidential treatment request.
Omissions are designated as ***. A complete version of this agreement has been
filed separately with the Securities and Exchange Commission.
Version 2.3 December 30, 2009
Ford-BSquare
SYNC Gen 2 Hardware Design & Systems Integration Services
Confidential
GLOBAL TERMS AND CONDITIONS
TABLE OF CONTENTS
SECTION
DESCRIPTION
PAGE
1
What Is Covered 1
2
Documents Used In Production Purchasing 1
3
Web-Guides and Supplemental Terms and Conditions 2
4
The Terms and Conditions That Apply 3
5
When The Contract Is Formed 4
6
Quantity 5
7
Volume Projections 5
8
Duration Of the Production Purchase Order 5
9
Changes 6
10
Payment Terms and Taxes 6
11
Setoff 7
12
Quality Assurance 7
13
Shipping, Packaging and Delivery 8
14
Delivery of Nonconforming Goods 8
15
Using The Buyer’s Intellectual Property and Tooling 9
16
Using The Supplier’s Technical Information 9
17
Confidentiality 10
18
TVM and Warranty Reduction Programs 12
19
Licenses 12
20
Embedded Software and Other Works of Authorship 14
21
Software Development/Hosting/Network Attachment Terms 14
22
Warranty 15
23
Recalls and Other Field Service Actions 18 16
24
Information Provided to A Government; Substance and Materials Reporting and
Compliance 16
25
Indemnification Obligations Of The Supplier 17
26
Termination For Cause 19
27
Other Termination 21
28
Claims 22
29
Program Cancellation 22
30
Potential Adjustment Of Supplier Financial Responsibility 22
31
Supplier’s Obligations On Expiration or Termination 23
32
Audit Rights and Financial Information 23
33
Service Parts 29 24
34
Tooling and Other Property Of The Buyer 32 24
35
Supplier-Owned Tooling 32 24
36
Compliance With Laws 24
37
Basic Working Conditions and Employment Status 25
38
Protection Of Supply 26
39
Resolving Disputes 26
40
Excusable Delay 27
41
Waiver Of Nonperformance 28
42
Assignments 28
43
Continuing Obligations; Severability 29
44
Written Notices 29
45
No Third-Party Rights 29
Ford-BSquare
Confidential
46
Advertising, Publicity and News Releases 29
47
Miscellaneous Matters 29
48
Limitation of Liability 30
filed separately with the Securities and Exchange Commission. 3
Ford-BSquare
Confidential
GLOBAL TERMS AND CONDITIONS
INDEX OF DEFINED OR REFERENCED TERMS
TERM
SECTION
PAGE
TERM
SECTION
PAGE Production Tool Order 2.14 2
Advanced Shipping Notices
10.03 6 Production Vehicle 22.02 15 Prototype Purchase
Order 2.09 1
Blanket Purchase Order
2.11 2 Prototype Tool Order 2.13 2
Buyer
1.02 1 Purchase Order 1.02 1
Buyer Confidential Information
17.01(b) 10 Quality/Reliability Statement of Work 2.06 1
Buyer Works
19.07 12 Reasonable Care 17.02(a) 10
Code of Basic Working Conditions
37.03 23 Related Company 11.02 6 Release 2.17 2
Commercially Reasonable
19.04 12 Renewal Term 8.02 5
Confidential Information
17.01 9 Retained Works 19.06 12
Confidential Information of the Other Party
17.01 9
Document Release Date
4.03 3 Request for Quote 2.04 1
Effective Date
4.03 3
Earlier Agreements
2.20 2
Embedded Software
20.01 13 Statement of Work 2.05 1
Excusable Event
40.01 25 Supplemental Terms and Conditions 2.16 2
Extended Term
8.04(a) 5 Supplier 1.02 1 Supplier Confidential
Information 17.01(a) 9
Financial Reports
32.03 22
Ford Vehicle
22.01 15 Target Agreement 2.03 1
General Purchase Order Documents
2.19 2 Team Value Management 18.01 11
Global Terms and Conditions
2.15 2 Technical Information 16.01 8
Goods
1.02 1 Technology Agreement 2.08 1
Government
36.01 23 Third Party IP 19.02 11
Government Requirement
36.01 23
Indemnified Person
25.01 16 Volume Projections 7.01 4
Initial Term
8.01 5 Warranty Reduction Program 18.01 11
Intellectual Property Rights
15.01 8 Warranty Period 22.01 15
Level One Materials
16.02 8 Warranty Program Agreement 2.07 1
Level Two Materials
16.03 9 Web-Guides 3.01 2
License
19.01 11 Written Notice 44.01 27
Litigation Costs
25.01 16
Lump Sum Purchase Order
2.12 2
Net Settlement Basis
11.01 6
Off-the-Shelf Goods
19.02 11
Production Purchase Order
2.10 2
Production Spot Buy Purchase Order
2.12 2
Ford-BSquare
Confidential
filed separately with the Securities and Exchange Commission. FORD CONFIDENTIAL
– DO NOT DISTRIBUTE EXTERNALLY DRAFT JULY 17, 2003
Ford-BSquare
Confidential
GLOBAL TERMS AND CONDITIONS
SECTION 1. WHAT IS COVERED
1.01 Goods and Services The Global Terms and Conditions apply to the purchase by
the Buyer of production goods and services from the Supplier including:
(a) production and service parts, components, assemblies and accessories;
(b) raw materials; (c) tooling; and (d) design, engineering or other services.
Separate Global Terms and Conditions apply to the purchase of non-production
goods and services. The Global Terms and Conditions can be found at the Global
Terms and Conditions home page accessible via the Ford Supplier Portal (FSP)
(http://fsp.covisint.com/) or obtained directly from the Buyer.
1.02 What’s Being Purchased The Production Purchase Order, Production Tool
Order, Blanket Purchase Order, Prototype Purchase Order, Prototype Tool Order,
Lump Sum Purchase Order or Production Spot Buy Purchase Order describe the goods
and services being purchased and specify the name and address of the Buyer and
the Supplier. The goods and services purchased are referred to as the Goods or
Deliverables. A reference to a Purchase Order in a provision of the Global Terms
and Conditions is a reference to all of the following: Production Purchase
Order, Production Tool Order, Blanket Purchase Order, Prototype Purchase Order,
Prototype Tool Order, Lump Sum Purchase Order, and Production Spot Buy Purchase
Order. References to this Agreement shall mean this “SYNC Generation 2 Hardware
Design and Systems Integration Services Global Terms and Conditions” agreement.
SECTION 2. DOCUMENTS USED IN PRODUCTION PURCHASING
2.01 General Provisions in this Section 2 describe the most common types of
documents that may apply to the purchase of the Goods. The documents are listed
in the approximate timing sequence in which they may be entered into with the
Supplier.
2.02 A Sourcing Agreement – Intentionally stricken.
2.03 A Target Agreement – Intentionally stricken.
2.04 A Request For Quote (RFQ) asks the Supplier to provide a quotation for the
Goods. Any quotation must be based on the Global Terms and Conditions.
2.05 A Statement of Work is prepared or approved by the engineering activity of
the Buyer. In most cases, it is developed before a Production Purchase Order is
issued.
2.06 A Quality/Reliability Statement of Work is a Statement of Work that
includes long-term durability specifications for the Goods (like 10-years or
150,000 miles, whichever comes first). It may also specify the testing
methodology that will be used.
2.07 A Warranty Program Agreement is an agreement relating to a warranty
reduction, recovery or chargeback program. It may be entered into at any time
and may apply to some or all of the brands of the Buyer or its Related Companies
(defined in Section 11.02).
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Confidential
2.08 A Technology Agreement may be entered into in special cases to address
Intellectual Property Rights (defined in Section 15.01), Confidential
Information (defined in Section 17.01), or other matters. In most cases, it will
be entered into before a Production Purchase Order is issued.
2.09 A Prototype Purchase Order is used to purchase a fixed amount of prototype
Goods. It describes the Goods and specifies the price, quantity and other key
terms.
2.10 A Production Purchase Order is used to purchase most types of production
goods and services. It describes the Goods and specifies the price, quantity and
other key terms.
2.11 A Blanket Purchase Order is used to purchase certain types of goods or
services, like Service Parts. It provides a framework of agreed terms, like the
price, that will apply when the Buyer issues a Release.
2.12 A Lump Sum Purchase Order or Production Spot Buy Purchase Order is used on
an exception basis for the purchase of a fixed amount of the Goods.
2.13 A Prototype Tool Order may be used to purchase Tooling required to produce
prototype Goods.
2.14 A Production Tool Order is used to purchase Tooling used to make the Goods.
2.15 The Global Terms and Conditions are the primary contract terms and
conditions that apply to the purchase of the Goods. They also include special
provisions for the purchase of Tooling, Service Parts and Component Parts.
2.16 Supplemental Terms and Conditions may be issued by the Buyer to address
special product or local market requirements, including legal matters specific
to the country where the Buyer or the Supplier is located. The Supplemental
Terms and Conditions will identify the scope of their applicability. See
Section 3 for more details.
2.17 A Release instructs the Supplier to ship a specified quantity of the Goods
to a particular location by a specified date and time.
2.18 Either party may provide a Written Notice. It is defined in Section 44.01.
2.19 General Purchase Order Documents are the Global Terms and Conditions,
Web-Guides, and applicable Supplemental Terms and Conditions, as described in
Section 4.01.
2.20 Earlier Agreements are written agreements entered into with the Supplier
relating to the Goods, like a Target Agreement, Technology Agreement, Statement
of Work, or Warranty Program Agreement, as described in Section 4.02.
SECTION 3. WEB-GUIDES AND SUPPLEMENTAL TERMS AND CONDITIONS
3.01 Web-Guides The Web-Guides contain specific requirements for matters like
packaging, shipping, Service Parts, taxes, environmental and obsolescence. The
Web-Guides are part of the Purchase Order and are binding on the Supplier and
the Buyer. The Global Terms and Conditions will take precedence in the event of
any conflict with a Web-Guide, except to the extent that the Web-Guide specifies
otherwise.
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Confidential
3.02 Supplemental Terms and Conditions The Supplemental Terms and Conditions
contain specific requirements to address special product or local market
requirements, including legal matters specific to the country where the Buyer or
the Supplier is located. As with the Web-Guides, the Supplemental Terms and
Conditions are part of the Purchase Order and are binding on the Supplier and
the Buyer. The Supplemental Terms and Conditions will take precedence in the
event of any conflict with the Global Terms and Conditions.
3.03 Where Found The Web-Guides and Supplemental Terms and Conditions can be
found at the Global Terms and Conditions home page described in Section 1.01, or
Frequently Asked Questions (FAQs). Interpretations included in the FAQs are
binding on the Buyer.
SECTION 4. THE TERMS AND CONDITIONS THAT APPLY
4.01 General The contract between the Buyer and the Supplier for the purchase
and sale of the Goods is the Purchase Order. The Purchase Order includes the
Global Terms and Conditions, the Web-Guides, and the other applicable documents
described in Section 2 that are issued by the Buyer, or signed by the Buyer and
the Supplier (in the case of agreements), relating to the purchase and sale of
the Goods. The Global Terms and Conditions, Web-Guides, and applicable
Supplemental Terms and Conditions are referred to as the General Purchase Order
Documents.
4.02 Earlier Agreements Written agreements entered into with the Supplier
of Work, or Warranty Program Agreement, are referred to as Earlier Agreements.
They will continue to apply after a Purchase Order has been issued, subject to
Section 4.09.
4.03 Effective Date and Document Release Date The Effective Date is shown on the
Purchase Order. It is the date on which the Purchase Order went into effect.
Each General Purchase Order Document will have a Document Release Date, which is
the date on which it went into effect. General Purchase Order Documents in
effect on the Effective Date are part of the Purchase Order and apply to the
purchase of the Goods, subject to Sections 4.04 through 4.07 below.
4.04 Renewal Date The General Purchase Order Documents in effect on July 1st of
a Renewal Term (defined in Section 8.02) will apply to a Production Purchase
Order renewed on that date. These may include requirements that are different
from those in effect when the Production Purchase Order was first issued or
previously renewed. For Blanket Purchase Orders, the General Purchase Order
Documents in effect at the time of a Release will apply.
4.05 Annual Updates Changes in the General Purchase Order Documents shall only
be effective for Statements of Work and/or Purchase Orders issued following the
effective date of such changes. In the event Supplier takes exception to any
changes, Buyer and Supplier will negotiate in good faith to find a solution
prior to the effective date of the changes. If a dispute remains, Supplier shall
not be obligated to perform work under any Statement of Work or Purchase Order
issued after changes have been implemented.
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4.06 Other Updates The Buyer may make revisions to the General Purchase Order
Documents at times other than the May 1st annual update. If it does so, the
Buyer will post the revisions on the Global Terms and Conditions home page
described in Section 1.01 and provide the Supplier with a Written Notice of the
revisions. The Written Notice will include the date on which the revisions will
become effective.
4.07 Binding Effect Revisions to the General Purchase Order Documents that are
made after the Effective Date shown on the Purchase Order or after the beginning
of a Renewal Term are binding on the Buyer and the Supplier upon the written
consent of both parties.
4.08 Supplier Terms and Conditions No terms or conditions other than those that
apply to the Purchase Order as described in this Section 4 will apply to the
Purchase Order, including any contract terms that may have been submitted by the
Supplier.
4.09 Exceptions to Global Terms and Conditions
(a) General Requirements Any exception, deviation, amendment, modification or
waiver of any provision of the Global Terms and Conditions or any General
Purchase Order Document, whether made under an Earlier Agreement or otherwise,
will be binding on the Buyer only if it has been: (1) made in a Written Notice;
and (2) approved by the highest ranking purchasing executive of the Buyer
(which, if the Buyer is Ford U.S., is its Vice President – Global Purchasing).
If the Buyer is other than Ford U.S., the Buyer is required to first obtain a
favorable written recommendation from the Ford Vice President – Global
Purchasing. The Supplier may obtain written evidence of the recommendation from
the Buyer.
(b) Service Parts – Intentionally stricken.
(c) Supplemental Terms and Conditions Any Supplemental Terms and Conditions
posted on the Global Terms and Conditions home page described in Section 1.01 do
not require any of the approvals described in this Section 4.09.
(d) Expansion of Rights to Intellectual Property in Earlier Agreements In the
event that an Earlier Agreement provides the Buyer with rights to the Supplier’s
Intellectual Property Rights (defined in Section 15.01) that go beyond, or are
in addition to, the Buyer’s rights under the Global Terms and Conditions,
Sections 4.09(a) through (c) do not apply to the additional rights and no
additional approvals or recommendations relating to the additional rights are
required.
SECTION 5. WHEN THE CONTRACT IS FORMED
5.01 Buyer’s Offer When the Buyer issues a Prototype Purchase Order, Production
Purchase Order, Prototype Tool Order, Production Tool Order, Lump Sum Purchase
Order or Production Spot Buy Purchase Order, it makes an offer to purchase the
Goods or Tooling from the Supplier on the terms and conditions specified in
Section 4.
5.02 Blanket Purchase Orders For a Blanket Purchase Order, the offer is made
when the Buyer issues a Release. The offer applies for only the quantity
specified in the Release.
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Confidential
5.03 Supplier Acceptance The contract is formed when the Supplier accepts the
offer of the Buyer. This occurs upon the earlier of: (a) the Supplier beginning
work or performance; or (b) the Supplier notifying the Buyer of its acceptance
of the offer.
SECTION 6. QUANTITY
6.01 Requirements The Supplier will provide the Buyer’s requirements for the
Goods or Tooling as shown on the Purchase Order. On a Production Purchase Order,
the quantity is typically specified as a percentage of the Buyer’s requirements
for the Goods. The Buyer will purchase this same quantity. The Buyer will issue
Releases to specify the quantities needed, delivery locations, times and dates.
Time and quantity are of the essence in the purchase of the Goods.
SECTION 7. VOLUME PROJECTIONS
7.01 Projections The Buyer may provide the Supplier with estimates, forecasts or
projections of its future volume or quantity requirements for the Goods. These
are Volume Projections. They are provided for informational purposes only. The
Supplier and the Buyer may agree on a timeline over which Volume Projections
will be provided.
7.02 No Commitment Volume Projections are not a commitment by the Buyer to
purchase the quantities specified in the Volume Projections. The Buyer’s
purchase obligation is only as specified in Section 6. The Supplier acknowledges
that Volume Projections, like any other forward looking projections, are based
on a number of economic and business factors, variables and assumptions, some or
all of which may change over time, and may or may not be accurate at the time
they were made or later on. The Buyer makes no representation, warranty,
guaranty or commitment of any kind or nature, express or implied, regarding any
Volume Projection.
SECTION 8. DURATION OF THE PRODUCTION PURCHASE ORDER
8.01 Initial Term The Initial Term of the contract begins on the Effective Date
shown on the Production Purchase Order and expires on June 30th of the next
calendar year. If, for example, a Production Purchase Order is issued on July 1,
2004, the Initial Term will end on June 30, 2005. Similarly, the Initial Term of
a Production Purchase Order issued on January 1, 2004 will expire on June 30,
2005.
8.02 Renewal Term The Production Purchase Order will renew automatically on
July 1st for an additional 12 months, ending on the next June 30th, unless a
notice of non-renewal has been provided under Section 8.03. This is the Renewal
Term. The Production Purchase Order will automatically be renewed each
subsequent year for an additional Renewal Term of 12 months unless a notice of
non-renewal has been provided under Section 8.03.
8.03 Non-renewal Either party may elect not to renew the Production Purchase
Order by providing a Written Notice to the other party to that effect. The Buyer
will provide its Written Notice by May 1st of the year in which the Initial Term
or Renewal Term (as applicable) is scheduled to expire. The Supplier will do so
sufficiently in advance of the scheduled expiration date to enable the Buyer to
resource the production of the Goods in a timely and orderly manner, but in no
case later than May 1st of the year in which the Initial Term or Renewal Term
(as applicable) is scheduled to expire. In all cases, the Supplier will consult
with the Buyer’s production purchasing activity prior to giving its Written
Notice to ensure that it will be timely, and the parties will confirm in writing
their agreement to
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the Supplier’s Written Notice period. If the Supplier elects not to renew, it
will, if requested by the Buyer: (a) work diligently with the Buyer to identify
an alternative source of supply that is acceptable to the Buyer; and
(b) identify the Supplier’s component-part and raw-material suppliers relating
to the Goods.
8.04 Optional Extended Term
(a) The Buyer, at its option, may extend the term of the Production Purchase
Order for up to 4 months beyond the scheduled June 30th expiration date of the
Initial Term or Renewal Term (as applicable). This is the Extended Term. If the
Extended Term is implemented, the Production Purchase Order will expire at the
end of the Extended Term.
(b) The Buyer will provide the Supplier with Written Notice of any Extended Term
on or before the June 1st before the Initial Term or Renewal Term is set to
expire. The Written Notice will specify the Extended Term (up to 4 months) and
include a Volume Projection of the Buyer’s needs. Prices in effect at the end of
the Initial Term or Renewal Term and all other terms and conditions will remain
in effect during the Extended Term. If a transition period longer than the
Extended Term is required, the Buyer and the Supplier will negotiate in good
faith the terms and conditions of any extension.
SECTION 9. CHANGES
9.01 Changes To Buyer’s Order The Buyer may make changes to its order for the
Goods at any time, in accordance with the change processes set forth in the SOW,
and such changes shall be effective upon written acceptance by Supplier. These
may include changes to the design, specifications, engineering level, materials,
packaging, shipping date, or time or place of delivery. The Supplier will make
all changes requested by the Buyer. The Supplier may not make any change on its
own without first obtaining the Buyer’s consent in a Written Notice. Any
exceptions, deviations, amendments, or modifications to the Global Terms and
Conditions must be made, if at all, under Section 4.09, not under this
Section 9.01.
9.02 Notice The Buyer will provide the Supplier with notice of any change
through an amendment or revision to the outstanding Purchase Order, the issuance
of a new Production Purchase Order, an RFQ or a Written Notice. If the amendment
is accomplished by issuing a new Production Purchase Order, the Initial Term of
the original Production Purchase Order will apply. If the Initial Term has
already expired, the Renewal Term in effect at the time of amendment will
continue.
9.03 Impact on Cost The Supplier will promptly notify the Buyer in a Written
Notice if the proposed change will affect cost or timing and provide
substantiation of its claim. Buyer and Supplier will negotiate in good faith on
an equitable price adjustment (up or down), a change in shipping or delivery
terms, or other appropriate adjustment.
SECTION 10. PAYMENT TERMS AND TAXES
10.01 Payment Terms The Purchase Order will detail payment dates and milestones
where applicable.
10.02 Currency In most cases, payment will be made in the local currency of the
country where the Goods will be manufactured. If a different currency applies,
it will be shown on the Purchase Order or other Written Notice from the Buyer.
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10.03 Advanced Shipping Notices The Supplier will provide the Buyer with
Advanced Shipping Notices and otherwise comply with the payment requirements
specified in the Payment Web-Guide. Failure to do so may delay payment to the
Supplier.
10.04 Total Price and Taxes The total price for the Goods will include duty, if
applicable, and tax unless otherwise specified in the Tax Web-Guide. The
Supplier will separately show on its invoice any duties, and any sales tax, use
tax, value-added tax (VAT) or similar turnover taxes, levied on the Goods. The
Supplier will provide whatever documents and information the Buyer may require
to support taxes paid, tax reporting, or recovery of VAT. The Supplier will
comply with the requirements of the Tax Web-Guide. The Supplier will pay duty if
the delivery term specified on the Purchase Order requires the Supplier to pay
it (see the Delivery Terms Web-Guide for more details).
SECTION 11. SETOFF
11.01 Supplier’s Direct Accounts The Buyer will administer on a Net Settlement
Basis all of the accounts of the Supplier arising from the Purchase Orders and
other agreements the Supplier has with the Buyer. Net Settlement Basis means
that, unless prohibited by law, the Buyer may set off and recoup against the
Buyer’s accounts payable to the Supplier any amounts for which the Buyer
determines in good faith the Supplier is liable to it under any Purchase Order
or other agreements with the Supplier. The Buyer may do so without notice to the
Supplier.
11.02 Related Companies The Buyer or its Related Companies may also setoff and
recoup against the accounts payable of the Buyer or its Related Companies to the
Supplier or its Related Companies any amounts for which the Buyer or its Related
Companies determines in good faith the Supplier or its Related Companies is
liable under any Purchase Order or other agreements with the Supplier or its
Related Companies.
A Related Company is any parent company of the Buyer or the Supplier, as
appropriate, and any subsidiary or affiliate in which any of them owns or
controls at least 25% of the voting stock, partnership interest or other
ownership interest.
The Buyer will provide the Supplier and the affected Related Company with 21
days’ Written Notice (or such shorter period as may be commercially reasonable
under the circumstances) before implementing a setoff (a) of the Supplier’s debt
against accounts payable to a Related Company of the Supplier, or (b) of a
Related Company’s debt against accounts payable to the Supplier. The Written
Notice will specify the basis for the setoff.
11.03 Basis of Debit The Buyer will be presumed to have acted in good faith if
it has a commercially reasonable basis for believing that the Supplier or one of
its Related Companies is liable for the amount of the debit. A debit may include
the actual professional fees and other costs incurred by the Buyer or a Related
Company.
SECTION 12. QUALITY ASSURANCE
12.01 Compliance with Buyer’s Programs The Supplier will promote continuous
quality improvement in the manufacture, production and distribution of the
Goods. The Supplier will comply with the quality assurance processes,
inspections and standards specified by the Buyer for suppliers providing goods
or services similar in nature to the Goods. These standards include the Buyer’s
Q1 quality program, ISO/TS 16949 or QS-9000, ISO 14001 and the Buyer’s Supplier
Delivery Rating.
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SECTION 13. SHIPPING, PACKAGING AND DELIVERY
13.01 Web-Guides The Supplier will comply with the Buyer’s requirements for
packing, marking, labeling and shipping. These are specified in the appropriate
Web-Guides. The Supplier will ship only the quantity of the Goods specified by
the Buyer in the Purchase Order or a Release.
13.02 Delivery, Title and Risk of Loss Title and risk of loss will pass at the
time and place of delivery in accordance with (a) the delivery term on the
Purchase Order for the Goods and (b) Section 34 in the case of Tooling. Title
and risk of loss will pass at the consolidator’s location if one is used.
SECTION 14. DELIVERY OF NONCONFORMING GOODS
14.01 Delivery The delivery, inspection, and acceptance process for all Goods
shall be set forth in the Statement of Work.
14.02 Notice If the Goods do not conform, the Buyer will inform the Supplier,
orally or in writing, about the nonconformity as soon as reasonably practicable
after the Buyer has discovered it. The Buyer will confirm the nonconformity in a
Written Notice if requested by the Supplier to do so.
14.03 Supplier’s Right to Cure The Supplier will be permitted to rework, replace
or otherwise remedy a nonconformity in the Goods as long as: (a) the
nonconformity has been discovered after delivery of the Goods but before the
Buyer has started to use the Goods (including in any pre-assembly processing or
fitment); (b) the Supplier can perform the remedial work at its location, or at
the Buyer’s site (subject to any restrictions in any labor agreement of the
Buyer), without disruption to the Buyer’s operations; (c) the remedial work will
not cause any delay in the Buyer’s operations, including its production process,
or cause the Buyer to incur any additional costs; and (d) the cure can be
completed by the deadline established by the Buyer.
14.04 Buyer’s Options If the Buyer determines in good faith, after consulting
with the Supplier, that the remedial work cannot be done within the limits of
Section 14.03, the Buyer is entitled to: (a) reject the nonconforming Goods,
return them to the Supplier and, at the Buyer’s option, request redelivery of
conforming Goods; or (b) retain them and either repair them itself or request
the Supplier do so, on or off-site. In any event, the Supplier will bear the
risk and expense of the remedial action undertaken by the Buyer or the Supplier.
14.05 Supplier’s Right To Nonconforming Goods The Supplier may request that the
Buyer hold and make available to the Supplier, at the Supplier’s expense, any
nonconforming Goods, subject to the Buyer’s options under Section 14.04.
14.06 Costs Incurred by the Buyer Subject to the sublimit specified in
Section 22.01, the Supplier will be liable for all direct, incidental and
consequential losses, costs, and expenses incurred by the Buyer resulting from
any failure by the Supplier to comply with any of the requirements of the
Agreement (even if the Supplier has cured the noncompliance under Section 26.02,
or from termination by the Buyer under Section 26.01 or 26.04, and termination
under those sections does not relieve the Supplier from this liability. Such
liability is limited to a maximum of thirty-five million US dollars
($35,000,000).
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14.07 No Acceptance or Waiver of Rights The Buyer’s rights under this Section 14
apply even if the nonconformity does not become apparent until after delivery of
the Goods, but prior to Acceptance as defined in the Statement of Work. The
Supplier is not liable for damage to the Goods after Acceptance by Buyer, or
after delivery if the damage is due to actions taken by the Buyer or third
parties. Payment will not constitute Acceptance of nonconforming Goods, nor will
it limit or affect any of the Buyer’s rights.
SECTION 15. USING THE BUYER’S INTELLECTUAL PROPERTY AND TOOLING
15.01 Buyer’s Intellectual Property Rights The Buyer and its Related Companies
may have valuable Intellectual Property Rights in Tooling, documents and
information provided to the Supplier. Intellectual Property Rights (or “IP”)
include trademarks, trade dress, patents, copyrights, trade secrets and
industrial design rights. The Supplier may use the Intellectual Property Rights
of the Buyer and its Related Companies only in the production and supply of the
Goods to the Buyer and its Related Companies.
15.02 Parts Branding Directive – Intentionally stricken.
15.03 Other Use of Buyer’s Intellectual Property Rights The Supplier will first
obtain the Buyer’s written approval before it manufactures, sells or otherwise
disposes to third parties any goods made by the Supplier, its Related Companies
or one of their subcontractors using any Tooling, equipment or Intellectual
Property Rights of the Buyer or its Related Companies.
SECTION 16. USING THE SUPPLIER’S TECHNICAL INFORMATION
16.01 Technical Information The Supplier will provide the Buyer and its Related
Companies with Technical Information required by the Buyer to install, assemble
and otherwise use the Goods. Technical Information includes engineering, package
and installation drawings, specifications, testing protocols and results,
documents, data and other information relating to the Goods and Tooling.
Technical Information must comply with the computer-aided-design and drafting
standards of the Buyer and its Related Companies. Technical Information will be
provided as specified in Sections 16.02 and 16.03 and categorized into either
Level One Materials or Level Two Materials as provided in Section 16.04.
16.02 Use of Level One Materials The Supplier will provide the Buyer and its
Related Companies with Level One Materials to use without restriction. Level One
Materials define in general terms the geometric and functional attributes of the
Goods as they interface with the Buyer’s products, demonstrate that they meet
the Buyer’s specifications, and describe how they interact with other vehicle
systems or environments. At a minimum, Level One Materials are those the Buyer
or its Related Companies require to support their engineering release systems
(including the Ford Worldwide Engineering Release System (WERS)), and package
and installation drawings with functional requirements. At the Buyer’s request,
Level One Materials must also be provided for Component Parts (as defined in
Section 33.01). Except for Supplier’s Retained Works, as defined and set forth
herein, the Buyer may use or disclose Level One Materials without restriction,
subject only to any patent or trademark rights of the Supplier. Any Supplier
legend, like “Confidential” or “Proprietary,” will not affect the Buyer’s right
to use Level One Materials.
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16.03 Use of Level Two Materials Level Two Materials include more detailed
design and manufacturing information such as Failure Mode and Effects Analyses
(FMEA, including Design Failure Mode and Effects Analysis and Process Failure
Mode and Effects Analysis), Design Verification Plans and Reports (DVP&R,
including test specifications, test reports and test data), P-Diagrams and
Control Plans. The Supplier will provide the Buyer and its Related Companies
with reasonable access, including delivery of reference copies, to Level Two
Materials as well as the right to use Level Two Materials internally, including
to integrate the Goods into the vehicle. Any additional rights (such as licenses
or ownership, or the right to disclose the materials to third parties to which
disclosure is not permitted under this Section 16 or Section 17) to these or
other materials (such as detailed drawings and math data, CAE Models, electrical
schematics, or software algorithm and code) will be negotiated in good faith by
the Buyer and the Supplier and formalized in a Statement of Work or other
written document. The Buyer’s obligations to treat Level Two Materials as
confidential are described in Section 17.
16.04 Categorization The Supplier and the Buyer will work in good faith to
categorize the Supplier’s Technical Information as Level One Materials or Level
Two Materials and, if appropriate, itemize them in a Statement of Work or other
written document. In the event that the Supplier and the Buyer are unable to
agree on the appropriate categorization, there will be a presumption that the
Supplier’s Technical Information is Level One Materials.
16.05 Market Testing The Buyer may share Level One Materials with third parties
without restriction. The Buyer may not share Level Two Materials that are
Supplier Confidential Information, or any other Supplier Confidential
Information, except as provided in Section 17.
16.06 Effective Date of Buyer’s Obligations The Buyer’s obligations under this
Section 16 relating to Level Two Materials apply to Level Two Materials
disclosed to the Buyer on or after January 1, 2004.
SECTION 17. CONFIDENTIALITY
17.01 Confidential Information Confidential Information is information that
meets the requirements specified below for Supplier Confidential Information or
Buyer Confidential Information. Information that does not meet these
requirements is not Confidential Information, regardless of any legend or
marking to the contrary. A reference in this Section 17 to Confidential
Information of the Other Party is a reference to Supplier Confidential
Information when the reference relates to an obligation of the Buyer, and to
Buyer Confidential Information when the reference relates to an obligation of
the Supplier.
(a) Supplier Confidential Information is any information disclosed under the
Purchase Order that meets all of the following requirements:
(1) The information is non-public information that is proprietary to: (A) the
Supplier; (B) any of its Related Companies; or (C) any third party to which any
of them has an obligation of confidentiality relating to the information.
(2) The information is disclosed to the Buyer: (A) in tangible form and
identified as confidential in the tangible form; or (B) orally, and is
identified as confidential at the time of disclosure, and is described in a
written statement (which must also identify it as confidential) within a
reasonable time after disclosure.
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(3) The information is: (A) Level Two Materials, as described in Section 16.03;
(B) provided under a Team Value Management initiative, as described in
Section 18.01; (C) Embedded Software, as defined in Section 20.01; (D) provided
under Section 24; (E) provided to the Buyer’s Purchasing Controller’s Office
under Section 32.03; or (F) provided under Section 38.02.
(b) Buyer Confidential Information is any information that meets all of the
following requirements, regardless of whether it has been disclosed under the
Purchase Order:
Buyer; (B) any of its Related Companies; or (C) any third party to which any of
them has an obligation of confidentiality relating to the information.
(2) The information is:
(A) a Volume Projection, as defined in Section 7.01, or is provided under a Team
Value Management initiative, as described in Section 18.01;
(B) the Buyer’s or any of its Related Companies’ future product plans or any
details of those plans; or
(C) any other information identified by the Buyer or any of its Related
Companies (orally or in writing) as confidential.
(3) The Deliverables, apart from Retained Works or Third Party IP, will be
considered Buyer Confidential Information.
17.02 Obligations and Standard of Care
(a) The Buyer and the Supplier will each use Reasonable Care to protect the
confidentiality of Confidential Information of the Other Party. Reasonable Care
is the standard of care that the party holding the information would use in
protecting the confidentiality of its own confidential information. The Supplier
may consult the Global Terms and Conditions home page described in Section 1.01
for information on the practices that apply to the Buyer’s employees for the
handling of confidential information.
(b) Some of the Buyer’s and its Related Companies’ electronic systems (for
example, WERS) are designed for collaboration and the sharing of information
among multiple parties, including other suppliers. The Supplier should not input
Supplier Confidential Information into any electronic system of the Buyer or any
of its Related Companies unless the Buyer or any of its Related Companies has
advised the Supplier in a Written Notice that the system is suitable for receipt
of Supplier Confidential Information.
(c) The obligations under Section 17.02(a) do not apply to any information that:
(1) is or becomes publicly available through no breach of any agreement between
the Buyer and the Supplier; (2) is approved for release by the disclosing party
in a Written Notice; (3) is lawfully obtained from a
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third party without a duty of confidentiality; (4) was already known to the
receiving party prior to its disclosure; (5) is required to be disclosed by a
valid court order; or (6) is input by the Supplier into an electronic system for
which the Supplier has not received the Written Notice described in
Section 17.02(b). The exception in clause (5) will apply only if the receiving
party has: (A) provided the disclosing party with a Written Notice of the court
order; and (B) fully cooperated with the disclosing party in seeking
confidential treatment for the disclosures. The Buyer’s confidentiality
obligations under Section 17.02(a) also do not apply to Embedded Software, to
the extent required to exercise License rights for the Embedded Software granted
under Section 20.01.
17.03 Sharing with Related Companies and Consultants The Buyer and the Supplier
may share Confidential Information of the Other Party with their: (a) Related
Companies; and (b) consultants, contractors, experts and agents; provided, that
the person or entity with whom or which the information is being shared has
agreed in writing to be bound by confidentiality provisions comparable to those
specified in this Section 17. The Supplier will first obtain the written consent
of the Buyer if the Supplier or any of its Related Companies wants to share
Buyer Confidential Information with any party (including any of its Related
Companies) that is a motor vehicle manufacturer or distributor.
17.04 Sharing with Other Third Parties Neither the Buyer nor the Supplier will
share any Confidential Information of the Other Party with any third party,
including any competitor of the other party, without the prior written agreement
of the other party, except as may otherwise be permitted under the Purchase
Order, a Technology Agreement, or other written agreement between the parties.
17.05 No Other Obligations The Buyer, the Supplier, and their Related Companies
have no other obligation for confidential information supplied to them from
whatever source, unless otherwise agreed to in writing.
17.06 Effective Date of Buyer’s Obligations The Buyer’s obligations under this
Section 17 apply to Supplier Confidential Information disclosed to the Buyer on
or after January 1, 2004.
SECTION 18. TVM AND WARRANTY REDUCTION PROGRAMS
18.01 Supplier Participation The Buyer may initiate various programs designed to
improve quality, increase customer satisfaction or reduce costs. Current
initiatives include Team Value Management (TVM) and the Warranty Reduction
Program. All suppliers are required to participate in these initiatives to the
extent requested by the Buyer. The Supplier can learn more about them by
visiting the Ford Supplier Portal (http://fsp.covisint.com/) or contacting the
Buyer directly. If Buyer requests Supplier participation, Supplier will be paid
on a time and materials basis equal to that defined in the applicable SOW.
18.02 Confidential Information The Buyer’s and Supplier’s obligations to treat
information received under the Team Value Management initiative as confidential
are described in Section 17.
SECTION 19. LICENSES
19.01 Supplier Grants The Supplier will grant Licenses on the bases specified
below unless an Earlier Agreement (as defined in Section 4.2) states otherwise.
19.02 Off-the-Shelf Goods & Third Party IP Purchase of the Goods does not
include any License from the Supplier if they are Off-the-Shelf Goods or Third
Party IP. Off-the-Shelf Goods do not
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include any functionally or structurally significant features developed
specifically for the Buyer. Third Party IP includes software or other products
that are licensed by Buyer pursuant to a separate license agreement either with
Supplier or with the provider of the Third Party IP and as such are not
considered Goods pursuant to the Agreement.
19.03 Buyer Specific Development Work Intentionally stricken.
19.04 Commercially Reasonable When negotiating Commercially Reasonable terms and
conditions, the parties will take into account the relative technical and other
contributions to the development of the technology, the level of business being
offered to the Supplier, and the Buyer’s needs for subsequent migration of the
developed technology to other projects or vehicle applications.
19.05 License to Rebuild The Supplier grants to the Buyer a permanent, paid-up
License under any Intellectual Property Rights that are owned or controlled by
the Supplier or its Related Companies (now or in the future) necessary to
rebuild and have rebuilt, but not to have newly manufactured by another, the
Goods and Tooling.
19.06 Ownership of IP
(a) All intellectual property rights in Deliverables in all formats, including
but not limited to all computer code contained in Deliverables and all
derivative works of Deliverables, developed by Seller (or in collaboration with
Buyer) in the course of performance of this Agreement, other than Retained Works
(defined below and listed in Exhibit A, and third party intellectual property
and any derivative work thereof, used, incorporated or referenced therein, are
the sole, exclusive and perpetual property of Buyer. Buyer grants to Supplier a
limited license to use the IP embodied in the Deliverables solely to perform its
obligations under, and only for the term of, this Agreement.
(b) Supplier will remain the sole owner of any Retained Works. “Retained Works”
are any Supplier pre-existing (i) materials, including software code, hardware
designs, and proprietary software tools incorporated into the Deliverables and
training materials; and (ii) methodologies, specifications, documentation and
techniques, including derivative works, listed and fully described in Exhibit A.
19.07 License to Retained Works & Buyer Works
(a) The parties agree to identify any Retained Works in Exhibit A. Supplier
grants Buyer a non-exclusive, worldwide, permanent, paid-up, sub-licensable and
transferrable license to all Intellectual Property Rights that Supplier has in
all Retained Works, including all derivative works and all source code necessary
for Buyer to use, modify, and distribute any Deliverables. Buyer’s license to
Retained Works is conditioned upon Buyer’s material compliance with the terms of
this Agreement.
(b) Buyer grants to Supplier (and its contractors as necessary) a temporary,
royalty-free, non-exclusive license to use, reproduce and modify any computer
code or materials provided by Buyer pursuant to this Agreement (“Buyer Works”)
solely for the performance of the Supplier Services. Supplier acknowledges and
agrees that, except to the extent necessary for Supplier to perform the Services
under this Agreement, no grant or license (implied or otherwise) under any of
Buyer’s Intellectual Property Rights in the Buyer Works, is given or intended
under this Agreement.
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19.08 Third Party IP Buyer shall obtain any and all third party licenses for any
software and/or materials supplied by Buyer to Supplier, which shall be passed
through to Buyer. Buyer acknowledges and agrees that, if applicable to the
Services provided under this Agreement, Buyer must enter into a separate license
agreement in order to use Windows CE or any other operating system, and Adobe
Flash, and that this Agreement grants Buyer no rights thereto. In the event that
Buyer supplies materials to Supplier in order for Supplier to perform Services,
Buyer will obtain the necessary license rights for the respective third-party
licensor to allow for such activity. Buyer and Supplier shall agree in advance
on any Third Party IP to be included in the Deliverables and will identify it as
such on Exhibit A or in the SOW, which shall also identify whether Buyer is
responsible for obtaining the license rights for such IP. For any Third Party IP
not so identified, Supplier shall obtain, at no additional cost to Buyer, any
and all third party licenses for any software and/or materials supplied by
Supplier to Buyer as part of the Deliverables, including all source code
necessary for Buyer to use, modify, and distribute the Deliverables.
19.09 Software License Intentionally stricken.
SECTION 20. EMBEDDED SOFTWARE AND OTHER WORKS OF AUTHORSHIP
20.01 Embedded Software. Intentionally stricken.
20.02 Confidentiality. Intentionally stricken.
20.03 Other Works. - Intentionally stricken.
20.04 Subcontractors In each subcontract of the Supplier’s work performed
pursuant to the Purchase Order, the Supplier will use its best efforts to obtain
for the Buyer all of the rights and Licenses granted to the Buyer under
Section 16, Section 19 and Section 20.
SECTION 21. CLAIMS OF INFRINGEMENT – Intentionally stricken.
SECTION 21. SOFTWARE DEVELOPMENT/HOSTING/NETWORK TERMS
21.01 Supplier’s Responsibilities.
a) Supplier will provide software and documentation (“Software”) and/or perform
the services (“Services”) in conformance to one or more Statements of Work (each
an “SOW”) which will be attached or as indicated on the face of the Purchase
Order. As applicable and further defined in an SOW or on the face of the
Purchase Order,
b) Unless otherwise agreed in a SOW, during the term of each Purchase Order,
Supplier will attend monthly review meetings for the purpose of keeping Buyer
completely informed about the status of this project.
c) Supplier will use its best efforts to correct any errors or performance
problems identified by Buyer during acceptance testing in accordance with the
issue resolution and change request process set forth in each SOW.
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21.02 Buyer’s Responsibilities.
a) Unless otherwise agreed in a SOW, Buyer will assign an IT project contact
knowledgeable in the requirements of the Deliverables who will work with
Supplier on an as-required basis to assist Supplier in understanding Buyer’s
requirements, resolving design questions, determining and defining functions and
generally being available and responsible for decisions necessary to allow
Supplier to provide the Deliverables required hereunder. The IT project contact
of Buyer, as necessary, will administer the monthly status meetings attended by
Supplier.
b) Unless otherwise agreed in a SOW, Buyer will provide written acceptance of
each phase within 30 business days of receipt of that phase’s Deliverables or
provide a list of problems or nonconformities to Supplier within that same
period.
21.03 Delivery Dates and Timing Where timetables, delivery dates, estimates of
resources or the duration of any Services are specified in a SOW or on the face
of the Purchase Order, time shall be of the essence in relation to the same and
the Supplier shall complete the Services by these dates or such revised dates as
may be granted by Buyer in its sole discretion, and the Supplier shall notify
the Buyer of any anticipated delay as soon as possible. In the event of a delay
caused by Supplier, the Supplier shall pay reasonable costs incurred by Buyer as
a result of such delay, subject to the limitation on liability set forth in
Section 48 below.
21.04 Changes.
a) Buyer and Supplier acknowledge that modifications and adjustments to the
specifications for the Deliverables may become necessary in order to clarify and
define these specifications.
b) In the event there is substantial change to the specifications which results
in (i) the expansion of the scope of the specifications, (ii) the reduction in
the scope of the specifications, Supplier will submit to Buyer a written
proposal therefore describing the change to be made and an estimate of the
increase or decrease in time required therefore, as the case may be.
(c) If Supplier’s proposal under subparagraph (b) above is acceptable to Buyer,
Buyer will issue a new Purchase Order or an amendment to the existing Purchase
Order reflecting such modifications to the specifications and adjustment in
price. Supplier will not commence any work in connection with such change until
Buyer issues such purchase order amendment, and Buyer will not be responsible
for any work performed in connection with such change if a purchase order
amendment is not issued.
SECTION 22. WARRANTY
22.01 Supplier Warranty Supplier warrants that the goods and services supplied
under a PO will be free from Defects for the Warranty Period. Buyer’s sole
remedy for a failure of Supplier’s warranty obligation is for Supplier to repair
or replace. ‘Repair or replace’ means as the case may be, creating and
delivering a software update or patch if related to software, re-doing work if
related to services, or replacement of hardware if related to hardware and
includes paying for the actual costs of re-manufacture, re-distribution, or
re-installation as applicable, whether incurred by Supplier or by Buyer, up to a
maximum of five million dollars.
Defect means deviation from the “Functional Requirements” as set forth in the
applicable Statement of Work.
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“Warranty Period” means: the time period starting on the date the Goods are
delivered to the Buyer (or a third party designated by the Buyer) and expiring
two (2) years following the date of first production of a Ford Vehicle
containing the Goods. “Ford Vehicle” means a vehicle sold by Ford or its
Affiliates.
22.02 Claim for Breach of Warranty The Supplier’s Warranty and any rights of the
Buyer to make a claim under it will be effective even if the Buyer has accepted
all or a portion of the Goods.
SECTION 23. RECALLS AND OTHER FIELD SERVICE ACTIONS – Intentionally stricken.
SECTION 24. INFORMATION PROVIDED TO A GOVERNMENT; SUBSTANCE AND MATERIALS
REPORTING AND COMPLIANCE
24.01 Government Submissions Involving the Goods The Supplier will promptly
notify the Buyer via e-mail directed to [email protected] if it has provided
information to a Government regarding the Goods, including information provided
to the U.S. Government in accordance with the following reporting requirements
of U.S. law: 49 CFR Part 573 (Defect and Noncompliance Reporting) and 49 CFR
Part 579 (Reporting of Information and Communications About Potential Defects).
This e-mail notification will include the following information: the date the
notification was provided to a Government, the affected Goods (or components of
the Goods, as applicable), and the report type (e.g., for reporting to the U.S.
Government, an Early Warning Report or Noncompliance Report).
Upon the request of the Buyer, the Supplier will provide the Buyer (and any
Related Company specified by it) with access to and copies of any data,
materials or information provided to a Government relating to the Goods, any
component or part of the Goods, or any materials or substances used in the Goods
or in connection with their production, including any test, manufacturing, field
performance or warranty data. The Supplier will provide the information within
10 business days after receipt of the Buyer’s request.
24.02 Government Submissions Involving Derivative Products The Supplier will
promptly notify the Buyer, via the method described in Section 24.01, if it has
provided information to a Government regarding goods of a comparable or
derivative nature to the Goods that the Supplier has supplied to the Buyer or a
Related Company, including information provided to the U.S. Government of the
type or kind described in Section 24.01. Upon the request of the Buyer, the
Supplier will provide the Buyer (and any Related Company specified by the Buyer)
with access to and copies of all materials in accordance with Section 24.01.
24.03 Contract Restrictions If the Supplier is restricted by contract, court
order or otherwise from disclosing the information to the Buyer, the Supplier
will promptly notify the Buyer in a Written Notice. The Buyer and the Supplier
will agree on the steps to be taken by the Supplier to obtain the requested
information.
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24.04 Substance and Materials Reporting and Compliance
(a) Upon the request of the Buyer or a Related Company of the Buyer, the
Supplier will provide it with access to and copies of any data, materials or
other information, including any formulas or analyses, that:
(1) Relates to the Goods, their composition, any component or part of the Goods,
or any materials or substances used in the Goods or in connection with their
production; and
(2) Is needed, as determined by the requestor, to enable compliance with any
requirement of a Government (either mandated or voluntarily agreed upon by the
Buyer or any of its Related Companies) relating to the hazardous, toxic or other
content or nature of the Goods, or the ability to recycle the Goods or any
component, part or materials in the Goods.
(b) The Supplier will comply with the Buyer’s requirements relating to the use
(or prohibition on use) of certain materials and substances in the Goods (such
as Ford’s Restricted Substance Management Standard (RSMS)), and utilize and
comply with the Buyer’s reporting processes and requirements relating to any
data, materials or other information described in Section 24.04(a) (such as the
International Material Data System (IMDS)). See the Environmental Web-Guide.
24.05 Confidentiality The Buyer’s obligations to treat information provided by
the Supplier under this Section 24 as confidential are described in Section 17;
however, the Buyer’s obligations will not apply to the extent required in order
for it or any of its Related Companies to comply with any reporting,
certification, or similar requirement of a Government (either mandated or
voluntarily agreed upon by the Buyer or any of its Related Companies).
SECTION 25. INDEMNIFICATION OBLIGATIONS OF THE SUPPLIER
25.01 Definitions For purposes of this Section 25, Indemnified Person includes
the Buyer, its Related Companies, and their directors, officers, and employees.
Litigation Costs includes all costs, damages, losses, claims and expenses
(including actual fees for attorneys, experts and consultants, settlement costs
and judgments) incurred in defending against a claim under Section 25.02.
25.02 Supplier’s Obligations – Intentionally stricken.
25.02 Supplier Indemnification
(a) The Supplier will indemnify and hold an Indemnified Person harmless against:
(i) all Litigation Costs occasioned by, resulting from, or arising out of any
claim by a third party for death, personal injury, or property damage which
results from: (A) any defect or alleged defect in the Goods supplied by the
Supplier, to the extent that such defects are attributable to the Supplier’s
design or unauthorized changes by the Supplier to Buyer’s design; (B) any
noncompliance or alleged noncompliance by the Supplier with any of its
representations, warranties or obligations under a Purchase Order.; or (C) any
negligence or fault or alleged negligence or fault of the Supplier in connection
with the design or manufacture by the Supplier of the Goods;
(ii) all third party claims of Intellectual Property Rights infringement with
respect to all Deliverables made by Supplier under this Agreement
(iii) any breach by Supplier of Section 17
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(b) In the event of any claims from third parties, Buyer will timely notify
Supplier of the claim and turn control of defense over to Supplier. Supplier
will have the right to consent to the entry of judgment with respect to, or
otherwise settle such claim. Buyer will cooperate and assist Supplier in the
defense or settlement of the claim as reasonably requested by Supplier and at
Supplier’s expense. However, Supplier will have no such obligation to the extent
that any claim is based upon (i) Buyer’s or its agents’ modification of or
addition to the Deliverables or combination of the Deliverables with any other
product that is not specified in this Agreement, or (ii) Buyer’s failure to
obtain any third party licenses as required hereunder, or (iii) unmodified
incorporation by Supplier of Buyer’s infringing design; or (iv) compliance by
Supplier with instructions, design documentation and/or specifications provided
by Buyer where a reasonable person would consider that such claim was
specifically, directly, and primarily attributable to such instructions, design
documentation and/or specifications. The exclusions from liability for Supplier
under this Section 25.02(b) shall not apply for claims that arise solely out of
Supplier’s implementation of Buyer’s instructions, design documentation and/or
specifications, where such instructions, design documentation or specifications
did not specify the mode, method and details of the implementation.
(c) If any Deliverable is held by a court or arbitration panel of competent
jurisdiction to infringe and the use of said Deliverable is enjoined, or if
Supplier believes that the Deliverable is likely to become the subject of a
claim of infringement or to be enjoined, Supplier will have the option, at its
expense, (i) to procure for Buyer the right to continue using the Deliverable,
or (ii) to replace the Deliverable with non-infringing software (or hardware as
the case may be), or (iii) to modify the Deliverable so it becomes
non-infringing. All such replacements and/or modifications shall provide Buyer
with not less than all of the pre-replacement and pre-modification functionality
and reliability.
25.03 Apportionment of Litigation Costs Upon the filing of any third-party claim
against an Indemnified Person that is subject to Section 25.02, the Supplier and
the Buyer will, in good faith, attempt to reach agreement concerning whether,
notwithstanding the provisions of Section 25.02, it is appropriate under the
circumstances of the particular case to apportion Litigation Costs between the
Supplier and the Buyer.
25.04 Factors to be Considered in Apportionment In determining whether and to
what extent Litigation Costs should be apportioned between the Supplier and the
Buyer under Section 25.03, all relevant factors should be considered, including
the relative strength of the claim, whether the claimant alleges solely that the
Indemnified Person is vicariously liable for the Supplier’s fault (or a defect
in the Goods for which the Supplier is primarily responsible), and whether any
independent fault alleged on the part of an Indemnified Person consists of a
mere failure to discover or guard against the Supplier’s negligence or an
alleged defect in the Goods. Absent an agreement on apportioning Litigation
Costs, the terms of Section 25.02 will apply.
25.05 Work Performed on Premises If the Supplier performs any work on an
whether on or off the Indemnified Person’s premises, the Supplier will indemnify
and hold the Indemnified Persons harmless from and against any liability,
claims, demands or expenses (including actual fees of attorneys and other
professionals) for damages to the property of or injuries (including death) to
Indemnified Persons, their employees or any other person arising from or in
connection with the Supplier’s performance of work or use of the Indemnified
Person’s property, except for such liability, claim, or demand arising out of
the sole negligence of an Indemnified Person.
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SECTION 26. TERMINATION FOR CAUSE
26.01 Supplier Breach The Buyer may terminate a Purchase Order, in whole or in
part, upon Written Notice to the Supplier if the Supplier fails to comply with
any of the requirements of the Purchase Order. If the noncompliance relates to
an obligation of the Supplier that is, in the opinion of the Buyer, capable of
cure as described in Section 26.02, the Buyer may terminate under this
Section 26.01 only if the Supplier has failed to either: (a) timely cure the
noncompliance (as described in Section 26.02); or (b) provide the Buyer with
adequate assurances of performance acceptable to the Buyer.
26.02 Cure Periods If the Supplier delivers Goods that fail to comply with the
requirements of Section 14.01, the cure provisions of Section 14.03 will apply.
For all other failures by the Supplier to comply with the requirements of the
Purchase Order, the Supplier will have 10 days (or less if commercially
reasonable under the circumstances) after the effective date (as described in
Section 44.02) of the Buyer’s Written Notice to the Supplier specifying the
failure by the Supplier within which to: (a) cure the nonperformance; or
(b) provide adequate assurances of performance acceptable to the Buyer.
26.03 Change of Control The Buyer may terminate a Purchase Order, in whole or in
part, upon Written Notice to the Supplier, if control of the Supplier changes
such that the entity gaining control: (1) is or is controlled by a competitor of
Buyer; or (2) is an entity that has materially breached a prior agreement with
Buyer or that has been documented by Buyer as having performed poorly under a
prior agreement with Buyer; (3) is already a supplier to Buyer with which Buyer
has an agreement; or (4) is a competitor of a Supplier with which Buyer has a
conflicting agreement. A change of control includes: (a) the sale, lease or
exchange of a substantial portion of the Supplier’s assets used for the
production of the Goods; (b) the sale or exchange of a controlling interest in
the shares of the Supplier; or (c) the execution of a voting or other agreement
of control. The Supplier will provide the Buyer with Written Notice of a change
of control within 10 days after the change of control has become effective. The
Buyer will have 60 days from the date the Written Notice from the Supplier is
effective (as described in Section 44.02) within which to notify the Supplier of
its decision to terminate the Purchase Order and the effective date of the
termination, which will be no sooner than 30 days after the date the Written
Notice of termination is effective (as described in Section 44.02).
26.04 Insolvency The Buyer may terminate a Purchase Order, in whole or in part,
upon Written Notice to the Supplier, if the Supplier: (a) becomes insolvent;
(b) files a voluntary petition in bankruptcy; (c) has an involuntary petition in
bankruptcy filed against it; (d) has a receiver, administrator, custodian or
trustee appointed over the Supplier or its assets; or (e) executes an assignment
for the benefit of its creditors. In each case, the Supplier is liable for all
actual costs incurred by the Buyer, including those for attorneys, experts,
consultants and other professionals.
26.05 Excusable Delay The Buyer may terminate a Purchase Order, in whole or in
part, upon written Notice to the Supplier, as described in Section 40.05.
26.06 Effective Date of Termination Termination under Section 26.01, 26.04, or
26.05 will be effective on the date the Buyer’s Written Notice of termination is
effective (as described in Section 44.02), unless the Written Notice specifies
another date. Termination under Section 26.03 will be effective on the date
specified in the Written Notice of termination.
26.07 Amounts Payable by Buyer upon Termination under Section 26.01 In the event
of a termination under Section 26.01, the Buyer will pay the Supplier, subject
to Section 11, for:
(a) Any unpaid Goods previously delivered and accepted that fully conform to the
requirements of the Purchase Order;
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(b) Any outstanding balance owed to the Supplier for Buyer-Owned Tooling that
fully conforms to the requirements of the Production Tool Order; and
(c) Any outstanding balance for time spent or actual costs, subject to the
limitation in Section 27.04, incurred for work-in-process and raw materials that
are transferred to Buyer in accordance with Section 31.01(c) if applicable.
26.08 Amounts Payable by Buyer upon Termination under Sections 26.03, 26.04, or
26.05 In the event of a termination under Sections 26.03, 26.04, or 26.05, the
Buyer will pay the Supplier, subject to Section 11, for:
fully conforms to the requirements of the Production Tool Order;
(c) Undelivered finished Goods that: (1) fully conform to the requirements of
the Purchase Order; (2) were produced in accordance with delivery or Release
schedules approved by the Buyer and outstanding as of the date the termination
was effective (as described in Section 26.06); and (3) are transferred to the
Buyer in accordance with Section 31.01(c);
(d) Actual costs incurred by the Supplier in protecting the Buyer’s property
pending delivery or return to the Buyer;
(e) Any other costs or allowances that the Buyer, in its sole discretion, may
elect to pay; and
(f) Any outstanding balance for time spent or actual costs, subject to the
26.09 Amounts Payable by the Supplier upon Termination under Section 26
Subject to the sublimit specified in Section 22.01, Supplier will be liable for
all direct, incidental and consequential losses, costs, and expenses incurred by
the Buyer resulting from any failure by the Supplier to comply with any of the
requirements of the Purchase Order (even if the Supplier has cured the
noncompliance under Section 26.02), or from termination by the Buyer under
Section 26.01 or 26.04, and termination under those sections does not relieve
the Supplier from this liability. Such liability is limited to a maximum of
thirty five million US dollars ($35,000,000)
26.10 Repeated Failures to Comply If the Buyer has determined, in accordance
with Section 26.11, that the Supplier has repeatedly failed to comply with the
requirements of Section 15.03, Section 34.17, Section 35.03, Section 36, or
Section 37.01 or 37.02, the Buyer may, to the extent not prohibited by law,
debit the Supplier for an amount not to exceed 15% of the aggregate price paid
under all of the outstanding Purchase Orders with the Supplier that gave rise to
the repeated failures.
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26.11 Good Faith Determination The Buyer will act in good faith in making its
determination under Section 26.10 and will take into account relevant
information provided by the Supplier. Any debit made under Section 26.10 is in
addition to any other remedy the Buyer may have for any failure by the Supplier
to comply with any of its obligations under the Purchase Order.
SECTION 27. OTHER TERMINATION
27.01 Termination
(a) The Buyer may terminate the Purchase Order, in whole or in part, at any time
and for any or no reason, upon Written Notice to the Supplier after providing at
least sixty (60) days prior written notice during the initial year of the
Agreement, and at least thirty (30) days in subsequent years, if any.
(b) The Supplier may terminate or stop work if: (a) Buyer fails to make payments
when due and fails to remedy such non-payment within 30 days of receipt of
written notice of such failure, during which time, Supplier will participate in
good faith in all dispute resolution and governance processes defined in the
SOW; or (b) if Supplier is unable to proceed with a material amount of the work
that is then required under a Statement of Work or Purchase Order for a period
of 30 days due to any material failure or delay on the part of Buyer.
27.02 Effective Date of Termination Termination under this Section 27 will be
effective on the date the Written Notice of termination is effective (as
described in Section 44.02), unless the Written Notice specifies another date,
provided, however, that in all cases Buyer must provide at least sixty (60) days
prior written notice for any termination by Buyer hereunder during the initial
year of the Agreement, and at least thirty (30) days in subsequent years, if
any.
27.03 Amounts Payable to the Supplier In the event of a termination under this
Section 27, the Buyer will pay the Supplier, subject to Section 11, for:
(a) Unpaid Goods previously delivered and accepted which fully conform to the
was effective (as described in Section 27.02); and (3) are transferred to the
(d) Actual costs, subject to the limitation in Section 27.04, incurred for
work-in-process and raw materials that: (1) are not damaged or destroyed;
(2) were not purchased by a third party with the Buyer’s prior authorization in
a Written Notice; (3) cannot be used by the Supplier to produce goods for itself
or other customers; and (4) are transferred to the Buyer in accordance with
Section 31.01(c);
(e) Actual costs incurred by the Supplier in protecting the Buyer’s property
pending delivery or return to the Buyer; and
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(f) Any other costs or allowances that the Buyer, in its sole discretion, may
elect to pay.
27.04 Limitation on Costs The Buyer will be liable for costs under
Section 27.03(d) only to the extent any work-in-process and raw materials were
acquired to complete quantities to be delivered in accordance with delivery or
Release schedules approved by the Buyer and outstanding as of the date the
termination was effective (as described in Section 27.02).
SECTION 28. CLAIMS
28.01 Process for Submitting Claims Any claim seeking a payment from the Buyer
as the result of termination under Section 26 or Section 27, non-renewal under
Section 8.03, or program cancellation under Section 29 must be submitted within
60 days after the effective date of termination, non-renewal, or program
cancellation. The claim must include sufficient supporting data to permit the
Buyer’s auditors to verify and substantiate the claim. The Buyer (and its
designated agents) have the right to examine and audit all pertinent items
related to the claim, including books, records, facilities, work-in-process, raw
materials and inventory. If necessary, the Supplier may request an extension of
the submission deadline, provided that it does so within the 60-day submission
period.
28.02 Payment Not a Waiver Any amount paid by the Buyer for the Goods will not
be deemed to be a waiver of any breach by the Supplier or any amount otherwise
due to the Buyer under the Purchase Order. Waiver by the Buyer of any breach by
the Supplier on one occasion will not preclude the Buyer from terminating the
Purchase Order for, or constitute a waiver of, any similar breach at another
time.
28.03 No Other Liability The Buyer has no liability to the Supplier or any
Related Company of the Supplier for lost profits, unabsorbed overhead, capital
investment, interest expense, product development and engineering costs,
facilities and equipment rental or purchase or rearrangement costs, unamortized
depreciation costs, penalties, or general or administrative charges, whether
incurred directly or indirectly by the Supplier, any of its Related Companies,
or their suppliers, except to the extent provided in Section 26 or Section 27.
SECTION 29. PROGRAM CANCELLATION
29.01 Program Cancellation The Buyer reserves the right to cancel a vehicle, or
vehicle-related (e.g., powertrain), program for which the Supplier has been
issued a Purchase Order to supply the Goods. The Buyer’s right to do so is in
addition to any other termination rights it may have under the Global Terms and
Conditions.
29.02 Process for Submitting Claims If, as the result of a cancellation under
Section 29.01, the Supplier believes it is entitled to reimbursement of any of
its costs, it may submit a claim to the Buyer in accordance with the process
specified in Section 28.01. Costs for which the Buyer may consider reimbursement
are those specified in Section 27.03.
SECTION 30. POTENTIAL ADJUSTMENT OF SUPPLIER FINANCIAL RESPONSIBILITY
30.01 No Obligation The Buyer has no obligation to compromise a claim or an
amount owed to the Buyer arising from a breach by the Supplier.
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30.02 Factors Considered The Buyer may elect to reduce the amount for which the
Supplier may otherwise be financially responsible. If the Buyer elects to do so,
it will take into account one or more of the following factors:
(a) The extent and timeliness of the cooperation of the Supplier, including the
early identification and resolution of any potential or actual nonconformity of
the Goods;
(b) The volume of business, tenor, value and length of the relationship with the
Supplier;
(c) The extent of the Supplier’s participation in Team Value Management (TVM)
initiatives, the Warranty Reduction Program, and other programs of the Buyer;
(d) The financial health of the Supplier; and
(e) Any other factor the Buyer believes to be relevant.
SECTION 31. SUPPLIER’S OBLIGATIONS ON EXPIRATION OR TERMINATION
31.01 Actions by Supplier Upon the expiration or termination of the Purchase
Order, the Supplier will:
(a) Take all actions necessary to protect any of the Buyer’s property in the
possession of the Supplier or its suppliers and subcontractors;
(b) Cooperate with the Buyer to help avoid production disruptions while the
production of the Goods is being resourced to another supplier;
(c) Transfer title and possession of the Goods, Supplier-Owned Tooling,
work-in-process and raw materials that the Buyer has agreed to acquire from the
Supplier and return Tooling and other property of the Buyer;
(d) Terminate all orders and subcontracts related to work to be performed after
the effective date of any expiration or termination; and
(e) Cease all work under the Purchase Order unless directed otherwise by the
Buyer.
SECTION 32. AUDIT RIGHTS AND FINANCIAL INFORMATION
32.01 Supplier Records and Facilities If requested by the Buyer, the Supplier
will permit the Buyer (which, for purposes of this Section 32.01, includes its
authorized representatives) to:
(a) Examine all pertinent documents, data and other information relating to the
Goods, Tooling, the Supplier’s obligations under the Purchase Order, any payment
made to the Supplier or any claim made by the Supplier;
(b) View any facility or process relating to the Goods or the Purchase Order,
including those relating to production quality; and
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(c) Audit any facility or process to determine compliance with the requirements
of the Purchase Order, including those under Section 12, Section 36, and
Section 37.
Any examination under this Section 32.01 will be conducted during normal
business hours and upon advance Written Notice to the Supplier.
32.02 Subcontractor Records and Facilities If requested by the Buyer, the
Supplier will use its best efforts to permit the Buyer to obtain from the
subcontractors of, and vendors, to the Supplier the information and permission
to conduct the reviews specified in Section 32.01, regardless of any other right
the Buyer may have to that information or facilities.
32.03 Supplier Financial Reports If requested by the Buyer, the Supplier will
provide to the Buyer’s Purchasing Controller’s Office the most current publicly
available Financial Reports: (a) for the Supplier; and, (b) for any Related
Company of the Supplier involved in producing, supplying, or financing the Goods
or any component part of the Goods. Financial Reports include income statements,
balance sheets, cash flow statements and supporting data. The Buyer’s Purchasing
Controller’s Office may use Financial Reports provided under this Section 32.03
only to assess the Supplier’s ongoing ability to perform its obligations under
the Purchase Order and for no other purpose, unless the Supplier agrees
otherwise in writing.
32.04 Time of Disclosure If the Supplier is a publicly traded company, the
Supplier will provide Financial Reports to the Buyer under Section 32.03 at the
time it is permitted to do so under applicable law and the rules of the
appropriate stock exchanges.
32.05 Confidentiality The Buyer’s obligations to treat information provided to
its Purchasing Controller’s Office under Section 32.03 as confidential are
described in Section 17.
32.06 Records Retention The Supplier will keep all relevant documents, data and
other written information for at least 2 years following: (a) in the case of the
Goods, the later of the last delivery of the Goods or the date of the final
payment to the Supplier under the Purchase Order; and (b) in the case of
Tooling, the later of the date of completion of the Production Part Approval
Process (PPAP), the date of submission of the Part Submission Warrant (PSW), or
the date of final payment. The Buyer may make copies of these materials.
SECTION 33. SERVICE PARTS – Intentionally stricken.
SECTION 34. TOOLING AND OTHER PROPERTY OF THE BUYER – Intentionally stricken.
SECTION 35. SUPPLIER-OWNED TOOLING – Intentionally stricken.
SECTION 36. COMPLIANCE WITH LAWS
36.01 General Obligations The Supplier will comply with all Government
Requirements that may apply to the design, production, sale, or distribution of
the Goods. A Government Requirement includes any law or requirement of a
Government, including those that apply to new motor vehicles in general or
specific components installed in them. These requirements include emissions
control, safety, hazardous materials, recycling, and end-of-life disposal. A
Government Requirement may include specific warranty periods or terms of
coverage, or a period of time during which the Buyer may
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be required to conduct a Field Service Action as defined in Section 23.02. The
term Government refers to an entity that claims a right to investigate or
regulate the Goods, the vehicles into which the Goods may be installed, the
Buyer, the Supplier, or any of their Related Companies. The term Government
includes the United States Environmental Protection Agency, the United States
National Highway Traffic Safety Administration, and the Commission of the
European Union.
36.02 Government Contractors The Supplier will comply with all applicable
Government Requirements for Government subcontractors, including, if the Buyer
is a U.S. company, the following requirements of U.S. law:
(a) Title 48, Code of Federal Regulations: Section 52-219-8, Utilization of
Small Business Concerns; Section 52.225-11, Restrictions on Certain Foreign
Purchases; Section 52.222-21, Prohibition of Segregated Facilities;
Section 52.222-26, Equal Opportunity; Section 52.222-35, Equal Opportunity for
Special Disabled Veterans, Veterans of the Vietnam Era and Other Eligible
Veterans; Section 52.222-36, Affirmative Action for Workers With Disabilities;
Section 52.222-37 Employment Reports on Special Disabled Veterans, Veterans of
the Vietnam Era, and Other Eligible Veterans; and Section 52.222-41, Service
Contract Act.
(b) Executive Order 13201, Notification of Employee Rights Concerning Payment of
Union Dues or Fees, at such time as it may come into effect.
SECTION 37. BASIC WORKING CONDITIONS AND EMPLOYMENT STATUS
37.01 Basic Working Conditions When the Supplier performs work on the Goods or
their component parts, the Supplier will not: (a) use forced labor, regardless
of its form; (b) employ any person below the age of 15, unless it is part of a
Government approved job training, apprenticeship or other program that would be
clearly beneficial to its participants; or (c) engage in physically abusive
disciplinary practices.
37.02 Subcontractors If the Supplier retains subcontractors to perform work on
the Goods or their component parts, the Supplier will use only subcontractors
that will adhere to the requirements of Section 37.01. The Supplier will monitor
the subcontractor’s compliance.
37.03 Adoption of Code The Buyer has adopted a Code of Basic Working Conditions
that includes the requirements of Section 37.01 and other work-place practices.
The Code applies to all of the Buyer’s operations. The Code can be found via the
Social Responsibility Web-Guide or by contacting the Buyer directly. The
Supplier is encouraged to adopt and enforce a similar code of practice and to
have its subcontractors do so.
37.04 Certification of Compliance The Supplier represents when it delivers the
Goods that it has complied with the requirements of Section 36, Section 37.01
and Section 37.02. The Buyer may retain an independent third party, or request
the Supplier to retain one reasonably acceptable to the Buyer, to: (a) audit the
Supplier’s compliance with the requirements of Section 37; and (b) provide the
Supplier and the Buyer with written certification of the Supplier’s compliance,
including areas for potential improvement.
37.05 Cost of Audit The Supplier will bear the cost of any third-party audit and
certification under Section 37.04, regardless of which party retained the
auditor. The Buyer, at its option, may accept an audit or certification by the
Supplier in lieu of a third-party certification.
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37.06 Temporary Assignment of Employees The temporary assignment of employees of
one party to the facilities operated by the other party will not affect the
status or change the employment relationship of the assigned employees.
SECTION 38. PROTECTION OF SUPPLY
38.01 Notice to the Buyer The Supplier will provide the Buyer with Written
Notice (a) at least 30 days in advance of the expiration of any labor contract
or (b) concerning any potential labor dispute involving the Supplier that could
affect the Buyer’s operations or the supply of the Goods under the Production
Purchase Order.
38.02 Plan to Avoid Disruption Upon the Buyer’s request, the Supplier will
provide the Buyer with its plan to avoid adversely affecting the Buyer’s
operations or to ensure that the Buyer’s requirements for the Goods will be met
without disruption for at least a 30-day period after the expiration of the
labor contract or the commencement of a labor dispute affecting the Supplier.
The Supplier will keep the Buyer informed of any changes to the plan, its
implementation and the Supplier’s efforts to resolve the labor dispute. The
Buyer’s obligations to treat information provided by the Supplier under this
Section 38.02 as confidential are described in Section 17.
SECTION 39. RESOLVING DISPUTES
39.01 Negotiation In the event of a dispute between the parties relating to the
Purchase Order, the one raising the matter in dispute will notify the other in a
Written Notice describing in sufficient detail the nature of the dispute. Each
party will then appoint one or more representatives to resolve the dispute.
These representatives will promptly meet and negotiate in good faith to reach a
fair and equitable settlement. At the end of 60 days, if no settlement has been
reached, either party may end discussions and declare an impasse.
39.02 Mediation If an impasse is declared under Section 39.01, the parties will
participate in non-binding mediation by a third-party mediator in good faith.
The parties will promptly agree on the mediator and the cost of the mediator
will be shared equally. The mediator has 90 days from the date of appointment to
help resolve the dispute.
39.03 Arbitration A party may request the other to participate in binding
arbitration following the declaration of an impasse under Section 39.01 or the
conclusion of mediation under Section 39.02. The request will be made in a
Written Notice provided within 30 days following the end of the applicable
resolution time period, and the other party must respond within 30 days after
receipt of the request. Neither party is required to participate in any
arbitration proceeding under this Section 39.03. If both agree to do so, they
will participate in good faith and in accordance with applicable requirements of
the Dispute Resolution Web-Guide.
39.04 Litigation If the dispute has not been resolved within 60 days after the
end of the mediation period specified in Section 39.02, litigation may be
initiated, unless the parties agree to arbitration under Section 39.03. In any
litigation, the parties agree that the litigation will be filed only in the
courts of the country in which the Buyer has its principal place of business,
regardless of where the Supplier may be located or the Goods may have been
designed, manufactured, sold or delivered, unless the applicable provisions of
the Dispute Resolution Web-Guide provide otherwise.
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39.05 Principal Place of Business in the U.S. If the principal place of business
of the Buyer is in the United States, each party will, in any litigation brought
under Section 39.04:
(a) Irrevocably submit to the exclusive jurisdiction of: (1) the United States
District Court for the Eastern District of Michigan, Southern Division in
Detroit, as to any claim or proceeding over which it may have jurisdiction; or,
(2) the Circuit Court for the County of Oakland, Michigan (6th Circuit –
Pontiac) as to all other claims or proceedings;
(b) Expressly waive any objection to venue or jurisdiction, including an
objection based on the inconvenience of the forum; and
(c) Not seek or accept any award of punitive, exemplary or multiple damages
other than a right to recover them under the indemnification provisions in
Section 25.
39.06 Principal Place of Business Outside the U.S. If the principal place of
business of the Buyer is outside of the United States, the applicable provisions
of the Dispute Resolution Web-Guide may require binding arbitration in place of
litigation, and will describe the jurisdiction and venue for any litigation. See
39.07 Governing Law The Purchase Order will be governed by the laws of the
Buyer’s principal place of business without regard to any conflict of laws
provisions that might otherwise apply. If the Buyer is located in the United
States, its principal place of business will be deemed to be the state of
Michigan. The United Nations Convention on Contracts for the International Sale
of Goods is expressly excluded.
39.08 Effect on Buyer’s Rights The dispute resolution processes specified in
Sections 39.01 through 39.04 are not preconditions to the exercise by the Buyer
of any of its rights or remedies under the Purchase Order or applicable law,
including its rights under Section 11 or Section 23. The Buyer’s exercise of its
rights will not, however, affect either party’s obligations to comply with the
requirements of this Section 39.
SECTION 40. EXCUSABLE DELAY
40.01 Excusable Events Neither the Buyer nor the Supplier will be liable for a
delay or failure to perform directly due to an Excusable Event. An Excusable
Event is a cause or event beyond the reasonable control of a party that is not
attributable to its fault or negligence. Excusable Events include fire, flood,
earthquake, and other extreme natural events, acts of God, riots, civil
disorders, labor problems (including strikes, lockouts, and slowdowns regardless
of their lawfulness), and war or acts of terrorism whether or not declared as
such by a Government. In every case, other than those relating to labor
problems, the failure to perform must be beyond the reasonable control, and not
attributable to the fault or negligence, of the party claiming the Excusable
Event. Excusable Events also include delays or nonperformance of a
subcontractor, agent or supplier of a party only if and only to the extent that
the cause or event would be an Excusable Event as defined in this Section 40.01.
Excusable Events do not include the failure to comply with applicable law or to
take actions reasonably necessary to schedule performance in anticipation of any
customs, export-import, or other Government Requirement of which public notice
has been given.
40.02 Notice of Excusable Event The party claiming an Excusable Event will
provide the other party with Written Notice of its occurrence and its
termination as soon as practicable.
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40.03 Work-In-Process In the event of an Excusable Event, the Buyer, at its
option, may acquire possession of all finished Goods, work-in-process, and raw
materials produced or acquired for the work under the Purchase Order.
40.04 Right to Substitute and Reduce Quantity The Buyer reserves the right to
acquire the Goods elsewhere for the duration of the Excusable Event and for a
reasonable time afterwards to minimize production disruptions until the
Supplier’s facilities are producing the Goods in the quantities required by the
Purchase Order or Releases and to reduce accordingly any quantity of Goods
ordered under an outstanding Release.
40.05 Right to Terminate The Buyer may terminate a Purchase Order, in whole or
in part, upon written Notice to the Supplier if an Excusable Event has occurred
resulting in a failure or delay to perform that has lasted for more than 3
consecutive months after the date the Written Notice from the party claiming an
Excusable Event is effective (as described in Section 44.02).
SECTION 41. WAIVER OF NONPERFORMANCE
41.01 Waiver of Nonperformance A waiver of nonperformance under the Purchase
Order must be in a Written Notice and will apply only to the specific instance
addressed in the waiver and to no other past or future nonperformance.
SECTION 42. ASSIGNMENTS
42.01 Assignment of Payment by the Supplier The Supplier may assign its right to
receive payment from the Buyer. The Supplier will provide the Buyer with
reasonable advance Written Notice of any such assignment. The Buyer will use
reasonable efforts to effect payment in accordance with the Supplier’s
assignment. The Buyer will have no liability to the Supplier or the party to
which the payment has been assigned if the Buyer sends payment to an incorrect
party following an assignment.
42.02 Indemnification The Supplier will defend, indemnify and hold the Buyer
harmless against any claim of non-payment by the assignee in the event the Buyer
made payment to the Supplier after receipt of an assignment notice. Any
assignment will not affect the validity or enforceability by the Buyer of any of
its rights against the Supplier.
42.03 Assignment by the Buyer The Buyer may assign any benefit or duty under the
Purchase Order upon Written Notice to the Supplier.
42.04 Assignment by the Supplier The Supplier may not assign or delegate any of
its obligations without obtaining the Buyer’s prior written consent. The
Supplier will continue to be liable to the Buyer for the performance of all of
its obligations following any assignment or delegation, including one for which
the Supplier has not obtained the consent of the Buyer as required by this
Section 42.04. Any consent to an assignment does not include consent to any
further assignment by the party to which the Supplier has made the assignment.
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SECTION 43. CONTINUING OBLIGATIONS; SEVERABILITY
43.01 Continuing Obligations The obligations of the Buyer and the Supplier under
the following Sections will survive the expiration, non-renewal or termination
of the Purchase Order: 11, 15, 16, 17, 19, 20, 21, 22, 23, 24, 25, 31, 32, 33,
34 and 39.
43.02 Severability Any term or condition that is declared unlawful or
unenforceable by a court of competent jurisdiction will not apply. The
unenforceability of any such term or condition will not affect the
enforceability of any other term or condition.
SECTION 44. WRITTEN NOTICES
44.01 Use of Written Notice A Written Notice is used by the Buyer to provide a
required notice or instructions to the Supplier, or to authorize an exception,
deviation or waiver of a pre-existing obligation or requirement under the
Purchase Order. A Written Notice is also used by the Supplier to provide any
notice to the Buyer that is required to be in writing. In the case of the Buyer,
any Written Notice is valid only if signed by a representative of the Buyer’s
purchasing activity. A Written Notice may be signed manually or electronically.
44.02 How Provided A Written Notice may be provided by: (a) first class mail;
(b) courier service; (c) fax; (d) standard e-mail; or (e) the Buyer’s electronic
system for communications with its suppliers. A Written Notice using method
(a) or (b) is effective as of the date of delivery, and using method (c), (d),
or (e) is effective as of the date of transmission.
SECTION 45. NO THIRD-PARTY RIGHTS
45.01 No Third-Party Rights Except as expressly provided in the Global Terms and
Conditions, no term, condition or right in or arising under any of the documents
or Web-Guides relating to the purchase of the Goods gives or creates any
third-party beneficiary rights or any other rights whether in law or equity to
any person or entity other than the Buyer, the Supplier and their Related
Companies.
SECTION 46. ADVERTISING, PUBLICITY AND NEWS RELEASES
46.01 Advertising All advertising and promotional materials related to the Buyer
or the Goods the Supplier sells to the Buyer must be approved in advance in
accordance with the Supplier Advertising Web-Guide.
46.02 News Releases All news releases and other forms of publicity related to
the Buyer or the Goods the Supplier sells to the Buyer must be approved in
advance in accordance with the Supplier News Release & Publicity Web-Guide.
SECTION 47. MISCELLANEOUS MATTERS
47.01 Convenience Only The Table of Contents, Index of Defined or Referenced
Terms, headings and captions are provided for convenience only and do not create
or affect any substantive rights. Examples are provided for illustrative
purposes only.
47.02 Construction No provision may be construed against the Buyer as the
drafting party. The term “including” means “including without limitation.” The
term “days” means calendar days. The term “document” means a document in paper
or electronic form.
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47.03 Controlling Language The English version of the Global Terms and
Conditions will apply in the event of any disagreement over any translation.
SECTION 48. LIMITATION OF LIABILITY
48.01 Except as otherwise stated herein in Section 25 – Indemnification
Obligations of The Supplier, Supplier’s total liability arising under this
Agreement shall be limited to a maximum of thirty five million dollars
Authorized Signatures
FORD MOTOR COMPANY
BSQUARE CORPORATION
Signature
Signature
Jason Rodriguez
Brian Crowley
Print Name
Print Name
Buyer – Global Purchasing
President & CEO
Title
Title
Date:
Date:
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EXHIBIT A
BSQUARE RETAINED WORKS & THIRD PARTY IP
Retained Works – The following are Retained Works of Bsquare pursuant to the
Agreement:
•
All “BSQUARE CODE” as that term is defined in the Adobe Flash Distribution
Agreement (the “Adobe Agreement”)
Third Party IP – The following are Third Party IP pursuant to the terms of the
Agreement.
•
All “Software” as that term is defined in and as licensed pursuant to the Flash
Distribution License Agreement signed by Buyer.
Unless subsequently agreed to in a written and signed amendment or superseding
agreement, defined terms referenced in this Exhibit included only the
definitions as they existed on the Effective Date of this Agreement.
Page 31
EXHIBIT A
Ford SYNC System Gen2 – Applications and System Integration
Statement of Work
Rev. 2.3
December 30, 2009
Submitted by:
BSQUARE Corporation
110 110th Avenue NE, Suite 200
Bellevue, WA 98004
(425) 519-5900 (Voice)
(425) 519-5999 (Fax)
To:
Ford Motor Company
20300 Rotunda Drive
BUILDING #5
Dearborn, MI 48124
Attn: ***
Telephone #: ***
Email: ***
Copyright Notice
©2002-2009 BSQUARE Corporation – Confidential Data
IMPORTANT: This document is intended only for the use of the individual or
entity to which it is addressed, and contains information that is confidential
and proprietary. If the reader of this document is not the intended recipient,
or the employee or agent responsible for delivering the document to the intended
recipient, you are hereby notified that any dissemination, distribution or
copying of this document is strictly prohibited. If you have received this
document in error, please notify the sender immediately and return the original
document. BSQUARE is a registered trademark of BSQUARE Corporation and other
marks are the property of the respective owners.
BSQUARE Confidential Page 1 of 31 Confidential treatment has been
requested for portions of this agreement. This agreement omits the information
subject to the confidential treatment request. Omissions are designated as ***.
A complete version of this agreement has been filed separately with the
Revision History
Revision
Date
By
Purpose
0.2 *** Darrell Wasill Draft revision 0.3 *** Darrell Wasill
Meeting feedback 0.4 *** Darrell Wasill Significant update to section V
0.5 *** Darrell Wasill Addition of QA activities 1.0 *** Darrell
Wasill Refinement of QA, *** 1.1 *** Darrell Wasill Incorporation of
comments from Ford cursory review 1.2 *** Darrell Wasill, Carey Butler
Add draft reference and legal disclaimer in preparation for Ford initial review.
Incorporate C. Butler redlines. 1.3 *** Darrell Wasill, Martin Hernandez
Incorporate QA update 1.4 *** Darrell Wasill Highlight changes from
estimate, update references from estimate, add QA assumptions. 1.5 ***
Darrell Wasill Incorporate Ford Feedback 1.6 *** Darrell Wasill
Incorporate final review remarks and comments 1.7 *** Dean Starr ***
1.8 *** Mounir Hider Revised by Ford to update acceptance criteria and
to include comments to bring SOW up to current project understanding 1.9 ***
Nicholas Hargreaves
•Updated IV – Project Activities to reflect current scope.
•Updated IX – Cost Estimate to reflect current scope.
•Updated C – Project Assumptions: ***
•Removed *** Exclusion.
2.0 *** Nicholas Hargreaves
•Incorporate agreed upon COS cost updates
2.1 *** Nicholas Hargreaves
•Incorporated *** Activities
•Moved *** Cost to Expense
2.2 *** Darrell Wasill, Nicholas Hargreaves
•***
•Milestone payment addition
•***
•Update of Costs and Expense
2.2b *** Darrell Wasill, Martin Hernandez
•Capture updated *** test development costs after spec receipt.
2.2c ***
Darrell Wasill,
Tim Harrington
*** 2.3 *** Darrell Wasill *** 2.3 *** Tim Harrington
Update Estimate Tables 2.3 *** Darrell Wasill
Incorporate Ford comments to Table 2
Fix heading number and Acceptance Criteria Cross References
2.3 *** Darrell Wasill Updated *** deliverables and timeline
BSQUARE Confidential Page 2 of 31 Confidential treatment has been
Reference Documents
The following documents were used in the creation of this SOW.
Document
Description
1 *** Ford’s Overview of functional requirements for the *** 2
***
***
BSQUARE’s Detailed Estimate and response to the bid *** 3 *** Ford
timeline of *** 4 *** Ford Engineering Specification *** 5 ***
Ford’s document describing the requirements for *** 6 *** BSQUARE SOW for
HW and BSP *** 7 Master Spec List *** Referenced Specification List
defining basis for SOW scope.
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I. Definitions
The following table lists terms used in this document.
Table 1. Definitions
Term
Description
BSQUARE BSQUARE Corporation, also referenced as ‘Company A’ and “System
Integrator’ COMPANY Ford Motor Company Acceptance Period The period set
forth in Section IX, Acceptance Process, Table 3, that COMPANY has to accept or
reject each deliverable made under this Statement of Work. Adapt BSQUARE will
adapt existing BSQUARE-owned software to the target hardware. Agreement The
SYNC Generation 2 Hardware Design and Systems Integration Services Global Terms
and Conditions entered into by the parties, to which this Exhibit A is
incorporated. BOM Bill of Materials BSP Board Support Package, the work
encompassing the software required to enable an Operating System on a hardware
platform. CE Microsoft Windows CE COS Change of Scope. Code Complete
Milestone at which all features from the specification have been implemented and
the Deliverable is ready for a complete QA test pass. CR Change request
Device For purposes of this Statement of Work, Device shall mean the ***
Develop BSQUARE will develop new software. FTE Full Time Equivalent
Functional Requirements Functional Requirements” means the specifications set
forth in Addendum A-3 to this SOW, including the referenced versions of each
document ID, ***. A deviation from the Functional Requirements shall mean, with
respect to a particular requirement, that it does not meet the acceptance
criteria and levels of quality as set forth in Section VIII of this Statement of
Work. HW Hardware Integrate BSQUARE will integrate existing software owned
by the COMPANY or a third-party. Modify BSQUARE will modify existing software
owned by the COMPANY or a third-party OS Operating System PCB Printed
Circuit Board PM Program Manager Project Software Middleware and user
facing applications. QA Quality Assurance *** *** *** *** *** ***
*** *** *** *** SOW Statement of Work SW Software SYNC Device ***
System Integrator *** VMCU *** Windows© OS ***
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II. Project Description
SYNC is a voice-activated hands-free, in-car communications and entertainment
system that integrates user’s mobile phone and digital media player into the
vehicle cabin. Ford and Microsoft worked closely to design and engineer Ford’s
SYNC ***, which is based on state-of-the art Microsoft Auto software. Ford
further developed and customized this technology to deliver in-car solutions
that help drivers conveniently and reliably enjoy digital entertainment and
communications while on the road. With the introduction of SYNC, Ford, Lincoln
and Mercury are proud to be the first and only automotive brands to market this
product in North America.
This Statement of Work (SOW) and related documentation describe a ***
III. Project Key Deliverables
A. Ford Deliverables
i. Detailed project requirements document jointly developed with BSQUARE.
ii. Ford *** Engineering Specification.
iii. ***
iv. ***
v. Software tools ***
vi. Direct access to Ford technical personnel for SYNC related technical
details.
vii. Any additional product related information required throughout the
duration of the project.
viii. *** Hardware platforms, BSP and supporting applications***
ix. Third Party Applications *** that are not the responsibility of the System
Integrator.
x. ***
xi. Applicable source code***
B. BSQUARE Deliverables
i. ***
ii. ***
v. ***
vi. ***
vii. ***
viii.
***1
ix. ***
xi. ***
xii. ***
xiii. ***
xiv. ***
xv. ***
xvi. ***
1
The *** deliverables are specifically excluded from this Statement of Work due
to specification changes. Completion and delivery of the *** related
deliverables will be added to this Statement of Work as a Change of Scope.
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IV. Project Timeline Overview
The dates provided in the following table are based on the Assumptions and
External Dependencies defined in Section VI, Assumptions and External
Dependencies of this Statement of Work and are subject to change in the event of
a Change of Scope event as described in Section VII.E, Change of Scope. ***
In the table below, BSQUARE will refer to the Bellevue office of BSQUARE, unless
otherwise noted. All FORD deliveries will be made to the BSQUARE office in
Bellevue, Washington unless otherwise noted. All BSQUARE deliverables will be
made to FORD in Dearborn, Michigan.
For details of the Deliverables in the table below, see Section V, Project
Activities and Deliverables.
Table 2. Estimated Deliverables Timelines
Responsible Party
Deliverables
Target Date
1 BSQUARE Project Start *** 2 BSQUARE, FORD
Interim Service Order Signed *** 3 BSQUARE, Ford
Requirements Capture Phase *** 4 BSQUARE *** *** 5 FORD ***
*** 6 BSQUARE *** *** 7 FORD *** *** 8 BSQUARE, FORD
Agreement Signed *** 9 BSQUARE *** *** 10 BSQUARE *** ***
11 BSQUARE *** *** 12 BSQUARE *** *** 13 BSQUARE ***
*** 13 BSQUARE *** *** 14 BSQUARE *** *** 15 BSQUARE ***
*** 16 BSQUARE *** *** 17 BSQUARE *** *** 18 BSQUARE
*** *** 19 BSQUARE *** *** 20 BSQUARE *** *** 21 BSQUARE
***
Figure 1. SYNC *** Timing ***
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V. Project Activities and Deliverables
Program management, engineering management, vendor management, build, and
configuration management occur throughout the project.
A. ***
i. Prerequisites required for ***
ii. FORD deliverables required for ***
FORD will be responsible for delivery of the following to BSQUARE per the
timeline in Section III, Project Timeline Overview.
6. ***
7. ***
iii. *** Activities
BSQUARE will perform the following activities in this phase of the project.
a. *** - BSQUARE will Develop new code
b. *** - BSQUARE will Develop new code
c. *** - BSQUARE will Develop new code
d. *** - BSQUARE will Develop new code
e. *** - BSQUARE will Develop new code
2. *** - BSQUARE will Develop new code
3. *** - BSQUARE will Develop new code
4. *** - BSQUARE will Develop new code
5. *** - BSQUARE will Develop new code
6. *** - BSQUARE will Develop new code.
7. *** - BSQUARE will Develop new code.
8. *** - BSQUARE will Develop new code
9. *** - BSQUARE will Develop new code ***
10. *** - BSQUARE will Develop new code
11. *** - BSQUARE will Integrate existing code
12. ***
c. *** - BSQUARE will Integrate existing code
f. *** - BSQUARE will Develop new code
g. *** - BSQUARE will Develop new code
13. Installation - BSQUARE will Integrate existing code
a. General ***
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b. *** (May require code development)
c. OS update
iv. BSQUARE Deliverables ***
1. Source code/resources for all applications ***
2. Docs/Specs for each component built by BSQR
B. SYNC Applications
i. Prerequisites required for SYNC Applications
ii. FORD deliverables required for SYNC Applications
8. ***
9. ***
10. ***
11. ***
13. ***
14. ***
15. ***
16. ***
17. ***
18. ***
19. ***
20. ***
21. ***
22. ***
iii. SYNC Applications Activities
1. *** - BSQUARE will Develop new code
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6. *** - BSQUARE will Develop new code
a. ***
b. ***
7.
*** - BSQUARE will Integrate 3rd Party software
9.
10. Settings - BSQUARE will Develop new code
11. *** - BSQUARE will Develop new code
12.
13. *** - BSQUARE will Develop new code
14. *** - BSQUARE will Develop new code
15. *** - BSQUARE will Develop new code
16. *** - BSQUARE will Develop new code
17. *** - BSQUARE will Develop new code
18. *** - BSQUARE will Develop new code
19. *** - BSQUARE will Develop new code
20. *** - BSQUARE will Develop new code
21. *** - BSQUARE will Develop new code
22. *** - BSQUARE will Develop new code
23. *** - BSQUARE will Develop new code
iv. BSQUARE Deliverables from SYNC Application Activities
C. *** Development
i. Prerequisites required ***
ii. FORD deliverables required ***
timeline in Section III, Project Overview.
1. *** specs
iii. ***Development Activities
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7. *** - BSQUARE will Develop new code
9. *** - BSQUARE will Develop new code
12. *** - BSQUARE will Develop new code
iv. BSQUARE Deliverables from *** Development
1. Specifications/Developer Guidelines***
D. ***
3. *** - BSQUARE will Develop new code.
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BSQUARE Deliverables from ***
E. ***
***
***
***
***
F. ***
G. Quality Assurance
i. Prerequisites required for Quality Assurance Activities
ii. FORD deliverables required for Quality Assurance Activities
iii. Quality Assurance Activities
BSQUARE Confidential Page 11 of 31 Confidential treatment has been
c. ***
d. ***
e. ***
f. ***
g. ***
h. ***
j. ***
k. ***
l. ***
m. ***
n. ***
o. ***
p. ***
q. ***
r. ***
s. ***
t. ***
u. ***
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7. General System Testing
a. *** Testing
b. *** Testing
8. *** testing
a. *** testing
iv. BSQUARE Deliverables from Quality Assurance Activities
H. Project Documentation
i. Prerequisites required for Project Documentation
1. *** document
2. High level Project timeline and schedule for completion
ii. FORD deliverables required for Project Documentation
timeline in Section V, Timeline Overview.
2. Access to and support from project personnel in defining specifications of
the system
iii. Project Documentation Activities
iv. BSQUARE Deliverables from Project Documentation
1. Final documents in Ford format
I. Build
i. Prerequisites required for Build Activities
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ii. FORD deliverables required for Build Activities
iii. Build Activities
iv. BSQUARE Deliverables from Build Activities
J. ***
VI. Assumptions and External Dependencies
In preparing the fee quote and planning the project schedule and Deliverables,
BSQUARE is dependent upon schedules and deliverables that are beyond the control
of BSQUARE. The assumptions and dependencies upon which the quote and schedule
are based are documented here and include Project Delays, Specification Changes,
Project Assumptions and Project Exclusions.
A. Project Delays
The fee quoted to FORD for performance of the work under this Statement of Work
assumes that all deliverables provided by FORD or any third-party contracted by
FORD, including hardware, software, design documentation, and any written
instructions, will be delivered to BSQUARE per the schedule in Section IV,
Project Timeline Overview and will be complete, accurate, and fully functional.
Work performed by BSQUARE that is affected by late, incomplete, inaccurate, or
non-functional FORD deliverables as described in Section V, Project Activities
and Deliverables may result in a day-for-day slip in the project schedule and/or
may be subject to a Change of Scope (“COS”), as defined in Subsection E of this
section.
If delays as described heretofore do occur, BSQUARE will make reasonable efforts
to reassign the project team members to other areas of the project in order to
keep the project on schedule. If BSQUARE is unable to do so, there will be a
day-for-day slip in the project schedule and the provisions of Subsection E,
Change of Scope, of this section shall apply.
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B. Specification Changes
Any changes or additions, including changes to the hardware and system
requirements or to the Deliverables described in Section V, Project Activities
and Deliverables shall be evaluated by BSQUARE on a case-by-case basis, and may
be determined to be outside of the scope of this Statement of Work. In such case
the provisions of Subsection E, Change of Scope, of this section shall apply.
C. Project Assumptions
assumes that all of the following Assumptions will either occur or will be
accurate, as stated below:
i. General Assumptions
1. The project price does not include any ***
4. This estimate is based upon All 3rd party dependencies will be delivered in
a timely matter in order for BSQUARE to complete the applications on schedule.
These include documentation and defect remediation necessary to complete the
applications.
5. All final 3rd party software deliverables have been tested and are of
production quality. BSQUARE will provide issue identification and triage to
appropriate 3rd party during initial integration milestones.
6. The travel estimate is a level of support anticipated on the project and is
quoted at rates assuming a reasonable booking lead time. BSQUARE will make all
reasonable efforts to minimize travel costs but market conditions, time and
duration of travel may dramatically affect flight costs.
ii. Hardware-Specific Assumptions
1. None.
iii. Software-Specific Assumptions
2. Applications
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5. QA
If project assumptions either do not occur or prove to be inaccurate the
D. Project Exclusions
assumes that all of the following Exclusions will apply:
viii. ***
xvii. ***
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E. Change of Scope
The occurrence of any of the following events which results in a change (that
BSQUARE deems, in its sole discretion, to be a significant change) in the work
as described in this Statement of Work will result in a COS:
If any of the above occurs, BSQUARE will provide to FORD a COS form (attached as
Addendum A-1) that will detail the following:
1. Additions and/or reductions in the scope of work
2. Net change in the fees charged for the work.
3. Net change in the schedule of BSQUARE Deliverables
FORD shall have *** from its receipt of the COS in which to provide its written
acceptance of the proposed COS. If FORD does not accept the proposed COS within
*** from the receipt of the COS, BSQUARE will continue the work as defined in
this Statement of Work. ***
F. Rules of the Road & Third Party Dependencies.
In the course of negotiating the Agreement and this SOW, Ford and BSQUARE
reached agreement on certain “rules of the road” that would apply to this
project, which are attached as Addendum A-4 to this SOW, and incorporated herein
by this reference.
VII. Third-Party Product Licenses
The following third-party product licenses are required for the work under this
Statement of Work:
***
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B. ***
***
VIII. Communication
During the project, BSQUARE will provide FORD with regular status reports.
Phone meetings will be scheduled. During this meeting, BSQUARE and FORD will
discuss the status of the projects and current issues.
IX. Acceptance Process
The following Acceptance Period, Acceptance Criteria, and Software Levels of
Quality apply to the BSQUARE deliverables as described in Section V, Project
Activities and Deliverables of this Statement of Work.
A. Acceptance Period
***
***
***
B. Acceptance Criteria and Levels of Quality
Table 3 describes the acceptance criteria and quality level for each of the
deliverables listed in Section V, Project Activities and Deliverables.
Table 3. Acceptance Criteria and Levels of Quality
ID
BSQUARE Deliverable
Section Acceptance
Criteria Acceptance
Period Levels of
Quality Acceptance
Period
Following
Remediation
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
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ID
BSQUARE Deliverable
Section Acceptance
Criteria Acceptance
Period Levels of
Quality Acceptance
Period
Following
Remediation
16
17
18
Criteria; however, if there are defects attributable to FORD or a third party,
BSQUARE will work to remediate the defect provided such additional work is
covered by a change of scope. If BSQUARE receives no notification by the end of
the Acceptance Period or the Remediation Acceptance Period as outlined in Table
3 above, FORD shall be deemed to have accepted the BSQUARE deliverable as of the
date of the last day of the Acceptance Period or Remediation Acceptance Period
for the BSQUARE deliverable.
***
Ford has the right to prioritize issues as they see fit throughout the course of
the project. Issues shall be closed in the order prioritized until the allowed
number of issues is reached or project time expires. All deviations from
prioritized issues resolution order shall be approved by Ford.
C. Software Levels of Quality
BSQUARE supports several levels of software quality. ***
***
D. Severity Levels of Defects
Severity describes the impact that the defect has on the acceptance of the final
product:
•
***
•
***
•
***
•
***
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•
***
•
***
•
***
•
***
•
***
•
***
•
***
E. Third-Party Software and Hardware
***
***
***
X. Costs
***
***
Notes:
1) BSQUARE/Ford negotiated concession amount. *** The email agreement did not
allocate the concession between the two projects. This concession amount
represents a simple prorated allocation of the concession amount between the two
projects based on the project as a percentage of the combined projects. No other
agreement is intended or implied by this prorated allocation.
2) On *** BSQUARE and Ford agreed to certain changes of scope as outlined in
the Project Costs table above and in the Materials/Services table below. ***
3) As part of the above referenced Bsquare/Ford concessions, the parties
agreed that there are no claims for delay of the project for work that has been
performed by Bsquare up through the date the Agreement and these SOW’s are
finalized.
***
***
Ford will pay BSQUARE an additional $*** upon successful completion of each of
the following 3 milestones described in Project Timeline to the SOW, totaling an
additional $*** of payments. (i.e. each successful completion will result in
Ford paying BSQUARE $***).
(1) Test Pass 1 – ***
(2) Test Pass 2 – ***
(3) Test Pass 3 – ***
***
The parties expressly agree that the timing and cost of the overall project may
change depending on the occurrence of various conditions included but not
limited to those described in Section VI, Assumptions and External Dependencies.
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Addendum A-1
Change of Scope
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LOGO [g26230ex10_19b.jpg]
Change of Scope
BSQUARE Corporation
110 110th Ave. NE, Suite 200, Bellevue, WA 98004-5840
Project Code
Customer
Project Name
COS #
Date
Change Request Information – Completed by Preparer or Requestor
Preparer:
Requestor (if different): Request Type: ¨ Customer Request ¨
Internal Request ¨ Other (Describe): Request Priority: ¨ Optional
¨ Desirable ¨ Mandatory
COS Short Name:
Related COS #s:
COS Description:
Estimate for COS – Completed by BSQUARE Program Manager
Estimator:
Est Start Date for COS:
Est Complete Date:
Est Hours for COS:
Est Cost Impact ($):
Est Schedule Impact (days):
New Project Total ($):
Impact on Deliverables:
Agreement Name:
Agreement Amendments:
Customer Disposition – Completed by Customer Program Manager or Sponsor
Approval (Check One): ¨ Approve ¨ Disapprove ¨ Defer Until:
Name (Print):
Signature: Date:
Final Signatures – Completed by BSQUARE
BSQUARE Program Manager (Print):
Signature: Date:
BSQUARE Vice President (Print):
Signature: Date:
BSQUARE Authorized Officer (Print):
Signature: Date: Note: Customer agrees that this change request is an
addendum to the existing Agreement with BSQUARE, and all terms and conditions
are still in effect in accordance with this change. BSQUARE agrees to the
changes reflected in this COS document subject to its assumption that the
individual who signs this COS on behalf of the customer has the authority to
bind the customer to the terms of this COS.
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LOGO [g26230ex10_19pg.jpg]
Acceptance / Rejection Certificate
Client:
Project Name: Agreement:
Preparer:
Date Submitted:
Section 1: To be Completed by Preparer or Requestor
Deliverable Name:
Date Delivered:
Deliverable Description (Reference section in Statement of Work as appropriate):
BSQUARE Assessment of Compliance with Acceptance Criteria:
Outstanding Action Items Remaining:
Section 2: Client Assessment of Non-Compliance with Acceptance Criteria:
Use this section to describe non-compliance with Acceptance Criteria:
Section 3: Client Acceptance or Rejection of Deliverable ¨ Accept Deliverable
¨ Reject Deliverable Section 4: Signatures BSQUARE believes the referenced
Deliverable / Milestone has been completed in accordance with the Acceptance
Criteria agreed between BSQUARE and FORD. If this document is not returned to
the BSQUARE Project Manager within #5 working days with signature or comments,
the deliverable will be considered accepted. Once accepted, by signature or by
default, future changes to this deliverable must be requested through a formal
Change of Scope Request.
Client Name (Print):
Signature: Date:
Signature: Date:
Signature: Date:
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ADDENDUM A-3
Extracted from: Master Spec List v2.32.xls
The specifications provided in this Addendum are included for scope
clarification. In the event of a discrepancy between a written specification in
this Addendum and any term or specification in the SOW, this Addendum A-3 shall
take precedence.
ID
Specification
Name
Version
***
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ADDENDUM A-4
Ford and BSQUARE have agreed to the following Rules of the Road.
1. Version 2.3 of this Statement of Work represents the agreed upon requirements
and scope of work to be performed by BSQUARE under this project. The total
project cost for the work performed under this SOW shall not exceed $***, which
is the total cost from table 4 of Section X above, unless otherwise provided for
as a result of items 1.a) through 1.c) or e) below in this Addendum A-4. This
total project cost amount does not include materials/services (aka rebillables)
which are above the total project cost amount and both parties agree that the
rebillable amounts, currently estimated at $***, are not fixed. For clarity, the
parties understand that the Ford Resident Staff amounts in the total project
cost in Table 4 are being invoiced as rebillables.
a) If Ford requests a change of scope beyond that agreed upon in SOW v2.3,
Ford is responsible for the additional cost.
b) If Ford misses, or is late with, a deliverable, or the deliverable is not
of sufficient quality, and any of these conditions cause BSQUARE to expend extra
effort, Ford is responsible for the additional cost.
c)
If a 3rd party misses, or is late with, a deliverable, or the deliverable is not
effort, Ford will be responsible for the extra cost to BSQUARE. BSQUARE will
assist Ford in identifying the root cause such that Ford may pursue the 3rd
party for the overruns
d) If BSQUARE asks for a change of scope due to a BSQUARE error or omission,
Ford will not be responsible for any increase in BSQUARE hours.
e) In the event the root cause for the error or omission identified in 1.d)
above, is the result of an error or omission by any party other than BSQUARE
(i.e. Ford’s or a third party’s), BSQUARE will be reimbursed for all hours
expended or engaged to remedy the issue or discover the root cause.
2. BSQUARE will be responsible for increases in project hours assumed in SOW
v2.3 that are not due to the items identified in sections 1.a) through 1.c) or
1.e) above (i.e. if BSQUARE misestimated a task in SOW v2.3 that ends up taking
longer than anticipated and the overrun wasn’t caused by Ford or a third-party,
BSQUARE will not bill Ford for the additional hours incurred).
3. If a scope change is identified resulting from Items 1.a) through 1.c) and
Item 1.e), regardless of whether BSQUARE has previously performed work, the
parties will enter into a Change of Scope (COS) to identify the tasks involved
in the COS. Unless otherwise agreed to by the parties, COS shall be invoiced by
BSQUARE on a fixed price basis. Each individual COS shall contain a separate
line item for materials/rebillables and one for labor costs. If the COS is
approved by Ford, Buyer will issue a P.O.
Ford and BSQUARE also agree that the table below includes, to the best of both
parties’ knowledge, all of the remaining Ford and third party deliverables and
other dependencies relevant to BSQUARE’s work hereunder, as of the date of this
SOW. This schedule does not include items already delivered to BSQUARE as of the
date of this SOW, nor does it include any additional items that may be required
as a result of a Change of Scope. BSQUARE shall not be responsible for any
delays, costs, or damages associated with any deviations or failures by Ford
and/or a third party to meet the requirements of the table below. If BSQUARE
causes any delay resulting in increased costs, BSQUARE’s responsibility for such
costs shall be in accordance with the terms of the Agreement.
Vendor
Description of the Deliverable
BSQUARE
Gated
Deliverable?
Final Delivery
Date Expected
from Vendor to Bsquare
Required Quality
Comment as of ***
*** *** No *** *** *** *** No *** *** ***
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***
Ford and BSQUARE have also agreed that as of the date of this SOW, there are no
claims pending against BSQUARE for any delays of the project for work that has
been performed by Bsquare up through the date the Agreement and these SOW’s are
finalized.
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EXHIBIT A
Ford SYNC System Gen2 – Hardware and BSP
Statement of Work
Rev. 2.3
December 30, 2009
Submitted by:
BSQUARE Corporation
Bellevue, WA 98004
To:
Ford Motor Company
20300 Rotunda Drive
BUILDING #5
Dearborn, MI 48124
Copyright Notice
Revision History
Revision
Date
By
Purpose
0.1 *** Frank Pereira Initial Revision 0.2 *** Frank Pereira
Add reviewer comments 0.3 *** Darrell Wasill Formatting updates 0.5
*** Frank Pereira Change structure. 0.6 *** Frank Pereira *** 0.7
*** Frank Pereira Detail changes. 1.0 *** Frank Pereira Review
input. 1.1 *** Darrell Wasill Consistency edits 1.2 *** Darrell
Wasill Incorporation of comments from Ford cursory review 1.3 ***
Darrell Wasill, Carey Butler Add draft reference and legal disclaimer in
preparation for Ford initial review. Cost table update. Incorporate C. Butler
redlines. 1.4 *** Darrell Wasill, Martin Hernandez Incorporate QA
updates 1.5 *** Darrell Wasill Incorporate Ford Feedback 1.6 ***
Darrell Wasill Incorporated review remarks and comments 1.7 *** Dean
Starr *** 1.8 *** Mounir Hider Revised by Ford to include needed
update comments and revised acceptance criteria. 1.9 *** Wayne Waldroup,
Frank Pereira, Darrell Wasill Added activities, scope, and cost estimates to
bring SOW up to current understanding. 2.0 *** Darrell Wasill
Incorporate agreed upon COS cost updates 2.1 *** Darrell Wasill
Incorporate redline feedback 2.2 *** Darrell Wasill, Frank Pereira
Updated scope and costs to current program forecasts. 2.2b *** Darrell
Wasill, Tim Harrington *** 2.3 *** Darrell Wasill *** 2.3 ***
Tim Harrington Update Estimate Tables 2.3 *** Darrell Wasill
Fix heading number and Acceptance Criteria Cross Reference
2.3 *** Darrell Wasill Updated timeline
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Reference Documents
Document
Description
1 *** Ford’s Overview of functional requirements for the *** 2 ***
Ford’s document describing the requirements for *** 6 Master Spec List ***
Referenced Specification List defining basis for SOW scope.
I. Definitions
Table 1. Definitions
Term
Description
Integrator” COMPANY Ford Motor Company Acceptance Period The period set
platform. CE Microsoft Windows CE CM Contract Manufacturer COS Change
of Scope. Code Complete Milestone at which all features from the
specification have been implemented and the Deliverable is ready for a complete
QA test pass. CR Change request Device For purposes of this Statement of
Work, Device shall mean the *** Develop BSQUARE will develop new software.
FTE Full Time Equivalent Functional Requirements “Functional Requirements”
means the specifications set forth in Addendum A-3 to this SOW, including the
referenced versions of each document ID, ***. A deviation from the Functional
Requirements shall mean, with respect to a particular requirement, that it does
not meet the acceptance criteria and levels of quality as set forth in Section
VIII of this Statement of Work. HW Hardware ICT In Circuit Test Integrate
BSQUARE will integrate existing software owned by the COMPANY or a
third-party. Modify BSQUARE will modify existing software owned by the
COMPANY or a third-party OS Operating System PCB Printed Circuit Board PM
Program Manager Project Software Middleware and user facing applications.
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SOW Statement of Work SW Software SYNC Device *** System Integrator
II. Project Description
A. Ford Deliverables
iii. Software tools such as ***
iv. Direct access to Ford technical personnel for SYNC related technical
details.
v. Any additional product related information required throughout the duration
of the project.
vi. Applicable source code ***
vii. *** Specifications and reference documentation
x. Windows *** operating system (OS) configuration ***
B. BSQUARE Deliverables
i. *** Hardware Prototypes ***
ii. *** Hardware Prototypes ***
iii. *** Hardware Prototypes
iv. *** Hardware Prototypes
vi. PCB Design Files ***
vii. PCB Production Files ***
viii. *** Housing Design ***
ix. *** Housing Prototypes ***
x. *** Housing Design
xi. *** Housing Prototypes
xii. *** Bezel Design
xiii. *** Bezel Prototypes
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xvi. Source Code ***
xviii. End of Line (EOL) Test Stand Design
xix. EOL Test Stand ***
xx. EOL test image ***
xxi. Design Validation (DV) Test Stand Design
xxii. DV Test Stand (Hardware and Software)
xxiii. Ford Lab Test Stand Design
xxiv. Ford Lab Test Stand (Hardware and Software)
xxv. *** Test Stand Design
xxvi. *** Test Stand (Hardware and Software)
xxvii. Bezel Test Stand Design
xxviii. Bezel Test Stand (Hardware and Software)
xxix. ***
a Change of Scope event as described in VI.E, Change of Scope. ***
otherwise noted. All Ford deliveries will be made to the BSQUARE office in
Activities and Deliverables.
Table 2. Deliverables Timelines
Responsible Party
Deliverables
Target Date
1
BSQUARE Project Start ***
2
BSQUARE, FORD Interim Service Order Signed ***
3
BSQUARE, Ford Requirements Capture Phase ***
4
BSQUARE *** ***
5
FORD *** ***
6
7
8
BSQUARE, FORD Agreement Signed ***
9
10
11
12
13
14
15
16
17
18
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19 BSQUARE *** *** 20 BSQUARE *** *** 21 BSQUARE ***
*** 22 BSQUARE *** *** 23 BSQUARE *** *** 24 BSQUARE ***
*** 25 BSQUARE *** *** 26 BSQUARE *** *** 27 BSQUARE
*** *** 28 BSQUARE *** *** 29 BSQUARE *** *** 30
BSQUARE/Flex *** *** 31 BSQUARE *** *** 32 BSQUARE ***
*** 33 BSQUARE *** *** 34 BSQUARE *** *** 35 BSQUARE ***
*** 36 BSQUARE *** *** 37 BSQUARE *** *** 38 BSQUARE
*** *** 39 BSQUARE *** *** 40 BSQUARE *** *** 41 BSQUARE
*** *** 42 BSQUARE *** ***
***
A. Hardware Development
i. Prerequisites/ FORD deliverables required for ***
ii. Hardware Development Activities
iii. BSQUARE Deliverables from Hardware Development
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B. Software (BSP) Design
i. Prerequisites/ FORD deliverables required for Software (BSP) Design
ii. Software Development Activities
iii. BSQUARE Deliverables from Software Development
C. Design for Manufacturing
i. Prerequisites/ FORD deliverables required for Design for Manufacturing
(DFM)
ii. DFM Development Activities
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iii. BSQUARE Deliverables from DFM
D. Prototyping
i. Prerequisites/ FORD deliverables required for Prototyping
1. None
ii. Prototyping Activities
iii. BSQUARE Deliverables from Prototyping
E. Testing / Quality Assurance
i. Prerequisites/ FORD deliverables required for Testing / QA
1. Test & programming collateral *** for reference
ii. Testing / Quality Assurance Activities
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iii. BSQUARE Deliverables from Testing / QA
F. Production Support
i. Prerequisites/ FORD deliverables required for Production Support
1. None
ii. Production Support Activities
iii. BSQUARE Deliverables from Production Support
A. Project Delays
section.
B. Specification Changes
Reference Ford *** Engineering Specification.
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C. Project Assumptions
i. General Assumptions
iv. QA-Specific Assumptions
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v. DV 2 assumptions
vi. PV Assumptions:
vii. EMC Assumptions:
D. Project Exclusions
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F. Rules of the Road & Third Party Dependencies. In the course of negotiating
the Agreement and this SOW, Ford and BSQUARE reached agreement on certain “rules
of the road” that would apply to this project, which are attached as Addendum
A-4 to this SOW, and incorporated herein by this reference,
VII. Third-Party Product Licenses/IP
Statement of Work:
***
***
VIII. Communication
IX. Acceptance Process
A. Acceptance Period
***
***
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***
ID
BSQUARE
Deliverable
Phase Section Acceptance
Criteria Acceptance
Period Levels
of
Quality Acceptance
Period
Following
Remediation
1
3
4
5
6
7
8
9
10
***
number of issues is reached and project time expires. All deviations from
***
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product:
•
***
•
***
•
***
•
***
•
***
•
***
•
***
•
***
•
***
•
***
•
***
***
X. Costs
***
***
Notes:
1) BSQUARE/Ford negotiated concession amount. ***. The email agreement did not
the Project Costs table and the Materials/Services table above. ***
finalized.
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***
***
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Addendum A-1
LOGO [g26230ex10_19pg59.jpg]
Change of Scope
BSQUARE Corporation
Project Code
Customer
Project Name
COS #
Date
Change Request Information – Completed by Preparer or Requestor Preparer:
Requestor (if different): Request Type: ¨ Customer Request ¨ Internal
Request ¨ Other (Describe): Request Priority: ¨ Optional ¨
Desirable ¨ Mandatory COS Short Name: Related COS #s: COS
Description: Estimate for COS – Completed by BSQUARE Program Manager
Estimator: Est Start Date for COS: Est Complete Date: Est
Hours for COS: Est Cost Impact ($): Est Schedule Impact (days):
New Project Total ($): Impact on Deliverables: Agreement Name:
Agreement Amendments:
Signature: Date:
Final Signatures – Completed by BSQUARE BSQUARE Program Manager (Print):
Signature: Date: BSQUARE Vice President (Print): Signature: Date:
BSQUARE Authorized Officer (Print): Signature: Date: Note: Customer agrees
that this change request is an addendum to the existing Agreement with BSQUARE,
and all terms and conditions are still in effect in accordance with this change.
BSQUARE agrees to the changes reflected in this COS document subject to its
assumption that the individual who signs this COS on behalf of the customer has
the authority to bind the customer to the terms of this COS.
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Addendum A-2
LOGO [g26230ex10_19pg60.jpg]
Acceptance / Rejection Certificate
Client:
Preparer:
Date Submitted:
Deliverable Name:
Date Delivered:
Signature: Date:
Signature: Date:
Signature: Date:
ADDENDUM A-3
take precedence.
ID
Specification
Name
Version
***
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ADDENDUM A-4
parties understand that the EOL Text Fixture amounts in the total project cost
in Table 4 are being invoiced as rebillables.
c)
party for the overruns
Vendor
Description of the Deliverable
BSQUARE
Gated
Deliverable?
Final Delivery
Date Expected
from Vendor to
Bsquare
Required Quality
*** No *** ***
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*
***
finalized.
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Report of Independent Registered Public Accounting Firm To the Board of Trustees and Shareholders of John Hancock Investment Trust: In planning and performing our audits of the financial statements of John Hancock Investment Trust (the “Funds”) as of and for the year ended October 31, 2011, in accordance with the standards of the Public Company Accounting Oversight Board (United States), we considered the Funds' internal control over financial reporting, including controls over safeguarding securities, as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements and to comply with the requirements of Form N-SAR, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Funds' internal control over financial reporting. The management of the Funds is responsible for establishing and maintaining effective internal control over financial reporting. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. A fund’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A fund's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the fund; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the fund are being made only in accordance with authorizations of management and trustees of the fund; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of a fund’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Funds' annual or interim financial statements will not be prevented or detected on a timely basis. Our consideration of the Funds' internal control over financial reporting was for the limited purpose described in the first paragraph and would not necessarily disclose all deficiencies in internal control over financial reporting that might be material weaknesses under standards established by the Public Company Accounting Oversight Board (United States). However, we noted no deficiencies in the Funds' internal control over financial reporting and their operation, including controls over safeguarding securities that we consider to be material weaknesses as defined above as of October 31, 2011. This report is intended solely for the information and use of management and the Board of Trustees of John Hancock Investment Trust and the Securities and Exchange Commission and is not intended to be and should not be used by anyone other than these specified parties. December
|
EXECUTION VERSION
THIRD LOAN AND SECURITY AGREEMENT
THIS THIRD LOAN AND SECURITY AGREEMENT (this “Agreement”), dated as of March 2,
2011 (the “Effective Date”) is entered into by and between (i) deltathree, Inc.,
a Delaware corporation, Delta Three Israel, Ltd., an Israeli company (the
“Israeli Subsidiary”), (ii) DME Solutions, Inc., a New York corporation (jointly
and severally, the “Borrower”), and (iii) D4 Holdings, LLC, a Delaware limited
liability company (“Lender ”).
RECITALS
WHEREAS, Lender is a shareholder of deltathree, Inc.;
WHEREAS, Borrower has entered into (i) that certain Loan and Security Agreement
dated as of March 1, 2010, among Borrower and Lender (the “First Loan
Agreement”) for advances from the Lender in an aggregate principal amount not to
exceed $1,200,000; and (ii) that certain Second Loan and Security Agreement
dated as of August 10, 2010 (the “Second Loan Agreement”) for advances from the
Lender in an aggregate principal amount not to exceed $1,000,000 (the First Loan
Agreement and the Second Loan Agreement are referred to collectively as the
“Existing Loan Agreements ”);
WHEREAS, Borrower has requested that Lender make advances to Borrower under this
Agreement from time to time in an aggregate principal amount thereof not to
exceed one million six hundred thousand dollars ($1,600,000) (the “Maximum
Principal Amount”); and
WHEREAS, Lender is willing to make such advances to Borrower on the terms and
subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and covenants contained herein,
which are hereby acknowledged, Borrower and Lender, intending to be legally
bound, hereby agree as follows:
1. Loans and Convertible Promissory Note.
(a) Commitment to Lend. Subject to the terms and conditions set forth
in this Agreement, Lender hereby agrees to make advances to Borrower (each a
“Loan Advance” and collectively, the “Loan Advances”) from time to time, during
the period beginning on the date hereof and ending on March 2, 2014 (the “Draw
Period”), in an amount up to, but not to exceed, the Maximum Principal Amount in
the aggregate, for the purposes stated herein only. During the Draw Period,
subject to the terms and conditions of this Agreement, Borrower may borrow, in
increments of no less than $100,000, amounts up to the Maximum Principal Amount
at any time and from time to time; provided however, that the Lender shall not
be required to make more than $400,000 in Loan Advances hereunder to Borrower
during any thirty day period.
(b) Convertible Promissory Note. The Loan Advances made by Lender
hereunder shall be evidenced by the duly executed Convertible Promissory Note of
Borrower to Lender, dated as of the date hereof in an original principal amount
up to the Maximum Principal Amount and in the form attached hereto as Exhibit A
(as amended, modified, extended, renewed or replaced from time to time, the
“Note”).
(c) Repayments. Borrower shall pay in full any outstanding principal
amount, all accrued but unpaid interest, and all other Obligations on the
Maturity Date. Outstanding principal amounts may not be prepaid (in whole or in
part) unless Borrower notifies Lender in writing no less than 90 days prior to
any such prepayment, and prepayment may be made only to the extent the Lender
has not elected to exercise its right to convert outstanding principal into
shares of the Borrower’s common stock as set forth in the Note.
(d) Payment of Interest.
(i) Subject to Section 7(b)(ii), the principal amount outstanding
under each Loan Advance shall accrue interest from the date of issuance of such
Loan Advance until the Maturity Date at the rate of twelve percent (12%) per
annum, compounding daily. The initial payment of interest shall be due on the
first calendar day of the month following the first Loan Advance under this
Agreement, and payment of accrued interest shall be due on the first calendar
day of each month thereafter.
(ii) Interest will be computed on the basis of a year deemed to consist
of 360 days and shall be paid for the actual number of days elapsed.
(e) Subordination of Payments. No repayment of principal under this
Agreement or the Note issued hereunder shall be made by the Borrower unless and
until all Obligations under the Existing Loan Agreements shall have been
indefeasibly paid in full. The foregoing shall in no way limit the right of the
stock as set forth in the Note.
2. Creation of a Security Interest; Subordination.
(a) Grant of Security Interest.
(i) Borrower hereby grants to Lender, to secure the payment and
performance in full of all of the Obligations, a continuing security interest
in, and pledges to Lender, all of Borrower’s right, title and interest in, to
and under all the Collateral, wherever located, whether now owned or hereafter
acquired or arising, and all proceeds and products thereof. Borrower
represents, warrants, and covenants that the security interest granted herein is
and shall at all times be a first priority perfected security interest in the
Collateral other than with respect to Permitted Liens. If Borrower shall
acquire a commercial tort claim, Borrower shall promptly notify Lender in
writing of the general details thereof and grant to Lender a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance reasonably satisfactory to Lender.
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(ii) If this Agreement is terminated, Lender’s security interest in the
Collateral shall continue until the Obligations are repaid in full. Upon
payment in full of the Obligations and at such time as Lender’s obligation to
make Loan Advances has terminated, Lender shall, at Borrower’s sole cost and
expense, release its security interest in the Collateral and all rights therein
shall revert to Borrower.
(b) Authorization to File Financing Statements. Borrower hereby
(including, without limitation, collateral agreements and filings with the
United States Patent and Trademark Office), without notice to Borrower, with all
appropriate jurisdictions to perfect or protect Lender’s interest or rights
hereunder. Such financing statements may indicate the Collateral as “all assets
of the Debtor” or words of similar effect, or as being of an equal or lesser
scope, or with greater detail, all in Lender’s discretion, and may include a
notice that any disposition of the Collateral, either by Borrower or any other
person, shall be deemed to violate the rights of Lender under the Code.
(c) Subordination. Notwithstanding anything contained herein to the
contrary, and notwithstanding the date, manner or order of grant, attachment or
perfection of any lien or security interest created hereunder or any other Loan
Document, the Liens created hereby and by the other Loan Documents, and payment
of the Obligations hereunder and under the Note, are each subordinated to the
security interests and liens granted under the Existing Loan Agreements.
3. Conditions of Loans.
(a) Conditions Precedent to Loan Advances. Lender’s obligation to
make each Loan Advance is subject to satisfaction of the following conditions:
(i) The Borrower shall have received the Maximum Initial Loan Amounts
(as defined under each of the Existing Loan Agreements) from Lender under each
of the Existing Loan Agreements;
(ii) Receipt of an executed Notice of Borrowing (as defined below);
(iii) The representations and warranties in Section 4 shall be true in
all material respects on the date of each Notice of Borrowing and each Loan Date
(as defined below);
(iv) No Event of Default shall have occurred and be continuing or result
from such Loan Advance;
(v) There shall not have occurred, in Lender’s sole discretion, any
Material Adverse Change; and
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(vi) Borrower shall have maintained compliance with the following
financial measures, which shall be measured quarterly as of the end of each
fiscal quarter (commencing with the quarter ended December 31, 2010):
(A) Minimum Revenue. Borrower’s revenues shall be no less than 90% of
the amounts set forth in the Financial Projections for the relevant quarter.
(B) Minimum EBITDA. If the projected EBITDA in the Financial
Projections for the relevant quarter is a positive number, Borrower’s EBITDA for
such quarter shall be no less than 80% of the amounts set forth in the Financial
Projections. If the projected EBITDA in the Financial Projections for the
relevant quarter is a negative number (loss), Borrower’s EBITDA (loss) for such
quarter shall be no more than 120% of the amounts set forth in the Financial
Projections.
(b) Procedure for Borrowing. Subject to the prior satisfaction of the
conditions set forth in Section 3(a), to obtain a Loan Advance, Borrower shall
give written notice to Lender in the form attached as Exhibit B (a “Notice of
Borrowing”) not later than the tenth (10th) Business Day prior to the date of
the proposed Loan Advance (a “Loan Date”). Each Notice of Borrowing shall be in
writing and shall specify (a) the Loan Date, (b) the account of Borrower to be
funded and the wire instructions applicable thereto, (c) the purpose for which
such Loan Advance shall be used; and (d) the amount of such proposed Loan
Advance. Each Loan Advance shall be in an amount of at least $100,000. Lender
shall not be required to make more than $400,000 in Loan Advances under this
Agreement during any thirty day period. Following Lender’s receipt of a Notice
of Borrowing and satisfaction of the conditions set forth in Section 3(a),
Lender shall deliver the applicable Loan Advance to Borrower on the Loan Date by
wire transfer of immediately available funds to the account specified by
Borrower.
4. Representations and Warranties of Borrower. Each Borrower hereby
represents and warrants to Lender as of the date hereof as follows:
(a) Binding Agreement. The Loan Documents constitute or will
constitute, when issued and delivered, valid and binding obligations of
Borrower, enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors’ rights in general, and general principles of equity.
(b) Organization; Power; Authorization. Each Borrower is a Registered
Organization duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized. Each Borrower has all
requisite power and authority (corporate and otherwise) to execute, deliver and
perform the Loan Documents and to consummate the transactions contemplated
thereby. The execution, delivery and performance by Borrower of the Loan
Documents and the consummation of the transactions contemplated thereby have
been duly authorized by all necessary action on the part of Borrower.
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(c) Non-Contravention. Neither the execution and the delivery of the
Loan Documents, nor the consummation of the transactions contemplated hereby,
will (a) violate any injunction, judgment, order, decree, ruling, charge or any
provision of Borrower’s charter documents, or, to Borrower’s knowledge, any
restriction of any government, governmental agency, or court to which Borrower
is subject, or (b) conflict with, result in a material breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, any material agreement, contract,
lease, license, instrument, or other arrangement to which Borrower is a party or
by which it is bound or to which any of its assets are subject.
(d) Collateral.
(i) Borrower has good title to, has rights in, and the power to
transfer each item of the Collateral upon which it purports to grant a Lien
hereunder, free and clear of any and all Liens except (A) Permitted Liens and
(B) the Lien created under the Existing Loan Agreements. The security interests
and Liens granted to Lender under this Agreement and the other Loan Documents to
which Borrower is a party constitute valid and perfected first priority liens
and security interests in and upon the Collateral to which Borrower now has or
hereafter acquires rights other than with respect to Permitted Liens. Borrower
has no deposit accounts other than the deposit accounts described in Exhibit C,
or of which Borrower has given Lender notice and taken such actions as are
necessary to give Lender a perfected security interest therein. The Accounts are
bona fide, existing obligations of the Account Debtors. No obligations remain
outstanding under the letter of credit secured by the Lien described in Section
9(p)(iii) hereof.
(ii) The Collateral is not in the possession of any third party bailee
(such as a warehouse). None of the components of the Collateral shall be
maintained at locations other than (A) the primary business address of Borrower,
(B) collocation sites at which Borrower leases space and (C) storage facilities
utilized by Borrower, in the case of (B) and (C) at such locations as have been
previously disclosed to Lender. In the event that Borrower, after the date
hereof, intends to store or otherwise deliver any portion of the Collateral to a
bailee, then Borrower will first receive the written consent of Lender and such
bailee must execute and deliver a bailee agreement in form and substance
satisfactory to Lender in its sole discretion.
(iii) All Inventory is in all material respects of good and marketable
quality, free from material defects.
(iv) Borrower is the sole owner of its intellectual property, except for
non-exclusive licenses granted to its customers in the ordinary course of
business. Borrower’s intellectual property does not include any patents, nor
does Borrower have any patents pending or any applications for patents on file.
No part of the intellectual property has been judged invalid or unenforceable,
in whole or in part, and to the best of Borrower’s knowledge and except as
previously disclosed to Lender, no claim has been made that any part of the
intellectual property violates the rights of any third party.
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(v) Borrower is not a party to, nor is bound by, any material license or
other agreement with respect to which Borrower is the licensee (A) that
prohibits or otherwise restricts Borrower from granting a security interest in
Borrower’s interest in such license or agreement or any other property, or (B)
for which a default under or termination of could interfere with Lender’s right
to sell any Collateral. Borrower shall provide written notice to Lender within
ten (10) days of entering or becoming bound by any such license or agreement
which is reasonably likely (in Borrower’s reasonable determination) to have a
material impact on Borrower’s business or financial condition (other than
over-the-counter software that is commercially available to the public).
Borrower shall take such steps as Lender requests to obtain the consent of, or
waiver by, any Person whose consent or waiver is necessary for (Y) all such
licenses or agreements to be deemed “Collateral” and for Lender to have a
security interest in it that might otherwise be restricted or prohibited by law
or by the terms of any such license or agreement, whether now existing or
entered into in the future, and (Z) Lender to have the ability in the event of a
liquidation of any Collateral to dispose of such Collateral in accordance with
Lender’s rights and remedies under this Agreement and the other Loan Documents.
(e) Good Faith and Arm’s Length Transaction. The loan contemplated by
this Agreement is being made on a good faith, arms length basis on what the
Borrower reasonably believes to be the best available market terms, Borrower
reasonably believes in good faith that the terms and conditions of the Loan
Documents are substantially equivalent to and at least as favorable in the
aggregate as those Borrower would be able to receive from an unaffiliated
lender. After having reviewed its financial position and forecast, the Borrower
reasonably believes that it will be in a position to repay all Loan Advances
according to the terms of this Agreement.
(f) Tax Returns and Payments. Except as previously disclosed to
Lender, and in no event in excess of $50,000 in the aggregate unpaid, Borrower
has filed, or caused to be filed, in a timely manner all material tax returns,
reports and declarations which are required to be filed by it (without requests
for extension except as previously disclosed in writing to Lender). All
information in tax returns, reports and declarations filed by Borrower is
complete and accurate in all material respects. Except as previously disclosed
to Lender, and in no event in excess of $50,000 in the aggregate unpaid,
Borrower has paid or caused to be paid prior to delinquency all taxes due and
payable or claimed due and payable in any assessment received by it, except
taxes the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to Borrower and with respect to
which adequate reserves have been set aside on its books. Adequate provision
has been made by Borrower for the payment of all accrued and unpaid federal,
state, county, local, foreign and other taxes whether or not yet due and payable
and whether or not disputed.
6
5. Covenants.
(a) Affirmative Covenants.
(i) Maintenance of Properties. Borrower shall maintain all tangible
property included in the Collateral in good order and repair, subject to normal
wear and tear, and make all needed and proper repairs to its properties so that
Borrower’s business may be properly conducted at all times in accordance with
prudent business management and in compliance with all governmental requirements
and regulations;
(ii) Government Compliance. Borrower shall maintain its legal
existence and good standing in its jurisdiction of formation and maintain
qualification in each jurisdiction in which the failure to so qualify would
reasonably be expected to have a material adverse effect on Borrower’s business
or operations. Borrower shall comply with all laws, ordinances and regulations
to which it is subject, the noncompliance with which could reasonably be
expected to cause, or causes, a Material Adverse Change;
(iii) Intellectual Property Rights. Borrower shall: (a) take reasonable
steps to protect, defend and maintain the validity and enforceability of its
intellectual property, (b) promptly advise Lender in writing of material
infringements of its intellectual property; and (c) not allow any intellectual
property material to Borrower’s business to be abandoned, forfeited or dedicated
to the public without Lender’s written consent. If after the date hereof
Borrower (i) obtains any patent, registered trademark or service mark,
registered copyright, registered mask work, or any pending application for any
of the foregoing, whether as owner, licensee or otherwise, or (ii) applies for
any patent or the registration of any trademark or service mark, then Borrower
shall provide written notice thereof to Lender on a quarterly basis and shall
execute such intellectual property security agreements and other documents and
take such other actions as Lender shall request in its good faith business
judgment to perfect and maintain a first priority perfected security interest in
favor of Lender in such property. If Borrower registers any copyrights or mask
works in the United States Copyright Office, Borrower shall: (x) provide Lender
with at least fifteen (15) days prior written notice of Borrower’s registration
of such copyrights; (y) execute an intellectual property security agreement and
such other documents and take such other actions as Lender may reasonably
request in its good faith business judgment to perfect and maintain a first
priority perfected security interest in favor of Lender in the copyrights or
mask works intended to be registered with the United States Copyright Office;
and (z) record such intellectual property security agreement with the United
States Copyright Office contemporaneously with filing the copyright or mask work
application(s) with the United States Copyright Office. Borrower shall promptly
provide to Lender copies of all applications that it files for patents or for
the registration of trademarks, service marks, copyrights or mask works,
together with evidence of the recording of the intellectual property security
agreement necessary for Lender to perfect and maintain a first priority
perfected security interest in such property;
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(iv) Use of Proceeds. Borrower shall use the proceeds of the Loan
Advances solely as working capital and to fund its general business requirements
and not for personal, family, household or agricultural purposes;
(v) Insurance. Borrower shall, at all times, maintain with (in its
reasonable determination) financially sound and reputable insurers insurance
with respect to the Collateral against loss or damage and all other insurance of
the kinds and in the amounts customarily insured against or carried by
corporations of established reputation engaged in the same or similar businesses
and similarly situated;
(vi) Further Assurances. Borrower shall execute any further instruments
and take further action as Lender reasonably requests to perfect or continue
Lender’s security interest in the Collateral or to otherwise effect the purposes
of this Agreement.
(b) Negative Covenants. Borrower shall not, without Lender’s prior
written consent:
(i) Dispositions. Convey, sell, lease, transfer, assign or otherwise
dispose of (collectively, “Transfer”), or permit any of its subsidiaries to
Transfer, all or any part of its business or property, except for Transfers (a)
of Inventory in the ordinary course of business; (b) of worn-out or obsolete
Equipment; (c) of non-exclusive licenses for the use of the property of Borrower
or its subsidiaries in the ordinary course of business;
(ii) Mergers; Acquisitions; Liquidations. Merge or consolidate, or
permit any of its subsidiaries to merge or consolidate, with any other Person;
acquire, or permit any of its subsidiaries to acquire, all or substantially all
of the capital stock or property of another Person; or liquidate, wind-up or
dissolve (or suffer any liquidation, winding up or dissolution), terminate or
discontinue its business. A subsidiary may merge or consolidate into another
subsidiary or into Borrower; provided that, in the case of a merger of a
subsidiary into Borrower, Borrower shall remain the surviving entity;
(iii) Indebtedness. Borrow money or engage in any debt or other
financing transaction for borrowed money, except under this Agreement or the
Existing Loan Agreements and except for trade payables incurred in the ordinary
course of Borrower’s business individually in an amount of up to $25,000
individually or up to $100,000 in the aggregate;
8
(iv) Encumbrances. Create, incur, allow, or suffer any Lien on any
Collateral, or assign or convey any right to receive income or permit any of
Borrower’s subsidiaries to do so, or permit any Collateral not to be subject to
the first priority security interest granted herein, in each case other than
with respect to Permitted Liens; provided however, that Borrower shall not,
directly or indirectly, (A) take any action to accelerate or increase the
obligations secured by any Permitted Lien, or (B) draw on or otherwise utilize
(or authorize any other person to take any such action) the letter of credit
underlying the Lien described in Section 9(p)(iii) hereof;
(v) Loans. Make any loan to any Person except receivable, prepaid items
or deposits incurred in the ordinary course of business; or
(vi) Capital Expenditures. Make nor agree to make any material capital
expenditures.
6. Representations and Warranties of Lender.
(a) Binding Agreement. This Agreement constitutes or will constitute,
when issued and delivered, a valid and binding obligation of Lender, enforceable
in accordance with its terms, subject to bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors’ rights in general, and
general principles of equity.
(b) Organization; Power; Authorization. Lender is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware. Lender has full limited liability company power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Lender of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary limited liability company
action.
provision of Lender’s charter documents, or, to Lender’s knowledge, any
restriction of any government, governmental agency, or court to which Lender is
lease, license, instrument, or other arrangement to which Lender is a party or
7. Events of Default; Remedies Upon Default.
(a) Events of Default. The occurrence of any of the following events
shall constitute an event of default (each, an “Event of Default”) hereunder:
(i) Borrower fails to pay timely any of the principal and/or any
accrued interest or other amounts due under the Loan Documents, or under any
other loan agreement or promissory note among Borrower and Lender, when the same
becomes due and payable;
9
(ii) Borrower (A) files any petition or action for relief under any
bankruptcy, reorganization, insolvency or moratorium law, or any other law for
the relief of, or relating to, debtors, now or hereafter in effect; (B) applies
for or consents to the appointment of a custodian, receiver, trustee,
sequestrator, conservator or similar official for Borrower or for a substantial
part of Borrower’s assets; (C) makes a general assignment for the benefit of
creditors; (D) becomes unable to, or admits in writing its inability to, pay its
debts generally as they come due; or (E) takes any corporate action in
furtherance of any of the foregoing;
(iii) An involuntary petition is filed against Borrower (unless such
petition is dismissed or discharged within sixty (60) days) under any bankruptcy
statute now or hereafter in effect, or a custodian, receiver, trustee,
sequestrator, conservator, assignee for the benefit of creditors (or other
similar official) is appointed to take possession, custody or control of any
property of Borrower;
(iv) One or more judgments for the payment of money in an amount,
individually or in the aggregate, that could reasonably be expected to have a
material adverse effect on Borrower’s business or operations (not covered by
independent third-party insurance as to which liability has been accepted by
such insurance carrier) are entered by a court of competent jurisdiction against
Borrower which judgment remains undischarged, unsatisfied, unvacated or unstayed
for a period of ten (10) days after such judgment becomes final and
non-appealable (and Lender shall not be required to make any Loan Advances prior
to the satisfaction, vacation or stay of such judgment, order or decree);
(v) A default or breach occurs under any agreement between Borrower and
any creditor of Borrower that signed a subordination, intercreditor, or other
similar agreement with Lender, or any creditor that has signed such an agreement
with Lender breaches any terms of such agreement;
(vi) Any representation, warranty or other statement made by Borrower in
the Loan Documents, or any other agreement or other document delivered in
connection with any of the Loan Documents, shall prove to have been false or
misleading in any material respect when made;
(vii) Borrower violates any covenant set forth in Section 5 hereof;
(viii) After the date hereof, Borrower grants any Person, other than
Lender, any Lien or other encumbrance on all or any substantial part of its
assets other than (A) with respect to Permitted Liens or (B) with respect to any
Lien or other encumbrance that is junior in priority to the Lien created by
Section 2 hereof;
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(ix) There is a default in any agreement to which any Borrower is a
party with a third party or parties resulting in a right by such third party or
parties, whether or not exercised, to accelerate the maturity of any
indebtedness in an amount that could, in Lender’s sole discretion, reasonably be
expected to result in a Material Adverse Change; provided, however, that the
Event of Default under this Section 7(a)(ix) caused by the occurrence of a
default under such other agreement shall be cured or waived for purposes of this
Agreement upon Lender receiving written notice from the party asserting such
default of such cure or waiver of the default under such other agreement, if at
the time of such cure or waiver under such other agreement (a) Lender has not
declared an Event of Default under this Agreement and/or exercised any rights
with respect thereto; (b) any such cure or waiver does not result in an Event of
Default under any other provision of this Agreement or any Loan Document; and
(c) in connection with any such cure or waiver under such other agreement, the
terms of any agreement with such third party are not modified or amended in any
manner which could in the good faith judgment of Lender be materially less
advantageous to Borrower; or
(x) any Loan Document, at any time after its execution and delivery and
for any reason or the indefeasible satisfaction in full, in cash, of all the
Obligations, ceases to be in full force and effect; or any Borrower contests in
any manner the validity or enforceability of any Loan Document; or any Borrower
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document.
(b) Remedies Upon Default.
(i) Upon the occurrence of an Event of Default hereunder:
(A) all unpaid principal, accrued interest and other amounts owing
hereunder shall, at the option of Lender, be immediately due and payable by
Borrower (but if an Event of Default described in Section 7(a)(ii) or (iii)
occurs, all Obligations are immediately due and payable without any action by
Lender);
(B) Lender may terminate its commitment to make additional Loan
Advances;
(C) Lender shall have the right to exercise all the remedies of a
secured party under the Code, including without limitation the right to require
Borrower to assemble the Collateral and to make it available to Lender at a
place designated by Lender. Borrower will pay any reasonable expenses (including
reasonable attorneys’ fees) incurred by Lender in connection with the exercise
of any of Lender’s rights hereunder, including without limitation any expense
incurred in disposing of the Collateral; and
(D) Lender may proceed to protect and enforce its right by suit in the
specific performance of any covenant or agreement contained in the Loan
Documents or in aid of the exercise of any power granted in the Loan Documents
or may proceed to enforce the payment of the Loan Documents or to enforce any
other legal or equitable rights as Lender may have, including exercising any
right or remedies available to Lender under the Loan Documents and under the
Code (including disposal of the Collateral pursuant to the terms thereof).
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(ii) Any and all amounts (including principal, unpaid interest and all
reasonable costs and expenses of collection, including reasonable attorneys’
fees) outstanding hereunder after an Event of Default shall bear interest from
the date due until paid at the rate of eighteen percent (18%) per annum.
(iii) Upon the occurrence of an Event of Default, and upon the filing of
a suit or other commencement of judicial proceedings to enforce the rights of
Lender under this Agreement, Lender shall be entitled, as a matter of right, to
the appointment of a receiver or receivers of the Borrower and of the revenues,
issues, payments and profits thereof, pending such proceedings, with such powers
as the court making such appointment shall confer.
(iv) If an Event of Default occurs, in addition to any other right under
this Agreement, Lender shall have the right to require, in writing, the Borrower
to hire either an independent management consultant with sufficient expertise in
and knowledge of the business of the Borrower, or new management, and shall have
the right to consent, in writing, to the independent management consultant,
management personnel and/or company that the Borrower recommends as consultant
or replacement management, as applicable.
(c) Power of Attorney. Borrower hereby irrevocably appoints Lender as
its lawful attorney-in-fact, exercisable upon the occurrence and during the
continuance of an Event of Default, to: (a) endorse Borrower’s name on any
checks or other forms of payment or security; (b) sign Borrower’s name on any
invoice or bill of lading for any Account or drafts against Account Debtors; (c)
settle and adjust disputes and claims about the Accounts directly with Account
Debtors, for amounts and on terms Lender determines reasonable; (d) make,
settle, and adjust all claims under Borrower’s insurance policies; (e) pay,
contest or settle any Lien (except for Permitted Liens), charge, encumbrance,
security interest, and adverse claim in or to the Collateral, or any judgment
based thereon, or otherwise take any action to terminate or discharge the same;
and (f) transfer the Collateral into the name of Lender or a third party as the
Code permits. Borrower hereby appoints Lender as its lawful attorney-in-fact to
sign Borrower’s name on any documents necessary to perfect or continue the
perfection of Lender’s security interest in the Collateral regardless of whether
an Event of Default has occurred until all Obligations have been satisfied in
full and Lender is under no further obligation to make Loan Advances hereunder.
Lender’s foregoing appointment as Borrower’s attorney-in-fact, and all of
Lender’s rights and powers, coupled with an interest, are irrevocable until all
Obligations have been fully repaid and performed and Lender’s obligation to
provide Loan Advances terminates.
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(d) Application of Payments and Proceeds. If an Event of Default has
occurred and is continuing, Borrower shall have no right to specify the order or
the accounts to which Lender shall allocate or apply any payments required to be
made by Borrower to Lender or otherwise received by Lender under this Agreement
when any such allocation or application is not specified elsewhere in this
Agreement. If an Event of Default has occurred and is continuing, Lender may
apply any funds in its possession, whether from Borrower account balances,
payments, proceeds realized as the result of any collection of Accounts or other
disposition of the Collateral, or otherwise, to the Obligations in such order as
Lender shall determine in its sole discretion. If Lender, in its good faith
business judgment, directly or indirectly enters into a deferred payment or
other credit transaction with any purchaser at any sale of Collateral, Lender
shall have the option, exercisable at any time, of either reducing the
Obligations by the principal amount of the purchase price or deferring the
reduction of the Obligations until the actual receipt by Lender of cash
therefor.
(e) Lender’s Liability for the Collateral. So long as Lender complies
with reasonable practices regarding the safekeeping of the Collateral in the
possession or under the control of Lender customary for Persons in possession or
having control of items similar to the Collateral, Lender shall not be liable or
responsible for: (i) any loss or damage to the Collateral; (ii) any diminution
in the value of the Collateral; or (iii) any act or default of any carrier,
warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage
or destruction of the Collateral.
8. Other Provisions.
(a) Demand Waiver; Representations and Expenses. Borrower waives
presentment, notice of dishonor, protest and notice of protest of this Agreement
and the Note and all other notices or demands in connection with the delivery,
acceptance, performance, default or endorsement of the Loan Documents, and shall
pay reasonable out-of-pocket costs and expenses of collection when incurred by
Lender, including, without limitation, reasonable attorneys’ fees and expenses.
(b) Waivers; Remedies Cumulative. Either party’s failure, at any time
or times, to require strict performance by the other party of any provision of
this Agreement or any other Loan Document shall not waive, affect, or diminish
any right of such party thereafter to demand strict performance and compliance
herewith or therewith. Any waiver is only effective for the specific instance
and purpose for which it is given. Lender’s rights and remedies under this
Agreement and the other Loan Documents are cumulative. Lender has all rights
and remedies provided under the Code, by law, or in equity. Lender’s exercise
of one right or remedy is not an election, and Lender’s waiver of any Event of
Default is not a continuing waiver. Any delay in exercising any remedy by a
party is not a waiver, election, or acquiescence.
(c) Binding Agreement; Governing Law. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement shall be governed by and
construed in accordance with the internal and substantive laws of the State of
Delaware and without regard to any conflicts of laws concepts which would apply
the substantive law of some other jurisdiction.
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(d) Further Assurances. The parties hereto agree to execute and
deliver all such other papers and documents and to take such other further
actions that may be reasonably necessary or appropriate to carry out the terms
of this Agreement.
(e) Entire Agreement; Amendment. The Loan Documents contain the
entire agreement among the parties with respect to the subject matter hereof and
there are no agreements, understandings, representations, or warranties
regarding the subject matter hereof that are not set forth herein. This
Agreement may not be amended or revised except by a writing signed by Borrower
and Lender.
(f) Notices. Any notices required or permitted to be sent to Borrower
or Lender shall be delivered to the address of Borrower or Lender, as
applicable, as set forth below. All notices required or permitted hereunder, to
be effective, shall be in writing and shall be deemed effectively given: (i)
when sent by confirmed facsimile if sent during normal business hours of the
recipient, and if not, then on the next Business Day, or (ii) one (1) Business
Day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt.
If to Borrower, to:
deltathree, Inc.
Jerusalem Technology Park – Bldg. #9
P.O. Box 48265, Jerusalem 91481, Israel
Attention: Chief Executive Officer
Facsimile: 011.972.2.649.1200
deltathree, Inc.
Attention: General Counsel
Facsimile: 011.972.2.649.1200
If to Lender, to:
D4 Holdings, LLC
349-L Copperfield Blvd, #407
Concord, NC 28025
Attention: Robert Stevanovski, Manager
Facsimile: 704.260.3304
14
D4 Holdings, LLC
Concord, NC 28025
Attention: General Counsel
Facsimile: 704.260.3304
(g) Counterparts. This Agreement may be executed in one or more
counterparts, all of which when taken together shall constitute but one
instrument, and in the event any signature is delivered by facsimile or “.pdf”
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” were an original thereof.
(h) Severability. The provisions of this Agreement are severable, and
the invalidity of any provision shall not affect the validity or enforceability
of any other provision hereof.
(i) Captions. The captions herein have been inserted solely for
convenience of reference and in no way define, limit, or describe the scope or
substance of any provision of this Agreement.
(j) Interpretation. All pronouns used herein shall include the
masculine, feminine, and neuter gender as the context requires. All defined
terms shall include both the plural and singular case as the context requires.
(k) Restriction on Assignment. Notwithstanding anything herein to the
contrary, Borrower shall not assign this Agreement without obtaining the prior
written approval of Lender. Lender may assign or transfer any of its rights or
obligations under the Loan Documents without the consent of Borrower, and the
provisions of the Loan Documents shall be binding upon and inure to the benefit
of such assignee or transferee. Any attempted assignment in violation of this
Section 8(k) shall be void and the other party hereto shall not recognize any
such purported assignment.
15
(l) Borrower Matters. Any Borrower may, acting singly, request a
Loan Advance hereunder. Each Borrower hereby appoints each other Borrower as
such Borrower’s agent for all purposes hereunder, including with respect to
requesting Loan Advances hereunder. Each Borrower hereunder shall be jointly and
severally obligated to repay all Loan Advances made hereunder, regardless of
which Borrower actually receives said Loan Advances, as if each Borrower
hereunder directly received all Loan Advances. Each Borrower waives any
suretyship defenses available to it under the Code or any other applicable law.
Each Borrower waives any right to require Lender to: (i) proceed against any
Borrower or any other Person; (ii) proceed against or exhaust any security; or
(iii) pursue any other remedy. Lender may exercise or not exercise any right or
remedy it has against any Borrower or any security it holds (including the right
to foreclose by judicial or non-judicial sale) without affecting any Borrower’s
liability hereunder. Notwithstanding any other provision of this Agreement or
any other Loan Document, each Borrower irrevocably waives all rights that it may
have at law or in equity (including, without limitation, any law subrogating
Borrower to the rights of Lender under this Agreement) to seek contribution,
indemnification or any other form of reimbursement from any other Borrower, or
any other Person now or hereafter primarily or secondarily liable for any of the
Obligations, for any payment made by Borrower with respect to the Obligations in
connection with this Agreement, any other Loan Document or otherwise and all
rights that it might have to benefit from, or to participate in, any security
for the Obligations as a result of any payment made by Borrower with respect to
the Obligations in connection with this Agreement or otherwise. Any agreement
providing for indemnification, reimbursement or any other arrangement prohibited
under this Section 8(l) shall be null and void. If any payment is made to a
Borrower in contravention of this Section 8(l), such Borrower shall hold such
payment in trust for Lender and such payment shall be promptly delivered to
Lender for application to the Obligations, whether matured or unmatured.
(m) Maximum Legal Rate. Anything herein to the contrary
notwithstanding, if during any period for which interest is computed hereunder,
the amount of interest computed on the basis provided for in this Agreement,
together with all fees, charges, and other payments or rights which are treated
as interest under applicable law, as provided for herein or in any other
document executed in connection herewith, would exceed the amount of such
interest computed on the basis of the Highest Lawful Rate (as defined below),
the Borrower shall not be obligated to pay, and the Lender shall not be entitled
to charge, collect, receive, reserve, or take, interest in excess of the Highest
Lawful Rate, and during any such period the interest payable hereunder shall be
computed on the basis of the Highest Lawful Rate. “Highest Lawful Rate” means
the maximum non-usurious rate of interest, as in effect from time to time, which
may be charged, contracted for, reserved, received, or collected by the Lender
in connection with this Agreement under applicable law. In accordance with this
paragraph, any amounts received in excess of the Highest Lawful Rate shall be
applied towards the prepayment of principal then outstanding.
9. Definitions. As used in this Agreement:
(a) “Account” means all present and future rights of Borrower to
payment for goods sold or leased or for services rendered, which are not
evidenced by instruments or chattel paper, and whether or not earned by
performance.
(b) “Account Debtor” is any “account debtor” as defined in the Code
with such additions to such term as may hereafter be made.
(c) “Board of Directors” means the board of directors of deltathree,
Inc., a Delaware corporation.
(d) “Business Day” means any day except Saturday, Sunday and any day
which shall be a federal legal holiday or a day on which banking institutions in
the State of Delaware are authorized or required by law or governmental action
to close.
16
(e) “Code” means the Uniform Commercial Code, as the same may, from
time to time, be enacted and in effect in the State of Delaware; provided, that,
to the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, or priority of, or
remedies with respect to, Lender’s security interest in any Collateral is
governed by the Uniform Commercial Code in effect in a jurisdiction other than
the State of Delaware, the term “Code” shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes on the
provisions thereof relating to such attachment, perfection, priority, or
remedies and for purposes of definitions relating to such provisions.
(f) “Collateral” is any and all properties, rights and assets of
Borrower described on Exhibit C.
(g) “EBITDA” means, for any reporting period, Borrower’s consolidated
earnings before stock-based compensation, interest, income taxes, depreciation
and amortization.
(h) “Equipment” is all “equipment” as defined in the Code with such
additions to such term as may hereafter be made, and includes without limitation
all machinery, fixtures, goods, vehicles (including motor vehicles and
trailers), and any interest in any of the foregoing.
(i) “Financial Projections” shall mean the projected financial
results of the Borrower’s consolidated business provided to the Board of
Directors on November 3, 2010, and any future financial projections prepared by
management and presented to the Board of Directors at any regularly scheduled
meeting of the Board of Directors.
(j) “Inventory” means all “inventory” as defined in the Code in
effect on the date hereof with such additions to such term as may hereafter be
made, and includes without limitation all merchandise, raw materials, parts,
supplies, packing and shipping materials, work in process and finished products,
including without limitation such inventory as is temporarily out of Borrower’s
custody or possession or in transit and including any returned goods and any
documents of title representing any of the above.
(k) “Lien” means any claim, mortgage, deed of trust, levy, charge,
pledge, security interest or other encumbrance of any kind, whether voluntarily
incurred or arising by operation of law or otherwise against any property.
(l) “Loan Documents” means this Agreement and the Note, each as may
be amended, restated, supplemented, varied or otherwise modified.
(m) “Material Adverse Change” means (i) any impairment in the
perfection or priority of Lender’s security interest in the Collateral, other
than with respect to any Permitted Lien, or in the value of such Collateral;
(ii) a material adverse change in the business, operations or condition
(financial or otherwise) of Borrower; or (iii) a material impairment in the
prospect of repayment of any portion of the Obligations.
17
(n) “Maturity Date” means the date that is three years from the date
of the first Loan Advance under this Agreement.
(o) “Obligations” means Borrower’s obligation to pay when due any
debts, principal, interest, and other amounts Borrower owes Lender now or later
under the Loan Documents.
(p) “Permitted Liens” means the following, which under no
circumstances will exceed the amounts set forth below: (i) the Lien provided to
Jerusalem Technology Park Ltd., the landlord for the offices leased by the
Israeli Subsidiary as of the date hereof, equal to approximately $140,000 as of
the date hereof (and as adjusted pursuant to the Consumer Price Index) on the
deposit in the bank account of the Israeli Subsidiary maintained at First
International Bank of Israel Ltd., (ii) the Lien provided to First International
Bank of Israel Ltd. equal to approximately $30,000 as of the date hereof on the
International Bank of Israel Ltd., and (iii) Liens pursuant to the Existing Loan
Agreements, as amended, restated, modified, or supplemented from time to time,
or pursuant to agreements entered into pursuant thereto.
(q) “Person” means an individual, corporation association,
partnership, limited liability company, joint venture, trust, government, agency
department or any other entity.
(r) “Previously disclosed to Lender” means those matters described in
writing in the disclosure letter provided by Borrower to Lender on the date of
this Agreement.
(s) “Records” means all of Borrower’s present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Collateral or any account
debtor, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of Borrower with respect to the
foregoing maintained with or by any other person).
(t) “Registered Organization” means any “registered organization” as
defined in the Code with such additions to such term as may hereafter be made.
18
IN WITNESS WHEREOF, the parties hereto have executed this Loan and Security
Agreement as of the date first above written.
BORROWER:
LENDER:
DELTATHREE, INC.
D4 HOLDINGS, LLC
By: Praescient, LLC, its Manager
By:
/s/ Effi Baruch
Name: Effi Baruch
Title: CEO and President
By:
/s/ Robert Stevanovski
Name: Robert Stevanovski
Title: Manager
DELTA THREE ISRAEL, LTD.
By:
Name: Effi Baruch
DME SOLUTIONS, INC.
By:
Name: Effi Baruch
Exhibit A
Form of Convertible Promissory Note
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT. ANY SUCH
DISPOSITION MAY ALSO BE SUBJECT TO APPLICABLE STATE SECURITIES LAWS.
CONVERTIBLE PROMISSORY NOTE
Up to $1,600,000
March 2, 2011
FOR VALUE RECEIVED, DELTATHREE, INC., a Delaware corporation, DELTA THREE
ISRAEL, LTD., an Israeli company, and DME SOLUTIONS, INC., a New York
corporation (jointly and severally, the “Borrower”), hereby absolutely,
irrevocably, unconditionally and jointly and severally promises to pay to the
order of D4 HOLDINGS, LLC, a Delaware limited liability company (“Lender”), in
United States dollars and in immediately available funds, the principal sum of
ONE MILLION SIX HUNDRED THOUSAND DOLLARS ($1,600,000), or such lesser amount as
may be advanced by Lender to the Borrower from time to time in accordance with
the terms and conditions of that certain Loan and Security Agreement dated of
even date herewith, between the Borrower and Lender (as it may be amended,
modified, extended or restated from time to time, the “Loan Agreement”),
together with interest thereon, as provided in the Loan Agreement; provided,
however, that upon conversion of any principal due under this Convertible
Promissory Note (this “Note”) into Conversion Shares pursuant to and subject to
the terms of Section 4 hereof, such conversion will constitute the discharge of
such principal so converted under this Note to the extent herein provided. The
aggregate principal amount outstanding under this Note shall not exceed one
million six hundred thousand dollars ($1,600,000). This Note is subject to all
of the terms and conditions set forth in, and such terms and conditions are
hereby incorporated herein by reference to, the Loan Agreement. All capitalized
terms not otherwise defined herein shall have the meanings set forth in the Loan
Agreement. In the event of any conflict between the provisions of this Note and
the Loan Agreement, the provisions of the Loan Agreement shall prevail.
1. The obligations of the Borrower evidenced by this Note are secured
as set forth in the Loan Agreement. Payment of such obligations, and the liens
securing such obligations, are subordinated as set forth in the Loan Agreement
2. Except as otherwise provided in the Loan Documents, all outstanding
principal and interest with respect to Loan Advances shall be due and payable in
full on the Maturity Date. The daily unpaid principal balance outstanding under
this Note shall bear interest at the rate(s) set forth in the Loan Agreement.
All payments in respect of amounts outstanding under this Note shall be paid in
immediately available funds to the account(s) specified by Lender from time to
time. Any payment due in respect of this Note which falls due on a day other
than a Business Day shall be made on the next Business Day.
3. Upon the occurrence of an Event of Default, Lender shall have, and
shall be entitled to exercise, all of the rights and remedies set forth in the
Loan Agreement and the other Loan Documents.
4. Conversion
(a) Optional Conversion. The Lender may, at any time and from time to
time prior to the Maturity Date, upon giving written notice to the Borrower,
elect to convert all or any portion of the outstanding principal amount of this
Note into that number of whole shares of the Borrower’s Common Stock (or such
other securities and property at any time receivable or issuable upon conversion
of this Note in accordance with its terms ) (“Conversion Shares”) as is
determined by dividing (x) such principal amount by (y) $.08 (the “Conversion
Price Per Share”), subject to adjustment as provided in this Section 4. Any
accrued and unpaid interest outstanding on the portion of this Note being
converted, at the time of such conversion will become immediately due and
payable to the Lender in cash. Any accrued and unpaid interest on the principal
portion of this Note that is not converted shall be due and payable in
accordance with the Loan Agreement.
(b) Reservation. The Borrower will at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of this Note into Conversion Shares,
such number of shares of its duly authorized shares of Common Stock as will from
time to time be sufficient to effect the conversion of this Note into Conversion
Shares in full. If at any time the number of authorized but unissued shares of
Common Stock is not sufficient to effect the conversion of this Note into
Conversion Shares, the Borrower will take such action as may, in the reasonable
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number as is sufficient for such purpose,
including engaging in commercially reasonable efforts to obtain the requisite
stockholder approval of any necessary amendment to its certificate of
incorporation. The Borrower further agrees that all shares of Common Stock that
may be issued upon the conversion of the rights represented by this Note will be
duly authorized and will be validly issued, fully paid and non-assessable, free
from all taxes, Liens (other than Liens created by Lender), charges and
preemptive rights with respect to the issuance thereof, other than restrictions
imposed by federal and state securities laws.
(c) Mechanics of Conversion; Delivery of Shares. Upon total or
partial conversion of this Note, the Lender will surrender the original of this
Note, duly endorsed, to the Borrower at its principal office. The Borrower will
deliver a certificate or, if requested by the Lender, certificates for
Conversion Shares issuable on conversion of this Note as soon as practicable
after surrender of this Note for conversion (bearing such legends as may be
required in the reasonable opinion of counsel to the Borrower), but the Person
or Persons to whom such certificates are issuable will be considered the holder
of record of the Conversion Shares from the time this Note is surrendered by the
Lender. If less than all of the outstanding principal amount of this Note is
converted pursuant to Section 4(a), the Borrower will additionally deliver to
the Lender an amended and restated Note, containing an original principal amount
equal to that portion of the then-outstanding principal amount not converted
containing the other terms and provisions of this Note and otherwise in form and
substance reasonably satisfactory to the Lender. Upon the conversion of this
Note, all rights of the Lender, except the right to receive the Conversion
Shares in accordance with this Article 4, will cease as to that portion of the
Note so converted and this Note will no longer be deemed to be outstanding as to
that portion of the Note so converted.
(d) Fractional Shares. In lieu of issuing fractional shares upon
conversion of all or any portion of this Note, the Borrower shall pay cash in an
amount equal to the product of the then applicable Conversion Price Per Share
and the number of fractional shares that would otherwise be issuable hereunder.
(e) Adjustment. The number of Conversion Shares issuable upon
conversion of this Note or any portion thereof (or any shares of stock or other
securities or property at the time receivable or issuable upon conversion of
this Note or any portion thereof) and the Conversion Price Per Share therefor
are subject to adjustment upon the occurrence of any of the following events
between the Issue Date and the date that all Obligations hereunder are repaid or
this Note is converted into Conversion Shares:
(i) Adjustment for Stock Splits, Stock Dividends, Recapitalizations,
etc. The Conversion Price Per Share of this Note will be proportionally
adjusted to reflect any stock dividend, stock split, reverse stock split,
reclassification, recapitalization or other similar event affecting the number
of outstanding Conversion Shares.
(ii) Adjustment for Other Dividends and Distributions. In case the
Borrower shall make or issue, or shall fix a record date for the determination
of eligible holders entitled to receive, a dividend or other distribution
payable with respect to the capital stock that is payable in (i) securities of
the Borrower or (ii) other assets or property, then, and in each such case, the
Lender, upon conversion of this Note at any time after the consummation,
effective date or record date of such event, shall receive, in addition to the
number of Conversion Shares issuable upon such exercise prior to such date, the
securities or such other assets of the Borrower to which the Lender would have
been entitled upon such date if the Lender had converted this Note immediately
prior thereto (all subject to further adjustment as provided in this Note).
(iii) Adjustment for Reorganization, Consolidation, Merger. In case of
any reorganization, reclassification or similar event involving the Borrower (or
of any other corporation the stock or other securities of which are at the time
receivable on the conversion of this Note) after the initial issuance date of
this Note, or in case, after such date, the Borrower (or any such corporation)
shall consolidate with or merge with another entity, then, and in each such
case, the Lender, upon the conversion of this Note at any time after the
consummation of such reorganization, consolidation or merger, will be entitled
to receive, in lieu of the stock or other securities and property receivable
upon the conversion of this Note prior to such consummation, the stock or other
securities or property to which the Lender would have been entitled upon the
consummation of such reorganization, consolidation or merger if the Lender had
converted this Note immediately prior thereto, subject to further adjustment as
provided in this Note, and, in such case, appropriate adjustment (as determined
in good faith by the Board of Directors of the Borrower) will be made in the
application of the provisions in this Section 4 with respect to the rights and
interests thereafter of the Lender, to the end that the provisions set forth in
this Section 4 will thereafter be applicable, as nearly as reasonably may be, in
relation to any securities or other property thereafter deliverable upon the
conversion of this Note. The successor or purchasing corporation in any such
reorganization, consolidation or merger (if other than the Borrower) will duly
execute and deliver to the Lender a supplement hereto reasonably acceptable to
the Lender acknowledging such entity’s obligations under this Note and, in each
such case, the terms of the Note will be applicable to the shares of stock or
other securities or property receivable upon the conversion of this Note after
the consummation of such reorganization, consolidation or merger.
(iv) Conversion of Stock. In case all the authorized Common Stock of the
Borrower is converted, pursuant to the Borrower’s Certificate of Incorporation,
into other securities or property, or the Common Stock otherwise ceases to
exist, then, in such case, the Lender, upon conversion of this Note at any time
after the date on which the Common Stock is so converted or ceases to exist (the
“Termination Date”), will receive, in lieu of the number of Conversion Shares
that would have been issuable upon such exercise immediately prior to the
Termination Date (the “Former Number of Conversion Shares”), the stock and other
securities and property which the Lender would have been entitled to receive
upon the Termination Date if the Lender had converted this Note with respect to
the Former Number of Conversion Shares immediately prior to the Termination Date
(f) Certificate of Adjustments. The Borrower will, at its expense,
cause an authorized officer promptly to prepare a written certificate showing
each adjustment or readjustment of the Conversion Price Per Share or the number
of Conversion Shares or other securities issuable upon conversion of this Note
and cause such certificate to be delivered to the Lender in accordance with the
provisions of this Section 4. The certificate will describe the adjustment or
readjustment and include a description in reasonable detail of the facts on
which the adjustment or readjustment is based.
(g) No Change Necessary. The form of this Note need not be changed
because of any adjustment in the Conversion Price Per Share or in the number of
Conversion Shares issuable upon its conversion.
5. General
(a) The Borrower hereby waives presentment and demand for payment,
notice of dishonor, protest and notice of protest of this Note. No release of
any security for the payment of this Note or extension of time for payment of
this Note, and no alteration, amendment or waiver of any provision of this Note
made by agreement between Lender and any other Person shall release, discharge,
modify, change or affect the liability of the Borrower under this Note.
(b) Each right, power and remedy of Lender under this Note, the Loan
Agreement, any other Loan Document, or under applicable laws shall be cumulative
and concurrent, and the exercise of any one or more of them shall not preclude
the simultaneous or later exercise by Lender of any or all such other rights,
powers or remedies. No failure or delay by Lender to insist upon the strict
performance of any one or more provisions of this Note, the Loan Agreement, any
other Loan Document, or to exercise any right, power or remedy consequent upon
an Event of Default shall constitute a waiver thereof, or preclude Lender from
exercising any such right, power or remedy. No modification, change, waiver or
amendment of this Note shall be deemed to be made unless in writing signed by
the Borrower and Lender. This Note shall inure to the benefit of and be binding
upon the Borrower and Lender and their respective successors and assigns;
provided that except as set forth in the Loan Agreement, the Borrower shall have
no right to assign any of its rights or delegate any of its obligations under
this Note; and provided further that there shall be no restrictions of any
nature on Lender’s right to assign this Note or its rights hereunder. The
invalidity, illegality or unenforceability of any provision of this Note shall
not affect or impair the validity, legality or enforceability of any other
provision. This Note shall be deemed to be made in, and shall be governed by
the laws of, the State of Delaware (without regard to its conflicts of laws
principles).
IN WITNESS WHEREOF, this Convertible Promissory Note has been duly executed by
the undersigned as of the day and year first above written.
BORROWER:
DELTATHREE, INC.
By:
Name: Effi Baruch
By:
Name: Effi Baruch
By:
Name: Effi Baruch
Exhibit B
Form of Notice of Borrowing/Loan Advance Request
NOTICE OF BORROWING/LOAN ADVANCE REQUEST
Date: [________], 20__
D4 HOLDINGS, LLC
Concord, NC 28025
Advance Request: Loan and Security Agreement
Dear Robert:
Reference is made to that certain Loan and Security Agreement (as from time to
time amended, restated, varied, supplemented or otherwise modified, the “Loan
Agreement”), dated as of March 2, 2011, by and between (i) deltathree, Inc., a
Delaware corporation, Delta Three Israel, Ltd., an Israeli company, and DME
Solutions, Inc., a New York corporation (jointly and severally, the “Borrower”),
and (ii) D4 Holdings, LLC, a Delaware limited liability company (“Lender”).
This is a Notice of Borrowing. All capitalized terms used herein and not
otherwise defined shall have the meanings given to them in the Loan Agreement.
1.
LOAN ADVANCE REQUEST
In accordance with the Loan Agreement, the undersigned hereby requests that
Lender make a Loan Advance as follows:
a.
Loan Date: [________], 20__
b.
Amount of Loan Advance: US$[___________],1 to be disbursed as follows:
[INSERT APPLICABLE BORROWER]
Account Information
[INSERT APPLICABLE INFORMATION]
c.
Purpose for which Loan Advance will be used: ______________________.
2.
CERTIFICATION
The Borrower hereby certifies that (a) the representations and warranties in
Section 4 of the Loan Agreement are true in all material respects as of the date
hereof, (b) no Event of Default (i) has occurred that is continuing as of the
date hereof or (ii) will result from the Loan Advance requested hereunder, and
(c) no Material Adverse Change has occurred.
Sincerely,
1 At least $100,000.
Exhibit C
Description of Collateral
The Collateral consists of all of Borrower’s right, title and interest in and to
the following personal property:
1.
All Accounts and other indebtedness owed to Borrower;
2.
All present and future contract rights, general intangibles (including, but not
limited to, tax and duty refunds, intellectual property, registered and
unregistered patents, trademarks, service marks, copyrights, trade names,
applications for the foregoing, technology, software, know-how, designs, trade
secrets, goodwill, processes, drawings, blueprints, customer lists, mailing
lists, licenses, whether as licensor or licensee, choses in action and other
claims and existing and future leasehold interests in equipment, real estate and
fixtures), chattel paper, documents, instruments, securities, investment
property, letters of credit, proceeds of letters of credit, bankers’ acceptances
and guaranties;
3.
All present and future monies, securities, credit balances, deposits, deposit
accounts and other property of Borrower, including without limitation any such
items now or hereafter held or received by or in transit to Lender or any of its
affiliates or at any other depository or other institution from or for the
account of Borrower, whether for safekeeping, pledge, custody, transmission,
collection or otherwise; and all present and future Liens, security interests,
rights, remedies, title and interest in, to and in respect of Accounts and other
Collateral, including, without limitation, (a) rights and remedies under or
relating to guaranties, contracts of suretyship, letters of credit and credit
and other insurance related to the Collateral, (b) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (c) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Accounts or other Collateral, including, without limitation,
returned, repossessed and reclaimed goods, and (d) deposits by and property of
Account Debtors or other Persons securing the obligations of Account Debtors;
4.
All Inventory;
5.
All Equipment;
6.
All Records; and
7.
All products and proceeds of the foregoing, in any form, including, without
limitation, insurance proceeds and any claims against third parties for loss or
damage to or destruction of any or all of the foregoing.
|
EXHIBIT 10.A
SKYWORKS SOLUTIONS, INC.
AMENDED AND RESTATED 2005 LONG-TERM INCENTIVE PLAN
1. Purpose
The purpose of this Amended and Restated 2005 Long-Term Incentive Plan (the
“Plan”) of Skyworks Solutions, Inc., a Delaware corporation (the “Company”), is
to advance the interests of the Company’s stockholders by enhancing the
Company’s ability to attract, retain and motivate persons who are expected to
make important contributions to the Company and by providing such persons with
equity ownership opportunities and performance-based incentives that are
intended to align their interests with those of the Company’s stockholders.
Except where the context otherwise requires, the term “Company” shall include
any of the Company’s present or future parent or subsidiary corporations as
defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”) and any other
business venture (including, without limitation, joint venture or limited
liability company) in which the Company has a controlling interest, as
determined by the Board of Directors of the Company (the “Board”).
2. Eligibility
All of the Company’s employees, officers, consultants and advisors are eligible
to receive options, stock appreciation rights, restricted stock and other
stock-based awards and cash (each, an “Award”) under the Plan. Each person who
receives an Award under the Plan is deemed a “Participant”.
3. Administration and Delegation
(a) Administration by Board of Directors. The Plan will be administered by the
Board. The Board shall have authority to grant Awards and to adopt, amend and
repeal such administrative rules, guidelines and practices relating to the Plan
as it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency. All decisions by the Board
shall be made in the Board’s sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Award. No
director or person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination relating to or under the Plan made in
good faith.
(b) Appointment of Committees. To the extent permitted by applicable law, the
Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a “Committee”). All references in the
Plan to the “Board” shall mean the Board or a Committee of the Board or the
officers referred to in Section 3(c) to the extent that the Board’s powers or
authority under the Plan have been delegated to such Committee or officers.
(c) Delegation to Officers. To the extent permitted by applicable law, the Board
may delegate to one or more officers of the Company the power to grant Awards to
employees or officers of the Company or any of its present or future subsidiary
corporations and to exercise such other powers under the Plan as the Board may
determine, provided that the Board shall fix the terms of the Awards to be
granted by such officers (including the exercise price of such Awards, which may
include a formula by which the exercise price will be determined) and the
maximum number of shares subject to Awards that the officers may grant; provided
further, however, that no officer shall be authorized to grant Awards to any
“executive officer” of the Company (as defined by Rule 3b-7 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of
the Company (as defined by Rule 16a-1 under the Exchange Act).
4. Stock Available for Awards
(a) Number of Shares. Subject to adjustment under Section 9, Awards may be made
under the Plan for a number of shares of common stock, $.25 par value per share,
of the Company (the “Common Stock”) that is equal to the sum of:
(1) 41.75 million shares of Common Stock; and
(2) Such additional number of shares of Common Stock (up to 15 million shares)
as is equal to the sum of (x) the number of shares of Common Stock reserved for
issuance under the Company’s 1999 Employee Long-Term Incentive Plan (the “1999
Plan”) that remain available for grant under the 1999 Plan as of April 26, 2009
and (y) the number of shares of Common Stock subject to awards granted under the
1999 Plan which awards expire, terminate or are otherwise surrendered, canceled,
forfeited or repurchased by the Company at their original issuance price
pursuant to a contractual repurchase right after April 26, 2009.
(b) Counting of Shares. Subject to adjustment under Section 9, an Option shall
be counted against the share limit specified in Section 4(a) as one share for
each share of common stock subject to the Option, and an Award that is not an
Option (a “Non-Option Award”) shall be counted against the share limit specified
in Section 4(a) as one and one-half (1.5) shares for each share of Common Stock
issued upon settlement of such Non-Option Award.
(c) Lapses. If any Award expires or is terminated, surrendered or canceled
without having been fully exercised or is forfeited in whole or in part
(including as the result of shares of Common Stock subject to such Award being
repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right) or results in any Common Stock not being issued,
the unused Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan. Shares issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares.
(d) Section 162(m) Per-Participant Limit. Without regard to the share counting
rules in Section 4(b) hereof, the maximum number of shares of Common Stock with
respect to which Awards may be granted to any Participant under the Plan shall
be 1,500,000 per calendar year. For purposes of the foregoing limit, the
combination of an Option in tandem with an SAR (as each is hereafter defined)
shall be treated as a single Award. The per-Participant limit described in this
Section 4(d) shall be construed and applied consistently with Section 162(m) of
the Code or any successor provision thereto, and the regulations thereunder
(“Section 162(m)”).
5. Stock Options
(a) General. The Board may grant options to purchase Common Stock (each, an
“Option”) and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. Any Option granted pursuant to the Plan is not intended
to be an incentive stock option described in Code Section 422 and shall be
designated a “Nonqualified Stock Option”.
(b) Exercise Price. The Board shall establish the exercise price of each Option
and specify such exercise price in the applicable option agreement; provided,
however, that the exercise price shall not be less than 100% of the Fair Market
Value (as defined below in subsection (g)(3)) at the time the Option is granted.
(c) Limitation on Repricing. Unless such action is approved by the Company’s
stockholders: (1) no outstanding Option granted under the Plan may be amended to
provide an exercise price per share that is lower than the then-current exercise
price per share of such outstanding Option (other than adjustments pursuant to
Section 9) and (2) the Board may not cancel any outstanding Option and grant in
substitution therefore new Awards under the Plan covering the same or a
different number of shares of Common Stock and having an exercise price per
share lower than the then-current exercise price per share of the cancelled
Option.
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(d) No Reload Rights. No Option granted under the Plan shall contain any
provision entitling the optionee to the automatic grant of additional Options in
connection with any exercise of the original Option.
(e) Duration of Options. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board may specify in the applicable
option agreement; provided, however, that no Option will be granted for a term
in excess of seven (7) years.
(f) Exercise of Option. Options may be exercised by delivery to the Company of a
written notice of exercise signed by the proper person or by any other form of
notice (including electronic notice) approved by the Board together with payment
in full as specified in Section 5(g) for the number of shares for which the
Option is exercised. Shares of Common Stock subject to the Option will be
delivered by the Company following exercise either as soon as practicable or,
subject to such conditions as the Board shall specify, on a deferred basis (with
the Company’s obligation to be evidenced by an instrument providing for future
delivery of the deferred shares at the time or times specified by the Board).
(g) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option
granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may otherwise provide in an option agreement, by
(i) delivery of an irrevocable and unconditional undertaking by a creditworthy
broker to deliver promptly to the Company sufficient funds to pay the exercise
price and any required tax withholding or (ii) delivery by the Participant to
the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price and any required tax withholding;
(3) when the Common Stock is registered under the Securities Exchange Act of
1934 (the “Exchange Act”), by delivery of shares of Common Stock owned by the
Participant valued at their fair market value as determined by (or in a manner
approved by) the Board (“Fair Market Value”), provided (i) such method of
payment is then permitted under applicable law, (ii) such Common Stock, if
acquired directly from the Company, was owned by the Participant for such
minimum period of time, if any, as may be established by the Board in its
discretion and (iii) such Common Stock is not subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirements;
(4) to the extent permitted by applicable law and by the Board, by (i) delivery
of a promissory note of the Participant to the Company on terms determined by
the Board, or (ii) payment of such other lawful consideration as the Board may
determine; or
(5) by any combination of the above permitted forms of payment.
(h) Substitute Options. In connection with a merger or consolidation of an
entity with the Company or the acquisition by the Company of property or stock
of an entity, the Board may grant Options in substitution for any options or
other stock or stock-based awards granted by such entity or an affiliate
thereof. Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options
contained in the other sections of this Section 5 or in Section 2.
6. Stock Appreciation Rights.
(a) General. A Stock Appreciation Right, or SAR, is an Award entitling the
holder, upon exercise, to receive Common Stock determined in whole or in part by
reference to appreciation, from and after the date of grant, in the fair market
value of a share of Common Stock. SARs may be based
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solely on appreciation in the fair market value of Common Stock or on a
comparison of such appreciation with some other measure of market growth such as
(but not limited to) appreciation in a recognized market index. The date as of
which such appreciation or other measure is determined shall be the exercise
date unless another date is specified by the Board in the SAR Award.
(b) Grants. Stock Appreciation Rights may be granted in tandem with, or
independently of, Options granted under the Plan.
(1) Tandem Awards. When Stock Appreciation Rights are expressly granted in
tandem with Options, (i) the Stock Appreciation Right will be exercisable only
at such time or times, and to the extent, that the related Option is exercisable
(except to the extent designated by the Board in connection with a
Reorganization Event and will be exercisable in accordance with the procedure
required for exercise of the related Option; (ii) the Stock Appreciation Right
will terminate and no longer be exercisable upon the termination or exercise of
the related Option, except to the extent designated by the Board in connection
with a Reorganization Event and except that a Stock Appreciation Right granted
with respect to less than the full number of shares covered by an Option will
not be reduced until the number of shares as to which the related Option has
been exercised or has terminated exceeds the number of shares not covered by the
Stock Appreciation Right; (iii) the Option will terminate and no longer be
exercisable upon the exercise of the related Stock Appreciation Right; and
(iv) the Stock Appreciation Right will be transferable only with the related
Option.
(2) Independent SARs. A Stock Appreciation Right not expressly granted in tandem
with an Option will become exercisable at such time or times, and on such
conditions, as the Board may specify in the SAR Award.
(c) Exercise. Stock Appreciation Rights may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board,
together with any other documents required by the Board.
7. Restricted Stock; Restricted Stock Units.
(a) General. The Board may grant Awards entitling recipients to acquire shares
of Common Stock (“Restricted Stock”), subject to the right of the Company to
repurchase all or part of such shares at their issue price or other stated or
formula price (or to require forfeiture of such shares if issued at no cost)
from the recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award. Instead
of granting Awards for Restricted Stock, the Board may grant Awards entitling
the recipient to receive shares of Common Stock to be delivered at the time such
shares of Common Stock vest (“Restricted Stock Units”) subject to such terms and
conditions on the delivery of the shares of Common Stock as the Board shall
determine (each Award for Restricted Stock or Restricted Stock Units is referred
to herein as a “Restricted Stock Award”).
(b) Terms and Conditions. The Board shall determine the terms and conditions of
a Restricted Stock Award, including the conditions for repurchase (or
forfeiture) and the issue price, if any.
(c) Stock Certificates. Any stock certificates issued in respect of a Restricted
Stock Award shall be registered in the name of the Participant and, unless
otherwise determined by the Board, deposited by the Participant, together with a
stock power endorsed in blank, with the Company (or its designee). At the
expiration of the applicable restriction periods, the Company (or such designee)
shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a
manner determined by the Board, by a Participant to receive amounts due or
exercise rights of the Participant in the event of the Participant’s death (the
“Designated Beneficiary”). In the absence of an effective designation by a
Participant, “Designated Beneficiary” shall mean the Participant’s estate.
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8. Other Stock-Based Awards.
Other Awards of shares of Common Stock, and other Awards that are valued in
whole or in part by reference to, or are otherwise based on, shares of Common
Stock or other property, may be granted hereunder to Participants (“Other Stock
Unit Awards”). Such Other Stock Unit Awards shall also be available as a form of
payment in the settlement of other Awards granted under the Plan or as payment
in lieu of compensation to which a Participant is otherwise entitled. Other
Stock Unit Awards may be paid in shares of Common Stock or cash, as the Board
shall determine. Subject to the provisions of the Plan, the Board shall
determine the conditions of each Other Stock Unit Awards, including any purchase
price applicable thereto and any conditions applicable thereto, including
without limitation, performance-based conditions.
9. Adjustments for Changes in Common Stock and Certain Other Events.
(a) Changes in Capitalization. In the event of any stock split, reverse stock
split, stock dividend, recapitalization, combination of shares, reclassification
of shares, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than an ordinary cash dividend,
(i) the number and class of securities available under this Plan, (ii) the
sub-limits set forth in Section 4(b), (iii) the number and class of securities
and exercise price per share of each outstanding Option, (iv) the share- and
per-share provisions of each Stock Appreciation Right, (v) the repurchase price
per share subject to each outstanding Restricted Stock Award and (vi) the share-
and per-share-related provisions of each outstanding Other Stock Unit Award,
shall be appropriately adjusted by the Company (or substituted Awards may be
made, if applicable) to the extent determined by the Board.
(b) Reorganization Events.
(1) Definition. A “Reorganization Event” shall mean: (a) any merger or
consolidation of the Company with or into another entity as a result of which
all of the Common Stock of the Company is converted into or exchanged for the
right to receive cash, securities or other property or is cancelled, (b) any
exchange of all of the Common Stock of the Company for cash, securities or other
property pursuant to a share exchange transaction or (c) any liquidation or
(2) Consequences of a Reorganization Event on Awards Other than Restricted Stock
Awards. In connection with a Reorganization Event, the Board shall take any one
or more of the following actions as to all or any outstanding Awards on such
terms as the Board determines: (i) provide that Awards shall be assumed, or
substantially equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof), (ii) upon written notice to a
Participant, provide that the Participant’s unexercised Options or other
unexercised Awards shall become exercisable in full and will terminate
immediately prior to the consummation of such Reorganization Event unless
exercised by the Participant within a specified period following the date of
such notice, (iii) provide that outstanding Awards shall become realizable or
deliverable, or restrictions applicable to an Award shall lapse, in whole or in
part prior to or upon such Reorganization Event, (iv) in the event of a
Reorganization Event under the terms of which holders of Common Stock will
receive upon consummation thereof a cash payment for each share surrendered in
the Reorganization Event (the “Acquisition Price”), make or provide for a cash
payment to a Participant equal to (A) the Acquisition Price times the number of
shares of Common Stock subject to the Participant’s Options or other Awards (to
the extent the exercise price does not exceed the Acquisition Price) minus
(B) the aggregate exercise price of all such outstanding Options or other
Awards, in exchange for the termination of such Options or other Awards,
(v) provide that, in connection with a liquidation or dissolution of the
Company, Awards shall convert into the right to receive liquidation proceeds (if
applicable, net of the exercise price thereof) and (vi) any combination of the
foregoing.
5
For purposes of clause (i) above, an Option shall be considered assumed if,
following consummation of the Reorganization Event, the Option confers the right
to purchase, for each share of Common Stock subject to the Option immediately
prior to the consummation of the Reorganization Event, the consideration
(whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock
held immediately prior to the consummation of the Reorganization Event (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares of Common Stock);
provided, however, that if the consideration received as a result of the
Reorganization Event is not solely common stock of the acquiring or succeeding
corporation (or an affiliate thereof), the Company may, with the consent of the
acquiring or succeeding corporation, provide for the consideration to be
received upon the exercise of Options to consist solely of common stock of the
acquiring or succeeding corporation (or an affiliate thereof) equivalent in fair
market value to the per share consideration received by holders of outstanding
shares of Common Stock as a result of the Reorganization Event.
To the extent all or any portion of an Option becomes exercisable solely as a
result of clause (ii) above, the Board may provide that upon exercise of such
Option the Participant shall receive shares subject to a right of repurchase by
the Company or its successor at the Option exercise price; such repurchase right
(x) shall lapse at the same rate as the Option would have become exercisable
under its terms and (y) shall not apply to any shares subject to the Option that
were exercisable under its terms without regard to clause (ii) above.
(3) Consequences of a Reorganization Event on Restricted Stock Awards. Upon the
occurrence of a Reorganization Event other than a liquidation or dissolution of
the Company, the repurchase and other rights of the Company under each
outstanding Restricted Stock Award shall inure to the benefit of the Company’s
successor and shall apply to the cash, securities or other property which the
Common Stock was converted into or exchanged for pursuant to such Reorganization
Event in the same manner and to the same extent as they applied to the Common
Stock subject to such Restricted Stock Award. Upon the occurrence of a
Reorganization Event involving the liquidation or dissolution of the Company,
except to the extent specifically provided to the contrary in the instrument
evidencing any Restricted Stock Award or any other agreement between a
Participant and the Company, all restrictions and conditions on all Restricted
Stock Awards then outstanding shall automatically be deemed terminated or
satisfied.
(c) Change in Control Events.
(1) Definition. A “Change in Control Event” will be deemed to have occurred if
the Continuing Directors (as defined below) cease for any reason to constitute a
majority of the Board. For this purpose, a “Continuing Director” will include
any member of the Board as of the Effective Date (as defined below) and any
individual nominated for election to the Board by a majority of the then
Continuing Directors.
6
(2) Consequences of a Change in Control Event on Options. Notwithstanding any
other provision of this Plan to the contrary, if a Change in Control Event
occurs, except to the extent specifically provided to the contrary in the
instrument evidencing any Option or any other agreement between a Participant
and the Company, any options outstanding as of the date such Change of Control
is determined to have occurred and not then exercisable shall become fully
exercisable to the full extent of the original grant.
(3) Consequences of a Change in Control Event on Restricted Stock
Awards. Notwithstanding any other provision of this Plan to the contrary, if a
Change in Control Event occurs, except to the extent specifically provided to
the contrary in the instrument evidencing any Restricted Stock Award or any
other agreement between a Participant and the Company, all restrictions and
conditions on all Restricted Stock Awards then outstanding shall automatically
be deemed terminated or satisfied.
10. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise determine or
provide in an Award, Awards shall not be sold, assigned, transferred, pledged or
otherwise encumbered by the person to whom they are granted, either voluntarily
or by operation of law, except by will or the laws of descent and distribution
and, during the life of the Participant, shall be exercisable only by the
Participant. References to a Participant, to the extent relevant in the context,
shall include references to authorized transferees.
(b) Documentation. Each Award shall be evidenced in such form (written,
electronic or otherwise) as the Board shall determine. Such written instrument
may be in the form of an agreement signed by the Company and the Participant or
a written confirming memorandum to the Participant from the Company. Each Award
may contain terms and conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each Award may
be made alone or in addition or in relation to any other Award. The terms of
each Award need not be identical, and the Board need not treat Participants
uniformly.
(d) Termination of Status. The Board shall determine the effect on an Award of
the disability, death, or other change in the employment or other status of a
Participant and the extent to which, and the period during which, the
Participant, or the Participant’s legal representative, conservator, guardian or
Designated Beneficiary, may exercise rights under the Award.
7
(e) Withholding. Each Participant shall pay to the Company, or make provision
satisfactory to the Company for payment of, any taxes required by law to be
withheld in connection with an Award to such Participant. Except as the Board
may otherwise provide in an Award, for so long as the Common Stock is registered
under the Exchange Act, Participants may satisfy such tax obligations in whole
or in part by delivery of shares of Common Stock, including shares retained from
the Award creating the tax obligation, valued at their Fair Market Value;
provided, however, except as otherwise provided by the Board, that the total tax
withholding where stock is being used to satisfy such tax obligations cannot
exceed the Company’s minimum statutory withholding obligations (based on minimum
statutory withholding rates for federal and state tax purposes, including
payroll taxes, that are applicable to such supplemental taxable income). Shares
surrendered to satisfy tax withholding requirements cannot be subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements. The
Company may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to a Participant.
(f) Amendment of Award. Except as provided in Section 5, the Board may amend,
modify or terminate any outstanding Award, including but not limited to,
substituting therefor another Award of the same or a different type and changing
the date of exercise or realization, provided that the Participant’s consent to
such action shall be required unless the Board determines that the action,
taking into account any related action, would not materially and adversely
affect the Participant.
(g) Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
(h) Acceleration. Except as otherwise provided in Sections 9(c) and 10(i), the
Board may at any time provide that any Award shall become immediately
exercisable in full or in part, free of some or all restrictions or conditions,
or otherwise realizable in full or in part, as the case may be.
(i) Performance Awards.
(1) Grants. Restricted Stock Awards and Other Stock-Unit Awards under the Plan
may be made subject to the achievement of performance goals pursuant to this
Section 10(i) (“Performance Awards”), subject to the limit in Section 4(d) on
shares covered by such grants. Performance Awards can also provide for cash
payments of up to $1,500,000 per fiscal year per individual.
(2) Committee. Grants of Performance Awards to any Covered Employee intended to
qualify as “performance-based compensation” under Section 162(m)
(“Performance-Based Compensation”) shall be made only by a Committee (or
subcommittee of a Committee) comprised solely of two or more directors eligible
to serve on a committee making Awards qualifying as “performance-based
compensation” under Section 162(m). In the case of such Awards granted to
Covered Employees, references to the Board or to a Committee shall be treated as
referring to such Committee or subcommittee. “Covered Employee” shall mean any
person who is, or whom the Committee, in its discretion, determines may be, a
“covered employee” under Section 162(m)(3) of the Code.
8
Performance Measures. For any Award that is intended to qualify as
Performance-Based Compensation, the Committee shall specify that the degree of
granting, vesting and/or payout shall be subject to the achievement of one or
more objective performance measures established by the Committee, which shall be
based on the relative or absolute attainment of specified levels of one or any
combination of the following: Revenues, net income (loss), operating income
(loss), gross profit, earnings before or after discontinued operations,
interest, taxes, depreciation and/or amortization, operating profit before or
after discontinued operations and/or depreciation and/or amortization, earnings
(loss) per share, net cash flow, cash flow from operations, revenue growth,
earnings growth, gross margins, operating margins, net margins, inventory
management, working capital, return on sales, assets, equity or investment, cash
or cash equivalents position, achievement of balance sheet or income statement
objectives or total stockholder return, stock price, completion of strategic
acquisitions/dispositions, manufacturing efficiency, product quality, customer
satisfaction, market share and improvement in financial ratings. Such goals may
reflect absolute entity or business unit performance or a relative comparison to
the performance of a peer group of entities or other external measure of the
selected performance criteria and may be absolute in their terms or measured
against or in relationship to other companies comparably, similarly or otherwise
situated. The Committee may specify that such performance measures shall be
adjusted to exclude any one or more of (i) extraordinary and/or non-recurring
items, (ii) the cumulative effects of changes in accounting principles,
(iii) gains or losses on the dispositions of discontinued operations, (iv) the
writedown of any asset, (v) charges for restructuring and rationalization
programs, (vi) amortization of purchased intangibles associated with
acquisitions, (vii) compensation expenses related to acquisitions, (viii) other
acquisition related charges, (ix) impairment charges, (x) gain or loss on
minority equity investments, (xi) non-cash income tax expenses, and
(xii) equity-based compensation expenses. Such performance measures: (i) may
vary by Participant and may be different for different Awards; (ii) may be
particular to a Participant or the department, branch, line of business,
subsidiary or other unit in which the Participant works and may cover such
period as may be specified by the Committee; and (iii) shall be set by the
Committee within the time period prescribed by, and shall otherwise comply with
the requirements of, Section 162(m). Awards that are not intended to qualify as
Performance-Based Compensation may be based on these or such other performance
measures as the Board may determine.
(3) Adjustments. Notwithstanding any provision of the Plan, with respect to any
Performance Award that is intended to qualify as Performance-Based Compensation,
the Committee may adjust downwards, but not upwards, the cash or number of
Shares payable pursuant to such Award, and the Committee may not waive the
achievement of the applicable performance measures except in the case of the
death or disability of the Participant or a change in control of the Company.
(4) Other. The Committee shall have the power to impose such other restrictions
on Performance Awards as it may deem necessary or appropriate to ensure that
such Awards satisfy all requirements for Performance-Based Compensation.
11. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any claim or
right to be granted an Award, and the grant of an Award shall not be construed
as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
9
(b) No Rights As Stockholder. Subject to the provisions of the applicable Award,
no Participant or Designated Beneficiary shall have any rights as a stockholder
with respect to any shares of Common Stock to be distributed with respect to an
Award until becoming the record holder of such shares. Notwithstanding the
foregoing, in the event the Company effects a split of the Common Stock by means
of a stock dividend and the exercise price of and the number of shares subject
to such Option are adjusted as of the date of the distribution of the dividend
(rather than as of the record date for such dividend), then an optionee who
exercises an Option between the record date and the distribution date for such
stock dividend shall be entitled to receive, on the distribution date, the stock
dividend with respect to the shares of Common Stock acquired upon such Option
exercise, notwithstanding the fact that such shares were not outstanding as of
the close of business on the record date for such stock dividend.
(c) Effective Date and Term of Plan. The Plan shall become effective on the date
on which it is adopted by the Board (the “Effective Date”), but no Award may be
granted unless and until the Plan has been approved by the Company’s
stockholders. No Awards shall be granted under the Plan after the completion of
10 years from the earlier of (i) the date on which the Plan was adopted by the
Board or (ii) the date the Plan was approved by the Company’s stockholders, but
Awards previously granted may extend beyond that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time; provided that, to the extent required by
Section 162(m), no Award granted to a Participant that is intended to comply
with Section 162(m) after the date of such amendment shall become exercisable,
realizable or vested, as applicable to such Award, unless and until such
amendment shall have been approved by the Company’s stockholders if required by
Section 162(m) (including the vote required under Section 162(m)); and provided
further that, without approval of the Company’s stockholders, no amendment may
(1) increase the number of shares authorized under the Plan (other than pursuant
to Section 9), (2) materially increase the benefits provided under the Plan,
(3) materially expand the class of participants eligible to participate in the
Plan, (4) expand the types of Awards provided under the Plan or (5) make any
other changes that require stockholder approval under the rules of the Nasdaq
National Market, Inc.
(e) Provisions for Foreign Participants. The Board may modify Awards or Options
granted to Participants who are foreign nationals or employed outside the United
States or establish subplans or procedures under the Plan to recognize
differences in laws, rules, regulations or customs of such foreign jurisdictions
with respect to tax, securities, currency, employee benefit or other matters.
(f) Compliance With Code Section 409A. No Award shall provide for deferral of
compensation that does not comply with Section 409A of the Code, unless the
Board, at the time of grant, specifically provides that the Award is not
intended to comply with Section 409A of the Code.
(g) Governing Law. The provisions of the Plan and all Awards made hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Delaware, without regard to any applicable conflicts of law.
10 |
Exhibit 10.1 TRANSACTION SUPPORT AGREEMENT (RECAPITALIZATION) This TRANSACTION SUPPORT AGREEMENT (RECAPITALIZATION) (as amended, modified or supplemented from time to time, this “ Agreement ”) is entered into as of September 16, 2013, by and among (i) Interactive Network, Inc., a Nevada corporation (“
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 6-K REPORT OF FOREIGN PRIVATE ISSUERPURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of January, 2015 Commission File Number 000-23288 SILICOM LTD. (Translation of Registrant’s name into English) 8 Hanagar St., P.O.Box 2164, Kfar-Sava 44425, Israel (Address of Principal Executive Offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-FxForm 40-Fo Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): On January 5, 2015, the Registrant issued a press release: “Silicom’s fourth quarter and full year 2014 results release scheduled for Thursday, January 29, 2015”. Attached hereto are the following exhibits: Exhibit 99.1Press Release SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SILICOM LTD. (Registrant) Date: January 5, 2014 By: /s/Eran Gilad Eran Gilad Chief Financial Officer
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INGERSOLL-RAND COMPANY LIMITED DEBT SECURITIES
UNDERWRITING AGREEMENT STANDARD PROVISIONS
May 24, 2005
From time to time Ingersoll-Rand Company Limited, a Bermuda company (the
"Company") proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement) certain of its debt
securities (the "Securities") specified in Schedule II to such Pricing Agreement
(the Securities so specified being referred to herein as the "Designated
Securities"). The Designated Securities may be guaranteed (the “Guarantee”) by
Ingersoll-Rand Company, a New Jersey corporation and a subsidiary of the Company
(the “Guarantor”) (any such guaranteed Designated Securities, the “Guaranteed
Securities”). If the Designated Securities are Guaranteed Securities, the
Guarantor will also enter into the Pricing Agreement with respect thereto.
1. The terms and rights of the issuance of the Designated Securities shall be
specified in Schedule I to the applicable Pricing Agreement and in or pursuant
to the indenture (the "Indenture") identified in such Pricing Agreement.
Particular sales of Designated Securities may be made from time to time to the
Underwriters of such Securities, for whom the firm or firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representative (the "Representative"). The term
"Representative" also refers to Underwriters who act without any firm being
designated as their representative. These Underwriting Agreement Standard
Provisions shall not be construed as an obligation of the Company to sell or the
Guarantor to guarantee any of the Securities or as an obligation of any of the
Underwriters to purchase the Securities. The obligation of the Company to issue
and sell any of the Securities, the obligation of the Guarantor to issue any
Guarantee and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters, whether the Designated Securities are Guaranteed Securities and
the principal amount of such Designated Securities to be purchased by each
Underwriter and shall set forth the date, time and manner of delivery of such
Designated Securities and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the Indenture and the registration
statement and prospectus with respect thereto) the terms of such Designated
Securities. A Pricing Agreement shall be in the form of an executed writing
(which may be in counterparts), and may be evidenced by an exchange of facsimile
communications or any other rapid transmission device designated to produce a
written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company, and if the Designated Securities are Guaranteed Securities,
the Guarantor, jointly and severally represent and warrant to, and agree with,
each of the Underwriters that:
(a) A registration statement in respect of the Securities and, in the case of
Guaranteed Securities, the Guarantees and more particularly described in the
applicable Pricing Agreement has been filed with the Securities and Exchange
Commission (the "Commission") in the form heretofore delivered or to be
delivered to the Representative, and such registration statement in such form
has been declared effective by the Commission and no stop order suspending the
effectiveness of such registration statement has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in such registration statement being hereinafter
called a "Preliminary Prospectus"); if any post-effective amendment to such
registration statement has been filed with the Commission prior to the date of
the applicable Pricing Agreement, the most recent such amendment has been
declared effective by the Commission; "Effective Date" means the date as of
which such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; such registration
statement, as amended at the Effective Date, including all material incorporated
by reference therein and, if the date of the Pricing Agreement is on or before
the fifteenth business day after the Effective Date, including all information
deemed to be a part thereof as of the Effective Date pursuant to paragraph (b)
of Rule 430A under the Securities Act of 1933, as amended (the "Act"), is
hereinafter referred to as the "Registration Statement," and the form of
prospectus relating to the Designated Securities, as first filed pursuant to
paragraph (1) or (4) of Rule 424(b) ("Rule 424(b)") under the Act or, if the
date of the Pricing Agreement is after the fifteenth business day after the
Effective Date, pursuant to Rule 424(b)(2) or (5), as such form of prospectus
may be supplemented as contemplated by Section 1 to reflect the terms of the
Designated Securities and the terms of offering thereof, including all documents
incorporated by reference therein, is hereinafter referred to as the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
incorporated therein by reference);
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; any further
documents so filed and incorporated by reference in the Prospectus or in any
amendments or supplements thereto, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall apply only to
documents so filed and incorporated by reference during the period that a
prospectus relating to the Designated Securities is required to be delivered in
connection with sales of such Designated Securities (such period being
hereinafter sometimes referred to as the "prospectus delivery period"); and
provided further, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company or (in the case of Guaranteed
Securities) the Guarantor by an Underwriter through the Representative expressly
for use in the Prospectus;
2
(c) The Registration Statement and the Prospectus conform, and any amendments
or supplements thereto will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission
thereunder, and the Registration Statement does not and will not, as of the
applicable effective date as to the Registration Statement and any amendment
thereto, contain an untrue statement of a material fact or omit to state a
therein not misleading, and the Prospectus does not and will not, as of the
applicable filing date as to the Prospectus and any supplement thereto and as of
the Time of Delivery contain an untrue statement of a material fact or omit to
make the statements therein in light of the circumstances under which they were
made not misleading; provided, however, that this representation and warranty
shall apply only to amendments or supplements filed or made during the
prospectus delivery period; and provided further, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company or (in the case of Guaranteed Securities) the Guarantor by an
Underwriter through the Representative expressly for use in the Prospectus;
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change or any development involving a prospective material adverse
change in or affecting the business and operations, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Prospectus;
(e) The Company is duly incorporated and validly existing as a company in good
standing under the laws of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation for the
transaction of business under the laws of each other jurisdiction in which the
nature of the business it transacts or the properties it owns requires such
qualification except where such failures to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the Company
and its subsidiaries taken as a whole;
3
(f) If the Designated Securities are Guaranteed Securities, the Guarantor is
duly incorporated and validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation, with corporate power and
authority to own its properties and conduct its business as described in the
Guarantor and its subsidiaries taken as a whole;
(g) The Securities have been duly authorized by the Company, and, when
Designated Securities are issued and delivered pursuant to this Agreement and
the Pricing Agreement with respect thereto and duly authenticated by the Trustee
in accordance with the Indenture, such Designated Securities will have been duly
executed, issued and delivered by the Company and will constitute valid and
legally binding obligations of the Company enforceable against the Company in
accordance with their terms and entitled to the benefits provided by the
Indenture, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and to general equity principles; the Indenture has
been duly authorized, executed and delivered by the Company and is duly
qualified under the Trust Indenture Act and, assuming due authorization,
execution and delivery thereof by the Trustee, constitutes a valid and legally
binding instrument of the Company, enforceable against the Company in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
creditors' rights generally and to general equity principles; this Agreement and
the Pricing Agreement with respect to the Designated Securities has been duly
authorized, executed and delivered by the Company; and the Securities, the
Designated Securities, this Agreement, the Pricing Agreement and the Indenture
will conform in all material respects to the descriptions thereof in the
Prospectus;
(h) If the Designated Securities are Guaranteed Securities, the Guarantee of
the Guaranteed Securities has been duly authorized by the Guarantor and, when
the Guarantee endorsed on the Guaranteed Securities is executed by the
Guarantor, and when the Guaranteed Securities are issued, executed and delivered
pursuant to this Agreement and the Pricing Agreement with respect thereto and
duly authenticated by the Trustee in accordance with the Indenture and delivered
and paid for by the Underwriters, such Guarantee will have been duly executed
and issued by the Guarantor and will constitute a valid and legally binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms and entitled to the benefits provided by the Indenture, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and to general
equity principles; the Indenture has been duly authorized, executed and
delivered by the Guarantor and, assuming due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally binding
instrument of the Guarantor, enforceable against the Guarantor in accordance
authorized, executed and delivered by the Guarantor; and the Guarantee will
conform in all material respects to the descriptions thereof in the Prospectus;
4
(i) The issue and sale of the Designated Securities and, in the case of
Guaranteed Securities, the Guarantee, and the compliance by the Company and, in
the case of Guaranteed Securities, the Guarantor, with all of the provisions of
the Designated Securities, the Indenture, the Guarantee and this Agreement and
the Pricing Agreement with respect thereto, and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or, in the case of Guaranteed Securities, the
Guarantor, is a party or by which the Company or, in the case of Guaranteed
Securities, the Guarantor, is bound or to which any of the property or assets of
the Company or, in the case of Guaranteed Securities, the Guarantor, is subject,
nor will such action result in any violation of the provisions of the Memorandum
of Association or Bye-Laws of the Company, or in the case of Guaranteed
Securities, the certificate of incorporation, as amended, or the by-laws of the
Guarantor or any statute, order, rule or regulation (except for state securities
or Blue Sky laws, rules and regulations, as to which the Company and the
Guarantor make no representation) of any court or governmental agency or body
having jurisdiction over the Company or, in the case of Guaranteed Securities,
the Guarantor, or any of the properties of the Company, or in the case of
Guaranteed Securities, the Guarantor; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Designated Securities
or the consummation by the Company or, in the case of Guaranteed Securities, the
Guarantor, of the other transactions contemplated by the applicable Pricing
Agreement or the Indenture except such as have been, or will have been prior to
the Time of Delivery (as defined in Section 4 hereof), obtained under the Act
and the Trust Indenture Act and such consents, approvals, authorizations,
registrations and qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Designated
Securities by the Underwriters.
(j) Other than as set forth or contemplated in the Prospectus, there are no
legal or governmental proceedings pending or, to the best of the Company's or,
in the case of Guaranteed Securities, the Guarantor’s knowledge, threatened to
which the Company, the Guarantor (in the case of Guaranteed Securities) or any
of their subsidiaries is a party or of which any property of the Company, the
Guarantor (in the case of Guaranteed Securities) or any of their subsidiaries is
the subject which individually or in the aggregate have a reasonable possibility
of having a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole.
3. Upon the execution of the applicable Pricing Agreement and the
authorization by the Representative of the release of the Designated Securities,
the several Underwriters propose to offer such Securities for sale upon the
terms and conditions set forth in the Prospectus.
5
4. Designated Securities to be purchased by each Underwriter in such
authorized denominations and registered in such names as the Representative may
request upon at least forty-eight hours' prior notice to the Company, shall be
delivered by or on behalf of the Company to the Representative for the accounts
of the Underwriters, against payment by such Underwriter or on its behalf of the
purchase price therefor in the manner and in the funds specified in such Pricing
Agreement, all at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representative and the
Company may agree upon in writing, such time and date being herein called the
"Time of Delivery" for such Designated Securities.
5. The Company and, in the case of Guaranteed Securities, the Guarantor,
jointly and severally agree with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in relation to the
applicable Designated Securities in a form not disapproved by the Representative
and to file such Prospectus with both the Registrar of Companies in Bermuda and
with the Commission (i) pursuant to Rule 424(b)(1) (or, if applicable and if
consented to by the Representatives, pursuant to Rule 424(b)(4)) not later than
the Commission's close of business on the earlier of (A) the second business day
following the date of the applicable Pricing Agreement or (B) the fifteenth
business day after the Effective Date, or (ii) if the date of the applicable
Pricing Agreement is after the fifteenth business day after the Effective Date,
pursuant to Rule 424(b)(2) (or, if applicable and if consented to by the
Representatives, pursuant to Rule 424(b)(5)) not later than the second business
day following the date of the applicable Pricing Agreement; the Company or, in
the case of Guaranteed Securities, the Guarantor, will advise you promptly of
any such filing pursuant to Rule 424(b); to advise the Representative promptly
of any amendment or supplement to the Registration Statement or Prospectus after
such relevant Time of Delivery and during the prospectus delivery period and
furnish the Representative with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company or, in the case of Guaranteed Securities, the Guarantor, with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and during the prospectus delivery
period; and during such same period to advise the Representative, promptly after
it receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or become effective or any supplement to the Prospectus
or any amended Prospectus has been filed, or mailed for filing, of the issuance
by the Commission of any stop order or of any order preventing or suspending the
use of any prospectus relating to the Designated Securities, of the suspension
of the qualification of such Designated Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Designated
Securities or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
6
(b) Promptly from time to time to take such action as the Representative may
reasonably request to qualify the Designated Securities for offering and sale
under the securities laws of such jurisdictions as the Representative may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Designated Securities, provided that in
connection therewith neither the Company nor the Guarantor shall be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in such
quantities as the Representative may from time to time reasonably request, and,
if the delivery of a prospectus is required at any time prior to the expiration
of nine months after the time of issue of such prospectus in connection with the
offering or sale of the Designated Securities and if at such time any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act, to
notify the Representative and upon the request of the Representative to file
such document and to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as the Representative may from time
to time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance; and in case any Underwriter is required to deliver a prospectus in
connection with sales of any of such Designated Securities at any time nine
months or more after the time of issue of the Prospectus, upon the request of
the Representative but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as the Representative may request of
an amended or supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To make generally available to its security holders as soon as practicable
an earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company or the
Guarantor, Rule 158); and
(e) During the period beginning from the date of the applicable Pricing
Agreement and continuing to and including the earlier of (i) the termination of
trading restrictions for the Designated Securities, as notified to the Company
by the Representative and (ii) the Time of Delivery, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company or,
in the case of Guaranteed Securities, the Guarantor, which mature more than one
year after such Time of Delivery, without the prior written consent of the
Representative.
7
6. The Company and, in the case of Guaranteed Securities, the Guarantor,
jointly and severally covenant and agree with the several Underwriters that the
Company and, in the case of Guaranteed Securities, the Guarantor, will jointly
and severally pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's and the Guarantor’s counsel and accountants in
connection with the registration of the Designated Securities and, in the case
of Guaranteed Securities, the Guarantee, under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements (except as expressly provided in the last clause of Section 5(c)
hereof) thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any
Blue Sky survey and any other documents in connection with the offering,
purchase, sale and delivery of the Designated Securities; (iii) all expenses in
connection with the qualification of the Designated Securities for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) any fees charged by securities rating services for rating the Designated
Securities; (v) any filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Designated Securities; (vi) the cost of preparing the Designated Securities and,
in the case of Guaranteed Securities, the Guarantee; (vii) the fees and expenses
of any Trustee and any agent of any Trustee and the fees and disbursements of
counsel for any Trustee in connection with any Indenture, the Designated
Securities and, in the case of Guaranteed Securities, the Guarantee; and (viii)
all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, Section 5(c),
Section 8 and Section 11 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities and Guarantees by them, and any advertising
expenses connected with any offers they may make.
7. The Representative shall have the right to terminate the Pricing Agreement,
in its sole discretion, due to any inaccuracy in the representations and
warranties and other statements of the Company or, in the case of Guaranteed
Securities, the Guarantor, herein, at and as of the Time of Delivery, the
nonperformance by the Company or, in the case of Guaranteed Securities, the
Guarantor, of any of its obligations hereunder to be performed, and the
nonperformance of the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the rules
and regulations under the Act and in accordance with Section 5(a) of the
Agreement; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with;
(b) Simpson Thacher & Bartlett LLP, counsel for the Underwriters, shall have
furnished to the Representative such opinion or opinions, dated the Time of
Delivery, with respect to the validity of the Indenture, the Designated
Securities, the Registration Statement, the Prospectus as amended or
supplemented and other related matters as the Representative may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;
8
(c) Conyers Dill & Pearman, Bermuda counsel for the Company, shall have
furnished to the Representative its written opinion, dated the Time of Delivery,
covering such matters (including, without limitation, the validity of the
Indenture and the Designated Securities) and in such form and substance as the
Representative may reasonably request;
(d) Patricia Nachtigal, Esq., Senior Vice President and General Counsel of the
Guarantor, shall have furnished to the Representative her written opinion, dated
the Time of Delivery, to the effect that:
(i) In the case of Guaranteed Securities, the Guarantor has been duly
incorporated and is validly existing and in good standing as a corporation under
the laws of the State of New Jersey and has full corporate power and authority
to own its properties and conduct its business as described in the Prospectus;
(ii) Each of the Company and, in the case of Guaranteed Securities, the
Guarantor has been duly qualified as a foreign corporation for the transaction
of business and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business, so as to require
such qualification except where such failures to be so qualified or be in good
standing would not, individually or in the aggregate, have a material adverse
effect on the Company, the Guarantor (in the case of Guaranteed Securities) and
their subsidiaries taken as a whole (such counsel being entitled to rely in
respect of the opinion in this clause upon certificates of state officials,
provided that such counsel shall state that she believes that both the
Representative and she are justified in relying upon such certificates);
(iii) To the best of such counsel's knowledge there are no legal or
governmental proceedings pending to which the Company, the Guarantor (in the
case of Guaranteed Securities) or any of their subsidiaries is a party or of
which any property of the Company, the Guarantor (in the case of Guaranteed
Securities) or any of their subsidiaries is the subject, other than as set forth
in the Prospectus and other than litigation incident to the kind of business
conducted by the Company, the Guarantor (in the case of Guaranteed Securities)
and their subsidiaries which individually and in the aggregate is not material
to the Company, the Guarantor (in the case of Guaranteed Securities) and their
subsidiaries taken as a whole; and to the best of such counsel's knowledge no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(iv) In the case of Guaranteed Securities, this Agreement and the Pricing
Agreement with respect to the Designated Securities have been duly authorized,
executed and delivered by the Guarantor;
9
(v) This Agreement and the Pricing Agreement with respect to the Designated
Securities have been duly delivered by the Company;
(vi) The Designated Securities have been duly issued and delivered by the
Company and, assuming due authentication thereof by the Trustee and upon payment
and delivery in accordance with this Agreement and the Pricing Agreement, will
constitute valid and legally binding obligations of the Company enforceable
against the Company in accordance with their terms and entitled to the benefits
provided by the Indenture, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles; and
the Designated Securities and the Indenture conform to the descriptions thereof
in the Prospectus as amended or supplemented;
(vii) The Indenture has been duly delivered by the Company, and assuming the
Indenture is the valid and legally binding obligation of the Trustee, the
Indenture constitutes a valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles; and
(viii) In the case of Guaranteed Securities, the Guarantee has been duly
authorized, executed and issued by the Guarantor and, assuming due
authentication of the Designated Securities by the Trustee and upon payment for
and delivery of the Designated Securities in accordance with this Agreement and
the Pricing Agreement, will constitute valid and legally binding obligations of
the Guarantor enforceable against the Guarantor in accordance with its terms and
entitled to the benefits provided by the Indenture, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles; and the Guarantee conforms to the descriptions thereof in the
Prospectus as amended or supplemented;
(ix) In the case of Guaranteed Securities, the Indenture has been duly
authorized, executed and delivered by the Guarantor and, assuming the Indenture
is the valid and legally binding obligation of the Trustee, constitutes a valid
and legally binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other similar laws of general
principles; and the Indenture has been duly qualified under the Trust Indenture
Act;
(x) The issue and sale of the Designated Securities and the compliance by the
Company with all of the provisions of the Designated Securities, the Indenture,
this Agreement and the Pricing Agreement with respect to the Designated
Securities and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property or assets
of the Company pursuant to the terms of, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument which is material to the Company
and its subsidiaries taken as a whole and is known to such counsel to which the
Company is a party or by which the Company is bound or to which any of the
property or assets of the Company or any of its significant subsidiaries is
subject, nor will such action will not result in any violation of any statute or
any order, rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of its properties;
and no consent, approval, authorization, order, registration or qualification of
or with any such court or any such regulatory authority or other governmental
or the consummation of the other transactions contemplated by this Agreement or
such Pricing Agreement or the Indenture, except such as have been obtained under
the Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Designated Securities by the Underwriters;
10
(xi) In the case of Guaranteed Securities, the issue and sale of the
Designated Securities and the Guarantee and the compliance by the Guarantor with
all of the provisions of the Guarantee, the Indenture, this Agreement and the
Pricing Agreement with respect to the Designated Securities and the consummation
of the transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
encumbrance upon any of the property or assets of the Guarantor pursuant to the
terms of, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument which is material to the Company, the Guarantor and its
Guarantor is a party or by which the Guarantor is bound or to which any of the
property or assets of the Guarantor or any of its significant subsidiaries is
subject, nor will such action result in any violation of the provisions of the
Restated Certificate of Incorporation, as amended, or the By-Laws, as amended,
of the Guarantor or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction over the
Guarantor or any of its properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or any such
regulatory authority or other governmental agency or body is required for the
issue and sale of the Guarantee or the consummation of the other transactions
contemplated by this Agreement or such Pricing Agreement or the Indenture,
except such as have been obtained under the Act and the Trust Indenture Act and
such consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Securities by the Underwriters;
(xii) The documents incorporated by reference in the Prospectus as amended or
supplemented (other than the financial statements and related schedules therein,
as to which such counsel need express no opinion), when they became effective or
were filed with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder; and such
counsel has no reason to believe that any of such documents, when they became
effective or were so filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act, an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and, in the
case of other documents which were filed under the Act or the Exchange Act with
the Commission, an untrue statement of a material fact or omitted to state a
when such documents were so filed, not misleading; and
11
(xiii) The Registration Statement, as of its effective date, and the
Prospectus as amended or supplemented and any further amendments and supplements
thereto made by the Company prior to the Time of Delivery for the Designated
Securities as of its date (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations thereunder; such counsel has no
reason to believe that, as of the effective date of the Registration Statement,
the Registration Statement (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material fact
misleading or that, as of its date and as of the Time of Delivery, the
Prospectus, as amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion),
contains an untrue statement of a material fact or omits to state a material
and such counsel does not know of any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or incorporated by
reference or described as required;
(e) The Trustee shall have furnished to the Representative a certificate,
dated the Time of Delivery, as to its due authorization, execution and delivery
of the Indenture and its due authentication of the Designated Securities;
(f) At the Time of Delivery, the independent accountants who have certified
the financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have furnished to
the Representative a letter, dated the Time of Delivery, of the type described
in the American Institute of Certified Public Accountants' Statement on Auditing
Standards No. 72 covering such matters as the Representative may reasonably
request and in form and substance satisfactory to the Representative;
12
(g) Since the effective date of the Registration Statement (or any
post-effective amendment thereto) no event shall have occurred which should have
been set forth in an amendment to the Registration Statement or a supplement to
the Prospectus but which has not been so set forth, and since the respective
dates as of which information is given in the Prospectus there shall not have
been any change or any development involving a prospective change in or
affecting the business and operations, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the effect of
which is in the reasonable judgment of the Representative so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Securities on the terms and in the
manner contemplated in the Prospectus;
(h) Subsequent to the date of the applicable Pricing Agreement there shall not
have occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange, Inc.; (ii) a
general moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; (iii) a material disruption in
securities settlement or clearance services; or (iv) the outbreak or material
escalation of hostilities involving the United States or Bermuda or the
declaration, on or after the date hereof, by the United States or Bermuda of a
national emergency or war if the effect of any such event specified in this
clause (iv) in the reasonable judgment of the Representative makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Designated Securities on the terms and in the manner contemplated in the
Prospectus;
(i) Each of the Company and, in the case of Guaranteed Securities, the
Guarantor shall have furnished or caused to be furnished to the Representative
at the Time of Delivery a certificate or certificates of officers of the Company
and, in the case of Guaranteed Securities, the Guarantor as to the accuracy of
the representations and warranties of the Company and, in the case of Guaranteed
Securities, the Guarantor herein at and as of the Time of Delivery, as to the
performance by the Company and, in the case of Guaranteed Securities, the
Guarantor of all of their obligations hereunder to be performed at or prior to
the Time of Delivery, and as to the matters set forth in subsections (a) and (g)
of this Section; and
(j) Subsequent to the execution of the applicable Pricing Agreement, there
shall not have been (i) any decrease in the ratings of any of the debt
securities of the Company or the Guarantor by Moody's Investors Service, Inc. or
Standard & Poor's Corporation and (ii) Moody's Investors Service, Inc. or
Standard & Poor's Corporation shall not have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
the debt securities of the Company or the Guarantor.
13
8. (a) Each of the Company and, in the case of Guaranteed Securities, the
Guarantor will jointly and severally indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus or
any other prospectus relating to the Designated Securities, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim; provided, however, that neither the Company nor, in the case of
Guaranteed Securities, the Guarantor shall be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus or any other prospectus
relating to the Designated Securities, or any amendment or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Company or, in the case of Guaranteed Securities, the Guarantor by any
Underwriter through the Representative expressly for use in the Prospectus
relating to such Designated Securities; provided further, however, that the
foregoing indemnity with respect to preliminary prospectuses shall not inure to
the benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Designated Securities if such untrue
statement or omission made in any preliminary prospectus is eliminated or
remedied in the Prospectus relating to such Securities and if a copy of the
Prospectus relating to such Securities (excluding documents incorporated by
reference) has not been sent or given to such person at or prior to the written
confirmation of the sale of such Securities to such person.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company and, in the case of Guaranteed Securities, the Guarantor
against any losses, claims, damages or liabilities to which the Company or, in
the case of Guaranteed Securities, the Guarantor may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus or any other prospectus relating to the Designated Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus or any other prospectus relating to the Designated
Securities, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company or, in the case of
Guaranteed Securities, the Guarantor by such Underwriter through the
Representative expressly for use therein; and will reimburse the Company and, in
the case of Guaranteed Securities, the Guarantor for any legal or other expenses
reasonably incurred by the Company or, in the case of Guaranteed Securities, the
Guarantor in connection with investigating or defending any such action or
claim.
14
(c) Promptly after receipt by an indemnified party under subsection (a) or (b)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party, provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by its counsel that representation of
such indemnified party and the indemnifying party by the same counsel would be
inappropriate (whether or not such representation by the same counsel has been
proposed) under applicable standards of professional conduct due to actual or
potential differing interests or defenses between them, the indemnified party or
parties shall have the right to select separate counsel or participate in the
receipt of notice from the indemnifying party to such indemnified party of its
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
separate counsel, approved by the Representative in the case of paragraph (a) of
this Section 8, representing the indemnified parties under such paragraph (a)
who are parties to such action). No indemnifying party will (i) without the
prior written consent of the indemnified parties (which consent will not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action), unless such settlement, compromise or consent
(A) includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and (B) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent will not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
15
(d) If the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and, in the case of Guaranteed Securities, the Guarantor on the
one hand and the Underwriters on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and, in the case of
Guaranteed Securities, the Guarantor on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company and, in the case of Guaranteed Securities, the
Guarantor bear to the total underwriting discounts and commissions received by
the Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and, in the case of Guaranteed Securities,
the Guarantor on the one hand or the Underwriters on the other and the parties'
prevent such statement or omission. The Company, the Guarantor (in the case of
Guaranteed Securities) and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
amount by which the total price at which the Designated Securities underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations with respect to such Securities and
not joint.
(e) The obligations of the Company and, in the case of Guaranteed Securities,
the Guarantor under this Section 8 shall be in addition to any liability which
the Company and, in the case of Guaranteed Securities, the Guarantor may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions to each officer and director of the
Company and, in the case of Guaranteed Securities, the Guarantor and to each
person, if any, who controls the Company and, in the case of Guaranteed
Securities, the Guarantor within the meaning of the Act.
16
9. (a) If any Underwriter shall default in its obligations to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement, the Representative may in its discretion arrange for any Underwriter
or Underwriters or another party or other parties to purchase such Designated
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representative does not arrange for the purchase
of such Designated Securities, then the Company and, in the case of Guaranteed
Securities, the Guarantor shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to the
Representative to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed periods, the Representative
notifies the Company and, in the case of Guaranteed Securities, the Guarantor
that it has so arranged for the purchase of such Designated Securities, or
either of the Company and, in the case of Guaranteed Securities, the Guarantor
notifies the Representative that it has so arranged for the purchase of such
Designated Securities, the Representative, the Company or, in the case of
Guaranteed Securities, the Guarantor shall have the right to postpone the Time
of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and each of the
Company and, in the case of Guaranteed Securities, the Guarantor agrees to file
promptly any amendments to the Registration Statement or the Prospectus which in
the opinion of the Representative may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangement for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representative, the Company and, in the case of Guaranteed Securities, the
Guarantor as provided in subsection (a) above, the aggregate principal amount of
such Designated Securities which remains unpurchased does not exceed one-tenth
of the aggregate principal amount of all the Designated Securities, then the
Company and, in the case of Guaranteed Securities, the Guarantor shall have the
right to require each non-defaulting Underwriter to purchase the principal
amount of Designated Securities which such Underwriter agreed to purchase
hereunder and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of such Designated
Securities which such Underwriter agreed to purchase hereunder) of the
Designated Securities of such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities which remains unpurchased exceeds one-tenth of the
aggregate principal amount of Designated Securities, or if the Company and, in
the case of Guaranteed Securities, the Guarantor shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Designated Securities of a defaulting Underwriter or Underwriters, then
this Agreement shall thereupon terminate, without liability on the part of any
nondefaulting Underwriter, the Company or, in the case of Guaranteed Securities,
the Guarantor, except for the expenses to be borne by the Company, the Guarantor
(in the case of Guaranteed Securities) and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
17
10. The respective indemnities, agreements, warranties and other statements of
the Company, the Guarantor (in the case of Guaranteed Securities) and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company or any officer or director or controlling person
of the Company, or, in the case of Guaranteed Securities, the Guarantor or any
officer or director or controlling person of the Guarantor, and shall survive
delivery of and payment for the Designated Securities.
11. If the applicable Pricing Agreement shall be terminated pursuant to
Section 9 hereof, neither the Company nor, in the case of Guaranteed Securities,
the Guarantor shall then be under any liability to any Underwriter with respect
to the Designated Securities except as provided in Section 6 and Section 8
hereof; but if for any other reason Designated Securities are not delivered by
or on behalf of the Company as provided herein, the Company and, in the case of
Guaranteed Securities, the Guarantor will jointly and severally reimburse the
Underwriters through the Representative for all out-of-pocket expenses approved
in writing by the Representative, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of such Designated Securities, but the Company and, in the
case of Guaranteed Securities, the Guarantor shall then be under no further
liability to any Underwriter with respect to such Designated Securities except
as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representative shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by the Representative.
All statements, requests, notices and agreements hereunder shall be in writing
or by facsimile, and if to the Underwriters shall be sufficient in all respects
if delivered or sent by registered mail to the address of the Representative as
set forth in the applicable Pricing Agreement; if to the Company shall be
sufficient in all respects if delivered or sent by registered mail in care of
the Guarantor to the address of the Guarantor set forth in the Registration
Statement, Attention: Vice President and Treasurer, with a copy to: Senior Vice
President and General Counsel; if to the Guarantor (in the case of Guaranteed
Securities) shall be sufficient in all respects if delivered or sent by
registered mail to the address of the Guarantor set forth in the Registration
President and General Counsel; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
registered mail to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or facsimile constituting such Questionnaire, which
address has been supplied to the Company by the Representative.
18
13. This Agreement shall be binding upon, and inure solely to the benefit of,
the Underwriters, the Company, the Guarantor (in the case of Guaranteed
Securities) and, to the extent provided in Section 8 and Section 10 hereof, the
officers and directors of the Company and the Guarantor (in the case of
Guaranteed Securities) and each person who controls the Company, the Guarantor
(in the case of Guaranteed Securities) or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence in connection with each Pricing Agreement.
15. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York applicable to contracts made and to be performed
therein.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto in any number of counterparts (including by means of
facsimile), each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
19
PRICING AGREEMENT
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
As Representatives of the several
Underwriters named in Schedule I hereto,
9 West 57th Street, 29th Floor
May 24, 2005
Dear Ladies and Gentlemen:
Ingersoll-Rand Company Limited (the "Company") proposes, subject to the terms
and conditions stated herein and in the Underwriting Agreement Standard
Provisions dated as of May 24, 2005 (the "Underwriting Agreement"), to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedule II hereto (the "Designated Securities"). The
Designated Securities will be guaranteed (the “Guarantee”) to the extent and as
provided in the Indenture. Each of the provisions of the Underwriting Agreement
is incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty with respect to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the Prospectus,
as the case may be, relating to the Designated Securities, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the time and place and at the
purchase price to the Underwriters set forth in Schedule II hereto, the
principal amount of Designated Securities set forth opposite the name of such
Underwriter in Schedule I hereto.
2
If the foregoing is in accordance with your understanding, please sign and
return to us two counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Company and the Guarantor. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and the Guarantor for
examination, upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
INGERSOLL-RAND COMPANY LIMITED
By: /s/ Timothy R. McLevish_________________
By: /s/ Barbara L. Brasier___________________
INGERSOLL-RAND COMPANY
By: /s/ Barbara L. Brasier____________________
2
Accepted as of the date hereof:
By:/s/ Lily Chang____________________
By:/s/ Christopher T. Whitman_________
By:/s/ Marc Fratepietro_______________
3
SCHEDULE I
Underwriter
Principal Amount of
Designated Securities
to be Purchased
Banc of America Securities LLC
$
76,923,000
Deutsche Bank Securities Inc.
$
46,154,000
Citigroup Global Markets Inc.
$
30,768,000
J.P. Morgan Securities Inc.
$
30,768,000
Lazard Frères & Co. LLC
$
23,077,000
BNP Paribas Securities Corp.
$
15,385,000
Credit Suisse First Boston LLC
$
15,385,000
HSBC Securities (USA) Inc.
$
15,385,000
Greenwich Capital Markets, Inc.
$
15,385,000
UBS Securities LLC
$
15,385,000
Wachovia Capital Markets, LLC
$
15,385,000
Total
$
300,000,000
SCHEDULE II
TITLE OF DESIGNATED SECURITIES
4.75% Senior Notes due May 15, 2015
AGGREGATE PRINCIPAL AMOUNT:
U.S. $300,000,000
PRICE TO PUBLIC:
99.625% of the principal amount of the Designated Securities, plus accrued
interest, if any, from May 27, 2005
PURCHASE PRICE BY UNDERWRITERS:
98.975% of the principal amount of the Designated Securities, plus accrued
METHOD AND SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Same day funds; book-entry form
INDENTURE:
Debt Securities Indenture, dated as of May 24, 2005, between the Company, the
Guarantor and Wells Fargo Bank, N.A., as Trustee
MATURITY:
May 15, 2015
INTEREST RATE:
4.75%
INTEREST PAYMENT DATES:
The notes will bear interest from and including May 27, 2005. Interest will be
payable semiannually on May 15 and November 15 of each year, commencing November
15, 2005, to the holders of record of the notes at the close of business on the
preceding May 1 or November 1, whether or not such day is a business day.
2
REDEMPTION PROVISIONS:
The Designated Securities are redeemable in whole or in part, at any time at a
redemption price equal to the greater of: (i) 100% of the principal amount of
the Designated Securities to be redeemed, plus accrued interest to the
redemption date, or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest on the notes to be redeemed (not
including any portion of payments of interest accrued as of the redemption date)
discounted to the redemption date on a semiannual basis at an adjusted treasury
rate plus 15 basis points, plus accrued interest to the redemption date.
CONVERSION PROVISIONS:
No provisions for conversion
PUT PROVISIONS:
No provisions for right to put
SINKING FUND PROVISIONS:
No sinking fund provisions
TIME OF DELIVERY:
10:00 a.m., New York City time, May 27, 2005.
CLOSING LOCATION:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
NAME AND ADDRESSES OF REPRESENTATIVE:
|
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of June 2013 BioLineRx Ltd. (Translation of Registrant’s name into English) P.O. Box 45158 19 Hartum Street Jerusalem 9777518, Israel (Address of Principal Executive Offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-FxForm 40-F o Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: YesoNo x The Registrant announces that it will hold an Extraordinary General Meeting of Shareholders on July 11, 2013 at 11:00 a.m. (Israel time) at the Registrant’s office, 19 Hartum Street, Jerusalem, Israel to re-elect external directors and approve the grant of options to the external directors. Attached hereto as Exhibits 1 and 2 are, respectively, the Notice of Extraordinary General Meeting and Proxy Statement, and Proxy Card. Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BioLineRx Ltd. By: /s/Philip Serlin Philip Serlin Chief Financial and Operating Officer Dated: June 5, 2013
|
Name: Council Regulation (EEC) No 3914/87 of 22 December 1987 extending the period of application of Regulation (EEC) No 3310/75 on agriculture in the Grand Duchy of Luxembourg
Type: Regulation
Subject Matter: agricultural activity; farming systems; Europe
Date Published: nan
29 . 12. 87 Official Journal of the European Communities No L 369/3 COUNCIL REGULATION (EEC) No 3914/87 of 22 December 1987 extending the period of application of Regulation (EEC) No 3310/75 on agricul ture in the Grand Duchy of Luxembourg Whereas the application of the said system in favour of Luxembourg wines will continue to be of benefit to the agricultural income of the Grand Duchy of Luxembourg in the sector concerned ; Whereas, having regard, moreover, to the other reasons set out in Regulation (EEC) No 3310/75, the period of appli cation of that Regulation should be extended, HAS ADOPTED THIS REGULATION : THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to the Protocol on the Grand Duchy of Luxembourg annexed thereto, Having regard to Council Regulation (EEC) No 3310/75 of 16 December 1975 on agriculture in the Grand Duchy of Luxembourg ('), as last amended by Regulation (EEC) No 4067/86 (2), and in particular Article 2 (2) thereof, Having regard to the proposal from the Commission, Whereas, under the second subparagraph of Article 1 ( 1 ) of the Protocol on the Grand Duchy of Luxembourg, Belgium, Luxembourg and the Netherlands are to apply the system provided for in the third paragraph of Article 6 of the Convention on the Economic Union of Belgium and Luxembourg of 25 July 1921 ; whereas the period of application of that system was last extended by Regula tion (EEC) No 4067/86 ; whereas the Council has to decide to what extent those provisions should be main tained, amended or discontinued ; Article 1 In the first subparagraph of Article 2 of Regulation (EEC) No 3310/75, '31 December 1987' shall be hereby replaced by '31 December 1988 '. Article 2 This Regulation shall enter into force on 1 January 1988 . This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels, 22 December 1987. For the Council The President N. WILHJELM (') OJ No L 328 , 20 . 12. 1975, p . 12. O OJ No L 371 , 31 . 12. 1986, p . 13 . |
Title: Honestly scared... this guy called me threatening to have me arrested in the morning if I do not pay them X amount of dollars immediately.
Question:Long story short I had a Kay Jewelers account when I was very young and I defaulted on it. This was many years ago but I am working on cleaning up my credit so I set up a payment plan with the law firm that was handling the collections. Some how this months payment did not go through and I immediately get a call at around 6:30 PM central from someone from a company called Empire Asset Collection Agency? (I think that is what he said.)
He said since I defaulted on a payment with a law firm there would be a additional 6 months added on to my sentence. Then listed off a laundry list of charges that I would be picked up for which included bank wire fraud, theft of goods, larceny? (I think he said that he was talking a lot)
I have no idea what to do and honestly am scared as I have never been to jail nor committed any crimes like this.
I have no problem with paying them what I owe but do not want to go to jail or have a record.
Tennessee, USA
Thanks for reading.
Topic:
Consumer Law
Answer #1: Well they're just breaking rules left and right. First, breathe. Next, look at the [FTC's explanation of exactly what debt collectors are and are *not* allowed to do or say.](https://www.consumer.ftc.gov/articles/0149-debt-collection) You definitely will not be arrested.
In case you don't feel like reading that, here's the relevant bit:
>**Debt collectors are also not allowed to say that:**
>you will be arrested if you don’t pay your debt;
>they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so;
>or legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.Answer #2: Here's a fairly comprehensive list of people who can have you arrested:
* The Police (not the band, but actual law enforcement officers).
* Prosecutors.
* A stripper dressed as a sexy cop. (Arrest is temporary, and no charges will be filed.)
This caller is none of those. You won't be arrested. |
Exhibit 99.4 Form 52-109F2 Certification of Interim Filings Full Certificate I, Barney Magnusson, Chief Financial Officer of SilverCrest Mines Inc., certify the following: 1. Review:I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of SilverCrest Mines Inc. (the “issuer”) for the interim period ended March31, 2013. 2. No misrepresentations:Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation:Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design:Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings (a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that (i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and (ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and (b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. Control framework:The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control - Integrated Framework (COSO Framework) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO). ICFR – material weakness relating to design: N/A Limitation on scope of design:N/A 6. Reporting changes in ICFR:The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January1, 2013 and ended on March31, 2013that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. Date: May 15, 2013 Barney Magnusson Chief Financial Officer
|
Exhibit 10.2
EXTENSION AGREEMENT
Bank of America, N.A.
100 North Tryon Street
Charlotte, NC 28255
April 26, 2012
SITEL CANADA CORPORATION
c/o SITEL Worldwide Corporation
Two American Center
3102 West End Avenue, Suite 1000
Nashville, TN 37203
Attention: Mr. Neal Miller, Treasurer
Telecopier No.: 615-301-7377
Telephone No.: 615-301-7150
Goldman Sachs Credit Partners L.P.,
as Administrative Agent
200 West Street
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of January 30, 2007, among
SITEL, LLC, a Delaware limited liability company (“U.S. Borrower”), ClientLogic
Holding Limited, a company incorporated in England and Wales under company
number 3530981 (“UK Borrower”), SITEL CANADA CORPORATION, an Ontario corporation
(“Canadian Borrower”, and Canadian Borrower, collectively with U.S. Borrower and
UK Borrower, the “Borrowers”), the other Credit Parties party thereto, the
Lenders from time to time party thereto, Goldman Sachs Credit Partners L.P., as
Joint Lead Arranger, Joint Bookrunner, Administrative Agent (together with its
permitted successor(s) in such capacity, “Administrative Agent”) and Collateral
Agent (together with its permitted successor(s) in such capacity, “Collateral
Agent”), and General Electric Capital Corporation, as Syndication Agent (in such
capacity, “Syndication Agent”) (as amended as of December 9, 2008, as amended as
of April 21, 2009, as amended as of February 18, 2010, as amended as of May 12,
2011, as amended as of April 5, 2012 and as it may be further amended, restated,
supplemented or otherwise modified through the date hereof, the “Credit
Agreement”). Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Credit Agreement.
Each Lender party to this letter agreement (this “Extension Agreement”, and each
such Lender, an “Extending Lender”) hereby severally agrees to convert on April
26, 2012 the Original Canadian Revolving Commitments set forth on such Lender’s
applicable Extension Election and Original
Canadian Revolving Loans thereunder to an Extended Canadian Revolving Commitment
and related Extended Canadian Revolving Loans with the terms set forth on Annex
I hereto. Each Extended Canadian Revolving Commitment and related Extended
Canadian Revolving Loans provided pursuant to this Extension Agreement shall be
subject to the terms and conditions set forth in the Credit Agreement. Each
Extending Lender also agrees that the provisions set forth on Annex I attached
hereto shall be applicable to its Extended Canadian Revolving Commitments and
related Extended Canadian Revolving Loans.
The Canadian L/C Issuer party to this Extension Agreement (the “Extending
Issuing Bank”) hereby agrees to extend its commitment under the Credit Agreement
to issue Canadian Letters of Credit until the scheduled final maturity date and
commitment termination date of the Extended Canadian Revolving Commitments and
related Extended Canadian Revolving Loans set forth on Annex I hereto. Each
Canadian Letter of Credit shall be subject to the terms and conditions set forth
in the Credit Agreement.
The Canadian Dollars Swing Line Lender party to this Extension Agreement (the
“Extending Swing Line Lender”) hereby agrees to extend its commitment to make
Canadian Dollars Swing Line Loans until the scheduled final maturity date and
Canadian Dollars Swing Line Loan shall be subject to the terms and conditions
set forth in the Credit Agreement.
Each Extending Lender, the Extending Issuing Bank and the Extending Swing Line
Lender hereby:
1. confirms that it has received a copy of the Credit Agreement and the other
Loan Documents, together with copies of the financial statements delivered
pursuant thereto and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Extension Agreement;
2. agrees that it will, independently and without reliance upon the
Administrative Agent, the other Agents, or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
3. appoints and authorizes the Agents to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement and the other Loan
Documents or any other instrument or document furnished pursuant thereto as are
delegated to the Agents by the terms thereof, together with such powers as are
reasonably incidental thereto;
4. agrees that its Extended Canadian Revolving Commitments resulting from the
effectiveness of this Extension Agreement (if any) shall be referred to as
“Tranche A Extended Canadian Revolving Commitments”;
5. authorizes the Agents to execute such amendments to the Loan Documents as are
considered to
be necessary or advisable pursuant to Section 1.17 of the Credit Agreement;
6. agrees that it will continue to perform, in accordance therewith, all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender;
7. to the extent required by Section 1.11 of the Credit Agreement, in the case
of each Non-US Lender, attaches the forms prescribed by the Internal Revenue
Service of the United States, certifying as to its entitlement to a complete
exemption from United States withholding taxes with respect to all payments to
be made under the Credit Agreement and the other Loan Documents; and
8. (a) acknowledges and agrees that the Fourth Amendment complies in all
respects with the Credit Agreement (prior to giving effect to the Fourth
Amendment), including Section 11.1 thereof, and consents and agrees to the
amendments and other agreements made in the Second Amendment, (b) acknowledges
and agrees that this Extension Agreement complies in all respects with the
Credit Agreement, including Sections 1.17 and 11.1 thereof, and (c) consents in
accordance with the Credit Agreement, including Sections 1.17 and 11.1 thereof,
to the extensions and other agreements contemplated herein.
Each Credit Party hereby acknowledges that it has reviewed the terms and
provisions of the Credit Agreement and this Extension Agreement and consents to
the supplement of the Fourth Amendment and/or the Credit Agreement effected
pursuant to this Extension Agreement. Each Credit Party hereby confirms that the
Guaranty by such Credit Party will continue to guarantee, to the fullest extent
possible in accordance with such Guaranty, the payment and performance of all
applicable Obligations. Each Credit Party hereby confirms that each relevant
Collateral Document to which it is a party or otherwise bound and all Collateral
of such Credit Party encumbered thereby will continue to secure, to the fullest
extent possible in accordance with such Collateral Document, the payment and
performance of all Obligations of such Credit Party.
Each Credit Party acknowledges and agrees that any of the Loan Documents to
which it is a party or otherwise bound, as amended (including as amended and
modified by this Extension Agreement), shall continue in full force and effect
and that all of its obligations thereunder shall not be impaired or limited by
the execution or effectiveness of this Extension Agreement. Each Credit Party
represents and warrants that, after giving effect to the amendments and other
agreements made in this Extension Agreement, all representations and warranties
made by it in each Loan Document to which it is a party or otherwise bound are
true and correct in all material respects on and as of the date hereof to the
same extent as though made on and as of the date hereof, except to the extent
such representations and warranties specifically relate to an earlier date, in
which case they were true and correct in all material respects on and as of such
earlier date.
The Canadian Borrower and each other Credit Party party hereto has duly
authorized, executed (if applicable) and recorded (or caused to be recorded) in
each appropriate governmental office all relevant filings and recordations to
ensure that the Extended Canadian Revolving Commitments are secured in
accordance with the Collateral Documents (other than with respect to
modification agreements to Mortgages, if any, that shall be provided no later
than 60 days (or such greater number of days as agreed to by Administrative
Agent in its sole discretion) following the effective date of
this Extension Agreement).
In order to induce Lenders and/or the Canadian L/C Issuer and/or the Canadian
Dollars Swing Line Lender to enter into this Extension Agreement and to
supplement the Fourth Amendment and/or the Credit Agreement in the manner
provided herein, the Canadian Borrower and each other Credit Party represents
and warrants to the Administrative Agent and each Lender and/or the Canadian L/C
Issuer and/or the Canadian Dollars Swing Line Lender that the following
statements are true and correct in all material respects:
1. Each Credit Party which is party hereto has all requisite power and authority
to enter into this Extension Agreement.
2. The execution and delivery of this Extension Agreement by each Credit Party
that is a party hereto have been duly authorized by all necessary action on the
part of each such Credit Party.
3. The execution, delivery and performance by each Credit Party of this
Extension Agreement (including the extensions of maturity contemplated hereby)
does not and will not (i) violate any applicable law or regulation, or any order
or decree of any court or Governmental Authority except where such violation
would not reasonably be expected to have a Material Adverse Effect, (ii)
contravene any provision of such Person’s charter, bylaws or partnership or
operating agreement, memorandum or articles of association (or equivalent) as
applicable, (iii) conflict with or result in the breach or termination of,
constitute a default under or accelerate or permit the acceleration of any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Person is a party or by which such
Person or any of its property is bound except where such conflict, breach or
default would not reasonably be expected to have a Material Adverse Effect, (iv)
result in the creation or imposition of any Lien upon any material property of
such Person other than those in favor of Collateral Agent, on behalf of itself
and Secured Parties, pursuant to the Loan Documents other than Liens permitted
hereunder and (v) require the consent or approval of any Governmental Authority,
other than those which have been (or will be within any applicable statutory
time limits) duly obtained, made or complied with on or prior to the date
hereof.
4. No registration with, consent or approval of, or notice to, or other action
to, with or by, any Governmental Authority is or will be required in connection
with the execution and delivery by each Credit Party of this Extension
Agreement.
5. This Extension Agreement has been duly executed and delivered by each of the
Credit Parties that is a party thereto and is the legally valid and binding
obligation of such Credit Party, enforceable against such Credit Party in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability.
6. After giving effect to the amendments and other agreements made in this
Extension Agreement, the representations and warranties contained in Section 3
of the Credit Agreement (after giving effect to this Extension Agreement) are
and will be true and correct in all material respects on and
as of the date hereof to the same extent as though made on and as of the date
hereof, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true and correct in all
material respects on and as of such earlier date.
7. After giving effect to the amendments and other agreements made in this
Extension Agreement, no event has occurred and is continuing that would
constitute an Event of Default or a Default.
Upon the execution of a counterpart of this Extension Agreement by the Canadian
Borrower and each other Credit Party, each Extending Lender, the Canadian L/C
Issuer and the Canadian Dollars Swing Line Lender, the delivery to the
Administrative Agent of a fully executed copy hereof (including by way of
counterparts and by electronic delivery) and the payment of any fees required in
connection herewith, this Extension Agreement and the conversions, extensions
and other agreements contemplated herein shall become effective as of April 26,
2012. The parties hereto agree that (a) the aggregate principal amount of
Original Canadian Revolving Commitments converted into Extended Canadian
Revolving Commitments pursuant to this Extension Agreement is $10,000,000 and
(b) the aggregate principal amount of Original Canadian Revolving Loans related
to such Original Canadian Revolving Commitments converted into Extended Canadian
Revolving Loans pursuant to this Extension Agreement is $606,183.07.
After the effectiveness of this Extension Agreement in accordance with the
preceding paragraph, this Extension Agreement may only be changed, modified or
varied by written instrument in accordance with the requirements for the
modification of Loan Documents pursuant to Section 11.1 of the Credit Agreement.
THIS EXTENSION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.
This Extension Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of this page intentionally left blank.]
Very truly yours,
BANK OF AMERICA, N.A., as an Extended Canadian Revolving Lender, as Canadian
Dollars Swing Line Lender and as Canadian L/C Issuer
By: /s/ Medina Sales De Andrade_____
Name: Medina Sales De Andrade
Title: Vice President
ACCEPTED AND AGREED AS OF THE DATE FIRST WRITTEN ABOVE:
SITEL, LLC
By: /s/ Neal Miller________________
Name: Neal Miller
Title: Treasurer
CLIENTLOGIC HOLDING LIMITED
By: /s/ John Kellett ______________
Name: John Kellett
Title: Director
SITEL CANADA CORPORATION
Name: Neal Miller
Title: Treasurer
SITEL WORLDWIDE CORPORATION
Name: Neal Miller
Title: Treasurer
SITEL OPERATING CORPORATION
Name: Neal Miller
Title: Treasurer
SERVICE ZONE HOLDINGS, LLC
Name: Neal Miller
Title: Treasurer
CATALOG RESOURCES, INC.
Name: Neal Miller
Title: Treasurer
SITEL INTERNATIONAL HOLDINGS, INC.
Name: Neal Miller
Title: Treasurer
1293219 ONTARIO INC.
Name: Neal Miller
Title: Treasurer
1293220 ONTARIO INC.
Name: Neal Miller
Title: Treasurer
SITEL MEXICO S.A. DE C.V.
By: /s/ David Beckman____________
Name: David Beckman
Title: Director
CLIENTLOGIC (UK) HOLDING LIMITED
Name: John Kellett
Title: Director
CLIENTLOGIC LIMITED
Name: John Kellett
Title: Director
CLIENTLOGIC (UK) LIMITED
Name: John Kellett
Title: Director
SITEL INTERNATIONAL LLC
Name: Neal Miller
Title: Treasurer
NA LIQUIDATING COMPANY, INC. (F/K/A NATIONAL ACTION FINANCIAL SERVICES, INC.)
Name: Neal Miller
Title: Treasurer
SITEL CUSTOMER CARE, INC.
Name: Neal Miller
Title: Treasurer
SITEL TELESERVICES CANADA, INC.
Name: Neal Miller
Title: Treasurer
SITEL (BVI) INTERNATIONAL, INC.
Name: Neal Miller
Title: Treasurer
SITEL EUROPE LIMITED
Name: John Kellett
Title: Director
SITEL UK LIMITED
Name: John Kellett
Title: Director
SITEL NEW ZEALAND LIMITED
By: /s/ Steven Barker ______________
Name: Steven Barker
Title: Director
CLIENTLOGIC B.V.
Name: John Kellett
Title: Director
SYSTEMS INTEGRATED TELEMARKETING NETHERLANDS B.V.
Name: John Kellett
Title: Director
SITEL GMBH
Name: John Kellett
Title: Director
SRM INKASSO GMBH
Name: John Kellett
Title: Director
SITEL IBERICA TELESERVICES, S.A.U.
Name: John Kellett
Title: Director
SITEL BELGIUM NV
Name: John Kellett
Title: Director
SITEL FINANCE CORP.
Name: Neal Miller
Title: Treasurer
SITEL PANAMA, S.A.
Name: Neal Miller
Title: Treasurer
SITEL PHILIPPINES CORPORATION
Name: Steven Barker
Title: Director
GOLDMAN SACHS CREDIT PARTNERS L.P., as Administrative Agent
By: /s/ Gabe Jacobson_________________
Authorized Signatory
ANNEX I TO EXTENSION AGREEMENT
1. Scheduled final maturity date and commitment termination date of such
Extended Canadian Revolving Commitments and related Extended Canadian Revolving
Loans: January 30, 2016
2. Applicable Margin for such Extended Canadian Revolving Loans: Applicable
Index Margin = 5.75% and Applicable BA Rate Margin = 6.75%
3. Applicable Unused Line Fee Margin for such Extended Canadian Revolving
Commitments and related Extended Canadian Revolving Loans: 0.50%
4. Name of class of such Extended Canadian Revolving Commitments (and Extended
Canadian Revolving Loans): Such Extended Canadian Revolving Commitments (and
Extended Canadian Revolving Loans) shall, from and after the Effective Date, be
part of the Tranche A Extended Canadian Revolving Commitments (and Tranche A
Extended Canadian Revolving Credit Advances) class for all purposes of the
Credit Agreement, including with respect to paragraph 5 below)
5. Any Extension Series of Extended Canadian Revolving Commitments established
on or after the Effective Date shall comply with the following requirement: If
any Extension Series of Extended Canadian Revolving Commitments is established
on or after the Effective Date, the Lenders who hold Tranche A Extended Canadian
Revolving Commitment or have made Tranche A Extended Canadian Revolving Credit
Advances shall, at their option, be allowed to amend the terms of their Tranche
A Extended Canadian Revolving Commitments and Tranche A Extended Canadian
Revolving Credit Advances to conform to the terms of any such Extension Series
(including, without limitation, with respect to maturity date and Weighted
Average Yield)
|
Title: Police confiscated SD Card from GoPro...
Question:Laguna Beach, California: Police confiscated SD Card from GoPro on Sunday April 15th during a motorcycle group ride. We were all riding through red lights and some were stunting. The cop said that he could confiscate my SD card without a warrant and get a warrant at a later date. When I called today to see when I could get my card back, he stated that he has not submitted it for evidence just yet and proceeded to offer me two options. One...I could allow him consent to view the footage or Two...he can try to request a warrant for the viewing of the footage. He also asked for the name of the motorcycle facebook group and the address of the meet up spot which I told hm I would find and possibly send him later. My dilemma is how I should proceed from this point on. He was nice on the phone but I don't want to screw myself over. Yes, I was riding reckless like the group so I could be possibly be prosecuted if the footage is viewed as well as the other riders if there plates are ran. What is the smart thing to do in this case?? Please no "daddy" responses like "don't ride stupid" or "you shouldn't have being doing that". Just need law based answers. Thank you for reading this and any help that follows.
Answer #1: The law based answer is to hire an attorney and see if they can possibly suppress the evidence of you breaking the law.Answer #2: > We were all riding through red lights and some were stunting.
> "you shouldn't have being doing that". Just need law based answers.
The law based answer is to stop doing that.
Get a criminal defense attorney. Don't talk to the police without one. Answer #3: You should get a lawyer before you incriminate yourself further. |
Title: I have an abusive husband and need to get out. I need to know if my idea is legal...
Question:I posted earlier in r/relationship_advice and have a question based off of some of the advice I was given there. Basically, I am a SAHM with a 1yo and an 8yo. I have no local family, no job, and no money. My husband is abusive - mentally, physically, and emotionally. I need to leave this situation, but I'm scared about the legal battles I will face - primarily due to my husband's financial resources and his proven-to-be-good attorney (my husband was previously married and used this lawyer during those divorce proceedings). I have family out of state (I'm in PA, they're in NJ)... Because there is no current custody agreement, am I able to just take off with my children? I'm scared of what might happen if he finds out if leaving or finds out where I've gone. Not so much scared that he will hurt me, more scared that he will take my children away from me somehow. Would it be considered kidnapping if I take off with our kids and not tell him (or anyone outside of my family, for that matter) where I'm going? I don't see many options that won't take time that I'm honestly not sure I have to prepare for...
Answer #1: Contact a counselor and or the local Dv center. Get the location for the local batters women's shelter. Note - this is DIFFERENT than a homeless shelter . the first time I tried to leave some judgey cop dropped me and my 2yo at the homeless shelter. We were home within a day BC that place is just a jail and mental hospital with no guards and no doctors. Plus, its public knowledge.
The second time, I had been seeing a counselor who got me info on the battered women's shelter. I also spent 3 months secretly documenting the abuse, and letting my counselor document it as well. For some reason I felt like I couldn't leave when he was in a nice phase, so I waited for the next explosion. I just gathered up the kids, walked out, drove to the gas station, called the battered women's shelter and told them I was coming - and that if I didn't I had a drunk man waiting to beat me when I got home. Headed over to the shelter, and It was an absolute dream compared to what i left, and an undisclosed location. By that time I had a newborn as well, and I was able to stay there with both small children for over a month, no fears or cares, and get access to legal aid as needed.
Remember, walking out the door is the hardest thing to imagine, but actually the easiest thing to do. Its just a series of steps out the door that you take every day, only this time you don't turn around and walk back inside. |
Exhibit 31 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Raymond D. Zinn, certify that: 1.I have reviewed this annual report on Form 10-K/A of Micrel, Incorporated; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as designed in the Exchange Act Rules 13a-15(d) and 15d-15(f) for the registrant and have: (a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b)designed such internal control over financial reporting, or caused such internal control over financial control to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;and (d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: April 29, 2008 /S/ Raymond D. Zinn Raymond D. Zinn President, Chief Executive Officer and Director (Principal Executive Officer) Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Richard D. Crowley, certify that: 1.I have reviewed this annual report on Form 10-K/A of Micrel, Incorporated; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as designed in the Exchange Act Rules 13a-15(d) and 15d-15(f) for the registrant and have: (a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b)designed such internal control over financial reporting, or caused such internal control over financial control to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;and (d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: April 29, 2008 /S/ Richard D. Crowley Richard D. Crowley Vice President, Finance and Chief Financial Officer (Principal Financial and Accounting Officer)
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EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of December 10,
2018, by and between CEREBAIN BIOTECH CORP., a Nevada corporation, with
headquarters located at 600 Anton Blvd., Suite 1100, Costa Mesa, California
92626 (the “Company”), and JEFFERSON STREET CAPITAL LLC, a New Jersey limited
liability company (the “Buyer”).
WHEREAS:
A. The Company and the Buyer are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the rules
and regulations as promulgated by the United States Securities and Exchange
Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933
Act”);
B. Buyer desires to purchase and the Company desires to issue and sell, upon the
terms and conditions set forth in this Agreement a Convertible Promissory Note
of the Company, in the form attached hereto as Exhibit A, in the aggregate
principal amount of US$55,000.00 (together with any note(s) issued in
replacement thereof or as a dividend thereon or otherwise with respect thereto
in accordance with the terms thereof, the “Note”), convertible into shares of
common stock, $0.001 par value per share, of the Company (the “Common Stock”),
upon the terms and subject to the limitations and conditions set forth in such
Note;
C. The Buyer wishes to purchase, upon the terms and conditions stated in this
Agreement, such principal amount of Note as is set forth immediately below its
name on the signature pages hereto; and
NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby
agree as follows:
1. PURCHASE AND SALE OF NOTE.
a. Purchase of Note. On the Closing Date (as defined below), the Company shall
issue and sell to the Buyer and the Buyer agrees to purchase from the Company
such principal amount of Note as is set forth immediately below the Buyer’s name
on the signature pages hereto.
b. Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall
pay the purchase price for the Note to be issued and sold to it at the Closing
(as defined below) (the “Purchase Price”) by wire transfer of immediately
available funds to the Company, in accordance with the Company’s written wiring
instructions, against delivery of the Note in the principal amount equal to the
Purchase Price as is set forth immediately below the Buyer’s name on the
signature pages hereto, and (ii) the Company shall deliver such duly executed
Note on behalf of the Company, to the Buyer, against delivery of such Purchase
Price.
1
c. Closing Date. Subject to the satisfaction (or written waiver) of the
conditions thereto set forth in Section 5 and Section 6 below, the date and time
of the issuance and sale of the Note pursuant to this Agreement (the “Closing
Date”) shall be 12:00 noon, Eastern Standard Time on or about December 10, 2018,
or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date
at such location as may be agreed to by the parties.
2. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to the Company that:
a. Investment Purpose. As of the date hereof, the Buyer is purchasing the Note
and the shares of Common Stock issuable upon conversion of or otherwise pursuant
to the Note (including, without limitation, such additional shares of Common
Stock, if any, as are issuable (i) on account of interest on the Note (ii) as a
result of the events described in Sections 1.3 and 1.4(g) of the Note or (iii)
in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f)
below) pursuant to this Agreement, such shares of Common Stock being
collectively referred to herein as the “Conversion Shares” and, collectively
with the Note, the “Securities”) for its own account and not with a present view
towards the public sale or distribution thereof, except pursuant to sales
registered or exempted from registration under the 1933 Act; provided, however,
that by making the representations herein, the Buyer does not agree to hold any
of the Securities for any minimum or other specific term and reserves the right
to dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.
b. Accredited Investor Status. The Buyer is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).
c. Reliance on Exemptions. The Buyer understands that the Securities are being
offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and the Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of the Buyer to acquire the
Securities.
d. Information. The Buyer and its advisors, if any, have been, and for so long
as the Note remains outstanding will continue to be, furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities which have been
requested by the Buyer or its advisors. The Buyer and its advisors, if any, have
been, and for so long as the Note remains outstanding will continue to be,
afforded the opportunity to ask questions of the Company. Notwithstanding the
foregoing, the Company has not disclosed to the Buyer any material nonpublic
information and will not disclose such information unless such information is
disclosed to the public prior to or promptly following such disclosure to the
Buyer. Neither such inquiries nor any other due diligence investigation
conducted by Buyer or any of its advisors or representatives shall modify, amend
or affect Buyer’s right to rely on the Company’s representations and warranties
contained in Section 3 below. The Buyer understands that its investment in the
Securities involves a significant degree of risk. The Buyer is not aware of any
facts that may constitute a breach of any of the Company's representations and
warranties made herein.
2
e. Governmental Review. The Buyer understands that no United States federal or
state agency or any other government or governmental agency has passed upon or
made any recommendation or endorsement of the Securities.
f. Transfer or Re-sale. The Buyer understands that (i) the sale or re-sale of
the Securities has not been and is not being registered under the 1933 Act or
any applicable state securities laws, and the Securities may not be transferred
unless (a) the Securities are sold pursuant to an effective registration
statement under the 1933 Act, (b) the Buyer shall have delivered to the Company,
at the cost of the Company, an opinion of counsel that shall be in form,
substance and scope customary for opinions of counsel in comparable transactions
to the effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration, which opinion shall
be accepted by the Company, (c) the Securities are sold or transferred to an
“affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a
successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise
transfer the Securities only in accordance with this Section 2(f) and who is an
Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e)
the Securities are sold pursuant to Regulation S under the 1933 Act (or a
successor rule) (“Regulation S”), and the Buyer shall have delivered to the
Company, at the cost of the Company, not to exceed $300 per opinion, an opinion
of counsel that shall be in form, substance and scope customary for opinions of
counsel in corporate transactions, which opinion shall be accepted by the
Company; (ii) any sale of such Securities made in reliance on Rule 144 may be
made only in accordance with the terms of said Rule and further, if said Rule is
not applicable, any re-sale of such Securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and (iii) neither the Company nor any other person is under any
obligation to register such Securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder (in each case). Notwithstanding the foregoing or anything else
contained herein to the contrary, the Securities may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement. In the
event that the Company does not accept the opinion of counsel provided by the
Buyer with respect to the transfer of Securities pursuant to an exemption from
registration, such as Rule 144 or Regulation S, within three (3) business days
of delivery of the opinion to the Company, the Company shall pay to the Buyer
liquidated damages of three and one half percent (3.5%) of the outstanding
amount of the Note per day plus accrued and unpaid interest on the Note,
prorated for partial months, in cash or shares at the option of the Buyer
(“Standard Liquidated Damages Amount”). If the Buyer elects to be pay the
Standard Liquidated Damages Amount in shares of Common Stock, such shares shall
be issued at the Conversion Price (as defined in the Note) at the time of
payment.
3
g. Legends. The Buyer understands that the Note and, until such time as the
Conversion Shares have been registered under the 1933 Act may be sold pursuant
to Rule 144 or Regulation S without any restriction as to the number of
securities as of a particular date that can then be immediately sold, the
Conversion Shares may bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of the
certificates for such Securities):
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective registration statement
filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or
Regulation S without any restriction as to the number of securities as of a
particular date that can then be immediately sold, or (b) such holder provides
the Company with an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public
sale or transfer of such Security may be made without registration under the
1933 Act, which opinion shall be accepted by the Company so that the sale or
transfer is effected. The Buyer agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, in
compliance with applicable prospectus delivery requirements, if any. In the
registration, such as Rule 144 or Regulation S, at the Deadline (as such term is
defined in Section 1.4(d) of the Note), it will be considered an Event of
Default pursuant to Section 3.2 of the Note.
4
h. Authorization; Enforcement. This Agreement has been duly and validly
authorized. This Agreement has been duly executed and delivered on behalf of the
Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer
enforceable in accordance with its terms.
i. Residency. The Buyer is a resident of the jurisdiction as set forth in the
Preamble of this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Buyer that:
a. Organization and Qualification. The Company and each of its Subsidiaries (as
defined below), if any, is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated,
with full power and authority (corporate and other) to own, lease, use and
operate its properties and to carry on its business as and where now owned,
leased, used, operated and conducted. The Company and each of its Subsidiaries
is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership or use of property or the
nature of the business conducted by it makes such qualification necessary except
where the failure to be so qualified or in good standing would not have a
Material Adverse Effect. “Material Adverse Effect” means any material adverse
effect on the business, operations, assets, financial condition or prospects of
the Company or its Subsidiaries, if any, taken as a whole, or on the
transactions contemplated hereby or by the agreements or instruments to be
entered into in connection herewith. “Subsidiaries” means any corporation or
other organization, whether incorporated or unincorporated, in which the Company
owns, directly or indirectly, any equity or other ownership interest.
b. Authorization; Enforcement. (i) The Company has all requisite corporate power
and authority to enter into and perform this Agreement, the Note and to
consummate the transactions contemplated hereby and thereby and to issue the
Securities, in accordance with the terms hereof and thereof, (ii) the execution
and delivery of this Agreement, the Note by the Company and the consummation by
it of the transactions contemplated hereby and thereby (including without
limitation, the issuance of the Note and the issuance and reservation for
issuance of the Conversion Shares issuable upon conversion or exercise thereof)
have been duly authorized by the Company’s Board of Directors and no further
consent or authorization of the Company, its Board of Directors, or its
shareholders is required, (iii) this Agreement has been duly executed and
delivered by the Company by its authorized representative, and such authorized
representative is the true and official representative with authority to sign
this Agreement and the other documents executed in connection herewith and bind
the Company accordingly, and (iv) this Agreement constitutes, and upon execution
and delivery by the Company of the Note, each of such instruments will
constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
5
c. Capitalization. As of November 28, 2018, the authorized capital stock of the
Company consists of 249,000,000 shares of Common Stock, of which approximately
17,232,097 shares of Common Stock are issued and outstanding, and 1,000,000
shares of preferred stock authorized of which 0 shares of preferred stock are
issued and outstanding. Except as disclosed in the SEC Documents, no shares are
reserved for issuance pursuant to the Company’s stock option plans, no shares
are reserved for issuance pursuant to securities (other than the Note)
exercisable for, or convertible into or exchangeable for shares of Common Stock
and immediately upon the Company increasing its authorized shares of capital
stock 75,000,000 shares of Common Stock shall be reserved for issuance upon
conversion of the Note (the “Initial Reserve Amount”). All of such outstanding
shares of capital stock are, or upon issuance will be, duly authorized, validly
issued, fully paid and non-assessable. No shares of capital stock of the Company
are subject to preemptive rights or any other similar rights of the shareholders
of the Company or any liens or encumbrances imposed through the actions or
failure to act of the Company. Except as disclosed in the SEC Documents, as of
the effective date of this Agreement, (i) there are no outstanding options,
warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for any shares of capital stock of the Company or any of its
Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is
or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale
of any of its or their securities under the 1933 Act and (iii) there are no
anti-dilution or price adjustment provisions contained in any security issued by
the Company (or in any agreement providing rights to security holders) that will
be triggered by the issuance of the Note or the Conversion Shares. The Company
has filed in its SEC Documents true and correct copies of the Company’s
Certificate of Incorporation as in effect on the date hereof (“Certificate of
Incorporation”), the Company’s By-laws, as in effect on the date hereof (the
“By- laws”), and the terms of all securities convertible into or exercisable for
Common Stock of the Company and the material rights of the holders thereof in
respect thereto. The Company shall provide the Buyer with a written update of
this representation signed by the Company’s Chief Executive on behalf of the
Company as of the Closing Date.
d. Issuance of Shares. The issuance of the Note is duly authorized and, upon
issuance in accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable and free from all preemptive or similar rights,
taxes, liens, charges and other encumbrances with respect to the issue thereof.
The Conversion Shares are duly authorized and reserved for issuance and, upon
conversion of the Note in accordance with its respective terms, will be validly
issued, fully paid and non-assessable, and free from all taxes, liens, claims
and encumbrances with respect to the issue thereof and shall not be subject to
preemptive rights or other similar rights of shareholders of the Company and
will not impose personal liability upon the holder thereof.
6
e. Acknowledgment of Dilution. The Company understands and acknowledges the
potentially dilutive effect to the Common Stock upon the issuance of the
Conversion Shares upon conversion of the Note. The Company further acknowledges
that its obligation to issue Conversion Shares upon conversion of the Note in
accordance with this Agreement, the Note is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership
interests of other shareholders of the Company.
f. No Conflicts. The execution, delivery and performance of this Agreement and
the Note by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and
reservation for issuance of the Conversion Shares) will not (i) conflict with or
result in a violation of any provision of the Certificate of Incorporation or
By-laws, or (ii) violate or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which with notice or lapse of
time or both could become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture, patent, patent license or instrument to which the Company or any of
its Subsidiaries is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and regulations of any self-regulatory organizations to
which the Company or its securities are subject) applicable to the Company or
any of its Subsidiaries or by which any property or asset of the Company or any
of its Subsidiaries is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect). Neither
the Company nor any of its Subsidiaries is in violation of its Certificate of
Incorporation, By-laws or other organizational documents and neither the Company
nor any of its Subsidiaries is in default (and no event has occurred which with
notice or lapse of time or both could put the Company or any of its Subsidiaries
in default) under, and neither the Company nor any of its Subsidiaries has taken
any action or failed to take any action that would give to others any rights of
indenture or instrument to which the Company or any of its Subsidiaries is a
party or by which any property or assets of the Company or any of its
Subsidiaries is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses
of the Company and its Subsidiaries, if any, are not being conducted, and shall
not be conducted so long as the Buyer owns any of the Securities, in violation
of any law, ordinance or regulation of any governmental entity. Except as
specifically contemplated by this Agreement and as required under the 1933 Act
and any applicable state securities laws, the Company is not required to obtain
any consent, authorization or order of, or make any filing or registration with,
any court, governmental agency, regulatory agency, self-regulatory organization
or stock market or any third party in order for it to execute, deliver or
perform any of its obligations under this Agreement, the Note in accordance with
the terms hereof or thereof or to issue and sell the Note in accordance with the
terms hereof and to issue the Conversion Shares upon conversion of the Note. All
consents, authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof. The Company is not in violation of the
listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”), the
OTCQB or any similar quotation system, and does not reasonably anticipate that
the Common Stock will be delisted by the OTCBB, the OTCQB or any similar
quotation system, in the foreseeable future nor are the Company's securities
“chilled” by DTC. The Company and its Subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.
7
g. SEC Documents; Financial Statements. The Company has timely filed all
quarterly and annual reports required to be filed by it with the SEC pursuant to
the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “1934 Act”) (all of the foregoing filed prior to the date hereof and all
exhibits included therein and financial statements and schedules thereto and
documents (other than exhibits to such documents) incorporated by reference
therein, being hereinafter referred to herein as the “SEC Documents”). The
Company has delivered to the Buyer true and complete copies of the SEC
Documents, except for such exhibits and incorporated documents, and except as
such Documents are available EDGAR filings on the SEC’s sec.gov website. As of
their respective dates, the SEC Documents complied in all material respects with
the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
the circumstances under which they were made, not misleading. None of the
statements made in any such SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements as have been
amended or updated in subsequent filings prior the date hereof). As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
United States generally accepted accounting principles, consistently applied,
during the periods involved and fairly present in all material respects the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the
financial statements of the Company included in the SEC Documents, the Company
has no liabilities, contingent or otherwise, other than (i) liabilities incurred
in the ordinary course of business subsequent to September 30, 2016, and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected in such financial statements, which, individually or in the aggregate,
are not material to the financial condition or operating results of the Company.
The Company is subject to the reporting requirements of the 1934 Act. For the
avoidance of doubt, filing of the documents required in this Section 3(g) via
the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”)
shall satisfy all delivery requirements of this Section 3(g).
h. Absence of Certain Changes. Since September 30, 2018, there has been no
material adverse change and no material adverse development in the assets,
liabilities, business, properties, operations, financial condition, results of
operations, prospects or 1934 Act reporting status of the Company or any of its
Subsidiaries.
8
i. Absence of Litigation. There is no action, suit, claim, proceeding, inquiry
or investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against or affecting the Company or any
of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. Schedule 3(i) contains a complete
list and summary description of any pending or, to the knowledge of the Company,
threatened proceeding against or affecting the Company or any of its
Subsidiaries, without regard to whether it would have a Material Adverse Effect.
The Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.
j. Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or
possesses the requisite licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights
(“Intellectual Property”) necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future). Except
as disclosed in the SEC Documents, there is no claim or action by any person
pertaining to, or proceeding pending, or to the Company’s knowledge threatened,
which challenges the right of the Company or of a Subsidiary with respect to any
Intellectual Property necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future); to the
best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and
intended products, services and processes do not infringe on any Intellectual
Property or other rights held by any person; and the Company is unaware of any
facts or circumstances which might give rise to any of the foregoing. The
Company and each of its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of their Intellectual Property.
k. No Materially Adverse Contracts, Etc. Neither the Company nor any of its
Subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the judgment of the
Company’s officers has or is expected in the future to have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is a party to any
contract or agreement which in the judgment of the Company’s officers has or is
expected to have a Material Adverse Effect.
l. Tax Status. The Company and each of its Subsidiaries has made or filed all
federal, state and foreign income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim. The Company has not executed a
waiver with respect to the statute of limitations relating to the assessment or
collection of any foreign, federal, state or local tax. None of the Company’s
tax returns is presently being audited by any taxing authority.
9
m. Certain Transactions. Except for arm’s length transactions pursuant to which
the Company or any of its Subsidiaries makes payments in the ordinary course of
business upon terms no less favorable than the Company or any of its
Subsidiaries could obtain from third parties and other than the grant of stock
options disclosed on Schedule 3(c), none of the officers, directors, or
employees of the Company is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for services as employees,
officer, director or such employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any officer, director,
trustee or partner.
n. Disclosure. All information relating to or concerning the Company or any of
its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant
to Section 2(d) hereof and otherwise in connection with the transactions
contemplated hereby is true and correct in all material respects and the Company
has not omitted to state any material fact necessary in order to make the
statements made herein or therein, in light of the circumstances under which
they were made, not misleading. No event or circumstance has occurred or exists
with respect to the Company or any of its Subsidiaries or its or their business,
properties, prospects, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed
(assuming for this purpose that the Company’s reports filed under the 1934 Act
are being incorporated into an effective registration statement filed by the
Company under the 1933 Act).
o. Acknowledgment Regarding Buyer’ Purchase of Securities. The Company
acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s
length purchasers with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that the Buyer is not
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated
hereby and any statement made by the Buyer or any of its respective
representatives or agents in connection with this Agreement and the transactions
contemplated hereby is not advice or a recommendation and is merely incidental
to the Buyer’ purchase of the Securities. The Company further represents to the
Buyer that the Company’s decision to enter into this Agreement has been based
solely on the independent evaluation of the Company and its representatives.
10
p. No Integrated Offering. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has directly or indirectly made any
offers or sales in any security or solicited any offers to buy any security
under circumstances that would require registration under the 1933 Act of the
issuance of the Securities to the Buyer. The issuance of the Securities to the
Buyer will not be integrated with any other issuance of the Company’s securities
(past, current or future) for purposes of any shareholder approval provisions
applicable to the Company or its securities.
q. No Brokers. The Company has taken no action which would give rise to any
claim by any person for brokerage commissions, transaction fees or similar
payments relating to this Agreement or the transactions contemplated hereby.
r. Permits; Compliance. The Company and each of its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the “Company Permits”), and there is
no action pending or, to the knowledge of the Company, threatened regarding
suspension or cancellation of any of the Company Permits. Neither the Company
nor any of its Subsidiaries is in conflict with, or in default or violation of,
any of the Company Permits, except for any such conflicts, defaults or
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since September 30, 2016, neither
the Company nor any of its Subsidiaries has received any notification with
respect to possible conflicts, defaults or violations of applicable laws, except
for notices relating to possible conflicts, defaults or violations, which
conflicts, defaults or violations would not have a Material Adverse Effect.
s. Environmental Matters.
(i) There are, to the Company’s knowledge, with respect to the Company or any of
its Subsidiaries or any predecessor of the Company, no past or present
violations of Environmental Laws (as defined below), releases of any material
into the environment, actions, activities, circumstances, conditions, events,
incidents, or contractual obligations which may give rise to any common law
environmental liability or any liability under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 or similar federal, state,
local or foreign laws and neither the Company nor any of its Subsidiaries has
received any notice with respect to any of the foregoing, nor is any action
pending or, to the Company’s knowledge, threatened in connection with any of the
foregoing. The term “Environmental Laws” means all federal, state, local or
foreign laws relating to pollution or protection of human health or the
groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.
11
(ii) Other than those that are or were stored, used or disposed of in compliance
with applicable law, no Hazardous Materials are contained on or about any real
property currently owned, leased or used by the Company or any of its
Subsidiaries, and no Hazardous Materials were released on or about any real
property previously owned, leased or used by the Company or any of its
Subsidiaries during the period the property was owned, leased or used by the
Company or any of its Subsidiaries, except in the normal course of the Company’s
or any of its Subsidiaries’ business.
(iii) There are no underground storage tanks on or under any real property
owned, leased or used by the Company or any of its Subsidiaries that are not in
compliance with applicable law.
t. Title to Property. Except as disclosed in the SEC Documents the Company and
its Subsidiaries have good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by them
which is material to the business of the Company and its Subsidiaries, in each
case free and clear of all liens, encumbrances and defects or such as would not
have a Material Adverse Effect. Any real property and facilities held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as would not have a
Material Adverse Effect.
u. Internal Accounting Controls. Except as disclosed in the SEC Documents the
Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient, in the judgment of the Company’s board of directors, to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
v. Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries,
nor any director, officer, agent, employee or other person acting on behalf of
the Company or any Subsidiary has, in the course of his actions for, or on
behalf of, the Company, used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended, or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
12
w. Solvency. The Company (after giving effect to the transactions contemplated
by this Agreement) is solvent (i.e., its assets have a fair market value in
excess of the amount required to pay its probable liabilities on its existing
debts as they become absolute and matured) and currently the Company has no
information that would lead it to reasonably conclude that the Company would
not, after giving effect to the transaction contemplated by this Agreement, have
the ability to, nor does it intend to take any action that would impair its
ability to, pay its debts from time to time incurred in connection therewith as
such debts mature. The Company did not receive a qualified opinion from its
auditors with respect to its most recent fiscal year end and, after giving
effect to the transactions contemplated by this Agreement, does not anticipate
or know of any basis upon which its auditors might issue a qualified opinion in
respect of its current fiscal year. For the avoidance of doubt any disclosure of
the Borrower’s ability to continue as a “going concern” shall not, by itself, be
a violation of this Section 3(w).
x. No Investment Company. The Company is not, and upon the issuance and sale of
the Securities as contemplated by this Agreement will not be an “investment
company” required to be registered under the Investment Company Act of 1940 (an
“Investment Company”). The Company is not controlled by an Investment Company.
y. Insurance. The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are engaged. Neither the
Company nor any such Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.
Upon written request the Company will provide to the Buyer true and correct
copies of all policies relating to directors’ and officers’ liability coverage,
errors and omissions coverage, and commercial general liability coverage.
z. Bad Actor. No officer or director of the Company would be disqualified under
Rule 506(d) of the Securities Act as amended on the basis of being a “bad actor”
as that term is established in the September 19, 2013 Small Entity Compliance
Guide published by the SEC.
aa. Shell Status. The Company represents that it is not a “shell” issuer and has
never been a “shell” issuer, or that if it previously has been a “shell” issuer,
that at least twelve (12) months have passed since the Company has reported Form
10 type information indicating that it is no longer a “shell” issuer. Further,
the Company will instruct its counsel to either (i) write a 144- 3(a)(9) opinion
to allow for salability of the Conversion Shares or (ii) accept such opinion
from Holder’s counsel.
bb. No-Off Balance Sheet Arrangements. There is no transaction, arrangement, or
other relationship between the Company or any of its Subsidiaries and an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its 1934 Act filings and is not so disclosed or that
otherwise could be reasonably likely to have a Material Adverse Effect.
13
cc. Manipulation of Price. The Company has not, and to its knowledge no one
acting on its behalf has: (i) taken, directly or indirectly, any action designed
to cause or to result, or that could reasonably be expected to cause or result,
Securities, or (iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
dd. Sarbanes-Oxley Act. The Company and each Subsidiary is in material
compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002
that are effective as of the date hereof, and all applicable rules and
regulations promulgated by the SEC thereunder that are effective as of the date
hereof.
ee. Employee Relations. Neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement or employs any member of a union.
The Company believes that its and its Subsidiaries’ relations with their
respective employees are good. No executive officer (as defined in Rule 501(f)
promulgated under the 1933 Act) or other key employee of the Company or any of
its Subsidiaries has notified the Company or any such Subsidiary that such
officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. To
the knowledge of the Company, no executive officer or other key employee of the
Company or any of its Subsidiaries is, or is now expected to be, in violation of
any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non- competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer or other key employee (as the case may be) does
not subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters. The Company and its Subsidiaries are in
compliance with all federal, state, local and foreign laws and regulations
respecting labor, employment and employment practices and benefits, terms and
conditions of employment and wages and hours, except where failure to be in
compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
ff. Breach of Representations and Warranties by the Company. The Company agrees
that if the Company breaches any of the representations or warranties set forth
in this Section 3, and in addition to any other remedies available to the Buyer
pursuant to this Agreement and it being considered an Event of Default under
Section 3.5 of the Note, the Company shall pay to the Buyer the Standard
Liquidated Damages Amount in cash or in shares of Common Stock at the option of
the Company, until such breach is cured. If the Company elects to pay the
Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall
be issued at the Conversion Price at the time of payment.
14
4. COVENANTS.
a. Best Efforts. The parties shall use their commercially reasonable best
efforts to satisfy timely each of the conditions described in Section 7 and 8 of
this Agreement.
b. Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to
the Securities as required under Regulation D and to provide a copy thereof to
the Buyer promptly after such filing. The Company shall, on or before the
Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Securities for sale to the Buyer at the applicable
closing pursuant to this Agreement under applicable securities or “blue sky”
laws of the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to the
Buyer on or prior to the Closing Date.
c. Use of Proceeds. The Company shall use the proceeds from the sale of the Note
for working capital and other general corporate purposes and shall not, directly
or indirectly, use such proceeds for any loan to or investment in any other
corporation, partnership, enterprise or other person (except in connection with
its currently existing direct or indirect Subsidiaries).
d. Right of First Refusal. Unless it shall have first delivered to the Buyer, at
least seventy two (72) hours prior to the closing of such Future Offering (as
defined herein), written notice describing the proposed Future Offering,
including the terms and conditions thereof, and providing the Buyer an option
during the seventy two (72) hour period following delivery of such notice to
purchase the securities being offered in the Future Offering on the same terms
as contemplated by such Future Offering (the limitations referred to in this
sentence and the preceding sentence are collectively referred to as the “Right
of First Refusal”) (and subject to the exceptions described below), the Company
will not conduct any equity financing (including debt with an equity component)
(“Future Offerings”) during the period beginning on the Closing Date and ending
twelve (12) months following the Closing Date. In the event the terms and
conditions of a proposed Future Offering are amended in any respect after
delivery of the notice to the Buyer concerning the proposed Future Offering, the
Company shall deliver a new notice to the Buyer describing the amended terms and
conditions of the proposed Future Offering and the Buyer thereafter shall have
an option during the seventy two (72) hour period following delivery of such new
notice to purchase its pro rata share of the securities being offered on the
same terms as contemplated by such proposed Future Offering, as amended. The
foregoing sentence shall apply to successive amendments to the terms and
conditions of any proposed Future Offering. The Right of First Refusal shall not
apply to any transaction involving (i) issuances of securities in a firm
commitment underwritten public offering (excluding a continuous offering
pursuant to Rule 415 under the 1933 Act), (ii) issuances to employees, officers,
directors, contractors, consultants or other advisors approved by the Board,
(iii) issuances to strategic partners or other parties in connection with a
commercial relationship, or providing the Company with equipment leases, real
property leases or similar transactions approved by the Board (iv) issuances of
securities as consideration for a merger, consolidation or purchase of assets,
or in connection with any strategic partnership or joint venture (the primary
purpose of which is not to raise equity capital), or in connection with the
disposition or acquisition of a business, product or license by the Company. The
Right of First Refusal also shall not apply to the issuance of securities upon
exercise or conversion of the Company’s options, warrants or other convertible
securities outstanding as of the date hereof or to the grant of additional
options or warrants, or the issuance of additional securities, under any Company
stock option or restricted stock plan approved by the shareholders of the
Company.
15
e. Financial Information. The Company agrees to send or make available the
following reports to the Buyer until the Buyer transfers, assigns, or sells all
of the Securities: (i) within ten (10) days after the filing with the SEC, a
copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and
any Current Reports on Form 8-K; (ii) within one (1) day after release, copies
of all press releases issued by the Company or any of its Subsidiaries; and
(iii) contemporaneously with the making available or giving to the shareholders
of the Company, copies of any notices or other information the Company makes
available or gives to such shareholders. For the avoidance of doubt, filing the
documents required in (i) above via EDGAR or releasing any documents set forth
in (ii) above via a recognized wire service shall satisfy the delivery
requirements of this Section 4(e).
f. Listing. The Company shall promptly secure the listing of the Conversion
Shares upon each national securities exchange or automated quotation system, if
any, upon which shares of Common Stock are then listed (subject to official
notice of issuance) and, so long as the Buyer owns any of the Securities, shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all Conversion Shares from time to time issuable upon conversion of
the Note. The Company will obtain and, so long as the Buyer owns any of the
Securities, maintain the listing and trading of its Common Stock on the OTCBB,
OTCQB, OTC Pink or any equivalent replacement exchange, the Nasdaq National
Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York
Stock Exchange (“NYSE”), or the NYSE MKT and will comply in all respects with
the Company’s reporting, filing and other obligations under the bylaws or rules
of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as
applicable. The Company shall promptly provide to the Buyer copies of any
material notices it receives from the OTCBB, OTCQB and any other exchanges or
quotation systems on which the Common Stock is then listed regarding the
continued eligibility of the Common Stock for listing on such exchanges and
quotation systems. The Company shall pay any and all fees and expenses in
connection with satisfying its obligation under this Section 4(f).
g. Corporate Existence. So long as the Buyer beneficially owns any Note, the
Company shall maintain its corporate existence and shall not sell all or
substantially all of the Company’s assets, except in the event of a merger or
consolidation or sale of all or substantially all of the Company’s assets, where
the surviving or successor entity in such transaction (i) assumes the Company’s
obligations hereunder and under the agreements and instruments entered into in
connection herewith and (ii) is a publicly traded corporation whose Common Stock
is listed for trading on the OTCBB, OTCQB, OTC Pink, Nasdaq, NasdaqSmallCap,
NYSE or AMEX.
16
h. No Integration. The Company shall not make any offers or sales of any
security (other than the Securities) under circumstances that would require
registration of the Securities being offered or sold hereunder under the 1933
Act or cause the offering of the Securities to be integrated with any other
offering of securities by the Company for the purpose of any stockholder
approval provision applicable to the Company or its securities.
i. Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns
the Note, the Company shall comply with the quarterly and annual reporting
requirements of the 1934 Act; and the Company shall continue to be subject to
the reporting requirements of the 1934 Act.
j. Trading Activities. Neither the Buyer nor its affiliates has an open short
position (or other hedging or similar transactions) in the Common Stock of the
Company and the Buyer agree that it shall not, and that it will cause its
affiliates not to, engage in any short sales of or hedging transactions with
respect to the Common Stock of the Company.
k. Restriction on Activities. Commencing as of the date first above written, and
until the sooner of the six month anniversary of the date first written above or
payment of the Note in full, or full conversion of the Note, the Company shall
not, directly or indirectly, without the Buyer’s prior written consent, which
consent shall not be unreasonably withheld: (a) change the nature of its
business; (b) sell, divest, acquire, change the structure of any material assets
other than in the ordinary course of business; or (c) solicit any offers for,
respond to any unsolicited offers for, or conduct any negotiations with any
other person or entity in respect of any variable rate debt transactions (i.e.,
transactions were the conversion or exercise price of the security issued by the
Company varies based on the market price of the Common Stock) above $500,000,
whether a transaction similar to the one contemplated hereby or any other
investment; or (d) file any registration statements with the SEC.
l. Legal Counsel Opinions. Upon the request of the Buyer from to time to time,
the Company shall be responsible (at its cost) for promptly (within two (2)
business days from the Buyer’s request) supplying to the Company’s transfer
agent and the Buyer a customary legal opinion letter of its counsel (the “Legal
Counsel Opinion”) to the effect that the sale of Conversion Shares by the Buyer
or its affiliates, successors and assigns is exempt from the registration
requirements of the 1933 Act pursuant to Rule 144 (provided the requirements of
Rule 144 are satisfied and provided the Conversion Shares are not then
registered under the 1933 Act for resale pursuant to an effective registration
statement). Should the Company’s legal counsel fail for any reason to issue the
Legal Counsel Opinion, the Buyer may (at the Company’s cost) secure another
legal counsel to issue the Legal Counsel Opinion, and the Company will instruct
its transfer agent to accept such opinion.
17
m. Par Value. If the closing bid price at any time the Note is outstanding falls
below $0.001 for five (5) consecutive days, the Company shall cause the par
value of its Common Stock to be reduced to $0.0001 or less.
n. Breach of Covenants. The Company agrees that if the Company breaches any of
the covenants set forth in this Section 4, and in addition to any other remedies
available to the Buyer pursuant to this Agreement, it will be considered an
Event of Default under Section 3.4 of the Note, the Company shall pay to the
Buyer the Standard Liquidated Damages Amount in cash or in shares of Common
Stock at the option of the Buyer, until such breach is cured, or with respect to
Section 4(d) above, the Company shall pay to the Buyer the Standard Liquidated
Damages Amount in cash or shares of Common Stock, at the option of the Buyer,
upon each violation of such provision. If the Company elects to pay the Standard
Liquidated Damages Amounts in shares of Common Stock, such shares shall be
issued at the Conversion Price at the time of payment.
o. Transfer Agent Instructions. The Company shall issue irrevocable instructions
to its transfer agent to issue certificates, registered in the name of the Buyer
or its nominee, for the Conversion Shares in such amounts as specified from time
to time by the Buyer to the Company upon conversion of the Note in accordance
with the terms thereof (the “Irrevocable Transfer Agent Instructions”).
Immediately upon the Company increasing its authorized shares of capital stock
the Initial Reserve Amount shall be reserved for issuance upon conversion of the
Note. In the event that the Borrower proposes to replace its transfer agent, the
Borrower shall provide, prior to the effective date of such replacement, a fully
executed Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to the Purchase Agreement (including but not limited to the
provision to irrevocably reserve shares of Common Stock in the Reserved Amount)
signed by the successor transfer agent to Borrower and the Borrower. Prior to
registration of the Conversion Shares under the 1933 Act or the date on which
the Conversion Shares may be sold pursuant to Rule 144 without any restriction
as to the number of Securities as of a particular date that can then be
immediately sold, all such certificates shall bear the restrictive legend
specified in Section 2(g) of this Agreement. The Company warrants that: (i) no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section, and stop transfer instructions to give effect to Section 2(f)
hereof (in the case of the Conversion Shares, prior to registration of the
Conversion Shares under the 1933 Act or the date on which the Conversion Shares
may be sold pursuant to Rule 144 without any restriction as to the number of
Securities as of a particular date that can then be immediately sold), will be
given by the Company to its transfer agent and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the Note; (ii) it will not direct
its transfer agent not to transfer or delay, impair, and/or hinder its transfer
agent in transferring (or issuing) (electronically or in certificated form) any
certificate for Conversion Shares to be issued to the Buyer upon conversion of
or otherwise pursuant to the Note as and when required by the Note and this
Agreement; and (iii) it will not fail to remove (or directs its transfer agent
not to remove or impairs, delays, and/or hinders its transfer agent from
removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any Conversion Shares issued to the
Buyer upon conversion of or otherwise pursuant to the Note as and when required
by the Note and this Agreement. Nothing in this Section shall affect in any way
the Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply
with all applicable prospectus delivery requirements, if any, upon re-sale of
the Securities. If the Buyer provides the Company, at the cost of the Company
not to exceed $300, with (i) an opinion of counsel in form, substance and scope
customary for opinions in comparable transactions, to the effect that a public
sale or transfer of such Securities may be made without registration under the
1933 Act and such sale or transfer is effected or (ii) the Buyer provides
reasonable assurances that the Securities can be sold pursuant to Rule 144, the
Company shall permit the transfer, and, in the case of the Conversion Shares,
promptly instruct its transfer agent to issue one or more certificates, free
from restrictive legend, in such name and in such denominations as specified by
the Buyer. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyer, by vitiating the intent and
purpose of the transactions contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Section may be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Section, that the Buyer shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate transfer, without the necessity
of showing economic loss and without any bond or other security being required.
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p. Transaction Expense Amount. The Company shall pay US$5,000.00 to the Buyer to
cover the Buyer’s due diligence, monitoring, and other transaction costs
incurred in connection herewith (the “Commitment Fee”). The Commitment Fee has
been included in the Principal Amount of the Note and accordingly such Principal
Amount of the Note is US$55,000.00.
5. CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO SELL. The obligation of
the Company hereunder to issue and sell the Note to the Buyer at the Closing is
subject to the satisfaction, at or before the Closing Date of each of the
following conditions thereto, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion:
a. The Buyer shall have executed this Agreement and delivered the same to the
Company.
b. The Buyer shall have delivered the Purchase Price in accordance with Section
1(b) above.
c. The representations and warranties of the Buyer shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date), and the Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Buyer at or prior to the Closing Date.
d. No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.
19
6. CONDITIONS PRECEDENT TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation of
the Buyer hereunder to purchase the Note at the Closing is subject to the
satisfaction, at or before the Closing Date of each of the following conditions,
provided that these conditions are for the Buyer’s sole benefit and may be
waived by the Buyer at any time in its sole discretion:
a. The Company shall have executed this Agreement and delivered the same to the
Buyer.
b. The Board of Directors of the Company shall have approved by Unanimous
Written Consent (the “Consent”) the transactions contemplated by this Agreement
and the Note and the Company shall have delivered such fully executed Consent to
the Buyer.
c. The Company shall have delivered to the Buyer the duly executed Note (in such
denominations as the Buyer shall request) and in accordance with Section 1(b)
above.
d. The Irrevocable Transfer Agent Instructions, in form and substance
satisfactory to a majority-in-interest of the Buyer, shall have been delivered
to and acknowledged in writing by the Company’s Transfer Agent and such fully
executed Irrevocable Transfer Agent Instructions shall have been delivered to
the Buyer.
e. The representations and warranties of the Company shall be true and correct
in all material respects as of the date when made and as of the Closing Date as
though made at such time (except for representations and warranties that speak
as of a specific date) and the Company shall have performed, satisfied and
Company at or prior to the Closing Date. The Buyer shall have received a
certificate or certificates, executed by the chief executive officer of the
Company, dated as of the Closing Date, to the foregoing effect and as to such
other matters as may be reasonably requested by the Buyer including, but not
limited to certificates with respect to the Company’s Certificate of
Incorporation, By-laws and Board of Directors’ resolutions relating to the
transactions contemplated hereby.
by this Agreement.
20
g. No event shall have occurred which could reasonably be expected to have a
Material Adverse Effect on the Company including but not limited to a change in
the 1934 Act reporting status of the Company or the failure of the Company to be
timely in its 1934 Act reporting obligations.
h. The Conversion Shares shall have been authorized for quotation on the OTCBB,
OTCQB, OTC Pink or any similar quotation system and trading in the Common Stock
on the OTCBB, OTCQB or any similar quotation system shall not have been
suspended by the SEC or the OTCBB, OTCQB, OTC Pink or any similar quotation
system.
i. The Buyer shall have received an officer’s certificate described in Section
3(c) above, dated as of the Closing Date.
7. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada without regard to principles of
conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement, the Note or any
other agreement, certificate, instrument or document contemplated hereby shall
be brought only in the state courts of New Jersey or in the federal courts
located in the District of the State of New Jersey. The parties to this
Agreement hereby irrevocably waive any objection to jurisdiction and venue of
any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER
TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY
OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
The prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid or
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to
process being served in any suit, action or proceeding in connection with this
Agreement or any other Transaction Document by mailing a copy thereof via
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any other manner permitted by law.
21
b. Counterparts; Signatures by Facsimile. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
c. Construction; Headings. This Agreement shall be deemed to be jointly drafted
by the Company and the Buyer and shall not be construed against any person as
the drafter hereof. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. In the event that any provision of this Agreement is invalid or
e. Entire Agreement; Amendments. This Agreement, the Note and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in writing
signed by the majority in interest of the Buyer.
f. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, email, or facsimile, addressed as set
forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by email or facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
22
If to the Company, to:
Cerebain Biotech Corp.
600 Anton Blvd., Suite 1100
Costa Mesa, California 92626
Attn: Eric Clemons, Chief Executive Officer
If to the Buyer, to:
Lucosky Brookman LLP
101 Wood Avenue South, 5th Floor
Woodbridge, New Jersey 08830
Attn: Seth Brookman, Esq.
Each party shall provide notice to the other party of any change in address.
g. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns. Neither the Company nor
the Buyer shall assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other. Notwithstanding the foregoing,
subject to Section 2(f), the Buyer may assign its rights hereunder to any person
that purchases Securities in a private transaction from the Buyer or to any of
its “affiliates,” as that term is defined under the 1934 Act, without the
consent of the Company.
h. Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not
for the benefit of, nor may any provision hereof be enforced by, any other
person.
23
i. Survival. The representations and warranties of the Company and the
agreements and covenants set forth in this Agreement shall survive the closing
hereunder not withstanding any due diligence investigation conducted by or on
behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer
and all their officers, directors, employees and agents for loss or damage
arising as a result of or related to any breach or alleged breach by the Company
of any of its representations, warranties and covenants set forth in this
Agreement or any of its covenants and obligations under this Agreement,
including advancement of expenses as they are incurred.
j. Further Assurances. Each party shall do and perform, or cause to be done and
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
k. No Strict Construction. The language used in this Agreement will be deemed to
rules of strict construction will be applied against any party.
l. Remedies. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyer by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Company
Agreement will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Agreement, that the Buyer shall
be entitled, in addition to all other available remedies at law or in equity,
and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Agreement and
to enforce specifically the terms and provisions hereof, without the necessity
m. Publicity. The Company, and the Buyer shall have the right to review a
reasonable period of time before issuance of any press releases, SEC, OTCQB or
FINRA filings, or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of the Buyer, to make any press release or SEC, OTCQB
(or other applicable trading market) or FINRA filings with respect to such
transactions as is required by applicable law and regulations (although the
Buyer shall be consulted by the Company in connection with any such press
release prior to its release and shall be provided with a copy thereof and be
given an opportunity to comment thereon).
n. Indemnification. In consideration of the Buyer’s execution and delivery of
this Agreement and acquiring the Securities hereunder, and in addition to all of
the Company’s other obligations under this Agreement or the Note, the Company
shall defend, protect, indemnify and hold harmless the Buyer and its
stockholders, partners, members, officers, directors, employees and direct or
indirect investors and any of the foregoing persons’ agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in this Agreement or the Note or any other agreement, certificate,
instrument or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in this Agreement or
the Note or any other agreement, certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought
or made against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of this
Agreement or the Note or any other agreement, certificate, instrument or
document contemplated hereby or thereby, (ii) any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of the
issuance of the Securities, or (iii) the status of the Buyer or holder of the
Securities as an investor in the Company pursuant to the transactions
contemplated by this Agreement. To the extent that the foregoing undertaking by
the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under applicable law.
24
IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this
CEREBAIN BIOTECH CORP.
By:
/s/ Eric Clemons
Name:
Eric Clemons
Title:
Chief Executive Officer
JEFFERSON STREET CAPITAL
By:
/s/ Brian Goldberg
Name:
Brian Goldberg
Title:
Managing Member
AGGREGATE SUBSCRIPTION AMOUNT:
Aggregate Principal Amount of Note:
US$55,000.00
Aggregate Purchase Price:
US$50,000.00
25
Exhibit A
Note
See attached
26
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Name: Commission Regulation (EC) No 1501/2003 of 27 August 2003 establishing the standard import values for determining the entry price of certain fruit and vegetables
Type: Regulation
Subject Matter: plant product; prices
Date Published: nan
Avis juridique important|32003R1501Commission Regulation (EC) No 1501/2003 of 27 August 2003 establishing the standard import values for determining the entry price of certain fruit and vegetables Official Journal L 216 , 28/08/2003 P. 0017 - 0018Commission Regulation (EC) No 1501/2003of 27 August 2003establishing the standard import values for determining the entry price of certain fruit and vegetablesTHE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community,Having regard to Commission Regulation (EC) No 3223/94 of 21 December 1994 on detailed rules for the application of the import arrangements for fruit and vegetables(1), as last amended by Regulation (EC) No 1947/2002(2), and in particular Article 4(1) thereof,Whereas:(1) Regulation (EC) No 3223/94 lays down, pursuant to the outcome of the Uruguay Round multilateral trade negotiations, the criteria whereby the Commission fixes the standard values for imports from third countries, in respect of the products and periods stipulated in the Annex thereto.(2) In compliance with the above criteria, the standard import values must be fixed at the levels set out in the Annex to this Regulation,HAS ADOPTED THIS REGULATION:Article 1The standard import values referred to in Article 4 of Regulation (EC) No 3223/94 shall be fixed as indicated in the Annex hereto.Article 2This Regulation shall enter into force on 28 August 2003.This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 27 August 2003.For the CommissionJ. M. Silva Rodrà guezAgriculture Director-General(1) OJ L 337, 24.12.1994, p. 66.(2) OJ L 299, 1.11.2002, p. 17.ANNEXto the Commission Regulation of 27 August 2003 establishing the standard import values for determining the entry price of certain fruit and vegetables>TABLE> |
Exhibit 15.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUTING FIRM We consent to the incorporation by reference in the Registration Statement (Form S-8, No. 333-111310 and 333-152335) pertaining to the Employees' Stock Option Plans of Elron Electronic Industries Ltd. of our report dated March 28, 2010, with respect to the consolidated financial statements of Elron Electronic Industries Ltd. and the effectiveness of internal control over financial reporting of Elron Electronic Industries Ltd. included in this Annual Report on Form 20-F for the year ended December 31, 2009. /s/ KOST FORER GABBAY & KAISERER Tel-Aviv, Israel
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EXHIBIT32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION -OXLEY ACT OF 2002 Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Pursuant to Section906 of the Sarbanes-Oxley Act of 2002, the undersigned hereby certifies that theQuarterly Report on Form 10-Q for the period ended March 31, 2014 of Hyperera, Inc. (the “Company”) fully complies with the requirements of Section13(a) or Section15(d) of the Securities Exchange Act of 1934 and that the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: May 20, 2014 By: /s/Simon Bai Simon Bai Chief Financial Officer A signed original of this written statement required by Section906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section906, has been provided to Hyperera, Inc. and will be retained by Hyperera, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. * This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
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Contracts of Purchases and Sales of Products
Party A: Tianjin Daxing Import & Export Trade Co., Ltd.
Party B: Tianjin Joway Textile Co., Ltd.
1. Product Names, Specifications, Quantity, Amount:
Date of Signing the Contract:
October 9, 2008
Product
Name
Color
Fabric
Requirement
Specification
Unit Price
( Yuan/Piece)
Quantity
( Piece)
Amount(Yuan)
Including
Tax
Sock
Cotton
male /female
Underwear
Cotton plus Spandex
male /female
Underclothes
Cotton
male / emale
Bra
Spandex plus Polyamide
All Sizes
Kneepad
Polyamide
L/XL/XXL
Decorative Cloth
Synthetic Fiber
1.95m/w
Hat
Cotton
red/m
Shampoo
Bottle
Shower gel
Bottle
Soap
Bar
Tie
Box
Soften Cotton
kg
Pillowcase Cloth
m
Knitted Fabrics
kg
Knitting
Amount (Capital)
Note: Party B entrusts Party A with commodity purchases. Due to price changing
with the market, the current settlement price is determined via bilateral
negotiation, which is the delivered price including VAT. The number shall be
allowed within the range of plus-minus 10%, and the volume above 10% shall not
be settled within the current period.
2. Product Quality Standards and Acceptance Methods:
(i)Reactive dyes are needed for fabric dyeing and finishing processes to meet
the national environmental requirements in accordance with GB-18401-2003-B,
color fastness up to 4th level or above with appearance quality unaffected due
to fading in finishing treatments of the purchaser. Color difference on fabrics
can not exceed the visual standard, finished products referred by the standards
of retained sample. The products with great disparity shall be treated as
nonconformity.
(ii) Fabrics shall be without any damage, spinning or skipped stitches;
(iii) Workmanship Requirements: Delicate, fine and close stitches, perfect
design, no out-pin or short-thread; binding edge width of 2.5cm, uniform smooth
and natural sewing.
3. Delivery Date: The supplier shall deliver goods 30-45 days after signing the
contract with partial delivery permitted during the period, but the completion
date can not exceed the time agreed in the contract. If the supplier fails to
deliver the goods within the stipulated time, he needs to inform the purchaser
in advance. With the approval of both sides, the delivery date can be adjusted;
the purchaser can notice the supplier to adjust shipping time in case that there
is excessive inventory in the purchaser.
4. Means of Transportation and Freight: The supplier is responsible for
safety of packages, and processing such as waterproof, moisture-proof,
anti-fouling during transport. The supplier shall choose safe and efficient
transportation and pay for long-distance shipping freight.
5. Payment Settlement Methods: Both parties shall check accounts monthly. The
purchaser shall make acceptance check on all commodities in accordance with the
acceptance criteria provided to the supplier and return unqualified goods to the
supplier without paying shipping fee for returning with the number of qualified
products as payment basis. The supplier shall issue value-added invoice and the
purchaser pay upon invoice
6. Responsibility of Each Party: Both parties shall abide by all clauses agreed
in the contract and safeguard bilateral rights and interests. The supplier shall
not produce goods with the logo of the purchaser without the permission of the
latter. Once found, the purchaser shall be entitled to terminate the contract
and ask for the supplier to assume the economic losses, and reserve the right of
action against the supplier. The purchaser is entitled to unilaterally terminate
the contract and ask for the supplier to bear the actual loss he supplier has
brought about if frequent extension of the contract causes a fundamental breach.
The supplier should exchange or return any commodity with quality problem
confirmed such as non-normal fading, fabric pilling, fabric damage, etc., when
consumers use it and compensate the loss of consumers.
7. Methods of Contract Default and Dispute Resolution: The both parties shall be
exempt from financial responsibilities by mutual consultation for economic
losses due to force majeure. Any disputes of the both parties arising from in
economic contacts that cannot be resolved after negotiation on the principle of
amicable negotiation and mutual benefits shall be submitted to the court at the
purchaser’s side for settlement through litigation。
8. This contract is executed in duplicate, one for each, and shall enter into
force after being signed and sealed by both parties, the fax version is also
valid. This contract shall take effect as of October 9, 2008 and shall expire on
Party A
Unit Name: Tianjin Daxing Import & Export Trade Co., Ltd.
Address: No.8 Huatiandao Road,Tianjin
Legal Representative:Sun Wenxue
Stamped: Tianjin Daxing Import & Export Trade Co., Ltd.
Tel : (022)2322-8032
Fax: (022)2322-8031
Party B
Unit Name: Tianjin Joway Textile Co., Ltd.
Address: No.2 Baowang Road, Tianbao Industrial Park, Baodi Economic Development
Zone, Tianjin
Legal Representative:Feng Yanli
Stamped: Tianjin Joway Textile Co., Ltd.
Tel: (022)2253-1918
Fax: (022)2253-3666
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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of April, 2013 Commission File Number 1-14732 COMPANHIA SIDERÚRGICA NACIONAL (Exact name of registrant as specified in its charter) National Steel Company (Translation of Registrant's name into English) Av. Brigadeiro Faria Lima 3400, 20º andar São Paulo, SP, Brazil 04538-132 (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F X Form 40-F Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No X Dear Shareholders, Below we present CSN’s management’s proposal for the amendment of the Company’s Bylaws, detailing the origin and justification of the proposed alterations that will be resolved on at the Extraordinary Shareholders’ Meeting (ESM) to be held, at second call, on April 30, 2013. Pursuant to article 11 of CVM Instruction 481/2009, the Management hereby explains the reasons for the proposed amendments to the Company’s Bylaws: Matters to be resolved on at the ESM : (i) to approve the amendment of article 5 of the Bylaws to reflect the new amount of the Company’s capital stock, due to the cancellation of shares held in treasury and the capital increase approved by the Company’s board of directors; Origin and Justification of the Proposed Amendment : The aim of this amendment is to update the amount of the Company’s subscribed and paid-in capital stock in article 5 of the Bylaws in order to reflect: (i) the cancellation of twenty-five million, sixty-three thousand, five hundred and seventy-seven (25,063,577) shares previously held in treasury, approved by the Board of Directors’ Meeting of August 2, 2011, and (ii) the capital increase totaling two billion, eight hundred and fifty-nine million, fifty-two thousand, six hundred and thirty-six reais and twenty-nine cents (R$2,859,052,636.29), without the issuance of new shares, approved by the Board of Directors’ Meeting of May 10, 2012, within the limits of authorized capital. Analysis of the Legal and Economic Effects : The proposed amendment will have no legal or economic effects. PROPOSED TEXT CURRENT TEXT Article 5 - The capital stock of the Company, fully subscribed and paid in, comprises R$4,540,000,000.00 (four billion and five hundred and forty million reais), divided into 1,457,970,108 (one billion, four hundred and fifty-seven million, nine hundred and seventy thousand, one hundred and eight) common book-entry shares with no par value. Article 5 - The capital stock of the Company, fully subscribed and paid in, is R$1,680,947,363.71 (one billion, six hundred and eighty million, nine hundred and forty seven thousand, three hundred and sixty three reais and seventy one cents) divided into 1,483,033,685 (one billion, four hundred eighty-three million, thirty-three thousand, six hundred eighty-five) common and book-entry shares with no par value . (ii) to approve the amendment of articles 14 and 15 of the Bylaws in order to exclude the need for members of the Company’s Board of Directors to be shareholders and to adjust the number of members, pursuant to article 140 of the Brazilian Corporate Law; Origin and Justification of the Proposed Amendment : The aim of this amendment is to align the Bylaws with Law 6404/76 (Brazilian Corporate Law), excluding the need for members of the Board of Directors to be Company’s shareholders and admitting the fact that said body must contain at least three (3) members, pursuant to article 140 of Brazilian Corporation Law. As a result of the amendment to article 14 above, it will also be necessary to alter the number of Board members needed to install a Board of Directors’ meeting. 1 Analysis of the Legal and Economic Effects : The proposed amendment will have no legal or economic effects. PROPOSED TEXT CURRENT TEXT Article 14 - The Board of Directors is composed of up to 11 (eleven) members , elected by resolution of the General Meeting, with a term of office of 1 (one) year, reelection being allowed. One member shall be the Chairman and another the Vice-Chairman. The term of office of the Board Members shall extend until the investiture of their successors. Article 14 - The Board of Directors is composed of 7 (seven) to 11 (eleven) members, all of whom shareholders, elected by resolution of the General Meeting, with a term of office of 1 (one) year, reelection being allowed. One member shall be the Chairman and another the Vice-Chairman. The term of office of the Board Members shall extend until the investiture of their successors. Article 15 - The Board of Directors shall meet, ordinarily, on the dates established in the yearly calendar approved by said Board in the last month of the immediately preceding year, and extraordinarily whenever called by the Chairman, the Vice-Chairman, when exercising the role of Chairman, or by the majority of its members
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Exhibit 10.3
Albireo AB and
Jan Mattsson
amended and restated employment agreement regarding managing director
Amended and restated employment agreement
This employment agreement (the “Agreement”) is entered into as of March 6, 2019,
and amends and restates the employment agreement entered into on February 14,
2008
BETWEEN:
(1) Albireo AB, Reg. No. 556737-4631, a company duly incorporated
and organised under the laws of Sweden, having the registered address Arvid
Wallgrens backe 20, SE-413 46 Gothenburg (the “Company”); and
(2) Jan Mattsson, Swedish personal identity number 641007-5573,
Kullaviksvägen 137, SE-429 33 Kullavik.
The Company and Jan Mattsson are hereinafter separately referred to as a “Party”
and jointly as the “Parties”.
1 Background
1.1 It is noted that Jan Mattsson is employed by the Company since
14 February 2008 and that Jan Mattsson’s employment remains valid unless and
until terminated by either Party or until otherwise mutually agreed. The Parties
have now agreed to revise the terms of employment of Jan Mattsson as set out in
this Agreement.
1.2 This Agreement supersedes all previous written or oral
agreements between the Company, or any associated company, and Jan Mattsson due
to the employment. For the purposes of this Agreement, “associated company”
means a legal entity directly or indirectly controlling or controlled by or
under common control with the Company, irrespective of the country of
registration of such legal entity.
2 Position
2.1 Jan Mattsson is employed and holds the position as shall be
employed as Managing Director of the Company and the associated company Elobix
AB, and in addition Jan Mattsson shall also hold the position as Chief
Scientific Officer of Albireo Pharma, Inc., reporting to the Chief Executive
Officer of Albireo Pharma, Inc. Where reference is made in this Agreement to Jan
Mattsson’s duties and responsibilities as Managing Director of the Company, the
corresponding shall also apply mutatis mutandis towards Elobix AB.
2.2 The Parties note that the provisions of the Swedish Employment
Protection Act (Sw. lagen om anställningsskydd (1982:80)) do not apply to Jan
Mattsson’s employment.
2.3 Jan Mattsson shall accept appointment to the Company’s or any
associated company’s board of directors if so requested. Jan Mattsson is not
entitled to any separate compensation for such assignments. In the event of
either Party’s termination of this Agreement, Jan Mattsson shall immediately
resign from all such assignments following a decision thereon by the Company.
2 (13)
3 Powers and responsibilities
Jan Mattsson shall as Managing Director report to the Company’s board of
directors (the “Board”) and shall:
(a) manage the business of the Company subject to the Company’s articles of
association, the Instructions for the Managing Director adopted by the Board as
well as the Company’s guidelines and objectives as otherwise determined by the
Board;
(b) ensure that the provisions of the Swedish Companies Act (Sw.
aktiebolagslagen (2005:551)) and other legislation, as well as the Company’s
articles of association, are complied with; and
(c) ensure that the management of the Company is carried out in accordance
with sound principles pertaining to both the financial and personnel aspects of
the Company.
4 Loyalty
4.1 During the term of employment, Jan Mattsson shall devote his
full business time and his best efforts, business judgment, skill and knowledge
exclusively to the advancement of the business and interests of the Company and
its associated companies and to the discharge of his duties and responsibilities
hereunder. Jan Mattsson shall not engage in any other business activity or serve
in any industry, trade, professional, governmental or academic position during
the term of this Agreement, except as may be expressly approved in advance by
the Board in writing; provided, however, that Jan Mattsson may without advance
consent participate in charitable activities and passive personal investment
activities, provided that such activities do not, individually or in the
aggregate: (i) interfere with the performance of Jan Mattsson’s duties under
this Agreement; (ii) conflict with the business interests of the Company or any
of its associated companies; and (iii) violate Sections 14, 15, 16 and 17 of
this Agreement.
4.2 Jan Mattsson hereby confirms that as of the date of execution of
this Agreement Jan Mattsson is not engaged in any other business or professional
engagement for any third party.
5 Company information
Jan Mattsson shall at all times promptly provide the chairman of the Board, or
any person designated thereby, with such information and explanations as may be
required in connection with matters relating to the employment under this
Agreement or in connection with the business of the Company or any of its
associated companies.
6 Performance of duties
6.1 Jan Mattsson shall perform his duties at the Company’s current
premises in Gothenburg or at any other locations in Sweden where the Company may
conduct operations in the future. Jan Mattsson may be required to travel within
and outside Sweden from time to
3 (13)
time in order to promote the Company's interests in the best possible way. Jan
Mattsson shall furthermore devote as much time to the Company’s business as
required for the performance of the duties.
6.2 For the performance of Jan Mattsson’s duties hereunder, Jan
Mattsson is not entitled to any compensation in addition to the compensation set
forth in this Agreement.
6.3 During the term of employment, Jan Mattsson shall comply with
all policies, practices, and procedures and all codes of ethics or business
conduct established by the Company and its associated companies that are
applicable to Jan Mattsson’s position, as in effect from time to time.
7 Salary and other remuneration
7.1 Jan Mattsson is entitled to an annual salary of SEK 2,749,996
paid in monthly instalments. The salary shall be paid in accordance with the
Company’s policy as applicable from time to time. The salary shall normally be
subject to an annual review.
7.2 For each full fiscal year completed during the term of the
employment, Jan Mattsson shall be eligible to participate in an annual bonus
plan provided by Albireo Pharma, Inc. Jan Mattsson’s annual target bonus
opportunity shall be thirty-five percent (35%) of the annual base salary (the
“Target Bonus”), with the actual amount of the bonus, if any, to be determined
by the board or the Compensation Committee of the board of Albireo Pharma, Inc.,
in accordance with applicable performance criteria reasonably established by the
board or the Compensation Committee of the board of Albireo Pharma, Inc. In
order to earn an annual bonus for any fiscal year, Jan Mattsson must be employed
by the Company on the last date of the applicable fiscal year. Any annual bonus
payable hereunder will be paid at the same time as such bonuses are paid to
similarly situated executives employed by Albireo Pharma, Inc., but in no event
later than two and one-half months following the end of the fiscal year for
which the bonus is earned.
7.3 Jan Mattsson shall be eligible to receive grants under the
Albireo Pharma, Inc. 2018 Equity Incentive Plan (the “Equity Plan”), and any
subsequent equity plan, with the amount of future grants, if any, to be
determined by the Board or the Compensation Committee of the Board, and subject
to the terms of the Equity Plan or any subsequent equity plan.
7.4 Jan Mattsson shall receive a car allowance of 5883SEK/month.
8 Pension and insurance
8.1 Jan Mattsson’s employment shall expire by the end of the month
prior to Jan Mattsson’s 65th birthday.
8.2 The Parties agree that Jan Mattsson shall be entitled to pension
benefits as prescribed by the collective bargaining agreement for white collar
employees which the Company is bound by. The Parties note that as regards
pension benefits, Jan Mattsson is entitled to defined contribution ITP 1.
4 (13)
8.3 In addition, the Company shall supply occupational group life
insurance (“TGL”), industrial (occupational) injury insurance (“TFA”), travel
insurance covering Jan Mattsson’s business trips in accordance with the
Company’s policy as applicable from time to time.
9 Work equipment
For the performance of Jan Mattsson’s duties, the Company will provide such
equipment that the Company deems necessary from time to time.
10 Expenses
10.1 The Company shall reimburse Jan Mattsson for all reasonable
travel, hotel, entertainment and other out-of-pocket expenses incurred in the
discharge of Jan Mattsson’s duties provided that Jan Mattsson provides the
Company with receipts or other supporting documentation, where applicable.
10.2 Expenses drawn on the Company’s credit card (which will be
available for Jan Mattsson’s use) which Jan Mattsson has not accounted for in
accordance with the Company’s expense reporting policy within one (1) month of
the due date of the credit card company’s invoice may be set off by the Company
against Jan Mattsson’s net salary.
11 Vacation
11.1 Jan Mattsson is entitled to thirty-two (32) days’ paid vacation
per year to be taken at such times as agreed with the chairman of the Board.
Vacation pay is calculated in accordance with the terms of the collective
bargaining agreement for white collar employees which the Company is bound by.
11.2 The Company shall be entitled to deduct from Jan Mattsson’s final
salary as well as from accrued vacation pay, any vacation days that have been
taken but have not accrued as per the date of expiry of the employment.
11.3 Following the effective date of this Agreement,if Jan Mattsson is
prevented from taking out all vacation days during any vacation year or wishes
to save vacation days in accordance with the Swedish Annual Leave Act (Sw.
Semesterlagen (1977:480)), Jan Mattsson shall be obliged to consult with the
chairman of the Board. This provision shall not apply to any of Jan Mattsson’s
saved vacation days as of the effective date of this Agreement.
12 Sick pay
In case of absence due to sickness, the m any other insurance. However, Jan
Mattsson shall not be entitled to any compensation for the first day of absence
during any sick leave (Sw. karensdag). The provisions of the Swedish Sick Pay
Act (Sw. lagen om sjuklön (1991:1047)) and the collective bargaining agreement
for white collar employees which the Company is bound by shall apply to any
other periods.
5 (13)
13 Personal data and data security
13.1 Jan Mattsson hereby confirms that the Company has informed him of
the Company’s processing and use of employees’ personal data in accordance with
the provisions of the applicable data protection legislation.
13.2 Jan Mattsson agrees to comply with the Company’s policies
regarding the use of the Company’s computers, e-mail system, Internet services
and other software programs. Jan Mattsson is aware and acknowledges that the
Company has complete and unrestricted access to all material and e-mail
correspondence and an overview of Internet usage that is saved in, or performed
via, the Company’s data systems.
14 Intellectual property rights
14.1 For the purposes of this Agreement, “Intellectual Property” means
inventions, discoveries, developments, methods, processes, compositions, works,
concepts and ideas (whether or not patentable or copyrightable or constituting
trade secrets) conceived, made, created, developed or reduced to practice by Jan
Mattsson (whether alone or with others, whether or not during normal business
hours or on or off Company premises) during Jan Mattsson’s employment and during
the period of six (6) months immediately following termination of his employment
that relate either to (i) all products planned, researched, developed, tested,
sold, licensed, leased, or otherwise distributed or put into use by the Company
or any of its Associated companies, together with all services provided or
otherwise planned by the Company or any of its associated companies, during Jan
Mattsson’s employment, or (ii) to any prospective activity of the Company or any
of its associated companies or that result from any work performed by Jan
Mattsson for the Company or any of its associated companies or that make use of
Confidential Information (as defined in Section 15) or any of the equipment or
facilities of the Company or any of its associated companies.
14.2 Jan Mattsson shall promptly and fully disclose all Intellectual
Property to the Company. Jan Mattsson hereby assigns and agrees to assign to the
Company (or as otherwise directed by the Company) Jan Mattsson’s full right,
title and interest in and to all Intellectual Property. The Company shall have a
right to freely develop and alter such Intellectual Property and to licence and
assign them to third parties, with or without a reference to Jan Mattsson’s
name. Jan Mattsson shall execute any and all applications for domestic and
foreign patents, copyrights or other proprietary rights and to do such other
acts (including without limitation the execution and delivery of instruments of
further assurance or confirmation) requested by the Company to assign the
Intellectual Property to the Company (or as otherwise directed by the Company)
and to permit the Company to enforce any patents, copyrights or other
proprietary rights to the Intellectual Property. Jan Mattsson will not charge
the Company for time spent in complying with these obligations. All
copyrightable works that Jan Mattsson creates in and which relate to his duties
under this Agreement shall upon creation be owned exclusively by the Company.
6 (13)
15 Confidentiality
15.1 For the purposes of this Agreement, “Confidential Information”
means any and all information of the Company and its associated companies that
is not generally available to the public, and any and all information, publicly
known in whole or in part or not, which, if disclosed by the Company or any of
its associated companies, would assist in competition against any of them.
Confidential Information includes without limitation such information relating
to (i) the development, research, testing, manufacturing, marketing and
financial activities of the Company and its associated companies, (ii) all
products planned, researched, developed, tested, sold, licensed, leased, or
otherwise distributed or put into use by the Company or any of its Associated
companies, together with all services provided or otherwise planned by the
Company or any of its associated companies, during Jan Mattsson’s employment,
(iii) the costs, sources of supply, financial performance and strategic plans of
the Company and its associated companies, (iv) the identity and special needs of
the patients of the Company and its associated companies and (v) the people and
organizations with whom the Company and its associated companies have business
relationships and the nature and substance of those relationships. Confidential
Information also includes information that the Company or any of its associated
companies has received, or may receive hereafter, belonging to others or that
was received by the Company or any of its associated companies with any
understanding, express or implied, that it would not be disclosed.
15.2 Jan Mattsson acknowledges that the Company and its associated
companies continually develop Confidential Information, that Jan Mattsson will
develop Confidential Information for the Company or its associated companies and
that Jan Mattsson will learn of Confidential Information during the course of
employment. All Confidential Information which Jan Mattsson creates or to which
he has access as a result of his employment or other associations with the
Company or any of its associated companies is and shall remain the sole and
exclusive property of the Company or its associated company, as applicable. Jan
Mattsson shall comply with the policies and procedures of the Company and its
associated companies for protecting Confidential Information and shall never
disclose to any third party (except as required by applicable law or for the
proper performance of his duties and responsibilities to the Company and its
associated companies), or use for his own benefit or gain or the benefit or gain
of any third party, any Confidential Information obtained by Jan Mattsson
incident to his employment or any other association with the Company or any of
its associated companies. Jan Mattsson understands that this restriction shall
continue to apply after his employment terminates, regardless of the reason for
such termination. Further, Jan Mattsson shall furnish prompt notice to the
Company of any required disclosure of Confidential Information sought pursuant
to subpoena, court order or any other legal process or requirement, and provide
the Company a reasonable opportunity to seek protection of the Confidential
Information prior to any such disclosure. The confidentiality obligation under
this Section 15 shall not apply to information that has become generally known
through no wrongful act on the part of Jan Mattsson or any third party having an
obligation of confidentiality to the Company or any of its associated companies.
Nothing in this Agreement limits, restricts or in any other way affects Jan
Mattsson from communicating with any governmental agency or entity, or
communicating with any official or staff person of a governmental agency or
entity, concerning matters relevant to the governmental agency or entity.
7 (13)
15.3 All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the Company or
any of its associated companies and any copies or derivatives (including without
limitation electronic), in whole or in part, thereof (the “Documents”), whether
or not prepared by Jan Mattsson, shall be the sole and exclusive property of the
Company and its associated companies. Except in the proper performance of Jan
Mattsson’s regular duties for the Company or as expressly authorized in writing
in advance by the Board or its expressly authorized designee, Jan Mattsson will
not copy any Documents or remove any Documents or copies or derivatives thereof
from the premises of the Company. Jan Mattsson shall safeguard all Documents and
shall surrender to the Company at the time his employment terminates, and at
such earlier time or times as the Board or its designee may specify, all
Documents and other property of the Company or any of its associated companies
and all documents, records and files of the customers and other third parties
with whom the Company or any of its associated companies does business (“Third
Party Documents”) and each individually a “Third Party Document”) then in Jan
Mattsson’s possession or control; provided, however, that if a Document or
Third-Party Document is on electronic media, Jan Mattsson may, in lieu of
surrendering the Document or Third-Party Document, provide a copy to the Company
on electronic media and delete and overwrite all other electronic media copies
thereof. Upon request of any duly authorized officer of the Company, Jan
Mattsson shall disclose all passwords and passcodes necessary or desirable to
enable the Company or any of its associated companies or the third parties with
whom the Company or any of its associated companies do business to obtain access
to the Documents and Third-Party Documents.
15.4 Jan Mattsson hereby agrees that Jan Mattsson will not, during the
employment with the Company, improperly use or disclose any proprietary
information or trade secrets of any former or concurrent employer or other
person or entity. Further, Jan Mattsson will not bring into the Company any
proprietary information or trade secret of any such employer, person or entity
unless consented to in writing by such employer, person or entity.
16 Non-competition
16.1 The Parties hereby agree that Jan Mattsson in the course of the
employment will gain access to Company specific trade secrets that cannot be
protected through patents or other similar registrations and which may cause the
Company considerable harm if used for the benefit of a competing business. The
Parties furthermore agree that it is a precondition for Jan Mattsson’s
employment that the Company can disclose such information to Jan Mattsson in the
knowledge that it will not be used to engage in or promote a business that
competes with the Company’s (or any associated company’s) business. Jan Mattsson
thus agrees to refrain, during the term of this Agreement and for a period of 6
months after its termination, directly or indirectly, whether alone or as a
partner, officer, employee, director or executive or consultant, from engaging
or having any interest in any business which is directly or indirectly engaged
in business which is, at the time of the expiry of the employment, in
competition with the business of the Company or any associated company.
16.2 Subject to the exceptions stated below in this section, the
Company shall, as compensation for the inconvenience that the existing
non-competition covenant causes Jan Mattsson after the expiry of the employment,
pay Jan Mattsson per month the
8 (13)
difference between Jan Mattsson’s average monthly remuneration (both fixed and
variable) paid by the Company during the 12 months preceding the time of
termination of the employment and the (lower) salary which Jan Mattsson earns,
or reasonably could have earned from any new employment or proceeds of any
business activity. However, the monthly compensation payable by the Company
shall never exceed sixty (60) per cent of Jan Mattsson’s average monthly
remuneration as set out above during the restrictive period of the
non-competition covenant. For the avoidance of doubt, if Jan Mattsson, despite
reasonable efforts to minimise Jan Mattsson’s loss of income, does not obtain
new employment or is not engaged in any business activity after the employment
with the Company has terminated, the Company shall pay Jan Mattsson per month
sixty (60) per cent of Jan Mattsson’s average monthly remuneration as set out
above during the restrictive period of the non-competition covenant. The right
to compensation according to this section presupposes that there is a causal
relationship between Jan Mattsson’s undertaking in accordance with the
non-competition covenant and the loss of income that is caused by its
application. Compensation shall not be paid in the event of Jan Mattsson’s
breach of this non-competition covenant.
16.3 After the expiry of employment, Jan Mattsson is obliged to inform
the Company in writing of the level of Jan Mattsson’s current salary from any
new employment or proceeds of any business activity. Such written information
shall be provided to the Company no later than on the 15th day of each month. In
the event such written information is not provided in accordance with this
section, it shall be understood that Jan Mattsson has not suffered any loss of
income with regards to the concerned month, but Section 16.1 shall still apply.
16.4 Compensation according to this section shall not be paid during
any period for which Jan Mattsson receives severance pay from the Company or if
the employment expires (i) due to Jan Mattsson’s retirement or (ii) due to the
16.5 During the term of employment, as well as in the event of either
Party’s termination of the employment and during such time as the
non-competition covenant remains in force, the Company may unilaterally, subject
to one (1) month’s prior written notice, either limit the application of the
non-competition covenant or completely release Jan Mattsson from the
non-competition covenant. In the event of a full release from the
non-competition covenant, the Company shall be released from the obligation to
pay compensation in accordance with Section 16.2 above.
17 Non-solicitation
17.1 During the term of this Agreement and for a period of six (6)
months following termination thereof, Jan Mattsson shall not, directly or
indirectly, engage or participate in professional contacts with anyone who,
during the twelve months preceding the termination of Jan Mattsson’s employment,
has been a customer or client of the Company or any of its associated companies
or is a potential customer or client who has been actively approached by the
Company or any of its associated companies, with the intention of persuading
such customer or client/potential customer or client to change the business
relationship, to cease to do business with or to refrain from initiating a
business
9 (13)
relationship with the Company or any of its associated companies. The Company
may through written notification release Jan Mattsson from this obligation in
specific cases.
17.2 During the term of this Agreement and for a period of six (6)
indirectly, solicit or attempt to solicit, or participate in the solicitation of
employees of the Company, or any of its associated companies, with whom Jan
Mattsson has had professional cooperation with during Jan Mattsson’s employment
with the Company, or who otherwise have professional competence of importance to
the Company, or use the services of any such persons for any means other than
for the benefit of the Company. The Company may through written notification
release Jan Mattsson from this obligation in specific cases.
18 Liquidated damages
If Jan Mattsson fails to comply with the provisions of Section 14 (Intellectual
property rights), Section 15 (Confidentiality), Section 16 (Non-competition) or
Section 17 (Non- solicitation), Jan Mattsson shall, in respect of every breach,
pay liquidated damages to the Company amounting to six (6) times Jan Mattsson’s
average total monthly gross remuneration (both fixed and variable) paid by the
Company during the 12 months preceding the breach or, if Jan Mattsson’s
employment has expired, immediately prior to the expiry of the employment. In
the event the breach is of a continuing nature, during each month that the
situation or action constituting the breach continues despite written objection
from the Company to Jan Mattsson, the breach shall be deemed to constitute one
breach and give rise to an obligation to pay liquidated damages as above. In the
event the actual loss caused to the Company exceeds this amount, the Company
shall be entitled to damages in respect of such excess amount and/or to take
other legal measures.
19 Termination of employment
19.1 This Agreement may be terminated by the Company subject to six
(6) months’ notice and by Jan Mattsson subject to six (6) months’ notice. The
Agreement expires without any prior notice in conjunction with Jan Mattsson’s
retirement pursuant to Section 8.1.
19.2 In connection with either Party’s termination of this Agreement,
the Company shall be entitled to relieve Jan Mattsson of the duties as Managing
Director with immediate effect. Jan Mattsson shall, however, remain at the
Company’s disposal during the notice period to carry out such duties within Jan
Mattsson’s competence, as the Board deems fit. The Company is, however, entitled
to permanently require Jan Mattsson not to perform any work for the Company.
During the notice period, Jan Mattsson may not commence any new employment or
engage in any business activity without the prior written consent of the
chairman of the Board.
19.3 During the notice period, Jan Mattsson is entitled to all
benefits according to the terms and conditions of the Agreement.
19.4 If Jan Mattsson’s employment is terminated (i) by the Company
subject to prior notice or
(ii) by Jan Mattsson for Good Reason (as defined in Section 19.6 below), Jan
Mattsson shall be entitled to severance pay equivalent to (i) six (6) times the
monthly base salary which Jan Mattsson had at the expiry of the employment and
(ii) six (6) times the monthly
10 (13)
proportion of Jan Mattsson’s annual target bonus as applicable at the time of
expiry of employment. The severance pay shall be paid monthly during a period of
six (6) months in equal instalments starting in the month after the expiry of
the employment.
19.5 In the event of a termination of Jan Mattsson’s employment within
twelve (12) months following a Change of Control (as defined in the Equity Plan)
either (i) by the Company or (ii) or by Jan Mattsson for Good Reason, the
severance pay as set out in section 19.4 shall be equivalent to (i) nine (9)
times the monthly base salary which Jan Mattsson had at the expiry of the
employment and (ii) nine (9) times the monthly proportion of Jan Mattsson’s
annual target bonus as applicable at the time of expiry of employment.
19.6 For the purpose of this Agreement, the following, if occurring
without Jan Mattsson’s consent, shall constitute “Good Reason” for termination
by Jan Mattsson:
a) a material diminution in the nature or scope of Jan Mattsson’s title,
duties, authority or responsibilities;
b) a requirement that the Jan Mattsson report to any person other than the
Board or the CEO following a Change in Control;
c) a requirement Jan Mattsson relocate his principal work location to a
location more than thirty (50) kilometres outside of Gothenburg; or
d) a material reduction in base salary, which for purposes of this Agreement
shall mean a reduction of more than fifteen percent (15%) in the aggregate.
Termination by Jan Mattsson for Good Reason presupposes that Jan Mattsson is (A)
providing notice to the Company specifying in reasonable detail the condition
giving rise to the Good Reason no later than the thirtieth (30th) day following
the occurrence of that condition; (B) providing the Company a period of thirty
(30) days to remedy the condition and so specifying in the notice; and (C)
terminating his employment for Good Reason within thirty (30) days following the
expiration of the period to remedy if the Company fails to remedy the condition.
19.7 Any obligation of the Company to provide severance pay as set out
in this Agreement is conditioned, however, on Jan Mattsson signing and returning
to the Company (without revoking) a timely and effective general release of
claims in the form provided by the Company by the deadline specified therein,
all of which (including the lapse of the period for revoking the release of
claims as specified in the release of claims) shall have occurred no later than
the sixtieth (60th) calendar day following the date of termination (any such
separation agreement submitted by such deadline, the “Release of Claims”) and on
Jan Mattsson’s continued compliance with the obligations of Jan Mattsson to the
Company and its associated companies that survive termination of his employment,
including without limitation under Section 14 (Intellectual property rights),
Section 15 (Confidentiality), Section 16 (Non-competition), Section 17
(Non-solicitation) and Section 18 (Liquidated damages) of this Agreement.
19.8 Notwithstanding anything to the contrary, including, without
limitation, the Equity Plan or any subsequent equity plan, in the event of a
termination of Jan Mattsson’s employment within twelve (12) months following a
Change of Control (as defined in the
11 (13)
Equity Plan) either (i) by the Company or (ii) or by Jan Mattsson for Good
Reason, all equity awards held by Jan Mattsson that are outstanding prior to the
Change of Control shall, to the extent unvested or subject to vesting-like
restrictions, be fully vested and exercisable (and any vesting-like restrictions
shall lapse in full) immediately prior to the Change of Control. The foregoing
sentence shall be (A) deemed incorporated into each option agreement or similar
agreement evidencing awards made to Jan Mattsson after 1 January 2019 and (B)
without prejudice to Jan Mattsson’s right to any earlier acceleration of
vesting, continued period of vesting or post-termination rights for Jan Mattsson
provided for in the applicable plan or program under which such equity award was
granted or under applicable law.
19.9 Salary and other benefits during any notice period or severance
pay as set out above shall not be payable for the month in which Jan Mattsson
reaches the age of 65. This shall apply in the event of either Party’s
termination of this Agreement and irrespective of when such termination takes
place.
19.10 In the event of Jan Mattsson’s material breach of Jan Mattsson’s
obligations under this Agreement, the Company shall be entitled to terminate the
Agreement with immediate effect. Notwithstanding such termination, Jan
Mattsson’s obligations pursuant to Section
14 (Intellectual property rights), Section 15 (Confidentiality), Section 16
(Non- competition), Section 17 (Non-solicitation) and Section 18 (Liquidated
damages) shall remain in full force and effect.
For the purpose of this Agreement, material breach shall include but not be
limited to the following circumstances:
a) Jan Mattsson’s wilful failure to perform, or gross negligence in the
performance of, his material duties and responsibilities to the Company or any
of its associated companies;
b) Conduct by Jan Mattsson that constitutes fraud, embezzlement or other
material dishonesty with respect to the Company or any of its associated
companies;
c) Jan Mattsson’s commission of, or admission of, any crime involving moral
turpitude; or
d) Jan Mattsson’s material breach of this Agreement, any material written
policies of the Company, or any other agreement between Jan Mattsson and the
Company or any of its associated companies or of any fiduciary duty that Jan
Mattsson has to the Company or any of its associated companies.
19.11 Jan Mattsson shall at the expiry of the employment deliver up to
the chairman of the Board all reports, papers, correspondence, documents and any
other materials (including copies thereof) supplied, or entrusted to Jan
Mattsson or in Jan Mattsson’s possession in connection with this employment
and/or relating to the Company, its associated companies and/or their businesses
and the same shall at all times remain the sole property of the Company or the
associated company as the case may be.
12 (13)
20 Amendments
This Agreement may only be changed or amended by an instrument in writing duly
executed by the Parties.
21 Governing law and disputes
21.1 This Agreement shall be governed by and construed in accordance
with the laws of Sweden.
This Agreement has been duly executed in two original copies of which each of
the Parties has taken one.
Gothenburg, Sweden March 7, 2019
For Albireo AB
/s/ Ronald H.W. Cooper
/s/ Jan Mattson
Ronald H.W. Cooper, Director
Jan Mattsson
13 (13)
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Exhibit 10.1
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”), is
effective as of the 14th day of January, 2008 between Cinemark, Inc., a Delaware
corporation (the “Company”), and Robert Carmony (“Executive”).
RECITALS
A. The Company and Executive previously entered into that certain
Employment Agreement effective as of March 12, 2004 (the “Original Employment
Agreement”), setting forth the terms and conditions of their understandings and
agreements with respect to Executive’s employment as the Company’s Senior Vice
President of Operations.
B. Executive was elected as the Senior Vice President — New Technology
and Training, of the Company, Cinemark Holdings, Inc. and Cinemark USA, Inc.,
effective May 23, 2007.
C. The Company and Executive now wish to make certain changes to the
terms and conditions set forth in the Original Employment Agreement by amending
such agreement as set forth herein to reflect his current position and title.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein and in the Original Employment Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive, each intending to be legally bound,
hereby agree as follows:
1. Amendment of Original Employment Agreement.
(a) Section 1.1 of the Original Employment Agreement is hereby amended
and restated in its entirety to read as follows:
1.1 Title and Duties. The Company employs Executive as Senior Vice
President — New Technology and Training, of the Company. Executive’s duties,
responsibilities and authority shall be consistent with Executive’s position and
titles and shall include serving in a similar capacity with Cinemark Holdings,
Inc., Cinemark USA, Inc. and such other duties, responsibilities and authority
as may be assigned to Executive by the Board of Directors of the Company (the
“Board”). Executive shall report directly to the Chief Executive Officer of the
Company.
(b) Except as specifically set forth in Section 1(a) hereof, the
Original Employment Agreement remains in full force on its terms.
2. Governing Law. This Amendment shall be construed, interpreted and
governed in accordance with the laws of the State of Texas without regard to any
conflict of laws rule or principle which might refer the governance or
construction of this Amendment to the laws of another jurisdiction.
3. Entire Agreement. This Amendment, together with the Original
Employment Agreement contain the entire understanding between the parties hereto
with respect to the subject matter hereof and supersede in all respects any
prior or other agreement or understanding, written or oral, between the Company
and Executive with respect to such subject matter.
4. Counterparts. This Amendment may be executed in multiple
counterparts, each of which will be deemed an original.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Amendment to be executed and delivered by their proper
and duly authorized officers as of the day and year first above written.
COMPANY:
CINEMARK, INC.
By: /s/ Michael Cavalier Name: Michael Cavalier
Title: Senior Vice President-General Counsel
EXECUTIVE:
/s/ Robert Carmony Robert Carmony
Signature Page to First Amendment To Employment Agreement
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-07972 Exact name of registrant as specified in charter: Delaware Group® Adviser Funds Address of principal executive offices: 2005 Market Street Philadelphia, PA 19103 Name and address of agent for service: David F. Connor, Esq. 2005 Market Street Philadelphia, PA 19103 Registrant’s telephone number, including area code: (800) 523-1918 Date of fiscal year end: October 31 Date of reporting period: April 30, 2011 Item 1. Reports to Stockholders Semiannual report Delaware Diversified Income Fund April 30, 2011 Fixed income mutual fund Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Fund’s prospectus and, if available, its summary prospectus, which may be obtained by visiting www.delawareinvestments.com or calling 800 523-1918. Investors should read the prospectus and, if available, the summary prospectus carefully before investing. You can obtain shareholder reports and prospectuses online instead of in the mail.
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Monster Beverage Corporation (formerly known as New Laser Corporation) (Name of the Issuer) Common Stock, par value $0.005 per share (Title of Class of Securities) 61174X109 (CUSIP Number) Bernhard Goepelt Senior Vice President, General Counsel and Chief Legal Counsel The Coca-Cola Company One Coca-Cola Plaza Atlanta, Georgia 30313 (404) 676-2121 (Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons) Copy to: Martha E. McGarry, Esq. Thomas W. Greenberg, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 (212) 735-3000 June 12, 2015 (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule13G to report the acquisition that is the subject of this Schedule13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o CUSIP No. 49271M100 1. NAME OF REPORTING PERSONS The Coca-Cola Company 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) þ 3. SEC USE ONLY 4. SOURCE OF FUNDS OO 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)o 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7. SOLE VOTING POWER 0 8. SHARED VOTING POWER 9. SOLE DISPOSITIVE POWER 0 SHARED DISPOSITIVE POWER AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARESo PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.7%* TYPE OF REPORTING PERSON CO * Based on the total number of issued and outstanding shares of Common Stock (as defined herein) as of June 12, 2015 as provided by the Issuer to the Reporting Persons on June 12, 2015 (204,251,380 shares after giving effect to the issuance of Shares to the Reporting Persons). - 2 - CUSIP No. 49271M100 1. NAME OF REPORTING PERSONS European Refreshments 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) þ 3. SEC USE ONLY 4. SOURCE OF FUNDS WC 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)o 6. CITIZENSHIP OR PLACE OF ORGANIZATION Ireland NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7. SOLE VOTING POWER 0 8. SHARED VOTING POWER 9. SOLE DISPOSITIVE POWER 0 SHARED DISPOSITIVE POWER AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARESo PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.7%* TYPE OF REPORTING PERSON CO * Based on the total number of issued and outstanding shares of Common Stock as of June 12, 2015 as provided by the Issuer to the Reporting Persons on June 12, 2015 (204,251,380 shares after giving effect to the issuance of Shares to the Reporting Persons). - 3 - Item 1. Securities and the Issuer This Schedule 13D (the "Statement") relates to the common stock, par value $0.005 per share (the "Common Stock"), of Monster Beverage Corporation (formerly known as New Laser Corporation), a Delaware corporation (the "Issuer").The principal executive offices of the Issuer are located at 1 Monster Way, Corona, California 92879. Item 2. Identity and Background This Statement is being filed jointly pursuant to Rule 13d-1(a) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to report the beneficial ownership that The Coca-Cola Company, a Delaware corporation ("TCCC"), and European Refreshments, an Irish corporation and indirect wholly owned subsidiary of TCCC ("ER", and together with TCCC, the "Reporting Persons"), acquired at the closing of the issuance of the Shares (defined below) pursuant to the Transaction Agreement referred to below. The Reporting Persons have entered into a joint filing agreement relating to the joint filing of this Statement in accordance with the provisions of Rule 13d-1(k)(1) under the Exchange Act, a copy of which is attached as Exhibit 2 hereto. ER's registered office is located at Southgate, Dublin Road, Drogheda, County Meath, Ireland, Telephone: +'s principal executive office is located at One Coca-Cola Plaza, Atlanta, Georgia 30313, Telephone: (404) 676-2121. TCCC is the world's largest beverage company. TCCC owns or licenses and markets more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. TCCC owns and markets four of the world's top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage products bearing TCCC's trademarks, sold in the United States since 1886, are now sold in more than 200 countries. Certain information with respect to the directors and executive officers of the Reporting Persons is set forth in Schedule A attached hereto, including each director's and executive officer's business address, present principal occupation or employment, citizenship and other information. None of the Reporting Persons nor, to the best of their knowledge, any director, executive officer or controlling person of any Reporting Person has, during the last five years, been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which proceeding any Reporting Person or any director, executive officer or controlling person of any Reporting Person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, or finding any violation with respect to federal or state securities laws. Item 3. Source and amount of Funds and Other Consideration On June 12, 2015, the Issuer issued to the Reporting Persons 34,040,534 shares of Common Stock of the Issuer, and transferred to TCCC the Issuer's non-energy drink business and certain distribution rights with respect to Monster products, pursuant to the Transaction Agreement and Asset Transfer Agreement (each as defined below), for a net cash payment of $2.15 billion made by the Reporting Persons to the Issuer and Monster, and the transfer of TCCC's worldwide energy drink business to Monster (as defined below). The Reporting Persons funded the purchase of the Common Stock with cash on hand of the Reporting Persons and assets constituting the energy drink business of TCCC, pursuant to the Transaction Agreement and Asset Transfer Agreement. - 4 - Item 4. Purpose of the Transaction On August 14, 2014, TCCC, ER, the Issuer, New Laser Merger Corp. ("Merger Sub") and Monster Beverage Corporation (now known as Monster Beverage 1990 Corporation) ("Monster") entered into a Transaction Agreement (the "Transaction Agreement"), under which the Issuer agreed to issue and sell to TCCC and ER, and TCCC and ER agreed to purchase from the Issuer, an amount of newly-issued shares of Common Stock (the “Shares”) representing one share less than 16.666% of total number of issued and outstanding Common Stock of the Issuer (measured on a post-issuance basis), at the closing. Pursuant to the Transaction Agreement, TCCC and ER made a net cash payment of $2.15 billion to the Issuer and Monster and transferred TCCC's worldwide energy drink business to Monster, receiving in turn, the Shares, the Issuer's non-energy drink business and certain distribution rights with respect to Monster products. In connection with the above, Monster reorganized itself under a new holding company by merging Merger Sub into Monster, with Monster surviving as a wholly owned subsidiary of the Issuer. In the merger, each outstanding share of Monster's Common Stock was converted into one share of the Issuer's Common Stock. The Transaction Agreement is filed as Exhibit 1 to this Statement and is incorporated herein by reference. The following description of various terms of the Transaction Agreement is qualified in its entirety by reference to the Transaction Agreement. The purpose of the Reporting Persons' acquisition of Common Stock is for the Reporting Persons to hold an equity interest in the Issuer in connection with what the Reporting Persons anticipate will be a long-term collaborative and strategic partnership between TCCC and the Issuer, expected to accelerate growth for both companies. On August 14, 2014, in connection with the execution of the Transaction Agreement, Monster, TCCC and the Issuer entered into an Asset Transfer Agreement (the "Transfer Agreement"), pursuant to which (i) TCCC transferred ownership of its worldwide energy drink business, including NOS, Full Throttle, Burn, Mother, BU, Gladiator, Samurai, Nalu, BPM, Play and Power Play, Ultra and Relentless, to the Issuer; and (ii) the Issuer transferred its non-energy drink business, including Hansen's Natural Sodas, Peace Tea, Hubert's Lemonade and Hansen's Juice Products, to TCCC. Monster and TCCC also amended and restated their existing distribution coordination arrangements, which contemplated expanding distribution of Monster's products into additional territories pursuant to long-term commercial agreements with TCCC's network of owned or controlled bottlers/distributors and independent bottling/distribution partners. Under the Transaction Agreement, the Reporting Persons agreed, for the period from June 12, 2015 (the "Closing Date") through the earliest of (i) the four-year anniversary of the Closing Date, (ii) the date on which the amended distribution coordination agreement entered into between Monster and TCCC related to the United States or Canada is terminated or modified such that TCCC, its subsidiaries and distributors in the TCCC distribution network would cease to have exclusive distribution rights to Monster products representing, in the aggregate, at least 50% of the dollar volume of all Monster products that are energy beverages and distributed by TCCC, its subsidiaries and the distributors in the TCCC distribution network in the territories in the U.S. and Canada covered by then-effective distribution agreements entered into by the Issuer, Monster or any of their subsidiaries (measured during the 12-month period immediately prior to such modification or termination), or (iii) a change of control of the Issuer or Monster (such period the "Lock-Up Period"), not to directly or indirectly, sell, assign, pledge, hypothecate or otherwise transfer (or enter into an obligation regarding the future sale, assignment, pledge or transfer of) any of the Shares or the Additional Shares (as defined below), other than into a tender or exchange offer made by a third party in accordance with the terms of the Transaction Agreement. Following the Lock-Up Period, (i) the Issuer will have a right of first offer with respect to any transfer of Shares or Additional Shares representing beneficial ownership of more than 1% of the then-outstanding shares of Common Stock of the Issuer in any privately negotiated sale or sales to one or more third parties - 5 - during any 90-day period (excluding transfers pursuant to registered public offerings and open market sales under Rule 144 under the Securities Act), and (2) the Reporting Persons will not transfer any shares of Common Stock of the Issuer to any significant competitor of the Issuer (excluding transfers pursuant to registered public offerings and open market sales under Rule 144 under the Securities Act of 1933). Furthermore, the Reporting Persons also agreed not to enter into any derivative or lending transaction that would have the same economic effect as a sale of any shares of Common Stock of the Issuer. Under the Transaction Agreement, the Reporting Persons further agreed that, until the fourth anniversary after the Closing Date, unless invited in writing with the approval of a majority of the Issuer's Board of Directors, the Reporting Persons will not, and will not cause or permit any of their consolidated subsidiaries to, directly or indirectly: (i) acquire, offer to acquire or agree to acquire any Issuer equity securities or convertible securities, except pursuant to certain exceptions; (ii) make any public announcement, proposal or offer or otherwise solicit or effect (A) any business combination, merger, tender offer, exchange offer or similar transaction involving the Issuer or its subsidiaries, including any change of control, (B) any restructuring, recapitalization, liquidation, dissolution or similar transaction involving the Issuer or its subsidiaries or (C) any acquisition of any of the Issuer’s or its subsidiary’s equity securities; (iii) negotiate or act in concert with, or knowingly finance, assist or encourage, any other person or entity in connection with any of the actions set forth above in clauses (i) and (ii), or otherwise form, join or participate in a group (other than a group comprised solely of the Reporting Persons and their respective subsidiaries) with respect to any equity securities in connection with any of the actions set forth in (i) and (ii); (iv) request or call or seek to call a meeting of the Issuer's stockholders, nominate any individual for election as a director of the Issuer at any meeting of the Issuer’s stockholders, submit any stockholder proposal (pursuant to Rule 14a-8 promulgated under the Exchange Act or otherwise) to seek representation on the Issuer’s Board of Directors or any other proposal to be considered by the Issuer’s stockholders, or publicly recommend that any other stockholder vote in favor of, or otherwise publicly comment favorably about, or solicit votes or proxies for, any such nomination or proposal submitted by another stockholder, or otherwise publicly seek to control or influence the Board of Directors, management or policies of the Issuer; (v) deposit any shares of voting stock of the Issuer in a voting trust or similar arrangement or subject any shares of voting stock of the Issuer to any voting agreement, pooling arrangement or similar arrangement (other than as contemplated by the Transaction Agreement); or (vi) take any action which would reasonably be expected to require the Issuer or ER or any of its affiliates to make a public announcement regarding any of the actions set forth above in clauses (i) - (v) above (clauses (i) - (vi), collectively, the “Standstill Restrictions”). If the Issuer or Monster determines to explore a possible process for a sale transaction that would, if consummated, constitute a change of control, and the Issuer notifies the Reporting Persons of such process and allows the Reporting Persons to participate therein, on the terms and conditions thereof, the Standstill Restrictions will not apply solely for such purpose. In addition, the Standstill Restrictions will not apply solely to the extent necessary to facilitate a public or private offer by ER or its affiliates to acquire directly or indirectly at least a majority of the outstanding shares of Common Stock of the Issuer or all or substantially all of the Issuer's assets if: (i) the Issuer or Monster enters into a binding definitive agreement with any third party providing for a change of control; (ii) any person or entity or group (other than ER or any of its affiliates) acquires beneficial ownership of more than 35% of the outstanding the Common Stock of the Issuer; (iii) any bona fide acquiror makes a public or non-public offer or proposal to the Issuer which, if fully subscribed, would result in such acquiror acquiring beneficial ownership of more than 35% of the outstanding Common Stock of the Issuer, or publicly announces a proposal to effect or an intention to engage in a transaction involving a change of control of the Issuer and, following such proposal, the Issuer, Monster or their representatives provide material non-public information to any such acquiror or its representatives or engage in substantive negotiations with such acquiror or its representatives; or (iv) any bona fide acquiror publicly announces a tender or exchange offer for more than 35% of the outstanding Common Stock of the Issuer and files a tender offer statement under Section 14(d)(1) or 13(e)(1) of the Exchange Act. - 6 - The Reporting Persons and their affiliates may submit to the Issuer's chairman of the board or chief executive officer confidential proposals for a potential transaction, including a change of control transaction, relating to the Issuer or Monster, as long as the proposals are made in a manner that would not reasonably be expected to require the Issuer or Monster to make a public announcement regarding the proposals. Prior to submission of such a written proposal during the four-year period following the Closing Date relating to any change of control transaction, TCCC or its affiliates will advise the Issuer of its intention and refrain from submitting such proposal if affirmatively so requested by the Issuer, based on action by the Issuer's Board of Directors. Notwithstanding the Standstill Restrictions, the Reporting Persons and their consolidated subsidiaries will be entitled to purchase additional shares of Common Stock of the Issuer (the “Additional Shares”) following the closing in open market or privately registered transactions as long as, when taken together with all other shares of Common Stock of the Issuer beneficially owned by the Reporting Persons and their consolidated subsidiaries at the time such transaction is consummated, such purchase will not result in the Reporting Persons and their consolidated subsidiaries being the beneficial owner of more than 25% of the total number of shares of Common Stock of the Issuer outstanding at such time. At the closing, the number of members of the Issuer's Board of Directors was increased by two, and the Issuer appointed two new individuals to the Board of Directors who were designated by TCCC, subject to the requirements that (i) such individuals be reasonably acceptable to the Issuer and qualified and suitable to serve as members of the Board of Directors under all applicable policies and requirements and (ii) one of such individuals be an "independent director" (as defined in Nasdaq Listing Rule 5602(a)(2)) who is not employed by TCCC or any of its affiliates and the other individual be an executive officer of TCCC, in each case, as determined in good faith by the Board of Directors. From the closing until the earlier of (i) 36 months after the closing and (ii) the first date on which ER has beneficial ownership of at least 20% of the aggregate shares of Common Stock of the Issuer then outstanding (the "Initial Period"), ER will have the right to designate to the Issuer's Board of Directors a number of individuals who satisfy the director requirements described above equal to the greater of (i) two or (ii) 20% the size of the Issuer's Board of Directors at any time (rounded up to the next whole number). After the Initial Period, for so long as ER has ownership of at least 10% of the aggregate shares of Common Stock of the Issuer then outstanding, ER shall have the right to designate for election to the Board of Directors one individual who satisfies the director requirements described above. The Reporting Persons each agreed that it will, and will cause its controlled affiliates to, prior to the occurrence of a Management Triggering Event (as defined below), vote all of the shares of Common Stock that the Reporting Persons collectively beneficially own in excess of 20% of the total outstanding shares of Common Stock in the same proportion as all shares of Common Stock not beneficially owned by Reporting Persons with respect to any proposals to approve a transaction with a third party that would result in a change of control of the Issuer on which the Reporting Persons are entitled to vote. ER also agreed to waive any appraisal or dissenters' rights in connection with any such transactions that would result in a change of control of the Issuer. In addition, for as long as the Reporting Persons beneficially own at least 5% of the aggregate number of shares of Common Stock then-outstanding and prior to the occurrence of a change of control of the Issuer or Monster or a Management Triggering Event: (i) the Reporting Persons will vote in favor of all director nominees recommended by the Issuer's Board of Directors or, if requested by the Issuer, in the same proportion as all shares of Common Stock not beneficially owned by the Reporting Persons, other than with respect to the nominees designated by the Reporting Persons in accordance with the Transaction Agreement; and (ii) the Reporting Persons will also use their commercially reasonable efforts to be present, in person or by proxy, at all meetings of shareholders of the Issuer, so that all such shares may be counted for purposes of determining the presence of a quorum at all meetings of holders of shares of Common Stock of the Issuer. For purposes of the Transaction Agreement, "Management Triggering Event" means the occurrence of either (i) the chairman/chief executive officer and the president/chief operating officer of - 7 - Monster as of the date of the Transaction Agreement collectively beneficially owning less than 750,000 Common Stock of the Issuer or (2) any date as of which neither the chairman/chief executive officer of Monster nor the president/chief operating officer of Monster, each as of the date of the Transaction Agreement, is then serving in a senior executive leadership position or as chairman of the Issuer's Board of Directors. Under the Transaction Agreement, the Issuer granted the Reporting Persons certain preemptive rights, where,in the event that the Reporting Persons beneficially own at least 20% of the aggregate number of shares of Common Stock of the Issuer then-outstanding, if the Issuer engages in any transaction involving the direct or indirect sale or issuance by the Issuer of equity securities (subject to customary exceptions) and such sale or issuance would cause the Reporting Persons to beneficially own less than 20% of the aggregate number of shares of Common Stock outstanding immediately following such sale or issuance, the Reporting Persons will be afforded the opportunity to acquire from the Issuer, for the same price and on the same terms as such equity securities are offered, up to an amount necessary to enable the Reporting Persons to own 20% of the aggregate number of shares of Common Stock outstanding immediately following such sale or issuance. As stockholders of the Issuer, the Reporting Persons expect that they will continuously monitor their investment in the Issuer. The Reporting Persons will, from time to time, review their investment in the shares of Common Stock and, to the extent permitted by the Transaction Agreement, may determine to acquire additional shares of Common Stock or to sell shares of Common Stock. In addition, subject to the provisions of the Transaction Agreement, the Reporting Persons from time to time may consider, evaluate and propose other possible transactions involving the Issuer or its subsidiaries. Except as otherwise described herein, the Reporting Persons do not presently have any plans or proposals which relate to or would result in any of the events, actions or conditions specified in paragraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer (a)−(b)The Reporting Persons beneficially own the 34,040,534 shares of Common Stock that the Issuer issued and sold to the Reporting Persons pursuant to the Transaction Agreement. On June 12, 2015, the Issuer informed the Reporting Persons that there were 204,251,380 shares of Common Stock of the Issuer issued and outstanding as of June 12, 2015, after giving effect to the issuance of the Shares to the Reporting Persons pursuant to the Transaction Agreement. The number of shares issued to the Reporting Persons represents one share less than 16.666% of total number of issued and outstanding shares of Common Stock of the Issuer on June 12, 2015, pursuant to the Transaction Agreement. To the best of the Reporting Persons' knowledge, none of the persons named in Schedule A beneficially owns any Common Stock of the Issuer. (c)The 34,040,534 shares of Common Stock of the Issuer were acquired by the Reporting Persons on June 12, 2015, along with the Issuer's non-energy drink business and certain distribution rights with respect to Monster products, pursuant to the Transaction Agreement and Asset Transfer Agreement, for a net cash payment of $2.15 billion made to the Issuer and Monster by the Reporting Persons and the transfer of TCCC's worldwide energy drink business to Monster.Except as specifically set forth in this Statement, none of the Reporting Persons or, to the best knowledge of the Reporting Persons, any of the persons listed on Schedule A has effected any transaction in the Common Stock during the past 60 days. (d)To the best knowledge of the Reporting Persons, no person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities beneficially owned by the Reporting Persons identified in this Item 5. (e)Not applicable. - 8 - Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. As more fully described in Item 4 above, the Reporting Persons and the Issuer are parties to the Transaction Agreement. Except as described herein, none of the Reporting Persons nor, to the knowledge of the Reporting Persons, any of the persons listed on Schedule A has any contracts, arrangements, understandings or relationships (legal or otherwise) with any persons with respect to any securities of the Issuer, including, but not limited to, transfers or voting of any securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Item 7. Material To Be Filed as Exhibits. The following documents are filed or incorporated by reference as exhibits to this Statement: Exhibit Number Description of Exhibit Exhibit 1 Transaction Agreement, dated as of August 14, 2014, between the Issuer, Monster Beverage Corporation, New Laser Merger Corp., The Coca-Cola Company and European Refreshments (incorporated by reference from Exhibit 2.1 to the Form S-4/A filed by New Laser Corporation and dated May 4, 2015, File No. 333-201839). Exhibit 2 Amendment to the Transaction Agreement and Asset Transfer Agreement, dated as of May 4, 2015, by and among Monster Beverage Corporation, New Laser Corporation, New Laser Merger Corp., The Coca-Cola Company and European Refreshments (incorporated by reference from Exhibit 2.3 to the Form S-4/A filed by New Laser Corporation and dated May 5, 2015, File No. 333-201839). Exhibit 3 Joint Filing Agreement, dated June 22, 2015, between the Reporting Persons. - 9 - SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. THE COCA-COLA COMPANY Dated: June 22, 2015 By: /s/ Kathy N. Waller Name: Kathy N. Waller Title: Chief Financial Officer EUROPEAN REFRESHMENTS Dated: June 22, 2015 By: /s/ Una Sheils Name: Una Sheils Title: Director SCHEDULE A DIRECTORS AND EXECUTIVE OFFICERS OF THE COCA-COLA COMPANY AND EUROPEAN REFRESHMENTS Set forth below is the name, business address and present occupation or employment of each director and executive officer of The Coca-Cola Company ("TCCC") and European Refreshments ("ER"). Except as indicated below, each such person is a citizen of the United States. None of the directors or executive officers named below beneficially owns any Common Stock of Monster Beverage Corporation. (formerly known as New Laser Corporation). Directors of TCCC or ER who are also executive officers of TCCC or ER are indicated by an asterisk. Except as indicated below, the business address of each director and executive officer of TCCC is OneCoca-Cola Plaza, Atlanta, Georgia 30313 and of each director of ER is either One Coca-Cola Plaza, Atlanta, Georgia 30313 or Southgate, Dublin Road, Drogheda, County Meath, Ireland. DIRECTORS OF THE COCA-COLA COMPANY NAME PRINCIPAL OCCUPATION OR EMPLOYMENT ADDRESS Muhtar Kent* Chairman of the Board of Directors, President and Chief Executive Officer of The Coca-Cola Company Herbert A. Allen President, Chief Executive Officer and a Director of Allen & Company Incorporated, a privately held investment firm Allen & Company Incorporated 711 Fifth Avenue New York, NY 10022 Ronald W. Allen Former Chairman of the Board of Directors, President and Chief Executive Officer of Aaron's, Inc. c/o Aaron's, Inc. 309 East Paces Ferry Road Suite 1100 Atlanta, GA 30305 Marc Bolland Chief Executive Officer and Director, Marks & Spencer Group plc, an international multi-channel retailer Mr. Bolland is a citizen of The Netherlands. Marks & Spencer Group plc Waterside House 35 North Wharf Road London W2 1NW Ana Botín Executive Chairman and a Director of Banco Santander, S.A., a global multinational bank, and a Director of Santander UK plc, a leading financial services provider in the United Kingdom and subsidiary of Banco Santander S.A. Ms. Botín is a citizen of Spain. Santander UK plc 2 Triton Square Regent’s Place London NW1 3AN United Kingdom Howard G. Buffett President of Buffett Farms, a commercial farming operation, andChairman and Chief Executive Officer of the Howard G. Buffett Foundation, a private foundation supporting humanitarian initiatives focused on food and water security, conservation and conflict management Howard G. Buffett Foundation 145 North Merchant Street Decatur, IL 62523 NAME PRINCIPAL OCCUPATION OR EMPLOYMENT ADDRESS Richard M. Daley Executive Chairman of Tur Partners LLC, an investment and advisory firm focused on sustainable solutions within the urban environment Tur Partners LLC 900 N. Michigan Avenue Suite 1720 Chicago, IL 60611 Barry Diller Chairman of the Board of Directors and Senior Executive of IAC/InterActiveCorp, a leading media and internet company IAC/InterActiveCorp 555 West 18thStreet New York, New York 10011 Helene D. Gayle President and Chief Executive Officer of CARE USA, a leading international humanitarian organization. CARE USA 151 Ellis Street, NE Atlanta, GA 30303 Evan G. Greenberg Chairman and Chief Executive Officer of ACE Limited, the parent company of the ACE Group of Companies, a global insurance and reinsurance company ACE Group 1133 Avenue of the Americas 45thFloor New York, NY 10036 Alexis M. Herman Chair and Chief Executive Officer of New Ventures, LLC, a corporate consulting company New Ventures, Inc. 633 Pennsylvania Avenue NW 3rdFloor Washington, D.C. 20004 Robert A. Kotick President, Chief Executive Officer and a Director of Activision Blizzard, Inc. an interactive entertainment software company Activision Blizzard, Inc. 3100 Ocean Park Boulevard Santa Monica, CA 90405 Maria Elena Lagomasino Chief Executive Officer and Managing Partner of WE Family Offices, a multi-family office serving global high net worth families Rockefeller Center 1270 Avenue of the Americas Suite 2101 New York, NY 10020 Sam Nunn Co-Chairman and Chief Executive Officer of the Nuclear Threat Initiative, a nonprofit organization working to reduce the global threats from nuclear, biological and chemical weapons The Sam Nunn School of International Affairs Georgia Institute of Technology 781 Marietta Street, NW Atlanta, Georgia 30318 David B. Weinberg Chairman of the Board and Chief Executive Officer of Judd Enterprises, Inc., a private investment management office with diverse interests in a variety of asset classes. Judd Enterprises, Inc. 401 N. Michigan Ave #3050 Chicago, IL 60611 EXECUTIVE OFFICERS OF THE COCA-COLA COMPANY NAME PRINCIPAL OCCUPATION OR EMPLOYMENT ADDRESS Muhtar Kent Chairman of the Board of Directors, President and Chief Executive Officer of The Coca-Cola Company Ahmet C. Bozer Executive Vice President of The Coca-Cola Company and President of Coca-Cola International Alexander B. Cummings, Jr. Executive Vice President and Chief Administrative Officer of The Coca-Cola Company Marcos de Quinto Executive Vice President and Chief Marketing Officer of the Coca-Cola Company Mr. de Quinto is a citizen of Spain. J. Alexander M. Douglas, Jr. Executive Vice President and of The Coca-Cola Company and President of Coca-Cola North America Ceree Eberly Senior Vice President and Chief People Officer of The Coca-Cola Company Irial Finan Executive Vice President of The Coca-Cola Company and President, Bottling Investments and Supply Chain Mr. Finan is a citizen of Ireland. Bernhard Goepelt Senior Vice President, and General Counsel and Chief Legal Counsel of The Coca-Cola Company Mr. Goepelt is a citizen of Germany. Julie Hamilton Vice President and Chief Customer and Commercial Leadership Officer of The Coca-Cola Company Brent Hastie Vice President of The Coca-Cola Company, Strategy and Planning Ed Hays, PhD Senior Vice President and Chief Technical Officer of The Coca-Cola Company Nathan Kalumbu President of the Eurasia and Africa Group of The Coca-Cola Company Mr. Kalumbu is a citizen of Zimbabwe. James Quincey President of the Europe Group of The Coca-Cola Company Mr. Quincey is a citizen of the United Kingdom. Atul Singh President of the Asia Pacific Group of The Coca-Cola Company Brian Smith President of the Latin America Group of The Coca-Cola Company Clyde C. Tuggle Senior Vice President and Chief Public Affairs and Communications Officer of The Coca-Cola Company Kathy N. Waller Executive Vice President and Chief Financial Officer of The Coca-Cola Company DIRECTORS OF EUROPEAN REFRESHMENTS NAME PRINCIPAL OCCUPATION OR EMPLOYMENT ADDRESS Ann McKenna Financial Controller, European Refreshments Ms. McKenna is a citizen of Ireland Una Sheils GFO Group Entities Controller, European Refreshments Ms. Sheils is a citizen of Ireland Bob Jordan Vice President and General Tax Counsel`, The Coca-Cola Company Marie Quintero-Johnson Vice President and Director of Mergers & Acquisitions, The Coca-Cola Company Jack Gogarty Process Optimisation Director, European Refreshments Mr. Gogarty is a citizen of Ireland Gerry Leydon Customer Relationship Director, European Refreshments Mr. Leydon is a citizen of Ireland Miriam Doyle Director and Company Secretary, European Refreshments Ms. Doyle is a citizen of Ireland EXECUTIVE OFFICERS OF EUROPEAN REFRESHMENTS1 NAME PRINCIPAL OCCUPATION OR EMPLOYMENT ADDRESS Anna McKenna Financial Controller, European Refreshments Ms. McKenna is a citizen of Ireland Una Sheils GFO Group Entities Controller, European Refreshments Ms. Sheils is a citizen of Ireland Bob Jordan Vice President and General Tax Counsel`, The Coca-Cola Company Marie Quintero-Johnson Vice President and Director of Mergers & Acquisitions, The Coca-Cola Company Jack Gogarty Process Optimisation Director, European Refreshments Mr. Gogarty is a citizen of Ireland Gerry Leydon Customer Relationship Director, European Refreshments Mr. Leydon is a citizen of Ireland Miriam Doyle Director and Company Secretary, European Refreshments Ms. Doyle is a citizen of Ireland 1 The officers of the Company are its directors, along with the company secretary (who does not have powers of management).
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Exhibit 10.1
Summary of Loan (Credit) Contract of Maximum Amount
Loan (Credit) Contract of Maximum Amount between Jiangsu Best Appliance Co.,
Ltd. (the “Company”) and Jiangsu Wujin Rural Commercial Bank (the “Creditor”)
dated December 10, 2008.
Main contents:
* Contract number: 1140827008150016;
* The Creditor will provide to the Company a credit with maximum amount of RMB
21 million for the period from December 10, 2008 to December 9, 2011;
* Interest rate of loan: for short term loan (less than one year), the rate is
fixed subject to each loan agreement to be signed; for loan term loan (more
than one year), the rate shall be floating rate subject to adjust of
benchmark rate published by the People’s Bank. The interest shall be settled
on a monthly basis.
* The Creditor is entitled to adjust the credit at the discretion of the
Creditor.
* The Creditor’s approval shall be obtained in case of material change of the
Company, including transfer of the significant assets, lease out, reform as a
company limited by shares, joint operation, combination, merger, division,
joint venture, equity transfer, and any other activities which shall affect
the realization of the Creditor’s rights hereunder
* Breach of contract penalty: adjustment of credit, cancellation of unused
credit, imposition of punitive interest, demand prepayment of loan and other
measures;
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MTN GLOBAL FUNDING AGREEMENT
Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0001
(515) 247-5111
In consideration of the payment made by, or at the direction of,
Principal Life Income Fundings Trust 2006-41
(the “Agreement Holder”)
of the Net Deposit, as described below, Principal Life Insurance Company
(“Principal Life”) agrees to make payments to the person or persons entitled to
them, subject to the provisions of this funding agreement (this “Agreement”).
This Agreement is delivered in and subject to the laws of the State of Iowa.
This Agreement is issued and accepted subject to all the terms set out in it.
This Agreement is executed by Principal Life at its Corporate Center to take
effect as of the 6th day of July, 2006, which is referred to as the Effective
Date, subject to the receipt by Principal Life or its designee of the Net
Deposit (as set forth in Section 1).
/s/ Joyce N. Hoffman
/s/ J. Barry Griswell
Senior Vice President and
Chairman, President and
Corporate Secretary
Chief Executive Officer
/s/ Jim Madden Registrar July 6, 2006 Date
GLOBAL FUNDING AGREEMENT NO. 6-13518
RESTRICTIONS REGARDING THE TRANSFER OR SALE OF
THIS FUNDING AGREEMENT OR ANY INTEREST HEREIN ARE SET FORTH HEREIN
FUNDING AGREEMENT No. 6-13518
This Agreement is issued in connection with the issuance by the Trust
(specified in the Annex) of Secured Notes (the “Notes”) which are identified in
the annex hereto (the “Annex”) and which are being issued by the Trust pursuant
to the Prospectus dated February 16, 2006, the Prospectus Supplement dated
February 16, 2006, as from time to time amended or supplemented, and the Pricing
Supplement applicable to the Notes (the “Pricing Supplement”). Capitalized terms
not otherwise defined herein shall have the meanings ascribed to them in the
Notes. Where used in this Agreement, the term “Notes” shall mean the Notes
secured by this Agreement as the same exist on the Effective Date, without
giving effect to any amendments or modifications to said Notes effected or made
after any such Effective Date unless such amendments or modifications to said
Notes have been consented to in writing by Principal Life.
1. Deposit Principal Life agrees to accept, and the Agreement Holder
agrees to pay or cause to be paid to Principal Life, for value on the Effective
Date, the Net Deposit (as specified in the Annex). All funds received by
Principal Life under this Agreement shall become the exclusive property of
Principal Life and remain a part of Principal Life’s general account without any
duty or requirement of segregation or separate investment. This Agreement
shall become effective only upon the receipt by Principal Life or its designee
of the Net Deposit. 2. Fund Upon receipt of the Net Deposit, Principal
Life will establish, under this Agreement, a bookkeeping account in the name of
the Agreement Holder, which will evidence Principal Life’s obligations under
this Agreement. The Deposit deemed received (as specified in the Annex),
(i) less any withdrawals to make payments hereunder and (ii) plus any interest
accrued and premium, if any, pursuant to Section 7, will be referred to as the
“Fund”. Principal Life is neither a trustee nor a fiduciary with respect
to the Fund. 3. Purchase of Notes By Principal Life. Principal Life
may purchase some or all of the Notes in the open market or otherwise at any
time, and from time to time. Simultaneously, upon such purchase, (1) the
purchased Notes shall, by their terms become mandatorily redeemable by the Trust
as specified in the related Pricing Supplement, Prospectus Supplement and/or
Prospectus and (2) the Fund under this Agreement shall be permanently reduced by
the same percentage as the principal amount of the Notes so redeemed bears to
the sum of (i) the aggregate principal amount of all Notes issued and
outstanding immediately prior to such redemption and (ii) the principal amount
of the Trust Beneficial Interest related to such Notes. If Principal Life, in
its sole discretion, engages in such open market or other purchases, then the
Trust, the Indenture Trustee in respect of such Notes, and Principal Life shall
take
2
actions (including, in the case of Principal Life, making the payment(s)
necessary to effect the Trust’s redemption of such Notes) as may be necessary or
desirable to effect the cancellation of such Notes by the Trust. 4. Entire
Agreement This Agreement and the Annex attached hereto constitute the
entire Agreement. 5. Representations
(a) Each party hereto represents and warrants to the other that as of the
date hereof:
(i) it has the power to enter into this Agreement and to consummate the
transactions contemplated hereby; (ii) this Agreement has been duly
authorized, executed and delivered, this Agreement constitutes a legal, valid
and binding obligation of each party hereto, and this Agreement is enforceable
in accordance with the terms hereof, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights, and subject as to
enforceability to general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law; and (iii) the
execution and delivery of this Agreement and the performance of obligations
hereunder do not and will not constitute or result in a default, breach or
violation of the terms or provisions of its certificate, articles or charter of
incorporation, declaration of trust, by-laws or any agreement, instrument,
mortgage, judgment, injunction or order applicable to it or any of its property.
(b) The Trust further represents and warrants to Principal Life that:
(i) it is a person other than a natural person and is purchasing this
Agreement for the purpose of providing collateral security for securities
registered with the United States Securities and Exchange Commission; (ii)
it has been informed and understands that transfer is restricted by the terms of
this Agreement; and (iii) it (a) is solely responsible for determining
whether this Agreement is suitable for the purpose intended; (b) has carefully
read this Agreement (including the Annex) before signing this Agreement; (c) has
had a reasonable opportunity to make such inquiries as it deemed necessary prior
to signing this Agreement; and (d) has received or had access to such additional
information as it deemed necessary in connection with its decision to sign this
Agreement.
3
In performing its obligations hereunder Principal Life is not acting as a
fiduciary, agent or other representative for the Agreement Holder or anyone
else. All representations and warranties made by the Agreement Holder and
Principal Life in this Agreement shall be considered to have been relied upon by
the other in connection with the execution hereof. 6. Assignment of
Agreement The following conditions must be satisfied in order to
effectuate any assignment of this Agreement:
(i) This Agreement may only be transferred through a book entry system
maintained by Principal Life, or an agent designated by it, within the meaning
of Temporary Treasury Regulations Section 5f.103-1(c) and Treasury Regulations
Section 1.871-14(c)(1)(i). (ii) The Agreement Holder, and any assignee,
must comply with applicable securities laws. (iii) Principal Life has
consented in writing to the proposed assignment, such consent not to be
unreasonably withheld. (iv) Principal Life shall have received from the
proposed assignee a duly executed certificate containing, in substance, the
information, representations, warranties, acknowledgments and agreements set
Any attempted sale, transfer, anticipation, assignment, hypothecation, or
alienation not in accordance with this Section 6 shall be void and of no effect.
Until such time, if any, as Principal Life has consented in writing to a
proposed assignment, Principal Life shall not be obligated to make any payments
to or at the direction of anyone other than the person shown on Principal Life’s
books and records as the Agreement Holder. Once the foregoing conditions have
been satisfied with respect to an assignment, the assignee or its successor
shall be deemed to be the sole Agreement Holder for all purposes of this
Agreement and Principal Life shall promptly amend its records to reflect the
assignee’s status as Agreement Holder. 7. Payments to the Agreement Holder
Principal Life shall pay to, or at the direction of, the Agreement Holder by
the date (the “Due Date”) on which any payment becomes due in respect of the
Notes secured by this Agreement (and in any event such period of time prior to
the Due Date as shall be necessary to ensure that the Trust can fulfill its
obligation to make payment in full of all amounts due and payable under the
Notes on the Due Date), an amount in the currency or currencies in which the
Notes are denominated as specified in the Notes equal to the sum of (i) the
amount of principal and/or (as the case may be) interest and/or (as the case may
be) premium falling due in respect of the Notes on such Due Date (the “Notes
Component”) and (ii) the amount of any payments owed by the Trust in respect of
the Trust Beneficial Interest falling due on such date (the “Beneficial Interest
Component”). In the event that Principal Life fails to make payment of any such
amount on or prior to
4
the Due Date, Principal Life shall pay to or at the direction of the
Agreement Holder, on demand by the Agreement Holder, (i) if the failure relates
to the Notes Component, an amount in the currency specified in the Notes equal
to the amount of default interest (or other amount) which becomes due and
payable by the Trust in accordance with the Notes as a consequence of any delay
in the Trust making the relevant payment of principal, interest or premium (as
the case may be) to the holders of the of Notes and (ii) if the failure relates
to the Beneficial Interest Component, such amount or default interest, if any,
determined in the same manner as default interest on the Notes Component.
Interest shall accrue on the Fund in the same amount and pursuant to the same
terms as interest accrues on the Notes secured by this Agreement and on the
Trust Beneficial Interest related to the Notes. If any amount is withdrawn
from the Fund in order to make a payment under this Section 7, interest will
cease to be credited with regard to such amount as of the end of the day
immediately preceding the date on which such withdrawal is made. All
payments made by Principal Life to the Agreement Holder hereunder shall be paid
in same-day, freely transferable funds to such account as has been specified for
such purpose by the Agreement Holder. Notwithstanding anything to the
contrary in this Section 7, if Principal Life shall, with respect to any
scheduled amount due and payable under any of the Notes, comply in all respects
with the requirements of this Section 7, but an event of default has occurred
with respect to the Notes and as a result payments with respect to the Notes
have been accelerated, otherwise than by reason of any default under this
Agreement by Principal Life, no Event of Default (as defined below) under this
Funding Agreement shall be deemed to have occurred, no payments with respect to
this Agreement shall be accelerated and Principal Life will remain obligated to
make payments under this Agreement as if no event of default had occurred with
respect to the Notes. 8. Termination of Agreement Subject to the
provisions of the following paragraph and the Annex, this Agreement shall
terminate and cease to be of any further force or effect on the day and at the
time upon which all amounts have been withdrawn from the Fund pursuant to this
Agreement. Upon the occurrence of any of the following events (each, an
“Event of Default”) and following a written demand by the Agreement Holder,
Principal Life shall pay to, or at the direction of, the Agreement Holder all
amounts that the Trust is required to pay in such event under the Notes and the
Trust Beneficial Interest:
(i) Principal Life’s failure to make any payment of interest, premium (if
applicable) or installment payments (if applicable) in accordance with this
Agreement, if such failure to pay is not corrected within seven (7) Business
Days after such payment becomes due and payable; or
5
(ii) Principal Life’s failure to make any payment of principal (other than
any installment payment) in accordance with this Agreement, if such failure to
pay is not corrected within one (1) Business Day after such payment becomes due
and payable; or (iii) if Principal Life (a) is dissolved (other than
pursuant to a consolidation, amalgamation or merger in which the resulting
entity assumes its obligations); (b) becomes insolvent or is unable to pay its
debts or fails or admits in writing its inability generally to pay its debts as
they become due; (c) makes a general assignment, arrangement or composition with
or for the benefit of its creditors; (d) institutes or has instituted against it
an administrative or legal proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any supervision, rehabilitation,
liquidation, bankruptcy or insolvency law or other similar law affecting
creditors’ rights, or a petition is presented for its winding-up or liquidation,
and, in the case of any such proceeding or petition instituted or presented
against it, such proceeding or petition (1) results in a judgment of insolvency
or bankruptcy or the entry of an order for relief or the making of an order for
its rehabilitation, winding-up or liquidation or (2) is not dismissed,
discharged, stayed or restrained in each case within 60 days of the institution
or presentation thereof; (e) has a resolution passed for its rehabilitation,
winding-up, official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger in which the resulting entity assumes the
obligations of Principal Life); (f) seeks or becomes subject to the appointment
of an administrator, supervisor, rehabilitator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official for it or
for all or substantially all its assets; (g) has a secured party take possession
of all or substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or against all
or substantially all its assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed or restrained, in each
case within 60 days thereafter; (h) causes or is subject to any event with
respect to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (a) to (g)
(inclusive); or (i) takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the foregoing acts.
Notwithstanding anything to the contrary in this Section 8, if an event
described in clause (iii) above occurs, this Agreement will automatically
terminate and the amount of the Fund will be immediately due and payable by
Principal Life to the Agreement Holder, or the account specified by the
Agreement Holder. Principal Life will promptly notify the Agreement Holder
and the Rating Agencies in writing of the occurrence of any of (i) through
(iii) above. 9. Withholding; Additional Amounts All amounts due in
respect of this Agreement will be made without withholding or deduction for or
on account of any present or future taxes, duties, levies, assessments or
6
other governmental charges of whatever nature imposed or levied by or on
behalf of any governmental authority in the United States unless the withholding
or deduction is required by law, regulation or official interpretation thereof.
Unless otherwise specified in the Annex, Principal Life will not pay any
additional amounts to the Agreement Holder in the event that any withholding or
deduction is so required by law, regulation or official interpretation thereof,
and the imposition of a requirement to make any such withholding or deduction
will not give rise to an Event of Default or any independent right or obligation
to redeem this Agreement. 10. Currency Except as may be specifically
noted in the Annex, the Net Deposit and all payments under Section 7 of this
Agreement shall be made using the currency or currencies as specified in the
Notes. 11. Tax Treatment Principal Life and the Agreement Holder agree
that this Agreement shall be disregarded for U.S. Federal income tax purposes.
Principal Life and the Agreement Holder further agree that if this Agreement is
not so disregarded, it will and is intended to be treated as a debt obligation
of Principal Life issued in registered form within the meaning of Treasury
Regulations Section 1.871-14(c)(1)(i), except to the extent provided in Treasury
Regulations Section 1.163-5T (or any subsequent similar regulation). 12.
Amendment and Modification This Agreement may be amended or modified in
whole or in part, at any time and from time to time, for any period or periods
(a) by mutual written agreement by such officers of Principal Life, the
Agreement Holder and, where such Agreement Holder is the Indenture Trustee upon
an assignment by way of security of this Agreement by the Trust, the Trust and
(b) without the consent of any other person affected thereby. 13. Notice
Except as otherwise provided herein, all notices given pursuant to this
Agreement shall be in writing, and shall either be delivered, mailed or
telecopied to the locations listed below or at such other address or to the
attention of such other persons as such party shall have designated for such
purpose in a written notice complying as to delivery with the terms of this
Section 13. Each such notice shall be effective (i) if given by telecopy, when
transmitted to the applicable number so specified in this Section 13 (if
required herein, such notice shall also be sent by mail, with first class
postage prepaid), (ii) if given by mail, three days after deposit in the mails
with first class postage prepaid, or (iii) if given by any other means, when
actually delivered at such address.
7
If to Principal Life:
Principal Life Insurance Company 711 High Street Des Moines, Iowa
50392-0001
Attention:
General Counsel
Telephone:
Telecopy:
(515) 248-3011
Principal Life Insurance Company 711 High Street Des Moines, Iowa 50392-0001
Attention:
Jim Fifield, Counsel
Telephone:
(515) 248-9196
Telecopy:
(515) 235-9353
If to the Agreement Holder:
Principal Life Income Fundings Trust 2006-41 c/o U.S. Bank Trust National
Association 100 Wall Street, 16th Floor New York, NY 10005
Attention:
Thomas E. Tabor
Telephone:
(212) 361-6184
Facsimile:
(212) 809-5459
Citibank, N.A. Citibank Agency and Trust 388 Greenwich Street, 14th Floor
Attention:
Nancy Forte
Telephone:
(212) 816-5685
Telecopy:
(212) 816-5527
14. Business Day For purposes of this Agreement, “Business Day” means
any day that is a Business Day as specified in the Notes or the Indenture. 15.
Business Day Convention If the date on which any payment is due to be
made under this Agreement shall occur on a day on which is not a Business Day,
such payment shall be made in accordance with the Business Day Convention as
specified in the Notes or the Indenture.
8
16. Jurisdiction The parties to this Agreement hereby consent to the
non-exclusive jurisdiction of any State or Federal Court of competent
jurisdiction located within the State of New York, in the Borough of Manhattan,
in connection with any actions or proceedings arising directly or indirectly
from this Agreement. 17. Waiver The obligations of Principal Life or
the Agreement Holder under this Agreement may be waived only in writing by the
party to this Agreement whose interests are adversely affected by such waiver.
No failure or delay, on the part of the party adversely affected, in exercising
any right or remedy hereunder shall operate as a waiver thereof. 18. Tax
Redemption. If a Tax Event (defined below) occurs, Principal Life will
have the right to redeem this Agreement by giving not less than 30 and no more
than 60 days prior written notice to the Agreement Holder and by paying to the
Agreement Holder an amount equal to the Fund. The term “Tax Event” means that
Principal Life shall have received an opinion of independent legal counsel
stating in effect that as a result of (a) any amendment to, or change (including
any announced prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority thereof or
therein or (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any governmental authority in the United
States, which amendment or change is enacted, promulgated, issued or announced
on or after the Effective Date of this Agreement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the date
thereof, subject to U.S. federal income tax with respect to interest accrued or
received on this Agreement or (ii) the Trust is, or will be within 90 days of
the date thereof, subject to more than a de minimis amount of taxes, duties or
other governmental charges.
9
ANNEX
This Annex will become effective as of the Effective Date, subject to the
requirements of Section 1.
Trust: Principal Life Income Fundings Trust 2006-41
Net Deposit: The Net Deposit is $1,087,020.00.
Deposit: Regardless of the amount of the Net Deposit, the Deposit is
deemed to be $1,098,015.00.
Bank and Account: Wells Fargo Bank Iowa, N.A.
ABA No.: XXXXXXXXX
For credit to Principal Life Insurance Company
Account #XXXXXXXXX
Title of Notes: Principal Life Income Fundings Trust 2006-41 5.80%
Principal® Life CoreNotes® Due 2011
Survivor’s Option: Unless this Agreement has been declared due and
payable prior to the Maturity Date of the related Notes by reason of any Event
of Default, or has been previously redeemed or otherwise repaid, the Agreement
Holder may request repayment of this Agreement upon the valid exercise of the
Survivor’s Option in the Notes by the Representative of the deceased Beneficial
Owner of such Notes (a “Survivor’s Option”).
Except as provided below, upon the tender to and acceptance by
Principal Life of this Agreement (or portion thereof) securing the Notes as to
which the Survivor’s Option has been exercised, Principal Life shall repay to
the Agreement Holder the amount of the Fund equal to (i) 100% of the principal
amount of the Notes as to which the Survivor’s Option has been validly exercised
and accepted, plus accrued and unpaid interest on such amount to the date of
repayment, or (ii) in the case of Discount Notes, the Issue Price of the Notes
as to which the Survivor’s Option has been validly exercised and accepted, plus
accrued discount and any accrued and unpaid interest on such amount to the date
of repayment. However, Principal Life shall not be obligated to repay:
• more than the greater of $2,000,000 or 2% of the aggregate deposit for all
funding agreement contracts securing all outstanding notes issued under the
Principal® Life CoreNotessm program as of the end of the most recent calendar
year;
A-1
• more than $250,000 in aggregate deposit of funding agreement contracts
securing outstanding notes issued under the Principal® Life CoreNotesSM program
as to which the Survivor’s Option has been exercised on behalf of any single
beneficial owner in any calendar year; or • more than 2% of the Deposit
under this Agreement which secures the related Notes, as of the end of the most
recent calendar year.
Principal Life shall not make repayments pursuant to the Agreement Holder’s
request for repayment upon exercise of the Survivor’s Option in amounts that are
less than $1,000, and, in the event that the limitations described in the
preceding sentence would result in the partial repayment of this Agreement, the
principal amount of this Agreement remaining outstanding after repayment must be
at least $1,000 (the minimum authorized denomination of this Agreement). A
request for repayment by the Agreement Holder upon an otherwise valid election
to exercise the Survivor’s Option may not be withdrawn.
This Agreement (or portion thereof) accepted for repayment shall be repaid on
the first Interest Payment Date for the related Notes that occurs 20 or more
calendar days after the date of such acceptance.
In order to obtain repayment of this Agreement (or portion thereof) upon
exercise of the Survivor’s Option, the Agreement Holder must provide to
Principal Life (i) a written request for repayment signed by the Agreement
Holder, and (ii) any additional information Principal Life requires to evidence
satisfaction of any conditions to the repayment of this Agreement (or portion
thereof).
A-2
PRINCIPAL LIFE INSURANCE COMPANY
By:
/s/ Christopher P. Freese
Name:
Christopher P. Freese
Title:
Officer
PRINCIPAL LIFE INCOME FUNDINGS TRUST 2006-41
By:
U.S. Bank Trust National Association,
not in its individual capacity, but solely
in its capacity as trustee
By:
Bankers Trust Company, N.A., under
Limited Power of Attorney, dated
By:
/s/ Diana L. Cook
Name:
Diana L. Cook
Title:
Vice President
A-3 |
Title: [Calif.] Received multiple parking tickets for the same violation. Is this legal?
Question:**TLDR**: Got multiple tickets for the same violation over a short period of time. Is this legal? If I don't want to contest the original violation, do I have to pay all of the tickets?
I parked at a public university to visit a friend for a few hours, and when I returned to my car, I had three parking tickets for "not displaying the proper permit". These tickets were approximately $70 each, so the fees quickly add up. Can the university parking enforcement legally give me multiple tickets for the same violation? If so, where is the limit? Could a parking enforcement officer just stand in front of my car and write tickets over and over until the car was moved? This seems like a cash grab by the university.
Topic:
Traffic and Parking
Answer #1: They most likely were issued by different officers who thought that the other ones were from the previous day. This is especially true if it was dorm parking where cars are typically parked long term. I suggest you appeal all of them, and they will probably cancel all except one. The UC system is good about this for non-students, I don't know about CSU. |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13G Under the Securities Exchange Act of 1934 51JOB (Name of Issuer) ADR (Title of Class of Securities) 316827104 (CUSIP Number) December 31, 2015 (Date of Event which Requires Filing of this Statement) Check the appropriate box to designate the rule pursuant to which this Schedule is filed: [X] Rule 13d-1(b) [] Rule 13d-1(c) [] Rule 13d-1(d) * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see Instructions). CUSIP No.: 316827104 1 NAME OF REPORTING PERSON Harding Loevner LP I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) 27-068-4167 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [] (b) [] 3 SEC USE ONLY 4 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware, United States NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 5 SOLE VOTING POWER 3,707,760 6 SHARED VOTING POWER 7 SOLE DISPOSITIVE POWER 8 SHARED DISPOSITIVE POWER 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,707,760 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES [] 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 6.31% 12 TYPE OF REPORTING PERSON IA CUSIP No.: 316827104 ITEM 1(a). NAME OF ISSUER: 51JOB ITEM 1(b). ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES: No.1387, Building 3Zhang Dong RoadShanghai, 201203CHINA ITEM 2(a). NAME OF PERSON FILING: Harding Loevner LP ITEM 2(b). ADDRESS OF PRINCIPAL BUSINESS OFFICE OR, IF NONE, RESIDENCE: 400 Crossings Blvd.Bridgewater, NJ 08807United States ITEM 2(c). CITIZENSHIP: Delaware, United States ITEM 2(d). TITLE OF CLASS OF SECURITIES: ADR ITEM 2(e). CUSIP NUMBER: 316827104 ITEM 3. IF THIS STATEMENT IS FILED PURSUANT TO SECTION 240.13d-1(b), or 13d-2(b) or (c) CHECK WHETHER THE PERSON FILING IS A: (a) [ ] Broker or dealer registered under Section 15 of the Act (15 U.S.C. 78c); (b) [ ] Bank as defined in Section 3(a)(6) of the Act (15 U.S.C. 78c); (c) [ ] Insurance company as defined in Section 3(a)(19) of the Act (15 U.S.C. 78c); (d) [ ] Investment company registered under Section 8 of the Investment Company Act of 1940 (15 U.S.C 80a-8); (e) [ ] An investment adviser in accordance with 240.13d-1(b)(1)(ii)(E); (f) [ ] An employee benefit plan or endowment fund in accordance with 240.13d-1(b)(1)(ii)(F); (g) [ ] A parent holding company or control person in accordance with 240.13d-1(b)(1)(ii)(G); (h) [ ] A savings associations as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813); (i) [ ] A church plan that is excluded from the definition of an investment company under Section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3); (j) [ ] A non-U.S. institution in accordance with 240.13d-1(b)(1)(ii)(J); (k) [ ] Group, in accordance with 240.13d-1(b)(1)(ii)(K). If filing as a non-U.S. institution in accordance with 240.13d1(b)(1)(ii)(J), please specify the type of institution: ITEM 4. OWNERSHIP (a) Amount beneficially owned: 3,707,760 (b) Percent of class: 6.31% (c) Number of shares as to which the person has: (i) sole power to vote or to direct the vote: 3,707,760 (ii) shared power to vote or to direct the vote: (iii) sole power to dispose or direct the disposition of: (iv) shared power to dispose or to direct the disposition of: ITEM 5. OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS: If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following [ ]. ITEM 6. OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER PERSON: ITEM 7. IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH ACQUIRED THE SECURITY BEING REPORTED ON BY THE PARENT HOLDING COMPANY: ITEM 8. IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP: ITEM 9. NOTICE OF DISSOLUTION OF GROUP: ITEM 10. CERTIFICATION: By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect. CUSIP No.: 316827104 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. January 20 2016 Harding Loevner LP By: /s/ Lori M. Renzulli Name: Lori M. Renzulli Title: Chief Compliance Officer/ Chief Counsel Attention — Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001).
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Name: Commission Regulation (EEC) No 1201/81 of 29 April 1981 amending Regulation (EEC) No 3226/80 fixing the free-at-frontier reference prices applicable to wine imports from 16 December 1980
Type: Regulation
Date Published: nan
No L 122/ 12 Official Journal of the European Communities 6. 5. 81 COMMISSION REGULATION (EEC) No 1201/81 of 29 April 1981 amending Regulation (EEC) No 3226/80 fixing the free-at-frontier reference prices applicable to wine imports from 16 December 1980 recently introduced in respect of Turkey by Council Regulation (EEC) No 562/81 of 20 January 1981 on the reduction of customs duties on imports into the Community of certain agricultural products originat ing in Turkey (6), new free-at-frontier reference prices should be fixed for imports of wine originating in the said country, HAS ADOPTED THIS REGULATION : Article 1 THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 337/79 of 5 February 1979 on the common organization of the market in wine ('), as last amended by Regulation (EEC) No 3456/80 (2), and in particular Article 18(8) thereof, Whereas Article 18 of Regulation (EEC) No 337/79 lays down special rules relating to the importation of certain products in the wine-growing sector ; whereas Commission Regulation (EEC) No 1393/76 (3), as last amended by Regulation (EEC) No 3104/80 (4), lays down the relevant implementing rules ; whereas, pursuant to Article 18 (8) of Regulation (EEC) No 337/79 , the Commission is required to fix the free-at frontier reference prices ; Whereas the said free-at-frontier reference prices were fixed by Commission Regulation (EEC) No 3226/80 (*) ; whereas, as a result of the special system In the Annex to Regulation (EEC) No 3226/80, the figures given in the column headed Turkey' are hereby replaced by those given in the Annex to this Regulation . Article 2 This Regulation shall enter into force on the 15th day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels, 29 April 1981 . For the Commission Poul DALSAGER Member of the Commission (') OJ No L 54, 5 . 3 . 1979, p. 1 . (2) OJ No L 360, 31 . 12. 1980, p. 18 . (3) OJ No L 157, 18 . 6 . 1976, p. 20 . (<) OJ No L 324, 29 . 11 . 1980, p . 63 . 0 OJ No L 336, 13 . 12. 1980, p. 1 . (<) OJ No L 65, 11 . 3 . 1981 , p . 1 . 6. 5 . 81 Official Journal of the European Communities No L 122/ 13 ANNEX NB : For Greek imports, the free-at-frontier reference prices applicable are those in the column 'other third countries in the Annex to Regulation (EEC) No 3226/80. (ECU/hl) CCT heading No Description Free-at-frontier reference price Turkey 22.05 Wine of fresh grapes ; grape must with fermentation arrested by the addition of alcohol : ex C. Other : I. Of an actual alcoholic strength by volume not exceeding 1 3 % vol , in containers holding : a) Two litres or less : (3) Other : (aa) Red wine of an actual alcoholic strength by volume : Of less than 9 % vol 59-25 Of 9 % vol but not exceeding 9-5 % vol 6014 Exceeding 9-5 % vol but not exceeding 10 % vol 61-91 Exceeding 10 % vol but not exceeding 10-5 % vol 63-69 Exceeding 10-5 % vol but not exceeding 1 1 % vol 65-46 Exceeding 1 1 % vol but not exceeding 11-5 % vol 67-24 Exceeding 11-5 % vol but not exceeding 12 % vol 69-01 Exceeding 1 2 % vol but not exceeding 1 2-5 % vol 70-79 Exceeding 12-5 % vol but not exceeding 13 % vol 72-56 (bb) White wine : (1 1 ) Presented for importation under the name of Riesling or Sylvaner 97-73 (22) Other of an actual alcoholic strength by volume : Of less than 9 % vol 57-72 Of 9 % vol but not exceeding 9-5 % vol 58-57 Exceeding 9-5 % vol but not exceeding 10 % vol 60-26 Exceeding 10 % vol but not exceeding 10-5 % vol 61-95 Exceeding 10-5 % vol but not exceeding 1 1 % vol 63-64 Exceeding 1 1 % vol but not exceeding 1 1 -5 % vol 65-33 Exceeding 11-5 % vol but not exceeding 1 2 % vol 67-02 Exceeding 1 2 % vol but not exceeding 1 2-5 % vol 68-71 Exceeding 12-5 % vol but not exceeding 13 % vol 70-40 b) More than two litres : ( 1 ) Red wine of an actual alcoholic strength by volume : Of less than 9 % vol 27-45 Of 9 % vol but not exceeding 9-5 % vol 28-34 Exceeding 9-5 % vol but not exceeding 10 % vol 30-11 Exceeding 1 0 % vol but not exceeding 1 0-5 % vol 31-89 Exceeding 10-5 % vol but not exceeding 1 1 % vol 33-66 Exceeding 1 1 % vol but not exceeding 1 1 -5 % vol 35-44 Exceeding 11-5 % vol but not exceeding 1 2 % vol 37-21 Exceeding 1 2 % vol but not exceeding 1 2-5 % vol 38-99 Exceeding 12-5 % vol but not exceeding 13 % vol 40-76 (2) White wine : (aa) Presented for importation under the name of Riesling or Sylvaner 65-93 No L 122/ 14 Official Journal of the European Communities 6. 5. 81 (ECU/hl) CCT heading No Description Free-at-frontier reference price Turkey 22.05 ex C. I. b) (2) (bb) Other of an actual alcoholic strength by volume : (cont'd) Of less than 9 % vol 25-92 Of 9 % vol but not exceeding 9-5 % vol 26-77 Exceeding 9-5 % vol but not exceeding 10 % vol 28-46 Exceeding 10 % vol but not exceeding 1 0*5 % vol 30-15 Exceeding 10-5 % vol but not exceeding 1 1 % vol 31-84 Exceeding 1 1 % vol but not exceeding 1 1 -5 % vol 33-53 Exceeding 11-5 % vol but not exceeding 1 2 % vol 35-22 Exceeding 1 2 % vol but not exceeding 1 2-5 % vol 36-91 Exceeding 1 2-5 % vol but not exceeding 1 3 % vol 38-60 II . Of an actual alcoholic strength by volume exceeding 13 % vol but not exceeding 15% vol , in containers holding : a) Two litres or less : (3) Liqueur wine 85-30 (4) Other : (aa) Red wine of an actual alcoholic strength by volume : Exceeding 13 % vol but not exceeding 13-5 % vol (') 73-34 Exceeding 13-5 % vol but not exceeding 14 % vol 75-11 Exceeding 1 4 % vol but not exceeding 1 4-5 % vol 76-89 Exceeding 14-5 % vol but not exceeding 15 % vol 78-66 (bb) White wine : (1 1 ) Presented for importation under the name of Riesling or Sylvaner 96-73 (22) Other of an actual alcoholic strength by volume : Exceeding 1 3 % vol but not exceeding 1 3-5 % vol (') 71 09 Exceeding 13-5 % vol but not exceeding 14 % vol 72-78 Exceeding 14 % vol but not exceeding 14-5 % vol 74-47 Exceeding 14-5 % vol but not exceeding 15 % vol 76-16 b) More than two litres : ( 1 ) Red wine of an actual alcoholic strength by volume : Exceeding 13 % vol but not exceeding 13-5 % vol (') 41-54 Exceeding 13-5 % vol but not exceeding 14 % vol 43-31 Exceeding 14 % vol but not exceeding 14-5 % vol 45-09 Exceeding 1 4-5 % vol but not exceeding 1 5 % vol 46-86 (2) White wine : (aa) Presented for importation under the name of Riesling or Sylvaner 64-93 (bb) Other of an actual alcoholic strength by volume : Exceeding 13 % vol but not exceeding 13-5 % vol (') 39-29 Exceeding 13-5 % vol but not exceeding 14 % vol 40-98 Exceeding 14 % vol but not exceeding 14-5 % vol 42-67 Exceeding 14-5 % vol but not exceeding 15 % vol 44-36 (3) Liqueur wine : (aa) Intended for processing into products other than those falling within heading No 22.05 45-50 (bb) Other 53-50 (') Including wines of an actual alcoholic strength by volume of not more than 1 3 % vol and with a total dry extract exceeding 90 grams per litre . 6 . 5 . 81 Official Journal of the European Communities No L 122/ 15 (ECU/hl) CCT heading No Description Free-at-frontier reference price Turkey 22.05 (cont'd) ex C. III. Of an actual alcoholic strength by volume exceeding 1 5 % vol but not exceeding 1 8 % vol, in containers holding : a) Two litres or less : 2. Other : (aa) Liqueur wine : (22) Other : (aaa) 1 5 % vol (') (bbb) Other (bb) Other : (1 1 ) Red wine : (bbb) Other of an actual alcoholic strength by volume : Exceeding 1 5 % vol but not exceeding 1 5-5 % vol Exceeding 1 5-5 % vol but not exceeding 1 6 % vol Exceeding 1 6 % vol but not exceeding 1 6-5 % vol Exceeding 16-5 % vol but not exceeding 17 % vol Exceeding 1 7 % vol but not exceeding 1 7-5 % vol Exceeding 1 7-5 % vol but not exceeding 1 8 % vol (22) White wine : (bbb) Other of an actual alcoholic strength by volume : Exceeding 1 5 % vol but not exceeding 1 5-5 % vol Exceeding 1 5-5 % vol but not exceeding 1 6 % vol Exceeding 1 6 % vol but not exceeding 1 6-5 % vol Exceeding 1 6-5 % vol but not exceeding 1 7 % vol Exceeding 1 7 % vol but not exceeding 1 7-5 % vol Exceeding 1 7-5 % vol but not exceeding 1 8 % vol b) More than two litres : 3 . Other : (aa) Liqueur wine : ( 11 ) Intended for processing into products other than those falling within heading No 22.05 (2) (22) Other : (aaa) 1 5 % vol (') (bbb) Other (bb)Wine fortified for distillation (cc) Other : (1 1 ) Red wine of an actual alcoholic strength by volume : Exceeding 1 5 % vol but not exceeding 1 5-5 % vol Exceeding 1 5 ·5 % vol but not exceeding 1 6 % vol Exceeding 1 6 % vol but not exceeding 1 6-5 % vol Exceeding 1 6-5 % vol but not exceeding 1 7 % vol Exceeding 1 7 % vol but not exceeding 1 7-5 % vol Exceeding 1 7-5 % vol but not exceeding 18 % vol 83-70 88-70 78-84 80-61 82-39 84-16 85-94 87-71 76-25 77-94 79-63 81-32 83-01 84-70 47-00 52-00 57-00 32-42 47-14 48-91 50-69 52-46 54-24 56-01 (') Wines with a total dry extract exceeding 130 grams but not exceeding 330 grams per litre . (2) Including wines of an actual alcoholic strength by volume of 1 5 % vol and with a total dry extract exceeding 1 30 grams but not exceeding 330 grams per litre . No L 122/ 16 Official Journal of the European Communities 6 . 5 . 81 (ECU/hl) CCT heading No Description Free-at-frontier reference price Turkey 22.05 ex C. III . b) 3 , (cc) (22) White wine of an actual alcoholic strength by volume : (cont'd) Exceeding 1 5 % vol but not exceeding 1 5 -5 % vol 44-55 Exceeding 15-5 % vol but not exceeding 16 % vol 46-24 Exceeding 16 % vol but not exceeding 16-5 % vol 47-93 Exceeding 16-5 % vol but not exceeding 17 % vol 49-62 Exceeding 17 % vol but not exceeding 17-5 % vol 51-31 Exceeding 17-5 % vol but not exceeding 18 % vol 53-00 IV. Of an actual alcoholic strength by volume exceeding 1 8 % vol but not exceeding 22 % vol, in containers holding : a) Two litres or less : 2. Other : (aa) Liqueur wine : (22) Other (') 102-70 (bb) Other : (1 1 ) Red wine of an actual alcoholic strength by volume : Exceeding 1 8 % vol but not exceeding 1 8-5 % vol (') 88-49 Exceeding 18-5 % vol but not exceeding 19 % vol 90-26 Exceeding 19 % vol but not exceeding 19-5 % vol 92-04 Exceeding 19-5 % vol but not exceeding 20 % vol 93-81 Exceeding 20 % vol but not exceeding 20-5 % vol 95-59 Exceeding 20-5 % vol but not exceeding 21 % vol 97-36 Exceeding 21 % vol but not exceeding 21 -5 % vol 99-14 Exceeding 21 -5 % vol but not exceeding 22 % vol 100-91 (22) White wine of an actual alcoholic strength by volume : Exceeding 18 % vol but not exceeding 18-5 % vol (') 85-39 Exceeding 18-5 % vol but not exceeding 19 % vol 87-08 Exceeding 19 % vol but not exceeding 19-5 % vol 88-77 Exceeding 19-5 % vol but not exceeding 20 % vol 90-46 Exceeding 20 % vol but not exceeding 20-5 % vol 92-15 Exceeding 20-5 % vol but not exceeding 21 % vol 93-84 Exceeding 21 % vol but not exceeding 21 -5 % vol 95-53 Exceeding 21-5 % vol but not exceeding 22 % vol 97-22 b) More than two litres : 3 . Other : (aa) Liqueur wine : (1 1 ) Intended for processing into products other than those falling within heading No 22.05 (') 56-40 (22) Other (') 69-40 (') Including wines of an actual alcoholic strength by volume exceeding 1 5 % vol but not exceeding 1 8 % vol and with a total dry extract exceeding 130 grams but not exceeding 330 grams per litre . 6. 5 . 81 Official Journal of the European Communities No L 122/ 17 (ECU/hl) CCT heading No Description Free-at-frontier reference price Turkey 22.05 (cont'd) ex C. IV. b) 3 , (bb) Wine fortified for distillation of an actual alcoholic strength by volume : Exceeding 18 % vol but not exceeding 18-5 % vol (') Exceeding 18-5 % vol but not exceeding 19 % vol Exceeding 19 % vol but not exceeding 19-5 % vol Exceeding 19-5 % vol but not exceeding 20 % vol Exceeding 20 % vol but not exceeding 20-5 % vol Exceeding 20-5 % vol but not exceeding 21 % vol Exceeding 21 % vol but not exceeding 21-5 % vol Exceeding 21 -5 % vol but not exceeding 22 % vol (cc) Other : (1 1 ) Red wine of an actual alcoholic strength by volume : Exceeding 18 % vol but not exceeding 18-5 % vol (') Exceeding 18-5 % vol but not exceeding 19 % vol Exceeding 19 % vol but not exceeding 19-5 % vol Exceeding 19-5 % vol but not exceeding 20 % vol Exceeding 20 % vol but not exceeding 20-5 % vol Exceeding 20-5 % vol but not exceeding 21 % vol Exceeding 21 % vol but not exceeding 21 -5 % vol Exceeding 21-5 % vol but not exceeding 22 % vol (22) White wine of an actual alcoholic strength by volume : Exceeding 18 % vol but not exceeding 18-5 % vol (') Exceeding 18-5 % vol but not exceeding 19 % vol Exceeding 19 % vol but not exceeding 19-5 % vol Exceeding 19-5 % vol but not exceeding 20 % vol Exceeding 20 % vol but not exceeding 20-5 % vol Exceeding 20-5 % vol but not exceeding 21 % vol Exceeding 21 % vol but not exceeding 21 -5 % vol Exceeding 21-5 % vol but not exceeding 22 % vol V. Of an actual alcoholic strength by volume exceeding 22 % vol, in containers holding : a) Two litres or less : ( 1 ) Red wine of an actual alcoholic strength by volume : Exceeding 22 % vol but not exceeding 22-5 % vol (2) Exceeding 22-5 % vol but not exceeding 23 % vol Exceeding 23 % vol but not exceeding 23-5 % vol Exceeding 23-5 % vol but not exceeding 24 % vol (2) White wine of an actual alcoholic strength by volume : Exceeding 22 % vol but not exceeding 22-5 % vol (2) Exceeding 22-5 % vol but not exceeding 23 % vol Exceeding 23 % vol but not exceeding 23-5 % vol Exceeding 23-5 % vol but not exceeding 24 % vol (3) Liqueur wine (2) 30-37 31-46 32-56 33-65 34-75 35-84 36-94 38-03 55-19 56-96 58-74 60-51 62-29 64-06 65-84 67-61 52-09 53-78 55-47 57-16 58-85 60-54 62-23 63-92 91-59 Q 92-96 (3) 94-44 (3) 95-81 (3) 87-81 (3) 89-10 (3) 90-49 j3) 91-78 (3) 98-90 (') Including wines of an actual alcoholic strength by volume exceeding 1 5 % vol but not exceeding 1 8 % vol and with a total dry extract exceeding 130 grams but not exceeding 330 grams per litre . (2) Including wines of an actual alcoholic strength by volume not exceeding 22 % vol and with a total dry extract exceeding 330 grams per litre. (3) This amount is to be increased by 0-12 ECU per 0-1 % vol of alcohol in so far as the actual alcoholic strength by volume of the imported wine is lower than the maximum degree of actual alcoholic strength specified in this subheading. No L 122/ 18 Official Journal of the European Communities 6. 5. 81 (ECU/hl) CCT heading No Description Free-at-frontier reference price Turkey 22.05 (cont'd) ex C. V. b) More than two litres : ( 1 ) Wine fortified for distillation of an actual alcoholic strength by volume : Exceeding 22 % vol but not exceeding 22-5 % vol (') Exceeding 22-5 % vol but not exceeding 23 % vol Exceeding 23 % vol but not exceeding 23-5 % vol Exceeding 23-5 % vol but not exceeding 24 % vol (2) Liqueur wine (') : (aa) Intended for processing into products other than those falling within heading No 22.05 (bb) Other (3) Other : (aa) Red wine of an actual alcoholic strength by volume : Exceeding 22 % vol but not exceeding 22-5 % vol (') , Exceeding 22-5 % vol but not exceeding 23 % vol Exceeding 23 % vol but not exceeding 23-5 % vol Exceeding 23-5 % vol but not exceeding 24 % vol (bb) White wine of an actual alcoholic strength by volume : Exceeding 22 % vol but not exceeding 22-5 % vol (') Exceeding 22-5 % vol but not exceeding 23 % vol Exceeding 23 % vol but not exceeding 23-5 % vol Exceeding 23-5 % vol but not exceeding 24 % vol 33-03 Q 33-72 (2) 34-52 0 35-21 (2) 58-60 70-60 63-29 (2) 64-66 (2) 66-14 (2) 67-51 (2) 59-51 (2) 60-80 (2) 62-19 (2) 63-48 (2) (') Including wines of an actual alcoholic strength by volume not exceeding 22 % vol and with a total dry extract exceeding 330 grams per litre . (2) This amount is to be increased by 012 ECU per 0-1 % vol of alcohol in so far as the actual alcoholic strength by volume of the imported wine is lower than the maximum degree of actual alcoholic strength specified in this subheading. |
Exhibit 10.33
AMENDMENT TO THE BUNGE GLOBAL MARKETS
DEFERRED COMPENSATION PLAN FOR CERTAIN EMPLOYEES
WHEREAS, Bunge Global Markets (the “Company”) is the sponsor of the Bunge Global
Markets Deferred Compensation Plan for Certain Employees (as amended from time
to time) (the “Plan”);
WHEREAS, the Company desires to amend the Plan to no longer permit Participants
to make a Payment Election providing for monthly installment payments of their
Deferred Amounts; and
WHEREAS, pursuant to Section 11 of the Plan, the Chief Executive Officer of
Bunge Limited may amend the Plan from time to time;
NOW, THEREFORE, effective as of January 1, 2008, the Plan is hereby amended as
follows:
1. The definition of Payment Election in Section 2 of the Plan is
hereby amended and restated in its entirety to read as follows:
“ “Payment Election” means an election as to the form and timing of distribution
of Deferred Amounts elected in writing by a Participant at the time of his
corresponding Deferral Election. Unless the Committee determines otherwise, the
form of distribution of an Account Value pursuant to a Payment Election may be
in the form of a single lump sum payment or in up to twenty-five annual
installments over twenty-five years.”
2. A new Section 7(i) is hereby added to the Plan to read as
follows:
“(i) Payment Elections — Monthly Installments. Notwithstanding
any provision in the Plan to the contrary, if a Participant’s Payment Election
is in the form of monthly installment payments over a specified number of years
(the “Original Payment Election”), the Committee may permit such Participant, to
the extent permitted by Section 409A of the Code and the regulations and
guidance promulgated thereunder, to amend his Original Payment Election
effective as of January 1, 2008. In the event that such Participant does not
amend his Original Payment Election in accordance with this Section 7(i),
effective as of January 1, 2008, the Participant’s Account Value shall be paid
in the form of annual installment payments over the same number of years that
the Participant specified in his Original Payment Election.”
Except to the extent set forth herein, the Plan shall remain in full force and
effect without change or modification.
IN WITNESS WHEREOF, this amendment is duly executed and delivered this 19th day
of December, 2007.
BUNGE LIMITED
By:
/s/ ALBERTO WEISSER
Name:
Alberto Weisser
Title:
Chief Executive Officer
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Exhibit 10.2
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (this “Agreement”) is entered into
by and between Fred’s, Inc. (the “Company”) and Mary Louise Gardner
(“Executive,” and, together with the Company, the “Parties”).
1. The Parties acknowledge and agree that Executive’s last day of
employment with the Company will be May 27, 2018 (the “Separation Date”).
Effective as of the Separation Date, Executive shall not be, or hold herself out
as, an Executive, agent, or representative of the Company or any of its
affiliates.
2. Consistent with Paragraph 4(b) of Executive’s Employment
Agreement, dated April 10, 2017 (the “Employment Agreement”), the period between
April 27, 2018 and May 27, 2018 shall be the “Notice Period.” During the Notice
Period, Executive will not report to the office or be authorized to take (and
will not take) any actions on behalf of the Company or any Company affiliate.
Executive will continue to receive her base salary, at the annual rate of
$331,500 per annum (less applicable deductions and withholdings) through the
Notice Period, and COBRA eligible benefits through May 31, 2018.
3. Consistent with Paragraph 4(e)(i) of the Employment Agreement, the
Company shall pay Executive any vested or accrued and unpaid payments, rights or
benefits Executive may otherwise be entitled to receive pursuant to the terms of
any accrued but unused vacation or other employee benefit or compensation plan
maintained by Company at the time or times provided therein. The Company
confirms that as of the date of this Agreement, Executive is entitled to payment
for zero (0) days of accrued but unused vacation.
4. Consistent with Paragraph 4(e)(ii) of the Employment Agreement, in
consideration of Executive executing and complying with this Agreement and the
Surviving Provisions in full settlement of any compensation or benefits to which
Executive otherwise could claim to be entitled, and in exchange for the mutual
promises, covenants, releases, and waivers set forth in this Agreement, the
Company will provide Executive with the following severance benefits:
(a)On the Separation Date, Executive’s rights under any compensation or benefits
program shall become vested and any restrictions on stock options or contractual
rights granted to Executive shall be removed. For the avoidance of doubt, the
foregoing includes, without limitation (i) 7,210 shares of no par value common
stock of the Company, issued to Executive pursuant to the Restricted Stock Award
Agreement, entered into by and between the Company and Executive, dated February
22, 2016; (ii) 4,430 shares of no par value common stock of the Company, issued
to Executive pursuant to the Restricted Stock Award Agreement, entered into by
and between the Company and Executive, dated August 15, 2016; (iii) 1,813 shares
of no par value common stock of the Company, issued to Executive pursuant to the
Restricted Stock Award Agreement, entered into by and between the Company and
Executive, dated April 5, 2017; (iv) the option to purchase 23,150 shares of
Company Class A common stock, at option price of $14.29, pursuant to the
Incentive Stock Option Agreement, entered into by and between the Company and
Executive, dated August 15, 2016; (v) the option to purchase 50,633 shares of
Company Class A common stock, at option price of $13.87, pursuant to the
Executive, dated February 22, 2016; and (vi) the option to purchase 6,302 shares
of Company Class A common stock, at option price of $12.55, pursuant to the
Executive, dated April 5, 2017.
1
(b)When the Executive’s coverage (if any) under the Company’s medical plan(s)
ceases, pursuant to governing law and independent of this Agreement, Executive
will be entitled to elect benefit continuation coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), for Executive
and any eligible dependents if Executive timely applies for such coverage. If
Executive elects COBRA, Company shall reimburse Executive for Executive’s COBRA
premiums (including with respect to any health, dental and vision plans that
Executive participates in) for a maximum of eighteen (18) months, which shall by
payable in monthly installments to Executive in accordance with reimbursement
claims submitted to the Company by Executive; provided, however, that the
Company’s reimbursement of continuation coverage will cease at any time
Executive becomes eligible for group medical coverage from another employer.
Information regarding Executive’s rights under COBRA will be provided to
Executive in a separate mailing. Executive acknowledges and agrees that
Executive is solely responsible for all federal, state, and/or tax liability, if
any, arising from any such COBRA reimbursement described in this Paragraph 4 and
that neither the Company nor any of its representatives have provided advice
regarding the tax consequences of any consideration set forth in this Paragraph
4.
(c)Following the expiration of the eighteen (18) month COBRA reimbursement
period, Executive shall receive monthly payments in the amount of $1,842.83 for
an additional six (6) months; provided, however, that these payments will cease
at any time Executive becomes eligible for group medical coverage from another
employer.
(d)The Company agrees within ten (10) business days following the Effective Date
(defined below), it shall make a one-time lump sum payment to Executive in the
amount of $6,000, which amount represents payments due and owing by the Company
to Executive pursuant to Paragraph 3(g) of the Employment Agreement. Executive
acknowledges and agrees that payment of the foregoing amount shall satisfy the
Company’s obligations under Paragraph 3(g) of the Employment Agreement.
(e)The Company agrees that pursuant to Paragraph 3(f) of the Employment
Agreement, it shall reimburse Executive for any and all reasonable business
expenses incurred by Executive in connection with the performance of Executive’s
duties as an employee of the Company. Executive shall provide the Company with
receipts and/or other documentation of any such expenses by no later than ten
(10) business days following the Separation Date.
2
(f)The Company agrees that it shall reimburse Executive up to $2,500 of
attorney’s fees incurred in connection with the review of this Agreement, upon
submission by Executive to the Company of records sufficient to demonstrate fees
actually incurred by Executive.
5. Consistent with Paragraph 4(e)(ii) and 4(e)(iii) of the Employment
Agreement, in exchange for Executive timely executing and complying with both
this Agreement and the release attached hereto as Exhibit A (the
“Post-Employment Release”), and for not timely revoking the Post-Employment
Release in accordance with its terms: severance in the amount equal to $663,000
less applicable deductions and withholdings, to be paid in substantially equal
installments at Executive’s regular pay intervals in effect prior to the
Separation Date, over a period of twenty-four (24) months beginning on the first
regular Company payroll payment date that occurs after the lapse of any right of
Executive to revoke the Post-Employment Release.
6. Executive acknowledges and agrees that the consideration provided
in Paragraphs 2 through 5, above: (a) is in full discharge of any and all
obligations owed to Executive, monetarily or otherwise, with respect to
Executive’s employment, including but not limited to any obligations set forth
in the Employment Agreement; and (b) exceeds any payment, benefit, or other
thing of value to which Executive might otherwise be entitled in the absence of
this Agreement. Executive specifically acknowledges and agrees that Executive is
not entitled to any other salary, wages, commissions, overtime, premiums, paid
time off, vacation, sick pay, holiday pay, personal day pay, royalties, equity,
phantom equity, carried interest, bonuses, deferred compensation, or other forms
of compensation, benefits, fringe benefits, perquisites, interests, or payments
of any kind or nature whatsoever (collectively, “Compensation”), except as
explicitly provided in this Agreement. Further, Executive acknowledges and
agrees that the terms of this Agreement and the Surviving Provisions remain in
full force and effect and will continue to bind Executive following the
Separation Date. Executive further acknowledges that by Executive executing this
Agreement, Executive and the other Releasors are waiving and releasing any and
all legal rights and claims they may have under the ADEA and all other federal,
state and local laws regarding age discrimination, whether those claims are
currently known to Executive or hereafter discovered. However, nothing in the
foregoing is intended to limit or restrict Executive’s right to challenge the
validity of this Agreement as to claims and rights asserted under the ADEA or
Executive’s right to enforce the Agreement. Executive further agrees that in the
event she or any of the other Releasors brings any ADEA Claims against any of
the Releasees, or in the event they seek to recover monetary or other
compensation against any of the Releasees through any ADEA Claim brought by a
governmental agency on their behalves, this Agreement shall serve as a complete
defense to such Claims.
3
7. Consistent with Paragraph 4(e)(iii) of the Employment Agreement,
in exchange for the consideration provided to Executive in Paragraph 4,
Executive, on behalf of Executive and all of Executive’s heirs, executors,
administrators, successors, and assigns (collectively, “Releasors”), hereby
releases and forever waives and discharges any and all claims, liabilities,
causes of action, demands, charges, complaints, suits, rights, costs, debts,
expenses, promises, agreements, or damages of any kind or nature (collectively,
“Claims”) that Executive or any of the other Releasors ever had, now have, or
might have against the Company and its current, former, or future affiliates, or
any of their respective current, former, or future subsidiaries, parents,
related companies, controlling shareholders, or divisions, as well as
(collectively with the Company, the “Company Entities”), or any of the Company
Entities’ and Alden Global Capital LLC’s respective directors, members,
managers, employees, trustees, officers, general partners, limited partners,
Executives, consultants, contractors, advisors, agents, benefit plans,
attorneys, successors, assigns, or investment funds (or the other investment
vehicles any of the foregoing manage and/or for which they perform services)
(collectively with the Company Entities, the “Releasees,” and each a
“Releasee”), arising at any time prior to the date Executive executes this
Agreement, whether such Claims are known to Executive or unknown to Executive,
whether such Claims are accrued or contingent, including, but not limited to,
any and all (a) Claims arising out of, or that might be considered to arise out
of or to be connected in any way with, Executive’s employment or other
relationship with any of the Releasees, or the termination of such employment or
other relationship; (b) Claims under any contract, agreement, or understanding
that Executive may have with any of the Releasees, whether written or oral,
express or implied, at any time prior to the Effective Date (as defined below);
(c) Claims arising under any federal, state, foreign, or local law, rule,
constitution, ordinance, or public policy, including, without limitation, (i)
Claims arising under Title VII of the Civil Rights Act of 1964, the Civil Rights
Act of 1866, 42 U.S.C. § 1981, the Civil Rights Act of 1991, the Americans With
Disabilities Act, the Age Discrimination in Employment Act, the Family and
Medical Leave Act, the Executive Retirement Income Security Act of 1974, the
Vietnam Era Veterans Readjustment Act of 1974, the Immigration Reform and
Control Act of 1986, the Equal Pay Act, the Labor Management Relations Act, the
National Labor Relations Act, the Occupational Safety and Health Act, the
Genetic Information Nondiscrimination Act of 2008, the Rehabilitation Act of
1973, the Uniformed Services Employment and Reemployment Rights Act, the Worker
Adjustment and Retraining Notification Act, the Sarbanes-Oxley Act of 2002, the
Dodd-Frank Act, the Internal Revenue Code of 1986, the Tennessee Human Rights
Act, and/or the Tennessee Disability Act as all such laws have been amended from
time to time, or any other federal, state, foreign, or local labor law, wage and
hour law, worker safety law, Executive relations or fair employment practices
law, or public policy, (ii) Claims arising in tort, including, but not limited
to, Claims for misrepresentation, defamation, libel, slander, invasion of
privacy, conversion, replevin, false light, tortious interference with contract
or economic advantage, negligence, fraud, fraudulent inducement, quantum meruit,
promissory estoppel, prima facie tort, restitution, or the like, and (iii)
Claims for Compensation, other monetary or equitable relief, attorneys’ or
experts’ fees or costs, forum fees or costs, or any tangible or intangible
property of Executive’s that remains with any of the Releasees; and (d) Claims
arising under any other applicable law, regulation, rule, policy, practice,
promise, understanding, or legal or equitable theory whatsoever; provided,
however, that Executive does not release (A) any claims that arise after the
Effective Date; (B) any claims for breach of this Agreement or to enforce the
terms of this Agreement; or (C) any claims that cannot be waived or released as
a matter of law. Executive specifically intends the release of Claims in this
Paragraph 7 to be the broadest possible release permitted by law.
4
8. Executive represents and warrants that Executive has never
commenced or filed, or caused to be commenced or filed, any lawsuit or
arbitration against any of the Releasees. Except as otherwise provided in
Paragraph 7 of this Agreement, Executive further agrees not to directly or
indirectly commence, file, or in any way pursue, or cause or assist any person
or entity to commence, file, or pursue, any Claim, lawsuit, or arbitration
against any of the Releasees in the future. For avoidance of doubt, nothing in
this Agreement, any other agreement between Executive and the Company, or any
Company policy shall prevent Executive from filing a charge with the Equal
Employment Opportunity Commission (the “EEOC”) or any other government agency or
participating in any EEOC or other agency investigation; provided, that
Executive may not receive any monetary relief from any of the Releasees as a
consequence of any charge filed with the EEOC and/or any litigation arising out
of an EEOC charge; and provided, further, that nothing herein shall restrict
Executive’s right to receive an award for information provided to the U.S.
Securities and Exchange Commission pursuant to Section 21F of the Securities
Exchange Act of 1934.
9. Consistent with Paragraph 13 of the Employment Agreement, this
Agreement shall be interpreted strictly in accordance with its terms, to the
maximum extent permissible under governing law, and shall not be construed
against or in favor of any Party, regardless of which Party drafted this
Agreement or any provision hereof. If any provision of this Agreement (or any of
the Surviving Provisions) is determined to be unenforceable as a matter of
governing law, an arbitrator or reviewing court of appropriate jurisdiction
shall have the authority to “blue pencil” or otherwise modify such provision so
as to render it enforceable while maintaining the Parties’ original intent to
the maximum extent possible. Each provision of this Agreement is severable from
the other provisions hereof, and if one or more provisions hereof are declared
invalid, the remaining provisions shall nevertheless remain in full force and
effect. For purposes of this Agreement, the connectives “and,” “or,” and
“and/or” shall be construed either disjunctively or conjunctively as necessary
to bring within the scope of a sentence or clause all subject matter that might
otherwise be construed to be outside of its scope.
10. Consistent with Paragraph 5(h)(iv) of the Employment Agreement,
Executive agrees to cooperate with the Company with respect to reasonable
requests by the Company in connection with (a) responding to the Company’s
requests for knowledge or information within Executive’s possession relating to
Executive’s employment by the Company following the Separation Date, and (b) any
investigation or review by any federal, state, foreign, or local regulatory or
other authority, and in the defense or prosecution of any demand, claim, or
action, that is now in existence or may be brought in the future against or on
behalf of any of the Releasees relating to events, occurrences, or omissions
that may have occurred (or failed to have occurred) while Executive was employed
by the Company and which relate to Executive’s employment or about which
Executive has personal knowledge. Executive’s cooperation in connection with any
such investigation, demand, claim, or action shall include, but not be limited
to, being reasonably available as may be reasonably requested by the Company to
(i) meet with the Releasees and their counsel in connection with discovery or
pre-trial issues, and (ii) testify on behalf of the Company in connection with
any such action or proceeding in connection with any such proceeding. In the
event that the Company requests Executive’s cooperation under this Paragraph,
such assistance shall be provided in a time and manner that is reasonably
convenient to all Parties (except as may be required by subpoena, Court order,
or similar compulsory legal process). The Company will reimburse Employee for
all reasonable expenses actually incurred in connection with her provision of
testimony or assistance, including attorneys’ fees.
5
11. Consistent with Paragraph 5 of the Employment Agreement, Executive
represents, warrants and agrees that she has not breached, and will not breach,
(i) any of her covenants under this Agreement, or (ii) any of her other
obligations as an employee of the Company including, without limitation, those
under Paragraph 5(a)-(g) of the Employment Agreement (the “Surviving
Provisions”) Executive’s obligations thereunder are summarized as follows:
(a)Confidentiality. As more fully set forth in Paragraph 5(a)-(c) of the
Employment Agreement, while employed by Company and thereafter, Executive shall
not disclose any Confidential Information (as defined in the Employment
Agreement) either directly or indirectly, to anyone (other than appropriate
Company employees and advisors), or use such information for her own account, or
for the account of any other person or entity, except as required by law or in
the performance of her job duties and responsibilities. This confidentiality
covenant has no temporal or geographical restriction. For purposes of this
Agreement, “Confidential Information” shall have the meaning set forth in the
Employment. Executive shall promptly supply to Company all property of the
Company and any other tangible product or document relating to business of the
Company that has been produced by, received by or otherwise submitted to
Executive during or prior to her term of employment, and shall not retain any
copies thereof. As set forth in paragraph 5(c) of the Employment Agreement,
Executive agrees to indemnify and hold the Company harmless for any loss, claim
or damages, including attorney’s fees or costs, arising out of or related to the
unauthorized disclosure or use of the Confidential Information by Executive.
(b)Non-Competition. As more fully set forth in Paragraph 5(d) of the Employment
Agreement, Executive acknowledges that her services are of special, unique and
extraordinary value to Company. Accordingly, the Executive shall not at any time
prior to May 27, 2019 become an employee, consultant, officer, partner or
director or provide services in any fashion to any Competitor (as defined in the
Employment Agreement) of Company within the Restricted Area (as defined in the
Employment Agreement).
(c)Non-Solicitation. As more fully set forth in Paragraph 5(e) of the Employment
Agreement, Executive shall not, at any time prior to May 27, 2019, whether on
Executive’s own behalf or on behalf of or in conjunction with any person,
company, business entity or other organization whatsoever, directly or
indirectly, (i) solicit or encourage any employee of Company or its Affiliates
(as defined in the Employment Agreement) to leave the employment of Company or
its Affiliates or (ii), without permission of Company, knowingly hire a former
employee of Company or its Affiliates (as defined in the Employment Agreement).
6
(d)Non-Disparagement. As more fully set forth in Paragraph 5(f) of the
Employment Agreement, while employed by Company and at any time after the
Separation Date, Executive agrees not to make any untruthful or disparaging
statements, written or oral, about Company, its affiliates, their predecessors
or successors or any of their past and present officers, directors,
stockholders, partners, members, agents and employees or Company’s business
practices, operations or personnel policies and practices to any of Company’s
customers, clients, competitors, suppliers, investors, directors, consultants,
employees, former employees, or the press or other media in any country. The
Company likewise agrees that it shall instruct its senior personnel, including
its officers and executives, not to make any untruthful or disparaging
statements, written or oral, about Executive, Executive’s performance with the
Company, or Executive’s business reputation.
(e)For the avoidance of doubt, the Parties acknowledge and agree that a person
or entity, other than Fred’s Inc., shall not be deemed a “Competitor” or an
“Affiliate” of the Company, as such terms are used in this Agreement and in the
Surviving Provisions, as a result of their common control or management by, or
due to an investment in or ownership by, in whole or part, Alden Global Capital
LLC, or any of its subsidiaries, divisions, affiliates, holding companies, or
otherwise, whether directly or indirectly. In accordance with Paragraph 4(g) of
the Employment Agreement, Executive understands and agrees that her obligations
under the Surviving Provisions survive her termination from the Company.
Notwithstanding the foregoing, in accordance with the Defend Trade Secrets Act,
18 U.S.C. § 1833(b), and other applicable law, nothing in this Agreement or any
other agreement or policy of the Company shall prevent Executive from, or expose
Executive to criminal or civil liability under federal or state trade secrets
law for, (i) directly or indirectly sharing any Company trade secrets or other
Confidential Information (except information protected by the Company’s
attorney-client or work product privilege) with an attorney or with any federal,
state, or local government agencies, regulators, or officials, for the purpose
of investigating or reporting a suspected violation of law, whether in response
to a subpoena or otherwise, without notice to the Company; or (ii) disclosing
the Company’s trade secrets in a filing in connection with a legal claim,
provided that the filing is made under seal. Furthermore, Executive shall be
permitted to (A) share information about this Agreement with Executive’s spouse,
attorney, accountant, or financial advisor, so long as Executive ensures that
such parties maintain the strict confidentiality of this Agreement; (B) share
information regarding Executive compensation with other persons or entities; and
(C) apprise any future employer or other person or entity to which Executive
provides services of Executive’s continuing obligations to the Company under
this Agreement and/or the Employment Agreement.
12. This Agreement and the Surviving Provisions set forth the entire
agreement between the Parties hereto, fully supersedes any and all prior
agreements or understandings between the Parties, and can be modified only in a
written agreement signed by Executive, on the one hand, and an officer of the
Company, on the other hand. Executive specifically acknowledges and agrees that
notwithstanding any discussions or negotiations Executive may have had with the
Company prior to the execution of this Agreement, Executive is not relying on
any promises or assurances other than those explicitly contained in this
Agreement. In accordance with Paragraph 7 of the Employment Agreement, this
Agreement shall be deemed to have been made in Memphis, Tennessee, and shall be
interpreted, construed, and enforced pursuant to the laws of the State of
Tennessee, without giving effect to Tennessee’s conflict or choice of law
principles.
7
13. Executive represents and warrants that she is not aware of any
facts or circumstances that Executive knows or believes to be either (a) a past
or current violation of the Company’s or any of its affiliates’ rules and/or
policies, or (b) a past or current violation of any laws, rules, and/or
regulations applicable to the Company or any of its affiliates. This Agreement
shall not in any way be construed as an admission by any of the Releasees of any
liability or of any wrongful acts whatsoever against Executive or any other
person.
14. Executive agrees that her breach or threatened breach of Paragraphs
7, 8, 10, 11, or 16 of this Agreement or the Surviving Provisions would result
in irreparable and continuing harm to the Releasees for which there is no
adequate remedy at law. Thus, in addition to the Releasees’ right to arbitrate
disputes hereunder, the Releasees shall be entitled to obtain emergency
equitable relief, including a temporary restraining order and/or preliminary
injunction, in aid of arbitration, from any state or federal court of competent
jurisdiction, without first posting a bond, to restrain any such breach or
threatened breach. Upon the issuance (or denial) of an injunction, the
underlying merits of any dispute will be resolved in accordance with the
arbitration provisions of Paragraph 16 of this Agreement.
15. (a) Except as provided in Paragraph 14 of this Agreement,
the Parties irrevocably and unconditionally agree that any past, present, or
future dispute, controversy, or claim arising under or relating to this
Agreement; arising in connection with Executive’s employment or affiliation or
the termination thereof; or otherwise arising between Executive and any of the
Releasees, involving Executive, on the one hand, and any of the Releasees, on
the other hand, including both claims brought by Executive and claims brought
against Executive, shall be submitted for resolution to binding arbitration as
provided herein; provided, that nothing herein shall require arbitration of a
claim or charge which, by law, cannot be the subject of a compulsory arbitration
agreement. Any such arbitration shall be administered by the American
Arbitration Association (“AAA”); shall be conducted in accordance with AAA’s
Employment Arbitration Rules and Procedures, as modified herein; and shall be
conducted by a single arbitrator, who shall be a partner at an “AmLaw 200” law
firm based in New York, New York. Such arbitration will be conducted in a
mutually agreeable location, and the arbitrator will apply Tennessee law,
including federal statutory law as applied in Tennessee courts. Except as set
forth in Paragraph 14, above, the arbitrator, and not any federal or state
court, shall have exclusive authority to resolve any dispute relating to the
interpretation, applicability, enforceability, and/or formation of this
Agreement, including any dispute as to whether (i) a particular claim is subject
to arbitration hereunder, and/or (ii) any part of this Paragraph 16 is void or
voidable. The arbitral award shall be in writing, shall state the reasons for
the award, and shall be final and binding on the parties. Executive shall treat
the arbitration as strictly confidential, and Executive shall not disclose the
existence or nature of any claim, defense, or argument; any documents,
correspondence, pleadings, briefing, exhibits, arguments, testimony, evidence,
or information exchanged or presented in connection with any claim, defense, or
argument; or any rulings, decisions, or results of any claim, defense, or
argument (collectively, “Arbitration Materials”) to any third party, with the
sole exception of Executive’s legal counsel, who Executive shall ensure complies
with these confidentiality terms. Nothing contained herein shall prevent a party
from seeking to enforce a judgment awarded in arbitration in an applicable court
of law. The arbitrator shall only have authority to award relief measured by the
prevailing party’s out of pocket losses, except to the extent such relief is
explicitly available under a statute, ordinance, or regulation pursuant to which
a successful claim is brought or otherwise provided for in this Agreement. In
agreeing to arbitrate her claims hereunder, Executive hereby recognizes and
agrees that she is waiving her right to a trial in court and/or by a jury. The
Party who does not prevail in arbitration, agrees to pay the costs of
arbitration, provided, however, that, the Party is not required to pay the
attorney’s fees of the prevailing party, except as provided in Paragraph 11(a)
of this Agreement.
8
16. In the event of any court proceeding to challenge or enforce an
arbitrator’s award, the Parties hereby consent to the exclusive jurisdiction of
the state and federal courts sitting in Tennessee; agree to exclusive venue in
that jurisdiction; and waive any claim that such jurisdiction is an inconvenient
or inappropriate forum. The Parties agree to take all steps necessary to protect
the confidentiality of the Arbitration Materials in connection with any court
proceeding, agree to use their reasonable best efforts to file any court
proceeding permitted herein and all Confidential Information (and all documents
containing Confidential Information) under seal, and agree to the entry of an
appropriate protective order encompassing the confidentiality terms of this
Agreement.
17. (a)In accordance with the Age Discrimination in Employment Act (“ADEA”) and
the Older Workers Benefit Protection Act, 29 U.S.C. § 621 et seq., Executive
understands that she has twenty-one (21) days to consider this Agreement,
execute it, and return it via email or overnight courier (via FedEX or UPS) to
Esther Lander, Akin Gump Strauss Hauer & Feld, LLC, 1333 New Hampshire Ave, NW,
Washington DC, 20036, [email protected]. To the extent that Executive
executes this Agreement prior to the end of the twenty-one (21) day period,
Executive hereby knowingly and voluntarily waives the remainder of this
twenty-one (21) day period. If Executive fails to execute and return this
Agreement within the twenty-one (21) day period in the manner provided above,
then this Agreement will be null and void and of no force or effect.
(b)Executive acknowledges that if she timely executes this Agreement, she will
have seven (7) days from the date she executes this Agreement to revoke this
Agreement by providing written notice of such revocation by email or overnight
courier (via FedEx or UPS) to Esther Lander, Akin Gump Strauss Hauer & Feld,
LLC, 1333 New Hampshire Ave, NW, Washington DC, 20036, [email protected]. If
Executive revokes this Agreement within seven (7) days from the date she
executes it as provided herein, then this Agreement will be null and void and of
no force or effect. If Executive does not revoke this Agreement within seven (7)
days from the date she timely executes this Agreement in the manner provided
above, then this Agreement will become fully binding, effective, irrevocable,
and enforceable on the eighth (8th) calendar day after Executive executes it
(the “Effective Date”).
9
18. By signing below, Executive expressly acknowledges, represents, and
warrants that Executive has carefully read this Agreement; that Executive fully
understands the terms, conditions, and significance of this Agreement and its
final and binding effect; that no other promises or representations were made to
Executive other than those set forth in this Agreement; that Executive is fully
competent to manage Executive’s business affairs; that Executive understands
that this Agreement contains a waiver and release of all known or unknown
claims; that the Company has advised Executive to consult with an attorney
concerning this Agreement; that Executive has executed this Agreement
voluntarily, knowingly, and with an intent to be bound by this Agreement; and
that Executive has full power and authority to release Executive’s Claims as set
forth herein and has not assigned any such claims to any other individual or
entity.
19. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together will
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10
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date indicated below.
FRED’S, INC.
By: /s/ Joe Anto May 3, 2018 Joe Anto Date Authorized Signatory
ExecutivE /s/ Mary Louise Gardner May 3, 2018 Mary Louise
Gardner Date
11
[TO BE EXECUTED NO EARLIER THAN MAY 27, 2018
AND NO LATER THAN JUNE 17, 2018]
EXHIBIT A
POST-EMPLOYMENT RELEASE
In exchange for the payments and other consideration provided to Mary Louise
Gardner (“Executive”) under the Separation Agreement and General Release between
Executive and Fred, Inc. (the “Company”) and its affiliates (the “Separation
Agreement”), to which this Post-Employment Release is an Exhibit, and as a
precondition to Executive’s receipt of the payments and other consideration set
forth in Paragraph 5 thereof, Executive hereby agrees as follows. All
capitalized terms utilized but not defined herein shall have the same meanings
ascribed to them in the Separation Agreement:
1. Upon the Post-Employment Release Effective Date, as defined below,
and consistent with Paragraph 4(e)(iii) of the Employment Agreement, Executive,
on behalf of herself and for any person or entity who may claim by or through
her, irrevocably and unconditionally releases, waives, and forever discharges
Company, and its current, former, or future affiliates, or any of their
respective current, former, or future subsidiaries, parents, related companies,
controlling shareholders, or divisions, and their and Alden Global Capital LLC’s
respective officers, directors, attorneys, agents, and present and past
employees (“Releasees”) from any and all claims or causes of action that
Executive had, has, or may have relating to Executive’s employment with Company
and/or termination therefrom up to and including the date of this Agreement,
including but not limited to any claims under Title VII of the Civil Rights Act
of 1964, as amended, the Tennessee Human Rights Act, the Age Discrimination in
Employment Act (“ADEA”), and claims under any other federal, state, or local
statute, regulation, or ordinance, including wrongful or retaliatory discharge.
2. For avoidance of doubt, the foregoing Release does not include any
claims that cannot be released or waived by law, nor does it prohibit Executive
or any of the other Releasors from filing a charge or complaint with or
participating in an investigation or proceeding conducted by any Government
Agencies (including but not limited to the Equal Employment Opportunity
Commission); provided, however, that Executive and the other Releasors are
releasing and waiving the right to seek or accept any compensatory damages, back
pay, front pay, or reinstatement remedies for Executive or the other Releasors
personally with respect to any and all Claims released in this Post-Employment
Release; and provided, further, that nothing herein shall restrict Executive’s
right to receive an award for information provided to the U.S. Securities and
Exchange Commission pursuant to Section 21F of the Securities Exchange Act of
1934.
3. Executive acknowledges that by Executive executing this
Post-Employment Release, Executive and the other Releasors are waiving and
releasing any and all legal rights and claims they may have under the ADEA and
all other federal, state and local laws regarding age discrimination, whether
those claims are currently known to Executive or hereafter discovered. However,
nothing in the foregoing is intended to limit or restrict Executive’s right to
challenge the validity of this Post-Employment Release as to claims and rights
asserted under the ADEA or Executive’s right to enforce the Separation
Agreement. Executive further agrees that in the event she or any of the other
Releasors brings any ADEA Claims against any of the Releasees, or in the event
they seek to recover monetary or other compensation against any of the Releasees
through any ADEA Claim brought by a governmental agency on their behalves, this
Post-Employment Release shall serve as a complete defense to such Claims.
Exhibit A-1
4. In accordance with the Age Discrimination in Employment Act
(“ADEA”) and the Older Workers Benefit Protection Act, 29 U.S.C. § 621 et seq.,
Executive understands that she shall have twenty-one (21) days to consider this
Agreement, execute it, and return it via email, facsimile, or overnight courier
(via FedEX or UPS) to Esther Lander, Akin Gump Strauss Hauer & Feld, LLC, 1333
New Hampshire Ave, NW, Washington DC, 20036, [email protected]. To the extent
that Executive executes this Release prior to the end of the twenty-one (21) day
period, Executive hereby knowingly and voluntarily waives the remainder of this
5. If Executive does not revoke this Post-Employment Release within
seven (7) days from the date she executes it, this Post-Employment Release will
become fully binding, effective, and enforceable on the eighth (8th) calendar
day after the day she executes it (the “Post Employment Release Effective
Date”). For avoidance of doubt, should Executive fail to timely execute this
Post-Employment Release, or should she timely revoke this Post-Employment
Release after signing it, (A) she shall receive the payments and benefits set
forth in Paragraph 4 of the Separation Agreement, (B) the Company’s and Company
Affiliates’ obligations under Paragraph 5 of the Separation Agreement shall be
null and void and of no force or effect, and (C) the remainder of the Separation
Agreement shall remain binding, enforceable, and irrevocable.
6. By signing below, Executive acknowledges and agrees that she (i)
has carefully read and fully understands all of the provisions of the Separation
Agreement (including this Post-Employment Release); (ii) knowingly and
voluntarily agrees to all of the terms set forth in the Separation Agreement
(including this Post-Employment Release); (iii) knowingly and voluntarily agrees
to be legally bound by the Separation Agreement (including this Post-Employment
Release); (iv) has been advised to consult with an attorney prior to signing
this Separation Agreement (including this Post-Employment Release); (v) has full
power to release her and the other Releasors’ Claims as set forth herein; and
(vi) has not assigned any such Claims to any individual or to any corporation,
partnership or any other entity or organization.
7. This Exhibit A shall be part of the Separation Agreement and, once
executed, may be enforced in accordance with the terms of the Separation
Agreement. Executive understands that once the Separation Agreement becomes
effective, it will remain effective and irrevocable regardless of whether this
Post-Employment Release is timely executed (or, if it is executed, regardless of
whether it is timely revoked); provided, that if Executive does not timely
execute the Post-Employment Release (or if Executive timely revokes the
Post-Employment Release after signing it) she will not receive the consideration
set forth in Paragraph 5 of the Separation Agreement. For avoidance of doubt,
Executive further understands that if she and/or the Company fail to timely
execute the Separation Agreement, then the Separation Agreement (including this
Post-Employment Release) will be null and void.
Exhibit A-2
8. PDF, facsimile, and other true and correct copies of this
Post-Employment Release shall have the same force and effect as an original
hereof.
Exhibit A-3
To confirm Executive’s understanding of, and agreement to, the terms of this
Post-Employment Release, and to execute it, she has signed and dated it below.
Mary Louise Gardner Date:
Exhibit A-4
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Exhibit 10.26 September 16, 2010 Google Inc. Attn:Lease Administration 1600 Amphitheater Parkway Mountain View, CA94043 Re:Lease Agreement dated as of February 1, 2007, by and between Google, Inc. successor in interest to DoubleClick, Inc. and Epsilon Data Management, LLC (“Lease”) Dear Sir/Madam: Pursuant to Article 29 of the Lease, Tenant hereby requests an extension of the Lease.Article 29 suggests that the extension shall be for thirty (30) months; however, Tenant understands that Landlord wants the Tenant to move out of the Premises.As a compromise, Tenant only seeks an extension for eighteen (18) months.Such time will enable Tenant to prepare a suitable replacement site and execute a move out of the Thornton facility. Please confirm your agreement to this extension below. Sincerely, Epsilon Data Management, LLC /s/ Jeanette Fitzgerald Jeanette Fitzgerald Vice President and Assistant General Counsel ACCEPTANCE: Google, Inc. agrees to extend the Lease for eighteen (18) additional months until July 31, 2013. GOOGLE, INC. /s/ James Braun cc:James Braun 12396 Grant Street Thornton, CO80241
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Exhibit 10.1
LOGO [g659029ex10_1logo.jpg]
January 10, 2014
John F. Thero
c/o Amarin Pharma, Inc.
1430 Route 206
Bedminster, NJ 07921
Dear Mr. Thero:
On behalf of Amarin Corporation plc (the “Company”), I am pleased to confirm the
terms of your continued employment with the Company, effective January 10, 2014.
The purpose of this letter agreement is to set forth those terms of employment.
This letter agreement (the “Agreement”) fully supersedes any prior agreements,
understanding or arrangements, whether oral or written, implied or express, with
respect to the terms and conditions of your employment with the Company
including, without limitation, your employment agreement with the Company dated
December 23, 2011, and any other employment agreement, offer letter or other
agreement or understanding relating to compensation, benefits, severance pay or
other terms or conditions of employment (collectively, the “Prior Agreements”),
provided any agreement you have with the Company and/or any of its subsidiaries
or affiliates related to confidentiality/nondisclosure, noncompetition,
nonsolicitation, assignment of inventions and patents, any stock option
agreement entered into by you in connection an equity award issued to you by the
Company or its subsidiaries or affiliates and any Deed of Indemnity applicable
to you (collectively the “Preserved Agreements”) shall remain in full force and
effect.
With those understandings, you and the Company agree as follows:
1. Position: Your current position with the Company is President and Chief
Executive Officer (“CEO”). You will have such duties, responsibilities and
authorities as determined by the Company’s Board of Directors (the “Board”).
This is a full-time position. It is understood and agreed that, while you render
services to the Company, you will not engage in any other employment, consulting
or other business activities (whether full-time or part-time) without prior
express written consent of the Board. Notwithstanding the foregoing, you may
(i) serve on one outside board of directors as long as such service is disclosed
to the Board and (ii) engage in religious, charitable, or other community
activities, provided that your services or activities under subsections (i) and
(ii) do not interfere or conflict with your obligations to the Company. In
addition to your role as President and CEO, you acknowledge and agree that you
may be required, without additional compensation, to perform duties for certain
affiliated entities of the Company, including without limitation Amarin Pharma,
Inc., and to accept any reasonable office or position with any such affiliate as
the Company’s Board of Directors may require, including, but not limited to,
service as an officer or director of any such affiliate.
Mr. John Thero
January 10, 2014
Page 2
2. Salary: The Company will pay you a salary at the annual rate of $500,000,
effective as of January 1, 2014, subject to periodic review and adjustment at
the discretion of the Company. Currently our policy is to make salary payments
semi-monthly.
3. Bonus: You will be eligible to receive annual performance bonuses. The
Company will target the Bonus of up to 65% of your annual salary rate. The
actual bonus is discretionary and will be subject to the Company’s assessment of
your performance, as well as business conditions at the Company. The bonus also
will be subject to your employment for the full period covered by the bonus,
approval by and adjustment at the discretion of the Company’s Board of Directors
or an authorized committee thereof, and the terms of any applicable bonus plan.
The Company may also make adjustments in the targeted amount of your annual
performance bonus. Any bonus awarded to you will be paid by March 15 of the year
following the bonus year to which such bonus relates.
4. Benefits: You will be eligible to participate in the employee benefits and
insurance programs generally made available to its full-time employees,
including health, life, disability and dental insurance. You will be eligible
for up to eighteen (18) days of paid time off (“PTO”) per year, which shall
accrue on a prorated basis. Other provisions of the Company’s PTO policy are set
forth in the policy itself. You will be reimbursed for all reasonable business
expenses you incur while carrying out your duties on behalf of the Company
provided such reimbursement shall be conditioned on you following the Company’s
reimbursement policies and claims procedures, including by providing appropriate
documentation of such expenses.
5. Stock Options: Except as expressly provided herein, your current equity with
the Company shall be governed by the terms of the Company’s 2002 Stock Option
Plan and associated stock option or other stock agreements and/or 2011 Stock
Incentive Plan and associated stock option or other stock agreements, as
applicable (collectively the “Equity Documents”). You shall be eligible for
additional equity based awards at the discretion of the Company and subject to
approval by the Company’s Board of Directors.
6. At-will Employment, Accrued Obligations; Severance: Your employment will
continue to be “at will” meaning you or the Company may terminate it at any time
for any or no reason. In the event of the termination of your employment for any
reason, the Company shall pay you the Accrued Obligations, defined as (1) your
base salary through the date of termination, (2) an amount equal to the value of
your accrued unused PTO days, if any, and (3) the amount of any business
expenses properly incurred by you on behalf of the Company prior to any such
termination and not yet reimbursed. In addition to the Accrued Obligations, in
the event the Company terminates your employment without Cause at any time, or
you terminate your employment for Good Reason (defined below), or during the
twenty-four (24) month period that immediately follows a Change of Control (the
“Post-Change in Control Period”) the Company terminates your employment without
Cause or you terminate your employment for Good
Mr. John Thero
January 10, 2014
Page 3
Reason, the Company shall provide you with the following termination benefits
(the “Termination Benefits”), which shall be substantively dependent on the date
of the last day of your employment (the “Date of Termination”):
(i) continuation of your base salary then in effect during the “Salary
Continuation Period” which shall be either: (A) twelve (12) months from the Date
of Termination, if the Company terminates your employment without Cause or you
terminate your employment for Good Reason and the Date of Termination occurs at
any time outside of the Post-Change in Control Period, or (B) eighteen
(18) months from the Date of Termination, if the Company terminates your
employment without Cause or you terminate your employment for Good Reason and,
in either case, the Date of Termination occurs during the Post-Change in Control
Period. Solely for purposes of Section 409A of the Internal Revenue Code of
1986, as amended, each Salary Continuation Payment during the Salary
Continuation Period is considered a separate payment;
(ii) continuation of group health plan benefits to the extent authorized by and
consistent with 29 U.S.C. § 1161 et seq. (commonly known as “COBRA”), with the
cost of the regular premium for such benefits shared in the same relative
proportion by the Company and you as in effect on the date of termination until
the earlier of: (i) the end of the Salary Continuation Period, and (ii) the date
you become eligible for health benefits through another employer or otherwise
become ineligible for COBRA;
(iii) if the Company terminates your employment without Cause or you terminate
your employment for Good Reason and, in either case, the Date of Termination
occurs during the Post-Change in Control Period, a lump sum cash payment equal
to your target annual performance bonus for the year during which the Date of
Termination occurs;
(iv) if the Company terminates your employment without Cause and the Date of
Termination occurs outside of the Post-Change in Control Period, twelve
(12) months of accelerated vesting from the Date of Termination with respect to
any of your then outstanding stock options, restricted stock units or other
equity incentive awards (in each case, only to the extent subject to time-based
vesting); and
(v) if the Company terminates your employment without Cause or you terminate
occurs during the Post-Change in Control Period, then outstanding stock options,
restricted stock units or other equity incentive awards (whether or not subject
to time based vesting) shall immediately vest in full effective upon the Date of
Termination.
Notwithstanding anything to the contrary in this Agreement, you shall not be
entitled to any Termination Benefits unless you first (i) enter into, do not
revoke, and comply with the terms
Mr. John Thero
January 10, 2014
Page 4
of a separation agreement in a form acceptable to the Company which shall
include a release of claims against the Company and related persons and entities
(the “Release”), provided that the Release shall not require you to release
(a) claims to enforce your right to receive Termination Benefits; (b) claims for
vested benefits pursuant to ERISA; (c) claims with respect to your vested equity
rights as of the Date of Termination; (d) claims to enforce the Company’s
obligation to indemnify you to the extent such indemnification obligations
exist; and (e) claims which legally may not be waived; (ii) resign from any and
all positions, including, without implication of limitation, as a director,
trustee, and officer, that you then hold with the Company and any affiliate of
the Company; and (iii) return all Company property and comply with any
instructions related to deleting and purging duplicates of such Company
property, in each case within the time period designated by the Company but in
no event later than 60 days of the Date of Termination. The Salary Continuation
Payments shall commence within 60 days after the Date of Termination and shall
be made on the Company’s regular payroll dates; provided, however, that if the
60-day period begins in one calendar year and ends in a second calendar year,
the Salary Continuation Payments shall begin to be paid in the second calendar
year. In the event you miss a regular payroll period between the Date of
Termination and first Salary Continuation Payment, the first Salary Continuation
Payment shall include a “catch up” payment. Notwithstanding the foregoing, if
you breach any of the material provisions of this Agreement or the Nondisclosure
Developments and Non-competition Agreement, in addition to all other rights and
remedies, the Company shall have the right to terminate or cease payment of the
Termination Benefits. For the avoidance of doubt, you shall not be entitled to
the Termination Benefits in the event your employment ends due to your death or
disability.
7. Definitions: For purposes of this Agreement, the following terms shall have
the following meanings:
“Cause” shall mean: (i) conduct by you constituting an act of material
misconduct in connection with the performance of your duties, including, without
limitation, misappropriation of funds or property of the Company other than the
occasional, customary and de minimis use of Company property for personal
purposes; (ii) the commission by you of (A) any felony; or (B) a misdemeanor
involving moral turpitude, deceit, dishonesty or fraud; (iii) any conduct by you
that would reasonably be expected to result in material injury or reputational
harm to the Company or any of its subsidiaries and affiliates if you were
retained; (iv) continued non-performance or continued unsatisfactory performance
by you of your responsibilities as reasonably determined by the Company’s Board
of Directors; (v) a breach by you of any of the material provisions of any
agreement between you and the Company including, without limitation, any
agreement relating to non-disclosure, non-competition or assignment of
inventions; (vi) a material violation by you of any of the Company’s written
policies or procedures provided that, other than in the case of noncurable
events, you are provided with written notice and fifteen (15) days to cure.
Mr. John Thero
January 10, 2014
Page 5
“Change of Control” shall have the meaning set forth in the 2011 Option Plan, as
may be amended from time to time, but only to the extent such event also
constitutes a “change in ownership” of the Company or a “change in the ownership
of a substantial portion of the Company’s assets” for purposes of Section 409A
of the Code.
“Disability” shall mean that, due to your illness or injury, you are unable to
perform the essential functions of your position with or without reasonable
accommodation for a period of 180 days in any 12-month period (whether or not
consecutive). Nothing in this Agreement shall be construed to waive your rights,
if any, under existing law including, without limitation, the Family and Medical
Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities
Act, 42 U.S.C. §12101 et seq.
“Good Reason” shall mean that you have complied with “Good Reason Process”
(hereinafter defined) following the occurrence of any of the following Good
Reason conditions that occur without your consent: (i) a material diminution of
your base salary; (ii) a material diminution in your authority, duties or
responsibilities; (iii) a material change in the principal location where you
are required to provide services for the Company (subject to the relocation
requirements above and not including business travel and short-term
assignments); and/or (iv) a material breach by the Company of this Agreement.
For purposes of this Agreement, “Good Reason Process” shall mean that: (x) you
reasonably determine in good faith that a “Good Reason” condition has occurred;
(y) you notify the Company in writing of the Good Reason condition within sixty
(60) days of the first occurrence of such condition; (z) you cooperate in good
faith with the Company’s efforts, for a period of thirty (30) days following
such notice (the “Cure Period”), to remedy the condition; notwithstanding such
efforts, the Good Reason condition continues to exist; and you terminate your
employment within thirty (30) days after the end of the Cure Period. If the
Company cures the Good Reason condition during the Cure Period, Good Reason
shall be deemed not to have occurred.
8. Section 280G Limitation: Anything in this Agreement to the contrary
notwithstanding, in the event that the amount of any compensation, payment or
distribution by the Company to or for the benefit of you, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise, calculated in a manner consistent with Section 280G of the Code
and the applicable regulations thereunder (the “Severance Payments”), would be
subject to the excise tax imposed by Section 4999 of the Code, the following
provisions shall apply:
(a) If the Severance Payments, reduced by the sum of (1) the Excise Tax and
(2) the total of the Federal, state, and local income and employment taxes
payable by you on the amount of the Severance Payments which are in excess of
the Threshold Amount, are greater than or equal to the Threshold Amount, you
shall be entitled to the full benefits payable under this Agreement.
Mr. John Thero
January 10, 2014
Page 6
(b) If the Threshold Amount is less than (x) the Severance Payments, but greater
than (y) the Severance Payments reduced by the sum of (1) the Excise Tax and
the amount of the Severance Payments which are in excess of the Threshold
Amount, then the Severance Payments shall be reduced (but not below zero) to the
extent necessary so that the sum of all Severance Payments shall not exceed the
Threshold Amount. In such event, the Severance Payments shall be reduced in the
following order: (1) cash payments not subject to Section 409A of the Code;
(2) cash payments subject to Section 409A of the Code; (3) equity-based payments
and acceleration; and (4) non-cash forms of benefits. To the extent any payment
is to be made over time (e.g., in installments, etc.), then the payments shall
be reduced in reverse chronological order.
(c) For the purposes of this Section, “Threshold Amount” shall mean three times
your “base amount” within the meaning of Section 280G(b)(3) of the Code and the
regulations promulgated thereunder less one dollar ($1.00); and “Excise Tax”
shall mean the excise tax imposed by Section 4999 of the Code, and any interest
or penalties incurred by you with respect to such excise tax.
(d) The determination as to which of the alternative provisions of this
Section 9 shall apply to you shall be made by a nationally recognized accounting
firm selected by the Company (the “Accounting Firm”), which shall provide
detailed supporting calculations both to the Company and you within 15 business
days of the Date of Termination, if applicable, or at such earlier time as is
reasonably requested by the Company or you. For purposes of determining which of
the alternative provisions of this Section 9 shall apply, you shall be deemed to
pay federal income taxes at the highest marginal rate of federal income taxation
applicable to individuals for the calendar year in which the determination is to
be made, and state and local income taxes at the highest marginal rates of
individual taxation in the state and locality of your residence on the date of
termination, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. Any determination by the
Accounting Firm shall be binding upon the Company and you.
9. Taxes; Section 409A: All forms of compensation referred to in this letter
agreement are subject to reduction to reflect applicable withholdings and
payroll taxes and other deductions required by law. You hereby acknowledge that
the Company does not have a duty to design its compensation policies in a manner
that minimizes tax liabilities. Anything in this Agreement to the contrary
notwithstanding, if at the time of your separation from service within the
meaning of Section 409A of the Code, the Company determines that you are a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code,
then to the extent any payment or benefit that you become entitled to under this
Agreement on account of your separation from service would be considered
deferred compensation subject to the 20 percent
Mr. John Thero
January 10, 2014
Page 7
additional tax imposed pursuant to Section 409A(a) of the Code as a result of
the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not
be payable and such benefit shall not be provided until the date that is the
earlier of (A) six months and one day after your separation from service, or
(B) your death. If any such delayed cash payment is otherwise payable on an
installment basis, the first payment shall include a catch-up payment covering
amounts that would otherwise have been paid during the six-month period but for
the application of this provision, and the balance of the installments shall be
payable in accordance with their original schedule.
All in-kind benefits provided and expenses eligible for reimbursement under this
Agreement shall be provided by the Company or incurred by you during the time
periods set forth in this Agreement. All reimbursements shall be paid as soon as
administratively practicable, but in no event shall any reimbursement be paid
after the last day of the taxable year following the taxable year in which the
expense was incurred. The amount of in-kind benefits provided or reimbursable
expenses incurred in one taxable year shall not affect the in-kind benefits to
be provided or the expenses eligible for reimbursement in any other taxable
year. Such right to reimbursement or in-kind benefits is not subject to
liquidation or exchange for another benefit.
To the extent that any payment or benefit described in this Agreement
constitutes “non-qualified deferred compensation” under Section 409A of the
Code, and to the extent that such payment or benefit is payable upon the
termination of this Agreement, then such payments or benefits shall be payable
only upon your “separation from service.” The determination of whether and when
a separation from service has occurred shall be made in accordance with the
presumptions set forth in Treasury Regulation Section 1.409A-1(h).
The parties intend that this Agreement will be administered in accordance with
Section 409A of the Code. To the extent that any provision of this Agreement is
ambiguous as to its compliance with Section 409A of the Code, the provision
shall be read in such a manner so that all payments hereunder comply with
Section 409A of the Code. The parties agree that this Agreement may be amended,
as reasonably requested by either party, and as may be necessary to fully comply
with Section 409A of the Code and all related rules and regulations in order to
preserve the payments and benefits provided hereunder without additional cost to
either party.
The Company makes no representation or warranty and shall have no liability to
you or any other person if any provisions of this Agreement are determined to
constitute deferred compensation subject to Section 409A of the Code but do not
satisfy an exemption from, or the conditions of, such Section.
10. Other Terms: Your employment with the Company shall be on an at-will basis.
In other words, you or the Company may terminate employment for any reason and
at any time, with or without notice, subject to the Termination Benefits
provisions herein. Similarly, the terms of employment outlined in this letter
are subject to change at any time. You also will be required to sign and comply
with the Company’s Nondisclosure Developments and Non-competition
Mr. John Thero
January 10, 2014
Page 8
Agreement as a condition of your continued employment and of your receipt of any
post-employment severance pay or benefits, the terms of which shall be
incorporated by reference into this Agreement. A copy of the Nondisclosure
Developments and Non-competition Agreement is attached.
11. Interpretation, Amendment and Enforcement: This Agreement, along with the
Company’s Nondisclosure Developments and Non-competition Agreement and the
Preserved Agreements, constitutes the complete agreement between you and the
Company, contains all of the terms of your employment with the Company and
supersedes any prior agreements, representations or understandings (whether
written, oral or implied) between you and the Company, including the Prior
Agreements. This Agreement may be amended or modified only by a written
instrument signed by you and by a representative of the Company authorized by
the Board. The terms of this Agreement and the resolution of any disputes as to
the meaning, effect, performance or validity of this Agreement or arising out
of, related to, or in any way connected with, this Agreement, your employment
with the Company or any other relationship between you and the Company (the
“Disputes”) will be governed by the laws of the State of Connecticut, excluding
laws relating to conflicts or choice of law. You and the Company submit to the
exclusive personal jurisdiction of the federal and state courts located in the
State of Connecticut in connection with any Dispute or any claim related to any
Dispute.
12. Notices: Any notices, requests, demands and other communications provided
for by this Agreement shall be sufficient if in writing and delivered in person
or sent by a nationally recognized overnight courier service or by registered or
certified mail, postage prepaid, return receipt requested, to you at the last
address you have filed in writing with the Company or, in the case of the
Company, at its main offices, attention of the Board.
13. Assignment: Neither you nor the Company may make any assignment of this
Agreement or any interest in it, by operation of law or otherwise, without the
prior written consent of the other; provided, however, that the Company may
assign its rights and obligations under this Agreement without your consent to
one of its Affiliates or to any person with whom the Company shall hereafter
effect a reorganization, consolidate with, or merge into or to whom it transfers
all or substantially all of its properties or assets. This Agreement shall inure
to the benefit of and be binding upon you and the Company, and each of our
respective successors, executors, administrators, heirs and permitted assigns.
14. Survival: The provisions of this Agreement shall survive the termination of
this Agreement and/or the termination of your employment to the extent necessary
to effectuate the terms contained herein.
15. Enforceability: If any portion or provision of this Agreement (including,
without limitation, any portion or provision of any section of this Agreement)
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as
Mr. John Thero
January 10, 2014
Page 9
to which it is so declared illegal or unenforceable, shall not be affected
thereby, and each portion and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
16. Waiver: No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to require the
performance of any term or obligation of this Agreement, or the waiver by any
party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
If you have any questions about this Agreement, please let me know. Otherwise,
please confirm your acceptance of this Agreement by signing below and returning
a copy to me.
Signed for and on behalf of:
AMARIN CORPORATION PLC Signed:
/s/ Joseph T. Kennedy
Joseph T. Kennedy General Counsel and Secretary Dated:
January 10, 2014
Mr. John Thero
January 10, 2014
Page 10
UNDERSTOOD, AGREED AND ACCEPTED: Signed:
/s/ John F. Thero
John F. Thero Dated:
January 10, 2014
Enclosures |
Name: 2013/640/EU: Commission Implementing Decision of 7Ã November 2013 on setting up the European Advanced Translational Research Infrastructure in Medicine as a European Research Infrastructure Consortium (EATRIS ERIC)
Type: Decision_IMPL
Subject Matter: health; European construction; research and intellectual property; economic geography; legal form of organisations; EU institutions and European civil service
Date Published: 2013-11-08
8.11.2013 EN Official Journal of the European Union L 298/38 COMMISSION IMPLEMENTING DECISION of 7 November 2013 on setting up the European Advanced Translational Research Infrastructure in Medicine as a European Research Infrastructure Consortium (EATRIS ERIC) (2013/640/EU) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Council Regulation (EC) No 723/2009 of 25 June 2009 on the Community legal framework for a European Research Infrastructure Consortium (ERIC) (1), and in particular point (a) of Article 6(1) thereof, Whereas: (1) The Czech Republic, the Kingdom of Denmark, the Republic of Estonia, the Italian Republic, the Kingdom of the Netherlands and the Republic of Finland requested the Commission to set up the European Advanced Translational Research Infrastructure in Medicine as a European Research Infrastructure Consortium (EATRIS ERIC). The Kingdom of Spain and the Republic of France will participate initially in EATRIS ERIC as an Observer. (2) The Kingdom of the Netherlands has been chosen by the Czech Republic, the Kingdom of Denmark, the Republic of Estonia, the Kingdom of Spain, the Republic of France, the Italian Republic and the Republic of Finland as the Host Member State of EATRIS ERIC. (3) The measures provided for in this Decision are in accordance with the opinion of the Committee established by Article 20 of Regulation (EC) No 723/2009, HAS ADOPTED THIS DECISION: Article 1 1. A European Research Infrastructure Consortium for the European Advanced Translational Research Infrastructure in Medicine named EATRIS ERIC is hereby established. 2. The statutes of EATRIS ERIC are set out in the Annex. These Statutes shall be kept up to date and made publicly available on the website of EATRIS ERIC and at its statutory seat. 3. The essential elements of the EATRIS ERIC Statutes for which amendments shall require approval by the Commission in accordance with Article 11(1) of Regulation (EC) No 723/2009 are provided for in Articles 1, 2, 18, 20, 21, 22, 23, 24, 25, 28 and 29. Article 2 This Decision shall enter into force on the third day following its publication in the Official Journal of the European Union. Done at Brussels, 7 November 2013. For the Commission The President Josà © Manuel BARROSO (1) OJ L 206, 8.8.2009, p. 1. ANNEX STATUTES OF EATRIS ERIC THE MEMBERS, while recognising the important role for the national centres and their translational research capacities as organised through the EATRIS ERIC infrastructure; Having the aim to improve translational biomedical research by developing a European advanced translational research infrastructure consisting of key preclinical and clinical facilities and translational expertise necessary to support the development of new preventive, diagnostic and therapeutic strategies of biomedical research and development for providing people with better healthcare; Having the aim to provide access to the European advanced translational research infrastructure with the objective to realise a significant impact on healthcare and make a significant contribution to the advancement of the tools and technologies that drive translational science; Recognising and elaborating on the results of the EATRIS Preparatory Phase project, funded by the European Commission and the progress made during the Transition Phase of EATRIS; Deciding to request the European Commission to establish the European Advanced Translational Research Infrastructure in Medicine European Research Infrastructure Consortium (EATRIS ERIC) as an outcome of the Transition Phase of EATRIS; HAVE THEREFORE AGREED UPON THE FOLLOWING PROVISIONS: CHAPTER I GENERAL PROVISIONS Article 1 Name, seat, and working language 1. There shall be a distributed European Research Infrastructure called European Advanced Translational Research Infrastructure in Medicine, hereinafter referred to as EATRIS. 2. The name of the European Research Infrastructure Consortium (ERIC) European Advanced Translational Research Infrastructure in Medicine shall be EATRIS ERIC. 3. EATRIS ERIC shall have its statutory seat in Amsterdam, the Netherlands. 4. The working language of EATRIS ERIC shall be English. Article 2 Tasks and activities 1. EATRIS ERIC shall advance research in translational medicine. 2. EATRIS ERIC shall be committed to organising and facilitating the governance and coordination that is required to establish and operate the EATRIS research infrastructure. 3. The EATRIS research infrastructure shall connect leading European research institutes that dedicate part of their research and development capacities to EATRIS ERIC sharing content, tools and knowledge related to research in translational medicine and in particular on the following: (a) biologics and advanced therapies, such as gene and cell therapies and regenerative medicine; (b) biomarkers; (c) small molecules; (d) molecular imaging and tracers; (e) vaccines. CHAPTER II MEMBERS Article 3 Membership and representation 1. EATRIS ERIC shall have at least three Member States as Member, only States and intergovernmental organisations may become Member and have voting rights. 2. Any Member shall appoint one or two representatives in the Board of Governors. Two representatives shall together hold one vote. 3. The Members and their representatives are listed in Appendix 1. The States that submitted the application requesting the setting up of EATRIS ERIC to the European Commission are hereinafter referred to as Founding Members. Article 4 Admission of new members 1. Applicants for Membership shall submit a written application to the Chairperson of the Board of Governors describing their financial contribution and other contributions to EATRIS ERIC tasks and activities and how they will fulfil their obligations. 2. The admission of new Members shall be subject to the approval of the Board of Governors. Article 5 Withdrawal of a member and termination of membership 1. No Member may withdraw within the first five years of the establishment of EATRIS ERIC unless the Membership has been entered into for a specified shorter period. 2. After the first five years of the establishment of EATRIS ERIC a Member may withdraw provided a request is submitted to this effect 12 months in advance. A withdrawal shall only become effective at the end of a financial year and after the withdrawing Member has fulfilled its obligations. 3. By derogation from paragraph 1 of this Article, a Member may withdraw during the first five years if the Board of Governors decide to raise the thresholds of the annual financial contribution as specified in points (e) and (f) of Appendix 2. Member wishing to withdraw shall request withdrawal within six months of the adoption of the proposal to raise the annual financial contribution. The withdrawal shall become effective at the end of the financial year on the condition that the withdrawing Member has fulfilled its obligations. 4. The Board of Governors shall have the power to terminate a Membership in the following cases: (a) the Member is in serious breach of one or more of its obligations under these Statutes; (b) the Member has failed to rectify such breach within a period of six months of notification thereof. The Member shall be invited by the Board of Governors to present its position on the proposed decision of termination before any decision may be adopted. 5. Members that withdraw or have their Membership terminated shall neither have right to restitution or reimbursement of any contributions made, nor the right to lay any claim to the assets of EATRIS ERIC. Article 6 Rights and obligations of Members 1. Rights of Members shall include: (a) the right to attend and vote at the Board of Governors; (b) the right to participate in the development of strategies, policies and decision-making procedures concerning EATRIS ERIC; (c) the right of its research community to participate in EATRIS ERIC events; (d) the right of its research community to have access to and to receive support from EATRIS ERIC. 2. Each Member shall: (a) pay an annual financial contribution as decided by the Board of Governors; (b) empower its representatives with the full authority to vote by single vote on all issues raised during a meeting of the Board of Governors; (c) create a national centre or infrastructure consortium for the purpose of fulfilling the obligations arising from these Statutes; (d) appoint one National Director to represent it on the Board of National Directors; (e) provide the necessary technical infrastructure to make access possible; (f) promote the uptake of EATRIS ERIC services among researchers in its own country and gather user feedback and requirements; (g) support centres in its own country that wish to join the national infrastructure of a Member State participating in the EATRIS ERIC infrastructure. 3. Contributions other than the annual financial contribution may be made by Members individually or jointly in cooperation with other Members, Observers or third parties. Such contributions, in cash or in kind, shall be subject to approval by the Board of Governors. 4. EATRIS ERIC shall enter into an agreement with the national centres in order to establish the terms and conditions under which the national centres may join the EATRIS ERIC infrastructure and commit to the tasks and activities set out in Article 2. The National Director shall use its best efforts to coordinate the interaction of its national centres with the EATRIS ERIC. CHAPTER III OBSERVERS Article 7 Observer status 1. States and intergovernmental organisations which are willing to contribute to EATRIS ERIC but are not yet in a position to join as Members may apply for Observer status. 2. Observers shall be admitted for a maximum of three years, unless another term is decided by the Board of Governors. 3. Applications for Observer status shall be made in writing to the Chairperson of the Board of Governors and shall set out how the applicant intends to contribute to EATRIS ERIC tasks and activities. 4. The admission of Observers shall be subject to the approval of the Board of Governors. Article 8 Withdrawal of an observer and termination of observer status 1. Observers may withdraw at the end of a financial year provided they have submitted a request thereto six months in advance. 2. Financial and other obligations must be fulfilled before a withdrawal by an Observer can take effect. 3. The Board of Governors shall have the power to terminate the Observer status of an Observer in the following cases: (a) the Observer is in serious breach of one or more of its obligations under these Statutes; (b) the Observer has failed to rectify such breach within a period of six months of notification thereof. The Observer shall be invited by the Board of Governors to present its position on the proposed decision of termination before any decision may be adopted. 4. Observers that withdraw or have their Observer status terminated shall have neither the right to restitution or reimbursement of any contribution made, nor the right to lay any claim to the assets of EATRIS ERIC. Article 9 Rights and obligations of an Observer 1. Rights of Observers shall include: (a) the right to attend the meeting of the Board of Governors without a right to vote; (b) the right of their research community to participate in EATRIS ERIC events; (c) the right of their research community to access EATRIS ERIC infrastructure and to receive support from EATRIS ERIC. 2. Each Observer shall: (a) appoint one or two representatives in the Board of Governors; (b) pay the annual financial contribution as decided by the Board of Governors; (c) set out its contribution to the EATRIS ERIC tasks and activities set out in Article 2. 3. Contributions other than the annual financial contribution to EATRIS ERIC may be provided by Observers individually or jointly in cooperation with other Members, Observers or third parties. Such contributions, in cash or in kind, shall be approved by the Board of Governors. 4. An Observer shall empower its representative(s) to fulfil the obligations referred to in points (b) and (c) of Article 9(2). 5. EATRIS ERIC shall enter into an Observer Agreement with the Observer in order to establish the terms and conditions under which the obligations are to be fulfilled or the contribution is to be made. CHAPTER IV GOVERNANCE OF EATRIS ERIC Article 10 Governance and management The governance structure of EATRIS ERIC shall comprise the following bodies: (a) the Board of Governors; (b) the Executive Board. Article 11 Board of Governors 1. The Board of Governors shall be the highest and ultimate governing body of EATRIS ERIC with full decision-making power. The Board of Governors shall meet at least once a year and shall be responsible in accordance with the provisions of these Statutes for the overall direction and supervision of EATRIS ERIC. 2. Member States shall jointly hold the majority of the votes. 3. The Board of Governors shall elect amongst its members a Chairperson and a deputy for a two-year term. The Chairperson and deputy may be re-elected. Unless decided otherwise, the Chairperson shall chair all meetings of the Board of Governors and shall be assisted by the deputy. 4. The Board of Governors shall use their best efforts to achieve consensus on all decisions. Failing consensus, a simple majority of the votes cast shall suffice to pass a decision, except for decisions referred to in paragraphs 5, 6 and 7. 5. The Board of Governors shall decide with a majority of at least two-thirds of the votes of the Members on decisions to: (a) adopt or change the strategies for the development of EATRIS ERIC; (b) appoint, suspend or dismiss the Finance Director and the Scientific Director after consultation with the Board of National Directors; (c) establish Subsidiary Bodies in addition to the Permanent Bodies; (d) adopt or change Standing Orders which describe the mandate and specify the activities of the Executive Board and of the Subsidiary Bodies; (e) adopt and amend the annual work programme and the annual budget. 6. Decisions of the Board of Governors to terminate a Membership or Observer status shall require a majority of at least three quarters of the votes of the Members. 7. A Member whose Membership termination is to be decided upon shall have no vote in that decision. 8. The Board of Governors shall decide with unanimity of the Members, not counting any abstentions, on decisions to: (a) amend the statutes, except for Appendix 1; (b) wind up EATRIS ERIC. Unless otherwise agreed, Members shall be informed of the exact wording of amendments to the Statutes and to Appendix 2 at least three months before those amendments are put to vote. 9. The Board of Governors shall meet and decide validly only if a quorum of two thirds of all the Members of EATRIS ERIC are present or represented. 10. The Board of Governors shall adopt Rules of Procedure for implementing the provisions of the Statutes. Article 12 Executive Board 1. The Executive Board shall be responsible for the implementation of EATRIS ERIC and for supporting the Board of Governors. The Executive Board shall be accountable solely to the Board of Governors. 2. The Executive Board shall perform its duties as determined by the Board of Governors and shall prepare its own internal procedures of organisation, meetings and the way the Finance and Scientific Director shall work together in the Rules of Procedure, to be submitted for approval by the Board of Governors. 3. The Executive Board shall consist of the Finance Director and the Scientific Director. 4. The Finance Director shall be the legal representative of EATRIS ERIC, shall represent EATRIS ERIC in any litigation and shall be responsible for the (day-to-day) operational management of EATRIS ERIC. 5. The Scientific Director of EATRIS ERIC shall be responsible for the strategic scientific development and all operational scientific matters of EATRIS ERIC. 6. The Directors of the Executive Board may serve for a term of up to five years to be decided by the Board of Governors. After the initial term the Board of Governors shall decide on any extension. The procedures for the selection and appointment of Directors shall be laid down in Rules of Procedure adopted by the Board of Governors. Article 13 EATRIS ERIC coordination and support office 1. EATRIS ERIC Coordination and Support Office shall be the central management and daily operations office of EATRIS ERIC and shall assist the Board of Governors. It shall be managed and its staff shall be recruited by the Finance Director in consultation with the Scientific Director. 2. The EATRIS Coordination and Support Office shall be accommodated at the premises of EATRIS ERIC located at its statutory seat. CHAPTER V SUBSIDIARY BODIES Article 14 Subsidiary bodies 1. EATRIS ERIC shall have the following Subsidiary Bodies: (a) the Board of National Directors; (b) the Scientific Advisory Board. 2. The Board of Governors may establish other Subsidiary Bodies if deemed necessary for the functioning of EATRIS ERIC. Article 15 Board of National Directors 1. The Board of National Directors shall oversee the coordination of the implementation of the strategies approved by the Board of Governors. The Board of National Directors shall be responsible for all national scientific activities related to EATRIS ERIC and shall maintain coherence and consistency across EATRIS ERIC and collaboration between the Members. 2. The Board of National Directors shall consist of the National Directors appointed by the Members. 3. The members of the Board of National Directors shall elect amongst its members a Chairperson and a deputy for a two-year term with the possibility of re-election in conformity with the procedures laid down in Rules of Procedure. 4. The Board of National Directors shall propose the Rules of Procedure and adopt them after approval by the Board of Governors for their internal operational procedures. 5. The Board of National Directors shall perform the activities as determined by the Board of Governors in Standing Orders. 6. The Board of National Directors shall select the members of the Scientific Advisory Board subject to approval by the Board of Governors. Article 16 Scientific Advisory Board 1. The Scientific Advisory Board shall consist of independent and internationally recognised scientists involved in biomedical translational research acting on their personal title and strategic experience. 2. The Scientific Advisory Board shall offer advice on request to the Board of Governors and may be consulted by the Executive Board and the Board of National Directors on all scientifically and technologically relevant matters including questions regarding the EATRIS ERIC research agenda, scientific strategies, ethical issues and the annual work programme. CHAPTER VI FINANCE AND REPORTING Article 17 Budgetary principles and accounts 1. The financial year of EATRIS ERIC shall begin on 1 January and shall end on 31 December of each year. 2. EATRIS ERIC funds may be used solely for purposes as laid down in these Statutes. 3. All items of revenue and expenditure of EATRIS ERIC shall be included in estimates to be drawn up for each financial year and shall be recorded in the annual budget. 4. The accounts of EATRIS ERIC shall be accompanied by an audited report on the budgetary and financial management of the financial year. EATRIS ERIC shall produce an annual activity report, describing, in particular, the scientific, operational and financial aspects of its activities. The report shall be approved by the Board of Governors and transmitted to the European Commission and relevant public authorities within six months of the end of the corresponding financial year. This report shall be made publicly available in full or in part. 5. EATRIS ERIC shall be subject to the requirements of the applicable law and regulations as regards preparation, filing, auditing and publication of accounts. 6. EATRIS ERIC shall ensure that all appropriations shall be used in accordance with the principles of sound financial management. Article 18 Liability 1. EATRIS ERIC shall be liable for its debts. 2. The Members financial liability towards ERICs debts shall be limited to each individual Members annual financial contribution. 3. EATRIS ERIC shall take appropriate insurance to cover the risks of liability specific to the construction and operation of EATRIS ERIC. CHAPTER VII POLICIES Article 19 Agreements with third parties In cases where EATRIS ERIC deems it beneficial, it can enter into agreements with third parties. Article 20 Intellectual property rights policy 1. The term intellectual property shall mean intellectual property as defined in Article 2 of the Convention Establishing the World Intellectual Property Organization signed on 14 July 1967. 2. The Board of National Directors shall provide for common principles and policies for Intellectual Property as laid down in Rules of Procedure. Those common principles and policies shall be approved by the Board of Governors. 3. The Board of National Directors may recommend agreements with the national centres and infrastructure consortia within the EATRIS research infrastructure in order to ensure that these entities as well as third parties have access to the scientific knowledge of the EATRIS research infrastructure. Article 21 Access policy 1. EATRIS ERIC shall ensure as a general rule open access to services and infrastructures supporting and promoting excellence in translational research as well as a culture of best practices through training activities. 2. EATRIS ERIC shall provide guidance for users of EATRIS infrastructure to best ensure that research which has been undertaken using the resources of the EATRIS infrastructure recognises and respects compliance with any property, personal privacy, ethical and data owners protection rights as well as secrecy and confidentiality obligations as defined in Rules of Procedure, further ensuring that users comply with access terms and conditions, security arrangements for the internal storage and handling of (bio) materials and handling of information of research institutions participating in EATRIS infrastructure. 3. The criteria and procedures that provide or restrict access to EATRIS ERIC infrastructure data and tools shall be defined in Rules of Procedure and decided by the Board of Governors after advice from the Board of National Directors and the Scientific Advisory Board. Article 22 Scientific evaluation policy 1. EATRIS ERIC shall provide access to its translational infrastructure to projects that have the most potential for making a significant impact on health care or a significant contribution to the advancement of the tools and technologies that drive translational science. 2. The scientific evaluation process of projects requesting access to the EATRIS ERIC infrastructure shall consider scientific merit, unmet medical need, eligibility and translational potential, and shall be based on transparency, fairness and impartiality. That process shall be approved by the Board of Governors and laid down in Rules of Procedure. 3. The scientific evaluation of projects within the EATRIS ERIC infrastructure shall consider scientific merit, unmet medical need and translational potential based on transparency, fairness and impartiality and shall be further elaborated by the Board of Governors and laid down in Rules of Procedure. Article 23 Dissemination policy 1. EATRIS ERIC shall take all appropriate action to promote the infrastructure and its use in research and education. 2. EATRIS ERIC shall promote the dissemination and sharing of results obtained by national and international research activities. 3. Without prejudice to any property rights EATRIS ERIC shall request its users to make their research results publicly available and to make results available through EATRIS ERIC. 4. The dissemination policy shall identify the various target groups, and EATRIS ERIC shall use several channels to reach the target audiences, such as web portals, newsletters, workshops, presence at conferences, articles in journals and daily newspapers. Article 24 Employment policy EATRIS ERIC shall endeavour to select the best candidate on a non-discriminatory basis, regardless of background, nationality, religion or gender, reflecting contributions made by the Members. Article 25 Procurement policy 1. EATRIS ERIC shall treat procurement candidates and tenderers equally and without discrimination, regardless of whether or not they are based within the European Union. The EATRIS ERIC procurement policy shall respect the principles of transparency, non-discrimination and competition. The Board of Governors shall adopt Rules of Procedure establishing detailed rules on procurement procedures and criteria. 2. The Executive Board shall be responsible for all EATRIS ERIC procurement. All tenders shall be published on the EATRIS ERIC website and in the Members and Observers territories. For procurement amounts higher than EUR 200 000 EATRIS ERIC shall follow the principles of Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 concerning the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (1). The decision to award procurement shall be published and include a full justification. Article 26 Tax exemption 1. Tax exemptions based on Articles 143(1)(g) and 151(1)(b) of Council Directive 2006/112/EC (2) and in accordance with Articles 50 and 51 of Council Implementing Regulation (EU) No 282/2011 (3) shall be limited to the value added tax for such goods and services which are for official use by EATRIS ERIC, exceed the value of EUR 250, and are wholly paid for and procured by EATRIS ERIC. Procurement by individual Members shall not benefit from these exemptions. Without prejudice to paragraphs 2 and 3 no further limits shall apply. 2. Tax exemptions shall apply to non-economic activities, not to economic activities. 3. Tax exemptions shall be applied to goods and services for the scientific, technical and administrative operations undertaken by EATRIS ERIC in line with its principal tasks. This shall also include expenses for conferences, workshops and meetings directly linked to the official activities of EATRIS ERIC. However travel and accommodation expenses shall not be covered by tax exemptions. Article 27 Data policy The Executive Board shall submit to the Board of Governors for approval Rules of Procedure for data policy in relation to users of EATRIS ERIC infrastructure, the national centres and third parties such as universities, research institutes and industry, with due respect for existing licences. CHAPTER VIII DURATION, WINDING UP, DISPUTES, SET UP PROVISIONS Article 28 Duration The duration of EATRIS ERIC shall be indefinite. Article 29 Winding up 1. The winding up of EATRIS ERIC shall be decided by the Board of Governors. 2. The European Commission shall be notified within 10 calendar days of the decision to wind up EATRIS ERIC. 3. Assets remaining after payment of EATRIS ERIC debts shall be apportioned among the Members in proportion to their accumulated annual contribution to EATRIS ERIC. 4. The European Commission shall be notified within 10 calendar days of the closure of the winding up procedure. Article 30 Language and availability of the Statutes 1. These Statutes shall be kept up to date and made publicly available on the website of the ERIC and at its statutory seat. 2. These Statutes shall be deemed authentic in all official language versions of the Members listed in Appendix 1. These Statutes shall also be deemed authentic in the official language versions of the Members States not listed in Appendix 1. No language version shall prevail. 3. When language versions are not provided for through the Official Journal in case of amendments to these Statutes that do not require a Commission Decision, they shall be provided by EATRIS ERIC Coordination and Support Office. Article 31 Set-up provisions 1. A constitutional meeting of the Board of Governors shall be called by the host country as soon as possible but no later than within 45 calendar days after the entry into force of the decision of the European Commission setting up EATRIS ERIC. Without prejudice to paragraph 2 no decisions shall be taken by the Board of Governors before at least five Members have joined EATRIS ERIC. 2. The host country shall notify the Founding Members of any specific urgent legal action that needs to be taken on behalf of EATRIS ERIC before the constitutional meeting is held. Unless a Founding Member objects within five working days of being notified, the legal action shall be carried out by a person duly authorised by the host state. 3. As of the establishment of EATRIS ERIC, its bodies shall act in accordance with the Standing Orders and Rules of Procedure as approved by the EATRIS Governing Board during the EATRIS Transition Phase. (1) OJ L 134, 30.4.2004, p. 114. (2) OJ L 347, 11.12.2006, p. 1. (3) OJ L 77, 23.3.2011, p. 1. Appendix 1 List of members, observers, and the entities representing them Members Representing entity Czech Republic Ministry of Education, Youth and Sports (MEYS) Kingdom of Denmark Danish Agency for Science, Technology and Innovation (DASTI) Republic of Estonia Ministry of Education and Research of the Republic of Estonia (MER EE) Italian Republic Istituto Superiore di Sanità (ISS) Kingdom of the Netherlands ZonMW Republic of Finland Ministry of Education and Culture (OKM) Observers Representing entity Kingdom of Spain Instituto de Salud Carlos III (ISCIII) French Republic Commissariat à lEnergie Atomique et aux Energies Alternatives (CEA) Appendix 2 Annual financial contribution Financial Commitment for the first five years For the initial five-year period after the establishment of EATRIS ERIC the principles for the financial commitment shall be as follows: (a) initial commitment for Founding Members is five years (no initial commitment for Observers); (b) Founding Members can sign up for less than five years subject to a 25 % increase in the annual contribution; the excess shall be refunded if the Member completes the five years; (c) the initial financial contribution for EATRIS ERIC year one is based on the agreed five-year budget excluding any uncertain income source (e.g. the income from user fees) and a minimum of five Founding Members; (d) the Netherlands will pay an additional hosting contribution of EUR 500 000 in 2013, 2014 and 2015. After 2015 the Netherlands will pay an additional hosting contribution of EUR 50 000; (e) no Founding Member that has made a five-year commitment will pay more than EUR 140 000 per year (maximum threshold); (f) the minimum membership contribution will not be lower than EUR 50 000 per year regardless of the number of Members and regardless of any income generated by EATRIS ERIC (minimum threshold); (g) the financial contribution for EATRIS ERIC year two is based on the agreed five-year budget minus the net result from income in EATRIS ERIC year one. The financial contribution for EATRIS ERIC year three is based on the agreed five-year budget minus the net result from income in EATRIS ERIC year two etc.; (h) a new Member starts at the financial contribution level it would have paid as a Founding Member in EATRIS ERIC year one plus 25 %. After accession year one it pays the financial contribution set for EATRIS ERIC year two plus 25 % etc. If the new Member completes a five-year term, the excess is refunded; (i) Founding Observers with institutes not participating in all activities of EATRIS and not providing services pay 25 % of the annual financial contribution of what they would have paid as Founding Members; a Founding Observer with institutes participating in all activities of EATRIS including providing services shall pay the same annual financial contribution as a Founding Member; (j) a Founding Observer that pays 25 % of the annual financial contribution and that becomes a Member starts at the same level of financial contribution it would have paid as a Founding Member in EATRIS ERIC year one. After accession year one it pays the financial contribution set for EATRIS ERIC year two etc. If it completes a five-year term, the Observer financial contribution shall be refunded; (k) a new Observer starts at 25 % of the financial contribution it would have paid as a Founding Member in EATRIS ERIC year one. In year two of its accession it pays 25 % of what it would have paid in EATRIS ERIC year two etc.; (l) if a new Observer becomes a Member it pays the financial contribution it would have paid as a Founding Member in EATRIS ERIC year one; after accession year one it pays the financial contribution set for EATRIS ERIC year two etc.; if the new Member completes a five-year term, the Observer financial contribution shall be refunded; (m) if new Members or Observers join or if an Observer becomes a Member the financial contribution for that year is recalculated for all Members and Observers; (n) in all cases mentioned in points (a) to (m), the 25 % extra financial contribution shall be held in reserve. |
Name: Commission Regulation (EEC) No 1478/83 of 7 June 1983 fixing for Great Britain the level of the variable slaughter premium for sheep and the amounts to be charged on products leaving that region
Type: Regulation
Date Published: nan
9 . 6 . 83 No L 151 /21Official Journal of the European Communities COMMISSION REGULATION (EEC) No 1478/83 of 7 June 1983 fixing for Great Britain the level of the variable slaughter premium for sheep and the amounts to be charged on products leaving that region THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Whereas it follows from the application of the rules laid down in Article 9 ( 1 ) of Regulation (EEC) No 1837/80 and in Article 4 ( 1 ) and (3) of Regulation (EEC) No 2661 /80 that the variable slaughter premium for sheep certified as eligible in the United Kingdom, and the amounts to be charged on products leaving Great Britain during the period 16 to 22 May 1983, shall be as set out in the Annexes hereto ; Whereas it should be recalled that Commission Regu lation (EEC) No 3191 /80 of 9 December 1980 (*), as last amended by Regulation (EEC) No 1 558/82 (*), fixed transitional measures concerning non-recovery of the variable slaughter premium for sheepmeat and goatmeat products exported from the Community, Having regard to Council Regulation (EEC) No 1837/80 of 27 June 1980 on the common organization of the market in sheepmeat and goatmeat ( ! ), as last amended by Regulation (EEC) No 1 195/82 (2), Having regard to Commission Regulation (EEC) No 2661 /80 of 17 October 1980 laying down detailed rules for applying the variable slaughter premium for sheep (3), as amended by Regulation (EEC) No 1238/82 (4), and in particular Articles 3 ( 1 ) and 4 ( 1 ) thereof, HAS ADOPTED THIS REGULATION : Article 1 For sheep or sheepmeat certified in Great Britain as eligible for the variable slaughter premium during the period 16 to 22 May 1983, the level of the premium shall be as set out in Annex I hereto. Whereas the United Kingdom is the only country paying the variable slaughter premium ; whereas the United Kingdom has decided to pay it only in Region 5 (Great Britain), within the meaning of Article 3 ( 1 ) of Regulation (EEC) No 1837/80 ; whereas it is necessary therefore for the Commission to fix, for the period 16 to 22 May 1983 , the level of the premium and the amount to be charged on products leaving that region ; Article 2 Without prejudice to the provisions of Regulation (EEC) No 3191 /80 , for products referred to in Article 1 (a) of Regulation (EEC) No 1837/80 which left Great Britain during the period 16 to 22 May 1983 , the amounts to be charged shall be as set out in Annex II hereto . Whereas Article 3 ( 1 ) of Regulation (EEC) No 2661 /80 stipulates that the level of the variable slaughter premium is to be fixed each week by the Commission for each Member State concerned or, in the case of the United Kingdom, for Great Britain ; Whereas Article 4 ( 1 ) of Regulation (EEC) No 2661 /80 lays down that the amount to be charged on products leaving the Member States concerned or, in the case of the United Kingdom, Great Britain shall be fixed weekly by the Commission for each Member State concerned and in the case of the United Kingdom for Great Britain ; Article 3 This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. It shall apply with effect from 16 May 1983 . ( ) OJ No L 183 , 16 . 7 . 1980, p. 1 . 2 OJ No L 140, 20 . 5 . 1982, p. 22 . (3) OJ No L 276, 20 . 10 . 1980, p . 19 . ( 5) OJ No L 332, 10 . 12 . 1980 , p . 14 . (4) OJ No L 143 , 20 . 5 . 1982, p. 10 . (6) OJ No L 172, 18 . 6 . 1982, p. 21 . No L 151 /22 Official Journal of the European Communities 9 . 6 . 83 This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels, 7 June 1983 . For the Commission Poul DALSAGER Member of the Commission 9 . 6 . 83 Official Journal of the European Communities No L 151 /23 ANNEX I Level of variable slaughter premium for certified sheep in Great Britain for the week commencing 16 May 1983 Description Premium Certified sheep or sheepmeat 0 ECU per 100 kilograms of estimated or actual dressed carcase weight (') (') Within the weight limits laid down by Great Britain . ANNEX II Amount to be charged for products leaving Great Britain during the week commencing 16 May 1983 (ECU/100 kg) CCT heading No Description Charge Live weight 01.04 B Live sheep and goats other than pure-bred breeding animals 0 Il Net weight 02.01 A IV a) Meat of sheep or goats, fresh or chilled : 1 . Carcases or half-carcases 0 2. Short forequarters 0 3 . Chines and/or best ends 0 4. Legs 0 5. Other : aa) Unboned (bone-in) 0 bb) Boned or boneless 0 02.01 A IV b) Meat of sheep or goats, frozen : 1 . Carcases or half-carcases 0 2. Short forequarters 0 3 . Chines and/or best ends 0 4. Legs 0 5 . Other : aa) Unboned (bone-in) 0 bb) Boned or boneless 0 02.06 C II a) Meat of sheep or goats, salted in brine, dried or smoked : 1 . Unboned (bone-in) 0 2. Boned or boneless 0 |
Exhibit 10.3
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT (this “Agreement”), dated April 24, 2015, is
entered into by and between Windstream Services, LLC, a Delaware limited
liability company (“WIN”), and CSL National, LP, a Delaware limited partnership
(“CSL”), on behalf of itself and its Affiliates, including Talk America
Services, LLC (“TAS”). WIN and CSL are each sometimes referred to herein as a
“Party” and, collectively, as the “Parties”.
WHEREAS, CSL and WIN have entered into that certain Separation and Distribution
Agreement, dated March 26, 2015 (the “Distribution Agreement”; capitalized terms
used but not defined herein shall have the meanings ascribed thereto in the
Distribution Agreement), which provides, among other things, that WIN and CSL
shall enter into a Transition Services Agreement in connection with the
transactions contemplated by the Distribution Agreement;
WHEREAS, WIN and its Affiliates currently provide and provided as of the date of
the Distribution Agreement certain services in support of the CSL Business; and
WHEREAS, to facilitate the transition of the CSL Business to CSL, the Parties
desire that, for a limited transition period, WIN and its Affiliates provide
certain services to CSL and its Affiliates on the terms and conditions set forth
herein.
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, agree as follows:
1. Description of Services.
(a) Services. Subject to the terms and provisions of this Agreement and solely
for the purpose of facilitating the transition of the CSL Business to CSL, WIN
shall (or shall cause its Affiliates to) provide to CSL the services set forth
on Exhibit 1 hereto (as such Exhibit 1 may be amended by the mutual agreement of
the Parties in writing from time to time, the “Services Attachment”) (the
“Services”).
(b) Purchase of Additional or Modified Services. From time to time, CSL may
request WIN to provide additional or modified Services that are not described in
Exhibit 1, but are of a similar scope or nature as those used by WIN relating to
the CSL Business prior to the Distribution Date. WIN will use commercially
reasonable efforts to accommodate any reasonable requests by CSL to provide such
additional or modified Services. In order to initiate a request for additional
or modified Services, CSL shall submit a request in writing to WIN specifying
the nature of the additional or modified Services and requesting a cost estimate
(based on the general parameters set forth in this Agreement) and time frame for
completion. WIN shall respond within ten (10) business days to such written
request; provided that, subject to the second sentence of Section 1.3, such ten
(10) business day period shall be subject to a reasonable extension if, due to
the volume, frequency or type of requests submitted by CSL, WIN’s preparation of
responses to such requests is materially interfering with, or is likely to
materially interfere with, WIN’s normal business activities. If WIN can
accommodate CSL’s request to provide such additional or modified Services, and
if CSL accepts the terms and conditions set
1
forth in WIN’s response to such request, then such additional or modified
Services shall be provided hereunder and according to the terms agreed to by the
Parties in a written amendment to this Agreement, which shall be consistent to
the greatest extent practicable with the terms of this Agreement.
(c) Ancillary Services. Any functions, responsibilities, activities or tasks
that are not specifically described in this Agreement or the Exhibit hereto, but
are reasonably required for the proper performance and delivery of the Services
(including any additional or modified Services), and are a necessary or inherent
part of such Services, as performed by WIN, in the ordinary course of business,
shall be deemed to be implied by and included within the scope of such Services,
subject to any limitations set forth in this Agreement or the Exhibit hereto, to
the same extent and in the same manner as if specifically described in this
Agreement.
(d) Modifications. Unless otherwise provided for in this Agreement, if CSL makes
any change in the processes, procedures, practices, networks, equipment,
configurations, or systems pertaining to the CSL Business, and such change has a
materially adverse impact on WIN’s ability to provide any of the Services, then
WIN shall be excused from performance of any such affected Service until CSL
mitigates the material adverse impact of such change or the Parties enter into
an agreement to purchase additional or modified services that may be
necessitated by such changes, and CSL shall be responsible for all direct
expenses incurred by WIN in connection with the cessation and, if applicable,
the resumption of the affected Services.
(e) Transition Plan. The Parties shall agree on a written transition plan after
the execution of this Agreement (the “Transition Plan”) which shall include:
(i) a plan and timetable for the migration of CSL away from the Services;
(ii) assistance in relation to migration (including the migration of data and
the “Carve-Out Assistance” listed in the Services Attachment); (iii) information
in relation to the operation of the relevant IT systems and the interface
between such IT systems for the purpose of implementing the migration referred
to in this Section (including the applicable Services listed in the Services
Attachment); (iv) respective responsibilities of the Parties in carrying out the
migration; and (v) safeguards to ensure minimal disruption to both Parties’
ongoing businesses during the migration. Each Party shall implement and comply
with its obligations under the Transition Plan. Except as may otherwise be
expressly provided in the Transition Plan or Schedule of Services, as
applicable, CSL shall bear all costs associated with the migration by CSL away
from the Services provided by WIN.
(f) Representatives.
(i) Transition Representatives. Each Party will designate an individual who
shall be the primary interface for the purposes of coordinating the Services
provided hereunder (the “Transition Representative”). Such individual shall
(A) coordinate with the other Party and their Service Representatives (as
defined below) to provide the relevant contacts in that Party’s applicable
departments for the purposes of implementing and performing the Services, and
(B) evaluate in consultation with the other Party’s Transition Representative
when a particular Service may be terminated. The Transition Representative shall
perform the duties required hereby in a professional and timely manner. Each
Party may change its Transition Representative by giving written notice to the
other in accordance with the notice provisions of this Agreement.
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(ii) Role of the Service Representative. Each Party shall provide up to two
(2) individuals (each, a “Service Representative”) who are familiar with that
Party’s business and who will be that Party’s primary points of contact in
dealing with the other Party’s Service Representatives under this Agreement and
who will have the authority and power to make decisions with respect to actions
to be taken by such Party with respect to the provision of Services under this
Agreement. Each Party may change its Service Representative(s) by giving written
notice to the other in accordance with the notice provisions of this Agreement.
(iii) Obligations of the Service Representatives. Each Party shall, or shall
ensure that their Service Representative, as applicable, respond within a
commercially reasonable time to any reasonable requests by the other Party or
its Service Representative for such Party’s Service Representative to provide
directions, instructions, approvals, authorizations, decisions or other
information reasonably necessary for WIN to perform any Services; provided,
however, any request contemplated in Section 1(b) of this Agreement shall be
delivered by and to, and accepted or rejected by, the Transition
Representatives.
(iv) Meetings of the Transition and Service Representatives. The Transition
Representatives and the Service Representatives shall meet on a monthly basis
(which meeting may be held telephonically) during the Term. The purpose of such
meetings shall be to discuss the Services and each Party’s obligations under
this Agreement, including operational details, transitional matters, dispute
resolution and any other issues related to this Agreement. Such meetings will
take place at mutually agreed locations (including by teleconference) and may
include a reasonable number of additional representatives from either Party.
(g) Standard of the Provision of Services. WIN shall provide the Services in a
manner and at a level as more particularly described in Section 8 of this
Agreement. WIN shall provide Services in accordance in all material respects
with all applicable Laws.
2. Term.
(a) The term of this Agreement shall commence on the date hereof and, unless
terminated earlier in accordance with Section 12, expire on the latest end date
specified in Exhibit 1 (the “Term”). Thereafter, if CSL desires and WIN agrees
to continue to perform any of the Services after the Term has expired, the
parties shall negotiate in good faith to determine an amount that compensates
WIN for all of its costs for such performance. However, should WIN fail to
complete performance of any billing and/or collection Service(s), including the
logical billing database separation, within the Term identified in Exhibit 1 for
such Service(s), and such failure does not result from the actions or inactions
of CSL or a force majeure event (as defined in Section 16 herein), the Term for
such incomplete Service(s) shall be extended to accommodate complete performance
without additional charge to CSL. The Services so performed by WIN after the
expiration of the Term shall continue to constitute Services under this
Agreement and be subject in all respects to the provisions of this Agreement for
the duration of the agreed-upon extension period.
(b) WIN shall (or shall cause its Affiliates to) provide each Service for the
period commencing on the date hereof and ending on the earlier to occur of
(i) the expiration of the Term, (ii) the Parties mutually agree in writing that
such Service is no longer required to be provided by WIN or its Affiliates, or
(iii) the date upon which the trigger event for termination occurs for such
Service as set forth in the Services Attachment, subject to earlier termination
of this Agreement or termination of all or a portion of the Services, as set
forth in Section 12 hereof.
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Notwithstanding the foregoing, CSL shall (and shall cause its Affiliates to) use
commercially reasonable efforts to transition the Services to another,
non-transitional provider as quickly as practicable or, as applicable, to cause
CSL and/or its Affiliates to provide the Services.
3. Consideration for Services. As consideration for the Services, CSL shall pay
to WIN the service fee for the Services as set forth in the Services Attachment
and for all out-of-pocket costs and expenses from third parties actually
incurred by WIN in the provision of the Services that are explicitly set forth
in the applicable Services Attachment or otherwise approved in writing
(including by electronic mail) by CSL’s Transition Representative or Service
Representatives prior to WIN incurring such out-of-pocket expense; provided,
however, WIN shall be excused from performance for Services to the extent WIN’s
performance is delayed as a result of CSL’s pre-approval process for third-party
costs and expenses (the “Service Fee”).
4. Terms of Payment.
(a) Not later than thirty (30) calendar days following the end of each calendar
month during the Term, WIN shall submit to CSL in writing an invoice setting out
in reasonable detail each Service performed by WIN during the preceding month
and the related Service Fee. CSL shall pay the amount shown on each such invoice
no later than thirty (30) calendar days after receipt of such invoice; payment
shall be made without withholding or deduction of any kind. If such amount is
not received by WIN within such 30-day period, CSL shall also pay WIN interest
from and after the last day of such 30-day period following receipt of such
invoice, at a rate per annum equal to the prime lender rate as reported on the
last day of the calendar month in respect of such invoice by the Wall Street
Journal.
(b) Any transition, excise, sales, use or similar tax charged to, assessed on or
incurred by the rendering of the Services shall be split equally between WIN, on
the one hand, and CSL, on the other hand, and CSL’s share shall be paid to WIN
in addition to the Service Fees; provided, however, WIN shall be solely
responsible for its own income taxes.
(c) Should CSL dispute in good faith any portion or the entire amount due on any
invoice or require any adjustment to an invoiced amount, CSL shall promptly
notify WIN in writing of the nature and basis of the dispute and/or adjustment
within fifteen (15) business days after CSL’s receipt of such invoice. If CSL
fails to notify WIN within such 15-day period, the invoiced amount shall be
deemed to be accurate and correct and shall not be subject to dispute or contest
by CSL or any Affiliate thereof. In the event CSL timely delivers notice of a
dispute and/or adjustment, the Parties shall use their reasonable best efforts
to resolve such matter within thirty (30) calendar days. WIN shall reimburse CSL
within fifteen (15) business days following, as applicable (i) agreement by the
Parties of any excess payment made by CSL in respect of Services, or
(ii) resolution of any disputed amounts paid in excess of the amount of the
costs of such Services, in either case, with interest from and after the date
payment was made by CSL through, but excluding, the date of reimbursement by
WIN, at the rate per annum equal to the prime lender rate as reported on the
last day of the calendar month in respect of the applicable invoice by the Wall
Street Journal.
(d) WIN and CSL agree to remit payments to each other in accordance with the
terms and conditions set forth in the Billing and Remittance Agreement between
the Parties.
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5. Method of Payment. All amounts payable by CSL hereunder shall be remitted to
WIN in United States dollars to a bank to be designated in the invoice or
otherwise in writing by WIN, unless otherwise provided for and agreed upon in
writing by the Parties.
6. Accounting Records and Documents.
(a) WIN or its Affiliates shall be responsible for maintaining full and accurate
accounts and records of all Services rendered pursuant to this Agreement and
such additional information as CSL may reasonably request for purposes of their
internal bookkeeping, accounting, operations and management. WIN shall maintain
its accounts and records in accordance with past practice; provided, that, to
the extent full and accurate information is not relied upon by WIN in the
ordinary course of business with respect to any particular item, unit or
market/sub-market, WIN shall maintain such accounts and records on the basis of
appropriate and reasonable allocations. WIN shall keep such accounts and records
available, during all reasonable business hours during the Term of this
Agreement, at its principal offices, or at such other location as required by
applicable Laws, for audit, inspection and copying by CSL and Persons, upon
reasonable notice, authorized by them or any governmental agency having
jurisdiction over CSL; provided, that, the costs or expenses incurred by CSL or
WIN for any such audit, inspection or copying shall be the sole responsibility
of CSL.
(b) At any time during the Term of this Agreement, CSL, or its authorized
independent auditors or counsel, shall have the right to inspect and audit WIN’s
accounts, books and records relating to the Services upon five (5) business days
prior written notice during regular business hours and without undue disruption
of the normal operations of WIN.
(c) All information CSL, its Affiliates and its other authorized Persons gain
access to pursuant to this Section 6 shall be subject to the terms of the
confidentiality provisions set forth in Section 13 of this Agreement.
7. Consents.
(a) If any consent or approval of, or notice to, any third party is required to
implement the terms of this Agreement (“Third Party Consent”), CSL and WIN shall
each use their respective reasonable endeavors to obtain any Third Party Consent
as soon as reasonably practicable, each at the cost of CSL. If any such Third
Party Consent is refused or not obtained within three (3) months after the
Distribution Date, the Parties shall co-operate in good faith to agree and
implement reasonable alternative arrangements which achieve the same commercial
effect as that contemplated by this Agreement.
(b) If either Party so requests, the other Party shall provide all reasonable
assistance in obtaining any Third Party Consent and neither Party will
unreasonably do or omit to do anything which would cause any relevant third
party to refuse to grant or to terminate or revoke any Third Party Consent.
8. Performance Standards. In providing the Services to CSL under this Agreement,
WIN shall (and shall cause its Affiliates to) provide the Services in a timely
and professional manner generally consistent with the past practices of WIN and
its Affiliates in providing the same or similar Services to the CSL Business
prior to the execution of the Distribution Agreement and in conformance in all
material respects with any service levels set forth in the applicable Services
Attachment. For purposes of clarity, the Parties agree that the
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measure of such past performance shall be, except as otherwise agreed in writing
by the Parties, that WIN shall provide each of the Services in substantially the
same manner and with substantially the same level of care and service as the
manner and the level of care and service with which such Service was provided
during 2014.
9. No Representations or Warranties. WIN MAKES NO EXPRESS OR IMPLIED WARRANTY
WITH RESPECT TO THE TRANSITION SERVICES, AT LAW OR IN EQUITY, INCLUDING, WITHOUT
LIMITATION, WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE, AND ANY AND ALL REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY
DISCLAIMED.
10. Status of Employees and Facilities; Proprietary Rights.
(a) Whenever WIN utilizes its (or its Affiliates’) employees to perform the
Services for CSL pursuant to this Agreement, such employees shall at all times
remain subject to the direction and control of WIN (or its Affiliates), and CSL
shall have no liability to such Persons for their welfare, salaries, fringe
benefits, legally required employer contributions and tax obligations by virtue
of the relationships established under this Agreement. WIN shall have complete
discretion to supervise and manage such employees and any third-party
contractors providing the Services on behalf of WIN, and WIN is not required to
continue employment for any specific individual personnel of WIN or its
Affiliates or to maintain engagements with specific third-party contractors. No
equipment or facility of WIN used in performing the Services for or subject to
use by CSL shall be deemed to be transferred, assigned, conveyed or leased by
such performance or use. WIN shall maintain appropriate security, maintenance
and insurance coverage on such equipment or facility.
(b) Except as set forth in the Services Attachment, to the extent WIN or its
Affiliates use any proprietary intellectual property rights owned by or licensed
to WIN or its Affiliates in providing the Services, such proprietary
intellectual property rights and any derivative works thereof, or modifications
or improvements thereto, conceived or created as part of the provision of
Services (“Improvements”) will, as between the Parties, remain the sole property
of WIN or its Affiliate, as applicable, unless any such Improvement was created
for CSL pursuant to a certain Service. If any Improvement is created for CSL
pursuant to a certain Service or other proprietary intellectual property rights
are created specifically for CSL pursuant to Services provided under the
Services Attachment (a “CSL Specific Improvement”), such CSL Specific
Improvement shall be owned by CSL. The applicable Party will and hereby does
assign to the applicable owner designated above, and agrees to assign
automatically in the future upon first recordation in a tangible medium or first
reduction to practice, all of such Party’s right, title and interest in and to
all Improvements, if any. All rights not expressly granted herein are reserved.
11. Indemnification.
(a) From and after the date of this Agreement, WIN shall indemnify, defend and
hold harmless the CSL Indemnified Parties from and against all Liabilities
asserted against, imposed upon or incurred by the CSL Indemnified Parties
resulting from, arising out of, based upon or otherwise in respect of any third
party claim arising out of the gross negligence or willful misconduct of WIN in
the performance of its obligations under this Agreement, except to the extent
any such Liabilities arise out of or result from the gross negligence or willful
misconduct of CSL.
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(b) From and after the date of this Agreement, CSL shall indemnify, defend and
hold harmless the WIN Indemnified Parties from and against all Liabilities
asserted against, imposed upon or incurred by the WIN Indemnified Parties
party claim arising out of the gross negligence or willful misconduct of CSL in
misconduct of WIN.
(c) In the event WIN (or any WIN Indemnified Party) or CSL (or any CSL
Indemnified Party) shall have a claim for indemnity against the other party
under the terms of this Agreement, the parties shall follow the procedures set
forth in Article VII of the Distribution Agreement as if fully set forth herein.
(d) Independent of, severable from, and to be enforced independently of any
other enforceable or unenforceable provision of this Agreement, NO PARTY WILL BE
LIABLE TO ANY OTHER PARTY (NOR TO ANY PERSON CLAIMING RIGHTS DERIVED FROM ANY
OTHER PARTY’S RIGHTS) FOR PUNITIVE, EXEMPLARY, SPECIAL, CONSEQUENTIAL OR
INDIRECT DAMAGES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, ANY LOSS OF USE,
LOSS OF BUSINESS, LOSS OF PROFIT OR LOSS OF GOODWILL. Further, indemnification
shall be limited to actual damages which in no event shall exceed the total
amount of compensation payable to WIN hereunder.
(e) Except as otherwise provided in this Section 11, WIN’s sole responsibility
to CSL for errors or omissions in providing the Services shall be to re-perform
such Services promptly and properly in a diligent manner, at no additional cost
or expense; provided, however, that each Party shall use reasonable best efforts
to detect any such errors or omissions and promptly advise the other Party of
any such error or omission of which it becomes aware.
12. Termination.
(a) This Agreement may be terminated prior to expiration of the Term in
accordance with the following:
(i) upon the mutual written agreement of the Parties;
(ii) by either WIN, on the one hand, or CSL, on the other hand, (i) for material
breach of any of the terms hereof by WIN or by CSL, respectively, if such breach
is curable within thirty (30) days and such breach shall not have been cured
within thirty (30) calendar days after written notice of breach is delivered to
the defaulting Party and (ii) if such breach is not curable within thirty
(30) days, such breach shall not have been addressed by the defaulting Party
through a good faith plan to cure such breach;
(iii) CSL shall fail to pay for Services in accordance with the terms of this
Agreement (and such payment is not disputed by CSL in good faith in accordance
with Section 4(c) hereof) and such breach is not cured within fifteen
(15) calendar days after written notice of breach is delivered to CSL, including
by electronic mail to CSL’s Transition Representative; or
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(iv) by either WIN, on the one hand, or CSL, on the other hand, upon written
notice to WIN, on the one hand, or CSL, on the other hand, if the other Party
files a proceeding in bankruptcy, receivership, rehabilitation or
reorganization, or for composition, liquidation or dissolution or for similar
relief, or there is a filing against such person of any such proceeding which is
not dismissed within sixty (60) calendar days after the filing thereof.
(b) In addition, this Agreement may be terminated solely with respect to any one
or more Service(s) or additional service(s) provided hereunder prior to the
expiration of the Term in accordance with the following:
(i) If CSL desires to terminate a Service, CSL shall complete a Service
Termination Request Form, substantially in the form attached hereto as Exhibit
2. In completing the Service Termination Request Form, CSL shall refer to the
Service it wishes to terminate (the “Terminated Service”) as it is specifically
named in the Services Attachment or Transition Plan, as applicable.
(ii) Unless otherwise set forth on the Service Termination Request Form, WIN
shall cease such Terminated Service(s) or additional service(s) as soon as
practicable after WIN’s receipt of the Service Termination Request Form, but in
no event later than thirty (30) calendar days after WIN has received such
written notification from CSL.
(iii) If a Service is terminated, the Services Attachment and/or Transition Plan
shall be updated, as applicable, to reflect such termination.
(c) Immediately following expiration or termination of this Agreement, each
Party shall return to the other Party (and make no further use of) all
proprietary information of the other Party in each Party’s possession or
control, including, in the case of CSL, any WIN Confidential Information and, in
the case of WIN, any CSL Confidential Information. Likewise, except as necessary
to comply with applicable law, within thirty (30) days following any such
termination or expiration, each Party shall return to the other Party (and make
no further use of) all copies of all proprietary information of the other Party
in each Party’s possession or control, including, in the case of CSL, any WIN
Confidential Information and, in the case of WIN, any CSL Confidential
Information.
13. Confidentiality. Each Party acknowledges that during the course of providing
Services hereunder, or in the course of receiving Services hereunder, the other
Party may disclose to it certain confidential information. Each Party agrees to
use such confidential information only for the purposes for which it was
disclosed and in accordance with the terms and conditions set forth in
Section 8.2 of the Distribution Agreement and the obligations hereunder shall
survive until the earlier of (i) five (5) years after the date of final
disclosure of confidential information hereunder or (ii) so long as may be
required by Law.
14. Independent Contractor Status. Each Party shall be deemed to be an
independent contractor to the other Party. Nothing contained in this Agreement
shall create or be deemed to create an employment, agency, joint venture or
partnership relationship between WIN and CSL. The terms of this Agreement are
not intended to cause any of the Parties and their Affiliates to become a joint
employer for any purpose. Each of the Parties agrees that the provisions of this
Agreement as a whole are not intended to, and do not, constitute control of the
other Party (or any Affiliates thereof) or provide it with the ability to
control such other Party (or any Affiliates thereof), and each Party expressly
disclaims any right or power under this Agreement to exercise any power
whatsoever over the management or policies of the other Party (or any Affiliates
thereof). Nothing in this Agreement shall oblige either Party to act in breach
of the requirements of any Law applicable to it, including securities and
telecommunications laws,
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written policy statements of securities commissions, telecommunications and
other regulatory authorities, and the by-laws, rules, regulations and written
policy statements of relevant securities and self-regulatory organizations.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO THE CHOICE
OF LAW PROVISIONS THEREOF).
16. Force Majeure. Neither Party shall be held liable for any delay or failure
in performance of any part of this Agreement (other than outstanding payment
obligations hereunder) from acts of God, acts of civil or military authority,
embargoes, epidemics, war, terrorist acts, riots, insurrections, fires,
explosions, earthquakes, nuclear accidents, floods, strikes, and power
blackouts. Upon the occurrence of a condition described in this Section 16, the
Party whose performance is prevented shall give written notice to the other
Party and the Parties shall promptly confer, in good faith, to agree upon
equitable, reasonable action to minimize the impact, on both Parties, of such
conditions.
17. Dispute Resolution Procedures.
(a) Other than such disputed matters addressed by Section 4(c), if a dispute
arises between the Parties with respect to the terms and conditions of this
Agreement, a Party’s performance of its obligations hereunder, or any matter
relating to the Services (“Dispute”), the Parties agree to use and follow this
dispute resolution procedure described in this Section 17 prior to initiating
any judicial action.
(b) Claims Procedure. If a Party shall have a Dispute, such Party shall provide
written notice to the other Party in accordance with the provisions of
Section 19 of this Agreement, in the form of a claim identifying the nature of
the Dispute in sufficient detail to describe the basis for the claim (a “Dispute
Notice”). Upon receipt of the Dispute Notice, the other Party shall have five
(5) calendar days to provide a written response to the Dispute Notice (the
“Response”). The Party providing the Dispute Notice shall have an additional
five (5) calendar days following its receipt of the Response to accept the
proposed resolution or to request implementation of the procedure set forth in
Section 17(c) below (the “Escalation Procedure”). Failure to comply with the
time limitations set forth in this Section 17 may result in the implementation
of the Escalation Procedures.
(c) Escalation Procedure. At the written request of a Party involved in the
Dispute and in compliance with Section 17(b), each Party shall appoint a
knowledgeable, responsible representative to negotiate in good faith to resolve
such Dispute (the “Representatives”). The Parties intend that the
Representatives shall be empowered to decide the issues presented in any
Dispute. The Representatives will attempt to resolve the Dispute within five
(5) business days of receiving the written request. If the Dispute cannot be
resolved within that time period, then the Parties may resort to judicial action
or other remedies. During the time period of any Dispute, each Party shall
continue to perform its respective obligations under this Agreement (except in
the event CSL fails to pay amounts due in accordance with Section 4 hereunder).
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18. Amendments; Waivers. No alteration, modification or change of this
Agreement, including the Services set forth on the Services Attachment, shall be
valid except by an agreement in writing executed by the Parties. Except as
otherwise expressly set forth herein, no failure or delay by any Party in
exercising any right, power or privilege hereunder (and no course of dealing
between or among any of the Parties) shall operate as a waiver of any such
right, power or privilege. No waiver of any default on any one occasion shall
constitute a waiver of any subsequent or other default. No single or partial
exercise of any such right, power or privilege shall preclude the further or
full exercise thereof
19. Notices. All notices, demands and requests required or permitted to be given
under the provisions of this Agreement shall be (i) in writing, (ii) sent by
facsimile (with receipt personally confirmed by telephone), delivered by
personal delivery, or sent by commercial delivery service or certified mail,
return receipt requested, (iii) deemed to have been given on the date telecopied
with receipt confirmed, the date of personal delivery, or the date set forth in
the records of the delivery service or on the return receipt, and (iv) addressed
as follows:
If to WIN:
Windstream Services, LLC
4001 Rodney Parham Rd.
Little Rock, AR 72212
Attn: General Counsel
Fax No.: 501-748-7400
If to CSL:
CSL National, LP
10802 Executive Center Drive
Benton Building Suite 300
Little Rock, AR 72211
Attn: General Counsel
or to any other or additional persons and addresses as the Parties may from time
to time designate in a writing delivered in accordance with this Section 19.
20. Assignment; Benefit and Binding Effect. No Party may assign this Agreement
without the prior written consent of each of the other Party; provided, however,
WIN, without the consent of CSL, may assign this Agreement to any Affiliate of
WIN, and CSL may, without the consent of WIN, assign this Agreement to any
Affiliate of CSL, but none of the assignments described in this sentence shall
relieve the assignor of its obligations hereunder and, provided further, that
any Party may make a collateral assignment of its rights hereunder for the
benefit of its lenders. This Agreement shall be binding upon and shall inure to
assigns. The provisions of this Agreement shall be for the exclusive benefit of
the Parties (and their successors and permitted assigns) and shall not be for
the benefit of any other Person.
21. Severability. If any provision of this Agreement or the application thereof
to any Person or circumstance shall be invalid or unenforceable to any extent,
the remainder of this Agreement and the application of such provision to other
Persons or circumstances shall not be affected thereby and shall be enforced to
the greatest extent permitted by Law. Upon such determination that any term or
other provision is invalid or unenforceable, the Parties shall
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negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the greatest extent
possible.
22. Entire Agreement. The Distribution Agreement, this Agreement, the Billing
and Remittance Agreement, and the Schedules and Exhibits hereto and thereto
collectively represent the entire understanding and agreement of the Parties
with respect to the subject matter of this Agreement. Each Party hereby
represents, acknowledges and agrees that it has not relied on any
representation, warranty, covenant, understanding, agreement, written or oral,
discussion, or negotiation not expressly contained herein or in the Distribution
Agreement in entering into this Agreement.
23. Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
24. Counterparts. This Agreement may be signed in counterparts with the same
effect as if the signature on each counterpart were upon the same instrument.
25. Specific Performance. The Parties acknowledge that monetary damages may not
be an adequate remedy for violations of this Agreement and that any Party may,
in its sole discretion and in addition to all other rights and remedies
available in law or in equity, to the extent permitted hereunder, apply for
specific performance or injunctive or other relief with a court of competent
jurisdiction as such court may deem just and proper in order to enforce this
Agreement or to prevent violation hereof and, to the extent permitted by
applicable Law, each Party waives any objection to the imposition of such
relief.
26. Remedies Cumulative. All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall, be
cumulative and not alternative, and the exercise or beginning of the exercise of
any right, power or remedy thereof by a Party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy by such
Party.
27. Fees and Expenses. Except as otherwise provided in this Agreement and the
Exhibit hereto, each Party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement, including all fees and expenses of counsel, accountants, agents, and
representatives, and each Party shall be responsible for all fees or commissions
payable to any finder, broker, advisor, or similar Person retained by or on
behalf of such Party.
28. Survival. The provisions of Sections 4, 8 through 28, 30 and 31 shall
survive the expiration or earlier termination of this Agreement.
29. General Cooperation. Subject to the terms and conditions set forth in this
Agreement, WIN’s obligations under this Agreement shall be conditioned on CSL
using all commercially reasonable efforts to provide information and
documentation sufficient for WIN to perform the Services as they were performed
prior to the date of this Agreement, and make available, as reasonably requested
by WIN, sufficient resources and timely decisions, approvals and acceptances in
order that WIN accomplish its obligations under this Agreement in a timely and
efficient manner.
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30. Controlling Provisions. If there is any conflict or inconsistency between
the terms and conditions set forth in the main body of this Agreement and the
Services Attachment, the provisions of the Services Attachment shall control
with respect to the rights and obligations of the Parties regarding the
Services. If there is any conflict or inconsistency between the terms and
conditions of this Agreement and the Distribution Agreement, the provisions of
this Agreement shall control solely with respect to the rights and obligations
of the Parties regarding the Services.
31. No Set-Off. The obligations under this Agreement shall not be subject to
set-off for non-performance or any monetary or non-monetary claim by any Party
or any of their respective Affiliates under any other agreement between the
Parties or any of their respective Affiliates.
32. Parties in Interest. Other than Persons entitled to receive indemnification
under Section 10, nothing in this Agreement, express or implied, is intended to
confer on any Person other than the Parties and their respective successors and
permitted assigns any rights or remedies under or by virtue of this Services
Agreement. Each CSL Indemnified Party other than CSL, and each WIN Indemnified
Party other than WIN, is an express, third-party beneficiary of Section 11.
33. Data Protection. Each Party shall comply with its obligations under all
applicable data protection laws in respect of the Services to be provided under
this Agreement. Each Party agrees in respect of any such personal data supplied
to it by the other Party that it shall: (a) only act on instructions from the
other Party regarding the processing of such personal data under this Agreement
and shall ensure that appropriate technical and organizational measures shall be
taken against unauthorized or unlawful processing of the personal data and
against accidental loss or destruction of, or damage to, the personal data; and
(b) comply with any reasonable request made by the other Party to ensure
compliance with the measures contained in this Section.
34. Further Assurances. Each Party shall perform all other acts and execute and
deliver all other documents as may be necessary to secure all necessary
authorizations and approvals of this Agreement by all applicable governmental
bodies in the United States of America, and as otherwise may be required to give
effect to the terms and conditions of this Agreement.
12
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
on its behalf on the day and year first above written.
CSL NATIONAL, LP By: CSL NATIONAL GP, LLC, its general partner By:
/s/ Kenneth A. Gunderman
Name: Kenneth A. Gunderman Title: President & CEO
WINDSTREAM SERVICES, LLC By:
/s/ Tony Thomas
Name: Tony Thomas Title: President & CEO
Signature Page to Transition Services Agreement
EXHIBIT 1
SERVICES ATTACHMENT – SUMMARY SERVICES DESCRIPTION
Business
Function
Category
Business Area
Service
Description
Term
Detailed Service Description
Billing - Payment Assurance Consumer CLEC Billing - Payment Processing:
Receivables/ Cash Collections (pAptis only) 18 months Following its
existing processes, WIN shall provide to TAS processing of payments through lock
box, E-Pay, IVR, Recurring, etc. Existing vendor SLAs will apply to TAS. No
special reporting will be provided. Billing - Payment Assurance Consumer CLEC
Billing Payment Processing : Payment investigation (pAptis only) 18 months
Following its existing processes, WIN shall provide to TAS Investigation of
misapplied payments. Vendor SLAs will apply to TAS. Financial Services -
Collections Consumer CLEC Treatment Collections – Inbound/ Outbound Calls
(pAptis only) 18 months WIN shall provide to TAS Online collection support
to include Inbound/Outbound call support to customers. Financial Services -
Collections Consumer CLEC Treatment and Collections (pAptis only)
18 months WIN shall provide to TAS offline collections support including
preparation of customer lists for dunning/demand notifications, write off
balances, bankruptcies, and referral to 3rd Party Collections agency. Financial
Services - Collections Consumer CLEC Treatment Collections – Customer
Adjustments/ Refund Reviews (pAptis only) 18 months WIN shall provide to
TAS customer adjustments & refund reviews. IT Infrastructure Consumer CLEC
Data Migration: Cutover Assistance, including PST files 30 days Assistance
in planning, testing, and executing the cut-over from WIN to TAS applications at
exit including the following applications:
- File shares, PST files IT Infrastructure Consumer CLEC PC Programs,
Desktop Hardware and support 30 days
WIN shall provide to TAS PC Programs and LAN support.
WIN shall provide to TAS desktop hardware, support, and image. Manage and
support all business applications installed on end user workstation to include
images, installs and supports tickets as required. Manage licensing, vendors and
configurations.
IT Infrastructure
Consumer
CLEC
Infrastructure: End User Migration 90 days Provide ninety (90) days of
email forwarding IT Infrastructure Consumer CLEC Network and
Communication: LAN/WAN Data Service 120 days Provide Local Area Network
(LAN) / Wide Area Network (WAN) data connectivity to the Richmond office as
required to access core business systems identified within this Schedule.
IT Infrastructure Consumer CLEC Network and Communication: IP Telephony
120 days Provide telephony services to individual users and manage MACs
(Moves/Adds/Changes) within the system as requested by TAS. WIN may charge back
to TAS any usage fees as long as they can be directly attributed to use of the
resources.
1
EXHIBIT 1
SERVICES ATTACHMENT – SUMMARY SERVICES DESCRIPTION, CONT’D
Business
Function
Category
Business Area
Service
Description
Term
Detailed Service Description
Marketing Consumer CLEC Fulfillment (pAptis only) 90 days (on- demand)
WIN shall provide to TAS fulfillment literature/collateral if needed.
Assuming TAS will provide direction regarding which specific pieces are
required. List of current pieces in use in ILEC markets is being provided for
TAS to review and aid that decision. Marketing Communications Consumer CLEC
Advertising Support (pAptis only) 90 days (on- demand) WIN shall
provide to TAS advertising support to include: promotional mailers, email, bill
inserts/onserts, and newspaper ads. Media placement service will also be
available. Marketing Consumer CLEC Product Management/ Marketing Support
(pAptis only) 90 days (on- demand) WIN shall provide to TAS Product
Management/Marketing support for all current products/services (directory
assistance, operator services, 3PV, TechHelp and PC Protect etc.) Sales
Consumer CLEC End of Life Equipment (pAptis only) 18 months WIN shall
provide to TAS End of Life equipment support - processes and procedures as
provided to WIN’s customers today. SEC Financial Reporting Finance and
Accounting CSL Annual and Quarterly Filings 120 days WIN shall provide
to CSL financial information and related footnote support, in a timely manner,
to facilitate CSL in the preparation of its Q1 2015 Form 10-Q filing. SEC
Financial Reporting Finance and Accounting Financial Information
120 days WIN shall provide to CSL financial information and related footnote
support for the period from April 1, 2015 to spin-date, in a timely manner, to
facilitate CSL in the preparation of its Q2 2015 Form 10-Q filing Training
Consumer CLEC Provide Financial Services training (pAptis only) 18 months
WIN shall provide financial services training to TAS. HR HR: Payroll
Data Requirements 90 days (on- demand) General interaction and support
from the WIN Payroll team to transition HR and pay-related data to the
HR/Payroll vendors
2
EXHIBIT 2
SERVICES TERMINATION REQUEST FORM
Service Termination Request Form
[Insert WIN Logo]
[Insert CSL Logo]
Requesting Company:
Date of Request:
Completed By:
Service to be Changed:
Requested Service Termination
Item
# Service
Service Provider
(Company)
Service Recipient
(Company) Estimated Cost Requested
Termination Date 1 2
3 4
5 6
Acknowledgements
Functional TSA Owner: [insert Receiving Functional Lead name]
X
Functional TSA Owner: [insert Providing Functional Lead name]
X
On Behalf of [insert NewCo name] On Behalf of [insert ParentCo name]
Contract Manager: [insert CSL CM Name] Contract Manager: [insert WIN CM Name] X
X On Behalf of CSL National, LP On Behalf of Windstream Services, LLC
|
EXHIBIT 10.1
THE PMI GROUP, INC.
BONUS INCENTIVE PLAN
(February 20, 2008 Amendment and Restatement)
SECTION 1
BACKGROUND, PURPOSE AND DURATION
1.1 Effective Date. The Plan previously was amended and restated effective as
of September 19, 2007. The Plan hereby is amended and restated effective as of
February 20, 2008, subject to the affirmative vote of the holders of a majority
of the Shares that were present in person or by proxy and entitled to vote at
the 2008 Annual Meeting of Stockholders of the Company.
1.2 Purpose of the Plan. The Plan is intended to increase stockholder value and
the success of the Company by motivating Participants (1) to perform to the best
of their abilities, and (2) to achieve the Company’s objectives. The Plan’s
goals are to be achieved by providing Participants with the opportunity to earn
incentive awards for the achievement of goals relating to the performance of the
Company. The Plan is intended to help achieve long term stockholder value and
permit the payment of bonuses that qualify as performance-based compensation
under Section 162(m) of the Code.
SECTION 2
DEFINITIONS
The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:
2.1 “Actual Award” means as to any Performance Period, the actual award (if any)
payable to a Participant for the Performance Period. Each Actual Award is
determined by the Payout Formula for the Performance Period, subject to the
Committee’s authority under Section 3.6 to eliminate or reduce the award
otherwise determined by the Payout Formula.
2.2 “Adjusted Book Value” means “Book Value” excluding certain non-operating
items that are considered outside the control of management, as determined by
the Committee pursuant to Section 2.38 hereunder.
2.3 “Affiliate” means each corporation, trade or business which is, together
with the Company, a member of a controlled group of corporations or an
affiliated service group or under common control (within the meaning of
section 414(b), (c) or (m) of the Code), but only for the period during which
such other entity is so affiliated with the Company. Notwithstanding the
foregoing, in applying sections 1563(a)(1), (2) and (3) of the Code for purposes
of determining a controlled group of corporations under section 414(b) of the
Code and in applying Treasury regulation section 1.414(c)-2 for purposes of
determining trades or businesses that are under common control for purposes of
section 414(c) of the Code, the phrase “at least 50 percent” will be used
instead of “at least 80 percent” at each place it appears in such sections.
2.4 “Base Salary” means as to any Performance Period, the Participant’s earned
salary during the Performance Period. Such Base Salary shall be before both
(a) deductions for taxes or benefits, and (b) deferrals of compensation pursuant
to Company-sponsored plans and Affiliate-sponsored plans.
2.5 “Board” means the Board of Directors of the Company.
2.6 “Book Value” means as of a particular date, the Company’s total
stockholders’ equity on such date, as derived from the Company’s financial
statements for the period ended on such date.
2.7 “Brand Management” means as to any Performance Period, the objective and
measurable goals approved by the Committee that relate to promotion of a
favorable brand image and brand recognition.
2.8 “Business Quality” means as to any Performance Period, the objective and
measurable goals approved by the Committee that relate to the credit quality of
one or more business segments of the Company and/or its Affiliates or of their
insurance portfolios.
2.9 “Capital” means the sum of the par value of the Company’s outstanding Common
Stock and the paid-in capital of the Company, including cash derived from the
issuance of debt and/or equity as well as other sources. “Capital” may also
mean, in the discretion of the Committee, the capital resources of the Company
available to meet its commitments.
2.10 “Cash Flow” means as to any Performance Period, cash generated from
operating activities.
2.11 “Cash Operating Earnings” means as to any Performance Period, operating
earnings adjusted for certain non-cash items such as, but not necessarily
limited to, the amortization of goodwill and other acquired intangible assets.
2.12 “Change of Control” means a change in the ownership of the Company, a
change in the effective control of the Company, or a change in the ownership of
a substantial portion of the assets of the Company as determined in accordance
with section 409A(a)(2)(A)(v) of the Code and Treasury regulation section
1.409A-3(i)(5), and as set forth below:
(a) A change in the ownership of the Company occurs on the date that any one
person or more than one person acting as a group (a “Person”), acquires
ownership of the stock of the Company that, together with the stock held by such
Person, constitutes more than fifty percent (50%) of the total fair market value
or total voting power of the stock of the Company; provided, however, that for
purposes of this subsection (a), the acquisition of additional stock by any one
Person who is considered to own more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the Company shall not be
considered to cause a change in the ownership of the Company (or to cause a
change in the effective control of the Company within the meaning of
subsection (b) below). An increase in the percentage of stock owned by any one
Person as a result of a transaction in which the Company acquires its stock in
exchange for property shall be treated as an acquisition of stock for purposes
of this subsection (a). This subsection (a) applies only when there is a
transfer of stock of the Company (or issuance of stock of the Company) and the
Company’s stock remains outstanding after the transaction;
(b) A change in the effective control of the Company occurs on the date that
either: (1) any one Person acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such Person) ownership of
the stock of the Company possessing thirty percent (30%) or more of the total
voting power of the stock of the Company; or (2) a majority of the members of
the Board of Directors is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Board of Directors prior to the date of the appointment or election. A change in
effective control also may occur in a transaction in which either of the two
corporations involved in the transaction has a Change of Control under
subsection (a) above or (c) below. For purposes of this subsection (b), if any
one Person is considered to effectively control the Company within the meaning
of this subsection (b), the acquisition of additional control of the Company by
such Person shall not be considered to cause a change in the effective control
of the Company (or to cause a change in the ownership of the Company within the
meaning of subsection (a) above); or
(c) A change in the ownership of a substantial portion of the Company’s assets
occurs on the date that any one Person acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such
Person) assets from the Company that have a total gross fair market value equal
to or more than forty percent (40%) of the total gross fair market value of all
of the assets of the Company immediately prior to such acquisition or
acquisitions. For this purpose, “gross fair market value” means the value of the
assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets. However, there is
no Change of Control under this subsection (c) when there is a transfer of
assets of the Company to an entity that is controlled by the shareholders of the
Company immediately after the transfer, as provided below. A transfer of assets
by the Company shall not be treated as a change in the ownership of such assets
if the assets are transferred to: (1) a shareholder of the Company (immediately
before the asset transfer) in exchange for or with respect to the Company’s
stock; (2) an entity, fifty percent (50%) or more of the total value or voting
power of which is owned, directly or indirectly, by the Company; (3) a Person,
that owns, directly or indirectly, fifty percent (50%) or more of the total
value or voting power of all the outstanding stock of the Company; or (4) an
entity, at least fifty percent (50%) of the total value or voting power of which
is owned, directly or indirectly, by a Person described in clause (3) above. For
purposes of this subsection (c) and except as otherwise provided, a person’s
status is determined immediately after the transfer of the assets.
For purposes of this Section 2.12, persons will not be considered to be acting
as a group solely because they purchase or own stock of the Company at the same
time. However, persons will be considered to be acting as a group if they are
owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the Company, and if a
person, including an entity, owns stock in both the Company and another
corporation and the Company and the other corporation enter into a merger,
consolidation, purchase or acquisition of stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders only
with respect to the ownership in the Company before the transaction giving rise
to the change and not with respect to the ownership interest in the other
corporation. Section 318(a) of the Code also applies to determine stock
ownership. Stock underlying a vested option is considered owned by the
individual who holds the vested option (and the stock underlying an unvested
option is not considered owned by the individual who holds the unvested option);
provided, however, that if a vested option is exercisable for stock that is not
substantially vested (as defined by Treasury regulation sections 1.83-3(b) and
(j)), the stock underlying the option is not treated as owned by the individual
who holds the option.
2.13 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section
or regulation, any valid regulation or other Treasury Department or Internal
Revenue Service guidance promulgated thereunder, and any comparable provision of
any future legislation or regulation amending, supplementing or superseding such
section or regulation.
2.14 “Combined Ratio” means as to any Performance Period, the percentage equal
to the sum of the Expense Ratio and Loss Ratio.
2.15 “Committee” means the committee appointed by the Board (pursuant to
Section 5.1) to administer the Plan.
2.16 “Company” means The PMI Group, Inc., a Delaware corporation, or any
successor thereto.
2.17 “Customer Satisfaction” means as to any Performance Period, the objective
and measurable goals approved by the Committee that relate to fulfillment of
customer expectations and/or customer ratings.
2.18 “Determination Date” means the latest possible date that will not
jeopardize a Target Award or Actual Award’s qualification as performance-based
compensation under Section 162(m) of the Code.
2.19 “Disability” or “Disabled” means (a) the inability of a Participant to
determinable physical or mental impairment that can be expected to result in
(12) months, or (b) the Participant is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
The Committee shall determine whether or not a Participant is Disabled based on
such evidence as the Committee deems necessary or advisable. Notwithstanding the
foregoing, a Participant shall be deemed Disabled if he or she is determined to
be totally disabled by the Social Security Administration.
2.20 “Earnings” means as to any Performance Period, the Company’s income before
taxes.
2.21 “Employee” means any employee of the Company or of an Affiliate, whether
such employee is so employed at the time the Plan is adopted or becomes so
employed subsequent to the adoption of the Plan.
2.22 “Equity in the Earnings of Unconsolidated Subsidiaries” means the Company’s
interest in the net income (losses) of entities that are partially owned by the
Company, and the financial results of which are not consolidated with the
Company’s financial results.
2.23 “Expense Ratio” means as to any Performance Period, the ratio of total
underwriting and operating expenses to net premiums written or premiums earned,
as determined by the Committee.
2.24 “Fair Market Value” means the per share closing market price of the Shares,
as quoted in the New York Stock Exchange Composite Transactions Index for the
date in question.
2.25 “Fiscal Quarter” means a fiscal quarter within a Fiscal Year of the
Company.
2.26 “Fiscal Year” means the fiscal year of the Company.
2.27 “Incurred Losses” means claims paid and loss adjustment expenses incurred
during a particular period, and including the changes in loss reserves over the
period.
2.28 “Loss Ratio” means as to any Performance Period, the ratio of the Company’s
losses and loss adjustment expenses to premiums earned.
2.29 “Market Share” means as to any Performance Period, the Company’s or a
business unit’s percentage of a market segment with respect to a product.
2.30 “Maximum Award” means as to any Participant during any period of three (3)
consecutive Fiscal Years, $12 million.
2.31 “Net Income” means as to any Performance Period, the income after taxes for
the Performance Period.
2.32 “New Insurance Written” means as to any Performance Period, the aggregate
principal balances of all loans that receive new mortgage insurance coverage
during a given period.
2.33 “Operating Cash Flow” means the sum of Net Income plus depreciation and
amortization less capital expenditures plus changes in working capital,
excluding investment and financing activities and other items considered outside
the control of management in the determination of the Committee.
2.34 “Operating Income” means as to any Performance Period, the difference
between revenue and related costs and expenses, excluding income derived from
sources other than operating activities, such as investment and financing
activities and other items considered outside the control of management in the
determination of the Committee.
2.35 “Paid Claims” means as to any Performance Period, amounts paid on primary
and pool insurance claims.
2.36 “Participant” means as to any Performance Period, an Employee who has been
selected by the Committee for participation in the Plan for that Performance
Period.
2.37 “Payout Formula” means as to any Performance Period, the formula or payout
matrix established by the Committee pursuant to Section 3.4 in order to
determine the Actual Awards (if any) to be paid to Participants. The formula or
matrix may differ from Participant to Participant.
2.38 “Performance Goals” means the goal(s) (or combined goal(s)) determined by
the Committee (in its discretion) to be applicable to a Participant for a Target
Award for a Performance Period. As determined by the Committee, the Performance
Goals for any Target Award applicable to a Participant may provide for a
targeted level or levels of achievement using one or more of the following
measures: (a) Adjusted Book Value, (b) Book Value, (c) Brand Management,
(d) Business Quality, (e) Capital, (f) Cash Flow, (g) Cash Operating Earnings,
(h) Combined Ratio, (i) Customer Satisfaction, (j) Earnings, (k) Equity in the
Earnings of Unconsolidated Subsidiaries, (l) Expense Ratio, (m) Incurred Losses,
(n) Loss Ratio, (o) Market Share, (p) Net Income, (q) Operating Income, I New
Insurance Written, (s) Operating Cash Flow, (t) Paid Claims, (u) Premiums,
(v) Price to Book Value Ratio, (w) Price to Earnings Ratio, (x) Ratings,
(y) Return on Average Assets, (z) Return on Average Equity, (aa) Return on
Revenue, (bb) Revenue, (cc) Risk in Force, (dd) Total Shareholder Return, and
(ee) Value Added. Performance Goals may differ from Participant to Participant,
Performance Period to Performance Period and from award to award. Any criteria
used may be measured, as applicable, (i) in absolute terms, (ii) in relative
terms (including, but not limited, the passage of time and/or against other
companies or financial metrics), (iii) on a per share and/or share per capita
basis, (iv) against the performance of the Company as a whole or against
particular segments or products of the Company and/or (v) on a pre-tax or
after-tax basis. Prior to the Determination Date, the Committee shall determine
whether any element(s) (for example, but not by way of limitation, the effect of
mergers or acquisitions) shall be included in or excluded from the calculation
of any Performance Goal with respect to any Participants (whether or not such
determinations result in any Performance Goal being measured on a basis other
than generally accepted accounting principles).
2.39 “Performance Period” means any Fiscal Year or such other period longer or
shorter than a Fiscal Year but not shorter than a Fiscal Quarter nor longer than
three Fiscal Years, as determined by the Committee in its sole discretion.
2.40 “Plan” means The PMI Group, Inc. Bonus Incentive Plan, as set forth in this
instrument and as hereafter amended from time to time.
2.41 “Premiums” means amounts charged to customers with respect to the Company’s
insurance products.
2.42 “Price to Book Value Ratio” means as of a particular date, a ratio equal to
the Fair Market Value per share of the Company’s common stock divided by the
Company’s Book Value.
2.43 “Price to Earnings Ratio” means as of a particular date, a ratio equal to
Company’s Earnings per share as of the applicable date of the Company’s
financial statements, and for the period ending on such date.
2.44 “Ratings” means the Company’s debt ratings and/or the insurer financial
strength ratings of the Company and/or its Affiliates provided by independent
rating agencies.
2.45 “Retirement” means (a) a Termination of Service occurring on or after age
sixty-five, (b) a Termination of Service at or after age fifty-five with at
least ten years of Benefit Accrual Service (as defined under The PMI Group, Inc.
Retirement Plan, as amended), or (c) a Termination of Service approved by the
Company as an early retirement; provided that in the case of a person subject to
Section 16 of the Securities Exchange Act of 1934, as amended, such early
retirement must be approved by the Committee.
2.46 “Return on Average Assets” means as to any Performance Period, Net Income
divided by the average of beginning and ending designated Company or business
unit assets.
2.47 “Return on Average Equity” means as to any Performance Period, the
percentage equal to Net Income divided by average stockholders’ equity.
2.48 “Return on Revenue” means as to any Performance Period, the percentage
equal to Net Income, divided by Revenue.
2.49 “Revenue” means premiums, net investment income, net realized investment
gains and losses, and other revenue generated for the Performance Period.
2.50 “Risk in Force” means as of a particular date, the aggregate dollar amount
of each insured mortgage loan’s principal balance at such date multiplied by the
insurance coverage percentage specified in the policy.
2.51 “Shares” means shares of the Company’s common stock, $0.01 par value.
2.52 “Target Award” means the target award payable under the Plan to a
Participant for the Performance Period, expressed as a percentage of his or her
Base Salary or a specific dollar amount, as determined by the Committee in
accordance with Section 3.3.
2.53 “Termination of Service” means a cessation of the employee-employer
relationship between an Employee and the Company or an Affiliate for any reason
(as determined in accordance with section 409A(a)(2)(A)(i) of the Code and
Treasury regulation section 1.409A-1(h), including, but not by way of
limitation, a termination by resignation, discharge, death, Disability,
Retirement, or the disaffiliation of an Affiliate, but excluding any such
termination where there is a simultaneous reemployment by the Company or an
Affiliate. For this purpose, the employment relationship shall be treated as
continuing intact while the Participant is on military leave, sick leave or
other bona fide leave of absence, except that if the period of such leave
exceeds six (6) months and the Participant does not retain a right to
reemployment under an applicable statute or by contract, then the employment
relationship shall be deemed to have terminated on the first day immediately
following such six-month period. A leave of absence constitutes a bona fide
leave of absence only if there is a reasonable expectation that the Participant
will return to perform services for the Company or an Affiliate.
2.54 “Total Shareholder Return” means as to any Performance Period, the total
return (change in share price plus reinvestment of any dividends) of a share of
the Company’s common stock.
2.55 “Value Added” means a number, expressed as a percentage of the average
stockholder’s equity, equal to the difference between Net Income adjusted for
(i) the elimination of the cumulative effects of changes in accounting
standards, (ii) amortization of gains or losses on equipment disposition in lieu
of reported gains or losses, (iii) amortization of gains or losses from
repurchasing and refinancing of debt (including costs associated with preferred
stock redemption) in lieu of realized gains and losses, (iv) amortized bond,
equity and other portfolio gains and losses in lieu of realized gains and losses
as reported, and (v) exclusion of pretax amortization of intangibles, including
goodwill, related to assets acquired in a business acquisition that is still
owned by the Company, minus the capital charge. The capital charge is determined
as the product of the Company’s average stockholder’s equity and the Company’s
imputed equity cost based on a formula approved by the Committee.
SECTION 3
SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS
3.1 Selection of Participants. The Committee, in its sole discretion, shall
select the Employees who shall be Participants for any Performance Period. The
Committee, in its sole discretion, also may designate as Participants one or
more individuals (by name or position) who are expected to become Employees
during a Performance Period. Participation in the Plan is in the sole discretion
of the Committee, and shall be determined on a Performance Period by Performance
Period basis. Accordingly, an Employee who is a Participant for a given
Performance Period in no way is guaranteed or assured of being selected for
participation in any subsequent Performance Period.
3.2 Determination of Performance Goals. The Committee, in its sole discretion,
shall establish the Performance Goals for each Participant for the Performance
Period. Such Performance Goals shall be set forth in writing.
3.3 Determination of Target Awards. The Committee, in its sole discretion,
shall establish a Target Award for each Participant. Each Participant’s Target
Award shall be determined by the Committee in its sole discretion, and each
Target Award shall be set forth in writing.
3.4 Determination of Payout Formula or Formulae. On or prior to the
Determination Date, the Committee, in its sole discretion, shall establish a
Payout Formula or Formulae for purposes of determining the Actual Award (if any)
payable to each Participant. Each Payout Formula shall (a) be in writing, (b) be
based on a comparison of actual performance to the Performance Goals,
(c) provide for the payment of a Participant’s Target Award if the Performance
Goals for the Performance Period are achieved at the predetermined level, and
(d) provide for the payment of an Actual Award greater than or less than the
Participant’s Target Award, depending upon the extent to which actual
performance exceeds or falls below the Performance Goals. Notwithstanding the
preceding, in no event shall a Participant’s Actual Award(s) exceed the Maximum
Award for the applicable period.
3.5 Date for Determinations. The Committee shall make all determinations under
Sections 3.1 through 3.4 on or before the Determination Date.
3.6 Determination of Actual Awards. After the end of each Performance Period
the Committee shall certify in writing (for example, in its meeting minutes) the
extent to which the Performance Goals applicable to each Participant for the
Performance Period were achieved or exceeded, as determined by the Committee.
The Actual Award for each Participant shall be determined by applying the Payout
Formula to the level of actual performance that has been certified in writing by
the Committee. Notwithstanding any contrary provision of the Plan, the
Committee, in its sole discretion, may (a) other than as provided in
Section 3.7, eliminate or reduce the Actual Award payable to any Participant
below that which otherwise would be payable under the Payout Formula, and
(b) determine whether or not any Participant will receive an Actual Award in the
event the Participant incurs a Termination of Service prior to the date the
Actual Award is to be paid pursuant Section 4.2 below.
3.7 Special Rule for Change of Control. Notwithstanding any contrary provision
of the Plan, all then ongoing Performance Periods shall be deemed terminated
immediately prior to the occurrence of a Change of Control and 100% of Target
Awards shall be deemed to be earned and shall be paid to the Participants no
later than two and one-half months after the Change of Control.
SECTION 4
PAYMENT OF AWARDS
4.1 Right to Receive Payment. Each Actual Award that may become payable under
the Plan shall be paid solely from the general assets of the Company or the
Affiliate that employs the Participant (as the case may be), as determined by
the Committee. Nothing in this Plan shall be construed to create a trust or to
establish or evidence any Participant’s claim of any right to payment of an
Actual Award other than as an unsecured general creditor with respect to any
payment to which he or she may be entitled.
4.2 Timing of Payment. Subject to Section 3.6, payment of each Actual Award
shall be made as soon as administratively practicable, but in no event later
than two and one-half months after the end of the applicable Performance Period.
Unless otherwise determined by the Committee, and except as provided in
Section 4.4 (relating to death and Disability), a Participant must be employed
by the Company or any Affiliate on the date of payment to receive a payment
under the Plan.
4.3 Form of Payment. Each Actual Award shall be paid in cash (or its
equivalent) in a single lump sum. However, the Committee, in its sole
discretion, may declare any Actual Award, in whole or in part, payable in
restricted stock granted under the Company’s Equity Incentive Plan. The number
of Shares of restricted stock granted shall be determined by dividing the cash
amount foregone by the Fair Market Value of a Share on the date that the cash
payment otherwise would have been made. Any such restricted stock may be subject
to a vesting schedule (not to exceed two calendar years) determined by the
Committee, provided that accelerated vesting automatically shall occur upon
death, Disability, Retirement, Change of Control, or involuntary Termination of
Service without cause.
4.4 Payment in the Event of Death or Disability. If a Participant dies or
becomes Disabled prior to the payment of an Actual Award (determined under
Section 3.6) that was scheduled to be paid to him or her prior to death or
Disability for a prior Performance Period, the Award shall be paid to his or her
designated beneficiary or to the Participant, as the case may be, subject to the
Committee’s discretion to reduce or eliminate any Actual Award otherwise
payable.
1
SECTION 5
ADMINISTRATION
5.1 Committee is the Administrator. The Plan shall be administered by the
Committee. The Committee shall consist of not less than two (2) members of the
Board. The members of the Committee shall be appointed from time to time by, and
serve at the pleasure of, the Board. Each member of the Committee shall qualify
as an “outside director” under Section 162(m) of the Code. If it is later
determined that one or more members of the Committee do not so qualify, actions
taken by the Committee prior to such determination shall be valid despite such
failure to qualify. Any member of the Committee may resign at any time by notice
in writing mailed or delivered to the Secretary of the Company. As of the
Effective Date of the Plan, the Plan shall be administered by the Compensation
Committee of the Board.
5.2 Committee Authority. It shall be the duty of the Committee to administer
the Plan in accordance with the Plan’s provisions. The Committee shall have all
powers and discretion necessary or appropriate to administer the Plan and to
control its operation, including, but not limited to, the power to (a) determine
which Employees shall be granted awards, (b) prescribe the terms and conditions
of awards, (c) interpret the Plan and the awards, (d) adopt such procedures and
subplans as are necessary or appropriate to permit participation in the Plan by
Employees who are foreign nationals or employed outside of the United States,
(e) adopt rules for the administration, interpretation and application of the
Plan as are consistent therewith, and (f) interpret, amend or revoke any such
rules.
5.3 Decisions Binding. All determinations and decisions made by the Committee,
the Board, and any delegate of the Committee pursuant to the provisions of the
Plan shall be final, conclusive, and binding on all persons, and shall be given
the maximum deference permitted by law.
5.4 Delegation by the Committee. The Committee, in its sole discretion and on
such terms and conditions as it may provide, may delegate all or part of its
authority and powers under the Plan to one or more directors and/or officers of
the Company; provided, however, that the Committee may not delegate its
authority and/or powers with respect to awards that are intended to qualify as
performance-based compensation under Section 162(m) of the Code.
SECTION 6
GENERAL PROVISIONS
6.1 Tax Withholding. The Company or an Affiliate, as determined by the
Committee, shall withhold all applicable taxes from any Actual Award, including
any federal, state, local and other taxes.
6.2 No Effect on Employment. Nothing in the Plan shall interfere with or limit
in any way the right of the Company or an Affiliate, as applicable, to terminate
any Participant’s employment or service at any time, with or without cause.
Employment with the Company and its Affiliates is on an at-will basis only. The
Company expressly reserves the right, which may be exercised at any time and
without regard to when during or after a Performance Period such exercise
occurs, to terminate any individual’s employment with or without cause, and to
treat him or her without regard to the effect which such treatment might have
upon him or her as a Participant.
6.3 Participation. No Employee shall have the right to be selected to receive
an award under this Plan, or, having been so selected, to be selected to receive
a future award.
6.4 Indemnification. Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from (a) any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any award, and (b) from any and all amounts
paid by him or her in settlement thereof, with the Company’s approval, or paid
by him or her in satisfaction of any judgment in any such claim, action, suit,
or proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company’s Certificate of
Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under
any power that the Company may have to indemnify them or hold them harmless.
6.5 Successors. All obligations of the Company and any Affiliate under the
Plan, with respect to awards granted hereunder, shall be binding on any
successor to the Company and/or such Affiliate, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business or assets of the
Company or such Affiliate.
6.6 Beneficiary Designations
(a) Designation. Each Participant may, pursuant to such uniform and
nondiscriminatory procedures as the Committee may specify from time to time,
designate one or more Beneficiaries to receive any Actual Award payable to the
Participant at the time of his or her death. Notwithstanding any contrary
provision of this Section 6.6 shall be operative only after (and for so long as)
the Committee determines (on a uniform and nondiscriminatory basis) to permit
the designation of Beneficiaries.
(b) Changes. A Participant may designate different Beneficiaries (or may revoke
a prior Beneficiary designation) at any time by delivering a new designation (or
revocation of a prior designation) in like manner. Any designation or revocation
shall be effective only if it is received by the Committee. However, when so
received, the designation or revocation shall be effective as of the date the
designation or revocation is executed (whether or not the Participant still is
living), but without prejudice to the Committee on account of any payment made
before the change is recorded. The last effective designation received by the
Committee shall supersede all prior designations.
(c) Failed Designation. If the Committee does not make this Section 6.6
operative or if Participant dies without having effectively designated a
Beneficiary, the Participant’s Account shall be payable to the general
beneficiary shown on the records of the Employer. If no Beneficiary survives the
Participant, the Participant’s Account shall be payable to his or her estate.
6.7 Nontransferability of Awards. No award granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will, by the laws of descent and distribution, or to the limited extent
provided in Section 6.6. All rights with respect to an award granted to a
Participant shall be available during his or her lifetime only to the
Participant.
6.8 Deferrals. The Committee, in its sole discretion, may permit a Participant
to defer receipt of the payment of cash that would otherwise be delivered to a
Participant under the Plan. Any such deferral elections shall be subject to such
rules and procedures as shall be determined by the Committee in its sole
discretion. Unless otherwise expressly determined by the Committee, the rules
and procedures for any deferral elections and deferrals shall be designed to
comply with Section 409A of the Code.
SECTION 7
AMENDMENT, TERMINATION AND DURATION
7.1 Amendment, Suspension or Termination. The Board or the Committee, each in
its sole discretion, may amend or terminate the Plan, or any part thereof, at
any time and for any reason. The amendment, suspension or termination of the
Plan shall not, without the consent of the Participant, alter or impair any
rights or obligations under any Target Award theretofore granted to such
Participant. No award may be granted during any period of suspension or after
termination of the Plan.
7.2 Duration of the Plan. The Plan shall commence on the date specified herein,
and subject to Section 7.1 (regarding the Board or the Committee’s right to
amend or terminate the Plan), shall remain in effect thereafter.
SECTION 8
LEGAL CONSTRUCTION
8.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
8.2 Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.
8.3 Requirements of Law. The granting of awards under the Plan shall be subject
to all applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
8.4 Governing Law. The Plan and all awards shall be construed in accordance
with and governed by the laws of the State of California, but without regard to
its conflict of law provisions.
8.5 Captions. Captions are provided herein for convenience only, and shall not
serve as a basis for interpretation or construction of the Plan.
2
EXECUTION
IN WITNESS WHEREOF, The PMI Group, Inc., by its duly authorized officer, has
executed the amended and restated Plan on the date indicated below.
Date: May 20, 2008
By: /s/ Charles Broom
Name: Charles Broom
3 |
Title: Hunt Camp "Voted" Me Out Without Explanation and Now I'm Devastated
Question:Hi all
I have been part of Canadian hunting camp that is Incorporated and insured.
This group has:
- 1-time membership fee of $3,000
- Yearly fee of $400
- Unlimited use of property
- 9 members
- A constitution containing membership rules for voting in or removing members
- Property value of approx $60k
- A president who oversees all quarterly meetings
- Each member has 1 vote on all decisions
Scenario:
According to the constitution, for a member to be removed, they must have violated a constitutional rule. Prior to the removal of a member, the member is to be notified of a violation of such rule and brought before the membership to speak to the violation. Once the member has provided their explanation, a vote by all members is to take place. The vote is not unanimous. In case of a tie (4 Yes, 4 No), the president of the camp will make the final decision.
In my case, I was recently removed from the camp without being advised of violating a rule (which I did not do), nor was I brought before the membership to speak to my actions. From as far as I can tell, the president of the camp was frustrated with me for questioning suspicious activities within the camp. I have 2 very good friends in the camp, and this is what they were able to tell me via email.
I found out via email that I was voted out of the camp with no explanation given. Furthermore, I was told the vote was 6-2, however I have been able to confirm that at least 4 members were not aware of the vote taking place, nor did they place a vote against me.
I know this may sound odd to many of you, but this hunting camp was the most cherished asset I had in my life. I spent many weeks and thousands of dollars working and improving the place and now it’s all gone with no explanation.
The camp has 1 year from the date of the vote to return my initial membership fee of $3k – as per the constitution.
This has caused me unbelievable amounts of stress and I’m wondering if, from a legal standpoint, I can sue for a “wrongful dismissal” type of law which would include compensation for undue stress (or something along those lines)?
Any advice is sincerely appreciated
Answer #1: What do your bylaws say, if anything, about disputes?
If four people were not aware of the vote taking place, and you have two good friends, it sounds like you might have a majority. Vote out the president who didn't follow the written procedure for revoking membership? Answer #2: Talk to a Canadian business lawyer. While you don't have a "wrongful dismissal" type suit (because you were never an employee), this membership arrangement likely constitutes either (a) a contract, or (b) a partnership. Either way, any failure to follow the stated rules of the enterprise may invalidate the collective action of the group.Answer #3: I'm sorry to hear that you've lost something important to you. That's no fun, ever, and you're allowed to be angry and upset. Give yourself space to grieve; this loss obviously matters a lot to you.
You won't be able to sue to be reinstated as a member (and even if you could, they've made it clear they don't want you around any more, so your membership would be extremely awkward and uncomfortable). Assuming for the moment that your agreement with the hunting camp included a clause that explicitly promised you that your relationship with the camp would be governed by its constitution, then your damages would probably be limited to the loss of your one-time membership fee and some proportion of this year's fee. If there's no such clause exists, then your damages may be limited to just the proportion of this year's fee that you weren't able to enjoy. In either case, you'd be able to sue in small claims court in most provinces: in Ontario, for example, the ceiling on small claims cases is ~~$15,000~~ $25,000 (Edit: thanks, /u/cdnhearth!).
You _might_ be able to include some of the costs of the improvements, but if you improved the property of your own volition (without a request from the club) and with no agreements covering the improvements, those improvements are likely a gift to the club, and you wouldn't be entitled to anything for them. I wouldn't hold my breath on that one. |
EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION AS ADOPTED PURSUANT TO SECTION -OXLEY ACT OF 2002 In connection with the Quarterly Report of Consolidated-Tomoka Land Co. (The “Company”) on Form 10-Q for the period endingMarch 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William H. McMunn, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ Willam H. McMunn William H. McMunn President and Chief Executive Officer May 8, Back to 10Q
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EX-99.j.1 Consent of Registered Independent Public Accounting Firm To the Shareholder and Board of Trustees of PENN Capital Funds Trust: We consent to the use of our report dated November 18, 2015 included herein, with respect to the statements of assets and liabilities (in Organization) of PENN Capital Funds Trust (the “Funds”), comprised of PENN Capital Small/Mid Cap Equity Fund, PENN Capital Small Cap Equity Fund, PENN Capital High Yield Fund, and PENN Capital Senior Floating Rate Income Fund, as of November 17, 2015, and to the reference to our firm under the heading “Independent Registered Public Accounting Firm” in the Statement of Additional Information. /s/ KPMG LLP Philadelphia, Pennsylvania November 18, 2015
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Exhibit 2 Cimatron Limited Management's Discussion and Analysis of Financial Results for Years Ended December 31, 2010, 2009 and 2008 Revenue Our total revenues increased in 2010, to approximately $36.1 million, from approximately $33.0 million in 2009, after having decreased in 2009 from approximately $41.0 million in 2008. Our revenues from the sale of products increased in 2010 to approximately $16.0 million from approximately $13.2 million in 2009, after having decreased in 2009 from approximately $20.1 million in 2008. The increase in sale of products in 2010 relative to 2009 was primarily attributable to the global economic recovery in 2010, somewhat offset by the appreciation of the dollar relative to the Euro over the course of 2010 relative to 2009, which reduced the dollar value of the Euro-denominated revenues that we realized in 2010. The decrease in the sale of products in 2009 relative to 2008 was primarily attributable to (i) the global economic downturn that started to affect us in mid-2008, but which was reflected on a full year basis in 2009, and (ii) the appreciation of the dollar relative to the Euro over the course of 2009 relative to 2008, which reduced the dollar value of the Euro-denominated product sales that we made in 2009. As a percentage of revenues, our revenues from the sale of products increased in 2010 to approximately 44%, from approximately 40% in 2009, after having been approximately 49% in 2008. Our revenues from maintenance and services increased in 2010 to approximately $20.1 million, from approximately $19.8 million in 2009, after having decreased in 2009 from approximately $20.9 in 2008. The increase in 2010 in maintenance and service revenues was primarily attributable to the global economic recovery in 2010, which enabled customers to begin to increase their levels of spending on maintenance contracts and training and implementation services that they order from us with respect to our products. The decrease in 2009 primarily reflected a decrease in services revenues, as such revenues are more product-related and were therefore impacted by the decrease in product sales, whereas maintenance revenues remained practically unchanged from 2008. As a percentage of overall revenues, our revenues from maintenance and services decreased in 2010 to approximately 56%, from approximately 60% in 2009 after having been approximately 51% in 2008. This decrease in 2010 reflected the corresponding increase in products sales revenues. Because, during 2010, 49% of our revenues were derived from Europe, changes in the Euro-dollar exchange rate can significantly influence our revenues. Since mid 2007, the Euro–dollar exchange rate had an increasing influence on our revenues and results of operation due to the consolidation of Microsystem’s financial results with ours, since substantially all of Microsystem’s revenues are Euro-denominated. While we believe that the trend of migration of European mold, tool, die and fixture makers operations to low cost labor markets in the Far East, where markets are also characterized by lower prices and by higher usage of pirated copies of software products, may continue, we have previously adjusted our European strategy slightly in order to increasingly focus on penetrating the high end European market, in which such migration is less prevalent. At the same time, we continue with our sales efforts in China and in other emerging markets. In addition, following the Gibbs acquisition in early 2008, we have begun to introduce the GibbsCAM product line into our legacy Cimatron sales channels in Germany, Italy, China, South Korea and Israel, and ultimately in several other sales territories. Cost of Revenue Cost of revenue decreased in 2010, to approximately $5.9 million, from approximately $6.2 million in 2009, after having decreased in 2009 from approximately $7.8 million in 2008. The decrease in 2010 relative to 2009 was mainly due to (i) a different revenue mix, with higher percentage of software license revenues (which carry with them lower costs of revenues) and lower percentage of hardware revenues (which carry with them higher costs of revenues) in 2010 as compared to 2009, and (ii) lower royalty expense to the Chief Scientist of the Ministry of Industry and Trade of the Government of Israel (OCS) in 2010, as explained in note 10A to our 2010 financial statements. The decrease in 2009 relative to 2008 was mainly due to (i) lower product sales that resulted in lower payments to third party technology and hardware vendors, and lower royalties owed to the OCS, and (ii) cost reduction measures that we took during 2009 in order to mitigate the effects of the global economic downturn. Gross Profit Gross profit, as a percentage of total revenue, was 84%, 81% and 81% in 2010, 2009 and 2008, respectively.The gross margin in 2010 was higher than in 2009 due to (i) higher revenues in 2010, which, given the significant portion of the cost of revenue constituting fixed expenses that are not dependent on the revenue level, led to higher gross margin than in 2009, and (ii) the lower cost, higher margin revenue mix and lower royalty expense to the OCS in 2010, as described under “Cost of Revenue” above. The gross margin in 2009 remained unchanged as compared to 2008 despite a decrease in revenue, mainly due to (i) lower cost-of-revenue in 2009, which is dependent on revenue, and (ii) cost reduction measures that we took during 2009 in order to mitigate the effects of the global economic downturn. Research and Development Expenses, net Research and development expenses primarily consist of salaries and related costs with respect to employees engaged in ongoing research, design and development activities. Research and development expenses were $6.0 million in 2010, $5.7 million in 2009 and $6.9 million in 2008.The increase in 2010 was mainly due to higher employee-related costs in 2010, as we slightly increased our R&D spending in 2010 as we recovered from the global economic downturn of 2009. The decrease in 2009 was mainly due to cost reduction measures that we took during 2009 in order to mitigate the effects of the global economic downturn. These measures were intended to increase the efficiency of our R&D organization, rather than reducing its output, and, therefore, our development plans and rate remained unchanged as compared to 2008. 2 Selling, General and Administrative Expenses Selling expenses consist of costs relating to promotion, advertising, trade shows and exhibitions, compensation (including sales commissions), sales support, travel and travel-related expenses, and, when applicable, royalties to the Fund for the Encouragement of Marketing of the Government of Israel, or the Marketing Fund, including all such expenses for our subsidiaries. We did not receive any grants from the Marketing Fund in the years 2008, 2009 or 2010 and do not expect to receive any such grants in the future. We also did not pay any royalties to the Marketing Fund in 2008, 2009 and 2010. General and administrative expenses consist of (a)compensation costs for administration, finance and general management personnel, (b)office maintenance and administrative costs, (c) rent, (d)fees paid to DBSI and Koonras Technologies Ltd., or Koonras, our former significant shareholder, for management services, (e) reserves for doubtful debts and (f) amortization of investment in acquired companies. Selling, general and administrative expenses increased slightly in 2010 to $22.1 million, from $22.0 million in 2009, after having decreased in 2009 from $25.8 million in 2008. The increase in 2010 was mainly due to higher revenues that resulted in higher commission payments to our sales employees and agents, almost fully offset by lower reserve for doubtful debts and by the appreciation of the dollar relative to the Euro over the course of 2010 relative to 2009, which reduced the dollar value of the Euro-denominated selling, general and administrative expenses that we incurred in 2010.The decrease in 2009 was mainly due to (i) lower revenues that resulted in lower commission payments to our sales employees and agents, (ii) cost reduction measures that we took during 2009 in order to mitigate the effects of the global economic downturn and (iii) the appreciation of the dollar relative to the Euro over the course of 2009 relative to 2008, which reduced the dollar value of the Euro-denominated selling, general and administrative expenses that we incurred in 2009 Financial Income (Expenses), net Financial income (expenses), net, consists primarily of interest earned on our cash reserves, interest paid on our short term and long term credit facilities from financial institutions, gains (losses) from sale of bonds and funds, interest on trade receivables and currency translation adjustments between the U.S. dollar and the NIS and Euro based on changes in exchange rates, as applied to our assets and liabilities. Financial income (expense), net, was approximately $0.1 million in 2010, as compared to approximately $0.0 million in 2009 and approximately $(0.1) million in 2008. During 2010, 2009 and 2008, the interest that we received on our cash reserves was significantly lower than in previous years, due to the global trend of reduced interest rates. 3 Income Taxes, net Income Taxes, net, consist of changes in deferred tax assets and deferred tax liabilities, and of current tax expenses. In 2010, we recorded a tax expense of approximately $0.7 million, of which approximately $0.3 million related to changes in deferred taxes, and approximately $0.3 million related to current tax expenses.Most of the current taxes in 2010 were related to taxes for previous years, mainly as part of the final tax assessment we received in Germany for the years 2004-2007.Tax income, net, in 2009 and 2008, consisted primarily of changes in deferred tax assets and deferred tax liabilities, and to a lesser extent, in current tax expenses. Tax income, net, was $0.9 million in 2009 and $0.2 million in 2008. The increase in 2009 relative to 2008 was primarily due to an increase in deferred tax assets, as a result of an increase in US loss carry-forwards that we believe we would be able to use in the foreseeable future. Net Income Attributable to Cimatron Shareholders We recorded net income attributable to Cimatron shareholders of approximately $1.6 million, $0.0 million and $0.7 million in 2010, 2009 and 2008, respectively.The increase in 2010 relative to 2009 was mainly due to the increase in our revenues. The decrease in 2009 relative to 2008 was mainly due to the decrease in our revenues in 2009, partially offset by lower expenses as compared to 2008, and partially offset by the above-described tax income. Cash flow As of December 31, 2010, we had $10.2 million in cash and cash equivalents.During 2010, net cash provided by operating activities was $4.8 million, and was mainly comprised of our net profit of $1.6 million, increase in trade payables, accrued expenses and other liabilities of $1.9 million, decrease in net deferred taxes of $0.4 million, and depreciation and amortization of $1.5 million, as partially offset by increase in accounts receivable and prepaid expenses of $0.6 million. During 2010, net cash used in investing activities was $0.4 million, and was mainly comprised of $0.4 million used for capital expenditures. Our capital expenditures for 2010 were mostly for the purchase of computers, computer equipment and software, and other office equipment. During 2010, net cash used in financing activities was $0.6 million, and was mainly comprised of $0.4 million of cash used for the reduction of short and long term bank credit, and $0.2 million used pursuant to our ongoing share repurchase program, which had been announced back in June 2008. 4
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EXHIBIT 32 TIRE INTERNATIONAL ENVIRONMENTAL SOLUTIONS INC. CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO SECTION -OXLEY ACT OF 2002 In connection with the Quarterly Report of Tire International Environmental Solutions Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dean Petkanas, as Principal Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: August 13, 2010 By: /s/Dean Petkanas Name: Dean Petkanas Title: Principal Financial Officer A signed original of this written statement required by Section 1350 of Title 18 of the United States Code has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 1350 of Title 18 of the United States Code and, accordingly, is not being filed with the Securities and Exchange Commission as part of the Report and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Report, irrespective of any general incorporation language contained in such filing.)
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Name: Political and Security Committee Decision (CFSP) 2016/1193 of 12 July 2016 extending the mandate of the Head of Mission of the European Union Police Mission for the Palestinian Territories (EUPOL COPPS) (EUPOL COPPS/1/2016)
Type: Decision
Subject Matter: European construction; Asia and Oceania; cooperation policy
Date Published: 2016-07-22
22.7.2016 EN Official Journal of the European Union L 197/1 POLITICAL AND SECURITY COMMITTEE DECISION (CFSP) 2016/1193 of 12 July 2016 extending the mandate of the Head of Mission of the European Union Police Mission for the Palestinian Territories (EUPOL COPPS) (EUPOL COPPS/1/2016) THE POLITICAL AND SECURITY COMMITTEE, Having regard to the Treaty on European Union, and in particular the third paragraph of Article 38 thereof, Having regard to Council Decision 2013/354/CFSP of 3 July 2013 on the European Union Police Mission for the Palestinian Territories (EUPOL COPPS) (1), and in particular Article 9(1) thereof, Having regard to the proposal from the High Representative of the Union for Foreign Affairs and Security Policy, Whereas: (1) Pursuant to Article 9(1) of Decision 2013/354/CFSP, the Political and Security Committee (PSC) is authorised, in accordance with the third paragraph of Article 38 of the Treaty, to take the relevant decisions for the purpose of exercising political control and strategic direction of the European Union Police Mission for the Palestinian Territories (EUPOL COPPS), including the decision to appoint a Head of Mission. (2) On 17 February 2015, the PSC adopted Decision (CFSP) 2015/381 (2), appointing Mr Rodolphe MAUGET as Head of Mission of EUPOL COPPS from 16 February 2015 to 30 June 2015. (3) On 7 July 2015, the PSC adopted Decision (CFSP) 2015/1129 (3), extending the mandate of Mr Rodolphe MAUGET as Head of Mission of EUPOL COPPS from 1 July 2015 to 30 June 2016. (4) On 7 July 2016, the Council adopted Decision (CFSP) 2016/1108 (4), extending the mandate of EUPOL COPPS from 1 July 2016 to 30 June 2017. (5) The High Representative of the Union for Foreign Affairs and Security Policy has proposed the extension of the mandate of Mr Rodolphe MAUGET as Head of Mission of EUPOL COPPS from 1 July 2016 to 30 June 2017, HAS ADOPTED THIS DECISION: Article 1 The mandate of Mr Rodolphe MAUGET as Head of Mission of the European Union Police Mission for the Palestinian Territories (EUPOL COPPS) is hereby extended until 30 June 2017. Article 2 This Decision shall enter into force on the date of its adoption. It shall apply from 1 July 2016. Done at Brussels, 12 July 2016. For the Political and Security Committee The Chairperson W. STEVENS (1) OJ L 185, 4.7.2013, p. 12. (2) Political and Security Committee Decision (CFSP) 2015/381 of 17 February 2015 on the appointment of the Head of Mission of the European Union Police Mission for the Palestinian Territories (EUPOL COPPS) (EUPOL COPPS/1/2015) (OJ L 64, 7.3.2015, p. 37). (3) Political and Security Committee Decision (CFSP) 2015/1129 of 7 July 2015 extending the mandate of the Head of Mission of the European Union Police Mission for the Palestinian Territories (EUPOL COPPS) (EUPOL COPPS/2/2015) (OJ L 184, 11.7.2015, p. 17). (4) Council Decision (CFSP) 2016/1108 of 7 July 2016 amending Decision 2013/354/CFSP on the European Union Police Mission for the Palestinian Territories (EUPOL COPPS) (OJ L 183, 8.7.2016, p. 65). |
Exhibit 5.1 MINTZ & FRAADE, P.C. COUNSELORS AT LAW NEW YORK, NEW YORK 10022 TELEPHONE OF COUNSEL (212) 486-2500 JAY D. FISCHER EDWARD C. KRAMER KEVIN J. MCGRAW ARTHUR L. PORTER, JR TELECOPIER JON M. PROBSTEIN (212) 486-0701 SEYMOUR REITKNECHT I. FREDERICK SHOTKIN April 3, 2012 North Texas Energy, Inc. 5057 Keller Springs Road, Suite 300 Addison, TX 75001 Re:North Texas Energy, Inc. Gentlemen: Our firm has been requested by North Texas Energy, Inc., a Nevada corporation (the "Company"), to issue a legal opinion with respect to whether the 2,000,000 shares of Common Stock to be registered pursuant to the registration statement on Form S-1 (the "Registration Statement"), which we were advised by the Company will be filed shortly by the Company with the Securities and Exchange Commission for the purpose of registering such2,000,000 shares (the "Shares") of Common Stock, par value $.001 per share, of the Company pursuant to the Securities Act of 1933, as amended (the "Act"), shall upon issuance, be duly and validly authorized, legally issued, fully paid and non-assessable. We are not acting as counsel to the Company with respect to the Registration Statement. In connection with rendering this opinion, we have examined copies of the following: (A) the Articles of Incorporation of the Company and Amendment, as filed with the State of Nevada; (B) the Bylaws of the Company; (C) minutes dated November 30, 2011 of the Board of Directors of the Company approving the issuance of the Shares and their inclusion in the Registration Statement; and (D) the Business Entity Information for North Texas Energy, Inc. as shown on the web page of the Secretary of State of Nevada on April 2, 2012, which listsKevin Jones as the sole director of the Company, (collectively, the "Documents"). 1 In our examination, we have assumed, without investigation, the following: (1) the authenticity of the Documents; (2) the genuineness of all signatures to the Documents; (3) the legal capacity of all persons who executed the Documents; (4) the valid execution by all persons who executed the Documents; (5) that such Documents are free from any form of fraud, misrepresentation, duress or criminal activity; and (6) the copies which were submitted to us conform to the originals of the Documents. Solely for purposes of this opinion, you should assume that our investigation was and will be limited exclusively to the Documents. We believe that a review of the Documents was what was necessary in order for us to render this opinion. In rendering this opinion, we have assumed the legal competency of all persons who executed the Documents and the due authorization, valid execution, delivery and acceptance of all Documents by all parties who executed the Documents. No opinion is being rendered hereby with respect to the truth and accuracy, or completeness of the Registration Statement or any portion thereof. We did not review the Registration Statement for purposes of this opinion. Based upon the foregoing, it is our opinion that, subject to the limitations set forth herein, the Shares to be sold by the Company pursuant to the Registration Statement, will be duly and validly authorized, legally issued, fully paid and non-assessable when issued by the Company if the consideration for the Shares as required in the Registration Statement is received by the Company. We consent to the filing of this opinion as an Exhibit to the Registration Statement and to the reference to our firm, solely with respect to the issuance of this opinion, in the Prospectus which is a part of the Registration Statement. Very truly yours, Mintz & Fraade, P.C. By: /s/ Alan P. Fraade Alan P. Fraade 2
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Orion Diversified Technologies, Inc.
53 WestHills Road
Huntington Station, NY 11746
At a meeting of the Board of Orion Diversified Technologies, Inc., held at the
Corporate Offices at 53 West Hills Road, Huntington Station, on July 25, 2001 at
2 PM EDT
A quorum being present, the chairman asked that a record be made of the
following facts:
1. That David Sackler had caused to be filed with the SEC a Form 15, which would
delist Orion Diversified Technologies, Inc., was without authorization and
without a Board resolution necessary to authorize the same.
2. That his actions would cause great financial harm to the Corporation and
otherwise totally disenfranchise over 300 shareholders.
3. That the actions of David Sackler were ultra vires acts, and necessitated
that the Board take corrective steps, as follows:
1. Terminate Mr. Sackler as President Pro temp and reappoint Mr. Petito as
president.
2. Notify SEC, David Sackler, Harry Sackler, and Sackler Group II, Inc.
3. Notify Frank Hariton, Esq., Continental Stock Transfer, Roger Bernhammer, and
Steven Bloom, CPA.
4. Any other steps and proceedings necessary to minimize any damages to the
Corporation.
There being no opposition, the report of the chairman was accepted and otherwise
adopted by the Board unanimously.
Therefore, let it be resolved as follows:
1. The chairman should issue a termination notice to David Sackler relieving him
of all duties as President Pro temp.
2. Inform by letter, Frank Hariton, Esq., that he has been discharged as
attorney on all SEC matters, and should refrain from taking any steps or
proceedings in any matters whatsoever, concerning the Corporation.
3. That the chairman is further authorized to file a letter with the SEC
withdrawing Form 15.
4. That the chairman is authorized to file Form 8K informing the SEC and NASD,
and any brokerage houses of the withdrawal of Form 15.
5. That Joseph Petito, is authorized to reappoint himself as president pending
the next meeting of the shareholders.
6. That, Joseph Petito is authorized to send copies of all letters to
Continental Stock Transfer, Steven Bloom, CPA, Frank Hariton, Esq., Harry
Sackler, David Sackler, and Sackler Group II Inc.
That Joseph Petito take such other steps as necessary to minimize any damage to
the Corporation and bring any criminal or civil proceedings necessary to recover
any monetary losses to the corporation.
There being no further business, the Board adjourned
Joseph Petito
By:/s/ Irwin Lampbert
Irwin Lampert |
Exhibit 10.25
QCR HOLDINGS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(Effective October 23, 2008)
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (the “Participation Agreement”) is entered into as
of this 24th day of October, 2008 by and between QCR Holdings, Inc. (the
“Employer”) and Todd A. Gipple, an executive of the Employer (the
“Participant”).
RECITALS:
WHEREAS, QCR Holdings, Inc. (“QCR”) has adopted the QCR Holdings Executive
Deferred Compensation Plan (Effective October 23, 2008) (the “Plan”), the
Employer provides for participation in such Plan and the Administrator has
determined that the Participant is eligible to participate in the Plan on the
terms and conditions set forth in this Participation Agreement and the Plan.
NOW, THEREFORE, in consideration of the foregoing and the agreements and
covenants set forth herein, the parties agree as follows:
1. Definitions. Except as otherwise specifically provided herein, or unless the
context otherwise requires, the terms used in this Participation Agreement shall
have the same meanings as set forth in the Plan.
2. Incorporation of Plan. The Plan, a copy of which is attached hereto as
Exhibit A, is hereby incorporated into this Participation Agreement as if fully
set forth herein, and the parties hereby agree to be bound by all of the terms
and provisions contained in the Plan. The Participant hereby acknowledges
receipt of a copy of the Plan and, subject to the foregoing, confirms the
Participant’s understanding and acceptance of all of the terms and conditions
contained therein. The Plan and this Participation Agreement supersede and
replace in their entirety any prior agreements relating to such benefits.
3. Effective Date of Participation. The effective date of the Participant’s
participation in the Plan shall be January 1, 2002 (the “Participation Date”),
which includes any period Participant participated under an individual deferred
compensation agreement between the Participant and the Employer which was
amended and restated as the Plan.
4. Maximum Deferral Percentage. For purposes of Section 3.1.2 of the Plan, the
Participant is permitted to elect to defer up to one hundred percent (100%) of
the Participant’s Compensation on an annual basis to the Participant’s Deferral
Account.
5. Matching Contribution. For purposes of Section 4.1.2 of the Plan, the
Employer will credit the Participant’s Deferral Account with a Matching
Contribution equal to one hundred percent (100%) of the Participant’s Deferrals,
but not to exceed $15,000 (fifteen thousand dollars).
6. Interest. For purposes of Section 4.1.4 of the Plan, interest is to be
accrued on the account balances and compounded at an annual rate equal to the
Prime Rate as established on the first business day of the Plan Year. This
interest rate shall have a minimum or floor of six percent (6%) and shall not
exceed twelve percent (12%).
7. Change of Control Benefit — Amount of Benefit. For purpose of Section 5.3.1
of the Plan, the Participant’s benefit due to a Change of Control shall be
greater of (a) the Participant’s Deferral Account balance at the time of the
Separation from Service related to the Change of Control, or (b) $1,288,000 (one
million two hundred and eighty-eight thousand dollars).
8. Change of Control Benefit — Form of Payment and Payment Date. For purposes of
Section 5.3.2 of the Plan, the Participant’s benefit due to a Change of Control
shall be paid in a single lump sum within 60 days following the separation from
service on or after a Change of Control, subject to Section 5.6 of the Plan.
9. Death Benefits. For purposes of Section 6.1.1 of the Plan, the benefit due to
the death of the Participant shall be the greater of (a) the Participant’s
Deferred Account balance at the time of death, or (b) $1,288,000 (one million
two hundred and eighty-eight thousand dollars).
10. Successors. This Participation Agreement shall be binding upon each of the
parties and shall also be binding upon their respective successors and the
Employer’s assigns.
11. Amendments. This Participant Agreement may not be modified or amended except
by a duly executed instrument in writing signed by the Employer and the
Participant consistent with the provisions of Code Section 409A.
B-2
IN WITNESS WHEREOF, each of the parties has caused this Participation Agreement
to be executed as of the day first above written.
PARTICIPANT: QCR HOLDINGS, INC.
/s/ Todd A. Gipple
Todd A. Gipple
By: /s/ James J. Brownson
James J. Brownson
Chairman, QCR Holdings, Inc.
B-3 |
Exhibit 31.1 CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14 (a) OR RULE 15d-14 (a) OF THE SECURITIES EXCHANGE ACT OF 1934. I, Michael W. Evans, certify that: I have reviewed this annual report on Form 10-K of BAB, Inc. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a -15(e) and 15d -15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d -15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date:February 24, 2012 By: /s/Michael W. Evans Michael W. Evans, Chief Executive Officer
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Exhibit 10.4
PERFORMANCE AWARD AGREEMENT
[Full Name of Employee]
[Date]
Dear [First Name]:
Pursuant to the Amended and Restated 2011 Cash Incentive Plan (the “Plan”) of
AMC Networks Inc. (the “Company”), you have been selected by the Compensation
Committee of the Board of Directors of the Company to receive a contingent cash
award (the “Award”) effective as of March 12, 2013 (the “Effective Date”).
Capitalized terms used, but not defined, in this agreement (this “Agreement”)
have the meanings given to them in the Plan. The Award is subject to the terms
and conditions set forth below:
1.Amount and Payment of Award. In accordance with the terms of this Performance
Award Agreement, the target amount of your contingent Award is
$__________________ (the “Target Award”), which may be increased or decreased to
the extent the performance objectives set forth on Annex 1 hereto (the
“Objectives”) have been attained in respect of the period from January 1, 2013
through December 31, 2015 (the “Performance Period”). The Award, calculated in
accordance with Annex 1 attached hereto, will become payable to you upon the
date on which the Committee (as defined in Section 11 below) determines the
Company’s performance against the Objectives (the “Award Date”) provided, that
you have remained in the continuous employ of the Company or one of the AMC
Subsidiaries from the Effective Date through the Award Date.
2. Termination of Employment. If, on or prior to the Award Date, your
continuous employment by the Company or one of the AMC Subsidiaries ends for any
reason, other than as a result of your death, then you will automatically
forfeit all of your rights and interest in the Award regardless of whether the
Objectives are attained.
3. Death. If, prior to the end of the Performance Period, your employment
with the Company or any of the AMC Subsidiaries is terminated as a result of
your death then your estate will receive, promptly (and in any event within 30
days) following the date of such termination, payment of the Target Award
prorated for the number of completed months of your employment during the
Performance Period prior to such termination. If after the end of the
Performance Period but prior to the Award Date, your employment with the Company
or any of the AMC Subsidiaries is terminated as a result of your death then your
estate will receive, on the date payment is made to active eligible employees of
the Company, the Award, if any, to which you would have been entitled on the
Award Date had your employment not been so terminated.
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4. Going Private Transaction or Change in Control.
a. Going Private Transaction. Notwithstanding anything to the contrary
contained in this Agreement, if at any time a Going Private Transaction (as
defined below) occurs and immediately prior to such transaction you are employed
by the Company or one of the AMC Subsidiaries, the Target Award shall become
payable to you whether or not the Objectives have been attained at the earliest
of (i) January 1, 2016, (ii) the date of your death or (iii) the date subsequent
to the Going Private Transaction on which your employment with the Company, the
Surviving Entity or one of the AMC Subsidiaries is terminated (A) by the
Company, the Surviving Entity or one of the AMC Subsidiaries other than for
Cause (as defined below) or (B) by you for Good Reason (as defined below),
provided, in each case, that you remain in the continuous employ of the Company,
the Surviving Entity or one of the AMC Subsidiaries from the Effective Date
through such date. Notwithstanding the foregoing, if you become entitled to
payment of the Target Award by virtue of a termination in accordance with
(iii)(A) or (iii)(B) of this Section 4(a) and are determined by the Company to
be a “specified employee” within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (“Section 409A of the IRC”), the Target Award
shall be paid to you on the earlier of: (i) January 1, 2016, (ii) the date that
is six months from your date of employment termination and (iii) any other date
on which such payment or any portion thereof would be a permissible distribution
under Section 409A of the IRC. In the event of such a determination, the Company
shall promptly following the date of your employment termination set aside such
amount for your benefit in a “rabbi trust” that satisfies the requirements of
Revenue Procedure 92-64, and on a monthly basis shall deposit into such trust
interest in arrears (compounded quarterly at the rate provided below) until such
time as such amount, together with all accrued interest thereon, is paid to you
in full pursuant to the previous sentence; provided, that no payment will be
made to such rabbi trust if it would be contrary to law or cause you to incur
additional tax under Section 409A of the IRC. The initial interest rate shall be
the average of the one-year LIBOR fixed rate equivalent for the ten business
days prior to the date of your employment termination.
b. Change in Control. Notwithstanding anything to the contrary contained in
this Agreement but subject to the subsections of this Section 4(b), if at any
time a Change of Control (as defined below) of the Company occurs and
immediately prior to such transaction you are employed by the Company or one of
the AMC Subsidiaries, you will be entitled to the payment of the Target Award
whether or not the Objectives have been attained.
i. If the actual Change of Control:
(A) is a permissible distribution event under Section 409A of the IRC or
payment of the Award promptly upon such event is otherwise permissible under
Section 409A of the IRC (including, for the avoidance of doubt, by reason of the
inapplicability of Section 409A of the IRC to the Award), then the Target Award
shall be paid to you by the Company promptly following the Change of Control; or
(B) is not a permissible distribution event under Section 409A of the IRC and
payment of the Award promptly upon such event is not otherwise permissible under
Section 409A of the IRC, then the Target Award shall be paid to you by the
Company (together with interest thereon pursuant to Section 4(b)(ii) below) on
the earliest to occur of:
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(1) any subsequent date on which you are no longer employed by the Company,
the Surviving Entity or any of the AMC Subsidiaries for any reason other than
termination of your employment by one of such entities for Cause (provided that
if you are determined by the Company to be a “specified employee” within the
meaning of Section 409A of the IRC, six months from such date);
(2) any other date on which such payment or any portion thereof would be a
permissible distribution under Section 409A of the IRC; or
(3) January 1, 2016.
ii. Upon any Change of Control, to the extent any amounts are due to be paid
to you at a later date pursuant to Section 4(b)(i)(B) above, the Company shall
promptly following the Change of Control set aside such amount for your benefit
in a “rabbi trust” that satisfies the requirements of Revenue Procedure 92-64,
and on a monthly basis shall deposit into such trust interest in arrears
(compounded quarterly at the rate provided below) until such time as such
amount, together with all accrued interest thereon, is paid to you in full
pursuant to Section 4(b)(i)(B) above); provided, that no payment will be made to
such rabbi trust if it would be contrary to law or cause you to incur additional
tax under Section 409A of the IRC. The initial interest rate shall be the
average of the one-year LIBOR fixed rate equivalent for the ten business days
prior to the date of the Change of Control and shall adjust annually based on
the average of such rate for the ten business days prior to each anniversary of
the Change of Control.
If and to the extent that any payment under this Section 4 is determined by the
Company to constitute “non-qualified deferred compensation” subject to Section
409A of the IRC and is payable to you by reason of your termination of
employment, then such payment shall be made to you only upon a “separation from
service” as defined for purposes of Section 409A of the IRC under applicable
regulations.
5. Definitions. For purposes of this Agreement:
“Cause” means, your (i) commission of an act of fraud, embezzlement,
misappropriation, willful misconduct, gross negligence or breach of fiduciary
duty against the Company or an Affiliate thereof, or (ii) commission of any act
or omission that results in a conviction, plea of no contest, plea of nolo
contendere, or imposition of unadjudicated probation for any crime involving
moral turpitude or any felony.
“Change of Control” means the acquisition, in a transaction or a series of
related transactions, by any person or group, other than Charles F. Dolan or
members of the immediate family of Charles F. Dolan or trusts for the benefit of
Charles F. Dolan or his immediate family (or an entity or entities controlled by
any of them) or any employee benefit plan sponsored or maintained by the
Company, of the power to direct the management of the Company or substantially
all its assets (as constituted immediately prior to such transaction or
transactions).
“Going Private Transaction” means a transaction involving the purchase of
Company securities described in Rule 13e-3 to the Securities and Exchange Act of
1934.
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“Good Reason” means: (a) without your express written consent any reduction in
your base salary or target bonus opportunity, or any material impairment or
material adverse change in your working conditions (as the same may from time to
time have been improved or, with your written consent, otherwise altered, in
each case, after the Effective Date) at any time after or within ninety (90)
days prior to the Going Private Transaction including, without limitation, any
material reduction of your other compensation, executive perquisites or other
employee benefits (measured, where applicable, by level or participation or
percentage of award under any plans of the Company), or material impairment or
material adverse change of your level of responsibility, authority, autonomy or
title, or to your scope of duties; (b) any failure by the Company to comply with
any of the provisions of this Agreement, other than an insubstantial or
inadvertent failure remedied by the Company promptly after receipt of notice
thereof given by you; (c) the Company’s requiring you to be based at any office
or location more than thirty-five (35) miles from your location immediately
prior to the Going Private Transaction except for travel reasonably required in
the performance of your responsibilities; or (d) any failure by the Company to
obtain the assumption and agreement to perform this Agreement by a successor.
“Surviving Entity” means the entity that owns, directly or indirectly, after
consummation of any transaction, substantially all the assets of the Company as
constituted immediately prior to consummation of such transaction. If any such
entity is at least majority-owned, directly or indirectly, by any entity (a
“parent entity”) which has shares of common stock (or partnership units) traded
on a national stock exchange or the over-the-counter market, as reported on
NASDAQ, then such parent entity shall be deemed to be the Surviving Entity,
provided that if there shall be more than one such parent entity, the parent
entity closest to ownership of substantially all the assets of the Company shall
be deemed to be the Surviving Entity.
6. Termination. Except for a right which has accrued to receive a payment on
account of the Award, this Agreement shall automatically terminate and be of no
further force and effect on the Award Date.
7. Transfer Restrictions. You may not transfer, assign, pledge or otherwise
encumber the Award other than to the extent provided in the Plan.
8. Unfunded Obligation. The Plan will at all times be unfunded and, except as
set forth in Section 4(b) of this Agreement, no provision will at any time be
made with respect to segregating any assets of the Company or any of its
Affiliates for payment of any benefits under the Plan, including, without
limitation, those covered by this Agreement. Your right or that of your estate
to receive payments under this Agreement shall be an unsecured claim against the
general assets of the Company, including any rabbi trust established pursuant to
Section 4(b). Neither you nor your estate shall have any rights in or against
any specific assets of the Company other than the assets held by the rabbi trust
established pursuant to Section 4(b).
9. Tax Representations and Tax Withholding. You hereby acknowledge that you
have reviewed with your own tax advisors the federal, state and local tax
consequences of receiving the Award. You hereby represent to the Company that
you are relying solely on such advisors and not on any statements or
representations of the Company, its Affiliates or any of their respective
agents. If, in connection with the Award, the Company is required to withhold
any amounts by reason of any federal, state or local tax, such withholding shall
be effected in accordance with Section 8 of the Plan.
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10. Right of Offset. You hereby agree that if the Company shall owe you any
amount that does not constitute “non-qualified deferred compensation” pursuant
to Section 409A of the IRC (the “Company-Owed Amount”) under this Agreement,
then the Company shall have the right to offset against the Company-Owed Amount,
to the maximum extent permitted by law, any amounts that you may owe to the
Company or the AMC Subsidiaries of whatever nature.
11. The Committee. For purposes of this Agreement, the term “Committee” means
the Compensation Committee of the Board of Directors of the Company or any
replacement committee established under, and as more fully defined in, the Plan.
12. Committee Discretion. The Committee has full discretion with respect to
any actions to be taken or determinations to be made in connection with this
Agreement, and its determinations shall be final, binding and conclusive.
13. Amendment. The Committee reserves the right at any time and from time to
time to amend or revise the terms and conditions set forth in this Agreement,
except that the Committee may not make any such amendment or revision in a
manner unfavorable to you (other than if immaterial) without your consent. Any
amendment of this Agreement shall be in writing and signed by an authorized
member of the Committee or a person or persons designated by the Committee.
14. Award Subject to the Plan. The Award and all other amounts payable
hereunder are subject to the Plan.
15. Entire Agreement. Except for any employment agreement between you and the
Company or any of its Affiliates in effect as of the date of the grant hereof
(as such employment agreement may be modified, renewed or replaced), this
Agreement and the Plan constitute the entire understanding and agreement of you
and the Company with respect to the Award covered hereby and supersede all prior
understandings and agreements. In the event of a conflict among the documents
with respect to the terms and conditions of the Award covered hereby, the
documents will be accorded the following order of authority: the terms and
conditions of the Plan will have highest authority followed by the terms and
conditions of your employment agreement, if any, followed by the terms and
16. Successors and Assigns. The terms and conditions of this Agreement shall
be binding upon, and shall inure to the benefit of, the Company and its
successors and assigns.
17. Governing Law. This Agreement shall be deemed to be made under, and in
all respects be interpreted, construed and governed by and in accordance with,
the laws of the State of New York without regard to conflict of law principles.
18. Jurisdiction and Venue. You irrevocably submit to the jurisdiction of the
courts of the State of New York and the Federal courts of the United States
located in the Southern District and Eastern District of the State of New York
in respect of the interpretation and enforcement of the provisions of this
Agreement and the Plan, and hereby waive, and agree not to assert, as a defense
that you are not subject thereto or that the venue thereof may not be
appropriate. You agree that the mailing of process or other papers in connection
with any action or proceeding in any manner permitted by law shall be valid and
sufficient service.
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19. Waiver. No waiver by the Company at any time of any breach by you of, or
compliance with, any term or condition of this Agreement or the Plan to be
performed by you shall be deemed a waiver of the same, any similar or any
dissimilar term or condition at the same or at any prior or subsequent time.
20. Severability. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any term or condition hereof shall not
affect the validity or enforceability of the other terms and conditions set
forth herein.
21. Exclusion from Compensation Calculation. By acceptance of this Agreement,
you shall be considered in agreement that the Award shall be considered special
incentive compensation and will be exempt from inclusion as “wages” or “salary”
in pension, retirement, life insurance and other employee benefits arrangements
of the Company and its Affiliates, except as determined otherwise by the
Company. In addition, each of your beneficiaries shall be deemed to be in
agreement that the Award shall be exempt from inclusion in “wages” or “salary”
for purposes of calculating benefits of any life insurance coverage sponsored by
the Company or any of its Affiliates.
22. No Right to Continued Employment. Nothing contained in this Agreement or
the Plan shall be construed to confer on you any right to continue in the employ
of the Company or any Affiliate, or derogate from the right of the Company or
any Affiliate, as applicable, to retire, request the resignation of, or
discharge you, at any time, with or without cause.
22. AMC Subsidiaries. For purposes of this Agreement, “AMC Subsidiary” shall
mean the direct and indirect subsidiaries of the Company (or, in the case of a
Going Private Transaction or Change in Control, the direct or indirect
subsidiaries of the Surviving Entity).
23. Section 409A. It is the Company’s intent that payments under this
Agreement be exempt from, or comply with, the requirements of Section 409A of
the IRC, and that this Agreement be administered and interpreted accordingly. If
and to the extent that any payment or benefit under this Agreement, or any plan
or arrangement of the Company or its affiliates, is determined by the Company to
constitute “non-qualified deferred compensation” subject to Section 409A of the
IRC and is payable to you by reason of your termination of employment, then (a)
such payment or benefit shall be made or provided to you only upon a “separation
from service” as defined for purposes of Section 409A of the IRC under
applicable regulations and (b) if you are a “specified employee” (within the
meaning of Section 409A of the IRC and as determined by the Company), such
payment or benefit shall not be made or provided before the date that is six
months after the date of your separation from service (or your earlier death).
Any amount not paid in respect of the six month period specified in the
preceding sentence will be paid to you, together with interest on such delayed
amount at the rate equal to the average of the one-year LIBOR fixed rate
equivalent for the ten business days prior to the date of your separation from
service (or your earlier death), in a lump sum after the expiration of such six
month period. The Committee will determine the Company’s performance against the
Objectives under Section 1 hereof during the calendar year immediately following
the Performance Period. This Section 23 will also apply to all previous awards
granted to you pursuant to the Plan. Each payment under this Agreement will be
treated as a separate payment under Section 409A of the IRC.
24. Headings. The headings in this Agreement are for purposes of convenience
only and are not intended to define or limit the construction of the terms and
-6-
25. Effective Date. Upon execution by you, this Agreement shall be effective
from and as of the Effective Date.
26. Signatures. Execution of this Agreement by the Company may be in the form
of an electronic or similar signature, and such signature shall be treated as an
original signature for all purposes.
AMC NETWORKS INC.
By:
Joshua Sapan
President and CEO
By your signature, you (i) acknowledge that a complete copy of the Plan and an
executed original of this Agreement have been made available to you and
(ii) agree to all of the terms and conditions set forth in the Plan and this
Agreement.
Name:
-7-
Annex 1
AMC Networks Performance Objectives
($ in thousands)
[TBD]
-8- |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.20549 FORM 8-K CURRENT REPORT Pursuant To Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported):November 14, 2007 EnerLume Energy Management Corp. (Exact name of registrant as specified in its charter) Colorado 0-16196 06-1168423 (State or other jurisdiction of incorporation) (Commission File Number) IRS Employer Identification Number Two Broadway Hamden, Connecticut 06518 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code:(203) 248-4100 Host America Corporation (Former name or former address if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions: []Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425) []Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) []Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) []Pre-commencement communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR 240.13e-4(c)) Section 2.Financial Information Item 2.02.Results of Operations and Financial Condition On November 14, 2007, EnerLume Energy Management Corp. issued a press release announcing its financial results for the quarter ended September30, 2007.A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K. The information in this report, including the exhibit attached hereto, is intended to be furnished and shall not be deemed “filed” for the purposes of or otherwise subject to liabilities under Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed to be incorporated by reference into the filings of the company under the Securities Act of 1933, as amended. Section 9 - Financial Statements and Exhibits Item 9.01.Financial Statements and Exhibits. (d)Exhibits Exhibit Number Exhibit Title or Description 99.1 Press Release dated November 14, 2007 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ENERLUME ENERGY MANAGEMENT CORP. Dated:November 14, 2007 By: /s/ Michael C. Malota Michael C. Malota Chief Financial Officer 3 ENERLUME ENERGY MANAGEMENT CORP. EXHIBIT INDEX Exhibit Number Exhibit Title or Description 99.1 Press Release dated November 14, 2007 4
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Exhibit 10.29
CONSOLIDATED EBITDA
Earnings before interest, taxes, depreciation and amortization, non-cash stock
compensation and payments, non-cash charges that do not result in future cash
obligations, any extraordinary or non recurring gains (losses) and any non-cash
transactions (Consolidated EBITDA) is not intended to present a measure of
performance in accordance with accounting principles generally accepted in the
United States (GAAP). Nor should Consolidated EBITDA be considered as an
alternative to statements of cash flows as a measure of liquidity. Consolidated
EBITDA is included herein as means to measure operating performance that
financial analysts, lenders, investors and other interested parties find to be a
useful tool for analyzing companies.
The definition of Consolidated EBITDA is defined in the senior secured
convertible notes as a measurement for meeting the notes covenant requirements.
For the three months ended September 30, 2007, the Consolidated EBITDA was
required to be no less than a negative $3,500 in order for the Company to be
compliant with covenant requirements of the notes. The Company was in compliance
with the required covenant at September 30, 2007.
The following table reconciles our consolidated net earnings per GAAP to
Consolidated EBITDA:
Three Months
Ended
September 31,
2007
Consolidated Net Income
$ 22,283
Any extraordinary or non recurring gains or losses
Gain from disposed operations, net of tax
(29,774 )
Non recurring (income) loss from the discontinued operations
(220 )
Write-down of Goodwill
1,395
Non-cash charges that do not result in future cash obligations
Gain from fair value of notes and warrants
(1,080 )
Gain on Sale of Fixed Assets
(6 )
Non-cash expenses associated with stock compensation expense
225
Tax refunds, use of net operating losses to offset taxes or other net tax
benefits
(10 )
Other non-cash charges that do not result in future cash obligations
—
Adjusted Net Loss before
$ (7,187 )
Interest Income
(112 )
Interest Expense
1,778
Income tax expense
333
Depreciation Expense
1,549
Amortization Expense
303
Any non-cash transcations
Foreign currency losses
81
Adjustments related to Inventory
225
Bad Debt Expense
165
Hedge or non-hedge derivative adjustments
—
Consolidated EBITDA
$ (2,865 )
Other Financial Disclosure Required based on terms of notes:
Consolidated Net Interest
$ 1,666
Consolidated Net Debt (Total Debt less Cash and Cash Equivalents) at
September 30, 2007
$ 11,876
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FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule13a-16 or 15d-16 under the Securities Exchange Act of 1934 For the month of July, 2012 Commission File Number: 001-13928 Royal Bank of Canada (Exact name of registrant as specified in its charter) 200 Bay Street Royal Bank Plaza Toronto, Ontario Canada M5J 2J5 Attention: Vice-President, Associate General Counsel & Corporate Secretary 1 Place Ville Marie Montreal, Quebec Canada H3C 3A9 Attention: Vice-President, Associate General Counsel & Corporate Secretary (Address of registrant’s principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form20-F o Form40-F x Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by RegulationS-T Rule101(b)(1): o Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by RegulationS-T Rule101(b)(7): o This report on Form 6-K is incorporated by reference into the Registration Statements on Form F-3 (File Nos. 333-171806 and 333-181552) and the Registration Statements on Form S-8 (File Nos. 333-12036, 333-12050, 333-13052, 333-13112, 333-13176, 333-14144, 333-110953, 333-117922, 333-178350). SUPPLEMENTAL DISCLOSURE The disclosure under “Liquidity and funding management – Credit ratings” in the registrant’s Second Quarter 2012 Report to Shareholders which was filed as an exhibit to its Form 6-K dated May 24, 2012, is hereby updated by adding the following: “On July 27, 2012, Standard & Poor’s Rating Agency announced that it has changed our rating outlook to “negative” from “stable.””An additional update to such disclosure was previously provided in the registrant’s Form 6-K dated June 26, 2012. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROYAL BANK OF CANADA By: /s/ David M. Power Name: David M. Power Title: Vice-President, Corporate Treasury Date: July 31, 2012 By: /s/ Saqib Nazir Name: Saqib Nazir Title: Vice-President, Corporate Treasury Date: July 31, 2012
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of October 2010 Commission File Number 001-31269 ALCON, INC. (Translation of registrant's name into English) Bösch 69 P.O. Box 62 6331 Hünenberg, Switzerland 41-41-785-8888 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F x Form 40-F Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (1): Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (7): Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No x If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- Attached as Exhibit 99.1 is the Press Release issued by Alcon, Inc. on October 4, 2010. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Alcon, Inc. (Registrant) Date: October 5, 2010 By: /s/ Martin Schneider Name:Martin Schneider Title: Attorney-in-Fact Date: October 5, 2010 By: /s/ Stefan Basler Name:Stefan Basler Title: Attorney-in-Fact
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Exhibit 10.2 NON-SOLICIT/NON HIRE AGREEMENT AND FULL RELEASE OF CLAIMS This Non-Solicit/Non-Hire Agreement and Full Release of Claims (the "Agreement") is by and between Sunoco LP and its and their subsidiaries and affiliates (“Sunoco” or “Employer”) and Clare P. McGrory ("Employee").
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Exhibit 10.1
AMENDMENT NO. 2 TO LOAN AGREEMENT
AMENDMENT NO. 2 TO LOAN AGREEMENT (this “Amendment”), dated and effective as of
January 31, 2018, is made by and between the U.S. SMALL BUSINESS ADMINISTRATION
(“SBA”), an agency of the United States, and its successors and assigns, and
FRESHSTART VENTURE CAPITAL CORPORATION (the “Licensee”), a Small Business
Investment Company, licensed under the Small Business Investment Act of 1958, as
amended, whose principal office is located at 437 Madison Avenue, New York, NY
10022.
RECITALS
WHEREAS, SBA and the Licensee are parties to that certain Loan Agreement,
effective as of January 25, 2017 (as amended, the “Existing Agreement”);
WHEREAS, SBA and the Licensee have agreed, subject to the terms and conditions
of this Amendment, that the Existing Agreement be amended to reflect certain
agreed upon revisions to the terms of the Existing Agreement.
NOW THEREFORE, SBA and the Licensee hereby agree, in consideration of the mutual
premises and mutual obligations set forth herein, that the Existing Agreement is
hereby amended as follows:
SECTION 1. Defined Terms. Except as otherwise indicated herein, all words and
terms defined in the Existing Agreement shall have the same meanings when used
herein.
SECTION 2. Amendments.
a. In Section 3 of the Existing Agreement the phrase, “February 1, 2018:
$5,500,000 (five million five hundred thousand dollars);” is hereby deleted in
its entirety and replaced with the following:
“February 1, 2018: $5,000,000 (five million dollars);”
b. In Section 3 of the Existing Agreement the phrase, “February 1, 2019:
$9,500,000 (nine million five hundred thousand dollars); and” is hereby deleted
in its entirety and replaced with the following:
“February 1, 2019: $10,000,000 (ten million dollars); and”
c. The fourth and fifth sentences of Section 6 of the Existing Agreement which
state, “As of the date of the Loan Agreement, SBA has approved the establishment
of an initial Reserve in the amount of 18 months of management and operating
expenses, initially equal to $1,575,000 plus any approved SBA follow-on
investment(s). Any increase or decrease to this Reserve of 18 months of
management and operating expenses, initially equal to $1,575,000, must be
approved by SBA in writing.” are hereby deleted in their entirety and replaced
with the following:
“SBA has approved the establishment of a Reserve in the amount of 6 months of
management and operating expenses, equal to $525,000 plus any approved SBA
follow-on investment(s). Any increase or decrease to this Reserve of 6 months of
management and operating expenses, equal to $525,000, must be approved by SBA in
writing; provided, however, that the Reserve shall never be less than the amount
of 3 months of management and operating expenses, equal to $262,500.”
SECTION 3. Representations and Warranties. Each party hereby represents and
warrants to the other party that it is in compliance with all the terms and
provisions set forth in the Existing Agreement on its part to be observed or
performed and hereby confirms and reaffirms each of its representations and
warranties contained in the Existing Agreement.
SECTION 4. Limited Effect. Except as expressly amended and modified by this
Amendment, the Existing Agreement shall continue to be, and shall remain, in
full force and effect in accordance with its terms (and as duly amended).
SECTION 5. Counterparts. This Amendment may be executed by each of the parties
hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument. Delivery of an executed signature page of this Amendment in Portable
Document Format (PDF) or by facsimile transmission shall be effective as
delivery of an executed original counterpart of this Amendment.
SECTION 6. Governing Law. Pursuant to Section 101.106(b) of Part 13 of the Code
of Federal Regulations, this Amendment is to be construed and enforced in
accordance with the Act, the Regulations and other Federal law, and in the
absence of applicable Federal law, then by applicable New York law to the extent
it does not conflict with the Act, the Regulations or other Federal law.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
FRESHSTART VENTURE CAPITAL CORPORATION
By:
/s/ Alvin Murstein
Name: Alvin Murstein Title: Chairman & Chief Executive Officer
U.S. SMALL BUSINESS ADMINISTRATION
By:
/s/ Thomas G. Morris
Name: Thomas G. Morris Title: Director, Office of Liquidation |
Exhibit 31.2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION SARBANES-OXLEY ACT OF 2002 (15 U.S.C. § 7241) I, Grant A. Barber, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Hughes Communications, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periodspresented in this report; 4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, ismade known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; and d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performingthe equivalent functions): a) all significant deficiencies in the design or operation of internal controls which are reasonably likely to adversely affect theregistrant’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting. Date:November 4, 2009 HUGHES COMMUNICATIONS, INC. (Registrant) /s/ Grant A. Barber Name: Grant A. Barber Title: Executive Vice President and Chief Financial Officer (Principal Financial
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Name: 2000/209/EC: Commission Decision of 24 February 2000 amending Council Decision 79/542/EEC and Decisions 92/260/EEC, 93/195/EEC and 93/197/EEC with regard to the animal health conditions for the temporary admission, re-entry and imports into the Community of registered horses from the Republic of Korea (notified under document number C(2000) 472) (Text with EEA relevance)
Type: Decision_ENTSCHEID
Subject Matter: health; Asia and Oceania; cooperation policy; means of agricultural production; tariff policy; trade
Date Published: 2000-03-11
Avis juridique important|32000D02092000/209/EC: Commission Decision of 24 February 2000 amending Council Decision 79/542/EEC and Decisions 92/260/EEC, 93/195/EEC and 93/197/EEC with regard to the animal health conditions for the temporary admission, re-entry and imports into the Community of registered horses from the Republic of Korea (notified under document number C(2000) 472) (Text with EEA relevance) Official Journal L 064 , 11/03/2000 P. 0022 - 0023COMMISSION DECISIONof 24 February 2000amending Council Decision 79/542/EEC and Decisions 92/260/EEC, 93/195/EEC and 93/197/EEC with regard to the animal health conditions for the temporary admission, re-entry and imports into the Community of registered horses from the Republic of Korea(notified under document number C(2000) 472)(Text with EEA relevance)(2000/209/EC)THE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community,Having regard to Council Directive 90/426/EEC of 26 June 1990 on animal health conditions governing the movement and imports from third countries of equidae(1), as last amended by the Act of Accession of Austria, Finland and Sweden, and in particular Articles 12, 13, 15, 16 and 19(ii) thereof,Whereas:(1) Council Decision 79/542/EEC(2), as last amended by Commission Decision 2000/2/EC(3), established a list of third countries from which Member States authorise imports of bovine animals, swine, equidae, sheep and goats, fresh meat and meat products.(2) The health conditions and veterinary certification for the temporary admission, imports and re-entry and of registered horses are laid down respectively in Commission Decisions 92/260/EEC(4) and 93/197/EEC(5), both as last amended by Commission Decisions 1999/613/EC(6) and 93/195/EEC(7), as last amended by Decision 1999/558/EC(8).(3) Following a Commission veterinary inspection mission to the Republic of Korea the animal health situation appears to be under the satisfactory control of the veterinary services.(4) The veterinary authorities of the Republic of Korea have provided a written undertaking to notify within 24 hours by fax, telegram or telex to the Commission and the Member States the confirmation of any infectious or contagious disease in equidae mentioned in Annex A to Directive 90/426/EEC, which are compulsorily notifiable in the country, and within due time any change in the vaccination or import policy in respect of equidae.(5) Following a serological survey carried out in preparation of the Olympic Games in 1986 and taking into account the results of the above inspections mission, the country should be considered free of glanders and dourine for at least six months; African horse sickness, Venezuelan equine encephalomyelitis and vesicular stomatitis have never occured.(6) The Republic of Korea cannot be considered free of Japanese B-encephalitis and vaccination against this disease is carried out.(7) The animal health conditions and veterinary certification must be adopted according to the animal health situation of the third country concerned; the present case relates only to registered horses.(8) For clarity the ISO country code should be used for amendments of lists of third countries.(9) Decision 79/542/EEC and Decisions 92/260/EEC, 93/195/EEC and 93/197/EEC must be amended accordingly.(10) The measures provided for in this Decision are in accordance with the opinion of the Standing Veterinary Committee,HAS ADOPTED THIS DECISION:Article 1In Part 2 of the Annex to Decision 79/542/EEC, special column for registered horses, the following line is inserted in accordance with the alphabetical order of the ISO country code: ">TABLE>"Article 2Decision 92/260/EEC is amended as follows:(1) The list of third countries in Group C of Annex I is replaced by the following: "Canada (CA), Hong Kong (HK), Japan (JP), Republic of Korea (KR), Macau (MO), Malaysia (Peninsula) (MY), Singapore (SG), Thailand (TH), United States of America (US)".(2) The title of the health certificate set out in Annex II C is replaced by the following: "HEALTH CERTIFICATEfor the temporary admission of registered horses into Community territory from Canada, Hong Kong, Japan, Republic of Korea, Macau, Malaysia (Peninsula), Singapore, Thailand, United States of America for a period of less than 90 days".(3) "Republic of Korea (KR)" is added to the third indent of paragraph (d) in Chapter III of Annex II C.(4) In footnote (6) of Annex II C the words "Hong Kong, Japan, Macau, Malaysia (Peninsula), Singapore and Thailand", are replaced by the words "Hong Kong, Japan, Republic of Korea, Macau, Malaysia (Peninsula), Singapore, Thailand".(5) "Republic of Korea (KR)" is added to the third indent of Chapter III, point (d) of Annexes II A, B, D and E.Article 3Decision 93/195/EEC is amended as follows:(1) The list of third countries in Group C of Annex I is replaced by the following: "Canada (CA), Hong Kong (HK), Japan (JP), Republic of Korea (KR), Macau (MO), Malaysia (Peninsula) (MY), Singapore (SG), Thailand (TH), United States of America (US)".(2) The list of third countries under Group C in the title of the health certificate set out in Annex II is replaced by the following: "Canada, Hong Kong, Japan, Republic of Korea, Macau, Malaysia (Peninsula), Singapore, Thailand, United States of America".Article 4Decision 93/197/EEC is amended as follows:(1) The list of third countries in Group C of Annex I is replaced by the following: "Canada (CA), Hong Kong (HK), Japan (JP), Republic of Korea (KR), Macau (MO), Malaysia (Peninsula) (MY), Singapore (SG), Thailand (TH), United States of America (US)".(2) The title of the health certificate set out in Annex II C is replaced by the following: "HEALTH CERTIFICATEfor imports into Community territory of registered horses from Hong Kong, Japan, Republic of Korea, Macau, Malaysia (Peninsula), Singapore, Thailand and of registered equidae and equidae for breeding and production from Canada, United States of America".(3) In footnote (5) of Annex II C "Hong Kong, Japan, Macau, Malaysia (Peninsula), Singapore and Thailand", is replaced by "Hong Kong, Japan, Republic of Korea, Macau, Malaysia (Peninsula), Singapore, Thailand".Article 5This Decision is addressed to the Member States.Done at Brussels, 24 February 2000.For the CommissionDavid BYRNEMember of the Commission(1) OJ L 224, 18.8.1990, p. 42.(2) OJ L 146, 14.6.1979, p. 15.(3) OJ L 1, 4.1.2000, p. 17.(4) OJ L 130, 15.5.1992, p. 67.(5) OJ L 86, 6.4.1993, p. 16.(6) OJ L 243, 15.9.1999, p. 12.(7) OJ L 86, 6.4.1993, p. 1.(8) OJ L 211, 11.8.1999, p. 53. |
Exhibit 10.2
STOCK OPTION AGREEMENT
UNDER
THE ALFA CORPORATION
STOCK INCENTIVE PLAN
***
TO:
Name of Optionee
On , The Board of Directors of Alfa (the “Board”) approved
the issuance to you of options (“Options”) to purchase shares of ALFA Common
Stock under the ALFA CORPORATION 1993 STOCK INCENTIVE PLAN, as said Plan may be
subsequently amended and restated, (the “Plan”).
The Options are granted subject to all terms and conditions of the Plan (a copy
of the Plan is on file in the Alfa Human Resource Department and can be reviewed
or obtained upon request) and the following additional terms and conditions:
1. Nonqualified Stock Options. The options granted to you hereby are
Nonqualified Stock Options as defined in the Plan. Under the terms of the grant,
you may purchase such shares at the times and for the price specified below.
2. Number of Shares Subject to Option. You are granted under this Agreement
Options to purchase shares of ALFA Common Stock (subject to adjustment as
provided in Section 8 of the Plan).
3. Price. The option price for the ALFA Common Stock is the closing bid price
quoted on the NASDAQ National Market System on the date of the approval of the
grant by the Board of Directors, i.e., per share.
4. Three-Year Accrual of Rights to Exercise Options: Options Exercisable only as
to Accrued Rights of Exercise. The Options granted to you and evidenced by this
Agreement may not be exercised until the right to exercise accrues hereunder.
The right to exercise shall accrue in three annual, cumulative installments, as
follows:
(a) The number of Options granted hereby shall be divided by three to determine
the maximum number of shares as to which the right of exercise shall accrue
annually. If such division should result in fractional shares, such fractions
shall be accumulated into a whole share and assigned to the first annual accrual
amount.
(b) The right to purchase one-third (1/3) of the optioned shares shall accrue on
, and the Option may be exercised as to any or all
of such shares at any time on or after that date until the expiration date of
the Options as specified herein.
(c) The right to purchase an additional one-third (1/3) of the optioned shares
shall accrue on , and the Option may be exercised as
to any or all of such shares at any time on or after that date until the
expiration date of the Options as specified herein.
(d) The right to purchase the remaining one-third (1/3) of the optioned shares
After , all or any Options evidenced by this
Agreement may be exercised in full until date of expiration as provided herein.
Not withstanding the above, all options shall vest immediately upon the death of
the Grantee.
5. Expiration Date of Options. Your unexercised Options will expire at the
earlier of (a) the close of business on , or (b)
the date determined under Section 6(h) of the Plan. Upon expiration of your
Options, your right to exercise will terminate, and you will have no rights in
any of the shares reserved for such Options.
6. Manner of Exercise of Options. Options must be exercised in the manner
provided in Section 6(e) of the Plan. Appropriate forms for exercise of Options
may be obtained from the Senior Vice President of Human Resources of ALFA.
7. Payment of Shares upon Exercise of Options. No shares will be issued to you
upon exercise until the shares are fully paid and ALFA’s withholding tax
obligations have been provided for as required herein and in Section 6(g) of the
Plan, as more fully provided in Paragraph 8 below. Payment for the shares of
Stock purchased upon exercise of Options may be made by any of the methods
specified in Section 6(f) of the Plan, provided, however, that if shares of
previously owned Stock shall be anticipated to be used as a medium of payment,
the use of such previously owned shares for that purpose shall be subject to
limitations on the use of previously owned stock as ALFA shall deem necessary or
appropriate. If you should anticipate the use of previously owned shares as a
medium of payment, contact the Senior Vice President of Human Resources of ALFA
prior to exercise for applicable restrictions and prohibitions.
8. Withholding Taxes. Any applicable federal or state withholding taxes required
to be withheld and paid by ALFA under federal, state or local laws shall be paid
or otherwise provided for in the manner provided in Section 6(g) of the plan. If
you desire to pay or provide for all or a part of your withholding tax
obligation by the surrender and cancellation of Options or the delivery of
previously owned shares of Stock, you must notify The Senior Vice President of
Human Resources of ALFA prior to your exercise for instructions upon making the
appropriate election provided therein (which election is subject to the approval
of the Compensation Committee of the Board of Directors of ALFA).
9. Options Nontransferable. The Options granted hereby are nontransferable
10. Miscellaneous.
(a) Options Subject to All Other Applicable Terms and Conditions of the Plan.
The Options evidenced hereby are subject to all other stated terms and
conditions of the Plan unless those terms and conditions which are discretionary
to the Board of Directors or Committee (as said term is defined in the Plan) are
specifically addressed in this Agreement.
(b) Reserved Right of Interpretation and Administration. This Agreement and the
Options evidenced hereby, as well as the Plan, are subject to the reserved
rights of administration and interpretation contained in the Plan.
IN WITNESS WHEREOF the undersigned Grantee of Options under the PLAN and ALFA
CORPORATION have entered into this Stock Option Agreement on and as of the date
set forth opposite the Grantee’s name and signature below.
Signature of Grantee Date: , 200
Printed or Typed Name of Grantee ALFA CORPORATION
Date: , 200 Attest: By:
Jerry A. Newby Chairman and Chief Executive Officer
H. Al Scott
Secretary
|
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM N-PX annual report of proxy voting record of registered management investment company Investment Company Act file number: 811- 3954 Dreyfus Tax Exempt Cash Management Funds (Exact name of registrant as specified in charter) c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166 (Address of principal executive offices) (Zip code) John Pak, Esq. 200 Park Avenue New York, New York 10166 (Name and address of agent for service) Registrant's telephone number, including area code: (212) 922-6000 Date of fiscal year end: 1/31 Date of reporting period: July 1, 2014-June 30, 2015 Item 1. Proxy Voting Record Dreyfus Tax Exempt Cash Management Funds Dreyfus California AMT-Free Municipal Cash Management Dreyfus New York AMT-Free Municipal Cash Management
|
Title: [VA]A man hugs her ex-girlfriend and grab her hands by the wrists after breakup. The man and her ex-girlfriend is involved in another dispute revolved around housing issues. The incident is reported to the police as a sexual harassment case.
Question:I apologize if the description in the title is a bit confusing. So here's the situation:
My friend's ex-girlfriend broke up with him weeks ago. Since they both signed an lease to the same apartment and his ex does not want to live in the same apartment with him, she tried to ask him to move out (swapping the lease with one of their friends). However my friend decided not to move out. After my friend told her he wasn't going to move out, she reported to the police that he sexually harassed her about three days ago when they were having a conversation in the leasing office after they broke up.
While they were at the leasing office three days ago, my friend tried to hug his ex while she was not willing to give him a hug. Nevertheless, he finally hugs her (maybe without her explicit consent) and she patted on his back telling him it is okay. After talking for another while, my friends grabs her wrists (not in a forceful manner) and tried to rescue the relationship. He let go of her when she tried to free her wrists.
The reason I have to describe the incident is that these are all videotaped by the security cam and could potentially be an evidence to the DA/Court. Do you think the police/DA would follow through with a sexual battery/simple battery charge? If so, what are the possibilities if this goes to trial?
Apologize again if the description is confusing. It's my first time posting on this subreddit. Please feel free to ask for more info if you need in order to understand the situation.
Topic:
Criminal Law
Answer #1: Battery is any unlawful offensive physical contact with another person, with or without his or her consent. The contact does not have to be violent for the crime of battery to take place, it can be merely any offensive touching.
She clearly expressed she did not want to be touched and he touched her anyways, multiple times.
We cannot determine who the DA will prosecute, but he clearly broke the law and it is a strong possibility that they will press charges on him if the girl reports the incident to the police. |
Back to Form 8-K [form8-k.htm]
Exhibit 10.3
Healthease of Florida, Inc.
Medicaid HMO Reform Contract
AHCA CONTRACT NO. FAR001
AMENDMENT NO. 7
THIS CONTRACT, entered into between the STATE OF FLORIDA, AGENCY FOR HEALTH CARE
ADMINISTRATION, hereinafter referred to as the "Agency" and HEALTHEASE OF
FLORIDA, INC., hereinafter referred to as the "Vendor", is hereby amended as
follows:
1.
Attachment II, Medicaid Reform Health Plan Model Contract, Section I.A.,
Definitions, is hereby amended as follows:
--
The definition for Baker Act is hereby amended to read as follows:
Baker Act- The Florida Mental Health Act, pursuant to Sections 394.451 through
394.4789, F.S..
--
The definition for Children/Adolescents is hereby amended to read as follows:
Children/Adolescents — Enrollees under the age of 21. For purposes of the
provision of Behavioral Health Services, adults are persons age eighteen (18)
and older, and children/adolescents are persons under age eighteen (18), as
defined by the Department of Children and Families.
--
The definition for Contract Year is hereby amended to read as follows:
Contract Year- Each September 1 through August 31 within the Contract Period.
--
The definition for HEDIS is hereby included as follows:
HEDIS– Healthcare Effectiveness Data and Information Set developed and published
by the National Committee for Quality Assurance. HEDIS includes technical
specifications for the calculation of the Performance Measures.
--
The definition for Kick Payment is hereby amended to read as follows:
Kick Payment– The method of reimbursing Prepaid Health Plans in the form of a
separate one-time fixed payment for specific services.
--
The definition for Quality Improvement Plan is hereby included as follows:
Quality Improvement Plan (QI Plan) -A written document that describes the Health
Plan’s Quality Improvement Program (QIP), processes, and current strategy for
improving the health care outcomes of its Enrollees. It shall include, at a
minimum, all components required in Section VIII, A. 2. b. (1) through (10).
2.
Attachment II, Medicaid Reform Health Plan Model Contract, Section II., General
Overview, Item D., General Responsibilities of the Health Plan, sub-item 14,
first paragraph, the second sentence is hereby deleted and replaced as follows:
A Medicaid Encounter Data System Companion Guide is located on the Medicaid web
site: http://ahca.myflorida.com/Medicaid/meds/index.shtml.
AHCA Contract No. FAR001, Amendment No. 7, Page 1 of 66
Medicaid HMO Reform Contract
3.
Attachment II, Medicaid Reform Health Plan Model Contract, Section III.,
Eligibility and Enrollment, Item A., Eligibility, sub-item 2.a, is hereby
deleted and replaced as follows:
a.
Foster care Children/Adolescents, including Children/Adolescents receiving
Medical Foster Care Services;
4.
Eligibility and Enrollment, Item C., Disenrollment, sub-item 3.h.6., is hereby
amended to read as follows:
6. Uncooperative or disruptive behavior resulting from the Enrollee’s
special needs (withthe exception of C.3.f. (2) above);
5.
Attachment II, Medicaid Reform Health Plan Model Contract, Section IV., Enrollee
Services and Marketing, Item A., Enrollee Services, sub-item 1.e. is hereby is
New Enrollee materials are not required for a former Enrollee who was
disenrolled because of the loss of Medicaid eligibility and who regains his/her
eligibility within 180 days and is automatically reinstated as a Health Plan
Enrollee. In addition, unless requested by the Enrollee, new Enrollee materials
are not required for a former Enrollee subject to Open Enrollment who was
disenrolled because of the loss of Medicaid eligibility, who regains his/her
eligibility within 180 days of his/her Health Plan enrollment, and is reinstated
as a Health Plan Enrollee. A notation of the effective date of the
reinstatement is to be made on the most recent application or conspicuously
identified in the Enrollee's administrative file. Enrollees, who were
previously enrolled in a Health Plan, lose and regain eligibility after 180
days, will be treated as new Enrollees.
6.
Services and Marketing, Item A., Enrollee Services, sub-item 4.a.(20), is hereby
(20)
Information regarding health care Advance Directives pursuant to Section 765.302
through 765.309, F.S., and 42 CFR 422.128.
7.
Services and Marketing, Item A., Enrollee Services is hereby amended to include
sub-items 10 and 11 as follows:
10.
Prescribed Drug List (PDL)
The Health Plan’s website must include the Health Plan’s PDL. The Health Plan
may update the online PDL by providing thirty (30) days written notice of any
change to the Bureaus of Managed Health Care and Pharmacy Services.
11. Medicaid Redetermination Notices
Upon implementation of a systems change relative to this section, the Agency
will provide Medicaid recipient redetermination date information to the Health
Plan.
a.
This information may be used by the Health Plan only as indicated in this
subsection.
b.
The Agency will notify the Health Plan sixty (60) Calendar Days prior to
transmitting this information to the Health Plan and, at that time, will provide
the Health Plan with the file format for this information. The Agency will
decide whether or not to continue to provide this information to Health Plan
annually and will notify the Health Plans of its decision by May 1 for the
coming Contract Year. In addition, the Agency reserves the right to provide
thirty (30) Calendar Days notice prior to discontinuing this subsection at any
time.
AHCA Contract No. FAR001, Amendment No. 7, Page 2 of 66
Medicaid HMO Reform Contract
c.
Within thirty (30) Calendar Days after the date of the Agency’s notice of
transmitting this redetermination date information, and annually by June 1
thereafter, the Health Plan must notify the Agency’s Bureau of Managed Care
(BMHC), in writing, if it will participate in the use of this information for
the Contract Year. The Health Plan’s participation in using this information is
optional/voluntary.
(1)
If the Health Plan does not respond in writing to the Agency within thirty (30)
Calendar Days after the date of the Agency’s notice, the Health Plan forfeits
its ability to receive and use this information until the next Contract Year.
(2)
If the Health Plan chooses to participate in the use of this information, it
must provide with its response indicating it will participate, to the Agency for
its approval, its policies and procedures regarding this subsection.
(i)
A Health Plan that chooses to participate in the use of this information may
decide to discontinue using this information at any time. In this circumstance,
the Health Plan must notify the Agency’s BMHC of such in writing. The Agency
will then delete the Health Plan from the list of Health Plans receiving this
information for the remainder of the Contract Year.
(ii)
A Health Plan that chooses to participate in the use of this information must
train all affected staff, prior to implementation, on its policies and
procedures and the Agency’s requirements regarding this subsection. The Health
Plan must document such training has been provided including a record of those
trained for the Agency review within five (5) Business days after the Agency’s
request.
(3)
If the Health Plan has opted-out of participating in the use of this
information, it may not opt back in until the next Contract Year.
(4)
Regardless of whether or not the Health Plan has declined to participate in the
use of this information, it is subject to the sanctioning indicated in this
subsection if this information has been or is misused by the Health Plan.
d.
If the Health Plan chooses to participate in using this information, it may use
the redetermination date information only in the methods listed below, and may
choose to use both methods to communicate this information or just one method.
(1)
be sent to their Enrollees reminding them that their Medicaid eligibility may
end soon and to reapply for Medicaid if needed. If the Health Plan chooses to
use this method to provide this information to its Enrollees, it must adhere to
the following requirements:
(a)
The Health Plan must mail the redetermination date notice to each Enrollee for
whom the Health Plan received a redetermination date. The Health Plan may send
one notice to the Enrollee’s household when there are multiple Enrollees within
a family that have the same Medicaid redetermination date provided that these
Enrollees share the same mailing address.
AHCA Contract No. FAR001, Amendment No. 7, Page 3 of 66
Medicaid HMO Reform Contract
(b)
The Health Plan must use the Agency’s redetermination date notice template
provided to the Health Plan for its notices. The Health Plan may put this
template on its letterhead for mailing; however, the Health Plan may make no
other changes, additions or deletions to the letter text.
(c)
The Health Plan must mail the redetermination date notices to each Enrollee
whose redetermination date occurs within the month for which the enrollment file
is received. Such notices must be mailed within five (5) Business Days after the
Health Plan’s receipt of the Agency’s enrollment file for the month in which the
Enrollee’s redetermination date occurs.
(2)
The Health Plan may use redetermination date information in automated voice
response (AVR) or integrated voice response (IVR) automated messages sent to
Enrollees reminding them that their Medicaid eligibility may end soon and to
reapply for Medicaid if needed. If the Health Plan chooses to use this method to
provide this information to its Enrollees, it must adhere to the following
requirements:
(a)
The Health Plan must send the redetermination date messages to each Enrollee
is received and for whom the Health Plan has a telephone number. The Health Plan
may send an automated message to the Enrollee’s household when there are
multiple Enrollees within a family that have the same Medicaid redetermination
date provided that these Enrollees share the same mailing address/phone number.
(b)
For the voice messages, the Health Plan must use only the language in the
Agency’s redetermination date notice template provided to the Health Plan. The
Health Plan may add its name to the message but may make no other changes,
additions or deletions to the message text.
(c)
The Health Plan must make such automated calls within five (5) Business Days
after the Health Plan’s receipt of the Agency’s enrollment file for the month in
which the Enrollee’s redetermination date occurs.
(3)
The Health Plan may not include the redetermination date information in any file
viewable by customer service or marketing staff. This information may only be
used in the letter templates and automated scripts provided by the Agency and
cannot be verbally referenced or discussed by the Health Plan with the
Enrollees, unless in response to an Enrollee inquiry regarding the letter
received, nor may it be used a future time by the Health Plan. If the Health
Plan receives Enrollee inquiries regarding the notices, such inquiries must be
referred to the Department of Children and Families.
e.
If the Health Plan chooses to participate in using this information, the Health
Plan must keep the following information available regarding each mailing made
for the Agency’s review within five (5) Business Days after the Agency’s
request:
AHCA Contract No. FAR001, Amendment No. 7, Page 4 of 66
Medicaid HMO Reform Contract
(1)
For each month of mailings, a dated hard copy or pdf of the monthly template
used for that specific mailing.
(a)
A list of each Enrollee for whom a monthly mailing was sent. This list shall
include each Enrollee’s name and Medicaid identification number to whom the
notice was mailed and the address to which the notice was mailed.
(b)
A log of returned, undeliverable mail received for these notices, by month, for
each Enrollee for whom a returned notice was received.
(2)
For each month of automated calls made, a list including of each Enrollee for
whom a call was made, the Enrollee’s Medicaid identification number, telephone
number to which the call was made, and the date each call was made.
The Health Plan must retain this documentation in accordance with the Agency’s
Standard Contract, I.D., Retention of Records.
f.
Plan must keep up-to-date and approved policies and procedures regarding the
use, storage and securing of this information as well as addressing all
requirements of this subsection.
g.
Plan must submit to the Agency’s BMHC a completed quarterly summary report in
accordance with Section XII, X., of this Attachment.
h.
Should any complaint or investigation by the Agency result in a finding that the
Health Plan has violated this subsection, the Health Plan will be sanctioned in
accordance with Section XIV, B. The first such violation will result in a 30-day
suspension of use of Medicaid redetermination dates; any subsequent violations
will result in 30-day incremental increases in the suspension of use of Medicaid
redetermination dates. In the event of any subsequent violations, additional
penalties may be imposed in accordance with Section XIV, B. Additional or
subsequent violations may result in the Agency’s rescinding of the provision of
redetermination date information to the Health Plan.
8.
Services and Marketing, Item B., Marketing, sub-item 3.b., the first sentence is
hereby amended to read as follows:
The Health Plan may leave Request for Benefit Information (RBI) cards (as
described in Section IV, B.7) in Provider offices, at Public Events and Health
Fairs.
9.
Services and Marketing, Item B., Marketing, sub-item 4.b., is hereby deleted and
replaced with the following:
b.
Health Fairs and Public Events shall be approved or denied by the Agency using
the following process:
(1)
The Agency will approve or deny the Health Plan's request to market no later
than five (5) Business Days from receipt of the request.
AHCA Contract No. FAR001, Amendment No. 7, Page 5 of 66
Medicaid HMO Reform Contract
(2)
The Health Plan shall use the standard Agency format. Such format will include
minimum requirements for necessary information. The Agency will explain in
writing what is sufficient information for each requirement.
(3)
The Agency will establish a statewide log to track the approval and disapproval
of Health Fairs and Public Events.
(4)
The Agency may provide verbal approvals or disapprovals to meet the five (5)
Business Day requirement, and the Agency will follow up in writing with specific
reasons for disapprovals within five (5) Business Days of verbal disapprovals.”
10.
Services and Marketing, Item B., Marketing, sub-item 7.c, is hereby deleted and
RBIs may be for an individual or for a family. No health status information may
be asked on the RBI. Each RBI shall include an option for the Potential
Enrollee to request information about all Health Plan choices and shall include
the name of the Choice Counselor/Enrollment Broker Help Line. All RBIs shall
contain no more than the following information for each Potential Enrollee:
(1)
Name;
(2)
Address (home and mailing);
(3)
County of residence;
(4)
Telephone number;
(5)
Date of Application;
(6)
Applicant’s signature or signature of parent or guardian;
(7)
Marketing Representative’s signature and DFS license number.
(8)
Names of additional family members;
(9)
Birth day and month only of each family member;
(10)
Gender of each family member;
(11)
Language preference;
(12)
Request for home visit.
Marketing Representatives may not verify a beneficiary’s eligibility. Any
issues or questions relating to the member’s eligibility must be forwarded to
the Health Plan’s home office for eligibility verification. The 24-hour or one
business day waiting period must elapse prior to any home or phone contact by
the Health Plan or the Health Plan’s Marketing Representatives. Only after such
verification and the required waiting period may a home visit be made.
RBI information may be used only once and may not be maintained in any files,
either paper or electronic, or by any other means, for use a future time by the
Marketing Representatives. RBI information may only be retained by the Health
Plan and may not be used for any future contacts should the beneficiary not be
able to enroll in the Health Plan at that time.
Health Plan’s Marketing Representative has violated this part, the Health Plan
will be sanctioned in accordance with Section XIV, B.. The first such violation
will result in a 30-day suspension of marketing; any subsequent violations will
result in 30-day incremental increases in the suspension of marketing. For
example the first sanction will result in a 30-day marketing suspension, the
second violation in a 60-day suspension, and the third violation in a 90-day
suspension.
In the event of any subsequent violations, additional penalties will be
imposed. In addition to the marketing suspension, a suspension of mandatory
assignments to the Health Plan will be imposed
AHCA Contract No. FAR001, Amendment No. 7, Page 6 of 66
Medicaid HMO Reform Contract
for the same time period. For example, the fourth suspension will result in a
suspension of marketing for 120 days and suspension of mandatory assignments for
120 days.
Any additional or subsequent violations may result in Contract
termination. These sanctions shall be cumulative during the remainder of the
Contract in effect at the time of the violation. Any violation that occurred in
the final year of the previous contract period will also be considered for the
current Contract Period in determining the cumulative nature of the sanction.
11.
Attachment II, Medicaid Reform Health Plan Model Contract, Section V. Covered
Services, Item E., Customized Benefit Package, sub-item 2. is hereby amended to
include the following as the last sentence of the paragraph:
The Health Plan shall not place limits on services and/or medications provided
to Enrollees diagnosed with HIV or AIDS.
12.
Attachment II, Medicaid Reform Health Plan Model Contract, Section V., Covered
Services, Item F., Coverage Provisions, sub-item 5.a., the last sentence, is
In addition, the Health Plan shall not deny claims for treatment obtained when a
representative of the Health Plan instructs the Enrollee to seek Emergency
Services and Care in accord ance with Section 743.064, Florida Statutues.
13.
Services, Item F., Coverage Provisions, sub-item 5.k, he first sentence, is
k.
In accordance with 42 CFR 438.114, the Health Plan shall approve claims for Post
Stabilization Care Services without authorization, regardless of whether the
Enrollee obtains a service within or outside the Health Plan's networ k for the
following situations:
14.
Services, Item F., Coverage Provisions, sub-item 5.n., is hereby amended to now
read as follows:
n.
Notwithstanding the requirements set forth in this Section, the Health Plan
shall approve all claims for Emergency Services and Care by nonparticipating
providers pursuant to the requirements set forth in section 641 .3155, F.S. and
42 CFR 438.114.
15.
Services, Item F., Coverage Provisions, sub-item 7.c., he last sentence, is
See Section 390.01114, F.S.
16.
Services, Item F., Coverage Provisions, sub-item 8., is hereby amended to
include the following:
(i)
The Health Plan shall pay for any Medically Necessary duration of stay in a
noncontracted facility which results from a medical emergency until such time as
the Health Plan can safely transport the Enrollee to a Plan participating
facility.
17.
Services, Item F., Coverage Provisions, sub-item 9.b.(3) is hereby deleted and
AHCA Contract No. FAR001, Amendment No. 7, Page 7 of 66
Medicaid HMO Reform Contract
(3) If not usually considered Medically Necessary, is considered
Medically necessary such that the outpatient Hospital services necessitate being
provided in a Hospital due to the Enrollee’s disability, mental health condition
or abnormal behavior due to emotional instability or a developmental disability.
18.
Services, Item F., Coverage Provisions, sub-item 13.a., the second sentence, is
hereby amended to now read as follows:
As required by section 381.004, F.S., 2004 and 64C-7.009, F.A.C.
19.
Services, Item F., Coverage Provisions, sub-item 17, the third sentence is
hereby deleted and replaced with the following:
Therapy services are limited to Children/Adolescents under the age of twenty-one
(21).
20.
Services, Item F., Coverage Provisions, sub-item 18.c.(2)., is hereby amended to
now read as follows
(2)
Must provide Transportation Services for all Enrollees seeking Medically
Necessary Medicaid services, regardless of whether or not those services being
sought are covered under this Contract. This includes such services as
Prescribed Pediatric Extended Care (PPEC);
21.
Services, Item F., Coverage Provisions, sub-item 18.g., is hereby deleted and
g.
The Health Plan shall report immediately, in writing to the Agency’s Bureau of
Managed Health Care, any aspect of Transportation Service delivery, by any
Transportation services provider, any adverse or untoward incident (see Section
641.55, F.S.). The Health Plan shall also report, immediately upon
identification, in writing to the MPI, all instances of suspected Enrollee or
Transportation Services Provider fraud or abuse. (As defined in section
409.913, F.S.)
The Health Plan shall file a written report with the MPI, immediately upon the
detection of a potentially or suspected fraudulent or abusive action by a
Transportation services provider. At a minimum, the report must contain the
name, tax identification number and contract information of the Transportation
services provider and a description of the suspected fraudulent or abusive
act. The report shall be in the form of a narrative.
22.
Attachment II, Medicaid Reform Health Plan Model Contract, Section VI.,
Behavioral Health Care, Item B., Service Requirements, sub-item 1.f., is hereby
amended to now read as follows:
Crisis Stabilization Units may be used as a downward substitution for inpatient
psychiatric hospital care when determined medically appropriate. These bed days
are calculated on a two (2) for one (1) basis. Two CSU days count toward one
inpatient day. Beds funded by the Department of Children and Families, Substance
Abuse and Mental Health (SAMH) cannot be used for Enrollees if there are
non-funded clients in need of the beds. If CSU beds are at capacity, and some of
the beds are occupied by Enrollees, and a non-funded client presents in need of
services, the Enrollees must be transferred to an appropriate facility to allow
the admission of the non-funded client. Therefore, the Health Plan must
demonstrate adequate capacity for inpatient hospital care in anticipation of
such transfers.
AHCA Contract No. FAR001, Amendment No. 7, Page 8 of 66
Medicaid HMO Reform Contract
23. Attachment II, Medicaid Reform Health Plan Model Contract,
Section VI., Behavioral Health Care, Item B., Service Requirements, sub-item
4.c.(2), the first sentence, is hereby amended to read as follows:
Evaluation services, when determined Medically Necessary must include assessment
of mental status, functional capacity, strengths and service needs by trained
mental health staff.
24.
Behavioral Health Care, Item B., Service Requirements, sub-item 4.j., the last
sentence, is hereby amended to read as follows:
The protocol for integrating mental health services with substance abuse
services shall be monitored through the Quality of Care monitoring activities
completed by the Agency’s EQRO contractor and the Quality Improvement
requirements in Section VIII, A.3.b.
25.
Behavioral Health Care, Item B., Service Requirements, sub-item 5.b.(2), the
last bullet, is hereby amended to read as follows:
·
Do not possess the strengths, skills, or support system to allow them to access
or coordinate services. The Health Plan will not be required to seek approval
from the Department of Children and Families, District Substance Abuse and
Mental Health (SAMH) Office for individual eligibility or mental health targeted
case management agency or individual provider certification. The staffing
requirements for case management services are listed below. Refer to Section VI,
B.5.d., Additional Requirement For Targeted Case Management.
26.
Behavioral Health Care, Item B., Service Requirements, sub-item 9.a.(1), is
(1)
Mental health disorders due to or involving a general medical condition,
specifically ICD -9-CM Diagnoses 293.0 through 294.1, 294.9, 307.89, and 310.1;
and
27.
Behavioral Health Care, Item D., Assessment and Treatment of Mental Health
Residents Who Reside in Assisted Living Facilities (ALF) that hold a Limited
Mental Health License, the second sentence, is hereby amended to read as
follows:
A cooperative agreement, as defined in Section 429.02, F.S., must be developed
with the ALF if an enrollee is a resident of the ALF.
28.
Behavioral Health Care, Item G., Provision of Behavioral Health Services When
Not Covered by the Health Plan, sub-item 3., the last sentence, is hereby
The Health Plan shall request Disenrollment of all Enrollees receiving the
services described in this Section VI., G., Provision of Behavioral Health Care
Services When Not Covered by the Health Plan.
29.
Behavioral Health Care, Item H., Behavioral Health Services Care Coordination
and Management, sub-item 11., the parenthetical reference after the end of the
first sentence, is hereby amended to read as follows:
(See Section 409.912, F.S.)
AHCA Contract No. FAR001, Amendment No. 7, Page 9 of 66
Medicaid HMO Reform Contract
30. Attachment II, Medicaid Reform Health Plan Model Contract,
Section VI., Behavioral Health Care, Item H., Behavioral Health Services Care
Coordination and Management, sub-item 11., the second paragraph, the last
sentence, is hereby amended as follows:
The Health Plan shall participate in the SAMH planning process in each DCF
district. (See Section 409.912, F.S.)
31.
Attachment II, Medicaid Reform Health Plan Model Contract, Section VII.,
Provider Network, Item A., General Provisions, sub-item 1., is hereby amended to
now read as follows:
1.
The Health Plan shall have sufficient facilities, service locations, service
sites, and personnel to provide the Covered Services, described in Section V,
and Behavioral Health Services, described in Section VI.
32.
Provider Network, Item A., General Provisions, sub-item 8., is hereby amended to
include the following:
The Health Plan shall require each Provider to have a unique Florida Medicaid
Provider number, in accordance with the requirement of Section X, C. jj., of
this Contract. By May 2008, the Health Plan shall require each Provider to have
a National Provider Identifier (NPI) in accordance with section 1173(b) of the
Social Security Act, as enacted by section 4707(a) of the Balanced Budget Act of
1997.
a. The Health Plan need not obtain an NPI from the following Providers:
Individuals or organizations that furnish atypical or nontraditional services
that are only indirectly related to the provision of health care (examples
include taxis, home and vehicle modifications, insect control, habilitation and
respite services); and
b.
Individuals or businesses that only bill or receive payment for, but do not
furnish, health care services or supplies (examples include billing services,
repricers and value-added networks).
33.
Provider Network, Item E., Behavioral Health Services, sub-item 4., the first
paragraph, is hereby amended to read as follows:
The Health Plan’s array of Direct Service Behavioral Health Providers for adults
and children under the age of eighteen (18) shall include Providers that are
licensed or eligible for licensure, and demonstrate two (2) years of clinical
experience in the following specialty areas or with the following populations:
34.
Provider Network, Item E., Behavioral Health Services, sub-item 4.g., is hereby
Behavior management and alternative therapies for children under the age of
eighteen (18);
35.
Provider Network, Item E., Behavioral Health Services, sub-item 4.i., is hereby
Victims and perpetrators of sexual abuse (children under the age of eighteen
(18) and adults);
36.
Provider Network, Item E., Behavioral Health Services, sub-item 4.j., is hereby
AHCA Contract No. FAR001, Amendment No. 7, Page 10 of 66
Medicaid HMO Reform Contract
Victims and perpetrators of violence and violent crimes (children under the age
of eighteen (18) and adults);
37.
Provider Network, Item E., Behavioral Health Services, sub-item 5., is hereby
All Direct Service Behavioral Health Providers and mental health targeted case
managers serving children under the age of eighteen (18) shall be certified by
DCF to administer CFARS (or other rating scale required by DCF or the Agency).
38.
Provider Network, Item E., Behavioral Health Services, sub-item 7.a., the first
Have a baccalaureate degree from an accredited university, with major course
work in the areas of psychology, social work, health education or a related
human service field and, if working with children under the age of eighteen
(18), have a minimum of one (1) year full-time experience, or equivalent
experience, working with the target population.
39.
Provider Network, Item E E., Behavioral Health Services, sub-item 7.b., the
Have a baccalaureate degree from an accredited university and if working with
children under the age of eighteen (18), have at least three (3) years full-time
or equivalent experience, working with the target population.
40.
Provider Network, Item E., Behavioral Health Services, sub-item 9, the first
The Health Plan shall have access to no less than one (1) fully accredited
psychiatric community Hospital bed per 2,000 Enrollees, as appropriate, for both
children under the age of eighteen (18) and adults.
41.
Provider Network, Item E., Behavioral Health Services, sub-item 11, the first
The Health Plan shall ensure that it has Providers that are qualified to serve
Enrollees and experienced in serving severely emotionally disturbed children
under the age of eighteen (18) and severely and persistent mentally ill adults.
42.
Provider Network, Item E., Behavioral Health Services, sub-item 12, the first
The Health Plan shall adhere to the staffing ratio of at least one (1) FTE
Behavioral Health Care Case Manager for twenty (20) children under the age of
eighteen (18) and at least one (1) FTE Behavioral Health Care Case Manager per
forty (40) adults.
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43. Attachment II, Medicaid Reform Health Plan Model Contract,
Section VII., Provider Network, Item F., Specialists and Other Providers, is
hereby amended to include the following as sub-item 7:
7.
The Health Plan shall make a good faith effort to execute memoranda of agreement
with school districts participating in the certified match program regarding the
coordinated provision of school based services pursuant to Sections 1011.70 and
409.908(21), F.S.
44.
Provider Network, Item I., sub-item 3., the first paragraph, is hereby amended
The Health Plan shall make a good faith effort to give written notice of
termination within fifteen (15) Calendar Days after receipt of a Provider’s
termination notice to each Enrollee who received his or her primary care from,
or was seen on a regular basis by, the terminated Provider.
45.
Attachment II, Medicaid Reform Health Plan Model Contract, Section VIII, Quality
Management, Item A., Quality Improvement, sub-items 1.b. through 1.g., are
b.
The Health Plan shall develop and submit to the Agency a written Quality
Improvement Plan within thirty (30) Calendar Days from execution of the initial
Contract, and resubmit it annually by June 1 to the Agency’s Bureau of Managed
Health Care (BMHC) for written approval. The QIP shall include sections
defining how the QI Committee utilized any of the following programs to develop
their performance improvement projects (PIP): credentialing processes, case
management, utilization review, peer review, review of grievances, and review
and response to adverse events. Any problems/issues that are identified, but are
not included in a PIP, must be addressed and resolved by the QI Committee.
c.
The Health Plan’s written policies and procedures shall address components of
effective health care management including, but not limited to anticipation,
identification, monitoring, measurement, evaluation of Enrollee’s health care
needs, and effective action to promote Quality of care.
d.
The Health Plan shall define and implement improvements in processes that
enhance clinical efficiency, provide effective utilization, and focus on
improved outcome management achieving the highest level of success.
e.
The Health Plan and its QI Plan shall demonstrate in its care management,
specific interventions to better manage the care and promote healthier Enrollee
outcomes.
f.
The Health Plan shall cooperate with the Agency and the External Quality Review
Organization (EQRO). The Agency will set methodology and standards for Quality
Improvement (QI) with advice from the EQRO.
g.
Prior to implementation and annually thereafter, the Agency shall review the
Health Plan QI Plan.
46.
Management, Item A., Quality Improvement, sub-items 2.a through 2.d. are hereby
deleted and replaced with the following:
a.
The Health Plan’s governing body shall oversee and evaluate the QIP. The role of
the Health Plan’s governing body shall include providing strategic direction to
the QIP, as well as ensuring the QIP is incorporated into the operations
throughout the Health Plan. The written
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QI Plan shall clearly describe the mechanism within the Health Plan for
strategic direction from the governing body to be provided to the QIP and for
the QIP to communicate with the governing body.
b.
The Health Plan shall have a QIP Committee. The Health Plan 's Medical Director
shall serve as either the Chairman or Co-Chairman of the QIP Committee. Other
committee representatives shall be selected to meet the needs of the Health Plan
but must include: 1) the Quality Director; 2) the Grievance Coordinator; 3) the
Utilization Review Manager; 4) the Credentialing Manager; 5) the Risk
Manager/Infection Control Professional (if applicable); 6) the Advocate
Representative (if applicable) and 7) Provider Representation, either through
providers serving on the committee or through a provider liaison position, such
as a representative from the network management department. Individual staff
members may serve in multiple roles on the Committee if they also serve in
multiple positions within the Health Plan. The Health Plan is encouraged to
include an advocate representative on the QIP Committee. The Committee shall
meet on a regular periodic basis, no less than quarterly. Its responsibilities
shall include the development and implementation of a written QI Plan, which
incorporates the strategic direction provided by the governing body. The QI Plan
shall contain the following components:
(1)
The Health Plan’s guiding philosophy for Quality Management and it should
identify any nationally recognized, standardized approach that is used (for
example, PDSA, Rapid Cycle Improvement, FOCUS-PDCA, Six Sigma, etc.). Selection
of performance indicators and sources for benchmarking shall also be described.
(2)
A description of the Health Plan positions assigned to the QIP, including a
description of why each representative was chosen to serve on the Committee and
the roles each position is expected to fulfill. The resume of the QIP Committee
shall be made available upon the Agency’s request.
(3)
Specific training regarding Quality that will be provided by the Health Plan to
staff serving in the QIP. At a minimum, the training shall include protocols
developed by the Centers for Medicare and Medicaid Services regarding Quality.
(4)
The role of its Providers in giving input to the QIP, whether that is by
membership on the Committee, its Sub-Committees, or other means.
(5)
A standard for how the Health Plan will assure that QIP activities take place
throughout the Health Plan and document result Health Plan s of QIP activities
for reviewers. Protocols for assigning tasks to individual staff persons and
selection of time standards for completion shall be included. CMS protocols may
be obtained from either http://www.cms.hhs.gov/MedicaidManagCare/or
www.myfloridaeqro.com.
(6)
Standard describing the process the QIP will use to review and suggest new
and/or improved QI activities;
(7)
The process for selected and directing task forces, committees, or other Health
Plan activities to review areas of concern in the provision of health care
services to Enrollees;
(8)
The process for selecting evaluation and study design procedures;
AHCA Contract No. FAR001, Amendment No. 7, Page 13 of 66
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(9)
The process to report findings to appropriate executive authority, staff, and
departments within the Health Plan as well as relevant stakeholders, such as
network providers. The QI Plan shall also indicate how this communication will
be documented for Agency review; and
(10)
The process to direct and analyze periodic reviews of Enrollees' service
utilization patterns.
c.
The Health Plan shall maintain minutes of all QI Committee and Sub-Committee
meetings and make the minutes available for Agency review. The minutes shall
demonstrate resolution of items or be brought forward to the next meeting.
47.
Management, Item A., Quality Improvement, sub-item 3., the first sentence, is
The Health Plan shall monitor, evaluate, and improve the quality and
appropriateness of care and service delivery (or the failure to provide care or
deliver services) to Enrollees through performance improvement projects (PIPs),
medical record audits, performance measures, surveys, and related activities.
48.
Management, Item A., Quality Improvement, sub-item 3.a., is hereby amended to
read as follows:
a.
PIPs
Annually, by January 1, the Agency shall determine and notify the Health Plan if
there are changes in the number and types of PIPs the Health Plan shall perform
for the coming Contract Year. Beginning with the September 1, 2007 Contract
Year, the Health Plan shall perform four (4) Agency approved performance
improvement projects. There must be one clinical PIP and one non-clinical PIP.
(1)
One (1) of the PIPs must focus on Language and Culture, Clinical Health Care
Disparities, or Culturally and Linguistically Appropriate Services.
(2)
One (1) of the PIPs must be the statewide collaborative PIP coordinated by the
External Quality Review Organization.
(3)
One (1) of the clinical PIPs must relate to Behavioral Health Services.
(4)
One PIP must be designed to address deficiencies identified by the plan through
monitoring, performance measure results, member satisfaction surveys, or other
similar means.
(5)
Each PIP must include a statistically significant sample of Enrollees.
(6)
All PIPs must achieve, through ongoing measurements and intervention,
significant improvement to the Quality of care and service delivery, sustained
over time, in areas that are expected to have a favorable effect on health
outcomes and Enrollee satisfaction. Improvement must be measured through
comparison of a baseline measurement and an initial remeasurement following
application of an intervention. Change must be statistically significant at the
95% confidence level and must be
AHCA Contract No. FAR001, Amendment No. 7, Page 14 of 66
Medicaid HMO Reform Contract
sustained for a period of two additional remeasurements. Measurement periods and
methodologies shall be submitted to the Agency for approval prior to initiation
of the PIP. PIPs that have successfully achieved sustained improvement as
approved by the Agency shall be considered complete and shall not meet the
requirement for one of the four PIPs, although the Health Plan may wish to
continue to monitor the performance indicator as part of the overall QI program.
In this event, the Health Plan shall select a new PIP and submit it to the
Agency for approval.
(7)
Within 90 Calendar Days after initial Contract execution and then on June 1 of
each subsequent Contract Year, the Health Plan shall submit to the Agency’s
Bureau of Managed Health Care, in writing, a proposal for each planned PIP. The
PIP proposal shall be submitted using the most recent version of the External
Quality Review PIP Validation Report Form. Activities 1 through 6 of the Form
must be addressed in the PIP proposal. Annual submissions for on-going PIPs
shall update the form to reflect the Health Plan’s progress. In the event that
the Health Plan elects to modify a portion of the PIP proposal subsequent to
initial Agency approval, a written request must be submitted to the Agency. The
External Quality Review PIP Validation Report Form may be obtained from the
following website:
www.myfloridaeqro.com .
Instructions for using the form for submittal of PIP proposals and updates may
be obtained from the Agency.
(8)
The Health Plan’s PIP methodology must comply with the most recent protocol set
forth by the Centers for Medicare and Medicaid Services, Conducting Performance
Improvement Projects. This protocol may be obtained from either of the
following websites:
http://www.cms.hhs.gov/MedicaidManagCare/ or www.myfloridaeqro.com
(9)
Populations selected for study under the PIP must be specific to this Contract
and shall exclude non-Medicaid enrollees or Medicaid beneficiaries from other
states. In the event that the Health Plan contracts with a separate entity for
management of particular services, such as behavioral health or pharmacy, PIPs
conducted by the separate entity shall not include enrollees for other health
plans served by the entity.
(10)
The Health Plan’s PIPs shall be subject to review and validation by the External
Quality Review Organization. The Health Plan shall comply with any
recommendations for improvement requested by the External Quality Review
Organization, subject to approval by the Agency.
49.
Management, Item A., Quality Improvement, sub-item 3.b.(3)(i), is hereby amended
Perform a quarterly review of a random selection of ten percent (10%) or fifty
(50) medical records, whichever is less, of Enrollees who received Behavioral
Health Services during the previous quarter; and,
50.
Management, Item A., Quality Improvement, sub-item 3.b.(6), is hereby amended to
read as follows:
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Medicaid HMO Reform Contract
(6) Composition of local advisory groups shall follow Section VI,
Behavioral Health Care, P., Behavioral Health Managed Care Local Advisory Group.
51.
Management, Item A., Quality Improvement, sub-item 3.c., is hereby deleted and
c. Performance Measures (PMs)
The Health Plan shall collect data on patient outcome Performance Measures
(PMs), as defined by the Healthcare Effectiveness Data and Information Set
(HEDIS) or otherwise defined by the Agency. The Agency may add or remove
reporting requirements with sixty (60) Calendar Days advance notice.
Health Plan reporting on Performance Measures shall be submitted to the Agency
on an annual basis in a three-year phase-in schedule as specified in Attachment
II, Section XII, A.1.d., and in the Performance Measures Reporting Requirements
chart in Section XII, I. The submission of measures shall be cumulative so that
all measures must be collected and reported for Measurement Year Three.”
52.
Management, Item A., Quality Improvement, sub-item 3.h.(2)(c), is hereby deleted
in its entirety.
53.
Management, Item A., Quality Improvement, sub-items 3.h.(2)(d) through (2)(h)
are hereby renumbered as (2)(c) through (2)(g), respectively.
54.
Management, Item A., Quality Improvement, sub-item 3.h(5)(d), the last sentence,
is hereby amended to read as follows:
For each PCP and each OB/GYN Provider serving as a PCP, documentation in the
Health Plan’s credentialing files regarding the site survey shall include the
following:
55.
Management, Item A., Quality Improvement, sub-item 3., is hereby revised to
include the following:
i. Cultural Competency Plan
(1)
In accordance with 42 CFR 438.206, the Health Plan shall have a comprehensive
written Cultural Competency Plan (CCP) describing the program the Health Plan
has in place to ensure that services are provided in a culturally competent
manner to all Enrollees, including those with limited English proficiency. The
CCP must describe how Providers, Health Plan employees, and systems will
effectively provide services to people of all cultures, races, ethnic
backgrounds, and religions in a manner that recognizes values, affirms, and
respects the worth of the individual Enrollees and protects and preserves the
dignity of each. The CCP shall be updated annually and submitted to the Bureau
of Managed Health Care by October 1 for approval for implementation by January 1
of each Contract Year.
(2)
The Health Plan may distribute a summary of the CCP to network Providers if the
summary includes information about how the Provider may access the full CCP on
the Web site. This summary shall also detail how the Provider can request a hard
copy from the Health Plan at no charge to the Provider.
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Medicaid HMO Reform Contract
(3)
The Health Plan shall complete an annual evaluation of the effectiveness of its
CCP. This evaluation may include results from the CAHPS or other comparative
member satisfaction surveys, outcomes for certain cultural groups, member
grievances, member appeals, provider feedback and Health Plan employee surveys.
The Health Plan shall track and trend any issues identified in the evaluation
and shall implement interventions to improve the provision of services. A
description of the evaluation, its results, the analysis of the results and
interventions to be implemented shall be described in the annual CCP submitted
to the Agency.
56.
Attachment II, Medicaid Reform Health Plan Model Contract, Section VIII.,
Quality Management, Item B., Utilization Management (UM), sub-item 1.b., is
b.
The Health Plan shall report Fraud and Abuse information identified through the
Utilization Management program to the Agency’s MPI as described in Section X,
and referenced in 42 CFR. 455.1(a)(1).
57.
Quality Management, Item B., Utilization Management (UM), sub-item 5.h, the last
sentence, is hereby amended to now read as follows:
The Health Plan shall honor any written documentation of Prior Authorization of
ongoing Covered Services for a period of thirty (30) Calendar Days after the
effective date of Enrollment, or until the Enrollee's PCP reviews the Enrollee's
treatment plan for the following types of Enrollees:
58.
Quality Management, Item B., Utilization Management (UM), sub-items 6.b. and
6.c., and the first paragraph of sub-item 6.d., are hereby amended to now read
as follows:
b.
Each Disease Management program shall have policies and procedures that follow
the National Committee for Quality Assurance’s (NCQA’s) most recent Disease
Management Standards and Guidelines, which may be accessed online at
http://web.ncqa.org/tabid/381/Default.aspx. In addition to policies and
procedures, the Health Plan shall have a Disease Management program description
for each disease state that describes how the program fulfills the principles
and functions of each of the NCQA Disease Management Standards and Guidelines
categories. Each program description should also describe how Enrollees are
identified for eligibility and stratified by severity and risk level. The
Health Plan shall submit a copy of its policies and procedures and program
description for each of its Disease Management programs to the Agency by April
1st of each year.
c.
The Health Plan shall have a policy and procedure regarding the transition of
Enrollees from disease management services outside the Health Plan to the Plan’s
Disease Management program. This policy and procedure shall include
coordination with the Disease Management Organization (DMO) that provided
services to the Enrollee prior to his/her enrollment in the Health
Plan. Additionally, the Health Plan shall request that the Enrollee sign a
limited Release of Information to aid the Plan in accessing the DMO’s
information for the Enrollee.
d.
The Health Plan must develop and use a plan of treatment for chronic disease
follow-up care that is tailored to the individual Enrollee. The purpose of the
plan of treatment is to assure appropriate ongoing treatment reflecting the
highest standards of medical care designed to minimize further deterioration and
complications. The plan of treatment shall be on file for each Enrollee with a
chronic disease and shall contain sufficient information to explain the
AHCA Contract No. FAR001, Amendment No. 7, Page 17 of 66
Medicaid HMO Reform Contract
progress of treatment. Medication management, the review of medications that an
Enrollee is currently taking, should be an ongoing part of the plan of treatment
to ensure that the Enrollee does not suffer adverse effects or interactions from
contraindicated medications. The Enrollee’s ability to adhere to a treatment
regimen should be monitored in the plan of treatment as well.
59.
Quality Management, Item B., Utilization Management (UM), sub-item 6.e.(4)., is
(4)
If the Agency determines that the Health Plan will conduct the Disease
Management Provider satisfaction surveys, the Agency will provide the Health
Plan with the required sampling methodology and survey specifications by July 1,
2007.
60.
Attachment II, Medicaid Reform Health Plan Model Contract, Section IX, Grievance
System, Item A., General Requirements, sub-item 2., the second sentence, is
Before implementation, the Health Plan must request and receive written approval
from the Agency regarding the Health Plan’s Grievance System policies and
procedures.
61.
System, Item A., General Requirements, sub-item 3, is hereby amended to read as
follows:
3.
The Health Plan shall refer all Enrollees and/or providers, on behalf of the
Enrollee, (whether the provider is a participating Provider or a
nonparticipating provider) who are dissatisfied with the Health Plan or its
Actions to the Health Plan’s Grievance/Appeal Coordinator for processing and
documentation in accordance with this Contract and the Health Plan's
Agency-approved policies and procedures.
62.
Attachment II, Medicaid Reform Health Plan Model Contract, Section IX.,
Grievance System, Item B., Grievance Process, sub-item 3, is hereby amended to
read as follows:
3.
The Health Plan must complete the Grievance process in time to permit the
Enrollee's disenrollment to be effective in accordance with the time frames
specified in 42 CFR 438.56(e)(1) and Section 409.91211, F.S.
63.
Grievance System, Item C., The Appeal Process, sub-item 4.d., is hereby amended
d.
If services were not furnished while the Appeal was pending and the Appeal panel
reverses the Health Plan's decision to deny, limit or delay services, the Health
Plan must authorize or provide the disputed services promptly and as quickly as
the Enrollee's health condition requires.
64.
Grievance System, Item C., The Appeal Process, sub-item 4.e., is hereby amended
e.
If the services were furnished while the Appeal was pending and the Appeal panel
Plan must approve payment for disputed services in accordance with State policy
and regulations.
65.
Grievance System, Item C., The Appeal Process, sub-item 5.c., is hereby amended
AHCA Contract No. FAR001, Amendment No. 7, Page 18 of 66
Medicaid HMO Reform Contract
c.
The Health Plan shall resolve each Appeal within State-established time frames
not to exceed forty-five (45) Calendar Days from the day the Health Plan
received the initial Appeal request, whether oral or in writing.
66.
Attachment II, Medicaid Reform Health Plan Model Contract, Section X.,
Administration and Management, Item C., Provider Contracts Requirements,
sub-item 2.gg. is hereby amended to read as follows:
gg.
Contain no provision requiring the Provider to contract for more than one Health
Plan product line or otherwise be excluded (pursuant to Section 641.315, F.S.);
67.
Administration and Management , Item D., Provider Termination, sub-item 3., is
3.
The Health Plan shall notify Enrollees in accordance with the provisions of this
Contract regarding Provider termination; and,
68.
Administration and Management, Item E., Provider Services, sub-item 6.a., is
a.
The Health Plan shall establish a provider complaint system that permits a
provider to dispute the Health Plan’s policies, procedures, or any aspect of a
Health Plan’s administrative functions, including proposed Actions.
69.
Administration and Management, Item E., Provider Services, sub-item 6.e.(2), is
(2) Have dedicated staff for providers to contact via telephone,
electronic mail, or in person,to ask questions, file a provider complaint and
resolve problems;
70.
Administration and Management, Item F., Medical Records Requirements, sub-item
2.b, is hereby amended to read as follows:
b.
Must be legible and maintained in detail consistent with the clinical and
professional practice which facilitates effective internal and external peer
review, medical audit and adequate follow-up treatment; and,
71.
Administration and Management, Item H., Encounter Data, sub-item 3., is hereby
amended to read as follows
3.
Health Plans shall have the capability to convert all information that enters
their claims systems via hard copy paper claims to encounter data to be
submitted in the appropriate HIPAA compliant formats. Health Plans shall ensure
that network providers receiving subcapitation or a flat rate also generate
encounters, and the Health Plan is responsible for submitting these encounters
in the appropriate HIPAA compliant formats.
72.
Administration and Management, Item H., Encounter Data, sub-item 5., is hereby
5.
Health Plans shall require each Provider to have a unique Florida Medicaid
Provider number, in accordance with the requirement of Section X, C. ii. of this
Contract.
AHCA Contract No. FAR001, Amendment No. 7, Page 19 of 66
Medicaid HMO Reform Contract
73.
Administration and Management, Item J., Fraud Prevention, sub-item 4.d., is
d. Contain provisions for the confidential reporting of Health Plan
violations to theAgency’s MPI;
74.
Administration and Management, Item J., Fraud Prevention, sub-item 4.g., is
g.
Require all instances of provider or Enrollee Fraud and Abuse under State and/or
federal law be reported to the MPI. Additionally, any final resolution must
include a written statement that provides notice to the provider or enrollee
that the resolution in no way binds the State of Florida nor precludes the State
of Florida from taking further action for the circumstances that brought rise to
the matter;
75.
Administration and Management, Item J., Fraud Prevention, sub-item 4.h., first
h. Ensure that the Health Plan and all providers, upon request, and as
required by State and/orfederal law, shall:
76.
Administration and Management, Item J., Fraud Prevention, sub-item 4.i., is
i.
Ensure that the Health Plan shall cooperate fully in any investigation by the
Agency, MPI, MFCU or any subsequent legal action that may result from such an
investigation.
77.
Administration and Management, Item J., Fraud Prevention, sub-item 4., is hereby
amended to include the following:
l.
Provide details about the following, as required by Section 6032 of the federal
Deficit Reduction Act of 2005:
(1) the False Claim Act;
(2) the penalties for submitting false claims and statements;
(3) whistleblower protections;
(4) the law’s role in preventing and detecting fraud, waste and abuse;
and
(5) each person’s responsibility relating to detection and prevention.
78.
Administration and Management, Item J., sub-items 5 and 6 are hereby amended to
5.
In accordance with Section 6032 of the federal Deficit Reduction Act of 2005 the
Health Plan shall distribute written Fraud and Abuse policies to all employees.
If the Health Plan has an employee handbook, the Health Plan shall include
specific information about Section 6032 of the federal Deficit Reduction Act of
2005, the Health Plan‘s policies, and the rights of employees to be protected as
whistleblowers.
6.
The Health Plan shall comply with all reporting requirements set forth in
Section XII., Reporting Requirements.
AHCA Contract No. FAR001, Amendment No. 7, Page 20 of 66
Medicaid HMO Reform Contract
7. The Health Plan shall meet with the Agency periodically, at the
Agency’s request, to discuss fraud, abuse, neglect and overpayment issues. For
purpose of this section, the Health Plan Compliance Officer shall be the point
of contact for the Health Plan and the Agency’s Medicaid Fraud and Abuse Liaison
shall be the point of contact for the Agency.
79.
Administration and Management, Item I., Enhanced Benefit Program, The Healthy
Behaviors Definition and Reporting Requirements Table, is hereby deleted in its
entirety and replaced as follows:
Healthy Behaviors Definitions and Reporting Requirements
Children
Behavior #
Behavior Name
Reporting Process
1
Childhood dental exam
Reported by the plan using CPT code
2
Childhood vision exam
3
Childhood preventive care ( age-appropriate screenings and immunizations)
4
Childhood wellness visit
5
Keeps all primary care appointments
Adults
Behavior #
Behavior Name
Reporting Process
1
2
Mammogram
3
PAP Smear
4
Colorectal Screening
5
Adult Vision Exam
6
Adult Dental Exam
Reported by the plan using CPT code or Enhanced Benefit Universal Form (EBUF)
Additional Behaviors
Behavior #
Behavior Name
Reporting Process
1
Disease management participation
2a
Alcohol and/or drug treatment program participation
2b
Alcohol and/or drug treatment program 6 month success
3a
Smoking cessation program participation
3b
Smoking cessation program 6 month success
4a
Weight loss program participation
4b
Weight loss program 6 month success
5a
Exercise program participation
5b
Exercise program 6 month success
6
Flu Shot when recommended by physician
7
Compliance with prescribed maintenance medications
Provided and reported by the plan using NDC/GCN #
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80.
Attachment II, Medicaid Reform Health Plan Model Contract, Section XI.,
Information Management and Systems, Item D., sub-item 7., is hereby deleted and
replaced as follows:
7.
The Health Plan shall provide to the Agency full written documentation that
includes a corrective action plan. The corrective action plan shall include a
description of how problems with critical Systems functions will be prevented
from occurring again, and shall be delivered to the Agency within five (5)
Business Days of the problem’s occurrence.
81.
Information Management and Systems, Item H., Other Requirements, sub-item c., is
c.
The Health Plan shall also cooperate with the Agency in the continuing
development of the State’s health care data site (www.floridahealthstat.com).
82.
Attachment II, Medicaid Reform Health Plan Model Contract, Section XII.,
Reporting Requirements, Item A., Health Plan Reporting Requirements, sub-item
1.c., is hereby amended to read as follows:
c.
The Health Plan must submit its certification concurrently with the certified
data as outlined in Table 1 of Section XII (see 42 CFR 438.606(c)). The
certification page should be scanned and submitted electronically with the
certified data.
83.
1.d., is hereby deleted and replaced as follows:
d.
By July 1 of each year, the Health Plan shall deliver to the Florida Center for
Health Information and Policy Analysis a certification by an Agency-approved
independent auditor that the Performance Measure data reported for the previous
calendar year are fairly and accurately presented.”
84.
Reporting Requirements, Item A., Health Plan Reporting Requirements, sub-item 6,
6.
If the Health Plan fails to submit the required reports accurately and within
the timeframes specified, the Agency shall fine or otherwise sanction the Health
Plan in accordance with Section XIV, Sanctions. To be considered accurate, the
error ratio cannot exceed three percent (3%) for the total records submitted.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
AHCA Contract No. FAR001, Amendment No. 7, Page 22 of 66
Medicaid HMO Reform Contract
85.
7., Digit 1 Report Identifiers table, is hereby amended to read as follows:
Digit 1 Report Identifiers
R
Marketing Representative
I
Information Systems Availability
G
Grievance System Reporting
H
Inpatient Discharge Reporting
F
Financial Reporting
M
Minority Reporting
C
Claims Inventory
T
Transportation
S
Critical Incident Summary
E
Behavioral Health Encounter Data
B
Behavioral Health Pharmacy Encounter Data
P
Behavioral Health Required Staff/Providers
O
FARS/CFARS
86.
Reporting Requirements, Table 1, is hereby deleted in its entirety and replaced
by the following table:
AHCA Contract No. FAR001, Amendment No. 7, Page 23 of 66
Medicaid HMO Reform Contrac
Table 1
SUMMARY OF REPORTING REQUIREMENTS
Health Plan Reports Required by AHCA
Report
Specific Data Elements
Format
Frequency Requirements
Data and Certifications to be Submit Concurrently to:
Suspected Fraud Reporting
See Section X, K.
Narrative
Immediately upon occurrence
Via electronic mail to MPI
Critical Incident Report
See Section XII.F.
Code 15 Report
Immediately upon occurrence
electronic mail and Surface Mail to the Health Plan’s analyst at the Bureau of
Managed Health Care
Choice Counseling Disenrollment Reason Report
See Section XII B, 2
Choice Counseling Vendor proprietary format
Monthly– Provided by the Choice Counseling Vendor to the plan on the first
Tuesday after Monthly Magic
Uploaded to the Choice Counseling vendor’s secure ftp directory
Choice Counseling Involuntary Disenrollment Report
See Section XII B 3
Monthly– Provided by the plan to the Choice Counseling Vendor on the first
Thursday of every month.
Uploaded to the Choice Counseling Vendor’s secure ftp directory
Catastrophic Component
Threshold and Benefit Maximum
Report
See Section XII. AA,
Table 18
electronic template to
be provided by the
Agency
Monthly – Due fifteen (15) days after
the end of the month being reported
Data and Certification via Secure File Transfer Protocol (SFTP)
Provider Network Report
See Section XII, D., Table 3
Fixed record length ASCII flat file (.dat)
Monthly– Due on the first (1st) Thursday of the month (optional weekly
submissions on each Thursday for the remainder of the month)
FTP to Choice Counseling vendor
(???REFPROVYYYYMMDD.dat)
AHCA Contract No. FAR001, Amendment No. 7, Page 24 of 66
Medicaid HMO Reform Contrac
Report
Specific Data Elements
Format
Frequency Requirements
Marketing Representative Report
See Section XII, E., Table 4
electronic template provided by the Agency
Monthly– If the Health Plan is engaged in marketing activities, due within
fifteen (15) days after the end of the reporting month- Contains previous
calendar month’s data
Data and certification to Bureau of Managed Health Care (BMHC) by electronic
mail to [email protected]
(R***YYMM.xls)
Information Systems Availability and Performance Report
See Section XII, L., Table 6
Monthly– Due within fifteen (15) days after the end of the reporting month-
Contains previous calendar month’s data
Data and certification to BMHC by electronic mail to [email protected]
(I***YYMM.xls)
Minority Reporting
(M***YYMM.xls)
See Section XII, Z.
Narrative
Monthly– Due fifteen (15) days after the end of the month being reported
Enhanced Benefits Report
See Section XII, F., Table 5
Monthly– Due ten (10) days after the end of the month being reported
Submit via the Secure File Transmission Protocol (SFTP) SITE or mail CD ROM/DVD
to the Choice Counseling Section MS # 8
Customized Benefit Package Exhaustion of Benefits Report
See Section XII. BB, Table 19
Electronic template to be provided by the Agency
Inpatient Discharge Report(H***yyQ*.txt)
See Section XII CC, Table 20
Fixed record length text file
Quarterly – Due 30 Calendar days following the end of the quarter being reported
– Contains data for the entire quarter.
Data and certification via SFTP to the Agency
Grievance System Reporting
See Section XII, C., Table 2
Quarterly– Due forty-five (45) days after the end of the quarter being reported
– Contains data for the entire quarter. Combines both medical and behavioral
health care requirements to cover all grievances and appeals related to services
across the plan.
Data and certification to BMHC by Secure FTP (SFTP) or CD/DVD submission
(G*** yyQ*).txt)
Financial Reporting
(F*** yyQ*).xls)
See Section XII, J.
Electronic template provided by the Agency
Data and certification to BMHC by electronic mail to [email protected]
AHCA Contract No. FAR001, Amendment No. 7, Page 25 of 66
Medicaid HMO Reform Contrac
Report
Specific Data Elements
Format
Frequency Requirements
Claims Inventory Summary Reports
(C***YYQQ.xls)
See Section XII.M.,Tables 7-A, 7-B, 7-C and 7-D
Quarterly –. Due forty-five (45) days after the end of the quarter being
reported – Contains data for the entire quarter.
Data and certification to BMHC by electronic mail to [email protected]
Transportation Services and Performance Measures
See Section XII, Q., Tables 9 – 9i
Quarterly–due forty-five (45) days after the end of the quarter being reported –
Contains data for the entire quarter.
Annually– due on August 15 - contains cumulative data for the entire year
(T*** yyQ*).xls)
Pharmacy Encounter Data
*see section XII.N.3 for naming convention
See Section XII.O.
Quarterly– Due 30 days after the end of the quarter being reported – Contains
data for the entire quarter. Requires certification letter.
Data and certification by CD/DVD to HSD Contract Manager, or his/her designee,
at HSD
Medicaid Redetermination Notice Summary Report
See Section XII, DD.
Template to be provided by the Agency
– Contains data for the entire quarter, by month.
or CD/DVD submission to BMHC
Hernandez Settlement Agreement (HSA) Ombudsman Log
See Section XII, H.
Narrative
– Contains a copy of Hernandez Ombudsman Log for the quarter.
AHCA Contract No. FAR001, Amendment No. 7, Page 26 of 66
Medicaid HMO Reform Contrac
Report
Specific Data Elements
Format
Frequency Requirements
Hernandez Settlement Agreement (HSA) Report
Narrative
Annually - Due on August 1. Requires submission of the HSA Survey
Performance Measures
See Section XII, I
Table 21
Healthcare Effectiveness Data and Information Set (HEDIS) and Agency Defined
measures
Annually - Due no later than July 1 after the measurement year. Reporting is
done for each calendar year.
Electronic mail or CD/DVD submission to the Florida Center for Health
Information and Policy Analysis.
Cultural Competency Plan
See Section VIII A, 3. i
Narrative
Annually- Due on October 1 st for implementation by January 1 of each Contract
year.
Audited Financial Report
Annually - Within ninety (90) Calendar Days after the end of the Health Plan
Fiscal Year. Reporting is done for each calendar year.
electronic mail to [email protected]. In addition to the financial
template, the plan must provide a copy of the audited financial report by a
certified auditing firm, CPA and include a copy of the CPA's letter of opinion.
This can be submitted via a pdf file or hard copy to MS#26, Attn: Program
Compliance Unit.
Child Health Check Up Reports
See Section XII, N., Tables 8 and 8a
Annually - For previous federal fiscal year (Oct-Sep) due by January 15. Audited
report due by October 1.
AHCA Contract No. FAR001, Amendment No. 7, Page 27 of 66
Medicaid HMO Reform Contract
Table 1 Continued
Behavioral Health Specific Reporting
Report
Specific Data Elements
Format
Frequency Requirements
Submit to:
Critical Incidents Individual
See Section XII, U., Table 12a
Immediately upon occurrence
BMHC via Secure FTP (SFTP) and hardcopy to BMHC analyst
Critical Incident Summary
See Section XII. U., Table 12
Monthly – Due on the fifteenth (15th) of the month- Contains previous calendar
month’s data
BMHC via Secure FTP (SFTP)
(S***YYMM.xls)
Behavioral Health Services Grievance and Appeals
See Section XII.T. (see Section XII.C. and Table 2 for reporting instructions)
Quarterly – Due 45 days after the end of the quarter being reported – Contains
Data and certification via SFTP site
Behavioral Health Encounter Data (E***YYQ*.txt)
See section XII.X. Table 15
data for the entire quarter.
(B***YYQ*.txt)
See section XII.W. Tables 16
Required Staff/Providers
See Section XII, V., Table 13
Electronic mail to [email protected]
(P*** yyQ*).xls)
FARS / CFARS (O***YY06.txt or O***YY12.txt)
See Section XII,W., Table 14
Semi-annually - The reporting periods cover January through June and July
through December. It is due forty-five (45) days after the end of the reporting
period (August 15 and February 15).
Data and certification via SFTP
Enrollee Satisfaction Survey Summary
See Section XII, R., Table 10
Hardcopy
Annually - Due sixty (60) days after the end of the calendar year being
reported. Also requires submission of copy of survey tool, the methodology used,
and the results.
Electronic mail to [email protected] or hardcopy to BMHC
AHCA Contract No. FAR001, Amendment No. 7, Page 28 of 66
Medicaid HMO Reform Contract
Stakeholders Satisfaction Survey Summary
See Section XII, S., Table 11
Hardcopy
and the results.
AHCA Contract No. FAR001, Amendment No. 7, Page 29 of 66
Medicaid HMO Reform Contract
87.
Reporting Requirements, Item B., Enrollment/Disenrollment Reports, sub-item 2,
is hereby deleted and replaced with the following:
2.
Choice Counseling Disenrollment Reason Reports
The Agency or its Agent will provide Reform Disenrollment reason information to
the Health Plans after Contract execution. The Agency or its Agent will report
Disenrollment reason information to the Health Plans on a monthly basis. The
Agency or its Agent will provide the file format for Disenrollment reports. The
information on these reports includes only those Disenrollments
(voluntary/involuntary) processed by the Agency’s Choice Counselor/Enrollment
Broker.
88.
Reporting Requirements, Item B., Enrollment/Disenrollment Reports, is hereby
amended to include the following as sub-item 3:
3.
Involuntary Disenrollment Reports
Involuntary Disenrollments that meet the criteria established by the Agency
shall be submitted by the Health Plan to the Agency or its Agent in a manner and
format prescribed by the Agency. The Health Plan shall submit involuntary
Disenrollments monthly, by the first Thursday of the month, to the Agency’s
Choice Counselor/Enrollment Broker. Upon sixty (60) day notification from the
Agency, the report format and submission requirements may change
89.
Reporting Requirements, Item D., Provider Reporting, sub-item 3., is hereby
3.
The file is an ASCII flat file and is a complete refresh of the provider
information. The file must be submitted on the first Thursday of each month. The
file may be submitted each week by close of business on Thursday. The Agency or
its Choice Counselor/Enrollment Broker will reload the provider information each
Friday evening. The file name will be ???_PROVYYYYMMDD.dat (replacing ?’s with
the Health Plan’s three character approved abbreviation and yyyymmdd with the
date the file is submitted). Both the Choice Counselor/Enrollment Broker and
the Agency will use this required file. The Health Plan may use this optional
file submission opportunity to ensure that the information presented to
beneficiaries is the most current data available. Updated provider network
information is available to the Agency or its Choice Counselor/Enrollment staff
each Saturday morning.
90.
Reporting Requirements, Item D., Provider Reporting, Table 3., is hereby deleted
AHCA Contract No. FAR001, Amendment No. 7, Page 30 of 66
Medicaid HMO Reform Contract
Note: The following reporting material is proprietary information of ACS Inc.
and may not be used, duplicated, or altered without the written permission of
Corporate Management.
TABLE 3
MEDICAID PROVIDER FILE LAYOUT
Field #
Field Name
Field Length
Required Field
Field Format
Justification
Comments
1
Plan Code
9
X
alpha
HMO & PSN :
Left with leading zeros
MediPass: right justified
This is the 9 digit HMO Medicaid Provider ID, or PSN Supergroup, number
specific to the county of operation.
Effective 9-19-07, the Non-reform PSN subnetwork (SFCCN-PHT) will use a
Supergroup number.
This is the MediPass plan County identifier = MP+county number (MP06 = MediPass
Broward). Used for MediPass Providers, Non-Reform MediPass Supergroups
2
Provider Type
1
X
alpha
Left
Identifies the provider’s general area of service with an alpha character, as
follows:
P = Primary Care Provider (PCP)
I = Individual Practitioner other than a PCP
B = Birthing Center
T = Therapy
G = Group Practice (includes FQHCs and RHCs)
H = Hospital
C = Crisis Stabilization Unit
D = Dentist
R = Pharmacy
A = Ancillary Provider (DME providers, Home Health Care
Agencies, or other non-hospital, non-physician providers not listed as a
separate provider type, etc.)
3
Plan Provider Number
15
X
alpha
Left with leading zeros
Unique number assigned to the provider by the plan.
4
Group Affiliation
15
Required for all groups (type G) and providers (type P, I, D, or T) who are
members of a group
See Note For Individual Providers
alpha
Left with leading zeros
The unique provider number assigned by the plan to the group practice. This
field is required for all providers who are members of a group, such as PCPs and
specialists. The group affiliation number must be the same for all providers
who are members of that group. A record is also required for each group
practice (provider G) being reported.
For groups (provider Type G), this identification number must be the same as the
plan provider number.
NOTE: HMO and/or Reform PSNs: For HMO or Reform PSN individual providers that do
NOT practice as members of a group use the plan code (Plan Medicaid ID for the
county) with leading zeros.
5
SSN or FEIN
9
X
alpha
Left with leading zeros
Social Security number or Federal Identification Number for the individual
provider or the group practice.
6
Provider last name
30
X
alpha
Left
The last name of the provider, or the first 30 characters of the name of the
group. (Please do not include courtesy titles such as Dr., Mr., Ms., since
these titles can interfere with electronic searches of the data.) This field
should also be used to note hospital name. UPPER CASE ONLY PLEASE.
7
Provider first name
30
X
alpha
Left
The first name of the provider, or the continuation of the name of the
group. UPPER CASE ONLY PLEASE.
8
Address line 1
30
X
alpha
Left
Physical location of the provider or practice. Do not use P.O. Box or mailing
address is different from practice location. UPPER CASE ONLY PLEASE.
9
Address line 2
30
alpha
Left
Second line of the location address for the provider. UPPER CASE ONLY PLEASE
10
City
30
X
alpha
Left
Physical city location of the provider or practice. UPPER CASE ONLY PLEASE
11
Zip Code
9
X
numeric
Left with trailing zeros
Physical zip code location of the provider or practice. Please note that the
format does not allow for use of a hyphen. Accuracy is important, since address
information is one of the standard items used to search for providers that are
located in close proximity to the member.
12
Phone area code
3
numeric
Left
Area code for the phone number of the office. Please note that the format does
not allow for use of a hyphen.
13
Phone number
7
numeric
Left
Phone number of the office. Please note that the format does not allow for use
of a hyphen.
14
Phone extension
4
numeric
Left
Phone number extension of the office, if applicable. Please note that the format
does not allow for use of a hyphen.
15
Gender
1
alpha
Left
The gender of the provider.
Valid values: M = Male; F = Female; U = Unknown
16
PCP Indicator
1
X
Required for Provider Type P, or G if the group will be selected as the PCP.
alpha
Left
Used to indicate if an individual provider is a primary care physician.
Valid values: P = Yes, the provider is a PCP;
N = No, the provider is not a PCP.
This field should not be used to note group providers as PCPs for HMOs, since
members must be assigned to specific providers, not group practices. MediPass,
MPN, ER Div and Non-reform PSNs may allow enrollment to the group if
appropriate.
17
Provider Limitation
1
Required if PCP Indicator = P
alpha
Left
X = Accepting new patients
N = Not accepting new patients but remaining a contracted network provider
L = Not accepting new patients; leaving the network (Please note the “L”
designation at the earliest opportunity)
P = Only accepting current patients
C = Accepting children only
A = Accepting adults only
R = Refer member to HMO member services/Restricted Provider for MediPass
F = Only accepting female patients
S = Only serving children through CMS (MediPass/PSN only)
NOTE: This limitation code is critical to providing edits for Med.
Options/Choice Counseling staff to enroll within the provider’s patient
parameters.
18
HMO/
MediPass Indicator
1
X
alpha
Left
Valid Values: H = HMO, P= PSN, M=MediPass
This field must be completed with this designation for each record submitted by
the Plan.
19
Evening hours
1
alpha
Left
Y = Yes; N = No
20
Saturday hours
1
alpha
Left
21
Age restrictions
20
alpha
Left
Populate this field with free-form text, to identify any age restriction the
provider may have on their practice.
22
Primary Specialty
3
Required if Provider Type = P, I, D or T; also required for provider type G
(group) for MediPass and PSN where recipients are enrolled to the group.
numeric
Left with leading zeros
Insert the 3 digit code that most closely describes
001 Adolescent Medicine
002 Allergy
003 Anesthesiology
004 Cardiovascular Medicine
005 Dermatology
006 Diabetes
007 Emergency Medicine
008 Endocrinology
009 Family Practice
010 Gastroenterology
011 General Practice
012 Preventative Medicine
013 Geriatrics
014 Gynecology
015 Hematology
016 Immunology
017 Infectious Diseases
018 Internal Medicine
019 Neonatal/Perinatal
020 Neoplastic Diseases
021 Nephrology
022 Neurology
023 Neurology/Children
024 Neuropathology
025 Nutrition
026 Obstetrics
027 OB-GYN
028 Occupational Medicine
029 Oncology
030 Ophthalmology
031 Otolaryngology
032 Pathology
033 Pathology, Clinical
034 Pathology, Forensic
035 Pediatrics
036 Pediatric Allergy
037 Pediatric Cardiology
038 Pediatric Oncology &Hematology
039 Pediatric Nephrology
040 Pharmacology
041 Physical Medicine and Rehab
042 Psychiatry, Adult
043 Psychiatry, Child
044 Psychoanalysis
045 Public Health
046 Pulmonary Diseases
047 Radiology
048 Radiology, Diagnostic
049 Radiology, Pediatric
050 Radiology, Therapeutic
051 Rheumatology
052 Surgery, Abdominal
053 Surgery, Cardiovascular
054 Surgery, Colon / Rectal
055 Surgery, General
056 Surgery, Hand
057 Surgery, Neurological
058 Surgery, Orthopedic
059 Surgery, Pediatric
060 Surgery, Plastic
061 Surgery, Thoracic
062 Surgery, Traumatic
063 Surgery, Urological
064 Other Physician Specialty
065 Maternal/Fetal
066 Assessment Practitioner
067 Therapeutic Practitioner
068 Consumer Directed Care
069 Medical Oxygen Retailer
070 Adult Dentures Only
071 General Dentistry
072 Oral Surgeon (Dentist)
073 Pedodontist
074 Other Dentist
075 Adult Primary Care Nurse Practitioner
076 Clinical Nurse Spec
077 College Health Nurse Practitioner
078 Diabetic Nurse Practitioner
079 Brain & Spinal Injury Medicine
080 Family/Emergency Nurse Practitioner
081 Family Planning Nurse Practitioner
082 Geriatric Nurse Practitioner
083 Maternal/Child Family Planning Nurse Practitioner
084 Reg. Nurse Anesthetist
085 Certified Registered Nurse Midwife
086 OB/GYN Nurse Practitioner
087 Pediatric Neonatal
088 Orthodontist
089 Assisted Living for the Elderly
090 Occupational Therapist
091 Physical Therapist
092 Speech Therapist
093 Respiratory Therapist
100 Chiropractor
101 Optometrist
102 Podiatrist
103 Urologist
104 Hospitalist
BH1 Psychology, Adult
BH2 Psychology, Child
BH3 Mental Health Counselor
BH4 Community Mental Health Center
BH5 Case Manager
23
Specialty 2
3
numeric
Left with leading zeros
Use codes listed above.
24
Specialty 3
3
numeric
Left with leading zeros
25
Language 1
2
numeric
Left with leading zeros
01 = English
02 = Spanish
03 = Haitian Creole
04 = Vietnamese
05 = Cambodian
06 = Russian
07 = Laotian
08 = Polish
09 = French
10 = Other
26
Language 2
2
numeric
27
Language 3
2
numeric
28
Hospital Affiliation 1
9
numeric
Left with leading zeros
Hospital with which the provider is affiliated. Use the AHCA ID1 for accurate
identification.
29
Hospital Affiliation 2
9
numeric
Left with leading zeros
as above
30
Hospital Affiliation 3
9
numeric
Left with leading zeros
as above
31
Hospital Affiliation 4
9
numeric
Left with leading zeros
as above
32
Hospital Affiliation 5
9
numeric
Left with leading zeros
as above
33
Wheel Chair Access
1
alpha
Indicates if the provider’s office is wheelchair accessible. Use Y = Yes or
N = No.
34
# of member patients
4
X
(MediPass and PSN for Groups only)
numeric
Left with leading zeros
Information must be provided for PCPs only. Indicates the total number of
patients who are enrolled in submitting plan. For providers who practice at
multiple locations, the number of members specific to each physical location
must be specified.
35
Active Patient Load
4
X (not required for MediPass)
numeric
Left with leading zeros
Total Active Patient Load, as defined in HMO or PSN contract
36
Professional License Number
15
X
alpha/ numeric
Left with trailing spaces
(padded)
Must be included for all health care professionals and facilities.
NOTE: When AHCA has provided facility ID list with license information, the
professional license number will be required for providers other than health
care professional. Ancillary (provider type A) providers that are not health
care professionals, Birthing Centers (B), Crisis Stabilization Unit (C), Group
(G), Hospital (H), and Pharmacy ® provider records do not require a license
number).
37
AHCA Hospital ID /Facility ID2
8
Required if Provider Type = “H”, for HMO or PSN
numeric
Left with leading zeros
The number assigned by the Agency to uniquely identify each specific hospital by
physical location.
Currently, this field /ID number is required only for provider type
H=Hospital. Any out of state hospital for which an AHCA ID is not included
should be designated with the pseudo-number 99999999.
38
County Health Department (CHD) Indicator
1
alpha
Used to designate whether the individual or group provider is associated only
with a county health department. Y = Yes; N = No. This field must be completed
for all PCP and specialty providers.
39
NPI Type I
10
X as noted in comments
Left with Leading zeros
For health care providers who are individual human beings providing direct
services.
40
NPI Type II
10
Left with Leading zeros
For organization health care providers .
41
Medicaid Provider ID#
12
X
Left with Leading zeros
Provider Medicaid ID is required here even if it is in field #3. Note the
difference in field length. Report Medicaid IDs for provider Types A, B, C, D,
G, I, P, or T.
42
Filler
10
X
1 AHCA provided the list of AHCA IDS for hospitals to plans on 3-16-07.
2 AHCA provided the revised list of AHCA IDS for hospitals to plans on
3-16-07. The AHCA Facility ID will be provided to Plans at a later date. At
that time, Facility IDs will be required for Provider Types H, B and C after the
Plans have been given time to implement these numbers for their facilities.
AHCA Contract No. FAR001, Amendment No. 7, Page 38 of 66
Medicaid HMO Reform Contract
a. Trailer Record
The trailer record is used to balance the number of records received with the
number loaded on BESST. The data from the Trailer Record is not loaded on
BESST.
RECORD LENGTH: 76
Filed Name
Field Length
Field Format
Values
Trailer Record Text
36
Alpha
‘TRAILER RECORD DATA’
Record Count
7
Numeric
Total number of records on file
excluding the trailer record (right
justified, zero filled)
System Process date
8
Alpha
Mmddyyyy
Filler
25
b. Provider File Load
Each weekend ACS compiles the provider files and loads it to the Provider
table. During this process an error file is created for each plan identifying
the records that do not load to the table.
IF the plan does not send a new file, then the previous file is used for this
load. The tables are RELOADED not refreshed. Therefore, a file is needed for
each plan. If the file attempts to load and all records error off, there will
not be providers for that plan in the database. Weekly files are due by end of
business on Thursday.
ACS does not correct records provided by the plan. All records are loaded as
they are received. The plans are responsible for ensuring the data provided is
correct and complete.
All data in the file is loaded in upper case for use by BESST. All zip codes
are abbreviated to the first 5 digits of the zip code to facilitate searches.
c. Rules (Most provider network file rules are imbedded in the file
layout above.)
a)
If a provider practices at multiple ‘location addresses’, one record is
submitted for each location. The address is required and should be complete
with city and zip code.
b)
First occurrence of specialty code should be the ‘Primary’. This field should
be populated only with valid, state approved, specialty codes. This field is
not required but if not populated with a valid code, will omit the provider from
a by specialty search.
c)
HMO and Reform PSN beneficiaries do not have to select their PCP provider at the
time of enrollment. If they elect to do so, a provider, assigned to the plan
selected, will be identified with a PCP Indicator of P. If the PCP Indicator is
N or not populated, the provider cannot be selected as the beneficiary’s doctor,
groups cannot be selected as the primary care provider for an HMO or PSN plan.
d)
MediPass, Minority Physician Networks and ER Diversion Project beneficiaries DO
have to select a PCP at the time of enrollment.
d. Definitions (Field numbers correspond with layout grid above.)
9HCA Contract No. FAR001, Amendment No. 7, Page 39 of 66
Medicaid HMO Reform Contract
1. Plan Code: Required – For HMOs and Reform PSNs, this is the 9
digit HMO Medicaid Provider ID, or PSN Supergroupnumber specific to the county
of operations. Effective 9-19-07, the Non-reform PSN subnetwork (SFCCN-PHT)
will use a Supergroup number. This is the MediPassplan County identifier = MP +
county number (MP06 = MediPass Broward). Used for MediPass Provider and
Non-Reform Medipass Supergroups.
2.
Provider Type: Required - Identifies the physician’s general area of service
with an alpha character. See the provider description reference table for all
accepted values. Treating providers that are members of a group will have their
own record, provider type P, PCP indicator P, so the group or the individual may
be selected for enrollment. For PSN and Medipass-MPN and ER Diversion, each
Beneficiary will be enrolled to the Supergroup, the individual Provider selected
by the beneficiary will be provided to the PSN/MPN/PERD in the monthly Recipient
Data file.
3.
Plan Provider Number: Required - The unique number assigned to the provider by
the plan. Plans will be required to fill leading spaces with zeros. For
MediPass, MPNs, PERD, and Nonreform PSN, this is the assigned 9 digit Medicaid
ID for the provider.
4.
Group Affiliation:Required for Groups and members of groups (provider types, P,
I, D or T and G) (This field may be NULL for other records not associated with a
group)– This is the Plan Provider Number assigned by the HMO, PSN or MediPass to
the group practice that the provider is affiliated with. The group affiliation
number is the same for all providers within that group. While the Group
Affiliation is not required to be used for PCPs that are not members of a group
or for individual providers (i.e. non-PCPs), the provider file analysis is not
able to determine which I, T or D providers (or P) are solo
practitioners. Therefore, HMO or Reform PSNindividual providers that do NOT
practice as members of a group plan should populate this field and may use the
plan code (Plan Medicaid ID for the county) with leading zeroes or another
number, such as a number assigned to the provider by the plan, provider’s
Medicaid ID or other number.
5.
SSN/FEIN Number: Required - Social Security Number or Federal Identification
Number for the individual provider or group practice.
6.
Provider Last Name: Required - The last name of the provider (or beginning of
group name).
7.
Provider First Name:Optional - The first name of the provider (or continuation
of group name).
8.
Address Line 1: Required - First line of the practice/location address for the
provider.
9.
Address Line 2: Optional - Second line of the practice/location address for the
provider.
10.
City: Required – The city where the provider is located.
11.
Zip Code: Required – The zip code for the address of the provider.
12.
Phone Area Code:Optional – The area code for the phone number of the provider.
13.
Phone Number: Optional – The phone number for the provider.
AHCA Contract No. FAR001, Amendment No. 7, Page 40 of 66
Medicaid HMO Reform Contract
14.
Extension: Optional – The extension for the phone number of the provider.
15.
Gender: Optional – The gender of the provider. The allowed values are M=Male,
F=Female, U=Unknown or null.
16.
PCP Indicator: Required if Provider Type is P for all plans– Indicates if the
provider or group can be selected as a PCP. Valid Values are P=Yes the provider
can be selected as the primary, and N-No the provider cannot be selected as the
primary care provider. For Medipass or PSN enrollments, if the group record is
to be selected for enrollment, the PSP indicator must be P for the G, group
record. These are the only valid values for this field. See examples in this
document.
17.
Provider Limitation: Required if the PCP indicator is P – Limitation code the
provider has specified.
18.
HMO/MediPass Indicator: Required – Identifies if the provider is with an HMO=H,
MediPass=M or PSN=P. These are the only valid values for this field.
19.
Evening Hours: Optional – Indicates that the doctor or clinic is open in the
evenings. Values can be Y=Yes, N=No or null.
20.
Saturday Hours: Optional – Indicates that the doctor or clinic is open on
Saturdays. Values can be Y=Yes, N=No or null.
21.
Age Restrictions: Optional – Identifies the age restrictions that the provider
may have on their practice. This field is free form text, populate if
available.
22.
Primary Specialty: Three character field. Required if Provider Type = P, I, D
or T. Also required for provider type G (group) for MediPass and PSN where
recipients are enrolled to the group number. Primary specialty of the doctor.
23.
Specialty 2: Optional – Second specialty held by the doctor.
24.
Specialty 3: Optional – Third specialty held by the doctor.
25.
Language 1: Optional – Primary language spoken at the office. English should be
reported and not assumed spoken as the primary or other language spoken by the
provider.
26.
Language 2:Optional – Second language spoken at the office.
27.
Language 3: Optional – Third language spoken at the office.
28.
Hospital 1: Optional – First hospital the provider is affiliated with. See
hospital codes.
29.
Hospital 2: Optional – Second hospital the provider is affiliated with.
30.
Hospital 3:Optional – Third hospital the provider is affiliated with.
31.
Hospital 4:Optional – Fourth hospital the provider is affiliated with.
32.
Hospital 5: Optional – Fifth hospital the provider is affiliated with.
AHCA Contract No. FAR001, Amendment No. 7, Page 41 of 66
Medicaid HMO Reform Contract
33.
Wheel Chair Access: Optional – Indicates if the provider or clinic facility is
wheelchair accessible. Values are Y=Yes, N=No or null.
34.
# Beneficiaries: This field is required for Primary Care Providers, Provider
Type P. (HMOs and PSN) if assigning to an individual provider or G if assigning
to a group (MediPass/PSN). The total number of beneficiaries that have been
assigned to the provider/group at the location in the record.
35.
Active Patient Load: Required for HMOs and PSNs. Total Active Patient Load, as
defined in contract
36.
Professional License Number: Required. The professional license number issued
by the state for individual practitioners. Must be included for all health care
professionals (Provider Types P, I, T, or D). This field should be left
justified and padded with trailing spaces to maintain field length. NOTE: When
AHCA has provided facility ID list with license information, the professional
license number will be required for providers other than health care
professionals. Ancillary (provider type A) providers that are not health care
professionals, Birthing Centers (B), Crisis Stabilization Unit (C), Group (G),
Hospital (H), and Pharmacy (R) provider records do not require a license number.
37.
AHCA Hospital ID3/Facility ID: Required for HMOs and PSNs. The number assigned
by the Agency to uniquely identify each specific hospital or facility by
physical location. Any out of state hospital or facility for which an AHCA ID
is not included should be designated with the pseudo-number 99999999. The ID is
required for all provider types reported.
38.
County Health Department (CHD) Indicator: Required for HMOs and PSNs. Used to
designate whether the individual or group provider is associated only with a
all PCP and specialty providers.
39.
NPI Type I: Required (all plans) for health care providers who are individual
human beings providing direct services.
40.
NPI Type II: Optional (all plans) for organization health care providers
41.
Medicaid Provider ID #: Required for all plans. An individual Provider’s
Medicaid ID is required here even if it is in field #3 (expanded from 9 to 12
characters in the event of future expansion).
These provider types are:
I=Individual Practitioners other than a PCP
B=Birthing Center
T=Therapy
D=Dentist
A=Ancillary Provider
3 AHCA provided the revised list of AHCA IDS for hospitals to plans on
AHCA Contract No. FAR001, Amendment No. 7, Page 42 of 66
Medicaid HMO Reform Contract
42.
Filler – required to maintain full record length.
e. Valid Codes
HMO Table
Provider Description Information Table
Specialty Code Table
Hospital/Facility Code Table (Updated table to be provided by AHCA)
f. Provider Record Examples
PCP who practices outside of a group
Last Name
Plan Provider Number
Group Affiliation
PCP Indicator
Smith
15 digit Medicaid id
Not used (or can be equal to Plan Provider Number)
P
Treating provider – non PCP (i.e., specialist – private practice)
Last Name
Plan Provider Number
Group Affiliation
PCP Indicator
Smith
15 digit Medicaid id
N
PCP who practices as part of a group
Last Name
Plan Provider Number
Group Affiliation
PCP Indicator
Smith
15 digit Medicaid id assigned to the individual
Equal to Group’s Plan Provider Number
N
Clinic or Group Name
15 digit Medicaid id assigned to group
P
Specialist (group practice) – informational only, beneficiaries cannot enroll
with these providers unless the group is identified as a PCP.
Last Name
Plan Provider Number
Group Affiliation
Primary Spec
PCP Ind
Smith
15 digit Medicaid id
001
N
Clinic or Group Name
15 digit Medicaid id
Equal to Plan Provider Number
071
N
MPN/ER Diversion PCP Group or Individual PCP
Last Name
Plan Provider Number
Group Affiliation
PCP Indicator
Smith
Equal to MPN/ER Diversion Supergroup Provider Number
P
Clinic or Group Name
P
AHCA Contract No. FAR001, Amendment No. 7, Page 43 of 66
Medicaid HMO Reform Contract
g. Provider Error File
This file is produced by ACS for HMOs, PSNs and MediPass (including special
networks/projects) and contains information on the number of provider records
that were loaded into BESST and records that had errors and were not
loaded. The file is sent to each HMO, PSN and MediPass for each provider file
that is sent to ACS. The file is available the same day the new provider
information is available in BESST.
File Name =
Provider Error File
???_PROV_ERRyyyymmdd.dat
The date is the day the file is made available.
1..1. ??? = 3 character plan identifier
File Layout
Row #
Type
Description
1
Text
Message identifying purpose of file
2
Date
Date file was processed
3
Title and count
Count of records skipped by load process
4
Title and count
Count of records read by load process
5
Title and count
Count of records rejected by load process
6
Title and count
Count of records discarded by load process
7
Count
Number of rows loaded – should match the number of rows in the trailer record
minus any skipped, rejected or discarded
8
Blank
9
Title
BAD:
10
Blank
List of records skipped
11
Title
DISCARDED
12
Blank
List of records read and discarded
13
Title
Trailer record
14
Trailer record
Trailer record from provider file
Notes:
·
If the trailer record of the submitted provider file is not 76 characters it
will be counted as Discarded and under Trailer Record section of the error file.
·
If the trailer record starts with ‘TRAILER RECORD DATA’ but does not otherwise
match the trailer record format for the provider file, it will be listed as
Discarded and under Trailer Record section of the error file.
·
Blank rows in the provider file will show in the error file under BAD. This
section of the file generally only has one blank row between it and the
DISCARDED section. If more rows exist then the program is reporting blank rows
in the provider file.
·
If there is no trailer record listed in the Trailer Record of the file then
there was no trailer record in the provider file. A trailer record must match
the file layout to be considered by the program as a trailer record.
AHCA Contract No. FAR001, Amendment No. 7, Page 44 of 66
Medicaid HMO Reform Contract
File Example
THE FOLLOWING ERRORS WERE FOUND IN YOUR PROVIDER FILE
15-Feb-2006
Total logical records skipped: 0
Total logical records read: 5983
Total logical records rejected: 0
Total logical records discarded: 0
5983 Rows successfully loaded.
BAD:
DISCARDED:
Trailer Record:
TRAILER RECORD DATA 000598302132006
91.
Reporting Requirements, Item F., Enhanced Benefits Report, including Table 5, is
hereby deleted in its entirety and replaced with the following:
F.
Enhanced Benefits Report
The Health Plan shall submit a monthly report (flat text file) of all claims
paid for the following procedure codes in the prescribed format below. The
report shall be submitted to the Agency’s Bureau of Health Systems Development
via AHCA’s Secure FTP site, by the tenth (10th) Calendar Day of the month for
all claims paid for the previous month.
Table 5
Enhanced Benefits Naming Convention
The record is 90 bytes. File to include header record, detail records and
trailer record. Record fields are TAB delimited.
Health Plan Monthly Report
Digit Number
1
Report Identifier
Indicates the Report Type
"C"
2,3,4
Plan Identifier
3 letter unique Plan Identifier from Choice Counseling
"XXX"
5,6
Year
The Date is the date the data was sampled
"06"
7,8
Month
"12"
9,10
Day
"31"
Example:
CXXX061009.txt
CXXXYYMMDD.txt
AHCA Contract No. FAR001, Amendment No. 7, Page 45 of 66
Medicaid HMO Reform Contract
Health Plan Enhanced Benefits Credit Transaction
Format of the header record:
Bytes
01 – 01 Character ‘H’ indicating header
02 – 02 Character TAB delimiter
03 – 12 First of the month date to be processed, CCYY-MM-DD
13 – 13 Character TAB delimiter
14 – 15 Numeric 2 whole digits
File Type 01 = Health Plan Enhanced Benefit Credit Import
16 – 16 Character TAB delimiter
17 - 87 Character, spaces
88 - 88 Character TAB delimiter
89-89 Line Feed character
90-90 Carriage Return character
Format of each detail record:
Bytes 01 – 01 Character ‘D’ indicating detail
03 – 11 Character, 9 Plan ID
12 – 12 Character TAB delimiter
13 – 21 Character, 9 Recipient ID
22 – 22 Character TAB
delimiter
23 – 32 CCYY-MM-DD Date of Birth
33 – 33 Character TAB delimiter
34 – 38 Character, 5 Procedure Code
39 – 39 Character TAB delimiter
40 – 49 CCYY-MM-DD Date of Paid Claim / Date HP received EB
Universal Form
50 – 50 Character TAB delimiter
51 – 61 Character, 11 NDC
62 – 62 Character TAB delimiter
63 – 67 Character, 5 GCN
68 – 68 Character TAB delimiter
69 – 72 Numeric, 4 Quantity
73 – 73 Character TAB delimiter
74 – 76 Numeric, 3 Day Supply
77 – 77 Character TAB delimiter
78 – 87 CCYY-MM-DD Date of Service / End Date on the EB
Universal Form
88 – 88 Character TAB delimiter
89 – 89 Line Feed Character
90 – 90 Carriage Return Character
Format of the trailer record:
Bytes 01 – 01 Character ‘T’ indicating trailer
03 – 09 Total number of detail records, Sign Leading Separate 7
whole digits
10 – 10 Character TAB delimiter
11 – 88 Character, spaces
AHCA Contract No. FAR001, Amendment No. 7, Page 46 of 66
Medicaid HMO Reform Contract
Table 5A
CPT Procedure Codes and Enhanced Benefit Codes for Reporting Healthy Behaviors
CPT & EB CODES
No.
Procedure Code Number
Procedure
Occurrence Limit
Credit Amount Adult
Credit Amount Child
1
45330
CR
1
$25.00
$25.00
2
45378
CR
3
76090
MAMMO
1
$25.00
$25.00
4
76091
MAMMO
5
76092
MAMMO
6
88141
PAP
1
$25.00
$25.00
7
88142
PAP
8
88143
PAP
9
88150
PAP
10
88155
PAP
11
88164
PAP
12
88174
PAP
13
88175
PAP
14
92002
EYE Adult/Child
1
$25.00
$25.00
15
920 04
EYE Adult/Child
16
92012
EYE Adult/Child
17
92014
EYE Adult/Child
18
92015
EYE Adult/Child
19
92018
EYE Adult/Child
20
92020
EYE Adult/Child
21
99201
OV Initial-Adult/Child
2
$15.00
$25.00
22
99202
23
99203
24
99204
25
99205
26
99211
27
99212
28
99213
29
99214
30
99215
31
99381
PREV Child
5
$0.00
$25.00
32
99382
PREV Child
33
99383
PREV Child
34
99384
PREV Child
35
99385
PREV Child
36
99386
PREV Child
37
99387
PREV Child
38
99391
PREV Child
AHCA Contract No. FAR001, Amendment No. 7, Page 47 of 66
Medicaid HMO Reform Contract
CPT & EB CODES
No.
Procedure Code Number
Procedure
Occurrence Limit
Credit Amount Adult
Credit Amount Child
39
99392
PREV Child
40
99393
PREV Child
41
99394
PREV Child
42
99395
PREV Child
43
99396
PREV Child
44
99397
PREV Child
45
99403
PREV Child
46
99431
PREV Child
47
99432
PREV Child
48
99435
PREV Child
49
D1110
Dental
2
$15.00
$25.00
50
D1120
Dental
51
D1203
Dental
52
D1330
Dental
53
D1351
Dental
54
EB001
Congestive Heart Failure Disease Management Program
1
$25.00
$25.00
55
EB002
Diabetes Disease Management Program
1
$25.00
$25.00
56
EB003
Asthma Disease Management Program
1
$25.00
$25.00
57
EB004
HIV/AIDS Disease Management Program
1
$25.00
$25.00
58
EB005
Hypertension Disease Management Program
1
$25.00
$25.00
59
EB006
Other Disease Management Program
1
$25.00
$25.00
60
EB007
Flu Shot
1
$25.00
$25.00
61
EB008
Adult Dental Cleaning (preventative services)
1
$25.00
$25.00
62
EB009
Alcoholics Anonymous Program
1
$25.00
$25.00
63
EB109
Alcoholic Treatment 6 months success
2
$15.00
$15.00
64
EB010
Narcotics Anonymous Program
1
$25.00
$25.00
65
EB110
Narcotics Treatment 6 months success
2
$15.00
$15.00
AHCA Contract No. FAR001, Amendment No. 7, Page 48 of 66
Medicaid HMO Reform Contract
66
EB011
Smoking Cessation Program
1
$25.00
$25.00
67
EB111
Smoking Cessation. 6 months Success
2
$15.00
$15.00
68
EB012
Exercise Program
1
$25.00
$25.00
69
EB112
Exercise Program 6 months success
2
$15.00
$15.00
70
EB013
Weight Management
1
$25.00
$25.00
71
EB113
Weight Management 6 months success
2
$15.00
$15.00
92.
Reporting Requirements, Item I., Performance Measures Report, is hereby deleted
and replaced with the following:
Agency-Defined Performance Measure– These performance measures, not included in
the HEDIS data set, have been determined by the Agency to be critical to the
needs of the Medicaid population.
Hybrid Measure– A measure that requires the identification of a numerator using
both administrative and medical record data. The denominator consists of a
systematic sample of Enrollees drawn from the measure’s eligible population.
Measurement Year– January 1 - December 31
Report Year– The calendar year immediately following the Measurement Year
1.
The following Performance Measures Reporting Requirements chart provides the
listing of measures to be reported by the Health Plan and the phase-in schedule
encompassing the addition of the new measures. Measures 1 through 20 shall be
collected and reported for all Enrollees. Measures 21 through 33 shall be
collected and reported for Enrollees in the Health Plan’s respective Disease
Management programs. The Performance Measure (PM) report is due by July 1 after
the Measurement Year being reported.
a.
Measurement Year One captures January 1, 2007-December 31, 2007. The report
submission date for Year One is July 1, 2008.
b.
Measurement Year Two captures January 1, 2008-December 31, 2008. The report
submission date for Year Two is July 1, 2009.
c.
Measurement Year Three captures January 1, 2009-December 31, 2009. The report
submission date for Year Three is July 1, 2010.
AHCA Contract No. FAR001, Amendment No. 7, Page 49 of 66
Medicaid HMO Reform Contract
Table 21
Performance Measures Report
Medicaid Reform Performance Measures
Yr 1
Yr2
Yr3
Comments
Plan Population Measures
Existing Contract Measures
1.
Breast Cancer Screening – (BCS)
ü
2.
Cervical Cancer Screening – (CCS)
ü
3.
Childhood Immunization Status – (CIS)
ü
4.
Adolescent Immunization Status – (AIS)
ü
5.
Well-Child Visits in the First 15 Months of Life – (W15)
ü
6.
Well-Child Visits in the Third, Fourth, Fifth and Sixth Years of Life– (W34)
ü
7.
Adolescent Well Care Visits – (AWC)
ü
8.
Number of Enrollees Admitted to the State Mental Hospital
ü
Agency-Defined Measure
New Performance Measures & Contract Replacement Measures
9.
Follow-Up after Hospitalization for Mental Illness – (FUH)
ü
Contract Replacement Measure
10.
Antidepressant Medication Management – (AMM)
ü
11.
Use of Appropriate Medications for People with Asthma – (ASM)
ü
Allows trending for effectiveness of Disease Management Program
12.
Controlling High Blood Pressure – (CBP)
ü
Same As Above
13.
Comprehensive Diabetes Care – (CDC) – Without Blood Pressure Measure
ü
Same As Above
14.
Adults Access to Preventive /Ambulatory Health Services – (AAP)
ü
15.
Annual Dental Visits – (ADV)
ü
Contract Replacement Measure
16.
Prenatal and Postpartum Care – (PPC)
ü
Partial Prior Year Data Needed
17.
Frequency of Ongoing Prenatal Care – (FPC)
ü
18.
Ambulatory Care – (AMB)
ü
19.
Mental Health Utilization – Inpatient Discharges & Average Length Of Stay
– (MIP)
ü
20.
Mental Health Utilization – Inpatient, Intermediate, & Ambulatory Services –
(MPT)
ü
Disease Management (DM) Measures
All Disease Management Programs
21.
Smoking Cessation
ü
Agency-Defined Measure
22.
Body Weight Monitoring and / Loss (includes BMI)
ü
Agency-Defined Measure
23.
Medication Regimen Adherence
ü
Agency-Defined Measure
Diabetes Disease Management Program
24.
Foot Exam Annually
ü
Agency-Defined Measure
25.
Blood Glucose Self-Monitoring
ü
Agency-Defined Measure
26.
Use Angiotensin-Converting Enzyme (ACE) Inhibitors/Angiotensin Receptor Blockers
(ARB) Therapy
ü
Agency-Defined Measure
Hypertension Disease Management Program
27.
Lipid Profile Annually
ü
Agency-Defined Measure
Asthma Disease Management Program
28.
Use of Beta Agonist
ü
Agency-Defined Measure
29.
Use of Rescue Medication
ü
Agency-Defined Measure
30.
Use of Controller Medication
ü
Agency-Defined Measure
31.
Asthma Action Plan
ü
Agency-Defined Measure
32.
CD4 Test Performed and Results
ü
Agency-Defined Measure
33.
Viral Load Test Performed and Results
ü
Agency-Defined Measure
Cumulative Total Measures
13
25
33
AHCA Contract No. FAR001, Amendment No. 7, Page 51 of 66
Medicaid HMO Reform Contract
2.
Reporting Instructions
a.
Beginning with Measurement Year One data, each Health Plan shall submit PM data
no later than July 1 of the following year (Report Year).
b.
Data must be aggregated by Health Plan.
c.
For HEDIS and Agency-Defined PM there is no rotation schedule. Every PM is due
to the agency by July 1 of the report year.
d.
Data must be reported for every required data field for each PM. However, when
the denominator is less than 30, report "*" (asterisk) in the "rate" field. For
these PMs, other than "rate" report all data elements, including the numerator
and denominator.
e.
Extensions to the due date will be granted by the Agency for a maximum of 30
days from the due date in response to a written request signed by the chief
executive officer of the Health Plan or designee. The request must be received
prior to the due date and the delay must be due to unforeseen and unforeseeable
factors beyond the control of the reporting Health Plan. Extensions shall not be
granted to verbal requests.
f.
Each Health Plan shall submit indicator data in a text (ASCII) or Microsoft
Excel file. The file name shall be in the format: PlanIDyyyy.txt or
PlanIDyyyy.xls, where "PlanID" is the three-letter Health Plan identification
code as assigned by the Agency and "yyyy" is the Measurement Year of the PM data
g.
Each Health Plan shall send indicator data by electronic mail to
[email protected], or to the Agency’s mailing address using a 3.5''
diskette or CD as follows:
Agency for Health Care Administration
Attention: Medicaid Reform Performance Measures
2727 Mahan Drive, MS16
Tallahassee, Florida 32308
h.
Health Plans submitting indicator data using a diskette or CD must have an
external label affixed with the following information:
(a)
Text: "Medicaid Reform Performance Measure Data";
(b)
The three-letter Health Plan identification code;
(c)
Medicaid Reform Health Plan name;
(d)
File name in the format PlanIDyyyy.txt or PlanIDyyyy.xls.
i.
Health Plans submitting indicator data using electronic mail shall include in
the electronic mailing the following information:
(a) Text: "Medicaid Reform Performance Measure Data";
(b) The three-letter Health Plan identification code;
(c) Medicaid Reform Health Plan name;
(d) File name in the format PlanIDyyyy.txt or PlanIDyyyy.xls.
AHCA Contract No. FAR001, Amendment No. 7, Page 52 of 66
Medicaid HMO Reform Contract
3.
Data Specifications
Each Health Plan shall report the data elements described below for each of the
required PMs. Report PM data in the following format with a space or tab
between each data element (text files), or a single column for each data element
(Excel files). Start a new line with each different PM:
a.
Health Plan Identification Number – The nine-digit Medicaid ID number that
identifies the plan and county of operation, as assigned by the Agency for
reporting purposes. Format: Nine digits.
b.
Measurement Year – The calendar year of the data. Format: Four digits.
c.
Performance Measure Identifier – The three character code of the PM as specified
in the Performance Measures Reporting Requirements chart in parentheses after
the PM name in Section XII, I. Format: Three characters.
d.
Data Collection Method – The source of data and approach used in gathering the
data for all PMs as specified by HEDIS or Agency definitions: Format: One
digit, as below:
1. Administrative method – Enter "1".
2. Hybrid method – Enter "2".
e.
Eligible Enrollee Population – The number meeting the criteria as specified by
HEDIS or Agency definitions. Format: Number of digits required.
f.
Sample Size – Minimum required sample size as specified by HEDIS for HEDIS
measures only. This data element is not required if the administrative method
is used. Leave blank (zero-fill) if e. above is 1. Format: Number of digits
required.
g.
Denominator – If the administrative method is used, eligible member population
minus exclusions, if any, as specified by HEDIS or Agency definitions. If the
hybrid method is used, the sample size is the denominator or as specified by
h.
Numerator – Number of numerator events from all data sources as specified by
i.
Rate – Numerator divided by denominator times 100.00.
j.
Lower CI – Lower 95% confidence interval as specified by HEDIS. If the lower CI
is less than zero, report 000.00. This statistic is to be calculated for all
PMs.
k.
Upper CI – Upper 95% confidence interval as specified by HEDIS. If the upper CI
exceeds 100, report 100.00. This statistic is to be calculated for all PMs.
l.
Format for Rate, Lower CI and Upper CI: Five digits with two decimal places
required, right-justified. Zero-fill leading digits. Include decimal. Use the
format: xxx.xx where x represents any digit and xxx is a value between 0 and
100.00.
4.
The Number of Enrollees Admitted to State Mental Health Treatment Facilities,
Smoking Cessation, and Asthma – Use of Beta Agonist are Agency-Defined Measures
required for Measurement Year One and shall be collected and submitted following
the specifications
AHCA Contract No. FAR001, Amendment No. 7, Page 53 of 66
Medicaid HMO Reform Contract
listed below. All other Measurement Year One measures shall be collected and
submitted according to HEDIS specifications.
a.
Number of Enrollees Admitted to State Mental Health Treatment Facilities (MHF)
The percentage of all Enrollees 18 years of age and older who receive a
commitment order to a state mental health treatment facility within the
measurement year.
Ages: Eighteen years of age and older as of December 31 of the measurement
year.
Data Collection Method: Administrative data, based on provider reporting. No
sampling allowed.
Enrollment: No minimum or continuous period of enrollment is required. Include
all eligible Enrollees during the measurement year, regardless of period of
enrollment.
Calculation: Results will be expressed as a percentage rate:
Denominator: Number of enrollees with a mental health diagnosis during the
measurement year or the year prior to the measurement year.
"Mental health diagnosis" is defined from the following list of ICD-9-CM
codes. Codes can be a principal diagnosis or any secondary diagnosis:
290 - 290.43; 293 - 298.9; 300 - 301.9; 302.7, 306.51 - 312.4; 312.81 through
314.9; 315.3, 315.31, 315.5, 315.8, and 315.9.
Numerator: Number of Enrollees for whom a commitment order was signed during the
measurement year.
Exclusions:
·
Enrollees for whom the commitment process has been initiated but who have not
yet received an order for placement;
·
Enrollees who are awaiting transport and whose order was reported in an earlier
reporting period;
·
New enrollees whose commitment process was in progress prior to enrollment in
the Health Plan.
b.
Smoking Cessation (SMO).
The percentage of all health plan Enrollees who are participants in a Disease
Management program and who reported being daily smokers at the baseline
assessment and subsequently became (a) occasional smokers or (b) former
smokers. These two categories are reported separately.
Ages: Ages 18 years and older as of December 31 of the measurement year.
Results should be stratified into two age groups and an overall total rate:
·
18 to 24 years old
AHCA Contract No. FAR001, Amendment No. 7, Page 54 of 66
Medicaid HMO Reform Contract
·
25 years old and older
·
Total (Calculate "total" as the sum of the numerators for each age group divided
by sum of the denominators for each age group.)
Data Collection Method: Administrative data or Disease Management program record
review, including survey data, if available.
Enrollment: Enrollees in any of the Health Plan’s Disease Management programs
for a minimum of six continuous months during the measurement year. No more
than one gap of up to 30 Calendar Days in the Disease Management program is
allowed during the six-month period.
Denominator: The number of Disease Management Enrollees 18 years and older who
reported being daily smokers at the baseline assessment for the Disease
Management program.
Numerator:
·
Occasional: The number of Disease Management Enrollees who report having changed
their smoking habits from daily to occasionally at a follow-up or annual
assessment or other contact under the Disease Management program.
·
Former: The number of Disease Management Enrollees who report having quit
smoking, regardless of the length of this quit effort, at a follow-up or annual
c. Asthma - Use of Beta Agonist (UBE).
The percentage of Asthma Disease Management Enrollees during the measurement
year who had prescriptions for beta agonist medications filled during the
measurement year.
Ages: Ages 5 to 56 years as of December 31 of the measurement year.
Results should be stratified into three age groups and an overall total rate:
· 5 to 9 years old
· 10 to 17 years old
· 18 to 56 years old
·
Data Collection Method: Administrative data. No sampling allowed.
Enrollment: Enrollees in the Health Plan’s Asthma Disease Management program for
a minimum of six continuous months during the measurement year. No more than
one gap of up to 30 Calendar Days in the Asthma Disease Management program is
AHCA Contract No. FAR001, Amendment No. 7, Page 55 of 66
Medicaid HMO Reform Contract
Denominator: The number of Disease Management Enrollees ages 5 to 56 years old
who are in the Health Plan’s Asthma Disease Management program.
Numerator: The number of Disease Management Enrollees who had at least one
prescription for beta agonist medication filled during the measurement
year. Beta agonist medications are defined with the following therapeutic class
codes: J5D and J5G.
5.
The Agency shall supply specifications for Agency-Defined Measures scheduled for
Measurement Year Two and Measurement Year Three at least 30 Calendar Days prior
to the date collection is scheduled to begin.
6.
Data Certification
a.
By July 1 of each year, the Health Plan shall deliver to the Agency a
certification by an independent auditor that the PM data reported for the
previous year (Measurement Year) have been fairly and accurately presented. This
certification should accompany the PM data.
b.
The Health Plan shall submit and attest to the accuracy and completeness of data
from all subcontracted entities, including, but not limited to, behavioral
health managed care organizations, disease management organizations and
laboratories as described in Section XII, A.,of the Health Plan Model Contract.
In no instance will separate, direct submission of data to the Agency from such
entities be permitted.
7.
Data Validation
a.
As specified in Section VIII, A.1.e., the Health Plan shall cooperate with the
Agency and the External Quality Review Organization (EQRO). The Agency will set
methodology and standards for Quality Improvement with advice from the EQRO.
b.
Each Health Plan shall participate in the EQRO's performance measures validation
process according to CMS protocol.
c.
Any Health Plan failing to participate with the external EQRO PM validation
process will be deemed non-compliant.
8.
Report Deficiencies
a.
A report, certification, or other information required for PM reporting is
incomplete when it does not contain all data required by the Agency or when it
contains inaccurate data. A report or certification is “false” if done or made
with the knowledge of the preparer or a superior of the preparer that it
contains information or data that is not true or not accurate.
b.
A Health Plan that refuses to file, fails to timely file, or files a false or
incomplete report or a report that cannot be certified, validated, or excludes
other information required to be filed may be subject to administrative
penalties pursuant to Section XIV., Sanctions, of the Health Plan Model
Contract.
AHCA Contract No. FAR001, Amendment No. 7, Page 56 of 66
Medicaid HMO Reform Contract
93.
Reporting Requirements, Item K., Suspended Fraud Reporting, sub-item 1.a., is
a.
Upon detection of a potential or suspected fraudulent claim submitted by a
provider, the Health Plan shall file a report with the Agency’s MPI.”
94.
Reporting Requirements, Item K., Suspended Fraud Reporting, sub-item 2.a., is
a.
Upon detection of all instances of fraudulent claims or acts by an Enrollee, the
Health Plan shall file a report with the Agency’s MPI.
95.
Reporting Requirements, Item N., Child Health Check-Up Reports, sub-item 1., the
second sentence, is hereby amended to read as follows:
The Health Plan shall submit the report annually in the format set forth in
Table 8, below.
96.
Reporting Requirements, Item N., Child Health Check-Up Reports, sub-item 7.1,
the first sentence, is hereby amended to read as follows:
The Health Plan shall submit the Child Health Check Up, FL 60% Ratio Report
annually and in the formats as presented in Table 8.
97.
Reporting Requirements, Item Q., Transportation Services, the section title is
Q. Transportation Reports and Performance Measures
98.
Reporting Requirements, Item U., Critical Incident Reporting, sub-items f and g
are hereby amended to read as follows:
f.
The Health Plan shall report monthly to the Agency, in accordance with the
format in Table 13 Critical Incidents Summary, below, a summary of all critical
incidents.
g.
In addition to supplying a monthly Critical Incidents Summary, the Health Plan
shall also report Critical Incidents in the manner prescribed by the appropriate
district’s DCF Alcohol, Drug Abuse Mental Health office, using the appropriate
DCF reporting forms and procedures.
99.
Reporting Requirements, Item V., Required Staff/Providers, the first sentence,
AHCA Contract No. FAR001, Amendment No. 7, Page 57 of 66
Medicaid HMO Reform Contract
The Health Plan shall submit contracted and subcontracted staffing information
by position, name and FTE for all direct service positions on a quarterly basis
in accordance with Table 13, Required Staff/Providers, below.
100.
Reporting Requirements, Item W., FARS/CFARS, Table 14 is hereby deleted in its
entirety and replaced by the following table:
AHCA Contract No. FAR001, Amendment No. 7, Page 58 of 66
Medicaid HMO Reform Contract
Table 14
FUNCTIONAL ASSESSMENT RATING SCALE/CHILDREN’S FUNCTIONAL ASSESSMENT RATING SCALE
Reporting
O***YY06.txt (January through June, due August 15) OR
O***YY12.txt (July through December, due February 15)
Data Element Name
Length
Start Column
End Column
Description
Recipient Identification Number
9
1
9
9-Digit Medicaid Identification Number of Enrollee.
Recipient Date of Birth
10
10
19
Enrollee’s date of birth in CCYYMMDD format, e.g., 20010101.
Recipient First Name
15
20
35
Enrollee’s first name.
Recipient Last Name
15
36
50
Enrollee’s last name.
Provider Identification Number
9
51
59
9-Digit Medicaid Plan Identification Number.
Contractor Identification Number
10
60
70
10-digit Federal Tax Identification Number or National Provider Identifier (NPI)
of the provider conducting the assessment.
Contract Number
5
71
76
Up to 5-digit alphanumeric number of the Department of Children and Families
contract responsible for serving the enrollee being evaluated through FUNCTIONAL
ASSESSMENT RATING SCALE or CHILDREN’S FUNCTIONAL ASSESSMENT RATING SCALE. If
the provider does not have a contract, enter “00000”.
Assessment Type
1
77
77
1-digit code to designate the type of functional assessment that was done, i.e.,
“F” = FUNCTIONAL ASSESSMENT RATING SCALE or
“C” = CHILDREN’S FUNCTIONAL ASSESSMENT RATING SCALE
Assessment Purpose
1
78
78
1-digit code to designate the purpose for doing the assessment, i.e.,
“1” = Initial assessment at time of admission into provider agency;
“2” = every 6-month after admission, or
“3” = assessment at time of discharge from provider agency
Assessment Date
8
79
86
Date of assessment in CCYYMMDD format, e.g., 20060812.
AHCA Contract No. FAR001, Amendment No. 7, Page 59 of 66
Medicaid HMO Reform Contract
Data Element Name
Length
Start Column
End Column
Description
Disability Score
2
87
88
Sum of the assessment scores for all the scales in the Disability domain.
Emotionality Score
2
89
90
Sum of the assessment score for all the scales in the Emotionality domain.
Relationship Score
2
91
92
Sum of the assessment score for all the scales in the Relationships domain.
Safety Score
2
93
94
Sum of the assessment score for all the scales in the Personal Safety domain.
Overall Assessment Score
3
95
97
Sum of all domain scores.
The definitions of FUNCTIONAL ASSESSMENT RATING SCALE and CHILDREN’S FUNCTIONAL
ASSESSMENT RATING SCALE domains and related functional scales and subscales for
each domain are available on the following Florida Mental Health Institute web
site: http://outcomes.fmhi.usf.edu. For example, the following are domains and
functional scales for FUNCTIONAL ASSESSMENT RATING SCALE and CHILDREN’S
FUNCTIONAL ASSESSMENT RATING SCALE:
Domains
Functional Scales
FARS
CFARS
Disability
Hyper Affect
ü
Thought Process
ü
ü
Cognitive Performance
ü
Medical/Physical
ü
ü
Activity of Daily Living
ü
ü
Ability to Care for Self
ü
Emotionality
Depression
ü
ü
Anxiety
ü
ü
Traumatic Stress
ü
ü
Relationships
Interpersonal Relations
ü
ü
Family Relations
ü
Family Environment
ü
Socio-Legal
ü
Work or School
ü
ü
Danger to Others
ü
ü
Hyper Activity
ü
Cognitive Performance
ü
Behavior in Home Setting
ü
Personal Safety
Substance Use
ü
ü
Danger to Self
ü
ü
Security Management Needs
ü
ü
Socio-Legal
ü
AHCA Contract No. FAR001, Amendment No. 7, Page 60 of 66
Medicaid HMO Reform Contract
101.
Reporting Requirements, Item X., Behavioral Health Encounter Report, sub-item
3., is hereby amended to include the following:
c.
Additional procedure codes for Community Mental Health Services 90801; 90802;
90804 - 90819; 90821 - 90824; 90826 - 90829; 90846; 90847; 90849; 90853; 90857;
90862; 90870; 90880; 90901; 96101; 96103; 96150 - 96155; 99058; 99212; 99221 -
99223; 99231 - 99236; 99238 - 99239; 99241 - 99245; 99251 - 99255; and 99281 –
99285.
102.
Reporting Requirements, Item X., Behavioral Health Encounter Report, sub-items 4
and 5 are hereby deleted and replaced as follows
4.
Physician Services
Provider Type 25 (MD) or 26 (DO) with a specialty code of "042" Psychiatrist,
"043” Child Psychiatrist, or "044" Psychoanalysis –All Claim Input Indicators
submitted by these specialists apply.
5.
Advanced Nurse Practitioner Provider Type 30 (ARNP) with a specialty code of
“076” – Clinical Nurse Specialist – All Claim Input Indicators submitted by
these specialists apply.
103.
Reporting Requirements, Item X., Behavioral Health Encounter Report, Table 15 is
Table 15
Behavioral Health Encounter Data
Field Name
Field Length
Comments
Medicaid ID
9
First 9 digits of the Enrollee ID number
Plan ID
9
9 digit Medicaid ID of the Health Plan in which Enrollee was Enrolled on the
first date of service
Service Type
1
I Hospital Inpatient
C CSU
O Hospital Outpatient
P Physician (MD or DO)
A Advanced Nurse Practitioner, ARNP
H Comm. Mental Health, Mental Health Practitioner
T Targeted Case Management
L Locally Defined or Optional Service
First Date of Service
8
For Inpatient and CSU encounters, this equals the admit date. Use YYYYMMDD
format.
Revenue Code
4
Use only for Hospital Inpatient and Hospital Outpatient Encounters
Procedure Code
5
5 digit CPT or HCPCS Procedure Code (For Inpatient Claims only, use the ICD9-CM
Procedure Code.)
Procedure Modifier 1
2
Procedure Modifier 2
2
AHCA Contract No. FAR001, Amendment No. 7, Page 61 of 66
Medicaid HMO Reform Contract
Field Name
Field Length
Comments
Units of Service
3
For Inpatient and CSU encounters, report the number of covered days. For all
other encounters, use the units of service referenced in the appropriate
Medicaid Coverage and Limitations Handbook.
Diagnosis
6
Primary Diagnosis Code
Provider Type
2
01 General Hospital
02 Special Hospital/Outpatient Rehab
05 Community Alcohol Drug Mental Health
07 Mental Health Practitioner
08 District Schools
25 Physician (MD)
26 Physician (DO)
30 Advanced Registered Nurse Practitioner
31 Registered Nurse
32 Social Worker/Case Worker
66 Rural Health Clinic
68 Federally Qualified Health Center
91 Case Management Agency
Provider ID Type
1
Type of unique identifier for the direct service provider:
A = AHCA ID
M = Medicaid Provider ID
L = Professional License Number
Provider ID
9
Unique identifier for the direct service provider
Amount Paid
10
Costs associated with the claim. Format with an explicit decimal point and 2
decimal places but no explicit commas. Optional.
Run Date
8
The date the file was prepared. Use YYYYMMDD format
Claim Reference Number
25
The Health Plan’s internal unique claim record identifier
104.
Reporting Requirements, Item AA., Catastrophic Component Threshold and Benefit
Maximum Report, is hereby amended to read as follows:
Health Plans that choose to cover the comprehensive component shall submit this
report for each Enrollee, whose costs for Covered Services reach $25,000 in a
Contract Year. The report shall be in the format shown in Table 18 below unless
modified by the Agency within the notice requirements indicated in A.3. of this
Section. The report shall be submitted monthly from the time the Enrollee’s
costs reach $25,000 through the end of the Contract Year.
AHCA Contract No. FAR001, Amendment No. 7, Page 62 of 66
Medicaid HMO Reform Contract
105.
Maximum Report, Table 18 is hereby deleted in it’s entirety and replaced with
the following:
Table 18
Catastrophic Component Threshold and Benefit Maximum Report
Reporting Period
Enrollee Medicaid ID
Date of Birth
First Date of Service
Last Date of Service
Amount
MMDDYYYY
MMDDYYYY
MMDDYYYY
Note: The Enrollee Benefit Maximum will be confirmed using Encounter data priced
according to the Medicaid Fee Schedule.
106.
Reporting Requirements, is hereby amended to include the following as sub-items
CC. and DD.:
CC.
Inpatient Discharge Data
1.
The Health Plan shall submit its Inpatient Discharge Report to the Agency on a
quarterly basis via the AHCA Secure File Transfer Protocol (SFTP) site. The
required file will be due within thirty (30) Calendar Days following the end of
the quarter being reported.
2.
The Health Plan shall ensure that the Inpatient Discharge Report, as described
in Table 20 of this Section, is an electronic representation of the Health
Plan’s complete listing of all Medicaid Enrollees discharged from inpatient
hospitalization during the quarter being reported.
3.
The Inpatient Discharge Report shall be in an ASCII flat file in the format
described in Table 20 of this Section. The file name will be H***yyQ*.txt
(replacing *** with the Health Plan’s three character approved abbreviation and
replacing yyQ* with the year and number of the quarter being reported). This
file name may change upon notice from the Agency.
4.
Inpatient Psychiatric care will be identified as an Admit Type of “2”,
restricted to claims for Enrollees with a primary ICD-9CM diagnosis code of 290
through 290.43; 293 through 298.9; 300 through 301.9; 302.7, 306.51 through
312.4; 312.81 through 314.9; 315.3, 315.31, 315.5, 315.8, and 315.9.
AHCA Contract No. FAR001, Amendment No. 7, Page 63 of 66
Medicaid HMO Reform Contract
Table 20
Structure for Inpatient Discharge Reporting File
Field Name
Type
Width
Description
PLAN_ID
Character
9
9 Digit Medicaid provider number of Health Plan
RECIP_ID
Character
9
9 Digit Medicaid ID number of Enrollee
RECIP_LAST
Character
20
Last name of Enrollee
RECIP_FIRS
Character
10
First name of Enrollee
RECIP_DOB
Date
10
Enrollee’s date of birth
AHCA_ID
Character
8
AHCA ID Number of admitting hospital
HOSP_NAME
Character
60
Please use upper case only
ADMIT
Date
10
Date of Admission
DISCH
Date
10
Date of Discharge
ADMIT_TYPE
Character
1
Indicates the Type of Admission
1=General Acute Care 2=Inpatient Psych
TPL
Numeric
7
Amount paid by third party (whole dollars)
DIAGI
Character
7
Primary ICD-9 Diagnosis
DIAG2
Character
7
Secondary ICD-9 Diagnosis (if applicable)
DIAG3
Character
7
Tertiary ICD-9 Diagnosis (if applicable)
PROC1
Character
5
For an surgical or obstetrical admission, the principal ICD-9 Procedure Code
PROC2
Character
5
For an surgical or obstetrical admission, the secondary ICD-9 Procedure Code
PROC3
Character
5
For an surgical or obstetrical admission, the tertiary ICD-9 Procedure Code
DD. Medicaid Redetermination Notice Summary Report
This report must be submitted to the Agency if the Health Plan participates in
the receipt of Medicaid redetermination date information for its Enrollees. If
the Health Plan does not receive Medicaid redetermination date information
during a quarter, then the Health Plan does not submit this report. For Health
Plans that must submit this report, the following information and requirements
apply:
1.
The Agency will send the Health Plan the format and template for this report
when it notifies the Health Plan that it will transmit the redetermination date
information to the Health Plan (see Attachment II, Section IV., Enrollee
Services, A.11.).
AHCA Contract No. FAR001, Amendment No. 7, Page 64 of 66
Medicaid HMO Reform Contract
2.
The Health Plan must submit to the Agency’s BMHC a completed quarterly summary
report due forty-five (45) Calendar Days after the end of the calendar quarter
being reported. The summary report must include the following:
a. For mailed notices:
(1) Number of notices mailed each month, by month
(2) Date(s) the notices were mailed, by month
(3) Copy of the letter sent each month
(4)
Number of returned notices received at the Health Plan each calendar quarter.
b. For automated voice messages:
(1) Number of automated calls made each month, by month
(2) Dates the messages were made each month
107.
Attachment II, Medicaid Reform Health Plan Model Contract, Section XIII., Method
of Payment, Item C., Kick Payments, sub-item 4.a., is hereby amended to read as
follows:
a.
The Health Plan must submit an accurate and complete claim form in sufficient
time to be received by the Fiscal Agent within nine (9) months following the
date of service delivery. The Health Plan must submit the claim electronically
in a HIPAA compliant X12 837P format.
108.
Attachment II, Medicaid Reform Health Plan Model Contract, Section XVI., Terms
and Conditions, Item M., Misuse of Symbols, Emblems, or Names in Reference to
Medicaid, the first sentence, is hereby amended to read as follows:
No person or Health Plan may use, in connection with any item constituting an
advertisement, solicitation, circular, book, pamphlet or other communication, or
a broadcast, telecast, or other production, alone or with other words, letters,
symbols or emblems the words “Medicaid,” or “Agency for Health Care
Administration,” except as required in the Agency’s core contract, page six (6),
unless prior written approval is obtained from the Agency.
109.
and Conditions, Item 0., Subcontracts, is hereby amended to include sub-item 10.
as follows:
10.
(6)
the False Claim Act;
(7)
the penalties for submitting false claims and statements;
(8)
whistleblower protections;
(9)
the law’s role in preventing and detecting fraud, waste and abuse; and
(10)
each person’s responsibility relating to detection and prevention.
110.
This Amendment shall have an effective date of January 1, 2008, or the date on
which both parties execute the Amendment, whichever is later.
AHCA Contract No. FAR001, Amendment No. 7, Page 65 of 66
Medicaid HMO Reform Contract
All provisions in the Contract and any attachments thereto in conflict with this
Amendment shall be and are hereby changed to conform with this Amendment.
All provisions not in conflict with this Amendment are still in effect and are
to be performed at the level specified in the Contract.
This Amendment, and all its attachments, are hereby made part of the Contract.
This Amendment cannot be executed unless all previous Amendments to this
Contract have been fully executed.
IN WITNESS WHEREOF, the parties hereto have caused this sixty six (66) page
Amendment (including all attachments) to be executed by their officials
thereunto duly authorized.
HEALTHEASE OF FLORIDA, INC.
STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION
SIGNED BY: /s/ Todd S. Farha
SIGNED BY: /s/ Illegible
NAME: Todd S. Farha
(for)
NAME: Andrew C. Agwunobi, M.D.
TITLE: President & CEO
TITLE: Secretary
DATE: 1/2/08
DATE: 1/3/08
AHCA Contract No. FAR001, Amendment No. 7, Page 66 of 66
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Exhibit99.1 JOINT FILING AGREEMENT In accordance with Rule13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, the undersigned agree to the joint filing of a Statement on Schedule13G (including any and all amendments thereto) with respect to the Common Stock, $0.0001 par value, of Rxi Pharmaceuticals Corporation and further agree to the filing of this agreement as an exhibit thereto.In addition, each party to this Agreement expressly authorizes each other party to this Agreement to file on its behalf any and all amendments to such Statement on Schedule13G. Date: July 12, 2010 TANG CAPITAL PARTNERS, LP By: Tang Capital Management, LLC Its: General Partner By: /s/ Kevin C. Tang Name: Kevin C. Tang Title: Manager TANG CAPITAL MANAGEMENT, LLC By: /s/ Kevin C. Tang Name: Kevin C. Tang Title: Manager /s/ Kevin C. Tang Name: Kevin C. Tang
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K T (Mark One) [ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or [ X ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from April 1, 2015 to December 31, 2015 Commission file number: 000-54477 Iron Sands Corp . (Exact Name of Registrant as Specified in its Charter) Delaware 45-2258702 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1999 Broadway, Suite 3700, Denver, Colorado 80202 (Address of principal executive offices, including zip code) 303- - Registrant's telephone number including, area code Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock Par Value $0. 0 (Title of class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ]No [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes [ ]No [X] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]No [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KT or any amendment to this Form 10-KT. [X] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ]Accelerated filer [ ] Non-accelerated filer [ ] (Do not check if a smaller reporting company)Smaller reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [X] No [ ] The aggregate market value of the voting and non-voting common stock held by non-affiliates as of the last business day of the registrant’s most recently completed second fiscal quarter was $-0- as there were no non-affiliate holders of common stock and there was no market for the registrant’s common stock, as it is not listed on any market exchange. As of February 1, 2016, there were outstanding 5,000,000 shares of common stock. Documents Incorporated by Reference: None TABLE OFCONTENTS PART I Item 1. Business 2 Item 1A. Risk Factors 3 Item 1B. Unresolved Staff Comments 3 Item 2. Properties 3 Item 3. Legal Proceedings 3 Item 4. Mine Safety Disclosures 3 PART II Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 3 Item 6. Selected Financial Data 4 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 4 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 6 Item 8. Financial Statements and Supplementary Data 6 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 6 Item 9A. Controls and Procedures 6 Item 9B. Other Information 6 PART III Item 10. Directors, Executive Officers and Corporate Governance 7 Item 11. Executive Compensation 8 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 8 Item 13. Certain Relationships and Related Transactions, and Director Independence 8 Item 14. Principal Accountant Fees and Services 10 PART IV Item 15. Exhibits and Financial Statement Schedules 11 SIGNATURES 12 PART I ITEM 1. BUSINESS Forward looking S tatements The information in this transition report on Form10-KT includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report or incorporated herein by reference constitute our expectations or forecasts of future events as of the date this report was filed with the Securities and Exchange Commission and are not statements of historical fact. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Such statements may include words such as “anticipate,” “will,” “estimate,” “seek,” “expect,” “project,” “intend,” “should,” “plan,” “believe,” “hope,” and other words and terms of similar meaning in connection with any discussion of, among other things, future operating or financial performance, strategic initiatives and business strategies, regulatory or competitive environments, our intellectual property and product development. You are cautioned not to place undue reliance on these forward-looking statements and to note they speak only as of the date hereof. We disclaim any intention or obligation to update or revise any financial projections or forward-looking statements due to new information or other events. Except as the context otherwise requires, the terms “Iron Sands,” “we,” “our” or “us” means Iron Sands Corp. Background and History We were incorporated in the State of Delaware on January 18, 2011 with the objective to acquire, or merge with, an operating company. We filed a General Form for Registration of Securities on Form 10 (“Registration Statement”) with the U.S. Securities and Exchange Commission (“SEC”) on August 12, 2011, and we elected at that time to have March 31 as our fiscal year end. Effective with this report, we have elected to change our fiscal year end from March 31 to December 31, effective December 31, 2015. We currently conduct no business and are considered to be a "blank check" company. The SEC defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3(a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Under SEC Rule 12b-2 under the Exchange Act, the Company also qualifies as a “shell company,” because it has no or nominal assets (other than cash) and no or nominal operations.Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. At this time management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a financial transaction with an operating company or raise sufficient capital to commence a business operation. We intend to comply with the periodic reporting requirements of the Exchange Act while we are subject to those requirements. Recent Development On August 26, 2015, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with Badlands NGLs, LLC (“Badlands” or the “Parent”), an operating company that is engaged in the development of a polymer manufacturing plant in the U.S., we sold 5,000,000 newly issued shares of our common stock (“Common Stock”) to Badlands in exchange for total cash consideration in the amount of $49,319, resulting in Badlands owning all of the issued and outstanding Common Stock. Simultaneously with the execution of the Purchase Agreement, we entered into and consummated a Repurchase Agreement (the “Repurchase Agreement”), with our sole stockholder, NLBDIT 2010 Services, LLC (“NLBDIT Services”), a related party, whereby NLBDIT Services sold and we repurchased 5,000,000 shares of Common Stock, which represented all of the issued and outstanding Common Stock, for an aggregate purchase price of $20,000, which sum was paid to NLBDIT Services by us from the proceeds received from the sale of the Common Stock pursuant to the Purchase Agreement. 2 Employees As of December 31, 2015, we did not have any employees. Mikhail Y. Gurfinkel serves as our Chief Executive Officer, Chief Financial Officer, Secretary and our sole director and receives no compensation for his services. Mr. Gurfinkel is the President, Chief Operating Officer and a Manager of our Parent. How to O btain O ur SEC F ilings We file annual, quarterly, and special reports, proxy statements, and other information with the SEC. Reports, proxy statements and other information filed with the SEC can be inspected and copied at the public reference facilities of the SEC at treet N.E., Washington, DC 20549. Such material may also be accessed electronically by means of the SEC's website at www.sec.gov. ITEM 1A. RISK FACTORS We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES We currently do not lease or own any properties. We are provided free of charge office space at the headquarters of our Parent, which also functions as our headquarters. Our address is 1999 Broadway, Suite 3700, Denver, CO 80202. ITEM 3. LEGAL PROCEEDINGS We are not a party to any material legal proceedings nor is our property the subject of any material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY , AND RELATED STOCKHOLDER MATTERS AND Issuer Purchases of Equity Securitie S Common Stock Our Certificate of Incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”).Our Common Stock is not listed on an exchange and there is no publicly-traded market.As of February 1, 2016, the sole holder of record of our Common Stock is our Parent. Dividend Policy Since inception, we have not declared or paid any cash dividends on our common stock and do not intend to do so in the foreseeable future. The payment of dividends, if any, is within the discretion of our Board of Directors and will depend on our earnings, if any, our capital requirements and financial condition and such other factors as our Board of Directors may consider. 3 ITEM 6 . SELECTED FINANCIAL DATA We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Recent Development On August 26, 2015, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with Badlands NGLs, LLC (“Badlands” or the “Parent”), an operating company that is engaged in the development of a polymer manufacturing plant in the U.S., we sold 5,000,000 newly issued shares of our common stock (“Common Stock”) to Badlands in exchange for total cash consideration in the amount of $49,319, resulting in Badlands owning all of the issued and outstanding Common Stock. Simultaneously with the execution of the Purchase Agreement, we entered into and consummated a Repurchase Agreement (the “Repurchase Agreement”), with our sole stockholder, NLBDIT 2010 Services, LLC (“NLBDIT Services”), a related party, whereby NLBDIT Services sold and we repurchased 5,000,000 shares of Common Stock, which represented all of the issued and outstanding Common Stock, for an aggregate purchase price of $20,000, which sum was paid to NLBDIT Services by us from the proceeds received from the sale of the Common Stock pursuant to the Purchase Agreement. As part of the transactions contemplated by the Purchase Agreement and the Repurchase Agreement, we caused the purchase price paid to us under the Purchase Agreement plus additional cash on hand to be distributed as follows: (a) $20,000 to NLBDIT Services for payment of the purchase price under the Repurchase Agreement; (b) $11,032 for payment of accounts payable outstanding as of August 26, 2015; and (c) $17,464 to NLBDIT Enterprises, LLC (“NLBDIT Enterprises”), a related party, as partial payment on a note payable, dated June 3, 2011, between the Company and NLBDIT Enterprises (the “NLBDIT Enterprises Note”). Also as part of the transactions contemplated by the Purchase Agreement and the Repurchase Agreement, the debts of the Company were discharged by their respective payees as follows: (a) the balance of principal and interest of $74,558 related to the NLBDIT Enterprises Note, after the payment of $17,464 noted above, and any other past obligations or claims of any kind or nature whatsoever among us and NLBDIT Enterprises; and (b) loans in the amount of $47,735 advanced to us by Sunrise Financial Group Inc. (“SFG”), a related party (the “SFG Loans”), and any other past obligations or claims of any kind or nature whatsoever among us and SFG. For the nine months ended December 31, 2015, as a result of the Purchase Agreement and the Repurchase Agreement being among related parties, we recognized an equity contribution and credited additional paid-in capital in the amount of $122,293 for the extinguishment of the principal and accrued interest of the NLBDIT Services Note and the balance of the non-interest bearing SFG Loans. Results of Operations – Nine Months Ended December 31, 201 5 Compared to Nine Months Ended December 31, 2014 (unaudited) As a result of electing to change our fiscal year end from March 31 to December 31, and in accordance with reporting rules stipulated under the Exchange Act, the following discussion is based on a comparison of operating results for the nine months ended December 31, 2015 (“2015”), which are audited, to operating results for the nine months ended December 31, 2014 (“2014”), which are unaudited. Since inception, we have had no operations and have generated no revenue. For 2015 and 2014, our operating losses were primarily comprised of general and administrative expenses for legal, accounting, audit and other professional fees associated with our Exchange Act filings. For 2015 and 2014, general and administrative expenses were $45,145 and $29,336, respectively, and interest expense was $1,792 and $2,215, respectively, for those years. For 2015, we recognized a net loss of $46,937 compared to a net loss of $31,551 for 2014, primarily due to increased legal fees associated with the Purchase Agreement and Repurchase Agreement. 4 Liquidity and Capital Resources Our financial statements as presented in Item 15 of this report have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which contemplate our continuation as a going concern, whereby the realization of assets and liquidation of liabilities are in the ordinary course of business. However, the report of our independent registered public accounting firm on our financial statements, as of and for the nine months ended December 31, 2015, contains an explanatory paragraph expressing substantial doubt as to our ability to continue as a going concern. As of December 31, 2015, we had an accumulated deficit of $201,053, cash of $3,038 and stockholders’ deficit of $24,441. We require cash from our Parent to fund our ongoing operating expenses and we do not anticipate generating any revenue in the near term. These conditions raise substantial doubt as to our ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be different should we be unable to continue as a going concern. Cash Our available cash at December 31, 2015, March 31, 2015 and December 31, 2014 was $3,038, $2,907 and $3,338, respectively. Cash Flows from Operating Activities For 2015, net cash used in operations was $49,703. The primary uses of cash from operations were general and administrative expenses, which totaled $45,145, and a decrease in accounts payable of $4,560 due to the timing of payments to vendors. For 2014, net cash used in operating activities was $29,484. The primary use of cash from operations was general and administrative expenses, which totaled $29,336. Cash Flows from Investing Activities For 2015 and 2014, we did not generate or expend cash from investing activities. Cash Flows from Financing Activities For 2015, we generated $49,834 of cash from financing activities. The primary sources of cash from financing activities were proceeds from the NLBDIT Enterprises Note in the amount of $12,000, advances received from our Parent in the amount of $25,979 and the sale of Common Stock in the amount of $49,319 as part of the Purchase Agreement. The primary uses of cash from financing activities were the partial repayment of the NLBDIT Enterprises Note in the amount of $17,464 as part of the Purchase Agreement and the repurchase of shares from NLBDIT Services in the amount of $20,000 as part of the Repurchase Agreement. For 2014, we generated $30,150 of cash from financing activities from the proceeds from the NLBDIT Enterprises Note. Anticipated Cash Commitments During the nine months ended December 31, 2015, we received cash funding from related parties, including our Parent, in the aggregate amount of approximately $38,000. Based on our current shell company status, we estimate cash commitments for 2016 to fund legal, accounting and other general and administrative expenses associated with our periodic SEC filings to be in the range of $50,000 to $60,000. This assumes we maintain our shell company status through December 31, 2016. We believe that our Parent will provide cash to fund these expenses in the near term, although there can be no assurance that funding will be available from Badlands to continue to fund our operating expenses. Subsequent to December 31, 2015, Badlands has provided $5,474, in loan advances to us.If funding ceased to be available from Badlands, it is likely that we would have to cease our Exchange Act filings and cease to operate as a going concern. 5 Critical Accounting Policies We prepare our financial statements in accordance with US GAAP. Our significant accounting policies are disclosed in Note 2 to our financial statements listed in Item 15 of this report. Off-Balance Sheet Arrangements As of December 31, 2015, we had no off-balance sheet arrangements or obligations. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We do not hold any derivative instruments and do not engage in any hedging activities. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Financial Statements Our financial statements are included as a separate section of this report beginning on page F-1 immediately following the signature page to this report, and are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We are responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. Our sole member of management, serving as Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2015, and concluded that our disclosure controls and procedures were effective as of that date. Management’s Annual Report on Internal Control over Financial Reporting Our sole member of management, serving as Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2015 using the criteria set forth in the Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, our sole member of management concluded that our internal control over financial reporting was effective as of December 31, 2015. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9. OTHER INFORMATION None. 6 PART III ITEM DIRECTORS , EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Executive O fficer and Director The following table sets forth the names and ages of each of our directors and executive officers as of February 1, 2016: Name Age Position Date First Elected or Appointed Mikhail Y. Gurfinkel 42 Chief Executive Officer, Chief Financial Officer, Secretary and Sole Director August 26, 2015 The sole director named above serves for a one-year terms until our next annual meeting of stockholders or his earlier resignation or removal. Information concerning our sole director and sole executive officer is set forth below: Mikhail Y. Gurfinkel has served as our Chief Executive Officer, Chief Financial Officer, Secretary and sole director since August 2015. Since 2013, Mr. Gurfinkel has served as President and a Manager of Badlands NGLs, LLC, our Parent. Prior to this, Mr. Gurfinkel served from 2007 to 2013 as President and General Counsel, Americas Region, of Basic Element Company, a Russian private industrial conglomerate focusing on energy, metals & mining, manufacturing and construction. From 1999 to 2007, he was a corporate attorney at the law firms of Clifford Chance LLP and Hunton & Williams LLP. Through August 2015, Mr. Gurfinkel held director positions on the boards of two companies, Cabo Verde Capital Inc. (OTC: CAPV), a company focused on real estate development in the Republic of Cape Verde, and Bitumen Capital (TSXV: BTM.H), a company seeking to make private equity investments. Mr. Gurfinkel has a B.A. with honors in philosophy and a Juris Doctorate from the University of California, Berkeley. We believe that Mr. Gurfinkel’s current and prior senior executive experience, director experience and securities filing experience give him the qualification and skills to serve as a director. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors and holders of more than 10% of our common stock to file reports of ownership of our securities and changes in ownership with the SEC. Based solely on a review of the Section 16(a) reports furnished to us during the nine months ended December 31, 2015, we believe that all filings required to be made during nine months year ended December 31, 2015 were timely made. Code of E thics We have a Code of Ethics applicable to all of our officers and directors. Among other things, the Code of Ethics is designed to deter wrongdoing and to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; to promote full, fair, accurate, timely, and understandable disclosures in periodic reports required to be filed by us; and to promote compliance with applicable governmental laws, rules and regulations. The Code of Ethics provides for the prompt internal reporting of violations of the Code of Ethics to an appropriate person identified in the Code of Ethics and contains provisions regarding accountability for adherence to the Code of Ethics. Board of Directors Committees Currently, we have a sole stockholder and a sole director, who is an executive officer of our sole stockholder. Accordingly, we do not have a nominating committee, an audit committee or compensation committee, and the relevant functions of these committees are performed by our sole director. Our sole director has determined that he is not an “audit committee financial expert” as defined in Item 407(d) of Regulation S-K promulgated by the Securities and Exchange Commission. 7 ITEM EXECUTIVE COMPENSATION Samir N. Masri served as our sole executive officer and sole director for the year ended March 31, 2015 and through August 26, 2015. Mr. Masri did not receive compensation in any form for any of these periods for his services rendered as our sole executive officer and director. Mr. Gurfinkel did not receive compensation in any form for his services rendered as our sole executive officer and director for the period from August 26, 2015 through December 31, 2015. For the fiscal year ended March 31, 2015 and the nine months ended December 31, 2015, we did not have any employees, and Mr. Masri and Mr. Gurfinkel served as consultants in their roles as our sole executive officer during these periods. ITEM SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information with respect to the beneficial ownership of our common stock as of February 1, 2016 by (i) each person known to us to own beneficially more than five percent of our common stock, (ii) each of our named executive officers, (iii) each director and (iv) all directors and executive officers as a group. Unless otherwise indicated, the address of each stockholder below is 1999 Broadway, Suite 3700, Denver, CO 80202. Name and Address of Beneficial Owner Number of Shares Beneficially Owned Percent of Outstanding Shares (1) 5% Stockholders: Badlands NGLs, LLC 1999 Broadway, Suite 3700 Denver, CO 80202 5,000,000 (2) 100.0% Directors and Named Executive Officers: Mikhail Y. Gurfinkel - -% All directors and executive officers as a group (1 person) - -% Applicable percentage of ownership is based on 5,000,000 shares of common stock outstanding on February 1, 2016. Beneficial ownership is determined in accordance with the rules and regulations of the SEC and means that the holder has voting or investment power with respect to the subject securities. Includes 5,000,000 shares directly owned. ITEM 1 3. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Related P arties and T ransactions For the year ended March 31, 2015 and the nine months ended December 31, 2015, we engaged Samir Masri CPA Firm P.C. (the “Masri Firm”) to provide accounting services. Samir Masri is the founder of the Masri Firm and served as our sole executive officer and sole director through August 26, 2015.For the year ended March 31, 2015 and the nine months ended December 31, 2015, we paid the Masri Firm $10,000 and $5,044, respectively, for services rendered. For the period from August 27, 2015 through December 31, 2015, our Parent, a non-reporting company, provided accounting services, which included the preparation of our periodic reports filed with the SEC. In addition, effective August 26, 2015, Mikhail Y. Gurfinkel, our Parent’s President and COO, was appointed as our sole executive officer and sole director. Neither our Parent nor Mr. Gurfinkel received any payments for services rendered for the nine months ended December 31, 2015. There were no written agreements in connection with any of our arrangements with the Masri Firm, Mr. Gurfinkel or our Parent for the year ended March 31, 2015 or the nine months ended December 31, 2015. 8 On August 26, 2015, pursuant to the Purchase Agreement with Badlands, we sold 5,000,000 newly issued shares of our common stock (“Common Stock”) to Badlands in exchange for total cash consideration in the amount of $49,319, resulting in Badlands owning all of the issued and outstanding Common Stock. Simultaneously with the execution of Purchase Agreement, we entered into and consummated a Repurchase Agreement (the “Repurchase Agreement”), with our sole stockholder and a related party, NLBDIT 2010 Services, LLC (“NLBDIT Services”), whereby NLBDIT Services sold and we repurchased 5,000,000 shares of Common Stock, which represented all of the issued and outstanding Common Stock for an aggregate purchase price of $20,000, which sum was paid to NLBDIT Services by us from the proceeds received from the sale of the Common Stock pursuant to the Purchase Agreement. As part of the transactions contemplated by the Purchase Agreement and the Repurchase Agreement, we caused the purchase price paid to us under the Purchase Agreement plus additional cash on hand to be distributed as follows: (a) $20,000 to NLBDIT Services for payment of the purchase price under the Repurchase Agreement; (b) $11,032 to vendors of the Company, which included $2,500 owed to the Masri Firm, for payment of accounts payable outstanding as of August 26, 2015; and (c) $17,464 to NLBDIT Enterprises, LLC (“NLBDIT Enterprises”), a related party, as partial payment on a note payable, dated June 3, 2011, between us and NLBDIT Enterprises (the “NLBDIT Enterprises Note”). In conjunction with the Purchase Agreement and the Repurchase Agreement, and effective August 26, 2015, Mr. Masri resigned as our sole executive officer and sole director and Mr. Gurfinkel was appointed to fill these positions. The President and controlling stockholder of NLBDIT Services, NLBDIT Enterprises and Sunrise Financial Group Inc. (“SFG”) is a former executive officer of the Company and also owns approximately 27.0% of the outstanding equity of our Parent as of December 31, 2015. As a result, NLBDIT Services, NLBDIT Enterprises and SFG were considered related parties for the year ended March 31, 2015 and the nine months ended December 31, 2015. As part of the transactions contemplated by the Purchase Agreement and the Repurchase Agreement, our debts were discharged by their respective payees as follows: (a) the balance of principal and interest of $74,558 related to the NLBDIT Enterprises Note, after the payment of $17,464 noted above, and any other past obligations or claims of any kind or nature whatsoever among us and NLBDIT Enterprises; and (b) loans in the amount of $47,735 advanced to us by SFG and any other past obligations or claims of any kind or nature whatsoever among us and SFG. For the year ended March 31, 2015, NLBDIT Enterprises advanced us cash under the NLBDIT Enterprises Note of $36,150, and as of March 31, 2015, we owed NLBDIT Enterprises $78,228, including $5,432 of accrued interest, and SFG $47,735. For the nine months ended December 31, 2015, NLBDIT Enterprises advanced us cash under the NLBDIT Enterprises Note of $12,000, and our Parent paid on our behalf legal fees in the amount of $7,306 associated with various SEC filings we made, and advanced us cash of $10,000 to fund ongoing general and administrative expenses. We made no repayments to our Parent through December 31, 2015, and, as of December 31, 2015, we owed $25,979 to our Parent, of which all is payable upon demand by our Parent. For the year ended March 31, 2015 and the nine months ended December 31, 2015, we used office space and equipment of our management and Parent at no cost. Director Independence Under NASDAQ Rule 5605(a)(2)(A), a director is not considered to be independent if he or she also is an executive officer or employee of the corporation.Under such definition, our sole director, Mr. Gurfinkel, would not be considered independent as he also serves as our sole executive officer. 9 ITEM 14 . PRINCIPAL ACCOUNT ANT FEES AND SERVICES Raich Ende Malter & Co. LLP (“Raich”) served as our independent registered public accounting firm for the fiscal year ended March 31, 2015 and through October 14, 2015, at which time, we appointed Hein & Associates LLP (“Hein”) as our independent registered public accounting firm. We had no dispute with Raich over our financial statements at the time of their termination.The following table shows the fees for the audit and other services providedby Raich and Hein in the aggregate for the nine months ended December 31, 2015 and by Raich forthe fiscal year ended March 31, 2015: Nine months ended December 31, 2015 Year ended March 31, 2015 Audit Fees $ $ Audit-Related Fees - - Tax Fees - All Other Fees - - Total $ $ Audit Fees This category includes the aggregate fees for professional services for the audit of our annual financial statements for the fiscal year ended March 31, 2015 and the nine months ended December 31, 2015 and the review of the financial statements included in our quarterly reports on Form 10-Q filed during those periods. Audit - Related Fees There were no fees for audit-related services during the fiscal year end March 31, 2015 or the nine months ended December 31, 2015. Tax Fees This category includes fees for professional services for tax compliance, tax advice and tax planning, and there were no fees for these services for the fiscal year ended March 31, 2015 or the nine months ended December 31, 2015. Audit Committee Pre-Approval The Board of Directors, comprised of a sole director, serves as the Audit Committee and reviews and approves in advance the retention of the independent auditors for the performance of all audit and non-audit services that are not prohibited and the fees for such services. Pre-approval of audit and non-audit services that are not prohibited may be approved pursuant to appropriate policies and procedures established by the Audit Committee for the pre-approval of such services, including through delegation of authority to a member of the Audit Committee or Company management. For the fiscal year ended March 31, 2015 and the nine months ended December 31, 2015, all audit fees were reviewed and approved in advance of such services. 10 PART IV Item EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a)Financial Statements - See Index to Financial Statements at page F-1 of this Report. (b) Financial Statement Schedules - Not applicable. (c) Exhibits EXHIBIT # DESCRIPTION Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form 10 filed on August 12, 2011, as amended November 7, 2011 and January 31, 2012 ) Bylaws (incorporated by reference to Exhibit 3.3 to the Registrant’s Registration Statement on Form 10 filed on August 12, 2011, as amended November 7, 2011 and January 31, 2012 ) Securities Purchase Agreement dated as of August 26, 2015 between the Registrant and Badlands NGLs, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 1, 2015) Repurchase Agreement dated as of August 26, 2015 between the Registrant and NLBDIT 2010 Services, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on September 1, 2015) 31* Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241) 32* Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) 101.INS* XBRL Instance Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document 101 DEF* XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* XBRL Taxonomy Extension Label Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document *Filed or furnished herewith 11 SIGNATURES Pursuant to the requirements of Section13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. IRON SANDS CORP . February 8, 2016 By: /s/ Mikhail Y. Gurfinkel Mikhail Y. Gurfinkel Chief Executive and Chief Financial Officer (Principal Executive, Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated . February 8, 2016 By: /s/ Mikhail Y. Gurfinkel Mikhail Y. Gurfinkel Chief Executive Officer, Chief Financial Officer and Sole Director 12 Iron Sands Corp. Index to F inancial Statement s Page Report of Independent Registered Public Accounting Firm F-2 Report of Independent Registered Public Accounting Firm F-3 Balance Sheets as of December 31, 2015 and March 31, 2015 F-4 Statements of Operations for the Nine Months Ended December 31, 2015, the Year Ended March 31, 2015 and the Nine Months Ended December 31, 2014 (unaudited) F-5 Statements of Stockholder’s Deficit for the Nine Months Ended December 31, 2015 and the Year Ended March 31, 2015 F-6 Statements of Cash Flows for the Nine Months Ended December 31, 2015, the Year Ended March 31, 2015 and the Nine Months Ended December 31, 2014 (unaudited) F-7 Notes to Financial Statements F-8 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder Iron Sands Corp. Denver, Colorado We have audited the accompanying balance sheet of Iron Sands Corp. as of December 31, 2015, and the related statements of operations, stockholder’s deficit, and cash flows for the nine months ended December 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Iron Sands Corp. as of December 31, 2015, and the results of its operations and its cash flows for the nine months ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note1 to the financial statements, the Company has incurred recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Hein & Associates LLP Denver, Colorado February 8, 2016 F-2 To the Board of Directors and Stockholder of Iron Sands Corp. We have audited the accompanying balance sheets of Iron Sands Corp. (the “Company”) as of March 31, 2015 and 2014and the related statements of operations, changes in stockholder’s deficiency, and cash flows foreach of the years in the two-year periodended March 31, 2015. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Iron Sands Corp. as of March 31, 2015 and 2014, and the results of its operations and its cash flows foreach of the years in the two-year periodended March 31, 2015, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has negative working capital and has incurred net losses since inception. This raises substantial doubt about the Company's ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 1. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Raich Ende Malter & Co. LLP Raich Ende Malter & Co. LLP New York, New York July 14, 2015 F-3 IRON SANDS CORP. BALANCE SHEET S December 31, March 31, ASSETS Current assets: Cash $ $ Total current assets TOTAL ASSETS $ $ LIABILITIES & STOCKHOLDER’S DEFICIT Current liabilities: Advances from Parent $ $ - Accounts payable Accrued interest - Loans payable – related party - Note payable – related party - Total current liabilities Commitments and Contingencies (Note 1) - - Stockholder’s deficit: Preferred stock, $0.0001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding - - Common stock, $0.0001 par value; 100,000,000 shares authorized; 5,000,000 shares issued and outstanding Additional paid-in capital Accumulated deficit ) ) Total stockholder’s deficit ) ) TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT $ $ The accompanying notes are an integral part of these financial statements. F-4 IRON SANDS CORP. STATEMENTS OF OPERATIONS Nine months ended December 31, 2015 Year ended March 31, 2015 Nine months ended December 31, 2014 (Unaudited) Operating expense General and administrative $ $ $ Total operating expense Loss from operations ) ) ) Non-operating expense Interest expense – related party ) ) ) Total non-operating expense ) ) ) Net loss $ ) $ ) $ ) Basic and diluted net loss per share $ ) $ ) $ ) Weighted average shares outstanding – basic and diluted The accompanying notes are an integral part of these financial statements. F-5 IRON SANDS CORP. S TATEMENTS OF STOCKHOLDER’S DEFICIT Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Stockholder’s Deficit Shares Amount Shares Amount Shares Amount Balances at April 1, 2014 - $ - $ - $ - $ $ ) $ ) Net loss - ) ) Balances at March 31, 2015 - ) ) Repurchase of common stock from NLBDIT Services, a related party - - ) ) ) - - ) Issuance of common stock to Badlands, a related party - - ) - Equity contribution of related party from discharges of note and loans payable – related parties - Net loss - ) ) Balances at December 31, 2015 - $ - $ - $ - $ $ ) $ ) The accompanying notes are an integral part of these financial statements. F-6 IRON SANDS CORP. STATEMENTS OF CASH FLOWS Nine months ended December 31, 2015 Year ended March 31, 2015 Nine months ended December 31, 2014 (Unaudited) Cash flows from operating activities: Net loss $ ) $ ) $ ) Adjustments used to reconcile net loss to net cash used in operating activities: Changes in operating assets and liabilities: Accounts payable ) ) Accrued interest – related party Net cash used in operating activities ) ) ) Cash flows from financing activities Advances from Parent - - Proceeds from issuance of note payable – related party Repayment of note payable – related party ) - - Repurchase of common stock ) - - Proceeds from sale of common stock - - Net cash provided by financing activities Net increase in cash Cash at beginning of year Cash at end of year $ $ $ Supplemental disclosures of non-cash investing and financing activities Equity contribution of related party from discharges of note and loans payable – related parties $ $ - $ - F-7 IRON SANDS CORP. Notes to Financial Statements NOTE 1 - GENERAL Business Iron Sands Corp. (the “Company”) was incorporated in the state of Delaware on January 18, 2011 with the objective to acquire, or merge with, an operating business. The Company’s principal business objective in the near term will be to achieve long-term growth potential through capital formation or a combination with an operating business rather than seeking short-term earnings. On August 26, 2015, the Company was acquired by Badlands NGLs, LLC (“Badlands” or the “Parent”), a company that is engaged in the development of a polymer manufacturing plant in the U.S. See further discussion of the acquisition by Badlands in Note 3 below. Except as the context otherwise requires, the terms “Iron Sands,” “we,” “our” or “us” means Iron Sands Corp. Basis of Presentation and Going Concern The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which contemplate the Company’s continuation as a going concern, whereby the realization of assets and liquidation of liabilities are in the ordinary course of business. As of December 31, 2015, the Company had an accumulated deficit of $201,053, cash of $3,038, negative working capital of $24,441 and stockholder’s deficit of $24,441. The Company requires cash from its Parent to fund its ongoing operating expenses and does not anticipate generating any revenue in the near term. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be different should the Company be unable to continue as a going concern. The Company expects to continue to receive cash funding from its Parent to fund its operations in the near term, however, there can be no assurance that funding from its Parent will be available. Subsequent to December 31, 2015, Badlands has provided $5,474 in loan advances to the Company. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition and Accounts Receivable The Company has not recognized any revenue since inception and had no accounts receivable balances as of December 31, 2015 or March 31, 2015. Use of Estimates The financial statements are prepared in accordance with US GAAP. The preparation of these financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses, and related disclosures. On an ongoing basis, the Company evaluates its estimates and assumptions. Actual financial results may differ from these estimates under different assumptions or conditions. Earnings (Loss) per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period presented. Diluted net loss per share is computed in a manner consistent with that of basic net loss per share, while giving effect to all potentially dilutive common shares outstanding during the period. The Company has no potentially dilutive instruments outstanding for any of the periods presented. Accordingly, basic shares equal diluted shares for all periods presented. F-8 IRON SANDS CORP. Notes to Financial Statements Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is required to the extent that it is more likely than not that a deferred tax asset will not be realized. US GAAP prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of income tax positions taken or expected to be taken in an income tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company classifies penalty and interest expense related to income tax liabilities as an income tax expense. There are no interest and penalties recognized in the statements of operations or on the balance sheet. See further discussion and disclosures in Note 5, “Income Taxes.” Reclassifications Certain reclassifications have been made in the financial statements as of and for the year ended March 31, 2015 to conform to the presentation as of and for the nine months ended December 31, 2015. Recently I ssued A ccounting P ronouncements The Company has considered all recently issued accounting pronouncements through the filing date of these financial statements in its Transition Report on Form 10-KT for the nine months ended December 31, 2015 and does not believe they will have a material impact on its future financial statements. NOTE 3 – EQUITY AND DEBT TRANSACTIONS On August 26, 2015, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with Badlands, the Company sold 5,000,000 newly issued shares of the Company’s common stock (“Common Stock”) to Badlands in exchange for total cash consideration in the amount of $49,319, resulting in Badlands owning all of the issued and outstanding Common Stock of the Company. Simultaneously with the execution of Purchase Agreement, the Company entered into and consummated a Repurchase Agreement (the “Repurchase Agreement”), with its sole stockholder and a related party, NLBDIT 2010 Services, LLC (“NLBDIT Services”), whereby NLBDIT Services sold and the Company repurchased 5,000,000 shares of Common Stock, which represented all of the issued and outstanding Common Stock of the Company, for an aggregate purchase price of $20,000, which sum was paid to NLBDIT Services by the Company from the proceeds received from the sale of the Common Stock pursuant to the Purchase Agreement. As part of the transactions contemplated by the Purchase Agreement and the Repurchase Agreement, the Company caused the purchase price paid to the Company under the Purchase Agreement plus additional cash on hand to be distributed as follows: (a) $20,000 to NLBDIT Services for payment of the purchase price under the Repurchase Agreement; (b) $11,032 to vendors of the Company for payment of accounts payable outstanding as of August 26, 2015; and (c) $17,464 to NLBDIT Enterprises, LLC (“NLBDIT Enterprises”), a related party, as partial payment on a note payable, dated June 3, 2011, between the Company and NLBDIT Enterprises (the “NLBDIT Enterprises Note”). Also as part of the transactions contemplated by the Purchase Agreement and the Repurchase Agreement, the debts of the Company were discharged by their respective payees as follows: (a) the balance of principal and interest of $74,558 related to the NLBDIT Enterprises Note, after the payment of $17,464 noted above, and any other past obligations or claims of any kind or nature whatsoever among the Company and NLBDIT Enterprises; and (b) loans in the amount of $47,735 advanced to the Company by Sunrise Financial Group Inc. (“SFG”), a related party (the “SFG Loans”), and any other past obligations or claims of any kind or nature whatsoever among the Company and SFG. For the nine months ended December 31, 2015, as a result of the Purchase Agreement and the Repurchase Agreement being among related parties (as discussed in Note 4), the Company recognized an equity contribution and credited additional paid-in capital in the amount of $122,293 for the extinguishment of the principal and accrued interest of the NLBDIT Services Note and the balance of the non-interest bearing SFG Loans. F-9 IRON SANDS CORP. Notes to Financial Statements NOTE 4 – OTHER RELATED PARTY TRANSACTIONS In conjunction with the Purchase Agreement and Repurchase Agreement, the Company’s sole officer and director (“Former Officer”) resigned from the Company effective August 26, 2015. The Former Officer is a Manager of NLBDIT Services and NLBDIT Enterprises and provided accounting and tax services to the Company through August 26, 2015 through an entity that he controls. For the nine months ended December 31, 2015 and the year ended March 31, 2015, the Company incurred costs related to accounting services of $5,044 and $10,000, respectively, provided by the Former Officer’s entity. The President and controlling stockholder of NLBDIT Services, NLBDIT Enterprises and SPG is a former officer of the Company and also owns approximately 27.0% of the outstanding equity of Badlands as of December 31, 2015. The Company’s current CEO is the President and COO of the Company’s Parent. The current CEO receives no compensation for his services rendered, which are minimal, to the Company. For the nine months ended December 31, 2015, the Parent paid on the Company’s behalf legal fees in the amount of $15,979 associated with various SEC filings made by the Company for the year and advanced cash to the Company in the amount of $10,000. The Company made no repayments to the Parent for any of advances made during the nine months ended December 31, 2015, and all advances are payable upon demand by the Parent. Through August 26, 2015, the Company utilized office space and equipment at no cost at the location of the Former Officer’s entity. Also through August 26, 2015, the Company was headquartered at this location. Currently, the Company is headquartered at the corporate office of the Parent and, for the period from August 27, 2015 through December 31, 2015 is utilizing office space, office equipment and certain professional services of the Parent at no cost. NOTE 5 – INCOME TAXES As of December 31, 2015, the Company had a net operating loss carryforward available to offset future federal income tax of approximately $22,000. This carryforward expires as of the fiscal year ended December 31, 2035. Under the Tax Reform Act of 1986, the amount of and the benefit from net operating loss carryforwards incurred prior to a cumulative ownership change of more than 50% over a three-year period may be limited or not allowable. The Company carries a deferred tax valuation allowance equal to 100% of its total deferred asset. In recording this allowance, the Company has considered a number of factors, but chiefly, its sustained operating losses from inception. The Company has concluded that a valuation allowance is required for 100% of the total deferred tax asset as it is more likely than not that the deferred tax asset will not be realized. F-10 IRON SANDS CORP. Notes to Financial Statements The deferred tax asset, which was classified as long-term, was comprised of the following: December 31, March 31, Net operating loss carryforwards $ $ Valuation allowance ) ) Net deferred tax asset $ - $ - The benefit for income taxes differed from the amount computed using the U.S. federal income tax rate of 34% as follows: Nine months ended Year ended December 31, March 31, Income tax benefit computed at federal statutory rate $ ) $ ) Gain on discharge of note and loans payable - Debt discharge attribute reduction - State income taxes, net of federal benefit ) - Change in tax rate ) - Change in valuation allowance ) Income tax benefit $ - $ - As of December 31, 2015 and March 31, 2015, the Company had no liability for unrecognized tax benefits and no accrual for the payment of related interest. For the nine months ended December 31, 2015 and the year ended March 31, 2015, the Company recorded no amounts for interest expense related to unrecognized tax benefits or tax related penalties. The Company had no unrecognized tax benefits or uncertain tax positions at December 31, 2015 or March 31, 2015. Any uncertain tax positions are related to tax years that remain subject to examination by relevant tax authorities. All tax years since inception remain open to examination by the Internal Revenue Service. F-11
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of January, 2017 Commission File Number 1-15250 BANCO BRADESCO S.A. (Exact name of registrant as specified in its charter) BANK BRADESCO (Translation of Registrant's name into English) Cidade de Deus, s/n, Vila Yara 06029-900 - Osasco - SP Federative Republic of Brazil (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F X Form 40-F Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No X . Publicly-Held Company Corporate Taxpayer's ID (CNPJ ) No. 60.746.948/0001-12 Notice to the Market Banco Bradesco S.A., referring to the news published on this date in the newspaper "Valor Econômico", announces to its shareholders and to the market in general that until now the Company has not become aware, officially, of any new facts concerning the so called "Operação Zelotes" . In any case, Bradesco reiterates its previous statements to the effect that it has not carried out any proposal, contract or payment to anyone for any kind of advantage with the Board of Tax Appeals "CARF". The Company also reports that the tax proceeding with CARF, which is being investigated, is already under the legal aid of renowned tax lawyers and was unanimously tried in disfavor of Bradesco, and is currently under the Judiciary. Bradesco reaffirms its high standards of ethical conduct and its confidence in the full functioning of the Justice , further clarifying that any additional facts related to the subject will be immediately announced to the market. Cidade de Deus, Osasco, SP, January 26, 2017 Banco Bradesco S.A. Alexandre da Silva Glüher Executive Vice President and Investor Relations Officer SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date:January 26, 2017 BANCO BRADESCO S.A. By: /S/ Luiz Carlos Angelotti Luiz Carlos Angelotti Executive Managing Officer and Investor Relations Officer FORWARD-LOOKING STATEMENTS This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.
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Exhibit 10.7
TARGET HOSPITALITY CORP.
2019 INCENTIVE AWARD PLAN
1. Purpose. The purpose of the Target Hospitality Corp. 2019 Incentive Award
Plan (the “Plan”) is to provide a means through which the Company and its
Affiliates may attract and retain key personnel and to provide a means whereby
directors, officers, employees, consultants and advisors (and prospective
directors, officers, employees, consultants and advisors) of the Company and its
Affiliates can acquire and maintain an equity interest in the Company, or be
paid incentive compensation, which may (but need not) be measured by reference
to the value of Common Shares, thereby strengthening their commitment to the
welfare of the Company and its Affiliates and aligning their interests with
those of the Company’s shareholders.
2. Definitions. The following definitions shall be applicable throughout the
Plan:
(a) “Affiliate” means (i) any person or entity that directly or indirectly
controls, is controlled by or is under common control with the Company and/or
(ii) to the extent provided by the Committee, any person or entity in which the
Company has a significant interest. The term “control” (including, with
correlative meaning, the terms “controlled by” and “under common control with”),
as applied to any person or entity, means the possession, directly or
policies of such person or entity, whether through the ownership of voting or
other securities, by contract or otherwise.
(b) “Award” means, individually or collectively, any Incentive Stock Option,
Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Stock Bonus Award, and Performance Compensation Award
granted under the Plan.
(c) “Board” means the Board of Directors of the Company.
(d) “Business Combination” has the meaning given such term in the definition of
“Change in Control.”
(e) “Cause” means, in the case of a particular Award, unless the applicable
Award agreement states otherwise, (i) the Company or an Affiliate having “cause”
to terminate a Participant’s employment or service, as defined in any employment
or consulting or similar agreement between the Participant and the Company or an
Affiliate in effect at the time of such termination or (ii) in the absence of
any such employment or consulting or similar agreement (or the absence of any
definition of “Cause” contained therein), (A) the Participant’s indictment for,
conviction of or plea of nolo contendere to, a felony (other than in connection
with a traffic violation) under any state or federal law, (B) the Participant’s
failure to substantially perform his or her essential job functions after
receipt of written notice from the Company requesting such performance, (C) an
act of fraud or gross misconduct with respect, in each case, to the Company, by
the Participant, (D) any material misconduct by the Participant that could be
reasonably expected to damage the reputation or business of the Company or any
of its subsidiaries, or (E) the Participant’s violation of a material policy of
the Company. Any determination of whether Cause exists shall be made by the
Committee in its sole discretion.
(f) “Change in Control” shall, in the case of a particular Award, unless the
applicable Award agreement states otherwise or contains a different definition
of “Change in Control,” be deemed to occur upon:
(i) Any sale, lease, exchange or other transfer (in one or a series of related
transactions) of all or substantially all of the assets of the Company;
(ii) Any “Person” as such term is used in Section 13(d) and Section 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) is or becomes,
directly or indirectly, the “beneficial owner” as defined in Rule 13d-3 under
the Exchange Act of securities of the Company that represent more than 50% of
the combined voting power of the Company’s then outstanding voting securities
(the “Outstanding Company Voting Securities”); provided, however, that for
purposes of this Section 2(f)(ii), the following acquisitions shall not
constitute a Change in Control: (I) any acquisition directly from the Company,
(II) any acquisition by the Company, (III) any acquisition by any employee
benefit plan (or related trust) sponsored or
1
maintained by the Company or any Affiliate, (IV) any acquisition by any
corporation pursuant to a transaction that complies with Sections
2(f)(iv)(A) and 2(f)(iv)(B), (V) any acquisition involving beneficial ownership
of less than 50% of the then-outstanding Common Shares (the “Outstanding Company
Common Shares”) or the Outstanding Company Voting Securities that is determined
by the Board, based on review of public disclosure by the acquiring Person with
respect to its passive investment intent, not to have a purpose or effect of
changing or influencing the control of the Company; provided, however, that for
purposes of this clause (V), any such acquisition in connection with (x) an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents or
(y) any “Business Combination” (as defined below) shall be presumed to be for
the purpose or with the effect of changing or influencing the control of the
Company;
(iii) During any period of two (2) consecutive years, the individuals who at the
beginning of such period constituted the Board together with any individuals
subsequently elected to the Board whose nomination by the shareholders of the
Company was approved by a vote of the then incumbent Board (i.e. those members
of the Board who either have been directors from the beginning of such two-year
period or whose election or nomination for election was previously approved by
the Board as provided in this Section 2(f)(iii)) cease for any reason to
constitute a majority of the Board;
(iv) Consummation of a merger, amalgamation or consolidation (a “Business
Combination”) of the Company with any other corporation, unless, following such
Business Combination, (A) all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company Common
Shares and the Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of
the then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors (or,
for a non-corporate entity, equivalent governing body), as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns the Company or
all or substantially all of the Company’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common
Shares and the Outstanding Company Voting Securities, as the case may be, and
(B) at least a majority of the members of the board of directors (or, for a
non-corporate entity, equivalent governing body) of the entity resulting from
such Business Combination were members of the incumbent Board at the time of the
execution of the initial agreement or of the action of the Board providing for
such Business Combination;
(v) The date which is 10 business days prior to the consummation of complete
liquidation of the Company.
(g) “Code” means the Internal Revenue Code of 1986, as amended, and any
successor thereto. Reference in the Plan to any section of the Code shall be
deemed to include any regulations or other interpretative guidance under such
section, and any amendments or successor provisions to such section, regulations
or guidance.
(h) “Committee” means a committee of at least two people as the Board may
appoint to administer the Plan or, if no such committee has been appointed by
the Board, the Board.
(i) “Common Shares” means shares of the Company’s common stock, par value
$0.0001 per share (and any stock or other securities into which such ordinary
shares may be converted or into which they may be exchanged).
(j) “Company” means Target Hospitality Corp., a Delaware corporation.
(k) “Confidential Information” means any and all confidential and/or proprietary
trade secrets, knowledge, data, or information of the Company including, without
limitation, any: (A) drawings, inventions, methodologies, mask works, ideas,
processes, formulas, source and object codes, data, programs, software source
documents, works of authorship, know-how, improvements, discoveries,
developments, designs and techniques, and all other work product of the Company,
whether or not patentable or registrable under trademark, copyright, patent or
similar laws; (B) information regarding plans for research, development, new
service offerings and/or products, marketing, advertising and selling,
distribution, business plans and strategies, business forecasts, budgets and
2
unpublished financial statements, licenses, prices and costs, suppliers,
customers, customer history, customer preferences, or distribution arrangements;
(C) any information regarding the skills or compensation of employees,
suppliers, agents, and/or independent contractors of the Company; (D) concepts
and ideas relating to the development and distribution of content in any medium
or to the current, future and proposed products or services of the Company;
(E) information about the Company’s investment program, trading methodology, or
portfolio holdings; or (F) any other information, data or the like that is
labeled confidential or described as confidential.
(l) “Date of Grant” means the date on which the granting of an Award is
authorized, or such other date as may be specified in such authorization.
(m) “Effective Date” means the date on which the Plan is approved by the
shareholders of the Company.
(n) “Eligible Director” means a person who is (i) a “non-employee director”
within the meaning of Rule 16b-3 under the Exchange Act.
(o) “Eligible Person” means any (i) individual employed by the Company or an
Affiliate; provided, however, that no such employee covered by a collective
bargaining agreement shall be an Eligible Person unless and to the extent that
such eligibility is set forth in such collective bargaining agreement or in an
agreement or instrument relating thereto; (ii) director of the Company or an
Affiliate; (iii) consultant or advisor to the Company or an Affiliate; provided
that if the Securities Act applies such persons must be eligible to be offered
securities registrable on Form S-8 under the Securities Act; or (iv) prospective
employees, directors, officers, consultants or advisors who have accepted offers
of employment or consultancy from the Company or its Affiliates (and would
satisfy the provisions of clauses (i) through (iii) above once he or she begins
employment with or begins providing services to the Company or its Affiliates).
(p) “Exchange Act” has the meaning given such term in the definition of “Change
in Control,” and any reference in the Plan to any section of (or
rule promulgated under) the Exchange Act shall be deemed to include any rules,
regulations or other interpretative guidance under such section or rule, and any
amendments or successor provisions to such section, rules, regulations or
guidance.
(q) “Exercise Price” has the meaning given such term in Section 7(b) of the
Plan.
(r) “Fair Market Value” means, as of any date, the value of Common Shares
determined as follows:
(i) If the Common Shares are listed on any established stock exchange or a
national market system will be the closing sales price for such shares (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the day of determination, as reported in The Wall Street Journal or such other
source as the Committee deems reliable;
(ii) If the Common Shares are regularly quoted by a recognized securities dealer
but selling prices are not reported, the Fair Market Value of a Common Share
will be the mean between the high bid and low asked prices for the Common Shares
on the day of determination, as reported in The Wall Street Journal or such
other source as the Committee deems reliable; or
(iii) In the absence of an established market for the Common Shares, the Fair
Market Value will be determined in good faith by the Committee.
(s) “Good Reason” means, if applicable to any Participant in the case of a
particular Award, as defined in the Participant’s employment agreement or the
applicable Award agreement.
(t) “Immediate Family Members” shall have the meaning set forth in
Section 16(b).
3
(u) “Incentive Stock Option” means an Option that is designated by the Committee
as an incentive stock option as described in Section 422 of the Code and
otherwise meets the requirements set forth in the Plan.
(v) “Indemnifiable Person” shall have the meaning set forth in Section 4(e) of
the Plan.
(w) “Intellectual Property Products” shall have the meaning set forth in
Section 15(c) of the Plan.
(x) “Mature Shares” means Common Shares owned by a Participant that are not
subject to any pledge or security interest and that have been either previously
acquired by the Participant on the open market or meet such other requirements,
if any, as the Committee may determine are necessary in order to avoid an
accounting earnings charge on account of the use of such shares to pay the
Exercise Price or satisfy a withholding obligation of the Participant.
(y) “Nonqualified Stock Option” means an Option that is not designated by the
Committee as an Incentive Stock Option.
(z) “Option” means an Award granted under Section 7 of the Plan.
(aa) “Option Period” has the meaning given such term in Section 7(c) of the
Plan.
(bb) “Outstanding Company Common Shares” has the meaning given such term in the
definition of “Change in Control.”
(cc) “Outstanding Company Voting Securities” has the meaning given such term in
the definition of “Change in Control.”
(dd) “Participant” means an Eligible Person who has been selected by the
Committee to participate in the Plan and to receive an Award pursuant to
Section 6 of the Plan.
(ee) “Performance Compensation Award” shall mean any Award designated by the
Committee as a Performance Compensation Award pursuant to Section 11 of the
Plan.
(ff) “Performance Criteria” shall mean the criterion or criteria that the
Committee shall select for purposes of establishing the Performance Goal(s) for
a Performance Period with respect to any Performance Compensation Award under
the Plan.
(gg) “Performance Formula” shall mean, for a Performance Period, the one or more
objective formulae applied against the relevant Performance Goal to determine,
with regard to the Performance Compensation Award of a particular Participant,
whether all, some portion but less than all, or none of the Performance
Compensation Award has been earned for the Performance Period.
(hh) “Performance Goals” shall mean, for a Performance Period, the one or more
goals established by the Committee for the Performance Period based upon the
Performance Criteria.
(ii) “Performance Period” shall mean the one or more periods of time, as the
Committee may select, over which the attainment of one or more Performance Goals
will be measured for the purpose of determining a Participant’s right to, and
the payment of, a Performance Compensation Award.
(jj) “Permitted Transferee” shall have the meaning set forth in Section 16(b) of
the Plan.
(kk) “Person” has the meaning given such term in the definition of “Change in
Control.”
(ll) “Plan” means this Target Hospitality Corp. 2019 Incentive Award Plan.
4
(mm) “Qualifying Termination” means the occurrence of either a termination of a
Participant’s employment by the Company without Cause or for Good Reason, in
either case, occurring on or within the 12-month period following the
consummation of a Change in Control.
(nn) “Restricted Period” means the period of time determined by the Committee
during which an Award is subject to restrictions or, as applicable, the period
of time within which performance is measured for purposes of determining whether
an Award has been earned.
(oo) “Restricted Stock Unit” means an unfunded and unsecured promise to deliver
Common Shares, cash, other securities or other property, subject to certain
performance or time-based restrictions (including, without limitation, a
requirement that the Participant remain continuously employed or provide
continuous services for a specified period of time), granted under Section 9 of
the Plan.
(pp) “Restricted Stock” means Common Shares, subject to certain specified
the Plan.
(qq) “Retirement” means except as otherwise determined by the Committee and set
forth in an Award agreement, termination of employment from the Company and its
Affiliates (other than for Cause) on a date the Participant is then eligible to
any of the Company’s or its Affiliate’s retirement plans, or if the Participant
is not covered under any such plan, on or after attainment of age fifty-five
(55) and completion of ten (10) years of continuous service with the Company and
its Affiliates or on or after attainment of age sixty-five (65) and completion
of five (5) years of continuous service with the Company and its Affiliates.
(rr) “SAR Period” has the meaning given such term in Section 8(b) of the Plan.
(ss) “Securities Act” means the Securities Act of 1933, as amended, and any
successor thereto. Reference in the Plan to any section of the Securities Act
shall be deemed to include any rules, regulations or other interpretative
guidance under such section, and any amendments or successor provisions to such
section, rules, regulations or guidance.
(tt) “Stock Appreciation Right” or “SAR” means an Award granted under Section 8
of the Plan.
(uu) “Stock Bonus Award” means an Award granted under Section 10 of the Plan.
(vv) “Strike Price” means, except as otherwise provided by the Committee in the
case of Substitute Awards, (i) in the case of a SAR granted in tandem with an
Option, the Exercise Price of the related Option, or (ii) in the case of a SAR
granted independent of an Option, the Fair Market Value on the Date of Grant.
(ww) “Subsidiary” means, with respect to any specified Person:
(i) any corporation, association or other business entity of which more than 50%
of the total voting power of shares of Outstanding Company Voting Securities
(without regard to the occurrence of any contingency and after giving effect to
any voting agreement or shareholders’ agreement that effectively transfers
voting power) is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and
(ii) any partnership (or any comparable foreign entity (a) the sole general
partner (or functional equivalent thereof) or the managing general partner of
which is such Person or Subsidiary of such Person or (b) the only general
partners (or functional equivalents thereof) of which are that Person or one or
more Subsidiaries of that Person (or any combination thereof).
(xx) “Substitute Award” has the meaning given such term in Section 5(e).
5
3. Effective Date; Duration. The Plan shall be effective as of the Effective
Date. The expiration date of the Plan, on and after which date no Awards may be
granted hereunder, shall be the tenth anniversary of the Effective Date;
provided, however, that such expiration shall not affect Awards then
outstanding, and the terms and conditions of the Plan shall continue to apply to
such Awards.
4. Administration. (a) The Committee shall administer the Plan. To the extent
required to comply with the provisions of Rule 16b-3 promulgated under the
Exchange Act (if the Board is not acting as the Committee under the Plan), it is
intended that each member of the Committee shall, at the time he takes any
action with respect to an Award under the Plan, be an Eligible Director.
However, the fact that a Committee member shall fail to qualify as an Eligible
Director shall not invalidate any Award granted by the Committee that is
otherwise validly granted under the Plan. The acts of a majority of the members
present at any meeting at which a quorum is present or acts approved in writing
by a majority of the Committee shall be deemed the acts of the Committee.
Whether a quorum is present shall be determined based on the Committee’s charter
as approved by the Board.
(b) Subject to the provisions of the Plan and applicable law, the Committee
shall have the sole and plenary authority, in addition to other express powers
and authorizations conferred on the Committee by the Plan, to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant; (iii) determine the number of Common Shares to be covered by, or
with respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Common Shares, other securities, other Awards
or other property, or canceled, forfeited, or suspended and the method or
methods by which Awards may be settled, exercised, canceled, forfeited, or
suspended; (vi) determine whether, to what extent, and under what circumstances
the delivery of cash, Common Shares, other securities, other Awards or other
property and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the Participant or of the Committee;
(vii) interpret, administer, reconcile any inconsistency in, correct any defect
in and/or supply any omission in the Plan and any instrument or agreement
relating to, or Award granted under, the Plan; (viii) establish, amend, suspend,
or waive any rules and regulations and appoint such agents as the Committee
shall deem appropriate for the proper administration of the Plan;
(ix) accelerate the vesting or exercisability of, payment for or lapse of
restrictions on, Awards; and (x) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration of
the Plan.
(c) The Committee may delegate to one or more officers of the Company or any
Affiliate the authority to act on behalf of the Committee with respect to any
matter, right, obligation, or election that is the responsibility of or that is
allocated to the Committee herein, and that may be so delegated as a matter of
law, except for grants of Awards to persons subject to Section 16 of the
Exchange Act.
(d) Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award or any documents evidencing Awards granted pursuant to the
Plan shall be within the sole discretion of the Committee, may be made at any
time and shall be final, conclusive and binding upon all persons or entities,
including, without limitation, the Company, any Affiliate, any Participant, any
holder or beneficiary of any Award, and any shareholder of the Company.
(e) No member of the Board, the Committee, delegate of the Committee or any
employee or agent of the Company (each such person, an “Indemnifiable Person”)
shall be liable for any action taken or omitted to be taken or any determination
made in good faith with respect to the Plan or any Award hereunder. Each
Indemnifiable Person shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense (including attorneys’
fees) that may be imposed upon or incurred by such Indemnifiable Person in
connection with or resulting from any action, suit or proceeding to which such
Indemnifiable Person may be a party or in which such Indemnifiable Person may be
involved by reason of any action taken or omitted to be taken under the Plan or
any Award agreement and against and from any and all amounts paid by such
Indemnifiable Person with the Company’s approval, in settlement thereof, or paid
by such Indemnifiable Person in satisfaction of any judgment in any such action,
suit or proceeding against such Indemnifiable Person, provided that the Company
shall have the right, at its own expense, to assume and defend any such action,
suit or proceeding and once the Company gives notice of its intent to assume the
defense, the Company shall have sole control over such defense with counsel of
the Company’s choice. The foregoing right of indemnification shall not be
available to an Indemnifiable Person to the extent that a final judgment or
other final adjudication (in either case not subject to further appeal) binding
upon such
6
Indemnifiable Person determines that the acts or omissions of such Indemnifiable
Person giving rise to the indemnification claim resulted from such Indemnifiable
Person’s bad faith, fraud or willful criminal act or omission or that such right
of indemnification is otherwise prohibited by law or by the Company’s
Certificate of Incorporation or By-Laws. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
Indemnifiable Persons may be entitled under the Company’s Certificate of
Incorporation or By-Laws, as a matter of law, or otherwise, or any other power
that the Company may have to indemnify such Indemnifiable Persons or hold them
harmless.
(f) Notwithstanding anything to the contrary contained in the Plan, the Board
may, in its sole discretion, at any time and from time to time, grant Awards and
administer the Plan with respect to such Awards. In any such case, the Board
shall have all the authority granted to the Committee under the Plan.
5. Grant of Awards; Shares Subject to the Plan; Limitations. (a) The Committee
may, from time to time, grant Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Stock Bonus Awards and/or Performance
Compensation Awards to one or more Eligible Persons.
(b) Subject to Section 12 of the Plan, Awards granted under the Plan shall be
subject to the following limitations: (i) the Committee is authorized to deliver
under the Plan an aggregate of 4,000,000 Common Shares, (ii) the maximum number
of Common Shares that may be granted under the Plan to any Participant during
any single year with respect to Awards that are Options and SARs shall be
1,500,000 Common Shares, and (iii) the maximum number of Common Shares that may
be granted under the Plan during any single year to any Participant who is a
non-employee director, when taken together with any cash fees paid to such
non-employee director during such year in respect of his or her service as a
non-employee director, shall not exceed $600,000 in total value (calculating the
value of any such Awards based on the grant date Fair Market Value of such
Awards for financial reporting purposes); provided that the Board may make
exceptions to this limit for a non-executive chair of the Board.
(c) In the event that (i) any Option or other Award granted hereunder is
exercised through the tendering of Common Shares (either actually or by
attestation) or by the withholding of Common Shares by the Company, or
(ii) withholding tax liabilities arising from such Option or other Award are
satisfied by the tendering of Common Shares (either actually or by attestation)
or by the withholding of Common Shares by the Company, then in each such case
the Common Shares so tendered or withheld shall be added to the Common Shares
available for grant under the Plan on a one-for-one basis. Shares underlying
Awards under this Plan that are forfeited, cancelled, expire unexercised, or are
settled in cash are available again for Awards under the Plan.
(d) Common Shares delivered by the Company in settlement of Awards may be
authorized and unissued shares, shares held in the treasury of the Company,
shares purchased on the open market or by private purchase, or a combination of
the foregoing.
(e) Awards may, in the sole discretion of the Committee, be granted under the
Plan in assumption of, or in substitution for, outstanding awards previously
granted by an entity acquired by the Company or with which the Company combines
(“Substitute Awards”). The number of Common Shares underlying any Substitute
Awards shall not be counted against the aggregate number of Common Shares
available for Awards under the Plan.
6. Eligibility. Participation shall be limited to Eligible Persons who have
entered into an Award agreement or who have received written notification from
the Committee, or from a person designated by the Committee, that they have been
selected to participate in the Plan.
7. Options.
(a) Generally. Each Option granted under the Plan shall be evidenced by an Award
agreement (whether in paper or electronic medium (including email or the posting
on a web site maintained by the Company or a third party under contract with the
Company)). Each Option so granted shall be subject to the conditions set forth
in this Section 7, and to such other conditions not inconsistent with the Plan
as may be reflected in the applicable Award agreement. All Options granted under
the Plan shall be Nonqualified Stock Options unless the applicable
7
Award agreement expressly states that the Option is intended to be an Incentive
Stock Option. Incentive Stock Options shall be granted only to Eligible Persons
who are employees of the Company and its Affiliates, and no Incentive Stock
Option shall be granted to any Eligible Person who is ineligible to receive an
Incentive Stock Option under the Code. No Option shall be treated as an
Incentive Stock Option unless the Plan has been approved by the shareholders of
the Company in a manner intended to comply with the stockholder approval
requirements of Section 422(b)(1) of the Code; provided that any Option intended
to be an Incentive Stock Option shall not fail to be effective solely on account
of a failure to obtain such approval, but rather such Option shall be treated as
a Nonqualified Stock Option unless and until such approval is obtained. In the
case of an Incentive Stock Option, the terms and conditions of such grant shall
be subject to and comply with such rules as may be prescribed by Section 422 of
the Code. If for any reason an Option intended to be an Incentive Stock Option
(or any portion thereof) shall not qualify as an Incentive Stock Option, then,
to the extent of such nonqualification, such Option or portion thereof shall be
regarded as a Nonqualified Stock Option appropriately granted under the Plan.
(b) Exercise Price. The exercise price (“Exercise Price”) per Common Share for
each Option shall not be less than 100% of the Fair Market Value of such share
determined as of the Date of Grant; provided, however, that in the case of an
Incentive Stock Option granted to an employee who, at the time of the grant of
such Option, owns shares representing more than 10% of the voting power of all
classes of shares of the Company or any Affiliate, the Exercise Price per share
shall not be less than 110% of the Fair Market Value per share on the Date of
Grant and provided further, that, notwithstanding any provision herein to the
contrary, the Exercise Price shall not be less than the par value per Common
Share.
(c) Vesting and Expiration. Options shall vest and become exercisable in such
manner and on such date or dates determined by the Committee and shall expire
after such period, not to exceed ten years, as may be determined by the
Committee (the “Option Period”); provided, however, that the Option Period shall
not exceed five years from the Date of Grant in the case of an Incentive Stock
Option granted to a Participant who on the Date of Grant owns shares
representing more than 10% of the voting power of all classes of shares of the
Company or any Affiliate; provided, further, that notwithstanding any vesting
dates set by the Committee, the Committee may, in its sole discretion,
accelerate the exercisability of any Option, which acceleration shall not affect
the terms and conditions of such Option other than with respect to
exercisability. Unless otherwise provided by the Committee in an Award
agreement: (i) an Option shall vest and become exercisable with respect to 100%
of the Common Shares subject to such Option on the fourth anniversary of the
Date of Grant; (ii) the unvested portion of an Option shall expire upon
termination of employment or service of the Participant granted the Option, and
the vested portion of such Option shall remain exercisable for (A) two years
following termination of employment or service by reason of such Participant’s
Retirement, death or disability (as determined by the Committee), but not later
than the expiration of the Option Period or (B) 90 days following termination of
employment or service for any reason other than such Participant’s Retirement,
death or disability, and other than such Participant’s termination of employment
or service for Cause, but not later than the expiration of the Option Period;
and (iii) both the unvested and the vested portion of an Option shall expire
upon the termination of the Participant’s employment or service by the Company
for Cause. If the Option would expire at a time when the exercise of the Option
would violate applicable securities laws, the expiration date applicable to the
Option will be automatically extended to a date that is thirty (30) calendar
days following the date such exercise would no longer violate applicable
securities laws (so long as such extension shall not violate Section 409A of the
Code); provided, that in no event shall such expiration date be extended beyond
the expiration of the Option Period.
(d) Method of Exercise and Form of Payment. No Common Shares shall be delivered
pursuant to any exercise of an Option until payment in full of the Exercise
Price therefor is received by the Company and the Participant has paid to the
Company an amount equal to any federal, state, local and non-U.S. income and
employment taxes required to be withheld. Options that have become exercisable
may be exercised by delivery of written or electronic notice of exercise to the
Company in accordance with the terms of the Option accompanied by payment of the
Exercise Price. The Exercise Price shall be payable (i) in cash, check, cash
equivalent and/or Common Shares valued at the fair market value at the time the
Option is exercised (including, pursuant to procedures approved by the
Committee, by means of attestation of ownership of a sufficient number of Common
Shares in lieu of actual delivery of such shares to the Company); provided that
such Common Shares are not subject to any pledge or other security interest and
are Mature Shares and; (ii) by such other method as the Committee may permit in
accordance with applicable law, in its sole discretion, including without
limitation: (A) in other property having a fair market value on the date of
exercise equal to the Exercise Price or (B) if there is a public market for the
8
Common Shares at such time, by means of a broker-assisted “cashless exercise”
pursuant to which the Company is delivered a copy of irrevocable instructions to
a stockbroker to sell the Common Shares otherwise deliverable upon the exercise
of the Option and to deliver promptly to the Company an amount equal to the
Exercise Price or (C) by a “net exercise” method whereby the Company withholds
from the delivery of the Common Shares for which the Option was exercised that
number of Common Shares having a fair market value equal to the aggregate
Exercise Price for the Common Shares for which the Option was exercised. No
fractional Common Shares shall be issued or delivered pursuant to the Plan or
any Award, and the Committee shall determine whether cash, other securities or
other property shall be paid or transferred in lieu of any fractional Common
Shares, or whether such fractional Common Shares or any rights thereto shall be
canceled, terminated or otherwise eliminated.
(e) Notification upon Disqualifying Disposition of an Incentive Stock Option.
Each Participant awarded an Incentive Stock Option under the Plan shall notify
the Company in writing immediately after the date he makes a disqualifying
disposition of any Common Shares acquired pursuant to the exercise of such
Incentive Stock Option. A disqualifying disposition is any disposition
(including, without limitation, any sale) of such Common Shares before the later
of (A) two years after the Date of Grant of the Incentive Stock Option or
(B) one year after the date of exercise of the Incentive Stock Option. The
Company may, if determined by the Committee and in accordance with procedures
established by the Committee, retain possession of any Common Shares acquired
pursuant to the exercise of an Incentive Stock Option as agent for the
applicable Participant until the end of the period described in the preceding
sentence.
(f) Compliance With Laws, etc. Notwithstanding the foregoing, in no event shall
a Participant be permitted to exercise an Option in a manner that the Committee
determines would violate the Sarbanes-Oxley Act of 2002, if applicable, or any
other applicable law or the applicable rules and regulations of the Securities
and Exchange Commission or the applicable rules and regulations of any
securities exchange or inter-dealer quotation system on which the securities of
the Company are listed or traded.
8. Stock Appreciation Rights.
(a) Generally. Each SAR granted under the Plan shall be evidenced by an Award
Company)). Each SAR so granted shall be subject to the conditions set forth in
this Section 8, and to such other conditions not inconsistent with the Plan as
may be reflected in the applicable Award agreement. Any Option granted under the
Plan may include tandem SARs. The Committee also may award SARs to Eligible
Persons independent of any Option.
(b) Exercise Price. The Exercise Price per Common Share for each SAR shall not
be less than 100% of the Fair Market Value of such share determined as of the
Date of Grant
(c) Vesting and Expiration. A SAR granted in connection with an Option shall
become exercisable and shall expire according to the same vesting schedule and
expiration provisions as the corresponding Option. A SAR granted independent of
an Option shall vest and become exercisable and shall expire in such manner and
on such date or dates determined by the Committee and shall expire after such
period, not to exceed ten years, as may be determined by the Committee (the “SAR
Period”); provided, however, that notwithstanding any vesting dates set by the
Committee, the Committee may, in its sole discretion, accelerate the
exercisability of any SAR, which acceleration shall not affect the terms and
conditions of such SAR other than with respect to exercisability. Unless
otherwise provided by the Committee in an Award agreement: (i) a SAR shall vest
and become exercisable with respect to 100% of the Common Shares subject to such
SAR on the fourth anniversary of the Date of Grant; (ii) the unvested portion of
a SAR shall expire upon termination of employment or service of the Participant
granted the SAR, and the vested portion of such SAR shall remain exercisable for
(A) two years following termination of employment or service by reason of such
Participant’s Retirement, death or disability (as determined by the Committee),
but not later than the expiration of the SAR Period or (B) 90 days following
termination of employment or service for any reason other than such
Participant’s Retirement, death or disability, and other than such Participant’s
termination of employment or service for Cause, but not later than the
expiration of the SAR Period; and (iii) both the unvested and the vested portion
of a SAR shall expire upon the termination of the Participant’s employment or
service by the Company for Cause.
9
(d) Method of Exercise. SARs that have become exercisable may be exercised by
delivery of written or electronic notice of exercise to the Company in
accordance with the terms of the Award, specifying the number of SARs to be
exercised and the date on which such SARs were awarded. Notwithstanding the
foregoing, if on the last day of the Option Period (or in the case of a SAR
independent of an option, the SAR Period), the fair market value exceeds the
Strike Price, the Participant has not exercised the SAR or the corresponding
Option (if applicable), and neither the SAR nor the corresponding Option (if
applicable) has expired, such SAR shall be deemed to have been exercised by the
Participant on such last day and the Company shall make the appropriate payment
therefor.
(e) Payment. Upon the exercise of a SAR, the Company shall pay to the
Participant an amount equal to the number of shares subject to the SAR that are
being exercised multiplied by the excess, if any, of the fair market value of
one Common Share on the exercise date over the Strike Price, less an amount
equal to any federal, state, local and non-U.S. income and employment taxes
required to be withheld. The Company shall pay such amount in cash, in Common
Shares valued at fair market value, or any combination thereof, as determined by
the Committee. No fractional Common Shares shall be issued or delivered pursuant
to the Plan or any Award, and the Committee shall determine whether cash, other
securities or other property shall be paid or transferred in lieu of any
fractional Common Shares, or whether such fractional Common Shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.
9. Restricted Stock and Restricted Stock Units. (a) Generally. Each grant of
Restricted Stock and Restricted Stock Units shall be evidenced by an Award
Company)). Each such grant shall be subject to the conditions set forth in this
Section 9, and to such other conditions not inconsistent with the Plan as may be
reflected in the applicable Award agreement.
(b) Restricted Accounts; Escrow or Similar Arrangement. Upon the grant of
Restricted Stock, a book entry in a restricted account shall be established in
the Participant’s name at the Company’s transfer agent and, if the Committee
determines that the Restricted Stock shall be held by the Company or in escrow
rather than held in such restricted account pending the release of the
applicable restrictions, the Committee may require the Participant to
satisfactory to the Committee, if applicable, and (ii) the appropriate share
power (endorsed in blank) with respect to the Restricted Stock covered by such
agreement. If a Participant shall fail to execute an agreement evidencing an
Award of Restricted Stock and, if applicable, an escrow agreement and blank
share power within the amount of time specified by the Committee, the Award
shall be null and void. Subject to the restrictions set forth in this Section 9
and the applicable Award agreement, the Participant generally shall have the
rights and privileges of a shareholder as to such Restricted Stock, including
without limitation the right to vote such Restricted Stock and the right to
receive dividends, if applicable. To the extent shares of Restricted Stock are
forfeited, any share certificates issued to the Participant evidencing such
shares shall be returned to the Company, and all rights of the Participant to
such shares and as a shareholder with respect thereto shall terminate without
further obligation on the part of the Company.
(c) Vesting; Acceleration of Lapse of Restrictions. Unless otherwise provided by
the Committee in an Award agreement: (i) the Restricted Period shall lapse with
respect to 100% of the Restricted Stock and Restricted Stock Units on the fourth
anniversary of the Date of Grant; and (ii) the unvested portion of Restricted
Stock and Restricted Stock Units shall terminate and be forfeited upon
termination of employment or service of the Participant granted the applicable
Award.
(d) Delivery of Restricted Stock and Settlement of Restricted Stock Units.
(i) Upon the expiration of the Restricted Period with respect to any shares of
Restricted Stock, the restrictions set forth in the applicable Award agreement
shall be of no further force or effect with respect to such shares, except as
set forth in the applicable Award agreement. If an escrow arrangement is used,
upon such expiration, the Company shall deliver to the Participant, or his
beneficiary, without charge, the share certificate evidencing the shares of
Restricted Stock that have not then been forfeited and with respect to which the
Restricted Period has expired (rounded down to the nearest full share).
Dividends, if any, that may have been withheld by the Committee and attributable
to any particular share of Restricted Stock shall be distributed to the
Committee and attributable to any particular share of Restricted Stock shall be
distributed to the Participant in cash or, at the sole
10
discretion of the Committee, in Common Shares having a fair market value equal
to the amount of such dividends, upon the release of restrictions on such share
and, if such share is forfeited, the Participant shall have no right to such
dividends (except as otherwise set forth by the Committee in the applicable
Award agreement).
(ii) Unless otherwise provided by the Committee in an Award agreement, upon the
expiration of the Restricted Period with respect to any outstanding Restricted
Stock Units, the Company shall deliver to the Participant, or his beneficiary,
without charge, one Common Share for each such outstanding Restricted Stock
Unit; provided, however, that the Committee may, in its sole discretion, elect
to (x) pay cash or part cash and part Common Share in lieu of delivering only
Common Shares in respect of such Restricted Stock Units or (y) defer the
delivery of Common Shares (or cash or part Common Shares and part cash, as the
case may be) beyond the expiration of the Restricted Period if such delivery
would result in a violation of applicable law until such time as is no longer
the case. If a cash payment is made in lieu of delivering Common Shares, the
amount of such payment shall be equal to the fair market value of the Common
Shares as of the date on which the Restricted Period lapsed with respect to such
Restricted Stock Units, less an amount equal to any federal, state, local and
non-U.S. income and employment taxes required to be withheld.
10. Stock Bonus Awards. The Committee may issue unrestricted Common Shares, or
other Awards denominated in Common Shares, under the Plan to Eligible Persons,
either alone or in tandem with other awards, in such amounts as the Committee
shall from time to time in its sole discretion determine. Each Stock Bonus Award
granted under the Plan shall be evidenced by an Award agreement (whether in
paper or electronic medium (including email or the posting on a web site
maintained by the Company or a third party under contract with the Company)).
Each Stock Bonus Award so granted shall be subject to such conditions not
inconsistent with the Plan as may be reflected in the applicable Award
agreement.
11. Performance Compensation Awards. (a) Generally. The Committee shall have the
authority, at the time of grant of any Award described in Sections 7 through 10
of the Plan, to designate such Award as a Performance Compensation Award. The
Committee shall have the authority to make an award of a cash bonus to any
Participant and designate such Award as a Performance Compensation Award. All
Performance Compensation Awards shall be evidenced by an Award agreement.
(b) Discretion of Committee with Respect to Performance Compensation Awards. The
Committee shall have the discretion to the terms, conditions and restrictions of
any Performance Compensation Award. With regard to a particular Performance
Period, the Committee shall have sole discretion to select the length of such
Performance Period, the type(s) of Performance Compensation Awards to be issued,
the Performance Criteria that will be used to establish the Performance Goal(s),
the kind(s) and/or level(s) of the Performance Goals(s) that is (are) to apply
and the Performance Formula.
(c) Performance Criteria. The Committee may establish Performance Criteria that
will be used to establish the Performance Goal(s) for Performance Compensation
Awards which may be based on the attainment of specific levels of performance of
the Company (and/or one or more Affiliates, divisions, business segments or
operational units, or any combination of the foregoing) and may include, without
limitation, any of the following: (i) net earnings or net income (before or
after taxes); (ii) basic or diluted earnings per share (before or after taxes);
(iii) net revenue or revenue growth; (iv) gross profit or gross profit growth;
(v) operating profit (before or after taxes); (vi) return measures (including,
but not limited to, return on assets, capital, invested capital, equity, or
sales); (vii) cash flow (including, but not limited to, operating cash flow,
free cash flow, net cash provided by operations and cash flow return on
capital); (viii) financing and other capital raising transactions (including,
but not limited to, sales of the Company’s equity or debt securities);
(ix) earnings before or after taxes, interest, depreciation and/or amortization;
(x) gross or operating margins; (xi) productivity ratios; (xii) share price
(including, but not limited to, growth measures and total shareholder return);
(xiii) expense targets; (xiv) margins; (xv) productivity and operating
efficiencies; (xvi) objective measures of customer satisfaction; (xvii) customer
growth; (xviii) working capital targets; (xix) measures of economic value added;
(xx) inventory control; (xxi) enterprise value; (xxii) sales; (xxiii) debt
levels and net debt; (xxiv) combined ratio; (xxv) timely launch of new
facilities; (xxvi) client retention; (xxvii) employee retention; (xxviii) timely
completion of new product rollouts; (xxix) cost targets; (xxx) reductions and
savings; (xxxi) productivity and efficiencies; (xxxii) strategic partnerships or
transactions; and (xxxiii) objective measures of personal targets, goals or
completion of projects. Any one or more of the Performance Criteria may be used
on an absolute or relative basis to measure the performance of the Company
and/or one or more Affiliates as a
11
whole or any business unit(s) of the Company and/or one or more Affiliates or
any combination thereof, as the Committee may deem appropriate, or any of the
above Performance Criteria may be compared to the performance of a selected
group of comparison or peer companies, or a published or special index that the
Committee, in its sole discretion, deems appropriate, or as compared to various
stock market indices. The Committee also has the authority to provide for
accelerated vesting of any Award based on the achievement of Performance Goals
pursuant to the Performance Criteria specified in this paragraph. Any
Performance Criteria that are financial metrics, may be determined in accordance
with United States Generally Accepted Accounting Principles (“GAAP”) or may be
adjusted when established to include or exclude any items otherwise includable
or excludable under GAAP.
(d) Modification of Performance Goal(s). The Committee is authorized at any time
to adjust or modify the calculation of a Performance Goal for such Performance
Period, based on and in order to appropriately reflect any specified
circumstance or event that occurs during a Performance Period, including but not
limited to the following: (i) asset write-downs; (ii) litigation or claim
judgments or settlements; (iii) the effect of changes in tax laws, accounting
principles, or other laws or regulatory rules affecting reported results;
(iv) any reorganization and restructuring programs; (v) unusual and/or
infrequently occurring items as described in Accounting Principles Board Opinion
No. 30 (or any successor pronouncement thereto) and/or in management’s
discussion and analysis of financial condition and results of operations
appearing in the Company’s annual report to shareholders for the applicable
year; (vi) acquisitions or divestitures; (vii) discontinued operations;
(viii) any other specific unusual or infrequently occurring or non-recurring
events, or objectively determinable category thereof; (ix) foreign exchange
gains and losses; and (x) a change in the Company’s fiscal year.
(e) Terms and Condition to Receipt of Payment. Unless otherwise provided in the
applicable Award agreement, a Participant must be employed by the Company on the
last day of a Performance Period to be eligible for payment in respect of a
Performance Compensation Award for such Performance Period. A Participant shall
be eligible to receive payment in respect of a Performance Compensation Award
only to the extent that: (A) the Performance Goals for such period are achieved;
and (B) all or some of the portion of such Participant’s Performance
Compensation Award has been earned for the Performance Period based on the
application of the Performance Formula to such achieved Performance Goals.
Following the completion of a Performance Period, the Committee shall determine
whether, and to what extent, the Performance Goals for the Performance Period
have been achieved and, if so, calculate the amount of the Performance
Compensation Awards earned for the period based upon the Performance Formula.
The Committee shall then determine the amount of each Participant’s Performance
Compensation Award actually payable for the Performance Period.
(f) Timing of Award Payments. Performance Compensation Awards granted for a
Performance Period shall be paid to Participants as soon as administratively
practicable following the Committee’s determination in accordance with
Section 11(e).
12. Changes in Capital Structure and Similar Events. In the event of (a) any
dividend (other than ordinary cash dividends) or other distribution (whether in
the form of cash, Common Shares, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
amalgamation, consolidation, spin-off, split-up, split-off, combination,
repurchase or exchange of Common Shares or other securities of the Company,
issuance of warrants or other rights to acquire Common Shares or other
securities of the Company, or other similar corporate transaction or event
(including, without limitation, a Change in Control) that affects the Common
Shares, or (b) unusual or infrequently occurring events (including, without
limitation, a Change in Control) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or changes in applicable
rules, rulings, regulations or other requirements of any governmental body or
securities exchange or inter-dealer quotation system, accounting principles or
law, such that in either case an adjustment is determined by the Committee in
its sole discretion to be necessary or appropriate, then the Committee shall
make any such adjustments in such manner as it may deem equitable, including
without limitation any or all of the following:
(i) adjusting any or all of (A) the number of Common Shares or other securities
of the Company (or number and kind of other securities or other property) that
may be delivered in respect of Awards or with respect to which Awards may be
granted under the Plan (including, without limitation, adjusting any or all of
the limitations under Section 5 of the Plan) and (B) the terms of any
outstanding Award, including, without limitation, (1) the number of Common
Shares or other securities of the Company (or number and kind of other
12
securities or other property) subject to outstanding Awards or to which
outstanding Awards relate, (2) the Exercise Price or Strike Price with respect
to any Award or (3) any applicable performance measures (including, without
limitation, Performance Criteria and Performance Goals);
(ii) providing for a substitution or assumption of Awards, accelerating the
exercisability of, lapse of restrictions on, or termination of, Awards or
providing for a period of time for exercise prior to the occurrence of such
event; and
(iii) canceling any one or more outstanding Awards and causing to be paid to the
holders thereof, in cash, Common Shares, other securities or other property, or
any combination thereof, the value of such Awards, if any, as determined by the
Committee (which if applicable may be based upon the price per Common Share
received or to be received by other shareholders of the Company in such event),
including without limitation, in the case of an outstanding Option or SAR, a
cash payment in an amount equal to the excess, if any, of the fair market value
(as of a date specified by the Committee) of the Common Shares subject to such
Option or SAR over the aggregate Exercise Price or Strike Price of such Option
or SAR, respectively (it being understood that, in such event, any Option or SAR
having a per share Exercise Price or Strike Price equal to, or in excess of, the
fair market value of a Common Share subject thereto may be canceled and
terminated without any payment or consideration therefor); provided, however,
that in the case of any “equity restructuring” (within the meaning of the
Financial Accounting Standards Board Accounting Standards Codification Topic
718), the Committee shall make an equitable or proportionate adjustment to
outstanding Awards to reflect such equity restructuring. Any adjustment in
Incentive Stock Options under this Section 12 (other than any cancellation of
Incentive Stock Options) shall be made only to the extent not constituting a
“modification” within the meaning of Section 424(h)(3) of the Code, and any
adjustments under this Section 12 shall be made in a manner that does not
adversely affect the exemption provided pursuant to Rule 16b-3 under the
Exchange Act. The Company shall give each Participant notice of an adjustment
hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes.
13. Effect of Change in Control. Except to the extent otherwise provided in an
Award agreement, in the event of a Change in Control, notwithstanding any
provision of the Plan to the contrary, the Committee may provide that, with
respect to all or any portion of a particular outstanding Award or Awards:
(a) if a Participant experiences a Qualifying Termination, the Participant’s
then outstanding Options and SARs shall become immediately exercisable as of the
date of the Participant’s Qualifying Termination;
(b) if a Participant experiences a Qualifying Termination, any Restricted Period
in effect on the date of the Participant’s Qualifying Termination shall expire
as of such date (including without limitation a waiver of any applicable
Performance Goals);
(c) if a Participant experiences a Qualifying Termination, Performance Periods
in effect on the date of the Participant’s Qualifying Termination shall end on
such date, and the Committee shall (i) determine the extent to which Performance
Goals with respect to each such Performance Period have been met based upon such
audited or unaudited financial information or other information then available
as it deems relevant and (ii) cause the Participant to receive partial or full
payment of Awards for each such Performance Period based upon the Committee’s
determination of the degree of attainment of the Performance Goals, or assuming
that the applicable “target” levels of performance have been attained or on such
other basis determined by the Committee.
To the extent practicable, any actions taken by the Committee under the
immediately preceding clauses (a) through (c) shall occur in a manner and at a
time which allows affected Participants the ability to participate in the Change
in Control transactions with respect to the Common Shares subject to their
Awards.
14. Amendments and Termination.
(a) Amendment and Termination of the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that (i) no amendment to Section 14(b) (to the extent required by the proviso in
such Section 14(b)) shall be made without shareholder approval and (ii) no such
amendment, alteration, suspension, discontinuation or termination shall be made
without shareholder approval if
13
such approval is necessary to comply with any tax or regulatory requirement
applicable to the Plan (including, without limitation, as necessary to comply
with any rules or requirements of any securities exchange or inter-dealer
quotation system on which the Common Shares may be listed or quoted); provided,
further, that any such amendment, alteration, suspension, discontinuance or
termination that would materially and adversely affect the rights of any
Participant or any holder or beneficiary of any Award theretofore granted shall
not to that extent be effective without the consent of the affected Participant,
holder or beneficiary.
(b) Amendment of Award Agreements. The Committee may, to the extent consistent
with the terms of any applicable Award agreement, waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate,
any Award theretofore granted or the associated Award agreement, prospectively
or retroactively; provided that any such waiver, amendment, alteration,
suspension, discontinuance, cancellation or termination that would materially
and adversely affect the rights of any Participant with respect to any Award
theretofore granted shall not to that extent be effective without the consent of
the affected Participant; provided, further, that without shareholder approval,
except as otherwise permitted under Section 12 of the Plan, (i) no amendment or
modification may reduce the Exercise Price of any Option or the Strike Price of
any SAR, (ii) the Committee may not cancel any outstanding Option or SAR where
the Fair Market Value of the Common Shares underlying such Option or SAR is less
than its Exercise Price and replace it with a new Option or SAR, another Award
or cash and (iii) the Committee may not take any other action that is considered
a “repricing” for purposes of the shareholder approval rules of the applicable
securities exchange or inter-dealer quotation system on which the Common Shares
are listed or quoted.
15. Restrictive Covenants. (a) Confidentiality. By accepting an Award under the
Plan, and as a condition thereof, each Participant agrees not to, at any time,
either during their employment or thereafter, divulge, use, publish or in any
other manner reveal, directly or indirectly, to any person, firm, corporation or
any other form of business organization or arrangement, and to keep in the
strictest confidence any Confidential Information, except (i) as may be
necessary to the performance of the Participant’s duties to the Company,
(ii) with the Company’s express written consent, (iii) to the extent that any
such information is in or becomes in the public domain other than as a result of
the Participant’s breach of any of his or her obligations under this
Section 15(a), or (iv) where required to be disclosed by court order, subpoena
or other government process and in such event, the Participant shall cooperate
with the Company in attempting to keep such information confidential to the
maximum extent possible. Upon the request of the Company or an Affiliate, the
Participant agrees to promptly deliver to the Company the originals and all
copies, in whatever medium, of all such Confidential Information.
(b) Non-Disparagement. By accepting an Award under the Plan, and as a condition
thereof, the Participant acknowledges and agrees that he or she will not defame
or publicly criticize the services, business, integrity, veracity or personal or
professional reputation of the Company, including its officers, directors,
partners, executives or agents, in either a professional or personal manner at
any time during or following his or her employment.
(c) Post-Employment Property. By accepting an Award under the Plan, and as a
condition thereof, the Participant agrees that any work of authorship,
invention, design, discovery, development, technique, improvement, source code,
hardware, device, data, apparatus, practice, process, method or other work
product whatever (whether patentable or subject to copyright, or not, and
hereinafter collectively called “discovery”) related to the business of the
Company that the Participant, either solely or in collaboration with others, has
made or may make, discover, invent, develop, perfect, or reduce to practice
during his or her employment, whether or not during regular business hours and
created, conceived or prepared on the Company’s premises or otherwise shall be
the sole and complete property of the Company. More particularly, and without
limiting the foregoing, the Participant agrees that all of the foregoing and any
(i) inventions (whether patentable or not, and without regard to whether any
patent therefor is ever sought), (ii) marks, names, or logos (whether or not
registrable as trade or service marks, and without regard to whether
registration therefor is ever sought), (iii) works of authorship (without regard
to whether any claim of copyright therein is ever registered), and (iv) trade
secrets, ideas, and concepts ((i) — (iv) collectively, “Intellectual Property
Products”) created, conceived, or prepared on the Company’s premises or
otherwise, whether or not during normal business hours, shall perpetually and
throughout the world be the exclusive property of the Company, as shall all
tangible media (including, but not limited to, papers, computer media of all
types, and models) in which such Intellectual Property Products shall be
recorded or otherwise fixed. The Participant further agrees promptly to disclose
in writing and deliver to the Company all Intellectual Property Products created
during his or
14
her engagement by the Company, whether or not during normal business hours. The
Participant agrees that all works of authorship created by the Participant
during his or her engagement by the Company shall be works made for hire of
which the Company is the author and owner of copyright. To the extent that any
competent decision-making authority should ever determine that any work of
authorship created by the Participant during his or her engagement by the
Company is not a work made for hire, by accepting an Award, the Participant
assigns all right, title and interest in the copyright therein, in perpetuity
and throughout the world, to the Company. To the extent that this Plan does not
otherwise serve to grant or otherwise vest in the Company all rights in any
Intellectual Property Product created by the Participant during his or her
engagement by the Company, by accepting an Award, the Participant assigns all
right, title and interest therein, in perpetuity and throughout the world, to
the Company. The Participant agrees to execute, immediately upon the Company’s
reasonable request and without charge, any further assignments, applications,
conveyances or other instruments, at any time, whether or not the Participant is
engaged by the Company at the time such request is made, in order to permit the
Company and/or its respective assigns to protect, perfect, register, record,
maintain, or enhance their rights in any Intellectual Property Product; provided
that the Company shall bear the cost of any such assignments, applications or
consequences. Upon termination of the Participant’s employment by the Company
for any reason whatsoever, and at any earlier time the Company so requests, the
Participant will immediately deliver to the custody of the person designated by
the Company all originals and copies of any documents and other property of the
Company in the Participant’s possession, under the Participant’s control or to
which he or she may have access.
For purposes of this Section 15, the term “Company” shall include the Company
and its Affiliates.
16. General. (a) Award Agreements. Each Award under the Plan shall be evidenced
by an Award agreement, which shall be delivered to the Participant (whether in
maintained by the Company or a third party under contract with the Company)) and
shall specify the terms and conditions of the Award and any rules applicable
thereto, including without limitation, the effect on such Award of the death,
disability or termination of employment or service of a Participant, or of such
other events as may be determined by the Committee.
(b) Nontransferability. (i) Each Award shall be exercisable only by a
Participant during the Participant’s lifetime, or, if permissible under
applicable law, by the Participant’s legal guardian or representative. No Award
may be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant other than by will or by the laws of descent and
distribution and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the
Company or an Affiliate; provided that the designation of a beneficiary shall
not constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.
(ii) Notwithstanding the foregoing, the Committee may, in its sole discretion,
permit Awards (other than Incentive Stock Options) to be transferred by a
Participant, without consideration, subject to such rules as the Committee may
adopt consistent with any applicable Award agreement to preserve the purposes of
the Plan, to: (A) any person who is a “family member” of the Participant, as
such term is used in the instructions to Form S-8 under the Securities Act
(collectively, the “Immediate Family Members”); (B) a trust solely for the
benefit of the Participant and his or her Immediate Family Members; (C) a
partnership or limited liability company whose only partners or stockholders are
the Participant and his or her Immediate Family Members; or (D) any other
transferee as may be approved either (I) by the Board or the Committee in its
sole discretion, or (II) as provided in the applicable Award agreement. (each
transferee described in clauses (A), (B) (C) and (D) above is hereinafter
referred to as a “Permitted Transferee”); provided that the Participant gives
the Committee advance written notice describing the terms and conditions of the
proposed transfer and the Committee notifies the Participant in writing that
such a transfer would comply with the requirements of the Plan.
(iii) The terms of any Award transferred in accordance with the immediately
preceding sentence shall apply to the Permitted Transferee and any reference in
the Plan, or in any applicable Award agreement, to a Participant shall be deemed
to refer to the Permitted Transferee, except that (A) Permitted Transferees
shall not be entitled to transfer any Award, other than by will or the laws of
descent and distribution; (B) Permitted Transferees shall not be entitled to
exercise any transferred Option unless there shall be in effect a registration
statement on an appropriate form covering the Common Shares to be acquired
pursuant to the exercise of such Option if the Committee determines, consistent
with any applicable Award agreement, that such a
15
registration statement is necessary or appropriate; (C) the Committee or the
Company shall not be required to provide any notice to a Permitted Transferee,
whether or not such notice is or would otherwise have been required to be given
to the Participant under the Plan or otherwise; and (D) the consequences of the
termination of the Participant’s employment by, or services to, the Company or
an Affiliate under the terms of the Plan and the applicable Award agreement
shall continue to be applied with respect to the Participant, including, without
limitation, that an Option shall be exercisable by the Permitted Transferee only
to the extent, and for the periods, specified in the Plan and the applicable
Award agreement.
(c) Tax Withholding. (i) A Participant shall be required to pay to the Company
or any Affiliate, and the Company or any Affiliate shall have the right and is
hereby authorized to withhold, from any cash, Common Shares, other securities or
other property deliverable under any Award or from any compensation or other
amounts owing to a Participant, the amount (in cash, Common Shares, other
securities or other property) of any required withholding taxes (up to the
maximum statutory rate under applicable law) in respect of an Award, its
exercise, or any payment or transfer under an Award or under the Plan and to
take such other action as may be necessary in the opinion of the Committee or
the Company to satisfy all obligations for the payment of such withholding and
taxes.
(ii) Without limiting the generality of clause (i) above, the Committee may, in
its sole discretion, permit a Participant to satisfy, in whole or in part, the
foregoing withholding liability by (A) the delivery of Common Shares (which are
not subject to any pledge or other security interest and are Mature Shares)
owned by the Participant having a fair market value equal to such withholding
liability or (B) having the Company withhold from the number of Common Shares
otherwise issuable or deliverable pursuant to the exercise or settlement of the
Award a number of shares with a fair market value equal to such withholding
liability.
(d) No Claim to Awards; No Rights to Continued Employment; Waiver. No employee
of the Company or an Affiliate, or other person, shall have any claim or right
to be granted an Award under the Plan or, having been selected for the grant of
an Award, to be selected for a grant of any other Award. There is no obligation
for uniformity of treatment of Participants or holders or beneficiaries of
Awards. The terms and conditions of Awards and the Committee’s determinations
and interpretations with respect thereto need not be the same with respect to
each Participant and may be made selectively among Participants, whether or not
such Participants are similarly situated. Neither the Plan nor any action taken
hereunder shall be construed as giving any Participant any right to be retained
in the employ or service of the Company or an Affiliate, nor shall it be
construed as giving any Participant any rights to continued service on the
Board. The Company or any of its Affiliates may at any time dismiss a
Participant from employment or discontinue any consulting relationship, free
from any liability or any claim under the Plan, unless otherwise expressly
provided in the Plan or any Award agreement. By accepting an Award under the
Plan, a Participant shall thereby be deemed to have waived any claim to
continued exercise or vesting of an Award or to damages or severance entitlement
related to non-continuation of the Award beyond the period provided under the
Plan or any Award agreement, notwithstanding any provision to the contrary in
any written employment contract or other agreement between the Company and its
Affiliates and the Participant, whether any such agreement is executed before,
on or after the Date of Grant.
(e) International Participants. With respect to Participants who reside or work
outside of the United States of America, the Committee may in its sole
discretion amend the terms of the Plan or outstanding Awards with respect to
such Participants in order to conform such terms with the requirements of local
law or to obtain more favorable tax or other treatment for a Participant, the
Company or its Affiliates.
(f) Designation and Change of Beneficiary. Each Participant may file with the
Committee a written designation of one or more persons as the beneficiary(ies)
who shall be entitled to receive the amounts payable with respect to an Award,
if any, due under the Plan upon his death. A Participant may, from time to time,
revoke or change his beneficiary designation without the consent of any prior
beneficiary by filing a new designation with the Committee. The last such
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Participant’s death, and in no event
shall it be effective as of a date prior to such receipt. If no beneficiary
designation is filed by a Participant, the beneficiary shall be deemed to be his
or her spouse or, if the Participant is unmarried at the time of death, his or
her estate.
16
(g) Termination of Employment/Service. Unless determined otherwise by the
Committee at any point following such event: (i) neither a temporary absence
from employment or service due to illness, vacation or leave of absence nor a
transfer from employment or service with the Company to employment or service
with an Affiliate (or vice-versa) shall be considered a termination of
employment or service with the Company or an Affiliate; and (ii) if a
Participant’s employment with the Company and its Affiliates terminates, but
such Participant continues to provide services to the Company and its Affiliates
in a non-employee capacity (or vice-versa), such change in status shall not be
considered a termination of employment with the Company or an Affiliate.
(h) No Rights as a Stockholder. Except as otherwise specifically provided in the
Plan or any Award agreement, no person shall be entitled to the privileges of
ownership in respect of Common Shares that are subject to Awards hereunder until
such shares have been issued or delivered to that person.
(i) Government and Other Regulations. (i) The obligation of the Company to
settle Awards in Common Shares or other consideration shall be subject to all
applicable laws, rules, and regulations, and to such approvals by governmental
agencies as may be required. Notwithstanding any terms or conditions of any
Award to the contrary, the Company shall be under no obligation to offer to sell
or to sell, and shall be prohibited from offering to sell or selling, any Common
Shares pursuant to an Award unless such shares have been properly registered for
sale pursuant to the Securities Act with the Securities and Exchange Commission
or unless the Company has received an opinion of counsel, satisfactory to the
Company, that such shares may be offered or sold without such registration
pursuant to an available exemption therefrom and the terms and conditions of
such exemption have been fully complied with. The Company shall be under no
obligation to register for sale under the Securities Act any of the Common
Shares to be offered or sold under the Plan. The Committee shall have the
authority to provide that all certificates for Common Shares or other securities
of the Company or any Affiliate delivered under the Plan shall be subject to
such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan, the applicable Award agreement, the federal securities
laws, or the rules, regulations and other requirements of the Securities and
Exchange Commission, any securities exchange or inter-dealer quotation system
upon which such shares or other securities are then listed or quoted and any
other applicable federal, state, local or non-U.S. laws, and, without limiting
the generality of Section 9 of the Plan, the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions. Notwithstanding any provision in the Plan to the contrary, the
Committee reserves the right to add any additional terms or provisions to any
Award granted under the Plan that it in its sole discretion deems necessary or
advisable in order that such Award complies with the legal requirements of any
governmental entity to whose jurisdiction the Award is subject.
(ii) The Committee may cancel an Award or any portion thereof if it determines,
in its sole discretion, that legal or contractual restrictions and/or blockage
and/or other market considerations would make the Company’s acquisition of
Common Shares from the public markets, the Company’s issuance of Common Shares
to the Participant, the Participant’s acquisition of Common Shares from the
Company and/or the Participant’s sale of Common Shares to the public markets,
illegal, impracticable or inadvisable. If the Committee determines to cancel all
or any portion of an Award in accordance with the foregoing, the Company shall
pay to the Participant an amount equal to the excess of (A) the aggregate fair
market value of the Common Shares subject to such Award or portion thereof
canceled (determined as of the applicable exercise date, or the date that the
shares would have been vested or delivered, as applicable), over (B) the
aggregate Exercise Price or Strike Price (in the case of an Option or SAR,
respectively) or any amount payable as a condition of delivery of Common Shares
(in the case of any other Award). Such amount shall be delivered to the
Participant as soon as practicable following the cancellation of such Award or
portion thereof.
(j) Payments to Persons Other Than Participants. If the Committee shall find
that any person to whom any amount is payable under the Plan is unable to care
for his affairs because of illness or accident, or is a minor, or has died, then
any payment due to such person or his estate (unless a prior claim therefor has
been made by a duly appointed legal representative) may, if the Committee so
directs the Company, be paid to his spouse, child, relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Committee and the Company therefor.
17
(k) Nonexclusivity of the Plan. Neither the adoption of this Plan by the Board
nor the submission of this Plan to the shareholders of the Company for approval
shall be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options or other equity-based awards
otherwise than under this Plan, and such arrangements may be either applicable
generally or only in specific cases.
(l) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate, on the one hand, and a
Participant or other person or entity, on the other hand. No provision of the
Plan or any Award shall require the Company, for the purpose of satisfying any
obligations under the Plan, to purchase assets or place any assets in a trust or
other entity to which contributions are made or otherwise to segregate any
assets, nor shall the Company maintain separate bank accounts, books, records or
other evidence of the existence of a segregated or separately maintained or
administered fund for such purposes. Participants shall have no rights under the
Plan other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional compensation
by performance of services, they shall have the same rights as other employees
under general law.
(m) Reliance on Reports. Each member of the Committee and each member of the
Board shall be fully justified in acting or failing to act, as the case may be,
and shall not be liable for having so acted or failed to act in good faith, in
reliance upon any report made by the independent public accountant of the
Company and its Affiliates and/or any other information furnished in connection
with the Plan by any agent of the Company or the Committee or the Board, other
than himself.
(n) Relationship to Other Benefits. No payment under the Plan shall be taken
into account in determining any benefits under any pension, retirement, profit
sharing, group insurance or other benefit plan of the Company except as
otherwise specifically provided in such other plan.
(o) Governing Law. The Plan shall be governed by and construed in accordance
with the internal laws of the State of New York applicable to contracts made and
performed wholly within the State of New York, without giving effect to the
conflict of laws provisions thereof.
(p) Severability. If any provision of the Plan or any Award or Award agreement
is or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any person or entity or Award, or would disqualify the
Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
the Award, such provision shall be construed or deemed stricken as to such
jurisdiction, person or entity or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(q) Obligations Binding on Successors. The obligations of the Company under the
Plan shall be binding upon any successor corporation or organization resulting
from the merger, amalgamation, consolidation or other reorganization of the
Company, or upon any successor corporation or organization succeeding to
substantially all of the assets and business of the Company.
(r) Code Section 409A.
(i) Notwithstanding any provision of this Plan to the contrary, all Awards made
under this Plan are intended to be exempt from or, in the alternative, comply
with Code Section 409A and the interpretive guidance thereunder, including the
exceptions for stock rights and short-term deferrals. The Plan shall be
construed and interpreted in accordance with such intent. Each payment under an
Award shall be treated as a separate payment for purposes of Code Section 409A.
(ii) If a Participant is a “specified employee” (as such term is defined for
purposes of Code Section 409A) at the time of his or her termination of service,
no amount that is nonqualified deferred compensation subject to Code
Section 409A and that becomes payable by reason of such termination of service
shall
18
be paid to the Participant (or in the event of the Participant’s death, the
Participant’s representative or estate) before the earlier of (x) the first
business day after the date that is six months following the date of the
Participant’s termination of service, and (y) within 30 days following the date
of the Participant’s death. For purposes of Code Section 409A, a termination of
service shall be deemed to occur only if it is a “separation from service”
within the meaning of Code Section 409A, and references in the Plan and any
Award agreement to “termination of service” or similar terms shall mean a
“separation from service.” If any Award is or becomes subject to Code
Section 409A, unless the applicable Award agreement provides otherwise, such
Award shall be payable upon the Participant’s “separation from service” within
the meaning of Code Section 409A. If any Award is or becomes subject to Code
Section 409A and if payment of such Award would be accelerated or otherwise
triggered under a Change in Control, then the definition of Change in Control
shall be deemed modified, only to the extent necessary to avoid the imposition
of an excise tax under Code Section 409A, to mean a “change in control event” as
such term is defined for purposes of Code Section 409A.
(iii) Any adjustments made pursuant to Section 12 to Awards that are subject to
Code Section 409A shall be made in compliance with the requirements of Code
Section 409A, and any adjustments made pursuant to Section 12 to Awards that are
not subject to Code Section 409A shall be made in such a manner as to ensure
that after such adjustment, the Awards either (x) continue not to be subject to
Code Section 409A or (y) comply with the requirements of Code Section 409A.
(s) Expenses; Gender; Titles and Headings. The expenses of administering the
Plan shall be borne by the Company and its Affiliates. Masculine pronouns and
other words of masculine gender shall refer to both men and women. The titles
and headings of the sections in the Plan are for convenience of reference only,
and in the event of any conflict, the text of the Plan, rather than such titles
or headings shall control.
(t) Other Agreements. Notwithstanding the above, the Committee may require, as a
condition to the grant of and/or the receipt of Common Shares under an Award,
that the Participant execute lock-up, shareholder or other agreements, as it may
determine in its sole and absolute discretion.
(u) Payments. Participants shall be required to pay, to the extent required by
applicable law, any amounts required to receive Common Shares under any Award
made under the Plan.
(v) Erroneously Awarded Compensation. All Awards shall be subject (including on
a retroactive basis) to (i) any clawback, forfeiture or similar incentive
compensation recoupment policy established from time to time by the Company,
including, without limitation, any such policy established to comply with the
Dodd-Frank Wall Street Reform and Consumer Protection Act, (ii) applicable law
(including, without limitation, Section 304 of the Sarbanes-Oxley Act and
Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act),
and/or (iii) the rules and regulations of the applicable securities exchange or
inter-dealer quotation system on which the Common Shares are listed or quoted,
and such requirements shall be deemed incorporated by reference into all
outstanding Award agreements.
* * *
19
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report(Date of earliest event reported): July 21, 2010 LUFKIN INDUSTRIES, INC. (Exact name of registrant as specified in its charter) TEXAS 000-02612 75-0404410 (State or other jurisdiction (Commission (I.R.S. Employer Of incorporation) File Number) Identification No.) , LUFKIN, TEXAS (Address of Principal Executive Offices) (Zip Code) Registrant’s telephone number, including area code: (936) 634-2211 NOT APPLICABLE (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition On July 21, 2010, Lufkin Industries, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2010. A copy of the press release is furnished and attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information in this report and Exhibit 99.1 attached hereto are being furnished, not filed, pursuant to General Instruction B.2 of Form 8-K. Accordingly, the information in this report and Exhibit 99.1 attached hereto will not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, unless specifically identified therein as being incorporated therein by reference. Item 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit 99.1 Press Release, dated July 21, 2010, issued by Lufkin Industries, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. LUFKIN INDUSTRIES, INC By /s/ Christopher L. Boone Christopher L. Boone Vice President/Treasurer/Chief Financial Officer (Principal Financial and Accounting Officer) Date:July 21, 2010 EXHIBIT INDEX Exhibit No Description Press Release, dated July 21, 2010, issued by Lufkin Industries, Inc.
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ITEM 77D POLICIES WITH RESPECT TO SECURITY INVESTMENTS On December 31, 2012, a supplement was filed with the SEC for the Merk Absolute Return Currency Fund and the Merk Currency Enhanced U.S. Equity Fund to 1) change language related to each Fund’s principal investment strategies and 2) to change the investment objective of the Merk Currency Enhanced U.S. Equity Fund.
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Name: Commission Regulation (EC) No 362/2004 of 27 February 2004 opening a preferential tariff quota for imports of raw cane sugar originating in the ACP States for supply to refineries during the period 1 March to 30 June 2004
Type: Regulation
Subject Matter: international trade; beverages and sugar; economic geography; tariff policy; trade
Date Published: nan
Avis juridique important|32004R0362Commission Regulation (EC) No 362/2004 of 27 February 2004 opening a preferential tariff quota for imports of raw cane sugar originating in the ACP States for supply to refineries during the period 1 March to 30 June 2004 Official Journal L 063 , 28/02/2004 P. 0018 - 0019Commission Regulation (EC) No 362/2004of 27 February 2004opening a preferential tariff quota for imports of raw cane sugar originating in the ACP States for supply to refineries during the period 1 March to 30 June 2004THE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community,Having regard to Council Regulation (EC) No 1260/2001 of 19 June 2001 on the common organisation of the markets in the sugar sector(1), and in particular Article 39(6) thereof,Whereas:(1) Article 39(1) of Regulation (EC) No 1260/2001 provides that, during the 2001/02 to 2005/06 marketing years and in order to ensure adequate supplies to Community refineries, a special reduced rate of duty is to be levied on imports of raw cane sugar originating in States with which the Community has concluded supply agreements on preferential terms. At present such agreements have been concluded by Council Decision 2001/870/EC(2) with the African, Caribbean and Pacific States (ACP States) referred to in Protocol 3 on ACP sugar in Annex V to the ACP-EC Partnership Agreement(3) and with the Republic of India.(2) The agreements in the form of an exchange of letters concluded by Decision 2001/870/EC provide that the refiners in question are to pay a minimum purchase price equal to the guaranteed price for raw sugar, less the adjustment aid fixed for the marketing year in question. That minimum price should therefore be fixed in the light of the factors applicable in the 2003/04 marketing year.(3) The quantities of special preferential sugar to be imported are calculated in accordance with Article 39 of Regulation (EC) No 1260/2001 on the basis of an annual Community forecast supply balance.(4) The balance shows the need at this stage to import raw sugar and to open tariff quotas for the 2003/04 marketing year at the special reduced rate of duty provided for in the above agreements in order to meet the Community refineries' supply needs for part of that marketing year. Pursuant to Commission Regulation (EC) No 1115/2003(4), quotas were opened for the period 1 July 2003 to 29 February 2004.(5) Since the forecasts for raw cane sugar production are available for the 2003/04 marketing year, a quota should be opened for the second part of that marketing year.(6) In view of the presumed maximum refining needs fixed for each Member State and the shortfall predicted in the forecast supply balance, provision should be made to authorise imports for each refining Member State for the period 1 March to 30 June 2004.(7) The 2003 Act of Accession adds Slovenia to the list of countries for which maximum supply needs per marketing year are laid down in Article 39 of Regulation (EC) No 1260/2001. The needs of Slovenia for the two months (May and June 2004) falling under the 2003/04 marketing year after accession are set at 3264 t in Article 3 of Commission Regulation (EC) No 60/2004(5). In view of the relatively small quantity involved and the fact that the period of application is relatively short, special provisions must be adopted as regards the issue and validity of import licences and the refining period.(8) Commission Regulation (EC) No 1159/2003 of 30 June 2003 laying down detailed rules of application for the 2003/04, 2004/05 and 2005/06 marketing years for the import of cane sugar under certain tariff quotas and preferential agreements and amending Regulations (EC) No 1464/95 and (EC) No 779/96(6) must apply to the new quota.(9) In order to avoid any interruption in supplies, for quantities to be imported in accordance with Regulation (EC) No 1115/2003 and not covered by licence applications submitted by 1 March 2004, the Member States concerned should be authorised to issue the corresponding licences after that date in the course of the 2003/04 marketing year.(10) The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Sugar,HAS ADOPTED THIS REGULATION:Article 1For the period 1 March to 30 June 2004, a tariff quota is hereby opened under Decision 2001/870/EC for imports of raw cane sugar for refining falling within CN code 1701 11 10, amounting to 30459 tonnes expressed as white sugar originating in the ACP States signatory to the Agreement in the form of an Exchange of Letters approved by that Decision.The tariff quota shall bear the serial number 09.4097.Article 21. A special reduced duty of EUR 0 per 100 kg of standard-quality raw sugar shall apply to imports of the quantity referred to in Article 1.2. The minimum purchase price to be paid by Community refiners for the period referred to in Article 1 shall be EUR 49,68 per 100 kg of standard-quality raw sugar.Article 31. Import licences may be issued(a) by the Member States listed in Article 39 of Regulation (EC) No 1260/2001, except Slovenia, under the quota fixed in Article 1 and on the terms laid down in Article 2 for a total quantity of 27195 tonnes;(b) by Slovenia for a quantity of 3264 tonnes.2. Notwithstanding the last sentence of Article 4(4) of Commission Regulation (EC) No 1159/2003, licences issued by Slovenia shall be valid to the end of the third month following the marketing year in question. Notwithstanding Article 18(1) of that Regulation, the sugar must be refined by the end of the fourth month following the marketing year in question.Article 4Regulation (EC) No 1159/2003 shall apply to the tariff quota opened by this Regulation.Article 5The Member States referred to in Article 3 of Regulation (EC) No 1115/2003 are hereby authorised to issue licences for the import and refining by 30 June 2004 of the quantities listed in that Article and not covered by import licence applications submitted before 1 March 2004.Article 6This Regulation shall enter into force on 1 March 2004.Article 3(1)(b) and (2) shall apply subject to and from the date of entry into force of the Treaty of Accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia.This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 27 February 2004.For the CommissionFranz FischlerMember of the Commission(1) OJ L 178, 30.6.2001, p. 1. Regulation as last amended by Commission Regulation (EC) No 39/2004 (OJ L 6, 10.1.2004, p. 16).(2) OJ L 325, 8.12.2001, p. 21.(3) OJ L 317, 15.12.2000, p. 3.(4) OJ L 158, 27.6.2003, p. 30.(5) OJ L 9, 15.1.2004, p. 8.(6) OJ L 162, 1.7.2003, p. 25. |
Exhibit 10.11
INTEL CORPORATION
RESTRICTED STOCK UNIT AGREEMENT
UNDER THE 2004 EQUITY INCENTIVE PLAN
(FOR GRANTS UNDER THE ELTSOP PROGRAM)
1. TERMS OF RESTRICTED STOCK UNIT This Restricted Stock Unit Agreement
(this “Agreement”), the Notice of Grant delivered herewith (the “Notice of
Grant”) and the Intel Corporation 2004 Equity Incentive Plan (the “2004 Plan”),
as such may be amended from time to time, constitute the entire understanding
between you and Intel Corporation (the “Corporation”) regarding the Restricted
Stock Units (“RSUs”) identified in your Notice of Grant. 2. VESTING OF RSUs
Provided that you remain continuously employed by the Corporation or a
Subsidiary on a full time basis from the Grant Date specified in the Notice of
Grant through each vesting date specified in the Notice of Grant, the RSUs shall
vest and be converted into the right to receive the number of shares of the
Corporation’s Common Stock, $.001 par value (the “Common Stock”), specified on
the Notice of Grant with respect to such vesting date, except as otherwise
provided in this Agreement. If a vesting date falls on a weekend or any other
day on which the NASDAQ Stock Market (“NASDAQ”) is not open, affected RSUs shall
vest on the next following NASDAQ business day. The number of shares of Common
Stock into which RSUs convert as specified in the Notice of Grant shall be
adjusted for stock splits and similar matters as specified in and pursuant to
the 2004 Plan. RSUs will vest to the extent provided in and in accordance
with the terms of the Notice of Grant and this Agreement. If your status as an
Employee terminates for any reason except death, or Disablement (defined below),
prior to the vesting dates set forth in your Notice of Grant, your unvested RSUs
will be cancelled. 3. CONVERSION INTO COMMON STOCK Shares of Common
Stock will be issued or become free of restrictions as soon as practicable
following vesting of the RSUs, provided that you have satisfied your tax
withholding obligations as specified under Section 9 of this Agreement
1.
and you have completed, signed and returned any documents and taken any
additional action that the Corporation deems appropriate to enable it to
accomplish the delivery of the shares of Common Stock. The shares of Common
Stock will be issued in your name or, in the event of your death or Disablement,
to your executor or personal representative, and may be effected by recording
shares on the stock records of the Corporation or by crediting shares in an
account established on your behalf with a brokerage firm or other custodian, in
each case as determined by the Corporation. In no event will the Corporation be
obligated to issue a fractional share. Notwithstanding the foregoing,
(i) the Corporation shall not be obligated to deliver any shares of the Common
Stock during any period when the Corporation determines that the conversion of a
RSU or the delivery of shares hereunder would violate any laws of the United
States or your country of residence or employment and/or may issue shares
subject to any restrictive legends that, as determined by the Corporation’s
counsel, is necessary to comply with securities or other regulatory
requirements, and (ii) the date on which shares are issued may include a delay
in order to provide the Corporation such time as it determines appropriate to
address tax withholding and other administrative matters. 4. LEAVES OF
ABSENCE
(a) Except as expressly provided otherwise in this Agreement, if you take a
personal leave of absence under the Intel Leave Guidelines (“PLOA”), your RSUs
will vest only to the extent and during the times specified in this Section 4:
(1) If the duration of the PLOA is less than thirty (30) days:
a) The vesting date set forth in your Notice of Grant for any RSUs that (but
for this provision) would have vested during the PLOA shall be deferred until
the first day that you return to work (i.e., the date that the PLOA is
terminated) or, if you return on a day that the NASDAQ is not open, the next
following NASDAQ business day; and b) The vesting date set forth in your
Notice of Grant for any RSUs that are scheduled to vest following the date that
the PLOA is terminated shall not be affected by the PLOA.
(2) If the duration of the PLOA equals or exceeds thirty (30) days, the
vesting dates set forth in your Notice of Grant for any RSUs that follow the
commencement of the PLOA shall be deferred beyond the dates set forth in the
Notice of Grant by a period of time equal to the duration of the PLOA.
2.
(3) If you terminate employment with the Corporation during a PLOA, then in
addition to the effect on the vesting dates set forth in clause (a)(i) and
(a)(ii) of this Section 4, any RSUs that had not vested prior to the
commencement of the PLOA shall be cancelled as of the date of your termination
of employment, as applicable, except to the extent provided otherwise in
Sections 7 through 9 hereof.
(b) If you take an approved Leave of Absence other than a PLOA under Intel
Leave Guidelines, the vesting of RSUs shall be unaffected by such absence and
will vest in accordance with the schedule set forth in the Notice of Grant.
5. SUSPENSION OR TERMINATION OF RSU FOR MISCONDUCT If at any time the
Committee of the Board of Directors of the Corporation established pursuant to
the 2004 Plan (the “Committee”), including any Subcommittee or “Authorized
Officer” (as defined in Section 8(a)(v) of the 2004 Plan) notifies the
Corporation that they reasonably believe that you have committed an act of
misconduct as described in Section 8(a)(v) of the 2004 Plan (embezzlement,
fraud, dishonesty, nonpayment of any obligation owed to the Corporation, breach
of fiduciary duty or deliberate disregard of Corporation rules resulting in
loss, damage or injury to the Corporation, an unauthorized disclosure of any
Corporation trade secret or confidential information, any conduct constituting
unfair competition, inducing any customer to breach a contract with the
Corporation or inducing any principal for whom the Corporation acts as agent to
terminate such agency relationship), the vesting of your RSUs may be suspended
pending a determination of whether an act of misconduct has been committed. If
the Corporation determines that you have committed an act of misconduct, all
RSUs not vested as of the date the Corporation was notified that you may have
committed an act of misconduct shall be cancelled and neither you nor any
beneficiary shall be entitled to any claim with respect to the RSUs whatsoever.
Any determination by the Committee or an Authorized Officer with respect to the
foregoing shall be final, conclusive, and binding on all interested parties.
6. TERMINATION OF EMPLOYMENT Except as expressly provided otherwise in
this Agreement, if your employment by the Corporation terminates for any reason,
whether voluntarily or involuntarily, other than on account of death, or
Disablement (defined below), all RSUs not then vested shall be cancelled on the
date of employment termination, regardless of whether such employment
termination is as a result of a divestiture or otherwise. For purposes of this
Section 6, your employment with any partnership, joint venture or corporation
not meeting the requirements of a Subsidiary in which the Corporation or a
Subsidiary is a party shall be considered employment for purposes of this
provision if either (a) an the entity is designated by the Committee as a
Subsidiary for purposes of this provision or (b) you are
3.
specifically designated as an employee of a Subsidiary for purposes of this
provision. For purposes of this provision, your employment is not deemed
terminated if, prior to sixty (60) days after the date of termination from the
Corporation or a Subsidiary, you are rehired by the Corporation or a Subsidiary
on a basis that would make you eligible for future Intel RSU grants, nor would
your transfer from the Corporation to any Subsidiary or from any one Subsidiary
to another, or from a Subsidiary to the Corporation be deemed a termination of
employment. 7. DEATH Except as expressly provided otherwise in this
Agreement, if you die while employed by the Corporation, your RSUs will become
one hundred percent (100%) vested. 8. DISABILITY Except as expressly
provided otherwise in this Agreement and upon your termination of employment as
a result of a determination of Disablement, your RSUs will become one hundred
percent (100%) vested. For purposes of this Section 8, “Disablement” shall
be determined in accordance with the standards and procedures of the
then-current Long Term Disability Plan maintained by the Corporation or the
Subsidiary that employs you, and in the event you are not a participant in a
Subsidiary that employs you, “Disablement” shall have the same meaning as
disablement is defined in the Intel Long Term Disability Plan, which is
generally a physical condition arising from an illness or injury, which renders
an individual incapable of performing work in any occupation, as determined by
the Corporation. 9. TAX WITHHOLDING RSUs are taxable upon vesting
based on the market value in accordance with the tax laws of the country where
you are resident or employed. RSUs are taxable in accordance with the existing
or future tax laws of the country where you are resident or employed. If you are
an U.S. citizen or expatriate, you may also be subject to U.S. tax laws.
To the extent required by applicable federal, state or other law, you shall make
arrangements satisfactory to the Corporation or the Subsidiary that employs you
for the payment and satisfaction of any income tax, social security tax, payroll
tax, social taxes, applicable national or local taxes, payment on account or
other tax related to withholding obligations that arise by reason of granting of
a RSU, vesting of a RSU or any sale of shares of the Common Stock (whichever is
applicable).
4.
The Corporation shall not be required to issue or lift any restrictions on
shares of the Common Stock pursuant to your RSUs or to recognize any purported
transfer of shares of the Common Stock until such obligations are satisfied.
Unless provided otherwise by the Committee, these obligations will be
satisfied by the Corporation withholding a number of shares of Common Stock that
would otherwise be issued under the RSUs that the Corporation determines has a
Market Value sufficient to meet the tax withholding obligations. In the event
that the Committee provides that these obligations will not be satisfied under
the method described in the previous sentence, you authorize UBS Financial
Services Inc., or any successor plan administrator, to sell a number of shares
of Common Stock that are issued under the RSUs, which the Corporation determines
is sufficient to generate an amount that meets the tax withholding obligations
plus additional shares to account for rounding and market fluctuations, and to
pay such tax withholding to the Corporation. The shares may be sold as part of a
block trade with other participants of the 2004 Plan in which all participants
receive an average price. For this purpose, “Market Value” will be calculated as
the average of the highest and lowest sales prices of the Common Stock as
reported by NASDAQ on the day your RSUs vest. The future value of the underlying
shares of Common Stock is unknown and cannot be predicted with certainty.
You are ultimately liable and responsible for all taxes owed by you in
connection with your RSUs, regardless of any action the Corporation takes or any
transaction pursuant to this Section 9 with respect to any tax withholding
obligations that arise in connection with the RSUs. The Corporation makes no
representation or undertaking regarding the treatment of any tax withholding in
connection with the grant, issuance, vesting or settlement of the RSUs or the
subsequent sale of any of the shares of Common Stock underlying the RSUs that
vest. The Corporation does not commit and is under no obligation to structure
the RSU program to reduce or eliminate your tax liability. 10. RIGHTS AS A
STOCKHOLDER Your RSUs may not be otherwise transferred or assigned,
pledged, hypothecated or otherwise disposed of in any way, whether by operation
of law or otherwise, and may not be subject to execution, attachment or similar
process. Any attempt to transfer, assign, hypothecate or otherwise dispose of
your RSUs other than as permitted above, shall be void and unenforceable against
the Corporation. You will have the rights of a stockholder only after
shares of the Common Stock have been issued to you following vesting of your
RSUs and satisfaction of all other conditions to the issuance of those shares as
set forth in this Agreement. RSUs shall not entitle you to any rights of a
stockholder of Common Stock and there are no voting or dividend rights with
respect to your RSUs. RSUs shall remain terminable pursuant to this Agreement at
all times until they vest and
5.
convert into shares. As a condition to having the right to receive shares of
Common Stock pursuant to your RSUs, you acknowledge that unvested RSUs shall
have no value for purposes of any aspect of your employment relationship with
the Corporation.
6.
11. DISPUTES Any question concerning the interpretation of this
Agreement, your Notice of Grant, the RSUs or the 2004 Plan, any adjustments
required to be made thereunder, and any controversy that may arise under the
Standard Terms, your Notice of Grant, the RSUs or the 2004 Plan shall be
determined by the Committee (including any person(s) to whom the Committee has
delegated its authority) in its sole and absolute discretion. Such decision by
the Committee shall be final and binding unless determined pursuant to Section
14(e) to have been arbitrary and capricious. 12. AMENDMENTS The 2004
Plan and RSUs may be amended or altered by the Committee or the Board of
Directors of the Corporation to the extent provided in the 2004 Plan. 13.
DATA PRIVACY You explicitly and unambiguously consent to the collection,
use and transfer, in electronic or other form, of your personal data as
described in this document by the Corporation for the exclusive purpose of
implementing, administering and managing your participation in the 2004 Plan.
You hereby understand that the Corporation holds certain personal
information about you, including, but not limited to, your name, home address
and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of stock or
directorships held in the Corporation, details of all RSUs or any other
entitlement to shares of stock awarded, canceled, exercised, vested, unvested or
outstanding in your favor, for the purpose of implementing, administering and
managing the 2004 Plan (“Data”). You hereby understand that Data may be
transferred to any third parties assisting in the implementation, administration
and management of the 2004 Plan, that these recipients may be located in your
country or elsewhere, and that the recipient’s country may have different data
privacy laws and protections than your country. You hereby understand that you
may request a list with the names and addresses of any potential recipients of
the Data by contacting your local human resources representative. You authorize
the recipients to receive, possess, use, retain and transfer the Data, in
managing your participation in the 2004 Plan, including any requisite transfer
of such Data as may be required to a broker or other third party with whom you
may elect to deposit any shares of Common Stock acquired under your RSUs. You
hereby understand that Data will be held only as
7.
long as is necessary to implement, administer and manage your participation
in the 2004 Plan. You hereby understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data or refuse or withdraw the consents herein, in
any case without cost, by contacting in writing your local human resources
representative. You hereby understand, however, that refusing or withdrawing
your consent may affect your ability to participate in the 2004 Plan. For more
information on the consequences of your refusal to consent or withdrawal of
consent, you hereby understand that you may contact the human resources
representative responsible for your country at the local or regional level.
14. THE 2004 PLAN AND OTHER TERMS; OTHER MATTERS
(a) Certain capitalized terms used in this Agreement are defined in the 2004
Plan. Any prior agreements, commitments or negotiations concerning the RSUs are
superseded by this Agreement and your Notice of Grant. The grant of RSUs
to an employee in any one year, or at any time, does not obligate the
Corporation or any Subsidiary to make a grant in any future year or in any given
amount and should not create an expectation that the Corporation or any
Subsidiary might make a grant in any future year or in any given amount. (b)
To the extent that the grant of RSUs refers to the Common Stock of Intel
Corporation, and as required by the laws of your country of residence or
employment, only authorized but unissued shares thereof shall be utilized for
delivery upon vesting in accord with the terms hereof. (c) Notwithstanding
any other provision of this Agreement, if any changes in the financial or tax
accounting rules applicable to the RSUs covered by this Agreement shall occur
which, in the sole judgment of the Committee, may have an adverse effect on the
reported earnings, assets or liabilities of the Corporation, the Committee may,
in its sole discretion, modify this Agreement or cancel and cause a forfeiture
with respect to any unvested RSUs at the time of such determination. (d)
Nothing contained in this Agreement creates or implies an employment contract or
term of employment upon which you may rely. (e) Because this Agreement
relates to terms and conditions under which you may be issued shares of Common
Stock of Intel Corporation, a Delaware corporation, an essential term of this
Agreement is that it shall be governed by the laws of the State of Delaware,
without regard to choice of law principles of Delaware or other jurisdictions.
Any action, suit, or proceeding relating to this Agreement or the RSUs granted
hereunder
8.
shall be brought in the state or federal courts of competent jurisdiction
in the State of California. (f) Notwithstanding anything to the contrary
in this Agreement or the applicable Notice of Grant, your RSUs are subject to
reduction by the Corporation if you change your employment classification from a
full-time employee to a part-time employee. (g) RSUs are not part of your
employment contract (if any) with the Corporation, your salary, your normal or
expected compensation, or other remuneration for any purposes, including for
purposes of computing severance pay or other termination compensation or
indemnity. (h) In consideration of the grant of RSUs, no claim or
entitlement to compensation or damages shall arise from termination of your RSUs
or diminution in value of the RSUs or Common Stock acquired through vested RSUs
resulting from termination of your active employment by the Corporation (for any
reason whatsoever and whether or not in breach of local labor laws) and you
hereby release the Corporation from any such claim that may arise; if,
notwithstanding the foregoing, any such claim is found by a court of competent
jurisdiction to have arisen, then you shall be deemed irrevocably to have waived
your entitlement to pursue such claim. (i) Notwithstanding any terms or
conditions of the 2004 Plan to the contrary, in the event of involuntary
termination of your employment (whether or not in breach of local labor laws),
your right to receive the RSUs and vest in RSUs under the 2004 Plan, if any,
will terminate effective as of the date that you are no longer actively employed
and will not be extended by any notice period mandated under local law (e.g.,
active employment would not include a period of “garden leave” or similar period
pursuant to local law); furthermore, in the event of involuntary termination of
employment (whether or not in breach of local labor laws), your right to sell
shares of Common Stock that converted from vested RSUs after termination of
employment, if any, will be measured by the date of termination of your active
employment and will not be extended by any notice period mandated under local
law. (j) Notwithstanding any provision of these Standard Terms, the Notice
of Grant or the 2004 Plan to the contrary, if, at the time of your termination
of employment with the Corporation, you are a “specified employee” as defined in
Section 409A of the Internal Revenue Code (“Code”), and one or more of the
payments or benefits received or to be received by you pursuant to the RSUs
would constitute deferred compensation subject to Section 409A, no such payment
or benefit will be provided under the RSUs until the earliest of (A) the date
which is six (6) months after your “separation from service” for any reason,
other than death or “disability”
9.
(as such terms are used in Section 409A(a)(2) of the Code), (B) the date
of your death or “disability” (as such term is used in Section 409A(a)(2)(C) of
the Code) or (C) the effective date of a “change in the ownership or effective
control” of the Corporation (as such term is used in Section 409A(a)(2)(A)(v) of
the Code). The provisions of this Section 14(j) shall only apply to the extent
required to avoid your incurrence of any penalty tax or interest under
Section 409A of the Code or any regulations or Treasury guidance promulgated
thereunder. In addition, if any provision of the RSUs would cause you to incur
any penalty tax or interest under Section 409A of the Code or any regulations or
Treasury guidance promulgated thereunder, the Corporation may reform such
provision to maintain to the maximum extent practicable the original intent of
the applicable provision without violating the provisions of Section 409A of the
Code.
10. |
Name: nan
Type: Decision
Subject Matter: nan
Date Published: 1970-05-19
nan |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 16, 2015 Structured Products Corp. on behalf of CorTS Trust II for Provident Financing Trust I (Exact name of registrant as specified in its charter) Delaware 001-32090 13-3692801 (State or other jurisdiction of incorporation or organization) (Commission File Number) (IRS Employer Identification Number) 390 Greenwich Street New York, New York (212) 723-4070 (Address of principal executive offices) (Zip Code) (Registrant's telephone number including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c)) 1 Section 8 - Other Events Item 8.01 Other Events. This current report on Form 8-K relates to a distribution made to holders of the Certificates issued by the CorTS Trust II for Provident Financing Trust I. The issuer of the underlying securities, or guarantor thereof, or successor thereto, as applicable, is subject to the information reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act").Periodic reports and other information required to be filed pursuant to the Exchange Act, by the issuer of the underlying securities, or guarantor thereof, or successor thereto, as applicable, may be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission (the "Commission") at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a site on the World Wide Web at "http://www.sec.gov" at which users can view and download copies of reports, proxy and information statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval system.Neither Structured Products Corp. nor the trustee has participated in the preparation of such reporting documents, or made any due diligence investigation with respect to the information provided therein. Neither Structured Products Corp. nor the trustee has verified the accuracy or completeness of such documents or reports. There can be no assurance that events affecting the issuer of the underlying securities, or guarantor thereof, or successor thereto, as applicable, or the underlying securities have not occurred or have not yet been publicly disclosed which would affect the accuracy or completeness of the publicly available documents described above. Underlying Securities Issuer(s) or Guarantor, or successor thereto Exchange Act File Number Unum Group 001-11294 Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits. (c) Exhibits: 1. Trustee's Report with respect to the March 16, 2015 Distribution Date for the CorTS Trust II for Provident Financing Trust I 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. By:/s/ Stanley Louie Name:Stanley Louie Title:Vice President, Finance Officer. March 16, 2015 3 EXHIBIT INDEX Exhibit Page 1 Trustee's Report with respect to the March 16, 2015 Distribution Date for the CorTS Trust II for Provident Financing Trust I 5 4 Exhibit 1 To the Holders of: CorTS Trust II for Provident Financing Trust I UnumProvident 8.20% Corporate-Backed Trust Securities (CorTS) Certificates Class A *CUSIP:22081B200 U.S. Bank Trust National Association, as Trustee for the CorTS Trust II for Provident Financing Trust I, hereby gives notice with respect to the Distribution Date of March 16, 2015 (the "Distribution Date") as follows: 1. The amount of the distribution payable to the Certificateholders on the Distribution Date allocable to principal and premium, if any, and interest, expressed as a dollar amount per $25 original principal amount of Certificates, is as set forth below: Class Principal Interest Total Distribution A
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