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Exhibit 10.1
2008 INCENTIVE PLAN
Option awarded: 525,000
· Exercise Price: US$10.89 per Share
· Expiration Date: May 10, 2020
· Grant ID: 08003660
Schedule for Vesting
Date of Vesting
No. of Shares
Vesting at Vesting
Date
Cumulative No. of
Shares Vested at
Vesting Date
February 15, 2011
131,250
131,250
February 15, 2012
131,250
262,500
February 15, 2013
131,250
393,750
February 15, 2014
131,250
525,000
Company at:
3100 Ocean Park Boulevard
Ann E. Weiser
Chief Human Resources Officer
Date:
August 5, 2010
ACCEPTED AND AGREED:
Thomas Tippl
Date:
July 30, 2010
2
EXHIBIT A
2008 INCENTIVE PLAN
STOCK OPTION AWARD TERMS
1. Definitions.
affiliates.
Notice.
“Employment Violation means any material breach by the Holder of the Employment
the Holder (with any breach of the post-termination obligations contained
therein deemed to be material for purposes of these Award Terms).
plus
were not sold.
promulgated thereunder.
A-2
exercisable.
Grant Notice.
purchased.
A-3
Option.
event that the Holder’s employment is terminated by the Company or any of its
mutatis mutandis, and shall apply to the Grant Notice and these Award Terms with
the same force and effect as if expressly set forth therein or herein, shall
govern the disposition of the Stock Option.
after which the
A-4
events (including, without limitation, events described in
A-5
Section 8 hereof) affecting the Company or any of its subsidiaries or affiliates
or the financial statements of the Company or any of its subsidiaries or
law.
A-6
11. Employment Violation. In the event of an
and (ii) payment by the Holder to the Company of the Recapture Amount with
Violation and the Holder shall not be entitled to receive any consideration from
the Company in exchange therefor. Any such termination of the Stock Option and
limitation, the right to terminate the Holder’s employment if not already
(a) The Holder is responsible for complying
with (a) any federal, state and local taxation laws applicable to the Holder in
A-7
of laws thereof.
descent and distribution.
shown in the Employment Agreement or such other address as the Holder by notice
to the Company may designate in writing from time to time. Notices shall be
effective upon receipt.
A-8
control.
A-9
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Title: where is kim davis's marriage authorization power coming from? (Kentucky law)
Question:I just checked Duties Of Elected County Officials (http://www.lrc.ky.gov/lrcpubs/ib114.pdf) and the power of county clerks regarding issuing marriage licenses seems to fall under the Notary Power, which by Wikipedia definition, only need to verify the facts (e.g. the application presented accurate information and meets the legal eligibility required by Kentucky law), not approvals or disapprovals. Is there any law that defines this official capacity?
edit: County Clerks' Guide to Kentucky Marriage Law from KY Attorney General does not say anything about this either. (http://e-archives.ky.gov/Pubs/AG/clerks_guide_marriage_law%281996%29.htm)
Answer #1: That's correct, and one of the reasons most people think this whole issue is stupid. She doesn't actually grant the marriage, she's just responsible for making sure the paperwork is accurate. |
Exhibit 10.1
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is entered into as of July 13, 2014
between the parties (collectively, the "Parties"), by and through their
undersigned counsel, to the consolidated class and derivative action, captioned:
In re PokerTek Merger Litigation, No. 14 CVS 10579 (N.C.B.C.) (the "Consolidated
Action" or the "Action").
WHEREAS, on April 30, 2014, PokerTek, Inc. ("PokerTek" or the "Company") and
Multimedia Games, Inc. announced that they had entered into an Agreement and
Plan of Merger dated as of April 29, 2014 (the "Merger Agreement"), pursuant to
which PokerTek shareholders will receive $1.35 in cash for each share of
PokerTek common stock they own (the "Proposed Transaction");
WHEREAS, between May 9, 2014 and June 9, 2014, five (5) similar shareholder
derivative and/or class actions were filed in the General Court of Justice,
Superior Court Division, of Mecklenburg County, North Carolina and were assigned
to the Hon. Calvin Murphy and subsequently the Hon. Louis A. Bledsoe, III of the
North Carolina Business Court (the "Court"), alleging breaches of fiduciary
duties and/or aiding and abetting thereof against all of some of the following
defendants, Mark D. Roberson; James T. Crawford, III; Joseph J. Lahti; Lyle A.
Berman; Gehrig H. White; Arthur L. Lomax; PokerTek, Inc.; Multimedia Games,
Inc.; Multimedia Games Holding Company, Inc.; and 23 Acquisition Co.
(collectively, "Defendants") relating to the Proposed Transaction. The actions
were entitled: Simmer v. PokerTek, Inc., et al., Civil Action No. 14 CVS
8300(N.C.B.C.), filed May 9, 2014; Weber v. PokerTek, Inc., et al., Civil Action
No. 14CVS 8911 (N.C.B.C.), filed May 15, 2014; Stephens v. Roberson, et al.,
Civil Action No. 14 CVS 9215(N.C.B.C.), filed on May 16, 2014; Lobo v. PokerTek,
Inc., Civil Action No. 14 CVS 9271 filed May 19, 2014 and Sandler v. Lahti,
Civil Action No. 15 CVS 10579 filed June 9, 2014 (collectively the "Related
Actions"), the plaintiffs in which are referred to herein as “Plaintiffs”;
WHEREAS, on July 10, 2014, a substantially similar shareholder action was filed
alleging
1
breaches of fiduciary duty and aiding and abetting thereof and related
violations of federal securities law, against Defendants relating to the
Proposed Transaction;
WHEREAS, on June 9, 2014, Plaintiffs filed a Motion for Consolidate the Related
Actions;
WHEREAS, on June 16, 2014, the Company filed a Proxy Statement on Schedule 14A
(the "Proxy") pursuant to Section 14(a) of the Securities Exchange Act of 1934,
as amended, announcing, among other things, that the shareholder vote in
connection with the Proposed Transaction would take place on July 24, 2014;
WHEREAS, on July 8, 2014, the Court, with the consent of all parties, issued an
Order consolidating the Related Actions under the caption In re PokerTek Merger
Litigation, No. 14 CVS 10579;
WHEREAS, Defendants have voluntarily produced roughly 3,100 pages of documents
to Plaintiffs' counsel in the Consolidated Action on a confidential basis and
Plaintiffs have conducted a detailed review and analysis, in conjunction with
their financial expert, of the non-public documents produced by Defendants, as
well as publicly available documents, including the Proxy;
WHEREAS, Plaintiffs demanded that Defendants, among other things, make
WHEREAS, the Parties have engaged in discussions with respect to Plaintiffs'
demands concerning a potential resolution of Plaintiffs' claims;
WHEREAS, counsel to the Parties have engaged in arm's-length negotiations
concerning disclosure of further information to PokerTek shareholders and the
terms and conditions of a potential resolution of the Consolidated Action;
WHEREAS, in connection with settlement discussions and negotiations, counsel
for the Parties did not discuss the amount or appropriateness of any potential
application by Plaintiffs' counsel for attorneys' fees;
WHEREAS, Plaintiffs and Defendants each recognize the time and expense that
would be incurred by further litigation;
WHEREAS, on July 11, 2014, Plaintiffs filed a Motion for Preliminary Injunction,
seeking to enjoin the Proposed Transaction until and unless supplemental and
corrective disclosures were made to correct certain alleged misstatements and
omissions in the Proxy filed on June 16, 2014;
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WHEREAS, on July 13, 2014, the Parties reached an agreement-in-principle on the
structure of a settlement of the Consolidated Action;
WHEREAS, Defendants each have denied, and continue to deny, that they have
breaches of duty or engaged in any of the wrongful acts alleged in the Action,
and expressly maintain that they diligently and scrupulously complied with their
fiduciary, disclosure, and other legal duties, that they did not fail to
accurately include any material information in the Proxy, and that they are
entering into this MOU solely to eliminate the risk, burden, and expense of
further litigation;
WHEREAS, Plaintiffs and Plaintiffs' counsel believe that the claims asserted by
the Plaintiffs have merit, and the entry by Plaintiffs into this MOU is not an
admission as to the lack of merit of any claims asserted in the Actions, and
Plaintiffs are entering into the settlement set forth in this MOU only to secure
substantial, disclosure-based therapeutic relief for PokerTek and the Class
(defined herein) and to eliminate the risk, burden, and expense of further
litigation, and because they believe that the Supplemental Disclosures will
provide shareholders with substantial benefits and allow them to cast a more
fully informed vote on the Proposed Transaction; and
WHEREAS, Plaintiffs and Plaintiffs' counsel believe, subject to the completion
of Confirmatory Discovery, as defined below, that the terms contained in this
MOU are fair and adequate to both the Company and its shareholders and that it
is reasonable to pursue a settlement of the Consolidated Action based upon the
substantial benefits and protections offered herein.
NOW THEREFORE, the Parties have reached the following agreement-in-principle
intended to be a full and final resolution of the Released Claims (defined
below) (the "Settlement"):
1. PokerTek will provide the supplemental disclosures identified
in the document attached hereto as Exhibit A in a filing with the SEC on Form
8-K, to be filed promptly following execution of this MOU (the "Supplemental
Disclosures"). Without admitting any wrongdoing, Defendants acknowledge that the
Supplemental Disclosures were caused by Plaintiffs' initiation and prosecution
of their claims in the Consolidated Action.
2. Plaintiffs will withdraw any pending motion for preliminary injunctive relief
in the Consolidated Action related to the Shareholder Vote, the closing of the
Proposed Transaction, or any action taken to further enjoin the Shareholder Vote
or the closing of the Proposed Transaction, and will not seek injunctive
3
relief of any kind relating to the Proposed Transaction, either in this Court or
any other court. The parties shall jointly seek to adjourn and stay all pending
motions or deadlines until Confirmatory Discovery, defined below, is completed
and the Settlement has either been granted final approval or been terminated.
3. Pending negotiation, execution, and final approval of the Stipulation and
Settlement by the Court, Plaintiffs agree to cease the proceedings and to stay
and not initiate any other proceedings. The Plaintiffs also agree to cooperate
with Defendants to prevent, stay, or seek dismissal of or oppose the entry of
any interim or final order in favor of any member of the Class in the Federal
Action or any other litigation against any of the parties to this MOU that
challenges the Settlement, the Proposed Transaction, the Merger Agreement,
disclosures about any of these, or otherwise involves a Released Claim (as
defined below).
4. PokerTek has previously provided to Plaintiffs' counsel certain document
discovery. The Parties shall agree to such reasonable discovery as is necessary
to confirm the fairness and reasonableness of the Settlement (the "Confirmatory
Discovery") to include, but not necessarily be limited to, depositions of
Defendant Lahti and a designee of Burrill, the Board’s financial advisors. The
Parties will use their best efforts, in good faith, to complete the deposition
of Defendant Lahti on July 15, 2014 and to conclude all confirmatory discovery
within 45 days of the date of this MOU.
5. The consummation of the Settlement is subject to the following conditions,
and shall become effective on the date that all such conditions are satisfied
(the "Effective Date"): (a) satisfactory completion of the Confirmatory
Discovery, and Plaintiffs' continuing good faith belief following the completion
of the Confirmatory Discovery, that the Settlement is fair, reasonable and
adequate; (b) the drafting and execution of the Stipulation (as defined
in paragraph 7); (c) closing of the Proposed Transaction, subject to the
unilateral right of Defendants to waive this condition upon written notice to
Plaintiffs; (d) conditional certification of the Class (as defined below) for
settlement purposes; (e) final approval of the Settlement by the Court and the
affirmance of such approval on appeal or the expiration of the time to take any
further appeal; (f) approval of a complete release of all Released Persons (as
defined below), and of Plaintiffs and their agents and attorneys, by the Court,
in a form customarily approved by the Court in connection with settlements of
this type; (g) the inclusion in the preliminary order of approval and the final
of the Released Claims; and (h) dismissal with prejudice of the Consolidated
Action. In the event
4
any of these conditions are not met or otherwise waived, this MOU shall be null
and void and of no force and effect and this MOU shall not be deemed to
prejudice in any way the respective positions of the Parties with respect to the
Consolidated Action. In such event, Plaintiffs reserve all rights with respect
to any potential attorneys' fee application related to any mooted claims, and
Defendants reserve all applicable rights and defenses with respect thereto. This
paragraph shall be immediately binding on the Parties.
6. Plaintiffs acknowledge and agree that the parties to the Proposed Transaction
may negotiate amendments or modifications to the Merger Agreement, and agree
that they will not challenge, object to, or seek any further disclosures other
than those set forth in Exhibit A concerning any such amendments or
modifications so long as they are not inconsistent with the fairness of the
Settlement as referenced in this MOU, and such modifications or amendments do
not reduce the consideration to be paid to shareholders under the Merger
Agreement.
7. The Parties will attempt in good faith to agree promptly, after satisfactory
completion of the Confirmatory Discovery, upon an appropriate stipulation of
settlement (the "Stipulation") and such other documentation as may be required
in order to obtain final approval by the Court of the Settlement and the
dismissal of the Consolidated Action with prejudice and such Stipulation shall
be executed and submitted to the Court for approval at the earliest practicable
time after the closing of the Proposed Transaction. The Stipulation shall
expressly provide that, among other things:
a. Defendants each have denied, and continue to deny, that they have committed
or aided and abetted in the commission of any violation of law or breaches of
duty or engaged in any of the alleged wrongful acts, and expressly maintain that
they diligently and scrupulously complied with their fiduciary, disclosure, and
other legal duties, and that they did not fail to accurately include material
information in the Proxy, and that they are entering into this MOU solely to
eliminate the risk, burden, and expense of further litigation;
b. Plaintiffs' counsel acknowledge that Defendants would continue to assert
legal and factual defenses to claims made in the Actions, and that the terms of
the Settlement are fair, reasonable, adequate, and in the best interest of all
members of the Class; and
c. Plaintiffs' counsel believe that their claims have merit based on proceedings
to date but, having concluded that the proposed Settlement is fair and adequate
and recognizing the risk of further litigation, believe that it is reasonable to
pursue the settlement of the Consolidated Action based upon the procedures
outlined herein and the benefits provided to the proposed Class.
5
8. Contingent on satisfactory completion of
Confirmatory Discovery, the Stipulation will further provide for, among other
things:
a. The conditional certification, for settlement purposes only, of a mandatory,
non-opt-out class that includes any and all record and beneficial holders of
PokerTek common stock, their respective successors in interest, successors,
predecessors in interest, predecessors, representatives, trustees, executors,
held PokerTek common stock as of June 10, 2014 or between that date and the date
of consummation of the Proposed Transaction, but excluding: (i) the Defendants;
(ii) the immediate families of the PokerTek Board; (iii) any parent, subsidiary,
affiliate, officer, or director of PokerTek; (iv) any entity in which any
excluded person has a controlling interest; and (v) the legal representatives,
heirs, successors and assigns of any excluded person (the "Class").;
b. A provision that conditions the Settlement on Final Approval of the
Settlement by the Court and passage of the Effective Date;
c. The requirement that the Parties to the Consolidated Action present, as soon
as practicable, the Settlement to the Court and setting of a final hearing on
whether the Settlement should be approved, following appropriate notice to
members of the Class;
d. The requirement that the Parties use their best efforts, and take all such
other such steps as may be necessary and required to effect the implementation
and Final Approval of the Settlement on the terms set forth herein, including
the dismissal (with prejudice and without costs) of the Consolidated Action and
the Federal Action;
e. That Defendants: (i) deny and continue to deny that they have committed, or
aided or abetted in the commission of, any unlawful or wrongful act or violation
of any duty owed to Plaintiffs, the Class or anyone else in connection with the
Released Claims and the subject matter thereof, including the Proposed
Transaction and the Merger Agreement; (ii) maintain that they diligently and
scrupulously complied with all of
6
their legal duties and obligations in connection therewith; and (iii) are
entering into the Stipulation solely because the proposed Settlement will
eliminate the distraction, burden, risk, and expense of continued litigation;
f. That Plaintiffs' counsel, without any admission as to the lack of merit of
any of the claims asserted in the Action, believe that the Settlement has
provided PokerTek and its shareholders with substantial therapeutic benefits by
allowing for a materially fully informed vote on the Proposed Transaction; that
the terms of the Settlement are fair, reasonable, adequate and in the best
interest of all members of the proposed Class; that Plaintiffs have held and
continue to hold shares of PokerTek common stock at all times material thereto;
and that Plaintiffs' counsel further represent that none of the Plaintiffs'
claims or causes referred to in the Stipulation have been assigned, encumbered
or otherwise transferred;
g. Defendants' acknowledgment that the Supplemental Disclosures were caused by
Plaintiffs' initiation and prosecution of their claims as set forth in the
Consolidated Action;
h. The full and complete discharge, dismissal with prejudice, settlement, and
release of any Released Claim belonging to any Releasing Plaintiff against the
Released Persons and a permanent injunction barring the assertion by any
Releasing Plaintiff of any Released Claims against the Released Persons:
(i) The definition of Released Claims in the Stipulation shall include, without
limitation, any and all claims, debts, demands, rights, actions or causes of
action, liabilities, damages, interest, losses, obligations, judgments, suits,
fees, expenses, costs, matters and issues of any kind or nature whatsoever,
whether known or unknown, contingent or absolute, suspected or unsuspected,
disclosed or undisclosed, accrued or un accrued, liquidated or un-liquidated,
at law or in equity, matured or un matured, whether direct, derivative,
individual, class, representative, legal, equitable or of any other type, or in
any other capacity (including, but not limited to, any claims arising under
state, local, federal, foreign, statutory, or common law or any other law, rule
or regulation, including but not limited to any federal securities laws and any
state disclosure laws), that have been, could have been, or in the future can or
might be asserted in the Action or in any court, tribunal, forum or proceeding
by Plaintiffs or any of the other member of the Class arising out of the
allegations, facts, events, acquisitions, matters, acts, occurrences,
statements,
7
representations, misrepresentations, omissions, or any other matter, thing or
cause whatsoever, or any series thereof, embraced, involved or set forth in, or
referred to or otherwise related in any way to: (i) the Proposed Transaction;
(ii) the Merger Agreement or any amendments thereto; (iii) any actions,
deliberations or negotiations in connection with the Proposed Transaction, the
Merger Agreement or any amendment thereto, including the process of deliberation
or negotiation by each of PokerTek, Multimedia Games, Inc., Multimedia Games
Holding Company, Inc. and 23 Acquisition Co. and any of their respective
officers, directors, employees, representatives or advisors; (iv) the
consideration offered, paid or received by any Released Person or Class members
in connection with the Proposed Transaction; (v) the disclosures (including the
preliminary and final Proxy Statement, as well as any amendments thereto, or any
other disclosures, public filings, periodic reports, press releases, proxy
statements or other statements issued, made available or filed) or disclosure
obligations or any Defendant or Released Person relating to or discussing,
directly or indirectly, the Proposed Transaction, the Merger Agreement or any
amendments thereto; and/or (vi) any fiduciary obligations of any of the Released
Persons in connection with the Proposed Transaction, the Merger Agreement or any
amendment thereto, including the negotiation and consideration of the Proposed
Transaction, the Merger Agreement or any amendment thereto, or any disclosures
related thereto, and (vii) any Shareholder vote on the Proposed Transaction;
provided, however, that the Released Claims shall not include any claims to
enforce the Settlement;
(ii) The definition of Releasing Plaintiffs in the Stipulation shall include,
without limitation, Plaintiffs, PokerTek (in its capacity as derivative
plaintiff), and each member of the Class, on behalf of themselves and each of
their agents, representatives, heirs, executors, administrators, predecessors,
successors and assigns, and any other person or entity who has the right,
ability, standing or capacity to assert, prosecute or maintain on behalf of any
Class member any of the Released Claims or to obtain the proceeds of any
recovery in whole or in part (whether individual, derivative, representative,
legal, equitable or any other type or in any other capacity); and
8
(iii) The definition of Released Persons in the Stipulation shall include,
without limitation, each of the Defendants and their respective past and/or
present family members, heirs, estates, executors, administrators, predecessors,
successors, assigns, parent entities, subsidiaries, associates, affiliates,
employees, officers, directors, Shareholders, agents, representatives,
attorneys, financial or investment advisors, advisors, consultants, accountants,
investment bankers, commercial bankers, trustees, engineers, insurers,
co-insurers and re-insurers, general or
limited partners or partnerships, limited liability companies, members, and any
or affiliated with any of the Defendants, whether or not such Released Party
were named, served with process or appeared in the Action.
9. The Stipulation will include a provision that upon final approval of the
Settlement by the Court, Defendants, their counsel, and the Released Persons
finally, and forever released, relinquished, and discharged each and all of the
Releasing Persons, and Plaintiffs' counsel from all claims, complaints,
allegations or sanctions (including Unknown Claims) arising out of, relating to,
resolution of the Actions or the Released Claims (the
"Defendants' Released Claims").
10. The Settlement is intended to extinguish all Released Claims and Defendants'
Released Claims and, consistent with such intentions, the Releasing Persons and
Released Persons shall waive their rights to the extent permitted by state law,
federal law, foreign law, or principle of common law, which may have the effect
of limiting the releases set forth above. This shall include Unknown Claims.
"Unknown Claims" means any claim that a Releasing Party does not know or suspect
Claims as against the Released Persons, including without limitation those
and any claim that a Released Party does not know or suspect exists in his, her,
or its favor at the time of the release of the Defendants' Released Claims as
against the Releasing Persons, including without limitation those which, if
known, might have affected the decision to enter into the Settlement. This shall
include a waiver of any rights pursuant to § 1542 of the California Civil Code
(or any similar, comparable or equivalent provision) which provides:
9
WITH THE DEBTOR.
The Releasing Persons acknowledge that members of the Class and/or other Company
shareholders may discover facts in addition to or different from those that they
Class, to fully, finally, and forever settle and release any and all claims
released hereby known or unknown, suspected or unsuspected, which now exist, or
discovery or existence of such additional or different facts. Plaintiffs and the
other undersigned parties acknowledge, and the members of the Class by operation
Claims in the definition of Released Claims was separately bargained for,
constitutes separate consideration for, and was a key element of the Settlement
and is being relied upon by each and all of the Defendants in entering into the
Stipulation.
11. The Settlement described herein shall be subject to the approval of the
Court and any appeals that may be taken. Should there be a failure of any
condition set out in paragraph 5 hereof, the Settlement shall be null and void
and of no force and effect, and shall not be deemed to prejudice in any way the
position of any party with respect to this litigation (except with respect to
the provisions of paragraph 5, above). In such event, neither the existence of
this MOU nor its contents shall be admissible in evidence or shall be referred
to for any purpose in the Consolidated Action or in any other litigation or
proceeding except to enforce its terms.
12. Plaintiffs intend to file a petition for an award of
attorneys' fees and expenses with the Court. It is Plaintiffs' Counsel's
position that they are entitled to reasonable attorneys' fees and expenses for
the therapeutic benefits obtained by virtue of the Consolidated Action and the
Settlement for PokerTek and its shareholders. Defendants acknowledge that the
of their claims as set forth in the Consolidated Action, and that such
Supplemental Disclosures constitute valid
10
consideration to the Company and its shareholders. After agreeing upon all
other terms attendant to the Stipulation, the Parties will negotiate in good
faith regarding the amount of the attorneys' fees, costs, and expenses to be
paid to Plaintiffs' counsel in the Actions, subject to approval of the Court
(the "Agreed-to Fee"). Defendants shall not object to or oppose any application
for fees made by Plaintiffs' counsel in the Consolidated Action, provided that
such application is for an award no greater than the amount of the "Agreed-To
Fee." In no event shall Defendants be obligated to pay attorneys' fees and
expenses in excess of the Agreed-to-Fee in connection with the Settlement. If
the Parties are unable to reach agreement with respect to the amount of such
attorneys' fees, costs, and expenses, Plaintiffs reserve the right to submit an
application for an award of attorneys' fees, costs, and expenses to be paid to
Plaintiffs' counsel, consistent with the facts set forth herein, and Defendants
reserve the right to object to the amount of such application, consistent with
the facts set forth herein. PokerTek, its successor and/or assigns, and/or
their insurer(s), and/or the insurer(s) of the Individual Defendants, shall pay
the fees and expenses award to Plaintiffs' counsel in the Actions, on behalf of
all Defendants, within 15 business days after the entry of an order by the Court
awarding such fees and expenses. The Parties agree that no other Defendant shall
be required to make any such payment. Such payment shall be subject to the joint
and several obligation of Plaintiffs' counsel to refund, within 15 business
days, the amounts received and any interest accrued or accumulated thereon, if
and when, as a result of any appeal, or successful collateral proceeding, the
fee or expense award is reduced or reversed or if the award order does not
become final, if the Settlement itself is voided by any party as provided herein
or in the Stipulation, or if the approval of the Settlement is later reversed by
any court. Any failure by the Court to approve the amount of such fees shall not
affect the validity of the terms of the Settlement. The Parties agree that
PokerTek, its successors and/or assigns, and/or their insurers, and/or the
insurer(s) of the Individual Defendants, shall be solely responsible for the
payment of fees and expenses awarded to Plaintiffs' counsel, on behalf of all
Defendants, and that no other Defendant shall be required to make any such
payment. Defendants shall have no responsibility for allocation or distribution
of the fees and expenses award among Plaintiffs' counsel. Except as provided
herein, the Released Persons shall bear no other expenses, costs, damages, or
fees alleged or incurred by Plaintiffs in the Actions or by any of their
attorneys, experts, advisors, agents or representatives. Further, Plaintiffs
may petition the Court for incentive payments, not to exceed $1,000 per
plaintiff, for their participation in the Consolidated Action. Such incentive
payments, which shall be subject to Court approval, shall be paid exclusively
from the amount of attorneys' fees and costs awarded to Plaintiffs' Counsel by
the Court.
11
13. The provisions contained in this MOU shall not be deemed a presumption,
concession or an admission by any Defendant in the Action of any fault,
liability or wrongdoing as to any facts or claims alleged or asserted in the
Action, or any other actions or proceedings, or that any of the Supplemental
Disclosures are material. Nor shall the provisions contained in this MOU be
deemed a presumption, concession or an admission by any Plaintiffs concerning
the merits, or lack thereof, of any facts or claims alleged or asserted in the
Disclosures are not material. The provisions contained in this MOU shall not be
otherwise used by any person in the Action, or in any other action or
proceeding, whether civil, criminal, or administrative, except in connection
with any proceeding to enforce the terms of the Settlement.
14. PokerTek or its successor in interest shall cause notice of the Settlement
to be provided to the Class in a cost-effective form and manner to be approved
by the Court, and shall pay for any reasonable and necessary costs and expenses
related to the notice and administration of the Settlement and the Proposed
Transaction.
15. This MOU sets forth all of the material terms of the Settlement. The Parties
intend to memorialize the Settlement as soon as practicable in a Stipulation and
such other documentation as may be required in order to obtain final approval by
the Court of the
Settlement and the dismissal of the Consolidated Action with prejudice. In the
event of the Parties' failure to agree in good faith on the form of such
Stipulation and documentation, any party may seek the assistance of the Court in
facilitating the consummation of the Settlement as provided in this MOU. This
MOU and the Settlement shall be governed by, and construed in accordance with,
the laws of North Carolina, without regard to conflict of laws principles.
16. This MOU may be modified or amended only by a writing, signed by all of the
signatories hereto, that refers specifically to this MOU.
17. Each signatory to this MOU represents and warrants that he or she has
authority from his or her clients to enter into this MOU.
18. This MOU may be executed in counterparts by facsimile, electronic, or
original signature by any of the signatories hereto and as so executed shall
constitute one agreement.
12
19. This MOU shall be binding upon and shall inure to the benefit of the Parties
and their respective agents, successors, executors, heirs and assigns.
DATED: July 13, 2014
s/John Hughes__________________________
Mona Lisa Wallace
N.C. Bar No. 09021
John Hughes
N.C. Bar No. 22126
WALLACE & GRAHAM, P.A.
525 N. Main St.
Salisbury, NC 28144
Tel: 704-633-5244
Fax: 704-633-9434
mwallace@wallacegraham.com
jhughes@wallacegraham.com
s/Donald J. Enright
Donald J. Enright
Elizabeth K. Tripodi
LEVI & KORSINSKY, LLP
1101 30th Street, N.W., Suite 115
Washington, DC 20007
Tel: 202-524-4290
denright@zlk.com
etripodi@zlk.com
s/Evan J. Smith
Evan J. Smith
Marc Ackerman
BRODSKY & SMITH, LLC
Two Bala Plaza, Suite 510
Tel: 610-667-6200
esmith@brodsky-smith.com
mackerman@brodsky-smith.com
s/Seth Rigrodsky__________________________
Seth Rigrodsky
Brian D. Long
RIGRODSKY & LONG, P.A.
2 Righter Parkway, Suite 120
Wilmington, DE 19803
Tel: 302-295-5310
sdr@rigrodskylong.com
bdl@rigroskylong.com
13
s/ Laurence Rosen_________________________
Laurence Rosen
Phillip Kim
THE ROSEN LAW FIRM, P.A.
275 Madison Avenue, 34th Floor
Tel: 212-686-1060
lrosen@rosenlegal.com
pkim@rosenlegal.com
s/ Willie C. Briscoe________________________
Willie C. Briscoe
THE BRISCOE LAW FIRM
8150 North Central Expressway, Suite 1575
Dallas, Texas 75206
Tel: 214-239-4568
wbriscoe@thebriscoelawfirm.com
s/ Gary W. Jackson_________________________
Gary W. Jackson
N.C. State Bar No. 13976
Rabon Law Firm, PLLC
225 E. Worthington Avenue
Suite 200
Charlotte, NC 28203
Tel: 704-377-6680
gjackson@ncadvocates.com
Counsel for Plaintiffs
s/Irving M. Brenner_________________________
Irving M. Brenner, Esq
McGuireWoods LLP
201 North Tryon Street
Suite 3000
ibrenner@mcguirewoods.com
s/Lee M. Whitman__________________________
Charles George
Lee M. Whitman
Raleigh, NC 27607
cgeorge@wyrick.com
lwhitman@wyrick.com
s/Gregory A. Markel_________________________
Gregory A. Markel, Esq
One World Financial Center
Ney York, NY 10281
Greg.Markel@cwt.com
Counsel for Defendants
14
Exhibit A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
POKERTEK, INC.
(Exact Name of Registrant as Specified in Its Charter)
North Carolina
000-51572
61-1455265
(State or Other Jurisdiction of
Incorporation)
(IRS Employer
Identification No.)
Matthews, North Carolina
28105
(Zip Code)
following provisions:
o
230.425)
x
240.14a-12)
o
o
A-1
Item 8.01: Other Events
Settlement of Certain Litigation
Parent agreed to acquire all of the outstanding shares of PokerTek’s common
purported class action complaint on behalf of PokerTek’s shareholders was filed
A second purported class action complaint on behalf of PokerTek’s
June 6, 2014 (“Action #2”).
A third purported class action complaint on behalf of PokerTek’s shareholders
A fourth purported class action complaint on behalf of PokerTek’s shareholders
captioned Luis Lobo, individually and on behalf of all others similarly
A firth purported class action and shareholder derivative complaint on
Defendant (“Action #5”).
Actions. On July 8, 2014, the Actions were consolidated into a single action
under the caption of Action #5.
alleging breaches of fiduciary duty and aiding and abetting thereof and related
Proposed Transaction. This action has not yet been served on the defendants.
A-2
PokerTek believes that these lawsuits are without merit and that no further
disclosure is required to supplement the Definitive Proxy Statement under any
applicable rule, statute, regulation or law. However, to eliminate the burden,
defendants entered into a memorandum of understanding (the "Memorandum of
Understanding") regarding settlement of the Consolidated Action. The Memorandum
Consolidated Action and the Federal Action. In consideration for such
PokerTek will make certain supplemental disclosures to the Definitive Proxy
Statement, all of which are set forth below. The Memorandum of Understanding
Carolina Business Court of the General Court of Justice, Superior Court
Division, Mecklenburg County, North Carolina for approval at the earliest
practicable time. The Stipulation will be subject to customary conditions,
including confirmatory discovery and approval by the Court, which will consider
the fairness, reasonableness and adequacy of such settlement. Under the terms
Consolidated Action will be dismissed with prejudice. There can be no assurance
Stipulation. In such event, or if the Merger is not consummated for any reason,
of merger consideration to be paid to shareholders of PokerTek in connection
with the proposed Merger.
herein have the meanings ascribed to those terms in the Definitive Proxy
Statement.
SUPPLEMENTAL DISCLOSURES
In the Memorandum of Understanding with respect to the settlement of the
lawsuits described above, PokerTek has agreed to make these supplemental
disclosures to the Definitive Proxy Statement. These supplemental disclosures
be read in its entirety. Without admitting in any way that the disclosures
amended and supplemental disclosures:
1.
PokerTek hereby supplements the disclosures in the Proxy related to the
financial projections of the Company relied upon by Burrill in performing its
valuation analyses to provide the following additional information:
2014
2015
2016
2017
2018
2019
EBITDAS
$ 503 $ 1,662 $ 2,626 $ 3,731 $ 4,982 $ 6,098
Depreciation and Amortization
$ 873 $ 1,379 $ 1,415 $ 1,905 $ 2,618 $ 3,304
Share-based Compensation
$ 360 $ 336 $ 338 $ 372 $ 412 $ 454
Change in Working Capital
$ (488 ) $ (2,512 ) $ (2,960 ) $ (3,366 ) $ (3,818 ) $ (3,662 )
Capital Expenditures
$ - $ (21 ) $ (27 ) $ (32 ) $ (37 ) $ (41 )
Effective Tax Rate
-3 % -25 % 10 % 10 % 10 % 10 %
Unlevered Free Cash Flow
$ (11 ) $ (892 ) $ (455 ) $ 180 $ 923 $ 2,151
2.
None of the confidentiality agreements entered into between PokerTek and the
companies identified in the Proxy contain standstill provisions that are
currently barring those interested parties from making competing and/or superior
offers for the Company.
A-3
3.
PokerTek retained Northeast Securities, an investment bank, on July 12, 2012 to
assist PokerTek to explore potential sell side opportunities for PokerTek.
4.
PokerTek again retained Northeast Securities, an investment bank, on May 7, 2013
to assist PokerTek with respect to exploring a transaction with several
identified potential suitors.
5.
Historically, Burrill has never performed, or received compensation for
performing, any services for PokerTek or MGAM.
6.
With respect to Burrill's Comparable Companies Analysis , the enterprise
value/EBITDA and enterprise value/revenue multiples observed for each of the
companies for the last twelve months and estimated FY2014, as well as the price
to book value for each of the selected companies are as follows:
($ in millions, except per share data)
Enterprise Value
Price
Price
% of 52
Equity
Enterprise
Revenue
EBITDA
Book
Company
04/25/14
Wk High
Value
Value
LTM
2014E
LTM
2014E
Value
International Game Technology
$12.46
58.8%
$3,073.9
$4,906.6
2.2x
2.3x
6.9x
6.8x
2.8x
$62.88
76.1%
$2,458.4
$4,250.1
3.7x
3.2x
11.0x
8.9x
10.8x
Scientific Games Corporation
$11.68
60.0%
$980.3
$4,015.5
3.2x
2.4x
14.4x
7.5x
3.4x
Aristocrat Leisure Ltd.
$4.55
88.6%
$2,510.5
$2,721.5
3.5x
N.A.
16.4x
N.A.
6.9x
Ainsworth Game Technology Ltd.
$3.85
86.8%
$1,239.8
$1,186.1
5.9x
N.A.
17.5x
N.A.
6.2x
Universal Entertainment Corporation
$18.20
69.2%
$1,335.6
$1,059.9
1.3x
N.A.
4.1x
N.A.
0.7x
$27.22
67.8%
$805.7
$710.0
3.3x
3.1x
6.8x
6.2x
3.5x
Amaya Gaming Group Inc.
$6.17
73.4%
$580.7
$657.0
4.6x
3.6x
25.7x
8.7x
2.7x
IBASE GAMING Inc
$3.24
93.1%
$58.4
$45.1
1.4x
N.A.
18.8x
N.A.
5.3x
Gaming Partners International Corporation
$8.19
80.3%
$64.8
$45.2
0.9x
N.A.
24.1x
N.A.
1.4x
$0.45
88.2%
$17.2
$34.9
4.1x
3.6x
9.8x
8.1x
12.0x
DEQ Systems Corporation
$0.29
75.1%
$21.1
$19.9
2.9x
N.A.
22.2x
N.A.
2.8x
Source: S&P Capital IQ
The multiples selected and applied by Burrill as part of this analysis
(representing the 40th and 60th percentiles of the observed data sets) were
thus:
a.
3.2x – 3.6x LTM Revenue
b.
2.6x – 3.2x 2014 Revenue
c.
13.1x – 16.4x LTM EBITDA
d.
6.5x – 7.8x 2014 EBITDA
e.
3.0x – 4.1x Price/Book
A-4
7.
With respect to Burrill's Comparable Transactions Analysis, the enterprise
value/LTM Revenue and enterprise value/LTM EBITDA for each of the selected
transactions, as well as the price to book value for each of the transactions
observed are as follows:
Implied
Implied
Enterprise
Ent. Value / LTM
Equity /
Target/Issuer
Value
Revenue
EBITDA
Book Value
$ 1,343.5 4.9 x 16.1 x 4.4 x
WMS Industries Inc.
1,486.8 2.2 x 7.6 x 1.6 x
Cadillac Jack, Inc.
177.0 2.3 x 5.0 x -
GameTech International Inc.
19.6 0.6 x 7.5 x 0.7 x
Elo Touch Solutions, Inc.
380.0 0.9 x - -
Odyssey Gaming Limited
3.5 0.3 x 5.4 x 0.7 x
Abilit Corporation
72.5 1.4 x - 0.9 x
Inspired Gaming Group Limited
270.6 2.1 x 5.3 x 2.4 x
Cyberview Technology, Inc.
54.6 1.1 x
N.M.
2.2 x
Octavian Global Technologies, Inc.
30.1 0.5 x 4.9 x -
Inspired Gaming Group Limited
695.1 2.5 x 6.8 x 2.5 x
Summit Amusement & Distributing, Ltd.
44.0 1.7 x 9.0 x 41.7 x
Radica Games Ltd.
185.8 1.3 x 15.6 x 2.3 x
GTECH Holdings Corporation
4,717.3 3.7 x 9.4 x 4.8 x
Stargames
112.2 2.2 x 13.2 x 3.7 x
Taito Corporation
545.0 0.7 x 5.5 x 1.2 x
Atronic International
148.3 1.0 x 5.4 x -
Acres Gaming Incorporated
107.5 3.0 x 9.9 x 5.6 x
Anchor Coin, Inc.
57.0 1.3 x 6.1 x 1.3 x
Casino Data Systems
170.4 2.2 x 9.3 x 2.0 x
thus:
a.
1.3x – 2.1x LTM Revenue
b.
6.4x – 8.4x LTM EBITDA
c.
2.0x – 2.4x Price/Book
8.
With respect to Burrill's Premiums Paid Analysis, the one-day, seven-day, and
thirty-day premiums for each of the transactions observed in the
Comparable Transactions Analysis are as follows:
A-5
Premium Paid
1 Day
1 Week
1 Month
Target/Issuer
Acquirer
Prior
Prior
Prior
24.3 % 30.6 % 29.5 %
WMS Industries Inc.
Scientific Games Corporation
58.8 % 51.3 % 48.6 %
- - -
GameTech International Inc.
Yuri Itkis Gaming Trust of 1993
- - -
The Gores Group LLC
- - -
Odyssey Gaming Limited
eBet Limited
152.5 % 152.5 % 152.5 %
Abilit Corporation
Konami Corp.
14.4 % 14.4 % 9.6 %
Inspired Gaming Group Limited
Vitruvian Partners LLP
21.2 % 25.7 % 16.5 %
International Game Technology
97.7 % 93.9 % 71.3 %
PacificNet, Inc.
- - -
Inspired Gaming Group Limited
FL GROUP hf.
13.0 % 13.6 % 10.0 %
GameTech International Inc.
- - -
Radica Games Ltd.
Mattel, Inc.
11.5 % 13.8 % 9.0 %
GTECH Holdings Corporation
Lottomattica S.p.A.
4.5 % 9.2 % 11.5 %
Stargames
Shuffle Master Australasia Pty Limited
19.2 % 19.2 % 15.7 %
Taito Corporation
Square Enix Holdings Co., Ltd.
14.6 % 16.1 % 15.4 %
Atronic International
GTECH Corporation
- - -
Acres Gaming Incorporated
International Game Technology
2.7 % 13.9 % 31.4 %
Affinity Gaming
- - -
Casino Data Systems
Aristocrat Leisure Ltd.
7.2 % 33.3 % 54.2 %
9.
With respect to Burrill's Discounted Cash Flow and Sensitivity Analysis, the
following additional information is provided:
a.
Burrill utilized the end of period convention for the PokerTek DCF because it
was most appropriate for the projected growth rate of the Company.
b.
To demonstrate the sensitivity in the DCF, Burrill held the discount rate
constant for the purpose of calculating the terminal value because the terminal
value was already being varied to the terminal growth rate.
c.
The implied valuation range derived by Burrill is amended to $1.01 to $1.50 per
share (from $.98 to $1.47 per share).
acquisition of PokerTek by Multimedia Games. In connection with the proposed
merger transaction, PokerTek filed with the Securities and Exchange Commission
(the "SEC") the Definitive Proxy Statement on June 19, 2014. BEFORE MAKING ANY
VOTING DECISION, SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT
MERGER OR INCORPORATED BY REFERENCE TN THE DEFINITIVE PROXY STATEMENT BECAUSE
THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.
The Definitive Proxy Statement was mailed to PokerTek's shareholders on or about
June 24, 2014. Free copies of the Definitive Proxy Statement and other filings
that PokerTek has made with the SEC may be obtained at the SEC's website at
http://www.sec.gov. In addition, investors may obtain a free copy of the
Definitive Proxy Statement and other filings that PokerTek has made with the SEC
from PokerTek's website at http://www.pokertek.com or by directing a request to:
PokerTek, Inc., 1150 Crews Road, Suite F Matthews, North Carolina 28105, Attn:
A-6
Participants in the Solicitation
PokerTek and its directors, executive officers and certain other members of
management and employees of PokerTek may be deemed "participants" in the
solicitation of proxies from shareholders of PokerTek in favor of the proposed
be considered participants in the solicitation of the shareholders of PokerTek
in connection with the proposed merger are set forth in the Definitive Proxy
Statement and other relevant documents that may be filed with the SEC. You can
find information about PokerTek's executive officers and directors in its Annual
SEC on April 29, 2014.
Forward-Looking Statements
This document includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements may be identified by words such as "may," "will," "expect," "intend,"
"anticipate," "believe," "estimate," "plan," "project," "could," "should," "would," "continue," "seek," "target," "guidance,"
"outlook," "forecast" and other similar words. These forward-looking statements
are based on PokerTek's current objectives, beliefs and expectations, and they
are subject to significant risks and uncertainties that may cause actual results
and timing of certain events to differ materially from the information i n the
proposed merger agreement; the failure to receive, on a timely basis or
otherwise, the required approvals by PokerTek's shareholders and government or
regulatory agencies; the risk that a closing condition to the proposed merger
may not be satisfied; risks related to the disruption of management's attention
from PokerTek's ongoing business operations due to the transaction; the effect
of the announcement of the proposed merger on PokerTek's relationships with its
customers, suppliers and service providers; and other economic, business,
competitive, and regulatory factors affecting the businesses of PokerTek
generally, including those set forth in the filings of PokerTek with the SEC,
especially in the "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections of its annual reports on
hereof or as of the dates indicated in the statements. PokerTek assumes no
obligation to publicly update or supplement any forward-looking statement to
reflect actual results, changes in assumptions or changes in other factors
affecting these forward-looking statements except as required by law.
A-7
SIGNATURES
PokerTek, Inc.
Mark D. Roberson
Chief Executive Officer
A-8
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Title: IA. Hurt myself and injury not getting better, can I get workmans compensation?
Question:Last summer we worked 60+ hour weeks in a factory. I hurt my back and lost feeling my genitals. Can't feel heat. Anyway chiropractor thinks it's pinched nerve, general medicine doctor gave me muscle relaxers and advised me to come back. It's hard to get time off to go see doctor. Ive been back to her, four times. And more times than i can count to chiropractor. My back pain keeps getting worse and worse, and still not being about to feel warmth in genitals. If I would try to get workmans compensation would I quailty? How would I go about it? I've been working there about a year and a half. It's affecting my relationship, my job performance, and my sleep.
Answer #1: Stop going to the chiropractor immediately. They aren't real doctors and won't help. Go see a physical therapist.
Did you report the injury at the time? |
NATIONWIDE VARIABLE INSURANCE TRUST NVIT Multi-Manager International Growth Fund NVIT Multi-Manager International Value Fund NVIT Multi-Manager Large Cap Growth Fund NVIT Multi-Manager Large Cap Value Fund NVIT Multi-Manager Mid Cap Growth Fund NVIT Multi-Manager Mid Cap Value Fund NVIT Multi-Manager Small Cap Growth Fund NVIT Multi-Manager Small Cap Value Fund NVIT Multi-Manager Small Company Fund Supplement dated December 29, 2011 to the Prospectus dated May 1, 2011 Capitalized terms and certain other terms used in the supplement, unless otherwise defined in this supplement, have the meanings assigned to them in the Prospectus. NVIT Multi-Manager Large Cap Value Fund Effective immediately, Dolores Bamford, Managing Director at Goldman Sachs Asset Management, L.P., shall no longer serve as a portfolio manager to the NVIT Multi-Manager Large Cap Value Fund.References to Ms. Bamford found on pages 15 and 57 of the Prospectus are accordingly deleted. PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
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Exhibit NANOVIRICIDES, INC. INVESTOR SUBSCRIPTION AGREEMENT (the "Subscription Agreement") dated , 2008 between NANOVIRICIDES, INC., a publicly-owned Nevada corporation with principal offices at 135 Wood Street, West Haven, Connecticut 06516 (the "Company") and the person or persons executing this Subscription Agreement on the last page hereof (the "Subscriber").All documents mentioned herein are incorporated by reference. 1. Description of the Offering.This Offering (the “Offering”) is being made solely to holders (the “Warrantholders”) of the Company’s $1.00 Warrants (“Warrants”) to purchase the Company’s common stock, par value $0.001 per share (the “Common Stock”).Currently, each Warrant is exercisable at the exercise price of $1.00 per share of Common Stock for each Warrant exercisable.The Company is offering to the Warrant holders the opportunity to exercise their Warrants at the exercise price of $.75 per share.Accordingly, Warrant holders who subscribe to the Offering will receive one (1) share of Common Stock per Warrant exercised at an exercise price of $.75 per share.This Offering is made only to Warrantholders that are accredited investors who qualify as accredited investors pursuant to the suitability standards for investors described under Regulation D of the Securities Act and who have no need for liquidity in their investments.There is no minimum exercise amount.However, Warrantholders must exercise all, but not less than all, of their Warrants unless the Company, in its sole discretion, accepts fractional subscriptions.Prior to this Offering there was only a limited public market for the Common Stock and no assurance can be given that a market will be maintained so that any subscribers in this Offering may avail any benefit from the same. THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE, OR OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE SECURITIES MAY NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR ASSIGNED EXCEPT AS PERMITTED UNDER SUCH ACT OR SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. 2.Terms of the Offering.The Company believes that Subscribers who elect to exercise the Warrants may not avail themselves of the holding period of their original holding periods in attempting to sell the Common Stock under Rule 144 of the Securities Act.Accordingly, Warrant holders will be required to satisfy the requirements of Rule 144, in particular the holding period which would be six months after the exercise for most Warrant holders.(The form of the Notice of Exercise is attached hereto as Exhibit A.) 3. Other Terms of the Offering.The execution of this Subscription Agreement shall constitute an offer by the Subscriber to exercise the Warrants in the amount and on the terms specified herein.The Subscriber must also complete and execute the Subscriber Questionnaire attached hereto.The Company reserves the right, in its sole discretion, to reject in whole or in part, any subscription offer.If the Subscriber's offer is accepted, the Company will execute a copy of this Subscription Agreement and return it to Subscriber.The Company, may at its sole discretion, accept fractional subscriptions. 1 4.Subscription Procedures.Warrantholders who wish to subscribe in the Offering, must deliver to the Company completed and fully executed originals of the Subscription Agreement, Subscriber Questionnaire and Notice of Exercise along with the original form of Warrants and the subscription price.Warrantholders may not elect to exercise less than all of their Warrants.The subscription price, which is $.75 per warrant exercised, will be payable in full upon acceptance of the subscription.The Company reserves the right to accept fractional subscriptions. 5.The Company's Representations and Warranties. The Company hereby represents and warrants as follows: (a) All of the disclosure collateral in the Company’s filings with the Securities and Exchange Commission, available at www.sec.gov, are hereby incorporated by reference and made a part of this Subscription Agreement. (b) The Company warrants and covenants that there are no material misstatements or omissions in this Subscription Agreement or any information provided of the Offering documents herein; (c) The Company is a corporation duly formed and in good standing under the laws of the State of Nevada with a class of securities pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with full power and authority to conduct its business as presently contemplated; and (d) The Company has the power to execute, deliver and perform this Subscription Agreement and any other agreement contemplated herein; 6.Subscriber's Representations, Warranties and Covenants.The undersigned understands and acknowledges that the Offering is being made under one or more of the exemptions from registration provided for in Section 3(b), 4(2) and 4(6) of the Securities Act of 1933, as amended (the “Securities Act”) including, Regulation D promulgated thereunder, that the undersigned acknowledges that the Units are being purchased without the undersigned being offered or furnished any offering literature, prospectus or other material, financial or otherwise, and that this action has not been scrutinized by the United States Securities and Exchange Commission or by any regulatory authority charged with the administration of the securities laws of any state.The undersigned hereby further represents and warrants as follows: (a)The undersigned confirms that he understands and has fully considered, for purposes of this investment, the risks of an investment in the Units and understands that:(i) this investment is suitable only for an investor who is able to bear the economic consequences or losing his entire investment, (ii) the purchase of the Units is a speculative investment which involves a high degree of risk of loss by the undersigned of his entire investment, and (iii) that there will be no public market for the Units and accordingly, it may not be possible for him to liquidate his investment in the Units in case of an emergency; (b)The Subscriber is an "Accredited Investor" as defined in Rule 501(a) of Regulation D under the Securities Act.This representation is based on the fact that the Subscriber, inter alia, is an accredited individual who, together with the Subscriber’s spouse, have a net worth of at least $1,000,000 or the Subscriber, individually, has had net income of not less than $200,000 during the last two years, and reasonably anticipates that the Subscriber will have an income of at least $200,000 during the present year and the next year; 2 (c)If the Subscriber is a corporation, partnership, trust or any unincorporated association: (i) the person executing this Subscription Agreement does so with full right, power and authority to make this investment; (ii) that such entity was not formed for the specific purpose of making an investment in the Company; and (iii) that all further representations and warranties made herein are true and correct with respect to such corporation, partnership, trust and unincorporated association; (d)The address set forth below is the Subscriber's true and correct residence or place of business, and the Subscriber has no present intention of becoming a resident of any other state or jurisdiction; (e)The Subscriber understands and agrees that the Company prohibits the investment of funds by any persons or entities that are acting, directly or indirectly, (i) in contravention of any U.S. or international laws and regulations, including anti-money laundering regulations or conventions, (ii) on behalf of terrorists or terrorist organizations, including those persons or entities that are included on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Treasury Department's Office of Foreign Assets Control1 ("OFAC"), as such list may be amended from time to time, (iii) for a senior foreign political figure, any member of a senior foreign political figure’s immediate family or any close associate of a senior foreign political figure2, unless the Company, after being specifically notified by the Subscriber in writing that it is such a person, conducts further due diligence, and determines that such investment shall be permitted, or (iv) for a foreign shell bank3 (such persons or entities in (i) – (iv) are collectively referred to as "Prohibited Persons"). (f) The Subscriber represents, warrants and covenants that: (i) it is not, nor is any person or entity controlling, controlled by or under common control with the Subscriber, a Prohibited Person, and (ii) to the extent the Subscriber has any beneficial owners4, (a) it has carried out thorough due diligence to establish the identities of such beneficial owners, (b) based on such due diligence, the Subscriber reasonably believes that no such beneficial owners are Prohibited Persons, (c) it holds the evidence of such identities and status and will maintain all such evidence for at least five years from the date of the Subscriber's complete withdrawal from the Company, and (d) it will make available such information and any additional information requested by the Company that is required under applicable regulations. 1The OFAC list may be accessed on the web at http://www.treas.gov/ofac. 2Senior foreign political figure means a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation.In addition, a senior foreign political figure includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.The immediate family of a senior foreign political figure typically includes the political figure’s parents, siblings, spouse, children and in-laws.A close associate of a senior foreign political figure is a person who is widely and publicly known internationally to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure. 3Foreign shell bank means a foreign bank without a physical presence in any country, but does not include a regulated affiliate.A post office box or electronic address would not be considered a physical presence.A regulated affiliate means a foreign shell bank that: (1) is an affiliate of a depository institution, credit union, or foreign bank that maintains a physical presence in the United States or a foreign country, as applicable; and (2) is subject to supervision by a banking authority in the country regulating such affiliated depository institution, credit union, or foreign bank. 4Beneficial owners will include, but not be limited to: (i) shareholders of a corporation; (ii) partners of a partnership; (iii) members of a limited liability company; (iv) investors in a fund-of-funds; (v) the grantor of a revocable or grantor trust; (vi) the beneficiaries of an irrevocable trust; (vii) the individual who established an IRA; (viii) the participant in a self-directed pension plan; (ix) the sponsor of any other pension plan; and (x) any person being represented by the Subscriber in an agent, representative, intermediary, nominee or similar capacity.If the beneficial owner is itself an entity, the information and representations set forth herein must also be given with respect to its individual beneficial owners.If the Subscriber is a publicly-traded company, it need not conduct due diligence as to its beneficial owners. 3 (g)If any of the foregoing representations, warranties or covenants ceases to be true or if the Company no longer reasonably believes that it has satisfactory evidence as to their truth, notwithstanding any other agreement to the contrary, the Company may, in accordance with applicable regulations, freeze the Subscriber's investment, either by prohibiting additional investments, declining or suspending any withdrawal requests and/or segregating the assets constituting the investment, or the Subscriber's investment may immediately be involuntarily withdrawn by the Company, and the Company may also be required to report such action and to disclose the Subscriber's identity to OFAC or other authority.In the event that the Company is required to take any of the foregoing actions, the Subscriber understands and agrees that it shall have no claim against the Company, and its respective affiliates, directors, members, partners, shareholders, officers, employees and agents for any form of damages as a result of any of the aforementioned actions. (h)The Subscriber agrees to indemnify and hold harmless the Company, its respective affiliates, directors, members, partners, shareholders, officers, employees and agents from and against any and all losses, liabilities, damages, penalties, costs, fees and expenses (including legal fees and disbursements) which may result, directly or indirectly, from any inaccuracy in or breach of any representation, warranty, covenant or agreement set forth in this Agreement. (i)The Subscriber has received and read or reviewed, is familiar with and fully understands the documents furnished by the Company.The Subscriber also fully understands this Subscription Agreement and the risks associated with this interest and confirms that all documents, records and books pertaining to the Subscriber’s investment in the Units and requested by the Subscriber have been made available or delivered to the Subscriber by the Company; (j)The Subscriber has had an opportunity to ask questions of and receive answers from, the Company or a person or persons acting on its behalf, concerning the terms and conditions of this investment and confirms that all documents, records and books pertaining to the investment in the Units and requested by the Subscriber has been made available or delivered to the Subscriber; (k)The Subscriber will be acquiring the Common Stock solely for the Subscriber's own account, for investment and not with a view toward the resale, distribution, subdivision or fractionalization thereof; and the Subscriber has no present plans to enter into any such contract, undertaking, agreement or arrangement; (l)The Subscriber acknowledges and understands that prior to this Offering there was only a limited public market for the Common Stock and no assurance can be given that a public market will be maintained so that any subscribers in this Offering may avail any benefit from the same; 4 (m)The Subscriber's compliance with the terms and conditions of this Subscription Agreement will not conflict with any instrument or agreement pertaining to the will develop for the Units offered hereby, or if developed, that it or the transactions contemplated herein; and will not conflict in, result in a breach of, or constitute a default under any instrument to which the Subscriber is a party; (n)The Subscriber will seek its own legal, tax and investment advice concerning tax implications attendant upon the purchase of the Units and understands and accepts that the Company is relying upon this representation insofar as disclosure of tax matters is concerned; (o)The Subscriber hereby acknowledges and represents that the Subscriber is aware of the information set forth in this document and in any exhibits attached hereto; and (p)The foregoing representations and warranties are true and accurate as of the date hereof and shall be true and accurate as of the date of delivery of the subscription to the Company and shall survive such delivery.If, in any respect, such representations and warranties shall not be true and accurate, the Subscriber shall give written notice of such fact to the Company, specifying which representations and warranties are not true and accurate and the reasons therefor. 7.Risk Factors. THE SUBSCRIBER ACKNOWLEDGES THAT THERE ARE SIGNIFICANT RISKS ASSOCIATED WITH THE OFFERING AND THAT SUCH SECURITIES ARE HIGHLY SPECULATIVE AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD A TOTAL LOSS OF THEIR ENTIRE INVESTMENT. All of the risks and disclosures contained within the company’s filings with the securities and exchange commission, are hereby incorporated by reference.The Subscriber represents and warrants that he or she has carefully considered and reviewed the Company’s filings with the Securities and Exchange Commission, which are hereby incorporated by reference in reaching a determination to exercise the Warrants. 8.Responsibility.The Company or its officers and directors shall not be liable, responsible or accountable for damages or otherwise to any Subscriber for any act or omission performed or omitted by them in good faith and in a manner reasonably believed by them to be within the scope of the authority granted to them by this Subscription Agreement and in the best interests of the Company, provided they were not guilty of gross negligence, willful or wanton misconduct, fraud, bad faith or any other breach of fiduciary duty with respect to such acts or omissions. 9.Miscellaneous. (a) The Company and the Subscriber hereby covenant that this Subscription Agreement is intended to and does contain and embody herein all of the understandings and agreements, both written or oral, of the Company and the Subscriber with respect to the subject matter of this Subscription Agreement, and that there exists no oral agreement or understanding, express or implied liability, whereby the absolute, final and unconditional character and nature of this Subscription Agreement shall be in any way invalidated, empowered or affected.There are no representations, warranties or covenants other than those set forth herein. (b) The headings of this Subscription Agreement are for convenient reference only and they shall not limit or otherwise affect the interpretation or effect of any terms or provisions hereof. 5 (c) This Subscription Agreement shall not be changed or terminated except as set forth herein.All of the terms and provisions of this Subscription Agreement shall be binding upon and inure to the benefit of and be enforceable by and against the successors and assigns of the Company and the heirs, executors, administrators and assigns of the Subscriber. (d) A modification or waiver of any of the provisions of this Subscription Agreement shall be effective only if made in writing and executed with the same formality as this Subscription Agreement.The failure of either the Company or the Subscriber to insist upon strict performance of any of the provisions of this Subscription Agreement shall not be construed as a waiver of any subsequent default of the same or similar nature, or of any other nature or kind. (e) The various provisions of this Subscription Agreement are severable from each other and from the other provisions of this Agreement, and in the event that any provision in this Subscription Agreement shall be held invalid or unenforceable by a court of competent jurisdiction, the remainder of this Subscription Agreement shall be fully effective, operative and enforceable. (f) Pronouns used herein are to be interpreted as referring to both the masculine and feminine gender. (g)This Subscription Agreement shall be construed and interpreted in accordance with the laws of the State of Nevada without reference to conflict of laws principle.The parties agree that in the event of a laws controversy arising out of the interpretation, construction, performance or breach of this Subscription Agreement, any and all claims arising out of, or relating to, this Subscription Agreement shall be submitted by arbitration according to the Commercial Arbitration Rules of the American Arbitration Association located in New York City before a single arbitrator.Notwithstanding the prior sentence, any other action commenced by either party herein shall be venued in the appropriate court of competent jurisdiction located in the county of New York, State of New York. (h) This Subscription Agreement may be executed in one or more counterparts each of which shall be deemed an original and all of which together shall be deemed to be one and the same instrument. THE SUBSCRIBER ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE TO IT, OR TO ITS ADVISORS, BY THE COMPANY, OR BY ANY PERSON ACTING ON BEHALF OF THE COMPANY, WITH RESPECT TO THE INTERESTS, THE PROPOSED BUSINESS OF THE COMPANY, THE DEDUCTIBILITY OF ANY ITEM FOR TAX PURPOSES, AND/OR THE ECONOMIC, TAX, OR ANY OTHER ASPECTS OR CONSEQUENCES OF A PURCHASE OF AN INTEREST AND/OR ANY INVESTMENT IN THE COMPANY, AND THAT IT HAS NOT RELIED UPON ANY INFORMATION CONCERNING THE OFFERING, WRITTEN OR ORAL, OTHER THAN THAT CONTAINED IN THIS SUBSCRIPTION AGREEMENT. The rest of this page left intentionally left blank. 6 The Subscriber hereby offers to exercise Warrants to purchase shares of Common Stock and encloses payment of $ per Warrant exercised for an aggregate investment of $. Signature of Subscriber Name of Subscriber Name of the Authorized Signatory (If Applicable) (Print) Street Address - Residence (Print) City, State and Zip Code Social Security/Taxpayer I.D. Number: AGREED TO AND ACCEPTED: As of , 2008 NANOVIRICIDES, INC. By: Eugene Seymour, M.D. Chief Executive Officer The rest of this page left intentionally left blank. 7 COMPLETE “SUBSCRIBER QUESTIONNAIRE” BELOW; PROVIDE REQUISITE ADDITIONAL INFORMATION SUBSCRIBER QUESTIONNAIRE PERSONAL DATA. Full Name Residence Telephone (Area Code Number) Business Telephone (Area Code Number) Residence or Principal Address (Street/City/State/Zip Code) Birth Date Mailing Address (if other than residence) Citizenship (U.S./Other) Marital Status Social Security/Taxpayer I.D.Number Spouse’s Full Name E-mail Address Spouse’s Social Security Number Facsimile Number (Area Code/Number) ACCREDITED INVESTOR.If Subscriber (or the entity on behalf of which Subscriber is acting) is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Act, and, as such, falls within at least one of the following categories, then please INITIALeachapplicable category. (a) A bank or savings and loan association or other institution (acting either in an individual or fiduciary capacity), registered broker-dealer, insurance company, registered investment company, or business development company, or licensed “small business investment company,” or an employee benefit plan which either is represented in a fiduciary capacity by a bank, savings and loan association, insurance company or registered investment advisor, has total assets in excess of $5,000,000 or is self-directed and the plan’s business investments are made solely by accredited investors. (b) A trust (i) with total assets in excess of $5,000,000, (ii) which was not formed for the specific purpose of acquiring the subject securities, and (iii) whose purchase is directed by a person who has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment. (c) An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation or similar business trust, or partnership, not formed for the specific purpose of acquiring the subject securities, with total assets in excess of $5,000,000. (d) An entity in which all of the equity owners are “accredited investors.” (e) A director or an executive officer of the Company. (f) A natural person whose individual net worth, or joint net worth with spouse (if any), exceeds $1,000,000 (g) A natural person whose income in each of the two most recent calendar years exceeded $200,000 individually, or $300,000 jointly with spouse (if any), and who reasonably expects to reach that income level in the current year. 8 EXHIBIT A NOTICE OF EXERCISE TO: NANOVIRICIDES, INC. 1.The undersigned hereby elects to purchase shares of Common Stock of NanoViricides, Inc. pursuant to the terms of this Warrant, and tenders herewith payment of the purchase price of such shares in full. 2.Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below: (Name) (Address) 3.The undersigned hereby represents and warrants that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale, in connection with the distribution thereof, and that the undersigned has no present intention of distributing or reselling such shares and all representations and warranties of the undersigned set forth in the attached Warrant are true and correct as of the date hereof.In support thereof, the undersigned agrees to execute an Investment Representation Statement in a form substantially similar to the form attached hereto as EXHIBIT A-1. (Signature) By: Title: Date: , 200 9 EXHIBIT A-1 INVESTMENT REPRESENTATION STATEMENT PURCHASER: COMPANY: NANOVIRICIDES, INC. SECURITIES: COMMON STOCK ISSUED UPON EXERCISE OF THE WARRANTS ISSUED ON , 200_ AMOUNT: SHARES DATE: , 200_ In connection with the purchase of the referenced Shares, I, the Purchaser, represent to the Company the following: (a)I am aware of the Company’s business affairs and financial condition, and have acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares.I am purchasing these Shares for my own account for investment purposes only and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes of the Shares Act of 1933, as amended (the "Securities Act"). (b)I understand that the Shares have not been registered under the Shares Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of my investment intent as expressed herein.In this connection, I understand that, in the view of the Securities and Exchange Commission (the "Commission"), the statutory basis for such exemption may be unavailable if my representation was predicated solely upon a present intention to hold these Shares for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Shares, or for a period of one year or any other fixed period in the future. (c)I further understand that the Shares must be held indefinitely unless subsequently registered under the Shares Act or unless an exemption from registration is otherwise available.Moreover, I understand that the Company has represented it shall file a registration to register the Shares.There is no assurance that such a registration will be approved in such time to be able to avail its registration, if ever.In addition, I understand that the certificate evidencing the Shares will be imprinted with a legend which prohibits the transfer of the Shares until the registration statement is declared effective or such registration is not required in the opinion of counsel for the Company. (d)I am familiar with the provisions of Rule 144, promulgated under the Shares Act, which, in substance, permits limited public resale of "restricted securities" acquired, directly or indirectly, from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. The Shares may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires among other things:(1) the availability of certain public information about the Company, (2) the resale occurring not less than one year after the party has purchased, and made full payment for, within the meaning of Rule 144, the securities to be sold; and, in the case of an affiliate, or of a non-affiliate who has held the securities less than two years, (3) the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Shares Exchange Act of 1934) and the amount of securities being sold during any three month period not exceeding the specified limitations stated therein, if applicable. 10 (e)I further understand that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Shares Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. (Signature) By: Title: Date: ,200 11
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Exhibit 99.1 Synthetech Reports Second Quarter Fiscal 2008 Results Albany, Oregon, November 12, 2007 – Synthetech, Inc. (NZYM.OB) today announced financial results for the second quarter of fiscal 2008, which ended September 30, 2007.Revenue for the quarter was $3.0 million, a 6% decrease compared to revenue of $3.2 million in the second quarter of fiscal 2007.Operating loss for the current quarter was $841,000, compared to operating income of $203,000 for the same period last year.Net loss for the current quarter was $861,000, or $0.06 per share, compared to last year’s second quarter net income of $198,000, or $0.01 per share. For the first half of fiscal 2008, revenue of $7.2 million resulted in an operating loss of $705,000 and a net loss of $742,000, or $0.05 per share.For the comparable period last year, revenue of $4.9 million resulted in an operating loss of $592,000 and a net loss of $587,000, or $0.04 per share. International sales, mainly to Europe, were $1.3 million and $3.3 million in the second quarter and first six months of fiscal 2008, respectively, compared to $780,000 and $1.6 million in the second quarter and first six months of fiscal 2007, respectively.International sales, like all of our revenues, are subject to significant quarterly fluctuations. Financial results for the second quarter of fiscal 2008 were disappointing.A net loss of $861,000 for the second quarter of fiscal 2008 was a significantly larger loss than Synthetech normally would have expected on quarterly revenue of $3.0 million.Production process difficulties carried over from the first quarter combining to reduce revenue for the second quarter and increase the unit cost of the product produced.Based on a typical product mix, second quarter revenue of $3.0 million is inadequate to support Synthetech’s cost structure which has been increasing over the past nine months in response to improving market conditions.During the quarter, Synthetech incurred $385,000 of unfavorable inventory adjustments, approximately $197,000 of this amount relate to inventory items in support of specific customer drug development projects which have been discontinued. Research and development expense for the first six months of fiscal 2008 compared to the comparable period of fiscal 2007 increased $67,000 primarily due to the result of compensation and related costs pertaining to an increase in the number of chemists employed by Synthetech; general increases in salaries and benefits; and costs associated with hiring of new employees.These changes were made in response to improving business conditions and the need to provide competitive compensation packages. Selling, general and administrative expense for the first six months of fiscal 2008 compared to the comparable period of fiscal 2007 increased $256,000 primarily as the result of an increase in stock-based compensation expense; the addition of a new senior sales position; general increases in salaries and benefits; and an increase in consulting fees related to the implementation of Section 404 of the Sarbanes-Oxley Act. The Company’s cash and cash equivalents were $744,000 at September 30, 2007, compared to $259,000 at March 31, 2007.Synthetech’s working capital was $4.7 million at September 30, 2007, compared to $5.6 million at March 31, 2007. Synthetech, Inc. Condensed Statements of Operations (unaudited) Three Months Ended September 30, Six Months Ended September 30, (in thousands, except per share data) 2007 2006 2007 2006 Revenue $ 2,981 $ 3,187 $ 7,153 $ 4,930 Cost of revenue 2,838 2,110 5,821 3,808 Gross income 143 1,077 1,332 1,122 Research and development 346 277 674 607 Selling, general and administrative 638 597 1,363 1,107 Total operating expense 984 874 2,037 1,714 Operating income (loss) (841 ) 203 (705 ) (592 ) Interest income 3 10 12 22 Interest expense (23 ) (16 ) (49 ) (18 ) Income (loss) before income taxes (861 ) 197 (742 ) (588 ) Income tax benefit - (1 ) - (1 ) Net income (loss) $ (861 ) $ 198 $ (742 ) $ (587 ) Basic and diluted income (loss) per share $ (0.06 ) $ 0.01 $ (0.05 ) $ (0.04 ) Commenting on the financial results, Dr. Gregory Hahn, President and COO, stated, “Synthetech’s financial recovery encountered a setback during the second quarter of fiscal 2008.While softer quarterly sales had some impact, production issues were the major contributor to disappointing revenue and net income.We continue to focus significant resources on improving the reliability and performance of manufacturing resources.Synthetech’s order backlog of approximately $3.4 million as of September 30, 2007 and additional orders received through November 12, 2007 suggest our markets remain reasonably robust, although order lead times remain short, limiting our visibility into the fourth quarter of fiscal 2008 and into fiscal 2009." Dr. Daniel Fagan, Chairman and CEO stated, “We budgeted fiscal 2008 to be a mildly profitable rebuilding year in which Synthetech rebuilds its R&D and production capabilities for anticipated market demands in the future.Our financial recovery and strategic activity have been temporarily delayed because of the first and second quarter production difficulties which are in the process of being resolved. Many of these products have never been manufactured on large scale and may therefore pose production challenges until commercial processes are developed.” Management anticipates that Synthetech’s revenue will continue to be volatile from period to period.Variability in Synthetech’s level of revenue is based primarily on its participation in large-scale customer projects and the timing of shipments arising from these projects.Synthetech operates in a challenging business environment, characterized by the unpredictable dynamics and life cycle of pharmaceutical projects, which can lead to rapid fluctuations in the mix of projects and revenues.As the uncertainties inherent in drug development projects remain outside of Synthetech’s control, it is difficult to predict the progress, timing and revenue potential of these projects. About Synthetech Synthetech, Inc. is a fine chemicals company specializing in organic synthesis, biocatalysis and chiral technologies.Synthetech develops and manufactures amino acid derivatives, specialty amino acids, peptide fragments, proprietary custom chiral intermediates and specialty resins, primarily for the pharmaceutical industry.Synthetech’s products support the development and manufacture of therapeutic peptides and peptidomimetic small molecule drugs at every stage of a customer’s clinical development pipeline, and are used as ingredients in drugs for the treatment of AIDS, cancer, cardiovascular and other diseases. Forward-Looking Statements This press release contains “forward looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995.All statements, other than statements of historical fact, are forward-looking, including, without limitation, statements regarding: future operating results; the timing and amount of shipments; recurrence of large-scale projects; resolution of manufacturing process difficulties; status of markets; and estimated quarterly stock-based compensation amounts for the remainder of fiscal2008 and continued ongoing cost for implementing Section 404 of the Sarbanes-Oxley Act for the remainder of fiscal 2008.Words such as “believe,” “anticipate,” “expect,” “estimate,” “project,” “will be,” “will continue,” “will likely result,” or words or phrases of similar meanings identify forward-looking statements.Forward-looking statements reflect management’s current expectations, plans or projections and are inherently uncertain and actual results could differ materially from such expectations, plans or projections.Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.Risks and uncertainties that could cause actual results to differ significantly from management’s expectations include, but are not limited to, the following:Synthetech's limited financial and other resources; the uncertain market for Synthetech's products; potential loss of a significant customer; customer concentration; potential termination or suspension by customers of significant projects or orders; potential period-to-period revenue or expense fluctuations; production factors and timely access to raw materials; industry cost factors and conditions; competition; government regulation; labor disputes; technological changes; international business risks; and future incentive stock awards. Investors are urged to read Synthetech’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended March 31, 2007, for a further description of risks and uncertainties related to forward-looking statements made by Synthetech as well as to other aspects of Synthetech's business.Those reports describe, some, but not all of the factors that could cause actual results to differ significantly from management’s expectations.Additional risks and uncertainties not presently known to Synthetech or which Synthetech currently deems immaterial also may impair its business or operations.Synthetech does not intend to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. MORE INFORMATION: Web site: www.synthetech.com E-mail: investor@synthetech.com CONTACT: Gary Weber, CFO PO Box 646 Albany, Oregon97321 541 967-6575
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Name: 2003/226/EC: Commission Decision of 24 September 2002 on an aid scheme which the Federal Republic of Germany is planning to implement â "Guidelines on assistance for SMEs â Improving business efficiency in Saxony": Subprogrammes 1 (Coaching), 4 (Participation in fairs), 5 (Cooperation) and 7 (Design promotion) (notified under document number C(2002) 2606) (Text with EEA relevance)
Type: Decision_ENTSCHEID
Subject Matter: cooperation policy; business classification; economic policy; competition; regions of EU Member States
Avis juridique important|32003D02262003/226/EC: Commission Decision of 24 September 2002 on an aid scheme which the Federal Republic of Germany is planning to implement "Guidelines on assistance for SMEs Improving business efficiency in Saxony": Subprogrammes 1 (Coaching), 4 (Participation in fairs), 5 (Cooperation) and 7 (Design promotion) (notified under document number C(2002) 2606) (Text with EEA relevance) Official Journal L 091 , 08/04/2003 P. 0013 - 0022Commission Decisionof 24 September 2002on an aid scheme which the Federal Republic of Germany is planning to implement - "Guidelines on assistance for SMEs - Improving business efficiency in Saxony": Subprogrammes 1 (Coaching), 4 (Participation in fairs), 5 (Cooperation) and 7 (Design promotion)(notified under document number C(2002) 2606)(Only the German version is authentic)(Text with EEA relevance)(2003/226/EC)THE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community, and in particular the first subparagraph of Article 88(2) thereof,Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof,Having called on interested parties to submit their comments pursuant to those provisions(1),Whereas:1. PROCEDURE(1) By letter SG(98) D/9545 dated 12 November 1998, the Commission approved the guidelines of the Land of Saxony on assistance for SMEs until 31 December 2000(2).(2) By letter dated 29 December 2000 (registered as received by the Secretariat-General of the Commission on 3 January 2001 under ref. A/47), Germany notified pursuant to Article 88(3) of the EC Treaty six subprogrammes forming part of a new version of the guidelines (hereinafter referred to as the "scheme")(3) that is set to run for five years from the date of Commission approval. The Commission requested further information by letters dated 5 February 2001 (registered under D/50478) and 5 September 2001 (registered under D/53620).(3) Germany provided additional information by letters dated 12 March 2001 (registered the same day under A/3069), 13 March 2001 (registered on 20 March under A/3361), 1 June 2001 (registered on 11 June under A/34569) and 9 October 2001 (registered on 10 October under A/37882).(4) A meeting between the German authorities and the Commission was held on 14 June 2001 in Berlin.(5) By letter dated 2 August 2001, Germany sent summary information on the six subprogrammes with a view to exempting them from the requirement of compatibility with the common market until such time as the Commission takes a final decision provided that they comply with Commission Regulation (EC) No 70/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises(4).(6) The Commission informed Germany by letter SG(2001) D/292745 of 13 December 2001 that it had decided to initiate the formal investigation procedure laid down in Article 88(2) of the EC Treaty in respect of some of the subprogrammes, namely the subprogrammes "Coaching", "Participation in fairs", "Cooperation" and "Design promotion". In its decision the Commission did not raise any objections to the subprogrammes "External trade consultancy" and "Environmental management".(7) In its letter the Commission reminded Germany that Article 88(3) of the EC Treaty had suspensory effect and that Article 14 of Council Regulation (EC) No 659/1999(5), dated 22 March 1999, provides that all unlawful aid may be recovered from the recipient. At the same time, it highlighted the fact that individual grants of aid which complied with all the conditions of Commission Regulation (EC) No 70/2001 were considered to be compatible with the common market according to Article 3(1) of that Regulation.(8) The Commission decision to initiate the procedure was published in the Official Journal of the European Communities(6). The Commission called on interested parties to submit their comments on the measure but did not receive any comments back.(9) Germany set out its position by letter dated 21 January 2002 (registered under A/30488).(10) After the opening of the formal investigation procedure two more meetings between the German authorities and the Commission took place on 19 February 2002 in Brussels and on 10 June 2002 in Berlin.2. DESCRIPTION OF THE MEASURE2.1. Form of the aid and legal basis(11) The aid is granted by the Land of Saxony in the form of grants under Sections 23 and 44 of the Land Budget Order and on the basis of the scheme under scrutiny.2.2. Budget and duration(12) The scheme runs for five years from the date of Commission approval of the four subprogrammes; the budget for the overall scheme amounts to around EUR 89 million for this period.2.3. Recipients(13) The aid scheme is designed to assist economically viable small and medium-sized enterprises within the meaning of Commission Recommendation 96/280/EC of 3 April 1996 concerning the definition of small and medium-sized enterprises (SMEs)(7) with establishments in Saxony, which ranks as an assisted area under Article 87(3)(a) of the EC Treaty until 31 December 2003. Germany undertook to comply with the Community State aid rules in the "sensitive sectors" (coal and steel, transport, synthetic fibres and shipbuilding).(14) The scheme will not apply to activities linked to the production, processing or marketing of products listed in Annex I to the Treaty.2.4. Formal investigation into four subprogrammes(15) The following four subprogrammes of the scheme are the subject of the procedure under Article 88(2) of the EC Treaty:- Coaching (subprogramme 1),- Participation in fairs (subprogramme 4),- Cooperation (subprogramme 5),- Design promotion (subprogramme 7).2.5. Conditions of the four subprogrammes(16) For the purposes of the scheme, the Land of Saxony identified areas facing particular development problems on the basis of certain indicators such as income, purchasing power and the unemployment rate. Germany provided the Commission with a very detailed map of those areas. Two thirds of them are located at the EU's external borders.(17) Aid under the subprogramme "Coaching" is aimed at facilitating access by SMEs to services provided by outside consultants. The measure is designed to provide management with assistance in financial, personnel, technological and organisational matters.(18) The aid ceiling for this part of the scheme is 65 % for small enterprises in the areas facing particular development problems and 50 % for SMEs in other areas.(19) Eligible costs under the subprogramme are costs for outside consultancy. The services provided must not exceed 50 consultancy-days a year and must not constitute a continuous or periodic activity. Excluded from receiving aid are services concerning an enterprise's usual operating expenditure, such as routine tax consultancy services, regular legal services or advertising.(20) Aid under the subprogramme "Participation in fairs" is intended to help SMEs with their representation at fairs inside and outside the Community.(21) In areas facing particular development problems, a maximum aid intensity of 60 % is envisaged for small enterprises participating in fairs within the Community. In general, a ceiling of 50 % applies for SMEs in other areas.(22) Eligible costs under this subprogramme are:- rental payments for the exhibition stand,- construction and dismantling of the stand by third parties,- transport of goods being exhibited,- participation fees, interpretation costs and advertising costs.(23) This subprogramme allows aid for up to five times a year, and this includes the repeated participation (up to three times) in the same fair.(24) The subprogramme "Cooperation" aims at promoting cooperation between not less than 3 to 5 firms in the same region or sector in order to improve their efficiency and sales opportunities. The following in particular will be supported:- feasibility studies on cooperation projects to open up regional and sector-specific markets,- other services provided by third parties in connection with workshops and information events,- establishment of cooperation offices in Germany,- setting-up of "enterprise pools" (Absatzgemeinschaften) for opening up foreign markets inside and outside the Community: these are cooperative or contact arrangements providing SMEs with the services necessary to enter a foreign market(8).(25) The aid ceiling is generally 65 %; for small enterprises in areas facing particular development problems, it is 80 %.(26) Eligible costs for the establishment of cooperation offices are:- consultancy fees and fees for other services and activities provided by outside consultants,- rental payments for premises, costs of material and the salaries of employees and the office manager.(27) The subprogramme "Design promotion" aims at facilitating access by SMEs to the services of professional product designers.(28) In general, an aid ceiling of 50 % applies; for small firms in areas facing particular development problems, a ceiling of 70 % is envisaged.(29) Eligible costs are expenditures on outside design firms for:- the design of consumer goods, investment goods and services,- corporate design and product design.(30) For all the subprogrammes, Germany has undertaken to notify separately each individual case of aid where one of the following thresholds is exceeded:(a) the total eligible costs of the project are at least EUR 25 million and the net aid intensity is at least 50 % of the net ceiling specified in the regional map for the area concerned; or(b) the total amount of aid is at least EUR 15 million gross.(31) Germany has undertaken to grant aid under the subprogrammes only when an application for aid was submitted by the firm concerned before the project was started.(32) Germany has promised to ensure that aid granted under the subprogrammes will not be combined with any other State aid within the meaning of Article 87(1) of the EC Treaty or with Community funding in connection with the same eligible costs if this will result in the relevant aid intensity ceilings being exceeded.(33) Germany has undertaken to submit an annual report on the application of the subprogramme.3. GROUNDS FOR INITIATING THE PROCEDURE(34) For the reasons set out below, the Commission has examined the four subprogrammes under Commission Regulation (EC) No 70/2001 and under the 1998 Community guidelines on national regional aid (regional aid guidelines)(9).(35) Aid under the subprogramme "Coaching" for consultancy services that do not relate to the enterprise's usual operating expenditure satisfied the criteria laid down in Regulation (EC) No 70/2001, provided that, as stipulated in Article 5(a) of that Regulation, the aid ceiling does not exceed 50 % gross. This condition is not met in so far as the subprogramme provides for aid intensities of up to 65 % for small enterprises in areas facing particular development problems. The Commission thus had serious doubts as to the compatibility of the subprogramme with the common market.(36) Under the subprogramme "Participation in fairs", aid may be granted to a beneficiary up to five times each year, and participation at the same fair is permitted on up to three occasions. This is at variance with Article 5(b) of Regulation (EC) No 70/2001, which stipulates that the exemption is to apply only to the first participation of an enterprise in a particular fair or exhibition. In addition, the subprogramme provides for aid intensities that may exceed the ceiling of 50 % gross laid down in Article 5(b). The Commission thus had serious doubts as to the compatibility of the subprogramme with the common market.(37) In so far as the subprogramme "Cooperation" refers to consultancy services and other services provided by third parties in the context of cooperation that do not relate to the enterprise's usual operating expenditure, the Commission assumed that the aid fulfils the criteria laid down in Regulation (EC) No 70/2001 provided that, as stipulated in Article 5(a) of that Regulation, the aid ceiling does not exceed 50 % gross. With aid intensities of 80 % for small enterprises in areas facing particular development problems and 65 % for SMEs in other areas, the subprogramme is clearly not consistent with that Regulation.(38) In addition, the subprogramme "Cooperation" provides for aid in respect of the setting-up of national cooperation offices and the remuneration of office employees. On the basis of the information provided by Germany, the Commission had serious doubts whether these measures are covered by Article 4 (Investment) of Regulation (EC) No 70/2001. Article 4(3) of that Regulation stipulates that aid intensities may not exceed the ceiling of regional investment aid determined in the map approved by the Commission, plus 15 percentage points gross in Article 87(3)(a) regions. The regional aid map specifies for the Land of Saxony aid intensities of 35 % net plus 15 percentage points gross for SMEs. Hence, aid intensities of 80 % for small enterprises in areas facing particular development problems and 65 % for SMEs in other areas were not in line with Regulation (EC) No 70/2001 and so the Commission had raised serious doubts as to their compatibility with the common market.(39) Moreover, the subprogramme "Cooperation" clearly contained measures linked to the establishment and operation of a distribution network abroad and other current expenditure linked to the export activity. This is in breach of Article 1 of Regulation (EC) No 70/2001, which explicitly excludes such measures from the scope of the Regulation. Thus, the Commission had serious doubts as to the compatibility of this subprogramme with the common market.(40) The aid that may be granted in respect of certain cost elements (salaries for employees and managers of cooperation offices) under the subprogramme "Cooperation" may also include operating aid, which is covered by the regional aid guidelines. Operating aid though must fulfil certain conditions, e.g. it must be both limited in time and progressively reduced and must not be intended to promote exports between Member States (point 4.17 of the regional aid guidelines); these conditions are not met by the subprogramme. Therefore, the Commission had serious doubts as to its compatibility with the common market.(41) In the Commission's view, the subprogramme "Design promotion" basically falls within the scope of Article 5 (consultancy and other services and activities) of Regulation (EC) No 70/2001 but, since here too the aid intensities exceed the ceiling of 50 % gross laid down in Article 5(b), the Commission had serious doubts as to its compatibility with the common market.4. COMMENTS FROM GERMANY(42) Germany takes the view that the aid scheme has to be examined under the Community guidelines on State aid for small and medium-sized enterprises(10) ("SME guidelines") because it was notified to the Commission under the accelerated procedure on 3 January 2001, i.e. before Commission Regulation (EC) No 70/2001 entered in force(11). Since the questions put by the Commission in its letter dated 5 February 2001 were not substantial, the notification should have been considered to be complete from the beginning.(43) With reference to the wording of recitals 11(12) and 14(13) to Regulation (EC) No 70/2001, Germany takes the view that higher aid intensities in assisted regions under Article 87(3)(a) or (c) of the EC Treaty and in favour of small enterprises should be considered as compatible with the common market than those that apply to medium-sized firms in non-assisted areas. Since the Regulation declares an aid ceiling of 50 % in respect of consultancy and other services and activities for medium-sized enterprises outside assisted areas to be compatible with the common market, higher aid intensities should be authorised on the basis of a notification pursuant to Article 88(3) of the EC Treaty for small enterprises in Article 87(3)(a) areas.(44) With reference to recital 4(14) to Regulation (EC) No 70/2001, Germany takes the view that, even though Article 5 of that Regulation does not provide for higher aid ceilings for small enterprises, this does not mean that more favourable treatment of small firms or assisted areas within the meaning of Article 87(3)(a) of the EC Treaty cannot be approved by the Commission; correspondingly higher aid ceilings should simply be notified beforehand.(45) Germany points out that the Commission has a wide margin of discretion and can approve notified aid schemes directly under one of the derogations provided for in Article 87 of the EC Treaty even though the notified aid may not match precisely the requirements of Regulation (EC) No 70/2001. Hence it should be possible for the Commission to allow notified aid which goes beyond the provisions of that Regulation.(46) According to Germany, the Commission, when adopting Regulation (EC) No 70/2001, did not aim to tighten aid intensities but to simplify aid procedures and to relieve the Commission of the need to handle routine cases. A tightening of aid policy towards small enterprises is, according to Germany, not in line with the conclusions of the European Council meetings in Lisbon on 23 and 24 March 2000 and in Stockholm on 23 and 24 March 2001, both of which announced a reinforcement of horizontal objectives.(47) Germany takes the view that the aim and purpose of Regulation (EC) No 70/2001, which is designed to relieve the Commission of the need to handle routine cases, would not be undermined by allowing higher aid ceilings for small enterprises in assisted areas because such notifications are limited in number and are the exception. In addition, no appropriate measures were introduced with the Regulation and so a stricter aid policy could not have been intended; otherwise, cases of aid already approved would have been treated unequally.(48) As regards the subprogramme "Participation in fairs", Germany considers that one-off participation by a firm is insufficient to open up a market, as only repeated presence at the same fair could give the firm a sufficiently high profile. Here too, the Commission allegedly had a wide margin of discretion and could approve notified aid directly under Article 87 of the EC Treaty and, as a result, could allow notified aid that went beyond the provisions of Regulation (EC) No 70/2001.(49) With regard to the subprogramme "Cooperation", Germany acknowledges that the measure goes beyond the scope of Regulation (EC) No 70/2001 since it contains very complex measures in favour of groups of SMEs and not single firms. However, aid for the setting-up of offices and for the remuneration of employees should not be considered as investment aid within the meaning of Article 4 of the Regulation but as "aid for other purposes" within the meaning of point 4.2.8. of the SME guidelines. Although point 4.2.8 is not included in Regulation (EC) No 70/2001, the Commission should approve this kind of aid directly under Article 87(3) EC of the Treaty.(50) In response to the Commission's argument that certain measures under the subprogramme "Cooperation" might constitute operating aid, Germany takes the view that the requirement of "progressive reduction" under point 4.17 of the regional aid guidelines does not have to be fulfilled because of the subprogramme's low aid intensities.(51) As regards aid for the setting-up of enterprise pools inside and outside the Community, Germany points out that the establishment of an office abroad cannot be regarded as the "establishment and operation of a distribution network abroad" because the costs would not be directly linked to the exportation of goods but, in fact, as an incentive for SMEs to open up a foreign market, more often than not outside the Community. The personnel and operating costs should be approved by the Commission directly under Article 87(3) of the EC Treaty.5. ASSESSMENT OF THE MEASURE5.1. Existence of State aid(52) The four subprogrammes which are the subject of the formal investigation procedure under Article 88(2) of the EC Treaty fall within the scope of Articles 87(1) of the EC Treaty and 61(1) of the EEA Agreement for the following reasons: they provide for the granting of aid from State resources to firms involved in producing goods or providing services involved in intra-Community trade. These grants enable recipients to improve their overall financial situation and to enhance their market position. It must therefore be assumed that the measures under scrutiny are liable to distort competition and thereby affect trade between Member States. Germany has not challenged this finding.5.2. Legality of aid(53) The Commission notes that Germany has complied with the notification requirement under Article 88(3) of the EC Treaty.5.3. Procedural rules(54) Germany argues that the aid scheme notified should be assessed under the accelerated procedure (see recital 42). The Commission does not agree. The relevant procedural rules are those contained in Regulation (EC) No 659/1999. The 20-day rule indicated in the accelerated procedure does not apply in the present case and its application would not in any event affect the findings of the notification, for the following reasons:1. the scheme notified under the accelerated procedure and registered on 3 January 2001 did not fulfil the requirements of the Commission communication on the accelerated clearance of aid schemes for SMEs and of amendments of existing schemes(15). As a "new scheme" within the meaning of that communication, the measure did not fulfil the latter's requirements precisely for the reasons that led the Commission to open the Article 88(2) procedure (all aid to exports in intra-Community trade are excluded from the procedure). As a "modification of an existing scheme" within the meaning of that communication, the measure did not fall into any of the categories specified there since it consisted of more than a mere prolongation with a budgetary increase and did not involve a tightening of the criteria for applying the scheme;2. the time limit does not in any event start to run until the notification is complete, which was not the case here as long as the Commission was requesting further information;3. the notification was clearly made after the entry into force of Regulation (EEC) No 659/1999, the procedural provisions of which were immediately applicable, including in the present case. Germany did not invoke Article 4(6) of that Regulation;4. the Commission also opened the Article 88(2) procedure on the ground that the measure was new, a finding not contested by Germany within the relevant time limit;5. the Commission informed Germany by letter dated 5 February 2001 that complements provided for in the notified scheme could not be approved under the accelerated procedure, a finding also not contested by Germany.(55) Germany argues that the scheme notified should be assessed in the light of the SME guidelines (see recital 42). The Commission does not agree. Regulation (EC) No 70/2001 entered into force on 2 February 2001. As of that date, the Commission was obliged to apply the Regulation although a start had already been made on examining the notification. Moreover, recital 4 to the Regulation stipulates that "the guidelines on State aid for small and medium-sized enterprises should be abolished from the date of entry into force of this Regulation". There are no transitional rules for aid notified before its entry into force. Thus, the Commission was and is required to assess the notified subprogrammes in the light of Regulation (EC) No 70/2001 and not in the light of the SME guidelines. As regards operating aid for SMEs in assisted areas, the Commission has also had regard, where necessary, to the regional aid guidelines, which were not abolished in whole or in part at the time Regulation (EC) No 70/2001 was adopted.(56) Germany's argument that, if the Commission had decided within 20 working days of the original attempt at notification, the SME guidelines rather than Regulation (EC) No 70/2001 would have had to be applied (see recital 42) has no bearing on the present assessment, for all the reasons set out above, since it does not distinguish between procedural and substantive issues. Whatever the reason for the decision opening the procedure being adopted after the entry into force of Regulation (EC) No 70/2001, the Commission was and is obliged to apply that Regulation. In any event, the original notification did not comply with the requirements of the accelerated procedure and was, in any event, incomplete. At no time did Germany invoke Article 4(6) of Regulation (EC) No 659/1999.5.4. Compatibility of aid with the common market5.4.1. Subprogramme "Coaching"(57) The subprogramme "Coaching" provides for aid of a kind that is covered by Regulation (EC) No 70/2001. It complies with that Regulation and hence with Article 87(3)(c) of the EC Treaty only in so far it provides for aid for consultancy services that do not relate to the enterprise's usual operating expenditure and provided that, as stipulated in Article 5(a) of the Regulation, the aid ceiling does not exceed 50 % gross.(58) This condition is not met in so far as the subprogramme specifies aid ceilings of up to 65 % for small enterprises in areas facing particular development problems that are located in an Article 87(3)(a) region. The Commission thus notes that this part of the measure is not in conformity with Regulation (EC) No 70/2001.(59) Having regard to recital 4 to Regulation (EC) No 70/2001, which states that "notifications will be assessed by the Commission in particular in the light of the criteria set out in this Regulation", the Commission goes on to assess whether or not the additional amounts of aid can be approved, once again exercising its wide margin of discretion on the basis of Article 87(3)(c) of the EC Treaty. Such measures must be assessed with a view to ensuring coherence of decision-making practice and equality of treatment(16).(60) In the Commission's experience, an aid intensity in excess of 50 % for this type of measure would exceed the amount necessary to provide enterprises with an incentive to incur such expenditure. This is also true for small enterprises and for SMEs in assisted areas. Higher aid intensities would cause a disproportionate distortion of competition. In particular, the Commission takes the view that requiring an enterprise to finance at least half of the cost contributes to the efficiency and feasibility of the measure. It thus concludes that a higher aid intensity would adversely affect trading conditions to an extent contrary to the common interest; this part of the measure cannot, therefore, be regarded as compatible with the common market under Article 87(3)(c) of the EC Treaty.(61) Germany argues that a higher intensity for this type of aid should be available for small enterprises, as opposed to medium-sized enterprises (see recital 43). It refers in particular to recital 11 to Regulation (EC) No 70/2001. The Commission does not agree. Recital 11 refers to the specific situation of investment aid outside assisted areas. It does not refer to external consultancy aid. The Commission considers that a single rate (of 50 %) for external consultancy aid is appropriate for all SMEs. Such aid would generally represent a relatively modest amount compared with new investment and would be in the nature of a one-off cost (bearing in mind that usual operating aid is excluded under Article 5 of the above Regulation). As such, one would not normally expect SMEs to finance such costs through medium-term borrowing. However, it is mainly in the area of medium-term borrowing (for the purposes of investment) that SMEs experience a disadvantage owing to their relative size, with small enterprises being placed at a greater disadvantage than medium-sized enterprises. That is why the Commission considers that a difference in aid intensity is justified in the case of investment aid, but not in the case of external consultancy aid, where this relative disadvantage is less acute.(62) Germany also states that a higher aid intensity than that deemed compatible with the common market should be available for small firms in assisted areas under Article 87(3)(a) and (c) of the EC Treaty (see recital 43). It refers in particular to recital 14 to Regulation (EC) No 70/2001. The Commission does not agree. Recital 14 refers to the specific situation of investment aid. It does not refer to external consultancy aid. The Commission considers that a single rate (of 50 %) for external consultancy aid is appropriate for all SMEs, whether or not in assisted areas. Such aid does not generally have a direct long-lasting impact on regional development or job creation, at least not in the way that investment aid does. There is consequently no need for higher aid intensities in assisted areas.(63) Germany argues that it is illogical for there to be no differentiation between small and medium-sized enterprises in assisted areas when it comes to granting investment aid (see recital 43). The Commission does not agree. That observation made is irrelevant to the present case, which does not involve investment aid but external consultancy aid. For investment aid the regional development factor is more important than the relative size of enterprises. In any event, Member States may fix aid intensities lower than those set by Community law. They could thus fix lower aid intensities for medium-sized enterprises.(64) Germany has argued for a positive decision on the basis of certain assertions concerning the circumstances under which Regulation (EC) No 70/2001 was adopted (see recitals 46 and 47). The Commission notes that the objectives of that Regulation are stated in its recitals. The absence of appropriate measures does not mean that the wording of the Regulation is identical to that of the SME guidelines (it is not) but rather reflects a broad range of policy and other considerations that are though incapable of influencing the correct legal interpretation of the relevant texts.(65) As regards the regional aid guidelines, Germany has not argued that the measure constitutes operating aid in an Article 87(3)(a) area (in any event, Article 5 of Regulation (EC) No 70/2001 does not apply to operating aid) or demonstrated that the relevant rules set out in the guidelines (notably the rule that the aid would have to be temporary, degressive and proportional to the handicaps it seeks to alleviate) have been respected. The Commission thus has no reason to find that the aid could be compatible with the common market on that basis.5.4.2. Subprogramme "Participation in fairs"(66) The subprogramme "Participation in fairs" provides for aid that is governed by Regulation (EC) No 70/2001. It allows for aid to be granted to an enterprise up to five times each year, included repeated participation (up to three times) in the same fair. Germany stresses that it is not possible for an enterprise to gauge the importance of participating in a particular fair after only one participation. Thus, with regard to recitals 11 and 14 to that Regulation, Germany argues that it must be possible for the Commission to allow more generous aid measures and higher aid intensities (see recital 48). The Commission does not share this view. The Commission's assessment has shown that the subprogramme is not in line with Article 5(b) of Regulation (EC) No 70/2001, which lays down that only the first participation of an enterprise in a particular fair or exhibition is to be exempted and that the gross aid must not exceed 50 % gross of the additional costs. The measure is compatible with the common market only in so far as aid is granted for the first participation and incompatible in so far as aid is granted for subsequent participations. This rule is necessary since only in this way is the incentive effect of the measure guaranteed. Once an SME has participated in a certain fair, it reasonably can be expected to finance the second participation itself after deciding whether participation is useful.(67) Furthermore, the Commission considers that exercising once again in full its margin of discretion would in no way alter this finding. For all the reasons set out above, it takes the view that the means of achieving the SME development objective whilst preserving the incentive effect within the meaning of the Commission's customary and existing policy are sufficient and appropriate. A measure directly serving the market, such as participation in a fair, in respect of which the 50 % ceiling as provided for under this subprogramme is exceeded adversely affects trading conditions to an extent contrary to the common interest. In the Commission's view, the fact that an enterprise is required to contribute at least half of the cost contributes to the efficiency and feasibility of the measure. Consequently, the Commission considers that higher aid intensities could not be regarded as being compatible with the common market pursuant to Article 87(3)(c) of the EC Treaty.(68) As regards the regional aid guidelines, Germany has not argued that the measure constitutes operating aid in an Article 87(3)(a) area (and, in any event, Article 5 of Regulation (EC) No 70/2001 does not apply to operating aid) or demonstrated that the relevant rules set out in the guidelines (notably the rule that the aid would have to be proportional, temporary and degressive) have been respected. The Commission thus has no reason to find that the aid could be compatible with the common market on that basis.5.4.3. Subprogramme "Cooperation"(69) The subprogramme "Cooperation" contains several different aid measures. Aid can be granted, among other things, for the "establishment of cooperation offices in Germany" to cover rental charges, costs of materials and personnel costs. The offices and/or enterprises involved can receive an indeterminate amount of aid. The Commission considers this to be operating aid, which has to be examined in the light of the regional aid guidelines. It insists that the subprogramme must fulfil all the requirements set out in the guidelines without exception, namely operating aid must be both limited in time and progressively reduced and must not be intended to promote exports between Member States (point 4.17). In addition, the Member State has to demonstrate the existence of any handicaps and gauge their importance. The Commission notes that these conditions are not met as the scheme runs for five years, regardless of the fact that the regional aid map for Germany expires on 31 December 2003. Moreover, the aid measures are not progressively reduced and Germany takes the view that progressive reduction is not necessary because of the small amounts of aid involved (see recitals 49 and 50). The Commission cannot accept this argument and is of the opinion that, in so far as operating aid is provided for by this measure, it is not compatible with the common market. In addition, Germany has not demonstrated how the measure is justified in relation to the handicaps that need to be alleviated; nor is it certain that the cooperation offices are being established only in Saxony. However, Germany is free to support the measure "establishment of cooperation offices in Germany" as de minimis aid under the conditions set out in Commission Regulation (EC) No 69/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to de minimis aid(17).(70) The subprogramme "Cooperation" also comprises aid measures for the "establishment of enterprise pools" inside and outside the European Union (see recital 51). Here, at least three SMEs with complementary product ranges set up such a joint office. Eligible costs are personnel costs and operating costs of the "enterprise pool" itself and/or the enterprises concerned. The objective of the enterprise pool is to help SMEs explore and gain a foothold in foreign markets. The Commission takes the view that this measure cannot be sufficiently distinguished from commercial representation and is thus linked to the "establishment and operation of a distribution network", which is excluded from Regulation (EC) No 70/2001 (Article 1(2)(b)) as well as from the regional aid guidelines. In the light of its long-standing practice, the Commission will not approve any aid that constitutes export aid. Such aid cannot therefore be considered compatible with the common market on the basis of either of those legal bases, for all the reasons indicated therein.(71) Furthermore, the Commission considers that exercising in full once again its margin of discretion with regard to the measures above would not alter this finding. For the reasons set out above, it takes the view that its customary policy on this matter is sufficient and appropriate. In its opinion, the aid intensities of up to 80 % for measures directly serving the market under this subprogramme adversely affect trading conditions to an extent contrary to the common interest; thus, this part of the measure cannot be regarded as being compatible with the common market under Article 87(3)(c) of the EC Treaty.(72) In so far as the subprogramme "Cooperation" provides for aid in respect of external consultancy services and participation in fairs and seminars abroad, it is in line with Article 5 of Regulation (EC) No 70/2001, provided that the aid does not exceed 50 %. In the Commission's view, "enterprise pools" abroad can clearly advise SMEs in matters concerning foreign markets, and SMEs that have recourse to such services may obtain some compensation for them. Regulation (EC) No 70/2001 takes into account the international obligations of the European Union; recital 16 refers to the WTO Agreement on Subsidies and Countervailing Measures and states that "aid towards the costs of participation in trade fairs or of studies or consultancy services needed for the launch of a new or existing product on a new market [...] does not normally constitute export aid".5.4.4. Subprogramme "Design promotion"(73) For similar reasons, the subprogramme "Design promotion" is not in line with Regulation (EC) No 70/2001 and is therefore incompatible with the common market in so far as it provides for consultancy services that exceed the ceiling of 50 % gross.5.4.5. Closing remarks(74) The Commission notes that, in the case of the aid scheme under scrutiny, the exemptions provided for in Article 87(2) of the EC Treaty do not apply since the aid measure does not pursue any of the objectives listed there and since Germany did not argue that this would be the case.(75) Aid under the scheme is not intended to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State, nor is it intended to promote culture or heritage conservation. The Commission therefore considers that the subprogrammes cannot be exempted under Article 87(3)(b) or (d) of the EC Treaty as regards the basic incompatibility of State aid with the common market. The exemption under Article 87(3)(a) is not applicable either because the aim of the measures is the promotion of SMEs in Saxony, which is a horizontal objective.6. CONCLUSION(76) The subprogrammes "Coaching", "Participation in fairs" and "Design promotion", as well as the subprogramme "Cooperation" (in so far as it provides for consultancy services or participation in a fair) are compatible with the common market provided that Germany reduces the aid intensities to the ceilings specified in Regulation (EC) No 70/2001 and limits the granting of aid for participation in fairs to one participation in a particular fair or exhibition.(77) As far as the subprogramme "Cooperation" provides for operating aid, which does not fulfil the requirements of the regional aid guidelines, it is incompatible with the common market. The same applies to aid measures linked to the establishment of "enterprise pools" within the European Union, within the EEA and in countries with the official status of a candidate for accession to the European Union,HAS ADOPTED THIS DECISION:Article 1The four subprogrammes "Coaching", "Participation in fairs", "Design promotion" and "Cooperation" of the guidelines promoting SMEs - Improving business efficiency (Richtlinien zur Mittelstandsfà ¶rderung - Verbesserung der unternehmerischen Leistungsfà ¤higkeit) constitute State aid within the meaning of Article 87(1) of the EC Treaty.Article 2To the extent that they do not exceed the scope and aid intensities of Regulation (EC) No 70/2001, the four subprogrammes referred to in Article 1 can be regarded as being compatible with Article 87(3)(c) of the EC Treaty.To the extent that they provide for aid exceeding the scope and the aid intensities of Regulation (EC) No 70/2001, the four subprogrammes are incompatible with the common market.Article 3To the extent that the subprogramme "Cooperation" provides for operating aid, it is incompatible with the common market.Article 4Germany may implement the four subprogrammes referred to in Article 1 only if they have been brought into line with this Decision.Article 5Germany shall inform the Commission, within two months of notification of this Decision, of the measures taken to comply with it.Article 6This Decision is addressed to the Federal Republic of Germany.Done at Brussels, 24 September 2002.For the CommissionMario MontiMember of the Commission(1) OJ C 34, 7.2.2002, p. 2.(2) State aid N 567/98 - Germany (Richtlinien zur Mittelstandsfà ¶rderung - Verbesserung der unternehmerischen Leistungsfà ¤higkeit).(3) The guidelines in their revised form include 11 subprogrammes. The notification was limited to six of them; the others were considered by Germany not to fall within the scope of Article 87(1) of the EC Treaty.(4) OJ L 10, 13.1.2001, p. 33.(5) OJ L 83, 27.3.1999, p. 3.(6) See footnote 1.(7) OJ L 107, 30.4.1996, p. 4.(8) The "enterprise pools" measure was initially the subject of the procedure in Case CP 92/01 - Germany but was then combined with the main procedure in Case C 89/01 - Germany, of which Germany was informed by letter D/54756 dated 16 November 2001.(9) OJ C 74, 10.3.1998, p. 9.(10) OJ C 213, 23.7.1996, p. 4.(11) The Regulation entered into force on 2 February 2001.(12) "Having regard to the differences between small enterprises and medium-sized enterprises, different ceilings of aid intensity should be set for small enterprises and for medium-sized enterprises."(13) "This Regulation should exempt aid to small and medium-sized enterprises regardless of location. Investment and job creation can contribute to the economic development of less favoured regions in the Community. Small and medium-sized enterprises in those regions suffer from both the structural disadvantage of the location and the difficulties deriving from their size. It is therefore appropriate that small and medium-sized enterprises in assisted regions should benefit from higher ceilings."(14) "This Regulation is without prejudice to the possibility for Member States of notifying aid to small and medium-sized enterprises. Such notifications will be assessed by the Commission in particular in the light of the criteria set out in this Regulation."(15) OJ C 213, 19.8.1992, p. 10.(16) See, for example, the judgment dated 24 March 1993 in Case C-313/90 [1993] ECR I-1125, paragraph 44 and Article 4(2) of Council Regulation (EC) No 994/98, OJ L 142, 14.5.1999, p. 1.(17) OJ L 10, 13.1.2001, p. 30. |
November 2, 2015 DREYFUS VARIABLE INVESTMENT FUND International Value Portfolio Supplement to Summary and Statutory Prospectus dated May 1, 2015 The following information supersedes and replaces the information contained in "Portfolio Management" in the summary prospectus and "Fund Summary – Portfolio Management" in the statutory prospectus: The fund's investment adviser is The Dreyfus Corporation (Dreyfus). The fund is managed by a team of portfolio managers employed by Dreyfus and The Boston Company Asset Management, LLC (TBCAM), an affiliate of Dreyfus. The team consists of Mark A. Bogar, CFA, James A. Lydotes, CFA, and Andrew Leger, who serve as the fund's primary portfolio managers, positions they have held since November 2015. Mr. Bogar is a managing director, portfolio manager and head of the global equity team at TBCAM. Mr. Lydotes is a managing director, portfolio manager and senior research analyst at TBCAM. Mr. Leger is a director and senior research analyst at TBCAM. The following information supersedes and replaces the third paragraph in "Fund Details – Management" in the statutory prospectus: The fund is managed by a team of portfolio managers employed by Dreyfus and TBCAM. The team consists of Mark A. Bogar, CFA, James A. Lydotes, CFA, and Andrew Leger, who serve as the fund's primary portfolio managers and are jointly and primarily responsible for managing the fund's portfolio. Mr. Bogar is a managing director, portfolio manager and head of the global equity team at TBCAM, where he has been employed since August 2007. He also has been employed by Dreyfus since November 2008. Mr. Lydotes is a managing director, portfolio manager and senior research analyst at TBCAM, where he has been employed since February 2005. He also has been employed by Dreyfus since December 2009. Mr. Leger is a director and senior research analyst at TBCAM, where he has been employed since June 2014. Prior thereto, he was employed for more than five years as a research analyst at BlackRock, Inc. He also has been employed by Dreyfus since October 2015. Messrs. Bogar, Lydotes and Leger have been primary portfolio managers of the fund since November 2015, and manage the fund in their capacity as employees of Dreyfus. 0152STK1115 November 2, 2015 DREYFUS VARIABLE INVESTMENT FUND International Value Portfolio Supplement to Statement of Additional Information dated May 1, 2015 Effective November 2, 2015, t he following information supplements and supersedes any contrary information contained in "Certain Portfolio Manager Information": The following table lists the number and types of accounts advised by the primary portfolio managers of Dreyfus Variable Investment Fund—International Value Portfolio and assets under management in those accounts as of September 30, 2015: Primary Portfolio Manager Registered Investment Companies Total Assets Managed Other Pooled Investment Vehicles Total Assets Managed Other Accounts Total Assets Managed Mark A. Bogar 3 $2.1B 5 $541M 3 $292M Andrew Leger 3 $2.1B 5 $541M 3 $292M James A. Lydotes 3 $2.1B 5 $541M 3 $292M As of September 30, 2015, Messrs. Bogar, Leger and Lydotes did not manage any accounts subject to performance-based advisory fees. The following table lists the dollar range of fund shares beneficially owned by the primary portfolio managers of Dreyfus Variable Investment Fund—International Value Portfolio as of September 30, 2015: Primary Portfolio Manager Fund Dollar Range of Fund Shares Beneficially Owned Mark A. Bogar IVP None Andrew Leger IVP None James A. Lydotes IVP None ***** NY 75908784v5
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EXHIBIT 14.1 November 1, 2011 To:Noble Energy Employees Our Noble Energy, Inc. team shares a common purpose of energizing the world, bettering people’s lives.In fulfilling that purpose, the company and its subsidiaries (the “Company”) are committed to the highest standards of ethics and integrity.Truth, honesty, and compliance with the law reflect the core principles of our culture. The business climate has never been as dynamic and competitive as it is today.In this environment, we must be faithful to our core principles as we perform our jobs.The pressure to succeed, both on an individual and corporate level, does not absolve us of the responsibility to “do the right thing.”Our decisions and actions must continue to fit within the framework of our core principles. It is one thing to set high standards of conduct.We also must live by them.Our Code of Business Conduct and Ethics (the “Code”) contains a compilation of Company policies relevant to business conduct and a process designed to ensure compliance with those policies.Read it carefully and ask questions to ensure that you understand how it applies to your job.The policies in the Code are intended to provide the general standards by which we should assess our actions.Where there are no specific laws to direct us, integrity and personal responsibility should guide our decisions.Where there are legal requirements, we should comply with the letter, as well as the spirit and intent, of the law. It is also the responsibility of each of us to report unethical behavior.To encourage such reporting, we have put in place a Compliance Line and other means of communication that allow for confidential and anonymous reporting, and we do not tolerate any form of retaliation against those who report in good faith. We are the Company’s ambassadors to the public.The public’s confidence is one of our most valued assets.Regardless of the honesty and integrity of our employee body as a whole, the misdeeds of a few can reflect adversely upon us all.For that reason, the behavior of each of us must be appropriate and exemplary at all times while representing the Company. We value our well-deserved reputation for integrity.We have educated the public to expect the highest standards of integrity and ethical behavior from the Company and its employees.We must — and will — live up to those expectations. Sincerely, /s/ Charles D. Davidson Charles D. Davidson Chairman and Chief Executive Officer /s/ David L. Stover David L. Stover President and Chief Operating Officer Policy Regarding Laws and Business Conduct We are committed to conducting our business in a manner consistent with the highest ethical standards and by abiding with the national and local laws and regulations (“Law(s)”) of the countries where we operate, to the extent allowed by U.S. law.We are expected to ensure such compliance and observe high standards of business and personal ethics in the discharge of our responsibilities. This expectation requires the practice of honesty, integrity and fair dealing. Our Code of Business Conduct and Ethics (“Code”) sets forth the Company’s expectations for all.Company directors, officers and employees throughout the world, including employees of majority-owned affiliates (e.g., subsidiaries, joint ventures) (collectively, “Employees”), and third parties under circumstances discussed in specific policies and related guidance (e.g., the Policy Regarding Anti-Corruption).The Code is supported by other sources of written guidance, including: · The Compliance and Ethics Program, which provides a general overview of the Company’s compliance initiatives, such as training, monitoring and auditing, and communication and response mechanisms. · Policy-Specific Compliance Program Documents, which provide practical guidance on compliance with many policies set forth in this Code. · Procedures and other Guidelines, which provide detailed requirements for processes that support specific aspects of the Company’s compliance initiatives, such as accounting controls and due diligence reviews of business partners. Please visit the Company’s intranet site to familiarize yourself with the policy-specific compliance program documents, procedures, and other guidelines most relevant to your day-to-day work. Equal Employment Opportunity and Nondiscrimination Policy Part of what makes the Company successful is our diverse and talented workforce.Our employment decisions will be based solely on job-related qualifications.We will not make any hiring, promotion, termination or other job-related decision on the basis of age, race, color, sex, religion, national origin, sexual orientation, citizenship status, veteran status, marital status, pregnancy, disability (where the applicant or Employee is qualified to perform the essential functions of the job with or without reasonable accommodation), genetic information or any other characteristic protected by Law, or participation in a protected activity as defined by Law. Conflict of Interest Policy Employees will avoid any personal interest, influence, or relationship that might conflict, or appear to conflict, with the best interest of the Company and perform their work with undivided loyalty to the Company consistent with the highest ethical standards.A conflict of interest may arise where the actions of an Employee involve (1) personal financial benefits resulting from transactions between the Company and third parties, (2) giving, without proper authority, confidential information concerning the Company to anyone not an Employee or (3) personal financial interests in a competitor of the Company.We recognize that the existence of a conflict of interest may depend upon specific facts, and there may be cases in which an Employee is uncertain as to the applicability of this policy.In those cases, the Employee will report such circumstances to his or her supervisor and obtain approval before entering into the transaction or relationship at issue. Requests for Employment References Policy All requests to provide employment verifications, references or recommendations about current or former Employees must be in writing and directed to our Vice President of Human Resources. Nonharassment Policy We will not tolerate harassment on the basis of age, race, color, sex, religion, national origin, sexual orientation, citizenship status, veteran status, marital status, pregnancy, disability (where the applicant or Employee is qualified to perform the essential functions of the job with or without reasonable accommodation), genetic information or any other characteristic protected by Law, or participation in a protected activity as defined by Law.Each Employee is responsible for creating an environment free from harassing conduct.Harassment can be either sexual or non-sexual conduct that is offensive, fails to respect the rights of others or interferes with work. Substance Abuse Prevention Policy We prohibit the possession, use, sale, attempted sale, purchase, attempted purchase, conveyance, distribution, transfer, dispensation, cultivation or manufacture of illicit drugs or other intoxicants at any time, in any amount or in any manner, as well as the abuse or misuse of alcohol and prescription drugs.The prohibition regarding the abuse or misuse of alcohol and prescription drugs (1) applies to those working, present on the Company’s premises or representing the Company at any time and in any way, (2) includes the possession of open containers of alcohol while operating a Company-provided vehicle, or any other vehicle while on Company business and (3) applies off-the-job where such abuse or misuse could impair performance on-the-job. Policy Regarding Use of Company Assets As part of employment with the Company, Employees have access to and control over Company assets, including physical assets, information and intellectual property.Employees will care for and respect Company assets, and work to prevent theft, destruction, waste or misuse of those assets. Environment, Health and Safety Policy We are committed to conducting our business in a manner that protects the environment, health and safety (“EH&S”) of our Employees and the public.Our commitment is to maintain a culture that fosters the development of a safe, efficient and environmentally sound workplace.We will comply with EH&S Laws and apply reasonable standards where Laws do not exist.Through continuous EH&S stewardship, we strive to minimize injuries and incidents while protecting the environment. Policy Regarding Violence and Weapons in the Workplace We are committed to maintaining a non-violent work environment.We will not tolerate threats or acts of violence, including bullying, intimidation or instilling fear in others, in our workplace.Employees who know of an actual or potential threat or act of such violence should immediately report it to their supervisor.In addition, we prohibit, to the fullest extent permitted by Law, Employees and other persons (other than authorized security personnel) from carrying firearms or other weapons on the Company’s premises. Confidentiality Policy Employees are entrusted with confidential, proprietary, trade secret, restricted or non-public information about the Company.They will maintain the confidentiality of such information, except when disclosure is authorized or legally mandated and then only after approval by our Chief Compliance Officer. System Security Policy Employees have access to the Company’s telephone and electronic mail systems, computer network, Internet and Intranet connections, hardware, software, communications systems and stored information (collectively, the “System”).They will use the System primarily for Company-related business and in a manner (1) consistent with the Intellectual Property Policy and other Company-established guidelines, (2) that protects Company intellectual property rights and (3) that respects the intellectual property rights held by third parties. Intellectual Property Policy We protect the valuable rights to our intellectual property, such as copyrights, patents, trademarks, design rights, logos, brands, maps, seismic information and data.Employees will ensure the protection and enforcement of these intellectual property rights at all times. Electronic Communications Policy Employees will communicate appropriately when using Company electronic communications devices, including Company computers, electronic mobile devices and computer systems.Employees are expected to remember that their actions represent the Company when they are sending emails, voicemails or accessing the Internet.Employees will not use Company computers or systems to view inappropriate, sexually explicit or offensive materials, or to access illegal material or conduct business for another commercial organization.Finally, Employees will not use their Company email address when expressing a personal view in a public forum or reference Noble Energy or any other identifying Company information or details if they choose to express their personal views in a public forum. Insider Trading Policy Employees are entrusted with confidential information about the Company, as well as its joint venturers, clients, suppliers and other business partners.Trading on material, non-public information is considered “insider trading” and is prohibited.Therefore, Employees, and those having a close relationship with the Employee, may not directly or indirectly buy or sell Noble Energy securities (including stock options) or another company’s securities, or “tip” another to trade securities, based on such information. Accounting and Recordkeeping Policy We will keep the books, records and accounts of the Company in reasonable detail to accurately and fairly present our transactions and the additions, maintenance and disposition of our assets. We will fully implement our accounting standards and internal controls in affiliates (e.g., subsidiaries, joint ventures) in which we have majority ownership or control.Where we have minority interest or lack control, we will make good faith efforts to ensure that affiliates implement an effective system of internal controls. Records Management Policy Employees will comply with our records management program that systematically addresses the creation, use and disposition of Company records in accordance with our business needs, prudent records management practices and Laws. Anti-Boycotts and Export Controls Policy Many countries, including the United States, require a license to export certain controlled items and technology depending upon the destination, end user or end use.Similarly, trade sanctions restrict transactions and commercial dealings of United States (“U.S.”) companies and citizens with certain other countries, such as Cuba or Iran, and with individuals and entities listed by various U.S. Government agencies.Employees will comply with export control and sanctions Laws by, for instance, performing adequate due diligence of transactions and dealings.In addition, it is against Company policy and U.S. Law to honor or cooperate in boycotts against countries friendly to the United States, chiefly the Arab boycott of Israel. Policy Regarding Anti-Corruption The laws of many countries including the U.S. Foreign Corrupt Practices Act (“FCPA”) and local anti-corruption laws in countries where Noble does business, apply to the Company’s dealings with employees of government agencies (e.g., customs, immigration, other regulatory authorities), government-owned entities (e.g., national oil companies), public international organizations (e.g., the World Bank), or political parties, party officials and candidates for office (collectively, “government officials”).Employees and third parties acting on the Company’s behalf, will not offer, promise or pay money or anything of value either directly or indirectly to a government official, for the purpose of improperly obtaining or retaining business or securing any improper advantage.The Anti-Corruption Compliance Program provides practical guidance on common risk areas for which stringent review and approval requirements apply, including: · Selection, retention, and compensation of third parties (e.g., agents, contractors) · Formation and operation of joint ventures · Gifts, hospitality, travel (including use of Company aircraft), and promotional expenses · Commercial bribery · Conflicts of interest · Facilitation payments and payments in response to threats to life or safety · Charitable contributions, sponsorships and social projects · Political contributions · Mergers and acquisitions Policy on Gifts and Hospitality and Commercial Bribery Commercial bribery is illegal in many countries.Employees will not accept, directly or indirectly, a business gift or hospitality from a supplier, client, business partner or anyone else working on the Company’s behalf if doing so would appear to obligate the Employee or otherwise improperly influence the Employee’s business decisions.Additionally, Employees will not give a business gift or hospitality if doing so would appear to obligate the recipient or otherwise improperly influence the recipient’s business decisions regarding the Company.In all other cases, unless approved by our Chief Compliance Officer, Employees may only accept or offer a business gift or hospitality if it (1) is consistent with our business practices and local custom, (2) is reasonable under the circumstances and (3) does not violate Company policy or the Law.Employees should disclose any inappropriate gifts or hospitality that they have been offered or have received to our Chief Compliance Officer. Antitrust Compliance Policy The antitrust laws of the United States and other countries apply to the Company and its Employees, and impose restrictions on how we carry out various activities, such as conversations with competitors, partnerships, acquisitions, and participation in trade associations. We are committed to encouraging competition and complying with antitrust and anti-competition Laws. Employees will follow both the letter and spirit of those Laws wherever they are doing business for the Company. Corporate Communications Policy We are committed to providing timely and accurate disclosure to the public of relevant and appropriate Company information.To ensure that the public is consistently and accurately informed, Employees will refer all media inquiries to our Vice President of Investor Relations. Marketing Compliance Policy Employees will transact the scheduling, purchase, sale, transmission and transportation of crude oil, natural gas, natural gas liquids and other commodities in compliance with the Law. Political Contributions Policy We encourage our Employees to exercise their rights of citizenship by voting, making personal political contributions with their own funds and being otherwise politically active based on their beliefs.Employees will not make or promise political contributions from Company resources to any candidate for public office, or to any political party committee or other political committee, except where permitted by Law and approved by our Chief Executive Officer. Employment-at-Will Relationship This Code is a statement of policies for individual and business conduct and does not constitute an employment contract or an assurance of continued employment.Employer and Employee rights are governed by the Laws of the country and state or province of employment and the work rules of any applicable employing units or collective bargaining agreements.Unless otherwise provided by Law, contract or collective bargaining agreement, each Employee is an employee-at-will and has the right to terminate employment at any time, for any reason or no reason at all.The Company may likewise terminate an Employee’s employment at any time, for any lawful reason or no reason at all. ADMINISTRATION OF THE CODE The Code is an important part of our Compliance and Ethics Program, which is designed to prevent and detect criminal conduct and promote an organizational culture that encourages ethical conduct and a commitment to compliance with the Law.Our Chief Executive Officer has overall responsibility for the establishment and maintenance of the program, and our Chief Compliance Officer has responsibility for program implementation, maintenance, monitoring and documentation. Interpretation of the Code Questions concerning the interpretation of the Code will be addressed by our Chief Compliance Officer, in consultation with our Legal Department, Chief Executive Officer and the Audit Committee of our Board of Directors, as appropriate. Review of the Code At least annually, we periodically review our Code and recommend changes to our Board of Directors where appropriate. Such periodic reviews will take into consideration changes in the Company’s risk profile, evolving international and industry best practices, and specific areas in need of improvement identified in response to past issues. Communication of the Code The Code will be provided to all Employees, who will acknowledge receipt to our Vice President of Human Resources.The Company will provide periodic training on the Code, as well as periodic training on various subject areas within the Code for key employees. Monitoring and Auditing We will take reasonable steps to monitor and audit compliance with the Code, establishing systems that are reasonably designed to detect and report Employee conduct in violation of the Code. Reporting and Reviewing System We have established procedures under which potential violations of the Code may be reported and addressed.These procedures include (1) submission of an annual compliance certificate for directors, officers, and Employees with significant responsibility, (2) submission of concerns, complaints or violations to the Audit Committee of the Board of Directors pursuant to the Policy on Reporting Concerns and Complaints Regarding Accounting, Internal Accounting Controls and Auditing Matters posted on our website, (3) submission of concerns, complaints or violations to the Company’s 24-hour Compliance Line at 1-866-311-4219 or to our Chief Compliance Officer (281-943-1517), the Legal Department (281-872-3184) or the Human Resources Department (281-876-8822) and (4) in the case of our Chief Executive Officer and senior financial officers, submission of violations to the Audit Committee pursuant to the Code of Ethics for Chief Executive and Senior Financial Officers posted on our website.Employees wishing to report issues anonymously should contact the Compliance Line. For Employees in non-U.S. locations, the Compliance Line link on Noble’s intranet homepage provides additional access numbers that allow direct calls, without international calling charges, to the Compliance Line from select countries.Compliance Line support is available in local languages, including Spanish and French. The Audit Committee has responsibility for reviewing reported violations of the Code involving officers, and will discuss them with the Board of Directors as appropriate.Non-involved members of the Board of Directors have responsibility for reviewing reported violations of the Code involving directors.Our Chief Compliance Officer has responsibility for reviewing reported violations of the Code by all other Employees, and will report periodically to the Audit Committee on significant allegations, the status of significant investigations, and general trends in allegations, among other matters.The Company may also use independent third parties for auditing and reporting purposes. Anti-Retaliation Policy It is a violation of the Code to take any adverse or retaliatory employment action against an Employee who reports suspected violations in good faith.Each Employee is responsible for reporting behavior that is illegal, unethical, or otherwise in violation of the Code, to appropriate personnel.No Employee who reports an alleged violation of the Code in an appropriate manner will be subject to an adverse employment action because of the report.The Company recognizes, however, that false accusations of unlawful behavior can be damaging to an accused Employee and disruptive to the Company’s operations.Thus, knowingly-made false accusations may constitute misconduct for which disciplinary action may be imposed. Investigation and Remediation of Violations We will investigate and remediate alleged violations of the Code according to standard procedures maintained by the Legal Department.We will also make changes to our Compliance and Ethics Program as necessary to prevent further similar violations, and take appropriate corrective action to address any inappropriate conduct found to have occurred.In our discretion, we may disclose the results of investigations to Law enforcement agencies. Employees are expected to cooperate fully with, and assist us in, any investigation.The confidentiality of all reported alleged violations will be maintained to the extent reasonably possible while allowing us to conduct a full and fair investigation.We will take reasonable steps during the investigation to protect the privacy of, and minimize suspicion toward, all parties concerned. It is imperative that reporting persons not conduct their own preliminary investigations.Investigations of alleged violations may involve complex legal issues, and individual investigations may compromise the integrity of our investigation and adversely affect Employees and the Company. Disciplinary Measures Subject to Laws and applicable agreements, we will consistently enforce the Code through appropriate means of discipline.Pursuant to the foregoing procedures, (1) the Company will determine whether violations of the Code have occurred and, if so, the disciplinary measures to be taken against any Employee not an officer or director of the Company and (2) the Audit Committee or Board of Directors will determine whether violations of the Code have occurred and, if so, the disciplinary measures to be taken against any officer or director of the Company. Disciplinary measures may also be taken against (1) persons who fail to use reasonable care to detect a violation, (2) persons who, if requested to divulge information, withhold material information regarding a violation and (3) supervisors who approve or condone the violations or take adverse employment actions against Employees who have reported violations or violators in good faith. Documentation We will document our compliance efforts and results to evidence our commitment to comply with the standards and procedures set forth above. Effective Date This Code was originally adopted in 2001 and has been periodically revised.This revision is effective as of November 1, 2011. Adherence to Our Code We expect all employees to observe the requirements of the Code. It contains our basic standards of ethical and legal behavior.It emphasizes our commitment to ethics and compliance with the Law.It informs employees about critical issues that require consideration and caution.The Code is also designed as a tool to help prevent, detect and respond to violations of the Company’s policies and the Law. Many of the matters addressed in this Code are complex, subject to changes, and vary from country to country.For this reason, we encourage you to seek appropriate advice if you have any doubt regarding the lawfulness or appropriateness of any action. What is the purpose of the Code? The purpose of the Code is to ensure compliance with our Policy Regarding Laws and Business Conduct by: Setting out that policy and other Company policies involving legal and ethical standards of conduct expected of Employees; Delineating specific consequences where an Employee does not comply with the Code; and Providing a mechanism for administering the Code and ensuring compliance. To whom does the Code apply? The Code applies to all Employees, which includes directors, officers and employees throughout the world, including employees of majority-owned affiliates (e.g., subsidiaries, joint ventures), and third parties such as agents and contractors under circumstances discussed in specific policies and related guidance (e.g., the Policy Regarding Anti-Corruption). It is the personal responsibility of each Employee to adhere to the standards and restrictions imposed by the Code that are applicable to such Employee’s assigned responsibilities. How will conflicts in applying the Code be resolved? The Code has generally been prepared based on U.S. Laws. However, the Company does business in many countries around the world and must also observe the Laws of those countries. Sometimes there may be a conflict between U.S. Laws and those of other countries in which the Company operates. In such cases, the Company will endeavor to resolve the conflict in an appropriate manner, after consultation with the General Counsel. In the event of a conflict between standards and restrictions of the Code and the standards and restrictions imposed by Law, the latter will control. How is compliance with the Code to be administered? Compliance with the Code is administered in various ways, including communication of the Code to Employees, training as to the Code and the Company’s Compliance and Ethics Program, compliance monitoring and auditing (including the use of compliance certifications), reporting and investigation of suspected violations and enforcement through disciplinary measures. What are the consequences of not complying with the Code? Any Employee who does not adhere to the Code is acting outside the scope of employment and may be subject to disciplinary action including counseling, oral or written reprimand, warning, probation or suspension with or without pay, demotion, reduction in salary, termination of employment, or restitution. Applicants for employment who do not meet the requirements of the Code are subject to revocation of any offer of employment from the Company. In addition, if an Employee or applicant for employment violates the Law, the Company may contact appropriate law enforcement authorities for review as to possible civil or criminal prosecutions. How will I learn of modifications to the Code? The Company reserves the right to modify the Code without prior notice. The Company will promptly notify Employees of such modifications in writing, including any necessary updated or revised sections, so that Employees may fulfill their responsibility to maintain a current copy of the Code. Each written modification of the Code will indicate the effective date of modification. Who must approve exceptions to, or waivers of, the Code? Except where otherwise provided in the Code, all exceptions to, or waivers of, the Code must be approved by the Company’s Board of Directors or a Board of Directors committee. To whom should I direct questions about the Code? Some of the policies included in the Code identify specific individuals or groups to which questions may be directed.In all other cases, questions may be directed to your supervisor, the Vice President of Human Resources, Chief Compliance Officer or General Counsel.
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Exhibit 10.2
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement ("Agreement") is effective as of March
3, 2015, by and between RONALD N. TUTOR, as Trustee of the RONALD N. TUTOR
SEPARATE PROPERTY TRUST ("Assignor") and KRISTRA INVESTMENTS, LTD. ("Assignee").
RECITALS
WHEREAS, Assignor hereby assigns, transfers and conveys unto Assignee all of its
right, title, claim and interest in and to that certain real property located
Sylmar, CA and Fontana, CA and more particularly described on Exhibit A attached
hereto ("Property") and Assignee accepts such assignment; and
WHEREAS subject to certain other conditions, including consent of Comerica Bank
("Mortgagee");
covenants, conditions and agreements contained herein, the parties hereby agree
as follows:
1. Assignment. For good and valuable consideration, Assignor hereby grants,
conveys, assigns and transfers to Assignee all of Assignor's title and interest
in, and to a one hundred percent (100%) interest in the Property
2. Indemnification. Assignee hereby indemnifies and will defend and hold
Assignor harmless from any loss, attorney's fees, expenses or claims arising out
of or related to Assignee's failure to perform any of its obligations under the
Agreement pertaining to Assignee's Property (or any portion thereof) from and
3. Binding Effect. This Assignment shall be binding upon and inure to the
ASSIGNOR:/s/ Ronald N. TutorRonald N. Tutor, as TrusteeRonald N. Tutor Separate
Property TrustASSIGNEE:/s/ Ronald N. TutorKristra Investments, Ltd.By: Kristra
Investments, Inc., a California corporationIts: General PartnerBy: Ronald N.
TutorIts: President
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Title: (PA) Child support..is father responsible after possible adoption. (Explain inside)
Question:Have a situation a neighbor is facing and it got me curious as they begin their journey.
The girl got pregnant by her boyfriend. The decision was made to put the child up for birth upon delivery. The father was consulted and agreed...digno paperwork was in any rights to the baby allowing for the adoption.
After the birth, the young woman and her parents decided to keep the child and pulled out if the adoption proceedings without consulting the birth father. Now a few years have passed and I hear they are going after the father for child support.
I am just curious to the legal obligation of the father... considering he was esentially clear of responsibility and then the girl decided to go another direction.
I would be hearing any insights....
Ty
Answer #1: There was no adoption. So no judge removed his rights. Still his kid. Still his obligationAnswer #2: > I am just curious to the legal obligation of the father... considering he was esentially clear of responsibility
Yeah, no. He pays child support and/or maybe becomes a part of the child’s life. That’s his obligation.Answer #3: He is going to owe support, the kid wasn’t placed for adoption, so he is still the legal parent and has an obligation to financially support the kid. If he has not already signed paperwork that establishes his paternity he should verify paternity as a part of the process, but having agreed to allow the adoption and the adoption coming close to happening doesn’t terminate his responsibilities. Close only counts in horseshoes, hand grenades, and atomic bombs. |
Exhibit 10.3
SECURITIES PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 23rd day of March, 2015
by and between THINSPACE TECHNOLOGY, INC., a Delaware corporation (the
Recitals
as amended; and
Agreement, a $50,000 principal amount of 6% convertible debenture, in the form
Stock.
1
Documents.
Debenture.
“Transaction Documents” means this Agreement, the Debenture and the Irrevocable
Transfer Agent Instructions.
2. Purchase and Sale of the Debenture. Subject to the terms and conditions of
Investor, a Debenture in the principal amount of $50,000 in exchange for
$50,000.
offices of Thinspace Technology, Inc. 5535 S. Williamson Blvd, Suite 751, Port
Orange, Florida 32128, or at such other location and on such other date as the
hereto.
rights generally.
2
fully paid, nonassessable and free of pre-emptive rights. Except as described on
equity securities of any kind.
outstanding security.
4.4 Valid Issuance. The Debenture has been duly and validly authorized and, when
by applicable securities laws. Upon the due conversion of the Debenture, the
for those created by the Investor. The Company shall reserve a sufficient number
Transaction Documents.
3
4.7 Use of Proceeds. The net proceeds of the sale of the Debenture hereunder
4.9 Brokers and Finders. No Person will have, except per the Finder’s and
Advisory Agreement dated March 3, 2015 by and between the Company and Robert
Gray as “Finder” and Equinox Securities, Inc. as “Broker”, as a result of the
1933 Act.
Act.
4
certain limited circumstances.
5.10 Brokers and Finders. No Person will have, except per the Finder’s and
6.1 Conditions to the Investor’s Obligations. The obligation of the Investor to
purchase the Debenture at Closing is subject to the fulfillment to such
5
Investor; or
prior to March 24, 2015; provided, however, that, except in the case of clause
6
8. Miscellaneous.
7
interpreting this Agreement.
5535 S. Williamson Blvd, Suite 751
Port Orange, Florida 32128
Fax: 786-763-3830
ICONIC HOLDINGS, LLC
7200 Wisconsin Ave, Suite 206
Bethesda, MD 20814
proceedings.
8
THE COMPANY AND INVESTOR WAIVE ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
arbitrator.
9
written.
The Company: THINSPACE TECHNOLOGY, INC. By: /s/J. Christopher Bautista
Name: J. Christopher Bautista Title: CEO The
Investor: ICONIC HOLDINGS, LLC By: /s/ Michael Sobeck Name:
Michael Sobeck Title: Manager
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Opening of the sitting |
Exhibit 10.24
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of March 14, 2018, (the “Agreement”), is by
and between J. Alexander’s Holdings, Inc., a Tennessee corporation (the
“Company”), and Jason S. Parks (the “Executive”).
WHEREAS, the Company desires to continue to employ the Executive to serve as
Vice President and Chief Information Officer of the Company and the Executive
desires to hold such positions under the terms and conditions of this Agreement;
and
Company.
follows:
1.
Employment. The Company hereby employs the Executive (directly or through a
subsidiary) and the Executive hereby agrees to continue his employment with the
2.
Term.
a)
Subject to termination pursuant to Section 9, the term of the employment by the
Company of the Executive pursuant to this Agreement (as the same may be renewed
or extended, the “Term”) will commence on the date hereof (the “Effective Date”)
and terminate on March 14, 2020.
b)
Commencing on March 14, 2020 and on each subsequent anniversary thereof, this
Agreement shall automatically renew for successive one-year periods upon all
terms and conditions herein, unless either party shall provide written notice to
Notwithstanding any other provision of this Agreement, any non-renewal by the
Company of this Agreement shall constitute a termination by the Company without
Cause and will serve as a termination event giving rise to the Executive’s right
to receive payments pursuant to Section 9(e) as if the expiration of this
Agreement were the Date of Termination, unless employment continues after the
expiration of this Agreement on terms mutually agreed by the Company and the
Executive.
3.
Position. During the Term, the Executive will serve as Vice President and Chief
Information Officer of the Company performing duties commensurate with such
positions and will perform such additional duties as the Board of Directors of
the Company (the “Board”) will determine. The Executive will report to the Chief
Financial Officer of the Company. The Executive agrees to serve, without any
additional compensation, as a member of the board of directors and/or as an
the Executive will resign as a Company (and as a director and/or officer of any
of its subsidiaries), such resignation to be
1
with the Company.
4.
permitted to devote reasonable periods of time to charitable and community
the Executive’s responsibilities under this Agreement.
5.
Salary and Bonus.
a)
For purposes of this Agreement, the “Initial Contract Year” will mean the period
commencing on the Effective Date and ending on March 14, 2020. A “Contract Year”
will mean the Initial Contract Year and any anniversary thereof.
b)
During the Initial Contract Year, the Company or one of its subsidiaries will
pay the Executive a base salary at the rate in effect on the date hereof. Each
calendar year during the term of this Agreement, the Compensation Committee of
the Board (the “Compensation Committee”) will, in good faith, review the
in substantially equal installments in accordance with the Company’s, or such
paying subsidiary’s, as applicable, normal payroll practices.
c)
During each fiscal year of the Company, the Executive will be eligible for a
target cash bonus based on a percentage of his then-current Base Salary to be
designated by the Compensation Committee. The Executive’s entitlement to such
cash bonus, if any, will be determined by the Compensation Committee based on
Compensation Committee’s good faith determination as to whether pre-determined
Company’s year-end financial statements. All such performance targets will be
determined by the Compensation Committee after consulting with Executive.
6.
Long-Term Incentive Awards. The Executive shall participate in any long-term
incentive awards offered to senior executives of the Company, as determined by
the Compensation Committee.
7.
2
8.
Business Expenses. The Executive will be reimbursed for all reasonable business
expenses incurred by him in connection with his employment following timely
submission by the Executive of receipts and other documentation in accordance
with the Company’s normal expense reimbursement policies.
9.
Termination of Agreement. The Executive’s employment by the Company pursuant to
as set forth in this Section 9.
a)
Executive.
b)
Death. The Executive’s employment pursuant to this Agreement will be terminated
will receive, (i) all Base Salary and benefits to be paid or provided to the
Section 9(i) hereof), (ii) any other unpaid benefits (including death benefits)
applicable to the Executive as of the Date of Termination (such benefits shall
be paid in accordance with the provisions of the applicable arrangements) and
(iii) the amount of any cash bonus related to any year ending before the Date of
Termination that has been earned but remains unpaid. The amounts referred to in
clauses (i) and (iii) will be paid to the Executive’s spouse or heirs in a lump
sum no later than thirty (30) days following the date of the Executive’s death,
with the date of such payment within such period determined by the Company in
its sole discretion.
c)
Disability. The Executive’s employment pursuant to this Agreement may be
determined by the independent members of the Board of Directors (or any
Executive’s employment is terminated pursuant to this Section 9(c), the
Termination, (ii) any other unpaid benefits (including disability benefits) to
be paid in accordance with the provisions of the applicable arrangements), (iii)
Termination that has been earned but remains unpaid, and (iv) health insurance
benefits substantially commensurate with the Company’s standard health insurance
benefits for the Executive and the Executive’s spouse and dependents through the
first anniversary of the Date of Termination; provided, however, that such
continued benefits shall terminate on the date or dates Executive receives
substantially similar coverage and benefits, without waiting period or
pre-existing condition limitations, under
3
be determined on a coverage-by-coverage or benefit-by-benefit basis); provided
further, that any continued health insurance benefits which are provided under
this Agreement shall run concurrently with any continuation coverage that the
Executive or the Executive’s spouse and dependents are entitled to under COBRA
and any rights (including the length of coverage) that the Executive and the
Executive’s spouse and dependents may be entitled to under COBRA shall not be
increased (or extended) due to any continued health insurance benefits which may
be provided to the Executive and the Executive’s spouse or dependents pursuant
to this Agreement. The amounts referred to in clauses (i) and (iii) will be paid
to the Executive in a lump sum no later than thirty (30) days following the date
of the Executive’s Date of Termination, with the date of such payment within
such period determined by the Company in its sole discretion.
d)
termination): (i) conviction of a felony or of a crime involving
misappropriation or embezzlement; (ii) willful and material wrongdoing by the
Executive, including, but not limited to, acts of dishonesty or fraud, which
have a material adverse effect on the Company or any of its subsidiaries; (iii)
repeated material failure of the Executive to follow the direction of the
Company and its Board of Directors regarding the material duties of employment;
or (iv) material breach by the Executive of a material obligation under this
Agreement. In order for the Company to be entitled to terminate the Executive
for Cause under this Section 9(d) the following conditions must be met: (A) the
Company shall provide written notice to the Executive of the existence of a
condition described in clauses (i), (ii), (iii) or (iv) above within ninety (90)
days of the initial existence of such condition (which written notice shall
specifically identify the manner in which the Company believes the Executive has
triggered one of the conditions); (B) the Executive shall be entitled to remedy
the condition within thirty (30) days of receiving such notice; and (C) the
Executive shall have failed to remedy the condition during such period. If the
(such amounts shall be paid within thirty (30) days of the Date of Termination,
with the date of such payment determined by the Company in its sole discretion),
to any year ending before the Date of Termination that has been earned but
remains unpaid, with such benefits to be paid in accordance with the applicable
provisions of the applicable arrangement) and no more.
e)
By the Company Without Cause. The Executive’s employment pursuant to this
any year ending before the Date of Termination that has been
4
of the Executive’s Base Salary, (iv) an amount equal to one hundred percent
(100%) of the Executive’s average cash bonus paid (or earned, but not yet paid,
Termination occurs) to Executive in respect of the three most recent fiscal
years immediately preceding the fiscal year in which the Executive’s employment
terminates hereunder, or, if greater than such average, the bonus paid (or
earned, but not yet paid) for the fiscal year immediately preceding the fiscal
year in which the Date of Termination occurs (such average or greater amount,
the “Adjusted Bonus Amount”), (v) health insurance benefits substantially
commensurate with the Company’s standard health insurance benefits for the
Executive and the Executive’s spouse and dependents for eighteen (18) months
following the Date of Termination; provided, however, that such continued
benefits shall terminate on the date or dates Executive receives substantially
limitations, under the plans and programs of a subsequent employer (such
benefit-by-benefit basis); provided further, that any continued health insurance
benefits which are provided under this Agreement shall run concurrently with any
continuation coverage that the Executive or the Executive’s spouse and
dependents are entitled to under COBRA and any rights (including the length of
coverage) that the Executive and the Executive’s spouse and dependents may be
entitled to under COBRA shall not be increased (or extended) due to any
continued health insurance benefits which may be provided to the Executive and
the Executive’s spouse or dependents pursuant to this Agreement; and (vi) any
Date of Termination (such benefits shall be paid in accordance with the
provisions of the applicable arrangements). The amounts referred to in clauses
(i) through (iv) above will be paid to the Executive in a lump sum no later than
sixty (60) days following the Date of Termination, with the date of such payment
determined by the Company in its sole discretion. As a condition to receiving
such payment, the Executive agrees to execute, deliver and not revoke a general
release in the form attached as Exhibit A.
f)
Agreement may be terminated by the Executive by written notice of his
resignation (“Notice of Resignation”) delivered to the Company within two (2)
years of any of the following (each of which will constitute “Good Reason” for
resignation): (i) a material reduction by the Company in the Executive’s title
material reduction in Base Salary; (iii) any material breach of this Agreement
by the Company; or (iv) the Company’s requiring the Executive to relocate his
office location more than fifty (50) miles from Nashville, Tennessee. For
Executive. In order for the Executive to be entitled to resign for Good Reason
under this Section 9(f) the following conditions must be met: (A) the Executive
shall notify the Company of the existence of a condition described in (i), (ii),
or (iii) within ninety (90) days of the initial existence of the condition; (B)
the
5
Company shall be entitled to remedy the condition within thirty (30) days of
receiving such notice; and (C) the Company shall have failed to remedy the
condition during such time period. If the Executive resigns for Good Reason
(100%) of the Adjusted Bonus Amount, (v) health insurance benefits substantially
Executive and the Executive’s spouse and dependents through the first
anniversary of the Date of Termination; provided, however, that such continued
the Executive’s spouse or dependents pursuant to this Agreement, and (vi) any
g)
By the Executive Without Good Reason. The Executive’s employment pursuant to
terminated pursuant to this Section 9(g), the Executive will receive all Base
(such amounts shall be paid in a lump sum within thirty (30) days of the Date of
discretion), any other unpaid benefits to which the Executive is otherwise
Termination which has been earned but remains unpaid, with such benefits to be
paid in accordance with the applicable provisions of the applicable arrangement)
and no more.
6
h)
Following a Change in Control. If, within thirty-six (36) months following a
Change in Control, the Executive (i) is terminated without Cause, or (ii)
Termination, (ii) the amount of any cash bonus related to any year ending before
the Date of Termination that has been earned but remains unpaid, (iii) an amount
equal to one hundred and fifty percent (150%) of the Adjusted Bonus Amount, (iv)
an amount equal to one hundred and fifty percent (150%) of the Executive’s Base
Salary, (v) notwithstanding anything to the contrary in any equity incentive
plan or agreement, all equity incentive awards which are then outstanding, to
the extent not then vested, shall vest, (vi) health insurance benefits
substantially commensurate with the Company’s standard health insurance benefits
for the Executive and the Executive’s spouse and dependents for eighteen (18)
months following the Date of Termination; provided, however, that such continued
the Executive’s spouse or dependents pursuant to this Agreement, and (vii) any
(i) through (iv) above will collectively be referred to as the “Change in
to the Executive in a lump sum no later than sixty (60) days following the Date
sole discretion. The Executive agrees to execute, deliver and not revoke a
Section 9(h) will be made in lieu of, and not in addition to, any payment
i)
employment is terminated pursuant to Section 9(g), the date specified in the
Termination specified therein), or (v) if the Executive’s employment is
7
j)
following events:
i.
Exchange Act, other than the Company or a subsidiary thereof or any employee
owner of the Company’s securities having 35% or more of the combined voting
ii.
merger or other business combination, sales of all or substantially all assets
of the Company or any successor company or entity entitled to vote generally in
the election of the directors of the Company or a successor company or entity
iii.
nomination for election by the Company’s shareholders, of each director of the
of more than the permitted amount of the outstanding voting securities as a
the number of voting securities outstanding, increased the proportional number
of shares beneficially owned by the Subject Person, provided that if a Change in
acquisition by the Company, the Subject Person becomes the beneficial owner of
any additional voting securities, then a Change in Control shall occur.
k)
1986, as amended (the “Code”) and (ii) that the payments will satisfy, to the
(regarding short-term deferrals), 1.409A-
8
Regulation 1.409A-1(i)) of the Company and (ii) that any payments to be provided
otherwise required under this Agreement, then such payments will be delayed
1.409A-1(h)) with the Company. Any payments delayed pursuant to this Section
Treasury Regulation 1.409A-1(h)) and any remaining payments, if applicable,
compensation” within the meaning of Section 409A of the Code, then such amount
exchange for another benefit] Additionally, if the period during which a
release may be considered and become effective and irrevocable in accordance
with this Agreement as a condition to the making hereunder of any payment,
begins in one calendar year (the “earlier year”) and ends in a subsequent
calendar year, then in no event shall any such payment be made in the earlier
year (and, if such payment is delayed under this sentence to the subsequent year
(and is otherwise required to be made under this Agreement), such payment shall
be made as soon as administratively practicable in the subsequent year and any
remaining payments shall continue until the expiration of the applicable payment
period provided under this Agreement. For purposes of the payment or
reimbursement of continuation health coverage under this Agreement, the Company
may treat the amounts paid by it for premiums as taxable to the Executive or
make such payments (less any required withholding) directly to the Executive to
the extent required to avoid adverse consequences to the Executive or the
Company under either Section 105(h) of the Internal Revenue Code of 1986, as
amended (the “Code”), or the Patient Protection and Affordable Care Act of 2010
amended (to the extent applicable) (collectively, the “PPACA”); provided,
further, that the Company
9
may modify or discontinue the continuation coverage contemplated by this
10.
Representations.
a)
The Company represents and warrants that this Agreement has been authorized by
b)
in any way under this Agreement.
11.
12.
Confidentiality; Non-Solicitation; Non-Competition.
a)
the Date of Termination if the Executive receives a payment under Section 9(e),
Section 9(f) or Section 9(h), the Executive will not directly or indirectly
services of any person who is an executive officer of the Company or solicit any
of the Company’s executive officers to terminate their employment or agency with
the Company, except with the Company’s express written consent.
b)
Non-competition. So long as Executive remains employed by the Company, Executive
shall not compete, directly or indirectly, with the Company. For a period of
Company (the “Non-compete Period”) if the Executive receives a payment under
Section 9(e), Section 9(f) or Section 9(h), the Executive shall not enter into
or engage in any business that consists of a casual dining restaurant concept
whose menu is substantially similar to the Company’s menu in a geographic market
where the Company operates a restaurant at the time of the termination of the
Executive (the “Company Business”). For the purposes of this subsection (b),
Executive understands that he shall be competing if he engages in any or all of
the activities set forth herein directly as an individual on his own account, or
indirectly as a partner, joint venturer, employee, agent, consultant, officer
and/or director
10
of any firm, association, corporation, or other entity, or as a stockholder of
any corporation in which Executive owns, directly or indirectly, individually or
not by itself constitute a violation of this subsection (b).
c)
be construed as a series of separate covenants relating to jurisdictions in
which the Company may have a restaurant, one for each state of the United
States, each county of each state of the United States. Except for geographic
event that the provisions of this Section 12 should ever be deemed to exceed the
Section 12 will not preclude the enforcement of any other of said covenants or
covenants.
d)
If the Executive will be in violation of any provision of this Section 12, then
each time limitation set forth in this Section 12 will be extended for a period
then the covenants in this Section 12 will be extended for a period of time
Executive.
13.
Confidentiality.
a)
During the Term and at any time thereafter, Executive shall not disclose,
furnish, disseminate, make available or, except in the ordinary course of
marketing, real estate, or restaurant operations plans.
11
Executive specifically acknowledges that all such information, whether reduced
to writing or maintained in Executive’s mind or memory and whether compiled by
the Company and/or Executive derives independent economic value from not being
economic value from its disclosure or use, that reasonable efforts have been put
forth by the Company to maintain the secrecy of such information, that such
information is and shall remain the sole property of the Company and that any
retention and use of such information during or after the termination of
Executive’s relationship with the Company (except in the course of Executive’s
performance of his duties) shall constitute a misappropriation of the Company’s
trade secrets.
b)
The above restrictions on disclosure and use of confidential information shall
not prevent Executive from: (i) using or disclosing information in the good
faith performance of his duties on behalf of the Company; (ii) using or
disclosing information to another employee to whom disclosure is required to
perform in good faith the duties of either person on behalf of the Company;
(iii) using or disclosing information to another person or entity bound by a
duty or an agreement of confidentiality as part of the performance in good faith
of Executive’s duties on behalf of the Company or as authorized in writing by
the Company; (iv) at any time after the period of Executive’s employment using
or disclosing information to the extent such information is, through no fault or
disclosure of Executive, generally known to the public; (v) using or disclosing
information which was not disclosed to Executive by the Company or otherwise
during the period of Executive’s employment which is then disclosed to Executive
after termination of Executive’s employment with the Company by a third party
who is under no duty or obligation not to disclose such information; or (vi)
disclosing information as required by law. If Executive becomes legally
compelled to disclose any of the confidential information, Executive shall (i)
provide the Company with reasonable prior written notice of the need for such
disclosure such that the Company may obtain a protective order; (ii) if
disclosure is required, furnish only that portion of the confidential
information which, in the written opinion of Executive’s counsel delivered to
the Company, is legally required; and (iii) exercise reasonable efforts to
obtain reliable assurances that confidential treatment shall be accorded to the
confidential information.
14.
Company Remedies. The Executive acknowledges and agrees that the restrictions
and covenants contained in this Agreement are reasonable and necessary to
rendered by him hereunder are of a special, unique and extraordinary character.
To that end, in the event of any breach by the Executive of Section 12 or
inadequate. The Executive further acknowledges that legal counsel of his
counsel, and that he agrees to the terms herein without reservation.
Accordingly, the Executive specifically agrees that the Company will be
all payments not yet paid to him under
12
12 and 13 hereunder, (ii) in the event of such breach, recover an amount equal
to the after-tax payments previously made to the Executive under Section
9(e)(iii), 9(e)(iv), 9(f)(iii), 9(f)(iv), or 9(h)(iii), 9(h)(iv), and (iii)
obtain preliminary and permanent injunctive relief and specific performance for
Agreement. This provision with respect to injunctive relief will not, however,
15.
Entire Agreement. This Agreement and the equity incentive and benefit plans and
during the Term of this Agreement conflicts or is inconsistent with this
Agreement, the terms and conditions of this Agreement shall prevail and
supersede such inconsistent or conflicting term or provision.
16.
or any subsequent time.
17.
given when delivered personally, sent by courier or facsimile (if a facsimile
number is set forth) or registered or certified mail, postage prepaid, return
receipt requested, addressed to the party concerned at the address indicated
hereunder in writing:
Jason S. Parks
3401 West End Ave
Suite 260
Nashville, Tennessee 37203
13
3401 West End Avenue
Suite 260
Nashville, Tennessee 37203
Facsimile: (615) 269-1999
150 3rd Avenue South, Suite 2800
Nashville, Tennessee 37201
Facsimile: (615) 742-2775
Any notice delivered personally or by courier under this Section 17 will be
18.
19.
principles.
20.
State of Tennessee. The Executive and the Company hereby consent to the personal
jurisdiction of these courts and waive any objections that such venue is
objectionable or improper.
21.
Headings. All descriptive headings of sections and paragraphs in this Agreement
22.
14
23.
same instrument.
24.
Expenses Incurred in Enforcing this Agreement. The Executive shall be entitled
to reimbursement of costs and expenses (including reasonable attorneys fees)
incurred by the Executive or his heirs or executors in connection with any claim
or proceeding to enforce this Agreement by Executive.
25.
Tax Matters. By accepting this Agreement, Executive hereby agrees and
acknowledges that neither the Company nor its subsidiaries make any
hereunder (including, without limitation, payments pursuant to Section 9 above).
(i) Executive has obtained independent tax advice regarding the application of
Executive retains full responsibility for the potential application of Section
compensate the Executive for any violation of Section 409A of the Code that may
occur in connection with this Agreement (including, without limitation, payments
pursuant to Section 9 above). The parties agree to cooperate in good faith to
amend such documents and to take such actions as may be necessary or appropriate
15
J. ALEXANDER’S HOLDINGS, INC.
_/s/ Lonnie J. Stout II_____________
Officer
EXECUTIVE
__/s/ Jason S. Parks________________
Jason S. Parks
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13G Under the Securities Exchange Act of 1934 (AMENDMENT NO. 11)* FIRST MARBLEHEAD CORPORATION (Name of Issuer) Common Stock (Title of Class of Securities) 320771108 (CUSIP Number) December 31, 2010 (Date of Event which Requires Filing of this Statement) Check the appropriate box to designate the rule pursuant to which this Schedule is filed: oRule 13d-1(b) oRule 13d-1(c) xRule 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 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. 320771108 13G Page 2 of 6 Pages 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON William R. Berkley 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o (b) x 3 SEC USE ONLY 4 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 5 SOLE VOTING POWER 6 SHARED VOTING POWER 0 7 SOLE DISPOSITIVE POWER 8 SHARED DISPOSITIVE POWER 0 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES o 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 5.04% 12 TYPE OF REPORTING PERSON* IN *SEE INSTRUCTION BEFORE FILLING OUT Page2of 6 pages Item 1(a)Name of Issuer: The First Marblehead Corporation (the “Issuer”) Item 1(b) Address of Issuer's Principal Executive Offices: The Prudential Tower 800 Boylston Street, 34th Floor Boston, MA 02199-8157 Items 2(a) Name of Person Filing; Address of Principal Business Office: William R. Berkley (“Berkley”) Item 2(b) Address of Principal Business Office or, if None, Residence The address of Berkley is: 475 Steamboat Road Greenwich, CT 06830 Item 2(c) Citizenship: For the citizenship of Berkley, see Item 4 of the cover sheet. Item 2(d) Title of Class of Securities: Common Stock, par value $0.01 per share (“Common Stock”) Item 2(e) CUSIP Number: Page3 of 6 pages Item 3 If this statement is filed pursuant to §§240.13d-1(b) or 240.13d-2(b) or (c), check whether the person is filing as a: N/A Item 4. Ownership: (a) Amount beneficially owned: As of December 31, 2010, (i) Berkley owned directly 3,892,525 shares of Common Stock, options to purchase 24,000 shares of Common Stock, which options are currently exercisable and 6,000 stock units issued under the Issuer’s 2003 stock incentive plan, (ii) Berkley Peninsula LLC owned 375,000 shares of Common Stock, and (iii) The Berkley Family Foundation, Inc. (“The Berkley Foundation”) owned 787,024 shares of Common Stock. Berkley is the Managing Director and sole owner of Berkley Peninsula LLC and may be deemed to be the beneficial owner of the shares of Common Stock held by Berkley Peninsula LLC.Berkley is the President of The Berkley Foundation and may be deemed to be the beneficial owner of the shares of Common Stock held by The Berkley Foundation. Berkley disclaims beneficial ownership of all shares of Common Stock owned by The Berkley Foundation. (b) Percent of class Based upon 100,832,576 shares of Common Stock outstanding, as reported in the Issuer’s Form 10-Q filed on November 9, 2010, Berkley is deemed to hold 5.04% of the Issuer’s outstanding Common Stock. (c) Number of shares as to which the person has: William R. Berkley: 5,084,549 shares with sole power to vote or to direct the vote; 0 shares with shared power to vote or to direct the vote; 5,084,549 shares with sole power to dispose of or to direct the disposition of; 0 shares with shared power to dispose of or to direct the disposition of. Page4 of 6 pages Item 5 Ownership of Five Percent or Less of a Class: N/A Item 6 Ownership of More than Five Percent on Behalf of Another Person: N/A Item 7 Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on By the Parent Holding Company: N/A Item 8 Identification and Classification of Members of the Group: N/A Item 9Notice of Dissolution of Group: N/A Item 10 Certification: N/A Page5of 6 pages SIGNATURE After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated:February 3, 2011 By: /s/ William R. Berkley WILLIAM R. BERKLEY Page6of 6 pages
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Exhibit 10.24
Summary of Terms of 2005 Executive Management Bonus Plans
and Non-Employee Director Compensation
A. Leigh Powell, former CEO during 2005
During 2005, Mr. Powell operated under a personal bonus plan that provided the
potential for four quarterly and one additional annual cash bonus payments based
on objective performance criteria approved by the Board of Directors at the
beginning of the year. The maximum annual bonus for which he was eligible was
$250,000. His quarterly bonuses (maximum quarterly potential: $37,500) consisted
of separate payouts for attaining targeted metrics in three areas: (1) Company
revenues (including deferred revenues), 40%; (2) cash operating expenses (with
targeted metrics that rewarded lower expenses), 24%; and (3) Company
profitability, 36%. Mr. Powell’s separate year-end bonus (maximum potential:
$100,000), which was not earned because his employment ended in August 2005, was
based on the same targeted metrics but with annualized goals.
Terrence M. Nicholson, former COO during 2005
During 2005, Mr. Nicholson operated under a personal bonus plan that provided
the potential for four quarterly and one additional annual cash bonus payments
based on objective performance criteria approved by the Board of Directors at
the beginning of the year. The maximum annual bonus for which he was eligible
was $210,000. His quarterly bonuses (maximum quarterly potential: $31,500)
consisted of separate payouts for attaining targeted metrics in three areas:
(1) Company revenues (including deferred revenues), 40%; (2) cash operating
expenses (with targeted metrics that rewarded lower expenses), 24%; and
(3) Company profitability, 36%. Mr. Nicholson’s separate year-end bonus (maximum
potential: $84,000), which was not earned because his employment ended in August
2005, was based on the same targeted metrics but with annualized goals.
Kevin M. Harris, CFO
During 2005, Mr. Harris operated under a personal bonus plan that provided the
$105,000. His quarterly bonuses (maximum quarterly potential: $15,750) consisted
revenues (including deferred revenues), 24%; (2) cash operating expenses (with
targeted metrics that rewarded lower expenses), 52%; and (3) Company
profitability, 24%. Mr. Harris’s separate year-end bonus (maximum potential:
$42,000) was based on the same targeted metrics but with annualized goals.
Kirk Krappé, EVP of Worldwide Markets
During 2005, Mr. Krappé operated under a personal sales commission plan that
paid him quarterly cash awards based on total Company license sales, against
which he received a $15,000 non-recoverable quarterly draw for the first two
quarters of the year.
Robert G. Schwartz, Jr., VP and General Counsel
During 2005, Mr. Schwartz operated under a personal bonus plan that provided the
$89,100. His quarterly bonuses (maximum quarterly potential: $13,365) consisted
revenues (including deferred revenues), 33.3%; (2) expenditures on outside legal
resources (with targeted metrics that rewarded lower expenses), 33.3%; and
(3) Company profitability, 33.3%. Mr. Schwartz’s separate year-end bonus
(maximum potential: $35,640) was based on the same targeted metrics but with
annualized goals.
Our non-employee directors receive compensation in a combination of cash, stock
options and restricted stock. They receive:
• $2,500 per calendar quarter in cash
• a one-time grant of an option to purchase 62,500 shares of common stock,
granted on the date of election to the Board of Directors (vesting in three
equal annual installments beginning on the first anniversary of the option grant
date). The exercise price of all options will be the fair market value of
I-many’s common stock on the date of grant, and the term of each option may not
exceed ten years
• an option to purchase 25,000 shares of common stock, granted on the date
of each annual meeting of stockholders (vesting in three equal annual
installments beginning on the first anniversary of the option grant date). The
exercise price of all options will be the fair market value of I-many’s common
stock on the date of grant, and the term of each option may not exceed ten years
and
• a grant of restricted stock on each January 2 (or January 3 if January 2
is a Company holiday) on which such person is a member of the Board, which the
Company may repurchase for par value if the director’s service ends before the
grant vests. These shares vest if the director remains in the Company’s service
through the announcement of full-year financial results for the year of grant
(that is, approximately 13 months later). The number of shares granted is
determined by dividing $12,000 by the closing market price of I-many’s common
stock on the last trading day before the grant date (December 31, 2005 for the
January 3, 2006 award).
In addition, John Rade will receive a supplemental fee of $100,000 per annum for
serving as Chairman of the Board. This additional compensation is only payable
to a non-employee Director and will not be paid while Mr. Rade serves as Acting |
SUBLEASE AGREEMENT This Sublease Agreement (the “Agreement”) is made and effective February 1, 2014, BETWEEN: CannaSys LLC (the "Sublessee"), a corporation organized and existing under the laws of the, Colorado and licensed to do business in Colorado AND: Motocol LLC (the "Sublessor"), a corporation organized and existing under the laws of the Colorado RECITALS In consideration of the covenants and agreements hereinafter set forth to be kept and performed by the parties hereto, Sublessor, hereby subleases to Sublessee and Sublessee does hereby take, lease, and hire from Sublessor the Leased Premises hereinafter described for the period, and at the rental, subject to, and upon the terms and conditions hereinafter set forth, as follows: 1. DESCRIPTION OF PREMISES a. Lessee has leased office space consisting ofapproximately 4816 rentable square feet of office space from BRCP GREENWOOD COPORATE PLAZA, LLC, lessor, b. Lessee shall demise to sublessee the 430 rentable square feet of the building, more fully described as office #6 and #8 from the main suite entrance. 2. TERM OF SUBLEASE a. The term of this sublease agreement shall be for an initial period of 7 months, commencing on February 1, 2014 and terminating on August 31, 2014 unless earlier terminated by breach of the terms and conditions of this Sublease Agreement. b. Lessor concurs that sublessee may remain in possession of the demised premises for the full term of this sublease agreement, despite any change that may occur in the status of lessee or the lease agreement between lessee and lessor. 3. ACCEPTANCE OF LEASED PREMISES Sublessee’s occupancy of the Leased Premises shall be conclusive evidence of Sublessee's acceptance of all improvements constituting the Leased Premises, in good and satisfactory condition and repair. Sublessee shall accept possession and use of the Leased Premises “as is” in their condition existing as of the date hereof with all faults. Sublessee, at Sublessee’s sole cost and expense, shall promptly comply with all applicable laws, ordinances, codes, rules, orders, directions and regulations of governmental authority governing and regulating the use or occupancy of the Leased Premises as may now or hereafter be in effect during the Term hereof and shall if so required make no alterations, additions or changes to the Leased Premises. - 1 - 4. HOLDING OVER Any holding over of the Leased Premises by Sublessee after the expiration of the Term hereof shall only be with the written consent of Sublessor first had and obtained and shall be construed to be a tenancy from month to month at a rental per month, or portion thereof, in an amount equal to the same percentage in the lease between the sublessor and the landlord of the rent due Sublessor for the month immediately preceding such holding over, and shall otherwise be on the same terms, conditions and covenants herein specified. 5. SUBLEASE TERMINATION AND CONDITION OF PREMISES Upon the termination of this Sublease for any reason whatsoever, Sublessee shall return possession of the Leased Premises to Sublessor or Sublessor’s authorized agent in a good, clean and safe condition, reasonable wear and tear excepted. On or before, and in any event no later than 10 days following the date Sublessee vacates the Leased Premises and returns possession of same to Sublessor, Sublessee and Sublessor, or authorized agents thereof, shall conduct a joint inspection of the Leased Premises. Sublessee at its cost shall thereafter promptly repair or correct any defects or deficiencies in the condition of the Leased Premises, reasonable wear and tear excepted. 6. RENT Sublessee shall pay to lessee as base annual rent for the lease term as follows: AnnualMonthly Period of the lease termRate Base Rent 2/1/2014 - 8/31/2014$ 0 $ 1,200.00 7. PAYMENT OF RENT Sublessee hereby covenants and agrees to pay rent to Sublessor, without offset or deduction of any kind whatsoever, in the form and at the times as herein specified. All rent shall be paid to Sublessor at the address specified in this Sublease unless and until Sublessee is otherwise notified in writing. Base Minimum Rent payments in the monthly amount set forth above shall be payable monthly, in advance, due on the first (1st) day of each calendar month commencing on the Commencement Date hereof and delinquent if not paid on or before the tenth (10th) day of the month throughout the Term of this Sublease. Rent for any period which is for less than one month shall be a pro rata portion of the monthly installment. The required payments under Article 6 and all other charges payable by Sublessee shall be deemed to be additional rent. 8. DELINQUENT PAYMENTS In the event Sublessee shall fail to pay the rent or any installment thereof, or any other fees, costs, taxes or expenses payable under this Sublease within 20 days after the said payment has become due, Sublessee agrees that Sublessor will incur additional costs and expenses in the form of extra collection efforts, administrative time, handling costs, and potential impairment of credit on loans for which this Sublease may be a security. Both parties agree that in such event, Sublessor, in addition to its other remedies shall be entitled to recover a late payment charge against Sublessee equal to [10%] of the amount not paid within said 20 day period. Additionally, any past due amounts under this Sublease shall bear interest at the rate of the lesser of 2% per month or the maximum rate permitted by applicable law. Sublessee further agrees to pay Sublessor any cost incurred by Sublessor in effecting the collection of such past due amount, including but not limited to attorneys' fees and/or collection agency fees. Sublessor shall have the right to require Sublessee to pay monies due in the form of a cashier's check or money order. Nothing herein contained shall limit any other remedy of Sublessor with respect to such payment delinquency. - 2 - 9. SECURITY DEPOSIT On execution of this Sublease, Sublessee shall deposit with Sublessor a sum equal to $0.00 (the “Security Deposit”) in order to provide security for the performance by Sublessee of the provisions of this Sublease. If Sublessee is in default, Sublessor may, but shall not be obligated to use the Security Deposit, or any portion of it, to cure the default or to compensate Sublessor for damage sustained by Sublessor resulting from Sublessee's default. Sublessee shall immediately on demand pay to Sublessor a sum equal to the portion of the Security Deposit expended or applied by Sublessor as provided in this paragraph so as to maintain the Security Deposit in the sum initially deposited with Sublessor. At the expiration or termination of this Sublease, Sublessor shall return the Security Deposit to Sublessee or its successor, less such amounts as are reasonably necessary to remedy Sublessee's defaults, to repair damages the Leased Premises caused by Sublessee or to clean the Leased Premises upon such termination, as soon as practicable thereafter. In the event of the sale or other conveyance of the Leased Premises, the Security Deposit will be transferred to the purchaser or transferee and the Sublessor will be relieved of any liability with reference to such Security Deposit. Sublessor shall not be required to keep the Security Deposit separate from its other funds, and (unless otherwise required by law) Sublessee shall not be entitled to interest on the Security Deposit. USE OF PREMISES a. Permitted Use: The Leased Premises are to be used by Sublessee for the sole purpose of GENERAL AND EXECUTIVE OFFICES and for no other purpose whatsoever. Sublessee shall not use or occupy the Leased Premises or permit the same to be used or occupied for any use, purpose or business other than as provided in this Section a) during the Term of this Sublease or any extension thereof. b. Prohibited Activities: During the Term of Sublease or any extension thereof, Sublessee shall not: i. Use or permit the Leased Premises to be used for any purpose in violation of any statute, ordinance, rule, order, or regulation of any governmental authority regulating the use or occupancy of the Leased Premises. ii. Cause or permit any waste in or on the Leased Premises. iii. Use or permit the use of the Leased Premises in any manner that will tend to create a nuisance or tend to adversely affect or injure the reputation of Sublessor or its affiliates. - 3 - iv. Allow any activity to be conducted on the premises or store any material on the Leased Premises which will increase premiums for or violate the terms of any insurance policy(s) maintained by or for the benefit of Sublessor. v. Store any explosive, radioactive, dangerous, hazardous or toxic materials in or about the Leased Premises. vi. Use or allow the Leased Premises to be used for sleeping quarters, dwelling rooms or for any unlawful purpose. vii. Build any fences, walls, barricades or other obstructions; or, install any radio, television, phonograph, antennae, loud speakers, sound amplifiers, or similar devices on the roof, exterior walls or in the windows of the Leased Premises, or make any changes to the interior or exterior of the Leased Premises without Sublessor's prior written consent. c. Operational Permits: Sublessee, prior to the Commencement Date, shall obtain and thereafter continuously maintain in full force and effect for the Term of this Sublease or any extension thereof, at no cost or expense to Sublessor, any and all approvals, licenses, or permits required by any lawful authority as of the Commencement Date or imposed thereafter, for the use of Leased Premises, including but not limited to business licenses. d. Compliance With Laws: Sublessee shall comply with all federal, state, county, municipal, or other statutes, laws, ordinances, regulations, rules, or orders of any governmental or quasi-governmental entity, body, agency, commission, board, or official applicable to the Leased Premises and Sublessee’s business. MAINTENANCE AND ALTERATIONS a. Maintenance by Sublessee: Sublessee shall, at its sole cost and expense, keep in good and safe condition, order and repair all portions of the Leased Premises and all facilities appurtenant thereto and every part thereof which Sublessor is responsible to maintain or repair as lessee under the Master Lease, including without limitation, all plumbing, heating, air conditioning, ventilating, sprinkler, electrical and lighting facilities, interior walls, interior surfaces of exterior walls, floors, ceilings, windows, doors, entrances, all glass (including plate glass), and skylights located within the Leased Premises, walkways, parking and service areas within or adjacent to the Leased Premises. If the Leased Premises are not so maintained, and such condition continues 72 hours after notice or exists upon expiration or termination hereof, Sublessor may cause such maintenance to be performed at Sublessee's expense and/or may obtain maintenance contracts for the Store and charge the Sublessee for same. Sublessor shall, when and if it deems necessary, make any and all repairs on the Leased Premises, and Sublessee hereby consents to such actions by Sublessor. Sublessor may charge the Sublessee for any of the foregoing repairs, if, in Sublessor’s opinion, such repairs are occasioned by Sublessee's abuse or neglect. Sublessee shall not modify, alter, or add to the Leased Premises without the prior written consent of Sublessor. b. Damage; Abatement of Rent: Notwithstanding anything in this Sublease to the contrary, Sublessee at its own cost and expense shall repair and replace as necessary all portions of the Leased Premises damaged by Sublessee, its employees, agents, invitees, customers or visitors. There shall be no abatement of rent or other sums payable by Sublessee prior to or during any repairs by Sublessee or Sublessor hereunder. - 4 - c. Alterations and Liens: Sublessee shall not make or permit any other person to make any structural changes, alterations, or additions to the Leased Premises or to any improvement thereon or facility appurtenant thereto without the prior written consent of Sublessor first had and obtained. Sublessee shall keep the Leased Premises free and clear from any and all liens, claims, and demands for work performed, materials furnished, or operations conducted on the Leased Premises at the instance or request of Sublessee. As a condition to giving its consent to any proposed alterations, Sublessor may require that Sublessee remove any or all of said alterations at the expiration or sooner termination of the Sublease term and restore the Leased Premises to its condition as of the date of Sublessee's occupation of the Leased Premises. Prior to construction or installation of any alterations, Sublessor may require Sublessee to provide Sublessor, at Sublessee's sole cost and expense, a lien and completion bond in an amount equal to one and one-half times the estimated cost of such alterations, to insure Sublessor against any Liability for mechanic's and materialmen's liens and to insure completion of the work. Should Sublessee make any alterations without the prior written consent of Sublessor, Sublessee shall remove the same at Sublessee’s expense upon demand by Sublessor. d. Inspection by Sublessor: Sublessee shall permit Sublessor or Sublessor’s agents, representatives, designees, or employees to enter the Leased Premises at all reasonable times for the purpose of inspecting the Leased Premises to determine whether Sublessee is complying with the terms of this Sublease and for the purpose of doing other lawful acts that may be necessary to protect Sublessor’s interest in the Leased Premises under this Sublease, or to perform Sublessor’s duties under this Sublease, or to show the Leased Premises to insurance agents, lenders, and other third parties, or as otherwise allowed by law. e. Plans and Permits: Any alteration that Sublessee shall desire to make in or about the Leased Premises and which requires the consent of Sublessor shall be presented to Sublessor in written form, with proposed detailed plans and specifications therefor prepared at Sublessee's sole expense. Any consent by Sublessor thereto shall be deemed conditioned upon Sublessee’s acquisition of all permits required to make such alteration from all appropriate governmental agencies, the furnishing of copies thereof to Sublessor prior to commencement of the work, and the compliance by Sublessee with all conditions of said permits in a prompt and expeditious manner, all at Sublessee's sole cost and expense. f. Construction Work Done by Sublessee: All construction work required or permitted to be done by Sublessee shall be performed by a licensed contractor in a good and workmanlike manner and shall conform in quality and design with the Leased Premises existing as of the Commencement Date, and shall not diminish the value of the Leased Premises in any way whatsoever. In addition, all such construction work shall be performed in compliance with all applicable statutes, ordinances, regulations, codes and orders of governmental authorities and insurers of the Leased Premises. Sublessee or its agents shall secure all licenses and permits necessary therefor. g. Title to Alterations: Unless Sublessor requires the removal thereof, any alterations which may be made on the Leased Premises, shall upon installation or construction thereof on the Leased Premises become the property of Sublessor and shall remain upon and be surrendered with the Leased Premises at the expiration or sooner termination of the term of this Sublease. Without limiting the generality of the foregoing, all heating, lighting, electrical (including all wiring, conduits, main and subpanels), air conditioning, partitioning, drapery, and carpet installations made by Sublessee, regardless of how affixed to the Leased Premises, together with all other alterations that have become a part of the Leased Premises, shall be and become the property of Sublessor upon installation, and shall not be deemed trade fixtures, and shall remain upon and be surrendered with the Leased Premises at the expiration or sooner termination of this Sublease - 5 - INDEMNITY AND INSURANCE a. Hold-Harmless Clause: Sublessee agrees to indemnify, defend and hold Sublessor, the property of Sublessor, and the Leased Premises, free and harmless from any and all claims, liability, loss, damage, or expenses incurred by reason of this Sublease or resulting from Sublessee’s occupancy and use of the Leased Premises (other than as a result of the direct gross negligence of Sublessor), specifically including, without limitation, any claim, liability, loss, or damage arising by reason of: i. The death or injury of any person or persons, including Sublessee, any person who is an employee or agent of Sublessee, or by reason of the damage to or destruction of any property, including property owned by Sublessee or any person who is an employee or agent of Sublessee, and caused or allegedly caused by either the condition of the Leased Premises, or some act or omission of Sublessee or of some agent, contractor, employee, or invitee of Sublessee on the Leased Premises; ii. Any work performed on the Leased Premises or materials furnished to the Leased Premises at the instance or request of Sublessee or any agent or employee of Sublessee; and iii. Sublessee's failure to perform any provision of this Sublease or to comply with any requirement of law or any requirement imposed on the use by Sublessee of the Leased Premises by any governmental agency or political subdivision. iv. Maintenance of the insurance required under this Article shall not relieve Sublessee of the obligations of indemnification contained in this Section. b. Liability Insurance: Sublessee shall, at its own cost and expense, secure and maintain during the term of this Sublease, a comprehensive broad form policy of Combined Single Limit Bodily Injury and Property Damage Insurance issued by a reputable company authorized to conduct insurance business in the State of COLORADO insuring Sublessee against loss or liability caused by or connected with Sublessee’s use and occupancy of the Leased Premises in an amount not less than $1,000,000 per occurrence. c. Casualty and Fire Insurance: At all times during the Term hereof, Sublessee shall keep the Leased Premises and personal property thereon insured against loss or damage by fire, windstorm, hail, explosion, damage from vehicles, smoke damage, vandalism, casualty and malicious mischief and such other risks as are customarily included in “all risk” extended insurance coverage, including coverage for business interruption, in an amount equal to not less than $500,000 of the actual replacement value of the Leased Premises and the personal property, fixtures, and other property on the Leased Premises. d. Workers' Compensation Insurance: During the term of this Sublease, Sublessee shall comply with all Workers' Compensation laws applicable on the date hereof or enacted thereafter and shall maintain in full force and effect a Workers’ Compensation Insurance policy covering all employees in any way connected with the business conducted by Sublessee pursuant to this Sublease and shall pay all premiums, contributions, taxes and such other costs and expenses as are required to be paid incident to such insurance coverage, all at no cost to Sublessor. - 6 - e. Policy Form: The policies of insurance required to be secured and maintained under this Sublease shall be issued by good, responsible companies, qualified to do business in the State of COLORADO, with a general policy holders’ rating of at least “A”. Executed copies of such policies of insurance or certificates thereof shall be delivered to Sublessor and to the Master Lessor under the Master Lease not later than 30 days prior to the commencement of business operations of Sublessee at the Leased Premises and thereafter, executed copies of renewal policies of insurance or certificates thereof shall be delivered to Sublessor within 30 days prior to the expiration of the term of each such policy. All such policies of insurance shall contain a provision that the insurance company writing such policy(s) shall give Sublessor at least 15 days' written notice in advance of any cancellation or lapse, or the effective date of any reduction in the amounts or other material changes in the provisions of such insurance. All policies of insurance required under this Sublease shall be written as primary coverage and shall list the Master Lessor under the Master Lease and the Sublessor as loss payees and as additional insureds. If Sublessee fails to procure or maintain in force any insurance as required by this Section or to furnish the certified copies or certificates thereof required hereunder, Sublessor may, in addition to all other remedies it may have, procure such insurance and/or certified copies or certificates, and Sublessee shall promptly reimburse Sublessor for all premiums and other costs incurred in connection therewith. f. Waiver of Subrogation: Sublessee agrees that in the event of loss or damage due to any of the perils for which it has agreed to provide insurance, Sublessee hereby waives any and all claims that it might otherwise have against Sublessor with respect to any risk insured against to the extent of any proceeds realized from the insurance coverage to compensate for a loss. To the extent permitted by applicable insurance policies without voiding coverage, Sublessee hereby releases and relieves Sublessor, and waives its entire right of recovery against Sublessor for loss or damage arising out of or incident to the perils insured against to the extent of insurance proceeds realized for such loss or damage, which perils occur in, on or about the Leased Premises and regardless of the cause or origin, specifically including the negligence of Sublessor or its agents, employees, contractors and/or invitees. Sublessee shall to the extent such insurance endorsement is available, obtain for the benefit of Sublessor a waiver of any right of subrogation which the insurer of such party might otherwise acquire against Sublessor by virtue of the payment of any loss covered by such insurance and shall give notice to the insurance carrier or carriers that the foregoing waiver of subrogation is contained in this Sublease. CONDEMNATION AND DESTRUCTION a. Total Condemnation: Should, during the Term of this Sublease or any renewal or extension thereof, title and possession of all of the Leased Premises be taken under the power of eminent domain by any public or quasi-public agency or entity, this Sublease shall terminate as of the date actual physical possession of the Leased Premises is taken by the agency or entity exercising the power of eminent domain and both Sublessor and Sublessee shall thereafter be released from all obligations under this Sublease. b. Termination Option for Partial Condemnation: Should, during the Term of this Sublease or any renewal or extension thereof, title and possession of substantially all of the floor area of the Leased Premises, and/or substantially all of the parking area of the Leased Premises be taken under the power of eminent domain by any public or quasi-public agency or entity, Sublessor may terminate this Sublease. The option herein reserved shall be exercised by giving written notice on or before 30 days after actual physical possession of the portion subject to the eminent domain power is taken by the agency or entity exercising that power and this Sublease shall terminate as of the date the notice is deemed given. - 7 - c. Partial Condemnation Without Termination: Should Sublessee or Sublessor fail to exercise the termination option described in this Article, or should the portion of the Leased Premises taken under the power of eminent domain be insufficient to give rise to the option therein described, then, in that event: i. This Sublease shall terminate as to the portion of the Leased Premises taken by eminent domain as of the day (hereinafter called the “date of taking”), actual physical possession of that portion of the Leased Premises is taken by the agency or entity exercising the power of eminent domain; ii. Base Minimum Rent to be paid by Sublessee to Sublessor pursuant to the terms of this Sublease shall, after the date of taking, be reduced by an amount that bears the same ratio to the Base Minimum Rent specified in this Sublease as the square footage of the actual floor area of the Leased Premises taken under the power of eminent domain bears to the total square footage of floor area of the Leased Premises as of the date of this Sublease; and iii. Except to the extent the Master Lessor under the Master Lease is so obligated, Sublessee, at Sublessee's own cost and expense shall remodel and reconstruct the building remaining on the portion of the Leased Premises not taken by eminent domain into a single efficient architectural unit in accordance with plans mutually approved by the parties hereto as soon after the date of taking, or before, as can be reasonably done. d. Condemnation Award: Should, during the Term of this Sublease or any renewal or extension thereof, title and possession of all or any portion of the Leased Premises be taken under the power of eminent domain by any public or quasi-public agency or entity, the compensation or damages for the taking awarded shall belong to and be the sole property of the Sublessor. e. Destruction: (a) In the event the Leased Premises are damaged or destroyed by fire or other casualty so as to render the premise wholly untenable Sublessor, at Sublessor's option, may: i. Continue this Sublease in full force and effect by restoring, repairing or rebuilding the Leased Premises at Sublessor's own cost and expense or through insurance coverage; or ii. Terminate this Sublease by serving written notice of such termination on Sublessee no later than 60 days following such casualty, in which event this Sublease shall be deemed to have been terminated on the date of such casualty. iii. In the event the Leased Premises are damaged or destroyed and Sublessee will not be able to operate any business thereon for 180 consecutive days, Sublessee, at Sublessee's option, may terminate this Sublease by serving written notice of such termination on Sublessor no later than 60 days following such casualty, in which event this Sublease shall be deemed terminated on the date of such casualty; provided, however, that such termination right shall not be applicable unless Sublessor has a similar termination right under the Master Lease. - 8 - iv. Should Sublessor or the Master Lessor under the Master Lease elect to repair and restore the Leased Premises to their former condition following partial or full destruction of the Leased Premises: 1. Sublessee shall not be entitled to any damages for any loss or inconvenience sustained by Sublessee by reason of the making of such repairs and restoration. 2. Sublessor and such Master Lessor shall have full right to enter upon and have access to the Leased Premises, or any portion thereof, as may be reasonably necessary to enable such parties promptly and efficiently to carry out the work of repair and restoration. f. Damage by Sublessee: Sublessee shall be responsible for and shall pay to Sublessor any and all losses, damages, costs, and expenses, including but not limited to attorney's fees, resulting from any casualty loss caused by the negligence or wilful misconduct of Sublessee or its employees, agents, contractors, or invitees. SUBLEASING, ASSIGNMENT, DEFAULT AND TERMINATION a. Subleasing and Assignment: Sublessee shall not sell, assign, hypothecate, pledge or otherwise transfer this Sublease, or any interest therein, either voluntarily, involuntarily, or by operation of law, and shall not sublet the Leased Premises, or any part thereof, or any right or privilege appurtenant thereto, for any reason whatsoever, or permit the occupancy thereof by any person, persons, or entity through or under it, or grant a security interest in Sublessee's interest in the Leased Premises or this Sublease or any fixtures located on the Leased Premises, without the prior written consent of Sublessor first had and obtained, which may be given or withheld in the Sublessor’s sole and absolute discretion. For the purpose of this Section, any dissolution, merger, consolidation or other reorganization of Sublessee, or any change or changes in the stock ownership of Sublessee, which aggregates [%] or more of the capital stock of Sublessee shall be deemed to be an assignment of this Sublease. Sublessee shall not mortgage, hypothecate or encumber this Sublease. Sublessor's consent to one assignment, subletting, occupancy, or use by any other person, entity or entities shall not relieve Sublessee from any obligation under this Sublease and shall not be deemed to be a consent to any subsequent assignment, subletting, occupancy or use. Any assignment, pledge, subletting, occupancy or use without Sublessor's written consent shall be void and shall, at the option of the Sublessor, terminate this Sublease. Should this Sublease be assigned, or should the Leased Premises or any part thereof be sublet or occupied by any person or persons other than the original Sublessee hereunder, Sublessor may collect rent from the assignee, sublessee or occupant and apply the net amount collected to the rent herein reserved, but no such assignment, subletting, occupancy or collection of rent shall be deemed a consent to such assignment, subletting or occupancy or a waiver of any term of this Sublease, nor shall it be deemed acceptance of the assignee, sublessee or occupant as a tenant, or a release of Sublessee from the full performance by Sublessee of all the terms, provisions, conditions and covenants of this Sublease. In the event Sublessee wishes to assign this Sublease or sublet or allow the use of the Leased Premises or any part thereof, Sublessee shall give Sublessor not less than 60 days written notice thereof and shall, in such notice, provide the name of the proposed assignee or sublessee, its proposed use of the Leased Premises, its background, such financial and credit information as Sublessor may require to determine the business experience, financial stability and creditworthiness of the proposed assignee or sublessee, and such additional information as Sublessor may request. - 9 - b. Events of Default: Sublessee's failure to timely pay any rent, taxes or other charges required to be paid pursuant to the terms of this Sublease shall constitute a material breach of this Sublease and an event of default if not paid by Sublessee within 10 days of the date such rent, taxes or charges are payable. Events of default under this Sublease shall also include, without limitation, the events hereinafter set forth, each of which shall be deemed a material default of the terms of the Sublease if not fully cured within 5 days of occurrence. Such events shall include: i. Sublessee’s failure to perform or observe any term, provisions, convenant, agreement or condition of this Sublease; ii. Sublessee breaches this Sublease and abandons the Leased Premises before expiration of the Term of this Sublease; iii. Any representation or warranty made by Sublessee in connection with this Sublease between Sublessee and Sublessor proving to have been incorrect in any respect; iv. Sublessee's institution of any proceedings under the Bankruptcy Act, as such Act now exists or under any similar act relating to the subject of insolvency or bankruptcy, whether in such proceeding Sublessee seeks to be adjudicated a bankrupt, or to be discharged of its debts or effect a plan of liquidation, composition or reorganization; v. The filing against Sublessee of any involuntary proceeding under any such bankruptcy laws; vi. Sublessee's becoming insolvent or being adjudicated a bankrupt in any court of competent jurisdiction, or the appointment of a receiver or trustee of Sublessee's property, or Sublessee's making an assignment for the benefit of creditors; vii. The issuance of a writ of attachment by any court of competent jurisdiction to be levied on this Lease; or viii. Any event which is an event of default under the Master Lease or which would become so with the passage of time or the giving of notice or both. c. Sublessor's Remedies for Sublessee's Default: Upon the occurrence of any event of default described in Section 10.02 hereof, Sublessor may, at its option and without any further demand or notice, in addition to any other remedy or right given hereunder or by law, do any of the following: i. Sublessor may terminate Sublessee's right to possession of the Leased Premises by giving written notice to Sublessee. If Sublessor gives such written notice, then on the date specified in such notice, this Sublease and Sublessee's right of possession shall terminate. No act by Sublessor other than giving such written notice to Sublessee shall terminate this Sublease. Acts of maintenance, efforts to relet the Leased Premises, or the appointment of a receiver on Sublessor's initiative to protect Sublessor's interest under this Sublease shall not constitute a termination of Sublessee's right to possession. On termination, Sublessor has the right to recover from Sublessee: 1. The worth at the time of the award of the unpaid rent and other charges that had been earned or owed to Sublessor at the time of termination of this Sublease; - 10 - 2. The worth at the time of the award of the amount by which (a) the unpaid rent and other charges that would have been earned or owed to Sublessor after the date of termination of this Sublease until the time of award exceeds (b) the amount of such rental loss that Sublessee proves could have been reasonably avoided; 3. The worth at the time of the award of the amount by which (a) the unpaid rent and other charges for the balance of the term after the time of award exceeds (b) the amount of such rental loss that Sublessee proves could have been reasonably avoided; and 4. Any other amount necessary to compensate Sublessor for all the detriment caused by Sublessee's failure to perform its obligations under this Sublease or which in the ordinary course of things would be likely to result therefrom, including without limitation any costs or expenses incurred by Sublessor in recovering possession of the Leased Premises, maintaining or preserving the Leased Premises after such default, preparing the Leased Premises for reletting to a new tenant, or any repairs or alterations to the Leased Premises for such reletting, and all leasing commissions, reasonable attorney's fees, architect's fees and any other costs incurred by Sublessor to relet the Leased Premises or to adapt them to another beneficial use. Sublessee shall also indemnify, defend and hold Sublessor harmless from all claims, demands, actions, liabilities and expenses (including but not limited to reasonable attorney's fees and costs) arising prior to the termination of this Sublease or arising out of Sublessee's use or occupancy of the Leased Premises. ii. Sublessor may, in any lawful manner, re-enter and take possession of the Leased Premises without terminating this Sublease or otherwise relieving Sublessee of any obligation hereunder. Sublessor is hereby authorized, but not obligated (except to the extent required by law), to relet the Leased Premises or any part thereof on behalf of the Sublessee, to use the premises for its or its affiliates' account, to incur such expenses as may be reasonably necessary to relet the Leased Premises, and relet the Leased Premises for such term, upon such conditions and at such rental as Sublessor in its sole discretion may determine. Until the Leased Premises are relet by Sublessor, if at all, Sublessee shall pay to Sublessor all amounts required to be paid by Sublessee hereunder. If Sublessor relets the Leased Premises or any portion thereof, such reletting shall not relieve Sublessee of any obligation hereunder, except that Sublessor shall apply the rent or other proceeds actually collected by it as a result of such reletting against any amounts due from Sublessee hereunder to the extent that such rent or other proceeds compensate Sublessor for the non-performance of any obligation of Sublessee hereunder. Such payments by Sublessee shall be due at such times as are provided elsewhere in this Sublease, and Sublessor need not wait until the termination of this Sublease, by expiration of the term hereof or otherwise, to recover them by legal action or in any other manner. Sublessor may execute any lease made pursuant hereto in its own name, and the tenant thereunder shall be under no obligation to see to the application by Sublessor of any rent or other proceeds by Sublessor, nor shall Sublessee have any right to collect any such rent or other proceeds. Sublessor shall not by any re-entry or other act be deemed to have accepted any surrender by Sublessee of the Leased Premises or Sublessee's interest therein, or be deemed to have otherwise terminated this Sublease, or to have relieved Sublessee of any obligation hereunder, unless Sublessor shall have given Sublessee express written notice of Sublessor's election to do so as set forth herein. - 11 - iii. Even though Sublessee has breached this Sublease and may have abandoned or vacated the Leased Premises, this Sublease shall continue in effect for so long as Sublessor does not terminate Sublessee's right to possession, and Sublessor may enforce all its rights and remedies under this Sublease, including the right to recover the rent and other charges as they become due under this Lease. iv. In the event any personal property of Sublessee remains at the Leased Premises after Sublessee has vacated, it shall be dealt with in accordance with the statutory procedures provided by applicable law dealing with the disposition of personal property of Sublessee remaining on the Leased Premises after Sublessee has vacated. v. Sublessor may exercise any right or remedy reserved to the Master Lessor under the Master Lease (each of which rights and remedies are hereby incorporated herein), and any other remedy or right now or hereafter available to a landlord against a defaulting tenant under applicable law or the equitable powers of its courts, whether or not otherwise specifically reserved herein. vi. Sublessor shall be under no obligation to observe or perform any provision, term, covenant, agreement or condition of this Sublease on its part to be observed or performed which accrues after the date of any default by Sublessee hereunder. vii. Any legal action by Sublessor to enforce any obligation of Sublessee or in the pursuance of any remedy hereunder shall be deemed timely filed if commenced at any time prior to 2year after the expiration of the term hereof or prior to 5 years after the cause of action accrues, whichever period expires later. viii. In any action of unlawful detainer commenced by Sublessor against Sublessee by reason of any default hereunder, the reasonable rental value of the Leased Premises for the period of the unlawful detainer shall be deemed to be the amount of rent and additional charges reserved in this Sublease for such period. ix. Sublessee hereby waives any right of redemption or relief from forfeiture under any present or future law, if Sublessee is evicted or Sublessor takes possession of the Leased Premises by reason of any default by Sublessee hereunder. x. No delay or omission of Sublessor to exercise any right or remedy shall be construed as a waiver of any such right or remedy or of any default by Sublessee hereunder. d. Receiver: Upon the occurrence of any event of default as defined in Article 16 b) hereof or in any action instituted by Sublessor against Sublessee to take possession of the Leased Premises and/or to collect Base Minimum Rent, or any other charge due hereunder, a receiver may be appointed at the request of Sublessor to collect such rents and profits, to conduct the business of Sublessee then being carried on in the Leased Premises and to take possession of any property belonging to Sublessee and used in the conduct of such business and use the same in conducting such business on the Leased Premises without compensation to Sublessee for such use. Neither the application nor the appointment of such receiver shall be construed as an election on the Sublessor’s part to terminate this Sublease unless written notice of such intention is given by Sublessor to Sublessee. - 12 - e. Attorneys' Fees: If as a result of any breach or default in the performance of any of the provisions of this Sublease, Sublessor uses the services of an attorney in order to secure compliance with such provisions or recover damages therefor, or to terminate this Sublease or evict Sublessee, Sublessee shall reimburse Sublessor upon demand for any and all attorneys' fees and expenses so incurred by Sublessor, including without the limitation appraisers' and expert witness fees; provided that if Sublessee shall be the prevailing party in any legal action brought by Sublessor against Sublessee, Sublessee shall be entitled to recover the fees of its attorneys in such amount as the court may adjudge reasonable. Sublessee shall advance to Sublessor any and all attorneys' fees and expenses to be incurred or incurred by Sublessor in connection with any modifications to this Sublease proposed by Sublessee, any proposed assignment of this Sublease by Sublessee or any proposed subletting of the Leased Premises by Sublessee. f. Cumulative Remedies; No Waiver: The specified remedies to which Sublessor may resort under the terms hereof are cumulative and are not intended to be exclusive of any other remedy or means of redress to which Sublessor may be lawfully entitled in case of any breach or threatened breach by Sublessee of any provision hereof. If for any reason Sublessor fails or neglects to take advantage of any of the terms of this Sublease providing for termination or other remedy, any such failure of Sublessor shall not be deemed to be a waiver of any default of any of the provisions, terms, covenants, agreements or conditions of this Sublease. The waiver by Sublessor of any breach of any term, condition or covenant herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, condition or covenant herein contained. None of the provisions, terms, covenants, agreements or conditions hereof can be waived except by the express written consent of Sublessor. Subsequent acceptance of rent hereunder by Sublessor shall not be deemed to be a waiver of any preceding breach by Sublessee of any provision, term, covenant, agreement or condition of this Sublease other than the failure of Sublessee to pay the particular rental accepted, regardless of Sublessor’s knowledge of such preceding breach at the time of acceptance of such rent. FORCE MAJEURE – UNAVOIDABLE DELAYS Should the performance of any act required by this Sublease to be performed by either Sublessor or Sublessee be prevented or delayed by reason of an act of God, war, civil commotion, fire, flood, or other like casualty, strike, lockout, labor troubles, inability to secure materials, restrictive governmental laws or regulations, unusually severe weather, or any other cause, except financial inability, not the fault of the party required to perform the act, the time for performance of the act will be extended for a period equivalent to the period of delay and performance of the act during the period of delay will be excused; provided, however, that nothing contained in this section shall excuse the prompt payment of rent or other monies due by Sublessee as required by this Sublease or the performance of any act rendered difficult solely because of the financial condition of the party, Sublessor or Sublessee, required to perform the act. NOTICES Except as otherwise expressly provided by law, any and all notices or other communications required or permitted by this Sublease or by law to be served on or given to either party hereto by the other party hereto shall be in writing and shall be deemed duly served and given when personally delivered to the party, Sublessor or Sublessee, to whom it is directed or any managing employee of such party, or, in lieu of such personal service, [NUMBER] hours after deposit in the United States mail, certified or registered mail, with postage prepaid, or when transmitted by telecopy or facsimile addressed to the parties as set forth on the signature page hereof. Either party, Sublessor or Sublessee, may change the addresses herein contained for purposes of this Section by giving written notice of the change to the other party in the manner provided in this Section. - 13 - AMENDMENTS No amendment, change or modification of this Sublease shall be valid and binding unless such is contained in a written instrument executed by the parties hereto and which instrument expresses the specific intention of the parties to amend, change or modify this Sublease. ACCORD AND SATISFACTION No payment by Sublessee or receipt by Sublessor of a lesser amount than the monthly rent herein stipulated shall be deemed to be other than on account of the stipulated rent earliest in time, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction and Sublessor may accept such check or payment without prejudice to Sublessor's right to recover the balance of such rent or pursue any other remedy provided in this Sublease or by law. NO AGENCY CREATED Nothing contained in this Sublease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent, or of partnership, or of joint venture, or of any association whatsoever between Sublessor and Sublessee other than sublessor and sublessee. BROKERAGE COMMISSION Sublessee represents that neither it nor any of its affiliates has engaged the services of any real estate broker, finder, or any other person or entity in connection with this lease transaction and therefore should Sublessee be found to be in violation of such representation, Sublessee shall indemnify Sublessor against any and all claims for brokerage commissions or finders fees in connection with this transaction, and to indemnify, defend and hold Sublessor free and harmless from all liabilities arising from any such claim, including without limitation, attorneys’ fees in connection therewith. SOLE AND ONLY AGREEMENT This instrument constitutes the sole and only agreement between Sublessor and Sublessee respecting the Leased Premises or the leasing of the Leased Premises to Sublessee. Sublessor shall have no obligations to Sublessee, whether express or implied, other than those specifically set forth in this Sublease. SEVERABILITY AND GOVERNING LAW This Sublease shall be governed by the laws of the State of COLORADO. Whenever possible each provision of this Sublease shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Sublease shall be prohibited, void, invalid, or unenforceable under applicable law, such provision shall be ineffective to the extent of such prohibition, invalidity, voidability, or enforceability without invalidating the remainder of such, or the remaining provisions of this Sublease. - 14 - CONSTRUCTION AND HEADINGS All references herein in the singular shall be construed to include the plural, and the masculine, and the masculine to include the feminine or neuter gender, where applicable, and where the context shall require. Section headings are for convenience of reference only and shall not be construed as part of this Sublease nor shall they limit or define the meaning of any provision herein. The provisions of this Sublease shall be construed as to their fair meaning, and not strictly for or against Sublessor or Sublessee. AUTHORITY Each individual executing this Sublease on behalf of Sublessee and the Sublessee does hereby covenant and warrant that (i) Sublessee is a duly authorized and validly existing entity, (ii) Sublessee has and is qualified to do business in California, (iii) the entity has full right and authority to enter into this Sublease, and (iv) each person executing this Sublease on behalf of the entity was authorized to do so. SURVIVAL All obligations of Sublessee under this Sublease, including without limitation the obligations to pay Base Minimum Rent, shall survive the expiration or termination of this Sublease. WAIVER Sublessee hereby waives any rights it may have under the provisions of COLORADO LAW, if applicable, and any similar statutes regarding repair of the Leased Premises or termination of this Sublease after destruction of all or any part of the Leased Premises. RECORDATION Sublessee shall not record this Sublease or a short form memorandum hereof without the prior written consent of the Sublessor. TRANSFER OF MASTER LEASE In the event of any assignment or transfer of the Master Lease by Sublessor to any other party or entity, Sublessor shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Sublease arising out of any act, occurrence or omission occurring after the consummation of such assignment or transfer; and the assignee or such transferee shall be deemed, without any further agreement between parties or their successors in interest or between the parties and any such assignee or transferee, to have assumed and agreed to carry out any and all of the covenants and obligations of the Sublessor under this Sublease. Sublessee hereby agrees to attorn to any such assignee or trustee. Sublessee agrees to execute any and all documents deemed necessary or appropriate by Sublessor to evidence the foregoing. - 15 - SUBORDINATION, ATTORNMENT Without the necessity of any additional document being executed by Sublessee for the purpose of effecting a subordination, this Sublease shall in all respects be subject and subordinate at all times to the lien of any mortgage or deed of trust which may now exist or hereafter be executed in any amount for which the Leased Premises or Sublessor's interest or estate is specified as security. Notwithstanding the foregoing, Sublessor shall have the right to subordinate or cause to be subordinated any lien or encumbrance to this Sublease. In the event that any mortgage or deed of trust is foreclosed or a conveyance in lieu of foreclosure is made for any reason, Sublessee shall, notwithstanding any subordination, attorn to and become the sublessee of the successor in interest to Sublessor, at the option of such successor in interest. Sublessee covenants and agrees to execute and deliver, upon demand by Sublessor and in the form requested by Sublessor, any additional documents evidencing the priority or subordination of this Sublease. NO MERGER The voluntary or other surrender of this Sublease by Sublessee, or a mutual cancellation hereof, shall not work a merger, and shall, at the option of Sublessor, terminate all or any existing subleases or subtenancies or may, at the option of Sublessor, operate as an assignment to Sublessor of any or all such subleases or subtenancies. RIGHT OF SUBLESSOR TO PERFORM All terms, covenants and conditions of this Sublease to be performed or observed by Sublessee shall be performed or observed by Sublessee at its sole cost and expense and without any reduction of rent of any nature payable hereunder. If Sublessee shall fail to pay any sum of money, other than rent required to be paid by it hereunder or shall fail to perform any other term or covenant hereunder on its part to be performed, Sublessor, without waiving or releasing Sublessee from any obligation of Sublessee hereunder, may, but shall not be obligated to, make any such payment or perform any such other term or covenant on Sublessee's part to be performed. All sums so paid by Sublessor and all necessary costs of such performance by Sublessor, together with interest thereon from the date of payment at the rate eighteen percent (18%) or the highest rate permissible by law, whichever is less, shall be paid, and Sublessee covenants to make such payment, to Sublessor on demand, and Sublessor shall have, in addition to any over right or remedy of Sublessor, the same rights and remedies in the event of nonpayment thereof by Sublessee as in the case of failure in the payment of rent hereunder. SUBLESSOR’S PERSONAL LIABILITY The liability of Sublessor to Sublessee for any default by Sublessor under the terms of this Sublease shall be limited to the interest of Sublessor in the Leased Premises and Sublessee agrees to look solely to Sublessor's interest in the Leased Premises for the recovery of any judgment from Sublessor, it being intended that Sublessor shall not be personally liable for any judgment or deficiency. BREACH BY LANDLORD Sublessor shall not be deemed to be in breach in the performance of any obligation required to be performed by it hereunder unless and until it has failed to perform such obligation within 30 days after written notice by Sublessee to Sublessor specifying wherein Sublessor has failed to perform such obligation; provided, however, that if the nature of Sublessor's obligation is such that more than 10 are required for its performance then Sublessor shall not be deemed to be in breech if it shall commence such performance within such 30 day period and thereafter diligently prosecute the same to completion. In any event, Sublessee must bring an action for breach of this Sublease within 3 year of Sublessor’s breach or be deemed to have waived the breach and not harmed thereby. - 16 - SURVIVAL OF INDEMNITIES The obligations of the indemnifying party under each and every indemnification and hold harmless provision contained in this Sublease shall survive the expiration or earlier termination of this Sublease to and until the last to occur of (a) the last date permitted by law for bringing of any claim or action with respect to which indemnification may be claimed by the indemnified party against the indemnifying party under such provision or (b) the date on which any claim or action for which indemnification may be claimed under such provision is fully and finally resolved and, if applicable, any compromise thereof or judgment or award thereon is paid in full by the indemnifying party and the indemnified party is reimbursed by the indemnifying party for any amounts paid by the indemnified party in compromise thereof or upon a judgment or award thereon and in defense of such action or claim, including attorneys’ fees incurred. OPTION TO RENEW Subject to the receipt by lessee of an extension of the original lease agreement for a sufficient duration to include this renewal, at any time before the commencement of the last calendar month of the first term of this sublease agreement, sublessee is granted the option and privilege of extending and renewing the term of this sublease agreement for an additional 2-year period at an annual rental to be agreed on or arbitrated as provided in this sublease agreement. MEANING OF CONSENT Whenever an act or provision contained in this Sublease is conditioned upon the consent or approval of Sublessor, this shall be interpreted to mean, unless otherwise specified to the contrary, that the Sublessor has the full unconditional right and sole discretion as to whether or not to give its consent, which may only be given in writing. QUIET ENJOYMENT If sublessee performs the terms of this sublease agreement, lessee will warrant and defend sublessee in the enjoyment and peaceful possession of the demised premises during the term of this sublease agreement without any interruption by lessee or lessor or either of them or any person rightfully claiming under either of them. MASTER LEASE Notwithstanding anything in this Sublease to the contrary, the rights of Sublessee shall be subject to the terms and conditions contained in the lease (“Master Lease”) between Sublessor and the owner of the Leased Premises (the “Master Lessor''), as it may be amended from time to time. Sublessee shall assume and perform and comply with the obligations of the lessee under the Master Lease to the same extent as if references to the Sublessor therein were references to Sublessee (all of which obligations are hereby incorporated herein), including, without limitation, the payment of any and all costs, expenses, charges, fees, taxes, payments or other monetary obligations (except for minimum rent and percentage rent) for which Sublessor is liable or responsible under the Master Lease, as such costs, expenses, charges, fees, taxes, payment or other monetary obligations come due. Sublessee shall not commit or permit to be committed on the Leased Premises any act or omission which shall violate any term or condition of the Master Lease. Notwithstanding anything in this Sublease to the contrary, the effectiveness of this Sublease shall be conditioned upon Sublessor obtaining the written consent of the Master Lessor (if such consent is required under the Master Lease), in form and substance satisfactory to Sublessor, within ten (10) days of the date hereof. If the Master Lease terminates for any reason, this Sublease shall terminate coincidentally therewith without any liability of Sublessor to Sublessee. - 17 - IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. SUBLESSORSUBLESSE Motocol LLCCannaSys LLC Authorized SignatureAuthorized Signature Print Name and TitlePrint Name and Title - 18 -
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FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the month of June 2015 MEDIGUS LTD. (Translation of registrant's name into English) Omer Industrial Park, No. 7A, P.O. Box 3030, Omer 8496500, Israel (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 xForm 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. Yes oNo x CONTENTS On June 14, 2015, Medigus Ltd, (the “Registrant” or the “Company”) published immediate reports on the MAGNA site of the Israel Securities Authority and Tel Aviv Stock Exchange regarding the following matters, which are summarized below: 1) The results of a special general meeting of shareholders of the Company held on June 14, 2015 at 11 a.m., according to which the following resolution was duly approved: The shareholders of the Company approved to authorize the Company, as of the date of the meeting of the shareholders of the Company, to change from reporting in accordance with Chapter F of the Israeli Securities Law, 5728-1968 (the “Law”) and start reporting in accordance with Chapter E3 of the Law and the regulations promulgated thereunder, namely, in accordance with the U.S. securities regulation, all in accordance with and subject to the provisions of Section 35XXXII of the Law. The resolution was approved by the required majority: Total amount of shares participating in the voting:126,068,569 Amount of shares voting in favor: 122,874,963 (97.47%) Amount of shares voting against: 3,193,606 (2.53%) Amount of shares voting in favor, excluding the Company’s controlling shareholders: 68,324,955 (95.53%) Amount of shares voting against, excluding the Company’s controlling shareholders: 3,193,606 (4.47%) 2) The results of a special general meeting of the holders of Series 8 Warrantsof the Company held on June 14, 2015 at 12 p.m., according to which the following resolution was duly approved: The holders of the Series 8 warrants of the Company approved to authorize the Company, as of the date of the meeting of the holders of Series 8 Warrantsof the Company, to change from reporting in accordance with Chapter F of the Israeli Securities Law, 5728-1968 (the “Law”) and start reporting in accordance with Chapter E3 of the Law and the regulations promulgated thereunder, namely, in accordance with the U.S. securities regulation, all in accordance with and subject to the provisions of Section 35XXXII of the Law. The resolution was approved by the required majority: Total amount of Series 8 warrants participating in the voting:7,953,500 Amount of Series 8 warrants voting in favor: 7,479,500 (94.04%) Amount of Series 8 warrants voting against: 474,000 (5.96%) Amount of Series 8 warrants voting in favor, excluding the Company’s controlling shareholders: 7,000,000 (93.66%) Amount of Series 8 warrants voting against, excluding the Company’s controlling shareholders: 474,000 (6.34%) 3) Changing the Company’s reporting regime in accordance with American securities laws In accordance with Section 35XXXIII of the Israel Securities Law 1968 (the "Law"), and pursuant to aforementioned approvals of the shareholders and the holders of Warrants (Series 8) of the Company dated June 14, 2015 to change from reporting in accordance with Chapter F of the Law and start reporting in accordance with Chapter E3 of the Law and the regulations promulgated thereunder (namely, in accordance with the U.S. securities laws and regulations), and in accordance with the exemption from reporting under Chapter F of the Law which was received from the Israel Securities Authority, the Company announcedthat as of June 14, 2015 it shall commence reporting to the Israel Securities Authority and the Tel Aviv Stock Exchange in accordance with the provisions of Chapter E3 of the Law and the regulations promulgated thereunder (i.e., in accordance with US securities laws and regulations), all as described in the Notices and Proxy Statements of Special General Meetings of the Shareholders of the Company and of the holders of Warrants (Series 8) of the Company which were published by the Company on May 21, 2015. 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. MEDIGUSLTD. Date:June 15, 2015 By: /s/ Oded Yatzkan Oded Yatzkan Chief Financial Officer
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Title: Steam will not give me a refund on a game.
Question:Steam has VAC banned my copy of Black Ops 2. I have barely put 4 hours into it. When asked about it they said that they would not even give a reason for it. What can I do?
I can give screenshots if needed.
I live in New Hampshire, USA.
Topic:
Intellectual Property
Answer #1: If you got a VAC ban, it means that you violated the TOS for steam. One of the other parts of the TOS says that they won't refund you for a VAC ban.
You could try and fight it, but its generally not successful, as you agreed to those terms when you signed up for steam. |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): October 15, 2010 CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. (Exact name of registrant as specified in its charter) BERMUDA 0-24796 98-0438382 (State or other jurisdiction of incorporation and organisation) (Commission File Number) (IRS Employer Identification No.) Mintflower Place, 4th floor8 Par-La-Ville Rd, Hamilton, Bermuda HM 08 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (441) 296-1431 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 (see General Instruction A.2. below): 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 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item7.01 Regulation FD Disclosure On October 15, 2010, Central European Media Enterprises Ltd. (the “Company”) issued a news release announcing the pricing of the previously disclosed private placement of 9.0% senior secured notes due 2017 in the aggregate principal amount of €170,000,000 (approximately US$237.3 million) by CET 21 spol. s r.o., a wholly owned subsidiary of the Company.A copy of the press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is herein incorporated by reference. Item9.01- Financial Statements and Exhibits (d) The following exhibit is furnished under Item7.01 as part of this report: 99.1 Press release dated October 15, 2010. The information furnished under Item7.01 “RegulationFD Disclosure” shall not be deemed “filed” for purpose of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned thereunto duly authorized. CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. Date: October 15, 2010 /s/ David Sturgeon David Sturgeon Deputy Chief Financial Officer
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Title: Cop gave me the finger(on video) than ticketed me for speeding.
Question:So recently I was driving in Washington and got pulled over for speeding. the ticket and cop says I was going 75 in a 55(20 over), but he dropped it to 65 in a 55(10 over) for a $125 fine.
I am fairly certain I was not speeding to begin with and extremely confident I was in no way going 75 on that stretch of road. The ticket shows he used a speed measuring device(smd) to clock my speed even though he was moving in front of me. he was in no way pacing me for any length of time and being ahead of me I have no idea how he determined my speed.
Now the part that got to me the most was him giving me the finger prior to pulling me over. He then claimed i was tailing him "while he was speeding in response to a call". My dash cam shows otherwise. The video needs to be cleaned up but even now you can see him giving me the finger prior to pulling me over.
My questions are:
1) how could he measure my speed accurately when he was driving ahead of me without pacing me?
2) can I use this video to help me at all when I contest the ticket
3) if i have the video cleaned up will it be inadmissible as evidence?
tl;dr:
Cop gave me the finger then a ticket. hoping for some sweet justice.
Edit:I apologize if I sounded like i was trying to get out of something I did. I want to contest because I was not speeding and felt the officer was very unprofessional whether or not he made a mistake.
Seems like the consensus is I cant use the video in court but I can file a complaint against the officer.
Answer #1: Yes, you can use the video as evidence, but I doubt it is going to help you.
Here is what the cop is going to say in court:
"On such and such a date, I observed Defendant speeding on Speedtrap Road. I followed him at a distance of X feet and used my Super Duper Radar Gun, Model XR-725H, last calibrated by the Bumblephuck Police Department on September 25, to clock Defendant at a speed of 75 mph. I wrote Defendant a ticket for 65 in a 55 as he was cooperative and respectful, blah, blah."
Or he will just say that he was doing 80 in response to a call and he could tell by your distance from him that you were doing 75, based on his training received at the Bumblephuck police department where he was last certified on July 5th, etc, etc.
Giving you the finger was unprofessional but the judge is not going to drop the ticket because of that.
Now, if the cop does not show up, it will be dismissed and you have about a 50/50 chance of that in a large county. |
EXHIBIT 10.12
Mindspeed Technologies, Inc. (the "Company") has entered into an
agreement with each of the following persons, which is substantially identical,
except as set forth below, to the Form of Employment Agreement filed as
Exhibit 10.8.1 to the Company's Registration Statement on Form 10 (File
No. 1-31650):
Najabat H. Bajwa
Simon Biddiscombe
Kurt F. Busch
Ron Cates
Raouf Y. Halim
Gerald J. Hamilton
Thomas J. Medrek
Wayne K. Nesbit
Thomas A. Stites
Preetinder S. Virk
QuickLinks
EXHIBIT 10.12
|
Exhibit 10.1
EMPLOYMENT AGREEMENT
between ION Geophysical Corporation, a Delaware corporation (hereinafter
referred to as “Employer”), and Gregory J. Heinlein (hereinafter referred to as
“Employee”), effective as of November 28th, 2011 (the “Effective Date”).
WHEREAS, Employer has offered Employee employment with Employer as its Senior
Vice President and Chief Financial Officer in an “offer letter” dated
October 20, 2011 and executed by Employee November 3, 2011 (the “Offer Letter”),
the entirety of which is incorporated herein by reference;
WHEREAS, Employee desires to enter into the employment of Employer as its Senior
Vice President and Chief Financial Officer, pursuant to the terms set out in the
Offer Letter and this Agreement; and Employer desires to employ Employee in such
position, pursuant to the terms set out in the Offer Letter and this Agreement;
follows:
Section 1. Severance.
(a) If (i) Employee’s employment with Employer is terminated during the term of
this Agreement by Employer for no reason or for any reason other than Cause or
the death or Disability of Employee or (ii) Employee terminates his employment
with Employer for Good Reason; then Employer will pay or provide to Employee the
following:
(1) Employee’s base salary earned and payable through the Date of Termination;
(2) Any unpaid incentive compensation earned by Employee pursuant to the terms
of the relevant incentive compensation arrangement with respect to the year of
the Date of Termination. Any such amount payable to Employee pursuant to the
foregoing shall be payable to Employee at such time that incentive compensation
for such year is paid to other recipients under the plan and shall be subject to
the terms or requirements of such incentive compensation as may be set forth in
the plan or established by the Board of Directors of Employer or Compensation
Committee;
highest annual base salary earned during the term of his employment with
Employer, which Severance Payment will be paid to Employee over a two-year
period in accordance with Employer’s normal payroll practices; and
(4) Employee’s vesting and exercise rights with regard to outstanding stock
-1-
Except as otherwise provided above, all other compensation and benefits will
cease upon the Date of Termination other than the following: (i) those benefits
that are provided by retirement and benefit plans and programs specifically
adopted and approved by Employer for Employee that are earned and vested by the
Date of Termination; and (ii) medical and similar benefits the continuation of
which is required by applicable law or as provided by the applicable benefit
plan. As a condition to making the payments and providing the benefits specified
in this Section 1, Employer will require that Employee execute a release in form
and substance reasonably satisfactory to Employer of all claims Employee may
have against Employer at the time of Employee’s termination.
(b) As used in this Agreement, “Disability” means permanent and total disability
amended (the “Code”), or any successor provision) which has existed for at least
180 consecutive days.
(1) the willful and continued failure by Employee to substantially perform his
employment obligations to Employer (other than any such failure resulting from
has failed to remedy the situation within ten (10) days after such demand, or a
turpitude; or
(3) Employee’s material breach of this Agreement, which breach has not been
notice from Employer that he is in material breach of this Agreement, specifying
then in office at a meeting of the Board called and held
-2-
that, in the good faith opinion of the Board of Directors, Employee has
committed an act set forth above in this Section 1(c) and specifying the
particulars thereof in detail. Nothing herein shall limit the right of Employee
or his or her legal representatives to contest the validity or propriety of any
such determination.
(d) As used in this Agreement, “Good Reason” means any of the following:
(1) a reduction in any material respect in Employee’s position, duties or
responsibilities with Company, or
(2) a reduction of Employee’s annual base salary, unless agreed to by Employee.
(e) Any termination by Employer of Employee’s employment with Employer shall be
communicated by written notice (a “Notice of Termination”) from Employer to
Employee that shall:
termination;
(2) indicate the specific provision of this Agreement pursuant to which Employee
is to receive compensation and other benefits as a result of such termination;
and
(3) otherwise comply with the provisions of this Section 1(e).
notice is given. If the notice states that Employee’s employment with Employer
is terminated by Employer as a result of the occurrence of Cause, the Notice of
Termination shall specifically describe the action or inaction of Employee that
Employer believes constitutes Cause and shall be accompanied by a copy of the
resolution satisfying Section 1(c).
(1) if Employee’s employment with Employer is terminated for Disability, sixty
(60) days after Notice of Termination is received by Employee or any later date
-3-
(3) if Employee’s employment with Employer is terminated for Cause, the date
Notice of Termination, accompanied by a copy of the resolution satisfying
Section 1(c), is received by Employee or any later date specified therein,
Employee will comply with such considerations or requirements;
(4) if Employee’s employment with Employer is terminated for any reason other
than Employee’s Disability, Employee’s death or Cause, or for no reason, the
Termination; or
(5) if Employee terminates his employment for Good Reason, the date that is
fourteen (14) days after the date of Employer’s receipt of Employee’s written
resignation.
(g) Nothing in this Section 1 shall prevent or limit Employee’s continuing or
Section 2. Fiduciary Duty; Confidentiality.
(a) In keeping with Employee’s fiduciary duties to Employer, Employee agrees
that he will not knowingly take any action that would create a conflict of
(b) As part of Employee’s fiduciary duties to Employer, Employee agrees to
protect and safeguard Employer’s information, ideas, concepts, improvements,
discoveries, and inventions and any proprietary, confidential and other
information relating to Employer or its business (collectively, “Confidential
Information”) and, except as may be required by Employer, Employee will not
knowingly, either during his employment by Employer or thereafter, directly or
indirectly, use for his own benefit or for the benefit of another, or disclose
to another, any Confidential Information, except (i) with the prior written
consent of Employer; (ii) in the course of the proper performance of Employee’s
duties under this Agreement; (iii) for information that becomes generally
available to the public other than as a result of the unauthorized disclosure by
Employee; (iv) for information that becomes available to Employee on a
-4-
(c) Upon termination of his employment with Employer, Employee will immediately
deliver to Employer all documents in Employee’s possession or under his control
which embody any of Employer’s Confidential Information.
(d) In addition to the foregoing provisions of this Section 2, and effective as
commencement of employment.
(e) Employee will comply with Employer’s Code of Ethics, and any amendments or
Section 3. Term of Agreement. The term of this Agreement will commence effective
as of the Effective Date, and, subject to the terms and conditions hereof, will
continue for as long as Employee is employed by Employer as its Senior Vice
President and Chief Financial Officer (or similar title). Notwithstanding any
provision contained herein to the contrary, Employee acknowledges that his
employment with Employer is at will and that Employer may terminate his
employment at any time and for any reason or for no reason at the discretion of
Employer, but subject to any rights Employee has under Section 1 of this
Agreement.
Section 4. Non-Competition; Non-Solicitation; No Hire.
(a) Employee agrees that, effective as of the Effective Date and for a period of
competition with the “Business” (as defined in Section 4(d)) of Employer or any
and valid under applicable law
-5-
but if any provision of this covenant not to compete shall be prohibited by or
invalid under applicable law, such provision of this covenant not to compete
invalidating the remaining provisions of this covenant not to compete. If any
provision of this covenant not to compete shall, for any reason, be judged by
judgment shall not affect, impair or invalidate the remainder of this covenant
not to compete but shall be confined in its operation to the provision of this
covenant not to compete directly involved in the controversy in which such
judgment shall have been rendered. In the event that the provisions of this
covenant not to compete should ever be deemed to exceed the time or geographic
limitations permitted by applicable laws, then such provision shall be reformed
to the maximum time or geographic limitations permitted by applicable law.
(b) In addition to the restrictions set forth in Section 4(a), Employee agrees
that, during the Non-Compete Period, Employee will not, either directly or
with the Business of Employer or any of its subsidiaries or affiliates the names
and addresses of any of the suppliers or customers of Employer or any of its
subsidiaries or affiliates, potential customers of Employer or any of its
subsidiaries or affiliates upon whom Employer or any of its subsidiaries or
affiliates has called upon in the twelve (12) months preceding the Date of
solicit or take away any of the suppliers or customers of Employer or any of its
subsidiaries or affiliates, whether for Employee or for any other person, firm
or entity.
(c) Regardless of the reason for any termination of Employee’s employment,
effective as of the Effective Date and for twelve (12) months following the Date
of Termination, Employee will not, either on his or her own account or for any
other person, firm, partnership, corporation, or other entity (i) solicit any
employee of Employer or any of its subsidiaries or affiliates to leave such
employment; or (ii) induce or attempt to induce any such employee to breach her
or his employment agreement with Employer or any of its subsidiaries or
affiliates. This restriction shall not apply in the case of any employee or
former employee of Employer who at his or her own initiative seeks, without
solicitation or encouragement by Employee, a change of employment or responds to
solicitations made by means of general advertisement.
(d) As used in this Agreement, “Business” means the business of (i) design,
manufacture, marketing and sale of equipment for seismic acquisition,
(ii) seismic processing (iii) seismic navigation and data management software or
(iv) planning, performing or licensing multi-client seismic surveys.
(e) In the event that Employee breaches or violates any of the terms and
conditions of this Section 4 during the Non-Compete Period, then in addition to
the other rights and remedies available to Employer hereunder, Employer’s
obligations to pay to Employee any remaining installments of the Severance
Payment otherwise due and owing pursuant to Section 1 hereof, shall cease and
terminate.
-6-
Section 5. Successors; Binding Agreement.
(a) This Agreement is personal to Employee and without the prior written consent
of Employer shall not be assignable by Employee otherwise than by will or the
and be enforceable by Employee’s personal or legal representatives, executors,
agreement provided for in this Section 5(c) or which otherwise becomes bound by
(a) All notices and other communications required or permitted hereunder or
necessary or convenient in connection herewith will be in writing and will be
to the addresses set forth below in this Section 6(a):
ION Geophysical Corporation
Houston, TX 77042-2839
ION Geophysical Corporation
Attention: General Counsel
Gregory J. Heinlein
1924 Wimberly Lane
Austin, TX 78735
-7-
Section.
(b) This Agreement supersedes, replaces and merges all previous agreements and
discussions relating to the same or similar subject matters between Employee and
Employer and constitutes the entire agreement between Employee and Employer with
respect to the subject matter of this Agreement, except for any other agreements
expressly referred to in this Agreement, each of which shall remain in full
force and effect. This Agreement may not be modified in any respect by any
representative of Employer or by any written agreement unless signed by an
officer of Employer who is expressly authorized by the Board to execute such
document.
(c) If any provision of this Agreement or application thereof to any one or
under any circumstances should be determined to be invalid or unenforceable,
such invalidity or unenforceability will not affect any other provisions or
unenforceable provision or application. In addition, if any provision of this
Agreement is held by an arbitration panel or a court of competent jurisdiction
to be invalid, unenforceable, unreasonable, unduly restrictive or overly broad,
the parties intend that such arbitration panel or court modify said provision so
as to render it valid, enforceable, reasonable and not unduly restrictive or
overly broad.
(d) The internal laws of the State of Texas will govern the interpretation,
validity, enforcement and effect of this Agreement without regard to the place
of execution or the place for performance thereof.
(e) The covenants, agreements, rights and obligations of Employer under this
Agreement, and the covenants, agreements, rights and obligations of Employee
under this Agreement, shall survive the termination of this Agreement for any
reason including, but not limited to, the termination of Employee’s employment
with Employer. All covenants, agreements, indemnities, warranties, rights and
obligations contained herein shall continue for so long as necessary in order
for Employer and Employee to enforce their rights hereunder.
Section 7. Arbitration.
(a) Employer and Employee agree to submit to final and binding arbitration any
and all disputes or disagreements concerning the interpretation or application
of this Agreement. Any such dispute or disagreement will be resolved by
Arbitration will take place in Houston, Texas, unless the parties mutually agree
to a different location. Within thirty (30) calendar days of the initiation of
arbitration hereunder, each party will designate an arbitrator. The appointed
arbitrators will then appoint a third arbitrator. Employee and Employer agree
that the decision of the arbitrators will be final and binding on both parties.
the arbitrators.
(b) Notwithstanding the provisions of Section 6(a), Employer may, if it so
relief to enforce Employee’s obligations under Section 4.
-8-
EMPLOYER: ION GEOPHYSICAL CORPORATION By:
/s/ R. Brian Hanson
R. Brian Hanson President and Chief Operating Officer EMPLOYEE:
/s/ Gregory J. Heinlein
Gregory J. Heinlein
-9- |
Exhibit 10.1
SEMILEDS CORPORATION
2010 EQUITY INCENTIVE PLAN
(AS ADOPTED NOVEMBER 2, 2010 AND EFFECTIVE DECEMBER 8, 2010)
(AS AMENDED JANUARY 9, 2014 AND APPROVED BY STOCKHOLDERS ON APRIL 10, 2014)
TABLE OF CONTENTS
Page
ARTICLE 1.
INTRODUCTION
1
ARTICLE 2.
ADMINISTRATION
1
2.1
Committee Composition
1
2.2
Committee Responsibilities
1
2.3
Non-Officer Grants
2
ARTICLE 3.
SHARES AVAILABLE FOR GRANTS
2
3.1
Basic Limitation
2
3.2
Shares Returned to Reserve
2
3.3
Dividend Equivalents
2
ARTICLE 4.
GENERAL
3
4.1
Eligibility
3
4.2
Incentive Stock Options
3
4.3
Other Grants
3
4.4
Restrictions on Shares
3
4.5
Beneficiaries
3
4.6
Performance Conditions
3
ARTICLE 5.
OPTIONS
3
5.1
Stock Option Agreement
3
5.2
Number of Shares
4
5.3
Exercise Price
4
5.4
Exercisability and Term
4
5.5
4
5.6
Buyout Provisions
4
5.7
4
ARTICLE 6.
PAYMENT FOR OPTION SHARES
5
6.1
General Rule
5
6.2
Surrender of Stock
5
6.3
Exercise/Sale
5
6.4
Other Forms of Payment
5
i
TABLE OF CONTENTS
(continued)
Page
ARTICLE 7.
STOCK APPRECIATION RIGHTS
5
7.1
SAR Agreement
5
7.2
Number of Shares
5
7.3
Exercise Price
6
7.4
Exercisability and Term
6
7.5
Exercise of SARs
6
7.6
6
ARTICLE 8.
RESTRICTED SHARES
6
8.1
Restricted Stock Agreement
6
8.2
Payment for Awards
6
8.3
Vesting Conditions
7
8.4
Voting and Dividend Rights
7
ARTICLE 9.
STOCK UNITS
7
9.1
Stock Unit Agreement
7
9.2
Payment for Awards
7
9.3
Vesting Conditions
7
9.4
Voting and Dividend Rights
8
9.5
8
9.6
Death of Recipient
8
9.7
Creditors’ Rights
8
ARTICLE 10.
PROTECTION AGAINST DILUTION
8
10.1
Adjustments
8
10.2
Dissolution or Liquidation
9
10.3
Change in Control
9
ARTICLE 11.
AWARDS UNDER OTHER PLANS
10
ARTICLE 12.
11
12.1
Effective Date
11
12.2
11
12.3
11
ARTICLE 13.
LIMITATION ON RIGHTS
11
ii
TABLE OF CONTENTS
(continued)
Page
13.1
Retention Rights
11
13.2
Stockholders’ Rights
11
13.3
Regulatory Requirements
11
ARTICLE 14.
WITHHOLDING TAXES
11
14.1
General
11
14.2
Share Withholding
12
ARTICLE 15.
FUTURE OF THE PLAN
12
15.1
Term of the Plan
12
15.2
Amendment or Termination
12
15.3
Stockholder Approval
12
ARTICLE 16.
DEFINITIONS
12
iii
SEMILEDS CORPORATION
2010 EQUITY INCENTIVE PLAN
The Plan was adopted by the Board effective as of the IPO Date. The purpose of
Consultants directly to stockholder interests through increased stock
the form of Restricted Shares, Stock Units, Options (which may constitute ISOs
or NSOs) or stock appreciation rights.
ARTICLE 2. ADMINISTRATION
2.1 Committee Composition. The Compensation
Committee of the Board shall administer the Plan. The Committee shall consist
exclusively of members of the Board, who shall be appointed by the Board. In
(a) Any listing standards prescribed by the
principal securities market on which the Company’s equity securities are traded;
(b) Such requirements as the Internal Revenue
qualify for exemption under section 162(m)(4)(C) of the Code;
(c) Such requirements as the Securities and
Exchange Commission may establish for administrators acting under plans intended
Act; and
(d) Any other requirements imposed by applicable
requirements and other features and conditions of such Awards, (c) amend any
outstanding Awards, (d) accelerate the vesting or extend the post-termination
exercise term of Awards at any time and under such terms and conditions as it
deems appropriate, (e) correct any defect, supplying any omission or reconciling
any inconsistency in
the Plan or any agreement evidencing an Award, (f) interpret the Plan, (g) make
all other decisions relating to the operation of the Plan, (h) adopt such plans
or subplans as may be deemed necessary or appropriate to provide for the
participation by service providers of the Company, its Parent, Subsidiaries and
Affiliates who reside outside of the U.S., which plans and/or subplans shall be
attached hereto as Appendices and (i) carry out any other duties delegated to it
by the Board under the Plan. The Committee may adopt such rules or guidelines
2.3 Non-Officer Grants. The Board may also
appoint additional committees of the Board composed of one or more directors of
the Company. The additional committees need not satisfy the requirements of
Section 2.1. Such committees may (a) administer the Plan with respect to
Employees and Consultants who are not Outside Directors and are not considered
executive officers of the Company under section 16 of the Exchange Act,
(b) grant Awards under the Plan to such Employees and Consultants and
(c) determine all features and conditions of such Awards. Within the
limitations of this Section 2.3, any reference in the Plan to the Committee
shall include these additional committees to whom the Board has delegated the
required authority under this Section 2.3.
(a) five million two hundred fourteen thousand two hundred eighty-five
(5,214,285)(1) Common Shares plus (b) the additional Common Shares described in
Sections 3.2. The number of Common Shares that are subject to Awards
outstanding at any time under the Plan shall not exceed the number of Common
Shares that then remain available for issuance under the Plan. All Common
Shares available under the Plan may be issued upon the exercise of ISOs. The
limitation of this Section 3.1 shall be subject to adjustment pursuant to
Article 10.
3.2 Shares Returned to Reserve. If Options, SARs
or Stock Units are forfeited or terminate for any other reason before being
exercised or settled, then the Common Shares subject to such Options, SARs or
Stock Units shall again become available for issuance under the Plan. If SARs
settlement of such SARs shall reduce the number available under Section 3.1 and
the balance shall again become available for issuance under the Plan. If Stock
are reacquired by the Company pursuant to a forfeiture provision or for any
under the Plan.
(1) Such amount as well as all other share numbers in this Plan have been
adjusted to reflect the one-for-fourteen reverse stock split effective as of the
IPO date.
2
ARTICLE 4. GENERAL.
4.1 Eligibility. Only Employees, Outside
Directors, and Consultants shall be eligible to participate in the Plan.
4.2 Incentive Stock Options. Only Employees who
eligible for the grant of ISOs. In addition, an Employee who owns more than 10%
grant of an ISO unless the additional requirements set forth in
section 422(c)(5) of the Code are satisfied.
4.3 Other Grants. Only Employees, Outside
Stock Units, NSOs or SARs.
4.4 Restrictions on Shares. Any Shares issued
pursuant to an Award shall be subject to such rights of repurchase and other
transfer restrictions as the Committee may determine, in its sole discretion.
Such restrictions shall apply in addition to any restrictions that may apply to
4.5 Beneficiaries. Unless stated otherwise in an
agreement evidencing an Award and then only to the extent permitted by
applicable law, a Participant may designate one or more beneficiaries with
the Participant’s estate.
4.6 Performance Conditions. The Committee may, in
its discretion, include performance conditions in an Award. If performance
conditions are included in Awards to Covered Employees and such Awards are
Section 162(m), then such Awards will be subject to the achievement of
Performance Goals with respect to a Performance Period established by the
Committee. Such Awards shall be granted and administered pursuant to the
any Award payments are released to a Covered Employee with respect to a
Performance Period, the Committee shall certify in writing that the Performance
Goals for such Performance Period have been satisfied. Awards with performance
conditions that are granted to Participants who are not Covered Employees need
3
the Plan. The Stock Option Agreement shall specify whether the Option is an ISO
or an NSO. The provisions of the various Stock Option Agreements entered into
under the Plan need not be identical. Subject to an Optionee’s consent, Options
compensation.
shall specify the number of Common Shares subject to the Option, which shall be
subject to adjustment in accordance with Article 10. Options granted to an
214,286 Common Shares, except that Options granted to a new Employee in the
fiscal year of the Company in which his or her Service commences may cover up to
285,714 Common Shares. The limitations set forth in the preceding sentence
shall be subject to adjustment in accordance with Article 10.
shall specify the Exercise Price. In the case of an ISO (a) granted to an
Subsidiaries, the Exercise Price shall be no less than 110% of the Fair Market
Value on the date of grant; and (b) granted to any other Employee, the Exercise
exceed 10 years from the date of grant, except that the term of an ISO granted
to an Employee who owns more than 10% of the total combined voting power of all
Subsidiaries shall in no event exceed 5 years from the date of grant. A Stock
SARs are forfeited.
the limitations of the Plan, the Committee may modify, reprice, extend or assume
outstanding options or may accept the cancellation of outstanding options
previously granted or (b) authorize an
4
establish.
5.7 Assignment or Transfer of Options. No Option
or interest therein shall be transferred, assigned, pledged or hypothecated by
the Optionee during his or her lifetime, whether by operation of law or
otherwise, or be made subject to execution, attachment or similar process, other
of an NSO, as otherwise expressly permitted by the Committee including, if so
permitted, pursuant to a transfer to such Optionee’s Immediate Family. An
Option may be exercised, subject to the terms of the Plan and the applicable
Stock Option Agreement, only by the Optionee, the guardian or legal
representative of the Optionee, a beneficiary designated pursuant to
Section 4.5, or any person to whom such Option is transferred pursuant to this
paragraph.
permitted by section 13(k) of the Exchange Act.
6.3 Exercise/Sale. With the Committee’s consent,
6.4 Other Forms of Payment. With the Committee’s
rules.
7.1 SAR Agreement. Each grant of an SAR under the
Company. Such SAR shall be subject to all applicable terms of the Plan and may
identical. Subject to an Optionee’s consent, SARs may be granted in
5
7.2 Number of Shares. Each SAR Agreement shall
specify the number of Common Shares to which the SAR pertains and shall be
subject to adjustment in accordance with Article 10. SARs granted to an
Optionee in a single fiscal year shall in no event pertain to more than 214,286
the Company in which his or her Service commences may pertain to a maximum of
7.3 Exercise Price. Each SAR Agreement shall
specify the Exercise Price.
7.4 Exercisability and Term. Each SAR Agreement
exercisable and/or may include time-based vesting or performance-based vesting
(including Performance Goals pursuant to Section 4.6). The SAR Agreement shall
also specify the term of the SAR, which shall not exceed ten (10) years from the
date of grant. An SAR Agreement may provide for accelerated exercisability in
termination of the Optionee’s Service. SARs may be awarded in combination with
Options or Restricted Shares, and such an Award may provide that the SARs will
not be exercisable unless the related Options or Restricted Shares are
forfeited. An SAR may be included in an ISO only at the time of grant but may
be included in an NSO at the time of grant or thereafter. Notwithstanding any
other provision of the Plan or the SAR Agreement, no SAR can be exercised after
the expiration date provided in the applicable SAR Agreement.
7.5 Exercise of SARs. Upon exercise of an SAR,
combination of Common Shares and cash, as the Committee shall determine. The
SARs exceeds the Exercise Price. If, on the date when an SAR expires, the
Exercise Price is less than the Fair Market Value on such date but any portion
portion. An SAR Agreement may also provide for an automatic exercise of the SAR
7.6 Modification or Assumption of SARs. Within
exercise price. The foregoing notwithstanding, no modification of an SAR shall,
6
8.1 Restricted Stock Agreement. Each grant of
Agreement between the recipient and the Company. Such Restricted Shares shall
8.2 Payment for Awards. Restricted Shares may be
determine, including (without limitation) cash, cash equivalents, property, past
8.3 Vesting Conditions. Each Award of Restricted
Stock Agreement. The Committee may include among such conditions the
requirement that the performance of the Company or a business unit of the
Company for a specified period of one or more fiscal years equal or exceed a
target determined in advance by the Committee. The Committee shall determine
such performance. Such target may be based on one or more of the criteria set
forth in the Performance Goals. The Committee shall identify such target not
later than the 90th day of such period. In no event shall more than 214,286
Restricted Shares that are subject to performance-based vesting conditions be
granted to any Participant in a single fiscal year of the Company, except that
up to 285,714 Restricted Shares subject to performance-based vesting conditions
may be granted to a new Employee in the fiscal year of the Company in which his
or her Service commences. The limitations set forth in the preceding sentence
shall be subject to adjustment in accordance with Article 10. A Restricted
Stock Agreement may provide for accelerated vesting in the event of the
and other rights as the Company’s other stockholders. A Restricted Stock
Agreement, however, may require that any cash dividends paid on Restricted
Shares (a) be accumulated and paid when such Restricted Shares vest or (b) be
invested in additional Restricted Shares. Such additional Restricted Shares
ARTICLE 9. STOCK UNITS.
9.1 Stock Unit Agreement. Each grant of Stock
entered into under the Plan need not be identical. Subject to a recipient’s
consent, Stock Units may be granted in consideration of a reduction in the
recipient’s other compensation.
9.2 Payment for Awards. To the extent that an
7
9.3 Vesting Conditions. Each Award of Stock Units
Agreement. The Committee may include among such conditions the requirement that
the performance of the Company or a business unit of the Company for a specified
period of one or more fiscal years equal or exceed a target determined in
advance by the Committee. The Committee shall determine such performance. Such
target may be based on one or more of the criteria set forth in the Performance
Goals. The Committee shall identify such target not later than the 90th day of
such period. In no event shall more than 214,286 Stock Units that are subject
to performance-based vesting conditions be granted to any Participant in a
single fiscal year of the Company, except that up to 285,714 Stock Units subject
to performance-based vesting conditions may be granted to a new Employee in the
fiscal year of the Company in which his or her Service commences. The
in accordance with Article 10. A Stock Unit Agreement may provide for
9.4 Voting and Dividend Rights. The holders of
9.5 Form and Time of Settlement of Stock Units.
9.6 Death of Recipient. Any Stock Units Award
beneficiary survives the Award recipient, then any Stock Units Award that
becomes payable after the recipient’s death shall be distributed to the
recipient’s estate.
8
9.7 Creditors’ Rights. A holder of Stock Units
outstanding Common Shares, a stock split, a reverse stock split, a declaration
number of Common Shares, or any other increase or decrease in the number of
issued Common Shares effected without receipt of consideration by the Company,
(a) The number of Options, SARs, Restricted
Shares and Stock Units available for future Awards under Article 3;
(b) The limitations set forth in Sections 5.2,
7.2, 8.3 and 9.3;
(c) The number of Common Shares covered by each
outstanding Option and SAR;
(d) The Exercise Price under each outstanding
Option and SAR; and
(e) The number of Stock Units included in any
prior Award that has not yet been settled.
In the event of a declaration of an extraordinary dividend with respect to the
Common Shares payable in a form other than Common Shares in an amount that has a
material effect on the price of Common Shares, a recapitalization, a rights
offering, a reorganization, a merger, a spin-off or a similar occurrence, the
appropriate in one or more of the foregoing, and its determination shall be
final, binding and conclusive. Except as provided in this Article 10, a
immediately prior to the dissolution or liquidation of the Company.
10.3 Change in Control. Individual agreements evidencing
Awards may provide for vesting acceleration if the Company is subject to a
Change in Control. In addition, in the event that the Company is subject to a
Change in Control, outstanding Options, SARs, Stock Units and Restricted Shares
acquired under the Plan shall be subject to the agreement evidencing the Change
in Control, which need not treat all outstanding Options, SARs or Stock Units
(or portion thereof) in an identical manner. Such agreement, without each
Participant’s consent,
9
may dispose of Options, SARs or Stock Units (or portions thereof) that are not
vested as of the effective date of such Change in Control in any manner
permitted by applicable law, including (without limitation) the cancellation of
such Options, SARs or Stock Units (or portions thereof) without the payment of
any consideration. Such agreement, without each Participant’s consent, may
provide for one or more of the following with respect to Options, SARs or Stock
Units (or portions thereof) granted to each Participant that are vested and
exercisable as of the closing date of such Change in Control:
(a) The continuation of such outstanding Awards
(or portion thereof) by the Company (if the Company is the surviving
corporation).
(b) The assumption of such outstanding Awards
(or portion thereof) by the surviving corporation or its parent, provided that
the assumption of Options or SARs shall comply with section 424(a) of the Code
(whether or not the Options are ISOs).
(c) The substitution by the surviving
corporation or its parent of new awards for such outstanding Awards (or portion
thereof), provided that the substitution of Options or SARs shall comply with
section 424(a) of the Code (whether or not the Options are ISOs).
(d) The cancellation of outstanding Options and
SARs (or portion thereof) and a payment to the Participants equal to the excess
of (i) the Fair Market Value of the Common Shares subject to such Options and
SARs as of the closing date of such Change in Control over (ii) their Exercise
Price. Such payment shall be made in the form of cash, cash equivalents, or
equal to the required amount or any combination of the foregoing consideration.
If the Exercise Price of the Common Shares subject to such Options and SARs
exceeds the Fair Market Value of such Common Shares, then such Options and SARs
may be cancelled without making a payment to the Optionees. For purposes of
this Subsection (d), the Fair Market Value of any security shall be determined
(e) The cancellation of outstanding Stock Units
(or portion thereof) and a payment to the Participants equal to the Fair Market
Value of the Common Shares subject to such Stock Units as of the closing date of
such Change in Control. Such payment shall be made in the form of cash, cash
Fair Market Value equal to the required amount or any combination of the
foregoing consideration. For purposes of this Subsection (e), the Fair Market
Value of any security shall be determined without regard to any vesting
(f) The cancellation of outstanding Options
and SARs (or portion thereof) for no consideration.
10
Immediately following a Change in Control, all outstanding Options, SARs and
Stock Units shall terminate and cease to be outstanding, except to the extent
such Options, SARs and Stock Units (or portion thereof) have been continued or
assumed, as described in Sections 10.3(a) and/or 10.3(b).
ARTICLE 12. PAYMENT OF DIRECTOR’S FEES
IN SECURITIES.
12.1 Effective Date. No provision of this Article 12
provision.
12.2 Elections to Receive NSOs, Restricted Shares or
under the Plan. An election under this Article 12 shall be filed with the
Company on the prescribed form.
12.3 Number and Terms of NSOs, Restricted Shares or Stock
Outside Directors in lieu of annual retainers and meeting fees that would
Board. The Board shall also determine the terms of such NSOs, Restricted Shares
or Stock Units.
ARTICLE 13. LIMITATION ON RIGHTS.
13.1 Retention Rights. Neither the Plan nor any Award
an Employee, Outside Director or Consultant. The Company and its Parents,
Employee, Outside Director or Consultant at any time, with or without cause or
notice, subject to applicable laws, the Company’s certificate of incorporation
and by-laws and a written employment or consulting agreement (if any).
13.2 Stockholders’ Rights. A Participant shall have no
11
13.3 Regulatory Requirements. Any other provision of the
ARTICLE 14. WITHHOLDING TAXES.
14.1 General. To the extent required by applicable
14.2 Share Withholding. To the extent that applicable
Fair Market Value on the date when they are withheld or surrendered. This
Section 14.2 shall apply only to the minimum extent required by applicable tax
laws.
shall become effective on the IPO Date. The Plan shall remain in effect until
the earlier of (a) the date when the Plan is terminated under Section 15.2 or
(b) the 10th anniversary of the date when the Board adopted the Plan.
under the Plan.
15.3 Stockholder Approval. An amendment of the Plan
extent required by applicable laws, regulations or rules. However,
section 162(m) of the Code may require that the Company’s stockholders approve:
(a) The Plan not later than the first regular
meeting of stockholders that occurs in the fourth calendar year following the
calendar year in which the IPO Date occurred; and
(b) The Performance Goals not later than the
first meeting of stockholders that occurs in the fifth year following the year
in which the Company’s stockholders previously approved such criteria.
12
16.1 “Affiliate” means any entity other than a
of such entity.
16.2 “Award” means any award of an Option, an SAR, a
Restricted Share or a Stock Unit under the Plan.
16.3 “Board” means the Company’s Board of Directors, as
16.4 “Change in Control” means:
(a) The consummation of a merger or
consolidation of the Company or any other corporate reorganization or business
or person;
(b) The sale, transfer or other disposition of
(c) A change in the composition of the Board,
either:
(i) Had been directors of the Company on the
(the “Original Directors”); or
(ii) Were appointed to the Board, or nominated
nomination was previously approved in a manner consistent with this
Paragraph (ii); or
(d) Any transaction as a result of which any
Company.
that will be owned in substantially
13
16.5 “Code” means the Internal Revenue Code of 1986, as
amended.
16.6 “Committee” means the Compensation Committee of the
Board, as further described in Article 2.
16.7 “Common Share” means one share of the common stock
of the Company.
16.8 “Company” means SemiLEDs Corporation, a Delaware
corporation.
16.9 “Consultant” means a consultant or adviser who
Affiliate as an independent contractor.
16.10 “Covered Employees” means those persons identified by the
Company who are or who may be subject to the limitations of Code Section 162(m).
16.11 “Employee” means a common-law employee of the Company, a
16.12 “Exchange Act” means the Securities Exchange Act of 1934,
as amended.
16.13 “Exercise Price,” in the case of an Option, means the
16.14 “Fair Market Value” means the market price of a Common
Share as determined in good faith by the Committee. Such determination shall be
conclusive and binding on all persons. The Fair Market Value shall be
determined by the following:
(i) If the Common Shares are admitted to trading on any
established national stock exchange or market system on the date in question
then the Fair Market Value shall be equal to the closing sales price for such
Common Shares as quoted on such national exchange or system on such date; or
(ii) if the Common Shares are admitted to quotation or are
reported on the date in question, then the Fair Market Value shall be equal to
the mean between the bid and asked prices of the Common Shares reported for such
date.
In each case, the applicable price shall be the price reported in The Wall
Street Journal or such other source as the Committee deems reliable; provided,
however, that if there is
14
no such reported price for the Common Shares for the date in question, then the
Fair Market Value shall be equal to the price reported on the last preceding
date for which such price exists. If neither (i) or (ii) are applicable, then
16.15 “Immediate Family” means, except as otherwise defined by
the Committee, any child, sibling, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, sister-in-law, or brother-in-law, including
(or the Participant) own more than fifty percent (50%) or more of the voting
interests.
16.16 “IPO Date” means the effective date of the registration
statement filed by the Company with the Securities and Exchange Commission for
16.17 “ISO” means an incentive stock option described in
16.18 “NSO” means a stock option not described in sections 422
or 423 of the Code.
16.19 “Option” means an ISO or NSO granted under the Plan and
16.20 “Optionee” means an individual, estate or other person
holding an Option or SAR.
16.21 “Outside Director” means a member of the Board who is not
an Employee.
16.22 “Parent” means any corporation (other than the Company) in
16.23 “Participant” means an individual, estate or other person
holding an Award.
criteria determined by the Committee with respect to each Performance Period
utilizing one or more of the following factors and any objectively verifiable
adjustment(s) thereto permitted and pre-established by the Committee in
accordance with Code Section 162(m): revenue, operating income, adjusted
operating income (adjusted to add back items such as non-cash stock compensation
expense), EBITDA and/or net earnings (either before or after interest, taxes,
15
depreciation and amortization), adjusted EBITDA, net income (either before or
after taxes), earnings per share, earnings as determined other than pursuant to
United States generally accepted accounting principles (“GAAP”), return on gross
or net assets, return on equity, return on invested capital, cash flow
operating or gross margins, net margins, stock price appreciation, total
stockholder return, customer satisfaction metrics, customer count, customer
retention, cost per customer acquisition, and transaction volume, any of which
may be measured with respect to the Company, or any Subsidiary, affiliate or
other business unit of the Company, either in absolute terms, terms of growth or
as compared to any incremental increase, as compared to results of a peer
group. Awards that are not intended to comply with Code Section 162(m) may take
into account other factors (including subjective factors).
the Performance Period; or (x) any other items of significant income or expense
intended to comply with Code Section 162(m), such determinations shall be made
within the time prescribed by, and otherwise in compliance with,
16.25 “Performance Period” means any period not exceeding seven
(7) years as determined by the Committee, in its sole discretion. The Committee
may establish different Performance Periods for different Participants and the
16.26 “Plan” means this SemiLEDs Corporation 2010 Equity
16.27 “Restricted Share” means a Common Share awarded under the
Plan.
16.28 “Restricted Stock Agreement” means the agreement between
conditions and restrictions pertaining to such Restricted Share.
16.29 “SAR” means a stock appreciation right granted under the
Plan.
16
16.30 “SAR Agreement” means the agreement between the Company
and a Participant that contains the terms, conditions and restrictions
16.31 “Service” means service as an Employee, Outside Director
or Consultant.
16.32 “Stock Option Agreement” means the agreement between the
Company and an Optionee that contains the terms, conditions and restrictions
pertaining to his or her Option.
16.33 “Stock Unit” means a bookkeeping entry representing the
equivalent of one Common Share, as awarded under the Plan.
16.34 “Stock Unit Agreement” means the agreement between the
16.35 “Subsidiary” means any corporation (other than the
17
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Name: Commission Regulation (EEC) No 1024/91 of 24 April 1991 altering the corrective amount applicable to the refund on cereals
Type: Regulation
Date Published: nan
No L 105/52 Official Journal of the European Communities 25. 4. 91 COMMISSION REGULATION (EEC) No 1024/91 of 24 April 1991 altering the corrective amount applicable to the refund on cereals market into account, the corrective amount at present applicable to the refund on cereals should be altered, HAS ADOPTED THIS REGULATION : THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 2727/75 29 October 1975 on the common organization of the market in cereals ('), as last amended by Regulation (EEC) No 3577/90 (2), and in particular the fourth sentence of the second subparagraph of Article 16(4) thereof, Having regard to Council Regulation (EEC) No 2746/75 of 29 October 1975 laying down general rules for granting export refunds on cereals and criteria for fixing the amount of such refunds ('), Whereas the corrective amount applicable to the refund on cereals was fixed by Commission Regulation (EEC) No 695/91 (4), as last amended by Regulation (EEC) No 994/9 1 (5) ; Whereas, on the basis of today's cif prices and cif forward delivery prices, taking foreseeable developments on the Article 1 The corrective amount referred to in Article 16(4) of Regulation (EEC) No 2727/75, fixed in the Annex to amended Regulation (EEC) No 695/91 which is appli cable to the export refunds fixed in advance in respect of cereals, is hereby altered to the amounts set out in the Annex hereto . Article 2 This Regulation shall enter into force on 25 April 1991 . This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels, 24 April 1991 . For the ' Commission Ray MAC SHARRY Member of the Commission (') OJ No L 281 , 1 . 11 . 1975, p. 1 . 0 OJ No L 353, 17. 12 . 1990, p. 23 . (<) OJ No L 281 , 1 . 11 . 1975, p. 78 . (4) OJ No L 76, 22. 3 . 1991 , p. 21 . O OJ No L 104, 24. 4. 1991 , p. 21 . 25. 4. 91 No L 105/53Official Journal of the European Communities ANNEX to the Commission Regulation of 24 April 1991 altering the corrective amount applicable to the refund on cereals (ECU/ tonne) Product code Destination (') Current 4 1st period 5 2nd period 6 3rd period 7 4th period 8 5th period 9 6th period 10 0709 90 60 000 0712 90 19 000 1001 10 10 000 1001 10 90 000 01 0 0 - 40,00 - 40,00 ¢ - 40,00 - 40,00 - 40,00 1001 90 91 000 1001 90 99 000 01 0 0 0 - 30,00 - 30,00 - 30,00 - 30,00 1002 00 00 000 01 0 0 0 - 30,00 - 30,00 - 30,00 - 30,00 1003 00 10 000 01 0 0 - 30,00 - 30,00 - 30,00 - 30,00 - 30,00 1003 00 90 000 01 0 0 - 30,00 - 30,00 - 30,00 - 30,00 - 30,00 1004 00 10 000 1004 00 90 000 1005 10 90 000 1005 90 00 000 01 0 0 0 0 1007 00 90 000 1008 20 00 000 1101 00 00 100 01 0 0 - 30,00 - 30,00 - 30,00 - 30,00 - 30,00 1101 00 00 130 01 0 0 - 30,00 - 30,00 - 30,00 - 30,00 - 30,00 1101 00 00 150 01 0 0 0 - 30,00 - 30,00 - 30,00 - 30,00 1101 00 00 170 01 0 0 0 - 30,00 - 30,00 - 30,00 - 30,00 1101 00 00 180 01 0 0 0 - 30,00 - 30,00 - 30,00 - 30,00 1101 00 00 190 . 1101 00 00 900 . _ 1102 10 00 600 01 0 0 0 - 30,00 - 30,00 - 30,00 - 30,00 110210 00 900 , 1103 11 10 100 01 0 0 - 50,00 - 50,00 - 50,00 - 50,00 - 50,00 1103 11 10 200 01 0 0 - 50,00 - 50,00 - 50,00 - 50,00 - 50,00 1103 11 10 500 01 0 0 - 50,00 - 50,00 - 50,00 - 50,00 - 50,00 1103 11 10 900 01 0 0 - 50,00 - 50,00 - 50,00 - 50,00 - 50,00 1103 11 90 100 01 0 0 0 - 30,00 - 30,00 - 30,00 - 30,00 1103 11 90 900 - (') For the following destinations : 01 All third countries . NB : The zones are those defined in Commission Regulation (EEC) No 1124/77 (OJ No L 134, 28 . 5 . 1977, p. 53), as last amended by Regulation (EEC) No 3049/89 (OJ No L 292, 11 . 10 . 1989, p. 10). |
July 16, WE HEREBY CONSENT to the inclusion of our name in connection with the Form S-1/A amended Registration Statement filed with the Securities and Exchange Commission as attorney for the registrant, Intelimax Media Inc. Yours truly, Bacchus Law Corporation dba Bacchus Corporate and Securities Law /s/
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM8-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):April 13, 2016 (April 12, 2016) On Track Innovations Ltd. (Exact name of registrant as specified in its charter) Israel (State or Other Jurisdiction of Incorporation) 000-1021604 N/A (Commission File Number) (IRS Employer Identification No.) Z.H.R. Industrial Zone, P.O. Box 32, Rosh-Pina, Israel (Address of Principal Executive Offices) (Zip Code) (Registrant’s Telephone Number, Including Area Code) Check the appropriate box below if the Form8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: o Written communications pursuant to Rule425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule14d-2(b)under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule13e-4(c)under the Exchange Act (17 CFR 240.13e-4(c)) Item 3.01Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing On April 12, 2016, On Track Innovations Ltd. (the “Company”) received approval from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) to transfer the listing of the Company’s ordinary shares from the Nasdaq Global Market to the Nasdaq Capital Market. This transfer will be effective at the opening of business on April 14, 2016. The Nasdaq Capital Market is a continuous trading market that operates in substantially the same manner as the Nasdaq Global Market and listed companies must meet certain financial requirements and comply with Nasdaq’s corporate governance requirements. The Company’s ordinary shares will continue to trade under the symbol “OTIV.” As previously reported on a Current Report on Form 8-K filed with the Securities and Exchange Commission on October 19, 2015, the Company received a letter from Nasdaq on October 14, 2015 notifying the Company that the Company did not meet the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on the Nasdaq Global Market. Following the transfer of its listing, the Company has been granted an additional 180-day grace period to regain compliance with the Nasdaq’s $1.00 minimum bid price requirement. To regain compliance and qualify for continued listing on the Nasdaq Capital Market, the minimum bid price per share of the Company’s ordinary shares must be at least $1.00 for at least ten consecutive business days during the additional 180-day grace period, which will end on October 10, 2016. If the Company fails to regain compliance during this grace period, its ordinary shares will be subject to delisting by Nasdaq. The Company has provided written notice of its intention to cure the minimum bid price deficiency during the second grace period by carrying out a reverse stock split, if necessary. 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. On Track Innovations Ltd. Date: April 13, 2016 By: /s/Shlomi Cohen Name:Shlomi Cohen Title:Chief Executive Officer
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Exhibit 10.1
CRUDE OIL SALES AGREEMENT
between
PDVSA-PETRÓLEO S.A.
and
NUSTAR MARKETING LLC
dated effective as of
March 1, 2008
Table of Contents
Page # Part I DEFINITIONS AND CONSTRUCTION 1 Article 1
Definitions 1 1.1 Definitions 1 1.2 Construction 7 Part
II SPECIAL TERMS 7 Article 2 Purchase and Sale 7 Article 3 Quantity
7 3.1 Annual Contract Quantity 7 3.2 Monthly Contract
Quantity 7 Article 4 Destination; No Resale to Third Parties 9 4.1
Utilization at the Refineries 9 4.2 Discharge Documentation 9
Article 5 Price; Adjustment of Price Mechanism 9 5.1 Price 9
5.2 Adjustment of Price Mechanism 9 Article 6 Limited Market Adjustment
10 6.1 Calculation of Limited Market Adjustment 10 6.2
Expiration of Limited Market Adjustment 11 Article 7 Underlifting 12
Article 8 Payment Terms 12 8.1 Currency, Time and Place of Payment;
Overdue Payments 12 8.2 Contents of Invoices; Substantiating
Documentation 13 8.3 Payment Expenses 13 8.4 Security for
Payment 13 8.5 Suspension of Deliveries 14 Article 9 Duration
14 9.1 Term 14 9.2 Renewal 14 Part III STANDARD TERMS 14
Article 10 Arrival Procedures and Lifting 14 10.1 Lifting Program
14 10.2 Substitution of Vessels 17 10.3 Advice of ETA 17
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10.4 Notice of Readiness 17 10.5 Vessel Requirements;
Security Regulations 18 Article 11 Loading Conditions; Demurrage 19
11.1 Berthing of Vessels; Commencement of Laytime 19 11.2 Shifting
Loading Point of Vessels 20 11.3 Allowed Laytime 20 11.4
Adjustments to Laytime and Time on Demurrage 20 11.5 Demurrage 22
11.6 Buyer’s Liability for Delay and Damage 23 Article 12 Quantity
Measurements 23 12.1 Determination of Quantity 23 12.2
Volume Corrections for Temperature 24 12.3 Conclusiveness of
Measurements 25 Article 13 Quality 25 13.1 Determination of
Quality 25 13.2 Analysis of Samples 25 13.3 NO WARRANTIES
26 Article 14 Delivery 26 14.1 Passage of Title 26 14.2
Port and Loading Expenses 26 14.3 Loading Port Regulations 26
14.4 Buyer’s Knowledge of Loading Port Facilities; Standard Procedures
26 14.5 Hazardous Warning Responsibility 27 Article 15 No Set-Off
27 Article 16 Notice of Claims 28 Article 17 Termination 28
17.1 Termination 28 17.2 Termination Not to Relieve Buyer of
Obligations 29 17.3 Acceleration 29 17.4 Termination for
an Insolvency Event 29 17.5 No Gifts 29 17.6 Other Rights
and Remedies 29 Article 18 Confidentiality 30 Article 19 No
Third-Party Beneficiaries; Assignment 30 Article 20 Force Majeure 31
20.1 Relief from Liability 31 20.2 Notice 31 20.3
Payment for Oil Sold and Delivered 31
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20.4 Obligation to Apportion 31 20.5 No Makeup of Deliveries
Excused by Force Majeure 32 20.6 No Extension of Contract; Right to
Terminate 32 Article 21 Dispute Resolution; Governing Law 32 21.1
Settlement by Arbitration 32 21.2 Governing Law 32 21.3
Buyer’s Waiver 32 Article 22 Representations and Warranties 32 22.1
Buyer Representations 32 22.2 Seller Representations 33
Article 23 Liquidated Damages and Limitation of Liability 34 23.1
Failure to Deliver Oil 34 23.2 Limitation of Liability 34
Article 24 Compliance with Law 35 Article 25 No Waiver; Cumulative Remedies
35 Article 26 Severability of Provisions 35 Article 27 Notices 36
Article 28 Satisfactory Documentation 36 Article 29 Merger 37 29.1
Exclusive Agreement 37 29.2 General Terms and Conditions 37
Article 30 Amendments and Waivers; Counterparts 37 30.1 Amendments
and Waivers 37 30.2 Counterparts 37
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CRUDE OIL SALES AGREEMENT
This CRUDE OIL SALES AGREEMENT (“Agreement”) is entered into on March 19, 2008
and dated effective as of March 1, 2008, by and between PDVSA-Petróleo S.A., a
corporation organized under the laws of the Bolivarian Republic of Venezuela
(“Seller”), represented by Mr. Fernando Valera, Executive Director of Supply and
Commerce, and NuStar Marketing LLC, a Delaware limited liability company
(“Buyer”), represented by Mr. Curtis V. Anastasio, its Chief Executive Officer
and President. Seller and Buyer may sometimes hereinafter be referred to
individually as a “Party”, and, collectively, as the “Parties”.
RECITALS
WHEREAS, NuStar Asphalt Refining, LLC, a Delaware limited liability company and
an affiliate of Buyer (“NAR”), has agreed to acquire from CITGO Asphalt Refining
Company (“CARCO”) certain asphalt refineries located in Paulsboro, New Jersey
and Savannah, Georgia (“Refineries”) pursuant to that certain Sale and Purchase
Agreement, dated as of November 5, 2007, between CARCO and NAR (“SPA”);
WHEREAS, one of the conditions to NAR’s proceeding to a closing of the
transactions contemplated by the SPA is the execution and delivery by Seller of
this Agreement to supply crude oil to the Refineries during the term;
WHEREAS, Seller desires to sell and deliver to Buyer, and Buyer wishes to
purchase and lift from Seller, crude oil for processing at the Refineries in
warranties, covenants, agreements and undertakings hereinafter set forth or
referred to in this Agreement, the Parties hereby agree as follows:
PART I
DEFINITIONS AND CONSTRUCTION
Article 1
Definitions
1.1 Definitions. For purposes of this Agreement, the following terms, when
capitalized, shall have the meanings indicated below:
(a)
“Affiliate” means with respect to another entity, any entity which, directly or
other entity. For purposes of this definition, “control” (including, with
means (i) the ownership, directly or indirectly, of at least 50% of the voting
securities or other equity interests in such entity and/or
(ii) the right to determine management direction and policies of such entity,
whether through majority representation on the applicable governing board or by
contract;
(b) “Aggregate Deliveries” shall have the meaning set forth in Article 23.1;
(c) “Aggregate Nominated Volume” shall have the meaning set forth in Article
23.1;
(d) “Agreed Laydays” shall mean the three-Day range for the arrival of a
vessel set forth in an Agreed Lifting Program determined pursuant to Article
10.1;
(e) “Agreed Lifting Program” shall mean a final lifting program for a Month
determined pursuant to Article 10.1;
(f) “Agreement” shall mean this Crude Oil Sales Agreement, including this Part
I, the Special Terms contained in Part II hereof, the Standard Terms contained
in Part III hereof, and all Exhibits attached hereto, as the same may be
(g) “All Fast” shall mean such time as a vessel is completely moored at the
cargo transfer point with gangway down and secured;
(h) “Allowed Laytime” shall mean the period of time which Seller shall be
allowed, in accordance with Article 11.3, to complete the loading of a vessel
without incurring demurrage;
(i) “Annual Accounting” shall have the meaning set forth in Article 23.1;
(j) “Annual Contract Quantity” shall have the meaning set forth in Article
3.1;
(k) “API” shall mean the American Petroleum Institute;
(l) “API-MPMS” shall have the meaning set forth in Article 12;
(m) “ASBA” shall mean the Association of Ship Brokers and Agents;
(n) “Asphalt Season” shall mean the period comprised of the Asphalt Season
Months of any Year;
(o) “Asphalt Season Months” shall mean the calendar months of March, April,
May, June, July, August and September;
(p) “ASTM” shall mean the American Society for Testing and Materials;
(q) “Barrel” shall mean a quantity of crude oil equal to forty-two
(42) Gallons;
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(r) “Banking Day” shall mean any Day other than Saturday, Sunday or a Day on
which banking institutions in New York, New York, United States are authorized
or required by law to close;
(s) “BCF 13” shall mean crude oil of the Bachaquero BCF-13 type, typically
having characteristics within the ranges specified in Exhibit 1;
(t) “Boscán” shall mean crude oil of the Boscán type, typically having
characteristics within the ranges specified in Exhibit 1;
(u) “Business Day” shall mean any Day other than Saturday, Sunday or any
national holiday in Venezuela;
(v) “Buyer” shall have the meaning set forth in the Preamble to this
Agreement;
(w) “CARCO” shall have the meaning set forth in the Preamble to this
Agreement;
(x) “Cargo” shall mean a cargo of Oil to be sold by Seller and loaded by Buyer
into one of its vessels during any Lifting Month;
(y) “Contract Year” shall mean, except with respect to the First Contract Year
and the Final Contract Year, a Year;
(z) “Credit” shall have the meaning set forth in Article 6.1(c);
(aa) “Cumulative Net Surplus” means the sum of all Quarterly Surpluses less
the sum of all Quarterly Deficits since the commencement date of the Agreement;
(bb) This paragraph (bb) is intentionally left blank;
(cc) “Day” shall mean a calendar day;
(dd) “Deliveries” shall have the meaning set forth in Article 23.1;
(ee) “Defaulting Party” shall have the meaning set forth in Article 17.4;
(ff) “ETA” shall mean estimated time of arrival;
(gg) “Final Contract Year” shall mean the period commencing on January 1 of
the Year in which the later of the expiration of the Initial Term or the last
Renewal Term of this Agreement occurs and ending on the anniversary date of this
Agreement occurring in such Year;
(hh) “First Contract Year” shall mean the period commencing on the date of
this Agreement and ending on December 31, 2008;
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(ii) “FOB” shall have the meaning ascribed to such term in Incoterms (2000
edition), published by the International Chamber of Commerce; provided, however,
that, in the event of any conflict between the provisions of the Incoterms
definition and this Agreement, the provisions of this Agreement shall apply;
(jj) Formula Price” shall have the meaning set forth in Article 6.2(a);
(kk) “Force Majeure” shall have the meaning set forth in Article 20.1;
(ll) “Gallon” shall mean a unit of volume, measured at 60°F (equivalent to
15.56°C), equal to 231 cubic inches or 3.7853 liters;
(mm) “General Terms and Conditions” shall mean the Ministry’s General Terms
and Conditions for PDVSA FOB Crude Oil Sales (November 2006) attached hereto as
Exhibit 6, as the same may be modified as provided herein;
(nn) “ICC Rules” shall have the meaning set forth in Article 21.1;
(oo) “Investment Grade” shall mean a rating of (i) BBB- or higher by Standard
and Poor’s Rating Services, (ii) Baa3 or higher by Moody’s Investors Service,
Inc. and (iii) BBB- or higher by Fitch Ratings, Ltd. (or, if any such agency
changes its rating system, the equivalent successor rating applied by such
agency at the time in question);
(pp) “Governmental Mandate” shall have the meaning set forth in Article 20.1;
(qq) “Initial Term” shall have the meaning set forth in Article 9.1;
(rr)
“Insolvency Event” shall mean that an entity (i) is dissolved (other than
is unable to pay its debts or admits in writing its inability generally to pay
composition with or for the benefit of its creditors; (iv) (A) institutes a
rights, or a petition is presented for its winding-up or liquidation by it, or
winding-up or liquidation and such proceeding either (1) results in a judgment
stayed or restrained in each case within sixty (60) Days of the institution or
presentation thereof; (v) passes a resolution for its winding-up or liquidation
(other than pursuant to a consolidation, amalgamation or
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merger); (vi) seeks or becomes subject to the appointment of a receiver,
bankruptcy trustee, custodian or other similar official for it or for all or
substantially all its assets; or (vii) has a secured party take possession of
sequestration or other legal process levied or enforced on or against all or
substantially all its assets; provided that such secured party maintains
restrained, in each case within thirty (30) Days thereafter;
(ss) “ISPS Code” shall have the meaning set forth in Article 10.5.2(d);
(tt) “Letter of Credit” shall have the meaning set forth in Article 8.4;
(uu) “Lifting Month” shall mean the Month for which a Cargo is programmed for
lifting;
(vv) “Limited Market Adjustment” shall have the meaning set forth in Article
(ww) “Loading Point” (either standing alone or as part of another defined
term) shall mean a terminal, berth, jetty, buoy, dock, anchorage, sea terminal,
mooring, submarine loading line, or any other place, including alongside
lighters or other vessels, where a vessel can be loaded;
(xx) “Loading Port” shall mean any of Seller’s Loading Points located at
Puerto Miranda, La Salina and Bajo Grande;
(yy) “MBD” shall mean a thousand Barrels per Day;
(zz) “Ministry” shall mean the Ministerio del Poder Popular para la Energía y
Petróleo of Venezuela;
(aaa) “Month” shall mean a calendar month;
(bbb) “Monthly Contract Quantity” shall have the meaning set forth in Article
3.2;
(ccc) “NAR” shall have the meaning set forth in the Preamble to this
Agreement;
(ddd) “Nominated Volume” shall have the meaning set forth in Article 23.1;
(eee) “Non-Affiliated Buyer Purchases” shall have the meaning set forth in
Article 6.2(a);
(fff) “Non-Defaulting Party” shall have the meaning set forth in Article 17.4;
(ggg) “NOR” shall have the meaning set forth in Article 10.4;
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(hhh) “Oil” shall mean Venezuelan crude oil of the types specified in Exhibit
1;
(iii) “P&I Club” shall mean a maritime protection and indemnity mutual
insurance company;
(jjj) “Parties” shall mean Seller and Buyer, which may sometimes hereinafter
(kkk) “Quarter” means any period of three consecutive Months commencing
January 1, April 1, July 1 or October 1 of any Year;
(lll) “Quarterly Deficit” means, with respect to any Quarter, the amount, if
any, by which the Formula Price is less than the Maya parity price calculated in
accordance with Exhibit 4;
(mmm) “Quarterly Surplus” means, with respect to any Quarter, the amount, if
any, by which the Formula Price exceeds the Maya parity price calculated in
(nnn) “Ratings Agencies” shall mean Standard and Poor’s Rating Services,
Moody’s Investors Service, Inc. and Fitch Ratings, Ltd.;
(ooo) “Refineries” shall have the meaning set forth in the Preamble to this
Agreement;
(ppp) “Renewal Term” shall have the meaning set forth in Article 9.2;
(qqq) “S & W” shall mean sediments and water;
(rrr) “Security Regulations” shall have the meaning set forth in Article
10.5.2(d);
(sss) “Seller” shall have the meaning set forth in the Preamble to this
Agreement;
(ttt) “Specified Loading Port” shall mean a Loading Port specified in an
Agreed Lifting Program;
(uuu) “SPA” shall have the meaning set forth in the Preamble to this
Agreement;
(vvv) “Storage Facility” shall have the meaning set forth in Article 6.1(b);
(www) “United States” or “U.S.” shall mean the United States of America;
(xxx) “U.S. Dollars” or “U.S.$” and “cents” shall mean the lawful currency of
(yyy) “Venezuela” shall mean the Bolivarian Republic of Venezuela;
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(zzz) “Worldscale” shall mean, at any relevant time under this Agreement, the
applicable standard freight rate stated in the most recent edition of the New
Worldwide Tanker Nominal Freight Scale jointly published by Worldscale
Association (London) Limited and Worldscale Association (NYC) Inc., expressed in
U.S. dollars per metric ton for the route specified;
(aaaa) “Worldscale Assessment” shall mean, at any relevant time under this
Agreement, the current assessment published in the most recent edition of
Platt’s Oilgram Price Report, under the table representing “Dirty” cargoes of
50,000 metric ton size for Caribbean to U.S. Gulf Coast routes, in the column
labeled “WS”; and
(bbbb) “Year” shall mean a calendar year.
1.2 Construction. Terms defined in the singular have the corresponding meanings
in the plural, and vice versa. All headings herein are for convenience only and
shall not affect the construction or interpretation of this Agreement. Unless
otherwise specified, all references herein to Parts, Articles and Exhibits are
to the Parts, Articles and Exhibits of this Agreement. The terms “hereof,”
“herein,” “hereunder” and words of similar import shall refer to this Agreement
as a whole and not to the particular Part, Article or Exhibit in which such term
appears.
PART II
SPECIAL TERMS
Article 2
Purchase and Sale
Seller shall sell and deliver, and Buyer shall purchase and lift, Oil of the
Boscán type and the Bachaquero BCF-13 type, each having the typical
characteristics set forth on Exhibit 1 and in the quantities set forth on
Exhibit 2.
Article 3
Quantity
3.1 Annual Contract Quantity. Except as performance may be expressly excused in
accordance with this Agreement, in each Contract Year Seller shall sell and
deliver, and Buyer shall purchase and lift, an aggregate quantity of Oil equal
to seventy-five thousand (75,000) Barrels times the number of Days in such
Contract Year, apportioned between Barrels of Oil of the Boscán type and the
BCF-13 type as set forth in Exhibit 2 (the “Annual Contract Quantity”), subject
to an annual tolerance of three hundred twenty-five thousand (325,000) Barrels
for each such grade of Oil; provided that, with respect to the First Contract
Year and the Final Contract Year, the annual tolerance shall not be prorated for
such partial Year periods.
3.2 Monthly Contract Quantity. In satisfaction of Buyer’s obligation to purchase
and lift, and Seller’s obligation to sell and deliver, the Annual Contract
Quantity (except as performance
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may be expressly excused in accordance with this Agreement) during each Month of
each Contract Year, Seller shall sell and deliver, and Buyer shall purchase and
lift, such number of Barrels of Oil of the Boscán and BCF-13 type as set forth
in Exhibit 2 in respect of such Month (the “Monthly Contract Quantity”), subject
(a) an operational tolerance of five percent (5%) on each Cargo of Oil Buyer is
scheduled to lift due to conditions at the Loading Port or affecting the vessel
utilized by Buyer;
(b) notwithstanding Buyer’s obligations under Article 10.1.5 to minimize
deadfreight in developing the Agreed Lifting Program for any Month and solely
for the purpose of eliminating deadfreight, Seller shall at its option:
(i) permit Buyer to overlift the amount required to accept all vessels as
proposed by Buyer in its Lifting Program for such Month; it being understood
that Seller shall have no obligation to permit an overlifting in any Month
greater than 250,000 Barrels of Boscán and 325,000 Barrels of BCF-13; or
(ii) defer lifting for the last vessel to the first ten (10) Days of the
immediately subsequent Month; or
(iii) specify a short load for the last vessel of either or both types of Oil
to limit deliveries in such Month to a level at or above the Monthly Contract
Quantity;
provided that: (A) if Seller selects clause (i) above, the resulting quantity
overlifted shall be subtracted from the Monthly Contract Quantity for the
immediately subsequent Month; (B) if Seller selects clauses (ii) or (iii) above,
the resulting quantity underlifted shall be added to the Monthly Contract
Quantity for the immediately subsequent Month; and (C) if Seller selects clause
(iii) above, Buyer shall present a claim for reimbursement to Seller, and
notwithstanding any provision herein to the contrary, Seller shall reimburse
Buyer for the allocable portion of deadfreight cost based on the unit cost of
freight for the subject vessel and Buyer’s proposed lifting volume applied to
the short-loaded volume;
(c) notwithstanding the foregoing clauses (a) and (b) to the contrary, solely in
respect of the first Month of the First Contract Year, Buyer shall have the
option to nominate a Monthly Contract Quantity with a tolerance of thirty
percent (30%) for each grade of Oil to enable Buyer to offset any Oil inventory
surplus or shortfall at the Refineries.
In the event Buyer overlifts or underlifts the Monthly Contract Quantity in a
given Month as a result of any of the exceptions set forth in clauses (a) or
(b) above, Buyer shall accumulate and apply the net amount of such overlifted or
underlifted quantity toward the Monthly Contract Quantity to be lifted in any
subsequent Month.
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Article 4
Destination; No Resale to Third Parties
4.1 Utilization at the Refineries. The Oil to be sold by Seller to Buyer is
intended to be utilized by Buyer at the Refineries. No Cargo purchased by Buyer
under this Agreement may be shipped to any other facility except:
(a) a facility utilized by Buyer for storage of Oil;
(b) a facility with which Buyer has an arrangement to process such Cargo and
receive all refined products produced therefrom;
(c) any other U.S. refinery owned by Buyer or its Affiliates; provided, however,
that, any delivery to such other U.S. refinery shall not relieve Buyer or its
Affiliates from any of its obligations to lift, or receive delivery of, the full
quantity of crude oil required to be lifted or received from Seller under any
other long-term supply arrangement for such refinery. In the event that Buyer
shall deliver any Cargo of Oil purchased from Seller hereunder to any other
refinery within Buyer’s or its Affiliate’s U.S. refining system which is located
in a geographic market other than that in which the Refineries are located, the
prices determined pursuant to the provisions of Exhibit 3 shall be the Seller’s
prices applicable for deliveries in such other geographic market; or
(d) with respect to any Cargo lifted by Buyer, any facility with the express
written consent of Seller having been first obtained, which consent shall not be
unreasonably withheld if it is requested in connection with an event described
in Article 20.1.
Buyer shall not resell any Oil purchased under this Agreement to any Person not
4.2 Discharge Documentation. Upon Seller’s request, Buyer shall provide, for any
Cargo of Oil delivered hereunder, a discharge certificate, which may consist of:
(a) an independent inspector’s certificate of discharge, (b) a customs fees
receipt or other government document evidencing the port in which the Cargo of
Oil was discharged, (c) the exemption from customs fees at the port of discharge
or (d) any other document that Seller deems an appropriate substitute for the
foregoing.
Article 5
Price; Adjustment of Price Mechanism
5.1 Price. The price for each type of Oil to be sold by Seller and purchased by
Buyer hereunder shall be determined in accordance with the provisions of Exhibit
3, as adjusted by the Limited Market Adjustment determined in accordance with
the provisions of Article 6 and Exhibit 4.
5.2 Adjustment of Price Mechanism. Seller shall have the right at any time and
from time to time, based on (i) discontinuance of the published market markers
in the pricing formulas set forth in Exhibit 3 or the Limited Market Adjustment
set forth in Exhibit 4, (ii) changes in circumstances which make the
applicability of the published market markers in the pricing
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formula or the Limited Market Adjustment inconsistent with a competitive
market-based pricing formula, or (iii) changes in the quality of one or more
types of Oil, to notify Buyer that it wishes to adjust or amend the pricing
provisions of Exhibit 3 and/or the Limited Market Adjustment in Exhibit 4 with
the objective of ensuring that the price of Oil reflects market conditions for
similar crude oils. Seller’s notice shall state the proposed effective date
thereof, which shall be no earlier than thirty (30) Days after the date of its
notice; provided, however, that the succeeding provisions of this Article 5.2
shall only apply if such proposed adjustment or amendment is applicable to
Seller’s publicly announced pricing formula for deliveries of Oil destined for
ports in the United States and that the new price shall not apply to Oil already
nominated by Buyer. Buyer shall then have thirty (30) Days in which to accept or
reject such proposed changes. If Buyer accepts Seller’s proposal or does not
notify Seller within such thirty (30) Day period that it rejects Seller’s
proposal, then the provisions of Exhibit 3 and/or Exhibit 4 shall be deemed
amended in accordance with Seller’s proposal as of the effective date specified
in Seller’s notice. If Buyer rejects Seller’s proposal, then the provisions of
Exhibit 3 and/or Exhibit 4 shall remain in effect and unchanged; provided,
however, that Seller shall have the right to submit the matter to arbitration
pursuant to Article 21.1. In such arbitration, each Party shall submit its
proposed alternative pricing mechanism, and the arbitration panel shall
determine the appropriate adjustments, if any, to be made to the pricing
formulas and/or the Limited Market Adjustment as of the effective date specified
in Seller’s notice.
Article 6
Limited Market Adjustment
6.1 Calculation of Limited Market Adjustment.
(a) For each Quarter during the Initial Term, Seller shall set off and deduct,
and Buyer shall receive a credit and reduction for, an amount equal to (a) the
difference, if any, between (i) the price per Barrel of Oil charged by Seller
with respect to each Cargo of Oil lifted during such Quarter calculated in
accordance with Exhibit 3 and (ii) the price per Barrel of Oil calculated in
accordance with Exhibit 4, multiplied by (b) the respective quantities of Boscán
Oil and BCF-13 Oil delivered to the Refineries with respect to each such Cargo
of Oil. Such setoff, deduction, credit and reduction is referred to herein as
the “Limited Market Adjustment,” and each Limited Market Adjustment shall be
determined and applied in accordance with clause (b) below; it being understood
that any Cargo of Oil not delivered to either of the Refineries shall be
disregarded for purposes of the Limited Market Adjustment.
(b) In the event that Buyer shall deliver any Cargo of Oil to any storage
facility (“Storage Facility”) for subsequent redelivery to a Refinery, upon the
redelivery of such Cargo to a Refinery, such Cargo shall, for purposes of
calculating the Limited Market Adjustment, if any, applicable to such Quarter,
be deemed to have been delivered to a Refinery in the Quarter within which such
redelivery occurs and the prices to be used shall be the prices applicable at
the time of the original purchase.
(c) To the extent that, at any time, the sum of all Quarterly Surpluses exceeds
the sum of all Quarterly Deficits less any previous Credits (as defined below)
by more than U.S.$10 Million, Buyer shall receive a credit (each, a “Credit”)
against the purchase price of Boscán Oil or BCF-13 Oil delivered to the
Refineries or any Storage Facility in the succeeding Quarter equal
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to the amount by which the Cumulative Net Surplus, less previous Credits,
exceeds U.S.$10 Million, applied at the rate of U.S.$5.00 per Barrel beginning
with the first Barrel delivered in such succeeding Quarter.
(d) Within ten (10) Days after each Quarter during the Initial Term, Buyer shall
provide to Seller a detailed report including (i) the calculation of the Limited
Market Adjustment for the preceding Quarter in accordance with Exhibit 4, and
(ii) the calculation of any Credit for such Quarter. Within ten (10) Days after
receipt of such report, Seller shall notify Buyer of any claimed discrepancy
therein and any proposed amendment thereto; it being understood that the Parties
shall, in such event, undertake in good faith to resolve such discrepancy
promptly and in any event prior to the issuance of the first invoice for Oil
delivered in such Quarter.
(e) For purposes of calculating any Limited Market Adjustment as well as for
purposes of applying any Credit, Oil shall be considered to have been delivered
to a Refinery or a Storage Facility on the Day on which the bill of lading for
the Cargo in question was issued at the Loading Port, as reflected in such bill
of lading.
(f) To the extent that, at the expiration of the Initial Term, the sum of all
Quarterly Surpluses exceeds the sum of all Quarterly Deficits less any previous
Credits (irrespective of the U.S.$10 Million threshold specified in clause
(b) above), such difference, if any, shall be paid in cash by Seller to Buyer or
delivered in Oil at the price provided under this Agreement, at the option of
Seller, in either case within thirty (30) Days after expiration of the Initial
Term.
(g) Any outstanding Credit owing to Buyer shall accrue interest at a per annum
rate equal to one percent (1%) above the prime rate in effect from time to time
as announced by Citibank, N.A. at its principal office in New York, New York,
United States, calculated from the last Day of the Quarter in which such Credit
arises until the bill of lading date for the Cargo of Oil to which such Credit
is applied.
6.2 Expiration of Limited Market Adjustment.
(a) The Limited Market Adjustment clauses set out above will be deemed to have
lapsed once the average volume of Seller’s export sales of heavy crude oils
(i.e., crude oils with an API gravity less than 13 degrees and a sulfur content
greater than 2.5% by weight) subject to the formula price for each of Boscán Oil
or BCF-13 Oil set forth in Exhibit 3 (“Formula Price”) for deliveries into the
US Gulf Coast, the US East Coast and the Caribbean to non-Affiliated buyers
other than Buyer exceeds 60,000 BPD for a period of fourteen (14) consecutive
Asphalt Season Months, based on contracts with an average of two (2) or more
different customers during the same period provided that (i) such non-Affiliated
buyers purchase crude oil from Seller at the Formula Price on a spot basis or
pursuant to contracts under which they have the right to terminate upon prior
notice of ninety (90) Days or less, (ii) the Formula Price applicable to such
non-Affiliated buyers does not include a price protection clause and (iii) any
purchases of crude oil by Buyer from Seller pursuant to spot or term agreements
in excess of the Annual Contract Quantity shall be deemed to be purchases by
non-Affiliated buyers for purpose of (i) and (ii) above (“Non-Affiliated Buyer
Purchases”). Seller shall report periodically to Buyer on the average volume of
crude oil sold under the Formula Price to such non-Affiliated buyers and shall
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provide written confirmation to Buyer when such average daily volume conditions
have been met.
(b) In the event that, after the Limited Market Adjustment mechanism is deemed
to have lapsed, (i) during any six (6) month period, the average volume of
Seller’s export sales of heavy crude oils (i.e., crude oils with an API gravity
less than 13 degrees and a sulfur content greater than 2.5% by weight) for
deliveries into the US Gulf Coast, the US East Coast and the Caribbean to
non-Affiliated buyers (including Non-Affiliated Buyer Purchases) other than
Buyer at the Formula Price on a spot basis or pursuant to term supply contracts
under which such buyers have the right to terminate upon prior notice of ninety
(90) Days or less is less than 20,000 BPD, or (ii) the average number of such
non-Affiliated buyers of crude oil at the Formula Price (other than Buyer) has
been less than two (2) per Asphalt Season, then Seller and Buyer will agree on
such alternative pricing mechanism as may be necessary to meet the objective
that the price of Oil be market-related in parity with crude oil of the Maya
type.
Article 7
Underlifting
Buyer acknowledges that its commitment to purchase the Annual Contract Quantity
in each Year is an essential term of this Agreement. Except as otherwise
provided in this Agreement and subject to the provisions of Article 20, if, in
any Lifting Month, Buyer fails to lift any Cargo scheduled to be lifted during
such Lifting Month, Seller shall have the right to recover its damages for
Buyer’s breach of its lifting obligation. Notwithstanding the foregoing
provisions of this Article 7, Buyer shall not be required to lift, nor be
subject to any liability for lifting less than, the Monthly Contract Quantity in
any Month if and to the extent that:
(a) such underlifting is due to demonstrated operational reasons concerning only
the Loading Ports or the vessels involved and does not in any event exceed ten
percent (10%) of the Monthly Contract Quantity for such Month;
(b) such underlifting comes as a consequence of Buyer performing remedial work
(whether planned or unplanned) or an annual turnaround at the Refineries, or
either of them, provided that Buyer notifies Seller of any planned turnaround at
least ninety (90) Days prior to the Month in which the turnaround is planned and
of any planned remedial work as soon as reasonably possible;
(c) such underlifting is the result of Buyer decreasing inventories of Oil at
the Refineries, or either of them, having previously increased such inventories
by lifting in excess of the Monthly Contract Quantity due to increased risk of
weather-related interruption of supply; or
(d) such underlifting is due to an underdelivery by Seller.
Article 8
Payment Terms
8.1 Currency, Time and Place of Payment; Overdue Payments. Buyer shall make all
payments required to be made by it under this Agreement in immediately available
U.S. Dollars, without any discount or deduction whatsoever, by wire transfer to
such account at such bank as
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may be designated by Seller from time to time. Payments in respect of Oil sold
and delivered shall be made within thirty (30) Days after the date of the bill
of lading therefor (bill of lading date excluded). All other payments to Seller
shall be made fifteen (15) Days after presentation by Seller of a written demand
setting forth the provisions of this Agreement giving rise to the payment
obligation, the nature of such obligation, and the amount thereof. If any
payment hereunder is due on a Day which is not a Banking Day, such payment shall
be due on the immediately following Banking Day. In the event that Buyer fails
to make any payment when due, then, to the extent permitted by applicable law
and without prejudice to the application of any other provision hereof or to any
other remedy provided to Seller under this Agreement or otherwise (including,
without limitation, Articles 8.4 and 8.5), interest shall accrue daily on the
amount of the overdue payment, commencing on the date such payment was due, at a
rate per annum equal to one percent (1%) above the prime rate in effect from
time to time as announced by Citibank, N.A. at its principal office in New York,
New York, United States; it being understood and agreed that each change in the
prime rate shall take effect on the Day on which such change is announced by
Citibank, N.A. Interest shall be computed for the actual number of Days elapsed
on the basis of a year consisting of three hundred sixty (360) Days, payable on
demand.
8.2 Contents of Invoices; Substantiating Documentation. Each invoice shall set
forth at least the following information: (a) the date(s) of delivery in respect
of which the invoice is rendered; (b) the Loading Point(s) for such delivery;
(c) the volume of the delivery stated in Barrels; and (d) the purchase price for
each type of Oil comprising the delivery, and the terms of payment. Upon
request, each Party shall furnish to the other Party all available
substantiating documents incident to the delivery, including a satisfactory
source document for each volume delivered during any Month. The source documents
shall state at least the volume, type and quality of Oil delivered and method of
measurement, the corrected API gravity, temperature, and S & W content.
8.3 Payment Expenses. Buyer shall bear all expenses and bank charges in
connection with any payments made to Seller under this Agreement, including,
without limitation, any costs of establishing and obtaining confirmation of a
Letter of Credit referred to in Article 8.4.
8.4 Security for Payment. If at any time (i) Buyer fails to make any payment
required to be made by it hereunder when and as the same shall become due and
payable, (ii) Buyer defaults in any of its material obligations under this
Agreement, or (iii) the senior unsecured long-term debt securities of Buyer for
which there is no recourse to or credit enhancement from any party other than
NuStar Energy L.P. or its subsidiaries is rated below Investment Grade by at
least two of the three Ratings Agencies, then Seller shall have the right to
require Buyer (at Buyer’s option) to purchase Oil or make other payments
required hereunder by advance payment of immediately available funds or by
posting of an irrevocable documentary or standby letter of credit (“Letter of
Credit”); provided, however, that any such advance payment or Letter of Credit
shall no longer be required, and if outstanding, it shall be promptly returned
by Seller, when and if such debt securities are rated Investment Grade or better
by at least two of the three Ratings Agencies. The amount of the advance payment
or Letter of Credit shall be equal to Seller’s reasonable estimate of the value
of Oil, calculated in accordance with Exhibit 3, for which the advance payment
or a Letter of Credit is provided (which may be, at Seller’s discretion, for a
particular shipment or for some or all shipments in a Month, plus ten percent
(10%)), and paid or
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posted not later than seven (7) Business Days prior to the first Day of the
Agreed Laydays. Any such Letter of Credit shall be opened or confirmed by an
international bank having a net asset value of not less than Two Hundred Fifty
Million U.S. Dollars (U.S.$250,000,000) and such Letter of Credit shall be
otherwise satisfactory in form and substance to Seller.
8.5 Suspension of Deliveries. Without prejudice and in addition to any of
Seller’s rights under Article 17 or otherwise, if Buyer fails to make any
undisputed payment required to be made by it hereunder when the same shall
become due and payable or fails to make an advance payment or post a Letter of
Credit as required in accordance with Article 8.4, then Seller shall have the
right at its sole discretion to suspend further deliveries of Oil until Buyer
makes the required payment, together with any accrued interest thereon, or posts
a Letter of Credit as required by Seller in accordance with Article 8.4.
Article 9
Duration
9.1 Term. The term of this Agreement shall commence on the date hereof and shall
continue in full force and effect until the seventh (7th) anniversary date of
this Agreement, (“Initial Term”).
9.2 Renewal. This Agreement shall be renewed for successive two (2) Year terms
after the Initial Term (each, a “Renewal Term”), unless earlier terminated by a
Party in accordance with the provisions of this Agreement. Either Party may
terminate the Agreement at the end of the Initial Term or any Renewal Term by
delivering written notice of termination at least one (1) year prior to the last
Day of the Initial Term or to the Renewal Term in question.
PART III
STANDARD TERMS
Article 10
Arrival Procedures and Lifting
10.1 Lifting Program.
10.1.1 Not later than thirty five (35) Days prior to the beginning of the next
programmed Lifting Month, Buyer shall furnish Seller with a proposed lifting
program for such Lifting Month, specifying the following:
(a) a Specified Loading Port for each delivery requested for such Lifting Month;
(b) a three-Day period for the arrival of each vessel;
(c) each type of Oil to be lifted by Buyer’s vessels;
(d) the number of Cargos to be lifted and the quantity and type of Oil
comprising each Cargo;
(e) the port of discharge of each Cargo;
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(f) in respect of the lifting program for the previously programmed Lifting
Month, (i) the name, size and dimensions of each vessel designated for lifting
during such Lifting Month, together with the completed vetting information
required by Seller for each such vessel; (ii) the names of the vessel’s agent
and Buyer’s representative, and the vessel’s P&I Club, which shall be a member
of the International Group of P&I Clubs; (iii) documentation instructions;
(iv) the time required for deballasting (if any, but which, in any event, shall
not exceed six hours); (v) the distribution of the Oil to be loaded (e.g.,
commingled or segregated); (vi) the name of the proposed independent inspector;
and (vii) for at least the last ten (10) loading operations for crude oil for
each nominated vessel, the volume loaded as measured on shore in shore tanks or
by flow meters and the corresponding volume loaded as measured on board, such
volume to be evidenced by documentation (including ullage and innage reports and
onboard quantity and slop certificates) satisfactory to Seller; and
(g) an estimate of the volumes of the types of Oil that Buyer desires to
purchase during the three (3) Lifting Months following such Lifting Month.
If Buyer does not furnish Seller with a proposed lifting program complying with
the requirements of this Article 10.1.1 for the following Lifting Month within
the period specified above, Buyer shall be required to accept the lifting
program for such Lifting Month established by Seller.
Not later than thirty-five (35) Days prior to the beginning of the first
programmed Lifting Month of each Contract Year, Seller shall provide Buyer with
a list of objective vetting criteria in respect of vessels acceptable to Seller
during such Contract Year. Buyer shall obtain completed vetting information for
each vessel nominated by Buyer and submit the same to Seller in accordance with
Article 10.1.1(f). Seller shall have the absolute right to reject any vessel
nominated by Buyer that does not satisfy Seller’s objective vetting criteria.
10.1.2 If the name of a vessel is not known at the time the proposed lifting
program for the following Lifting Month is furnished to Seller, Buyer shall
notify Seller of such name and other data referred to in Article 10.1.1(f) as
soon as possible, but in any event not later than seven (7) Business Days prior
to the first Day of the Agreed Laydays for the unspecified vessel. Seller may
reject Buyer’s vessel nomination in the event such vessel does not satisfy
Seller’s objective vetting criteria, in which case Buyer shall take immediate
action to nominate another vessel acceptable to Seller. If the Parties do not
reach agreement on nomination of another vessel at least five (5) Business Days
prior to the first Day of the Agreed Laydays, Seller shall have the right to
cancel that lifting without prejudice to any and all other rights Seller has
under this Agreement and without prejudice to Seller’s claim for any losses or
expenses caused by Buyer’s failure to nominate an acceptable vessel. If Seller,
at its sole option, elects nevertheless to load a vessel agreed on less than
five (5) Business Days prior to the first Day of the Agreed Laydays, the loading
of the vessel shall be subject to berth, jetty, buoy, loading platform and
loading system availability, as applicable. In no event shall laytime or time on
demurrage be charged to Seller for delays incurred because the Parties have not
agreed on a vessel within five (5) Business Days prior to the first Day of the
Agreed Laydays.
10.1.3 Seller shall be deemed to have accepted Buyer’s proposed lifting program
for the following Lifting Month unless Seller has notified Buyer of alterations
thereto at least fifteen
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(15) Days prior to the beginning of such Lifting Month. Notwithstanding any
provision herein to the contrary, so long as Buyer’s proposed lifting program
for such Lifting Month nominates a quantity of Oil conforming to the Monthly
Contract Quantity, as such quantity may be adjusted pursuant to Article 7 and
Article 20, and subject to the exceptions set forth in Article 3.2, Seller shall
not alter the quantities of Oil described in Buyer’s proposed lifting program.
Seller shall in any event notify Buyer within such time period of the Specified
Loading Port to be used by Buyer’s vessels, to be narrowed to a specific Loading
Point not less than five (5) Days prior to the first Day of the Agreed Laydays
(subject to adjustment as provided in Article 10.1.4) and the name(s) of the
independent inspector(s) proposed by Buyer and accepted by Seller for purposes
of Article 12 and Article 13. If Seller timely notifies Buyer of alterations to
the lifting program, Buyer shall be deemed to have agreed to those alterations
unless, within five (5) Days after Buyer’s receipt of Seller’s notice, Buyer
requests Seller to reconsider such alterations. Seller’s decision following any
such reconsideration shall be final and binding on both Parties. If Seller
notifies Buyer that it objects to an independent inspector nominated by Buyer,
the Parties shall designate another independent inspector by mutual agreement.
The lifting program as finally determined pursuant to the provisions of Article
10.1 for any Lifting Month is referred to herein as the “Agreed Lifting Program”
for such Lifting Month, and the three (3) Day range for the arrival of any
vessel contained in any Agreed Lifting Program is referred to herein as the
“Agreed Laydays” for such vessel.
10.1.4 Seller may notify Buyer that any vessel scheduled in an Agreed Lifting
Program shall load the Oil at a Loading Point in the Specified Loading Port
different from the Loading Point previously specified pursuant to Article 10.1.3
or shall load the Oil at two (2) Loading Ports, provided that such notice is
given by Seller (a) at least seventy-two (72) hours prior to the ETA of such
vessel, if Buyer has notified Seller of an ETA falling within or after its
Agreed Laydays, or (b) at least seventy-two (72) hours prior to the first Day of
the Agreed Laydays, if Buyer has notified Seller of an ETA which is earlier than
the first Day of the Agreed Laydays. Seller shall not be liable for any charges
or expenses incurred by Buyer, including, but not limited to, deviation, as a
result of a shift from one Loading Point to another, or the specification of two
(2) Loading Ports; provided, however, if Seller exercises its option to change a
previously declared Loading Point or to load at two (2) Loading Ports, (i) Buyer
shall be compensated by Seller for any time by which the steaming time to the
Loading Port(s) or Point(s) to which a vessel is finally ordered exceeds that
which would have been taken if vessel had been ordered to proceed to such
Port(s) or Point(s) in the first instance at the deviation rate per running Day
and pro rata for a part thereof; and (ii) Seller shall pay for extra bunkers
consumed during excess time at documented actual replacement cost at the port
where bunkers are next taken, less a credit for daily in port fuel consumption
during any period of waiting.
10.1.5 Buyer, taking into account Loading Port constraints, shall use
commercially reasonable efforts to nominate vessels and schedule liftings so as
to avoid deadfreight. Any deadfreight incurred as a result of Buyer’s nomination
of a vessel whose dimensions are larger than those required to transport the
Cargo it is scheduled to lift pursuant to Article 10.1.1 shall be for the sole
account of Buyer, and Seller shall have no liability therefor by reason of its
acceptance of Buyer’s nomination. In the event that Buyer has a claim against
Seller for deadfreight expenses incurred as a result of an underdelivery by
Seller, subject to the operational tolerance set forth in Article 3.2 and any
event of Force Majeure under Article 20 Buyer shall present such claim in
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10.1.6 In working toward each Agreed Lifting Program, the Parties shall
cooperate with one another and exercise commercially reasonable efforts to
achieve the objective that Oil be nominated, delivered and lifted on a ratable
basis, taking into consideration turnarounds, planned and unplanned maintenance,
and other operational considerations at the Loading Ports and the Refineries. In
the event of scheduled maintenance turnarounds at the Refineries, Buyer will
give Seller not less than ninety (90) Days prior written notice of such
scheduled maintenance turnaround, and will use commercially reasonable efforts
to re-route the volumes affected by the reduced processing capacity of the
Refineries to other refineries within Buyer’s U.S. domestic refining system or
otherwise redirect such volumes in accordance with Article 4.1 of this
Agreement. The Parties will cooperate in good faith to make up for any
deliveries of Oil not purchased by Buyer during the turnaround period; provided,
however, that Seller shall have no obligation to make up for the volumes of Oil
not purchased and delivered during such turnaround period.
10.2 Substitution of Vessels. Buyer shall be entitled to substitute another
vessel for any vessel designated in an Agreed Lifting Program; provided,
however, that the substitute vessel shall have substantially the same
characteristics (including carrying capacity) as the vessel previously nominated
and accepted pursuant to Article 10.1 and shall meet the requirements for
vessels loading at the particular Loading Port involved; and provided, further,
that Buyer shall give Seller notice of the substitution not less than ninety-six
(96) hours prior to the first Day of the Agreed Laydays for the substituted
vessel and shall then provide all of the information specified in Article
10.1.1(e). In the event that Buyer substitutes a vessel other than in accordance
with the provisions of this Article 10.2, Seller may in its sole discretion
refuse to load such vessel, or it may load such vessel at any Loading Port on
any Day it may specify, whether or not within the Agreed Laydays for such
vessel, and Seller shall in no event be liable for demurrage, deadfreight or any
other charges with respect to the loading of any such vessel.
10.3 Advice of ETA. Buyer shall arrange for each vessel to advise the Loading
Port operator and the vessel agent (with a copy to Seller delivered by e-mail or
facsimile) of its ETA at each of the following times:
(a) immediately upon the vessel’s leaving its last port of call before the
Loading Port or ninety-six (96) hours before ETA, whichever is later;
(b) seventy-two (72) hours before ETA;
(c) forty-eight (48) hours before ETA;
(d) twenty-four (24) hours before ETA; and
(e) immediately upon learning of any material change in its ETA.
Seller shall not be liable for demurrage, deadfreight or any other charges in
respect of any delay in loading attributable to the failure of a vessel to give
notice of its ETA at any of the times enumerated above.
10.4 Notice of Readiness. The Buyer, its representative or the master of the
vessel (who shall be deemed to be acting on Buyer’s behalf) shall give notice of
readiness of the vessel
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to load (“NOR”) to the vessel agent and the Loading Port operator (with a copy
to Seller delivered by e-mail or facsimile). NOR shall not be given until the
vessel (a) has anchored at the customary anchorage area at the Loading Port,
(b) has been granted free pratique, (c) has received the necessary clearance by
customs and all other governmental authorities and (d) is ready in all other
respects to load; provided, however, that NOR may be given before the conditions
specified in clauses (b) and (c) above have been satisfied if, in accordance
with the practice at the Loading Port, such conditions may be satisfied only
after the vessel has been brought to the Loading Point. If, notwithstanding
having tendered NOR, the vessel is found not to be ready to load, such NOR will
be disregarded and Buyer shall be obligated to give a new NOR when it is in fact
ready to load.
10.5 Vessel Requirements; Security Regulations.
10.5.1 Loading Port(s):
(a) Seller shall accept only vessels having the following measurements:
BAJO GRANDE PUERTO
MIRANDA LA SALINA
LENGTH, feet (maximum)
751 900 900
DRAFT, feet (maximum)
35 38 39.6
WIDTH
no limit no limit no limit
DWT (maximum)
42,000 long tons 115,000 100,000
(b) Should there be a material change in the configurations specified herein,
Seller shall promptly advise Buyer in writing of said change.
(c) Where a different Loading Port other than those shown in this Article 10.5
is to be used, Seller shall promptly advise the Buyer in writing of the
corresponding restrictions.
10.5.2 Buyer represents, warrants, and covenants, that each vessel used for
loading Oil under this Agreement:
(a) shall be owned or demised-chartered by a member in good standing of the
International Vessel Owners Pollution Federation Limited, carry on board a
certificate of insurance as described in the Civil Liability Convention for Oil
Pollution Damage, issued to it by a signatory state, and comply with the
International Safety Management (ISM) code;
(b) shall be covered, without expense by Seller, by insurance protecting against
any and all liabilities from pollution issued by a protection and indemnity club
that is a member of the International Group of P & I Clubs and internationally
recognized insurers in an amount not less than one billion U.S. Dollars
(U.S.$1,000,000,000), or such greater amounts as may become available in the
insurance market and generally obtained by prudent owners of similar vessels;
(c) shall have a policy on drug and alcohol abuse which meets or exceeds the
standards in the Oil Company International Marine Forum Guidelines, dated June
1995, and take proper measures to ensure compliance therewith; and
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(d) shall comply with the International Code for Security of Ships and of Port
Facilities (“ISPS Code”) and relevant amendments to Chapter XI of the
International Convention for the Safety of Life at Sea, and similar laws and
regulations pertaining to the security of ports, terminals and facilities
(“Security Regulations”), and provide to Seller, prior to loading, a copy of the
vessel’s International Ship Security Certificate according to the ISPS Code.
10.5.3 Buyer shall be responsible for any costs or expenses in respect of the
vessel (including any demurrage, retention, delay or other charges, fees or
duties) imposed at the Loading Port resulting from the vessel agent’s or
vessel’s failure to comply with the Security Regulations or the imposition of
special security measures, inspections or other actions by authorities at the
Loading Port based on the vessel’s ten (10) prior ports of call, as established
in the ISPS Code, and shall reimburse Seller for any such costs or expenses
actually incurred by Seller. Notwithstanding any prior acceptance of the vessel
by Seller, if at any time the vessel ceases to comply with the requirements of
the ISPS Code, (a) Seller shall have the right not to berth the nominated vessel
and any demurrage and all other expenses and losses of whatsoever nature arising
from the vessel’s lack of compliance shall be for the account of Buyer, and
(b) Buyer shall be obligated to substitute a vessel in compliance with the ISPS
Code.
10.5.4 Seller shall procure that the Loading Port complies with the requirements
of the Security Regulations. Prior to loading of the vessel, Seller shall
provide Buyer with a copy of the International Port Security Certificate in
accordance to the ISPS Code. Seller shall be responsible for any costs or
expenses in respect of the vessel (including any demurrage, retention, delay or
other charges, fees or duties) resulting from the failure of the Loading Port to
comply with the Security Regulations, and shall reimburse Buyer for any such
costs or expenses actually incurred by Buyer.
10.5.5 If the maritime security is affected by any event or circumstance, as
defined in the ISPS Code, which is not imputable to either Party, and special
security measures or actions are required to be taken by the port authorities or
the vessel, any cost or expense for demurrage, retention or delay shall be
shared equally by Buyer and Seller.
Article 11
Loading Conditions; Demurrage
11.1 Berthing of Vessels; Commencement of Laytime.
11.1.1 Subject to the provisions of Articles 11.1.2 and 11.1.3, Seller shall
provide a safe Loading Point at the Loading Port for each vessel designated in
accordance with the provisions of Article 10, which Loading Point may be a
berth, dock, anchorage, sea terminal, sea buoy mooring, submarine loading line
or other place, including alongside lighters, or other vessels, at which the
vessel may at all times lie safely afloat. In the event that a vessel arrives
within its Agreed Laydays, then laytime and time on demurrage shall commence at
the earlier of (a) six (6) hours after NOR or (b) when the vessel is All Fast;
provided, however, that any NOR given within the last two (2) hours in which the
Loading Port is open shall be deemed given when the Loading Port next opens.
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11.1.2 Seller shall not be obligated to provide a Loading Point for any vessel
arriving after the last Day of its Agreed Laydays. Notwithstanding the
foregoing, Seller shall make reasonable efforts to receive the vessel as soon as
possible taking into account operational requirements and constraints.
Regardless of whether such vessel is permitted to berth, Seller shall in no
event be liable for demurrage, deadfreight or other charges in connection with
the loading thereof. If such vessel is permitted to berth, laytime and time on
demurrage shall commence at the commencement of loading.
11.1.3 Seller shall not be obligated to provide any vessel arriving prior to its
Agreed Laydays with a Loading Point until the first Day of its Agreed Laydays.
If Seller does provide a Loading Point prior to the first Day of its Agreed
Laydays, then laytime and time on demurrage shall commence at the earlier of
(a) six (6) hours after the Loading Port opens on the first Day of the Agreed
Laydays for such vessel and (b) when the vessel is All Fast.
11.2 Shifting Loading Point of Vessels. Seller shall have the right to shift
vessels at the Loading Point from one berth to another, provided that all
expenses incurred in connection therewith shall be borne by Seller and all time
expended in such shifting of vessels shall count as used laytime and time on
demurrage. Notwithstanding the provisions of the preceding sentence, the
expenses incurred in connection with a shifting of any vessel which is
attributable to one of the events referred to in Article 11.4 shall be borne by
Buyer, the time consumed during such shifting shall not count as used laytime or
time on demurrage, and Seller shall not be obligated to provide such vessel with
a Loading Point until a Loading Point becomes available, taking into account the
priority of other vessels.
11.3 Allowed Laytime. Except as otherwise agreed in writing, Seller shall have
an Allowed Laytime of thirty-six (36) hours to complete the loading of the
quantity of Oil nominated and accepted. In the event that an Agreed Lifting
Program provides for loading of Buyer’s vessel at two (2) Loading Ports or
Seller notifies Buyer pursuant to Article 10.1.4 that loading shall be at two
(2) Loading Points within the Specified Loading Port, the Allowed Laytime at
each Loading Port shall be determined by reference to the quantity of Oil to be
loaded at each Loading Port in accordance with Exhibit 2. Used laytime or time
on demurrage shall not commence at any Loading Port until six (6) hours after
NOR is tendered at such Loading Port or when the vessel is All Fast, whichever
occurs first. Used laytime and/or time on demurrage shall cease upon the
disconnection of delivery hoses after the completion of loading at the relevant
Loading Port; it being understood that the time consumed from the time at which
delivery hoses are disconnected at the first Loading Port until the time that
laytime and time on demurrage would commence at the second Loading Port pursuant
to the provisions of Article 11.1 shall not be counted as used laytime or time
on demurrage. Notwithstanding the foregoing, the Parties agree that used laytime
and time on demurrage shall restart if Cargo documentation has not been
delivered to the Buyer’s vessel within four (4) hours after disconnection of
hoses.
11.4 Adjustments to Laytime and Time on Demurrage. In the event that the loading
of any vessel is delayed, directly or indirectly, for any of the following
reasons, whether occurring prior to, during or after the berthing or
commencement of loading of the vessel:
(a) lightering at Buyer’s request;
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(b) delay or suspension in loading attributable to Buyer, vessel’s agents,
master, officers, crew, vessel owner or operator, or due to the failure of Buyer
to comply with any provision of this Agreement;
(c) more than one stoppage in loading as a result of instructions given by, or
on behalf of, Buyer as to distribution of the Oil in the vessel;
(d) any delay in loading as a result of the vessel not being in a seaworthy or
cargoworthy condition or otherwise caused by the condition or facilities of the
vessel, or any other reason attributable to or within the reasonable control of
Buyer or the vessel;
(e) failure of the vessel to have required documentation aboard;
(f) bunkering (including time to connect or disconnect the bunkering hose)
unless concurrent with loading so that no loss of time is involved;
(g) restraint or interference in the vessel’s operation by any governmental
authority in connection with the ownership, registration or obligations of the
Buyer or the vessel, or in connection with stowaways or with smuggling or other
prohibited activities;
(h) time spent by the vessel shifting from a lightering or waiting area to the
customary anchorage point or berth, even if lightering has taken place; or
proceeding from the customary anchorage to the designated berth or Loading Point
after it tenders NOR, calculated from the earlier of anchor aweigh or pilot on
board and ending at All Fast;
(i) regulations of the Loading Port operator, port authorities or the government
(or any political subdivision or agency thereof) having jurisdiction over the
Loading Port, including, but not limited to, regulations or decisions closing
the Loading Port, prohibiting night traffic or berth maneuvering or prohibiting
or restricting loading for any reason;
(j) time required for a vessel to be granted free pratique or to receive
customs, immigration or sanitary clearance;
(k) inspection, gauging and measurement of vessel tanks or valves before, during
and after loading;
(l) bad weather, rough seas, fires or explosions; or
(m) any of the events listed in Article 20.1 and not specifically listed above,
or any other event of Force Majeure;
then the amount of time during which the loading of such vessel is so delayed
shall not count as laytime or time on demurrage; provided, however, that in the
event the loading of any vessel is delayed due to bad weather or rough seas,
then one-half the period of delay shall count as laytime or time on demurrage.
Notwithstanding the foregoing, Seller will make reasonable efforts to berth
vessels in their order of arrival in case of delay due to bad weather or Force
Majeure.
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11.5 Demurrage.
11.5.1 Seller shall pay Buyer demurrage for any hour or part of an hour of
laytime in excess of the Allowed Laytime for the vessel involved, at a rate
equal to: (a) if the vessel is voyage-chartered, the rate specified in the
charter party for the vessel (it being understood that Seller shall in no event
be obligated to pay Buyer more demurrage than the amount of demurrage Buyer can
demonstrate has actually been paid to the vessel owner in accordance with the
terms of the charter party), or (b) if the vessel is owned by Buyer (or one of
its Affiliates) or is under time charter, the demurrage assessment of a member
of ASBA utilizing the nominated quantity, the route taken and the first Day of
the Agreed Laydays. Buyer shall select the member of the ASBA to make such
assessment and shall be solely responsible for all costs and expenses associated
therewith. Notwithstanding the foregoing, to avoid administrative time and
expenses, Buyer shall not make, and Seller shall not be obligated to pay, any
claim for demurrage of less than one thousand U.S. Dollars (U.S.$1,000). The
right of Buyer to demurrage pursuant to this Article 11.5 shall constitute
Buyer’s exclusive remedy with respect to any failure of Seller to complete the
loading of any vessel within the Allowed Laytime.
11.5.2 Buyer shall submit any claim for demurrage to Seller together with all
pertinent supporting documentation within ninety (90) Days of the bill of lading
date. The claim shall be submitted in the same manner as notices are required to
be sent pursuant to Article 27, and shall consist of the following information
and supporting documentation:
(a) Buyer’s calculations of demurrage and the amount claimed in U.S. Dollars;
(b) copies of the notices of ETA as stipulated in this Agreement and as advised
by the vessel directly to Seller or by the vessel agent based upon vessel
instructions to the agent;
(c) copies of the NORs at the Loading Port(s);
(d) copies of the statement of facts/time log of the port agent, the terminal
representative attending the vessel at the Loading Port or the inspection
company;
(e) copies of all letters of protest issued by or to the master of the vessel;
(f) if the vessel was voyage-chartered by Buyer, a copy of the fixture recap of
the broker’s fixture advice which reflects the demurrage rate, and a copy of the
vessel owner’s demurrage invoice; and
(g) if the vessel was owned or time-chartered by the Buyer, a copy of the
demurrage assessment obtained pursuant to Article 11.5.1.
Seller shall not be liable to Buyer in respect of (and Buyer shall be deemed to
have waived) any claim for demurrage which is not made in accordance with this
Article 11.5.2 within ninety (90) Days after the bill of lading date.
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11.6 Buyer’s Liability for Delay and Damage.
11.6.1 Buyer shall pay Seller its actual costs, expenses or damages (including
demurrage charges payable to third parties) incurred for each hour or part
thereof that loading is delayed due to any of the reasons specified in
(a) through (h) of Article 11.4.
11.6.2 Each vessel shall clear berth as soon as loading is completed and the
delivery hoses are disconnected. Buyer shall pay Seller its actual costs,
expenses or damages (including demurrage charges payable to third parties)
incurred for each hour or part thereof in excess of two (2) hours that the
vessel remains in berth subsequent to completion of loading and disconnection of
the delivery hoses. Notwithstanding the foregoing, Buyer shall not be liable for
the costs set forth above for all time in excess of two (2) hours after hoses
have been disconnected, if (a) the reason for Buyer’s vessel not vacating the
berth is Seller’s failure to deliver Cargo documents to Buyer’s vessel within
such two (2) hour time period, or (b) such delay is the result of a Force
Majeure event at the Loading Port or the berthing facilities. Notwithstanding
the foregoing and the provisions of Article 19, if such delay is a result of the
circumstances set forth in Article 11.4(l), then Buyer shall be liable for
one-half of the expenses described above.
11.6.3 In the event that for any reason Buyer’s vessel causes damage to any
facilities at the Loading Point and Seller is not timely compensated by the
vessel causing the damage, then (a) Buyer shall reimburse Seller for the full
cost of repair or replacement of such facilities without taking into account the
depreciated value of such facilities, (b) any delay in loading the vessel as a
result of such damage shall not be counted as used laytime or time on demurrage
for such vessel, and (c) Buyer shall pay Seller its actual costs, expenses or
damages (including demurrage charges to third parties) incurred for each hour or
part thereof that any Loading Point may not be used as a result of such damage.
Should any such damage occur, Buyer shall post such security for the payments
provided in the preceding sentence as Seller may request; it being understood
that Seller may detain the vessel at the Loading Port until such security shall
have been posted.
11.6.4 Subsequent to the completion of loading and disconnection of the delivery
hoses, and subject to the provisions set forth in Article 11.6.2 above, Buyer’s
vessel shall be permitted to clear berth if and only if Seller has delivered a
full set of Cargo documents for the vessel; it being understood that early
departure procedures (i.e., procedures allowing a vessel to clear berth while in
possession of incomplete Cargo documents) shall not be allowed without the
mutual consent of Buyer and Seller.
Article 12
Quantity Measurements
12.1 Determination of Quantity. The volume of each loading of Oil shall be
determined by an independent inspector selected as provided in Article 10.1.3,
whose fees shall be shared equally by the Parties. Measuring and gauging shall
be performed in accordance with one of the following measurement systems in
decreasing order of preference, depending on the operational conditions
prevailing at the Loading Port involved. Seller and Buyer or their respective
representatives may witness the taking of the measurements.
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(a) Flow meters installed on loading lines: Such meter measurements shall be
taken immediately before, during and after loading. When measurements are made
with positive displacement meters, the meters and associated measurement testers
will be installed, maintained and calibrated according to the latest revision of
API-Manual of Petroleum Measurement Standards (“API-MPMS”), Chapter 6.5,
“Metering Systems for Loading and Unloading Marine Bulk Carriers”; Chapter 4.2,
“Conventional Pipe Provers”; Chapter 4.8, “Operation of Proving Systems”;
Chapter 7, “Temperature Determination”; and Chapter 5.2, “Measurement of Liquid
Hydrocarbons by Displacement Meters”. If turbine meters are used, gauging will
follow the latest revision of API-MPMS, Chapter 5.3, “Measurement of Liquid
Hydrocarbons by Turbine Meters”, for the meters and measurement testers.
Calculation of metered quantity shall follow API-MPMS, Chapter 12.2,
“Calculation of Liquid Petroleum Quantities measured by Turbine or Displacement
Meters”.
(b) Shore tanks: Seller shall calibrate, or cause to be calibrated, the shore
tanks on a periodic basis according to the latest revision of API-MPMS, Chapter
2. The measurement of tank contents shall be performed according to the latest
revisions of API-MPMS, Chapter 3, “Tank Gauging”, and Chapter 7, “Temperature
Determination”. The independent inspector shall ensure that all equipment used
in the performance of this work is calibrated and in good working order. Volume
calculations shall follow the latest revision of API-MPMS, Chapter 12.1,
“Calculation of Static Petroleum Quantities”, Part 1, “Upright Cylindrical Tanks
and Marine Vessels”. In the absence of methods contained in Article 12.1(a) or
(b), discharge flow meters, or static shore tank measurements shall be utilized
to measure the quantity of the Cargo. If neither of these methods is available,
the quantity of the Cargo shall be determined by utilizing the methodology for
“Volume Measured on Board” specified below in Article 12.1(c).
(c) Volume measured on board: Volume measurements on board the vessel shall be
made in accordance with the latest edition of the API-MPMS, Chapter 17, “Marine
Measurement” and its subparts. The onboard quantity (including free water)
measured prior to loading shall be deducted from the total observed volume
measured after loading. Volume corrections in respect of temperature shall then
be effected at 60°F (equivalent to 15.56°C) in accordance with the latest
revision of ASTM D1250-80 or API-MPMS, Chapter 11.1, “Volume Correction Factors”
at Seller’s choice, thereby arriving at the gross standard volume. Such gross
standard volume shall then be further corrected by dividing it by the current
vessel experience factor, determined in accordance with the latest revision of
API-MPMS, Chapter 17.9, “Vessel Experience Factors”. S & W, determined in the
manner provided in Article 13.2, together with any increase in free water shall
then be deducted from the volume determined above in order to arrive at the
volume for purposes of the bill of lading and the invoice.
12.2 Volume Corrections for Temperature. Except in the case that quantity
measurements are made pursuant to the provisions of Article 12.1(c), in which
case temperature corrections shall be made in the manner and at the time
specified in that Article, temperature readings shall be taken in accordance
with the methods listed below in decreasing order of preference, depending on
operational conditions prevailing at the Loading Port involved: (a) the
flow-weighted average temperature taken at regular times during loading by
Seller or its agents at flow meters; and (b) the temperature taken in shore
tanks by Seller or its agent. Temperature corrections at 60°F (equivalent to
15.56°C) will then be effected for all volume determinations in accordance with
ASTM-1250 or API MPMS, Chapter 11.1, at Seller’s choice, provided that
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temperature corrections shall not be made in the case that volume is determined
by way of flow meters pursuant to Article 12.1(a) and temperature compensators
at 60°F (equivalent to 15.56°C) are integrated into the meter system. S & W,
determined in the manner provided in Article 13.1(a), (b) or (c), as the case
may be, and Article 13.2, shall be deducted from the volume corrected for
temperature as provided above in order to arrive at the volume for purposes of
the bill of lading and invoice.
12.3 Conclusiveness of Measurements. Quantity and temperature measurements
witnessed by the independent inspector as provided in this Article 12 shall be
final and binding on the Parties, except in the case of manifest error or fraud.
In any event, without prejudice to the right of either Party to pursue a claim
in accordance with Article 16, the determination of the independent inspector
shall govern for purposes of the quantity stated in the bill of lading and the
obligation of Buyer to make payment in accordance with the provisions of Article
8.
Article 13
Quality
13.1 Determination of Quality. Sampling for quality of the Oil loaded in each
shipment shall be witnessed by the independent inspector in accordance with the
latest revision of API-MPMS, Chapter 8.2, “Standard Practice for Automatic
Sampling of Liquid Petroleum and Petroleum Products”, or ASTM D-4177, at
Seller’s choice, where Oil is measured by flow metering, and API-MPMS, Chapter
8.1, “Standard Practice for Manual Sampling of Petroleum and Petroleum
Products”, or ASTM D-4057, at Seller’s choice, where Oil is measured by tank
gauging. When the Oil is sampled at a tank, samples shall be taken and analyzed
of the material in pipelines from the tank to the dock loading arms. Buyer and
Seller or their representatives may witness the taking and testing of samples.
Quality shall be determined by using the methods listed below in decreasing
order of preference, depending on the operational conditions prevailing at the
Loading Port involved: (a) from samples drawn from automatic samplers installed
in the loading lines of each tank; (b) from samples drawn from the isolated
storage shore tanks delivering the Oil; or (c) from a composite sample obtained
in proportional parts from the vessel’s tanks. In all cases, equal quantities of
Oil from each tank shall be drawn and mixed and equally filled in seven
(7) containers of one Gallon each and finally sealed. Three (3) of such sealed
containers shall be delivered to the local office of the Ministry at the Loading
Port (or to the address notified by the Ministry), one shall be handed over to
the master of the vessel and one (1) to the independent inspector, and two
(2) shall be kept by Seller for ninety (90) Days after the date of the bill of
lading.
13.2 Analysis of Samples. The independent inspector shall witness quality tests
for sulfur, salt and Reid vapor pressure on the samples according to the latest
revision of ASTM or API-MPMS procedures, at Seller’s choice. Gravity tests on
all Oil shall be made in accordance with the latest revision of API-MPMS,
Chapter 9.1, or ASTM D1298-80, at Seller’s choice. S & W shall be established in
each case pursuant to the latest revision of ASTM D-4377 or API Chapter 10-3, at
Seller’s choice, in tests witnessed by the independent inspector; it being
understood that if the Oil is reconstituted crude oil, deduction for S & W shall
be made only to the crude oil component of such Oil. Quality tests conducted in
accordance with the above provisions shall be final and binding upon the Parties
for invoicing purposes, but without prejudice to the right of either Party to
pursue a claim.
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13.3 No Warranties. Seller makes no warranties regarding Oil and does not
guarantee or warrant the suitability of Oil for any purpose whatsoever except
that Seller warrants that (a) each grade of Oil sold and delivered under this
Agreement shall meet the definition and typical specifications of each grade of
Oil as set forth in Exhibit 1 to this Agreement and shall be typical of oil sold
and delivered to Seller’s other export customers, and (b) Seller has good and
marketable title to all Oil sold to Buyer under this agreement. Except as
provided in the preceding sentence, Buyer hereby releases Seller from any and
all warranties whatsoever, including, without limitation, any implied warranties
of merchantability or fitness for a particular purpose.
Article 14
Delivery
14.1 Passage of Title. Delivery of the Oil shall be made in bulk to Buyer FOB
the applicable Loading Port to vessels to be provided by Buyer. Delivery shall
be deemed completed when the Oil passes the permanent flange connection of the
delivery hose at the Loading Port. At that point, Seller’s responsibility with
respect to the Oil shall cease, and title to and all risk of loss of or damage
to, and deterioration or evaporation of, the Oil so delivered shall pass to, and
be assumed by, Buyer. Any loss of or damage to Oil or any property of Seller or
of any other person during loading which is in any way attributable to the
vessel or its officers or crew shall be borne by Buyer.
14.2 Port and Loading Expenses. All expenses ashore pertaining to the pumping of
the Oil from shore tanks to vessels shall be borne by Seller, including, but not
limited to, wharfage, dockage and quay dues (if any) at the Loading Port. Seller
shall pay all export taxes or duties imposed by the government (or any political
subdivision or taxing authority thereof) having jurisdiction over the Loading
Port from which the Oil is deemed to have been exported. All other expenses
pertaining to the loading of any vessel, including, without limitation, all
vessel agency fees, anchorage, tonnage, towage, pilotage, customs, consular,
entrance, clearance and quarantine fees, port dues and all charges and expenses
relating to berthing and unberthing of vessels, shall be borne by Buyer.
14.3 Loading Port Regulations. All laws, rules and regulations now or hereafter
in existence relating to operations at the Loading Ports shall apply to all
vessels provided by Buyer, including, without limitation, any regulations
relating to (a) the prevention and control of fires and water pollution and
(b) lead-free and segregated or clean ballast. Buyer shall reimburse Seller or
its agent for any expenses they may incur as a result of the noncompliance by
any such vessel with any such applicable law, rule or regulation, including,
without limitation, any expenses incurred by Seller or its agent in connection
with the extinguishing of fires, the repair of damage caused thereby, the
cleaning-up of water pollution and the payment of any charges assessed by the
government (or any political subdivision or agency thereof) having jurisdiction
over the Loading Port in question.
14.4 Buyer’s Knowledge of Loading Port Facilities; Standard Procedures.
14.4.1 Buyer hereby acknowledges that it is fully familiar with the facilities
and conditions at the Loading Ports, including the loading conditions and
procedures and the
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facilities for the storage and delivery of the Oil. The facilities and
conditions at the Loading Ports may be changed at any time. Buyer also
acknowledges that standard procedures in effect at the Loading Ports from time
to time relating, inter alia, to quality and quantity measurements, safety in
loading, and inspection of vessel tanks, shall supplement (but not conflict
with) the procedures specified herein. Seller shall supply Buyer with a copy of
such procedures upon Buyer’s request.
14.4.2 Seller makes no representations, express or implied, concerning
navigational conditions in public channels or waterways to be utilized by the
vessel in order to reach or depart the Loading Point which may require the
exercise of special precautions or safety measures; it being understood that the
operator of the vessel shall be responsible for making a thorough check of any
navigational conditions as are likely to exist at the approaches of the Loading
Port about the time of its arrival so as to prevent and avoid any hazards or
controllable risks.
14.5 Hazardous Warning Responsibility.
Seller shall provide Buyer with a Material Safety Data Sheet for each type of
Oil sold hereunder. Buyer acknowledges that there may be hazards associated with
the loading, unloading, transporting, handling or use of the Oil sold hereunder,
which may require that warnings be communicated to or other precautionary action
taken with all persons handling, coming into contact with, or in any way
concerned with the Oil sold hereunder. Buyer assumes as to its employees,
independent contractors and any subsequent purchaser of the Oil sold hereunder
all responsibility for all such necessary warnings or other precautionary
measures relating to hazards to person and property associated with such Oil.
Buyer, at its own expense, shall defend, indemnify and hold harmless Seller and
its Affiliates and its and their respective agents, officers, directors,
employees, representatives, successors and assigns from and against any and all
liabilities; losses; damages; demands; claims; penalties; fines; actions; suits;
legal, administrative or arbitration proceedings; judgments, orders, directives,
injunctions, decrees or awards of any jurisdictions; costs and expenses
(including, but not limited to, attorneys’ fees, expert witness fees, and
related litigation costs) arising out of or in any manner related to Buyer’s
failure to provide necessary warnings or other precautionary measures in
connection with the Oil sold hereunder as provided above.
Article 15
No Set-Off
Without prejudice to Buyer’s right subsequently to assert claims it may have
under this Agreement by notices pursuant to Article 16 or in arbitration
proceedings pursuant to Article 21, all payments required to be made by Buyer
under this Agreement shall be made punctually and without set-off or deduction
whatsoever for any claims which Buyer or any other party may now have or
hereafter acquire against Seller. Without limiting the foregoing, Buyer shall
not be entitled to reduce or delay payment of the amount invoiced by Seller for
any Oil on the basis that a dispute exists as to the quality or quantity of Oil
recorded as having been delivered on the applicable certificate.
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Article 16
Notice of Claims
Any claim which Buyer may have arising out of or relating to this Agreement must
be notified to Seller: (a) within ninety (90) Days after the date of the bill of
lading for the shipment involved, if a claim is for demurrage (any such claim
must be accompanied by the documentation required by Article 11.5.2); (b) within
ninety (90) Days after the date on which the loading of any shipment is
completed, if a claim relates to the quantity or quality of Oil in such
shipment; or (c) within ninety (90) Days after the occurrence of the events
giving rise to such claim, if a claim involves any other matter relating to this
Agreement. Seller shall not be liable to Buyer in respect of, and Buyer shall be
deemed to have waived, any claim which is not so notified to Seller, and Buyer
shall reimburse Seller for any expenses, including reasonable attorneys’ fees,
incurred by Seller in connection with the defense of any such claim not so
notified to Seller.
Article 17
Termination
17.1 Termination. Notwithstanding anything herein to the contrary, this
Agreement may be terminated at any time:
(a) by written agreement of Seller and Buyer; or
(b) by Seller, upon written notice to Buyer, if one or more of the following
(i) Buyer defaults in any of its material obligations under this Agreement
(including its obligation to lift Oil), and, except as set forth in Article
17.1(b)(iii), such default continues unremedied for a period of sixty (60) Days
after notice thereof by Seller;
(ii) Buyer fails to pay any undisputed amount owed to Seller as required by
Article 8 or any arrangement securing payment hereunder has become impaired;
(iii) there occurs an Insolvency Event with respect to Buyer; or
(iv) any representation or warranty made by Buyer to Seller hereunder proves
to be false or incorrect in any material respect.
(c) by Buyer, upon written notice to Seller, if one or more of the following
(i) Seller defaults in any of its material obligations under this Agreement
(including its obligation to deliver Oil), and such default continues unremedied
for a period of sixty (60) Days after notice thereof by Buyer;
(ii) there occurs an Insolvency Event with respect to Seller;
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(iii) any representation or warranty made by Seller to Buyer hereunder proves
to be false or incorrect in any material respect; or
(iv) Seller suspends its performance obligations hereunder due to a
Governmental Mandate.
17.2 Termination Not to Relieve Buyer of Obligations. No termination of this
Agreement, whether pursuant to this Article 17 or any other provision of this
Agreement, shall relieve Buyer of any of its obligations to make any payment
required of it hereunder that accrued prior to such termination.
17.3 Acceleration. In the event that (a) Buyer fails to make any payment
required to be made by it under this Agreement when and as the same shall become
due and payable or (b) Seller exercises its right to terminate this Agreement
pursuant to any provision hereof, then, notwithstanding anything herein to the
contrary, any obligation of Buyer to make any payment under the terms of this
Agreement shall be accelerated and such payment shall become immediately due and
payable.
17.4 Termination for an Insolvency Event. Each Party acknowledges that this
Agreement is a “Forward Contract” as defined in United States Bankruptcy Code
(11 U.S.C. Sec. 101(25)). If a Party (the “Non-Defaulting Party”) terminates
this Agreement pursuant to Article 17.1(b)(iii) or Article 17.1(c)(ii), as
applicable, by reason of an Insolvency Event of the other Party (the “Defaulting
Party”), (i) the Defaulting Party shall have no right to recover damages or
other compensation from the Non-Defaulting Party and (ii) the Non-Defaulting
Party, in addition to any rights or remedies it may have under this Agreement or
otherwise, shall have the right to recover damages or other compensation from
the Defaulting Party in respect of the quantities of Oil that would have been
sold or purchased, as the case may be, hereunder in the absence of a
termination.
17.5 No Gifts. Neither Party shall, nor shall it permit its agents,
representatives or personnel, to grant or offer the agents, representatives or
personnel of the other, either directly or indirectly, any gifts, loans,
gratifications, commissions or fees, personally benefiting said agents,
representatives or personnel or any member of their families, or any company in
which they hold a substantial interest, except for such small scale
institutional gifts as are customary and permissible in accordance with best oil
industry practices in the Western Hemisphere. If either Party shall breach this
obligation, then this Agreement shall immediately terminate without prejudice to
any other remedies or actions as may be prescribed by applicable law. Where
either Party receives any requests from the agents, representatives or personnel
of the other Party (or from third parties purporting to act on their behalf) for
the granting of any gifts, loans, gratification, commissions or fees precluded
by the preceding provisions of this Article 17.5, it shall promptly notify the
other of such request together with such other information as may be required to
investigate the relevant facts and circumstances.
17.6 Other Rights and Remedies. The right of either Party to terminate under
this Article 17 shall be in addition to any other rights or remedies (including,
but not limited to, the right to seek damages) provided to such Party under this
Agreement or otherwise.
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Article 18
Confidentiality
Buyer agrees that all information obtained in connection with this Agreement
from Seller by any officer, director, employee, agent or other representative of
Buyer shall be treated as the confidential and proprietary information of
Seller, and such information shall not be disclosed without the prior written
consent of Seller; provided, however, that Buyer may disclose such information,
including the contents of this Agreement, (a) pursuant to governmental, judicial
and regulatory requirements to which Buyer is subject if such disclosure by
Buyer is judicially mandated or otherwise required by law or regulation
(including without limitation, disclosures required by the U.S. Securities and
Exchange Commission) and the failure to so disclose would subject Buyer to civil
or criminal action or other penalties, and (b) Buyer’s financial advisors,
attorneys, accountants and potential financing sources who agree to keep such
information confidential as required hereby. When such disclosure is required
pursuant to a subpoena, Buyer shall use commercially reasonable efforts
(including, but not limited to, seeking judicial appeal of such requirement) to
have the information maintained as confidential and shall disclose the minimum
information necessary to satisfy such requirements. In the event that Buyer
becomes legally compelled to disclose any of such information pursuant to a
subpoena, Buyer shall provide Seller with notice of such event promptly upon its
obtaining knowledge thereof (provided that Buyer is not otherwise prohibited by
law, regulation or legal process from giving such notice) so that Seller may
seek a protective order or other appropriate remedy. When information is
requested pursuant to a subpoena, in the event that such protective order or
other remedy is not obtained or is not otherwise available, Buyer shall furnish
only that portion of such information that is legally required to be disclosed
and in a manner reasonably designed to preserve its confidential nature. In the
event that Buyer makes a disclosure contrary to the provisions of this Article
18, Seller shall have the right, without prejudice to any other rights or
remedies it may have under this Agreement or otherwise, to obtain injunctive
relief prohibiting Buyer from disclosing such confidential information,
notwithstanding any monetary remedy which may be available to Seller. This
obligation shall be of a continuing nature and shall terminate five years after
Article 19
No Third-Party Beneficiaries; Assignment
give to any person or entity any rights as a third-party beneficiary of this
Agreement or any part hereof. Buyer shall not assign to any person or entity any
right or interest in this Agreement or delegate to any third party any of its
obligations hereunder without the consent of Seller, which consent shall not be
unreasonably withheld or delayed; provided, however, any such assignment or
delegation by Buyer to its Affiliates shall not require Seller’s consent
provided that such Affiliate demonstrates to Seller financial capacity at least
equal to that of Buyer prior to the effective date of such assignment. In the
event of any purported assignment or delegation by Buyer in contravention of the
provisions of this Article 19, Seller shall have the right, without prejudice to
this Agreement effective immediately upon notice to Buyer. Seller may assign
this Agreement to any of its Affiliates only with the consent of Buyer, which
consent shall not be unreasonably withheld or
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delayed. Notwithstanding the foregoing, Seller may freely assign its collection
rights under this Agreement to any bank or financial institution.
Article 20
Force Majeure
20.1 Relief from Liability. Neither Party to this Agreement shall be liable for
demurrage, loss, damage, claims or demands of any nature arising out of delays
or defaults in performance under this Agreement, due to any cause reasonably
beyond its control (“Force Majeure”). Force Majeure shall be deemed to include,
but not be limited to: (a) wars, hostilities, terrorism, acts of the public
enemy; sabotage, boycott, blockade, revolutions, insurrections, riots or
commotions; (b) acts of God, fires, frost or ice, earthquakes, storms,
lightning, weather or sea conditions, tidal wave or perils of the sea;
(c) navigational accidents, vessel damages or breakdowns, loss of vessel due to
sinking, belligerents or governmental confiscation, with or without formal
requisition; (d) accidents or closing of ports, docks, dams, channels,
river-beds and other maritime or navigational aids; (e) epidemics and
quarantines; (f) strikes or agreements among workers, lockouts or other labor
disturbances; (g) breakdowns, explosions or accidents caused by fire or other
causes to: wells, pipelines, storage deposits, refinery facilities, machinery
and other facilities; (h) faults or omissions caused or due to: expropriation,
requisition, confiscation or nationalization; (i) embargoes, export or import
restrictions, or restrictions of production, rationing or allocation of same,
whether imposed by law, decree or regulation, or by insistence, request or
instructions of any governmental authority or organization owned or controlled
by any government or of which such governmental authority is a member, or by any
Person purporting to represent a government, other than a Governmental Mandate;
j) for Seller, export restrictions or restrictions on production, rationing or
allocation of same, ordered by the Government of Venezuela and derived from
accords or agreements reached by the Organization of Petroleum Exporting
Countries. As well as any Government Measure (“Sovereign Acts”).
20.2 Notice. A Party claiming Force Majeure shall promptly notify the other
Party of the occurrence of the event of Force Majeure relied upon and the
expected duration thereof. The Party claiming Force Majeure shall use
commercially reasonable efforts to give the other Party notice of termination of
the event of Force Majeure and the date when performance is expected to resume.
20.3 Payment for Oil Sold and Delivered. Nothing in this Article 20 shall
relieve Buyer of its obligation to pay in full for Oil sold and delivered
hereunder and for all other amounts due to Seller from Buyer under this
Agreement.
20.4 Obligation to Apportion. If, as a result of Force Majeure, Seller at any
time does not have available a sufficient amount of Oil for export to supply the
aggregate amount of Oil to be sold by it hereunder to Buyer and under such
commitments as Seller may have with its other customers, Seller shall endeavor
to arrange an equitable pro-ration of Oil available from its own production for
export among its existing contractual customers, including Buyer; it being
understood that the occurrence of an event of Force Majeure shall not under any
circumstances require Seller to purchase crude oil from any party to sell to
Buyer.
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20.5 No Makeup of Deliveries Excused by Force Majeure. Seller shall not be
obligated to make up deliveries of Oil which have been prevented by an event of
Force Majeure.
20.6 No Extension of Contract; Right to Terminate. The occurrence of an event of
Force Majeure shall not operate to extend the period of this Agreement. Should
Seller suspend its performance obligations hereunder for any period of time due
to a Governmental Mandate, Buyer shall have the right to terminate this
Agreement without liability upon notice to Seller.
Article 21
Dispute Resolution; Governing Law
21.1 Settlement by Arbitration. All disputes arising under or in connection with
this Agreement shall be finally settled by arbitration under the Rules of
Arbitration (“ICC Rules”) of the International Chamber of Commerce in effect at
such time. The place of arbitration shall be Paris, France and the language of
the arbitration shall be English. The number of arbitrators shall be three (3),
and the arbitrators shall apply the substantive law of Venezuela to the merits
of the dispute. Any arbitral award relating to the performance by either Party
of its obligations under this Agreement shall be (i) reasoned in accordance with
Article 25.2 of the ICC Rules, (ii) in writing, and (iii) final and binding on
all parties to the arbitration. Any arbitral award may be confirmed or embodied
in any order or judgment of any court of competent jurisdiction.
21.2 Governing Law. The Parties agree that this Agreement shall be governed by
and interpreted in accordance with the laws of Venezuela.
21.3 Buyer’s Waiver. To the extent the same may be applicable, Buyer hereby
waives all causes of action and remedies to which Buyer is or may become
entitled under the Texas Deceptive Trade Practices Act.
Article 22
Representations and Warranties
22.1 Buyer Representations. Buyer represents and warrants to Seller that:
(a) Buyer is a limited liability company duly organized and validly existing
(b) this Agreement has been duly authorized by all necessary corporate or other
action of Buyer; and constitutes the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms;
(c) unless permitted as set forth herein or otherwise specifically agreed, Buyer
is purchasing the Oil hereunder exclusively for its own use;
(d) Buyer has not been contacted by or negotiated with any finder, broker or
other intermediary for the purchase of the Oil and no such person is entitled to
any compensation with respect to this Agreement or the sale of Oil hereunder;
and
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(e) none of Buyer’s directors, employees or agents has given or will give any
commission, fee, rebate, gift or entertainment of significant value in
connection with this Agreement, it being agreed that representatives of Seller
may audit the applicable records of Buyer solely for the purpose of determining
whether there has been compliance with this clause (e).
22.2 Seller Representations. Seller represents and warrants to Buyer that:
(a) Seller is a corporation duly organized and existing under the laws of
Venezuela having the legal capacity to enter into and perform this Agreement;
(b) Seller has obtained all necessary authorizations from the competent
governmental authorities for the execution of this Agreement and the performance
(c) the execution and performance by Seller of this Agreement has been duly
authorized by all necessary corporate action;
(d) this Agreement has been duly executed by Seller and, assuming the due
authorization and execution of this Agreement by Buyer, constitutes the legal,
with its terms;
(e) neither the execution of this Agreement by Seller nor the performance by
Seller of its obligations hereunder will conflict with or result in any breach
of, or constitute a violation of or default under, any applicable law, its
charter or by-laws, or any indenture, mortgage, deed of trust, or other
instrument or agreement (including, without limitation, any negative pledge or
similar clause), to which Seller is a party, or by which it may be bound, or to
which any of its property or assets may be subject;
(f) no lawsuit or other proceeding is pending or, to the knowledge of Seller,
threatened against Seller which, if determined adversely to Seller, may
materially and adversely affect its business or financial condition or the
consummation of the transactions contemplated by, or the performance of its
obligations under, this Agreement; and no action or proceeding has been
instituted, and no order, decree, injunction or judgment of any kind from any
court or other governmental authority has been issued, to avoid, restrain or in
any other manner prevent the consummation of the transactions contemplated by
this Agreement;
(g) Seller has not been contacted by or negotiated with any finder, broker or
other intermediary for the sale of Oil hereunder, and no person or entity is
entitled to any compensation with respect to this Agreement or the sale of Oil
hereunder; and
(h) no director, employee or agent of Seller has given or will give any
connection with this Agreement, it being agreed that representatives of Buyer
may audit the applicable records of Seller solely for the purpose of determining
whether there has been compliance with this clause (h).
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Article 23
Liquidated Damages and Limitation of Liability
23.1 Failure to Deliver Oil. If in any Year during the term of this Agreement,
Seller shall have failed to deliver any quantity of Oil and such failure to
deliver Oil is not excused pursuant to Article 20, then Buyer shall furnish to
Seller within thirty (30) Days after the end of such Year a calculation
respecting nominations, deliveries and excused deliveries of Oil for such Year
(said calculation being herein called the “Annual Accounting”). Specifically,
the Annual Accounting shall contain a tabulation of the following formula for
each grade of Oil for such Year:
Aggregate Nominated Volume minus Aggregate Deliveries where:
“Aggregate Nominated Volume” means the sum of the Nominated Volumes of the grade
of Oil included in the Agreed Lifting Program for each of the Months in the
Year;
“Nominated Volume” means, for each Month, the volume of that grade of Oil
included in the Agreed Lifting Program for such Month as provided in Article 10
of this Agreement;
“Aggregate Deliveries” means the sum of the Deliveries in each of the Months in
the Year; and
“Deliveries” means actual deliveries of Oil of such grade in a Month, plus
deliveries not made because of the occurrence of any event described in
Article 20.1 of this Agreement, to the extent that such event or condition was
not taken into account in establishing the Agreed Lifting Program for such
Month.
If the Annual Accounting for any such Year applicable to such grade of Oil shows
that the Aggregate Nominated Volume exceeded the sum of the Aggregate
Deliveries, then Seller shall pay to Buyer an amount equal to the lesser of
(i) the costs incurred (or that would have been incurred) in excess of the costs
of such undelivered shipment in obtaining and processing a cargo of oil in
substitution for the undelivered Oil or (ii) the lost profits that would have
been obtained if the Nominated Volumes of Oil had been delivered; it being
understood that, if Seller disputes such amount, in which event Seller shall
have the right to submit the matter to dispute resolution in accordance with the
provisions of Article 21, and damages, if any, payable to Buyer shall be as
determined by the dispute resolution panel.
23.2 Limitation of Liability. Except as set forth in Article 23.1, neither Party
shall be liable for any consequential, indirect or special losses or damages of
any kind arising out of or in any way connected with the performance of or
failure to perform this Agreement, including, but not limited to, losses or
damages resulting from shutdown of plants or inability to perform sales or any
other contracts arising out of or in connection with the performance or
nonperformance of this Agreement.
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Article 24
Compliance with Law
During the performance of this Agreement, each Party shall comply with all laws,
rules, regulations, ordinances and requirements of federal, state and local
governmental or regulatory bodies which are applicable to this Agreement.
Article 25
Except as expressly provided for in this Agreement, no failure or delay on the
part of either Party in exercising any right, power or remedy hereunder and no
course of dealing between the Parties hereto shall operate as a waiver by either
Party of any such right, power or remedy; nor shall any single or partial
prejudice to Article 23 and except to the extent otherwise expressly provided in
this Agreement, all rights, powers and remedies provided hereunder are
or otherwise. Except as required by this Agreement, no notice or demand upon
either Party in any case shall entitle such Party to any other or future notice
of either Party to take any other or further action in any such circumstances
Article 26
Severability of Provisions
26.1 If any provision of this Agreement shall be found to be illegal, invalid or
of such illegality, prohibition, or unenforceability without invalidating the
remaining provisions hereof which shall remain in force and effect, and the
finding of any such illegality, prohibition, or unenforceability shall not
26.2 The Parties agree, in the circumstances referred to in Article 26.1, to
negotiate in good faith to agree on a legal, valid and enforceable provision to
substitute for any illegal, invalid or unenforceable provision which achieves to
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Article 27
Notices
All notices and other communications given under this Agreement shall be in
writing and shall be given by certified or registered mail, return receipt
requested; internationally recognized courier service; or confirmed facsimile
transmission, and, in each case, shall be deemed effective upon receipt by the
addressee as provided below:
To Seller: PDVSA-Petróleo S.A. Avenida Libertador Edificio
Petróleos de Venezuela Torre Oeste Piso 7 La Campiña
Caracas 1060-A Venezuela Att’n.
Facsimile
Copy to: PDVSA-Petróleo S.A. Avenida Libertador
Edificio Petróleos de Venezuela Torre Este Piso 10 La Campiña
Caracas 1060-A Venezuela Att’n. General Counsel Facsimile
58-212-708-4666 To Buyer: NuStar Marketing LLC 2330 North Loop
1604 West San Antonio, Texas 78248 Att’n. General Counsel
Facsimile (210) 918-5500
or at such other address or facsimile as may be notified by either Party to the
other Party in the manner above provided. Any change of a Party’s address or
facsimile shall be advised to the other Party by written notice delivered at
least fifteen (15) Days prior to the effective date of the change.
Article 28
Satisfactory Documentation
Each Party shall promptly provide to the other Party each of the following:
(a) a list of those individuals authorized to represent such Party in its
dealings with the other Party; (b) a certificate of the Secretary or other
similar officer of such Party certifying as to the incumbency of each officer
executing this Agreement on its behalf; and (c) documentation evidencing the
authority of each person executing this Agreement on its behalf to act in such
capacity. Each Party shall at all times keep current the list described in
clause (a) of this Article 28. Buyer shall furnish to
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Seller such information or documentation concerning the financial and corporate
status of Buyer as Seller may from time to time reasonably request.
Article 29
Merger
29.1 Exclusive Agreement. This Agreement is a complete and exclusive statement
of all terms and conditions governing the sale and delivery of Oil to Buyer and
supersedes all prior agreements between Buyer and Seller, written or oral,
relating to the sale and delivery of Oil to Buyer. No prior contract or course
of dealing between the Parties, and no statement of any agent, employee or
representative of Seller or Buyer made prior to the execution of this Agreement,
shall be admissible in construing the terms of this Agreement.
29.2 General Terms and Conditions. Attached hereto as Exhibit 6 are the General
Terms and Conditions as in effect on the date hereof. In the event that this
Agreement shall fail to address any relevant issue with respect to nominations,
procedures at the Loading Port(s), quality or quantity measurement, or
inspections, then the Parties shall apply the relevant provision of the General
Terms and Conditions, as the same may be in effect from time to time; it being
understood and agreed by the Parties that the Ministry has the right, from time
to time and at any time, to modify any provision of the General Terms and
Conditions in any manner as the Ministry shall see fit; provided, however, that
any such modification shall be generally applicable to sales of crude oil by
Seller and made generally known to the public. For the avoidance of doubt,
should any provision of the General Terms and Conditions conflict with any
provision of this Agreement, this Agreement shall prevail.
Article 30
Amendments and Waivers; Counterparts
30.1 Amendments and Waivers. Except as provided for in Article 5.2, all
amendments and modifications to this Agreement must be made upon the express
written agreement of both Parties, and any waiver of any provision of this
Agreement by either Party must be upon the express written agreement of such
Party.
30.2 Counterparts. This Agreement may be executed in multiple counterparts and
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first above written and effective as of March 1, 2008.
PDVSA-PETRÓLEO S.A. By
/s/ Fernando Valera
Name: Mr. Fernando Valera Title: Executive Director of Supply and Commerce
NUSTAR MARKETING LLC By
Name: Mr. Curtis V. Anastasio Title: Chief Executive Officer and President
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EXHIBIT 1
SPECIFICATIONS
The Oil to be sold by Seller and purchased by Buyer under the Agreement shall be
crude oil of the “Boscán” and “Bachaquero BCF-13” types, whose typical
characteristics are set forth below.
TYPICAL ANALYSIS OF BOSCÁN CRUDE OIL
°API (Gravity)
10.6
VISCOSITY (CST 100°F)
13,700
WATER AND SEDIMENT (% Vol)
0.91
SULFUR (% wgt)
5.28
RVP (pound/in2)
0.25
POUR POINT (°C)
59.0 TYPICAL ANALYSIS OF BACHAQUERO BCF-13 CRUDE OIL
11.6
6,530
1.22
2.89
0.45
45.0
THE FOREGOING TYPICAL ANALYSIS DOES NOT CONSTITUTE ANY REPRESENTATION OR OTHER
ASSURANCE, EXPRESS OR IMPLIED, BY SELLER AS TO THE MARKETABILITY, FITNESS OR
SUITABILITY OF THE OIL FOR ANY PURPOSE OR USE BY BUYER.
EXHIBIT 2
QUANTITY OF EACH TYPE OF OIL
The quantity of each type of Oil shall be 27,375,000 Barrels per Year, as
follows:
Bachaquero BCF-13: 25,000 BPD multiplied by the number of Days in each Year.
Boscán: 50,000 BPD multiplied by the number of Days in each Year.
Month
Quantity of
Boscán
(BPD)
Quantity of
Bachaquero BCF-13
(BPD)
January
40,000 20,000
February
40,000 20,000
March
50,000 25,000
April
50,000 25,000
May
60,000 30,000
June
60,000 30,000
July
60,000 30,000
August
60,000 30,000
September
50,000 25,000
October
50,000 25,000
November
40,000 20,000
December
40,000 20,000
EXHIBIT 3
PRICE
The price of the Boscán crude oil to be sold and purchased under the Agreement
shall be calculated with respect to each delivery in accordance with the formula
set forth below:
PB= 0.65*WTS + 0.95 * FO3 – 0.30 *(WTI + FO1) + KB
The price of the Bachaquero BCF-13 crude oil to be sold and purchased under the
Agreement shall be calculated with respect to each delivery on the basis and in
PBCF = 0.65*WTS + 0.95 * FO3 – 0.30 *(WTI + FO1) + KB + Quality Adjustment
Where :
(1) “PB” means the price per Barrel of Boscán in U.S. Dollars, rounded to the
nearest cent;
(2) “PBCF” means the price per Barrel of BCF-13 in U.S. Dollars, rounded to the
nearest cent;
(3) “WTS” means the average of the Platt’s prices for West Texas Sour crude oil
(Midland) for the Five-Day Period;
(4) “WTI” means the average of the Platt’s prices for West Texas Intermediate
crude oil, First month, at Cushing (Okla.) for the Five-Day Period;
(5) “FO3 ” means the average of the Platt’s prices for the Number 6 fuel oil
having 3% Sulfur content for the Five-Day Period;
(6) “FO1” means the average of the Platt’s prices for the Number 6 fuel oil
having 1% Sulfur content for the Five-Day Period;
(7) “KB” means the constant term of the Boscán formula, expressed in U.S.
Dollars per Barrel, which shall be determined by Seller from time to time,
according to market conditions;
(8) “Quality Adjustment” means the quality adjustment for gravity and sulfur
content, expressed in U.S. Dollars per Barrel;
And where, for purposes of (2) through (4) above:
(a)
The “Platt’s Price” for any Day means (i) in the case of West Texas Sour and
West Texas Intermediate crude oils, the average of the high and low spot prices
for such crude oils as quoted for such Day in Platt’s Crude Oil Marketwire (Spot
Assessment Section); (ii) in the case of fuel oil having 3% and 1% Sulfur
content, the average of the high and low spot prices for such fuel oil as quoted
for such Day in Platt’s Oilgram U.S. Marketscan (U.S. Gulf Section, Waterborne
Column); and,
(b) “Five-Day Period” means, with respect to the price determination for any
delivery, the following five days:
(i) the day on which the bill of lading is issued in the case of vessels whose
loading commences within the agreed laydays, or the middle day of the agreed
laydays in the case of vessels whose loading commences before the first day of
the agreed laydays and vessels whose loading commences after the last day of the
agreed laydays; provided, however, that if any such day is a day for which the
relevant quotations do not regularly appear in the publications referred to
above, then in determining the day applicable pursuant to this clause (i),
reference in each case shall be made to the succeeding day for which such
quotations are regularly published, except that in the case of Saturdays or
Fridays for which such quotations are not so published, reference shall be made
to the preceding day for which such quotations are regularly published;
(ii) The two days (other than Saturdays, Sundays or other days for which the
above) preceding the day determined pursuant to clause (i) above; and
(iii) The two days (other than Saturdays, Sundays or other days for which the
above) succeeding the day determined pursuant to clause (i) above.
In the event that a regular quotation for a particular crude oil or the fuel oil
referred to above is suspended or interrupted for any reason in the relevant
publication for less than three of the days in any Five-Day Period, then such
days for which such quotation is suspended or interrupted shall not be taken
into account in calculating the average of the Platt’s prices for such Five-Day
Period for such crude oil or fuel oil, and such average shall be calculated for
only the number of days in such Five-Day Period for which quotations were not
suspended or interrupted. In the event that a regular quotation for a particular
crude oil or the fuel oil referred to above is suspended or interrupted for any
reason in the relevant publication for more than two of the days in any Five-Day
Period, then the formula for the pricing of Oil shall be temporarily adjusted by
Seller for the affected delivery or deliveries in such manner as to fairly
reflect the assumptions underlying the formula or similar assumptions; it being
understood that Buyer’s obligation to purchase Oil under the Agreement shall not
be suspended or interrupted pending such adjustment.
In order to determine the final price of Bachaquero BCF-13 (or any other type of
Oil delivered by Seller to Buyer pursuant to this Agreement) a quality
adjustment will be made to reflect the differences in gravity and sulfur content
between Boscán and Bachaquero BCF-13. The adjustment shall be made on the basis
of the differential values published during the first week of every month by the
Ministry for crude oils with an API gravity less than 13 degrees and sulfur
content greater than 2.5% by weight.
EXHIBIT 4
LIMITED MARKET ADJUSTMENT
The Limited Market Adjustment shall be calculated for each Cargo of Oil where
the applicable contract price, as determined in accordance with Exhibit 3
(Boscán = PB and Bachaquero BCF-13 = PBCF), exceeds the following applicable
Maya parity price (Boscán = PBP and Bachaquero BCF-13 = PBCFP), for the
identical Five-Day Period:
PBP= Maya (FOB) – (0.290*LLS – 0.290*FO3) + Maya Freight to USGC – Boscán
Freight to USGC PBCFP= Maya (FOB) – (0.290*LLS – 0.290*FO3) + Maya Freight to
USGC – Bachaquero BCF-13 Freight to USGC + Quality Adjustment
Where:
(1) “Maya (FOB)” means the average of calculated formula prices for Maya crude
oil (Cayo Arcas) for the Five-Day Period using Platt’s pricing for the formula
components and the published formula constant for such Five-Day Period, as
announced from time to time by P.M.I. Comercio Internacional, S.A. De C.V.;
(2) “LLS” means the average of Platt’s prices for Louisiana Light Sweet crude
oil (St. James) for the Five-Day Period, where the Platt’s price for any Day
means the average of the high and low spot prices for the LLS (1st month)
Assessment as quoted for such Day in Platt’s Crude Oil Marketwire (US domestic
spot crude assessments section);
(3)
“FO3” means the average of the Platt’s prices for number 6 fuel oil having 3%
sulfur content for the Five-Day Period, as set forth in Exhibit 3;
(4) “Maya Freight to USGC” means the current spot tanker rate for Maya crude
deliveries to the United States Gulf Coast, calculated by multiplying the
current Worldscale rate for the Cayo Arcas to Houston, by the Worldscale
Assessment for this route divided by 100, and dividing by a factor of 6.830
representing conversion of metric tons per Barrel for a crude with an API
gravity of 22.0, for the Five-Day Period;
(5) “Boscán Freight to USGC” means the current spot tanker rate for Boscán
crude deliveries to the United States Gulf Coast, calculated by multiplying the
current Worldscale rate for the Baja Grande to Houston, by the quantity obtained
by adding 10 points to the Worldscale Assessment for this route and divided by
100, and dividing by a factor of 6.322 representing conversion of metric tons
per Barrel for a crude with an API gravity of 10.6, for the Five-Day Period;
(6) “BCF-13 Freight to USGC” means the current spot tanker rate for BCF-13
current Worldscale rate for the La Salina to Houston, by the Worldscale
Assessment for this route divided by 100, and dividing by a factor of 6.367
gravity of 11.6, for the Five-Day Period;
(7) “Quality Adjustment” means the quality adjustment for gravity, sulfur
content, and acid content expressed in U.S. Dollars per Barrel, determined in
accordance with Exhibit 3; and
(8) “Five-Day Period” has the meaning set forth in Exhibit 3.
For each such Cargo of Oil, the Limited Market Adjustment shall be the
difference between the applicable contract price and the applicable Maya parity
price multiplied by the quantity of Oil comprising such Cargo, determined
according to the following formulas, as applicable:
LMACB = (PB – PBP) * QB
LMACBCF = (PBCF – PBCFP) * QBCF
Where:
(1)
“LMACB” means the Limited Market Adjustment for the applicable Cargo of Boscán
Oil;
(2)
“PB” has the meaning set forth in Exhibit 3 for the applicable Cargo of Boscán
Oil;
(3)
“PBP” means the price per Barrel of Boscán in U.S. Dollars, rounded to the
nearest cent, determined according to the Maya parity formula above, for the
applicable Cargo of Boscán Oil;
(4)
“QB” means the quantity in Barrels of the applicable Cargo of Boscán Oil;
(5)
“LMACBCF” means the Limited Market Adjustment for the applicable Cargo of
Bachaquero BCF-13 Oil;
(6)
“PBCF” has the meaning set forth in Exhibit 3 for the applicable Cargo of
(7)
“PBCFP” means the price per Barrel of Bachaquero BCF-13 in U.S. Dollars, rounded
to the nearest cent, determined according to the Maya parity formula above, for
the applicable Cargo of Bachaquero BCF-13 Oil;
(8)
“QBCF” means the quantity in Barrels of the applicable Cargo of Bachaquero
BCF-13 Oil.
EXHIBIT 5
EXAMPLE OF THE OPERATION OF THE LIMITED MARKET
ADJUSTMENT
All Figures in US$ Millions Unless Noted Otherwise
Limited Market Adjustment Element
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 5 A Quarterly payment for
Crude Oil as Determined by Exhibit 3 $ 337.500 $ 370.000 $ 320.000
$ 390.000 $ 350.000 B Quarterly payment for Crude Oil as Determined by
Exhibit 4 $ 340.000 $ 355.000 $ 323.500 $ 379.000 $ 352.000 C
Quarterly Limited Market Adjustment (A - B) $ (2.500 ) $ 15.000 $
(3.500 ) $ 11.000 $ (2.000 ) D Aggregate Quarterly Surpluses (Cumulative
Positive C) $ — $ 15.000 $ 15.000 $ 26.000 $ 26.000 E
Aggregate Quarterly Deficits (Cumulative Negative C) $ 2.500 $ 2.500 $
6.000 $ 6.000 $ 8.000 F Previous Credits (J for all previous
quarters) $ — $ — $ 2.500 $ 2.500 $ 10.000 G Credit
Prior to Threshold (D - E - F, if positive) $ — $ 12.500 $ 6.500
$ 17.500 $ 8.000 H Threshold (Minimum of G or $10 million) $ —
$ 10.000 $ 6.500 $ 10.000 $ 8.000 I Credit applied during
succeeding Quarter (G - H) $ — $ 2.500 $ — $ 7.500 $ —
K Amount of oil receiving $5.00/barrel discount for current quarter (I for
previous quarter divided by 5, million barrels) $ — $ — $ 0.500
$ — $ 1.500
EXHIBIT 6
GENERAL TERMS AND CONDITIONS
MINISTRY OF ENERGY AND PETROLEUM
General Terms and Conditions
for PDVSA FOB Crude Sales
(November 2006)
TABLE OF CONTENTS
Article 1. Definitions 1 Article 2. Construction, Headings and
References 5 Article 3. Quantity And Price 5 Article 4. Arrival
Procedures and Lifting 5 4.1 Lifting Program. 5 4.2 Substitution of
Vessels. 7 4.3 Advice of ETA. 8 4.4 Notice of Readiness. 8 4.5
Vessel Requirements; Security Regulations. 8 Article 5. Loading
Conditions; Demurrage 9 5.1 Berthing of Vessels; Commencement of Laytime.
9 5.2 Shifting Loading Point of Vessels. 10 5.3 Allowed Laytime.
10 5.4 Adiustments to Laytime and Time on Demurrage. 11 5.5 Demurrage.
12 5.6 Buyer’s Liability for Delay and Damage. 13 Article 6.
Quantity Measurements 14 6.1 Determination of Quantity. 14 6.2
Volume Corrections for Temperature. 15 6.3 Conclusiveness of Measurements.
15 Article 7. Quality 15 7.1 Determination of Quality. 15 7.2
Analvsis of Samples. 16 7.3 NO WARRANTIES. 16 Article 8. Passage of
Title; Delivery 16 8.1 Passage of Title. 16 8.2 Port and Loading
Expenses. 17 8.3 Loading Port Regulations. 17 8.4 Buyer’s Knowledge
of Loading Port Facilities; Standard Procedures. 17 8.5 Hazardous Warning
Responsibility. 17 Article 9. No Set-Off 18 Article 10. Payment
Terms 18 10.1 Currency, Time and Place of Payment; Overdue Payments. 18
10.2 Contents of Invoices; Other Substantiating Documentation. 19 10.3
Payment Expenses. 19 10.4 Security for Payment. 19
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10.5 Suspension of Deliveries. 20 Article 11. Claims 20 11.1
Notice of Claims. 20 11.2 Payment in Full. 20 Article 12. Force
Majeure 20 12.1 Relief from Liability. 20 12.2 Notice. 21 12.3
Pavment for Oil Sold and Delivered. 21 12.4 No Proration or Make-Up. 21
12.5 No Extension of Contract; Right to Terminate. 21 Article 13.
Dispute Resolution; Governing Law 22 13.1 Settlement by Arbitration. 22
13.2 Governing Law. 22 Article 14. Representations and Warranties of
Buyer 22 Article 15. Limitation of Liability 23 Article 16.
Termination 23 16.1 Termination. 23 16.2 Termination Not to Relieve
Buyer of Obligations. 23 16.3 Termination for an Insolvency Event. 23
16.4 No Gifts. 23 16.5 Other Rights and Remedies. 24 Article 17.
Confidentiality 24 Article 18. Compliance With Law 25 Article 19. No
Third Party Beneficiaries; Assignment 25 Article 20. No Waiver; Cumulative
Remedies 25 Article 21. Severability of Provisions 25 21.1
Illegality, Unenforceability or Invalidity. 25 21.2 Conflict with
Particular Conditions of Sale. 26 Article 22. Notices 26 Article 23.
Amendments and Waivers 27
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ARTICLE 1.
DEFINITIONS
For purposes of these General Terms and Conditions for FOB Crude Oil Sales
(November 2006) the following terms, when capitalized, shall have the respective
meanings indicated below:
a) “Agreed Laydays” shall mean the three-Day range for the arrival of a vessel
set forth in an Agreed Lifting Program determined pursuant to Article 4.1;
b) “Agreed Lifting Program” shall mean a final lifting program for a Month
determined pursuant to Article 4.1;
c) “Agreement” shall mean the agreement between Buyer and Seller for the
purchase and sale of Oil pursuant to the Particular Conditions of Sale
(including all Exhibits and Schedules thereto) and these General Terms, as the
same may hereafter be amended, modified or supplemented in accordance herewith;
d) “All Fast” shall mean such time as a vessel is completely moored at the cargo
transfer point with gangway down and secured;
e) “Allowed Laytime” shall mean the period of time which Seller shall be
allowed, in accordance with Article 5.3, to complete the loading of a vessel
without incurring demurrage;
f) “API” shall mean the American Petroleum Institute;
g) “API-MPMS” shall have the meaning set forth in Article 6.1(a);
h) “ASBA” shall mean the Association of Ship Brokers and Agents;
i) “ASTM” shall mean the American Society for Testing and Materials;
j) “Bahamas Loading Port” shall mean the terminal facility located in Freeport,
Bahamas, owned and operated by Bahamas Oil Refining Corporation;
k) “Barrel” shall mean a quantity of crude oil equal to forty-two (42) Gallons;
which banking institutions in the location specified for payment in the
Particular Conditions of Sale are authorized or required by law to close;
m) “Bonaire Loading Port” shall mean the Bopec terminal facility located in
Bonaire, Netherlands Antilles, owned and operated by Bonaire Petroleum
Corporation, NV;
n) “Business Day” shall mean any Day other than Saturday, Sunday or any national
holiday in Venezuela;
o) “Buyer” shall mean the entity designated in the Particular Conditions of Sale
as the purchaser of the Oil from Seller under the Agreement;
q) “Contract Quantity” shall mean the amount specified as such in the Particular
Conditions of Sale;
r) “Curaçao Loading Port” shall mean Bullenbaai terminal facility located in
Curaçao, Netherlands Antilles, leased and operated by Refinería Isla (Curazlo)
S.A.;
s) “Day” shall mean a calendar day;
t) “Defaulting Party” shall have the meaning set forth in Article 16.3;
u) “ETA” shall mean estimated time of arrival;
v) “East Coast Loading Ports” shall mean El Palito, Jose (TAEJ), Guaraguao
(Puerto La Cruz) and El Chaure (Puerto La Cruz) ;
w) “FOB” shall have the meaning ascribed to such term in Incoterms (2000
Edition);
x) “Force Majeure” shall have the meaning set forth in Article 12;
z) “General Terms” shall mean these General Terms and Conditions for PDVSA FOB
Crude Oil Sales (November 2006), including all Exhibits attached hereto;
aa) “ICC Rules” shall have the meaning set forth in Article 13.1;
bb) “Insolvency Event” shall mean that an entity (i) is dissolved (other than
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(iv)(A) institutes or has instituted against it, by a regulator, supervisor or
official, or (B) has instituted against it a proceeding seeking a judgment of
not dismissed, discharged, stayed or restrained in each case within fifteen
(15) Days of the institution or presentation thereof, (v) has a resolution
pursuant to a consolidation, amalgamation or merger); (vi) seeks or becomes
for all or substantially all its assets; (vii) has a secured party take
restrained, in each case within fifteen (15) Days thereafter; (viii) causes or
clauses (i) to (vii) above (inclusive); or (ix) takes any action in furtherance
foregoing acts;
cc) “ISPS Code” shall have the meaning set forth in Article 4.5.1(d);
dd) “Letter of Credit” shall have the meaning set forth in Article 10.4;
ee) “Lifting Month” shall mean the Month for which a Cargo is programmed for
lifting;
ff) “Loading Area” shall mean any of the following, (i) Seller’s Loading Ports
located within Lake Maracaibo; (ii) the East Coast Loading Ports; (iii) the West
Coast Loading Ports; (iv) the Curaçao Loading Port; (v) the Bonaire Loading
Port; (vi) the Bahamas Loading Port, and (vii) the Trinidad Loading Port;
gg) “Loading Point,” either standing alone or as part of another defined term,
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hh) “Loading Port,” either standing alone or as part of another defined term,
shall mean any of Seller’s Loading Points for exports of Oil, including any area
in which a vessel may be loaded by ship-to-ship transfer;
ii) “Ministry” shall mean the Ministry of Energy and Petroleum of Venezuela;
jj) “Month” shall mean a calendar month;
kk) “Non-Defaulting Party” shall have the meaning set forth in Article 16.3;
ll) “NOR’ shall have the meaning set forth in Article 4.4;
mm) “Oil” shall mean Venezuelan crude oil of the type(s) specified in the
Particular Conditions of Sale;
nn) “P&I Club” shall mean a maritime protection and indemnity mutual insurance
company;
oo) “Particular Conditions of Sale” shall mean the Particular Conditions of Sale
to which these General Terms are attached and incorporated by reference therein;
pp) “Parties” shall mean Seller and Buyer, which may sometimes hereinafter be
qq) “Purchase Price” shall mean the price per Barrel to be paid to Seller by
Buyer and specified as such in the Particular Conditions of Sale;
rr) “S & W” shall mean sediments and water;
ss) “Security Regulations” shall have the meaning set forth in Article 4.5.1(d);
tt) “Seller” shall mean PDVSA Petroleo S.A., a corporation organized under the
laws of Venezuela;
uu) “Specified Loading Area” shall mean a Loading Area specified in an Agreed
Lifting Program;
vv) “Trinidad Loading Port” shall mean Seller’s Loading Port at Pointe-a-Pierre,
Trinidad;
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yy) “Venezuela” shall mean the Bolivarian Republic of Venezuela; and
zz) “West Coast Loading Ports” shall mean Amuay (Complejo Refinador de
Paraguaná); Cardón (Complejo Refinador de Paraguaná); Bajo Grande; La Salina,
and Puerto Miranda.
ARTICLE 2.
CONSTRUCTION, HEADINGS AND REFERENCES
vice versa. All headings herein are for convenience only and shall not affect
the construction or interpretation of any of the terms hereof. Unless otherwise
specified, all references herein to Articles are to the Articles of these
General Terms. The terms “hereof,” “herein,” and “hereunder,” and words of
similar import refer to this Agreement as a whole and not to the particular
Article in which such term appears.
ARTICLE 3.
QUANTITY AND PRICE
The quantity of Oil to be purchased by Buyer during each year in the term of the
Agreement shall be the Contract Quantity specified in the Particular Conditions
of Sale and the purchase price for such Oil shall be the Purchase Price
specified in the Particular Conditions of Sale.
ARTICLE 4.
ARRIVAL PROCEDURES AND LIFTING
4.1 Lifting Program.
4.1.1 Not later than thirty-five (35) Days prior to the beginning of each Month,
Buyer shall furnish Seller with a proposed lifting program for the following
Month, specifying the following:
(a) a Specified Loading Area(s), and the Loading Points therein for each
delivery requested for such Month;
(b) a three (3) Day period for the arrival of each vessel;
comprising each Cargo;
(f) in the case of the lifting program for the following Month, (i) the name,
size and dimensions of each vessel designated for lifting during such Month;
(ii) the
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names of the vessel’s agent and Buyer’s representative, and the vessel’s P&I
Club, which shall be a member of the International Group of P&I Clubs;
(iii) documentation instructions; (iv) the time required for deballasting (if
any, but which, in any event, shall not exceed six hours); (v) the distribution
of the Oil to be loaded (e.g., commingled or segregated); (vi) the name of the
proposed independent inspector; and (vii) for at least the last ten (10) loading
operations for crude oil for each nominated vessel, the volume loaded as
measured on shore in shore tanks or by flow meters and the corresponding volume
loaded as measured on board, such volume to be evidenced by documentation
(including ullage and innage reports and onboard quantity and slop certificates)
satisfactory to Seller; and
purchase during the three (3) Months following such Month.
the requirements of this Article 4.1.1 for the following Month within the period
specified above, Buyer shall be required to accept the lifting program for such
Month established by Seller. Seller shall have an absolute right to reject any
vessel nominated by Buyer.
4.1.2 If the name of a vessel is not known at the time the proposed lifting
program for the following Month is furnished to Seller, Buyer shall notify
Seller of such name and other data referred to in Article 4.1.1(e) as soon as
possible, but in any event not later than seven (7) Business Days prior to the
first Day of the Agreed Laydays for the unspecified vessel. Seller shall have an
absolute right to reject Buyer’s vessel nomination, in which case Buyer shall
take immediate action to nominate another vessel acceptable to Seller. If the
Parties do not reach agreement on nomination of another vessel at least five
(5) Business Days prior to the first Day of the Agreed Laydays, Seller shall
have the right to cancel that lifting without prejudice to any and all other
rights Seller has under this Agreement and without prejudice to Seller’s claim
for any losses or expenses caused by Buyer’s failure to nominate an acceptable
vessel. If Seller, at its sole option, elects nevertheless to load a vessel
agreed on less than five (5) Business Days prior to the first Day of the Agreed
Laydays, the loading of the vessel shall be subject to berth, jetty, buoy,
loading platform and loading system availability, as applicable. In no event
shall laytime or time on demurrage be charged to Seller for delays incurred
because the Parties have not agreed on a vessel within five (5) Business Days
prior to the first Day of the of the Agreed Laydays.
4.1.3 Seller shall be deemed to have accepted Buyer’s proposed lifting program
for the following Month unless Seller has notified Buyer of alterations thereto
at least fifteen (15) Days prior to the beginning of such Month. Seller shall in
any event notify Buyer within such time period of the Specified Loading Area to
be used by Buyer’s vessels, to be narrowed to a specific Loading Point not less
than five (5) Days of the first Day of the Agreed Laydays (subject to adjustment
as provided in Article 4.1.4) and the name(s) of the independent inspector(s)
proposed by Buyer and accepted by Seller for purposes of Article 6 and Article
7. If Seller timely notifies Buyer of alterations to the lifting program, Buyer
shall be deemed to have agreed to those alterations unless, within five (5) Days
after Buyer’s receipt of Seller’s notice, Buyer requests Seller to reconsider
such alterations. Seller’s decision following any such reconsideration shall be
final and binding on both Parties. If Seller notifies Buyer that it objects to
an independent inspector nominated by Buyer, the Parties shall designate another
independent
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inspector by mutual agreement. The lifting program as finally determined
pursuant to the provisions of Article 4.1 for any Lifting Month is referred to
herein as the “Agreed Lifting Program” for such Lifting Month, and the three
(3) Day range for the arrival of any vessel contained in any Agreed Lifting
Program is referred to herein as the “Agreed Laydays” for such vessel.
4.1.4 Seller may notify Buyer that any vessel scheduled in an Agreed Lifting
Program shall load the Oil at a Loading Port in the Specified Loading Area
different from the Loading Port previously specified pursuant to Article 4.1.3
or shall load the Oil at two (2) Loading Points within the Specified Loading
Area, provided that such notice is given by Seller (a) at least seventy-two
(72) hours prior to the ETA of such vessel, if Buyer has notified Seller of an
ETA falling within or after its Agreed Laydays, or (b) at least seventy-two
(72) hours prior to the first Day of the Agreed Laydays, if Buyer has notified
Seller of an ETA which is earlier than the first Day of the Agreed Laydays.
Seller shall not be liable for any charges or expenses incurred by Buyer,
including, but not limited to, deviation, as a result of a shift from one
Loading Point to another, or the specification of two (2) Loading Ports within
the Specified Loading Area.
4.1.5 Any deadfreight incurred as a result of Buyer’s nomination of a vessel
whose dimensions are larger than those required to transport the Cargo it is
scheduled to lift shall be for the sole account of Buyer, and Seller shall have
no liability therefor by reason of its acceptance of Buyer’s nomination.
4.1.6 In working toward each Agreed Lifting Program, the Parties shall cooperate
with one another and exercise commercially reasonable efforts to achieve the
objective that Oil be nominated, delivered and lifted on a ratable basis, taking
into consideration turnarounds, planned and unplanned maintenance, and other
operational considerations at the Loading Ports and Buyer’s discharge points. In
the event of scheduled maintenance turnarounds at Buyer’s discharge points,
Buyer will give Seller not less than ninety (90) Days prior written notice of
such scheduled maintenance turnaround, and will make its best efforts to
mitigate the reduction. The Parties will cooperate in good faith to make up for
any deliveries of Oil not purchased by Buyer during the turnaround period;
provided, however, that Seller shall have no obligation to make up for the
volumes of Oil not purchased and delivered during such turnaround period.
4.2 Substitution of Vessels.
Buyer shall be entitled to substitute another vessel for any vessel designated
in an Agreed Lifting Program; provided, however, that the substitute vessel
shall have substantially the same characteristics (including carrying capacity)
as the vessel previously nominated and accepted pursuant to Article 4.1 and
shall meet the requirements for vessels loading at the particular Loading Port
involved; and provided, further, that Buyer shall give Seller notice of the
substitution not less than ninety-six (96) hours prior to the first Day of the
Agreed Laydays for the substituted vessel and shall then provide all of the
information specified in Article 4.1.1(f). In the event that Buyer substitutes a
vessel other than in accordance with the provisions of this Article 4.2, Seller
may in its sole discretion refuse to load such vessel, or it may load such
vessel at any Loading Port on any Day it may specify, whether or not within the
Agreed Laydays for
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such vessel, and Seller shall in no event be liable for demurrage, deadfreight
or any other charges with respect to the loading of any such vessel.
4.3 Advice of ETA.
Buyer shall arrange for each vessel to advise the Loading Port operator and the
vessel agent (with a copy to Seller delivered by e-mail or facsimile) of its ETA
at each of the following times:
4.4 Notice of Readiness.
The Buyer, its representative or the master of the vessel (who shall be deemed
to be acting on Buyer’s behalf) shall give notice of readiness of the vessel to
vessel (a) has anchored at the customary anchorage area at the Loading Port;
(b) has been granted free pratique; (c) has received the necessary clearance by
customs and all other governmental authorities, and (d) is ready in all other
after the vessel has been brought to the loading point. If, notwithstanding
ready to load.
4.5 Vessel Requirements; Security Regulations.
4.5.1 Buyer represents, warrants, and covenants, that each vessel used for
loading Oil under the Agreement:
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4.5.2 Buyer shall be responsible for any costs or expenses in respect of the
Code.
4.5.3 Seller shall procure that the Loading Port complies with the requirements
4.5.4 If the maritime security is affected by any event or circumstance, as
ARTICLE 5.
LOADING CONDITIONS; DEMURRAGE
5.1 Berthing of Vessels; Commencement of Laytime.
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5.1.1 Subject to the provisions of Articles 5.1.2 and 5.1.3, Seller shall
provide a safe loading point at the Loading Port for each vessel designated in
accordance with the provisions of Article 4, which loading point may be a berth,
dock, anchorage, sea terminal, sea buoy mooring, submarine loading line or other
place, including alongside lighters, or other vessels, at which the vessel may
at all times lie safely afloat. In the event that a vessel arrives within its
Agreed Laydays, then laytime and time on demurrage shall commence at the earlier
5.1.2 Seller shall not be obligated to provide a loading point for any vessel
5.1.3 Seller shall not be obligated to provide any vessel arriving prior to its
If Seller does provide a loading point prior to the first Day of its Agreed
Laydays for such vessel and (b) commencement of loading.
5.2 Shifting Loading Point of Vessels.
Seller shall have the right to shift vessels at the Loading Point from one berth
to another, provided that all expenses incurred in connection therewith shall be
borne by Seller and all time expended in such shifting of vessels shall count as
preceding sentence, the expenses incurred in connection with a shifting of any
vessel which is attributable to one of the events referred to in Article 5.4
shall be borne by Buyer, the time consumed during such shifting shall not count
as used laytime or time on demurrage, and Seller shall not be obligated to
provide such vessel with a Loading Point until a Loading Point becomes
available, taking into account the priority of other vessels.
5.3 Allowed Laytime.
Except as otherwise specified in the Particular Conditions of Sale, Seller shall
Program provides for loading of Buyer’s vessel at two (2) Loading Ports within
the Specified Loading Area, or Seller notifies Buyer pursuant to Article 4.1.4
that loading shall be at two (2) Loading Points within the Specified Loading
Area, the Allowed Laytime at each Loading Port shall be determined by reference
to the quantity of Oil to be loaded at each Loading Port in accordance with the
Particular Conditions of Sale. Used laytime or time on demurrage shall not
commence at any Loading Port until six (6) hours after NOR is tendered at such
Loading Port or when the vessel is All Fast, whichever occurs first. Used
laytime and/or time on demurrage shall cease upon the
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to the provisions of Article 5.1.1 shall not be counted as used laytime or time
hoses.
5.4 Adiustments to Laytime and Time on Demurrage.
In the event that the loading of any vessel is delayed, directly or indirectly,
for any of the following reasons, whether occurring prior to, during or after
the berthing or commencement of loading of the vessel:
to comply with any provision of the Agreement;
(c) more than one stoppage in loading as a result instructions given by, or on
prohibited activities;
(h) regulations of the Loading Port operator, port authorities or the government
(i) time spent by the vessel shifting from a lightering or waiting area to the
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and after loading;
(m) any of the events listed in Article 12.1 and not specifically listed above,
Majeure.
5.5 Demurrage.
5.5.1 Seller shall pay Buyer demurrage for any hour or part of an hour of
laytime at the Loading Port(s) in excess of the Allowed Laytime for the vessel
involved, at the rate specified in the Particular Conditions of Sale. If the
Particular Conditions of Sale do not specify a rate then the demurrage rate
shall be equal to: (a) if the vessel is voyage-chartered, the rate specified in
the charter party for the vessel (it being understood that Seller shall in no
event be obligated to pay Buyer more demurrage than the amount of demurrage
Buyer can demonstrate has actually been paid to the vessel owner in accordance
with the terms of the charter party), or (b) if the vessel is owned by Buyer (or
one of its affiliates) or is under time charter, the demurrage assessment of a
member of ASBA utilizing the nominated quantity, the route taken and the first
Day of the Agreed Loading Range. Buyer shall select the member of the ASBA to
make such assessment and shall be solely responsible for all costs and expenses
associated therewith. Notwithstanding the foregoing, to avoid administrative
time and expenses, Buyer shall not make, and Seller shall not be obligated to
pay, any claim for demurrage of less than one thousand five hundred U.S. Dollars
(U.S.$1,500). The right of Buyer to demurrage pursuant to this Article 5.5 shall
constitute Buyer’s exclusive remedy with respect to any failure of Seller to
complete the loading of any vessel within the Allowed Laytime.
5.5.2 Buyer shall submit any claim for demurrage to Seller together with all
be sent pursuant to Article 21, and shall consist of the following information
and supporting documentation:
(b) copies of the notices of ETA as stipulated in the Agreement and as advised
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representative attending the vessel at the Loading Port, or the inspection
company;
demurrage assessment obtained pursuant to Article 5.5.1.
Article 5.5.2 within ninety (90) Days after the bill of lading date.
5.6 Buyer’s Liability for Delay and Damage.
5.6.1 Buyer shall pay Seller its actual costs, expenses or damages (including
(a) through (j) of Article 5.4.
5.6.2 Each vessel shall clear berth as soon as loading is completed and the
the costs set forth above for all time in excess of four (4) hours after hoses
such four (4) hour time period, or (b) such delay is the result of a Force
the foregoing and the provisions of Article 12, if such delay is a result of the
circumstances set forth in Article 5.4(l), then Buyer shall be liable for
5.6.3 In the event that for any reason Buyer’s vessel causes damage to any
depreciated value of such facilities; (b) any delay in loading the vessel as a
have been posted.
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ARTICLE 6.
QUANTITY MEASUREMENTS
6.1 Determination of Quantity.
The volume of each loading of Oil shall be determined by an independent
inspector selected as provided in Article 4.1.3, whose fees shall be shared
equally by the Parties. Measuring and gauging shall be performed in accordance
with one of the following measurement systems in decreasing order of preference,
depending on the operational conditions prevailing at the Loading Port involved.
Seller and Buyer or their respective representatives may witness the taking of
the measurements.
Meters”.
and Marine Vessels”. In the absence of methods contained in Article 6.1(a) or
to measure the quantity of the Cargo. If neither of these methods are available,
“Volume Measured on Board” specified below in Article 6.1(c).
API-MPMS,
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Chapter 17.9, “Vessel Experience Factors”. S & W, determined in the manner
provided in Article 7.2, together with any increase in free water shall then be
deducted from the volume determined above in order to arrive at the volume for
purposes of the bill of lading and the invoice.
6.2 Volume Corrections for Temperature.
Except in the case that quantity measurements are made pursuant to the
provisions of Article 6.1(c), in which case temperature corrections shall be
made in the manner and at the time specified in that Article, temperature
readings shall be taken in accordance with the methods listed below in
decreasing order of preference, depending on operational conditions prevailing
at the Loading Port involved: (a) the flow-weighted average temperature taken at
regular times during loading by Seller or its agents at flow meters; and (b) the
temperature taken in shore tanks by Seller or its agent. Temperature corrections
at 60°F (equivalent to 15.56°C) will then be effected for all volume
determinations in accordance with ASTM-1250 or API-MPMS, Chapter 11.1, at
Seller’s choice, provided that temperature corrections shall not be made in the
case that volume is determined by way of flow meters pursuant to Article 6.1(a)
and temperature compensators at 60° F (equivalent to 15.56° C) are integrated
into the meter system. S & W, determined in the manner provided in Article
7.1(a), (b) or (c), as the case may be, and Article 7.2, shall be deducted from
the volume corrected for temperature as provided above in order to arrive at the
volume for purposes of the bill of lading and invoice.
6.3 Conclusiveness of Measurements.
Quantity and temperature measurements witnessed by the independent inspector as
provided in this Article 6 shall be final and binding on the Parties, except in
the case of manifest error or fraud. In any event, without prejudice to the
right of either Party to pursue a claim in accordance with Article 11, the
determination of the independent inspector shall govern for purposes of the
quantity stated in the bill of lading and the obligation of Buyer to make
payment in accordance with the provisions of Article 10.
ARTICLE 7.
QUALITY
7.1 Determination of Quality.
Sampling for quality of the Oil loaded in each shipment shall be witnessed by
the independent inspector in accordance with the latest revision of API-MPMS,
Chapter 8.2, “Standard Practice for Automatic Sampling of Liquid Petroleum and
Petroleum Products”, or ASTM D-4177, at Seller’s choice, where Oil is measured
by flow metering, and API-MPMS, Chapter 8.1, “Standard Practice for Manual
Sampling of Petroleum and Petroleum Products”, or ASTM D-4057, at Seller’s
choice, where Oil is measured by tank gauging. When the Oil is sampled at a
tank, samples shall be taken and analyzed of the material in pipelines from the
tank to the dock loading arms. Buyer and Seller or their representatives may
witness the taking and testing of samples. Quality shall be determined by using
the methods listed below in decreasing order of preference, depending on the
operational conditions prevailing at the Loading Port involved: (a) from samples
drawn from automatic samplers installed in the loading lines of each
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tank; (b) from samples drawn from the isolated storage shore tanks delivering
the Oil; or (c) from a composite sample obtained in proportional parts from the
vessel’s tanks. In all cases, equal quantities of Oil from each tank shall be
drawn and mixed and equally filled in seven (7) containers of one Gallon each
and finally sealed. Three (3) of such sealed containers shall be delivered to
the local office of the Ministry at the Loading Port (or to the address notified
by the Ministry), one shall be handed over to the master of the vessel and one
(1) to the independent inspector, and two (2) shall be kept by Seller for ninety
(90) Days after the date of the bill of lading.
7.2 Analvsis of Samples.
The independent inspector shall witness quality tests for sulfur, salt and Reid
vapor pressure on the samples according to the latest revision of ASTM or
API-MPMS procedures, at Seller’s choice. Gravity tests on all Oil shall be made
in accordance with the latest revision of API-MPMS, Chapter 9.1, or ASTM
D1298-80, at Seller’s choice. S & W shall be established in each case pursuant
to the latest revision of ASTM D-4007 or API Chapter 10-3, at Seller’s choice,
in tests witnessed by the independent inspector; it being understood that if the
Oil is reconstituted crude oil, deduction for S & W shall be made only to the
crude oil component of such Oil. Quality tests conducted in accordance with the
above provisions shall be final and binding upon the Parties for invoicing
purposes, but without prejudice to the right of either Party to pursue a claim.
7.3 NO WARRANTIES.
SELLER MAKES NO WARRANTIES REGARDING OIL AND DOES NOT GUARANTEE OR WARRANT THE
SUITABILITY OF OIL FOR ANY PURPOSE WHATSOEVER EXCEPT THAT SELLER WARRANTS THAT
(A) EACH GRADE OF OIL SOLD AND DELIVERED UNDER THE AGREEMENT SHALL MEET THE
DEFINITION AND TYPICAL SPECIFICATIONS OF EACH GRADE OF OIL AS SET FORTH IN THE
PARTICULAR CONDITIONS OF SALE AND SHALL BE TYPICAL OF OIL SOLD AND DELIVERED TO
SELLER’S OTHER EXPORT CUSTOMERS, AND (B) SELLER HAS GOOD AND MARKETABLE TITLE TO
ALL OIL SOLD TO BUYER UNDER THE AGREEMENT. EXCEPT AS PROVIDED IN THE PRECEDING
SENTENCE, BUYER HEREBY RELEASES SELLER FROM ANY AND ALL WARRANTIES WHATSOEVER,
ARTICLE 8.
PASSAGE OF TITLE; DELIVERY
8.1 Passage of Title.
Delivery of the Oil shall be made in bulk to Buyer FOB the applicable Loading
Port to vessels to be provided by Buyer. Delivery shall be deemed completed when
the Oil passes the permanent flange connection of the delivery hose at the
Loading Port. At that point, Seller’s responsibility with respect to the Oil
shall cease, and title to and all risk of loss of or damage to, and
deterioration or evaporation of, the Oil so delivered shall pass to, and be
assumed
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by, Buyer. Any loss of or damage to Oil or any property of Seller or of any
other person during loading which is in any way attributable to the vessel or
its officers or crew shall be borne by Buyer.
8.2 Port and Loading Expenses.
All expenses ashore pertaining to the pumping of the Oil from shore tanks to
vessels shall be borne by Seller, including, but not limited to, wharfage,
dockage and quay dues (if any) at the Loading Port. Seller shall pay all export
taxes imposed by the government (or any political subdivision or taxing
authority thereof) having jurisdiction over the Loading Port from which the Oil
is deemed to have been exported. All other expenses pertaining to the loading of
any vessel, including, without limitation, all vessel agency fees, anchorage,
tonnage, towage, pilotage, customs, consular, entrance, clearance and quarantine
fees, port dues and all charges and expenses relating to berthing and unberthing
of vessels, shall be borne by Buyer.
8.3 Loading Port Regulations.
All laws, rules and regulations now or hereafter in existence relating to
operations at the Loading Ports shall apply to all vessels provided by Buyer,
including, without limitation, any regulations relating to (a) the prevention
and control of fires and water pollution and (b) lead-free and segregated or
clean ballast. Buyer shall reimburse Seller or its agent for any expenses they
may incur as a result of the noncompliance by any such vessel with any such
applicable law, rule or regulation, including, without limitation, any expenses
incurred by Seller or its agent in connection with the extinguishing of fires,
the repair of damage caused thereby, the cleaning-up of water pollution and the
payment of any charges assessed by the government (or any political subdivision
or agency thereof) having jurisdiction over the Loading Port in question.
8.4 Buyer’s Knowledge of Loading Port Facilities; Standard Procedures.
8.4.1 Buyer hereby acknowledges that it is fully familiar with the facilities
procedures and the facilities for the storage and delivery of the Oil. The
facilities and conditions at the Loading Ports may be changed at any time. Buyer
also acknowledges that standard procedures in effect at the Loading Ports from
time to time relating, inter alia, to quality and quantity measurements, safety
in loading, and inspection of vessel tanks, shall supplement (but not conflict
8.4.2 Seller makes no representations, express or implied, concerning
controllable risks.
8.5 Hazardous Warning Responsibility.
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its parents, subsidiaries and affiliates and its and their respective agents,
officers, directors, employees, representatives, successors and assigns from and
against any and all liabilities; losses; damages; demands; claims; penalties;
fines; actions; suits; legal, administrative or arbitration proceedings;
judgments, orders, directives, injunctions, decrees or awards of any
jurisdictions; costs and expenses (including, but not limited to, attorneys’
fees, expert witness fees, and related litigation costs) arising out of or in
any manner related to Buyer’s failure to provide necessary warnings or other
precautionary measures in connection with the Oil sold hereunder as provided
above.
ARTICLE 9.
NO SET-OFF
under the Agreement by notices pursuant to Article 11 or in arbitration
proceedings pursuant to Article 13, all payments required to be made by Buyer
under the Agreement shall be made punctually and without set-off or deduction
ARTICLE 10.
PAYMENT TERMS
10.1 Currency, Time and Place of Payment; Overdue Payments.
Buyer shall make all payments required to be made by it under the Agreement in
immediately available U.S. Dollars, without any discount or deduction
whatsoever, by wire transfer to such account at such bank as may be designated
by Seller from time to time. Payments in respect of Oil sold and delivered shall
be made within thirty (30) Days of the date of the bill of lading therefor (bill
of lading date excluded) specified in the Particular Conditions of Sale. All
other payments to Seller shall be made five (5) Days after presentation by
Seller of a written demand setting forth the provisions of the Agreement giving
rise to the payment obligation, the nature of such obligation, and the amount
thereof. If any payment hereunder is due on a Day which is not a Banking Day,
such payment shall be due on the immediately preceding Banking Day. In the event
that Buyer fails to make any payment when due, then, to the extent permitted by
applicable law and without prejudice to the application of any other provision
hereof or to any other remedy provided to Seller under the Agreement or
otherwise (including, without limitation, Articles 10.4 and 10.5 ), interest
shall accrue daily on the amount
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of the overdue payment, commencing on the date such payment was due, at a rate
per annum equal to three percent (3%) above the prime rate in effect from time
demand.
10.2 Contents of Invoices; Other Substantiating Documentation.
Each invoice shall set forth at least the following information: (a) the date(s)
of delivery in respect of which the invoice is rendered; (b) the Loading
Point(s) for such delivery; (c) the volume of the delivery stated in Barrels;
and (d) the purchase price for each type of Oil comprising the delivery, and the
terms of payment. Upon request, each Party shall furnish to the other Party all
available such substantiating documents incident to the delivery, including a
satisfactory source document for each volume delivered during any Month. The
source documents shall state at least the type and quality of Oil delivered and
method of measurement, the corrected API gravity, temperature, and S & W
content.
10.3 Payment Expenses.
Buyer shall bear all expenses and bank charges in connection with any payments
made to Seller under the Agreement, including, without limitation, any costs of
establishing and obtaining confirmation of a Letter of Credit referred to in
Article 10.4.
10.4 Security for Payment.
Without prejudice and in addition to any of Seller’s rights under Article 16 of
these General Terms or otherwise, if at any time (a) Buyer fails to make any
payment required to be made by it contemplated by the Agreement when and as the
same shall become due and payable; (b) any guarantor of Buyer’s obligations
under the Agreement fails to make any payment required to be made by it under
the guaranty when and as the same shall become due and payable; (c) Buyer
defaults in any of its material obligations hereunder and under the Agreement;
(d) any guarantor of Buyer’s obligations under the Agreement defaults in any of
its material obligations under the guaranty; (e) in Seller’s judgment, the
financial condition of Buyer or any guarantor of Buyer’s obligations under the
Agreement warrants a change in credit terms, or (f) the amount payable by Buyer
exceeds the credit limits established by Seller, then Seller shall have the
right to require Buyer to make all payments required under the Agreement
(whether due in respect of the purchase of Oil or otherwise) in advance in
immediately available funds or, at Buyer’s option, by posting of an irrevocable
documentary or standby letter of credit (“Letter of Credit”). The amount of the
advance payment or Letter of Credit shall be equal to Seller’s estimate of the
value of Oil for which the advance payment or a Letter of Credit is provided
(which may be, at Seller’s discretion, for a particular shipment or for some or
all shipments in a Month, plus ten percent (10%)), and such other outstanding
obligations owed by Buyer to Seller as Seller shall determine, and paid or
Agreed Loading Range. Any such Letter of Credit shall be opened or confirmed by
a first-class international bank satisfactory to Seller and shall be otherwise
satisfactory in form and substance to Seller. In addition to the foregoing, if
Seller, at
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any time, has reasonable grounds to believe that Buyer will not be able to
perform its obligations under the Agreement, Seller shall have the right to
demand reasonable assurances of performance from Buyer. If such assurances are
not reasonably satisfactory to Seller, Seller, in addition to any other rights
or remedies that it may have, shall have the right to suspend performance of the
Agreement or cancel the Agreement.
10.5 Suspension of Deliveries.
Without prejudice and in addition to any of Seller’s rights under Article 16 or
otherwise, if (a) Buyer fails to make any payment required to be made by it
hereunder or under the Agreement when and as the same shall become due and
payable, or to make an advance payment or post a Letter of Credit as required in
accordance with Article 10.4; or (b) any guarantor of Buyer’s obligations under
the Agreement fails to make any payment required to be made by it under the
guaranty when and as the same shall become due and payable, then Seller shall
have the right at its sole discretion to suspend further deliveries of Oil until
Buyer makes the required payment, together with any accrued interest thereon, or
posts a Letter of Credit as required by Seller in accordance with Article 10.4.
ARTICLE 11.
CLAIMS
11.1 Notice of Claims.
Any claim which Buyer may have arising out of or relating to the Agreement must
must be accompanied by the documentation required by Article 5.5.2); (b) within
shipment, or (c) within thirty (30) Days after the occurrence of the events
giving rise to such claim, if a claim involves any other matter relating to the
shall reimburse Seller for any expenses, including attorneys’ fees, which Seller
incurs in connection with the defense of any such claim.
11.2 Payment in Full.
In no event shall Buyer be entitled to reduce or postpone payment of the full
Purchase Price owed in respect of any Cargo on the grounds that a dispute exists
concerning the quality or quantity of Oil so delivered.
ARTICLE 12.
FORCE MAJEURE
12.1 Relief from Liability.
Neither Party to the Agreement shall be liable for demurrage, loss, damage,
claims or demands of any nature arising out of delays or defaults in performance
under the Agreement due to any cause reasonably beyond its control despite the
due diligence of the Party
-20-
affected (“Force Majeure”). Force Majeure shall be deemed to include, but not be
limited to, wars, hostilities, terrorism, acts of the public enemy; sabotage,
boycott, blockade, revolutions, insurrections, riots or commotions, acts of God,
fires, frost or ice, earthquakes, storms, lightning, weather or sea conditions,
tidal wave or perils of the sea, navigational accidents, vessel damages or
breakdowns, loss of vessel due to sinking, belligerents or governmental
confiscation, with or without formal requisition; accidents or closing of ports,
docks, dams, channels, river-beds and other maritime or navigational aids;
epidemics and quarantines: strikes or agreements among workers, lockouts or
other labor disturbances; explosions or accidents caused by fire or other causes
to: wells, pipelines, storage deposits, refinery facilities, machinery and other
facilities; faults or omissions caused or due to: expropriation, requisition,
confiscation or nationalization; embargoes; export or import restrictions, or
restrictions of production, rationing or allocation of same, whether imposed by
law, decree or regulation, or by insistence, request or instructions of any
governmental authority, or organization owned or controlled by any government or
of which such governmental authority is a member, or by any person purporting to
represent a government; interference, restriction or onerous regulations,
imposed by any government authority to whose jurisdiction any of the Parties is
subject to, whether civil or military, legal or de facto, or which purports to
act under any constitution, decree, act or otherwise.
12.2 Notice.
A Party claiming Force Majeure shall promptly notify the other Party of the
occurrence of the event of Force Majeure relied upon and the expected duration
thereof. The Party claiming Force Majeure shall use commercially reasonable
efforts to give the other Party notice of termination of the event of Force
Majeure and the date when performance is expected to resume.
12.3 Pavment for Oil Sold and Delivered.
Nothing in this Article 12 shall relieve Buyer of its obligation to pay in full
for Oil sold and delivered hereunder and for all other amounts due to Seller
from Buyer under the Agreement.
12.4 No Proration or Make-Up.
12.4.1 If, as a result of Force Majeure, Seller at any time does not have
available a sufficient amount of Oil for export to supply the aggregate amount
of Oil to be sold by it hereunder to Buyer and under such commitments as Seller
may have with its other customers, Seller shall not be obligated to prorate the
Oil available to it for export among its customers, including Buyer, and shall
allocate such available Oil in a commercially reasonable manner determined by
Seller. If an event of Force Majeure affecting Seller shall occur, Seller shall
have no obligation to purchase crude oil from any party on the open market for
sale to Buyer or to supply Oil to Buyer from any of Seller’s other facilities or
supply other types of crude oil that are not specified in the Particular
Conditions of Sale.
12.4.2 Seller shall not be obligated to make up deliveries of Oil which have
been prevented by an event of Force Majeure.
12.5 No Extension of Contract; Right to Terminate.
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The occurrence of an event of Force Majeure shall not operate to extend the
period of the Agreement. Should any such event curtail or suspend the
performance of either Party hereunder for a period in excess of sixty (60) Days,
either Party shall have the right to terminate the Agreement upon notice to the
other Party.
ARTICLE 13.
13.1 Settlement by Arbitration.
All disputes arising under or in connection with the Agreement shall be finally
settled by arbitration under the Rules of Arbitration (“ICC Rules”) of the
International Chamber of Commerce in effect at such time. The place of
arbitration shall be Caracas, Venezuela and the language of the arbitration
shall be English, unless otherwise stipulated in the Particular Conditions of
Sale. The number of arbitrators shall be three (3), and the arbitrators shall
apply the substantive law of Venezuela to the merits of the dispute. Any
arbitral award relating to the performance by either Party of its obligations
under the Agreement shall be (a) reasoned in accordance with Article 25.2 of the
ICC Rules, (b) in writing, and (c) final and binding on all parties to the
arbitration. Any arbitral award may be confirmed or embodied in any order or
judgment of any court of competent jurisdiction.
13.2 Governing Law.
The Parties agree that the Agreement shall be governed by and interpreted in
accordance with the laws of the Venezuela, without giving any effect to any
principle of conflicts of law which would require the application of the law of
another jurisdiction.
ARTICLE 14.
(a) it is a legal entity duly organized and validly existing under the laws of
(b) the Agreement has been duly authorized by all necessary governance action
of Buyer and constitutes the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms;
(c) unless otherwise specifically agreed, Buyer is purchasing the Oil
hereunder exclusively for its own use;
any compensation with respect to the Agreement or the sale of Oil hereunder; and
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connection with the Agreement, it being agreed that representatives of Seller
ARTICLE 15.
LIMITATION OF LIABILITY
Except as expressly provided herein or in the Particular Conditions of Sale,
neither Party shall be liable for any consequential, indirect, exemplary or
special losses or damages of any kind arising out of or in any way connected
with the performance of or failure to perform the Agreement, including, but not
limited to, losses or damages resulting from shutdown of plants or inability to
perform sales or any other contracts arising out of or in connection with the
performance or nonperformance of the Agreement.
ARTICLE 16.
TERMINATION
16.1 Termination.
The Agreement may not be terminated except in accordance with these General
Terms as well as in accordance with the terms and conditions of in the
Particular Conditions of Sale.
16.2 Termination Not to Relieve Buyer of Obligations.
Notwithstanding any termination of the Agreement, Buyer shall not be relieved of
any of its obligations to make any payment required of it under the Agreement.
16.3 Termination for an Insolvency Event.
Each Party acknowledges that the Agreement is a “Forward Contract” as defined in
United States Bankruptcy Code (11 U.S.C. Sec. 101(25)). If a Party (the
“Non-Defaulting Party”) terminates the Agreement by reason of one or more events
of default of the other Party (the “Defaulting Party”), (a) the Defaulting Party
shall have no right to recover damages or other compensation from the
Non-Defaulting Party and (b) the Non-Defaulting Party, in addition to any rights
or remedies it may have under the Agreement or otherwise, shall have the right
to recover damages or other compensation from the Defaulting Party in respect of
the quantities of Oil that would have been sold or purchased, as the case may
be, under the Agreement in the absence of a termination.
16.4 No Gifts.
Neither Party shall, nor shall it permit its agents, representatives or
personnel, to grant or offer the agents, representatives or personnel of the
other, either directly or indirectly, any gifts, loans, gratifications,
commissions or fees, personally benefiting said agents,
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obligation, then the Agreement shall immediately terminate without prejudice to
by the preceding provisions of this Article 16.4, it shall promptly notify the
16.5 Other Rights and Remedies.
The right of either Party to terminate the Agreement shall be in addition to any
other rights or remedies (including, but not limited to, the right to seek
damages) provided to such Party under the Agreement, applicable law or
otherwise.
ARTICLE 17.
CONFIDENTIALITY
Buyer agrees that all information obtained in connection with the Agreement from
including the contents of the Agreement, (a) pursuant to governmental, judicial
Buyer is judicially mandated or otherwise required by law or regulation and the
failure to so disclose could subject Buyer to civil or criminal action or
penalties, and (b) Buyer’s financial advisors, attorneys, accountants and
potential financing sources who agree to keep such information confidential as
required hereby. When such disclosure is required pursuant to a subpoena, Buyer
shall use its best efforts (including, but not limited to, seeking judicial
appeal of such requirement) to have the information maintained as confidential
and shall disclose the minimum information necessary to satisfy such
requirements. In the event that Buyer becomes legally compelled to disclose any
of such information pursuant to a subpoena, Buyer shall provide Seller with
notice of such event promptly upon its obtaining knowledge thereof (provided
that Buyer is not otherwise prohibited by law, regulation or legal process from
giving such notice) so that Seller may seek a protective order or other
appropriate remedy. When information is requested pursuant to a subpoena, in the
event that such protective order or other remedy is not obtained or is not
otherwise available, Buyer shall furnish only that portion of such information
that is legally required to be disclosed and in a manner reasonably designed to
preserve its confidential nature. In the event that Buyer makes a disclosure
contrary to the provisions of this Article 17, Seller shall have the right,
without prejudice to any other rights or remedies it may have under the
Agreement or otherwise, to obtain injunctive relief prohibiting Buyer from
disclosing such confidential information, notwithstanding any monetary remedy
which may be available to Seller. This obligation shall be of a continuing
nature and shall not be cancelled by the expiration, suspension or termination
of the Agreement.
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ARTICLE 18.
COMPLIANCE WITH LAW
ARTICLE 19.
NO THIRD PARTY BENEFICIARIES; ASSIGNMENT
Nothing in the Agreement is intended or shall be construed to confer upon or
give to any person or entity any rights as a third-party beneficiary of the
right or interest in the Agreement or delegate to any third party any of its
obligations hereunder without the consent of Seller. Buyer shall not assign to
any party any right or interest in the Agreement or delegate to any party any
obligation thereunder without the prior written consent of Seller. In the event
of any purported assignment or delegation by Buyer in contravention of the
the Agreement effective immediately upon notice to Buyer. Seller may freely
assign the Agreement to any of its subsidiaries or affiliates and Seller’s
collection rights under this Agreement and rights to enforce any guarantee of
Buyer’s payment obligations under the Agreement to any bank or financial
institution.
ARTICLE 20.
Except as specifically provided in the Particular Conditions of Sale, no failure
or delay on the part of either Party in exercising any right, power or remedy
hereunder and no course of dealing between the Parties shall operate as a waiver
by either Party of any such right, power or remedy; nor shall any single or
Without prejudice to Article 15 and except to the extent otherwise expressly
provided in the Particular Conditions of Sale, all rights, powers and remedies
provided hereunder are cumulative and not exclusive of any rights, powers or
remedies provided by law or otherwise. Except as required by the Particular
Conditions of Sale, no notice or demand upon either Party in any case shall
entitle such Party to any other or future notice or demand in similar or other
circumstances or constitute a waiver of the right of either Party to take any
other or further action in any such circumstances without further notice or
demand.
ARTICLE 21.
SEVERABILITY OF PROVISIONS
21.1 Illegality, Unenforceability or Invalidity.
21.1.1 If any provision of the Agreement shall be found to be illegal, invalid
or unenforceable by any court or administrative body of competent jurisdiction,
remaining provisions hereof which shall remain in
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force and effect, and the finding of any such illegality, prohibition, or
unenforceability shall not invalidate or render unenforceable such provision in
any other jurisdiction.
21.1.2 If any provision of the Agreement is so found to be illegal, invalid or
unenforceable but would be legal, valid or enforceable if some part of the
provision were modified, the provision in question shall apply with such
modification(s) as may be necessary to make it legal, valid and enforceable.
21.1.3 The Parties agree, in the circumstances referred to in Article 21.1.1, to
21.1.4 If the Parties are unable to reach an agreement regarding a substitute
provision within a period of thirty (30) Days of the commencement of the
negotiations referred to in Article 21.1.3, then either Party shall be entitled
to refer the matter to arbitration under Article 13.
21.2 Conflict with Particular Conditions of Sale.
In the event of any conflict between any of the terms and conditions of these
General Terms and any of the terms and conditions set forth in the Particular
Conditions of Sale, the terms and conditions contained in the Particular
Conditions of Sale shall prevail.
ARTICLE 22.
NOTICES
All notices and other communications given under the Agreement shall be in
writing and shall be given by first class mail; internationally recognized
courier service; electronic mail or facsimile transmission, and, in each case,
shall be deemed effective upon receipt by the addressee as provided below:
To Seller: PDVSA-PETRÓLEO S.A. AVENIDA LIBERTADOR EDIFICIO PETRÓLEOS DE
VENEZUELA TORRE OESTE PISO 7 LA CAMPIÑA CARACAS 1060-A VENEZUELA
DIRECTOR, SUPPLY AND MARKETING FACSIMILE: ELECTRONIC MAIL: or at such
other address or electronic mail address as may be notified by Seller to Buyer
from time to time in the manner provided in this Article 22. To Buyer: At the
address or electronic mail address of its principal office or any office dealing
with Seller with respect to the Agreement, or at any such other address or
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electronic mail address as may be notified by Buyer to Seller from time to
time in the manner provided in this Article 22.
ARTICLE 23.
AMENDMENTS AND WAIVERS
Any amendment or modification to the Agreement must be made upon the express
written agreement of both Parties, and any waiver of any provision of the
Party. Notwithstanding anything herein that may be to the contrary, Seller
reserves the right, without the approval or consent of Buyer, to change or
modify these General Terms for reasons related to (a) health, safety and
environmental matters; (b) issues relating to operations of the Loading Port,
and (c) compliance with the requirements of any change in applicable law;
provided, however, that in each case any such change or modification shall apply
equally to all similarly situated customers of Seller.
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Exhibit 10.1
LIMITED WAIVER AGREEMENT RELATING
TO
PURCHASE AND CONTINUATION AGREEMENT
THIS LIMITED WAIVER AGREEMENT RELATING TO PURCHASE AND CONTINUATION
15, 2011, by and among CAMAC ENERGY INC. (formerly, Pacific Asia Petroleum,
Inc.), a Delaware corporation (“CEI”), CAMAC PETROLEUM LIMITED, a company
incorporated in the Federal Republic of Nigeria and a wholly-owned subsidiary of
CEI (“CPL,” and together with CEI, the “CEI Parties”), CAMAC ENERGY HOLDINGS
LIMITED, a Cayman Islands company (“CEHL”), ALLIED ENERGY PLC (formerly, Allied
Energy Resources Nigeria Limited), a company incorporated in the Federal
Republic of Nigeria and a wholly-owned subsidiary of CEHL (“Allied”), and CAMAC
INTERNATIONAL (NIGERIA) LIMITED, a company incorporated in the Federal Republic
of Nigeria and a wholly-owned subsidiary of CEHL (“CINL,” and together with CEHL
and Allied, the “CAMAC Parties”). Each of the Parties to this Agreement is
WHEREAS, the CEI Parties and the CAMAC Parties entered into that
certain Purchase and Continuation Agreement dated as of December 10, 2010 (as
amended, modified, restated, or supplemented from time to time, the “Purchase
Agreement”);
WHEREAS, the CAMAC Parties have determined that on the Closing Date
the CAMAC Parties may be in violation of the representation and warranty
contained in Section 4.4(f)(i)(A) of the Purchase Agreement (the “Section
4.4(f)(i)(A) Breach”) as a result of a subsisting security interest created by
Allied and CINL over all their respective rights, title and benefits under and
in respect of the Assigned Agreements (as defined in the Security Deed)
(including any assets or benefits accruable thereunder) under a Security Deed,
dated January 28, 2008 (the “Security Deed”), among Allied, CINL, and Union Bank
UK plc (as “Security Agent” for the lenders under a related facility agreement)
(the “Lien”);
the CAMAC Parties are not able to satisfy certain conditions to CEI’s obligation
to enter into and complete the Closing contained in Section 9.3(i) of the
Purchase Agreement, which conditions consist of the delivery on or prior to the
Closing Date of the Data (as defined in the Purchase Agreement) and the
delivery, in part, of the G & G Workstations (as defined in the Purchase
Agreement), specifically with respect to two (2) SMT geophysical workstations
located in Lagos, Nigeria, including corresponding Micro Seismic Technology
Geophysical software (SMT) and Petrel software and licenses, to the extent such
software licenses are assignable or transferrable by the CAMAC Parties to the
CEI Parties, and all in “as-is” condition (the “Lagos Workstations”) (such
breach, together with the Section 4.4(f)(i)(A) Breach, is hereinafter referred
to as the “Breach”);
WHEREAS, the CAMAC Parties have requested that the CEI Parties waive
the condition to CEI’s obligation to enter into and complete the Closing
contained in Section 9.3(a) and Section 9.3(i) of the Purchase Agreement (the
“Waiver”), but solely with respect to the Breach that may result from the Lien
or the non-delivery of the Data or Lagos Workstations, upon the terms and
1
WHEREAS, the CAMAC Parties and the CEI Parties desire to set forth
certain remedies of CEI in the event the CAMAC Parties fail to discharge the
Lien and deliver the Data in accordance with this Agreement.
1. Definitions. Except as otherwise provided below, unless the
context hereof indicates otherwise, all capitalized terms used herein shall have
the same meaning as such capitalized terms are defined in the Purchase
Agreement.
2. Waiver. From the date hereof until the date that is ten
business days after the date CEI delivers the Closing Cash Consideration to the
CAMAC Parties, CEI hereby waives the application of Section 9.3(a) and Section
9.3(i) of the Purchase Agreement, but solely with respect to the Breach that may
result from the Lien and the non-delivery of the Data. Additionally, CEI hereby
waives the application of Section 9.3(i) of the Purchase Agreement indefinitely
but solely with respect to the Breach that may result from the non-delivery of
the Lagos Workstations. However, except for the Waiver, nothing herein shall be
deemed to modify or waive any other provision of the Purchase Agreement or any
other Transaction Document or to constitute waiver of any default by any of the
CAMAC Parties under the Purchase Agreement or any other Transaction Document,
whether now existing or hereafter arising. Without limitation to the foregoing,
the Waiver shall constitute a waiver made pursuant to the terms of Section 12.2
of the Purchase Agreement and shall be governed in all respects by the terms and
conditions thereof. Except for the Waiver, all of the representations,
warranties, terms, covenants, conditions and other provisions of the Purchase
Agreement or any of the other Transaction Documents shall remain in full force
3. Discharge of Lien; Delivery of Data. In consideration of the
granting of the Waiver by CEI, the CAMAC Parties agree to, within ten business
days after receipt of the Closing Cash Consideration, (a) either (i) pay all
amounts or (ii) provide sufficient substitute collateral necessary to discharge
the Lien and obtain and deliver to CEI a release in form and substance
satisfactory to CEI from the Security Agent releasing the Lien and authorizing
the filing of any termination statements with any Governmental Authority in
connection therewith, and (b) deliver the Data to the CEI Parties.
4. Remedies for Failure to Cure Breach.
(a) If the CAMAC Parties fail to discharge the Lien, deliver the
Data and perform their obligations under Section 3 of this Agreement by the date
ten business days after receipt of the Closing Cash Consideration, CEI shall
have the right, at its sole option, by notice to CEHL, to either (i) rescind and
terminate the Purchase Agreement, subject to NAE’s agreement to terminate or
rescind the novation of the Contract Rights to the CEI Parties under the
Novation Agreement (the “NAE Approval”), in which case Section 4(b) below shall
apply, or (ii) pursue any and all rights and remedies it may have against the
CAMAC Parties with respect to the Breach, including a claim for indemnification
under Section 10.2 of the Purchase Agreement; provided, that Section 10.4(a) of
the Purchase Agreement shall not apply to any claim for indemnification that CEI
has with respect to the Breach. In addition, each of the CAMAC Parties hereby
waives any defense that any of the CAMAC Parties may have with respect to its
obligation to indemnify CEI for the Breach based on the fact that the CEI
Parties have knowledge of the Breach on or prior to the Closing Date.
2
(b) If CEI elects to rescind and terminate the Purchase Agreement
pursuant to Section 4(a)(i) above, within two business days following CEHL’s
receipt of CEI’s notice of such rescission and termination, the CAMAC Parties
shall refund the Closing Cash Consideration in full to CEI, plus interest on the
Closing Cash Consideration at the Interest Rate from the date of CEI’s payment
of the Closing Cash Consideration to the date of such refund, by wire transfer
of immediately available funds to an account to be designated by CEI, and the
CAMAC Parties agree to use their reasonable best efforts to promptly attain the
termination or rescission of the novation of the Contract Rights, the Contract
Rights shall revert back to CAMAC. In the event the NAE Approval is not obtained
within thirty calendar days, CEI shall have the right, at its sole option, to
retain the refunded Closing Cash Consideration in full, plus interest received,
and pursue it rights under Section 4(a)(ii) above, with any cash recovery being
reduced by the value of the Closing Cash Consideration previously refunded by
the CAMAC Parties to CEI. “Interest Rate” shall mean two percent per annum above
the “prime rate” or other comparable index or reference rate reported in the
Money Rates column or section of The Wall Street Journal as of the date of CEI’s
payment of the Closing Cash Consideration.
5. Representations and Warranties of the Parties. Each of the
under the laws of its respective jurisdiction of formation. It has all requisite
Agreement.
Agreement have been duly authorized and approved by its board of directors or
other governing body, and such authorizations and approvals remain in effect and
have not been rescinded or qualified in any respect, and no other proceedings on
the part of any such entities are necessary to authorize this Agreement. This
Agreement will be duly executed and delivered by it and constitutes the valid
3
6. Reference to and Effect on the Transaction Documents.
words of like import, and each reference in the Transaction Documents shall mean
and be a reference to the Purchase Agreement as supplemented hereby.
(b) Except as specifically supplemented or modified above, the
Purchase Agreement and all other Transaction Documents shall remain in full
(c) The execution, delivery and effectiveness of this Agreement
of any CEI Party under any of the Transaction Documents.
7. Execution in Counterparts. This Agreement may be executed in
purposes.
in accordance with, the laws of the State of Texas regardless of the laws that
4
indicated above.
CAMAC ENERGY INC.
By: /s/ Byron A. Dunn
Bryon A. Dunn
Address for Notice
Suite 2575
Houston, Texas 77056
CAMAC PETROLEUM LIMITED
Byron A. Dunn
Director
SIGNATURE PAGES FOR CAMAC PARTIES FOLLOW]
indicated above.
CAMAC ENERGY HOLDINGS LIMITED
Name: Kamoru Lawal
Title: Director
Address for Notice
Suite 2200
Houston, Texas 77056
Name: Kamoru Lawal
Title: Director
Address for Notice
Suite 2200
Houston, Texas 77056
[SIGNATURES FOR CAMAC PARTIES CONTINUE]
ALLIED ENERGY PLC
Name: Kamoru Lawal
Title: Director
Address for Notice
Suite 2200
Houston, Texas 77056
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Exhibit 8.1 · Companies Equity interests (%) Companies 12/31/2013 12/31/2012 Core business Jurisdiction Direct interest in subsidiaries: full consolidation CSN Islands VII Corp. 100.00 100.00 Financial transactions Grand Cayman/Cayman Island CSN Islands VIII Corp. 100.00 100.00 Financial transactions Grand Cayman/Cayman Island CSN Islands IX Corp. 100.00 100.00 Financial transactions Grand Cayman/Cayman Island CSN Islands X Corp. 100.00 100.00 Financial transactions Grand Cayman/Cayman Island CSN Islands XI Corp. 100.00 100.00 Financial transactions Grand Cayman/Cayman Island CSN Islands XII Corp. 100.00 100.00 Financial transactions Grand Cayman/Cayman Island International Investment Fund (1) 100.00 Equity interests and financial transactions Belize City/Belize CSN Minerals S.L.U. 100.00 100.00 Equity interests Madrid/Spain CSN Export Europe, S.L.U. 100.00 100.00 Financial transactions and equity interests Madrid/Spain CSN Metals S.L.U. 100.00 100.00 Equity interests and financial transactions Madrid/Spain CSN Americas S.L.U. 100.00 100.00 Equity interests and financial transactions Madrid/Spain CSN Steel S.L.U. 100.00 100.00 Equity interests and financial transactions Madrid/Spain TdBB S.A 100.00 100.00 Dormant company Panamá City/Panamá Sepetiba Tecon S.A. 99.99 99.99 Port services Itaguaí/RJ, Brazil Mineração Nacional S.A. 99.99 99.99 Mining and equity interests Congonhas/MG,Brazil Florestal Nacional S.A. (2) 99.99 Reforestation São Paulo/SP, Brazil Companhia Florestal do Brasil 99.99 Reforestation São Paulo/SP, Brazil Estanho de Rondônia S.A. 99.99 99.99 Tin mining Ariquemes/RO, Brazil Cia Metalic Nordeste 99.99 99.99 Manufacture of packaging and distribution of steel products Maracanaú/CE, Brazil Companhia Metalúrgica Prada 99.99 99.99 Manufacture of packaging and distribution of steel products São Paulo/SP, Brazil CSN Cimentos S.A. 99.99 99.99 Cement manufacturing Volta Redonda/RJ, Brazil CSN Gestão de Recursos Financeiros Ltda. 99.99 99.99 Dormant company São Paulo/SP, Brazil Congonhas Minérios S.A. 99.99 99.99 Mining and equity interests Congonhas/MG,Brazil CSN Energia S.A. 99.99 99.99 Sale of electric powe Rio de Janeiro/RJ, Brazil FTL - Ferrovia Transnordestina Logística S.A. (3) 88.41 99.99 Railroad logistics Fortaleza/CE, Brazil Transnordestina Logística S.A. (4) 76.13 Railroad logistics Fortaleza/CE, Brazil Indirect interest in subsidiaries: full consolidation CSN Aceros S.A. 100.00 100.00 Equity interests Panama City/Panama Companhia Siderúrgica Nacional LLC 100.00 100.00 Steel Terre Haute/EUA CSN Europe Lda. 100.00 100.00 Financial transactions, product sales and equity interests Madeira Island/Portugal CSN Ibéria Lda. 100.00 100.00 Financial transactions, product sales and equity interests Madeira Island/Portugal CSN Portugal, Unipessoal Lda. 100.00 100.00 Financial transactions and product sales Madeira Island/Portugal Lusosider Projectos Siderúrgicos S.A. 99.99 100.00 Equity interests Seixal/Portugal Lusosider Aços Planos, S. A. 99.98 99.94 Steel and equity interests Seixal/Portugal CSN Acquisitions, Ltd. 100.00 100.00 Financial transactions and equity interests London/England CSN Resources S.A. 100.00 100.00 Financial transactions and equity interests Luxembourg/Grand Duchy of Luxembourg CSN Holdings (UK) Ltd 100.00 100.00 Financial transactions and equity interests London/England CSN Handel GmbH 100.00 100.00 Financial transactions, product sales and equity interests Vienna/Austria Companhia Brasileira de Latas 59.17 59.17 Sale of cans and containers in general and equity interests São Paulo/SP, Brazil Rimet Empreendimentos Industriais e Comerciais S. A. 58.96 58.96 Production and sale of steel containers and forestry Resende/RJ, Brazil Companhia de Embalagens Metálicas MMSA 58.98 58.98 Production and sale of cans and related activities Barra Mansa/RJ, Brazil Empresa de Embalagens Metálicas - LBM Ltda. 58.98 58.98 Sales of containers and holding interests in other entities Barra Mansa/RJ, Brazil Empresa de Embalagens Metálicas - MUD Ltda. 58.98 58.98 Production and sale of household appliances and related products São Paulo/SP, Brazil Companhia de Embalagens Metálicas - MTM do Nordeste 58.98 58.98 Production and sale of cans and related activities São Paulo/SP, Brazil Companhia de Embalagens Metálicas - MTM 58.98 58.98 Production and sale of cans and related activities Teresina/PI, Brazil CSN Steel Comercializadora, S.L.U. 100.00 100.00 Financial transactions, product sales and equity interests Madrid/Spain CSN Steel Holdings 1, S.L.U. 100.00 100.00 Financial transactions, product sales and equity interests Madrid/Spain CSN Steel Holdings 2, S.L.U. 100.00 100.00 Financial transactions, product sales and equity interests Madrid/Spain Stalhwerk Thüringen GmbH 100.00 100.00 Production and sale of long steel and related activities Unterwellenborn/Germany CSN Steel Sections UK Limited 100.00 100.00 Financial transactions, product sales and equity interests Southend- on-sea/England CSN Steel Sections Czech Republic s.r.o. 100.00 100.00 Financial transactions, product sales and equity interests Praha/Czech Republic CSN Steel Sections Polska Sp.Z.o.o 100.00 100.00 Financial transactions, product sales and equity interests Katowice/Poland Direct interest in jointly controlled entities: proportionate consolidation Itá Energética S.A. 48.75 48.75 Electric power generation São Paulo/SP, Brazil CGPAR - Construção Pesada S.A. 50.00 50.00 Mining support services and equity interests Belo Horizonte/MG, Brazil Consórcio da Usina Hidrelétrica de Igarapava 17.92 17.92 Electric power consortium Belo Horizonte/MG, Brazil Direct interest in jointly controlled entities: equity method Nacional Minérios S.A. 60.00 60.00 Mining and equity interests Congonhas/MG,Brazil MRS Logística S.A. 27.27 27.27 Railroad transportation Rio de Janeiro/RJ, Brazil Aceros Del Orinoco S.A. 22.73 22.73 Dormant company Panama City/Panama CBSI - Companhia Brasileira de Serviços de Infraestrutura 50.00 50.00 Provision of services Araucária/PR, Brazil Transnordestina Logística S.A. (4) 77.30 Railroad logistics Fortaleza/CE, Brazil Indirect interest in jointly controlled entities: equity method Namisa International Minérios SLU 60.00 60.00 Financial transactions, product sales and equity interests Madrid/Spain Namisa Europe, Unipessoal Lda. 60.00 60.00 Equity interests and sales of products and minerals Madeira Island/Portugal Namisa Handel GmbH 60.00 60.00 Financial transactions, product sales and equity interests Vienna/Austria MRS Logística S.A. 6.00 6.00 Railroad transportation Rio de Janeiro/RJ, Brazil Aceros Del Orinoco S.A. 9.08 9.08 Dormant company Panama City/Panama Direct interest in associates: equity method Arvedi Metalfer do Brasil S.A. 20.00 Steel and equity interests Salto/SP,Brazil Company liquidated on May 9, 2013. Company merged on September 30, 2013. New corporate name of TFNE - Transnordestina Ferrovias do Nordeste S.A., changed on February 15, 2013. On December 27, 2013, TLSA became a jointly controlled entity and the investment accounted for under the equity method, as mentioned in note 9.b. · Exclusive funds Equity interests (%) Exclusive funds 12/31/2013 12/31/2012 Core business Direct interest: full consolidation DIPLIC - Private credit balanced mutual fund 100.00 100.00 Investment fund Mugen - Private credit balanced mutual fund 100.00 100.00 Investment fund Caixa Vértice - Private credit balanced mutual fund 100.00 100.00 Investment fund
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September 6, 2013 THE TEBERG FUND A series of Advisors Series Trust (the “Trust”) Supplement to the Prospectus and Statement of Additional Information (“SAI”) Dated July 29, 2013 The Board of Trustees of the Trust has voted to approve an Agreement and Plan of Reorganization whereby the Teberg Fund (the “Fund”) would reorganize out of the Trust and into a newly created series (the “New Fund”) of the same name of Northern Lights Fund Trust III, (the “Reorganization”).The Reorganization would be structured as a tax-free reorganization for federal tax purposes. The Fund and the New Fund will have the same investment objective, investment strategies and investment policies.The fees and expenses of the Fund are not expected to increase as a result of the Reorganization.The Fund’s and the New Fund’s investment adviser and portfolio manager will also remain the same.However, with the exception of the Fund’s custodian, service providers to the New Fund would be different than those currently utilized by the Fund.The Fund would have a new administrator, transfer agent, distributor, independent registered public accounting firm and legal counsel and will be under the supervision of a different Board of Trustees. In late October 2013, shareholders of the Fund will receive a proxy statement soliciting their vote with respect to the proposed Reorganization.If approved, the Reorganization is anticipated to take effect on or about December 13, 2013.The Reorganization must be approved by a vote of a majority of the outstanding shares of the Fund.When you receive your proxy statement, please review it and cast your vote as instructed in the materials so the Trust may avoid any future solicitations. ***** Please retain this Supplement with your Prospectus and SAI for reference.
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Exhibit 10
SIXTH AMENDMENT TO FINANCING AGREEMENT
THIS SIXTH AMENDMENT TO FINANCING AGREEMENT, dated as of June 30, 2006 (this
RECITALS:
as of July 16, 2003, as amended (as amended, modified, restated or supplemented
things, CIT extended to the Borrower a revolving credit and term loan facility.
otherwise defined herein.
AGREEMENTS:
ARTICLE I
AMENDMENTS
1.1 The definitions of “Anniversary Date”, “Applicable Margin” and “Early
Termination Fee” Section 1 of the Financing Agreement, Definitions, are hereby
“Anniversary Date shall mean June 30, 2009 and the same date in every year
thereafter.”
“Applicable Margin shall mean the appropriate applicable percentage
corresponding to Fixed Charge Coverage Ratio in effect as of the most recent
Calculation Date:
Tier
Fixed Charge
Coverage Ratio
Applicable Margin
for LIBOR Loans
Applicable Margin
For Chase Bank
Rate Loans
Revolving Loans
Revolving Loans
I
Less than 1.2 to 1.0
2.50% 0.50% II
Equal to or greater than 1.2 to 1.0 but less than 1.4 to 1.0
2.00% 0.00% III
Greater than or equal to 1.4 to 1.0
1.75% -0.25%
of Section 7.8 (each a “Calculation Date”); provided, however, that if the
Company fails to provide any financial statements for any fiscal quarter within
the time period set forth herein, the Applicable Margin from the Calculation
Date applicable to such fiscal quarter shall be based on Tier I until such time
as such financial statements are provided, whereupon the Applicable Margin shall
be determined as set forth above. Each Applicable Margin shall be effective from
one Calculation Date until the next Calculation Date.”
determined by multiplying the Revolving Line of Credit by (x) one percent
(1%) if the Early Termination Date occurs on or before June 30, 2007; (y) one
half of one percent (0.50%) if the Early Termination Date occurs on or before
June 30, 2008; and (z) zero percent (0%) if the Early Termination Date occurs
thereafter.”
1.2 Paragraph 8.3 of Section 8 of the Financing Agreement, Interest, Fees and
Expenses, is hereby deleted in its entirety and the following inserted in lieu
thereof:
“8.3 In consideration of the Letter of Credit Guaranty of CIT, the Company shall
(a) two percent (2.0%) on the face amount of each documentary Letter of Credit
payable upon issuance
2
thereof and (b) two percent (2.0%) per annum, payable monthly, on the face
amount of each standby Letter of Credit less the amount of any and all amounts
previously drawn under such standby Letter of Credit.”
1.3 The Financing Agreement and each of the other Loan Documents are amended to
provide that any reference to the Financing Agreement in the Loan Documents or
any of the other Loan Documents shall mean the Financing Agreement as previously
amended and as amended by this Amendment, and as it may be further amended,
ARTICLE II
REPRESENTATIONS AND WARRANTIES
respects.
relating to enforceability.
3
ARTICLE III
CONDITIONS PRECEDENT
hereof (the “Sixth Amendment Effective Date”) upon the satisfaction by the
(b) No Default or Event of Default shall have occurred and no material adverse
respective subsidiaries;
(c) Receipt by CIT of such other documents, instruments, and agreements as CIT
ARTICLE IV
MISCELLANEOUS
York.
4.4 Expenses. The Borrower shall reimburse CIT for all reasonable legal fees
(including fees for the use of CIT’s in-house counsel) and expenses, all
recordation, filing, and other fees and expenses incurred by CIT in connection
all other agreements and documents or contemplated hereby.
4.5 Headings. The headings in this Amendment are for the purpose of reference
4
4.6 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
Name: Arthur W. Hicks, Jr. Title: Executive Vice President THE CIT
GROUP/BUSINESS CREDIT, INC. By:
/s/ John McIntyre
Name: John McIntyre Title: Vice President
5
CONSENT OF GUARANTORS
foregoing Sixth Amendment to Financing Agreement, dated as of the same date
CYBEX CAPITAL CORPORATION By:
Name:
Title:
Vice-President
Signed as a deed by CYBEX INTERNATIONAL UK LIMITED acting by: Director
Director
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Name: 89/257/EEC: Commission Decision of 21 March 1989 concerning applications for refund of anti-dumping duties collected on certain imports of hydraulic excavators originating in Japan (Kobemac Ltd) (Only the English text is authentic)
Type: Decision_ENTSCHEID
Avis juridique important|31989D025789/257/EEC: Commission Decision of 21 March 1989 concerning applications for refund of anti-dumping duties collected on certain imports of hydraulic excavators originating in Japan (Kobemac Ltd) (Only the English text is authentic) Official Journal L 108 , 19/04/1989 P. 0001 - 0002COMMISSION DECISION of 21 March 1989 concerning applications for refund of anti-dumping duties collected on certain imports of hydraulic excavators originating in Japan (Kobemac Ltd) (Only the English text is authentic) (89/257/EEC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Communtity, Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection against dumped or subsidized imports from countries not members of the European Economic Community (1), and in particular Article 16 thereof, Whereas: A. PROCEDURE (1) Council Regulation (EEC) No 1877/85 (2) imposed a definitive anti-dumping duty on imports of certain hydraulic excavators exceeding six tonnes but not exceeding 35 tonnes originating in Japan. The rate of duty applied to Kobelco-Kobesteel Ltd (hereinafter referred to as Kobelco) was 31,9 %. (2) In October 1985 Kobemac Ltd, Hampshire, United Kingdom, made an application for the refund of the anti-dumping duty paid in August 1985 on the importation of a hydraulic excavator manufactured and exported by Kobelco. The total amount requested was £. . . (3). This amount represents all the duty paid. (3) The Commission asked the applicant for additional information on certain aspects of the dossier. It then visited Kobelco's premises in Japan to check the information supplied by Kobelco on the normal value of the goods during the six months preceding import. (4) The applicant was informed of the preliminary results of this examination and given an opportunity to comment. (5) The Commission informed the Member States and gave its opinion on the matter. No Member State raised any objection. B. ARGUMENT OF THE APPLICANT (6) The applicant argued that the excavator had been imported at a price equivalent to the price proposed to the Commission by Kobelco under the original proceeding with a view to a price undertaking. The applicant maintains therefore that the export price for the goods imported exceeded the normal value. C. ADMISSIBILITY (7) The application is admissible in that it was introduced in conformity with the relevant provisions of the Community's anti-dumping legislation, in particular with regard to time limits. D. MERITS OF THE CLAIM (8) The application is founded in part. Pursuant to Article 16 (1) of Council Regulation (EEC) No 2176/84 (4) (and under Regulation (EEC) No 2423/88) an importer who has paid anti-dumping duties and who applies for reimbursement must show that the duty collected exceeds the dumping margin calculated over the relevant reference period for the imports for which the duty was collected. Calculation of actual dumping margin must normally be based on the same method applied during the original investigation, in particular with regard to any application of weighted averages (5). (9) In this case an average dumping margin applied without distinction to all the models released for free circulation in the Community during a single reference period was established by comparing the normal value of each model on a monthly weighted average basis with the export price of the same model during the corresponding month on a transaction-by-transaction basis (6). The Commission considered that the information supplied by the applicant regarding export prices and by the exporter regarding the normal value of the different models was sufficient to calculate correctly the average actual dumping margin. A dumping margin was thus calculated for each reference period corresponding to an application, whereby the average normal value of each model was compared on a transaction-by-transaction basis with the export price for each of Kobelco's consignments released for free circulation in the Community during the reference period in question. It was found that in all the reference periods except for the first the initial dumping margin had been gradually reduced or eliminated, resulting in an average actual dumping margin below the amount of duty collected. This development was due essentially to a rise in export prices, which was not sufficient, however, to eliminate the dumping entirely in every case. (10) The similarity adduced by the applicant between the price paid for the model in question and the price undertaking offered by Kobelco in 1985 at the end of the original proceeding does not apply, since the Council did not accept that offer. Moreover, the actual dumping margin can be established only on the basis of all imports into the Community during the reference period. The applicant's argument referred only to a single excavator, whereas others were imported into the Community over the same period. More generally, a price undertaking may be offered only on the basis of reference data covering a period of investigation stretching back at least six months, and sometimes more, prior to a refund application. An offered price undertaking cannot therefore be used as a reference for assessing the actual dumping margin, which is updated to the time of the import operation following which a refund application is made for anti-dumping duties paid. E. AMOUNT TO BE REIMBURSED (11) A total of £. . . is reimbursable to Kobemac Ltd, representing the difference between the amount of duty collected and the actual dumping margin, HAS ADOPTED THIS DECISION: Article 1 The refund application submitted by Kobemac Ltd, Hampshire, is hereby granted for £. . . and rejected for the remainder. Article 2 The amount set out in Article 1 shall be refunded by the United Kingdom authorities. Article 3 This Decision is adressed to the United Kingdom and Kobemac Ltd, Harewood Forest Works, Longparish, Near Andover, Hampshire, United Kingdom. Done at Brussels, 21 March 1989. For the Commission Frans ANDRIESSEN Vice-President (1) OJ No L 209, 2. 8. 1988, p. 1. (2) OJ No L 176, 6. 7. 1985, p. 1. (3) In accordance with Article 8 of Regulation (EEC) No 2423/88, which deals with the non-disclosure of business secrets, certain figures have been omitted from the published version of this Decision.(4) OJ No L 201, 30. 7. 1984, p. 1. (5) Point II.2 (b) of the Commission notice concerning the reimbursement of anti-dumping duties, OJ No C 266, 22. 10. 1986. (6) Regulation (EEC) No 1877/85, point 9. |
EXHIBIT 10.23
FIRST AMENDMENT
TO THE
AK STEEL HOLDING CORPORATION
STOCK INCENTIVE PLAN
“Plan”), the introductory paragraph of Section 6.1(b) is changed in its entirety
“(b) Options with respect to ten thousand (10,000) Shares shall be granted to
each Director who is not employed by the Company on the date of his or her
initial election to the Board, and additional Options in a similar amount may be
granted at approximately five year intervals thereafter to such Directors during
their term on the Board as shall be determined by and in the sole discretion of
the Committee, subject to the following terms and conditions:”
IN WITNESS WHEREOF, AK Steel Holding Corporation has caused this First Amendment
to the Plan to be executed this 7th day of December, 2006.
/s/ LAWRENCE F. ZIZZO
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U.S. Securities and Exchange Commission Washington, D.C.20549 FORM 24F-2 Annual Notice of Securities Sold Pursuant to Rule 24f-2 1.Name and address of issuer:Merrill Lynch Variable Life Separate Account 4333 Edgewood Rd. NE Cedar Rapids, IA 45274 2.Name of each series or class of securities for which this Form is filed (if the Form is being filed for all series and classes of securities of the issuer, check the box but do not list the series or classes):Not Applicable 3.Investment Company Act File Number: 811-6225 Securities Act File Number: 33-41829, 33-41830, 33-55472, 33-55678, 333-47844 4(a).Last day of fiscal year for which this Form is filed: December 31, 2012 4(b).Check box if this Form is being filed late (i.e., more than 90 days after the end of the issuer’s fiscal year). Note:If the Form is being filed late, interest must be paid on the registration fee due. 4(c).Check box if this is the last time the issuer will be filing this Form. 5.Calculation of registration fee: (i)Aggregate sale price of securities sold during the fiscal year pursuant to section 24(f):$8,641,800 (ii) Aggregate price of securities redeemed or$55,133,572 repurchased during the fiscal year: (iii)Aggregate price of securities redeemed or repurchased during any prior fiscal year ending no earlier than October 11, 1995 that were not previously used to reduce registration fees payable to the Commission: $506,381,824 (iv)Total available redemption credits [add items 5(ii) and 5(iii)]:$561,515,396 (v)Net sales - if item 5(i) is greater than item 5(iv) [subtract 5(iv) from item 5(i)]:$0 (vi)Redemption credits available for use in future years - if item 5(i) is less than item 5(iv) [subtract item 5(iv) from item 5(i)]:$(552,873,596) (vii)Multiplier for determining registration feex.00013640 (see Instruction C.9): (viii)Registration fee due [multiply item 5(v) by item 5(vii) (enter “0” if no fee is due)]:$0 6.Prepaid Shares If the response to item 5(i) was determined by deducting an amount of securities that were registered under the Securities Act of 1933 pursuant to Rule 24e-2 as in effect before October 11,1997, then report the amount of securities (number of shares or other units) deducted here: .If there is a number of shares or other units that were registered pursuant to Rule 24e-2 remaining unsold at the end of the fiscal year for which this form is filed that are available for use by the issuer in future fiscal years, then state that number here: . 7.Interest due - if this Form is being filed more than 90 days after the end of the issuer’s fiscal year (see Instruction D): +$0 8.Total of the amount of the registration fee due plus any interest due [line 5(viii) plus line 7]: $0 9.Date the registration fee and any interest payment was sent to the Commission’s lockbox depository: N/A Method of Delivery: N/A SIGNATURES This report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated. By: (Signature/s/ Arthur D. Woods and Title)*Name:Arthur D. Woods Title: Vice President Date:March 26, 2013 * Please print the name and title of the signing officer below the signature.
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Exhibit 10.2 THIS OPTION AGREEMENT made as of March 6, 2011 BETWEEN:Sidney Chan (herein called the "Optionee" or the "Creditor") a Businessman residing at: 23H Block III Riviera Garden Tsuen Wan, New Territories Hong Kong AND:ALR TECHNOLOGIES INC. (herein called the "Company") a company incorporated under the laws of the State of Nevada, USA with its registered office at 3350 Riverwood Parkway, Suite 1900, Atlanta, Georgia. WITNESSES THAT WHEREAS: The Company has requested the Optionee to provide a line of credit of $2,500,000 ( the "Line of Credit") for a comprehensive marketing campaign and in consideration thereof the Company has agreed to grant stock options to the Optionee. Under the terms of the line of credit the amounts can only be borrowed for a comprehensive marketing and selling campaign and must be approved by the creditor. 1. Written Acknowledgement of Terms The Company and the Optionee wish to formalize their understanding of the terms as indicated by agreeing to the above mentioned terms as indicated by the signatures at the end of this document. 2. Grant of Options The Company hereby grants to the Optionee options to subscribe and purchase 20,000,000 shares of stock of the Company at a price of $0.125 per share, exercisable until March 5, 2016 (the "Options"). 3. Vesting Provisions The options will vest a) when the Company finalize a comprehensive selling and marketing campaign, which will involve the retention of a consulting firm to assist in developing and executing the campaign, and b) on a prorated basis to the extent that the line of credit is drawn down. Eight options will fully vest for each dollar borrowed by the Company from the Creditor under the line of credit arrangement. If the Company borrows the full $2,500,000, all 20,000,000 stock options will be fully vested. 4. Exercise Procedure The fully vested stock options may be exercised by the Optionee by giving notice in writing to the Company of the number of shares in respect of which the options are being exercised ("Option Shares") and by (i) enclosing a certified cheque or money order for the amount of the option price payable in favour of the Company or (b) by notifying the Company that a portion of the indebtedness outstanding under the Initial Line of credit or the increased Line of Credit equal to the option price should be applied toward the option price and upon the issuance of the Option Shares, such indebtedness shall be reduced accordingly. 5. Effective Date This Agreement shall be effective on the later of the date on which this Agreement is executed by both parties. IN WITNESS WHEREOF THE PARTIES HAVE SIGNED THIS AGREEMENT THE 6th DAY OF MARCH, 2011 SIDNEY CHAN Sidney Chan Signing Authority of behalf of ALR Technologies INC. Name: LAWRENCE WEINSTEIN Lawrence Weinstein3/10/11 Title:President & COO
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Exhibit 10.2
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
entered into as of September 3, 2019, (the “Effective Date”) by and between
HALCÓN RESOURCES CORPORATION, a Delaware corporation (the “Company’’) and David
S. Elkouri (the “Executive”).
WITNESSETH:
WHEREAS, the parties first entered into this Agreement pertaining to the
employment of the Executive by the Company as of June 1, 2012 (the “Original
Effective Date”);
WHEREAS, on August 2, 2019, the Company and its subsidiaries (collectively, the
“Debtors”) entered into a restructuring support agreement with certain
beneficial holders of the Company’s 6.75% senior notes due 2025 issued under
that certain indenture, dated as of February 16, 2017, by and among the Company,
as issuer, each of the guarantors named herein, and U.S. Bank National
Association, as indenture trustee;
WHEREAS, on August 7, 2019, the Debtors each filed voluntary petitions for
relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy
WHEREAS, on August 7, 2019, the Debtors filed the Joint Prepackaged Chapter 11
Plan of Halcón Resources Corporation and Its Affiliated Debtors [Docket No. 20]
(as may be amended, modified, or supplemented, the “Plan”); and
WHEREAS, the parties desire to amend and restate this Agreement effective as of
the Effective Date.
1. Term of Employment. Unless earlier
terminated as provided in paragraph 10, the Company shall employ the Executive
in the capacity set forth herein, commencing on the Original Effective Date and
ending on the later of (x) December 31, 2019 and (y) the effective date of the
Plan (the “Term”). Notwithstanding the foregoing, the Term shall immediately
terminate if the Debtors consummate a sale of all or substantially all of their
assets under section 363 of the Bankruptcy Code in one or more third-party arm’s
length transactions to persons, groups, or entities that are not affiliates of
the Debtors. Upon the conclusion of the Term, the employment of the Executive
with the Company and its Affiliates shall automatically terminate, and such
termination shall be considered a termination by the Company without Cause for
purposes of paragraph 10.
Following the conclusion of the Term, the parties may mutually agree to retain
the Executive as a consultant or other service provider, on such terms as are
mutually agreed; provided, however, that
the level of bona fide services the parties reasonably anticipate to be provided
by Executive following the conclusion of the Term (whether as an employee or as
an independent contractor) shall in all cases permanently decrease to less than
50% of the average level of bona fide services performed as an employee of the
Company over the immediately preceding 36-month period prior to the conclusion
of the Term, determined in accordance with Section 409A.
2. Duties of the Executive. During the
Term, the Executive shall serve as Executive Vice President-General Counsel of
the Company and shall devote his full time, attention, and effort to performing
the customary duties and responsibilities of such office, including those duties
and responsibilities assigned to him by the Chief Executive Officer of the
to perform all duties and responsibilities that are required to fully and
faithfully execute the offices and positions held by him, and to comply in all
respects with the Texas Rules of Disciplinary Conduct and any other applicable
rules of conduct relating to attorneys (the “Rules”). The Executive shall be
the Executive shall primarily work remotely from any residence of the Executive,
with reasonable travel as required to the Company’s executive offices in the
metropolitan area of Houston, Texas or other locations.
services to be rendered by the Executive for and on behalf of the Company
hereunder, the Executive shall be entitled to the following (collectively
referred to hereinafter as the “Total Compensation”):
(a) Base Salary. A base salary at an annual
rate of four hundred thousand dollars ($400,000) (as adjusted in accordance with
the provisions of this Agreement, the “Base Salary”) will be paid to the
Executive at such intervals as may be established by the Company for payment of
its employees under its normal payroll practices. Base Salary payments shall be
taxes, and all applicable deductions for benefits as may be required by law or
Executive’s authorization.
The Base Salary shall be reviewed periodically by the Compensation Committee of
the Board (the “Compensation Committee”) and may be increased from time to time
as the Compensation Committee may deem appropriate.
(b) Bonus. In addition to the Base Salary,
consistent with past practice, during each month of the Term the Executive shall
earn a fixed monthly bonus in the amount of one-twelfth of the Base Salary.
Each such fixed monthly bonus shall not be conditioned on the satisfaction of
any performance metric, but shall be conditioned on the Executive’s continued
employment through the last day of each such month. Within five (5) business
days of the approval of this Agreement by the Bankruptcy Court, the Company will
pay to the Executive any installments of the monthly bonus that have been earned
but are unpaid as of the date hereof. Thereafter each
2
installment of the monthly bonus shall be paid within five (5) business days of
the last day of the month with respect to which such bonus installment relates.
4. Other Benefits. In addition to the
Total Compensation to be paid to the Executive as provided for herein, the
Executive shall also be entitled to the following benefits:
(a) Equity Vesting. Upon the approval of this
Agreement by the Bankruptcy Court, all stock options and other equity or
equity-based incentive awards held by the Executive will become fully vested and
immediately exercisable and all restrictions on any restricted stock held by the
Executive will be removed.
reimburse the Executive for all reasonable business expenses incurred by the
Executive in the performance of his duties, provided that the Executive provides
adequate documentation required by law and by the policies and procedures of the
Company, as adopted and amended from time to time, provided that in no event
shall the Executive submit any required documentation later than 60 days after
the end of the calendar year in which such expense was incurred. Any such
reimbursement shall be made as soon as reasonably practicable but in no event
the applicable expense was incurred. The Executive acknowledges and agrees that
all such expenses will be subject to the oversight of the Audit Committee of the
Board.
(c) Other Benefits. Except as otherwise
specifically provided to the contrary in this Agreement, the Executive shall be
provided with retirement, welfare and other benefits to the same extent and on
the same terms as those benefits are provided by the Company from time to time
to the Company’s other senior executive officers, including, but not limited to,
vacation, participation in various health, retirement, life insurance,
disability insurance or other employee benefit plans or programs, subject to
regular eligibility requirements with respect to each such benefit plans or
programs, as well as other benefits or perquisites as may be approved by the
Board; provided, however, that the Company shall not be required to provide a
benefit under this subparagraph (c) if such benefit would duplicate (or
otherwise be of the same type as) a benefit specifically required to be provided
under another provision of this Agreement. In addition, the Executive shall be
provided with the benefits set forth on Exhibit A, if any.
5. Confidential Information. The Executive
acknowledges that, during the course of his employment, he will have access to
and will receive information which constitutes trade secrets, is of a
confidential nature, is of great value to the Company and/or is a foundation on
which the business of the Company is predicated. The Executive further
acknowledges that (a) given his position and responsibilities, he is a fiduciary
of the Company; (b) his status as a fiduciary of the Company (as defined
hereafter) and the proper functioning of the legal system require the
preservation by him of the Confidential Information during the Term and
thereafter; and (c) he is obligated by the Rules and the common law during the
Term and thereafter to protect and preserve the Confidential Information and
not to use the Confidential Information to the disadvantage of the Company or
for his own or a third party’s benefit. With respect to all such Confidential
3
Information, the Executive agrees, during the Term and thereafter, not to
performance of this Agreement). “Confidential Information” also includes any
“privileged information” and “unprivileged client information” as those terms
are defined in Rule 1.05 of the Texas Disciplinary Rules of Professional
Conduct, and any attorney work- product relating to the Company.
basis by disclosure or access provided by the Company or a third party without
breaching any obligations of the Company or such third party, or was otherwise
developed or obtained legally and independently by the person to whom disclosed
without a breach of this Agreement. This paragraph shall not preclude the
Executive from disclosing Confidential Information if compelled to do so by the
Rules, law, or valid legal process, provided that if the Executive believes the
Executive is so compelled by the Rules, law, or valid legal process, the
protect its interests against such disclosure unless such notice is prohibited
by the Rules or law. The rights and obligations of the parties under this
reason.
6. Proprietary Matters. The Executive
expressly agrees that any and all improvements, inventions, discoveries,
processes, or know-how that are generated or conceived by the Executive during
the Term, whether conceived during the Executive’s regular working hours or
requested by the Company (either during the Term or thereafter), the Executive
will assign or execute any and all applications, assignments and/or other
documents, and do all things which the Company reasonably deems necessary or
know-how generated or conceived by the Executive and referred to in this
paragraph (except those which may be included in the patents, copyrights, or
have
4
7. Non-Competition. As part of the
consideration for the compensation and benefits to be paid to the Executive
hereunder, and in order to protect the Confidential Information, business
during the Term, he will not, directly or indirectly, engage in or become
director, any business (other than the Company) that is engaged in leasing,
acquiring, exploring, producing, gathering, or marketing hydrocarbons and/or
related products; provided, however, that the Executive shall be entitled to
continue to invest in those entities as set forth on Exhibit B, if any, and to
invest in stocks, bonds, or other securities in any such business (without
over the counter market; and such investment does not exceed, in the case of any
capital stock of any one issuer, five percent of the issued and outstanding
capital stock, or in the case of bonds or other securities, five percent of the
or policies of such business is exercised. Notwithstanding the foregoing,
nothing in this Agreement prohibits the Executive’s post-employment activities
as a practicing attorney conducted in accordance with the Rules.
8. Non-Solicitation. Executive agrees that
he will not, at any time during the Term, or at any time within six months after
the termination of his employment, for his own account or benefit or for the
solicit for employment any employee of the Company (or any person who was an
employee of the Company in the 90-day period before such solicitation) or induce
the 90-day period before such inducement) to terminate his employment with the
Company. Notwithstanding the above, the restrictions relating to persons
employed in the 90-day period referenced in the parentheticals in the
immediately preceding sentence shall not apply to a person who was a party to an
employment agreement with the Company and who terminates his employment for Good
Reason or is terminated by the Company without Cause. The rights and
9. Injunctive Relief. The Executive
acknowledges and agrees that any violation of paragraphs 5-8 of this Agreement
would result in irreparable harm to the Company and, therefore, agrees that, in
the event of an actual, suspected, or threatened breach of paragraphs 5-8 of
this Agreement, the Company shall be entitled to an injunction restraining the
Executive from committing or continuing such actual, suspected or threatened
breach. The parties acknowledge and agree that the right to such injunctive
relief shall be cumulative and shall not be in lieu of, or be construed of a
waiver of the Company’s right to pursue, any other remedies to which it may be
entitled in law or in equity. The parties agree that for purposes of paragraph
5-8 of this Agreement, the term “Company’’ shall include the Company and its
Affiliates.
5
10. Termination of Employment. The Executive’s
employment by the Company and this Agreement may be terminated before the
expiration of the Term, without breach of this Agreement, in accordance with the
Term and while in the employ of the Company, his employment and this Agreement
shall automatically terminate and the Company shall be relieved of all of its
obligations to the Executive or his estate under this Agreement, except that the
Company shall pay to the Executive’s estate any unpaid portion of the
Executive’s Base Salary and benefits accrued through the date of death, and at
the discretion of the Compensation Committee, a bonus, if any. These amounts,
but in no event later than 30 days after the date of the Executive’s death or,
employee benefit plan under which such benefits were accrued. In addition, all
stock options and other incentive awards held by the Executive will become fully
held by the Executive will be removed.
(b) Inability to Perform. The Company may
terminate the Executive’s employment and this Agreement in the event of the
Executive’s Inability to Perform. For this purpose, “Inability to Perform”
means and shall be deemed to have occurred if the Executive has been determined
under the Company’s or an Affiliates’ long-term disability plan to be eligible
for long-term disability benefits or, in the event the Company or an Affiliate
does not maintain such a plan or in the absence of Executive’s participation in
or application for benefits under such a plan, such term shall mean the
inability of the Executive, despite any reasonable accommodation required by
law, due to bodily injury or disease or any other physical or mental incapacity,
to perform the services required hereunder for a period of 120 consecutive
days. In the event of a termination pursuant to this paragraph 10(b), the
that the Company shall pay to the Executive, or his estate in the event of his
subsequent death, any unpaid portion of the Executive’s Base Salary and benefits
accrued through the date of such termination and, at the discretion of the
than 30 days after the date of termination or, with respect to benefits accrued,
the date provided for under the terms of the employee benefit plan under which
such benefits were accrued. In addition, upon any such termination, all stock
options and other incentive awards held by the Executive will become fully
Company may terminate the Executive’s employment and this Agreement for Cause
(defined hereafter), but only after: (i) giving the Executive written notice of
the failure or conduct which the Company believes to constitute Cause; and
(ii) with respect to elements (1) through (5) below, providing the Executive a
reasonable opportunity, and in no
6
event more than 30 days, to cure such failure or conduct, unless the Board
reasonably capable of being cured. In the event the Executive does not cure the
referenced in this paragraph l0(c) any fact or circumstance which contributes to
(1) The willful failure by the Executive to
perform his duties in any material respect as required hereunder (other than any
illness or disability) or the commission by Executive of an act of willful
misconduct in any material respect with respect to the Company; or
(2) The engaging by Executive in conduct which
is demonstrably and materially injurious to the Company and/or its Affiliates;
or
(3) The willful engaging, or failure to engage,
by the Executive in conduct which is in material violation of any term of this
or
(4) the Executive’ breach of duty (other than
inadvertent acts or omissions) involving fraud, dishonesty, disloyalty, or a
conflict of interest; or
(5) The Executive’s failure to cooperate with
any investigation or inquiry authorized by the Company or an Affiliate or
conducted by a governmental authority related to the Company’s or an
Affiliate’s business or the Executive’s conduct; or
(6) The Executive’s conviction of, or entry of a
plea agreement or consent decree or similar arrangement with respect to, any
felony, any crime involving deceit, fraud, perjury or embezzlement, or any
violation of federal or state securities laws; or
(7) Executive’s failure to maintain a law
license in good standing in the State of Texas.
For purposes of this paragraph l0(c), no act, or failure to act, shall be deemed
the Company
7
Executive’s employment.
The Company may also terminate the Executive’s employment and this Agreement
without Cause by providing at least 30 days’ written notice of such termination
to the Executive. A termination of the Executive’s employment and this
Agreement by the Company without Cause shall entitle the Executive to payments
and other benefits as specified in paragraph 10(g), as applicable. For the
avoidance of doubt, if the Executive’s employment is terminated without Cause
under this Agreement, such termination shall be deemed to be without Cause for
all purposes under the Retention Bonus Letter, dated as of July 12, 2019, by and
between the Executive and the Company (such letter and all payments thereunder,
the “Retention Bonus”).
Reason. The Executive shall be entitled to terminate his employment and this
Agreement at any time for “Good Reason” (defined hereafter). A termination of
employment and this Agreement by the Executive for Good Reason shall entitle the
Executive to payments and other benefits as specified in paragraph 10(g), as
applicable. For purposes of this Agreement, “Good Reason” shall mean, subject
to the notice and cure provisions below, any of the following actions occur
without the Executive’s prior consent: (i) a material reduction in the
Executive’s Base Salary; (ii) a material reduction in the Executive’s
authority, responsibilities or duties; (iii) a material reduction in the
authority, responsibilities or duties of the supervisor to whom the Executive is
required to report; (iv) a material reduction in the budget over which the
Executive retains authority; (v) a permanent relocation of the Executive’s
principal place of employment to any location other than as set forth in
paragraph 2 of this Agreement, provided such relocation is a material change in
the geographic location at which the Executive must provide services for
purposes of Code Section 409A and the regulations thereunder; or (vi) any other
Agreement. To exercise the option to terminate employment for Good Reason, the
Executive must provide written notice to the Company of the Executive’s belief
Reason condition, and that notice shall describe in reasonable detail the
condition(s) believed to constitute Good Reason. The Company then shall have 30
30-day period or if the Company notifies the Executive that
8
period, the Executive may submit a notice of termination to the Company;
provided, however, that the notice of termination invoking the Executive’s
option to terminate employment for Good Reason must be given no later than 100
days after the date the Good Reason condition first arose; otherwise, the
Good Reason.
(f) Termination by the Executive Without Good
Reason. The Executive may also terminate his employment and this Agreement
without Good Reason by providing at least 30 days’ written notice of such
termination to the Company. In the event of a termination pursuant to this
paragraph 10(f), the Executive shall be entitled to no severance or other
termination benefits and the Company shall be relieved of all of its obligations
under this Agreement, except that the Company shall pay to the Executive any
unpaid portion of the Executive’s Base Salary and benefits accrued through the
date of such termination. These amounts, if any, shall be paid at the time and
in the manner required by applicable law but in no event later than 30 days
after the date of termination or, with respect to benefits accrued, the date
provided for under the terms of the employee benefit plan under which such
benefits were accrued. At the Company’s option, the Company may accelerate the
date of the Executive’s termination of employment by paying to the Executive the
Base Salary and value of the benefits that the Executive would have received
during the period by which the date of termination is so accelerated and such
acceleration shall not change the characterization of the termination from one
by Executive without Good Reason.
(g) Termination by the Executive for Good
Reason or by the Company without Cause. In the event that (i) the Executive
terminates the Executive’s employment and this Agreement without Cause, then,
subject to paragraph 22, the following shall occur:
(1) The Company shall pay the Executive any
date of termination. These amounts, if any, shall be paid at the time and in
the manner required by applicable law but in no event later than 30 days after
the date of termination or, with respect to benefits accrued, the date provided
for under the terms of the employee benefit plan under which such benefits were
accrued.
(2) The Company shall pay the Executive a lump
sum severance payment in an amount equal to the Executive’s Base Salary in
the year immediately preceding the date of termination). This amount shall be
paid within five business days after the Release (defined in paragraph 22)
becomes effective and enforceable but in no event later than 60 days after the
date of termination; provided, that if the 60 day period following the date of
termination ends in the calendar year following the year that includes the
9
date of termination, then payment of any amount that is conditioned upon the
execution of the Release and is subject to Code Section 409A shall not be paid
until the first day of the calendar year following the year that includes the
date of termination, regardless of when the Release is executed.
(3) Should the Executive timely elect to
continue coverage under a group health insurance plan sponsored by the Company
or one of its Affiliates and timely make the premium payments, reimburse
Executive on a monthly basis for the cost of continued coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 or other applicable law
(“COBRA”) for Executive and any eligible dependents until the earlier of (A) the
date Executive is no longer entitled to continuation coverage under COBRA or
(B) for 12 months after the date of termination. The first reimbursement shall
not be paid before five business days after the Release (defined in paragraph
22) becomes effective and enforceable.
(h) Return of Confidential Information and
Company Property. Upon termination of the Executive’s employment for any
reason, the Executive shall immediately return all Confidential Information and
11. Code Section 409A. The severance pay and
severance benefits provided under this Agreement are intended to be exempt from
Internal Revenue Code Section 409A (“Code Section 409A”) and any ambiguous
the application of Code Section 409A. In particular, the severance pay and
benefits are intended to constitute a short-term deferral within the meaning of
Treasury Regulation Section l.409A-l (b)(4), a payment or benefit described in
paragraphs (b)(9)(iv) and (v) of Treasury Regulation Section 1.409A-l, and/or
severance pay due to involuntary separation from service under Treasury
Regulation Section l.409A-l (b)(9)(iii). If a provision of the Agreement would
parties agree that such provision shall be reformed to the extent permissible
Executive. Notwithstanding any provision in this Agreement to the contrary, if
(a) the Executive is a “specified employee,” as such term is defined in Code
entitlement to a series of separate payments. With respect to any
reimbursements that are nonqualified deferred compensation subject to Code
Section 409A, (i) the amount of
10
other benefit.
For purposes of this Agreement, “Separation from Service” means separation from
guidance promulgated thereunder) with the group of employers that includes the
Company and each of its “409A Affiliates;” provided, that for purposes of this
Agreement, the Executive shall separate from service upon such date that the
parties reasonably anticipate that the level of bona fide services the Executive
contractor) will permanently decrease to less than 50 percent of the average
of services if the Executive has been providing services for less than 36
months). For this purpose, “409A Affiliate” means any incorporated or
Internal Revenue Code Section 414(b) or Internal Revenue Code Section 414(c),
but (i) in applying Internal Revenue Code Section 1563(a)(l), (2), and (3) for
the purposes of determining a controlled group of corporations under Internal
80 percent” appears in Internal Revenue Code Section I 563(a)(l), (2), and (3),
and (ii) in applying Treasury Regulation Section l.414(c)-2 for the purposes of
common control for the purposes of Internal Revenue Code Section 414(c), the
Regulation Section l.414(c)-2.
12. Assistance with Claims. The Executive agrees
that, for the period beginning on the Original Effective Date, and continuing
for a reasonable period after the termination or expiration of this Agreement
for any reason, the Executive will assist the Company in the defense of any
claims that may be made against the Company and will assist the Company in the
prosecution of any claims that may be made by the Company, to the extent such
claims may relate to services performed by the Executive for the Company. The
of any lawsuits or potential claims that may be filed against the Company. For
all assistance occurring after termination of the Executive’s employment by the
Company, the Company agrees to provide reasonable compensation to the Executive
for such assistance. The Executive also agrees to promptly inform the Company
relate to services performed by the Executive for the Company, regardless of
whether a lawsuit has been filed against the Company with respect to such
investigation.
13. Successors and Assigns. The Company will
require any successor (whether direct or indirect) to all or substantially all
of the business and assets of the Company (“Successor”) or any corporation which
becomes the ultimate parent corporation of the Company or any such Successor to
expressly assume and agree in writing satisfactory to the Executive to perform
be required to
11
perform if no succession had taken place; provided, however, that express
assumption shall not be required where this Agreement is assumed by operation of
law. After the death or disability of the Executive, all his rights hereunder
devisees, and legatees. Except as otherwise provided herein, the Executive’s
rights and obligations may not be assigned without the prior written consent of
the Company.
Company (including for this purpose each of the Company’s Affiliates) and the
Executive (i) agree that this Agreement is governed by and shall be construed
and enforced in accordance with Texas law, excluding its choice-of-law
principles, except where federal law may preempt the application of state law;
(ii) submit and consent to the exclusive jurisdiction, including removal
jurisdiction, of the state and federal courts located in Harris County, Texas
(or the county where the Company’s principal executive offices are located if
different) for any action or proceeding relating to this Agreement or
jurisdictions; and (v) irrevocably waive the right to trial by jury and agree
15. Notice. All notices required or permitted
under this Agreement shall be in writing and shall be deemed effective: (i) upon
delivery, if delivered in person; (ii) upon delivery to Federal Express or other
similar courier service, marked for next day delivery, addressed as set forth
below; (iii) upon deposit in United States Mail if sent by registered or
certified mail, return receipt requested, addressed as set forth below; or
(iv) upon being sent by facsimile transmission, provided an original is mailed
the same day by registered or certified mail, return receipt requested:
Halcon Resources Corporation
Houston, TX 77002
Fax No. (832) 538-0220
At the most current address reflected in the Company’s records.
validity and enforceability of the other provisions.
17. Dodd-Frank Act and Other Applicable Law
Requirements. The Executive agrees (i) to abide by any compensation recovery,
recoupment, anti-hedging or other policy applicable to executives of the Company
Board or a duly authorized committee thereof or as required by the Dodd-Frank
other applicable law, and (ii) that the terms and conditions of this Agreement
shall be deemed automatically amended as may be necessary from time to time to
ensure compliance by the Executive and this Agreement with such policies, the
Dodd-Frank Act, or other applicable law.
12
entire agreement and understanding by and between the Company and the Executive
with respect to the employment of the Executive, and no representations,
promises, agreements, or understandings, written or oral, not contained herein
shall be of any force or effect. No waiver of any provision of this Agreement
waiver is sought to be enforced. No valid waiver of any provision of this
Agreement at such time or any other time.
19. Modification. No amendment, alteration or
made in writing and signed by both parties. Notwithstanding the previous
sentence, the Company may amend or modify this Agreement in its sole discretion
at any time without the further consent of the Executive in any manner necessary
to comply with applicable law and regulations, including without limitation the
Dodd- Frank Act and the regulations thereunder, or the listing or other
requirements of any stock exchange upon which the Company or an Affiliate is
listed.
20. Paragraph Headings. The paragraph headings
22. Release of Claims. The Executive shall not be
entitled to receive the severance pay and benefits under paragraph 10(g)(2) and
(3), as applicable, unless (a) the Executive executes and returns to the
Company a release agreement substantially similar in form and substance to the
Release of Claims set forth on Exhibit A hereto (the “Release”) on or before the
benefits that already have been paid to the Executive.
23. Definition of “Affiliate”. For purposes of
this Agreement, “Affiliate” means the Company and any other entity that,
24. Condition Precedent. This Agreement shall
only become effective if it is approved by the Bankruptcy Court. For the
avoidance of doubt, at all times prior to the approval of this Agreement by the
Bankruptcy Court, the Executive’s Employment Agreement shall remain in effect
without reflecting the amendments herein. In the event that this Agreement is
not approved by the Bankruptcy Court prior to December 31, 2019, this Agreement
13
IN WITNESS WHEREOF, the parties have caused this Amended and Restated Employment
Agreement to be executed on the dates written below.
COMPANY
HALCÓN RESOURCES CORPORATION
Houston TX 77002
By:
/s/ Richard H. Little
September 3, 2019
Name:
Richard H. Little
Date
Title:
Chief Executive Officer
EXECUTIVE
September 3, 2019
David S. Elkouri
Date
EXHIBIT A
Release of Claims
In connection with the termination of the employment of David Elkouri (the
“Employee”) by Halcón Resources Corporation (the “Company”), effective
[ ], and in accordance with the terms and conditions of the Amended and
Restated Employment Agreement, dated as of [ ], 2019, by and between the
Employee and the Company (the “Employment Agreement”), the Employee and the
Company agree knowingly and voluntarily to the terms of this Release of Claims
(the “Release Agreement”). Capitalized terms used but not defined herein shall
Section 1. Terms of the Release of
Claims. The terms of the Employee’s release of “Employee Released Claims” and
the Company’s release of “Company Released Claims” (each as defined below) under
this Release Agreement:
(A) Definition of Company Released Parties.
“Company Released Parties” shall mean the following:
(i) The Company and any parent, subsidiary,
affiliated entity, joint venture, successor, predecessor, or assignee of the
Company;
(ii) The stockholders, officers, directors,
employees, agents, representatives, and/or fiduciaries of the Company and of any
parent, subsidiary, affiliated entity, joint venture, successor, predecessor, or
assignee of the Company; and
concert with any of the persons or entities listed in Section 1(A)(i) and/or
Section 1(A)(ii).
(B) Definition of Employee Released Parties.
“Employee Released Parties” shall mean the Employee, the Employee’s successors,
heirs, assignees, attorneys, agents, related entities, and representatives.
(C) Definition of Employee Released Claims.
“Employee Released Claims” means debts, claims, liabilities, demands, and causes
of action of every kind, nature, and description, past or present, known or
unknown, which the Employee now has, or may have, or could ever assert against
the Company Released Parties, but not to include those where the events in
question first arise after the execution of this Release Agreement by the
Employee.
(D) Definition of Company Released Claims.
“Company Released Claims” means debts, claims, liabilities, demands, and causes
unknown, which the Company or any other Company Released Party now has, or may
have, or could ever assert against the Employee Released Parties, but not to
include those where the events in question first arise after the execution of
this Release Agreement by the Company. For the avoidance of doubt, any cause of
action the Company may have against the
A-1
Employee Released Parties with respect to the Retention Bonus shall be Company
Released Claims under this Release Agreement.
(E) Release of Claims by the Employee. Subject
to Subsection (G), the Employee hereby unconditionally and forever releases,
acquits, and discharges the Company Released Parties from any and all Employee
Released Claims, whether known or unknown, including, but not limited to, any
and all Employee Released Claims for wages or damages of any kind whatsoever,
arising out of any of the following:
(ii) Any covenant of good faith and fair
dealing, express or implied;
(iii) Any legal restriction on the Company’s right
to terminate the Employee;
(iv) Any federal, state, local, or governmental
statute or ordinance, including, but not limited to, the following:
(a) The Age Discrimination in Employment Act of
1967 (the “ADEA”), as amended;
(b) The Immigration and Nationality Act of 1952,
as amended;
as amended;
(e) Immigration Reform and Control Act of 1986;
(f) The Employee Polygraph Protection Act of
1988, as amended;
(g) The Worker Adjustment and Retraining
Notification Act of 1988, as amended;
(h) The Americans with Disabilities Act of 1990
(commonly referred to as the “ADA”), as amended;
(i) The Civil Rights Act of 1991, as
amended;
(j) The Family and Medical Leave Act of 1993
(commonly referred to as the “FMLA”), as amended;
(k) The Uniformed Services Employment and
Reemployment Rights Act of 1994 (commonly referred to as “USERRA”), as amended;
(l) The Genetic Information
Nondiscrimination Act of 2008 (commonly referred to as “GINA”), as amended;
(m) Title III of the Consumer Credit Protection Act,
as amended;
A-2
(n) The National Labor Relations Act, as
amended;
(o) Any state civil rights laws, as amended; and
(p) Any state wage and hour laws, as amended;
and
(v) Any other legal limitation on the employment
relationship;
(vi) The laws of contract and tort;
(vii) Any claims in connection with or arising out of
the voluntary petitions for relief under chapter 11 of title 11 of the United
including claims with respect to the rejection of the Employment Agreement under
section 502(b)(7) of the Bankruptcy Code;
(viii) Any claims for reimbursement of business expenses
that the Employee incurred at any time; and
(ix) Any other matter arising out of or relating to
the employment relationship between the Employee and the Company Released
Parties.
The Employee is releasing the Employee Released Claims, not only for the
Employee, but also on behalf of the Employee’s successors, heirs, assignees,
attorneys, agents, related entities, and representatives.
(F) Release of Claims by the Company. The
Employee hereby represents that, in the course of his employment or service
relationship with the Company and the other Company Released Parties, he has not
committed any fraudulent or criminal act. In express reliance on the Employee’s
representation and warranty in the foregoing sentence, the Company hereby
forever releases, acquits, and discharges the Employee Released Parties from any
and all Company Released Claims, whether known or unknown, including, but not
limited to, any and all Company Released Claims for damages of any kind
whatsoever, arising out of any of the following:
(iii) Any federal, state, local, or governmental
statute or ordinance;
(iv) Any other matter arising out of or relating to
the employment relationship or any other act or omission by an Employee Released
(v) The laws of contract and tort.
The Company is releasing the Company Released Claims, not only for the Company,
but also on behalf of the other Company Released Parties.
A-3
Notwithstanding any other provisions of this Release Agreement, the Company and
the other Company Released Parties do not release, acquit, discharge or waive
any claims, rights or remedies they may have against Employee and the Employee
Released Parties if Employee committed a fraudulent or criminal act in the
course of his employment or service relationship with the Company and the other
Company Released Parties.
(G) Claims not Released By Employee.
Notwithstanding the foregoing, “Employee Released Claims” released hereunder do
not include (i) claims for unemployment benefits or workers’ compensation
benefits; (ii) continuation of group health plan benefits under the Consolidated
Omnibus Budget Reconciliation Act (“COBRA”); (iii) claims with respect to
benefits, including short- and long-term disability benefits, under any welfare
benefit plan governed by the Employee Retirement Income Security Act (“ERISA”);
(iv) claims with respect to vested benefits under a retirement plan governed by
ERISA; (v) claims for the exclusive purpose of enforcing the Employee’s rights
under the Employment Agreement or this Release Agreement; (vi) rights that
cannot be waived as a matter of law or that cannot be released by an individual
without court or government approval (unless such approval has been obtained);
(vii) indemnification or for coverage under officer and director liability
policies, if applicable; (viii) claims with respect to benefits which are to
continue in effect after termination of the Employment Agreement, in accordance
with the terms of the Employment Agreement; (ix) claims with respect to the
reimbursement of business expenses incurred in accordance with the Company’s
business expense reimbursement policy, so long as the Employee submits requests
for such reimbursement within thirty (30) days after the date of termination of
employment (and provides reasonable supporting documentation as may be
reasonably requested by the Company); (x) claims that the Employee may have as a
governed by the documents by which the Employee was granted such options); or
(xi) claims that the Employee may have as a stockholder of the Company.
Furthermore, nothing in this Release Agreement prevents the Employee from
(xii) reporting possible violations of federal or state laws or regulations to
any “Government Agency” (defined below); (xiii) participating in any
investigation, hearing, or proceeding conducted by a Government Agency;
(xiv) making disclosures to a Government Agency that are protected under the
whistleblower provisions of federal and state laws or regulations, or
(xv) receiving an award for information provided to a Government Agency.
“Government Agency” means any federal, state, or local government agency or
entity, including, but not limited to, the following: the Equal Employment
Securities and Exchange Commission, Congress, any agency Inspector General, or
any other banking agency. Notwithstanding anything else herein, by signing this
Release Agreement, the Employee waives any and all rights to personally recover
any damages or personally receive other relief under, or by virtue of, any such
charge, disclosure, investigation, hearing, proceeding, or lawsuit brought by or
through any Government Agency. The Employee does not need prior authorization
from the Company to make any report or disclosure to a
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Government Agency, and the Employee is not required to notify the Company of any
(H) Consideration for Release of Claims. The
Employee agrees that the Employee’s release of claims agreed to in this Release
Agreement is in consideration for the severance payments and benefits set forth
in Section 10 (g)(ii) and (iii) of the Employment Agreement and other rights and
benefits provided in the Employment Agreement to the Employee by the Company,
none of which the Employee is entitled to receive without the Employee’s release
of claims.
(I) No Pending Claims. The Employee
represents that the Employee has no Employee Released Claims on file, lodged, or
otherwise currently pending with a court or Government Agency against any of the
Company Released Parties, and the Employee expressly agrees that this Release
Agreement shall extend and apply to all unknown, unsuspected, and unanticipated
injuries and damages that occurred during the Employee’s employment. The
Company represents that the neither it nor any other Company Released Party has
any Company Released Claims on file, lodged, or otherwise currently pending with
a court or Government Agency against any of the Employee Released Parties, and
the Company expressly agrees that this Release Agreement shall extend and apply
to all unknown, unsuspected, and unanticipated injuries and damages that
occurred during the Employee’s employment and/or service to any Company Released
Party.
(J) Later Claims. This Release Agreement
shall not be construed to waive any Employee Released Claims or Company Released
Claims where the events in dispute first arise after the execution of this
Release Agreement. For this purpose, the Employee expressly agrees that the
decision for the Employee’s employment with the Company to end on the
termination date of employment arose prior to the execution of this Release
(K) Enforcement of Release Agreement by Employee.
Subject to the terms of any arbitration agreement between the Company and the
Employee, the Company acknowledges and agrees that this Release Agreement shall
not be construed to preclude the Employee from filing a claim for the purpose of
enforcing the Employee’s rights under this Release Agreement.
(L) Enforcement of Release Agreement by the
Released Parties. The Employee acknowledges and agrees that the Company
Released Parties may recover from the Employee any loss incurred by the Company
Released Parties arising out of the Employee’s breach of this Release Agreement,
including, but not limited to, attorneys’ fees and costs of defending against
any claim brought by the Employee in violation of this Release Agreement. The
Company acknowledges and agrees that the Employee Released Parties may recover
from the Company any loss incurred by the Employee Released Parties arising out
of the Company’s breach of this Release Agreement, including, but not limited
to, attorneys’ fees and costs of defending against any claim brought by the
Company in violation of this Release Agreement.
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(M) No Admission of Liability. The Company’s
decision to offer severance payments and benefits in exchange for a release of
Employee Released Claims against the Company Released Parties shall not be
construed as an admission by the Company or any of the other Company Released
Parties of any of the following:
(ii) Any violation of the rights of the
Employee or of any other person; and/or
duty, or contract.
The Company and the other Company Released Parties specifically disclaim any
liability to the Employee or to any other person for any alleged violation of
the rights of the Employee or any other person, or for any alleged violation of
Parties. The Employee’s decision to enter into this Release Agreement, which
includes a release of Company Released Claims against the Employee Released
Parties shall not be construed as an admission by the Employee or any other
Employee Released Party of any liability whatsoever, any violation of any
obligations, and/or any violation of any order, law, statute, duty, or
contract. The Employee and the other Employee Released Parties specifically
disclaim any liability to the Company or to any other person for any alleged
violation of any obligation, or for any alleged violation of any order, law,
statute, duty, or contract on the part of the Employee Released Parties.
(N) The Company’s Acknowledgments. The Company
hereby acknowledges the following:
(i) The Company understands that, subject to
the exceptions specified above, this Release Agreement specifically waives all
claims the Company may have against the Employee, whether or not they are
specifically listed above and whether or not they are related to employment;
(ii) The Company understands that the release
of Company Released Claims hereunder is final and binding;
(iii) The Company understands and agrees that the
Company cannot challenge the enforceability of the Release Agreement and the
release of Company Released Claims hereunder;
(iv) None of the Employee Released Parties has made
any promise or representation to the Company that is not set forth in this
Release Agreement. In signing this Release Agreement, the Company is not
relying on any such promise or representation but instead is relying solely on
the Company’s own judgment and on the agreement of the Employee to comply with
his obligations under this Release Agreement;
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(v) The Company has been given a reasonable
amount of time to consider the terms of this Release Agreement and to seek
advice from legal counsel relating to the legal effect of the release of Company
Released Claims;
(vi) The Company knowingly and voluntarily enters
into this Release Agreement without duress or coercion from any source;
(vii) The Employee has satisfied all of his
obligations to the Company Released Parties through the date that the Company
(O) Employee’s Acknowledgements. The Employee
(i) This Release Agreement is written in a
manner that the Employee can and does understand, and the Employee is fully
competent to execute this Release Agreement;
(ii) The Employee has read this Release
Agreement carefully and fully understands all of the provisions of this Release
Agreement;
(iii) The Employee understands that, subject to
claims the Employee may have against the Company (including but not limited to,
ADEA claims), whether or not they are specifically listed above and whether or
not they are related to employment;
(iv) The Employee understands that the release of
Employee Released Claims hereunder is final and binding;
(v) The Employee understands and agrees that the
Employee cannot challenge the enforceability of the Release Agreement and the
release of Employee Released Claims hereunder, except as the Release Agreement
relates to rights and age discrimination claims under the ADEA;
(vi) None of the Company Released Parties has made
any promise or representation to the Employee that is not set forth in this
Release Agreement. In signing this Release Agreement, the Employee is not
the Employee’s own judgment and on the agreement of the Company to comply with
its obligations under this Release Agreement;
(vii) The Employee has been given a reasonable amount
of time to consider the terms of this Release Agreement and to seek advice from
legal counsel and tax advisors relating to the legal effect of the release of
Employee Released Claims and the tax implications of the severance payments and
benefits;
(viii) The Employee knowingly and voluntarily enters into
this Release Agreement without duress or coercion from any source;
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(ix) The severance payments and benefits and other
rights that are subject to or provided in this Release Agreement are adequate
and sufficient consideration for entering into this Release Agreement;
(x) The Employee has been paid all of the
Employee’s earned wages through the date the Employee signs this Release
Agreement (other than any base salary owed for the pay period in which the
Employee signs this Release Agreement); and
(xi) As of the date the Employee signs this Release
Agreement, and except as previously fully reported to the Company, the Employee
acknowledges and represents, to the best of the Employee’s knowledge and belief,
that the Employee has not been directly or indirectly involved in, witnessed,
asked, or directed to participate in any conduct that could give rise to an
allegation that the Company has violated any laws applicable to the Company
and/or its business. The Employee acknowledges and represents that the Employee
has been given the opportunity to report such conduct to the Company and to
third parties and that the Employee has reported all such conduct to the Company
and has not made any such report to any third parties other than as required in
the discharge of the Employee’s duties while employed by the Company or as
previously fully reported to the Company. The Employee further acknowledges
that the Employee has been given the opportunity to report any and all conduct
that the Employee believes could be construed as inappropriate or unethical in
any law, and that the Company has fully investigated all such reported conduct
to the best of the Employee’s knowledge. If at any time in the future the
Employee recalls, or is made aware, that the Company violated (or may have
violated) any law, the Employee agrees to immediately disclose such information
to the Company unless expressly directed not to in writing by a court or
Government Agency.
Section 2. 50-Day Consideration Period
and Acceptance of Release Agreement. The following is required by the ADEA, as
amended by the Older Workers Benefit Protection Act:
(A) 50 Days to Accept. The Employee has up to
fifty (50) days from the delivery of this Release Agreement to the Employee (the
“Consideration Period”) to accept the terms of this Release Agreement; however,
the Employee may accept it at any time within the Consideration Period. The
method of accepting this Release Agreement is described below.
(B) Attorney Consultation. The Employee is
advised to consult an attorney about this Release Agreement prior to signing the
Release Agreement.
(C) [Informational Requirements. In order to
assist the Employee in making the decision whether to accept the terms of this
Release Agreement, the Company provides the Employee with the following
information:
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(i) Decisional Group. All of the Company’s
Executive Officers were considered by the Company for termination due to
restructuring of the Company’s business (the “Decisional Group”).
(ii) Job Titles and Ages. The table attached
as Exhibit A shows the job titles and ages (as of [ ]) of all members of
the Decisional Group. The employees in the Decisional Group whom the Company
has selected for employment termination as of or about [ ], are marked
with an “X” in the last column of the table.]
(D) Acceptance. To accept this Release Agreement,
the Employee must sign this Release Agreement and return it to:
Halcón Resources Corporation
Attn: [Senior Vice President, Human Resources]
1000 Louisiana, Ste. 6700
Houston, TX 77002
E-mail: [ ]@Halcónresources.com
The signed Release Agreement must be returned to the Company by mail,
hand-delivery, or scanning and e-mailing, subject to the following:
(i) If mailed, the postmark must be within
the Consideration Period;
(ii) If hand-delivered, the Acknowledgement of
Hand-Delivery form below must be signed by an authorized Company official within
the Consideration Period; and
(iii) If scanned and e-mailed, the e-mail must be
received within the Consideration Period.
(E) Revocation of Acceptance. Once the Employee
has accepted this Release Agreement as described above, the Employee will have
an additional seven (7) days in which to revoke the Employee’s acceptance as it
relates to rights and age discrimination claims under the ADEA. To revoke the
Employee’s acceptance as it relates to rights and age discrimination claims
under the ADEA, the Company must receive the following written statement of
revocation from the Employee by 11:59 P.M. on the seventh (7th) calendar day
after the date the signed Release Agreement was returned to the Company (as
described in Subsection (D)) (the “Revocation Period”).
“I hereby revoke my acceptance of the Separation and Release Agreement between
Halcón Resources Corporation and me.”
The statement of revocation may be mailed or e-mailed to:
Halcón Resources Corporation
A-9
Houston, TX 77002
E-mail: [ ]@Halconresources.com
(F) Effective Date. This Release Agreement will
become effective upon the satisfaction of the following conditions (the
“Conditions Precedent”):
(i) The Employee must execute this Release
Agreement;
(ii) The Company must receive this Release
Agreement executed by the Employee within the Consideration Period; and
(iii) The Revocation Period must expire without
the Employee revoking acceptance of the Release Agreement as it applies to
rights and claims under the Age Discrimination in Employment Act of 1967 (the
If the Employee does revoke the Employee’s acceptance as described above, but
all of the other Conditions Precedent are satisfied, this Release Agreement may
become effective, but only in the Company’s sole discretion, in which case the
Release Agreement and its release of claims will be effective (so long as, and
only if, Employee is provided all of the severance payments and benefits set
forth in Section 10 (g)(ii) and (iii) of the Employment Agreement as if all
Conditions Precedent had been satisfied and the Company complies with the terms
of this Release Agreement) as to any and all claims, excluding age
discrimination claims under the ADEA.
(G) Warranty of Capacity to Execute Agreement.
The Employee represents and warrants that no other person or entity, has, has
had, or could have any interest in the claims, demands, obligations, or causes
of action referred to in this Release Agreement and released by the Employee,
and that the Employee has the sole rights authority to execute this Release
Agreement. The Company represents and warrants that no other person or entity,
has, has had, or could have any interest in the claims, demands, obligations, or
causes of action referred to in this Release Agreement and released by the
Company, and that the Company has the rights and authority to execute this
Release Agreement.
(H) Delivery Date of Agreement. The Employee
acknowledges and agrees that (a) this Release Agreement was delivered to the
Employee on [ ] (the “Delivery Date”) and (b) revisions to the Release
50-day Consideration Period that began on the Delivery Date.
(I) Severance of Terms. If any provision of
this Release Agreement is or may be held by a court or arbitrator of competent
of the remaining parts, terms, or provisions of this Release Agreement shall not
be deemed not to be part of this Release Agreement. The remaining provisions
shall nevertheless survive and continue in full force and
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effect without being invalidated in any way. Furthermore, if the release of
claims provided under this Release Agreement is found by a court or arbitrator
of competent jurisdiction to be invalid, void, or unenforceable or not entered
into knowingly and voluntarily, the Employee agrees to execute a release of
claims that is legal and enforceable.
(J) Entire Agreement. This Release Agreement
subject matter hereof and supersedes and replaces all prior communications,
understandings and agreements between the parties, whether written or oral,
express or implied, relating to the subject matter hereof.
(K) State Law. This Release Agreement is made
within the State of Texas. Therefore, except where preempted by federal law,
this Release Agreement shall in all respects be interpreted, enforced, and
governed under the laws of the State of Texas and shall in all cases be
construed as a whole (according to its fair meaning, and not strictly for or
against any of the parties). Subject to the terms of any arbitration agreement
between the Company and the Employee, any action seeking interpretation or
enforcement of its terms may be maintained only in the state courts of Harris
County, Texas without regard to where the cause of action arose.
(L) Counterparts. This Release Agreement may be
executed in counterparts, each of which shall be construed as an original for
all purposes, but all of which taken together shall constitute one and the same
agreement.
COMPANY
By:
Name:
Title:
AGREED AND ACKNOWLEDGED
By:
Name:
Date:
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|
M E M O R A N D U M O F AGREEMENT
This MEMORANDUM OF AGREEMENT(the "Agreement) is made and entered
into this day August 17, 2012 ("Effective Date") by and between the following
parties:
the Philippines with principal place of business and office address at the 6th
Floor Kings Court Building 2, 2129 Don Chino Roces Avenue corner Dela Rosa
Street, Makati City 1230, Philippines, herein represented by its President& CEO,
Jose Luis Romero-Salas, duly authorized for the purpose, hereinafter referred to
as "TELUPAY";
- and -
MEGALINK, INC
., a domestic corporation duly organized and existing under and by virtue of the
laws of the Philippines with principal place of business and office address at
the 4TH Floor, OneE-comCenter Building, Palm Coast Avenue, Mall of Asia Complex,
Pasay City, Philippines, herein represented by its President & CEO, Benjamin P.
Castillo, duly authorized for the purpose, hereinafter referred to as
"MEGALINK".
W I T N E S S E T H ; That,
WHEREAS,TELUPAY is an independent service provider in the business
of providing support services for mobile banking services of banks and other
businesses;
WHEREAS, MEGALINK is a consortium of banks and other participating
institutions in the business of routing financial transactions electronically
via a network of service channels owned by its members, participating
institution and other service partners;
WHEREAS, TELUPAY and MEGALINK have executed a Memorandum of
Understanding (MOU) dated December 16, 2011, whereby the Parties agreed to
cooperate and collaborate in a mutually accepted business and technical solution
for the development of a TELUPAY
's Telco agnostic Mobile Banking Servicesas a Pilot Program pursuant to the
terms and conditions of the MOU.
WHEREAS, the Pilot Program has been successfully completed
andTELUPAYhas offered to provide MEGALINKsupport services for mobile banking
services of the latter
's members, participating institutions and other service partners, and MEGALINK
has agreed to proceed with the commercial implementation of the mobile banking
service and to engage TELUPAY's Telco Agnostic Mobile Banking Services for the
purpose;
WHEREAS, there is a need for TELUPAY and MEGALINK to execute a
Memorandum of Agreement to govern the terms of the Telco Agnostic Mobile Banking
Service.
NOW, THEREFORE,
the parties hereby agreeas follows:
1. DEFINITIONS AND INTERPRETATIONS.
Unless the context otherwise requires, the following terms and interpretations
are defined and used in this Agreement as follows:
1.1.
"Production Server Set-Up" shall mean the specific computer hardware, to include
the development server, equipment, telecommunications and/or network
connections, security firewalls, commercial off-the-shelf (COTS) software,
operating systems, and other resources, to include the licensing, insurance,
warranty, maintenance service and/or sub-contracting of any and all third-party
hardware and software necessary to support the Production Server Set-Up to be
used by TELUPAY. The Production Server Set-Up shall be provided by MEGALINK and
would be kept in an area controlled and secured by MEGALINK. MEGALINK shall
provide TELUPAY with reasonable access to the Production Server Set-Up to
include site-to-site VPN connectivity.
1.2.
"System Specification" shall mean the required specification of the Production
Server Set-Up, more particularly described in the "Specifications of the System"
hereto attached Annex "E". While the TELUPAY Services would function on the
"Minimum" system configuration within the stated performance range, the
same performance range.
1.3.
"Location" shall mean the area provided, maintained and secured by MEGALINK
located within its premises where the Production Server Set-Up is.
1.4.
"Maintenance Services" shall mean the maintenance and technical support services
performed by TELUPAYas specified in the Service Level Agreement.
1.5.
"Service Level Agreement" or "SLA" shall mean the agreement between the Parties
specifying and defining the parameters by which the operation of the installed
system in the premises of MEGALINK shall be maintained in accordance with the
commitment levels, hereto attached as Annex "B".
1.6. "Members"shall mean, for purposes of this Agreement, such members,
participating institution and service partners of MEGALINK, listed in the List
of Members, hereto attached as Annex "C"
1.7.
"Pilot Program" shall mean MEGALINK's and its members use of the TELUPAY
Services for a period of six (6) months or less from Effective Date of the MOU
on the Pilot Program. The Pilot Program established MEGALINK's assessment and
acceptance of the TELUPAY Services in terms of capability, reliability,
usability, security, viability, scalability, performance, instability,
compatibility and overall requirements of MEGALINK and network for an interbank
mobile banking service, in which both Parties agreed on the testing and
acceptance criteria of the TELUPAY Services.
1.8.
"Parties" shall collectively refer to TELUPAYand MEGALINK, and "Party" shall
refer to any of the individual Parties.
1.9.
"Memorandum of Agreement" or "Agreement" shall mean this document, and its
annexes as a whole, which defines the terms and conditions governing the
production and/or commercial implementation of TELUPAY Services in the
operations of MEGALINK.
1.10.
"TELUPAY Confidential Information" shall mean any and all of the TELUPAY
Services, TELUPAY Services Documentation, and the TELUPAY System that are
confidential, proprietary and shall remain the property of TELUPAY.
1.7. "TELUPAY Services" shall mean services to be provided by TELUPAY in
accordance with Section 2 hereof, which shall include Telco Agnostic Mobile
Banking System ("MBS"), SMS Information Management System ("SIMS") and Eload
services including all updates, patches or enhancements thereto, training,
maintenance and support services and other deliverables and information supplied
by or on behalf of TELUPAY.
1.11. "TELUPAY Services Documentation" shall mean the services manuals, user
instructions, technical literature and all other related materials in eye
readable form supplied to MEGALINK and its Members by TELUPAY for aiding the use
of the whole or part of the TELUPAY Services.
1.12. "TELUPAY System" shall mean the TELUPAY Services and the TELUPAY
Services Documentation.
2. SCOPE OF WORK
2.1 During effectivity of this Agreement and in accordance with the terms
and conditions set out herein, TELUPAY hereby agrees to:
(a) Provide to MEGALINK the TELUPAY Services which TELUPAY shall install on
the MEGALINK Production Server Set-Up as listed in the List of TELUPAY Services,
hereto attached as Annex
"D";
(b) Provide training to MEGALINK in terms of the User Training Plan (
"Training Plan") and assist MEGALINK in training the MEGALINK Members who will
avail of the TELUPAY Services;
(c) Provide a soft copy of a set of services manual for the TELUPAY Services
containing sufficient information to enable proper use of all the facilities and
functions set out in the System Specification (Services Manual). Production and
copying whole or part of the Services Manual is limited to the official use of
MEGALINK related to TELUPAY Services, and any changes made on the Services
Manual by MEGALINK shall require prior written notice to TELUPAY, who shall then
be provided a copy of the proposed changes. Unless MEGALINK receives TELUPAY
's written objection within two (2) working days from TELUPAY's receipt of the
notice, changes shall be deemed accepted by TELUPAY. Any copying, disclosure,
distribution or reliance on the Services Manual by anyone other than the
intended recipient is strictly prohibited;
(d) Provide a soft copy of a set of user manual (Customer Manual) for the
TELUPAY Services. Production and copying whole or part of the Customer Manual is
limited to the official use of MEGALINK and its Members for their mobile phone
banking services for their customers or end-user accountholders, and any changes
made on the Customer Manual by MEGALINK or its Members for release to its
customers shall require prior written notice to TELUPAY, who shall be provided a
copy of the proposed changes. Unless MEGALINK and its Members receive TELUPAY
distribution or reliance on this material by anyone other than the intended
recipient is strictly prohibited;
(e) Provide the Maintenance Services for MEGALINK in accordance with the
SLA;
(f) Provide for MEGALINK such professional personnel of such qualification
as to ensure full and uninterrupted rendering of the TELUPAY Services; and
(g) Provide TELUPAY Services in the most efficient manner, including
services related to Mobile Banking Services as listed in the List of TELUPAY
Services, hereto attached as Annex
"D".
2.2 All TELUPAY Services Documentation and other readable materials relating
to the TELUPAY Services and this Agreement shall be provided using the English
language.
2.3 Only MEGALINK and Members
' customers with Megalink bank accounts in the Philippines may utilise the
TELUPAY Services. MEGALINK and Members' customers travelling outside of the
Philippines using a local SIM may opt to use the TELUPAY Services subject to the
availability of the network connectivity and subject to the mobile network
operator applicable roaming charges to be paid by the MEGALINK and Members'
customers. Access using international numbers shall be subject to MEGALINK's
system enhancement that facilitates international SMS gateway.
3. PAYMENT
a. The service fee for the TELUPAY Services and other services or charges to
be provided under this Agreement are set out in Annex "A" of this Agreement.
b. The service fee shall be paid in accordance with the BSP-MEGALINK
Electronic Settlement process and will be reflected in TELUPAY Settlement
report.
c.
All fees are VAT inclusive.
d.
TELUPAY reserves the right to charge additional interest charges for fees
not paid within ten (10) calendar days after the due date at the rate of 5% per
annum from the time the fees became due until receipt of full payment by
MEGALINK.
e.
For Maintenance Services, no fees shall be charged to MEGALINK for works
covered by the SLA. Maintenance Service Fees for works not covered by the SLA
shall be paid within ten (10) days from receipt of invoice at such rate as shall
be mutually agreed upon
f.
The Parties shall agree on the provision of any additional development
works, features or services not specified in this Agreement and/or outside of
the SLA, and the corresponding fees or charges thereof.
4. WARRANTIES OF THE PARTIES
4.1 TELUPAY hereby represents and warrants to MEGALINK that:
a. It has legal capacity, power and corporate authority, and has taken all
action necessary, to execute and deliver this Agreement and any and all other
documents required to be executed and delivered by it in connection herewith and
b. No governmental authorizations or other authorizations or consents are
required in connection with this Agreement, or any other documents required to
be executed and delivered in connection herewith, and the performance of its
TELUPAY enforceable against it in accordance with its terms;
4.2
MEGALINK hereby represents and warrants to TELUPAY that:
a. It has power and authority, and has taken all action necessary, to
execute and deliver this Agreement and any and all other documents required to
be executed and delivered by it in connection herewith and to perform its
obligations hereunder, and to consummate the transactions contemplated by, this
Agreement;
MEGALINK enforceable against it in accordance with its terms;
5. RIGHTS AND OBLIGATION
5.1.
TELUPAY
During the effectivity of this Agreement, TELUPAY agrees to:
a.
Provide the TELUPAY Services and TELUPAY Services Documentation set forth
b.
Appoint a Project Management Team Lead to manage the scope of this
Agreement who will act as a point-of-contact to handle all technical, commercial
and other related matters with MEGALINK. TELUPAY shall immediately notify
MEGALINK in writing in case of substitution or replacement of such Project
Management Team Lead or contact details of such Team Lead.
c.
Maintain the TELUPAY Services according to the SLA in the most efficient
and effective manner necessarily called for by, and bearing in mind the nature
of, the business needs of the Members and MEGALINK
d.
In the event that there will be a need for changes, upgrade, manipulation
of the Systems Specifications changes (i.e., patches, fixes, changes in IP
address, etc.) required to maintain the quality operation of the TELUPAY
Services, the same shall be conducted only upon prior written agreement of both
Parties, in the event that the implementation of any such agreed changes in
Systems Specifications that will affect or disrupt in any manner the operations
of TELUPAY Services, TELUPAY shall inform MEGALINK in writing at least
forty-eight (48) hours prior to commencing any such implementation. In any
event, all changes and maintenance services shall require prior written notice
to MEGALINK and its Members.
e.
TELUPAY commits to integrate the mobile banking system of SMART
Communications and Globe Telecoms with the TELUPAY Services installed at the
Location.-
5.2.
MEGALINK
During the effectivity of this Agreement, MEGALINK agrees to;
a.
Appoint a Project Management Team Lead to interface with TELUPAY on all
aspects of management of this Agreement and its Annexes.
b.
Ensure the availability of its representatives in coordination meetings for
the smooth implementation of the TELUPAYServices, to include coordination with
representatives of Members, if needed.
c.
Provide and maintain the Production Server Set-Up based on System
Specification
d.
Provide proper and required security measures for the Location
e.
Allow the automatic generation and transmission of daily transaction
reports by the TELUPAY Services to TELUPAY
f.
Use its best commercial efforts to market and promote the mobile phone
banking services using the TELUPAY Services to theMembers, customers, end-user
account holders,and the general public for the entire duration of this
Agreement;
6. TAXES AND COSTS
All taxes payable by the Parties arising from or in connection with the
implementation of this Agreement shall be paid by or for the account of the
Party to whom such tax is imposable under the law.
7.1. Unless otherwise terminated in accordance with the terms of this
Agreement. This Agreement shall take effect upon its signing by both Parties and
shall remain in full force and effect for five (5) year from the date of
execution, and shall automatically be considered renewed from year to year,
unless a notice of intent not to renew is served upon the other Party in writing
within 30 days prior to date of termination.
7.2.
TELUPAY shall notify MEGALINK in writing of any plans of merger, consolidation,
reorganization or change in ownership structure involving TELUPAY. In the event
of such merger, consolidation, reorganization or change in ownership with
respect to TELUPAY, this Agreement shall be deemed automatically terminated and
the rights and obligations herein contained and pertaining to TELUPAY shall be
deemed discontinued unless the surviving corporation or resulting consolidated
entity is still TELUPAY, or if the reorganized/restructured organization did not
result in any change in majority control of TELUPAY. This is without prejudice
to rights and obligations already incurred and outstanding prior to the
effective date of merger, consolidation, reorganization or restructuring (Date
of Merger, Consolidation, Reorganization or Restructuring), all of which shall
be deemed due and should be settled within five (5) business days from such
effective date.
7.3.
This Agreement may be terminated pursuant to the following terms:
7.3.1.
Voluntary Termination - Subject to the provisions of this Agreement, any Party
may voluntarily terminate this Agreement by providing at least thirty (30) - day
7.3.2.
Termination by Reason of Insolvency - If either Party enters into liquidation
whether compulsory or voluntary or if a petition for bankruptcy is filed against
either Party and the said compulsory liquidation or petition for bankruptcy is
not remedied within 90 days from the date of its filing, or if either Party
assigns its assets for the benefit of a creditor or creditors, the Party may
immediately terminate this Agreement by notice in writing but without prejudice
to the rights which may have accrued to either Party prior the date of
termination.
7.3.3.
Termination due to Breach of Obligation - If either Party (i) breaches or fails
in any material respect to perform or comply with any of its material covenants
and agreements contained herein which remain unremedied for thirty (30) calendar
days from notice of such breach to the other Party, or (ii) breaches its
representations and warranties in any material respectand such breach would have
material and adverse effect on the ability of the other Party to perform its
obligations hereunder, the non-defaulting Party may there upon terminate the
Agreement without prejudice to other remedies and actions that both Parties may
have.
7.3.4.
Termination due to Force Majeure - When a Party is unable to fulfill, in whole
or in part, its obligations hereunder, and such inability arises by reason of an
event constituting Force Majeure, such Party may be temporarily excused from
fulfilling such obligations (but only to the extent that its inability to
fulfill such obligations is caused by the Force Majeure event) until the
abatement of such Force Majeure event; provided, that such Party provides prompt
written notice of the existence of such Force Majeure event to the other Party.
The Term shall not be extended as a result of any Force Majeure event. In the
event that the Force Majeure event has the effect of interrupting materially the
performance of the affected Party's obligations under this Agreement for a
period of more than fifteen (15) consecutive days, either Party may terminate
this Agreement affected as of a date specified by the terminating Party in a
written notice of termination to the other Party without payment of any
termination fee or penalty, but without prejudice to rights and obligations
which have already accrued prior to the termination.
7.4. Action Upon Termination
Upon termination of this Agreement, and for whatever reason:
7.4.1. In the event that the Agreement is terminated TELUPAY agrees not to
immediately (i) pull-out the TELUPAY Service installed in the Production Server
Set-Up in MegaLink
's premises and (ii) cut-off the TELUPAY Services and shall allow for and agree
to a reasonable phase-in and phase-out arrangement with MEGALINK until such time
that MEGALINK could secure a substitute service provider subject to payment of
fees as may be agreed upon by the Parties. TELUPAY shall give full cooperation
and support to MEGALINK including transition assistance to assure an orderly and
efficient transfer
7.4.2.
Both Parties shall return any and all materials, documents and equipment owned
by the other Party within five (5) days from the termination of the phase-in
phase-out arrangement or such other reasonable period as may be agreed.
7.4.3.
The Party with obligation to pay or remit any amount due to the other Party
shall pay the amount due in full pursuant to this Agreement within five (5)
business days from termination.
7.4.4.
Provisions of this Agreement that by their nature continue beyond the expiration
or termination of this Agreement, and those provisions that are expressly stated
to survive termination, shall survive the termination or expiration of this
Agreement, including, without limitation, Sections 8(Disclosure and
Confidentiality), 19.i (Limitations of Liability) and 19.k (Governing Law), and
obligation to satisfy any accrued but unpaid financial obligations.
8. DISCLOSURE AND CONFIDENTIALITY
8.1. No public announcement of this Agreement or of the transaction
contemplated hereunder shall be issued or published, or caused or permitted to
be issued or published, by either Party without the prior written consent of the
other.
8.2. None of the Parties shall disclose to any third party, without the
prior written approval of the other Party (which approval shall not be
unreasonably withheld) any confidential information, which includes (i) the
contents of this Agreement (ii) any details or information about the other Party
's business or activities or confidential or proprietary information of the
other Party, acquired as a result of their relationship except as may be
required by existing contracts, applicable law, legal process or duly authorized
regulatory authorities or to their respective professional advisers.
8.3. If any Party makes any disclosure to an employee, professional adviser
or any other party, when permitted under this Section, that Party shall ensure
that the recipient of the information covenants on similar terms as those
appearing in this Section to keep such information confidential except in
accordance with applicable law. It is agreed that such party making the
disclosure to its professional adviser or any other third party shall be liable
for unauthorized disclosures by such professional adviser and third party.
8.4. Each Party shall exert best efforts to ensure that its employees,
agents, advisers and contractors who are at any time in possession of such
confidential information do not disclose or suffer or permit the disclosure of
such confidential information.
8.5. A party violating its obligations under this Agreement shall fully
indemnify the other for all actual and direct damages caused by such breach.
Moreover, the Disclosing Party shall be entitled to specific performance and
injunctive relief as well as other equitable relief as a remedy for any such
breach of this Agreement in addition to all monetary or other remedies available
under the law or in equity. Either Party may not, however, be made liable to the
other Party for any moral, nominal, exemplary, special, indirect or
consequential damages, including profit loss or lost business opportunities,
whether foreseen or unforeseen unless it is shown that there is evident bad
faith, gross negligence or willful breach on the part of the Party who violated
any of the terms of this Agreement
9.
PERMITTED PURPOSE AND USAGE
9.1.
The TELUPAY Services shall be used by MEGALINK for the purpose of providing
mobile phone banking and Eload services to its Members and the Members'customers
and/or end-user accountholders of whom have subscribed to the TELUPAY Services.
9.2.
MEGALINK shall impose on its Members transaction fees for the mobile phone
banking services usingthe TELUPAY Services which shall be subject to the terms
9.3.
MEGALINK shall not in any way allow the TELUPAY System to be used outside
of the permitted purpose without the approval of TELUPAY.
10.
WARRANTY WITH RESPECT TO THE TELUPAY SERVICES
TELUPAY warrants that the TELUPAY Services shall conform to the published
specifications and shall function according to the business requirement it was
customized to, for a period of ninety (90) days starting from the date the
TELUPAY Services are in production and/or in commercial use.
For the avoidance of doubt, production and/or commercial use shall mean any of
the TELUPAY Services are already in production, that is the TELUPAY Services
have "gone live
"and accepted by MEGALINK to be stable and relatively bug-free with a quality
suitable and ready for wide distribution and use by MEGALINK, MEGALINK Members
and their customers and/or end-user accountholders, even without commercial
support or use.
MEGALINK or any of its Members has started charging its customers and/or
end-user accountholders transaction fees for the use of the TELUPAY Services.
MEGALINK or any of its Members havemade announcement(s) of its mobile phone
banking or mobile banking using the TELUPAYServices is commercially available
Within the period of Warranty, TELUPAY
's responsibility shall be for the restoration, at its own expense, the feature
or module of the TELUPAY Services which was found to be faulty, provided that
the TELUPAY Services were not subjected to any intervention by any other party
other than the authorized representative of TELUPAY.
The limited Warranty applies only to the TELUPAY Services and does not apply to
any hardware or third-party software operating system which may reside in
MEGALINK Production Server Set-Up as detailed in the
"Specifications of the System" hereto attached Annex "E".
The limited Warranty herein is offered on an AS-IS and AS-AVAILABLE
BASIS, without warranties of any kind, either express or implied, statutory or
otherwise from future technologies and changes in the technologies, release and
functional features updates which may come up as a result of evolving
technologies.
11. MAINTENANCE SERVICE
Immediately following the Warranty Period, the obligations of the Service
Provider with regards to the Maintenance of the TELUPAY Services shall be
governed by the provisions as stated in the SLA whichis deemed incorporated in
and made coterminous with this Agreement
MEGALINK, subject to existing security arrangements, shall allow TELUPAY's
authorized representative to enter the Location, in order to conduct repairs,
system health check, monitoring activities, accessing necessary information or
data, to include downloading and printing of necessary information or data, as
part of the Service Provider's activity in providing Maintenance Service or as
may be required in the SLA.
The Maintenance Service shall only cover the TELUPAY System, and shall not apply
to the Hardware and other peripherals which shall be for the account of
MEGALINK.
For services outside of the scope of the SLA, both Parties shall agree in
writing as regards to the scope and charges that will be applied prior to
conduct of any actual work.
12.
ACCESS TO PREMISES AND DATA
12.1. MEGALINK agrees that TELUPAY shall not be made jointly and severely
liable for any violation of Republic Act No. 1405 otherwise known as the Bank
Deposit Secrecy Lawgranting that TELUPAY shall not have access to the account
information of MEGALINK and its Members
' customers and/or end-user accountholders.
12.2. TELUPAY shall install the TELUPAY Services in the MEGALINK Production
Server Set-Up provided by MEGALINK at the Location. MEGALINK shall take all the
necessary measures to ensure protection of the installation at all times and
ensure that every visit by TELUPAY shall be accompanied by MEGALINK
representative and monitored accordingly.
12.3. Both Parties shall allow access to internal and external auditors to
information regarding the installation of the TELUPAY System as may be
reasonably necessary for the auditors to exercise their duties and
responsibilities.
12.4. TELUPAY shall grant access to Bangko Sentral ng Pilipinas (BSP)
representatives relative to the operations of TELUPAY in order to review the
same in relation to the TELUPAY Services
's installation.
12.5. MEGALINK and TELUPAY shall immediately take the necessary corrective
measures to satisfy the findings and recommendations of BSP examiners and those
of the internal and/or external auditors of MEGALINK and/or TELUPAY
13.
SECURITY AND DATA PROTECTION
13.1. MEGALINK shall for the duration of the TELUPAY Services, effect and
maintain adequate security measures to safeguard the TELUPAY Services from
access or use by any unauthorized person by:
13.1.1. Ensuring that TELUPAY Confidential Information is only transmitted to
those of its officers and employees who need to know the TELUPAY Confidential
Information, who are properly informed of the confidential nature of the TELUPAY
Confidential Information, whose names and titles have been previously disclosed
in writing to TELUPAY, and, who have agreed beforehand in writing to abide by
the terms and conditions of this Agreement. TELUPAY reserves the right, in its
sole discretion, to withhold access to and/or disclosure of all or part of the
TELUPAY Confidential Information to any person or entity in cases where it
considers such disclosure may compromise the confidentiality, secrecy and/or
integrity of the TELUPAY Confidential Information;
13.1.2. Maintaining a security log of periodic tests of security, distribution
of TELUPAY Confidential Information from one secure location to another (if
applicable), and breaches of security at all secure locations;
13.1.3. Maintaining sole possession of the operating system and root user
password and serial numbers for access and use of the TELUPAY Services;
13.1.4. Maintain sole control of its network and physical facilities;
13.1.5. To promptly report to TELUPAY any theft or attempted theft or any loss
of Information from MEGALINK
's possession, and co-operate with TELUPAY to immediately investigate the events
or potential events, to regain possession of the stolen, lost or disclosed
Information and to prevent its further unauthorised use or disclosure.
13.2. TELUPAY shall formulate and implement necessary internal policies and
procedures, including security and controls to ensure protection to itself, to
the MEGALINK network as well as to MEGALINK
's members, from any operational risk as a result of transactions entered into
13.3. TELUPAY shall comply with standards, guidelines and procedures of
MEGALINK including, but not limited to, availability, response time, security
requirements, control measures and other procedural standards that may be
adopted by MEGALINK;
13.4. With respect to the access to the TELUPAY Services, MEGALINK shall be
equally responsible for any breach of this clause committed by any of its
affiliates, partners, sub-contractors, consultants, agents, employees,
customers, representatives and the Members, provided there is proven fault or
gross negligence of the MEGALINK which directly resulted in the breach.
14.
FORCE MAJEURE
and other events of similar nature beyond its own reasonable control.
The Parties shall not be liable for the non-performance of any of the
obligations under this Agreement when such inability is due to an event of force
majeure which:
I. directly affects the performance of a Party's obligations under this
Agreement; and
II. the occurrence of which event is not exacerbated by the fault or negligence
of said Party.
15.
DISASTER RECOVERY AND TRANSITION SERVICES
15.1. The Parties agree on a Business Continuity Plan and Disaster Recovery
as defined in the Service Level Agreement. Any and all hardware, equipment, and
peripheral required to run the Disaster Recovery System shall be for the account
of MEGALINK. TELUPAY shall only be responsible for the TELUPAY System to be
replicated in the Disaster Recovery System. Disaster recovery sites shall be
placed in operation in the event that operations at the MEGALINK
's primary Locationcannot be accessed or restored within two (2) hours from
receipt of written notification from MEGALINK to TELUPAY of the occurrence of a
force majeure event or any unresolved interruption of the TELUPAY Services.
Commission of the respective disaster recovery site shall be jointly undertaken
and coordinated by the Parties' respective crisis management teams.
15.2. While both Parties acknowledge that the service being provided by
TELUPAY is critical to the nature of business of MEGALINK, and that an abrupt
termination of this Agreement may cause both Parties to suffer unquantifiable
losses, TELUPAY, to the best of its efforts, shall continue to perform its
obligations under this Agreement, notwithstanding a change in ownership,
assignment or attachment of assets, or the rendering of judgement of insolvency
or the appointment of a receiver, up to three (3) months following such incident
or until such time that MEGALINK is able to secure the services of another
service provider or put in place the necessary measure in the minimum, to
maintain the quality of service this Agreement offers, whichever is earlier.
TELUPAY shall give full cooperation and support to MEGALINK including transition
assistance to assure an orderly and efficient transfer.
16.
PROPERTY RIGHTS
The TELUPAY Services and/or TELUPAY System and the copyright and other
Intellectual Property Rights of whatever nature in the TELUPAY Services and/or
TELUPAY System are and shall remain assets of TELUPAY and TELUPAY reserves the
right to provide or authorise the use of the TELUPAY Services and/or TELUPAY
System by third parties.
MEGALINK shall notify TELUPAY immediately if MEGALINK becomes aware of any
unauthorised use of the whole or any part of the TELUPAY Services and/or the
TELUPAY System by any unauthorized persons or third parties.
Subject to pertinent governmental rules and procedures, MEGALINK irrevocably
grants authorization to TELUPAY, and its authorized employees and agents to
enter the Location to check in the presence of MEGALINK
's representative/s the Use of the TELUPAY Services.
MEGALINK accepts and acknowledges that the TELUPAY Services have a significant
value to TELUPAY, and that should MEGALINK wish to use or set up a competitive
business that this would cause TELUPAY considerable loss, accordingly MEGALINK
agrees and undertakes to TELUPAY that it shall not, directly or indirectly,
alone or jointly with any other person, and whether as a shareholder, partner,
director, principal, consultant or agent:
a. for a period of three (3) years starting on the date of termination of
this Agreement, carry on or be engaged in any business which competes with
TELUPAY
's services as defined in this Agreement.;
this Agreement, and to the detriment of TELUPAY or its business, induce or
endeavour to induce any of its other clients to cease to use the TELUPAY
Servicesand/or TELUPAY System or to restrict or adversely to vary the terms of
their respective agreements; and
Each of the Parties agrees that all and any of their rights under this Agreement
may be specifically enforced by preliminary and permanent injunction, it being
acknowledged that a breach of any of those rights might cause injury in respect
of which damages would not provide an adequate remedy.
17.
Intellectual Property Rights of Third Parties
Where no exclusion of warranty against infringement of the Intellectual Property
Rights of third parties is allowed, under applicable laws and without prejudice
to TELUPAY
's right under applicable paragraphs in this Agreement, to further limit its
liability in this regard (if so allowed by applicable laws), the entire
liability of TELUPAY to the MEGALINK in
all or any part of the TELUPAY Services and/or the TELUPAY System and in order
to avoid or rectify such infringement. In such event, TELUPAY undertakes to keep
MEGALINK free and harmless from any and all losses, damages, liabilities and
claims arising from or in connection with such infringement.
In any claim that the normal use or possession of the TELUPAY Services and/or
the TELUPAY System infringes the Intellectual Property Rights of a third party,
MEGALINK shall not oppose, interfere or prejudice TELUPAY
's defence of such claim and MEGALINK shall provide TELUPAY with all reasonable
assistance with such claim. TELUPAY shall have no obligation whatsoever where
the claim arises from the use of the TELUPAY Services and/or the TELUPAY System
in combination with MEGALINK Produciton Server Set-Up and any upgrades not
supplied or approved by TELUPAY save where TELUPAY was proven guilty of fault or
negligence at the Location.
18.
ENTIRE AGREEMENT / AMENDMENTS
18.1. This Agreement, constitute the entire agreement of the Parties hereto
with respect to the subject matter hereof and shall supersede any prior
expressions of intent or agreement with respect to this transaction, without
prejudice to the rights and outstanding obligations which may have accrued in
favor of or for the benefit of either Party prior to the date of effectivity of
this Agreement.
18.2. Unless otherwise provided, any amendment of any provisions of this
Agreement shall be in writing and with the consent of the Parties affected by
such amendment. No Party shall be deemed to have waived any right or provision
under this Agreement unless such waiver is made in writing.
19.
MISCELLANEOUS
a. Marketing and Promotional Activities. MEGALINK undertakes to market the
service to its members as part of its overall training and orientation
programsin coordination with TELUPAY in planning and conducting said activities
as applicable.
b. Press Releases and Other Ad/Marketing Promo Content. MEGALINK and its
Members shall allow the marketing logo tag
"powered by TELUPAYTM (logo)" and "TELUPAYTM Making Money MobileTM" to be
included in MEGALINK's and its Members' ad or promotional and marketing
materials either in print or in broadcast in promoting MEGALINK's and its
Members' mobile phone banking services, and to allow such materials to be
featured onTELUPAY's website or promotional and marketing materials.
c. No Third Party Use. MEGALINK shall use the TELUPAY Services and/or
TELUPAY System for its own internal business purposes only, specifically
providing mobile phone banking services to the Members and their customers
and/or end-user accountholders. Except as otherwise provided herein, any use,
operation or implementation of all or part of the TELUPAY Services and/or
TELUPAY System by third parties shall be subject to separate negotiations and/or
user agreements.
d. Effects of Unauthorized Use.Except as otherwise provided in this
Agreement, where MEGALINK itself or MEGALINK knowingly allows or causes other
third parties or affiliates to use, study, implement or in any way infringe any
part or all of the TELUPAY Services, the TELUPAY Confidential Information, the
TELUPAY Services and/or TELUPAY System without the proper use, rights and/or
license agreement and without the prior written consent of TELUPAY, MEGALINK
shall be considered to have materially breached this Agreement. In the event of
such material breach, TELUPAY shall have the absolute right and full discretion
to immediately, without need of any notice, stop and terminate the availability
for use, use and/or access by such unauthorized third parties and/or to
immediately rescind this Agreement upon written notice sent to MEGALINK without
need of any court intervention. TELUPAY shall not be liable to MEGALINK or to
its affiliates, officers, employees, customers or any third party for any
damages that may result from the exercise of the said right. Additionally in the
said situation, TELUPAY shall have the right to undertake any and all actions
necessary to prevent any further unauthorized use of the TELUPAY Services and/or
the TELUPAY System and/or the unauthorized disclosure of the TELUPAY
Confidential Information.
e. Non-Transferable Authority. Subject to the terms and conditions set out
in this Agreement, TELUPAY grants the MEGALINK a non-transferable authority to
avail itself of and use the TELUPAY Services and/or TELUPAY System, which in
turn shall be subject to periodic revision by TELUPAY and MEGALINK to reflect
changes agreed upon by both Parties
f. Prohibition. MEGALINK may not make any copies of the TELUPAY Services
and/or TELUPAY System. The TELUPAY Services and/or the TELUPAY System are
accredited to TELUPAY and MEGALINK shall ensure that the TELUPAY Services and/or
the TELUPAY System in the possession of MEGALINK shall always bear TELUPAY
's proprietary notice.
g. Non-modification. MEGALINK hereby undertakes to TELUPAY not to alter or
modify the whole or any part of the TELUPAY Services and/or the TELUPAY System
in any way whatsoever, nor wilfully permit the whole or any part of the TELUPAY
Services and/or the TELUPAY System to be combined with or become incorporated in
any other programs, nor decompile, disassemble or reverse engineer the same, nor
attempt to do any of such things.
h. Injunctive Relief and Damages. Each Party acknowledges that any breach or
proprietary information pertains to (the
"aggrieved Party") for which there will be no adequate or speedy remedy at law;
and the aggrieved Party shall be immediately entitled to injunctive relief
in the circumstances (including monetary damages if appropriate). In the proper
cases and upon competent judicial authority, the aggrieved Party may enter upon
any location or territory where the compromised confidential or proprietary
information may be kept for the purpose of preventing the unauthorized use,
reproduction, examination, distribution, or transaction thereof.
i. Limitation of Liability. Each Party
'sliability with respect to breach of any of its obligations under this
Agreement shall be limited to the total cost of implementing the service but
shall not include the cost or the purchase of any or all hardware and other
peripherals.
Each party shall hold the other party, its officers, directors, agents,
employees and affiliates free and harmless from any and all actual and direct
damages, claims, demands, costs, expenses, obligations, or causes of action of
any nature, including reasonable attorney
's fees and costs, arising from this Agreement, except for: (i) violation by the
other party (the "Guilty Party") of any law, ordinance, rules and regulations;
(ii) material breach by the Guilty Party of any obligation, representation or
warranty stated herein; and/or (iii) damages suffered by third parties or the
non-guilty party or its employees or agents caused by Guilty Party's fault or
gross negligence in the performance of its obligations under this Agreement.
Under no circumstances shall any Party be made liable for any moral, nominal,
exemplary, special, indirect or consequential damages, including profit loss or
lost business opportunities, whether foreseen or unforeseen unless there exists
bad faith.
j. Severability of Provisions. If any one or more of the provisions
contained in this Agreement or any other document executed in connection
herewith shall be held invalid, illegal or unenforceable in any respect, the
herein or in such other document shall not in any way be affected or impaired.
k. Governing Law. This Agreement shall be governed by and in accordance with
the laws of the Republic of the Philippines.
l. Compliance with Laws. In connection with this Agreement, each Party shall
comply with all applicable regulations and laws, and other relevant laws that
m. Venue for Suit. The Parties hereby agree that any legal action, suit or
proceeding arising out of or in relation to this Agreement shall be instituted
only in the proper court of Pasay City.
n. No Assignment. The Parties shall not assign any of their respective
Party, the latter shall inform the other party in writing of such changes and
such Party shall not be excused from complying with its obligations under this
Agreement.
o. Limited Trademark Rights Granted. Nothing in this Agreement shall be
p. Notice. Any notice required or permitted to be made or given to either
requested, five (5) days after deposit in the mail or (e) by electronic mail
acknowledged and upon receipt of email read notification . All notices must be
sent to the address set forth below or to such other address as the receiving
party may have designated by written notice given to the other Party.
q. Amendment and Modification. Subject to applicable law, this Agreement may
be amended, modified and supplemented in any and all respects only by written
r. Further Assurances. Each Party agrees to use all reasonable efforts to
s. Non-Solicitation of Personnel.
Except for the benefit of both Parties, the Parties agree that at no time during
the time that this Agreement is in effect, or for a period of one (1) year after
termination of the employment relationship between the Party and its employee,
regardless of the reason for the termination of the employment relationship,
will the Parties either solicit or accept as an employee, independent contractor
or other agent of the other Party, without first obtaining the express written
IN WITNESS WHEREOF, the parties hereto hereby cause their respective authorized
representatives to affix their respective signatures this 17th day of August,
2012 at the Pasay City.
By:
President/CEO
MEGALINK INC.
By:
BENJAMIN P. CASTILLO
President & CEO
/s/ Rosarito Carrillo
________________________________
Rosarito Carrillo
Director for Operations
/s/ Bernadette A. Ramos
________________________________
Bernadette A. Ramos
Head, Product Development and
Management Group
ACKNOWLEDGEMENT
REPUBLIC OF THE PHILIPPINES
)
MAKATI CITY
)
S.S.
Before me, a Notary Public, for and in __________________, personally came and
appeared the following:
NAME
VALID GOVERNMENT ID
DATE/PLACE ISSUED
TELUPAY:
JOSE LUIS-ROMERO SALAS
ROSARITO D. CARRILLO
MEGALINK:
Benjamin P. Castillo
BERNADETE A.RAMOS
known to me to be the same persons who executed the foregoing Memorandum of
Agreement, consisting of nineteen (19) pages, including this Acknowledgement
page, signed by the parties and the witness on all pages, and the parties to the
instrument acknowledged to me that the same is of their own free will and
voluntary act and deed and of the corporations herein represented
.
IN WITNESS WHEREOF
, I have hereunto set my hand and affixed my Notarial Seal this __th day of
______________ 2012 at _________________.
Doc. No. ________;
Page No. ________;
Book No. ________;
Series of 2012
.
ANNEX A
TRANSACTION FEES
1. TRANSACTION FEES
transaction fees:
Mobile Banking Transaction Fee Distribution
Table 1
Transaction Type
TELUPAY
(as ACQUIRER)
MEGALINK
Participating Member
(as ISSUER)
Others
User Registration (with Balance Inquiry)
Gets P1.50
Gets P0.75
Pays P2.25
N/A
Balance Inquiry
Gets P1.50
Gets P0.75
Pays P2.25
N/A
Bills Payment
Gets P3.25
Gets
P2.00 to P4.00
Gets P1.75
Biller Institution Pays P7.00 to P9.00
Funds Transfer (Own Account)
Gets P1.50
Gets P0.75
Pays P2.25
N/A
Inter-Bank Funds Transfer
Gets P6.75
Gets P5.00
Pays P18.75
N/A
Load Fulfillment:
Globe
Gets 50% of discount plus P0.75
Gets 20% of discount
Gets 30% of discount less P0.75
Eload Provider (TelUPay) gives 12% discount from Load amount
Smart
Gets 40% of discount plus P0.75
Gets 35% of discount
Gets 25% of discount less 0.75
Eload Provider (TelUPay) gives 10.5% discount from Load amount
SUN
Eload Provider (TelUPay) gives 13% discount from Load amount
Request (Checkbook and Statement)
Gets P1.50
Gets P0.75
Pays P2.25
N/A
Mobile Banking History
(with Balance Inquiry)
Gets P1.50
Gets P0.75
Pays P2.25
N/A
Rejected Transaction with SMS
Gets P0.75
-
Pays P0.75
N/A
TELUPAY shall receive through its designated SETTLEMENT BANK the corresponding
TELUPAY transaction fees for all Mobile banking related transactions that was
processed successfully by MEGALINK and the Participating Issuers. MEGALINK shall
be under no obligation to pay
TELUPAY
's corresponding transaction fees for transactions that were not processed
successfully by MEGALINK and/or the Participating Issuers.
Any future changes to the transaction fees and/or fee distribution defined above
shall be mutually agreed upon by the parties in writing at least sixty (60) days
prior to intended date of implementation.
The corresponding transaction fees settled to TELUPAY for disputed transactions
and found to be in favor of the participating ISSUER, shall be returned / paid
back by TELUPAY via the regular MEGALINK settlement and reconciliation process.
Eload Discount Matrix
Table 2
TELCO
Airtime Packages
Load Amount
Discount
Revenue to be Shared
Globe
AMAX 30
30.00
12.0%
Php3.60
AMAX 60
60.00
Php 7.20
AMAX 100
100.00
Php 12.00
AMAX 150
150.00
Php 18.00
Smart
ELOAD 60
60.00
10.5%
Php 6.30
ELOAD 100
100.00
Php 10.50
ELOAD 115
115.00
Php 12.08
ELOAD 200
200.00
Php 21.00
ELOAD 300
300.00
Php 31.50
ELOAD 500
500.00
Php 52.50
ELOAD 1000
1,000.00
Php 105.00
SUN
Xpressload Regular 50
50.00
13.0%
Php 6.50
Xpressload Regular 75
75.00
Php 9.75
Xpressload Regular 100
100.00
Php 13.00
Xpressload Regular 150
150.00
Php 19.50
Xpressload Regular 300
300.00
Php 39.00
Xpressload Regular 500
500.00
Php 65.00
2. MAINTENANCE SERVICE FEES
a. Annual Maintenance Service Fee
TELUPAY has agreed to waive the Annual Maintenance Service Fee of Four Hundred
Twenty Thousand Pesos (P420,000.00) for the duration of the SLA which shall run
for five (5) years starting from ninety (90) days from the date the TELUPAY
Services are in production and/or in commercial use by the MEGALINK and/or any
of the MEGALINK Members
b. For SW Development works outside of the SLA or Change Orders
i. Dev Engr. - P8,000 per day
ii. Project Mgmt
- 10% of total Development Engr.
c. For works which requires TELUPAY personnel to provide services outside
Metro Manila, the cost of transportation and accommodation shall be reimbursed
by MEGALINK.
3. PAYMENTS
a. TELUPAY shall appoint a SETTLEMENT BANK that is a Principal member of
MEGALINK, which will assume all financial obligation of TELUPAY and perform
settlement, i.e. debiting or crediting of the net results of transaction amount,
fees, service charges, adjustment or any penalties/sanctions due to or due from
TELUPAY, in connection with or resulting for the service contemplated in this
Agreement. TELUPAY shall ensure that the SETTLEMENT BANK agrees and assumes
TELUPAY
's financial obligation and provides MEGALINK written acknowledgement of
financial obligation in connection with or resulting from this AGREEMENT.
b. Settlement of transaction fees due to and due from TELUPAY in connection
with or resulting from this Agreement shall be done through the Settlement Bank
on a next banking day basis and whenever BSP PhilPaSS is available. Arrangement
on the timing of the actual debit or credit to TELUPAY
's account maintained in the Settlement Bank shall be covered by a separate
Settlement Agreement between TELUPAY and its Settlement Bank
c. MEGALINK on a daily basis shall make available for download the MegaLink
reports i.e. Settlement Report, Transaction Listings and Statistics via MEGALINK
File Transfer Protocol facility.
d. TELUPAY agrees that MEGALINK report shall be the ruling report and basis
for Settlement and Reconciliation.
ANNEX B
SERVICE LEVEL AGREEMENT
1
TABLE OF CONTENTS
1
TABLE OF CONTENTS
2
2
INTRODUCTION
3
3
SCOPE
3
3.1
PREVENTIVE MAINTENANCE
3
3.2
TECHNICAL SUPPORT
4
3.3
TELUPAY KEY PERSONNEL
5
3.4
SEVERITY LEVEL DESCRIPTION
6
3.5
PROBLEM MANAGEMENT
7
3.6
INCIDENT MANAGEMENT
7
3.7
PROBLEM ESCALATION WORKFLOW
7
3.8
PROBLEM ESCALATION PROCESS:
8
3.9
SOFTWARE MAINTENANCE
9
4
CHANGE ORDERS
10
4.1
MEGALINK'S RIGHT TO VARY
10
4.2
RECOMMENDATION FROM TELUPAY
10
4.3
CHANGE ORDER PROCEDURE
10
4.4
TELUPAY TO PROCEED
10
5
SERVICE LEVEL REVIEW AND REPORTING
10
5.1
REPORTS
10
5.2
SERVICE REVIEW MEETING
11
6
GOVERNANCE BODY
11
6.1
PARTICIPANTS AND OBJECTIVES
11
6.2
OBJECTIVE OF THE GOVERNANCE BODY
11
6.3
FREQUENCY OF GOVERNANCE MEETING
12
2 INTRODUCTION
The Parties have come together to define the parameters by which the operation
of the installed system in the premises of MegaLink will be maintained in
accordance with the commitment levels defined in this document.
This document shall be an integral part of the Agreement signed between the
Parties, herein referred to as "Agreement"
3 SCOPE
TelUPay shall provide the following services to support MegaLink's mobile
banking operation to within the 99.8% system availability:
-
Preventive Maintenance
-
Technical Support
-
Problem Management
-
Software Maintenance
In addition to the above services, both Parties shall form a Governance Body
which shall meet based on agreed schedules per Section 6 to review the
performance of the system and to address important matters relating to the
operation of the system. The composition of the Governance Body and its
functions are discussed in Section 6 of this document.
3.1 PREVENTIVE MAINTENANCE
In accordance with the Bangko Sentral ng Pilipinas (BSP) regulation on
segregation of data, TelUPay will provide preventive maintenance recommendations
and suggestions subject to MegaLink performing the recommended health check
procedures below:
To ensure that the MBS servers are in good condition, health check should be
performed by MegaLink on a weekly basis, a report in the form of an email must
be sent to TelUPay every Friday or as needed. The report will include data like
CPU usage, server utilization and others.
MegaLink shall provide its own computer to serve as the console to monitor the
areas and component of the MBS:
Component
Status
1
Gateway
MCPro Client Status
Host Alive Monitor
Uptime
Memory Usage
CPU Load
Drive Space Usage
2
MBS Connections
-to Gateway Server
-to Backup Server
-to Midlet Server
3
Backup Server Health
Host Alive Monitor
Uptime
Memory Usage
CPU Load
Drive Space Usage
4
Monitor connection to Mail Server
Connection from MBS to mail server
Connection from Midlet server to mail server
5
Monitor connection to Sun Cellular
Connection from MBS to Midlet server
Connection from Midlet server to Sun MCPro server
6
Monitor connection to UDH Gateway
The following will be included in the Health Check Reports:
-
Current memory usage given by "free -m" shell command including a screen shot of
MRTG memory page.
-
Current bandwidth usage as given by MRTG summary and a screen shot of MRTG
Traffic Analysis page.
-
Current disk space usage given by "df -hT" shell command.
-
Current CPU usage given by MRTG summary and a screenshot of MRTG CPU Load
Average page.
-
Summary of total number running processes given by "ps aux | wc -l" shell
command and a Screen shot of Nagios Service Detail page.
-
Last 100 lines of /var/log/messages and /var/log/secure.
3.2 TECHNICAL SUPPORT
TelUPay shall provide technical support to MegaLinkduring regular business
hours: Monday - Friday, 9:00 A.M. to 6:00 P.M.
On-call Client support will be available 24/7.
3.3 TelUPay KEY PERSONNEL
TelUPay will provide key personnel or helpdesk team with different escalation
levels as the primary contact points for the counterpart key personnel provided
by MegaLink for various concerns as indicated in the 'Client Key Personnel' part
of this SLA.
In case the personnel assigned for the first escalation priority is not
available or cannot be contacted for some reason, MegaLink can move up the
escalation priority list.
Should there be a change of key personnel from TelUPay, TelUPay will communicate
the change to MegaLink immediately to ensure proper turnover.
Key Personnel
Level of Support
Severity level
Project Role
Contact Information
Lhalaine Galicia
1st
4th
Quality Assurance (QA) Team
Email:
lhaine.galicia@telupay.com
Mobile: +63 920 5581316
Office: (+632) 6597595 or (+632) 8460709
Aljo Fabro
2nd
3rd
Lead Programmer
Email:
aljo.fabro@telupay.com
Mobile: +63 927 9848173
Marlon Portugal
3rd
2nd
Assistant Project Manager
Email: marlon.portugal@telupay .com
Mobile: +63 917 8535416
Adrian Ocampo
4th
1st
Project Manager
Email: adrian.ocampo@telupay .com
Mobile: +63 920 9385001
The TelUPay Helpdesk Team will respond to service incidents that affect the
business based on the following metrics on Severity level.
3.3.1 Issue Resolution Targets
Severity
Response
Time
Target system
restore time
(workaround)
Target Resolution
Status Call
Severity 1
Immediate
Within 2 hours after issuing response
1 business day after issuing response
Every 2 hrs after restore time
Severity 2
12 hours after ticket report
24 hours after issuing response
1 - 2 business days
Every 4 hrs
Severity 3
24 hours after ticket report
1-2 business days after issuing response
5 - 10 business days
Every 4 hrs
Severity 4
1-2 days after ticket report
2-3 business days after issuing response
Upon closure
3.4 SEVERITY LEVEL DESCRIPTION
Severity Level can be defined based on the following description:
Severity Level
Description
Severity 1: Urgent
MBS or its significant elements are not functioning. All or part of the
activities connected to MBS, excluding dependencies from third-party service
providers and other projects of Megalink that uses the functionalities of MBS,
are not functioning or functioning with the performance that makes it unusable.
During SEVERITY ONE incidences, MBS ceases to function and Business cannot
continue.
Severity 2: Major
MBS or its significant elements are functioning at partial capacity which
hampers the functioning of all or part of the activities connected to MBS,
excluding dependencies from third-party service providers and other projects of
Megalink that uses the functionalities of MBS.
During SEVERITY TWO incidences, major elements of MBS cease to function making
the operations of MBS slow and non-productive.
Severity 3: Minor
MBS or its significant elements are exhibiting errors that have minor influence
on all or part of the activities connected to MBS, excluding dependencies from
third-party service providers and other projects of Megalink that uses the
functionalities of MBS.
During SEVERITY THREE incidences, all business functions are working as
required, but at a slower performance output.
Severity 4: Trivial
MBS or its significant elements are exhibiting errors that do not have direct
influence on all or part of the activities connected to the MBS.
During SEVERITY FOUR incidences e.g. aesthetic errors all business functions are
working as required and there is no impact on the operations of MBS.
3.5 PROBLEM MANAGEMENT
Problem Management is structured to address the causes of incidents which pose
the greatest risk. The main goal of problem management activities is to
ascertain the root causes of incidents and to minimize their impact on the
business operations of MegaLink (and hence eliminating repeat problems).
TelUPay shall manage all issues and escalate them in the proper manner to
achieve its resolution according to the metrics described in Table 3.3.1 Issue
Resolution Targets.
3.6 INCIDENT MANAGEMENT
The TelUPay Helpdesk Team will respond to each service incidents/issues reported
that affects the continuity of the business operation. Issues are received by
both TelUPay and MegaLinkin the form of a ticket created in the TelUPay web base
Bug Tracking System (BTS).
BTS is accessible through the following URL Link:
https://bugtrack.telupay.com
Issues are categorized according to its type (i.e. Architectural, Software,
Application, Data Input and Change Request) and assessed its severity to
determine the cause of the interruption.
As soon as any issues occur, the problem is cross-referenced to a database of
known errors in the TelUPay Bug Tracker. If it is identified as a known error,
the appropriate patch shall be applied and tested to be closed subject to
confirmation of the issue owner. Errors which do not have an existing match in
the database of the TelUPay Bug Tracker shall be automatically assigned to a
TelUPay Key Personnel for corresponding actions.
3.7 PROBLEM ESCALATION WORKFLOW
The diagram below represents the flow of resolution levels that MegaLinkwill
follow upon receipt of problem and shall assume the following conditions:
MegaLink has its own escalation procedure and problem isolation protocol to
diagnose that the problem lies within the application (MBS).
Problems/ Issues should be created as a ticket in the TelUPay Bug Tracker.
Only assigned key personnel from both TelUPay and MegaLink will report, assess
and update the problem/issue in the TelUPay Bug Tracker.
[image462.jpg]
3.8 PROBLEM ESCALATION PROCESS:
1. MegaLink representative reports issues through the TelUPay Bug Tracker in
the form of a ticket. Issues are categorized according to its type and assessed
according to its severity.
2. TelUPay Quality Assurance (QA) will cross-reference reported issue if there
exists a record on the TelUPay Bug Tracker. If so, the new incident will either
be closed or tagged as a child issue with reference to the existing one.
However, if the known error doesn't match any existing ticket, it will be
assigned to key personnel (Project Manager (PM); Developer) for corresponding
solutions.
a. Project Manager - Change request and uncontrolled variables.
b. Developer - Bug fixes.
3. Key Personnel will re-asses ticket. If issue can be replicated, resolution
or fixes will be applied. However, if the issue forwarded cannot be replicated,
ticket will be re-assigned to the MegaLink representative for re-evaluation or
closing.
4. Fixed ticket will be forwarded to QA for regression testing.
5. If ticket has passed the testing, QA will forward ticket to PM. If not,
ticket will be re-assigned to the Key Personnel for re-fixing.
6. PM will tag ticket as resolved , if verified successful. If not, ticket
will be re-assigned to the QA.
7. MegaLinkwill re-test issue and if confirmed resolved, will tag ticket as
closed. However, if still not addressed, will re-assign issue to QA for possible
resolution until MegaLinkwill tag it solved.
3.9 SOFTWARE MAINTENANCE
During the term of the Agreement, TelUPay will provide software maintenance
services only for the MBS installed in MegaLink's premises, third party
solutions and/or peripherals shall not be covered in this or any other section
of this SLA.
TelUPay shall carry out the following tasks as part of the Software Maintenance:
-
If appropriate, TelUPay shall develop, deliver and, with the prior consent of
MegaLink, install a Patch for the purposes of rectifying Faults.
-
TelUPay shall ensure that each Patch is backwards compatible.
-
TelUPay shall publish technical notes and reports to inform MegaLink about
faults caused bySoftware Defects (generic and specific), and deliver these to
MegaLink.
-
Where a Patch:
includes an amendment to the current Release or the provision of new software to
form part of the current Release; and
is provided to correct software to MegaLink,
-
TelUPay shall deliver to MegaLink, with the Patch, two copies of any amendments
details that reflect the provision of the Patch.
-
Immediately upon correction of a fault through the installation of a Patch (or
other Software correction) TelUPay shall deliver to MegaLink appropriate
amendments to the documentation specifying the nature of the correction and
providing instructions for the proper use of the corrected software.
-
TelUPay shall provide MegaLink with all assistance reasonably required by
MegaLink to enable MegaLink to implement the use of any corrected version of the
patch correction Release.
-
TelUPay shall appropriately test each Patch that is delivered under this
AgreementContract. These tests shall include, as a minimum, tests which
demonstrate that the fault has been resolved and that the performance of the
current patch Release has not deteriorated as a result of the correction.
-
Promptly following installation of the patch, TelUPay shall certify to The
Client that such tests have been carried out and passed.
-
TelUPay shall install each corrective patch:
on the dates agreed between TelUPay and MegaLink; and
at no additional cost to MegaLink;
4 CHANGE ORDERS
4.1 MEGALINK'S RIGHT TO VARY
MegaLink may issue a Change Order, to TelUPay requesting TelUPay to alter,
amend, omit, add to or otherwise vary any part of the system. TelUPay shall not
vary or alter any part of the system, except in accordance with a Change Order
from MegaLink and mutually agreed by the both Parties.
4.2 RECOMMENDATION FROM TELUPAY
TelUPay may propose recommendations to MegaLink at any time to improve any part
of the system. TelUPay shall not vary or alter any part of the system, except in
accordance with a Change Order from MegaLink and mutually agreed by the both
Parties.
4.3 CHANGE ORDER PROCEDURE
In the event that one Party wishes to alter, amend, omit, add to or otherwise
vary any part of the system, such Party may issue a written notice to the other
Party informing of such intention and the variation required. As soon as
possible after having received such notice, TelUPay shall submit to MegaLink:
a. a description of work, if any, to be performed and a programme for its
execution;
b. TelUPay's proposals for any necessary modifications or to any of TelUPay's
obligations under theAgreement;and
c. Pricing considerations, if any.
Following the receipt of TelUPay's submission, both Parties shall discuss and
decide as soon as possible whether or not the variation shall be carried out.
TelUPay may claim an extension of time if it is delayed or will be delayed in
completing the scope as a result of any Change Order, provided always, TelUPay
shall provide full particulars to substantiate the basis of the claim.
Upon mutual agreement on the content, the Parties shall sign the Change Order.
4.4 TELUPAY TO PROCEED
Upon approval of a Change Order, TelUPay shall proceed to carry out the
variation and be bound pursuant to the terms and conditions of theAgreementin so
doing, as if such variation was stated in this Agreement.
5 SERVICE LEVEL REVIEW AND REPORTING
5.1 REPORTS
TelUPay shall provide a weekly summary report via email to ensure that no issue
has been left unresolved and the service level agreement is met on all the
agreed issues/problems.
The weekly summary report shall include statistics on how many issues have been
reported, resolved and still open among others. This report should be available
for printing from the TelUPay Bug Tracker to include history for the past 90
days.
5.2 Service Review Meeting
As services and technologies change, the SLA may change to reflect the
improvements and/or changes. This SLA will be reviewed every six months and
updated as necessary. When updates are deemed necessary, MegaLink will be asked
to review and approve the changes. In the absence of the completion of a review,
the current SLA will remain in effect.
Reviews of the service will be jointly conducted by both Parties quarterly or,
right after a Severity One outage as defined in the 'Severity Level' part of the
'Problem Management' section of this SLA or, after any enhancement or
customization as indicated in Section 4under the Change Order Process.
6 GOVERNANCE BODY
6.1 PARTICIPANTS AND OBJECTIVES
Participants to the Governance Body will be senior TelUPay and MegaLink
representatives not directly involved on the day to day operations. The
Governance Body may require key personnel from both Parties to provide
information related to the matters that will be discussed during the governance
meetings.
Composition
TelUPay
MegaLink
Executive Level
Operations Director
Business Level
Key Account Manager
Technical Level
Chief Technical Officer
6.2 OBJECTIVE OF THE GOVERNANCE BODY
The following are the Governance Body's objectives:
a. To serve a main escalation level,if needed;
b. To get and ensure management awareness on system performance versus service
levels;
c. To ensure both Parties' objectives are aligned and that any strategic move
of any of the Parties directly impacting the system and its operation is
properly communicated and analysed;
d. To ensure MegaLink and TelUPay share a common view on commercial and
marketing status;
e. To recommend changes on the scope of the SLA;
f. To approve or disapprove Change Orders as stated in Section
3.
6.3 FREQUENCY OF GOVERNANCE MEETING
During the launching period of the service, the Governance Body's meeting
frequency will be monthly.
After an initial period of six months, the proposed frequency will be quarterly
unless otherwise requested by MegaLink.
All meetings of the Governance Body will be documented. Minutes of each meeting
will be jointly verified and agreed within seven days. All decisions of the
Governance Body shall be by majority.
ANNEX C
MEGALINK MEMBERS
Banco de Oro Universal Bank
Cooperative Rural Bank of Bulacan
Country Rural Bank of Taguig
ENCASH
G-Xchange
GSIS Family Bank
MASS-SPECC Cooperative Development Center
Microfinance Maximum Savings Bank
NATCCO
One Network Bank
Pacific Ace Savings Bank
Planters Development Bank
Queen City Development Bank
Union Bank of the Philippines
United Coconut Planters Bank
ANNEX D
TELUPAY SERVICES
Availability
MOBILE BANKING SERVICES:
Transaction Type:
Balance Inquiry
Upon Production
Bills Payment
Funds Transfer:
Intra Bank (Own Account)
Upon Production
Inter Bank (IBFT)
Requests:
Checkbook
2 Months after Production
Statement
Load Fulfillment
Upon Production
Mobile Banking History
Mobile Application Program
Symbian (Java)
Upon Production
2 Months after Production
Android
iOS
Blackberry
Others
SIMS SERVICE
Upon Production
AIRTIME PROVIDER
Mobile Banking:
Globe and Touch Mobile (TM)
Upon Production
Smart and Talk n
' Text
Sun
MegaLink Channels
(e.g. ATM, POS, Internet):
Sun
1 Month after Production
MOBILE COMMERCE
Timetable to be agreed by both parties
|
Title: Caught neighbor stealing my packages on camera, lazy Property Manager won't do anything
Question:First, thanks in advance for taking the time to read my issue.
So I've had a few packages delivered from Amazon or other big companies that have been verified delivered by the shipping companies that weren't there when I got home. So I bought security cameras, and set them up to view my garage door, and my front door. I continued buying things online, and sure enough, the first package that gets put by my garage gets stolen by my next door neighbor (I live in connected condominiums).
So I call the cops, show them the video, and eventually he gets arrested.
Our lease agreement states that ANY illegal activity by a resident or their guest, is grounds for immediate eviction. Which is something we absolutely want done, especially my gf who is now scared to be living next to such a person. So I contacted the property manager immediately and tell her everything, and she pretty much blows me off and says "ok, what do you want me to do about it?" I said I want them evicted. She says she can only evict them once a conviction is made and that could take years. She's pretty much trying to scare me off from going through with it so she doesn't have to do her job.
The thing is, the lease agreement we signed does not state anything about conviction being necessary. Only that any illegal activity results in eviction.
And on top of that, he isn't on the lease at his home, only his gf. He couldn't be put on because he has prior felonies and she wouldn't have been approved. The lease also states anyone living in the house for more than 7 days in a month needs to be put on the lease. Which means they are breaking that part also.
So my next move is to either call corporate office and see what happens or get a lawyer to make them uphold the contract we signed.
Any advice on what to do it very much appreciated!
Answer #1: They don’t have to kick him out. You cannot make them. |
Title: Being threatened with Libel suit HELP USA NJ
Question:I need to give a little information before I can ask my questions. I have tried to summarize as best as possible. I feel the back story is needed to answer the question.
I lost my oldest child earlier this year. He was driving into town when he was hit by a drugged driver. He was not wearing his seat belt and died at the scene.
The asshole that killed him was high AF on bupe? and xanax. The police did an accident reconstruction the day of the accident and it only took them 6 hours to determine what happened. The asshole who killed my kid has been charged two times. Once about 2 months ago for gross negligent death resulting and just recently for DUI drugs death resulting. The guy who caused the accident HASN'T EVEN BEEN IN JAIL ONCE! At the first arraignment he just walked into the court house, no hand cuffs or ANYTHING. The judge released him on the condition that he not drive(WTF?). At the second arraignment we had a new judge and a new prosecutor. The prosecutor asked for 50k bail but it was DENIED! They again released him this time with more conditions. I have been telling people to let the prosecutor know that the guy is violating his conditions, even if he is not. I did this after his first arraignment.
I have a reporter friend who has been covering this case. I help him write articles about the guy who killed my kid. I am not a good writer so I mostly just give my friend ideas. So for example on the last article we wrote, to make the guy look bad, we made some stuff up and also quoted people in such a way that it makes the guy look bad. Turns out this guy was a CI. The prosecutor outed him in open court at his last arraignment. So we wrote about that of course we quoted the prosecutor but not exactly.
Again at his last arraignment the prosecutor brought up that she had been hearing that the guy had been violating his conditions, but that she had no proof of this. We included this in our last article as well. Again we quoted what the prosecutor said, even though she had no proof. I have tried to get other newspapers to publish our articles but they won't.
Well yesterday my friend got an e mail from the asshole saying that he intends to sue for libel. He says we are the only newspaper that publishes news articles purposely tailored to make him look bad. He also said that we are putting his life in danger because we are the only newspaper that reported he was a CI.
I don't have enough money for a lawyer but he says he knows I've been helping my friend write articles. Does he have a leg to stand on as far as a libel suit goes?
RIP buddy, im trying but its hard.
Answer #1: You do realize you just admitted in detail to committing intentional libel? Delete this and get a lawyer. Jesus Christ.Answer #2: Your friend is the editor of an actual newspaper and knowingly publishes stories based on made up information?
Yes, you can be sued here, you can be sued for anything. |
LAWLER & ASSOCIATES 11622 El Camino Real, Suite 100 San Diego, California, 92130 Telephone: 888-675-0888 Facsimile: 866-506-8877 W. Scott Lawler, Esp. Admitted in California Thursday, May 14, 2009 Sent Via Edgar SECURITIES AND EXCHANGE COMMISSION Division of Corporation Finance, Chief Accountant Attn.: Anne Nguyen Parker RE:Pana-Minerales S.A. (“Pana-Minerales”) (File No.: 333-154218) Dear Ms.
|
REVOLVING CREDIT NOTE
$25,000,000
October __, 2007
acknowledged, HOUSE OF TAYLOR JEWELRY, INC., a Nevada corporation (“Borrower”),
hereby promises to pay to the order of NEW STREAM SECURED CAPITAL, L.P., a
Delaware limited partnership (“Lender”) at its offices located at 38C Grove
Street, Ridgefield, Connecticut 06877, or at such other place as Lender may
America and in immediately available funds, the amount of TWENTY-FIVE MILLION
DOLLARS and NO CENTS ($25,000,000), or such greater or lesser amount as shall be
advanced by Lender from time to time, together with interest on the unpaid
balance of such amount from the date of the initial Revolving Credit Advance.
This Note is the Revolving Credit Note issued under the Loan and Security
Agreement among Borrower, the other Credit Party signatories thereto and Lender
of even date herewith (said agreement, as the same may be amended, restated or
supplemented from time to time, being herein called the “Agreement”) to which a
evidenced hereby. Capitalized terms not defined in this Note shall have the
respective meanings assigned to them in the Agreement. This Note is secured by
the Agreement, the other Loan Documents and the Collateral, and is entitled to
the benefit of the rights and security provided thereby.
Interest on the outstanding principal balance under this Note is payable at the
Revolving Credit Rate, or, under the circumstances contemplated by the
Agreement, at the Default Rate, in immediately available United States Dollars
at the time and in the manner specified in the Agreement. The outstanding
principal and interest under this Note shall be immediately due and payable on
the Commitment Termination Date. Payments received by Lender shall be applied
against principal and interest as provided for in the Agreement. Borrower
acknowledges that (a) Lender is authorized under the Agreement to charge to the
Revolving Credit Loan unpaid Obligations of Borrower to Lender, (b) the
principal amount of the Revolving Credit Loan will be increased by such amounts,
and (c) the principal, as so increased, will bear interest as provided for
Lender’s taking possession or control of, or to Lender’s replevy, attachment or
or consumer purpose.
Borrower agrees to pay to Lender all Fees and expenses described in the
Agreement.
BORROWER ACKNOWLEDGES THAT BORROWER HAS WAIVED THE RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ON THIS NOTE. THIS NOTE IS GOVERNED BY THE LAW OF THE STATE
OF CONNECTICUT.
By:
Name:
Title:
879712.3
Revolving Credit Note - HOTJ
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Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF ISSUER PURSUANT TO SECTION 13a-16 or 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of: June, 2007 Commission File Number: 033-80178 TEMBEC INDUSTRIES INC. (Exact name of the registrant as specified in its charter) QUEBEC, CANADA (Jurisdiction of Incorporation or Organization) 800 René-Lévesque Boulevard West, Suite 1050 Montréal, Québec H3B 1X9 (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-F ¨ Form 40-F þ 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 þ If "Yes" is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): N/ A SIGNATURE 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. June 15, 2007 TEMBEC INDUSTRIES INC. (signed) Antonio Fratianni Antonio Fratianni Vice President, General Counsel and Secretary List of Exhibits Exhibit Description 99.1 Amended and Restated Financing Agreement First Amending Agreement
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Name: Commission Regulation (EEC) No 2506/84 of 31 August 1984 fixing the import levies on syrups and certain other products in the sugar sector
Type: Regulation
Date Published: nan
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UNITED STATES
SECURITIESAND EXCHANGE COMMISSION
Washington, DC 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934 February 15, 2011 Barclays PLC and
Barclays Bank PLC (Names of Registrants) 1 Churchill Place
London E14 5HP England (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-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
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
This Report is a joint Report on Form 6-K filed by Barclays PLC and Barclays Bank PLC. All of the issued ordinary share capital of Barclays Bank PLC is owned by Barclays PLC.
This Report comprises:
Information given to The London Stock Exchange and furnished pursuant to General Instruction B to the General Instructions to Form 6-K.
EXHIBIT INDEX Disclosure of compensation outcomes and practices - February 15, 2011 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BARCLAYS PLC (Registrant)
Date: February 15, 2011 By: /s/ Patrick Gonsalves Patrick Gonsalves Deputy Secretary BARCLAYS BANK PLC (Registrant) Date: February 15, 2011 By: /s/ Patrick Gonsalves Patrick Gonsalves Joint Secretary 15 February 2011 Barclays PLC Barclays expands disclosure of compensation outcomes and practices Barclays has today released additional detail on its revised compensation framework alongside its Preliminary Results Announcement. This recognises the significant interest in bank compensation. Aggregate 2010 performance awards have been reduced as a result of a number of factors, including Barclays commitments in the context of Project Merlin. Barclays pay practices and outcomes are fully compliant with the FSA's revised Remuneration Code. Notwithstanding a 32% increase in 2010 Group profit before tax, and a 2% increase in Barclays Capital profit before tax excluding own credit, 2010 performance awards were down relative to 2009: · at a Grouplevel by 7%; · at a Barclays Capital level by 12%. Total performance awards for UK-based staff were down broadly in line. These performance awards include all elements that relate to 2010 performance, excluding salaries and performance awards deferred from prior years, but including awards deferred to future years. They include other current year contractual awards (e.g., guarantees, commitments, commissions and new long term incentive plan awards). For the first time, Barclays has introduced a Contingent Capital Plan as a part of deferred compensation arrangements for all senior staff. Under the Plan: · payment of awards is deferred over three years and is only made if the Group's Core Tier 1 capital position at the point of vesting is at least 7%, the new Basel III regulatory minimum; · the interests of senior staff are directly aligned with shareholders and regulators by linking the payment of awards under the Plan to the Group's capital position; and · a potential capital buffer is created in a stress scenario through the potential for the vesting of Plan awards to be forfeited. Barclays has also expanded significantly the number of staff subject to 60% deferral of 2010 performance award beyond those required by the FSA's Remuneration Code. Detail of Executive Directors' remuneration will be disclosed in Barclays Annual Report, consistent with normal practice. Commenting on these revisions to Barclays compensation framework and outcomes today, Bob Diamond said: "We are committed to demonstrating that we are both responsible in our compensation decisions and practices and that we take our regulatory obligations and UK Government commitments seriously. In particular, our overall performance awards for 2010 have been directly influenced by the commitments that we have made under Project Merlin. In reaching our final decisions, we have had to balance carefully these obligations with our need to ensure that our decisions are commercial in a highly competitive global environment and with the requirements of our shareholders. We welcome the UK Government's commitment to ensure that London remains a leading financial centre and the competitiveness of the financial firms based in the UK, in particular by ensuring those firms are able to compete on a level playing field." In introducing Barclays 2010 Full Year Results today, Marcus Agius said: "The decisions embedded in today's results reflect the careful deliberation of the Board and, in particular, the Board Remuneration Committee. We believe, in the context of the Group's absolute and relative performance, they demonstrate clearly our responsibility and are fully compliant with the FSA's Remuneration Code." -ENDS- For further information please contact: Investor Relations Media Relations Stephen Jones Giles Croot +44 (0) 20 7116 5752 +44 (0)20 7116 6132 About Barclays PLC Barclays is a major global financial services provider engaged in retail banking, credit cards, corporate and investment banking and wealth management with an extensive international presence in Europe, the Americas, Africa and Asia. With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 147,000 people. Barclays moves, lends, invests and protects money for over 48 million customers and clients worldwide. For further information about Barclays, please visit our website www.barclays.com. APPENDIX Extract from Barclays PLC Preliminary Results Announcement 2010 Chris Lucas, Group Finance Director's Review: Staff costs increased 20% to £11.9bn (2009: £9.9bn), of which performance costs amounted to £3.5bn (2009: £2.8bn). Within this total, 2010 charges relating to prior year deferrals increased by £0.7bn relative to 2009. The Group 2010 performance awards (which exclude charges relating to prior year deferrals but include current year awards vesting in future years) were down 7% on 2009 at £3.4bn. Within this, the Barclays Capital 2010 performance awards were down 12% at £2.6bn, compared to an increase in headcount of 7%. Details of Performance Awards Group Barclays Capital FY 10 FY 09 Change FY 10 FY 09 Change £bn £bn % £bn £bn % Current year awards Forward deferrals 3 1 Total
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SECURITIES AND EXCHANGE COMMISSION Washington, D.C.20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 OR 15b-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month ofNovem ber 2015 Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (Exact name of Registrant as specified in its charter) CresudInc. (Translation of registrant´s name into English) Republic of Argentina (Jurisdiction of incorporation or organization) Moreno 877 (C1091AAQ) Buenos Aires, Argentina ( Address of principal executive offices) Form 20-F x Form 40-Fo 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 o No x CRESUD S.A.C.I.F.y A. (THE “COMPANY”) REPORT ON FORM 6-K Attached is an English translation of the letter datedNovember11, 2015 filed by the Company with the Comisión Nacional de Valores and the Bolsa de Comercio de Buenos Aires : By letter dated November 11, 2015 theCompany reported that in compliance with the regulations in force, please regard the following information for the three-month periods ended September 30, 2015 and 2014 as duly received: 09/30/2015 09/30/2014 In thousands of Pesos Net Income/(Loss) (three-month period) (361,760 ) 21,665 Gain / Loss attributable to: Company’s shareholders (292,151) (122,005) Non-controlling interests (69,609) 143,670 Shareholders’ Equity: Capital stock 495,015 487,929 Treasury shares 6,628 13,634 Comprehensive adjustment of capital stock 64,561 63,647 Comprehensive adjustment of treasury shares 864 1,778 Additional paid-in capital 659,464 773,079 Premium for trading of treasury shares 14,952 - Cost of treasury shares (32,198) (87,074) Share warrants 106,264 Changes in non-controlling interest 48,668 13,606 Conversion reserve 350,151 625,232 Reserve for share-based payments 83,719 82,097 Statutory reserve - 81,616 Reserve for new projects - 17,065 Special reserve - 633,940 Reserve for purchase of securities issued by the Company 32,198 200,000 Retained earnings (173,928) (1,188,433) Shareholders’ Equity attributable to controlling company’s shareholders 1,550,094 1,824,380 Non-controlling interest 2,258,916 2,593,976 TOTAL SHAREHOLDERS’ EQUITY 3,809,010 4,418,356 In compliance with Section o) of the referred Regulations, we report that as of the closing date of the financial statements, the Company’s capital stock was ARS 501,642,804, divided into 501,642,804 common, registered, non-endorsable shares of ARS 1 par value each and entitled to one vote per share. The Company’s principal shareholder is Inversiones Financieras del Sur S.A with 184,416,710 shares, accounting for 36.76% of the issued and subscribed capital stock. In addition, we report that as of September 30, 2015, after deducting Inversiones Financieras del Sur S.A.’s interest and the treasury shares, the remaining shareholders held 310,596,519 common, registered, non-endorsable shares of ARS 1 par value each and entitled to one vote per share, accounting for 61.9% of the issued and subscribed capital stock. Below are the highlights for the three-month period ended September 30, 2015: · Net loss for the first quarter of 2016 was ARS 361.8 million compared to income for ARS 21.7 million in the same period of 2015, mainly due to the change in the valuation method applied with respect to our subsidiary IRSA’s investment in IDB Development Corporation. · Profit from operations rose 12.5% in the quarter, mainly due to higher revenues and sales of investment properties derived from the urban segment, offset by lower profits from the agricultural segment. · During this quarter we made no sales of farmlands in the region. · We expect to plant approximately 176,000 hectares in the region. · Our subsidiary Brasilagro declared dividends for BRL 80.7 million (BRL/share 1.3977) that will become payable on November 13, 2015. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Buenos Aires, Argentina. Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria Novem ber12, 2015 By: /s/Saúl Zang Saúl Zang Responsible for the Relationship with the Markets
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Exhibit 10.53
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated November 19, 2008, between QUAKER CHEMICAL CORPORATION, a
Pennsylvania corporation (the “Company”), and Mark A. Featherstone (the
“Manager”),
Company; and
WHEREAS, the Manager and the Company entered into a Change in Control Agreement
dated June 10, 2004; and
WHEREAS, the Manager and the Company wish to amend and restate the Change in
Control Agreement to (i) reflect final regulations under Section 409A of the
Internal Revenue Code, and (ii) increase the multiple applicable to the
Manager’s benefits hereunder from one to one and one-half;
Company agree that the Change in Control Agreement is amended and restated, as
follows:
This Agreement shall become effective on January 1, 2008 (the “Effective Date”),
and shall continue in effect through December 31, 2009, provided, however, that
year beyond December 31, 2009, and successive one-year periods thereafter,
unless, not later than eighteen (18) months (nine (9) months with respect to the
automatic extension that would otherwise begin on January 1, 2010) preceding the
calendar year for which the term would otherwise automatically extend, the
Company shall have given written notice to the Manager of intention not to
extend this Agreement for an additional year, in which event this Agreement
shall continue in effect until December 31 of the calendar year immediately
preceding the calendar year for which the term would have otherwise
automatically extended. Notwithstanding any such notice not to extend, if a
Change in Control (as defined in Section 2) occurs during the original or
extended term of this Agreement, this Agreement shall remain in effect after a
Change in Control until all obligations of the parties hereto under this
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Person who, within the one year prior to the event which would otherwise be a
Change in Control, is an executive officer of the Company or any group of
Persons of which he voluntarily is a part), is or becomes the “beneficial owner”
of the Company’s then outstanding securities or such lesser percentage of voting
power, but not less than 15%, as determined by the members of the Board of
Directors of the Company who are independent directors (as defined in the New
York Stock Exchange, Inc. Listed Company Manual); provided, however, that a
Change in Control shall not be deemed to have occurred under the provisions of
this subsection (a) by reason of the beneficial ownership of voting securities
by members of the Benoliel family (as defined below) unless and until the
beneficial ownership of all members of the Benoliel family (including any other
individuals or entities who or which, together with any member or members of the
Benoliel family, are deemed under Sections 13(d) or 14(d) of the Exchange Act to
constitute a single Person) exceeds 50% of the combined voting power of the
- 2 -
event the Manager has a Separation from Service under the circumstances
described in (a) below (a “Covered Termination”), provided the Manager executes
and does not revoke a Release (as defined below), if any, provided by the
Company.
(a) A Covered Termination shall have occurred in the event the Manager’s
employment with the Company or its affiliates is terminated within two (2) years
following a Change in Control by:
below), or (ii) by the Company or its affiliates for Cause. In the event the
Manager’s employment is terminated for any reason prior to a Change in Control,
the Manager shall have no rights to any payments or benefits under this
Agreement and, after any such termination, this Agreement shall be of no further
force or effect.
(ii) dishonesty, fraud, willful malfeasance, gross negligence, or other gross
his position.
any applicable regulations thereunder.
“Disability” shall mean covered total and permanent disability as defined in the
long-term disability plan maintained by the Company for employees generally or,
if the Company does not maintain such a plan, the long-term disability plan most
recently maintained by the Company for employees generally.
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(v) the Manager being required to accept a primary employment location which is
more than twenty-five (25) miles from the location at which he primarily was
employed during the ninety (90) day period prior to a Change in Control.
“Payment Date” shall mean the 60th day after the Manager’s Separation from
Service, subject to Section 9.
under the terms of this Agreement, under any employment agreement between the
Manager and the Company, or under any plans or programs of the Company under
which the Manager has accrued a benefit) that the Company provides to the
Manager no later than three days after the date of the Manager’s Covered
Termination. Notwithstanding any provision of this Agreement to the contrary, if
the Company provides a Release to the Manager, the Manager shall not be entitled
to any payments or benefits under this Agreement unless the Manager executes the
Release within 45 days of the later of the date he receives the Release or the
date of his Covered Termination, and the Manager does not revoke the Release.
“Separation from Service” shall mean the Manager’s separation from service with
the Company and its affiliates within the meaning of Treas. Reg. §1.409A-1(h) or
any successor thereto.
“Specified Employee” shall mean the Manager if he is a specified employee as
defined in Section 409A of the Code as of the date of his Separation from
Service.
(a) Amount of Severance Allowance. In the event of a Covered Termination, the
Company shall pay or cause to be paid to the Manager in cash a severance
allowance (the “Severance Allowance”) equal to one (in the event the Covered
Termination occurs before January 1, 2009) or one and one-half (in the event the
Covered Termination occurs after December 31, 2008) times the sum of the amounts
determined in accordance with the following paragraphs (i) and (ii):
- 4 -
the Manager in the Applicable Three-Year Period under all applicable annual
incentive compensation plans maintained by the Company and its affiliates (other
than compensation relating to relocation expense; the grant, exercise, or
settlement of stock options, restricted stock or performance incentive units or
the sale or other disposition of shares received upon exercise or settlement of
such awards); provided, however, that (x) in determining the average amount paid
under the annual incentive plan during the Applicable Three-Year Period there
plan, a Change in Control, or a similar occurrence. The Applicable Three-Year
Period shall be (A) if the Manager has received an annual incentive compensation
plan payment in the calendar year of his Covered Termination, the calendar year
in which such Covered Termination occurs and the two preceding calendar years,
or (B) in any other case, the three calendar years preceding the calendar year
in which the Manager’s Covered Termination occurs; provided, however, that the
Applicable Three-Year Period shall be determined by substituting “Change In
Control” for “Covered Termination” if such substitution results in a higher
amount under this subsection (ii).
hereunder.
Manager in a lump sum on the Payment Date if the applicable Change in Control is
successor thereto). In any other case, the Severance Allowance shall be paid
(i) if the Covered Termination occurs before January 1, 2009, in twelve monthly
installments commencing on the Payment Date, each of which is equal to
one-twelfth (1/12th) of the amount of the Severance Allowance determined under
Section 4(a), or (ii) if the Covered Termination occurs after December 31, 2008,
in eighteen monthly installments commencing on the Payment Date, each of which
is equal to one eighteenth (1/18th) of the amount of the Severance Allowance
determined under Section 4(a), which are treated as a right to a series of
(a) Outplacement. Subject to Section 6, for a period of one year following a
Covered Termination of the Manager, the Company shall make or cause to be made
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(b) Welfare Benefits. Subject to Section 6, for a period of twelve months (in
the event the Covered Termination occurs before January 1, 2009) or eighteen
months (in the event the Covered Termination occurs after December 31, 2008)
following a Covered Termination of the Manager, the Manager and the Manager’s
dependents shall be entitled to participate in the Company’s life, medical, and
dental insurance plans at the Company’s expense, in accordance with the terms of
such plans at the time of such Covered Termination as if the Manager were still
employed by the Company or its affiliates under this Agreement. If, however,
life, medical, or dental insurance benefits are not paid or provided under any
such plan to the Manager or his dependents because the Manager is no longer an
employee of the Company or its subsidiaries, the Company itself shall, to the
extent necessary, pay or otherwise provide for such benefits to the Manager and
his dependents.
6. Effect of Other Employment.
the date of such employment. For the purposes of this Section 6, the Manager
provided for herein.
7. Other Payments and Benefits.
On the Payment Date, the Company shall pay or cause to be paid to the Manager
the aggregate of: (a) the Manager’s earned but unpaid base salary through the
Covered Termination at the rate in effect on the date of the Covered
Termination, or if higher, at the rate in effect at any time during the 90-day
period preceding the Change in Control; (b) any unpaid bonus or annual incentive
payable to the Manager in respect of the calendar year ending prior to the
Covered Termination; (c) the pro rata portion of any and all unpaid bonuses and
annual incentive awards for the calendar year in which the Covered Termination
occurs, said pro rata portion to be calculated on the fractional portion (the
numerator of said fraction being the number of days between January 1 and the
date of the Covered Termination, and the denominator of which is 365) of the
target bonuses or annual incentive awards for such calendar year; and (d) the
pro rata portion of any and all awards under the Company’s long term incentive
plan for the performance period(s) in which the Covered Termination occurs, said
pro rata portion to be calculated on the fractional portion (the numerator of
said fraction being the number of days between the first day of the applicable
performance period and the date of the Covered Termination, and the denominator
of which is the total number of days in the applicable performance period) of
the amount of the award which would have been payable had (i) the Covered
Termination not occurred, and (ii) the target level of performance been achieved
for the applicable performance
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period. The Manager shall be entitled to receive any other payments or benefits
that the Manager is entitled to pursuant to the express terms of any
compensation or benefit plan or arrangement of the Company or any of its
affiliates; provided that: (x) the Severance Allowance (i) shall be in lieu of
any severance payments to which the Manager might otherwise be entitled under
the terms of any severance pay plan, policy, or arrangement maintained by the
Company or the employment agreement, if any, between the Manager and the
Company, and (ii) shall be credited against any severance payments to which the
Manager may be entitled by statute; (y) any annual incentive described in
subsection (b) or (c) shall decrease (or shall be decreased by), but not below
zero, the amount of the annual incentive payable (or paid) with respect to the
same calendar year under the Company’s annual incentive plan (currently the 2001
Global Annual Incentive Plan); and (z) any amount described in subsection
(d) shall decrease (or shall be decreased by), but not below zero, the amount of
the analogous performance award payable (or paid) with respect to the same
performance period(s) under the Company’s long term incentive plan(s) (currently
the 2006 Long-Term Performance Incentive Plan).
8. Death After Covered Termination.
payments due to the Manager under Section 4 and the first sentence of Section 7
spouse and dependents shall be eligible for the welfare benefits described in
Section 5(b). Payments pursuant to subsection (a) shall be made on the later of
(i) the date payment would have been made to the Manager without regard to
Section 9, or (ii) the date of the Manager’s death.
9. Certain Section 409A Rules.
(a) Specified Employee. Notwithstanding any provision of this Agreement to the
contrary, if the Manager is a Specified Employee, any payment or benefit under
this Agreement that constitutes deferred compensation subject to Section 409A of
the Code and for which the payment event is Separation from Service shall not be
Manager’s Separation from Service. Any payment or benefit that is delayed
pursuant to this Section 9 shall be made or provided on the first business day
of the seventh month following the month in which the Manager’s Separation from
Service occurs. With respect to any cash payment delayed pursuant to this
Section 9, the first payment shall include interest, at the Wall Street Journal
Prime Rate published in the Wall Street Journal on the date of the Manager’s
Covered Termination (or the previous business day if such date is not a business
day), for the period from the date the payment would have been made but for this
Section 9 through the date payment is made. The provisions of this Section 9
shall apply only to the extent required to avoid the Manager’s incurrence of any
(b) Reimbursement and In-Kind Benefits. Notwithstanding any provision of this
Agreement to the contrary, with respect to in-kind benefits provided or expenses
eligible for reimbursement under this Agreement which are subject to
Section 409A of the Code, (i) the benefits provided or the amount of expenses
eligible for reimbursement during any calendar year
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shall not affect the benefits provided or expenses eligible for reimbursement in
any other calendar year, except as otherwise provided in Treas. Reg.
§1.409A-3(i)(1)(iv)(B), and (ii) the reimbursement of an eligible expense shall
be made as soon as practicable after the Manager requests such reimbursement
(subject to Section 9(a)), but not later than the December 31 following the
(c) Interpretation and Construction. This Agreement is intended to comply with
Section 409A of the Code and shall be administered, interpreted and construed in
accordance therewith to avoid the imposition of additional tax under
the Company.
distributor of specialty chemical products or chemical management services which
offered by the Company (or any of its affiliates);
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(ii) directly or indirectly recruit, solicit or encourage any employee of the
Company (or any of its affiliates) or otherwise induce such employee to leave
the employ of the Company (or any of its affiliates) or to become an employee or
otherwise be associated with his or any firm, corporation, business or other
entity with which he is or may become associated; or
thereby.
Except as provided in Section 6, the Company’s obligation to make the payments
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Agreement at any time during his lifetime, the Company shall pay (or the Manager
enforcement of his said rights (including those incurred in or related to any
arbitration proceedings provided for in subsection (a) and the enforcement of
any arbitration award in court), regardless of the final outcome.
(a) Definitions. For purposes of this Section 13, all terms capitalized but not
otherwise defined herein shall have the meanings as set forth in Section 280G of
the Code. In addition:
Section 280G(b)(2)(A) or Section 280G(b)(2)(B) of the Code (including, but not
limited to, any stock option rights, stock grants, and other cash and noncash
compensation amounts that are treated as payments under either such section) and
not excluded under Section 280G(b)(4)(A) or Section 280G(b)(6) of the Code;
(b) Limitation. Notwithstanding any other provision of this Agreement, Parachute
Payments to be made to or for the benefit of the Manager but for this subsection
(b), whether pursuant to this Agreement or otherwise, shall be reduced if and to
the extent necessary so that the aggregate Present Value of all such Parachute
Payments shall be at least one dollar ($1.00)
- 10 -
less than the greater of (i) three times the Manager’s Base Amount and (ii) the
aggregate Reasonable Compensation allocable to such Parachute Payments. Any
reduction in Parachute Payments caused by reason of this subsection (b) shall be
applied in the manner least economically detrimental to the Manager. In the
event reduction of two or more types of payments would be economically
equivalent, the reduction shall be applied pro-rata to such types of payments.
(c) Illegal Payments. Notwithstanding any other provision of this Agreement, no
payment shall be made hereunder to or for the benefit of the Manager if and to
the extent that such payments are determined to be illegal.
14. Notices.
15. Withholding.
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of laws.
(a) This Agreement supersedes the Change in Control Agreement entered into
between the Manager and the Company on June 10, 2004, which agreement shall be
null and void as of the Effective Date. Except for the change in control
provisions set forth in the Company’s annual incentive plan and long term
incentive plans, this Agreement represents the entire agreement and
Manager understands and acknowledges that the Company’s severance plan, annual
incentive plan and long term incentive plans are hereby amended with respect to
the Manager to avoid duplication of benefits, as provided in Section 7.
(b) The Company reserves the right to unilaterally amend this Agreement without
the consent of the Manager to the extent the Compensation/Management Development
Committee of the Company’s Board of Directors (in its sole discretion)
determines is necessary or appropriate to avoid the additional tax under
Section 409A(a)(1)(B) of the Code; otherwise, this Agreement may not be altered
or amended except by an agreement in writing executed by the Company and the
Manager.
20. Severability.
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21. Indemnification.
by the Manager in defending such a claim, action, suit or investigation or
criminal proceeding shall be paid by the Company in advance of the final
disposition thereof upon the receipt by the Company of an undertaking by or on
behalf of the Manager to repay said amount unless it shall ultimately be
determined that the Manager is entitled to be indemnified hereunder; provided,
however, that this shall not apply to a nonderivative action commenced by the
Company against the Manager.
MANAGER /s/ Mark A. Featherstone QUAKER CHEMICAL CORPORATION By: /s/ Michael
F. Barry Title: CEO & President
ATTEST: /s/ Irene M. Kisleiko
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Exhibit 10.4
FOLEY TRASIMENE ACQUISITION CORP. II
1701 Village Center Circle
August 21, 2020
1701 Village Center Circle
Ladies and Gentlemen:
Foley Trasimene Acquisition Corp. II (the “Company”) and continuing until the
Date”), Cannae Holdings, Inc. (“Cannae Holdings”) shall take steps directly or
situated at 1701 Village Center Circle, Las Vegas, NV 89134 (or any successor
location). In exchange therefore, the Company shall pay Cannae Holdings a sum of
$5,000 per month, respectively, on the Effective Date and continuing monthly
thereafter until the Termination Date. Cannae Holdings hereby agrees that it
Very truly yours, FOLEY TRASIMENE ACQUISITION CORP. II By: /s/
Michael L. Gravelle Name: Michael L. Gravelle Title: General Counsel and
Corporate Secretary
AGREED TO AND ACCEPTED BY: CANNAE HOLDINGS, INC. By: /s/ Michael L. Gravelle
Counsel and Corporate Secretary
2
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Exhibit 10.22
FIRST LOAN MODIFICATION AGREEMENT
This First Loan Modification Agreement (this "Loan Modification
Agreement") is entered into as of June 27, 2003, by and among (i) SILICON VALLEY
BANK, a California chartered bank, with its principal place of business at 3003
("Bank") and (ii) ASPEN TECHNOLOGY, INC., a Delaware corporation with offices at
(jointly and severally, individually and collectively, "Borrower")
January 30, 2003, evidenced by, among other documents, a certain Loan and
Security Agreement dated as of January 30, 2003 between Borrower and Bank, as
amended by a certain letter agreement dated February 14, 2003 (as amended, the
"Loan Agreement"). Capitalized terms used but not otherwise defined herein shall
Loan Documents".
in Section 6.2 of the Loan Agreement:
"Without limiting the generality of the foregoing, if on the Maturity Date, or
on any earlier effective date of termination, there are any outstanding Letters
of Credit issued by Silicon or issued by another institution based upon an
equal to 100% of the undrawn amount of all such Letters of Credit plus all
interest, fees and cost due or to become due in connection therewith, to secure
all of the Obligations relating to said Letters of Credit, pursuant to Silicon's
then standard form cash pledge agreement."
application, guarantee, indemnity or similar agreement on the part of Silicon or
any outstanding FX Contacts, then on such date Borrower shall provide to Silicon
(i) cash collateral in an amount equal to 100% of the undrawn amount of all such
Letters of Credit plus all interest, fees and cost due or to become due in
connection therewith, and (ii) cash collateral in an amount equal to 100% of the
amount of the FX Reserve plus all interest, fees and cost due or to become due
in connection therewith, to secure all of the Obligations relating to said
Letters of Credit and FX Contracts, pursuant to Silicon's then standard form
cash pledge agreement."
in Section 1 of the Schedule thereto:
" (ii) the following amount to be included at all times other than as of 12/31,
3/31, 6/30 and 9/30 of each calendar year: the lesser of (x) 50% of the current
portion of Borrower's long term domestic contract receivables that will be
billed within the following 90 days, but that are otherwise Eligible Receivables
hereunder or (y) $5,000,000.00; minus"
" (ii) (a) the following amount to be included at all times other than as of
12/31, 3/31, 6/30 and 9/30 of each calendar year: the lesser of (x) 50% of the
current portion of Borrower's long term domestic contract receivables that will
be billed within the following 90 days, but that are otherwise Eligible
Receivables hereunder or (y) $5,000,000.00; and (b) the following amount to be
included as of 12/31, 3/31, 6/30 and 9/30 of each calendar year: the lesser of
(x) 50% of the current portion of Borrower's long term domestic contract
receivables that will be billed within the following 90 days, but that are
otherwise Eligible Receivables hereunder or (y) $3,000,000.00 minus"
3.The Loan Agreement shall be amended by deleting the following text appearing
"Letter of Credit/FX Contract/Cash Management Services Sublimit
(Section 1.5, 1.6, 1.7): $11,000,000 (of which only $2,000,000 may be used for
FX Reserve)"
(Section 1.5, 1.6, 1.7): $11,000,000 (of which only $10,000,000 may be used for
FX Reserve, less any amounts used for FX Reserve pursuant to, and as defined in,
the Exim Agreement)"
4.The Loan Agreement shall be amended by deleting Section 5(a) of the Schedule
"a. Minimum Tangible Net Worth:
Borrower shall maintain, as of the last day of each month, to be tested
monthly, a Tangible Net Worth of not less than the sum of (i) plus (ii) below:
(i)
(a)from June 1, 2003 through and including June 30, 2003—$122,000,000
(b)from July 1, 2003 through and including July 31, 2003—$110,000,000
(c)from August 1, 2003 through and including August 31, 2003—$98,000,000
(d)from September 1, 2003 through and including September 30, 2003—$122,000,000
(e)from October 1, 2003 through and including October 31, 2003—$110,000,000
(f)from November 1, 2003 through and including November 30, 2003—$98,000,000
(g)from December 1, 2003 through and including December 31, 2003—$127,000,000
(h)from January 1, 2004 through and including January 31, 2004—$115,000,000
(i)from February 1, 2004 through and including February 29, 2004—$103,000,000
(j)from March 1, 2004 through and including March 31, 2004—$127,000,000
(k)from April 1, 2004 through and including April 30, 2004—$115,000,000
(l)from May 1, 2004 through and including May 31, 2004—$103,000,000
(m)from June 1, 2004 through and including June 30, 2004—$127,000,000
(n)from July 1, 2004 through and including July 31, 2004—$115,000,000
(o)from August 1, 2004 through and including August 31, 2004—$103,000,000
(p)from September 1, 2004 through and including September 30, 2004—$127,000,000
(q)from October 1, 2004 through and including October 31, 2004—$115,000,000
(r)from November 1, 2004 through and including November 30, 2004—$103,000,000
(s)from December 1, 2004 through and including December 31, 2004—$127,000,000
(t)from January 1, 2005 and thereafter—$115,000,000.
(ii)75% of all consideration received after the date hereof from proceeds from
the issuance of any equity securities of the Borrower (other than (i) the
issuance of stock options under Borrower's employee stock option plan or
(ii) stock purchases under Borrower's employee stock purchase plan) and/or
subordinated debt incurred by the Borrower (net of refinanced amounts of
existing subordinated debt and Preferred Series B shareholders)."
4. RELEASE OF HYPROTECH. Bank hereby releases Hyprotech Company, a
corporation organized under the laws of Nova Scotia, Canada ("Hyprotech") from
all obligations and liabilities under the Loan Agreement and each other Existing
Loan Document, including all Obligations. The Bank also hereby releases any and
all liens and encumbrances in favor of Bank on the assets of Hyprotech arising
under the Loan Agreement or any Existing Loan Documents. The Bank agrees to
promptly deliver to Hyprotech such termination statements, releases, requests
for reconveyances and such other documents as may be required to fully terminate
Bank's security interests in the assets of Hyprotech. From and after the date of
this Loan Modification Agreement, Hyprotech shall no longer be a "Borrower"
under the Loan Agreement or any Existing Loan Documents and the Loan Agreement
is hereby amended accordingly. In connection with such release, Hyprotech hereby
that if it now has, or ever did have, any offsets, defenses, claims, or
of them are hereby expressly WAIVED and Hyprotech hereby RELEASES Bank from any
liability thereunder.
Fifteen Thousand Dollars ($15,000.00), which fee shall be due on the date hereof
6. RATIFICATION OF NEGATIVE PLEDGE. Borrower hereby ratifies,
Negative Pledge Agreements each dated as of January 30, 2003 between Borrower
7. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby
contained in certain Perfection Certificates each dated as of January 30, 2003
and acknowledges, confirms and agrees the disclosures and information therein
has not changed, as of the date hereof.
10. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and
expressly WAIVED and Borrower hereby RELEASES Bank from any liability
thereunder.
writing.
12. COUNTERSIGNATURE. This Loan Modification Agreement shall
above.
BORROWER:
By:
/s/ CHARLES F. KANE
Name: Charles F. Kane Title: CFO
ASPENTECH, INC.
By:
Name: Lisa W. Zappala Title: CFO
BANK:
SILICON VALLEY EAST
By:
/s/ JOHN V. ATANASOFF
Name: John V. Atanasoff Title: Vice President
ACKNOWLEDGED AND AGREED AS TO PARAGRAPH NO. 4:
HYPROTECH COMPANY
By:
/s/ D. E. MOULT
Name: D. E. Moult Title: CFO
The undersigned, ASPENTECH SECURITIES CORP., a Massachusetts
corporation, ratifies, confirms and reaffirms, all and singular, the terms and
conditions of a certain Unlimited Guaranty dated January 30, 2003 (the
"Guaranty") and a certain Security Agreement dated as of January 30, 2003 (the
"Security Agreement") and acknowledges, confirms and agrees that the Guaranty
and Security Agreement shall remain in full force and effect and shall in no way
herewith.
ASPENTECH SECURITIES CORP
By: /s/ LISA W. ZAPPALA
Name: Lisa W. Zappala Title: Senior VP and CFO
QuickLinks
Exhibit 10.22
FIRST LOAN MODIFICATION AGREEMENT
|
Exhibit 10.2
LOGO [g21039img004.jpg]
INVENTORY SECURITY AGREEMENT
Seattle WA 98134
98015-0245.
COLLATERAL:
OBLIGATIONS SECURED:
agreement dated, November 9, 2006 executed and delivered by CLIENT to NFS/BANK
for $3,000,000.00 (The Maximum Purchase Amount)
for CLIENT
hereinafter set forth.
any interest therein.
replevined.
structure.
Page 1
therefrom;
EVENTS OF DEFAULT:
thereon;
surety for CLIENT.
between CLIENT and NFS/BANK referenced above, dated November 9, 2006.
RIGHTS UPON DEFAULT:
GENERAL PROVISIONS:
20.
taxes, liens, security interests, or
Page 2
other encumbrances at any time levied or placed on the Collateral; may place and
pay for insurance thereon; may order and pay for the repair, maintenance, and
preservation thereof; and may pay any necessary filing or recording fees. The
CLIENT agrees to reimburse NFS/BANK on demand for payment made or any expense
incurred by NFS/BANK pursuant to the foregoing authorization.
misconduct.
enforceable.
described herein.
DATED this 13th day November, 2006.
Tully’s Coffee Corporation
By:
/s/ KRISTOPHER S. GALVIN
Title:
Page 3 |
Exhibit CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 333-147944) of Procera Networks, Inc. of our report dated February 13, 2006, with respect to the financial statements of Procera Networks, Inc. for the year ended January 1, 2006 included in this Annual Report (Form 10-K) for the year ended December 31, 2007. /s/ Burr, Pilger, & Mayer LLP Palo
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Exhibit 10.5
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT (this “Agreement”), dated as of April 23, 2014 by and
between SUNSHINE BIOPHARMA, INC., a Colorado corporation (the “Company”), and
contained herein, the Investor shall invest up to two million five hundred
thousand dollars ($2,500,000) to purchase the Company's Common Stock with $0.001
par value per share (the “Common Stock”);
agree as follows:
1
“Commitment Shares” shall have the meaning specified in Section 12.
Agreement.
Registration Rights Agreement.
“Pricing Period” shall mean the five (5) consecutive Trading Days immediately
preceding the Put Notice Date.
Stock is listed.
2
“Purchase Price” shall mean ninety percent (90%) of the lowest daily VWAP (as
such date.
“Put Restriction” shall mean the ten (10) Trading Days after the Put Notice
Notice, unless first approved by Investor, in writing, in its sole discretion.
of this Agreement.
issuable hereunder.
of the Agreement.
3
Purchase Price of two million five hundred thousand dollars ($2,500,000).
“Put”). The Put Amount shall be up to one hundred thousand dollars ($100,000).
until ten (10) Trading Days after each Put Notice Date. The Common Stock
Purchase Price.
(C) SUSPENSION PRICE. In the event the Common Stock falls below ten cents
($0.10) per share (“Suspension Price”), the Company shall not be entitled to
deliver a Put to the Investor.
4
than two (2) Trading Days following the applicable date the Shares are delivered
for that Put, as outlined in this Section, by the Company to the Investor (each
a “Closing Date”). Within one (1) Trading Day following the Put Notice Date (I)
the Company shall deliver to the Investor pursuant to this Agreement,
representing the Securities and provided that the Company's transfer agent then
shall use all commercially reasonable efforts to cause its transfer agent to
Effective Date and if the Company fails to use commercially reasonable efforts
to cause its transfer agent to electronically transmit the Securities and
described above, as compensation to the Investor for such loss, the Company
1
$100
2
$200
3
$300
4
$400
5
$500
6
$600
7
$700
8
$800
9
$900
10
$1000
Over 10
5
Notice Date, the Company fails to deliver any portion of the Securities subject
subsequent purchasers, pursuant to transactions entered into before the Closing
be $1,000.
SECTION 3. INVESTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The Investor
6
period of time.
affected.
reasonably be expected to constitute a material adverse effect on the
Investor. The business of the Investor is not being conducted, and shall not be
7
liabilities.
(l) SHORT SALES. The Investor will not engage in any short sales with
respect to the Shares of Common Stock of the Company at any time during the Open
Period remain in effect, either directly or indirectly.
Documents, the Company represents and warrants to the Investor that:
and validly existing in good standing under the laws of the State of Colorado,
Company operates (so long as the Company is not disproportionately affected
8
shareholders.
Company consists of 200,000,000 shares of Common Stock with $0.001 par value per
share, of which as of April 23, 2014, 64,375,728 shares were issued and
with the SEC: (1) no shares of the Company's capital stock are subject to
9
respect thereto.
(D) ISSUANCE OF SHARES. The Company has reserved 13,000,000 Shares for issuance
practicable.
10
such Closing Date.
11
proceedings.
the SEC Documents or as disclosed by the Company to the Investor, there is no
12
13
Material Adverse Effect.
14
selling Common Stock during the ten (10) Trading Day immediately following each
Put Notice Date.
Agreement.
Date.
15
(F) RESERVATION OF SHARES. The Company shall reserve 13,000,000 Shares for the
person or entity.
16
to have liability.
17
SECTION 6. CONDITIONS OF THE COMPANY'S OBLIGATION TO SELL. The obligation
discretion.
funds constituting the Purchase Amount.
18
Date.
SECTION 7. FURTHER CONDITIONS OF THE INVESTOR'S OBLIGATION TO PURCHASE. The
19
approval pursuant to the requirements of Colorado law and the Company’s Articles
events:
(A) when the Investor has purchased an aggregate of two million five hundred
thousand dollars $2,500,000 in the Common Stock of the Company pursuant to this
Agreement; or,
20
Period; or,
the Investor.
SECTION 10. INDEMNIFICATION. In consideration of the parties’ mutual
person's agents or other representatives (including, without limitation, those
obtaining an injunction.
21
SECTION 12. LEGAL EXPENSES; COMMITMENT SHARES AND MISCELLANEOUS EXPENSES. Except
the Investor in connection with the preparation, negotiation, execution and
of any Securities. The Company shall issue to the Investor four hundred
thousand (400,000) Shares (“Commitment Shares”) to the Investor as an inducement
to enter this Agreement. The Commitment Shares shall be included in the
Registration Statement or in the event the Registration Statement is not
declared effective within six months of the date the issuance of the Commitment
Shares, they shall be eligible for resale under Rule 144, as promulgated. If the
Company is not DWAC eligible at the time of a Put Closing, there will be a
$2,000 charge on each Closing Date to cover costs associated with, but not
limited to: deposit costs, legal review fees and wire fees. If the Company is
DWAC eligible at the time of a Put Closing, there will be a $250 charge on each
Closing Date.
signature.
feminine.
22
Montreal, QC H3N 1R4
Boston, MA 02116
party. Subject to the preceding sentence, all of the terms, agreements,
partner.
23
transactions contemplated hereby.
Investor will not sell short any of the Company's common stock at any time
the Company.
24
By: /s/ Douglas H.
Leighton
Douglas H. Leighton
Managing Member of:
General Partner to:
By: /s/ Camille Sebaaly
Camille Sebaaly
Chief Financial Officer
25
LIST OF EXHIBITS
EXHIBIT C Put Notice
26
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
(Attached)
A-1
EXHIBIT B
OPINION OF COMPANY’S COUNSEL
(Attached)
B-1
EXHIBIT C
FORM OF PUT NOTICE
Date:
This is to inform you that as of today, SUNSHINE BIOPHARMA, INC. a Colorado
Investment Agreement entered into with Dutchess Opportunity Fund II, LP
(“Dutchess”) to require Dutchess to purchase shares of its common stock. The
misleading.
5. The amount of this put is up
to .
6. The Pricing Period runs
from until .
7. The current number of shares issued and outstanding as of the Company are:
8. The number of shares currently available for resale pursuant to the
[Company Name]
By:
Name:
Title:
C-1
EXHIBIT D
Date:
RE: SUNSHINE BIOPHARMA, INC.
Dear :
Pursuant to the Put given by SUNSHINE BIOPHARMA, INC. to Dutchess Opportunity
Fund, II, LP on 20__, we are now submitting the amount of common shares for you
Please deliver __________ shares to Dutchess Opportunity Fund, II, LP
immediately and send via DWAC to the following account:
XXXXXX
Company.
Regards,
Douglas H. Leighton
D-1
DATE
PRICE
Date of Day 1
VWAP of Day 1
Date of Day 2
VWAP of Day 2
Date of Day 3
VWAP of Day 3
Date of Day 4
VWAP of Day 4
Date of Day 5
VWAP of Day 5
LOWEST VWAP IN PRICING
PERIOD ____________________
PUT
AMOUNT
____________________
PURCHASE PRICE (NINETY PERCENT (90%))
____________________
AMOUNT OF SHARES
DUE ____________________
By: ____________________
Name: ____________________
Title: ____________________
D-2
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Name: Council Regulation (EEC) No 1143/76 of 17 May 1976 amending Regulation (EEC) No 2727/75 on the common organization of the market in cereals
Type: Regulation
Date Published: nan
19 . 5 . 76 Official Journal of the European Communities No L 130/ 1 I (Acts whose publication is obligatory) COUNCIL REGULATION (EEC) No 1143/76 of 17 May 1976 amending Regulation (EEC) No 2727/75 on the common organization of the market in cereals THE COUNCIL OF THE EUROPEAN COMMUNITIES, principal cereals, so that a better balance between the different types of production can be ensured on the basis of real market needs but without affecting producers' incomes ; whereas, to this end, the interven tion price for high-yield common wheat varieties of poor breadmaking quality should be brought into line with those for barley and maize ; whereas such common intervention level for all feed grains consti tutes the minimum level guaranteed to producers, above which market prices for these cereals should develop in accordance with their value for use in animal feed ; Whereas , on the other hand, the production of common wheat of good breadmaking quality should be encouraged by fixing a reference price the level of which should reflect the difference in return between the production of common wheat of breadmaking quality and that of common wheat of non-bread making quality ; whereas provision should be made that, if necessary, the development of market prices should be supported in relation to this level ; Whereas there should be sufficient difference between the target price, which determines the level of protec tion of the Community market, and the intervention price to ensure market fluidity and to balance excess production in surplus areas and shortages in deficit areas ; whereas , to attain this objective, target prices should be established taking into consideration , in addition to the element reflecting the cost of transport between the area having the largest surplus and that having the largest deficit, a market element reflecting the difference, recorded in a price structure deve loping under normal conditions in the production area having the largest surplus, between market prices and the price support level reflected in the reference price for common wheat and in the intervention prices for other cereals ; Whereas the reference price for common wheat of breadmaking quality should be included among those prices that are subject to monthly increases during the marketing year ; Having regard to the Treaty establishing the European Economic Community, and in particular Articles 42 and 43 thereof, Having regard to the proposal from the Commission , Having regard to the opinion of the European Parlia ment ('), Whereas the common organization of the market in cereals includes a single-price system for the Commu nity ; whereas this system provides, in particular, that a target price and a single intervention price must be fixed annually for each basic cereal , with the excep tion of common wheat for which provision is made for a basic intervention price from which are obtained various derived intervention prices ; Whereas this price system and the structure resulting from its application no longer represent the best means of attaining the objectives set out in Article 39 of the Treaty ; whereas, in particular, the aim of stabi lizing market prices , which is essential to ensure an equitable standard of living for the agricultural community concerned , has not been fully achieved as witnessed by the number of unusual intervention measures for certain cereals ; Whereas the system should therefore be reviewed ; whereas , in the light of experience gained with other cereals , regionalization for common wheat should be abolished and replaced by a single-price intervention system for the Community ; Whereas, moreover, in order to enhance the fluidity of the cereals market as a whole , a new structure should be set up for the fixing of intervention prices for the (') OJ No C .53 , 8 . 3 . 1976, p . 24 . No L 130/2 Official Journal of the European Communities 19 . 5 . 76 Whereas, in certain regions of the Community, parti cular circumstances may temporarily cause market prices to follow a trend other than in the rest of the Community ; whereas, to avoid large-scale interven tion in such regions, it should be possible to take, by way of prevention , particular intervention measures to relieve their markets for a given period ; whereas it should also be possible to take special intervention measures for common wheat of breadmaking quality where there is a risk that market prices no longer develop normally in relation to the level of the refer ence price ; Whereas, in view of the uniformity which should char acterize the Community market in cereals, the above mentioned particular and special intervention measures should be assessed and decided on from a Community viewpoint ; Whereas, in view of the radical nature of this review and in order to enable the market to adjust to it under optimum conditions, it should be possible to post pone, for the duration of the 1976/77 marketing year, the full application of the review, particularly the esta blishment of a price structure which fully complies with the new system ; Whereas, in view of the rise in the Community production of durum wheat, it is no longer justified to grant uniform aid to all procedures ; whereas , however, with a view to encouraging an increase in productivity and an improvement of the quality of this product, it should continue to benefit from aid ; whereas, however, such aid could be confined to certain regions and to durum wheat having certain qualitative and technical characteristics which make it suitable for the manufacture of pasta products ; Whereas, to avoid sales to intervention agencies of durum wheat which does not have the above characte ristics , provision should be made for additional condi tions of eligibility for intervention in respect of this cereal , a common single intervention price for common wheat, barley and maize, and a single intervention price for rye and durum wheat, a reference price for common wheat of bread making quality, a target price for common wheat, durum wheat and rye and a common target price for barley and maize . 2 . These prices shall be fixed for a standard quality to be determined for each of the above cereals . 3 . The single intervention prices shall be fixed for the Ormes intervention centre , which is the centre of the Community area having the greatest surplus for all cereals, at the wholesale stage, goods delivered at warehouse , before unloading. They shall be valid for all Community intervention centres designated for each cereal . The single intervention prices shall be valid from 1 August to 31 May of the following year. From 1 June to 31 July, the intervention prices valid for August of the marketing year in progress shall apply . 4 . The reference price for common wheat of breadmaking quality shall be calculated by adding to the common single intervention price for this product an amount reflecting the difference in return between the production of common wheat of breadmaking quality and that of common wheat of non-breadmaking quality. 5 . The target prices shall be fixed for Duisburg, which is the centre of the Community area having the greatest deficit for all cereals, at the wholesale stage, goods de'ivered at warehouse, before unloading. They shall be calculated by adding a market element and an element reflecting the cost of transport between the Ormes area and the Duis burg area : to the reference price, for common wheat, to the respective single intervention price for rye and durum wheat, to the common single intervention price, for barley and maize . For rye, durum wheat and common wheat respec tively, the market element shall reflect the differ ence which should exist between : HAS ADOPTED THIS REGULATION : Article 1 The following Articles shall be substituted for Articles 2, 3 and 4 of Regulation (EEC) No 2727/75 : 'Article 2 The marketing year for all the products listed in Article 1 shall begin on 1 August and end on 31 July of the following year. Article 3 1 . Before 1 August of each year the following prices shall be fixed for the Community for the marketing year beginning the following year : 19 . 5 . 76 No L 130/3Official Journal of the European Communities 2. When, in application of the derogation referred to in paragraph 1 , the single intervention price for common wheat is fixed with respect to its breadmaking quality, the price shall , by way of derogation from Article 3 (2), be fixed in respect of a standard breadmaking quality. Such standard quality shall be that defined pursuant to Article 3 (6), with the addition of certain criteria concerning the minimum require ments for breadmaking. Common wheat which does not meet these requirements shall only receive at intervention a price corresponding to the common single intervention price which for the marketing year in question shall be that appli cable to barley. In the case covered by this paragraph the refer ence price referred to in Article 3(1 ) shall not be fixed and the target price for common wheat shall be established according to Article 3 (5), by substi tuting the single intervention price for that cereal for its reference price . 3 . The Council , acting by a qualified majority on a proposal from the Commission, shall lay down the minimum requirements for bread making. The method to be followed for determining whether common wheat meets such requirements and the detailed rules for the application of this Article shall be adopted in accordance with the procedure laid down in Article 26 .' (a) the single intervention price for rye, the single intervention price for durum wheat and the reference price for common wheat of bread making quality on the one hand, and (b) the level of the market prices for rye, durum wheat and common wheat of breadmaking quality respectively to be expected, in a normal harvest and under natural conditions of price formation on the Community market, in the area having the greatest surplus, on the other. The market element for barley and maize shall reflect the difference which should exist between the market price for barley and the common single intervention price, plus the difference in market prices reflecting the ratio between the average relative values of the two cereals concerned for use in animal feed . The market prices to be taken into consideration are those to be expected, in a normal harvest and under natural conditions of price formation on the Community market, in the production area having the greatest surplus. The element reflecting the cost of transport shall be determined on the basis of the most favourable means of transport or combination of means of transport and on existing tariffs . 6 . The prices referred to in paragraph 1 and the standard qualities referred to in paragraph 2 shall be determined in accordance with the procedure laid down in Article 43 (2) of the Treaty. 7 . The Council , acting by a qualified majority on a proposal from the Commission, shall lay down the rules for determining the intervention centres to which the single intervention prices apply. 8 . The intervention centres referred to in para graph 7 shall be determined, after consultation with the Member States concerned, before 1 May of each year for the following marketing year, in accordance with the procedure laid down in Article 26. Article 2 The following shall be substituted for Article 6(1 ) of Regulation (EEC) No 2727/75 : ' 1 . The intervention prices, the reference price for common wheat of breadmaking quality, the target prices and the threshold prices shall be the subject of monthly increases phased over all or part of the marketing year.' Article 4 Article 3 The following Article shall be substituted for Article 7 of Regulation (EEC) No 1111US : Article 7 1 . To facilitate the transition from the arrange ments applied during the 1975/76 marketing year to those laid down in Article 3 and in particular the price structure normally established thereby, the single intervention prices for common wheat, barley and maize may, by way of derogation from paragraph 1 of that Article, be fixed at different levels for the 1976/77 marketing year . In that case, the common single intervention price used to esta blish the common target price for barley and maize shall be the single intervention price for barley. 1 . Throughout the marketing year, the interven tion agencies designated by the Member States shall be obliged to buy in cereals mentioned in Article 3 which have been harvested in the Community and are offered to them, provided that the offers comply with conditions, in particular in respect of quality and quantity, to be determined in accordance with paragraph 5 . No L 130/4 Official Journal of the European Communities 19 . 5 . 76 and procedures for the sale or for any other means of disposal of the products subject to these measures shall be determined in accordance with the procedure laid down in Article 26 . Detailed rules for the application of this Article shall , where appropriate, be adopted in accordance with the same procedure .' 2 . The intervention agencies shall buy in at the single intervention price regardless of the centre at which the cereal is offered, under conditions deter mined in accordance with paragraphs 4 and 5 . If the quality of the cereal is different from the standard quality for which the intervention price has been fixed, the intervention price shall be adjusted in accordance with scales of price increases and reductions . These scales may also include a special price increase for breadmaking rye with certain quality characteristics. 3 . Under conditions laid down in accordance with paragraphs 4 and 5, the intervention agencies shall offer for sale : Article 5 The following Article shall be substituted for Article 10 of Regulation (EEC) No 2727175 : 'Article 10 for export to third countries, or for supply to the internal market, the product bought in under paragraph 1 . 4 . The Council , acting by a qualified majority on a proposal from the Commission , shall adopt general rules governing intervention . 5 . Detailed rules for the application of this Article shall be adopted in accordance with the procedure laid down in Article 26 , in particular as regards : the minimum quality and quantity required of each cereal and, in respect of durum wheat, the technical qualifies required of it, the scales of price increases and reductions applicable for the purposes of intervention , the procedures and conditions for taking over by the intervention agencies , the procedures and conditions for disposal of produce by the intervention agencies .' 1 . Aid shall be granted for the production of durum wheat in the Community. 2 . The amount of such aid shall be fixed per hectare of land sown and harvested and shall be equal throughout the marketing year. However, aid may be differentiated according to the region concerned and confined to certain production regions . Aid shall be granted only for durum wheat having qualitative and technical characteristics to be deter mined . 3 . The amount of aid shall be fixed before 1 August for the marketing year beginning the following year in accordance with the procedure laid down in Article 43 (2) of the Treaty. The production regions referred to in paragraph 2 shall be determined in accordance with the same procedure . 4 . The Council , acting by a qualified majority on a proposal from the Commission , shall lay down the general rules for the application of this Article and in particular the criteria for deter mining the qualitative and technical characteristics referred to in paragraph 2 . 5 . The following shall be adopted in accordance with the procedure laid down in Article 26 . the detailed rules for the application of this Article , the qualitative and technical characteristics required of durum wheat in order to be eligible for aid and, where appropriate, a list of the varieties concerned.' Article 4 The following Article shall be substituted for Article 8 of Regulation (EEC) No 2727/75 : ''Article 8 1 . To avoid substantial purchases having to be made in certain regions of the Community under Article 7(1 ), it may be decided that the interven tion agencies take particular intervention measures . 2 . Where necessitated by the situation on the Community market in common wheat of bread making quality, special intervention measures may be adopted in respect of this cereal with a view to supporting the development of the market therein in relation to the reference price referred to in Article 3(1 ). 3 . The Council , acting by a qualified majority on a proposal from the Commission , shall adopt general rules for the application of this Article . 4 . The nature and application of particular or special intervention measures and the conditions Article 6 In June and July of the 1975/76 marketing year, the intervention prices applicable in the new Member States shall be those applicable in the Community as originally constituted at the beginning of the 1976/77 marketing year reduced , where appropriate , by the accession compensatory amounts fixed for the 1975/76 marketing year . 19 . 5 . 76 Official Journal of the European Communities No L 130/5 Article 7 It shall apply from 1 August 1976 with the exception of Article 6 and the provisions designed to ensure that the new arrangements laid down in this Regulation are implemented particularly those governing the preparatory administrative measures to be taken by the Member States, which shall apply as soon as this Regulation enters into force . This Regulation shall enter into force on the third 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 , 17 May 1976 . For the Council The President J. HAMILIUS |
Exhibit 10.54
SEVENTH AMENDMENT TO
TERM LOAN CREDIT AGREEMENT
This SEVENTH AMENDMENT TO TERM LOAN CREDIT AGREEMENT (this “Seventh Amendment”)
dated as of March 21, 2019, among LEGACY RESERVES LP, a limited partnership duly
undersigned guarantors (the “Guarantors,” and together with the Borrower, the
“Obligors”); CORTLAND CAPITAL MARKET SERVICES LLC, as administrative agent for
Agent”); and the Lenders under the Term Loan Credit Agreement (the “Lenders”).
Recitals
the Term Loan Credit Agreement, dated December 31, 2017, as further amended by
2018, as further amended by the Fifth Amendment to the Term Loan Credit
Agreement, dated as of September 14, 2018, and as further amended by the Sixth
Amendment to the Term Loan Credit Agreement, dated as of September 20, 2018 (as
so amended prior to the date hereof, the “Existing Credit Agreement,” and the
Existing Credit Agreement as amended by this Seventh Amendment, the “Term Loan
have agreed to amend and waive certain provisions of the Existing Credit
Section1
Defined Terms. Each capitalized term which is defined in the Term Loan Credit
Agreement, but which is not defined in this Seventh Amendment, shall have the
meaning ascribed to such term in the Term Loan Credit Agreement, as amended
hereby, unless expressly provided to the contrary. Unless otherwise indicated,
all article, section and exhibit references in this Seventh Amendment refer to
articles, sections and exhibits of the Term Loan Credit Agreement. The words
this Seventh Amendment shall refer to this Seventh Amendment as a whole and not
to any particular provision of this Seventh Amendment. The term “including”
this Seventh Amendment as a matter of convenience for reference only and it is
agreed that such paragraph headings are not a part of this
Seventh Amendment and shall not be used in the interpretation of any provision
Section2Amendments to Term Loan Credit Agreement.
(a)The following definitions are hereby amended and restated in their entirety
Credit Agreement, dated December 31, 2017, as further amended by the Fourth
Amendment, dated as of March 23, 2018, as further amended by the Fifth
Amendment, dated as of September 14, 2018, as further amended by the Sixth
Amendment, dated as of September 20, 2018 and as further amended by the Seventh
Amendment, dated as of March 21, 2019, as the same may from time to time be
“Applicable Rate” means 12.0% plus the Waiver Rate.
“13-Week Budget” means a thirteen-week rolling operating budget and cash flow
forecast, in form and substance reasonably acceptable to the Majority Lenders.
“2019 Capex Acreage” means Oil and Gas Properties owned by the Borrower and its
Subsidiaries upon which any Obligor projects to make any capital expenditure for
the calendar year 2019 pursuant to the Capital Expenditure Budget.
“Capital Expenditure Budget” means a budget setting forth the projected capital
expenditures of the Obligors for the calendar year 2019, in form and substance
reasonably acceptable to the Majority Lenders.
“Investment Banker” has the meaning assigned to such term in Section 8.22(a).
“Material Permian Acreage” means Oil and Gas Properties owned by the Borrower
and its Subsidiaries in Martin, Reeves, Winkler, Midland, Pecos, Howard,
Glasscock, Reagan, Upton, Irion, Crockett, Loving and Andrews Counties, Texas
and Lea County, New Mexico except for any such Oil and Gas Property that the
Majority Lenders expressly agree in writing is not Material Permian Acreage.
“Refinancing Plan” has the meaning assigned to such term in Section 8.22(a).
“Seventh Amendment” means that certain Seventh Amendment to Term Loan Credit
Agreement, dated as of March 21, 2019, among the Borrower, the Guarantors, the
Seventh Amendment.
“Waiver Rate” means a rate per annum equal to 2.25%.
2.2Amendment to Section 1.06(a). Section 1.06(a) is hereby amended by inserting
at the end of thereof: “The Borrower shall not designate any Subsidiary as an
E&P Subsidiary after the Seventh Amendment Effective Date.”
2.3Amendment to Section 3.02(c). Section 3.02(c) is hereby amended by deleting
“(c) Post-Default Rate. If (x) an Event of Default has occurred and is
continuing, or if any principal of or interest on any Loan or any fee or other
Term Loan Document is not paid when due, whether at stated maturity, upon
acceleration or otherwise and (y) all interest on the Loans is being paid in
cash and a PIK Option notice has not been delivered pursuant to Section
3.02(d)(ii) for the applicable Interest Payment Date, then all Loans
before judgment, at a rate per annum equal to the Applicable Rate plus two
percent (2%) minus the Waiver Rate, but in no event to exceed the Highest Lawful
Rate,”
2.4Amendment to Section 3.02(d)(ii). Section 3.02(d)(ii) is hereby amended by
“(ii) Interest shall be payable on each Interest Payment Date entirely in cash,
except that, the Borrower may elect to pay any interest payable in respect of
the Waiver Rate in kind by having such interest capitalized, compounded and
added to the unpaid principal amount of the Loan (the “PIK Option”) on such
Interest Payment Date in lieu of cash payment whereupon on such Interest Payment
Date the aggregate outstanding principal amount of the applicable Loans shall be
automatically increased by the amount of such interest paid in kind (which
interest paid in kind shall be treated as principal of the Loans for all
purposes hereunder). Borrower shall notify the Administrative Agent in writing
of its exercise the PIK Option no later than three Business Days prior to the
relevant Interest Payment Date. The Administrative Agent shall deliver to the
Lenders prompt written notice of the Borrower’s exercise of any such PIK
Option.”
2.5Amendments to Section 8.01.
(a)Section 8.01(l) is hereby amended by deleting the phrase “having a value,
individually or in the aggregate, in excess of $1,000,000 (in each case as
assigned to such Oil and Gas Properties in the most recently delivered Reserve
Report)”
(b)Section 8.01(o) is hereby amended by deleting it in its entirety and
“(o) Production Report and Lease Operating Statements. On or prior to the
20th Business Day after the end of each month, a report setting forth, for each
calendar month during the then-current fiscal year to date, the volume of
and incurred for each such calendar month.”
(c)Section 8.01(t) is hereby amended by deleting the term “Specified Permian
Acreage” and replacing it with the term “Material Permian Acreage”.
(d)Section 8.01 is hereby amended by inserting the following clause (v) at the
end thereof:
“(v) Additional Monthly Reporting. (A) on or prior to the 20th Business Day
after the end of each month, (i) an updated Capital Expenditure Budget including
a report from a Financial Officer identifying and addressing any variance of
actual performance to the Capital Expenditure Budget for the prior month; and
(ii) an updated accounts payable schedule as of the last day of the immediately
prior month., (B) each Friday following the end of a four week period, beginning
on the second week after the Seventh Amendment Effective Date, an updated
13-Week Budget and (C) on or prior to the last day of each calendar week, a
variance report comparing the Borrower’s actual receipts and disbursements for
the prior calendar week and the prior four calendar weeks (on a cumulative
basis) with the projected receipts and disbursements for such week and the prior
four calendar weeks (on a cumulative basis) as reflected in the 13-Week Budget,
which variance report shall include a report from a Financial Officer
identifying and addressing any variance of actual performance to projected
performance for the prior week.”
2.6Amendment to Section 8.14(a). The second paragraph of Section 8.14(a) is
following:
“In addition to the foregoing, (i) not later than 30 days after the Effective
Date (or such longer period as the Majority Lenders may agree), (ii) not later
than 15 days after the Seventh Amendment Effective Date (or such longer period
as the Majority Lenders may agree), and (iii) thereafter, contemporaneously with
the acquisition of any Material Permian Acreage or Specified East Texas Acreage
by the Borrower or any of its Subsidiaries (or such longer period as the
Majority Lenders may agree), the Borrower shall, and shall cause its
Subsidiaries to, grant to the Administrative Agent as security for the
Obligations a second-priority Lien (provided that Excepted Liens of the type
described
to the provisos at the end of such definition) on (a) in the case of clause (i),
the Permian Acreage as of the Effective Date not already subject to a Lien of
the Term Loan Security Instruments such that after giving effect thereto, to the
knowledge of the Borrower and its Subsidiaries, 100% of the Permian Acreage as
of the Effective Date is Mortgaged Property, (b) in the case of clause (ii), the
Material Permian Acreage, the Specified East Texas Acreage and the 2019 Capex
Acreage, in each case not already subject to a Lien of the Term Loan Security
Instruments such that after giving effect thereto, to the knowledge of the
Borrower and its Subsidiaries, 100% of the Material Permian Acreage, the
Specified East Texas Acreage and 2019 Capex Acreage is Mortgaged Property, and
(c) in the case of clause (iii), the Material Permian Acreage and the Specified
East Texas Acreage not already subject to a Lien of the Term Loan Security
Borrower and its Subsidiaries, 100% of the Material Permian Acreage and the
Specified East Texas Acreage so requested by the Majority Lenders is Mortgaged
Property. All such Liens will be created and perfected by and in accordance with
the provisions of Term Loan Security Instruments, all in form and substance
reasonably satisfactory to the Majority Lenders and in sufficient executed (and
shall become a Guarantor and comply with Section 8.14(b).”
2.7Amendment to Article VIII. Article VIII is hereby amended by inserting the
following Section 8.22.
“Section 8.22 Investment Banker; Refinancing Plan; Lender Presentations.
(a) The Borrower shall at all times retain an investment banker (the
“Investment Banker”), to identify, evaluate and pursue strategic alternatives
for the Borrower and the Obligors to repay, redeem and/or refinance the Loans
and other Debt outstanding under the Term Loan Credit Agreement (the
“Refinancing Plan”). The Borrower will deliver a copy of its engagement letter
with such Investment Banker to the Administrative Agent and Lenders within three
(3) Business Days of the Seventh Amendment Effective Date, and any amendment or
supplement thereto, to the Majority Lenders.
(b) The Borrower shall provide the Lenders and their financial advisor with
reasonable access to the Investment Banker and shall direct the Investment
Banker to (i) regularly update (and in any event, no less than once each week)
the Lenders and their financial advisor as to the Borrower’s financial
performance and any material events, circumstances or developments relating to
the Refinancing Plan (including but not limited to, general discussions with
holders of Debt, any formal or informal, binding or non-binding, commitments,
bids or indications of interest) and (ii) update, on a monthly basis following
the Seventh Amendment Effective Date, the Lenders and their financial advisor
with respect to the then current 13-Week Budget, the Borrower’s financial
performance and information regarding the oil and gas reserves attributable to
the Oil and Gas Properties of the Borrower and its Subsidiaries.
(c) No less often than bi-weekly following the Seventh Amendment Effective
Date, the Borrower and the Investment Banker shall provide an oral report to the
Lenders on the Borrower’s financial performance and its Refinancing Plan.”
2.8Amendment to Section 9.01. Section 9.01 is hereby amended by inserting the
following clause (c) at the end thereof:
“(c) Total Leverage Ratio. The Parent will not permit, as of the last day of
the fiscal quarter ending March 31, 2019, its ratio of Total Debt to EBITDA for
the four fiscal quarters then ending, to be greater than 5.25 to 1.00.”
2.9Amendment to Section 9.12. Section 9.12 is hereby amended by:
(a)deleting the text of clause (g) and replacing it with “[intentionally
omitted]; and”;
(b)deleting the words “an E&P Subsidiary or” from the last paragraph of Section
9.12; and
(c)inserting the following at the end of Section 9.12:
“If the Borrower or any of its Subsidiaries, sells, assigns, farms-out, conveys
or otherwise transfers any Oil and Gas Property that is a Mortgaged Property or
any interest therein or Subsidiaries owning Oil and Gas Properties that are
Mortgaged Properties and that action is otherwise permitted by the previous
sentence of this Section 9.12, and the consideration received in respect of such
sale, assignment, farm-out, conveyance or other transfer consists in whole or in
part of Oil and Gas Properties acquired from or through the acquirer of the
Mortgaged Property, then the Borrower or the applicable Subsidiary shall
contemporaneously grant to the Administrative Agent as security for the
subject to the provisos at the end of such definition) on the Oil and Gas
Properties acquired as consideration from or through the acquirer of the
Mortgaged Property.”
Section3
Conditions Precedent. This Seventh Amendment shall not become effective until
accordance with Section 12.02 of the Term Loan Credit Agreement) (the “Seventh
3.1The Administrative Agent shall have received from each Lender, the Borrower
Administrative Agent) of this Seventh Amendment signed on behalf of such Person.
3.2The Administrative Agent shall have received a certificate of a Responsible
Officer of the Borrower certifying that attached thereto is a true, correct and
complete copy of the Twelfth Amendment to the RBL Credit Agreement, which shall
be in form and substance reasonably satisfactory to the Majority Lenders, and
shall in any event be in substantially the form attached as Exhibit A to this
Seventh Amendment (the “RBL Amendment”). The “Twelfth Amendment
Effective Date” under and as defined in the RBL Amendment shall have occurred
(or shall occur substantially concurrently with the Seventh Amendment Effective
Date).
3.3The Borrower shall have paid the fees and expenses of the Administrative
Agent’s counsel and the Lenders’ counsel and financial advisors submitted to the
Borrower on or before the date all of the conditions set forth in this Section 3
hereof have been satisfied and all other fees and expenses (including invoiced
retainers to Latham & Watkins LLP and PJT Partners LP) required to be paid as of
or prior to such date by Section 12.03 of the Term Loan Credit Agreement or any
other provision of a Term Loan Document.
3.4The Administrative Agent and the Lenders shall have received the 13-Week
Budget and the Capital Expenditure Budget.
3.5The Administrative Agent and the Lenders shall have received from the
the Administrative Agent) to the engagement letter with PJT Partners LP signed
3.6Extension Fee. As consideration for the amendments and waivers set forth
herein, the Borrower shall pay to each Lender the following (on the dates
specified below):
a.each Lender shall have been paid an extension fee in an amount equal to 35
basis points of the aggregate Loans of such Lender, which fee shall be paid in
kind by adding such fee to the aggregate outstanding principal amount of Loans
of such Lender on the Seventh Amendment Effective Date (and such increased
principal amount shall bear interest at a rate per annum equal to the interest
rate paid on the other Loans); and
b.an amount equal to 15 basis points of the aggregate Loans of such Lender,
which shall be fully earned as of the Seventh Amendment Effective Date but shall
be payable as of the earlier to occur of the (i) May 31, 2019 or (ii)
acceleration of the Loans, which fee shall be paid in kind by adding such fee to
the aggregate outstanding principal amount of Loans of such Lender on such date
(and such increased principal amount shall bear interest at a rate per annum
equal to the interest rate paid on the other Loans).
Section4Miscellaneous.
4.1Limited Waiver.
a.Subject to the terms and conditions hereof, the Administrative Agent and each
Lender agrees to waive through 12:01 am New York Time on May 31, 2019 (and not
after such date), the occurrence and continuation of the Waiver Default and not
to exercise any rights or remedies under the Term Loan Credit Agreement and the
Term Loan Documents and applicable law on account of the Waiver Default existing
prior to May 31, 2019 (it being acknowledged and agreed that this Amendment
shall not limit the rights and remedies of the Lenders or the Administrative
Agent on and after May 31, 2019 in respect of the existence of the Waiver
Default at any time on and after May 31, 2019, and that an Event of Default
relating to the Waiver Default shall occur on and after May 31, 2019). The
Borrower and each Obligor acknowledges and agrees that upon the occurrence of
any Default or Event of Default (other than the Waiver Default) under the Term
Loan Credit Agreement and the Term Loan Documents, the Administrative Agent will
be free, in accordance with the Term Loan Credit Agreement and applicable Term
Loan Documents and applicable law, to exercise any rights and remedies available
to them at that time on account of any Default or Event of Default that occurs
and remains uncured. For the purposes of this Seventh Amendment, “Waiver
Default” means the Borrower’s failure to deliver its audited consolidated
and without any qualification or exception as to the scope of such audit.
b.Each Obligor acknowledges that on the date hereof all outstanding Indebtedness
is payable in accordance with their terms and the Borrower and each Obligor
waives any defense, offset, counterclaim or recoupment with respect thereto. The
Junior Lien Secured Parties (as defined in the Second Lien Intercreditor
Agreement, the “Secured Parties”) hereby expressly reserve all of their rights,
remedies, and claims under the Term Loan Documents. Except as expressly provided
herein with respect to the Wavier Defaults, nothing in this Agreement shall
under any of the Term Loan Documents, (ii) any of the agreements, terms or
conditions contained in any of the Term Loan Documents except as expressly
amended hereby, (iii) any rights or remedies of any Secured Party with respect
to the Term Loan Documents except as expressly amended hereby, or (iv) the
rights of any Secured Party to collect the full amounts owing to them under the
Loan Documents.
c.Each Obligor hereby agrees and acknowledges that the Secured Parties require
and will require strict performance by the Obligors of all of their respective
Agreement and the other Term Loan Documents (including any action or
circumstance which is prohibited or limited during the existence of a Default or
Event of Default), and no inaction or action by any Secured Party regarding any
Default, Event of Default, termination event or event of default is intended to
be or shall be a waiver thereof. Each Obligor hereby also agrees and
acknowledges that no course of dealing and no delay in exercising any right,
power, or remedy conferred to any Secured Party in the Term Loan Credit
Agreement or in any other Term Loan Documents or now or hereafter existing at
d.Furthermore, each party hereto hereby agrees that, in no event and under no
circumstance shall any past or future discussions with the Administrative Agent
or any other Secured Party, serve to (i) cause a modification of the Term Loan
Documents, (ii) establish a custom or course of dealing with respect to any of
the Term Loan Documents, (iii) operate as a waiver of any existing or future
Default or Event of Default (as defined in the Term Loan Credit Agreement) under
the Term Loan Documents, event of default or termination event, as amended
hereby, (iv) entitle any Obligor to any other or further notice or demand
whatsoever beyond those required by the Term Loan Documents, as amended hereby,
Obligor’s obligations or liability under the Term Loan Documents, as amended
hereby, or any other liability any Obligor may have to any Secured Party.
4.2Confirmation. The provisions of the Term Loan Credit Agreement, as amended by
this Seventh Amendment, shall remain in full force and effect following the
4.3Ratification and Affirmation; Representations and Warranties. Each Obligor
hereby (a) acknowledges the terms of this Seventh Amendment; (b) ratifies and
after giving effect to the terms of this Seventh Amendment: (i) all of the
continuing, (iii) no event or events have occurred which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect and
(iv) it has not designated any Subsidiary as an E&P Subsidiary; and (d) agrees
that from and after the Seventh Amendment Effective Date each reference to the
Term Loan Credit Agreement in the other Loan Documents shall be deemed to be a
reference to the Term Loan Credit Agreement, as amended by this Seventh
Amendment. Without limiting the foregoing, each Guarantor hereby ratifies,
confirms, acknowledges and agrees that its obligations under the Term Loan
Guaranty Agreement are in full force and effect and that such Guarantor
otherwise, all of the Guaranteed Obligations (as defined in the Term Loan
Guaranty Agreement) as such Guaranteed Obligations may have been amended by this
establish an approval or consent requirement by such Guarantor under the Term
Loan Guaranty Agreement, in connection with the execution and delivery of
amendments, consents or waivers to the Term Loan Credit Agreement or any of the
other Term Loan Documents. Each of the Grantors have granted to the
Administrative Agent, a valid, binding, perfected, enforceable, second-priority
Liens (subject to Liens permitted by Sections 9.03(a) through (e) of the Term
Loan Credit Agreement) in the Collateral and all Deed of Trust Property and all
other assets described in the Term Loan Security Instruments and such Liens are
not subject to avoidance, subordination, recharacterization, recovery, attack,
offset, counterclaim, or defense of any kind,
4.4Counterparts. This Seventh Amendment may be executed by one or more of the
counterpart hereof.
4.5No Oral Agreement. This Seventh Amendment, the Term Loan Credit Agreement and
the other Term Loan Documents executed in connection herewith and therewith
4.6GOVERNING LAW. THE PROVISIONS OF SECTION 12.09 OF THE TERM LOAN CREDIT
AGREEMENT ARE INCORPORATED HEREIN MUTATIS MUTANDIS.
4.7Payment of Expenses. In accordance with Section 12.03 of the Term Loan Credit
Agreement, the Borrower agrees to pay or reimburse the Administrative Agent and
expenses incurred in connection with this Seventh Amendment, any other documents
and financial advisor to the Administrative Agent and the Lenders, promptly upon
receipt.
4.8Severability. Any provision of this Seventh Amendment which is prohibited or
other jurisdiction.
4.9Successors and Assigns. This Seventh Amendment shall be binding upon and
assigns.
4.10Term Loan Document. This Seventh Amendment is a “Term Loan Document” as
shall apply hereto. Without limiting the foregoing, any breach of
Default or Event of Default, as applicable, under the Term Loan Credit
Agreement.
4.11RELEASE. FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF
WHICH ARE HEREBY ACKNOWLEDGED, THE BORROWER AND EACH OTHER OBLIGOR HEREBY, FOR
ITSELF AND ITS SUCCESSORS AND ASSIGNS, FULLY AND WITHOUT RESERVE, RELEASES AND
FOREVER DISCHARGES EACH LENDER, EACH AGENT AND EACH OF THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES,
TRUSTEES, ATTORNEYS, AGENTS, ADVISORS (INCLUDING ATTORNEYS, ACCOUNTANTS AND
EXPERTS) AND AFFILIATES (COLLECTIVELY THE “RELEASED PARTIES” AND INDIVIDUALLY A
“RELEASED PARTY”) FROM ANY AND ALL ACTIONS, CLAIMS, DEMANDS, CAUSES OF ACTION,
JUDGMENTS, EXECUTIONS, SUITS, DEBTS, LIABILITIES, COSTS, DAMAGES, EXPENSES OR
OTHER OBLIGATIONS OF ANY KIND AND NATURE WHATSOEVER, KNOWN OR UNKNOWN, DIRECT
AND/OR INDIRECT, AT LAW OR IN EQUITY, WHETHER NOW EXISTING OR HEREAFTER ASSERTED
USURY OR CLAIMS WITH RESPECT TO THE NEGLIGENCE OF ANY RELEASED PARTY), FOR OR
BECAUSE OF ANY MATTERS OR THINGS OCCURRING, EXISTING OR ACTIONS DONE, OMITTED TO
BE DONE, OR SUFFERED TO BE DONE BY ANY OF THE RELEASED PARTIES, IN EACH CASE, ON
OR PRIOR TO THE DATE OF THIS SEVENTH AMENDMENT AND ARE IN ANY WAY DIRECTLY OR
INDIRECTLY ARISING OUT OF OR IN ANY WAY CONNECTED TO ANY OF THIS SEVENTH
AMENDMENT, THE TERM LOAN CREDIT AGREEMENT, ANY OTHER TERM LOAN DOCUMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY
OBLIGOR, BY EXECUTION HEREOF, HEREBY ACKNOWLEDGES AND AGREES THAT THE AGREEMENTS
IN THIS SECTION 4.12 ARE INTENDED TO COVER AND BE IN FULL SATISFACTION FOR ALL
OR ANY ALLEGED INJURIES OR DAMAGES ARISING IN CONNECTION WITH THE RELEASED
MATTERS. THE BORROWER AND EACH OTHER OBLIGOR HEREBY FURTHER AGREES THAT IT WILL
NOT SUE ANY RELEASED PARTY ON THE BASIS OF ANY RELEASED MATTER RELEASED, REMISED
AND DISCHARGED BY THE BORROWER AND THE OBLIGORS PURSUANT TO THIS SECTION 4. IN
AGREEING TO THIS SECTION 4, THE BORROWER AND EACH GUARANTOR CONSULTED WITH, AND
HAS BEEN REPRESENTED BY, LEGAL COUNSEL AND EXPRESSLY DISCLAIM ANY RELIANCE ON
FORTH HEREIN DO NOT DEPEND IN ANY WAY ON ANY SUCH REPRESENTATIONS, ACTS AND/OR
THIS SECTION 4, SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT, THE TERM LOAN
CREDIT AGREEMENT AND THE OTHER TERM LOAN DOCUMENTS AND PAYMENT IN FULL OF THE
OBLIGATIONS.
4.12Administrative Agent Direction. Each undersigned Lender (collectively
the Administrative Agent to execute and deliver this Seventh Amendment.
its general partner
By:
James Daniel Westcott
GUARANTORS:
LEGACY RESERVES OPERATING LP
By:
By:
By:
By:
James Daniel Westcott
By:
By:
By:
James Daniel Westcott
DEW GATHERING LLC
PINNACLE GAS TREATING LLC
LEGACY RESERVES INC.
By:
James Daniel Westcott
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as Administrative Agent
By:
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EXHIBIT A
RBL AMENDMENT
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Exhibit 10.31 SECOND AMENDMENT TO FOURTH AMENDED AND RESTATED EMPLOYMENT AGREEMENT This Second Amendment (this “Amendment”) is entered into as of January 1, 2015, between CytRx Corporation, a Delaware corporation (“Employer”), and Steven A. Kriegsman (“Employee”) in order to amend as follows that certain Fourth Amended and Restated Employment Agreement, effective as of May 10, 2012, as previously amended by the First Amendment thereto dated as of March 4, 2014 (as so amended, the “Employment Agreement”), between Employer and Employee: 1.Change in Control.Section 7.5 of the Employment Agreement is hereby amended by removing therefrom the first and second sentences and substituting the following: “For purposes of this Section 7.5, a “Change in Control” shall mean any of a “change in ownership,” “change in effective control” and “change in ownership of a substantial portion of the assets” of Employer within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (or any successor to such Section).Notwithstanding the provisions of Section 7.2, Section 7.3 or any other provision of this Agreement, if a Change in Control occurs during the Term, and if, during the Term and within two years after the date on which the Change in Control occurs, Employee’s employment is terminated by Employer without Cause or by Employee for Good Reason, then Employee will be entitled to the payments and benefits, at the same times, described in Section7.2 for a termination by Employer without Cause, except that (i) Employee shall be entitled to continued participation, for a period of 36-months that commences on the date of termination, of Employee and each of his dependents in any Employer-sponsored health plan at the benefit level in effect from time to time and with COBRA benefits commencing thereafter, and (ii) the salary and bonus payments described in the last sentence of Section 7.2 shall instead be calculated using a 36-month “Severance Period” that commences on the date of termination and ends on the third anniversary of such termination date. If Employer's obligation to make the payments and provide the benefits described in this Section 7.5 is triggered, Employee will not be entitled to the payments or benefits described in Section 7.2 or Section 7.3, as applicable, that would otherwise be payable upon such termination of Employee's employment. For clarity, during the Term and after two years after a Change in Control, the provisions of Section 7.2 and Section 7.3 shall once more apply.” 2.No Other Changes to the Employment Agreement.Except as expressly amended by this Amendment, all of the terms of the Employment Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first set forth above. EMPLOYER: EMPLOYEE: CytRx Corporation By:/s/JOHN Y. CALOZ Name: John Y. Caloz Title: Chief Financial Officer /s/ STEVEN A. KRIEGSMAN Steven A. Kriegsman
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Name: Commission Regulation (EC) No 1704/2001 of 29 August 2001 establishing unit values for the determination of the customs value of certain perishable goods
Type: Regulation
Date Published: nan
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Exhibit 10.2
Execution Version
COMMERCIAL PAPER DEALER AGREEMENT
between
ONEOK Partners, L.P., as Issuer
and
dated as of June 16, 2010 between the Issuer and JPMorgan Chase Bank, N.A., as
Issuing and Paying Agent
Dated as of
June 16, 2010
1
COMMERCIAL PAPER DEALER AGREEMENT
through the Dealer.
provided herein.
2
in the form or forms annexed to the Issuing and Paying Agency Agreement.
Issuer’s account.
least $250,000 principal or face
3
amount of Notes.
acting as agent for the Issuer shall be made in accordance with Rule 506 under
obtained.
would be ineligible for resale under Rule 144A, the Issuer shall immediately
promptly prepare and deliver to the Dealer an amendment or supplement to the
Private Placement Memorandum describing the Notes that are ineligible, the
reason for such ineligibility and any other relevant information relating
thereto.
Section 3(a)(3) of the Securities Act. The Issuer agrees that if it shall issue
the Act in selling commercial paper or other short-term debt securities other
than the Notes in the United States.
connection with offers,
4
sales and resales of Notes, as follows:
only to offerees it reasonably believes to be QIBs or to QIBs it reasonably
believes are acting for other QIBs, in each case in accordance with Rule 144A or
interpretations thereunder.
Section 2. Representations and Warranties of Issuer.
2.1 The Issuer is a limited partnership duly organized, validly
existing and in good
5
and unsubordinated indebtedness of the Issuer.
Notes.
terms of the Issuer’s limited partnership agreement, any contract or instrument
on the condition (financial or otherwise), operations or business prospects of
6
2.8 There is no litigation or governmental proceeding pending, or to
of its subsidiaries which could reasonably be expected to result in a material
misleading.
given by the Issuer set forth above in this Section 2 remain true and correct on
prospects of the Issuer which has not been disclosed to the Dealer in writing.
Section 3. Covenants and Agreements of Issuer.
or waiver.
any development or occurrence in relation to the Issuer that would be material
has published a rating of the Notes),
7
development or occurrence.
exchange or rating agency, regarding (i) the Issuer’s operations and financial
condition, (ii) the due authorization and execution of the Note and (iii) the
of any Notes represented by a book-entry note registered in the name of DTC or
the Issuing and Paying Agent and DTC and (e) such other certificates, opinions,
for each prospective purchaser to ask
8
questions of, and receive answers from, the Issuer concerning the offering of
or can acquire without unreasonable effort or expense.
the occurrence of any event relating to or affecting the Issuer that would cause
the Company Information then in existence to include an untrue statement of a
Dealer Information.
9
the Issuer’s most recent annual audited financial statements and each interim
Placement Memorandum.
10
Securities Act.
6.11 “Private Placement Memorandum” shall mean offering materials
or incorporated by reference therein) provided to purchasers and prospective
6.12 “Qualified Institutional Buyer” or “QIB” shall have the meaning
6.15 “Securities Act” shall mean the U.S. Securities Act of 1933, as
amended.
6.16 “Sophisticated Individual Accredited Investor” shall mean an
economic risk of an investment in the Notes and (ii) having a net worth of at
least $5 million.
Section 7. General
Agreement to
11
provisions.
Manhattan. Each of the Dealer and the Issuer waives its right to trial by jury
in any suit, action or proceeding with respect to this Agreement or the
transactions contemplated hereby.
Dealer.
person whatsoever.
7.8 The Issuer acknowledges and agrees that (i) purchases and sales,
arm's-length commercial transactions between the Issuer and the Dealer, (ii) in
affiliates except the obligations expressly set forth in this Agreement, (iv)
the Issuer is capable of evaluating and understanding and understands and
Agreement, (v)
12
the Dealer and its affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Issuer and that the Dealer
has no obligation to disclose any of those interests by virtue of any advisory
contemplated hereby, and (vii) the Issuer has consulted its own legal and
shall not be on behalf of the Issuer. This Agreement supersedes all prior
agreements and understandings (whether written or oral) between the Issuer and
the Dealer with respect to the subject matter hereof. The Issuer hereby waives
and releases, to the fullest extent permitted by law, any claims the Issuer may
have against the Dealer with respect to any breach or alleged breach of
fiduciary duty.
13
By: ONEOK Partners GP, L.L.C., its sole general partner
By: /s/ Curtis
Dinan
Name: Curtis Dinan
Little
Name: Robert J. Little
Title: Managing Director
14
ADDENDUM
Agreement are Citigroup Global Markets Inc. and SunTrust Robinson Humphrey, Inc.
2. The following changes are hereby made to the Agreement:
Regulation D thereunder” after the words “Section 4(2) thereof” on the third
Securities Act.
not limited to, Bank of America, National Association and that such affiliates
the Dealer.
4. The addresses of the respective parties for purposes of notices
For the Issuer:
ONEOK Partners, L.P.
Address:
100 West Fifth Street
Tulsa, Oklahoma 74013
Attention:
Chief Financial Officer
Telephone number:
(918) 588-7917
Fax number:
(918) 588-7964
For the Dealer:
Short-Term Fixed Income Origination
Address:
Mail Code: NY1-100-08-01
Telephone number:
Fax number:
(404) 720-1652
2
EXHIBIT A
FORM OF LEGEND FOR
INVESTOR OR SOPHISTICATED INDIVIDUAL ACCREDITED INVESTOR (i) WHICH ITSELF
POSSESSES SUCH KNOWLEDGE AND EXPERIENCE OR (ii) WITH RESPECT TO WHICH SUCH
ISSUER AS A DEALER FOR THE NOTES (COLLECTIVELY, THE “DEALERS”), NONE OF WHICH
SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2) THROUGH A DEALER TO AN
EXHIBIT B
FURTHER PROVISIONS RELATING
TO INDEMNIFICATION
expenses (including reasonable fees and disbursements of internal and external
or (iii) the Issuer
1
has authorized in writing the employment of counsel for the Indemnitee. The
indemnity, reimbursement and contribution obligations of the Issuer hereunder
shall be in addition to any other liability the Issuer may otherwise have to an
assigns, heirs and personal representatives of the Issuer and any
Indemnitee. The Issuer agrees that without the Dealer’s prior written consent,
2
|
Name: Council Regulation (EEC) No 934/86 of 24 March 1986 amending Regulation (EEC) No 1785/81 on the common organization of the markets in the sugar sector
Type: Regulation
Subject Matter: beverages and sugar; foodstuff; agricultural policy
Date Published: nan
2. 4 . 86 Official Journal of the European Communities No L 87/ 1 I (Acts whose publication is obligatory) COUNCIL REGULATION (EEC) No 934/86 of 24 March 1986 amending Regulation (EEC) No 1785/81 on the common organization of the markets in the sugar sector machinery to other producers and whereas the foreseeable volume of overproduction of both A and B sugar is consi derably reduced as a result of this enlargement ; whereas, moreover, additional outlets could be found within the Community by encouraging, for instance, the use of quota sugar for purposes other than human consumption ; whereas, in view in particular of the unstable situation of world sugar market prices and the cyclical nature of this trend, it would appear appropriate to maintain unchanged the existing basic quantities of sugar and isoglucose for the 1986/87 and 1987/88 marketing years and to lay down that for the marketing years 1988/89 to 1990/91 the basic quantities and the allocation of the resulting costs for producers shall be fixed subsequently in the light of developments in the situation ; Whereas, in order to cover the disposal costs relating to the new outlets referred to above, the method of financing should be adjusted by making producers bear, as part of a review of the system, all or part of the cost of payment of the production refunds concerned ; THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular Articles 42 and 43 thereof, Having regard to the proposal from the Commission , Having regard to the opinion of the European Parli ament ('), Having regard to the opinion of the Economic and Social Committee (2), Whereas Article 23 of Regulation (EEC) No 1785/81 (3), as last amended by Regulation (EEC) No 3768/85 (4), lays down that the sugar sector's production quota arrange ments are applicable in respect of the marketing years 1981 /82 to 1985/86 and that the Council must, in good time, adopt the arrangements to be applied with effect from 1 July 1986 ; Whereas, since the 1981 /82 marketing year, the common organization of the sugar markets has been based on the principle that producers are financially liable for all the losses resulting from the disposal of the Community's surplus production in relation to domestic consumption ; Whereas, on the one hand, the changing situation on the world market in recent years, a constant feature of which has been overproduction, resulting in ever-rising surplus stocks, and, on the other hand, the large technical production potential of the Community mean that the effective measures applied to date in order to achieve cohtrol over production should be maintained ; whereas the quota arrangements should therefore be applied for a new five-year period ; Whereas enlargement of the Community extends the application of the quota system's basic rules and its Whereas, given the need to allow for a certain structural adjustment of the processing industry and of beet and cane growing during the period in which these quotas are applied, provision should be made for a margin of manoeuvre allowing Member States to alter undertaking quotas by a maximum of 10 % ; whereas, in view of the particular situation of this sector in Spain, Italy and the French overseas departments, this limit should not be applied in those regions when restructuring plans are being implemented ; Whereas, to enable all actual expenditure relating to the export of Community production surpluses in respect of the 1981 /82 to 1985/86 marketing years to be covered, regardless of application in the future of the self-financing system provided for in Article 28 of Regulation (EEC) No 1785/81 , provision should be made for the introduction of an elimination levy in this sector ; whereas a demon stration of solidarity should be asked of all producers concerned so that the deficit recorded following the period 1981 /82 to 1985/86, amounting in budgetary terms to some 400 million ECU, may be eliminated ; (') OJ No C 68 , 24 . 3 . 1986 . 2 OJ No C 354, 31 . 12 . 1985, p . 10 . (3) OJ No L 177, 1 . 7 . 1981 , p . 4 . 0 OJ No L 362, 31 . 12. 1985, p . 8 . No L 87/2 Official Journal of the European Communities 2. 4. 86 adopted in accordance with the procedure laid down in Article 41 of Regulation (EEC) No 1785/81 , whereas to establish this levy as fairly as possible, it seems warranted to spread it out over a period of five marketing years and to apply it to all sugar or isoglucose production which has benefited directly or indirectly from the guarantees under the common organization of the markets ; HAS ADOPTED THIS REGULATION : Whereas it is materially impossible to pass on this levy individually to the agricultural producer and the proces sing industry on the basis of the advantages reaped from the system in the past on account of the trend in produc tion structures in this sector ; whereas application differentiated according to production regions within the meaning of Article 24 (2) of Regulation (EEC) No 1785/81 is accordingly the sole possibility ; whereas, to this end, due account must be taken of contributions paid in the past by all planters of beet and cane and producers of sugar and isoglucose, and of foreseeable effective production in these same regions by reference to produc tion in the 1984/85 marketing year ; Whereas, however, in view of the need to balance the costs and benefits of the scheme, the differentiated amounts of the elimination levy must be adjusted as necessary so as to ensure that the revenue from the levy does not exceed, per region and for the entire period of the five marketing years in question, the amount needed to cover actual expenditure on exporting surpluses in respect of the 1981 /82 to 1985/86 marketing years ; Article 1 Regulation (EEC) No 1785/81 is hereby amended as follows : 1 . Article 19 (7) shall be replaced by the following : '7 . Detailed rules for the application of this Article, and the amendment to Annex I, shall be adopted in accordance with the procedure laid down in Article 41 .' 2 . Article 23 shall be replaced by the following : 'Article 23 1 . Articles 24 to 32 shall apply, without prejudice to paragraph 3 , in respect of the marketing years 1986/87 to 1990/91 . 2 . For the 1986/87 and 1987/88 marketing years, and without prejudice to Article 25, the A and B quotas of sugar-producing undertakings and isogluc ose-producing undertakings shall be those which obtained in the 1985/86 marketing year. 3 . The Council, acting in accordance with the procedure laid down in Article 43 (2) of the Treaty, shall determine before 1 January 1988 in respect of the marketing years 1988/89 to 1990/91 in particular the basic production quantities for A and B sugar and isoglucose and the allocation of the resulting costs for producers in the context of the quota arrangements under this Title.' 3 . Article 24 ( 1 ) (c) shall be replaced by the following : '(c) "C sugar" and "C isoglucose" mean any quantity of sugar or isoglucose the production of which is attributable to a specific marketing year and which is produced either by the undertaking concerned outside the sum of its A and B quotas or by an undertaking which has no quota.' 4 . The second subparagraph of Article 25 (2) shall be replaced by the following : 'The limit of 10 % referred to in the first subpara graph shall not apply in Italy, Spain or in the French overseas departments in cases where the transfer of quotas is made on the basis of restructuring plans in the beet, cane and sugar sectors in the region concerned and to the extent necessary to permit such plans to be implemented. As regards the transfers of quotas in Spain under such restructuring plans, Article 9 of Regulation (EEC) No 193/82 (') shall apply. Whereas, in view of the nature of the elimination levy, it should not be applied to production regions in Spain and Portugal ; Whereas beet and sugar production in Italy and that of cane and sugar in the French overseas departments continue to experience difficulties particularly in the application of modern production techniques or for struc tural reasons ; whereas these crops and their processing industries are important for these regions and even essen tial as regards the economy of the French overseas depart ments ; whereas the Member States concerned should therefore be authorized to grant national adjustment aids to these sectors for a specific period on certain condi tions ; whereas, in the case of Italy, given the serious position of the sugar industry and the restructuring programme in progress in this sector, provision should be made, without prejudice to the application of Articles 92 to 94 of the Treaty, for the possible adjustment of these aids, and for the Commission to assess, in particular, the compliance of these aids with the said programme when applying those Articles ; Whereas the provisions of this Regulation should be introduced in the best possible circumstances ; whereas a number of transitional measures may therefore be required ; whereas those measures, if any, should be (') OJ No L 21 , 21 . 1 . 1982, p. 3 . 2. 4. 86 Official Journal of the European Communities No L 87/3 Commission, shall decide on the detailed procedures for applying the elimination levy in accordance with paragraphs 2 and 3 for the 1988/89 to 1990/91 marketing years. 2 . With regard to sugar manufacturers, the elimi nation levy referred to in paragraph 1 shall be fixed, for the relevant regions, as follows : Region within the meaning of Article 24 (2) Amount in ECU for 100 kg (white sugar equivalent) 5. the second subparagraph of Article 26 ( 1 ) shall be replaced by the following : 'Articles 8 , 9, 18 and 19 shall not apply to this sugar, nor Articles 9 , 18 and 19 to this isoglucose.' 6 . in Article 28 ( 1 ), the introductory words shall be replaced by : ' 1 . Before the end of each marketing year, there shall be recorded 7. in Article 28 (2), the introductory words shall be replaced by : *2 . At the end of the 1987/88 marketing year there shall be recorded cumulatively for the two marketing years 1986/87 and 1987/88 8 . the following third and fourth subparagraphs shall be added to Article 28 (5) : 'However, the Council may, in accordance with the procedure referred to in the second subparagraph and as from the 1986/87 marketing year, increase the maximum permitted B levy up to 37,5 % of the intervention price for white sugar. According to the procedure referred to in the second subparagraph, the Council may decide that some or all of the losses resulting from payment of production refunds referred to in Article 9 (3) shall be taken into account for the establishment of the total loss referred to in paragraph 1 (e) of this Article.' 9 . the following Title shall be inserted after Article 32 : Denmark Germany France (metropolitan) French overseas departments Greece Ireland Italy Netherlands Belgo-Luxembourg Economic Union United Kingdom 0,7736 0,8823 0,8820 0,1766 0,3982 0,4080 0,3398 0,7552 0,7137 0,4357 3 . With regard to isoglucose manufacturers, the elimination levy referred to in paragraph 1 shall be fixed, for the relevant regions, as follows : Region within the meaning of Article 24 (2) Amount in ECU for 100 kg of isoglucose (dry matter equivalent) 'TITLE III a Denmark Germany France (metropolitan) French overseas departments Greece Ireland Italy Netherlands Belgo-Luxembourg Economic Union United Kingdom 0,3094 0,3529 0,3528 0,0706 0,1593 0,1632 0,1359 0,3021 0,2855 0,1743 ELIMINATION LEVY Article 32a 1 . Without prejudice to Title III , an elimination levy, designed to eliminate the 400 million ECU deficit recorded following application of the quota arrangements in the period 1981 /82 to 1985/86, shall be charged to manufacturers of sugar and isoglucose during the 1986/87 and 1990/91 marketing years in respect of their production of A and B sugar and A and B isoglucose . In the marketing years 1986/87 and 1987/88 the elimination levy designed to eliminate the deficit for the whole Community of 80 million ECU for each marketing year shall apply in accordance with the particulars set out in paragraphs 2 and 3 . When making the decisions to be taken before 1 January 1988 pursuant to Article 23 (3), the Council , acting by a qualified majority on a proposal from the 4. However, the amounts of the elimination levies shall be adjusted, in accordance with the procedure laid down in paragraph 6, to the extent necessary to ensure that revenue from the elimination levy does not exceed, by region and for the whole of the five marketing years in question, five times the product of the elimination levy applied in the case of the region in question during the marketing years 1986/87 and 1987/88 , multiplied by the A and B production quan tity recorded for the marketing year 1984/85 for the same region . No L 87/4 Official Journal of the European Communities 2. 4. 86 5. The sugar manufacturers may require, depend ing on the case, from the sellers of beet or the sellers of cane grown in the Community, for a quantity of sugar for which the relevant elimination levy is charged, reimbursement of 60 % of this levy. However, the parties concerned may agree another percentage . 6 . Detailed rules for the application of this Article shall , where necessary, be adopted according to the procedure provided for in Article 41 .' 10 . Article 46 shall be replaced by the following : 'Article 46 1 . During the 1986/87 and 1987/88 marketing years, the Italian Republic and the French Republic shall be authorized to grant adaptation aid under the conditions laid down in paragraphs 2 and 3 to produ cers of sugar beet, producers of sugar cane and, where the case arises, producers of sugar. 2 . In Italy, the aid referred to in paragraph 1 may be granted only in respect of the quantity of " sugar produced within the limit of the A and B quotas of each sugar-producing undertaking. For the sugar produced, the maximum amount of the aid per 100 kilograms of white sugar may not exceed 23,64 % of the intervention price for white sugar fixed in accordance with Article 3 ( 1 ) (a) for each of the marketing years 1986/87 and 1987/88 . 3 . However, the Italian Republic may adjust the aid referred to in paragraph 2 where this is necessi tated by exceptional requirements connected with current plans for restructuring the sugar sector in Italy. In applying Articles 92 to 94 of the Treaty, the Commission shall assess in particular whether such aid is consistent with the restructuring plans . 4. In France, the aid referred to in paragraph 1 may be granted only in respect of a quantity of white sugar produced in the overseas departments not exceeding the basic quantity allocated to those departments as reduced by the A quota transfer of 30 000 tonnes of white sugar made in 1981 /82 pursuant to the second subparagraph of Article 25 (3). Such aid may not exceed 6,04 ECU per 100 kilo grams of sugar expressed as white sugar. 5 . In addition , during the 1986/87 to 1987/88 marketing years the Italian Republic shall be autho rized, when the interest rate granted in Italy to the most solvent applicant is higher, by 3 % or more, than the interest rate used to calculate the reimburse ment referred to in Article 8 , to cover the effect of this difference on the storage costs by a national aid.' 1 1 . Article 48 shall be replaced by the following : 'Article 48 Transitional measures may be adopted in accordance with the procedure laid down in Article 41 . Such measures shall be applicable until 30 June 1987 at the latest.' Article 2 This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. It shall apply from 1 July 1986. This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels , 24 March 1986 . For the Council The President G. BRAKS |
EXHIBIT 10.1
DATED AS OF NOVEMBER 7, 2005
AMONG
AND
as Administrative Agent
as Co-Lead Arranger and Book Manager and
as Co-Lead Arranger and Syndication Agent
TABLE OF CONTENTS
SECTION
HEADING
SECTION 1.
THE CREDIT FACILITIES
Section 1.1.
Commitments
Section 1.2.
Letters of Credit
Section 1.3.
Applicable Interest Rates
Section 1.4.
Section 1.5.
Section 1.6.
Interest Periods
Section 1.7.
Maturity of Loans
Section 1.8.
Prepayments
Section 1.9.
Default Rate
Section 1.10.
The Notes
Section 1.11.
Funding Indemnity
Section 1.12.
Commitment Terminations
Section 1.13.
Substitution of Lenders
SECTION 2.
FEES
Section 2.1.
Fees
SECTION 3.
Section 3.1.
SECTION 4.
GUARANTIES
Section 4.1.
Guaranties
Section 4.2.
Further Assurances
SECTION 5.
DEFINITIONS; INTERPRETATION
Section 5.1.
Definitions
Section 5.2. [a05-19842_1ex10d1.htm#Section5_2_Interpretation_TheFore_054408]
Interpretation [a05-19842_1ex10d1.htm#Section5_2_Interpretation_TheFore_054408]
Section 5.3. [a05-19842_1ex10d1.htm#Section5_3_ChangeInAccountingPrin_054409]
Change in Accounting Principles
[a05-19842_1ex10d1.htm#Section5_3_ChangeInAccountingPrin_054409]
SECTION 6. [a05-19842_1ex10d1.htm#Section6_RepresentationsAndWarran_054410]
REPRESENTATIONS AND WARRANTIES
[a05-19842_1ex10d1.htm#Section6_RepresentationsAndWarran_054410]
Section 6.1. [a05-19842_1ex10d1.htm#Section6_1_OrganizationAndQualifi_054412]
Organization and Qualification
[a05-19842_1ex10d1.htm#Section6_1_OrganizationAndQualifi_054412]
Section 6.2. [a05-19842_1ex10d1.htm#Section6_2_Subsidiaries_EachSubsi_054412]
Subsidiaries [a05-19842_1ex10d1.htm#Section6_2_Subsidiaries_EachSubsi_054412]
Section 6.3. [a05-19842_1ex10d1.htm#Section6_3_AuthorityAndValidityOf_054413]
[a05-19842_1ex10d1.htm#Section6_3_AuthorityAndValidityOf_054413]
Section 6.4. [a05-19842_1ex10d1.htm#Section6_4_UseOfProceedsMarginSto_054414]
[a05-19842_1ex10d1.htm#Section6_4_UseOfProceedsMarginSto_054414]
Section 6.5. [a05-19842_1ex10d1.htm#Section6_5_FinancialReports_theCo_054415]
Financial Reports
[a05-19842_1ex10d1.htm#Section6_5_FinancialReports_theCo_054415]
Section 6.6. [a05-19842_1ex10d1.htm#Section6_6_NoMaterialAdverseChang_054416]
No Material Adverse Change
[a05-19842_1ex10d1.htm#Section6_6_NoMaterialAdverseChang_054416]
Section 6.7. [a05-19842_1ex10d1.htm#Section6_7_FullDisclosure_TheStat_054417]
Full Disclosure [a05-19842_1ex10d1.htm#Section6_7_FullDisclosure_TheStat_054417]
i
Section 6.8. [a05-19842_1ex10d1.htm#Section6_8_TrademarksFranchisesAn_054418]
[a05-19842_1ex10d1.htm#Section6_8_TrademarksFranchisesAn_054418]
Section 6.9. [a05-19842_1ex10d1.htm#Section6_9_GovernmentalAuthorityA_054419]
Governmental Authority and Licensing
[a05-19842_1ex10d1.htm#Section6_9_GovernmentalAuthorityA_054419]
Section 6.10. [a05-19842_1ex10d1.htm#Section6_10_GoodTitle_TheBorrower_054420]
Good Title [a05-19842_1ex10d1.htm#Section6_10_GoodTitle_TheBorrower_054420]
Section 6.11. [a05-19842_1ex10d1.htm#Section6_11_LitigationAndOtherCon_054421]
Litigation and Other Controversies
[a05-19842_1ex10d1.htm#Section6_11_LitigationAndOtherCon_054421]
Section 6.12. [a05-19842_1ex10d1.htm#Section6_12_Taxes_EachOfTheBorrow_054422]
Taxes [a05-19842_1ex10d1.htm#Section6_12_Taxes_EachOfTheBorrow_054422]
Section 6.13. [a05-19842_1ex10d1.htm#Section6_13_Approvals_NoAuthoriza_054422]
Approvals [a05-19842_1ex10d1.htm#Section6_13_Approvals_NoAuthoriza_054422]
Section 6.14. [a05-19842_1ex10d1.htm#Section6_14_AffiliateTransactions_054423]
Affiliate Transactions
[a05-19842_1ex10d1.htm#Section6_14_AffiliateTransactions_054423]
Section 6.15. [a05-19842_1ex10d1.htm#Section6_15_InvestmentCompanyPubl_054424]
[a05-19842_1ex10d1.htm#Section6_15_InvestmentCompanyPubl_054424]
Section 6.16. [a05-19842_1ex10d1.htm#Section6_16_Erisa_DuringThe5yearP_054425]
ERISA [a05-19842_1ex10d1.htm#Section6_16_Erisa_DuringThe5yearP_054425]
Section 6.17. [a05-19842_1ex10d1.htm#Section6_17_ComplianceWithLaws_at_054426]
Compliance with Laws
[a05-19842_1ex10d1.htm#Section6_17_ComplianceWithLaws_at_054426]
Section 6.18. [a05-19842_1ex10d1.htm#Section6_18_OtherAgreements_Neith_054427]
Other Agreements
[a05-19842_1ex10d1.htm#Section6_18_OtherAgreements_Neith_054427]
Section 6.19. [a05-19842_1ex10d1.htm#Section6_19_Solvency_TheBorrowerA_054428]
Solvency [a05-19842_1ex10d1.htm#Section6_19_Solvency_TheBorrowerA_054428]
Section 6.20. [a05-19842_1ex10d1.htm#Section6_20_NoBrokerFees_NoBroker_054429]
No Broker Fees. [a05-19842_1ex10d1.htm#Section6_20_NoBrokerFees_NoBroker_054429]
Section 6.21. [a05-19842_1ex10d1.htm#Section6_21_NoDefault_NoDefaultOr_054430]
No Default [a05-19842_1ex10d1.htm#Section6_21_NoDefault_NoDefaultOr_054430]
Section 6.22. [a05-19842_1ex10d1.htm#Section6_22_StockOfTheBorrower_As_054431]
Stock of the Borrower
[a05-19842_1ex10d1.htm#Section6_22_StockOfTheBorrower_As_054431]
Section 6.23. [a05-19842_1ex10d1.htm#Section6_23_ConditionOfPropertyCa_054432]
[a05-19842_1ex10d1.htm#Section6_23_ConditionOfPropertyCa_054432]
Section 6.24. [a05-19842_1ex10d1.htm#Section6_24_LegalRequirementsAndZ_054433]
[a05-19842_1ex10d1.htm#Section6_24_LegalRequirementsAndZ_054433]
Section 6.25. [a05-19842_1ex10d1.htm#Section6_25_QualifiedGroundLeases_054434]
Qualified Ground Leases
[a05-19842_1ex10d1.htm#Section6_25_QualifiedGroundLeases_054434]
Section 6.26. [a05-19842_1ex10d1.htm#Section6_26_NoDefaultsLandlordIsI_054435]
[a05-19842_1ex10d1.htm#Section6_26_NoDefaultsLandlordIsI_054435]
SECTION 7. [a05-19842_1ex10d1.htm#Section7_ConditionsPrecedent__054437]
CONDITIONS PRECEDENT
[a05-19842_1ex10d1.htm#Section7_ConditionsPrecedent__054437]
Section 7.1. [a05-19842_1ex10d1.htm#Section7_1_AllCreditEvents_AtTheT_054438]
All Credit Events
[a05-19842_1ex10d1.htm#Section7_1_AllCreditEvents_AtTheT_054438]
Section 7.2. [a05-19842_1ex10d1.htm#Section7_2_InitialCreditEvent_Bef_054439]
Initial Credit Event
[a05-19842_1ex10d1.htm#Section7_2_InitialCreditEvent_Bef_054439]
Section 7.3. [a05-19842_1ex10d1.htm#Section7_3_EligiblePropertyAdditi_054440]
[a05-19842_1ex10d1.htm#Section7_3_EligiblePropertyAdditi_054440]
SECTION 8. [a05-19842_1ex10d1.htm#Section8_Covenants__054441]
COVENANTS [a05-19842_1ex10d1.htm#Section8_Covenants__054441]
Section 8.1. [a05-19842_1ex10d1.htm#Section8_1_MaintenanceOfBusiness__054442]
Maintenance of Business
[a05-19842_1ex10d1.htm#Section8_1_MaintenanceOfBusiness__054442]
Section 8.2. [a05-19842_1ex10d1.htm#Section8_2_MaintenanceOfPropertie_054443]
Maintenance of Properties
[a05-19842_1ex10d1.htm#Section8_2_MaintenanceOfPropertie_054443]
Section 8.3. [a05-19842_1ex10d1.htm#Section8_3_TaxesAndAssessments_Th_054450]
Taxes and Assessments
[a05-19842_1ex10d1.htm#Section8_3_TaxesAndAssessments_Th_054450]
Section 8.4. [a05-19842_1ex10d1.htm#Section8_4_Insurance_TheBorrowerA_054451]
Insurance [a05-19842_1ex10d1.htm#Section8_4_Insurance_TheBorrowerA_054451]
Section 8.5. [a05-19842_1ex10d1.htm#Section8_5_FinancialReports_TheBo_054452]
Financial Reports
[a05-19842_1ex10d1.htm#Section8_5_FinancialReports_TheBo_054452]
Section 8.6. [a05-19842_1ex10d1.htm#Section8_6_Inspection_TheBorrower_054453]
Inspection [a05-19842_1ex10d1.htm#Section8_6_Inspection_TheBorrower_054453]
Section 8.7. [a05-19842_1ex10d1.htm#Section8_7_OfficeOfForeignAssetCo_054454]
[a05-19842_1ex10d1.htm#Section8_7_OfficeOfForeignAssetCo_054454]
Section 8.8. [a05-19842_1ex10d1.htm#Section8_8_Liens_TheBorrowerShall_054455]
Liens [a05-19842_1ex10d1.htm#Section8_8_Liens_TheBorrowerShall_054455]
Section 8.9. [a05-19842_1ex10d1.htm#Section8_9_InvestmentsAcquisition_054456]
[a05-19842_1ex10d1.htm#Section8_9_InvestmentsAcquisition_054456]
Section 8.10. [a05-19842_1ex10d1.htm#Section8_10_MergersConsolidations_054457]
[a05-19842_1ex10d1.htm#Section8_10_MergersConsolidations_054457]
Section 8.11. [a05-19842_1ex10d1.htm#Section8_11_MaintenanceOfMaterial_054458]
Maintenance of Subsidiaries
[a05-19842_1ex10d1.htm#Section8_11_MaintenanceOfMaterial_054458]
Section 8.12. [a05-19842_1ex10d1.htm#Section8_12_054806]
[Intentionally Omitted] [a05-19842_1ex10d1.htm#Section8_12_054806]
Section 8.13. [a05-19842_1ex10d1.htm#Section8_13_054809]
ERISA [a05-19842_1ex10d1.htm#Section8_13_054809]
Section 8.14. [a05-19842_1ex10d1.htm#Section8_14_054814]
Compliance with Laws [a05-19842_1ex10d1.htm#Section8_14_054814]
Section 8.15. [a05-19842_1ex10d1.htm#Section8_15_054817]
Burdensome Contracts With Affiliates [a05-19842_1ex10d1.htm#Section8_15_054817]
Section 8.16. [a05-19842_1ex10d1.htm#Section8_16_054819]
No Changes in Fiscal Year [a05-19842_1ex10d1.htm#Section8_16_054819]
Section 8.17. [a05-19842_1ex10d1.htm#Section8_17_054822]
Intentionally Omitted [a05-19842_1ex10d1.htm#Section8_17_054822]
Section 8.18. [a05-19842_1ex10d1.htm#Section8_18_054824]
Change in the Nature of Business [a05-19842_1ex10d1.htm#Section8_18_054824]
ii
Section 8.19. [a05-19842_1ex10d1.htm#Section8_19_054827]
Use of Loan Proceeds [a05-19842_1ex10d1.htm#Section8_19_054827]
Section 8.20. [a05-19842_1ex10d1.htm#Section8_20_054829]
No Restrictions [a05-19842_1ex10d1.htm#Section8_20_054829]
Section 8.21. [a05-19842_1ex10d1.htm#Section8_21_054832]
Financial Covenants [a05-19842_1ex10d1.htm#Section8_21_054832]
Section 8.22. [a05-19842_1ex10d1.htm#Section8_22_054834]
Borrowing Base Covenants [a05-19842_1ex10d1.htm#Section8_22_054834]
SECTION 9. [a05-19842_1ex10d1.htm#Section9_054840]
EVENTS OF DEFAULT AND REMEDIES [a05-19842_1ex10d1.htm#Section9_054840]
Section 9.1. [a05-19842_1ex10d1.htm#Section9_1_054842]
Events of Default [a05-19842_1ex10d1.htm#Section9_1_054842]
Section 9.2. [a05-19842_1ex10d1.htm#Section9_2_054845]
Non-Bankruptcy Defaults [a05-19842_1ex10d1.htm#Section9_2_054845]
Section 9.3. [a05-19842_1ex10d1.htm#Section9_3_054848]
Bankruptcy Defaults [a05-19842_1ex10d1.htm#Section9_3_054848]
Section 9.4. [a05-19842_1ex10d1.htm#Section9_4_054851]
[a05-19842_1ex10d1.htm#Section9_4_054851]
Section 9.5. [a05-19842_1ex10d1.htm#Section9_5_054853]
Notice of Default [a05-19842_1ex10d1.htm#Section9_5_054853]
Section 9.6. [a05-19842_1ex10d1.htm#Section9_6_054856]
Expenses [a05-19842_1ex10d1.htm#Section9_6_054856]
SECTION 10. [a05-19842_1ex10d1.htm#Section10_054901]
CHANGE IN CIRCUMSTANCES [a05-19842_1ex10d1.htm#Section10_054901]
Section 10.1. [a05-19842_1ex10d1.htm#Section10_1_054910]
Change of Law [a05-19842_1ex10d1.htm#Section10_1_054910]
Section 10.2. [a05-19842_1ex10d1.htm#Section10_2_054914]
[a05-19842_1ex10d1.htm#Section10_2_054914]
Section 10.3. [a05-19842_1ex10d1.htm#Section10_3_054916]
Increased Cost and Reduced Return [a05-19842_1ex10d1.htm#Section10_3_054916]
Section 10.4. [a05-19842_1ex10d1.htm#Section10_4_054919]
Lending Offices [a05-19842_1ex10d1.htm#Section10_4_054919]
Section 10.5. [a05-19842_1ex10d1.htm#Section10_5_054921]
[a05-19842_1ex10d1.htm#Section10_5_054921]
SECTION 11. [a05-19842_1ex10d1.htm#Section11__054925]
THE ADMINISTRATIVE AGENT [a05-19842_1ex10d1.htm#Section11__054925]
Section 11.1. [a05-19842_1ex10d1.htm#Section11_1_054931]
[a05-19842_1ex10d1.htm#Section11_1_054931]
Section 11.2. [a05-19842_1ex10d1.htm#Section11_2_054933]
[a05-19842_1ex10d1.htm#Section11_2_054933]
Section 11.3. [a05-19842_1ex10d1.htm#Section11_3_054936]
Action by Administrative Agent [a05-19842_1ex10d1.htm#Section11_3_054936]
Section 11.4. [a05-19842_1ex10d1.htm#Section11_4_054939]
Consultation with Experts [a05-19842_1ex10d1.htm#Section11_4_054939]
Section 11.5. [a05-19842_1ex10d1.htm#Section11_5_054946]
[a05-19842_1ex10d1.htm#Section11_5_054946]
Section 11.6. [a05-19842_1ex10d1.htm#Section11_6_054949]
Indemnity [a05-19842_1ex10d1.htm#Section11_6_054949]
Section 11.7. [a05-19842_1ex10d1.htm#Section11_7_054951]
Agent [a05-19842_1ex10d1.htm#Section11_7_054951]
Section 11.8. [a05-19842_1ex10d1.htm#Section11_8_054954]
L/C Issuer. [a05-19842_1ex10d1.htm#Section11_8_054954]
Section 11.9. [a05-19842_1ex10d1.htm#Section11_9_054958]
Designation of Additional Agents [a05-19842_1ex10d1.htm#Section11_9_054958]
SECTION 12. [a05-19842_1ex10d1.htm#Section12_055000]
THE GUARANTEES [a05-19842_1ex10d1.htm#Section12_055000]
Section 12.1. [a05-19842_1ex10d1.htm#Section12_1_055006]
The Guarantees [a05-19842_1ex10d1.htm#Section12_1_055006]
Section 12.2. [a05-19842_1ex10d1.htm#Section12_2_055022]
Guarantee Unconditional [a05-19842_1ex10d1.htm#Section12_2_055022]
Section 12.3. [a05-19842_1ex10d1.htm#Section12_3_055025]
[a05-19842_1ex10d1.htm#Section12_3_055025]
Section 12.4. [a05-19842_1ex10d1.htm#Section12_4_055027]
Subrogation [a05-19842_1ex10d1.htm#Section12_4_055027]
Section 12.5. [a05-19842_1ex10d1.htm#Section12_5_055029]
Waivers [a05-19842_1ex10d1.htm#Section12_5_055029]
Section 12.6. [a05-19842_1ex10d1.htm#Section12_6_055032]
Limit on Recovery [a05-19842_1ex10d1.htm#Section12_6_055032]
Section 12.7. [a05-19842_1ex10d1.htm#Section12_7_055034]
Stay of Acceleration [a05-19842_1ex10d1.htm#Section12_7_055034]
Section 12.8. [a05-19842_1ex10d1.htm#Section12_8_055036]
Benefit to Guarantors [a05-19842_1ex10d1.htm#Section12_8_055036]
Section 12.9. [a05-19842_1ex10d1.htm#Section12_9_055040]
Guarantor Covenants [a05-19842_1ex10d1.htm#Section12_9_055040]
iii
SECTION 13. [a05-19842_1ex10d1.htm#Section13_055042]
MISCELLANEOUS [a05-19842_1ex10d1.htm#Section13_055042]
Section 13.1. [a05-19842_1ex10d1.htm#Section13_1_055045]
Withholding Taxes [a05-19842_1ex10d1.htm#Section13_1_055045]
Section 13.2. [a05-19842_1ex10d1.htm#Section13_2_055047]
No Waiver, Cumulative Remedies [a05-19842_1ex10d1.htm#Section13_2_055047]
Section 13.3. [a05-19842_1ex10d1.htm#Section13_3_055053]
Non-Business Days [a05-19842_1ex10d1.htm#Section13_3_055053]
Section 13.4. [a05-19842_1ex10d1.htm#Section13_4_055055]
Documentary Taxes [a05-19842_1ex10d1.htm#Section13_4_055055]
Section 13.5. [a05-19842_1ex10d1.htm#Section13_5_055057]
Survival of Representations [a05-19842_1ex10d1.htm#Section13_5_055057]
Section 13.6. [a05-19842_1ex10d1.htm#Section13_6_055059]
Survival of Indemnities [a05-19842_1ex10d1.htm#Section13_6_055059]
Section 13.7. [a05-19842_1ex10d1.htm#Section13_7_055103]
Sharing of Set-Off [a05-19842_1ex10d1.htm#Section13_7_055103]
Section 13.8. [a05-19842_1ex10d1.htm#Section13_8_055105]
Notices [a05-19842_1ex10d1.htm#Section13_8_055105]
Section 13.9. [a05-19842_1ex10d1.htm#Section13_9_055108]
Counterparts [a05-19842_1ex10d1.htm#Section13_9_055108]
Section 13.10. [a05-19842_1ex10d1.htm#Section13_10_055110]
Successors and Assigns [a05-19842_1ex10d1.htm#Section13_10_055110]
Section 13.11. [a05-19842_1ex10d1.htm#Section13_11_055113]
Participants [a05-19842_1ex10d1.htm#Section13_11_055113]
Section 13.12. [a05-19842_1ex10d1.htm#Section13_12_055115]
Assignments [a05-19842_1ex10d1.htm#Section13_12_055115]
Section 13.13. [a05-19842_1ex10d1.htm#Section13_13_055118]
Amendments [a05-19842_1ex10d1.htm#Section13_13_055118]
Section 13.14. [a05-19842_1ex10d1.htm#Section13_14_055120]
Headings [a05-19842_1ex10d1.htm#Section13_14_055120]
Section 13.15. [a05-19842_1ex10d1.htm#Section13_15_055123]
Costs and Expenses; Indemnification [a05-19842_1ex10d1.htm#Section13_15_055123]
Section 13.16. [a05-19842_1ex10d1.htm#Section13_16_055126]
Set-off [a05-19842_1ex10d1.htm#Section13_16_055126]
Section 13.17. [a05-19842_1ex10d1.htm#Section13_17_055128]
Entire Agreement [a05-19842_1ex10d1.htm#Section13_17_055128]
Section 13.18. [a05-19842_1ex10d1.htm#Section13_18_055130]
Governing Law [a05-19842_1ex10d1.htm#Section13_18_055130]
Section 13.19. [a05-19842_1ex10d1.htm#Section13_19_055133]
Severability of Provisions [a05-19842_1ex10d1.htm#Section13_19_055133]
Section 13.20. [a05-19842_1ex10d1.htm#Section13_20_ExcessInterest_Notwi_055208]
Excess Interest [a05-19842_1ex10d1.htm#Section13_20_ExcessInterest_Notwi_055208]
Section 13.21. [a05-19842_1ex10d1.htm#Section13_063538]
Construction [a05-19842_1ex10d1.htm#Section13_063538]
Section 13.22. [a05-19842_1ex10d1.htm#Section13_22_063540]
Lender’s Obligations Several [a05-19842_1ex10d1.htm#Section13_22_063540]
Section 13.23. [a05-19842_1ex10d1.htm#Section13_23_063543]
[a05-19842_1ex10d1.htm#Section13_23_063543]
Section 13.24. [a05-19842_1ex10d1.htm#Section13_24_063544]
Amendment and Restatement [a05-19842_1ex10d1.htm#Section13_24_063544]
Section 13.25. [a05-19842_1ex10d1.htm#Section13_25_063546]
Equalization of Outstanding Obligations
[a05-19842_1ex10d1.htm#Section13_25_063546]
Signature Page [a05-19842_1ex10d1.htm#Signature_063947]
EXHIBIT A [a05-19842_1ex10d1.htm#Exhibita_085117]
— [a05-19842_1ex10d1.htm#Exhibita_085117]
Notice of Payment Request [a05-19842_1ex10d1.htm#Exhibita_085117]
EXHIBIT B [a05-19842_1ex10d1.htm#Exhibitb_085126]
— [a05-19842_1ex10d1.htm#Exhibitb_085126]
Notice of Borrowing [a05-19842_1ex10d1.htm#Exhibitb_085126]
EXHIBIT C [a05-19842_1ex10d1.htm#Exhibitc_085130]
— [a05-19842_1ex10d1.htm#Exhibitc_085130]
Notice of Continuation/Conversion [a05-19842_1ex10d1.htm#Exhibitc_085130]
EXHIBIT D [a05-19842_1ex10d1.htm#Exhibitd_085136]
— [a05-19842_1ex10d1.htm#Exhibitd_085136]
Note [a05-19842_1ex10d1.htm#Exhibitd_085136]
EXHIBIT E [a05-19842_1ex10d1.htm#Exhibite_085140]
— [a05-19842_1ex10d1.htm#Exhibite_085140]
Borrowing Base Certificate [a05-19842_1ex10d1.htm#Exhibite_085140]
EXHIBIT F [a05-19842_1ex10d1.htm#Exhibitf_085144]
— [a05-19842_1ex10d1.htm#Exhibitf_085144]
Compliance Certificate [a05-19842_1ex10d1.htm#Exhibitf_085144]
EXHIBIT G [a05-19842_1ex10d1.htm#Exhibitg_085148]
— [a05-19842_1ex10d1.htm#Exhibitg_085148]
Additional Guarantor Supplement [a05-19842_1ex10d1.htm#Exhibitg_085148]
EXHIBIT H [a05-19842_1ex10d1.htm#Exhibith_085153]
— [a05-19842_1ex10d1.htm#Exhibith_085153]
Assignment and Acceptance [a05-19842_1ex10d1.htm#Exhibith_085153]
EXHIBIT I [a05-19842_1ex10d1.htm#Exhibiti_085202]
— [a05-19842_1ex10d1.htm#Exhibiti_085202]
Opinion of Counsel [a05-19842_1ex10d1.htm#Exhibiti_085202]
SCHEDULE 1.0 [a05-19842_1ex10d1.htm#Schedule1_0_085210]
— [a05-19842_1ex10d1.htm#Schedule1_0_085210]
Commitments [a05-19842_1ex10d1.htm#Schedule1_0_085210]
SCHEDULE 1.1 [a05-19842_1ex10d1.htm#Schedule1_1_085213]
— [a05-19842_1ex10d1.htm#Schedule1_1_085213]
Initial Properties, Initial Investment Amount and Initial Senior Housing Value
[a05-19842_1ex10d1.htm#Schedule1_1_085213]
SCHEDULE 6.2 [a05-19842_1ex10d1.htm#Schedule6_2_085215]
— [a05-19842_1ex10d1.htm#Schedule6_2_085215]
Material Subsidiaries [a05-19842_1ex10d1.htm#Schedule6_2_085215]
SCHEDULE 6.26 [a05-19842_1ex10d1.htm#Schedule6_26_085217]
— [a05-19842_1ex10d1.htm#Schedule6_26_085217]
Significant Leases [a05-19842_1ex10d1.htm#Schedule6_26_085217]
iv
This Amended and Restated Credit Agreement is entered into as of
November 7, 2005 by and among LTC Properties, Inc., a Maryland corporation (the
“Borrower”), certain direct and indirect Subsidiaries of the Borrower from time
institutions from time to time party to this Agreement, as Lenders and Bank of
Montreal, Chicago Branch, as Administrative Agent as provided herein. All
PRELIMINARY STATEMENTS
are currently party to that certain Credit Agreement dated as of December 26,
2003; as amended by that certain First Amendment to the Credit Agreement dated
as of September 17, 2004; and by that certain Second Amendment to Credit
Agreement dated as of October 5, 2004 (together, the “Prior Credit Agreement”).
The Borrower has requested that the Prior Credit Agreement be amended in certain
respects as described below to, inter alia, (i) increase the Commitments,
(ii) amend the Applicable Margin, (iii) adjust certain financial covenants, and
(iv) make certain additional modifications to the Prior Credit Agreement, and
for the sake of clarity and convenience, the Borrower has requested that the
Prior Credit Agreement be restated as so amended.
WHEREAS, the Borrower has requested that the Lenders continue to extend credit
to it, and those Lenders, upon the occurrence of the Closing Date and subject to
the terms hereof, will continue to lend monies and/or make advances, extensions
of credit or other financial accommodations to, on behalf of or for the benefit
of the Borrower.
(individually a “Loan” and collectively the “Loans”) in U.S. Dollars to the
Lender’s Commitment, subject to any reductions thereof pursuant to the terms
hereof, before the Termination Date. The sum of the aggregate principal amount
of Loans and L/C Obligations at any time outstanding shall not exceed the lesser
of (i) the Commitments in effect at such time or (ii) the Borrowing Base as
determined based on the most recent Borrowing Base Certificate. Each Borrowing
of Loans shall be made ratably by the Lenders in proportion to their respective
Percentages. As provided in Section 1.5(a) hereof, the Borrower may elect that
each Borrowing of Loans be either Adjusted Base Rate Loans or Eurodollar Loans.
for the account of Borrower or for the account of the Borrower and one or more
be obligated to reimburse the L/C Issuer for such Lender’s Percentage of the
amount of each drawing thereunder and, accordingly, each Letter of Credit shall
constitute usage of the Commitment of each Lender pro rata in an amount equal to
its Percentage of the L/C Obligations then outstanding.
expiration dates no later than the Termination Date, in an aggregate face amount
as set forth above up to the L/C Sublimit, upon the receipt of an application
duly executed by the Borrower and, if such Letter of Credit is for the account
of one of its Subsidiaries, such Subsidiary for the relevant Letter of Credit in
otherwise provided in Section 1.8 hereof, before the occurrence of an Event of
Applicable Margin plus the Adjusted Base Rate from time to time in effect
scheduled expiration date, unless the Required Lenders instruct the L/C Issuer
after the Termination Date, (ii) the Commitments have been terminated, or
(iii) a Default or an Event of Default exists and the Administrative Agent, at
Application related to such Letter of Credit,
2
except that reimbursement shall be made by no later than 2:00 p.m. (Chicago
is given to the Borrower after 11:30 a.m. (Chicago time) on the date when such
the manner set forth in Section 1.2(d) below, then all payments thereafter
Reimbursement Obligations shall be distributed in accordance with
L/C Issuer to the date 2 Business Days after payment by such Participating
Lender, the Adjusted Base Rate in effect for each such day. Each such
L/C Issuer under this Section 1.2 shall be absolute, irrevocable, and
Section 1.2 shall be made without any offset, abatement, withholding or
reduction whatsoever.
3
of their respective Percentages, indemnify the L/C Issuer (to the extent not
Credit properly completed and executed by the Borrower and, in the case of an
extension or an increase in the amount of a Letter of Credit, a written request
Agent’s receipt of each such notice and shall send to each Lender within
five (5) Business Days of the date of receipt a facsimile of such notice and the
L/C Issuer shall promptly notify the Administrative Agent and the Lenders of the
issuance of the Letter of Credit so requested.
Section 1.3. Applicable Interest Rates. (a) Adjusted Base Rate
Loans. Each Adjusted Base Rate Loan made or maintained by a Lender shall bear
the unpaid principal amount thereof from the date such Loan is advanced or
continued, or created by conversion from a Eurodollar Loan, until maturity
the Applicable Margin plus the Adjusted Base Rate from time to time in effect,
payable on the last day of its Interest Period and at maturity (whether by
(b) the Federal Funds Rate in effect on such day plus 0.5 of 1% (one-half of one
percent), and
continued, or created by conversion from an Adjusted Base Rate Loan, until
sum of the Applicable Margin plus the Adjusted LIBOR applicable for such
Interest Period, payable on the last day of each calendar month within an
Interest Period or on the last day of the Interest Period and at maturity
4
Adjusted LIBOR
=
LIBOR
2 Business Days before the beginning of such Interest Period by 3 or more major
Loan scheduled to be made by the Administrative Agent as part of such Borrowing.
5
Section 1.4. Minimum Borrowing Amounts; Maximum Eurodollar Loans.
Each Borrowing of Adjusted Base Rate Loans advanced under the Revolving Credit
shall be in an amount not less than $100,000. Each Borrowing of Eurodollar
Loans advanced, continued or converted under the Revolving Credit shall be in an
more than five (5) Borrowings of Eurodollar Loans outstanding under the
Revolving Credit at any one time.
Section 1.5. Manner of Borrowing Loans and Designating Applicable
give notice to the Administrative Agent by no later than 11:00 a.m. (Chicago
date the Borrower requests the Lenders to advance a Borrowing of Adjusted Base
convert part or all of such Borrowing into Adjusted Base Rate Loans or (ii) if
such Borrowing is of Adjusted Base Rate Loans, on any Business Day, the Borrower
Borrowing to the Administrative Agent by telephone or telecopy (which notice
Notice of the continuation of a Borrowing of Eurodollar Loans for an additional
Interest Period or of the conversion of part or all of a Borrowing of Adjusted
Base Rate Loans into Eurodollar Loans must be given by no later than 11:00 a.m.
(Chicago time) at least 3 Business Days before the date of the requested
Interest Period applicable thereto. The Borrower agrees that the Administrative
Agent may rely on any such telephonic or telecopy notice given by any person the
(b) Notice to the Lenders. The Administrative Agent shall (i) give
prompt telephonic or facsimile notice of each Borrowing notice received from
Borrower pursuant to Section 1.5(a) above, (ii) send a facsimile copy to each
Lender within five (5) Business Days of the date of receipt of each notice from
the Borrower received pursuant to Section 1.5(a) above and (iii) if
6
such notice requests the Lenders to make Eurodollar Loans, the Administrative
Agent shall give notice to the Borrower and each Lender by like means of the
interest rate applicable thereto promptly after the Administrative Agent has
made such determination.
Conversions. Any outstanding Borrowing of Adjusted Base Rate Loans shall
automatically be continued for an additional Interest Period on the last day of
its then current Interest Period unless the Borrower has notified the
Administrative Agent within the period required by Section 1.5(a) that the
Section 1.8(a). If the Borrower fails to give notice pursuant to
Section 1.5(a) above of the continuation or conversion of any outstanding
then current Interest Period within the period required by Section 1.5(a) or,
forth in Section 7.1 for the continuation or conversion of a Borrowing of
accordance with Section 1.8(a), such Borrowing shall automatically be converted
into a Borrowing of Adjusted Base Rate Loans. In the event the Borrower fails
to give notice pursuant to Section 1.5(a) above of a Borrowing equal to the
amount of a Reimbursement Obligation and has not notified the Administrative
not borrowed under this Agreement, the Borrower shall be deemed to have
requested a Borrowing of Adjusted Base Rate Loans under the Credit on such day
in the amount of the Reimbursement Obligation then due, which Borrowing shall be
Administrative Agent’s principal office in Chicago, Illinois, by depositing such
proceeds to the credit of the Borrower’s operating account maintained with the
Administrative Agent or as the Borrower and the Administrative Agent may
otherwise agree.
case of a Borrowing of Adjusted Base Rate Loans, by 1:00 p.m. (Chicago time) on)
the date on which such Lender is scheduled to make payment to the Administrative
required to) make available to the Borrower the proceeds of the Loan to be made
by such Lender and, if any Lender has not in fact made such payment to the
Administrative Agent, such Lender shall, on demand, pay to the Administrative
Agent the amount made available to the Borrower attributable to such Lender
on (but excluding) the date
7
made by such Lender, the Adjusted Base Rate in effect for each such day. If
Section 1.6. Interest Periods. As provided in Section 1.5(a) hereof,
at the time of each request to advance, continue or create by conversion a
Borrowing of Eurodollar Loans, the Borrower shall select an Interest Period
applicable to such Loans from among the available options. The term “Interest
Period” means the period commencing on the date a Borrowing of Loans is
advanced, continued or created by conversion and ending: (a) in the case of
Adjusted Base Rate Loans, on the last day of the calendar month in which such
conversion on the last day of a calendar month) and (b) in the case of a
Eurodollar Loan 1, 2, 3 or 6 months thereafter; provided, however, that:
(i) any Interest Period for a Borrowing of Loans consisting of
Adjusted Base Rate Loans that otherwise would end after the Termination Date
(ii) no Interest Period with respect to any portion of the Loans shall
extend beyond the Termination Date;
Section 1.7. Maturity of Loans. Each Loan both for principal and
8
pursuant to Section 1.4 hereof remains outstanding) any Borrowing of Eurodollar
the Administrative Agent or, in the case of a Borrowing of Adjusted Base Rate
in the case of any Eurodollar Loans, accrued interest thereon to the date fixed
for prepayment plus any amounts due the Lenders under Section 1.11 hereof.
(b) Mandatory. (i) The Borrower shall, on each date the Commitments
are reduced pursuant to Section 1.12 hereof, prepay the Loans and, if necessary,
of the aggregate principal amount of Loans and L/C Obligations then outstanding
to the amount to which the Commitments have been so reduced.
(ii) If at any time the sum of the unpaid principal balance of the
Borrowing Base as determined on the basis of the most recent Borrowing Base
Certificate, the Borrower shall immediately and without notice or demand pay
prepayment first to be applied to the Loans until payment in full thereof with
Credit.
(iii) Unless the Borrower otherwise directs, prepayments of Loans under
this Section 1.8(b) shall be applied first to Borrowings of Adjusted Base Rate
prepayment of Loans under this Section 1.8(b) shall be made by the payment of
and borrowed again.
Section 1.9. Default Rate. Notwithstanding anything to the contrary
to:
9
(a) for any Adjusted Base Rate Loan, the sum of 2.0% plus the
Applicable Margin plus the Adjusted Base Rate from time to time in effect;
of 2.0% plus the Applicable Margin for Adjusted Base Rate Loans plus the
Adjusted Base Rate from time to time in effect;
due under Section 1.2 with respect to such Reimbursement Obligation; and
Section 1.10. The Notes. (a) The Loans made to the Borrower by a Lender
shall be evidenced by a single promissory note of the Borrower issued to such
Lender in the form of Exhibit D hereto. Each such promissory note is
hereinafter referred to as a “Note” and collectively such promissory notes are
referred to as the “Notes.”
(b) Each Lender shall record on its books and records or on a
schedule to its appropriate Note the amount of each Loan advanced, continued or
converted by it, all payments of principal and interest and the principal
balance from time to time outstanding thereon, the type of such Loan, and, for
any Eurodollar Loan, the Interest Period and the interest rate applicable
thereto. The record thereof, whether shown on such books and records of a
Lender or on a schedule to the relevant Note, shall be prima facie evidence as
to all such matters; provided, however, that the failure of any Lender to record
any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrower to repay all Loans made to it
hereunder together with accrued interest thereon. At the request of any Lender
outstanding Note.
cost or expense (including, without limitation, any loss of profit, and any
10
or to convert an Adjusted Base Rate Loan into a Eurodollar Loan, on the date
certificate shall be deemed prime facie correct.
Section 1.12. Commitment Terminations. (a) Optional Credit
time, upon 5 Business Days prior written notice to the Administrative Agent (or
the Commitments without premium or penalty and in whole or in part, any partial
outstanding. Any termination of the Commitments below the L/C Sublimit then in
Commitments.
(b) Any termination of the Commitments pursuant to this Section 1.12
order of any court or other
11
Section 1.11 hereof as if the Loans owing to it were prepaid rather than
Margin for commitment fees as shown in the definition of Applicable Margin in
Section 5.1 hereof, (computed on the basis of a year of 360 days and the actual
number of days elapsed) on the daily Unused Commitments. Such commitment fee
shall be payable quarterly in arrears on the last day of each Fiscal Quarter in
each year (commencing on December 31, 2005) and on the Termination Date, unless
the Commitments are terminated in whole on an earlier date, in which event the
equal to .125% of the face amount of (or of the increase in the face amount of)
such Letter of Credit. Quarterly in arrears, on the last day of each Fiscal
Quarter, commencing on December 31, 2005, the Borrower shall pay to the
their Percentages, a letter of credit fee at a rate per annum equal to the
Applicable Margin for Letter of Credit Fee as shown in the definition of
Applicable Margin in Section 5.1 hereof (computed on the basis of a year of
such quarter applied to the daily face amount of Letters of Credit outstanding
amendment, and other administrative fees for each Letter of Credit as
the Administrative Agent and the Borrower in a fee letter dated
September 1, 2005, or as otherwise agreed to in writing between them (without
duplication and pro rata for the administrative fee previously paid to the
Administrative Agent in connection with the Prior Credit Agreement).
principal and interest on the Loans and the Reimbursement Obligations, and of
Loan Documents, shall be made by the Borrower
12
(or such other location as the Administrative Agent may designate to the
Borrower) for the benefit of the Lender or Lenders entitled thereto. Any
Administrative Agent on the next Business Day, provided however, that if the
Borrower has provided to the Administrative Agent written authorization to
deduct such payments from its operating bank account maintained at Harris N.A.,
Chicago, Illinois, by 12:00 Noon (Chicago Time), such amounts shall be deemed to
have been received by the Administrative Agent upon receipt of such
notification. All such payments shall be made in U.S. Dollars, in immediately
respect of the Obligations, by the Administrative Agent or any of the Lenders
the Commitments as a result of an Event of Default shall be remitted to the
incurred by the Administrative Agent, in protecting, preserving or enforcing
13
L/C Obligations), the aggregate amount paid to, or held as collateral security
for, the Lenders and their Affiliates to be allocated pro rata in accordance
thereto.
Obligations shall at all times be guaranteed by each direct and indirect
Material Subsidiary of the Borrower (individually a “Guarantor” and collectively
the “Guarantors”) pursuant to Section 12 hereof or pursuant to one or more
guaranty agreements in form and substance acceptable to the Administrative
Guarantor forms or acquires any other Material Subsidiary after the date hereof,
except as otherwise provided in Section 4.1 above, the Borrower shall promptly
upon such formation or acquisition cause such newly formed or acquired Material
Subsidiary to execute an Additional Guarantor Supplement in the form of
Administrative Agent or any Lender in connection therewith. The Administrative
Agent shall promptly deliver to each Lender a copy of any Guaranty delivered
under this Section and any other materials requested by such Lender in the
“Acquired Business” means the entity, Property or assets acquired by the
Borrower or a Subsidiary in an Acquisition, after the date hereof.
14
“Adjusted Base Rate” is defined in Section 1.3(a) hereof.
“Adjusted Base Rate Loan” means a Loan bearing interest at a rate specified in
“Administrative Agent” means Bank of Montreal, Chicago Branch and any successor
terms hereof.
“ALF’s” is defined in the definition of Capitalization Rate.
the commitment fees and letter of credit fee payable under Section 2.1 hereof,
15
LEVEL
MAXIMUM TOTAL
INDEBTEDNESS/TOTAL
ASSET VALUE RATIO FOR
SUCH PRICING DATE
APPLICABLE MARGIN FOR
ADJUSTED BASE RATE
LOANS UNDER REVOLVING
CREDIT AND
REIMBURSEMENT
OBLIGATIONS SHALL BE:
APPLICABLE MARGIN FOR
EURODOLLAR LOANS
UNDER REVOLVING
CREDIT AND LETTER OF
APPLICABLE
MARGIN FOR
COMMITMENT FEE
SHALL BE:
IV
Greater than .45 to 1.0
1.50
%
2.50
%
0.40
%
III
.45 to 1.0 but greater
than .35 to 1.0
1.00
%
2.00
%
.0.35
%
II
.35 to 1.0 but greater
than .25 to 1.0
0.75
%
1.75
%
0.35
%
I
.25 to 1.0
0.50
%
1.50
%
0.30
%
the Borrower ending on or after December 31, 2005, the date on which the
Maximum Total Indebtedness/Total Asset Value Ratio for the most recently
delivered its financial statements, including a Compliance Certificate, by the
determined.
“Assets Under Development” means any real property under construction.
or different officers of the Borrower so
16
the Administrative Agent.
from one type of Loans to the other, all as determined pursuant to Section 1.5
hereof.
“Borrowing Base” means, at any date of its determination, an amount equal to 50%
of the Borrowing Base Value on such date minus the outstanding principal amount
of all Unsecured Debt of the Borrower on such date that is pari passu in rank to
the indebtedness under the Credit Agreement other than the Obligations.
delivered to the Administrative Agent and the Lenders pursuant to Sections 7.2
and 8.5 hereof.
(a) Quarterly. On the 50th day following each calendar quarter
(except when such calendar quarter ends on December 31, in which event it shall
be on the 60th day.
Eligible Property (an “Adjustment Event”), the Borrowing Base shall be adjusted
accordingly.
(c) Notice of Borrowing Base Change. Promptly following any date the
new Borrowing Base.
“Borrowing Base Requirements” means collectively that (a) no more than 10% of
the Borrowing Base Value may be comprised of Eligible Properties which are
leased by Borrower pursuant to a Qualified Ground Lease; (b) no more than 20% of
neither SNF’s or ALF’s; (c) no more than 15% of the Borrowing Base Value may be
comprised of Eligible Properties which are not 100% owned by Borrower and/or any
Guarantor (exclusive of Eligible Properties attributable to (a) above) and
(d) no more than 10% of the Borrowing Base Value may be comprised of any one
Eligible Property.
17
“Borrowing Base Value” means, at any date of its determination, an amount equal
to the sum of the following on such date (a) Eligible Properties owned more than
four quarters valued at the Calculated Value and (b) Eligible Properties owned
for less than four quarters valued at the Investment Amount.
Bahamas.
“Calculated Value” means the quotient of the Eligible Property NOI for each
applicable Eligible Property divided by its applicable Capitalization Rate with
the resulting quotient multiplied by owner’s percentage ownership of such
Eligible Property.
“Capitalization Rate” means 9.5% for assisted living facilities (“ALF’s”) and
12% for skilled nursing facilities (“SNF’s”).
Borrowed Money in excess of $10,000,000 shall occur or (c) during any
twelve (12) month period on or after the date hereof, individuals who at the
in office who either were members of the Board of Directors at the beginning of
statute thereto.
18
“Compliance Certificate” is defined in Section 8.5(c) hereof.
Borrower and the Lenders acknowledge and agree that the Commitments of the
Lenders aggregate $90,000,000 on the date hereof.
“Credit Facility Debt Service” means, for any Fiscal Quarter, all interest and
Letter of Credit fees payable on the Loans or Letters of Credit or as part of
the Obligations.
principal paid on such Total Indebtedness) less amortized principal payments
received on mortgage loans receivable or its REMIC Certificate investments
(exclusive of any balloon payments or prepayments of principal received on
mortgage loans receivable or on the underlying mortgage loans of investments in
REMIC Certificates).
Default.
“Defined Benefit Plan” is defined in Section 4.14(j) of the Code.
(or loss) plus: (i) depreciation and amortization expense; (ii) Interest
Expense; (iii) income tax expense; (iv) extraordinary, unrealized or
non-recurring losses, including impairment charges and reserves,
19
minus: (v) funds received by the Borrower or a Subsidiary as rent but which are
reserved for capital expenses; (vi) unrealized gains on the sale of assets; and,
(vii) income tax benefits.
“Effective Date” means the date all of the conditions precedent set forth in
Section 7.2 have been satisfied.
Property owned by the Borrower or a Material Subsidiary which satisfies the
following conditions which would permit such Property to be included in the
Borrowing Base:
(a) Is real property majority owned in fee simple, or 100% leased by
Borrower or a Material Subsidiary pursuant to a Qualified Ground Lease; provided
that for any Property owned less than 100%, the Borrower or Material Subsidiary
shall have the unilateral right to (i) sell, transfer or otherwise dispose of
such Property and (ii) to create a Lien on such Property as security for
(b) Currently in service (not under development or non-stabilized);
(d) Neither the Property nor the ownership interest is subject to any
Lien (other than Permitted Liens or Liens in favor of the Borrower or a Material
Subsidiary) or to any negative pledge;
(e) If such Property is owned by a Material Subsidiary, (i) none of
the Borrower’s beneficial ownership interest in such Material Subsidiary is
subject to any Lien (other than certain Permitted Liens or Liens in favor of the
Borrower or a Material Subsidiary) or to any negative pledge, (ii) the Material
Indebtedness, and (iii) the Material Subsidiary has provided a Guaranty to the
Administrative Agent pursuant to Section 4.1 hereof;
(f) That such Property, based on the Borrower’s or a Material
materially impair the value of such Property;
(g) The lessee of the Property under such lease is not more than 60
days past due with respect to any monthly rent payment obligations under such
lease, and,
Owner’s articles of
20
incorporation, by-laws, partnership agreements, operating agreements, as
applicable, and certificates of existence, good standing and authority to do
business from each appropriate state authority, and partnership, corporate or
limited liability company, as applicable, authorizations authorizing the
execution, delivery and performance of the Additional Guarantor Supplement all
certified to be true and complete by a duly authorized officer of such Property
Owner.
attributable to the Eligible Properties owned by the Borrower or a Material
Subsidiary for a period in excess of four Fiscal Quarters and defined for each
such Eligible Property or pool of such Eligible Properties under a master Lease
as the lesser of (i) Property NOI divided by 1.15, or (ii) the related Lease
payment on such Eligible Property or pool of Eligible Properties due to the
Borrower or a Material Subsidiary for such period.
member of the Borrower’s controlled group, or is under common control with the
Section 9.1 hereof.
21
(a) any total loss, destruction or damage of such Property or (b) any total
plus Preferred Dividends for such quarter, plus $400 per bed for any Property on
which the Lease of such Property does not require the tenant to pay for all
capital expenditures.
America, and (c) has substantially all of its assets outside of the United
States of America.
“Funds From Operations” or “FFO” means, for any period reported, as determined
on a consolidated basis of the Borrower, the sum of net income or (loss), plus:
(i) depreciation and amortization expense; (ii) realized losses from
extraordinary or non-recurring items; (iii) realized losses on sales of real
estate or other assets; (iv) impairment charges or other loss reserves; and
(v) provisions for income taxes for such period; minus: (i) gains (whether
realized or unrealized) on sales of real estate or other assets; and,
(ii) income tax benefits for such period.
“Future Property” means any Property which the Borrower or any Subsidiary of the
Borrower acquires after the date hereof.
similar functions of comparable stature and authority within
22
authority or instrumentality, bureau or court having jurisdiction over any
respective Properties.
“Improvements” for any Property means all buildings, structures, fixtures,
tenant improvements and other improvements of every kind and description now or
hereafter located in or on or attached to the Land for such Property; and all
replacements thereof.
23
of consolidated interest income) of such Person for such period. Interest
Expense shall exclude any amortization of (i) deferred financing fees, including
the write-off such fees relating to the early retirement of such related
debt).
“Investment Amount” means for any Property acquired after the date hereof, the
product of (i) the percentage interest of such Property owned by the Borrower or
Guarantor and (ii) the aggregate purchase price paid by the Borrower or its
Subsidiary for such other Property (giving effect to any securities used to
purchase a Property at the fair market value of the securities at the time of
purchase based upon the price at which such securities could be exchanged into
the Borrower’s common stock assuming such exchange occurred on the date of
acquiring the Property).
“Land” for any Property means the real property upon which the Improvements are
located, together with all rights, title and interests appurtenant to such real
property, including without limitation all rights, title and interests to
(a) all strips and gores within or adjoining such property, (b) the streets,
roads, sidewalks, alleys, and ways adjacent thereto, (c) all of the tenements,
hereditaments, easements, reciprocal easement agreements, rights-of-way and
other rights, privileges and appurtenances thereunto belonging or in any way
and all water, sewer and wastewater rights, (e) all mineral, oil, gas,
hydrocarbon substances and other rights to produce or share in the production of
anything related to such property, and (f) all other appurtenances appurtenant
to such property, including without limitation, any now or hereafter belonging
or in anywise appertaining thereto.
the Borrower and approved by the Administrative Agent in its sole discretion
“L/C Sublimit” means $10,000,000 as reduced pursuant to the terms hereof.
24
retention arrangement.
“Loan” is defined in Section 1.2 hereof and, as so defined, includes an Adjusted
hereunder.
or the Lenders thereunder; provided, however, that the sale of assets of one or
more Guarantors in accordance with the terms of this Agreement shall not be
deemed in and of itself to cause a Material Adverse Effect absent the presence
of the factors set forth above.
“Material Subsidiary” means, each Subsidiary that owns a Property included in
the Borrowing Base Value and Education Property Investors, Inc.
“Medical Office Buildings” means a medical office building that contains one or
more physicians’ offices and examination rooms, and may also include pharmacies,
hospital ancillary service space and day-surgery operating rooms.
25
“Note” is defined in Section 1.10 hereof.
represented by such Lender’s Credit Commitment or, if the Commitments have been
its primary operations within the United States of America;
(c) the investment or acquisition is an asset associated with an
Eligible Line of Business which may include but is not limited to sale/leaseback
transactions, mortgage loans, lines of credit or other financings, etc.;
(d) if a new Material Subsidiary is formed or acquired as a result of
or in connection with the Acquisition, the Borrower shall have complied with the
26
Default shall exist, including with respect to the financial covenants contained
in Section 8.21 hereof, further provided however, that if such Acquisition
together with any other Acquisitions made during the then-current Fiscal Quarter
and the preceding three Fiscal Quarters of the Borrower have an aggregate cost
exceeding $100,000,000, then for such Acquisition and thereafter for any
additional Acquisition in such then-current Fiscal Quarter for an aggregate cost
exceeding $20,000,000, the Borrower shall provide to the Administrative Agent
covenant calculations for the covenants contained in Section 8.21, showing that
the projected effect of the Acquisition, in terms of additional asset value,
liabilities incurred if any, additional revenues and expenses associated
therewith have been contemplated and have been projected into the expected
operating results and financial position of the Borrower for the Fiscal Quarter
in which the Acquisition occurs, and demonstrating that such Acquisition is not
reasonably expected to cause a violation of the Section 8.21 covenants for such
Fiscal Quarter.
appeal; and (h) Liens on Properties not included in the Borrowing Base Value.
27
“Prime Rate” shall mean the rate of interest per annum publicly announced by the
Administrative Agent from time to time as its U.S. prime rate in effect at its
office in Chicago, Illinois; each change in the Prime Rate shall be effective
represent the lowest or best rate charged to any customer. The Administrative
Agent may make commercial loans or other loans at rates of interest at, above or
“Prior Credit Agreement” is defined in the first paragraph of the Preliminary
Statements on Page 1 of this Agreement.
“Property or Properties” means, as to any Person, all types of real, personal,
Subsidiaries.
“Property Net Operating Income” or “Property NOI” means, with respect to a
Property and for the four most recently ended Fiscal Quarters, the sum of the
following (without duplication): (a) all revenues received in the ordinary
course of operating such Property (including proceeds of rent loss insurance but
(whether paid or accrued) directly related to the operation or maintenance of
such Property, including but not limited to payroll expenses, taxes, assessments
and other similar charges, insurance, utilities, maintenance, repair and
landscaping expenses but not including any management fees (in accordance with
the computation of EBITDA plus rent and management fees). All amounts due to
the Borrower or Guarantor, whether as rent or mortgage payments for the
property, will be excluded from the calculation of (b) above.
applicable) in, and to a Property.
forth on Schedule 1.1 hereto and for a Future Property means any ground lease
pre-defined requirements, (c) which has a remaining term (including any renewal
(e) with respect to which a Lien may be granted without the consent of the
lessor, (f) which contains lender protection provisions acceptable to the
Administrative Agent, including, without limitation, provisions to the effect
that (i) the lessor shall notify any holder of a Lien in such lease of the
occurrence of any default by the lessee under such lease and shall afford such
holder the option to cure such default, and (ii) in the event that
28
such lease is terminated, such holder shall have the option to enter into a new
lease having terms substantially identical to those contained in the terminated
lease and (g) which is otherwise acceptable in form and substance to the
Administrative Agent.
“Real Property” for any Senior Housing Asset means the Land and the Improvements
for such Senior Housing Asset, including without limitation, parking rights and
any and all real property rights to other ancillary functions necessary for the
operation of such Senior Housing Asset.
“Rehabilitation Assets” means healthcare facilities which are used primarily for
the provision of services to patients requiring rehabilitative or restorative
care, including some or all of the following services but not limited to
physical therapy, occupational therapy, speech therapy and other related
services.
“REMIC” means Real Estate Mortgage Investment Conduit.
“REMIC Certificates” means individually or collectively a certificated
beneficial interest in a REMIC.
constitute more than 66-2/3% of the sum of the total outstanding Loans,
interests in Letters of Credit, and Unused Commitments of the Lenders.
29
Vice President, Chief Operating Officer, Chief Financial Officer, or Treasurer
of any Person.
Letters of Credit described in Sections 1.1 and 1.2 hereof.
“Secured Debt” means as of any date of determination, the aggregate principal
amount of all indebtedness outstanding of the Borrower and its Subsidiaries,
evidenced by notes, bonds, indebentures or similar instruments and capital lease
obligations that are secured by a Lien (other than certain Permitted
Encumbrances).
“Secured Recourse Debt” means Secured Debt that is recourse for payment to the
improvements incidental thereto.
“Significant Lease” means any Lease under which the Borrower or one of its
Subsidiaries is the lessor and which Lease provides for minimum rent payments of
$1,000,000 or more during any calendar year.
“SNF’s” is defined in the definition of Capitalization Rate.
preferred equity security.
30
“Termination Date” means November 7, 2008, or such earlier date on which the
“Total Asset Value” means the book value, without giving effect to depreciation,
of all assets of the Borrower and its Subsidiaries at such time; less (a) the
amount, if any, of the Borrower’s investment in any unconsolidated subsidiary,
joint venture or other similar entity, and (b) all amounts appearing on the
assets side of its consolidated balance sheet separately identifiable as
money.
ERISA.
“Unsecured Debt” means, with respect to a Person as of any given date, the
aggregate principal amount of all Total Indebtedness of such Person outstanding
at such date that is not Secured Indebtedness (excluding Total Indebtedness
associated with Unconsolidated Affiliates that is not guaranteed by the Borrower
or a Subsidiary of the Borrower) and in the case of the Borrower shall include
(without duplication) Total Indebtedness that does not constitute Secured
Indebtedness.
“Unsecured Debt Service” means, for a given period, Debt Service with respect to
Unsecured Debt.
31
Obligations.
America.
contingency.
32
as follows:
laws of the State of Maryland, has full and adequate power to own its Property
Subsidiary free and clear of all Liens. Neither the Borrower or any of its
Subsidiaries has committed or is obligated to issue Stock Equivalents in any of
the Borrower’s Subsidiaries to any Person not owned by the Borrower or its
Subsidiaries.
Section 6.3. Authority and Validity of Obligations. The Borrower has
guarantee the Obligations and to perform all of its obligations under the Loan
each Material Subsidiary have been duly authorized, executed, and delivered by
such Person and constitute valid and binding obligations of such Person
do not, nor does the performance or observance by the Borrower or any Subsidiary
order or decree binding upon the Borrower or any Material Subsidiary or any
provision of the
33
the Borrower or any Material Subsidiary, (b) contravene or constitute a default
under any covenant, indenture or agreement of or affecting the Borrower or any
Material Subsidiary or any of its Property or (c) result in the creation or
imposition of any Lien on any Property of the Borrower or any Material
Subsidiary.
the proceeds of the Revolving Credit for refinancing its existing indebtedness,
for its general working capital purposes and for such other legal and proper
purposes as are consistent with all applicable laws. Neither the Borrower nor
any Subsidiary is engaged in the business of extending credit for the purpose of
restriction hereunder.
Section 6.5. Financial Reports. The consolidated balance sheet of
the Borrower and its Subsidiaries as at December 31, 2004, and the related
Ernst & Young, LLP, independent public accountants, and the unaudited interim
September 30, 2005 and the related consolidated statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for the
nine (9) months then ended, heretofore furnished to the Administrative Agent and
the Lenders, fairly present the consolidated financial condition of the Borrower
statements furnished pursuant to Section 8.5 hereof.
Section 6.6. No Material Adverse Change. Since September 30, 2005,
there has been no event which could reasonably be expected to have a Material
Adverse Effect on the Borrower or its Subsidiaries, taken as a whole, except
Section 6.7. Full Disclosure. The statements and information
Borrower only represents that the
34
same were prepared on the basis of information and estimates the Borrower
Section 6.9. Governmental Authority and Licensing. The Borrower and
Section 6.12. Taxes. Each of the Borrower and its Subsidiaries has filed,
or there has been filed on its behalf, all tax returns (federal, state, local
and foreign) required to be filed thereby and has paid all taxes shown thereon
to be due, including interest, additions to taxes and penalties, or has provided
adequate reserves in accordance with GAAP for payment thereof, except where the
failure to so file or pay would not cause a Material Adverse Effect on the
Borrower and its Subsidiaries taken as whole.
and effect.
(other than with Wholly-owned Subsidiaries) on terms and conditions which are
35
Section 6.15. Investment Company; Public Utility Holding Company.
Section 6.16. ERISA. During the 5-year period before each date as of
which this representation is made or deemed made with respect to any Plan (or,
with respect to (f) and (h) below, as of the date on which such representation
individually or in the aggregate, has occurred and could reasonably be expected
to have a Material Adverse Effect: (a) a Reportable Event; (b) an “accumulated
Section 302 of ERISA); (c) noncompliance with the applicable provisions of ERISA
or the Code; (d) termination of a Single Employer Plan; (e) a Lien on the
property of the Borrower or any Subsidiary in favor of the PBGC or a Plan; (f) a
complete or partial withdrawal from a Multiemployer Plan by the Borrower or any
Commonly Controlled Entity; (g) a liability of the Borrower or a Commonly
Controlled Entity under ERISA if the Borrower or such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the annual
made or deemed made; (h) the Reorganization or Insolvency of any Multiemployer
Plan; and (i) an event or condition with respect to which the Borrower or any
Commonly Controlled Entity could reasonably be expected to incur any liability
in respect of a Former Plan. Neither the Borrower nor any Subsidiary maintains
or participates in any Defined Benefit Plan or Multiple Employer Plan.
Material Adverse Effect.
Adverse Effect, the Borrower represents and warrants that to the actual
knowledge of each respectively that the Borrower and its Subsidiaries, and each
of the Properties owned by them: (i) comply in all material respects with all
applicable Environmental Laws; (ii) the tenants of the Borrower and its
Subsidiaries have obtained all governmental approvals required for the operation
of the Properties under any applicable Environmental Law; (iii) the Borrower and
its Subsidiaries have no actual knowledge of any other Person who has, caused
any Release, threatened Release or disposal of any Hazardous Material at, on,
about, or off any of the Properties in any material quantity and, to the actual
the knowledge of the
36
from any other property; (iv) none of the Properties contain or have contained
any: (1) underground storage tanks in which any Hazardous Material is being or
has been treated, stored or disposed of on any Property owned by the Borrower or
any Subsidiary, in each case in any manner not in compliance in all material
respects with all applicable Environmental Laws, (2) material amounts of
Hazardous Material Activity at any of the Properties; (vi) the Borrower and its
notice or actual knowledge of and are not required to give any notice of any
Environmental Claim involving the Borrower or any Subsidiary or any of their
Properties, and there are no conditions or occurrences at any of their
Environmental Claim against the Borrower or any Subsidiary or such Property;
transferability of their Properties in connection with any (1) Environmental Law
(ix) there are no conditions or circumstances at any of their Properties which
Section 6.18. Other Agreements. Neither the Borrower nor any Subsidiary
Section 6.20. No Broker Fees. No broker’s or finder’s fee or commission
and is continuing.
Section 6.22. Stock of the Borrower. As of October 21, 2005, the entire
outstanding capital stock of the Borrower consists of (i) Series C Cumulative
Convertible Preferred Stock,
37
2,000,000 shares; (ii) Series E Cumulative Convertible Preferred Stock,
356,875 shares; (iii) Series F Cumulative Preferred Stock, 6,640,000 shares; and
(iv) Common Stock, 23,195,999 shares; all of which are duly and validly issued
and outstanding, fully paid and nonassessable as of the Effective Date. The
issuance and sale of such Stock of the Borrower of the Borrower either (i) has
issued pursuant to an exemption therefrom. The Borrower meets the requirements
Section 6.23. Condition of Property; Casualties; Condemnation. As of the
Effective Date, to the actual knowledge of the Borrower or its Material
Subsidiaries, each Property owned by them, in all material respects (a) is in
free of structural defects, (c) is not subject to material deferred maintenance
and (d) has and will have all building systems contained therein in good repair,
working order and condition, normal wear and tear excepted. To the actual
knowledge of the Borrower or of any of its Material Subsidiaries, none of the
Properties owned by them is currently materially and adversely affected as a
the actual knowledge of the Borrower, threatened against any Property owned by
it in any manner whatsoever. No casualty has occurred to any such Property that
Section 6.24. Legal Requirements and Zoning. To the actual knowledge of
the Borrower and its Subsidiaries, the use and operation of each Property owned
by the Borrower and its Subsidiaries constitutes a legal use under applicable
Section 6.25. Qualified Ground Leases. The only material leases of
Eligible Properties for which either the Borrower or a Guarantor is a lessee are
the Qualified Ground Leases. The Property Owner for a Real Property subject to
a Qualified Ground Lease is the lessee under such Qualified Ground Lease and no
consent is necessary to such Person being the lessee under such Qualified Ground
Lease which has not already been obtained. The Qualified Ground Leases are in
full force and effect and no defaults exist thereunder.
name of each landlord and lessee under each Significant Lease. As of the
Effective Date: (i) none of the tenants under Significant Leases on Properties
owned by the Borrower, Material Subsidiaries or any other Subsidiary of the
Borrower are in default for a period in excess of 60 days on the monthly minimum
rent payments due under such Significant Leases and (ii) no other tenants on
other Leases that in the aggregate generate
38
more than $4,000,000 in annual contractual rents payable to the Borrower or its
Subsidiaries are in default for a period in excess of 60 days on the monthly
minimum rent payments due under such Leases.
than the continuation of, or conversion into, an Adjusted Base Rate Loan) or of
the L/C Issuer to issue, extend the expiration date (including by not giving
this Agreement, shall be subject to the following conditions precedent:
hereunder:
as a result of such Credit Event;
received the notice required by Section 1.5 hereof and a Borrowing Base
Certificate in the form attached hereto as Exhibit E, in the case of the
the date on such Credit Event as to the facts specified in
subsections (a) through (c), both inclusive, of this Section.
initial Credit Event:
Agreement duly executed by the Borrower and its Material Subsidiaries, as
39
in compliance with the provisions of Section 1.10 hereof;
copies of the Borrower’s and each Material Subsidiary’s articles of
Secretary;
copies of resolutions of the Borrower’s and each Material Subsidiary’s Board of
documents on the Borrower’s and each Material Subsidiary’s behalf, all certified
in each instance by its Secretary or Assistant Secretary;
copies of the certificates of good standing for the Borrower and each Material
Subsidiary from the office of the secretary of the state of its incorporation or
(h) each Lender shall have received a Borrowing Base Certificate
containing calculations of the Borrowing Base as of June 30, 2005, and
Schedule 1.1 (form of which is attached hereto) and a Compliance Certificate;
favorable written opinion of counsel (attached as Exhibit I hereto) to the
Borrower and each Material Subsidiary, in form and substance satisfactory to the
Administrative Agent; and
Section 7.3. Eligible Property Additions and Deletions to the
Borrowing Base. As of September 30, 2005, the Borrower represents to the
Required Lenders and the Administrative Agent that the Initial Properties
qualify as Eligible Properties and that the information provided on Schedule 1.1
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reasonably required by the Administrative Agent that such deletion shall not
(A) cause the Eligible Properties in the aggregate to violate the Borrowing Base
Requirements, (B) cause a Default, or (C) cause or result in the Borrower
failing to comply with any of the financial covenants contained herein. Each
addition shall be an Eligible Property in a minimum amount equal to $5,000,000
Borrowing Base Value, or shall be comprised of more than one qualifying Eligible
Properties that in the aggregate have a minimum amount equal to $5,000,000
Borrowing Base Value, and all such additions shall be subject to approval by the
Required Lenders.
Property to otherwise qualify as an Eligible Property and (b) upon five
(5) Business Days’ prior written notice to the Borrower, designate that a
Property is no longer an Eligible Property upon their determination that such
Property ceases to meet the criteria set forth in the definition of Eligible
Property, provided however, that if during such five (5) Business Day Period the
Borrower can satisfy those requirements deemed unsatisfied by the Required
Lenders, such Property shall remain an Eligible Property.
shall cause each Material Subsidiary to, preserve and maintain its existence,
shall cause each Material Subsidiary to, preserve and keep in force and effect
(ii)(a) the Common Stock of the Borrower shall at all times be duly listed on
Association of Securities Dealers Automated Quotation and (b) the Borrower shall
Exchange, Inc., the American Stock Exchange
41
Section 8.2. Maintenance of Properties. The Borrower and each
Material Subsidiary shall cause each of its tenants to, maintain, preserve, and
keep its Property in working order and condition (ordinary wear and tear
excepted) and to maintain the value of such Property in all material respects,
of such Person.
Section 8.3. Taxes and Assessments. The Borrower and each Material
Subsidiary shall cause its tenants to duly pay and discharge, all taxes, rates,
that individually or collectively would materially impair the value of such
Property, and in each case before the same become delinquent and before
of the matter under contest and adequate reserves are provided therefor.
Section 8.4. Insurance. The Borrower and each Material Subsidiary
shall maintain or cause its tenants to maintain insurance with responsible and
owning similar Properties in the same general areas in which the Borrower or
such Subsidiary owns such Properties.
GAAP and shall furnish to the Administrative Agent, each Lender and each of
their duly authorized representatives such information respecting the business
and financial condition of the Borrower and each Subsidiary as the
request, shall furnish to the Administrative Agent and the Lenders the
following:
last day of each Fiscal Quarter, a Borrowing Base Certificate showing the
business on the last day of such Fiscal Quarter, prepared by the Borrower and
Borrower a copy of the consolidated balance sheet of the Borrower and its
statements of income, and cash flows of the Borrower and its Subsidiaries for
the Fiscal Quarter and for the fiscal year-to-date period then ended, each in
accordance with GAAP and certified to by its chief financial officer or another
officer of the Borrower acceptable to the Administrative Agent (the delivery of
the Borrower’s Form 10-Q shall satisfy this requirement);
42
(c) with each of the financial statements furnished to the Lenders
pursuant to subsections (b) and (d) hereof, a written certificate (“Compliance
Certificate”) in the form attached hereto as Exhibit F signed by the chief
financial officer of the Borrower or another officer of the Borrower acceptable
to the Administrative Agent to the effect that to the best of such officer’s
has occurred during such period, setting forth a description of such Default or
(d) as soon as available, and in any event within 90 days after the
and accompanying notes thereto, each in reasonable detail showing in comparative
consolidated financial statements by an unqualified opinion of Ernst & Young,
LLP or another firm of independent public accountants of recognized national
any Subsidiary to its stockholders or other equity holders, and copies of each
(g) as soon as available, and in any event within 90 days after the
basis, with such projections
43
in reasonable detail prepared by the Borrower and in form satisfactory to the
of any responsible officer of the Borrower, written notice of any threatened or
(j) within 45 days of the end of each of the first 3 Fiscal Quarters
list of all newly formed or acquired Subsidiaries during such quarter (such list
Schedule 6.2 hereto); (ii) a list of newly executed Significant Leases or
Qualified Ground Leases during such quarter (upon receipt of which Schedule 1.1
and/or Schedule 6.26 shall be deemed amended to include references to such
Significant Lease and/or Qualified Ground Leases); (iii) a copy of any notice of
a material default or any other material notice (including without limitation
ground lessor under a Qualified Ground Lease or a Lease during such quarter and
is continuing to be in default with respect to monthly minimum rent payments in
of 60 days on the monthly minimum rent payments due under such Leases; and
of any responsible officer of the Borrower, written notice to each Lender if a
Lease of any Property included in the Borrowing Base Value is more than
thirty (30) days past due.
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Section 8.7. Office of Foreign Asset Control. Neither Borrower nor
any Guarantor is (or will be) a person with whom a Lender is restricted from
of the Department of the Treasury of the United States of America (including,
any Lender with any additional information that the Lender deems necessary from
not apply to nor operate to prevent any Permitted Liens.
Section 8.9. Investments, Acquisitions, Loans and Advances. The
indirectly, make, retain or have outstanding any investments or acquire all or
prevent:
Subsidiaries;
45
and its Subsidiaries in the ordinary course of business to finance working
capital needs;
(h) investments in Permitted Acquisitions;
(i) investments held by the Borrower and its Subsidiaries as of the
(j) investments in Medical Office Buildings in an amount not to
(k) investments in real properties that are not Senior Housing Assets
and are not otherwise permitted under this Section 8.9 in an amount not to
exceed $10,000,000 in the aggregate at any one time outstanding;
(l) investments in joint ventures in an amount not to exceed
$30,000,000 in the aggregate at any one time outstanding excluding investments
in joint ventures existing prior to the date of this Agreement;
(m) Assets Under Development in an amount not to exceed $30,000,000 in
the aggregate at any one time outstanding excluding Assets Under Development
existing prior to the date of this Agreement;
(n) investments in Rehabilitation Assets, in an amount not to exceed
$50,000,000 in the aggregate at any one time outstanding, excluding
Rehabilitation Assets existing prior to the date of this Agreement;
(o) investments in REMIC’s pertaining to issues for which the Borrower
is both the issuer and the servicer in an amount not to exceed $10,000,000 in
the aggregate at any one time outstanding excluding investments in REMIC’s of
the Borrower existing prior to the date of this Agreement;
(p) investments in publicly traded debt or equity instruments issued
by companies engaged in the healthcare industry in an amount not to exceed
$30,000,000 in addition to investments in publicly traded debt or equity
instruments held by the Borrower prior to the date of this Agreement; and
(q) investments received in connection with a workout of any
obligation owed to Borrower or its Subsidiaries.
Investments of the type described in Sections (j), (k), (l), (m), (n), (o), (p)
and (q) immediately preceding shall at no time exceed $80,000,000 in the
aggregate at any one time outstanding. In determining the amount of
(regardless of any subsequent appreciation or depreciation therein), and loans
and advances shall be taken at the principal amount thereof then remaining
unpaid.
46
Section 8.10. Mergers, Consolidations and Sales. The Borrower will not
different from that engaged in on the Closing Date and; further provided,
however, that so long as no Default or Event of Default exists this
business;
Subsidiaries not more than $100,000,000 during any fiscal year of the Borrower;
further provided however, that if such disposition during such Fiscal Quarter
exceeds $5,000,000 and together with any other dispositions made during the
preceding three Fiscal Quarters of the Borrower in the aggregate exceed
$50,000,000, then for such disposition(s) the Borrower shall provide to the
Administrative Agent covenant calculations for the covenants contained in
Section 8.21, showing that the projected effect of such disposition(s) have been
disposition occurs, and demonstrating that such disposition(s) are not
reasonably expected to cause a violation of the Section 8.21 covenants
applicable to the Fiscal Quarter.
Section 8.11. Maintenance of Material Subsidiaries. The Borrower shall
not assign, sell or transfer, nor shall it permit any Material Subsidiary to
interests of a Material Subsidiary; provided, however, that the foregoing shall
of Material Subsidiaries granted to the Administrative Agent, (b) the issuance,
necessary to qualify, such person as a director of such Material Subsidiary, and
(c) any transaction permitted by Section 8.10(b) above.
47
Section 8.12. Intentionally Omitted.
Property.
each of its owned Properties, respectively, the Borrower shall, and shall cause
each Subsidiary to require that each tenant and subtenant, if any, of any of the
Properties or any part thereof, at all times, do the following to the extent the
applicable Environmental Laws; (ii) obtain and maintain in full force and effect
all material governmental approvals required by any applicable Environmental Law
for operations at each of the Properties and (iii) cause to be cured any
material violation by it or at any of the Properties of applicable Environmental
Laws.
Section 8.15. Burdensome Contracts With Affiliates. The Borrower shall
not, nor shall it permit any Subsidiary to, enter into any contract, agreement
or business arrangement with any of its Affiliates (other than with Wholly-owned
other.
and its Subsidiaries ends on December 31st of each year; and the Borrower shall
present basis.
Section 8.17. Intentionally Omitted.
a result the general nature of the business of the Borrower and its Subsidiaries
engaged in by it as of the Closing Date. As of the Closing Date,
48
the general nature of the business of the Borrower and its Subsidiaries is
primarily the business of the acquisition, financing and ownership of Senior
Housing Assets and other business activities incidental thereto.
shall not, nor shall it permit any Subsidiary (except for bankruptcy remote
subsidiaries established in connection with (i) any securitization or
any other distributions on any Subsidiary’s capital stock or other equity
Property to the Borrower or any other Subsidiary provided however, that the
foregoing does not impose any limitation on transfers of property that is
subject to a Permitted Lien or (e) guarantee the Obligations and/or grant Liens
Section 8.21. Financial Covenants. (a) Maximum Total Indebtedness to
Borrower, the Borrower shall not permit the ratio of Total Indebtedness to Total
Asset Value to be greater than .50 to 1.0.
Secured Debt to Total Asset Value to be greater than .35 to 1.0
(c) Minimum EBITDA to Interest Expense Ratio. As of the last day of each
Rolling Period of the Borrower, the Borrower shall not permit the ratio of
EBITDA to Interest Expense to be less than 2.50 to 1.0.
Period of the Borrower, the Borrower shall not permit the ratio of EBITDA to
Fixed Charges to be less than 1.50 to 1.0.
(e) Maximum Secured Recourse Debt to Total Asset Value Ratio. As of the last
ratio of Secured Recourse Debt to Total Asset Value to be greater than .10 to
1.00.
(f) Maintenance of Net Worth. The Borrower shall at all times maintain a
Tangible Net Worth of not less than the sum of (a) $350,000,000 plus (b) 85% of
Tangible Net Worth.
49
(g) Floating Rate Debt. On any date, the Borrower and its Subsidiaries shall
40% of Total Asset Value.
Section 8.22. Borrowing Base Covenants. (a) The Borrower shall cause the
Borrowing Base Requirements; provided that if the requirements of clauses (a),
(b), (c) or (d) of the definition of Borrowing Base Requirements are not met,
then within 2 Business Days of notice of such failure either (i) the Borrower
shall have cured such failure or (ii) for Borrowing Base purposes the Borrower
shall have lowered the Borrowing Base Value of those Eligible Properties that
contributed to such failure to the point that such failure no longer exists.
(b) Minimum Borrowing Base Value. The Borrower shall at all times maintain a
Borrowing Base Value of not less than $50,000,000.
(c) Minimum Eligible Property NOI to Credit Facility Debt Service Ratio. As
permit the ratio of Eligible Property NOI to the sum of (i) Unsecured Debt
Service with respect to indebtedness that is pari passu in rank to the
indebtedness under the Credit Agreement, plus (ii) Credit Facility Debt Service,
to be less than 2.25 to 1.0.
(a) default in the payment when due of all or any part of the principal on any
in this Agreement) or of any Reimbursement Obligation payable hereunder or under
(b) default within three (3) Business Days of when due in the payment of all
or any part of the interest on any Note (whether at the stated maturity thereof
or at any other time provided for in this Agreement) or of any fee or other
(c) default in the observance or performance of any covenant set forth in
Sections 8.1, 8.8, 8.9, 8.10, 8.11, 8.21 or 8.22 hereof;
(d) default in the observance or performance of any other provision hereof or
50
subsections (a) through (e) above) which is specified as an event of default
(g) default shall occur under any Indebtedness for Borrowed Money issued,
$10,000,000 or under any indenture, agreement or other instrument under which
(k) the Borrower or any Material Subsidiary shall (i) have entered
a receiver, custodian, trustee, examiner,
51
good faith any appointment or proceeding described in Section 9.1(l) hereof;
(l) a custodian, receiver, trustee, examiner, liquidator or similar official
of any of its Property, or a proceeding described in Section 9.1(k)(v) shall be
a period of 60 days;
(m) default or event of default has occurred under any Qualified Ground Lease;
(n) there shall be a determination from the applicable Governmental Authority
from which no appeal can be taken that the Borrower’s tax status as a REIT has
been lost; or
(o) the Borrower at any time hereafter fails to cause the Common Stock of the
Borrower to be duly listed on the New York Stock Exchange, Inc., the American
Quotation.
than those described in subsection (k) or (l) of Section 9.1 hereof has occurred
Required Lenders declare the principal of and the accrued interest on all
52
in subsections (k) or (l) of Section 9.1 hereof has occurred and is continuing,
Credit.
(ii) no Letters of Credit, Commitments, Loans or other Obligations remain
notice to the Borrower under Section 9.1(d) hereof promptly upon being requested
53
Section 9.6. Expenses. The Borrower agrees to pay to the
means of Adjusted Base Rate Loans from such Lender, which Adjusted Base Rate
Lender.
impracticable,
54
55
comparable agency, has had the effect of reducing the rate of return on such
as will compensate such Lender for such reduction.
(c) A certificate of a Lender claiming compensation under this Section 10.3
shall be conclusive if reasonably determined. In determining such amount, such
Each Lender hereby appoints Bank of Montreal, Chicago Branch, as the
reasonably incidental thereto. The Lenders expressly agree that the
Administrative Agent is not acting as a fiduciary of the Lenders in respect of
Administrative Agent or any of the Lenders except as expressly set forth herein.
56
accountants or experts.
ascertain, inquire into or verify: (i) any
57
any other Loan Document or any Credit Event; (ii) the performance or observance
of any of the covenants or agreements of the Borrower or any Subsidiary
condition specified in Section 7 hereof, except receipt of items required to be
genuineness, enforceability, perfection, value, worth or collectibility hereof
connection with any Loan Document; and the Administrative Agent makes no
itself informed as to the creditworthiness of the Borrower and its Subsidiaries,
and the Administrative Agent shall have no liability to any Lender with respect
thereto.
Section 11.7. Resignation or Removal of Administrative Agent and
Administrative Agent may be removed for gross negligence or willful misconduct
at any time by written notice from the Required Lenders to the Administrative
Agent and the Borrower. Upon any such resignation or removal of the
58
successor Administrative Agent from the Lenders or if no Lender is willing to
serve as Administrative Agent, a third party. If no successor Administrative
Agent’s giving of notice of resignation then the retiring Administrative Agent
may be any Lender hereunder or any commercial bank organized under the laws of
appointment as the Administrative Agent hereunder, such successor Administrative
duties of the retiring Administrative Agent under the Loan Documents, and the
or removal hereunder as Administrative Agent, the provisions of this Section 11
payments due each Lender hereunder directly to such Lender.
consideration, receipt of which is hereby acknowledged, each Material Subsidiary
party hereto (including any Material Subsidiary formed or acquired after the
Closing Date executing an Additional Guarantor Supplement in the form attached
hereto as Exhibit G or such other form acceptable to the Administrative Agent)
hereby unconditionally and irrevocably guarantee jointly and severally to the
Administrative Agent, the
59
of principal of and interest on the Notes, the Reimbursement Obligations, and
the terms hereof and thereof (including interest which, but for the filing of a
petition in bankruptcy, would otherwise accrue on any such indebtedness,
obligation, or liability). In case of failure by the Borrower or other obligor
punctually to pay any Obligations guaranteed hereby, each Guarantor hereby
affected by:
or otherwise;
other Loan Document;
connection herewith;
60
interest on any Note or any Reimbursement Obligation or any other amount payable
Section 12.
Section 12.3. Discharge Only upon Payment in Full; Reinstatement in
Agreement and all other Loan Documents and, if then outstanding and unpaid. If
obligor or any Guarantor under the Loan Documents is rescinded or must be
hereunder, or otherwise, until all the Obligations shall have been paid in full
full of the Obligations and all other amounts payable by the Borrower hereunder
benefit of the Administrative Agent and the Lenders (and their Affiliates) and
Agreement or any other Loan Document, is stayed upon the insolvency, bankruptcy
or reorganization of the Borrower or such obligor, all
61
or the other Loan Documents, shall nonetheless be payable by the Guarantors
the Required Lenders.
Section 12.9. Guarantor Covenants. Each Guarantor shall take such action
that the net amount actually received by each Lender and the Administrative
amount) is equal to the amount which that Lender or the Administrative Agent (as
Administrative Agent or any Lender pays any amount in respect of any such taxes,
Administrative Agent or such Lender for that payment on demand in the currency
in which such payment was made. If the Borrower or such Guarantor pays any such
that payment or certified copies thereof to the Lender or Administrative Agent
payment.
fees, pursuant to the Loan Documents
62
and the Obligations) of the United States Internal Revenue Service or
Internal Revenue Service, and a certificate representing that such Lender is not
to time, each Lender shall submit to the Borrower and the Administrative Agent
Administrative Agent, to such Lender and (ii) required under then-current United
payments in respect of all amounts to be received by such Lender, including
the Borrower or the Administrative Agent, each Lender that is a United States
to the Borrower and the Administrative Agent a certificate to the effect that it
otherwise have.
payment of interest.
63
Section 13.6. Survival of Indemnities. All indemnities and other
signature pages hereof, and to the Borrower or any Guarantor to:
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31365 Oak Crest Drive
Suite 200
Telephone: (805) 981-8655
Telecopy: (805) 981-8663
Section 13.10. Successors and Assigns. This Agreement shall be binding
hereof. The Borrower authorizes each Lender to disclose to any participant or
prospective participant under this Section any financial or other information
pertaining to the Borrower or any Subsidiary.
65
if other than the Administrative Agent) and, so long as no Event of Default then
agreement (substantially in the form attached hereto as Exhibit H or in such
Lender, such assignee Lender or Lenders, the Administrative Agent (and the
L/C Issuers, if other than the Administrative Agent) and, if required as
provided above, the Borrower, which agreement shall specify in each instance the
portion of the Obligations which are to be assigned to the assignee Lender and
the portion of the Commitments of the assigning Lender to be assumed by the
information pertaining to the Borrower or any Subsidiary. Notwithstanding any
other provision hereof, neither the Borrower nor any of its Subsidiaries or
Affiliates may at any time hold any interest whether by assignment or otherwise
in the Loan Documents, as a Lender.
Lender from any of its obligations hereunder or substitute any such pledgee
66
L/C Issuer are affected thereby, the Administrative Agent or such L/C Issuer, as
signed by each Lender, increase the aggregate Commitments of the Lenders, change
the definitions of Termination Date or Required Lenders, change the provisions
of this Section 13.13, release any material guarantor or any substantial part of
the Collateral (except as otherwise provided for in the Loan Documents), or
agrees to pay all reasonable costs and expenses of the Administrative Agent in
consummated. The Borrower further agrees to indemnify the Administrative Agent,
each Lender, and their respective directors, officers, employees, agents,
financial advisors, and consultants against all losses, claims, damages,
indemnified Person is a party thereto, or any settlement arrangement arising
or a Lender at any time, shall reimburse the
67
68
superseded hereby.
arising out of the payment or collection of any Excess Interest.
69
Section 13.22. Lender’s Obligations Several. The obligations of the
entity.
the Federal Courts located in New York, New York and of any New York State court
sitting in the City of New York for purposes of all legal proceedings arising
court has been brought in an inconvenient forum. THE BORROWER, THE GUARANTORS,
THE ADMINISTRATIVE AGENT, AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL
Section 13.24. Amendment and Restatement. This Agreement shall become
effective on the Closing Date and shall supersede all provisions of the Prior
Credit Agreement as of such date. From and after the Closing Date, all
Agreement. The Parent heretofore executed and delivered to the Agent certain
Collateral Documents.
Section 13.25. Equalization of Outstanding Obligations. (a) Equalization
of Outstanding Obligations. Upon the satisfaction of the conditions precedent
set forth in Section 7.2 hereof, all Loans outstanding under, and as defined in,
the Prior Credit Agreement shall remain outstanding as part of the initial
Borrowing of Loans under this Agreement. On the Closing Date, the Lenders each
outstanding Loans. Such purchases and sales shall be arranged through the
instruments and documents, if any, as the Agent may reasonably request in
connection therewith.
(b) Return of Notes. The Lenders agree to return to the Borrower promptly
after the Closing Date the Notes issued under, and as defined in, the Prior
Credit Agreement, which Notes are replaced by certain Notes issued hereunder.
70
“BORROWER”
By
Name
Title Chairman and CEO
By
Name
Title President and COO
“GUARANTORS”
LTC-WEST, INC.
By
Name
Title Chairman and CEO
By
Name
Title President and COO
By
Name
Title Chairman and CEO
By
Name
Title President and COO
S-1
By
Name
Title Chairman and CEO
By
Name
Title President and COO
LTC GP VI, INC.
By
Name
Title Chairman and CEO
By
Name
Title President and COO
NORTH CAROLINA REAL ESTATE
INVESTMENTS, LLC
By
Name
Title Chairman and CEO
By
Name
Title President and COO
S-2
EDUCATION PROPERTY INVESTORS, INC.
By
Name
Title Chairman and CEO
By
Name
Title President and COO
S-3
“LENDERS”
BANK OF MONTREAL, Chicago Branch, in its
individual capacity as a Lender, as
L/C Issuer, and as Administrative Agent
By
Name
/s/ Thomas A. Batterham
Title Managing Director
Address:
115 South LaSalle Street
Chicago, Illinois 60603
Attention:
Thomas Batterham
Telecopy:
(312) 293-5852
Telephone:
(312) 293-8364
S-4
KEY BANK NATIONAL ASSOCIATION, as
successor in interest to KEY CORPORATE
CAPITAL INC., in its individual capacity as a
Lender
By
Name
Title Vice President
Address:
580 Walnut Street
Mail Code OH-18-58-0229
Cincinnati, Ohio 45202
Attention:
Jack Boulder
Telecopy:
(513) 762-8450
Telephone:
(513) 762-8284
127 Public Square
Mail Code OH-01-27-0839
Cleveland, Ohio 44114
Attention: Denise Jones
Real Estate Capital Services
Telecopy: (216) 689-3566
Telephone: (216) 689-3607
S-5
BANK LEUMI USA, in its individual capacity
as a Lender
By
Name
Title Vice President
Address:
562 Fifth Avenue
9th Floor (46th Street)
Attention:
Joung Hee Hong
Telecopy:
(212) 407-4317
Telephone:
(212) 407-4469
S-6
MERRILL LYNCH CAPITAL, a Division of
Inc., in its individual capacity as a Lender
By
Name
Title Vice President
Address:
16th Floor
Attention:
Chicago, IL 60601
Assistant Vice President, Operations
Telecopy:
(312) 499-3361
Telephone:
(312) 750-6240
S-7
EXHIBIT A
NOTICE OF PAYMENT REQUEST
[Date]
[Address]
Attention:
November 7, 2005, among LTC Properties, Inc., the Guarantors from time to time
party thereto, the Lenders party thereto, and Bank of Montreal, Chicago Branch,
amount of $ . Your Percentage of the unpaid Reimbursement
[ has been required to return a payment by
the Borrower of a Reimbursement Obligation in the amount of
$ . Your Percentage of the returned Reimbursement
Very truly yours,
By
Name
Title
EXHIBIT B
NOTICE OF BORROWING
Date: ,
To: BANK OF MONTREAL, Chicago Branch, as Administrative Agent for the
Lenders parties to the Amended and Restated Credit Agreement dated as of
November 7, 2005 (as extended, renewed, amended or restated from time to time,
the “Credit Agreement”), among LTC PROPERTIES, INC., certain Guarantors which
are signatories thereto, certain Lenders which are signatories thereto, and BANK
OF MONTREAL, Chicago Branch, as Administrative Agent
Ladies and Gentlemen:
The undersigned, LTC Properties, Inc. (the “Borrower”), refers to the Credit
hereby gives you notice irrevocably, pursuant to Section 1.5 of the Credit
, .
$ .
[Adjusted Base Rate] [Eurodollar] Loans.
By
Name
Title
By
Name
Title
EXHIBIT C
Date: ,
Ladies and Gentlemen:
that:
1. The conversion/continuation Date is ,
.
is $ .
[Adjusted Base Rate] Loans.
months.
therefrom:
outstanding Eurodollar Loan to an Adjusted Base Rate Loan; and
By
Name
Title
By
Name
Title
EXHIBIT D
NOTE
U.S. $
,
FOR VALUE RECEIVED, the undersigned, LTC PROPERTIES, INC., a Maryland
(the “Lender”) on the Termination Date of the
Montreal, Chicago Branch as Administrative Agent, in Chicago, Illinois, in
Agreement dated as of November 7, 2005, among the Borrower, the Guarantors party
thereto, the Lenders party thereto, and Bank of Montreal, Chicago Branch, as
Administrative Agent for the Lenders (the “Credit Agreement”), and this Note and
Credit Agreement.
hereunder.
By
Name
Title
By
Name
Title
EXHIBIT E
BORROWING BASE CERTIFICATE
To: Bank of Montreal, Chicago Branch, as
described below.
November 7, 2005, among us (the “Credit Agreement”), we submit this Borrowing
of this Certificate.
1.
Borrowing Base Value
$
2.
Line 1 multiplied by 50%
$
3.
Unsecured Debt (other than Obligations)
($
)
4.
Borrowing Base (Line 2 minus by Line 3 above)
$
The Borrower represents and warrants that the aggregate principal amount of
Loans and L/C Obligations on the date hereof, including any Loans to be made or
Letters of Credit to be issued on the date hereof, do not exceed the Borrowing
Base set forth above.
Schedule I hereto are made and delivered this day of
20 .
By
Name
Title
By
Name
Title
SCHEDULE I
CALCULATIONS
EXHIBIT F
COMPLIANCE CERTIFICATE
described below
of November 7, 2005, among us (the “Credit Agreement”). Unless otherwise
;
covered thereby; and
20 .
By
Name
Title
SCHEDULE I
TO COMPLIANCE CERTIFICATE
COMPLIANCE CALCULATIONS
FOR AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF NOVEMBER 7, 2005
CALCULATIONS AS OF ,
A.
Maximum Total Indebtedness to Total Asset Value (Section 8.21(a))
1.
Total Indebtedness
$
2.
Total Asset Value
3.
:1.0
4.
Line A3 ratio must not exceed
.50:1.0
5.
yes/no
B.
Maximum Secured Debt to Total Asset Value (Section 8.21(b))
1.
Secured Debt
$
2.
Total Asset Value
3.
:1.0
4.
Line B3 ratio must not exceed
.35:1.0
5.
yes/no
C.
Minimum EBITDA to Interest Expense Ratio (Section 8.21(c))
1.
Net Income for the last 4 quarters
$
2.
Depreciation and Amortization Expense for last 4 quarters
3.
Interest Expense for last 4 quarters
4.
Income Tax Expense for last 4 quarters
5.
Extraordinary, unrealized or non-recurring losses, including impairment charges
and reserves for the last 4 quarters
6.
Sum of Lines C1 through C5
7.
The funds received by the Borrower’s Subsidiaries rent by which are reserved for
capital expenses for the last 4 quarters
8.
Unrealized gains of the sale of assets for the last 4 quarters
9.
Income tax benefits of the last 4 quarters
10.
Sum of Lines C6 through C8
11.
Line 6 minus Line 10 (“EBITDA”)
12.
Interest Expense
13.
Ratio of Line C12 to C11
:1.0
14.
Line C13 ratio shall not be less than
2.50:1.0
15.
yes/no
D.
Minimum EBITDA to Fixed Charges Ratio (Section 8.21(d))
1.
EBITDA
$
2.
Fixed Charges
3.
Ratio of Line D1 to D2
:1.0
4.
Line D3 ratio shall not be less than
1.50:1.0
5.
yes/no
E.
Maximum Secured Recourse Debt to Total Asset Value Ratio (Section 8.21(e))
1.
Secured Recourse Debt
$
2.
Total Asset Value
$
3.
Ratio of Line E1 to Line E2
:1.0
4.
Line E3 shall not exceed
.10:1.0
5.
yes/no
F.
Tangible Net Worth (Section 8.21(f))
1.
Tangible Net Worth
$
2.
Line F1 shall not be less than
$
3.
Yes/no
2
G.
Floating Rate Debt (Section 8.21(g))
1.
Total Asset Value
$
2.
Percentage of Total Asset Value consisting of outstanding unhedged floating rate
debt
%
3.
Line G2 shall not exceed
40%
4.
yes/no
H.
Minimum Borrowing Base Value (Section 8.22(b))
1.
Borrowing Base Value
$
2.
Line H1 shall not be less than
$
50,000,000
3.
yes/no
I.
Minimum Eligible Property NOI to Debt Service Ratio (Section 8.22(c))
1.
Eligible Property NOI
$
2.
pari passu Unsecured Debt Service plus Credit Facility Debt Service
$
3.
Ratio of Line I1 to I2
:1.0
4.
Line I3 ratio shall not be less than
2.25:1.0
5.
yes/no
3
EXHIBIT G
ADDITIONAL GUARANTOR SUPPLEMENT
,
Bank of Montreal, Chicago Branch, as Administrative Agent for the Lenders named
in the Amended and Restated Credit Agreement dated as of November 7, 2005, among
LTC Properties, Inc., as Borrower, the Guarantors referred to therein, the
Ladies and Gentlemen:
Very truly yours,
By
Name
Title
EXHIBIT H
ASSIGNMENT AND ACCEPTANCE
Dated ,
November 7, 2005 (the ”Credit Agreement”) among LTC Properties, Inc., the
Chicago Branch, as Administrative Agent for the Lenders (the “Administrative
meaning.
agree as follows:
hereof (A) its Credit Commitment is $ , (B) the aggregate
outstanding principal amount of Loans made by it under the Credit Agreement that
have not been repaid is $ , and (C) the aggregate
principal amount of Assignor’s Percentage of outstanding L/C Obligations is
$ ; (ii) represents and warrants that it is the legal and
kind; (iii) makes no representation or warranty and assumes no responsibility
furnished pursuant thereto.
Borrower.
preferable in an appropriate case to specify these amounts generically or by
formula rather than as a fixed sum.
2
relevant Notes payable to the Assignee in the amount of its Commitments and new
Notes to the Assignor in the amount of its Commitments after giving effect to
this assignment.
[Assignor Lender]
By
Name
Title
[Assignee Lender]
By
Name
Title
Accepted and consented this
day of
By
Name
Title
BANK OF MONTREAL, Chicago Branch, as
By
Name
Title
3
EXHIBIT I
OPINION OF COUNSEL
ANNEX I
TO ASSIGNMENT AND ACCEPTANCE
PRINCIPAL AMOUNT
TYPE OF LOAN
INTEREST RATE
MATURITY DATE
SCHEDULE 1.0
COMMITMENTS
NAME OF LENDER
CREDIT COMMITMENT
$
30,000,000
Key Bank National Association, as successor in interest to Key Corporate
Capital Inc.
$
30,000,000
Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services
Inc.
$
20,000,000
Bank Leumi USA
$
10,000,000
TOTAL
$
90,000,000
SCHEDULE 1.1
INITIAL PROPERTIES, INITIAL INVESTMENT AMOUNT
AND INITIAL BORROWING BASE VALUE
SCHEDULE 6.2
SUBSIDIARIES
SCHEDULE 6.26
SIGNIFICANT LEASES
|
Exhibit 23 Consent of Independent Registered Public Accounting Firm The Board of Directors Central Pacific Financial Corp.: We consent to the incorporation by reference in the registration statements No.333-119538, No.333-119798, and No.333-141232 on FormS-8 and No.333-179807 on FormS-3 of Central Pacific Financial Corp. of our reports dated February28, 2013, with respect to the consolidated balance sheets of Central Pacific Financial Corp. and subsidiaries as of December31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the years in the three-year period ended December31, 2012, and the effectiveness of internal control over financial reporting as of December31, 2012, which reports appear in the December31, 2012 annual report on Form10-K of Central Pacific Financial Corp. /s/ KPMG LLP Honolulu, Hawaii February28, 2013
|
EXHIBIT 32.2 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 Emtec, Inc. (the “Company”) on Form 10-Q for the quarterly period ending November 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregory P. Chandler, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 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 result of operations of the Company. /s/ Gregory P. Chandler Chief Financial Officer January 14, 2013
|
Title: [California] My mother got an air conditioning and heating system installed in her home through the HERO Program, contractor wasn't paid, and now he's suing my mom.
Question:Background: My mother signed up for the hero program some time ago to get solar panels installed and have her roof fixed. The initial loan she was granted ended up being more than what was needed so they told her if she wanted to she could use that for getting an air conidition and heating system installed and she went for it.
HERO then had an independent local contractor find someone in our area to do the job. He came and did all the necessary work. This is where the problem is. The contractor decided to just take off with the money. He closed his office down and everything and just vanished.
The A/C guy (obviously) was upset and called my mom to take out his frustration. He told her she had to pay him that money otherwise he was going to put a lean on her home and sue her. My mother never signed any contracts or documents with this guy regarding the work. It all went through HERO and that Independent contractor.
Well he followed through and today my mother received a certified letter from the local court notifying her of his lawsuit against her. He said California has laws in place to allow him to sue my mom, but it seems somewhat weird that rather than sue the people who contracted him, he's suing my mom.
tl;dr: Mother agrees to get A/C system installed through HERO Program. After it's installed, Independent contractor runs off with money and doesn't pay A/C guy. A/C guy in turn files lawsuit against my mother who never signed any contracts or documents regarding the work with him.
Some much needed light sheeding/help, please!
Edit: I might not be using terms (e.g. contractor) correctly here, so I apologize but can clarify any vaugeness.
Answer #1: I don't know the exact process in California, but here in Oregon, perfecting a mechanic's lien is a *very* particular process that involves being able to prove you delivered very particular notices in a timely fashion.
Checking the [relevant section of the CA State Contractors Licensing Board website](http://www.cslb.ca.gov/Consumers/Legal_Issues_For_Consumers/Mechanics_Lien/) shows me that this is also the case in CA. The subcontractor must have delivered that notice within 20 days of start of work (this is actually a lot friendlier to contractors than Oregon. In Oregon you only have, IIRC, 8 days) in order to file a valid lien for that work. Having failed to provide correct notice makes the mechanic's lien unenforceable.
The timelines here are very important. You say your mother has been served with court papers notifying her of a lawsuit. A lien is not a lawsuit. A lien is an interest in the property recorded with the county. The mortgage holder also possesses a lien on the property. It is this lien that gives both the mortgage holder and the contractor the power to sue to force the sale of the home to satisfy the debt--foreclosure.
Now, I am guessing here, but it actually sounds a lot to me like the A/C guy has figured out that he can't place a valid lien, and is attempting to pursue the money like anyone with a debt to collect would--with a lawsuit. He's probably suing your mom because he doesn't think he can find the people who ran off with the money.
One of the ways you can attempt to collect on a lawsuit judgement is to place a lien on any real property (not just real estate, but stuff like trucks and tools, boats or RVs, anything that could be forcibly resold to pay off the debt). That may be the 'lien on her house' the A/C guy is talking about, if he did fail to provide proper notices. That lien is a lot less powerful than the mechanic's lien, however. It is subject to the homestead exemption, which protects $75,000 of proceeds from the sale of the home from being used to satisfy judgements. If she has less than $75k in equity, she is essentially 'judgement proof' from that angle, because a creditor wouldn't recover any money from forcing the sale of the house.
In any case, you need to have a lawyer examine the papers she received, in order to figure out what kind of suit he is bringing. You can also check county property records to see if he has already recorded a mechanic's lien against the property. |
[cslogohorizontala02.jpg]
World Headquarters
January 14, 2015
Matthew W. Hardt
1730 Adeline Drive
Mechanicsburg, Pennsylvania 17050
Dear Matt:
On behalf of Cooper-Standard, I am pleased to confirm our offer of employment to
you as Executive Vice President of Cooper-Standard Holdings Inc. and its main
operating subsidiary, Cooper-Standard Automotive Inc. (collectively, the
“Company”) commencing Monday, February 2, 2015 and Executive Vice President,
Chief Financial Officer of the Company commencing Monday, March 2, 2015. In
these positions, you will be located in the Company’s world headquarters in
Novi, Michigan and will report to me. The following outlines the key terms of
our offer.
Base Salary. Your base salary will be $400,000 per year, paid bi-weekly, less
deductions and withholdings required by law. The base salaries of executive
officers of the Company are generally reviewed for possible adjustment in the
first quarter of each year.
Annual Incentive Award. You will be eligible to participate in the company’s
Annual Incentive Plan (“AIP”). Your target AIP award will be 65% of your annual
base salary, not subject to proration.
The annual incentive payout for 2015 will be based on the achievement of an
adjusted EBITDA target and the achievement of an Operation Cash Flow performance
goal established by the Compensation Committee of the Board of Directors. The
Compensation Committee will be reviewing the basis upon which achievement and
payout will be determined for performance year 2015 and beyond, and final
decisions are expected in this regard in the coming months.
Executive Severance Pay Plan. As an executive officer of the Company, you will
be eligible for severance benefits in the event of the termination of your
employment with the Company under certain circumstances under the Company’s
Executive Severance Pay Plan in accordance with the terms of the plan as in
Long Term Incentive Awards. You will also be eligible for long-term incentive
awards under the Cooper-Standard Holdings Inc. 2011 Omnibus Incentive Plan (the
“Omnibus Plan”) and the Cooper-Standard Automotive Inc. Long-Term Incentive Plan
(together, the “LTIP”). In the first quarter of 2015, you will receive LTIP
awards designed to have an aggregate value, at the time of grant, targeting
approximately $500,000.
In recent years, LTIP awards have included both performance and time-vested
equity components. As a reference, in 2014, the aggregate LTIP target award
value granted to the company’s senior management team was delivered in the
following manner:
39550 Orchard Hill Place • Novi, MI 48375 • Phone: (248) 596-5900 • Fax: (248)
596-6535
World Headquarters
(i)
50% as performance share units, with the actual level of payout dependent on
achievement of financial objectives related to a full three year ROIC goal and
vested after three years;
(ii)
30% as stock options with an exercise price equal to the market price of the
company’s common stock on the date of grant and vested ratably over three years;
and
(iii)
20% as restricted stock units vested after three years.
Similar to its review of the Annual Incentive Plan, the Compensation Committee
will be reviewing the basis upon which achievement and payout will be determined
for the performance award component of the LTIP and also may consider allocating
the aggregate LTIP award across performance share units, restricted stock units,
and stock options in proportions different than the illustrative 2014
allocations outlined above. Final decisions are expected in the coming months.
Benefits. Coverage under the Company’s Health & Well-Being benefit program for
yourself and your eligible dependents will commence upon the first day of the
month following your hire date. Eligibility to participate in the Company’s
401(k) plan will commence 30 days after your first day of employment. In
addition, you will be eligible to participate in the Company’s Supplemental
Executive Retirement Plan (“SERP”). The SERP provides for an enhanced level of
retirement benefits and compensates for the loss of benefits under the 401(k)
plan resulting from certain limitations imposed by the Internal Revenue Code. In
all cases, eligibility and benefits provided are governed by the terms of the
applicable plan documents and may be modified from time to time at the Company’s
discretion and in accordance with the law.
Vacation. The Company’s vacation eligibility runs on a calendar year and
vacation days are accrued on a monthly basis. You will be eligible for 20 days
of paid vacation annually and will receive the full 20 days for 2015.
Company Car. You will be eligible to participate in the Company’s leased vehicle
program at the Executive level. The selection options and terms of the program
will be more clearly outlined after commencement of employment.
Non-Competition, Nondisclosure and Patent Assignment Agreement. As a condition
of your employment and prior to your commencement of work as an employee, you
must sign the Company’s Non-competition, Nondisclosure and Patent Assignment
Agreement, a copy of which is being sent to you with this letter for your
information and review.
596-6535
World Headquarters
You agree that, if you are employed by the Company, the employment relationship
is “at-will” which means that either the Company or you may terminate the
employment relationship at any time with or without cause or notice. The
compensation and benefit plans and practices of the Company are subject to
modification or termination at the discretion of the Company at any time
in accordance with applicable law, and nothing herein constitutes an undertaking
by the Company to continue any such plan or practice as it may apply to you.
The terms and conditions set forth in this letter shall be governed and
Matt, it is a pleasure to be able to extend this offer of employment to you. We
are looking forward to your joining Cooper Standard.
Very truly yours,
/s/ Jeffrey S. Edwards
Jeffrey S. Edwards
Enclosures via email
Accepted: /s/ Matthew Hardt
Matthew Hardt
Date: January 26, 2015
596-6535 |
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): December 11, 2009 Lightning Gaming, Inc. (Exact name of registrant as specified in charter) Nevada 000-52575 20-8583866 (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. EmployerIdentification No.) 106 Chelsea Parkway, Boothwyn, PA 19061 (Address of principal executive offices) (Zip Code) (Registrant’s telephone number, including area code) (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2): * Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) * Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) * Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) * Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 1 Section 1 - Registrant’s Business and Operations Item 1.01 Entry into a Material Definitive Agreement. On December 11, 2009, Lightning Gaming, Inc. (“LGI”) entered into a Note and Warrant Purchase Agreement (the “Agreement”) with SIG Strategic Investments, LLLP (“SIG”); The Co-Investment Fund II, LP (“CI II”); and Stewart J. Greenebaum, LLC (“Greenebaum” and, together with CI II, the “Purchasers”). Under the Agreement, the Purchasers acquired from SIG a $2 million Promissory Note (the “Note”) issued by LGI’s wholly-owned subsidiary, Lightning Poker, Inc. (“LP”), and warrants to purchase an aggregate of 500,000 shares of common stock of LGI at an exercise price of $2 per share.The warrants acquired by the Purchasers from SIG constituted one-half of the warrant held by SIG for the purchase of one million LGI shares.SIG has retained the other half of that warrant. The Note and warrant were originally issued to SIG under a Loan Agreement, dated June 27, 2007, among LP, SIG and the Purchasers (the “Loan Agreement”), which appears in Exhibit 10.21 of Amendment No. 1 to Form 10-K filed by LGI with the Securities and Exchange Commission on April 29, 2008. Pursuant to the Agreement, (i) the Note and warrant issued to SIG under the Loan Agreement were canceled, (ii) LP issued areplacement promissory note in the principal amount of $1 million to each of the Purchasers, and (iii) LGI issued areplacement warrant for 250,000 shares to each of the Purchasers and areplacement warrant for 500,000 shares to SIG, representing the portion of the original warrant retained by SIG under the Agreement. The terms of the replacement notes and warrants are substantially the same as the terms of the Note and warrant that were originally issued to SIG under the Loan Agreement.The replacement notes bear interest at 8% per annum, with all interest and principal due on June 27, 2010, and are subject to the Loan Agreement.The replacement warrants are for an aggregate of one million shares of LGI common stock at an exercise price of $2 per share, expiring on June 27, 2012. Giving effect to the Agreement, CI II, Greenebaum and SIG hold promissory notes issued by LP in the following aggregate principal amounts: CI II: Greenebaum: SIG: SIG, CI II and Greenebaum are each deemed to own beneficially more than 5% of LGI’s outstanding common stock, based on their ability to acquire LGI’s stock through the exercise of warrants or conversion of promissory notes. 2 CI IIis managed by Cross Atlantic Capital Partners Inc. (“Cross Atlantic”). Donald Caldwell, a director of LGI, is the founder and Chief Executive Officer of Cross Atlantic.Frederick Tecce, also a director of LGI, is amanaging director and of counsel ofCross Atlantic. The above descriptions of the Agreement, and thereplacement notes andwarrants are merely a summary of their material terms.Copies of those documents are filed as exhibits to this Form 8-K.Interested parties should read those documents, as well as the Loan Agreement, in their entirety. Section 3 - Securities and Trading Markets Item 3.02 Unregistered Sales of Equity Securities. The replacement warrants described in Item 1.01 of this Form 8-K were issued by LGI under the Agreement in order to facilitate a partial transfer of the warrant that SIG already held.LGI received no consideration in the transaction.Therefore, LGI does not consider the transaction to be a sale of equity securities by LGI.If, however, the transaction is deemed a sale by LGI, then the sale was exempt from registration under the Securities Act of 1933, as amended (the "Act"), pursuant to Section4(2) of the Act and Regulation D promulgated thereunder. Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits. (a)Not applicable. (b)Not applicable. (c)Not applicable. (d)Exhibits: Exhibit No. Description Note and Warrant Purchase Agreement among LGI, CI II, Greenebaum and SIG Promissory Note issued by LP to CI II Promissory Note issued by LP to Greenebaum Warrant for Stock issued by LGI to CI II Warrant for Stock issued by LGI to Greenebaum Warrant for Stock issued by LGI to SIG 3 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. Lightning Gaming, Inc. By: /s/ Robert D. Ciunci Robert D. Ciunci, Chief Financial Officer Date:
|
Exhibit 10.1 FOURTH AMENDMENT TO CREDIT AGREEMENT THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (the “Amendment”) is made and entered into effective May 22, 2017 by and between AMERICA FIRST MULTIFAMILY INVESTORS, L.P., a Delaware limited partnership (“Borrower”), and BANKERS TRUST COMPANY (“Bank”). RECITALS A. Borrower and Bank entered into a Credit Agreement dated May 14, 2015, which was amended by a First Amendment to Credit Agreement dated January 7, 2016, a Second Amendment to Credit Agreement dated February 10, 2016, and a Third Amendment to Credit Agreement dated November 10, 2016 (as amended, the “Agreement”)(all capitalized terms not otherwise defined herein are as defined in the Agreement), pursuant to which Bank agreed to provide certain credit facilities to Borrower on the terms and conditions contained therein. B. Borrower has requested that Bank consent to certain modifications to the terms and conditions of the Agreement.Bank is agreeable to such request on the terms and conditions hereinafter set forth. NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, Borrower and Bank agree as follows: I. The terms of the Agreement are modified and amended as hereinafter provided: A.Section 2.1 of Article II of the Agreement is amended by: i) changing the date in the first sentence of subsection (a) thereof from “May 13, 2018” to “May 13, 2019”; ii) replacing the form of Exhibit 2.1(a)(ii) referenced in the last sentence of subsection (a) thereof with the form of Exhibit 2.1(a)(ii) attached to this Amendment; and, iii) changing the date in the fifth sentence of subsection (c) thereof from “May 14, 2018” to “May 14, 2019.” B.Section 6.1 of Article VI of the Agreement is amended by adding the following to the end of Section 6.1: Without limiting the generality of the foregoing, Borrower acknowledges and agrees that the Line of Credit shall not be used for funding of any redemption of, or any distribution, dividend, or similar payment to any holder of, any of Borrower’s Series A Preferred Units (the “Series A Units”). C. Article VI of the Agreement is amended by adding the following new Section 6.6: Section 6.6.SERIES A UNITS.Amend its limited partnership agreement or any other agreement governing the Series A Units, without providing Bank with written notice thereof (along with copies of all proposed amended agreements) at least thirty (30) days prior to the adoption of any such amendment; other than the $100 million of Series A Units offered by Borrower pursuant to a Confidential Private Placement Memorandum dated December 18, 2015 (the “PPM”), and other than up to an additional $20 million to be offered, on the same terms as the PPM, as a supplement or modification to the PPM, issue any additional Series A Units without providing written notice to Bank at least thirty (30) days prior to any such issuance; nor redeem any of the Series A Units without providing written notice to Bank at least one hundred eighty (180) days prior to any such redemption. II.This Amendment shall be effective as of the effective date set forth above upon Bank having received an executed original hereof, together with payment to Bank from Borrower of a fee in the amount of $125,000 ($100,000 of which shall be an extension fee and $25,000 of which shall be an administration fee). III.Except as amended hereby, all terms of the Agreement are hereby ratified and confirmed and remain in full force and effect, the terms of which are incorporated herein by this reference.The parties confirm and ratify the Loan Documents, all certificates executed and delivered to Bank, and all other documents and actions relating to the obligations referred to in the Agreement, except as amended hereby. IV.Borrower represents that, to its knowledge, no Event of Default has occurred or is occurring under the terms of the Agreement or under any other Loan Documents, and that no circumstances exist such that but for a lapse of time or the giving of notice an Event of Default would exist under any such agreements and that all of the covenants, representations and warranties contained in the Agreement remain true as of the date hereof except with respect to those which are made with respect to specified earlier dates. V.The execution, delivery, and effectiveness of this Amendment shall not operate as a waiver of any right, power, or remedy of Bank under the Agreement or other Loan Documents, nor constitute a waiver of any provision of the Loan Documents.This Amendment shall not affect, alter, amend, or waive any right, power or remedy of Bank by virtue of any Borrower’s actions or failure to take certain actions which constitute a default or an Event of Default under the Agreement or any of the Loan Documents. VI.This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which shall be taken together and constitute one and the same agreement.Signatures may be made and delivered by telefax or other similar method which shall be effective as originals. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS] 2 AMERICA FIRST MULTIFAMILY INVESTORS, L.P. By: AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO, a Delaware limited partnership, its general partner By: BURLINGTON CAPITAL LLC, a Delaware limited liability company, its general partner By:/s/Craig S. Allen Craig S. Allen, Chief Financial Officer BANKERS TRUST COMPANY By: /s/Donald M. Shiu
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EXHIBIT 10.18
EXECUTION COPY
TAX MATTERS AGREEMENT dated as of September 22, 2016 (this “Agreement”) between
ASHLAND GLOBAL HOLDINGS INC., a Delaware corporation (“Ashland Global”), and
VALVOLINE INC., a Kentucky corporation (“Valvoline”, collectively, the
WHEREAS Ashland Global is the common parent of an affiliated group of
corporations, within the meaning of Section 1504(a) of the Code, that has
elected to file consolidated Federal income Tax Returns, and Valvoline is a
WHEREAS, pursuant to the Separation Agreement, the Companies have effected or
agreed to effect the Internal Transactions, Additional Pre-IPO Restructuring
Transactions and Initial Public Offering;
WHEREAS, following the Initial Public Offering, pursuant to the Separation
Agreement, Ashland Global intends to effect the Distribution;
WHEREAS the Companies intend each of the Internal Transactions, Additional
Pre-IPO Restructuring Transactions, Initial Public Offering and Distribution
(the “Transactions”) to qualify for its Intended Tax Treatment; and
WHEREAS Valvoline will cease to be wholly owned, directly or indirectly, by
Ashland Global following the Initial Public Offering and will cease to be a
member of the Ashland Global Consolidated Group after the Distribution;
contained herein, Ashland Global and Valvoline hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms. The following terms shall have the following
meanings (such meanings to apply equally to the singular and plural forms of the
terms defined). Capitalized terms used but not defined in this Agreement shall
have the meanings ascribed to them in the Separation Agreement. All section
references are to this Agreement unless otherwise stated. All references to
“includes” and “including” mean “includes without limitation” or “including
without limitation”, as the case may be.
“5% Acquisition Transaction” has the meaning set forth in Section 5.05(b).
“Actual Tax Return Amount” has the meaning set forth in Section 3.02(a)(i)(A).
“Ancillary Agreement” means an Ancillary Agreement, as defined in the Separation
Agreement, other than this Agreement.
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“Ashland Global” has the meaning set forth in the preamble.
“Ashland Global Combined Return” has the meaning set forth in Section 2.01(b).
“Ashland Global Consolidated Group” means Ashland Global (or, for periods prior
to the Ashland Merger, Ashland Inc., a Kentucky corporation) and the affiliated
which Ashland Global (or Ashland Inc., as applicable) is the common parent.
“Ashland Global Consolidated Return” has the meaning set forth in Section
“Ashland Global Tax Opinions” means the written opinions or memoranda, as
applicable, of Cravath, Swaine & Moore LLP and Deloitte Tax LLP issued to
Ashland Global, in form and substance satisfactory to Ashland Global in its sole
discretion, as to the qualification of the steps of each Transaction for its
Intended Tax Treatment.
“Ashland Global Tax Representations” means any representations made by Ashland
Global in Representation Letters that serve as a basis for any Ashland Global
Tax Opinion.
“Ashland Global Transaction Tax Percentage” means, with respect to any
Transaction Tax, the fraction, expressed as a percentage, the numerator of which
is the amount of such Transaction Tax allocated to Ashland Global pursuant to
Section 4.03 and the denominator of which is the total amount of such
Transaction Tax.
“Business Day” means any day on which the New York Stock Exchange, or its
successor, is open for trading.
“Chemicals Business” means the business and operations of the Specialty
Ingredients and Performance Materials business segments, as described in Ashland
Inc.’s and/or Ashland Global’s most recently filed (as of the date of this
Agreement) Annual Report on Form 10-K or Quarterly Report on Form 10-Q.
“Clause (iii) Taxes” has the meaning set forth in Section 4.01(b)(iii).
“Consolidation Year” means any taxable period (or portion thereof) ending on or
before the date on which Deconsolidation occurs.
“Deconsolidation” means that the Valvoline Consolidated Group ceases to be
included in the Ashland Global Consolidated Group.
“Determination” means the final resolution of liability for any tax for any
taxable period by or as a result of (i) a final and unappealable decision,
final settlement, compromise or other agreement with the relevant Taxing
Authority, an agreement that constitutes a determination under Section
1313(a)(4) of the Code, an agreement contained in an IRS Form 870-AD, a closing
agreement or accepted offer in compromise under Section 7121 or 7122 of the Code
or a comparable agreement under state, local or foreign Law; (iii) the
expiration of the applicable statute of limitations; or (iv) the payment of the
tax by the party responsible for payment of that tax under Section 2.04 if
Ashland Global and Valvoline agree that no action should be taken to recoup that
payment.
“Excess Loss Account” means any excess loss account within the meaning of
Section 1.1502-19 of the Regulations.
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“Hypothetical Tax Return Amount” has the meaning set forth in Section
3.02(a)(i)(B).
“Indemnifying Party” means a Person that has any obligation to indemnify an
Indemnitee pursuant to this Agreement, the Separation Agreement or any Ancillary
Agreement.
“Indemnitee” means a Person entitled to indemnification by an Indemnifying Party
pursuant to this Agreement, the Separation Agreement or any Ancillary Agreement.
“Intended Tax Treatment” means the tax treatment as specified in Schedule A.
“Legacy Tax Attribute” means any Tax Attribute in existence at the opening of
the taxable period that begins on October 1, 2016.
“Market Capitalization” means (i) in the case of Valvoline, the product of
(a)the mean of the daily volume-weighted average trading price per share of the
common stock of Valvoline for each of the 20 consecutive trading days beginning
on and following the first trading day following the Separation Date, as quoted
by Bloomberg Financial Services through its “Volume at Price” function, rounded
to the nearest whole cent, multiplied by (b) the mean of the number of common
shares of Valvoline outstanding, on a fully diluted basis (calculated under the
treasury stock method), on each of such 20 trading days, rounded to two decimal
places, and (ii) in the case of Ashland Global, (a) the mean of the daily
volume-weighted average trading price per share of the common stock of Ashland
Global for each of the 20 consecutive trading days beginning on and following
the first trading day following the Separation Date, as quoted by Bloomberg
Financial Services through its “Volume at Price” function, rounded to the
nearest whole cent, multiplied by (b) the mean of the number of common shares of
Ashland Global outstanding, on a fully diluted basis (calculated under the
places, less (c) the mean volume-weighted average trading price per share of the
common stock of Valvoline, as calculated pursuant to clause (i)(a) of this
definition, multiplied by the mean of the number of common shares of Valvoline
held by Ashland Global on each of the trading days described in clause (i)(b) of
this definition, rounded to two decimal places.
“Post-consolidation Year” means any taxable period (or portion thereof)
beginning on or after the date on which Deconsolidation occurs.
“Pro Forma Return Start Date” means the first day of the calendar month closest
to the Separation Date; provided, however, that if the Separation Date falls
exactly in the middle of a calendar month, the Pro Forma Return Start Date means
the first day of such calendar month.
“Pro Forma Valvoline Combined Return” has the meaning set forth in Section
“Pro Forma Valvoline Consolidated Return” has the meaning set forth in Section
2.05(a)(i).
“Pro Forma Valvoline Returns” means the Pro Forma Valvoline Consolidated Returns
and the Pro Forma Valvoline Combined Returns.
“Proportionate Share Factor” means (i) in the case of Ashland Global, the
quotient, rounded to four decimal places, of the Market Capitalization of
Ashland Global, divided by the sum of the Market Capitalization of each of
Ashland Global and Valvoline and (ii) in the case of Valvoline, 1 minus the
number computed in clause (i) of this definition.
“Proposed Acquisition Transaction” has the meaning set forth in Section
5.04(b)(i).
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“Protective Section 336(e) Election” means, with respect to an entity, a
the Regulations (and any similar provision of U.S. state or local Law) to treat
the disposition of the Stock of such entity, pursuant to certain of the
Transactions, as a deemed sale of the assets of such entity in accordance with
Section 1.336-2(h) of the Regulations (or any similar provision of U.S. state or
local Law).
“Records” has the meaning set forth in Section 7.03.
“Refund Recipient” has the meaning set forth in Section 4.05.
“Regulations” means the Treasury regulations promulgated under the
Code or any successor Treasury regulations.
“Representation Letters” means the representation letters delivered in
connection with the rendering by Tax Advisors of any opinions in connection with
the Transactions.
“Return Items” means any item of income, gain, loss, deduction or credit.
“Ruling” means a private letter ruling (including any supplemental ruling)
issued by the IRS in connection with the Transactions.
“Satisfactory Guidance” has the meaning set forth in Section 5.04(c)(ii).
“Separate Returns” has the meaning set forth in Section 2.01(c).
“Separation Agreement” means the Separation Agreement dated as of the
date hereof by and between Ashland Global and Valvoline.
“Stock” means (i) all classes or series of stock or other equity interests and
(ii) all other instruments properly treated as stock for U.S. Federal income tax
purposes.
“Straddle Period Return” has the meaning set forth in Section 2.01(c)(ii).
“tax” means all taxes, assessments, duties or similar charges of any kind
whatsoever, in the nature of a tax, whether direct or indirect, plus any
interest, penalties, additional amounts or additions thereto.
“Tax Attributes” means any carryovers or carrybacks of net operating losses, net
capital losses, excess tax credits and any other similar tax attributes as
determined for Federal, state, local or foreign tax purposes. For the avoidance
of doubt, the existence or amount of basis and computations of previously taxed
income and earnings and profits are not Tax Attributes.
“Tax Return” means any tax return, declaration, statement, report, form,
estimate and information return relating to taxes, including any amendments
thereto and any related or supporting information.
“Taxing Authority” means any governmental body charged with the determination,
collection or imposition of taxes.
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“Transaction Taxes” means all taxes arising as a result of or in connection with
the Transactions and, if such taxes result from the failure of a Transaction to
qualify for its Intended Tax Treatment, all reasonable out-of-pocket legal,
accounting and other advisory and court fees incurred in connection with
liability for such taxes.
“Unqualified Tax Opinion” has the meaning set forth in Section 5.04(c)(iii).
“Valvoline” has the meaning set forth in the preamble.
“Valvoline Consolidated Group” means Valvoline and the affiliated group of
Valvoline would be the common parent if it were not included in the Ashland
Global Consolidated Group.
“Valvoline Pro Forma Financial Statements” means the unaudited pro forma
condensed combined financial statements contained in the IPO Registration
Statement.
“Valvoline Pro Forma Tax Attributes” has the meaning set forth in Section
3.02(a)(i)(B)(2).
“Valvoline Tax Representations” means any representations made by Valvoline in
Representation Letters that serve as a basis for any Ashland Global Tax Opinion.
ARTICLE II
SECTION 2.01. Filing of Returns. (a) Consolidated Returns. Ashland Global shall
prepare and timely file (or cause to be prepared and timely filed) each Federal
income Tax Return required to be filed on behalf of the Ashland Global
Consolidated Group (an “Ashland Global Consolidated Return”). Ashland Global
shall include the Valvoline Consolidated Group in such Tax Return if entitled to
do so.
(b)Combined Returns. For each taxable year for which it is permissible to file a
Tax Return on a consolidated, combined, unitary or similar basis (other than an
Ashland Global Consolidated Return) that would include one or more members of
the Valvoline Group and one or more members of the Ashland Global Group (an
“Ashland Global Combined Return”), then the relevant member of the Ashland
Global Group may, in its sole discretion but subject to applicable Law,
determine whether to file such Ashland Global Combined Return and whether to
include certain or all of the relevant members of the Valvoline Group in such
Tax Return. Ashland Global shall prepare and timely file (or cause to be
prepared and timely filed) any Ashland Global Combined Returns. Schedule B sets
out a list of Ashland Global Combined Returns.
(c)Separate Returns. For all Tax Returns other than Ashland Global Consolidated
Returns and Ashland Global Combined Returns (“Separate Returns”), Ashland Global
shall prepare and timely file (or cause to be prepared and timely filed) any
such Separate Return for a taxable period that (i) ends on or before the Pro
Forma Return Start Date or (ii) begins before the Pro Forma Return Start Date
and ends after the Pro Forma Return Start Date (a “Straddle Period Return”). For
all other Separate Returns, Ashland Global and Valvoline shall prepare and
timely file (or cause to be prepared and timely filed) any such Separate Return
for one or more members of the Ashland Global Group or Valvoline Group,
respectively. Schedule C sets out a list of Separate Returns that the parties
presently intend will be prepared (or caused to be prepared) for members of the
Valvoline Group.
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SECTION 2.02. Preparing of Tax Returns. (a) Ashland Global-Prepared Tax Returns.
To the extent that any Ashland Global Consolidated Return, Ashland Global
Combined Return or Separate Return prepared (or caused to be prepared) by
Ashland Global directly relates to matters for which Valvoline must indemnify
the Ashland Global Group under Section 4.02 or to matters affecting a Pro Forma
Valvoline Return or Separate Return prepared (or caused to be prepared) by
Valvoline (including any refund or other Tax Attribute to which a member of the
Valvoline Group is entitled), Ashland Global shall prepare (or cause to be
prepared) the relevant portion of such Ashland Global Consolidated Return,
Ashland Global Combined Return or Separate Return, as the case may be, on a
basis consistent with past practice (except as required by applicable Law or as
determined by Ashland Global). Ashland Global shall notify Valvoline of any such
portions not prepared on a basis consistent with past practice.
(b) Valvoline-Prepared Tax Returns. To the extent that any Separate Return
prepared (or caused to be prepared) by Valvoline directly relates to matters for
which Ashland Global must indemnify the Valvoline Group under Section 4.01 or to
matters affecting any Ashland Global Consolidated Return, Ashland Global
Ashland Global (including any refund or other Tax Attribute to which a member of
the Ashland Global Group is entitled), Valvoline shall prepare (or cause to be
prepared) the relevant portion of such Separate Return on a basis consistent
with such Ashland Global Consolidated Return, Ashland Global Combined Return or
Separate Return and with past practice (except as required by applicable Law),
in each case subject to Section 2.07. Valvoline shall notify Ashland Global of
any such portions not prepared on a basis consistent with any Ashland Global
Consolidated Return, Ashland Global Combined Return or Separate Return prepared
(or caused to be prepared) by Ashland Global or with past practice.
(c) Review of Tax Returns. The party responsible under Section 2.01 for
preparing (or causing to be prepared) a Tax Return shall make such Tax Return or
relevant portions thereof and related workpapers available for review by the
other party at least 30 days prior to the due date (including any available
extensions) for filing such Tax Return and shall consider the reasonable
comments made by such other party, in each case to the extent (i) such Tax
Return relates to taxes for which such other party may be liable or otherwise
affects the preparation of Tax Returns prepared (or caused to be prepared) by
such other party (including any Pro Forma Valvoline Return) or
(i)adjustments to the amount of taxes reported on such Tax Return may affect the
determination of taxes for which such other party may be liable. The parties
such Tax Returns.
SECTION 2.03. Consents and Elections. Ashland Global and Valvoline shall
prepare, sign and timely file (or cause to be prepared, signed and timely filed)
any consents, elections and other documents and take any other actions necessary
or appropriate to effect the filing of the Tax Returns described in Section
2.01.
SECTION 2.04. Payment of Taxes. The party responsible under Section 2.01 for
preparing (or causing to be prepared) a Tax Return shall timely pay (or cause to
be paid) any taxes shown as due on that Tax Return to the relevant Taxing
Authority or the party that files (or causes to be filed) that Tax Return, as
applicable. The parties shall cooperate to ensure that such taxes are timely
paid to the relevant Taxing Authority as required under applicable Law. The
obligation to make these payments shall not affect the payor’s right, if any, to
receive payments under Section 2.05 or otherwise be indemnified with respect to
that tax liability.
SECTION 2.05. Pro Forma Valvoline Returns
(a)Pro Forma Valvoline Returns in General. (i) For each taxable period (or
portion thereof) that includes or begins after the Pro Forma Return Start Date
in which the Valvoline Consolidated Group is included in an Ashland Global
Consolidated Return, Valvoline shall prepare (or cause to be prepared) a pro
forma Federal income Tax Return for the Valvoline Consolidated Group (a “Pro
Forma Valvoline Consolidated Return”). Except as otherwise provided in this
Section 2.05, the Pro Forma Valvoline Consolidated Return shall
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be prepared as if Valvoline filed a consolidated return on behalf of the
Valvoline Consolidated Group.
(ii) For each taxable period (or portion thereof) that includes or begins
after the Pro Forma Return Start Date in which one or more members of the
Valvoline Group is included in an Ashland Global Combined Return, Valvoline
shall prepare (or cause to be prepared) a pro forma Tax Return for those members
of the Valvoline Group (a “Pro Forma Valvoline Combined Return”). Except as
otherwise provided in this Section 2.05, the Pro Forma Valvoline Combined Return
shall be prepared as if the members of the Valvoline Group included in the
Ashland Global Combined Return instead filed a single combined return.
(b)Preparation of the Pro Forma Valvoline Returns. Except as provided in Section
2.07, the Pro Forma Valvoline Returns shall be prepared in a manner consistent
with all elections, positions and methods used in the relevant Tax Returns
prepared (or caused to be prepared) by Ashland Global pursuant to Section 2.01
and in accordance with the principles set forth in Schedule D. Valvoline shall
provide Ashland Global a reasonable opportunity to review any Pro Forma
Valvoline Returns. Valvoline shall notify Ashland Global of any portions of such
Pro Form Valvoline Returns not prepared on a basis consistent with a relevant
Tax Return prepared (or caused to be prepared) by Ashland Global pursuant to
Section 2.01.
(c)Payments with Respect to Pro Forma Valvoline Returns. Each Company shall make
payments (including estimated payments) to the other Company with respect to any
Pro Forma Valvoline Return as if (i) that Pro Forma Valvoline Return were
actually required to be filed under the Laws of the applicable taxing
jurisdiction and (i) Ashland Global were the relevant Taxing Authority of that
taxing jurisdiction. In applying this Section 2.05(c), all Laws and regulations
relating to timing and computation of payments and estimated payments, interest,
penalties, additions to tax and additional amounts shall be applied.
SECTION 2.06. Recalculation of Pro Forma Valvoline Return for a Determination.
If a Determination is made with respect to a Return Item, or an amended Tax
Return is filed, for any taxable period for which a Pro Forma Valvoline Return
is required to be prepared, a corresponding adjustment shall be made to the
corresponding Return Items (if any) of the Pro Forma Valvoline Return for such
taxable period. Within 15 days of being provided with written notice of any such
adjustment, each Company shall make (or cause to be made) payments to the other
Company, including interest and any other amounts determined under Section
2.05(c), as appropriate, reflecting such adjustment.
SECTION 2.07. Valvoline Tax Return Dispute Resolution. If Valvoline wishes to
take a position (a) on either a Pro Forma Valvoline Return, or a Separate Return
prepared (or caused to be prepared) by Valvoline, that is inconsistent with a
position taken on a Tax Return prepared (or caused to be prepared) by Ashland
Global pursuant to Section 2.01 or (b) on a Separate Return prepared (or caused
to be prepared) by Valvoline that is inconsistent with past practice, then in
each case, Valvoline may do so only if:
(i)(A) Ashland Global’s position on such Tax Return (1) is inconsistent with
past practice and (2) would result in an increased payment obligation by
Valvoline or any of its Affiliates under Article II, obligate Valvoline to make
an increased indemnity payment under Article IV, cause Valvoline or any of its
Affiliates to incur any increased taxes for which it is not indemnified under
this Agreement or adversely affect a refund or other Tax Attribute to which
Valvoline or any of its Affiliates is entitled and (B) the position Valvoline
wishes to take on such Pro Forma Valvoline Return or Separate Return prepared
(or caused to be prepared) by Valvoline, as the case may be, is consistent with
past practice and permitted by applicable Law; or
(ii)Valvoline obtains an opinion from a Tax Advisor that there is no substantial
authority for Ashland Global’s position on such Tax Return prepared (or caused
to be prepared) by Ashland Global pursuant to Section 2.01 or past practice, as
applicable, and that there is substantial authority for the position Valvoline
(or caused to be prepared) by Valvoline, as the case may be.
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SECTION 2.08. Amendments. Each Company shall not (and shall cause its Affiliates
not to) file, amend, withdraw, revoke or otherwise alter any Tax Return if doing
so would reasonably be expected to (a) obligate the other Company to make an
indemnity payment under Article IV, (b) cause the other Company or any of its
Affiliates to incur any taxes for which it is not indemnified under this
Agreement or (c) adversely affect a refund or other Tax Attribute to which the
other Company or any of its Affiliates is entitled, in each case without the
prior written consent of the other Company.
ARTICLE III
Post-consolidation Periods
SECTION 3.01. Post-consolidation Year Carrybacks. Valvoline shall (and shall
cause members of the Valvoline Group to) waive, to the extent permitted under
applicable Law, carrybacks of Tax Attributes from any Post-consolidation Year to
any Consolidation Year unless such carryback does not have a material effect on
Ashland Global (as determined by Ashland Global in its sole discretion). If any
member of the Valvoline Group carries back a Tax Attribute from a
Post-consolidation Year to a Consolidation Year, no payment shall be due from
Ashland Global with respect to that carryback, regardless of whether such
carryback is required by Law or permitted by Ashland Global.
SECTION 3.02. Tax Attributes. (a) Annual Payments. For each of the 5 taxable
years after the date of Deconsolidation, Valvoline shall pay to Ashland Global
the excess (if any) of the Hypothetical Tax Return Amount over the Actual Tax
Return Amount, and Ashland Global shall pay to Valvoline the excess (if any) of
the Actual Tax Return Amount over the Hypothetical Tax Return Amount.
(i)For purposes of this Agreement, (A) “Actual Tax Return Amount” means the
aggregate, actual tax liability reported on all Tax Returns for such taxable
year that Valvoline files with a Taxing Authority (including all Tax Returns of
members of the Valvoline Group) and (B) “Hypothetical Tax Return Amount” means
the aggregate tax liability that would have been reported on such Tax Returns if
the relevant member of the Valvoline Group were (1) not able to utilize any
Legacy Tax Attributes but (2) able to utilize (one time, without duplication)
any Tax Attributes of the Valvoline Group (other than Legacy Tax Attributes)
that were not utilized on a Pro Forma Valvoline Return but that Ashland Global
utilized on a Tax Return (“Valvoline Pro Forma Tax Attributes”).
(ii)The amount payable under this Section 3.02(a) shall be payable within 20
Business Days after the last Tax Return for such taxable year is filed by
Valvoline; provided, however, that any amount payable by Ashland Global shall be
due no sooner than 10 Business Days after receiving an invoice from Valvoline
therefor.
(b) Lump Sum Settlement Payment. Within 20 Business Days after the later of
the filing of Valvoline’s (or its successor’s) Annual Report on Form 10-K for
the fifth fiscal year ending after the Distribution or Other Disposition, as the
case may be, or the filing by Valvoline of the last Tax Return for the fifth
taxable year after the date of Deconsolidation:
(i)Valvoline shall deliver to Ashland Global a statement setting forth
(A) the amounts of remaining (1) Legacy Tax Attributes that are reflected (or
would be reflected if Ashland Global were not entitled to the benefit of such
Legacy Tax Attributes under this Agreement) in its audited balance sheet in such
Annual Report on Form 10-K, net of any valuation allowance or any similar
reserve (except to the extent such valuation allowance or similar reserve was
established as a result of Ashland Global being entitled to the benefit of such
Legacy Tax Attributes under this Agreement), and (2) Valvoline Pro Forma Tax
Attributes that it reasonably expects the Valvoline Group
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would be able to utilize on Tax Returns for future taxable periods if such
Valvoline Pro Forma Tax Attributes were Tax Attributes of the Valvoline Group
under then-existing applicable Law (or, if applicable, that are reflected in its
audited balance sheet in such Annual Report on Form 10-K, net of any valuation
allowance or any similar reserve), in each case, without duplication of any
amounts attributable to Tax Attributes previously taken into account in
computing any Hypothetical Tax Return Amount and (B) the taxable year in which
it estimates such Legacy Tax Attributes or Valvoline Pro Forma Tax Attributes
will be utilized, as the case may be, consistent with the workpapers or
methodology used in preparing such audited balance sheet;
(ii)Valvoline shall separately compute the net present value of the tax benefit
in respect of amounts described in each of clauses (A)(1) and (A)(2) of Section
3.02(b)(i) and the relevant taxable year described in clause (B) of Section
3.02(b)(i) using a discount rate equal to the interest rate described in Section
8.01; and
(iii)Valvoline shall pay to Ashland Global the excess (if any) of the net
present value of such amounts described in such clause (A)(1) over the net
present value of such amounts described in such clause (A)(2), and Ashland
Global shall pay to Valvoline the excess (if any) of the net present value of
such amounts described in such clause (A)(2) over the net present value of such
amounts described in such clause (A)(1); provided, however, that any amount
payable by Ashland Global shall be due no sooner than 10 Business Days after
receiving an invoice from Valvoline therefor.
(a)Cooperation. Valvoline agrees to share any calculations, workpapers or
relevant Tax Returns reasonably requested by Ashland Global in connection with
matters related to this Section 3.02. The parties shall attempt in good faith to
resolve any issues or disputes related to this Section 3.02.
ARTICLE IV
Indemnity
SECTION 4.01. Ashland Global Indemnity. Ashland Global shall indemnify the
Valvoline Group and hold it harmless from:
(a)any taxes payable for a taxable period (or portion thereof) ending prior to
the date of Deconsolidation (other than taxes that arise out of a contest,
examination or audit by a Taxing Authority) with respect to a Tax Return
required to be prepared (or caused to be prepared) by Ashland Global pursuant to
Section 2.01;
(b)with respect to taxes payable for a taxable period (or portion thereof)
ending prior to the date of Deconsolidation that arise out of a contest,
examination or audit by a Taxing Authority:
(i)100% of such taxes that are directly attributable to the Chemicals Business;
(ii)100% of such taxes that are directly attributable to neither the Chemicals
Business nor the Valvoline Business and are payable to a Taxing Authority other
than a Taxing Authority of the United States or any state or political
subdivision thereof or the District of Columbia; and
(iii)if such taxes are directly attributable to neither the Chemicals Business
nor the Valvoline Business and are payable to a Taxing Authority of the United
States or any state or political subdivision thereof or the District of Columbia
(“Clause (iii) Taxes”):
10
(A)0% of all Clause (iii) Taxes until the aggregate amount of all Clause (iii)
Taxes paid by any party hereto or any Affiliate thereof equals
$26 million; and
(B)
50% of all Clause (iii) Taxes thereafter;
in each case, as such taxes are attributed pursuant to Section 4.06;
(c)any taxes incurred as a result of any gain recognized pursuant to a gain
recognition agreement entered into by any member of the Ashland Global
Consolidated Group by reason of an action or failure to act on or after the
Separation Date by any member of the Ashland Global Group in accordance with
Section 1.367(a)-8 of the Regulations, excluding any gain required to be
recognized as a result of Deconsolidation being a “triggering event” (within the
meaning of those Regulations); and
(d)any Transaction Taxes allocated to Ashland Global pursuant to Section 4.03;
excluding, in each case, any tax for which Valvoline is responsible under
Section 4.02.
SECTION 4.02. Valvoline Indemnity. In addition to payments pursuant to Section
2.05(c), Valvoline shall indemnify the Ashland Global Group and hold it harmless
from:
(a)with respect to taxes payable for a taxable period (or portion thereof)
ending prior to the Pro Forma Return Start Date that arise out of a contest,
(i)100% of such taxes that are directly attributable to the Valvoline Business;
and
(ii)
if such taxes are Clause (iii) Taxes:
(A)100% of all Clause (iii) Taxes until the aggregate amount of all Clause (iii)
(B)
(b)any taxes payable with respect to a Straddle Period Return allocated to
Valvoline pursuant to Section 4.08;
(c)if the Separation Date occurs prior to the Pro Forma Return Start Date, any
taxes that arise from the Valvoline Group entering into or engaging in any
action or transaction outside of the ordinary course of business on or after the
Separation Date and prior to the Pro Forma Return Start Date;
(d)any taxes payable with respect to a Separate Return prepared (or caused to be
prepared) by Valvoline pursuant to Section 2.01(c);
(e)any taxes incurred as a result of any gain recognized pursuant to a gain
Separation Date by any member of the Valvoline Group in accordance with Section
1.367(a)-8 of the Regulations, excluding any gain required to be recognized as a
result of Deconsolidation being a “triggering event” (within the meaning of
those Regulations); and
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(f)
any Transaction Taxes allocated to Valvoline pursuant to Section 4.03.
SECTION 4.03. Allocation of Transaction Taxes. (a) Except as otherwise provided
in this Section 4.03, all Transaction Taxes shall be allocated to (i) Ashland
Global in an amount equal to such Transaction Taxes multiplied by the
Proportionate Share Factor of Ashland Global and (ii) Valvoline in an amount
equal to such Transaction Taxes multiplied by the Proportionate Share Factor of
Valvoline.
(b) Any Transaction Taxes to the extent set forth in Schedule E shall be
allocated in accordance with such schedule.
(c) Subject to Section 4.03(d), Transaction Taxes not allocated pursuant to
Section 4.03(b) shall be allocated to a Company if such Transaction Taxes would
not have been imposed but for:
(i)the failure of any of the Ashland Global Tax Representations, in the case of
Ashland Global, and of any of the Valvoline Tax Representations, in the case of
Valvoline, to be true when made;
(ii)the breach by such Company of any covenant herein or in the Separation
(iii)the application of Section 355(e) or 355(f) of the Code after the
Separation Date as a result of any acquisition (or deemed acquisition) of Stock
or assets of such Company or its Affiliates;
(iv)a determination that the Distribution was used principally as a device for
the distribution of the earnings and profits within the meaning of Section
355(a)(1)(B) of the Code if such determination was based in whole or in part on
any sale or exchange of the Stock of such Company; or
(v)any other act or omission by such Company or its Affiliates that it knows or
reasonably should expect, after consultation with its Tax Advisor, could give
rise to Transaction Taxes (except to the extent such act or omission is
otherwise expressly required or permitted by this Agreement (other than under
Section 5.04(c)), the Separation Agreement or any Ancillary Agreement).
(d) To the extent any Transaction Taxes described in Section 4.03(c) would be
allocated to both Ashland Global and Valvoline, such Transaction Taxes shall be
allocated between Ashland Global and Valvoline in proportion to the relative
contribution of the members of the Ashland Global Group (and such members’
Affiliates), on the one hand, and the members of the Valvoline Group (and such
members’ Affiliates and counterparties to any consummated Proposed Acquisition
Transactions, if applicable), on the other hand, to the circumstances giving
rise to such Transaction Taxes.
SECTION 4.04. Treatment of Indemnity Payments. (a) Character. Any payment made
pursuant to this Agreement, the Separation Agreement or any Ancillary Agreement
shall be treated for all tax purposes, if made by Valvoline to Ashland Global
(or by or to their respective Affiliates), as a distribution from Valvoline to
Ashland Global and, if made by Ashland Global to Valvoline (or by or to their
respective Affiliates), as a contribution from Ashland Global to Valvoline. If
such payment is made after the Distribution or Other Disposition, as the case
may be, such distribution or contribution shall be treated as made immediately
before the Distribution or Other Disposition, as the case may be, except to the
extent otherwise required by Law.
(b) Net of Taxes. The amount of any indemnity payment made pursuant to this
Agreement, the Separation Agreement or any Ancillary Agreement shall be
(i) increased to take account of any taxes imposed on any taxable income or gain
to the Indemnitee with respect to such payment or the creation or increase of an
Excess Loss Account caused by such payment (in each case,
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including taxes imposed on payments of such additional amounts pursuant to this
paragraph) and (ii) reduced to take account of the present value of any cash tax
benefit reasonably likely to be realized (including with respect to any increase
in the basis of any asset, but solely to the extent such increase in basis is
depreciable or amortizable) by the Indemnitee arising from the incurrence or
payment of the loss giving rise to such indemnity.
(c) Assumed Tax Rate. For purposes of computing (i) amounts subject
to indemnification under Section 4.01 or 4.02 and (ii) indemnity payments under
Section 4.04(b), each Person is assumed to pay tax at the maximum applicable tax
rate.
(d) Timing of Indemnity Payments. Any amount payable under Section 4.01 or
4.02 shall be due within 10 Business Days after receiving an invoice from the
other party therefor.
SECTION 4.05. Refunds after Indemnity Payments. If Ashland Global, Valvoline or
any of their respective Affiliates receives any refund of any amounts for which
the other Company has previously made an indemnity payment or with respect to
taxes allocated to the other Company pursuant to Section 4.08 (the Company
receiving, or whose Affiliate receives, such refund, a “Refund Recipient”), the
Refund Recipient shall pay to the other Company the entire amount of the refund
(net of any taxes imposed with respect to such refund) within 20 Business Days
of receipt; provided, however, that the other Company, upon the request of the
Refund Recipient, shall repay the amount paid to the other Company (plus any
penalties, interest or other charges imposed by the relevant Taxing Authority)
in the event the Refund Recipient or any of its Affiliates is required to repay
such refund. Any tax credit, tax reduction or tax offset shall be treated as a
refund for purposes of this Section 4.05 and shall be treated as received by the
Refund Recipient (or one of its Affiliates) as and when applied (on a “with and
without” basis) to reduce the cash tax liability of such Refund Recipient (or
SECTION 4.06. Taxes Attributable to the Chemicals Business or Valvoline
Business. For purposes of Sections 4.01(b) and 4.02(a), a tax shall be deemed
directly attributable:
(a)to the Chemicals Business to the extent such tax (i) arises out of the
profits before tax of the operations of the Chemicals Business or the results of
the operations of the Chemicals Business that would have been reflected in
unaudited pro forma condensed combined financial statements for the Chemicals
Business had such financial statements been prepared for the same periods for
which, and in accordance with similar principles under which, the Valvoline Pro
Forma Financial Statements were prepared or (ii) would otherwise be attributable
to the Chemicals Business under such principles;
(b)to the Valvoline Business to the extent such tax (i) arises out of the
profits before tax of the operations of the Valvoline Business or the results of
the operations that were reflected in the Valvoline Pro Forma Financial
Statements (or is otherwise reflected in the Valvoline Pro Forma Financial
Statements) or (ii) would otherwise be attributable to the Valvoline Business
under the principles used to prepare the Valvoline Pro Forma Financial
Statements; or
(c)to neither the Chemicals Business nor the Valvoline Business if such tax is
described in Schedule F or is not otherwise deemed directly attributable to
either business under Section 4.06(a)or 4.06(b).
Attribution shall be narrowly construed in uncertain or doubtful cases of
attributing a tax to the Chemicals Business or Valvoline Business (i.e.,
uncertain or doubtful cases shall generally be deemed directly attributable to
neither business under Section 4.06(c)).
SECTION 4.07. Calculation of Market Capitalization. Within 10 Business Days
following the period of time described in clause (i)(a) of the definition of
“Market Capitalization”, Ashland Global shall calculate, in its reasonable
exercise of good faith, the Market Capitalization of each of Ashland Global and
Valvoline and send to Valvoline its calculations thereof. Valvoline shall have
10 Business Days to review such calculations and provide comments to Ashland
Global. The Market Capitalization thus agreed upon by the
13
parties shall be the Market Capitalizations of the Companies for all purposes of
this Agreement. The parties shall attempt in good faith to resolve any issues or
disputes related to this Section 4.07.
SECTION 4.08. Valvoline Straddle Period Taxes. Taxes attributable to any
Straddle Period Return for one or more members of the Valvoline Group shall be
allocated to Valvoline, except that:
(a)in the case of real, personal and intangible property taxes, there shall be
allocated to Ashland Global an amount equal to the amount of such taxes
beginning of the taxable period of such Straddle Period Return through the close
of business on the day prior to the Pro Forma Return Start Date, and the
denominator of which is the total number of days in such taxable period; and
(b)in the case of all other taxes, there shall be allocated to Ashland Global an
amount of such taxes as determined by closing the books of the relevant members
of the Valvoline Group as of the close of business on the day prior to the Pro
Forma Return Start Date.
For purposes of this Section 4.08, the taxable period of any partnership,
passthrough entity or controlled foreign corporation (within the meaning of
Section 957(a) of the Code or any comparable provision of state, local or
foreign Law) in which a member of the Valvoline Group holds a beneficial
interest shall be deemed to terminate on the close of business on the day prior
to the Pro Forma Return Start Date.
ARTICLE V
Tax Matters Relating to the Distribution
SECTION 5.01. Mutual Representations. Each Company represents that as of the
(a)all information contained in its Representation Letters (and those delivered
by its Affiliates) is true, correct and complete; and
(b)it has no plan or intention to take any action inconsistent with the
qualification of the Transactions for the Intended Tax Treatment.
SECTION 5.02. Tax Opinions. The Companies shall use their best efforts to cause
the Ashland Global Tax Opinions to be issued, including by executing any
Representation Letters reasonably requested in connection with the Ashland
Global Tax Opinions, provided that each Company shall have been provided with a
reasonable opportunity to review, comment and consent to the content of any
Representation Letter to be executed by it, such consent not to be unreasonably
withheld.
SECTION 5.03. Mutual Covenants. Neither Company shall take or fail to take, or
permit their respective Affiliates to take or fail to take, any action, if such
action or omission would be inconsistent with its respective Representation
Letters or cause any representation made in such Representation Letters to be
untrue when made.
SECTION 5.04. Restricted Actions. (a) Subject to Section 5.04(b), from the date
hereof until the first day after the 2-year anniversary of the Distribution (or
if Ashland Global publicly announces that it has abandoned its plan to effect
the Distribution, the first day after the 2-year anniversary of the date of the
Valvoline- ChemCo Spin), Valvoline shall not (and shall not cause or permit any
of its Affiliates to), in a single transaction or a series of transactions:
(i)cause or allow the Valvoline Consolidated Group to cease to be engaged in the
applicable active trade or business (within the meaning of Section 355(b) of the
Code and the Regulations thereunder) that formed the basis of the Ashland Global
Tax Opinions;
14
(ii)liquidate or partially liquidate, by way of a merger, consolidation,
conversion or otherwise (except as pursuant to the Separation Agreement);
(iii)sell or transfer 50% or more of the gross assets of the Valvoline Business
or 50% or more of the consolidated gross assets of Valvoline (other than (A)
sales, transfers or dispositions of assets in the ordinary course of business,
(B) payments of cash to acquire assets from an unrelated Person in an arm’s
length transaction, (C) sales, transfers or dispositions of assets to a Person
that is disregarded as an entity separate from the transferor for U.S. Federal
income tax purposes or (D) any mandatory or optional repayments (or prepayments)
of any indebtedness of Valvoline or any of its Subsidiaries for borrowed money
that is evidenced by a bond, debenture, note, loan agreement or similar
instrument);
(iv)redeem or otherwise repurchase (directly or indirectly) any Stock of
Valvoline, except to the extent such redemptions or repurchases meet the
following requirements: (A) there is a bona fide, non-tax business purpose for
the repurchases of such Stock, (B) such Stock is widely held, (C) the
repurchases of such Stock will be made on the open market and (D) the aggregate
amount of repurchases of such Stock will be less than 20% of the total value of
the outstanding Stock of Valvoline;
(v)
enter into a Proposed Acquisition Transaction; or
(vi)take any affirmative action that permits a Proposed Acquisition Transaction
to occur by means of an agreement to which it is not a party (including by (A)
redeeming rights under a shareholder rights plan, (B) making a determination
that a tender offer is a “permitted offer” under any such plan or otherwise
causing any such plan to be inapplicable or neutralized with respect to any
Proposed Acquisition Transaction or (C) approving any Proposed Acquisition
Transaction, whether for purposes of Section 203 of the Delaware General
Corporate Law or any similar corporate statute, any “fair price” or other
provision of its charter or bylaws or otherwise).
(b) Definition of Proposed Acquisition Transaction. (i) For the purposes of
this Agreement, “Proposed Acquisition Transaction” means a transaction or series
of transactions (or any agreement, understanding or arrangement to enter into a
transaction or series of transactions) as determined for purposes of Section
355(e) of the Code, in connection with which one or more Persons would (directly
or indirectly) acquire, or have the right to acquire (including pursuant to an
option, warrant or other conversion right), from any other Person or Persons,
Stock of Valvoline that, when combined with any other acquisitions of the Stock
of Valvoline that occur on or after the Initial Public Offering (but excluding
any other acquisition that occurs in (A) the Initial Public Offering itself, (B)
the Distribution or (C) any transaction that is excluded from the definition of
Proposed Acquisition Transaction under Section 5.04(b)(ii)), comprises 10% or
more of the value or the total combined voting power of all interests that are
treated as outstanding equity in Valvoline for U.S. Federal income tax purposes
immediately after such transaction or, in the case of a series of transactions,
immediately after any transaction in such series. For this purpose, any
recapitalization, repurchase or redemption of the Stock of, and any amendment to
the certificate of incorporation (or other organizational documents) of,
Valvoline shall be treated as an indirect acquisition of the Stock of Valvoline
by any shareholder to the extent such shareholder’s percentage interest in
interests that are treated as outstanding equity in Valvoline for U.S. Federal
income tax purposes increases by vote or value.
(ii) Notwithstanding Section 5.04(b)(i), a Proposed Acquisition Transaction
shall not include (A) the adoption by Valvoline of a shareholder rights plan
that meets the requirements of IRS Revenue Ruling 90-11, 1990-1 C.B. 10, (B)
issuances of Stock of Valvoline that satisfy Safe Harbor VIII (relating to
Section 1.355-7(d) of the Regulations or (C) any acquisition of the Stock of
Valvoline that satisfies Safe Harbor VII (relating to acquisitions of stock
listed on an established market) of Section 1.355-7(d) of the Regulations;
provided, however, that such transaction or series of transactions shall
constitute a Proposed
15
Acquisition Transaction if meaningful factual diligence is necessary to
establish that Section 5.04(b)(ii)(A), (B) or (C) applies.
(iii) The provisions of this Section 5.04(b), including the definition of
“Proposed Acquisition Transaction”, are intended to monitor compliance with
clarification of, or change in, Section 355(e) of the Code or the Regulations
thereunder shall be incorporated in this Section 5.04(b) and its interpretation.
(c) Consent to Take Certain Restricted Actions. (i) Valvoline may (and may
cause or permit its Affiliates to) take an action otherwise prohibited under
Section 5.04(a) if Ashland Global consents. Ashland Global may not withhold its
consent if Valvoline has received Satisfactory Guidance. In all other cases,
Ashland Global’s consent shall be at its sole discretion.
(ii) For purposes of this Agreement, “Satisfactory Guidance” means either a
Ruling or an Unqualified Tax Opinion, at the election of Valvoline, in either
case satisfactory to Ashland Global in its sole discretion in both form and
substance, including with respect to any underlying assumptions or
representations and any legal analysis contained therein, and concluding that
the proposed action will not cause any of the Transactions to fail to qualify
for its Intended Tax Treatment.
(iii) For purposes of this Agreement, “Unqualified Tax Opinion” means an
unqualified “will” opinion of a Tax Advisor that permits reliance by Ashland
Global. The Tax Advisor, in issuing its opinion, shall be permitted to rely on
the validity and correctness, as of the date given, of Rulings and any tax
opinions previously issued by a Tax Advisor, unless such reliance would be
unreasonable under the circumstances, and shall assume that each of the
Transactions would have qualified for its Intended Tax Treatment if the action
in question did not occur.
(d) Procedures Regarding Opinions and Rulings. (i) If Valvoline notifies
Ashland Global that it desires to take a restricted action described in Section
5.04(a) and seeks Satisfactory Guidance for purposes of Section 5.04(c), Ashland
Global, at the request of Valvoline, shall use commercially reasonable efforts
to expeditiously obtain, or assist Valvoline in obtaining, such Satisfactory
Guidance. Notwithstanding the foregoing, Ashland Global shall not be required to
take any action pursuant to this Section 5.04(d) if, upon request, Valvoline
fails to certify that all information and representations relating to Valvoline
or any of its Affiliates in the relevant documents are true, correct and
complete or fails to obtain certification from any counterparty to any Proposed
Acquisition Transaction that all information and representations relating to
such counterparty in the relevant documents are true, correct and complete.
Valvoline shall reimburse Ashland Global for all reasonable out-of-pocket costs
and expenses incurred by Ashland Global or any of its Affiliates in obtaining
Satisfactory Guidance within 10 Business Days after receiving an invoice from
Ashland Global therefor.
(ii) Ashland Global shall have the right to obtain a Ruling, any other
guidance from any Taxing Authority or an opinion of a Tax Advisor relating to
the Transactions at any time in Ashland Global’s sole discretion. Valvoline, at
the request of Ashland Global, shall use commercially reasonable efforts to
expeditiously obtain, or assist Ashland Global in obtaining, any such Ruling,
other guidance or opinion; provided, however, that Valvoline shall not be
required to make any representation or covenant that it does not reasonably
believe is (and will continue to be) true and accurate. Ashland Global shall
reimburse Valvoline for all reasonable out-of-pocket costs and expenses incurred
by Valvoline or any of its Affiliates in obtaining any such Ruling, other
guidance or opinion requested by Ashland Global within 10 Business Days after
(iii) Ashland Global shall have exclusive control over the process of
obtaining any Ruling or other guidance from any Taxing Authority concerning the
Transactions, and Valvoline shall not independently seek any Ruling or other
guidance concerning the Transactions at any time. In connection
16
with any Ruling requested by Valvoline pursuant to Section 5.04(d) or that can
reasonably be expected to affect Valvoline’s liabilities under this Agreement,
Ashland Global shall (A) keep Valvoline informed of all material actions taken
or proposed to be taken by Ashland Global, (B) reasonably in advance of the
submission of any ruling request provide Valvoline with a draft thereof,
consider Valvoline’s comments on such draft and provide Valvoline with a final
copy thereof and (C) provide Valvoline with notice reasonably in advance of, and
(subject to the approval of the IRS or other applicable Taxing Authority) permit
Valvoline to attend, any formally scheduled meetings with the IRS or other
applicable Taxing Authority that relate to such Ruling.
(iv) Notwithstanding anything herein to the contrary, Valvoline shall not
seek a ruling with respect to a taxable period (or portion thereof) that ends on
or before the date of the Distribution (whether or not relating to the
Transactions) if Ashland Global determines that there is a reasonable
possibility that such action could have a significant adverse impact on Ashland
Global or any of its Affiliates.
SECTION 5.05. Notification and Certification Respecting Certain Acquisition
Transactions. (a) If Valvoline proposes to enter into any 5% Acquisition
Transaction or takes any affirmative action to permit any 5% Acquisition
Transaction to occur at any time during the 30-month period following the date
of the Distribution, Valvoline shall undertake in good faith to provide Ashland
Global, no later than 10 Business Days following the signing of any written
agreement with respect to such 5% Acquisition Transaction or obtaining knowledge
of the occurrence of any such 5% Acquisition Transaction that takes place
without a written agreement, with a written description of such transaction
(including the type and amount of Stock to be issued) and an explanation as to
why such transaction does not result in the application of Section 355(e) of the
Code to the Transactions.
(b) For purposes of this Section 5.05, “5% Acquisition Transaction” means any
transaction or series of transactions that would be a Proposed Acquisition
Transaction if the percentage specified in the definition of Proposed
Acquisition Transaction were 5% instead of 10%.
SECTION 5.06. Reporting. Ashland Global and Valvoline each (a) shall timely file
(or cause to be filed) the appropriate information and statements (including as
required by Section 6045B of the Code and Section 1.355-5 and, to the extent
applicable, Section 1.368-3 of the Regulations) to report the Transactions as
qualifying for the Intended Tax Treatment and (b) absent a change of Law or a
Determination in respect of the Transactions, shall not take any position on any
Tax Return, financial statement or other document that is inconsistent with the
Transactions qualifying for the Intended Tax Treatment.
SECTION 5.07. Protective Section 336(e) Elections. (a) The Companies shall, at
Ashland Global’s election, timely enter into a written, binding agreement
(within the meaning of Section 1.336-2(h) of the Regulations) to make any
Protective Section 336(e) Election that Ashland Global chooses (it being
understood, for the avoidance of doubt, that such Protective Section 336(e)
Elections shall have a tax effect on the Companies only if (x) Section 355(d) or
355(e) of the Code applies to any Transaction or (y) any Transaction otherwise
fails its Intended Tax Treatment to qualify for nonrecognition treatment under
Section 355(c) of the Code). Ashland Global shall timely make such Protective
Section 336(e) Elections and timely file such forms as may be contemplated by
applicable tax Law or administrative practice to effect such Protective Section
336(e) Elections and shall have the exclusive right to prepare and file (i) the
relevant purchase price allocation and any corresponding IRS Form 8883 (or any
successor thereto) and (ii) any similar forms required or permitted to be filed
under U.S. state or local Law in connection with such Protective Section 336(e)
Elections.
(b) To the extent any such Transaction constitutes a “qualified stock
disposition” (as defined in Section 1.336-1(b)(6) of the Regulations) pursuant
to a Determination, the Companies shall not, and shall not permit any of their
respective Affiliates to, take any position for tax purposes inconsistent with
any of the Protective Section 336(e) Elections, except as may be required
pursuant to a Determination.
17
(c) If there is a failure of one or more of the Transactions to qualify (in
whole or in part) for its Intended Tax Treatment and, as a consequence, a
relevant Protective Section 336(e) Election results in a step-up in the basis of
any asset of the Valvoline Group, then Valvoline shall make quarterly payments
to Ashland Global equal to (i) the actual tax savings, if, as and when realized,
arising from such step-up in tax basis, determined on a “with and without” basis
(treating any deductions or amortization attributable to such step-up in tax
basis resulting from such Protective Section 336(e) Election as the last items
claimed for any taxable period, including after the utilization of any available
net operating loss carryforwards), and less a reasonable charge for
administrative expenses and other reasonable out-of-pocket expenses necessary to
secure the tax savings multiplied by (ii) the Ashland Global Transaction Tax
Percentage of any Transaction Taxes resulting from such failure of one or more
of the Transactions to qualify (in whole or in part) for its Intended Tax
Treatment.
ARTICLE VI
Audits and Contests
SECTION 6.01. Audits and Contests. (a) Subject to Section 6.01(b), (i) Ashland
Global shall have exclusive and sole responsibility and control with respect to
the conduct and settlement of any examinations and contests by a Taxing
Authority of any Ashland Global Consolidated Returns or Ashland Global Combined
Returns and (ii) Ashland Global and Valvoline shall each have exclusive and sole
responsibility and control with respect to the conduct and settlement of any
examinations and contests by a Taxing Authority of the respective Separate
Returns that each party is responsible for preparing under Article II.
(b) If the conduct or settlement of any portion or aspect of any examination or
contest of a party’s Tax Return could reasonably be expected to obligate the
other Company to make an indemnity payment under Article IV or result in an
additional payment obligation of the other Company under Article II, then (i)
the other Company shall have the right to share joint control over the conduct
and settlement of that portion or aspect and (ii) whether or not the other
Company exercises that right, such party shall not accept or enter into any
settlement that would obligate the other Company to make an indemnity payment
under Article IV or result in an additional payment obligation of the other
Company under Article II without the consent of the other Company (which consent
shall not unreasonably be withheld or delayed). Within 15 Business Days of the
commencement of any such examination or contest, such party shall give the other
Company notice of, and consult with the other Company with respect to, any
issues that could reasonably be expected to obligate the other Company as
described in the preceding sentence; provided, however, that the other Company
shall not be relieved of any obligation to make additional payments under this
Agreement if such party fails to timely deliver the notice described above
except to the extent that the other Company is actually prejudiced thereby. If
the other Company does not respond to such party’s request for consent within 15
Business Days, the other Company shall be deemed to have consented.
SECTION 6.02. Expenses. Each Indemnifying Party shall reimburse the Indemnitee
for all reasonable out-of-pocket expenses (including legal, consulting and
accounting fees) in the course of proceedings described in Section 6.01 to the
extent those expenses are reasonably attributable to the Indemnifying Party or
any of its Affiliates, or to any matter for which the Indemnifying Party is
required to indemnify under Article IV or which would result in an additional
payment obligation of the Indemnifying Party under Article II.
ARTICLE VII
General Cooperation and Document Retention
SECTION 7.01. Cooperation and Good Faith. Each member of the Ashland Global
Group and the Valvoline Group shall cooperate fully with all reasonable requests
Returns, audits, contests and other matters covered by this Agreement. Such
cooperation shall include the execution of any document that may be necessary or
reasonably helpful in
18
connection with any audit or contest, the filing or amending of a Tax Return by
a member of the Ashland Global Group or the Valvoline Group, obtaining any tax
opinion or Ruling or, for no more than 2 years following the date of this
Agreement, the provision of services described in Schedule G (which services
shall, for the avoidance of doubt, be provided without remuneration).
SECTION 7.02. Duty to Mitigate Recognition or Recapture of Income. Prior to any
event that may result in recognition or recapture of income (including under any
gain recognition agreement or domestic use agreement), Ashland Global and
Valvoline shall use (and shall cause the members of the Ashland Global Group and
Valvoline Group, respectively, to use) all commercially reasonable efforts to
eliminate such recognition or recapture of income or otherwise avoid or minimize
the impact thereof. For the avoidance of doubt:
(a)Valvoline shall enter into (or shall cause the appropriate member of the
Valvoline Group to enter into) a new gain recognition agreement pursuant to
Section 1.367(a)-8 of the Regulations, if entering into that gain recognition
agreement would preclude or defer the recognition of gain by any member of the
Ashland Global Group.
(b)To the extent that any member of the Valvoline Group is a “U.S. transferor”
(within the meaning of Section 1.367(a)-8(b)(1)(xvii) of the Regulations) with
respect to property for which a gain recognition agreement was entered into,
Valvoline shall comply (or shall cause the appropriate member of the Valvoline
Group to comply) with the annual certification requirements of Section
1.367(a)-8(g) of the Regulations for the term of such gain recognition agreement
and promptly provide copies of those annual certifications to Ashland Global. A
list of gain recognition agreements, which includes gain recognition agreements
that a member of the Ashland Global Group or Valvoline Group has or expects to
enter into, is set out in Schedule H.
(c)Valvoline shall enter into any agreements (including new domestic use
agreements under Section 1.1503(d)-6(f)(2) of the Regulations), make any
elections and take any other actions, in each case as requested by Ashland
Global or as otherwise required in order to avoid causing the Distribution or
Other Disposition, as the case may be, to be a “triggering event” requiring
recapture of any “dual consolidated loss” (in each case, within the meaning of
Section 1503(d) of the Code and the Regulations thereunder) for which an Ashland
Global Consolidated Group member has made a “domestic use election” under
Section 1.1503(d)-6(d) of the Regulations and that was incurred by a member of
the Valvoline Group during a Consolidation Year.
SECTION 7.03. Document Retention; Access to Records and Use of Personnel. Until
the expiration of the relevant statute of limitations (including extensions),
each of Ashland Global and Valvoline shall (i) retain records, documents,
accounting data, computer data and other information (collectively, the
all Tax Returns or relevant to an obligation, right or liability of either party
under this Agreement and (ii) give each other reasonable access to such Records
and to its personnel (ensuring their cooperation) and premises to the extent
relevant to an obligation, right or liability of either party under this
Agreement. Prior to disposing of any such Records, each of Ashland Global and
Valvoline shall notify the other party in writing of such intention and afford
the other party the opportunity to take possession or make copies of such
Records at its discretion.
ARTICLE VIII
Miscellaneous Provisions
SECTION 8.01. Interest. Except as provided in Section 2.05(c), any payments
required pursuant to this Agreement that are not made within the time period
specified in this Agreement shall bear interest at a rate equal to 200 basis
points above the average interest rate on the senior bank debt of Ashland
Global.
SECTION 8.02. No Duplication of Payment. Notwithstanding anything to the
contrary herein,
19
nothing in this Agreement shall require Ashland Global or Valvoline, as the case
may be, to make any payment to the extent that the payment is attributable to a
Tax Attribute, Return Item or any other amount for which payment has previously
been made under this Agreement.
SECTION 8.03. Confidentiality. Each of the Companies agrees that any information
furnished pursuant to this Agreement is confidential and, except as and to the
extent required by Law or otherwise during the course of an audit or contest or
other administrative or legal proceeding, shall not be disclosed to other
Persons. In addition, each of Ashland Global and Valvoline shall cause its
Affiliates, employees, agents and advisors to comply with the terms of this
Section 8.03.
SECTION 8.04. Successors and Access to Information. This Agreement shall be
binding upon and inure to the benefit of any successor to any of the parties, by
merger, acquisition of assets or otherwise, to the same extent as if the
successor had been an original party to this Agreement, and in such event, all
references herein to a party shall refer instead to the successor of such party.
SECTION 8.05. Injunctions. The Companies acknowledge that irreparable damage
would occur to them in the event that any of the provisions of this Agreement
breached. The Companies agree that they shall be entitled to an injunction or
jurisdiction, such remedy being in addition to any other remedy to which it may
be entitled at Law or in equity. Nothing in this Agreement shall prevent any
Company from seeking injunctive relief as it deems necessary or appropriate.
SECTION 8.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the Laws of New York excluding (to the greatest extent
permissible by Law) any rule of Law that would cause the application of the Laws
SECTION 8.07. Headings. The headings in this Agreement are for convenience only
and shall not be deemed for any purpose to constitute a part or to affect the
SECTION 8.08. Counterparts. This Agreement may be executed simultaneously in two
SECTION 8.09. Notice. All notices or other communications under this Agreement
shall be in writing and shall be deemed to be duly given (a) when delivered in
person, (b) on the date received, if sent by a nationally recognized delivery or
courier service or (c) upon the earlier of confirmed receipt or the fifth
follows:
If to Ashland Global, to:
50 East RiverCenter Boulevard
Covington, KY 41011
Attn: Scott A. Gregg
Peter Ganz
Email: sagregg@ashland.com
pganz@ashland.com
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Cravath, Swaine & Moore LLP Worldwide Plaza
825 Eighth Avenue New York, NY 10019
Attn:
Stephen L. Gordon Lauren Angelilli
Email: gordon@cravath.com
langelilli@cravath.com
If to Valvoline, to:
VALVOLINE INC.
3499 Blazer Parkway
Lexington, KY 40509
Attn:
Nicolas H. Schmelzer
Julie M. O’Daniel
Email: nhschmelzer@valvoline.com
jmodaniel@valvoline.com
Either Company may, by notice to the other Company, change the address to which
such notices are to be given. Any payment required to be made under this
Agreement shall be delivered to the relevant Company at an address to which
notice under this Section 8.09 may be given to such Company.
practicable. In any event, all other provisions of this Agreement shall be
deemed valid, binding and enforceable to their full extent.
SECTION 8.11. Termination. This Agreement shall remain in force and be binding
for 90 days following the expiration of the applicable period of assessments
(including extensions) for any taxes contemplated by this Agreement; provided,
however, that neither Ashland Global nor Valvoline shall have any liability to
the other party with respect to tax liabilities for taxable periods (or portions
thereof) in which Valvoline is not included in the Ashland Global Consolidated
Returns except as provided in Article II or IV of this Agreement.
SECTION 8.12. Successor Provisions. Any reference herein to any provisions of
the Code or Regulations shall be deemed to include any amendments or successor
provisions thereto as appropriate.
SECTION 8.13. Compliance by Group Members. Ashland Global and Valvoline each
shall cause all present and future members of the Ashland Global Group and the
Valvoline Group to comply with the terms of this Agreement.
SECTION 8.14. Survival. Notwithstanding anything in this Agreement to the
contrary, the provisions of this Agreement shall survive for the full period of
or extensions thereof) plus 90 days.
SECTION 8.15. Integration; Amendments. Except as explicitly stated herein, this
Agreement embodies the entire understanding between the parties relating to its
subject matter and supersedes and terminates all prior agreements and
understandings among the parties with respect to such matters. No promises,
herein, have been made to induce any party to enter into this Agreement. This
Agreement shall not be modified or terminated except by a writing duly signed by
each of the parties hereto, and no waiver of any provisions of this Agreement
shall be effective unless in a writing duly signed by the party sought to be
bound. If, and to the extent, the provisions of this Agreement conflict with the
TSA, the provisions of this Agreement shall control.
SECTION 8.16. Third-Party Beneficiaries. (a) The provisions of this Agreement
are solely for
21
the benefit of the Companies and are not intended to confer upon any Person
except the Companies any rights or remedies hereunder and (b) there are no
any third Person with any remedy, claim, liability, reimbursement, cause of
Agreement.
SECTION 8.17. Waiver of Jury Trial. EACH OF THE COMPANIES ACKNOWLEDGES AND
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH OF THE COMPANIES
OR RELATING TO THIS AGREEMENT. EACH OF THE COMPANIES CERTIFIES AND ACKNOWLEDGES
THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER COMPANY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER COMPANY WOULD NOT, IN THE
EVENT OF ANY LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) EACH OF THE
COMPANIES UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c)
EACH OF THE COMPANIES MAKES THIS WAIVER VOLUNTARILY AND (d) EACH OF THE
COMPANIES HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.17.
22
thei r duly authorized representatives as of the date first set forth above.
by
Counsel, and Secretary
VALVOLINE INC.
by
/s/ Julie O'Daniel
Name: Julie O'Daniel
General Counsel and Corporate
Secretary
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Name: Commission Regulation (EC) No 2059/2001 of 19 October 2001 fixing the export refunds on pigmeat
Type: Regulation
Date Published: nan
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Title: Doctors performed surgery on me without my permission, help.
Question:I tried to kill myself via overdosing on pain meds and alcohol, I was brought to hospital where I was sedated. Upon waking up I noticed they left what looks like a metal rod inside my arm, I didn't give them permission to perform surgery on me. What can I do?
[A photo of my surgery.](https://i.imgur.com/M2t4XOg.png)
Answer #1: .... and troll |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 23, 2012 ATMI, Inc. (Exact name of registrant as specified in its charter) Delaware 1-16239 06-1481060 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 7 Commerce Drive, Danbury, Connecticut (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (203) 794-1100 (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 the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 5.07. Submission of Matters to a Vote of Security Holders. The annual meeting of stockholders of ATMI, Inc. (the “Company”) was held on May 23, 2012.As of March 27, 2012, the record date for the meeting, 33,111,971 shares of ATMI common stock were outstanding.A quorum consisting of 30,284,437 shares of common stock were present or represented at the meeting. The stockholders elected each of the Company’s nominees for Class III director, approved the compensation of the Company’s named executive officers on an advisory basis, and ratified the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2012.The following tables represent the votes tabulated for each of these matters. A.Election of Class III Directors For Withheld Broker Non-Votes Stephen H. Mahle C. Douglas Marsh Douglas A. Neugold B.Advisory Vote to Approve Compensation of Named Executive Officers For Against Abstain Broker Non-Votes C.Ratification of Ernst & Young LLP For Against Abstain SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ATMI, Inc. (Registrant) May 24, 2012 (Date) /s/ TIMOTHY C. CARLSON Timothy C. Carlson Executive Vice President, Chief Financial Officer and Treasurer
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FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of December 2009 Commission File Number: Star Bulk Carriers Corp. (Translation of registrant's name into English) 7, Fragoklisias Street, 2nd floor, Maroussi 151 25, Athens, Greece (Address of principal executive office) 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-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): Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. 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: Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. INFORMATION CONTAINED IN THIS FORM 6-K REPORT Attached hereto as Exhibit 1 is Management's Discussion and Analysis of Financial Condition and Results of Operation and the unaudited interim condensed consolidated financial statements and related information and data of Star Bulk Carriers Corp. as of and for the nine months ended September 30, Exhibit 1 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion of our financial condition and results of operations for the nine months ended September 30, 2009 and 2008. Unless otherwise specified herein, references to the "Company," "we," "us," or "our" shall include Star Bulk Carriers Corp. and its subsidiaries. You should read the following discussion and analysis together with the financial statements and related notes included elsewhere in this report. For additional information relating to our management's discussion and analysis of financial condition and results of operation, please see our annual report on Form 20-F for the year ended December 31, 2008, which was filed with the U.S. Securities and Exchange Commission, or the Commission, on April 16, 2009. This discussion includes forward-looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those currently anticipated and expressed or implied by such forward-looking statements. Overview We are an international company providing worldwide transportation of drybulk commodities through our vessel-owning subsidiaries for a broad range of customers of major and minor bulk cargoes including iron ore, coal, grain, cement and fertilizer.
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[Execution Copy] AGREEMENT AND PLAN OF REORGANIZATION between UNION FIRST MARKET BANKSHARES CORPORATION and STELLARONE CORPORATION June 9, 2013 TABLE OF CONTENTS ARTICLE 1. THE MERGER AND RELATED MATTERS 1 The Merger 1 Effective Date 2 Closing 2 Corporate Governance and Related Matters 2 Banking Operations 3 Articles of Incorporation and Bylaws of the Continuing Corporation 3 Tax Consequences 4 Appraisal Rights 4 ARTICLE 2. MERGER CONSIDERATION; EXCHANGE PROCEDURES 4 Conversion of StellarOne Common Stock 4 Exchange Procedures 5 No Fractional Shares 6 Anti-Dilution 6 Dividends 6 StellarOne Stock Options and Other Equity-Based Awards 7 Treasury Warrant 8 Withholding Rights 8 ARTICLE 3. REPRESENTATIONS AND WARRANTIES 8 Disclosure Letters 8 Standard 9 Representations and Warranties 10 ARTICLE 4. COVENANTS RELATING TO CONDUCT OF BUSINESS 26 Conduct of Business Pending Merger 26 Dividends 29 Transition 29 Control of the Other Party's Business 30 ARTICLE 5. ADDITIONAL AGREEMENTS 30 Reasonable Best Efforts 30 Access to Information; Notice of Certain Matters; Confidentiality 30 Stockholder Approvals 31 Registration Statement; Joint Proxy Statement; SEC Filings 31 No Other Acquisition Proposals 32 Applications and Consents 35 Public Announcements 35 Affiliate Agreements 35 Employee Benefit Plans 35 Reservation of Shares; NASDAQ Listing 37 Indemnification 38 Employment and Other Arrangements 38 Consent to Assign and Use Premises; Extensions 39 Change of Method 39 Takeover Laws 40 Certain Policies 40 Supplemental Indentures 40 Shareholder Litigation 40 Exemption from Liability Under Section 16(b) 40 ARTICLE 6. CONDITIONS TO THE MERGER 41 General Conditions 41 Conditions to Obligations of Union 42 Conditions to Obligations of StellarOne 42 ARTICLE 7. TERMINATION 43 Termination 43 Effect of Termination 44 Non-Survival of Representations, Warranties and Covenants 45 Termination Fee 45 Expenses 46 ARTICLE 8. GENERAL PROVISIONS 46 Entire Agreement 46 Binding Effect; No Third Party Rights 46 Waiver and Amendment 47 Governing Law 47 Notices 47 Counterparts 48 Waiver of Jury Trial 48 Severability 49 LIST OF EXHIBITS EXHIBIT 1.1(a) Form of Plan of Merger EXHIBIT 1.4(b) Form of Bylaw Amendment of the Continuing Corporation EXHIBIT 5.8 Forms of Affiliate Agreements INDEX OF DEFINED TERMS Acquisition Proposal Section 5.5(c ) Bank Reports Section 3.3(g) Benefit Plans Section 3.3(n)(i) Change in StellarOne Recommendation Section 5.5(e) Change in Union Recommendation Section 5.5(e) Closing Section 1.3 Closing Date Section 1.3 Code Recitals Confidentiality Agreement Section 5.2(c ) Continuing Corporation Section 1.1 Continuing Corporation Common Stock Section 2.1(a) Continuing Corporation Stock Award Section 2.6 (c ) Derivative Contract Section 3.3(t) Disclosure Letter Section 3.1(a) Effective Date Section 1.2 Environmental Claim Section 3.3(q)(iv)(A) Environmental Laws Section 3.3(q)(iv)(B) ERISA Section 3.3(n)(iii) Exchange Act Section 3.3(f)(i) Exchange Agent Section 2.2(a) Exchange Fund Section 2.2(a) Exchange Ratio Section 2.1(a) FDIC Section 3.3(b) Financial Statements Section 3.3(f)(ii) GAAP Section 3.3(f)(ii) Governmental Authority Section 3.3(k) Indemnified Party Section 5.11(a) Intellectual Property Section 3.3(s) Joint Proxy Statement Section 5.4(a) Knowledge Section 3.2(c) Loan Loss Allowance Section 3.3(p)(ii) Material Adverse Effect Section 3.2 (b) Material Contract Section 3.3(j) Materials of Environmental Concern Section 3.3(q)(iv)(C ) Merger Recitals New Certificates Section 2.2(a) Notice of Termination or Recommendation Change Section 5.5(f) Old StellarOne Certificates Section 2.1(c ) Organizational Documents Section 3.3(a) OREO Section 3.3(p)(iii) Permitted Issuances Section 4.1 (d)(ii) Plan of Merger Section 1.1 Registration Statement Section 5.4(a) Regulatory Agencies Section 3.3(g) Regulatory Approvals Section 5.6(a) Replacement Option Section 2.6 Rights Section 3.3(d) Sarbanes-Oxley Act Section 3.3(f)(v) SCC Section 1.2 SEC Section 3.3 (f)(i) SEC Reports Section 3.3 (f)(i) Securities Act Section 3.3 (f)(i) StellarOne Afflilates Section 5.8 StellarOne Board Recommendation Section 5.3 (b) StellarOne Common Stock Section 2.1 (a) StellarOne Continuing Employees Section 5.9(a) StellarOne Directors Section 1.4(b) StellarOne Stock Award Section 2.6(c ) StellarOne Stock Option Section 2.6(a) StellarOne Stock Plan Section 2.6(a) StellarOne Stockholder Approval Section 3.3(c)(i)(A) StellarOne Stockholders Meeting Section 5.3(b) Subsidiary Section 3.3(b) Subsidiary Bank Merger Section 1.5(a) Superior Proposal Section 5.5(d) Takeover Laws Section 3.3(x) Tax Returns Section 3.3(l)(i) Tax or Taxes Section 3.3(l)(i) Technology Systems Section 3.3(s) Termination Fee Section 7.4(a) Treasury Section 3.3(c) Treasury Warrant Section 3.3(c) Union Affiliates Section 5.8 Union Bank Section 1.5(a) Union Board Recommendation Section 5.3(a) Union Common Stock Section 1.4(a) Union Directors Section 1.4(b) Union Stock Awards Section 3.3(d) Union Stock Options Section 3.3(d) Union Stock Plan Section 3.3(d) Union Stockholder Approvals Section 3.3(c)(i)(B) Union Stockholders Meeting Section 5.3(a) VSCA Section 1.1 AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION (the “Agreement”) is made and entered into as of June 9, 2013, between UNION FIRST MARKET BANKSHARES CORPORATION, a Virginia corporation (“Union”), and STELLARONE CORPORATION, a Virginia corporation (“StellarOne”). WHEREAS, the Boards of Directors of Union and StellarOne have approved, and deem it advisable and in the best interests of their respective stockholders to consummate, the business combination transaction provided for herein in which StellarOne will merge with and into Union (the “Merger”); WHEREAS, the Boards of Directors of Union and StellarOne have each determined that the Merger is consistent with and will further their respective business strategies and goals; and WHEREAS, it is the intention of the parties that, for federal income tax purposes, the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement shall constitute, and is adopted as, a “plan of reorganization” for purposes of Sections 354 and 361 of the Code. NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and intending to be legally bound hereby, the parties agree as follows: ARTICLE 1 The Merger and Related Matters 1.1The Merger. Subject to the terms and conditions of this Agreement, at the Effective Date (as defined in Section 1.2) and in accordance with the Virginia Stock Corporation Act (the “VSCA”), StellarOne will be merged with and into Union pursuant to the Plan of Merger, substantially in the form attached hereto as Exhibit1.1(a) and made a part hereof (the “Plan of Merger”).The separate corporate existence of StellarOne thereupon shall cease, and Union will be the surviving corporation in the Merger (Union is referred to herein as the “Continuing Corporation” whenever reference is made to it as of the Effective Date or thereafter).The Merger will have the effect set forth in Section 13.1-721 of the VSCA.Without limiting the generality of the foregoing, from and after the Effective Date, the Continuing Corporation shall possess all rights, privileges, properties, immunities, powers and franchises of StellarOne, and all of the debts, liabilities, obligations, claims, restrictions and duties of StellarOne shall become the debts, liabilities, obligations, claims, restrictions and duties of the Continuing Corporation. 1.2Effective Date. (a)The Merger will become effective on the date and at the time shown on the Certificate of Merger issued by the Virginia State Corporation Commission (the “SCC”) effecting the Merger (the “Effective Date”).Subject to the satisfaction or waiver of the conditions set forth in Article 6, the parties will use their reasonable best efforts to cause the Effective Date to occur on or before January 1, 2014, or on such other date as the parties may agree in writing.At or after the Closing Date (as defined herein), Union and StellarOne will execute and deliver Articles of Merger meeting the requirements of Section 13.1-720 of the VSCA, including containing the Plan of Merger to the SCC. (b)Notwithstanding any other provision to the contrary, if at any time after January 1, 2014 the conditions set forth in Article 6 shall have been satisfied or waived in accordance with the terms of this Agreement, other than those conditions that by their nature are to be satisfied at the Closing (as defined herein) and the Closing does not occur within five (5) business days thereafter, and a record date for any dividend or other distribution in respect of the Union Common Stock (as defined herein) is taken after the end of such five (5) day period such that the StellarOne stockholders will not be entitled to participate in such dividend, each holder of StellarOne Common Stock (as defined herein) shall be entitled to receive, upon surrender of the Old StellarOne Certificates (as defined herein) and compliance with the other provisions of Article 2, a payment equal to the difference between (i) the amount and kind of dividend or other distribution that such holder would have received had such holder been a holder of record of the shares of Union Common Stock issuable to such holder in the Merger on the record date for such dividend or other distribution and (ii) the amount and kind of dividend or other distribution that such holder actually received as a holder of record of the shares of StellarOne Common Stock for such same fiscal quarter. 1.3Closing. Subject to the terms and conditions of this Agreement, the closing of the Merger (the “Closing”) will take place at 10:00 a.m. at the offices of LeClairRyan, A Professional Corporation, Richmond, Virginia on a date mutually agreed to by the parties (the “Closing Date”).All documents required by this Agreement to be delivered at or prior to the Closing Date will be exchanged by the parties at the Closing. 1.4Corporate Governance and Related Matters. (a)Immediately prior to the Effective Date, the Articles of Incorporation of Union shall be amended to increase the number of authorized shares of common stock, par value $1.33 per share, of Union (“Union Common Stock”) from 36,000,000 to 100,000,000 shares. (b)Prior to the Effective Date, Union shall take all actions necessary to adopt the amendments to the Bylaws of Union substantially in the form set forth in Exhibit 1.4(b), effective as of the Effective Date.On or prior to the Effective Date, the Board of Directors of Union shall cause the number of directors that will comprise the full Board of Directors of the Continuing Corporation at the Effective Date to be fixed at such number, not to exceed nineteen (19), consisting of (i) not more than eleven (11) current Union directors designated by Union, including the current Chief Executive Officer of Union (the “Union Directors”), and eight (8) current StellarOne directors to be designated prior to the Effective Date by Stellar One, subject to the consent of Union which shall not be unreasonably withheld (the “StellarOne Directors”).No other directors of Union or StellarOne shall be designated to serve on the Board of Directors of the Continuing Corporation at the Effective Date.The Union Directors and StellarOne Directors will be split as equally as possible among the three classes of directors to serve staggered terms. (c)Subject to and in accordance with the Bylaws of the Continuing Corporation, effective as of the Effective Date, (i) Dr. Raymond D. Smoot, Jr. will serve as Chairman of the Board of Directors of the Continuing Corporation, (ii) Mr.RonaldL.Hicks will serve as Vice Chairman of the Board of Directors of the Continuing Corporation and (iii) the officers of Union in office immediately prior to the Effective Date, together with such additional persons as may thereafter be appointed, shall serve as the officers, respectively, of the Continuing Corporation from and after the Effective Date. 2 1.5Banking Operations. (a)At and after the Effective Date, StellarOne Bank, the wholly-owned Virginia chartered commercial bank subsidiary of StellarOne, shall operate as a separate Virginia chartered commercial banking subsidiary of the Continuing Corporation until such time as StellarOne Bank shall be merged (the “Subsidiary Bank Merger”) with and into Union First Market Bank, the wholly-owned Virginia chartered commercial bank subsidiary of Union (“Union Bank”). (b)The officers and directors of StellarOne Bank immediately prior to the Effective Date shall continue to be the officers and directors of StellarOne Bank after the Effective Date until the effective date of the Subsidiary Bank Merger, subject to the StellarOne Bank Board of Directors determination with respect to the officers, after consultation with Union to reflect any management changes occurring after the Effective Date.Prior to the effective date of the Subsidiary Bank Merger, Union Bank and its Board of Directors shall take all actions necessary to offer a board position with Union Bank to those current members of the Board of Directors of StellarOne who are not appointed to the Continuing Corporation’s Board of Directors as of the Effective Date, and to appoint such individuals to the Board of Directors of Union Bank as of the effective date of the Subsidiary Bank Merger, including amending the Bylaws of Union Bank for such purposes. 1.6Articles of Incorporation and Bylaws of the Continuing Corporation. The Articles of Incorporation and Bylaws of Union as in effect immediately prior to the Effective Date, as such Articles of Incorporation are proposed to be amended as set forth in Section 1.4(a) hereof and as such Bylaws are proposed to be amended as set forth in Exhibit 1.4(b) hereto, will be the Articles of Incorporation and Bylaws of the Continuing Corporation. 3 1.7Tax Consequences. It is intended that the Merger shall constitute a “reorganization” within the meaning of Section 368(a) of the Code, and that this Agreement shall constitute a “plan of reorganization” for purposes of Sections 354 and 361 of the Code. 1.8Appraisal Rights. In accordance with Section 13.1-730 of the VSCA, no appraisal rights shall be available to the holders of StellarOne Common Stock in connection with the Merger or the other transactions contemplated by this Agreement. ARTICLE 2 Merger Consideration; Exchange Procedures 2.1Conversion of StellarOne Common Stock. At the Effective Date, by virtue of the Merger and without any action on the part of Union or StellarOne or their respective stockholders: (a)Each share of common stock, par value $1.00 per share, of StellarOne (“StellarOne Common Stock”), that is issued and outstanding immediately before the Effective Date will be converted into and exchanged for 0.9739 shares of common stock, par value $1.33 per share, of the Continuing Corporation (“Continuing Corporation Common Stock”) pursuant to the terms and conditions set forth in this Agreement and the Plan of Merger (the “Exchange Ratio”). (b)All shares of StellarOne Common Stock converted pursuant to this Section2.1 shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist as of the Effective Date. (c)Each certificate previously representing shares of StellarOne Common Stock (the “Old StellarOne Certificates”) shall cease to represent any rights except the right to receive with respect to each underlying share of StellarOne Common Stock: (i) a new certificate representing the number of whole shares of Continuing Corporation Common Stock into which the shares of StellarOne Common Stock represented by the Old StellarOne Certificate have been converted pursuant to this Section 2.1 upon the surrender of such Old StellarOne Certificate in accordance with Section 2.2, (ii) in accordance with Section 2.3, cash in lieu of fractional shares of Continuing Corporation Common Stock; and (iii) any dividends or distributions which the holder thereof has the right to receive pursuant to Section 2.5. 4 (d)Each share of Union Common Stock issued and outstanding immediately before the Effective Date shall remain an issued and outstanding share of Continuing Corporation Common Stock.Each certificate previously representing shares of Union Common Stock shall continue to represent an equal number of shares of Continuing Corporation Common Stock on and after the Effective Date. (e)Each share of StellarOne Common Stock held by either party and each share of Union Common Stock held by StellarOne or any of its Subsidiaries (as defined herein) prior to the Effective Date (in each case other than in a fiduciary or agency capacity or on behalf of third parties as a result of debts previously contracted) shall be cancelled and retired and shall cease to exist at the Effective Date and no consideration shall be issued in exchange therefor; provided, that such shares of Union Common Stock shall resume the status of authorized and unissued shares of Union Common Stock. 2.2Exchange Procedures. (a)At the Effective Date, the Continuing Corporation shall deposit, or shall cause to be deposited, with its transfer agent or such other transfer agent or depository or trust institution of recognized standing approved by Union (the “Exchange Agent”), for the benefit of the holders of the Old StellarOne Certificates, certificates representing Continuing Corporation Common Stock (“New Certificates”), together with any dividends or distributions with respect thereto and any cash to be paid hereunder in lieu of fractional shares of Continuing Corporation Common Stock, without any interest thereon (the “Exchange Fund”), to be paid pursuant to Article 1 and this Article 2 in exchange for outstanding shares of StellarOne Common Stock. (b)As promptly as practicable after the Effective Date, and in no event later than five (5) business days thereafter, the Continuing Corporation shall cause the Exchange Agent to send to each former stockholder of record of StellarOne immediately before the Effective Date transmittal materials for use in exchanging such stockholder’s Old StellarOne Certificates for New Certificates based upon the Exchange Ratio. (c)The Continuing Corporation shall cause the New Certificates for shares of Continuing Corporation Common Stock into which shares of StellarOne Common Stock are converted at the Effective Date or dividends or distributions which such stockholder shall be entitled to receive and any cash to be paid in lieu of fractional shares to be paid to such stockholder upon delivery to the Exchange Agent of Old StellarOne Certificates, together with the transmittal materials duly executed and completed in accordance with the instructions thereto.No interest will accrue or be paid on any such cash to be paid pursuant to Section 2.3 or Section2.5. (d)A StellarOne stockholder whose Old StellarOne Certificates have been lost, destroyed, stolen or are otherwise missing shall be entitled to receive New Certificates, dividends or distributions, and cash in lieu of fractional shares, to which such stockholder shall be entitled upon compliance with reasonable conditions imposed by Union pursuant to applicable law and as required in accordance with Union’s standard policy (including the requirement that the shareholder furnish a surety bond or other customary indemnity). 5 (e)Any portion of the Exchange Fund that remains unclaimed by the stockholders of StellarOne for twelve (12) months after the Effective Date shall be returned to the Continuing Corporation (together with any dividends or earnings in respect thereof).Any former stockholders of StellarOne who have not complied with this Article 2 shall thereafter be entitled to look only to the Continuing Corporation, and only as a general creditor thereof, for payment of the consideration deliverable in respect of each share of StellarOne Common Stock such stockholder holds as determined pursuant to this Agreement, without any interest thereon. (f)None of the Exchange Agent, either of the parties hereto or any of their respective Subsidiaries shall be liable to any stockholder of StellarOne for any amount of property delivered to a public official pursuant to applicable abandoned property, escheat or similar laws. 2.3No Fractional Shares. Each holder of shares of StellarOne Common Stock exchanged pursuant to the Merger which would otherwise have been entitled to receive a fraction of a share of Continuing Corporation Common Stock shall receive, in lieu thereof, cash (without interest and rounded to the nearest cent) in an amount equal to such fractional part of a share of Continuing Corporation Common Stock multiplied by the closing sale price of Union Common Stock on the NASDAQ Global Select Market for the trading day immediately preceding (but not including) the Effective Date. 2.4Anti-Dilution. In the event Union changes (or establishes a record date for changing) the number of shares of Union Common Stock issued and outstanding before the Effective Date as a result of a stock split, stock dividend, recapitalization, reclassification, reorganization or similar transaction,appropriate and proportional adjustments will be made to the Exchange Ratio. 2.5Dividends. No dividend or other distribution payable to the holders of record of StellarOne Common Stock at, or as of, any time after the Effective Date will be paid to the holder of any Old StellarOne Certificates until such holder physically surrenders such certificate (or furnishes a surety bond of a customary indemnity that such certificate is lost, destroyed, stolen or are otherwise missing) for exchange as provided in Section 2.2 of this Agreement, promptly after which time all such dividends or distributions will be paid (without interest). 6 2.6StellarOne Stock Options and Other Equity-Based Awards. (a)At the Effective Date, each option to purchase shares of StellarOne Common Stock (a “StellarOne Stock Option”) granted under an equity or equity-based compensation plan of StellarOne (a “StellarOne Stock Plan”), shall vest and shall be converted into an option (each, a “Replacement Option”) to acquire, on the same terms and conditions as were applicable under such StellarOne Stock Option (except as provided otherwise in this Section 2.6(a)), the number of shares of Union Common Stock equal to (i) the number of shares of StellarOne Common Stock subject to the StellarOne Stock Option multiplied by (ii) the Exchange Ratio. Such product shall be rounded down to the nearest whole number.The exercise price per share (rounded up to the next whole cent) of each Replacement Option shall equal (y) the exercise price per share of shares of StellarOne Common Stock that were purchasable pursuant to such StellarOne Stock Option divided by (z) the Exchange Ratio.Notwithstanding the foregoing, each StellarOne Stock Option that is intended to be an “incentive stock option” (as defined in Section 422 of the Code) shall be adjusted in accordance with the requirements of Section 424 of the Code and all other options shall be adjusted in a manner that maintains the options exemption from Section 409A of the Code.At the Effective Date, Union shall assume the StellarOne Stock Plans; provided that such assumption shall only be with respect to the Replacement Options and the StellarOne Stock Awards (as defined herein) and shall have no obligation to make any additional grants or awards under the StellarOne Stock Plans. (b)Each restricted stock award granted under a StellarOne Stock Plan (a “StellarOne Stock Award”) which is unvested or contingent and outstanding immediately prior to the Effective Date, shall cease, at the Effective Date, to represent any rights with respect to shares of StellarOne Common Stock and shall be converted without any action on the part of the holder thereof, into a restricted stock award of the Continuing Corporation (a “Continuing Corporation Stock Award”), on the same terms and conditions as were applicable under the StellarOne Stock Awards (but taking into account any changes thereto, including any acceleration of vesting thereof, provided for in the StellarOne Stock Plan or in the related award document by reason of the Merger).The number of shares of Continuing Corporation Common Stock subject to each such Continuing Corporation Stock Award shall be equal to the number of shares of StellarOne Common Stock subject to the StellarOne Stock Award multiplied by the Exchange Ratio, rounded, if necessary, to the nearest whole share of Continuing Corporation Common Stock. (c)As soon as practicable after the Effective Date, the Continuing Corporation will deliver to the holders of Replacement Options and StellarOne Stock Awards any required notices setting forth such holders’ rights pursuant to the respective StellarOne Stock Plan and award documents and stating that such StellarOne Stock Awards have been assumed by the Continuing Corporation or that such Replacement Option has been issued by the Continuing Corporation and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.6 after giving effect to the Merger and the terms of the StellarOne Stock Plan). 7 2.7Treasury Warrant. At the Effective Date, each Treasury Warrant (as defined herein), which is then outstanding and unexercised shall cease to represent a right to acquire StellarOne Common Stock and shall be converted into a warrant to purchase shares of Union Common Stock in an amount and at an exercise price determined in accordance with the terms of such Treasury Warrant. 2.8Withholding Rights. The Exchange Agent will be entitled to deduct and withhold from the Merger consideration otherwise payable pursuant to this Agreement to any person such amounts, if any, as it is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign Tax (as defined herein) law. To the extent that amounts are so withheld and remitted to the appropriate Governmental Authority (as defined herein) by the Exchange Agent, such amounts withheld will be treated for all purposes of this Agreement as having been paid to such person in respect of which such deduction and withholding was made by the Exchange Agent. ARTICLE 3 Representations and Warranties 3.1Disclosure Letters. (a)Prior to the execution and delivery of this Agreement, each party has delivered to the other party a letter (its “Disclosure Letter”) setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more of such party’s representations or warranties contained in Section 3.3 or to one or more of its covenants or agreements contained in Articles 4 or 5; provided, that (i) no such item is required to be set forth in a party’s Disclosure Letter as an exception to any representation or warranty of such party if its absence would not result in the related representation or warranty being deemed untrue or incorrect under the standard established by Section 3.2, and (ii) the mere inclusion of an item in a party’s Disclosure Letter as an exception to a representation or warranty shall not be deemed an admission by that party that such item represents a material exception or fact, event or circumstance or that such item is reasonably likely to result in a Material Adverse Effect (as defined herein) with respect to such party. (b)Any disclosures made with respect to a subsection of Section 3.3 shall be deemed to qualify (i) any subsections of Section 3.3 specifically referenced or cross-referenced and (ii) other subsections of Section 3.3 to the extent it is reasonably apparent (notwithstanding the absence of a specific cross reference) from a reading of the disclosure that such disclosure (A) applies to such other subsections and (B) contains sufficient detail to enable a reasonable person to recognize the relevance of such disclosure to such other subsections. 8 3.2Standard. (a)No representation or warranty of Union or StellarOne contained in Section 3.3 (other than the representations and warranties contained in (i) Sections 3.3(c)(i), 3.3(d), 3.3(e) and 3.3(v), which shall be true in all material respects with respect to it, and (ii)Sections 3.3(c)(ii)(A) and 3.3(h)(ii) which shall be true and correct in all respects) will be deemed untrue or incorrect, including for purposes of Sections 6.2(a) and 6.3(a), and no party will be deemed to have breached a representation or warranty, as a consequence of the existence or absence of any fact, event or circumstance unless such fact, event or circumstance, individually or taken together with all other facts, events or circumstances inconsistent with any representation or warranty contained in Section 3.3 has had or is reasonably likely to have a Material Adverse Effect on such party. (b)The term “Material Adverse Effect,” as used with respect to a party, means an event, change, effect or occurrence which, individually or together with any other event, change, effect or occurrence (i) is materially adverse to the business, properties, financial condition or results of operations of such party and its Subsidiaries, taken as a whole, or (ii) materially impairs the ability of such party to perform its obligations under this Agreement or to consummate the Merger and the other transactions contemplated by this Agreement on a timely basis; provided that in the case of clause (i) only a Material Adverse Effect shall not be deemed to include the impact of (A) changes after the date of this Agreement in laws or regulations generally affecting the banking and bank holding company businesses and the interpretation of such laws and regulations by courts or governmental authorities, (B) changes after the date of this Agreement in generally accepted accounting principles or regulatory accounting requirements generally affecting the banking and bank holding company businesses, (C) changes or events after the date of this Agreement generally affecting the banking and bank holding company businesses, including changes in prevailing interest rates, and not specifically relating to Union or StellarOne or their respective Subsidiaries, (D) the effects of the actions expressly permitted or required by this Agreement or that are taken with the prior informed consent of the other party in contemplation of the transactions contemplated hereby, (E) the public disclosure of this Agreement and the transactions contemplated hereby, (F) a decline in the trading price of a party’s common stock or the failure, in and of itself, to meet earnings projections or internal financial forecasts, but not including the underlying causes thereof, and (G) any outbreak or escalation of major hostilities or acts of terrorism which involves the United States; except, with respect to clauses (A), (B), (C) or (G), to the extent that the effects of such change are materially disproportionately adverse to the business, properties, financial condition or results of operations such party and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its Subsidiaries operate. (c)The term “Knowledge” with respect to Union, shall mean the actual knowledge, after due inquiry, of those individuals set forth in Section 3.2 of the Disclosure Letter of Union and, with respect to StellarOne, shall mean the actual knowledge, after due inquiry, of those individuals set forth in Section 3.2 of the Disclosure Letter of StellarOne. 9 3.3Representations and Warranties. Subject to and giving effect to Sections 3.1 and 3.2 and except as set forth in the relevant Disclosure Letters or in any of such party’s SEC Reports (as defined below) filed on or after January 1, 2013 and prior to the date hereof (but excluding any risk factor disclosures contained under the heading “Risk Factors,” any disclosure of risks included in any “forward-looking statements” disclaimer or any other statements that are similarly non-specific or cautionary or forward-looking in nature), Union represents and warrants to StellarOne, and StellarOne represents and warrants to Union, to the extent applicable, as follows: (a)Organization, Standing and Power.It is a Virginia corporation duly organized, validly existing and in good standing under the laws of Virginia.It has the corporate power and authority to carry on its business as now conducted and to own and operate its assets, properties and business.It is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended.True and complete copies of its Articles of Incorporation, Bylaws or other similar governing instruments (the “Organizational Documents”), in each case as amended to the date hereof and as in full force and effect as of the date hereof, are set forth in Section 3.3(a) of its Disclosure Letter. (b)Subsidiaries.Each of its Subsidiaries (i) is a duly organized bank, corporation or statutory trust, validly existing and in good standing under applicable laws, (ii) has full corporate power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business in the states where its ownership or leasing of property or the conduct of its business requires such qualification and where the failure to so qualify would have a Material Adverse Effect on it on a consolidated basis.The outstanding shares of capital stock or equity interests of each of its Subsidiaries are validly issued and outstanding, fully paid and nonassessable and all such shares or equity interests are directly or indirectly owned by it free and clear of all liens, claims and encumbrances or preemptive rights of any person.No rights are authorized, issued or outstanding with respect to the capital stock or equity interests of any of its Subsidiaries and there are no agreements, understandings or commitments relating to the right to vote or to dispose of the capital stock or equity interests of any of its Subsidiaries.There are no restrictions on the ability of any of its Subsidiaries to pay dividends or distributions except, in the case of a Subsidiary that is a regulated entity, for restrictions on dividends or distributions generally applicable to all such regulated entities.The deposits of each of its Subsidiaries that is a commercial bank are insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (the “FDIC”) to the maximum extent permitted by law.A true and complete list of its direct and indirect Subsidiaries as of the date hereof is set forth in Section 3.3(b) of its Disclosure Letter that shows the jurisdiction of organization of each Subsidiary, its form of organization (corporate, partnership, joint venture), and lists the owner(s) and percentage ownership (direct or indirect) of each Subsidiary. The term “Subsidiary” when used with respect to any party means any corporation or other business organization, whether incorporated or unincorporated, at least a majority of the securities or other interests of which that have by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries. 10 (c)Authority; No Breach of the Agreement. (i)It has the corporate power and authority to execute, deliver and perform its obligations under this Agreement, and to consummate the transactions contemplated hereby.The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, by it have been duly and validly authorized by all necessary corporate action and subject only to the receipt of: (A)in the case of StellarOne, approval of this Agreement and the Plan of Merger by the holders of a majority of the outstanding shares of StellarOne Common Stock (the “StellarOne Stockholder Approval”), and (B)in the case of Union, approval of (1) the amendments to the Union Articles of Incorporation as described in Section 1.4(a), and (2) this Agreement and the Plan of Merger, each by the holders of a majority of the outstanding shares of Union Common Stock (the “Union Stockholder Approvals”). This Agreement is a valid and legally binding obligation, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws affecting the enforcement of rights of creditors or by general principles of equity.Union represents and warrants that the Continuing Corporation Common Stock to be issued in the Merger, when issued, will be validly issued, fully paid and nonassessable. (ii)Neither the execution and delivery of this Agreement by it, nor the consummation by it of the transactions contemplated hereby, nor compliance by it with any of the provisions hereof will:(A) conflict with or result in a breach of any provision of its Organizational Documents; (B) constitute or result in the breach of any term, condition or provision of, or constitute a default under, or give rise to any right of termination, cancellation or acceleration with respect to, or result in the creation of any lien, charge or encumbrance upon, any property or asset of it or any of its Subsidiaries pursuant to any (1) note, bond, mortgage, indenture, or (2) any material license, agreement or other instrument or obligation, to which it or any of its Subsidiaries is a party or by which it or any of its Subsidiaries or any of their properties or assets may be bound; or (C) subject to the receipt of all required regulatory and stockholder approvals, violate any order, writ, injunction, decree, statute, rule or regulation applicable to it or any of its Subsidiaries. 11 (iii)As of the date hereof, it is not aware of any reason why the necessary regulatory approvals and consents will not be received in order to permit consummation of the Merger. (d)Union Capital Stock.The authorized capital stock of Union consists of:(i)500,000 shares of preferred stock, par value $10.00 per share, of which no shares are issued and outstanding; and (ii) 36,000,000 shares of common stock, par value $1.33 per share, of which 24,880,402 shares are issued and outstanding as of this date.All outstanding shares of capital stock of Union have been duly authorized and validly issued, are fully paid and nonassessable and have not been issued in violation of the preemptive rights of any person.As of the date hereof, 448,265 shares of Union Common Stock are subject to options to purchase Union Common Stock (“Union Stock Options”), and 117,051 shares are subject to unvested restricted stock awards (“Union Stock Awards”), in each case granted under an equity or equity-based compensation plan of Union (a “Union Stock Plan”).As of the date of this Agreement, there are not any shares of capital stock of Union reserved for issuance, or any outstanding or authorized options, warrants, rights, agreements, convertible or exchangeable securities, or other commitments, contingent or otherwise, relating to its capital stock pursuant to which Union is or may become obligated to make a cash payment or to issue shares of capital stock or any securities convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock (collectively, “Rights”), except as contemplated by each Union Stock Plan. (e)StellarOne Capital Stock.The authorized capital stock of StellarOne consists of: (i) 5,000,000 shares of preferred stock, no par value per share, of which no shares are issued and outstanding; and (ii) 35,000,000 shares of common stock, par value $1.00 per share, of which 22,519,601 shares are issued and outstanding as of this date. All outstanding shares of capital stock of StellarOne have been duly authorized and validly issued, are fully paid and nonassessable and have not been issued in violation of the preemptive rights of any person.As of the date hereof, 161,042 shares of StellarOne Common Stock are subject to StellarOne Stock Options and 207,673 shares are subject to unvested StellarOne Stock Awards, in each case granted under a StellarOne Stock Plan, and 302,623 shares are subject to a Warrant To Purchase Common Stock, dated December19,2008 (including separate warrants derived therefrom, if any, the “Treasury Warrant”), issued to the United States Department of the Treasury (the “Treasury”) pursuant to the Securities Purchase Agreement incorporated into the Letter Agreement, dated December19,2008, between StellarOne and the Treasury.As of the date of this Agreement, there are not any shares of capital stock of StellarOne reserved for issuance, or any outstanding or authorized Rights, except as contemplated by the StellarOne Equity Plans and the Treasury Warrant and as set forth in Section 3.3(e) of its Disclosure Letter. (f)SEC Filings; Financial Statements. (i)It has filed all reports, registration statements, proxy statements, offering circulars, schedules and other documents required to be filed by it (collectively, the “SEC Reports”) with the Securities and Exchange Commission (the “SEC”) since December31,2009 under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, to the extent such SEC Reports are not available on the SEC’s Electronic Data Gathering Analysis and Retrieval system, made available to the other party copies of such SEC Reports.Its SEC Reports, including the financial statements, exhibits and schedules contained therein, (A) at the time filed, complied (and any SEC Reports filed after the date of this Agreement will comply) in all material respects with the applicable requirements of the Securities Act and the Exchange Act, and (B) at the time they were filed (or if amended or superseded by another SEC Report filed prior to the date of this Agreement, then on the date of such filing), did not (and any SEC Reports filed after the date of this Agreement will not) contain any untrue statement of a material fact or omit to state a material fact required to be stated in such SEC Reports or necessary in order to make the statements made in such SEC Reports, in light of the circumstances under which they were made, not misleading. 12 (ii)Each of its financial statements contained in or incorporated by reference into any SEC Reports (including any SEC Reports filed after the date of this Agreement) (the “Financial Statements”) complied (or, in the case of SEC Reports filed after the date of this Agreement, will comply) in all material respects with the applicable requirements of the Securities Act and the Exchange Act with respect thereto, fairly presented (or, in the case of SEC Reports filed after the date of this Agreement, will fairly present) the consolidated financial position of it and its Subsidiaries as at the respective dates and the consolidated results of its operations and cash flows for the periods indicated, in each case in accordance with generally accepted accounting principles in the United States of America (“GAAP”) consistently applied during the periods indicated, except in each case as may be noted therein, and subject to normal year-end audit adjustments and as permitted by Form 10-Q in the case of unaudited financial statements. (iii)It and each of its Subsidiaries has devised and maintains a system of “internal controls over financial reporting” (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances that:(i)transactions are executed in accordance with general or specific authorization of its Board of Directors and the duly authorized executive officers of such party, (ii)transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP consistently applied with respect to institutions such as such party or other criteria applicable to such financial statements, and to maintain proper accountability for items therein, (iii) access to its and its Subsidiaries’ properties and assets is permitted only in accordance with general or specific authorization of its Board of Directors and the duly authorized executive officers of such party, and (iv) the recorded accountability for items is compared with the actual levels at reasonable intervals and appropriate actions taken with respect to any differences. (iv)Its “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are designed to ensure that all information required to be disclosed by it in its SEC Reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that all such information is accumulated and communicated to its management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of its chief executive officer and chief financial officer required under the Exchange Act with respect to such reports. It has disclosed, to its auditors and the audit committee of its Board of Directors and on Section 3.3(f)(iv) of its Disclosure Letter (i) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that could adversely affect in any material respect its ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in its internal controls over financial reporting. For purposes of this Agreement, the terms “significant deficiency” and “material weakness” shall have the meaning assigned to them in Public Company Accounting Oversight Board Auditing Standard 2, as of the date hereof. 13 (v)Each of its principal executive officer and principal financial officer (or each former principal executive officer and each former principal financial officer, as applicable) has made all certifications required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (including the rules and regulations promulgated thereunder, the “Sarbanes-Oxley Act”) with respect to its SEC Reports, and the statements contained in such certifications are true and accurate in all material respects. For purposes of this Agreement, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act. It is in compliance with all applicable provisions of the Sarbanes-Oxley Act, except for any non-compliance that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. (g)Bank Reports.It and each of its Subsidiaries have filed all reports, forms, correspondence, registrations and statements, together with any amendments required to be made with respect thereto (the “Bank Reports”), that they were required to file since December 31, 2009 with the Board of Governors of the Federal Reserve System, the FDIC, the Bureau of Financial Institutions of the Virginia State Corporation Commission and any other federal, state or foreign governmental or regulatory agency or authority having jurisdiction over it or each of its Subsidiaries (collectively, the “Regulatory Agencies”), including any Bank Report required to be filed pursuant to the laws of the United States, any state or any Regulatory Agency, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file such Bank Report or to pay such fees and assessments, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on it.Any such Bank Report regarding it or any of its Subsidiaries filed with or otherwise submitted to any Regulatory Agency complied in all material respects with relevant legal requirements, including as to content.Except for normal examinations conducted by a Regulatory Agency in the ordinary course of its and its Subsidiaries business, there is no pending proceeding before, or, to its Knowledge, examination or investigation by, any Regulatory Agency into the business or operations of it or any of its Subsidiaries. There is no unresolved violation, criticism or exception by any Regulatory Agency with respect to any Bank Report or relating to any examination or inspection of it or any of its Subsidiaries, and there has been no formal or informal inquiries by, or disagreements or disputes with, any Regulatory Agency with respect to the business, operations, policies or procedures of it or any of its Subsidiaries since December 31, 2009, in each case, which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on it. 14 (h)Absence of Certain Changes or Events.Since December 31, 2012, except as disclosed in the SEC Reports, Bank Reports or Financial Statements filed by it or its Subsidiaries or made available to the other party prior to the date of this Agreement or as set forth in Section 3.3(h) of its Disclosure Letter, (i) it and each of its Subsidiaries have conducted their respective businesses and incurred liabilities only in the ordinary course consistent with past practices, and (ii) there have been no events, changes, developments or occurrences which, individually or in the aggregate, have had or are reasonably likely to have a Material Adverse Effect on it. (i)Absence of Undisclosed Liabilities.Except for (i) those liabilities that are fully reflected or reserved for in the SEC Reports, Bank Reports or Financial Statements filed by it or its Subsidiaries or made available to the other party prior to the date of this Agreement, (ii) liabilities incurred since March 31, 2013 in the ordinary course of business consistent with past practice, (iii) liabilities which would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect (iv) liabilities incurred in connection with the transactions contemplated by the Agreement, and (v) as set forth in Section 3.3(i) of its Disclosure Letter, neither it nor any of its Subsidiaries has, and since March 31, 2013 has not incurred (except as permitted by Section4.1), any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise and whether or not required to be reflected in the SEC Reports, Bank Reports or Financial Statements of it or any of its Subsidiaries). (j)Material Contracts; Defaults.Except as set forth in Section 3.3(j) of its Disclosure Letter (which may incorporate the contracts and instruments reflected as exhibits on the exhibit list included in its latest annual report on Form 10-K filed prior to the date of this Agreement), as of the date hereof, neither it nor any of its Subsidiaries is a party to, bound by or subject to any agreement, contract, arrangement, commitment or understanding (whether written or oral) (i) that is a “material contract” required to be filed as an exhibit pursuant to Item 601(b)(10) of the SEC’s Regulation S-K, (ii) that restricts the conduct of business by it or any of its Subsidiaries or its or their ability to compete in any line of business, (iii) with respect to employment of an officer, director or consultant, (iv) that would be terminable other than by it or any of its Subsidiaries or under which a material payment obligation would arise or be accelerated, in each case as a result of the announcement or consummation of this Agreement or the transactions contemplated herein (either alone or upon the occurrence of any additional acts or events), (v) that would require any consent or approval of a counterparty as a result of the consummation of this Agreement or the transactions contemplated herein; (vi) pursuant to which the annualized rent or lease payments are, or are reasonably expected to be, in excess of $100,000; (vii) for the use or purchase of materials, supplies, goods, services, equipment or other assets that involves payments in excess of $400,000per year, and (viii) that is material to the financial condition, results of operations or business of it or any of its Subsidiaries (any such being referred to as a “Material Contract”).Neither it nor any of its Subsidiaries is in default under any Material Contract, and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a default. 15 (k)Legal Proceedings; Compliance with Laws.Except as set forth in Section 3.3(k) of its Disclosure Letter, there are no actions, suits or proceedings instituted or pending or, to its Knowledge, threatened against it or any of its Subsidiaries or against any of its or its Subsidiaries’ properties, assets, interests or rights, or against any of its or its Subsidiaries’, or to its Knowledge, any of its officers, directors or employees in their capacities as such.Neither it nor any of its Subsidiaries is a party to or subject to any agreement, order, memorandum of understanding, enforcement action, or supervisory or commitment letter by or with any Governmental Authority (as defined herein)restricting its operations or the operations of any of its Subsidiaries or that relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business and neither it nor any of its Subsidiaries has been advised by any Governmental Authority that any such Governmental Authority is contemplating issuing or requesting the issuance of any such agreement, order, memorandum, action or letter in the future.It and each of its Subsidiaries have complied in all material respects with all laws, ordinances, requirements, regulations or orders applicable to its business (including environmental laws, ordinances, requirements, regulations or orders).It and each of its Subsidiaries hold, and have at all times since December 31, 2009, held, all licenses, franchises, permits and authorizations necessary for the lawful conduct of their respective businesses and ownership of their respective properties, rights and assets (and have paid all fees and assessments due and payable in connection therewith), except where neither the cost of failure to hold nor the cost of obtaining and holding such license, franchise, permit or authorization (nor the failure to pay any fees or assessments) would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on it, and to its Knowledge no suspension or cancellation of any such necessary license, franchise, permit or authorization is threatened.For the purposes of this Agreement, a “Governmental Authority” means any court, administrative agency or commission or other governmental authority, agency or instrumentality, domestic or foreign, or any industry self-regulatory authority, and includes Regulatory Agencies. (l)Tax Matters. (i)It and each of its Subsidiaries have timely filed all federal Tax Returns and all other material Tax Returns required to be filed, and all such Tax Returns were correct and complete in all material respects.All material Taxes (as defined herein) due and payable by it or any of its Subsidiaries have been timely paid, other than those that are being contested in good faith, as set forth in Section 3.3(l)(i) of its Disclosure Letter, and are reflected as a liability in its SEC Reports, Bank Reports or Financial Statements.Neither it nor any of its Subsidiaries has granted any extension or waiver of the limitation period for the assessment or collection of any Tax that remains in effect. Except as set forth in such section of its Disclosure Letter, no Tax Return filed by it or any of its Subsidiaries is under examination by any Governmental Authority or is the subject of any administrative or judicial proceeding, and no written notice of assessment, proposed assessment or unpaid tax deficiency has been received by or asserted against it or any of its Subsidiaries by any Governmental Authority.As used herein, “Tax” or “Taxes” mean all income, gross receipts, sales, use, ad valorem, goods and services, capital, transfer, franchise, profits, license, withholding, payroll, employment, employer health, excise, estimated, severance, stamp, occupation, and property taxes, together with any interest and any penalties, additions to tax or additional similar amounts, imposed by any Governmental Authority.As used herein, the term “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, supplied or required to be supplied to a Governmental Authority. 16 (ii)It and each of its Subsidiaries has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, shareholder, independent contractor or other third party.It and each of its Subsidiaries have complied in all material respects with all information reporting and backup withholding provisions of applicable law. (iii)There are no liens for Taxes (other than statutory liens for Taxes not yet due and payable) upon any of its assets or any of its Subsidiaries assets. Neither it nor any of its Subsidiaries is a party to or is bound by any Tax sharing, allocation or indemnification agreement or arrangement (other than such an agreement or arrangement exclusively between or among it and its Subsidiaries).Neither it nor any of its Subsidiaries has been, within the past two years or otherwise as part of a “plan (or series of related transactions)” within the meaning of Section 355(e) of the Code of which the Merger is also a part, a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code. (iv)Neither it nor any of its Subsidiaries is or has been a party to any “reportable transaction,” as defined in Code Section 6707A(c)(1) and Treasury Regulation Section 1.6011-4.It and each of its Subsidiaries have disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Code Section 6662.It is not and has not been a “United States real property holding company” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. (v)It is not aware of any reason why the Merger will fail to qualify as a reorganization under Section 368(a) of the Code. 17 (m)Property. (i)Except as set forth in Section 3.3(m) of its Disclosure Letter or reserved against as disclosed in its SEC Reports, Bank Reports or Financial Statements, it and each of its Subsidiaries have good and marketable title in fee simple absolute, free and clear of all material liens, encumbrances, charges, defaults or equitable interests, to all of the properties and assets, real and personal, reflected in the balance sheet included in its SEC Reports, Bank Reports or Financial Statements as of December31,2012 or acquired after such date (except to the extent that such properties and assets have been disposed of for fair value in the ordinary course of business since December31,2012).All buildings, and all fixtures, equipment, and other property and assets that are material to its or any of its Subsidiaries business, held under leases, licenses or subleases, are held under valid instruments enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws.Other than real estate that was acquired by foreclosure or voluntary deed in lieu of foreclosure, all of the buildings, structures and appurtenances owned, leased, licensed, subleased or occupied by it and each of its Subsidiaries are in good operating condition and in a state of good maintenance and repair and comply with applicable zoning and other municipal laws and regulations, and there are no latent defects therein. (ii)In the case of StellarOne, Section 3.3(m)(ii) of its Disclosure Letter provides a summary spreadsheet that identifies and sets forth the address of each parcel of real estate or interest therein, leased, licensed or subleased by StellarOne and each of its Subsidiaries or in which StellarOne or any of its Subsidiaries has any ownership or leasehold interest.StellarOne has made available to Union true and complete copies of all lease, license and sublease agreements, including without limitation every amendment thereto, for each parcel of real estate or interest therein to which StellarOne or any of its Subsidiaries is a party. (n)Employee Benefit Plans. (i)Section 3.3(n)(i) of its Disclosure Letter sets forth a complete and accurate list of all of its and its Subsidiaries’ employee benefit plans and programs, including without limitation: (A) all retirement, savings and other pension plans; (B) all health, severance, insurance, disability and other employee welfare plans; (C) all employment, vacation and other similar plans, (D) all bonus, stock option, stock purchase, restricted stock, equity compensation, incentive, deferred compensation, supplemental retirement, severance and other employee and director benefit plans, programs or arrangements; and (E) all employment or compensation arrangements, in each case for the benefit of or relating to its current and former employees and directors, whether or not written or unwritten (individually, a “Benefit Plan” and collectively, the “Benefit Plans”). 18 (ii)It has, with respect to each Benefit Plan, previously delivered to the other party or made available to the other party true and complete copies of: (A) all current Benefit Plan agreements and documents and related trust agreements or annuity contracts and any amendments thereto; (B) all current summary plan descriptions and material communications to employees and Benefit Plan participants and beneficiaries; (C) the Form 5500 filed in each of the most recent two plan years (including all schedules thereto and the opinions of independent accountants); (D) the most recent actuarial valuation (if any); (E) the most recent annual and periodic accounting of plan assets; (F) if the Benefit Plan is intended to qualify under Section 401(a) or 403(a) of the Code, the most recent determination letter or opinion letter, as applicable, received from the Internal Revenue Service; (G) copies of the most recent nondiscrimination tests for all Benefit Plans, as applicable; and (H) a written summary of any unwritten Benefit Plans that provide for material compensation or benefits. (iii)None of its Benefit Plans is a “multi-employer plan” as defined in Section3(37) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). (iv)All of its Benefit Plans are in compliance in all material respects with applicable laws and regulations, and it has administered its Benefit Plans in accordance with applicable laws and regulations in all material respects. (v)Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined by the Internal Revenue Service to be so qualified, as reflected in a current favorable determination letter (based on Internal Revenue Service permitted determination request procedures) or opinion letter, as applicable, or a filing for the same has been made with the Internal Revenue Service seeking such a determination letter and that request is still awaiting decision by the Internal Revenue Service (based on Internal Revenue Service permitted determination request procedures).Nothing has occurred since the date of any such determination that is reasonably likely to affect adversely such qualification or exemption, or result in the imposition of excise taxes or income taxes on unrelated business income under the Code or ERISA with respect to any tax-qualified plan.There have been no “terminations,” “partial terminations” or “discontinuances of contributions,” as such terms are used in Section 411 of the Code and the regulations thereunder, to any tax-qualified plan during the preceding five years without notice to and approval by the Internal Revenue Service and payment of all obligations and liabilities attributable to such tax-qualified plans. (vi)All required contributions (including all employer contributions and employee salary reduction contributions), premiums and other payments due for the current plan year or any plan year ending on or before the Closing Date, under all benefit arrangements have been made or properly accrued.All contributions to any Benefit Plan have been contributed within the time specified in ERISA and the Code and the respective regulations thereunder.There are no “accumulated funding deficiencies,” as defined in Section 412 of the Code or Section 302 of ERISA, with respect to any “employee pension benefit plan,” as defined in Section 3(2) of ERISA, of it or any of its Subsidiaries, and no request for a waiver from the Internal Revenue Service with respect to any minimum funding requirement under Section 412 of the Code. 19 (vii)To its Knowledge, it has not engaged in any prohibited transactions, as defined in Section 4975 of the Code or Section 406 of ERISA, with respect to any Benefit Plan or its related trust that is an employee benefit plan as defined in Section 3(3) of ERISA.To its Knowledge, no “fiduciary,” as defined in Section 3(21) of ERISA, of any Benefit Plan has any liability for breach of fiduciary duty under ERISA. (viii)There are no actions, suits, investigations or claims pending, or to its Knowledge threatened or anticipated, with respect to any of its Benefit Plans (other than routine claims for benefits). None of its Benefit Plans is the subject of a pending or, to its Knowledge, threatened investigation or audit by the Internal Revenue Service, the U.S. Department of Labor, or the Pension Benefit Guaranty Corporation. (ix)Except as set forth in Section 3.3(n)(ix) of its Disclosure Letter,(A) no compensation or benefit that is or will be payable in connection with the transactions contemplated by this Agreement will be characterized as an “excess parachute payment” within the meaning of Section 280G of the Code, (B) no Benefit Plan contains any provision that would give rise to any severance, termination or other payments or liabilities as a result of the transactions contemplated by this Agreement, and (C) no Benefit Plan contains any provision that would materially increase any benefits otherwise payable under any Benefit Plan or result in any acceleration of the time of payment or vesting of any such benefits to any material extent as a result of the transactions contemplated by this Agreement. (x)It has not sponsored and does not have any obligation with respect to any welfare plan, as defined in Section 3(1) of ERISA, that provides for any post-employment or post-retirement health or medical or life insurance benefits for retired, former or current employees or beneficiaries or dependents thereof, except as required by Section 4980B of the Code.It has reserved the right to amend, terminate or modify at any time all plans or arrangements providing for retiree health or life insurance coverage, and no representations or commitments, whether or not written, have been made that would limit its right to amend, terminate or modify any such benefits. (xi)Except as set forth in Section 3.3(n)(xi) of its Disclosure Letter, it and its Subsidiaries have made prior to the date hereof all bonus and commission payments to which they were required or are otherwise committed to make to any employee or independent contractor under any Benefit Plan for calendar years 2012 and 2013. 20 (xii)All “group health plans,” as defined in Section 5000(b)(1) of the Code, covering the employees of it or any of its Subsidiaries have been maintained in timely compliance with the notice and healthcare continuation coverage requirements of Section4980B of the Code and Part 6 of Subtitle B of Title I of ERISA. (xiii)Each Benefit Plan that is a “nonqualified deferred compensation plan,” as defined in Section 409A(d)(1) of the Code, and any award thereunder, in each case that is subject to Section 409A of the Code, has (A) since January1,2005, been maintained and operated, in all material respects, in good faith compliance with Section 409A of the Code, as determined under applicable guidance of the Treasury and the Internal Revenue Service, and (B) since January1, 2009, been, in all material respects, in documentary and operational compliance with Section 409A of the Code. (o)Insurance.It and its Subsidiaries are insured with reputable insurers against such risks and in such amounts as its management reasonably has determined to be prudent in accordance with industry practices, and are in compliance in all material respects with their insurance policies and are not in default under any of the terms thereof.Each such insurance policy is outstanding and in full force and effect, and all premiums and other payments due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion.Since December 31, 2012, neither it nor any of its Subsidiaries has received any notice of a premium increase or cancellation or a failure to renew with respect to any insurance policy or bond or, within the last three (3) calendar years and since January1,2013 has been refused any insurance coverage sought or applied for, and it has no reason to believe that existing insurance coverage cannot be renewed as and when the same shall expire upon terms and conditions as favorable as those presently in effect, other than possible increases in premiums or unavailability of coverage that do not result from any extraordinary loss experience on the part of it or its Subsidiaries.Set forth in Section 3.3(o) of its Disclosure Letter is a list of all insurance policies or bonds currently maintained by it and its Subsidiaries. (p)Loan Portfolio; Allowance for Loan Losses; Mortgage Loan Buy-Backs.Except as set forth in Section 3.3(p) of its Disclosure Letter and except for any changes hereafter made to the allowances and reserves described below pursuant to this Agreement: (i)All evidences of indebtedness reflected as assets in its SEC Reports, Bank Reports or Financial Statements as of March 31, 2013 were as of such dates: (A) evidenced by notes, agreements or evidences of indebtedness which are true, genuine and what they purport to be; (B) to the extent secured, secured by valid liens and security interests which have been perfected; and (C) the legal, valid and binding obligation of the obligor and any guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and no defense, offset or counterclaim has been asserted with respect to any such loan which if successful could have a Material Adverse Effect. 21 (ii)The allowance for possible loan losses (the “Loan Loss Allowance”) shown on its Financial Statements as of March 31, 2013 was, and the Loan Loss Allowance to be shown on its Financial Statements as of any date subsequent to the date of this Agreement will be, as of such dates, adequate to provide for possible losses, net of recoveries relating to loans previously charged off, in respect of loans outstanding (including letter of credit or commitments to make loans or extend credit). (iii)The reserve for losses with respect to other real estate owned (“OREO”) shown on its SEC Reports, Bank Reports or Financial Statements as of March 31, 2013 were, and the OREO reserve to be shown on its SEC Reports, Bank Reports or Financial Statements as of any date subsequent to the execution of this Agreement will be, as of such dates, adequate to provide for losses relating to the OREO portfolio of it and any of its Subsidiaries as of the dates thereof. (iv)The Loan Loss Allowance has been established by it in accordance with the accounting principles described in Sections3.3(f)(ii) and applicable regulatory requirements and guidelines. (v)Section 3.3(p) of its Disclosure Letter sets forth all residential mortgage or commercial loans originated on or after January 1, 2011 by it or any of its Subsidiaries (i) that were sold in the secondary mortgage market and have been re-purchased by it or any of its Subsidiaries or (ii) that the institutions to whom such loans were sold (or their successors or assigns) have asked it or any of its Subsidiaries to purchase back (but have not been purchased back). (q)Environmental Matters. (i)Except as described in Section 3.3(q) of its Disclosure Letter, it and each of its Subsidiaries are in material compliance with all Environmental Laws (as defined herein).Neither it nor any of its Subsidiaries has received any written communication alleging that it or such Subsidiary is not in such material compliance, and there are no present circumstances that would prevent or interfere with the continuation of such compliance. (ii)Neither it nor any of its Subsidiaries has received written notice of pending, and has no Knowledge of any threatened, legal, administrative, arbitral or other proceedings, asserting Environmental Claims (as defined herein) or other claims, causes of action or governmental investigations of any nature, seeking to impose, or that is reasonably likely to result in the imposition of, any material liability arising under any Environmental Laws upon (A) it or such Subsidiary, (B) any person or entity whose liability for any Environmental Claim it or any Subsidiary has or may have retained either contractually or by operation of law, (C) any real or personal property owned or leased by it or any Subsidiary, or any real or personal property which it or any Subsidiary has been, or is, judged to have managed or to have supervised or to have participated in the management of, or (D) any real or personal property in which it or a Subsidiary holds a security interest securing a loan recorded on the books of it or such Subsidiary.Neither it nor any of its Subsidiaries is subject to any agreement, order, judgment, decree or memorandum by or with any court, governmental authority, regulatory agency or third party imposing any such liability. 22 (iii)There are no past or present actions, activities, circumstances, conditions, events or incidents that could reasonably form the basis of any Environmental Claim or other claim or action or governmental investigation that could result in the imposition of any liability arising under any Environmental Laws against it or any of its Subsidiaries or against any person or entity whose liability for any Environmental Claim it or any of its Subsidiaries has or may have retained or assumed either contractually or by operation of law. (iv)For purposes of this Agreement, the following terms shall have the following meanings: (A)“Environmental Claim” means any written notice from any governmental authority or third party alleging potential liability (including, without limitation, potential liability for investigatory costs, clean-up, governmental response costs, natural resources damages, property damages, personal injuries or penalties) arising out of, based upon, or resulting from the presence, or release into the environment, of any Materials of Environmental Concern (as defined herein). (B)“Environmental Laws” means all applicable federal, state and local laws and regulations, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, that relate to pollution or protection of human health or the environment. (C)“Materials of Environmental Concern” means pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products and any other materials regulated under Environmental Laws. (r)Books and Records.Its books and records and those of its Subsidiaries have been fully, properly and accurately maintained in all material respects, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein. (s)Intellectual Property.It and its Subsidiaries own, or are licensed or otherwise possess sufficient legally enforceable rights to use, all Intellectual Property and the Technology Systems (as such terms are defined herein) that are used by it and its Subsidiaries in their respective businesses as currently conducted.To its Knowledge, it and its Subsidiaries have not infringed or otherwise violated the Intellectual Property rights of any other person in any material respect, and there is no claim pending, or to its Knowledge threatened, against it or its Subsidiaries concerning the ownership, validity, registerability, enforceability, infringement, use or licensed right to use any Intellectual Property.“Intellectual Property” means all trademarks, trade names, service marks, patents, domain names, database rights, copyrights, and any applications therefor, technology, know-how, trade secrets, processes, computer software programs or applications, and tangible or intangible proprietary information or material.The term “Technology Systems” means the electronic data processing, information, record keeping, communications, telecommunications, hardware, third party software, networks, peripherals and computer systems, including any outsourced systems and processes, and Intellectual Property used by either party and its Subsidiaries or by a third party. 23 (t)Derivative Instruments.Except as set forth in Section 3.3(t) of its Disclosure Letter, all derivative instruments, including, swaps, caps, floors and option agreements, whether entered into for its own account, or for the account of one or more of its Subsidiaries or its or their customers (each, a “Derivative Contract”), were entered into (i) only in the ordinary course of business, (ii) in accordance with prudent practices and in all material respects with all applicable laws, rules, regulations and regulatory policies and (iii) with counterparties believed to be financially responsible at the time; and each of such instruments constitutes the valid and legally binding obligation of it or one of its Subsidiaries, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws. Neither it or its Subsidiaries, nor, to its Knowledge, any other party thereto, is in breach of any of its material obligations under any such agreement or arrangement, except as set forth in Section 3.3(t) of its Disclosure Letter. (u)Deposits.Except as set forth in Section 3.3(u) of its Disclosure Letter, as of the date hereof none of its deposits or deposits of any of its Subsidiaries are “brokered” deposits or are subject to any encumbrance, legal restraint or other legal process (other than garnishments, pledges, liens, levies, subpoenas, set off rights, escrow limitations and similar actions taken in the ordinary course of business), and no portion of such deposits represents a deposit of it or any of its Subsidiaries. (v)Investment Securities. (i) It and each of its Subsidiaries has good and marketable title to all securities held by it (except securities sold under repurchase agreements or held in any fiduciary or agency capacity) free and clear of any lien, encumbrance or security interest, except to the extent that such securities are pledged in the ordinary course of business consistent with prudent business practices to secure obligations of it or its Subsidiaries and except for such defects in title or liens, encumbrances or security interests that would not be material to it. Such securities are valued on the books of it and each of its Subsidiaries in accordance with GAAP. 24 (ii) It and each of its Subsidiaries employs investment, securities risk management and other policies, practices and procedures that it and each such Subsidiary believes are prudent and reasonable in the context of such businesses. (w)Takeover Laws and Provisions.It has taken all action necessary, if any, to exempt this Agreement, the Plan of Merger and the transactions contemplated hereby and thereby from the requirements of any “control share,” “fair price,” “affiliate transaction,” “business combination” or other anti-takeover laws and regulations of any state (collectively, “Takeover Laws”), including without limitation Sections 13.1-725 through 13.1-728 of the VSCA (because a majority of its disinterested directors approved such transactions for such purposes before any “determination date” with respect to it) and Sections 13.1-728.1 through 13.1-728.9 of the VSCA.It has taken all action required to be taken by it in order to make this Agreement and the transactions contemplated hereby comply with, and this Agreement and the transactions contemplated hereby do comply with, the requirements of any articles, sections or provisions of its articles of incorporation and bylaws concerning “business combination,” “fair price,” “voting requirement,” “constituency requirement” or other related provisions. (x)Transactions With Affiliates. All “covered transactions” between it and an “affiliate,” within the meaning of Sections 23A and 23B of the Federal Reserve Act and regulations promulgated thereunder, have been in compliance with such provisions. (y)Financial Advisors.None of it, its Subsidiaries or any of their officers, directors or employees has employed any broker, finder or financial advisor or incurred any liability for any fees or commissions in connection with transactions contemplated herein, except that, in connection with this Agreement, Union has retained Keefe, Bruyette & Woods, Inc. as its financial advisor, and StellarOne has retained Raymond James & Associates, Inc. as its financial advisor (in each case pursuant to engagement letters true and complete copies of which have been previously provided to the other party). (z)Fairness Opinion.Prior to the execution of this Agreement, Union has received a written opinion of Keefe, Bruyette & Woods, Inc. to the effect that as of the date thereof and based upon and subject to the matters set forth therein, the consideration to be paid in the Merger is fair from a financial point of view to Union.Prior to the execution of this Agreement, StellarOne has received a written opinion of Raymond James & Associates, Inc. to the effect that as of the date thereof and based upon and subject to the matters set forth therein, the Exchange Ratio is fair from a financial point of view to the holders of StellarOne Common Stock.Such opinions have not been amended or rescinded as of the date of this Agreement. 25 ARTICLE 4 Covenants Relating to Conduct of Business 4.1Conduct of Business Pending Merger. From the date hereof until the Effective Date, except as expressly contemplated or permitted by this Agreement, as set forth in its Disclosure Letter or as required by law, without the prior written consent of the other party (which consent will not be unreasonably withheld or delayed), Union and StellarOne each agrees that it will not, and will cause each of its Subsidiaries not to: (a)Conduct its business other than in the ordinary and usual course or fail to use its reasonable best efforts to maintain and preserve intact its business organization, assets, employees and relationships with customers, employees, Regulatory Agencies and other entities with which it has advantageous business relationships. (b)Take any action that would adversely affect or delay the ability of either party (i) to obtain any necessary approvals, consents or waivers of any Regulatory Agency or Governmental Authority or third party required for the transactions contemplated hereby,(ii) to perform its covenants and agreements under this Agreement, or (iii) to consummate the transactions contemplated hereby on a timely basis. (c)Amend its Organizational Documents (except as provided herein for Union). (d)(i)Other than pursuant to stock options outstanding as of the date hereof under the Union Stock Plans or StellarOne Stock Plans and except for Permitted Issuances (as defined herein): (A) issue, sell or otherwise permit to become outstanding, or authorize the creation of, any additional shares of capital stock or any Rights with respect thereto, including the optional stock purchase feature of the StellarOne Dividend Reinvestment and Stock Purchase Plan; (B) enter into any agreement with respect to the foregoing; or (C)permit any additional shares of capital stock to become subject to new grants of employee and director stock options, restricted stock grants, stock appreciation rights or similar stock-based rights. (ii)“Permitted Issuances” mean: (A) issuances of new Rights granted after the date hereof pursuant to and in accordance with the Union Stock Plans for up to 25,000 shares, provided that such new issuances are in the ordinary course of business and consistent in all material respects with past practice in terms of timing, type (i.e., options, restricted stock), terms, and amount of such issuances; (B) in the event the Effective Date is delayed to a date in 2014 beyond which either party would ordinarily grant new Rights to participants in their respective management incentive or similar plans, issuances of new Rights pursuant to and in accordance with the Union Stock Plans and the StellarOne Stock Plans, provided that such new issuances are in the ordinary course of business and consistent in all material respects with past practice in terms of timing, type (i.e., options, restricted stock), terms, and amount of such issuances; (C) issuances of shares of Union Common Stock pursuant to the Union Dividend Reinvestment and Stock Purchase Plan and issuances of shares of StellarOne Common Stock pursuant to the dividend reinvestment feature of the StellarOne Dividend Reinvestment and Stock Purchase Plan; (D) shares of StellarOne Common Stock that may be issued upon exercise of the Treasury Warrant; or (E) issuances of Union Common Stock or any security convertible into shares of Union Common Stock in connection with one or more business acquisitions or entering into any agreement with respect to the foregoing; provided that the aggregate market value, as of the date of announcement or the date of entering into any such agreement if no announcement is made, of such acquisitions or proposed acquisitions does not exceed $5,000,000. 26 (e)Enter into or amend any written employment agreement, severance or similar agreements or arrangements with any of its directors, officers or employees, or grant any salary or wage increase or increase any employee benefit (including incentive or bonus payments), except for: (i) normal individual increases in compensation to employees in the ordinary course of business consistent with past practice; (ii) in the case of Union and after consultation with StellarOne as required by Section 4.3, entering into employment agreements in order to recruit new senior level employees in a manner that is consistent in all material respects with past practice; (iii) in the event the Effective Date is delayed to a date in 2014 beyond which either party would ordinarily establish and make incentive cash bonus awards for the 2014 performance period to employees, making such incentive cash bonus awards for 2014 that are in the ordinary course of business and consistent in all material respects with past practice in terms of timing and type; and (iv) in the case of StellarOne and after consultation with Union as required by Section 4.3, (A) making incentive compensation awards and payments under current plans based on performance in the normal course of business consistent with past practice, (B) making discretionary cash bonus awards of not more than the amount set forth in Section 4.1(e) of its Disclosure Letter to certain employees selected by officers of StellarOne after consultation with Union as required by Section 4.3, (C) making of cash awards under a retention bonus pool of not more than the amount set forth in Section 4.1(e) of StellarOne’s Disclosure Letter that will be dedicated to certain employees of StellarOne designated by StellarOne, subject to the approval of Union, pursuant to terms and conditions of a retention plan developed jointly by StellarOne and Union promptly after the date of this Agreement for the purpose of retaining such employees prior to and after the Effective Date, (D) providing a change in control agreement (substantially similar to existing change in control agreements provided to similarly situated StellarOne executives) to the employee set forth in Section 4.1(e) of its Disclosure Letter, and (E) establishing a mortgage sales management plan covering the employee set forth in Section 4.1(e) of StellarOne’s Disclosure Letter. (f)Enter into, amend or terminate (except as may be required by applicable law or the terms of any Benefit Plan) any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive, welfare contract, plan or arrangement, or any trust agreement related thereto, in respect of any directors, officers or employees, including without limitation taking any action that accelerates, or the lapsing of restrictions with respect to, the vesting or exercise of any benefits payable thereunder, except in the ordinary course of business consistent with past practice or as otherwise specifically permitted in this Agreement. 27 (g)Incur any obligation or liability (whether absolute or contingent, excluding suits instituted against it), make any pledge or encumber any of its assets, or dispose of any of its assets in any other manner, except in the ordinary course of its business and for adequate value, except as otherwise specifically permitted in this Agreement. (h)Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its stock (other than (i) dividends from its wholly owned Subsidiaries to it or another of its wholly owned Subsidiaries and (ii) as permitted by Section 4.2) or directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock, except in the case of Union for repurchases and other acquisitions of shares of Union Common Stock up to the amount set forth in Section 4.1(h) of its Disclosure Letter. (i)Make any material investment in or acquisition of (either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets) any other person other than its wholly owned Subsidiaries, except (i) by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary and usual course of business, or (ii)for a transaction that meets the market value limitation requirements of a Permitted Issuance under Section 4.1(d)(ii)(C), when combined with any other acquisitions or proposed acquisitions that also meet the requirements of Section 4.1(d)(ii)(C). (j)Implement or adopt any change in its tax or financial accounting principles, practices or methods, including reserving methodologies, other than as may be required by GAAP, regulatory accounting guidelines or applicable law. (k)Notwithstanding anything herein to the contrary, (i) knowingly take, or knowingly omit to take, any action that would reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section368(a) of the Code or (ii) knowingly take, or knowingly omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article 6 not being satisfied on a timely basis, except as may be required by applicable law. (l)Enter into any new line of business, or change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies that are material to it and its Subsidiaries, taken as a whole, except as required by applicable law. (m)Take any other action that would make any representation or warranty in Article 3 hereof untrue. 28 (n)(i) With respect to StellarOne and its Subsidiaries only, make, renew, restructure or otherwise modify any Loan that would result in the aggregate amount of the total lending relationship to any one borrower and its affiliates to exceed $15 million or, if the total lending relationship to any one borrower and its affiliates is in excess of $15 million as of the date of this Agreement, to make, renew, restructure or otherwise modify any Loan for such borrower and its affiliates; (ii) except in the ordinary course of its business, take any action that would result in any discretionary release of collateral or guarantees of any Loans; or (iii)enter into any Loan securitization or create any special purpose funding entity. (o)(i) Enter into or extend any material agreement, lease or license relating to real property, personal property, data processing or bankcard functions; (ii) purchase or otherwise acquire any investment securities or enter into any Derivative Contract other than as provided in each party’s currently existing investment policies and in accordance with prudent investment practices in the ordinary course of business; or (iii) in the case of StellarOne, make any capital expenditures in the aggregate in excess of $2,000,000, including the proposed capital expenditures set forth in Section 4.1(o) of its Disclosure Letter, and other than expenditures necessary to maintain existing assets in good repair. (p)Settle any material claim, suit, action or proceeding, except (i) in the ordinary course of business involving a settlement in an amount and for consideration not in excess of $300,000 and that would not impose any material restriction on the business of it or its Subsidiaries or the Continuing Corporation; and (ii) as set forth in Section 3.3(k) of its Disclosure Letter. (q)Agree to take any of the actions prohibited by this Section 4.1. 4.2Dividends. After the date of this Agreement until the Effective Date, (i) Union may (to the extent legally permitted to do so) declare and pay quarterly dividends on outstanding shares of Union Common Stock at a rate of $0.13 per share per quarter, with such increases, if any, that are consistent with past practice, (ii) StellarOne may (to the extent legally permitted to do so) declare and pay quarterly dividends on outstanding shares of StellarOne Common Stock at a rate not to exceed $0.10 per share per quarter, and (iii) Union’s and StellarOne’s direct and indirect Subsidiaries, respectively, may (to the extent legally and contractually permitted to do so), declare and pay dividends on their capital stock in cash, stock or other property to the parties or their wholly owned Subsidiaries (or from such Subsidiaries to Union or StellarOne) and required payments to the holders of any trust preferred securities issued by Subsidiaries of the parties. 4.3Transition. To facilitate the integration of the operations of Union and StellarOne and their Subsidiaries and to permit the coordination of their related operations on a timely basis, and in an effort to accelerate to the earliest time possible following the Effective Date the realization of synergies, operating efficiencies and other benefits expected to be realized by the parties as a result of the Merger, each of Union and StellarOne shall, and shall cause its Subsidiaries to, consult with the other on all material strategic and operational matters to the extent such consultation is not in violation of applicable laws, including laws regarding the exchange of information and other laws regarding competition. 29 4.4Control of the Other Party’s Business. Prior to the Effective Date, nothing contained in this Agreement (including, without limitation, Section 4.3) shall give Union, directly or indirectly, the right to control or direct the operations of StellarOne, and nothing contained in this Agreement shall give StellarOne, directly or indirectly, the right to control or direct the operations of Union.Prior to the Effective Date, each party shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over it and its Subsidiaries’ respective operations. ARTICLE 5 Additional Agreements 5.1Reasonable Best Efforts. Subject to the terms and conditions of this Agreement, the parties will use their reasonable best efforts to take, or cause to be taken, in good faith all actions, and to do, or cause to be done, all things necessary or desirable, or advisable under applicable laws, so as to permit consummation of the Merger as promptly as practicable and shall cooperate fully with the other party hereto to that end. 5.2Access to Information; Notice of Certain Matters; Confidentiality. (a)Each party will permit the other party to make or cause to be made such investigation of its operational, financial and legal condition as the other party reasonably requests; provided, that such investigation shall be reasonably related to the Merger and shall not interfere unnecessarily with normal operations.No investigation by either of the parties or their respective representatives shall affect or be deemed to modify or waive the representations and warranties of the other party set forth in this Agreement. (b)Each party will give prompt notice to the other party (and subsequently keep the other party informed on a current basis) upon its becoming aware of the occurrence or existence of any fact, event or circumstance known that (i) is reasonably likely to result in any Material Adverse Effect with respect to it, or (ii) would cause or constitute a material breach of any of its representations, warranties, covenants or agreements contained herein. (c)Each party hereto shall comply, and shall use its reasonable best efforts to cause each of its directors, officers, employees, attorneys and advisors to comply, with all of their respective obligations under the Mutual Confidentiality Agreement, dated as of May 6, 2013 (the “Confidentiality Agreement”), between Union and StellarOne, which agreement shall survive the termination of this Agreement in accordance with the terms set forth therein. 30 5.3Stockholder Approvals. (a)Union shall call a meeting of its stockholders for the purpose of obtaining the Union Stockholder Approvals and shall use its reasonable best efforts to cause such meeting to occur as soon as reasonably practicable (such meeting and any adjournment or postponement thereof, the “Union Stockholders Meeting”).Subject to Section 5.5, the Board of Directors of Union shall (i) recommend to Union’s stockholders the approval of this Agreement and the transactions contemplated hereby, including the Merger (the “Union Board Recommendation”), (ii) include the Union Board Recommendation in the Joint Proxy Statement, and (iii) solicit and use its reasonable best efforts to obtain the Union Stockholder Approvals. (b)StellarOne shall call a meeting of its stockholders for the purpose of obtaining the StellarOne Stockholder Approval and shall use its reasonable best efforts to cause such meeting to occur as soon as reasonably practicable (such meeting and any adjournment or postponement thereof, the “StellarOne Stockholders Meeting”).Subject to Section 5.5, the Board of Directors of StellarOne shall (i) recommend to StellarOne’s stockholders the approval of this Agreement and the transactions contemplated hereby, including the Merger (the “StellarOne Board Recommendation”), (ii) include the StellarOne Board Recommendation in the Joint Proxy Statement, and (iii) solicit and use its reasonable best efforts to obtain the StellarOne Stockholder Approval. (c)Union and StellarOne shall use their reasonable best efforts to hold their respective stockholder meetings on the same day. 5.4Registration Statement; Joint Proxy Statement; SEC Filings. (a)Each party will cooperate with the other party, and their representatives, in the preparation of a registration statement on Form S-4, including any pre-effective or post-effective amendments or supplements thereto (the “Registration Statement”), to be filed by Union with the SEC in connection with the Union Stockholders Meeting and the StellarOne Stockholders Meeting, and the parties will prepare a joint proxy statement and prospectus and other proxy solicitation materials of Union and StellarOne constituting a part thereof (the “Joint Proxy Statement”).Neither the Joint Proxy Statement nor the Registration Statement shall be filed, and, prior to the termination of this Agreement, no amendment or supplement to the Joint Proxy Statement or the Registration Statement shall be filed by Union or StellarOne without consultation with the other party and its counsel.Union will use its reasonable best efforts, in which StellarOne will reasonably cooperate as necessary, to file the Registration Statement, including the Joint Proxy Statement in preliminary form, with the SEC as promptly as reasonably practicable and to cause the Registration Statement to be declared effective under the Securities Act, as promptly as reasonably practicable after the filing thereof, and Union and StellarOne shall thereafter mail or deliver the Joint Proxy Statement to their respective stockholders. 31 (b)Each party agrees, as to itself and its Subsidiaries, that none of the information supplied or to be supplied by it for inclusion or incorporation by reference in (i) the Registration Statement will, at the time the Registration Statement and each amendment or supplement thereto, if any, becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) the Joint Proxy Statement and any amendment or supplement thereto will, at the date of mailing to shareholders and at the times of the respective stockholder meetings, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which such statement was made, not misleading.Each party further agrees that if it becomes aware that any information furnished by it that would cause any of the statements in the Joint Proxy Statement or the Registration Statement to be false or misleading with respect to any material fact, or to omit to state any material fact necessary to make the statements therein not false or misleading, to promptly inform the other party thereof and to take appropriate steps to correct the Joint Proxy Statement or the Registration Statement. 5.5No Other Acquisition Proposals. (a)Each party agrees that it will not, and will cause its Subsidiaries and its and its Subsidiaries’ officers, directors, employees, agents and representatives (including any financial advisor, attorney or accountant retained by it or any of its Subsidiaries) not to, directly or indirectly, (i) initiate, solicit or encourage or facilitate any inquiries or proposals with respect to, (ii) furnish any confidential or nonpublic information relating to, or (iii)engage or participate in any negotiations or discussions concerning, an Acquisition Proposal (as defined herein). (b)Notwithstanding the foregoing, nothing contained in this Section5.5 shall prohibit either party, prior to its respective meeting of stockholders to be held pursuant to Section5.3 and subject to compliance with the other terms of this Section 5.5, from furnishing nonpublic information to, or entering into discussions or negotiations with, any person or entity that makes an unsolicited, bona fide written Acquisition Proposal with respect to such party (that did not result from a breach of this Section 5.5) if, and only to the extent that (i) such party’s board of directors concludes in good faith, after consultation with outside legal counsel, that the failure to take such actions would be reasonably likely to result in a violation of its fiduciary duties to its stockholders under applicable law, (ii) before taking such action, such party receives from such person or entity an executed confidentiality agreement on terms no less restrictive with respect to the confidential treatment of information by such party than the Confidentiality Agreement, which confidentiality agreement shall not provide such person or entity with any exclusive right to negotiate with such party, and(iii) such party’s board of directors concludes in good faith, after consultation with its outside legal counsel and financial advisors, that the Acquisition Proposal constitutes or is reasonably likely to result in a Superior Proposal (as defined below).Each party shall immediately (within twenty-four (24) hours) notify the other party orally and in writing of its receipt of any such Acquisition Proposal, the material terms and conditions thereof, the identity of the person making such Acquisition Proposal, and will keep the other party apprised of any related developments, discussions and negotiations on a current basis, including by providing a copy of all material documentation or correspondence relating thereto. 32 (c)For purposes of this Agreement, an “Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry relating to, or any third party indication of interest in, any of the following transactions involving Union or StellarOne, or their respective Subsidiaries:(i) a merger, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving a party or its Subsidiaries whose assets, individually or in the aggregate, constitute more than 10% of the consolidated assets of the party; (ii) any acquisition or purchase, direct or indirect, of 10% or more of the consolidated assets of a party and its Subsidiaries or 10% or more of any class of equity or voting securities of a party or its Subsidiaries whose assets, individually or in the aggregate, constitute more than 10% of the consolidated assets of the party; or (iii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such third party beneficially owning 10% or more of any class of equity or voting securities of a party or its Subsidiaries whose assets, individually or in the aggregate, constitute more than 10% of the consolidated assets of the party. (d)For purposes of this Agreement, a “Superior Proposal” means an unsolicited, bona fide written Acquisition Proposal made by a person or entity (or group of persons or entities acting in concert within the meaning of Rule 13d-5 under the Exchange Act) that the Board of Directors of Union or StellarOne, as the case may be, concludes in good faith, after consultation with its financial and outside legal advisors, taking into account all legal, financial, regulatory and other aspects of the Acquisition Proposal and including the terms and conditions of this Agreement (as it may be proposed to be amended by Union or StellarOne, as applicable) (A) is more favorable to the stockholders of Union or StellarOne, as the case may be, from a financial point of view, than the transactions contemplated by this Agreement (as it may be proposed to be amended by Union or StellarOne, as applicable) and (B) is reasonably capable of being completed on the terms proposed; provided that, for purposes of this definition of “Superior Proposal,” the Acquisition Proposal shall have the meaning assigned to such term in Section 5.5(c), except the reference to “10% or more” in such definition shall be deemed to be a reference to “a majority” and “Acquisition Proposal” shall only be deemed to refer to a transaction involving StellarOne or Union or one of their respective banking Subsidiaries. (e)Except as provided in Section 5.5(f), neither the Board of Directors of StellarOne, the Board of Directors of Union, nor, in each case, any committee thereof shall withhold, withdraw or modify in any manner adverse to the other party, or propose publicly to withhold, withdraw or modify in any manner adverse to the other party, the approval, recommendation or declaration of advisability by the Board of Directors of StellarOne or Union, as applicable, or any such committee thereof with respect to this Agreement or the transactions contemplated hereby (a “Change in StellarOne Recommendation” or a “Change in Union Recommendation,” respectively). 33 (f)Notwithstanding anything in this Agreement to the contrary, with respect to an Acquisition Proposal, the Board of Directors of StellarOne or Union, as applicable, may either: (i)enter into a definitive agreement to accept a Superior Proposal and terminate this Agreement pursuant to Section 7.1(j) or (k), as the case may be, provided that such party shall pay the Termination Fee required to be paid pursuant to Section 7.4(b) or (d), as the case may be, or (ii)make a Change in StellarOne Recommendation or a Change in Union Recommendation, as applicable, if and only if in the case of both clause (i) and (ii) above (A) an unsolicited bona fide written Acquisition Proposal (that did not result from a breach of this Section 5.5) is made to StellarOne or Union, as applicable, by a third party, and such Acquisition Proposal is not withdrawn, (B) the Board of Directors of StellarOne or Union, as applicable, has concluded in good faith (after consultation with its outside legal counsel and financial advisors) that such Acquisition Proposal constitutes a Superior Proposal, (C) the Board of Directors of StellarOne or Union, as applicable, have concluded in good faith (after consultation with their outside legal counsel) that failure to do so would be reasonably likely to result in a violation of its fiduciary duties to its stockholders under applicable law, (D) five (5) business days shall have elapsed since the party proposing to take such action has given written notice to the other party advising such other party that the notifying party intends to take such action and specifying in reasonable detail the reasons therefor, including the terms and conditions of any such Acquisition Proposal that is the basis of the proposed action (a “Notice of Termination or Recommendation Change”) (it being understood that any amendment to any material term of such Acquisition Proposal shall require a new Notice of Termination or Recommendation Change, except that, in such case, the five (5) business day period referred to in this clause (D) and in clauses (E) and (F) shall be reduced to three (3) business days following the giving of such new Notice of Termination or Recommendation Change), (E) during such five (5) business day period, the notifying party has considered and, at the reasonable request of the other party, engaged in good faith discussions with such party regarding, any adjustment or modification of the terms of this Agreement proposed by the other party, and (F) the board of directors of the party proposing to take such action, following such five (5) business day period, again reasonably determines in good faith (after consultation with its outside legal counsel and its financial advisors, and taking into account any adjustment or modification of the terms of this Agreement proposed by the other party) that such Acquisition Proposal nonetheless continues to constitute a Superior Proposal and that failure to take such action is reasonably likely to result in a violation of its fiduciary duties to its stockholders under applicable law. 34 5.6Applications and Consents. (a)The parties hereto shall cooperate and use their reasonable best efforts to prepare as promptly as possible all documentation, to effect all filings and to obtain all permits, consents, approvals and authorizations of each Regulatory Agency or Governmental Authority and all third parties necessary to consummate the transactions contemplated by this Agreement (the “Regulatory Approvals”) and will make all necessary filings in respect of the Regulatory Approvals as soon as practicable. (b)Each party hereto will promptly furnish to the other party copies of applications filed with all Regulatory Agencies or Governmental Authorities and copies of written communications received by such party from any Regulatory Agency or Governmental Authority with respect to the transactions contemplated hereby.Each party will consult with the other party with respect to the obtaining of all Regulatory Approvals and other material consents from third parties advisable to consummate the transactions contemplated by this Agreement, and each party will keep the other party apprised of the status of material matters relating to completion of the transactions contemplated hereby.All documents that the parties or their respective Subsidiaries are responsible for filing with any Regulatory Agency or Governmental Authority in connection with the transactions contemplated hereby (including to obtain Regulatory Approvals) will comply as to form in all material respects with the provisions of applicable law. 5.7Public Announcements. Prior to the Effective Date, the parties hereto will consult with each other as to the form and substance of any press release or other public statement materially related to this Agreement prior to issuing such press release or public statement or making any other public disclosure related thereto (including any broad based employee communication that is reasonably likely to become the subject of public disclosure); provided, that nothing in this Section 5.7 shall prohibit any party from making any disclosure necessary in order to satisfy such party’s disclosure obligations imposed by applicable law or the rules established by the NASDAQ Global Select Market or any other self-regulatory organization. 5.8Affiliate Agreements. Union has identified to StellarOne all persons who are, as of the date hereof, directors or executive officers of Union (the “Union Affiliates”), and StellarOne has identified to Union all persons who are, as of the date hereof, directors or executive officers of StellarOne (the “StellarOne Affiliates”).Each party will use its reasonable best efforts to obtain a written agreement in the form of Exhibit 5.8 hereto to be delivered, on or prior to the date hereof to StellarOne from each Union Affiliate and to Union from each StellarOne Affiliate, on or prior to the date hereof. 35 5.9Employee Benefit Plans. (a)On or as soon as reasonably practicable following the Effective Date, the Continuing Corporation shall provide to officers and employees of StellarOne and its Subsidiaries, who at or after the Effective Date become employees of the Continuing Corporation or its Subsidiaries (“StellarOne Continuing Employees”), employee benefits under Benefit Plans maintained by the Continuing Corporation, on terms and conditions which are the same as for similarly situated officers and employees of the Continuing Corporation and its Subsidiaries.Until such time as the StellarOne Continuing Employees are able to participate in the Benefit Plans of the Continuing Corporation, the Continuing Corporation shall maintain for the benefit of the StellarOne Continuing Employees the Benefit Plans maintained by StellarOne immediately prior to the Effective Date (it being understood that participation in the Continuing Corporation’s Benefit Plans may commence at different times with respect to each Benefit Plan). (b)For purposes of participation, vesting and benefit accrual (but only for benefit accrual for vacation or paid time off) under the Continuing Corporation’s Benefit Plans, service with or credited by StellarOne or any of its Subsidiaries shall be treated as service with the Continuing Corporation; provided that this provision shall not cause Union’s tax-qualified defined benefit pension plan (which is not open to new participants) to be opened to new participants or to provide additional credit for pre-Effective Date service for benefit accrual purposes.Immediately following the Effective Date, a StellarOne Continuing Employee shall begin participation in the Continuing Corporation’s Employee Stock Ownership Plan, provided such StellarOne Continuing Employee meets any applicable age and service requirements on the Effective Date (based on the granting of StellarOne service credit). To the extent permitted under applicable law, the Continuing Corporation shall cause welfare Benefit Plans maintained by the Continuing Corporation that cover the StellarOne Continuing Employees after the Effective Date to (i)waive any waiting period and restrictions and limitations for preexisting conditions or insurability (except for pre-existing conditions that were excluded, or restrictions or limitations that were applicable, under the Benefit Plans maintained by StellarOne), and (ii)cause any deductible, co-insurance, flexible spending account contribution or maximum out-of-pocket payments made by the StellarOne Continuing Employees under welfare Benefit Plans maintained by StellarOne to be credited to such StellarOne Continuing Employees under welfare Benefit Plans maintained by the Continuing Corporation, so as to reduce the amount of any deductible, co-insurance, or maximum out-of-pocket payments payable by, and provide credit for any flexible spending account contributions already made by, such StellarOne Continuing Employees under welfare Benefit Plans maintained by the Continuing Corporation. Any paid time off amount with respect to each StellarOne Continuing Employee that is accrued and outstanding as of the Effective Date shall be carried over or cashed out by the Continuing Corporation in its sole discretion at or as soon as reasonably practicable after the Effective Date, as the case may be, subject to a carry-over limit of five (5) days. (c)Each employee of StellarOne, or one of its Subsidiaries, at the Effective Date who is terminated by the Continuing Corporation, or one of its Subsidiaries, on or after the Effective Date, excluding any employee who has a contract providing for severance (who shall be entitled to the severance amounts provided for in their respective contracts), shall be entitled to severance pay in accordance with the severance policy of StellarOne as in effect on the date of this Agreement, if and to the extent that such employee is entitled to severance pay under such policy. Each employee of StellarOne, or one of its Subsidiaries, who is terminated by the Continuing Corporation or any of its Subsidiaries (other than for cause) on or within six (6) months of the Effective Date, shall be entitled to reasonable outplacement services to be provided by an outplacement agency selected by the Continuing Corporation at no cost to the employee.The scope and duration of outplacement services offered will vary based on an employee’s position and exemption status at StellarOne immediately prior to the Effective Date. 36 (d)With respect to StellarOne’s 401(k) plan, StellarOne shall cause such plan to be fully vested and terminated effective immediately prior to the Effective Date, in accordance with applicable law and subject to the receipt of all applicable regulatory or governmental approvals.Each StellarOne Continuing Employee who is a participant in the StellarOne 401(k) plan shall be eligible to participate in Union’s 401(k) plan as soon as administratively practical after the Effective Date, and account balances under the terminated StellarOne 401(k) plan will be eligible for distribution or rollover, including direct rollover of both cash and promissory notes to Union’s 401(k) plan for the StellarOne Continuing Employees.Any other former employee of StellarOne or its Subsidiaries who is employed by Union or its Subsidiaries after the Effective Date shall be eligible to be a participant in Union’s 401(k) plan upon complying with eligibility requirements.For purposes of administering Union’s 401(k) plan, service with StellarOne and its Subsidiaries shall be deemed to be service with Union for participation and vesting purposes, but not for purposes of benefit accrual. (e)Except as provided in this Section 5.9(e), nothing in this Section 5.9 shall be construed to limit the right of the Continuing Corporation or any of its Subsidiaries, from and after the Effective Date, to amend or terminate any of the Benefit Plans maintained by Union or StellarOne or their respective Subsidiaries before the Effective Date to the extent such amendment or termination is permitted by the terms of the applicable Benefit Plan, provided that such amendment or termination shall not relieve the Continuing Corporation from its obligations under this Section 5.9. 5.10Reservation of Shares; NASDAQ Listing. (a)Union shall take all corporate action as may be necessary to authorize and reserve for issuance such number of shares of Continuing Corporation Common Stock to be issued pursuant to this Agreement, including proposing at the Union Stockholders Meeting that stockholders approve an amendment to Union’s Articles of Incorporation to increase the number of authorized shares of Union Common Stock as described in Section 1.3(a), and to cause all such shares, when issued pursuant to this Agreement, to be duly authorized, validly issued, fully paid and nonassessable. (b)Union shall use all reasonable best efforts to cause the shares of the Continuing Corporation Common Stock to be issued in the Merger to be approved for listing on the NASDAQ Global Select Market, subject to official notice of issuance, as promptly as practicable, and in any event before the Effective Date. 37 5.11Indemnification. (a)Following the Effective Date, the Continuing Corporation and its Subsidiaries, as the case may be, shall indemnify, defend and hold harmless any person who has rights to indemnification from StellarOne or any of its Subsidiaries (an “Indemnified Party”) (in all capacities), to the same extent and on the same conditions as such person was entitled to indemnification pursuant to applicable law and StellarOne’s Organizational Documents or any StellarOne Subsidiary’s Organizational Documents, as the case may be, as in effect on the date of this Agreement (including advancing expenses when requested).Without limiting the foregoing, in any case or proceeding in which corporate approval may be required to effectuate any indemnification, the Continuing Corporation or its applicable Subsidiary shall direct, if any Indemnified Party elects, that the determination of permissibility of indemnification shall be made by independent counsel mutually agreed upon between the Continuing Corporation or such Subsidiary and such Indemnified Party. (b)The Continuing Corporation shall, at or prior to the Effective Date, purchase a six (6) year “tail” prepaid policy on the same terms and conditions as the existing directors’ and officers’ liability (and fiduciary) insurance maintained by StellarOne from insurance carriers with comparable credit ratings, covering, without limitation, the Merger; provided, however, that the cost of such “tail” policy shall in no event exceed three hundred percent (300%) of the amount of the last annual premium paid by StellarOne for such existing directors’ and officers’ liability (and fiduciary) insurance.If, but for the proviso to the immediately preceding sentence, the Continuing Corporation would be required to expend more than three hundred percent (300%) of current annual premiums, the Continuing Corporation will obtain the maximum amount of that insurance obtainable by payment of annual premiums equal to three hundred percent (300%) of current annual premiums. (c)Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors’ and officers’ insurance claims under any policy that is or has been in existence with respect to StellarOne or any of its Subsidiaries for any of their respective directors, officers or other employees, it being understood and agreed that the indemnification provided for in this Section 5.11 is not prior to or in substitution for any such claims under such policies. (d)This covenant is intended to be for the benefit of, and shall be enforceable by, each Indemnified Party and his or her respective heirs and legal representatives.The rights to indemnification and advancement and the other rights provided for herein shall not be deemed exclusive of any other rights to which an Indemnified Party is entitled, whether pursuant to law, contract or otherwise. 5.12Employment and Other Arrangements. (a)The Continuing Corporation will, as of and after the Effective Date, assume and honor all employment agreements, change in control agreements, severance agreements and deferred compensation plans and agreements, including the obligations of StellarOne to the participants in the StellarOne Executive Deferred Compensation Plan, that StellarOne and its Subsidiaries have with current and former officers and directors and which are set forth in Section3.3(j) of its Disclosure Letter, except to the extent any such agreements shall be superseded on or after the Effective Date in a manner that complies with all amendment and termination requirements provided for in such agreements. 38 (b)For purposes of all Benefit Plans sponsored or maintained by StellarOne or its Subsidiaries and Affiliates, the Merger described in this Agreement shall be considered a “change in control” under such Benefit Plans and the rights of StellarOne employees or Benefit Plan participants to receive any payments or to vest in any such Benefit Plans or award agreements thereunder shall be governed by the terms of the respective StellarOne Benefit Plans or such award agreements. 5.13Consent to Assign and Use Leases Premises; Extensions. (a)On Section 5.13 of its Disclosure Letter, StellarOne has provided a list of all leases with respect to real or personal property used by it or any Subsidiary.With respect to the leases disclosed in Section 5.13 of its Disclosure Letter, StellarOne and each of its Subsidiaries will use commercially reasonable efforts to obtain all consents necessary or appropriate to transfer and assign, as of the Effective Date, all right, title and interest of StellarOne and each of its Subsidiaries to the Continuing Corporation and to permit the use and operation of the leased premises by the Continuing Corporation. (b)At the election of Union made within forty-five (45) days after the date hereof, with respect to any StellarOne lease that expires on or prior to June30, 2020 without any options to extend, StellarOne and each of its Subsidiaries shall use their commercially reasonable efforts to take, or shall cause to be taken, all steps reasonably requested by Union to obtain options to extend such leases effective at the Effective Date on such terms as are reasonably acceptable to Union. 5.14Change of Method. Union and StellarOne shall be empowered, upon their mutual agreement and at any time prior to the Effective Date, to change the method or structure of effecting the combination of Union and StellarOne (including the provisions of Article 1), if and to the extent they both deem such change to be necessary, appropriate or desirable; provided that no such change shall (i) alter or change the Exchange Ratio or the number of shares of Continuing Corporation Common Stock received by StellarOne stockholders in exchange for each share of StellarOne Common Stock, (ii) adversely affect the tax treatment of StellarOne’s stockholders pursuant to this Agreement, (iii) adversely affect the tax treatment of StellarOne or Union pursuant to this Agreement or (iv) materially impede or delay the consummation of the transactions contemplated by this Agreement in a timely manner. The parties hereto agree to reflect any such change in an appropriate amendment to this Agreement executed by both parties in accordance with Section 8.3. 39 5.15Takeover Laws. If any Takeover Laws may become, or may purport to be, applicable to the transactions contemplated hereby, each party hereto and the members of their respective Boards of Directors will grant such approvals and take such actions as are necessary and legally permissible (other than as contemplated by Section 5.3) so that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of any such laws or regulations on any of the transactions contemplated by this Agreement. 5.16Certain Policies. At Closing, StellarOne shall, consistent with GAAP and applicable banking laws and regulations, modify or change its Loan, OREO, accrual, reserve, Tax, litigation and real estate valuation policies and practices (including loan classifications and levels of reserves) so as to be applied on a basis that is consistent with that of Union. 5.17Supplemental Indenture. Prior to the Effective Date, StellarOne and Union shall take all actions necessary for Union to enter into supplemental indentures with the trustees of the (i) Indenture dated June 26, 2003 for StellarOne’s floating rate junior subordinated debt securities due June 26, 2033, and (ii) Indenture dated March 18, 2004 for StellarOne’s floating rate junior subordinated debt securities due June 17, 2034, to evidence the succession of Union as the obligor on those securities as of the Effective Date.The form of the supplemental indentures shall be reasonably acceptable to Union. Union agrees to assume StellarOne’s obligations under the above indentures and related subordinated debentures as well as under guaranty agreements related to the preferred trust securities issued by StellarOne’s trust subsidiaries, FNB (VA) Statutory Trust II and VFG Limited Liability Trust. 5.18Shareholder Litigation. Each of StellarOne and Union shall give the other prompt notice of any shareholder litigation against such party or its directors or affiliates (or combination thereof) relating to the transactions contemplated by this Agreement and shall give the other the opportunity to participate in, but not control, the defense or settlement of any such litigation.In addition, no such settlement by StellarOne shall be agreed to without Union’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed). 5.19Exemption from Liability Under Section 16(b). StellarOne and Union agree that, in order to most effectively compensate and retain certain directors and officers of StellarOne in connection with the Merger, both prior to and after the Effective Date, it is desirable that such directors and officers not be subject to a risk of liability under Section 16(b) of the Exchange Act, and for that compensatory and retentive purposes agree to the provisions of this Section 5.19.The Board of Directors of Union and of StellarOne, or a committee of non-employee directors (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act) thereof, shall adopt a resolution providing that the disposition of StellarOne Common Stock, StellarOne Stock Awards or StellarOne Stock Options by such directors and officers, and the acquisition of Continuing Corporation Common Stock, Continuing Corporation Stock Awards or Continuing Corporation Stock Options by such directors and officers, in each case pursuant to the transactions contemplated by this Agreement, are intended to be exempt from liability pursuant to Rule 16b-3 under the Exchange Act. 40 ARTICLE 6 Conditions to the Merger 6.1General Conditions. The respective obligations of each party to perform this Agreement and consummate the Merger are subject to the satisfaction of the following conditions, unless waived by each party pursuant to Section 8.3. (a)Corporate Action.All corporate action necessary to authorize the execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby shall have been duly and validly taken, including without limitation the Union Stockholder Approvals and the StellarOne Stockholder Approval. (b)Regulatory Approvals.Union and StellarOne shall have received all Regulatory Approvals required in connection with the transactions contemplated by this Agreement, all notice periods and waiting periods required after the granting of any such approvals shall have passed, and all such approvals shall be in effect; provided, that no such approvals shall contain (i) any conditions, restrictions or requirements that would, after the Effective Date, have or be reasonably likely to have a Material Adverse Effect on the Continuing Corporation (after giving effect to the Merger) in the reasonable opinion of Union or StellarOne, or (ii) any conditions, restrictions or requirements that would, after the Effective Date, be unduly burdensome in the reasonable opinion of Union or StellarOne. (c)Registration Statement.The Registration Statement shall have been declared effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement shall have been issued and be in effect and no proceedings for that purpose shall have been initiated by the SEC and not withdrawn. (d)NASDAQ Listing.The shares of the Continuing Corporation Common Stock to be issued to the holders of StellarOne Common Stock upon consummation of the Merger shall have been authorized for listing on the NASDAQ Global Select Market, subject to official notice of issuance. 41 (e)Legal Proceedings.Neither party shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction that enjoins or prohibits the consummation of the Merger. 6.2Conditions to Obligations of Union. The obligations of Union to perform this Agreement and consummate the Merger are subject to the satisfaction of the following conditions, unless waived by Union pursuant to Section 8.3. (a)Representations and Warranties.The representations and warranties of StellarOne set forth in Article 3, after giving effect to Sections 3.1 and 3.2, shall be true and correct as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date) as of the Closing Date as though made on and as of the Closing Date, and Union shall have received a certificate, dated as of the Closing Date, signed on behalf of StellarOne by the Chief Executive Officer and Chief Financial Officer of StellarOne to such effect. (b)Performance of Obligations.StellarOne shall have performed in all material respects all obligations required to be performed by it under this Agreement before the Closing Date, and Union shall have received a certificate, dated as of the Closing Date, signed on behalf of StellarOne by the Chief Executive Officer and Chief Financial Officer of StellarOne to such effect. (c)Federal Tax Opinion.Union shall have received a written opinion, dated the Closing Date, from its counsel LeClairRyan, A Professional Corporation in form and substance reasonably satisfactory to Union, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the Merger will constitute a reorganization within the meaning of Section 368(a) of the Code.In rendering such opinion, such counsel may require and shall be entitled to rely upon representations of officers of Union and StellarOne reasonably satisfactory in form and substance to such counsel. 6.3Conditions to Obligations of StellarOne. The obligations of StellarOne to perform this Agreement and consummate the Merger are subject to the satisfaction of the following conditions, unless waived by StellarOne pursuant to Section 8.3. (a)Representations and Warranties.The representations and warranties of Union set forth in Article 3, after giving effect to Sections 3.1 and 3.2, shall be true and correct as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date) as of the Closing Date as though made on and as of the Closing Date, and StellarOne shall have received a certificate, dated as of the Closing Date, signed on behalf of Union by the Chief Executive Officer and Chief Financial Officer of Union to such effect. 42 (b)Performance of Obligations.Union shall have performed in all material respects all obligations required to be performed by it under this Agreement before the Closing Date, and StellarOne shall have received a certificate, dated as of the Closing Date, signed on behalf of Union by the Chief Executive Officer and Chief Financial Officer of Union to such effect. (c)Federal Tax Opinion.StellarOne shall have received a written opinion, dated the Closing Date, from its counsel, Troutman Sanders LLP, in form and substance reasonably satisfactory to StellarOne, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the Merger will constitute a reorganization within the meaning of Section 368(a) of the Code.In rendering such opinion, such counsel may require and shall be entitled to rely upon representations of officers of StellarOne and Union reasonably satisfactory in form and substance to such counsel. ARTICLE 7 Termination 7.1Termination. This Agreement may be terminated and the Merger and the other transactions contemplated hereby abandoned at any time before the Effective Date, whether before or after the approval of the Merger by the stockholders of Union or StellarOne, as provided below: (a)By the mutual consent in writing of Union and StellarOne; (b)By either Union or StellarOne, evidenced by written notice, if the Merger has not been consummated by June 30, 2014, provided that the right to terminate this Agreement under this Section 7.1(b) shall not be available to any party whose action or failure to act has been the cause of or resulted in the failure of the Effective Date to occur on or before such date and such action or failure to act constitutes a breach of this Agreement; (c)By either Union or StellarOne in the event any Regulatory Approval required to be obtained pursuant to Section 6.1(b) has been denied by the relevant Governmental Authority and such denial has become final and nonappealable or any Governmental Authority of competent jurisdiction shall have issued a final, nonappealable injunction permanently enjoining or otherwise prohibiting the consummation of the transactions contemplated in this Agreement; (d)By either Union or StellarOne (provided that the terminating party is not then in breach of any representation or warranty contained in this Agreement under the applicable standard set forth in Section3.2 or in breach of any covenant or agreement contained in this Agreement) in the event of a breach or inaccuracy of any representation or warranty of the other party contained in this Agreement which is not cured within thirty (30) days after the giving of written notice to the breaching party or by its nature cannot be cured within such time period and which breach or inaccuracy (subject to the applicable standard set forth in Section3.2) would provide the terminating party the ability to refuse to consummate the Merger under Section 6.2(a) in the case of Union and Section6.3(a) in the case of StellarOne; 43 (e)By either Union or StellarOne (provided that the terminating party is not then in breach of any representation or warranty contained in this Agreement under the applicable standard set forth in Section3.2 or in breach of any covenant or agreement contained in this Agreement) in the event of a material breach by the other party of any covenant or agreement contained in this Agreement which is not cured within thirty (30)days after the giving of written notice to the breaching party or by its nature cannot be cured within such time period; (f)By Union, at any time prior to the StellarOne Stockholder Approval, (i) if StellarOne has failed to make the StellarOne Board Recommendation, (ii) upon a Change in StellarOne Recommendation (including by, in the case of a tender or exchange offer, failing to promptly recommend rejection of such offer) or (iii) if StellarOne has failed to comply in all material respects with its obligations under Section 5.3(b) and Section 5.5; (g)By either Union or StellarOne, if the StellarOne Stockholder Approval shall not have been obtained at the StellarOne Stockholders Meeting; (h)By StellarOne, at any time prior to the Union Stockholder Approval, (i) if Union has failed to make the Union Board Recommendation, (ii) upon a Change in Union Recommendation (including by, in the case of a tender or exchange offer, failing to promptly recommend rejection of such offer) (iii) if Union failed to comply in all material respects with its obligations under Section 5.3(a) and Section 5.5; (i)By either StellarOne or Union, if the Union Stockholder Approvals shall not have been obtained at the Union Stockholders Meeting; (j)By Union if the Board of Directors of Union determines to enter into a definitive agreement to accept a Superior Proposal in accordance with Section 5.5(f), provided that Union pays to StellarOne the Termination Fee simultaneously with such termination pursuant to Section 7.4(d); or (k)By StellarOne if the Board of Directors of StellarOne determines to enter into a definitive agreement to accept a Superior Proposal in accordance with Section 5.5(f), provided that StellarOne pays to Union the Termination Fee simultaneously with such termination pursuant to Section 7.4(b). 7.2Effect of Termination. In the event of termination of this Agreement by either party as provided in Section 7.1, none of Union, StellarOne, any of their respective Subsidiaries or any of the officers or directors of any of them shall have any liability hereunder or in connection with the transactions contemplated hereby, except that (i) Section 5.2(c) (Confidentiality), Section 5.7 (Public Announcements), Section 7.1 (Termination), Section 7.2 (Effect of Termination), Section 7.4 (Termination Fee) and Article 8 (General Provisions) shall survive any termination of this Agreement and (ii) notwithstanding anything to the contrary in this Agreement, termination will not relieve a breaching party from any liabilities or damages arising out of its willful and material breach of any provision of this Agreement. 44 7.3Non-Survival of Representations, Warranties and Covenants. None of the representations and warranties set forth in this Agreement or in any instrument delivered pursuant to this Agreement (other than the Confidentiality Agreement, which shall survive in accordance with its terms) shall survive the Effective Date, except for Section 5.11 and for any other covenant and agreement contained in this Agreement that by its terms applies or is to be performed in whole or in part after the Effective Date. 7.4Termination Fee. (a)In the event that (i) an Acquisition Proposal with respect to StellarOne shall have been communicated to or otherwise made known to the stockholders, senior management or Board of Directors of StellarOne, or any person or entity shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal with respect to StellarOne after the date of this Agreement, (ii) thereafter this Agreement is terminated (A) by StellarOne or Union pursuant to Section 7.1(b) (if the StellarOne Stockholder Approval has not theretofore been obtained), (B) by Union pursuant to Section 7.1(d) or (e) or (C) by StellarOne or Union pursuant to Section 7.1(g) and (iii) prior to the date that is fifteen (15) months after the date of such termination StellarOne enters into a definitive agreement or consummates a transaction with respect to an Acquisition Proposal (whether or not the same Acquisition Proposal as that referred to above), then StellarOne shall, on the earlier of the date it enters into such definitive agreement or the date of consummation of such transaction, pay Union a fee equal to $21,800,000 (the “Termination Fee”) by wire transfer of immediately available funds. (b)In the event this Agreement is terminated by Union pursuant to Section 7.1(f) or by StellarOne pursuant to Section 7.1(k), then StellarOne shall, on the date of termination, pay Union the Termination Fee by wire transfer of immediately available funds. (c)In the event that (i) an Acquisition Proposal with respect to Union shall have been communicated to or otherwise made known to the stockholders, senior management or Board of Directors of Union, or any person or entity shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal with respect to Union after the date of this Agreement, (ii) thereafter this Agreement is terminated (A) by Union or StellarOne pursuant to Section 7.1(b) (if the Union Stockholder Approvals have not theretofore been obtained), (B) by StellarOne pursuant to Section 7.1(d) or (e) or (C) by StellarOne or Union pursuant to Section 7.1(i) and (iii) prior to the date that is fifteen (15) months after the date of such termination Union enters into a definitive agreement or consummates a transaction with respect to an Acquisition Proposal (whether or not the same Acquisition Proposal as that referred to above), then Union shall, on the earlier of the date it enters into such definitive agreement or the date of consummation of such transaction, pay StellarOne the Termination Fee by wire transfer of immediately available funds. 45 (d)In the event this Agreement is terminated by StellarOne pursuant to Section 7.1(h) or by Union pursuant to Section 7.1(j), then Union shall, on the date of termination, pay StellarOne the Termination Fee by wire transfer of immediately available funds. (e)Each of Union and StellarOne acknowledges that the agreements contained in this Section 7.4 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, Union and StellarOne, respectively would not enter into this Agreement.Accordingly, if Union or StellarOne, as applicable, fails promptly to pay the amount due pursuant to this Section 7.4, and, in order to obtain such payment, Union or StellarOne, as applicable commences a suit which results in a judgment against the other party for the fee set forth in this Section 7.4, Union or StellarOne, as applicable, shall pay to the other party its fees and expenses (including attorneys’ fees and expenses) in connection with such suit, together with interest on the amount of the fee at a rate per annum equal to the prime rate published in The Wall Street Journal on the date such payment was required to be made. 7.5Expenses. Except as otherwise expressly provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense; provided, however, that the costs and expenses of printing and mailing the Joint Proxy Statement and all filing and other fees paid to the SEC and other Governmental Authorities in connection with the Merger shall be borne equally by Union and StellarOne. ARTICLE 8 General Provisions 8.1Entire Agreement. This Agreement, including the Disclosure Letters and Exhibits, contains the entire agreement between Union and StellarOne with respect to the Merger and the related transactions and supersedes all prior arrangements or understandings with respect thereto. 46 8.2Binding Effect; No Third Party Rights. This Agreement shall bind Union and StellarOne and their respective successors and assigns.Other than Sections 5.11 and 5.12, nothing in this Agreement is intended to confer upon any person, other than the parties hereto or their respective successors, any rights or remedies under or by reason of this Agreement. 8.3Waiver and Amendment. Any term or provision of this Agreement may be waived in writing at any time by the party that is, or whose stockholders are, entitled to the benefits thereof, and this Agreement may be amended or supplemented by a written instrument duly executed by the parties hereto at any time, whether before or after the later of the date of the Union Stockholders Meeting or the StellarOne Stockholders Meeting, except statutory requirements and requisite approvals of stockholders and Regulatory Approvals. 8.4Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Virginia without regard to the conflict of law principles thereof.The parties hereby consent and submit to the exclusive jurisdiction and venue of any state or federal court located in the Commonwealth of Virginia. 8.5Notices. All notices, requests and other communications given or made under this Agreement must be in writing and will be deemed given (i) when personally delivered or facsimile transmitted (with confirmation), or (ii) on the third business day after being mailed by registered or certified mail (return receipt requested) to the persons and addresses set forth below or such other place as such party may specify by notice. If to Union: G. William Beale Chief Executive Officer Union First Market Bankshares Corporation 1051 East Cary Street Suite 1200 Richmond, Virginia 23219 Tele:(804) 632-2121 Fax:(804) 448-0548 47 with a copy to: George P. Whitley, Esq. LeClairRyan, A Professional Corporation Riverfront Plaza, East Tower 951 East Byrd Street Richmond, Virginia 23219 Tele:(804) 343-4089 Fax:(804) 783-7628 If to StellarOne: O. R. Barham, Jr. President and Chief Executive Officer StellarOne Corporation 590 Peter Jefferson Parkway Suite 250 Charlottesville, Virginia22911 Tele:(434) 964-2316 Fax:(434) 964-2210 with a copy to: Jacob A. Lutz, III, Esq. R. Mason Bayler, Jr., Esq. Troutman Sanders LLP Troutman Sanders Building 1001 Haxall Point Richmond, Virginia 23219 Tele:(804) 697-1490 Fax:(804) 698-6014 8.6Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but such counterparts together shall constitute one and the same agreement. 8.7Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues, and therefore each party hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in respect of any litigation, directly or indirectly, arising out of or relating to this Agreement or the transactions contemplated by this Agreement.Each party certifies and acknowledges that (i) it understands and has considered the implications of this waiver and (ii) it makes this waiver voluntarily. 48 8.8Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provisions hereof.Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.Further, the parties agree that a court of competent jurisdiction may reform any provision of this Agreement held invalid or unenforceable so as to reflect the intended agreement of the parties hereto. 49 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in counterparts by their duly authorized officers and their corporate seals to be affixed hereto, all as of the date first written above. UNION FIRST MARKET BANKSHARES CORPORATION By:/s/ G. William Beale G. William Beale Chief Executive Officer STELLARONE CORPORATION By:/s/ O. R. Barham, Jr. O. R. Barham, Jr. President and Chief Executive Officer 50 EXHIBIT 1.1(a) To the Agreement and Plan of Reorganization PLAN OF MERGER BETWEEN STELLARONE CORPORATION AND UNION FIRST MARKET BANKSHARES CORPORATION Pursuant to this Plan of Merger (the “Plan of Merger”), StellarOne Corporation, a Virginia corporation (“StellarOne”), shall merge with and into Union First Market Bankshares Corporation, a Virginia corporation (“Union”). ARTICLE 1 Terms of the Merger 1.1The Merger. Subject to the terms and conditions of the Agreement and Plan of Reorganization, dated as of June 9, 2013, by and between Union and StellarOne (the “Agreement”), at the Effective Date (as defined herein), StellarOne will be merged with and into Union, in accordance with the provisions of Virginia law, and with the effect specified in Section 13.1-721 of the Virginia Stock Corporation Act (the “Merger”).The separate corporate existence of StellarOne thereupon shall cease, and Union will be the surviving corporation in the Merger (Union as existing on and after the Effective Date is sometimes referred to herein as the “Continuing Corporation” whenever reference is made to it as of the Effective Date or thereafter).The Merger shall become effective on such date and time as may be determined in accordance with Section 1.2 of the Agreement (the “Effective Date”).Without limiting the generality of the foregoing, from and after the Effective Date, the Continuing Corporation shall possess all rights, privileges, properties, immunities, powers and franchises of StellarOne, and all of the debts, liabilities, obligations, claims, restrictions and duties of StellarOne shall become the debts, liabilities, obligations, claims, restrictions and duties of the Continuing Corporation. ARTICLE 2 Merger Consideration; Exchange Procedures 2.1Conversion of StellarOne Common Stock. At the Effective Date, by virtue of the Merger and without any action on the part of Union or StellarOne or their respective stockholders: (a)Each share of common stock, par value $1.00 per share, of StellarOne (“StellarOne Common Stock”), that is issued and outstanding immediately before the Effective Date will be converted into and exchanged for 0.9739 shares of common stock, par value $1.33 per share, of the Continuing Corporation (“Continuing Corporation Common Stock”) pursuant to the terms and conditions set forth in the Agreement and this Plan of Merger (the “Exchange Ratio”). (b)All shares of StellarOne Common Stock converted pursuant to thisSection 2.1 shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist as of the Effective Date. (c)Each certificate previously representing shares of StellarOne Common Stock (the “Old StellarOne Certificates”) shall cease to represent any rights except the right to receive with respect to each underlying share of StellarOne Common Stock: (i) a new certificate representing the number of whole shares of Continuing Corporation Common Stock into which the shares of StellarOne Common Stock represented by the Old StellarOne Certificate have been converted pursuant to this Section 2.1 upon the surrender of such Old StellarOne Certificate in accordance with Section 2.2, (ii) in accordance with Section 2.3, cash in lieu of fractional shares of Continuing Corporation Common Stock; and (iii) any dividends or distributions which the holder thereof has the right to receive pursuant to Section 2.5. (d)Each share of Union Common Stock issued and outstanding immediately before the Effective Date shall remain an issued and outstanding share of Continuing Corporation Common Stock.Each certificate previously representing shares of Union Common Stock shall continue to represent an equal number of shares of Continuing Corporation Common Stock on and after the Effective Date. (e)Each share of StellarOne Common Stock held by either party and each share of Union Common Stock held by StellarOne or any of its Subsidiaries (as defined herein) prior to the Effective Date (in each case other than in a fiduciary or agency capacity or on behalf of third parties as a result of debts previously contracted) shall be cancelled and retired and shall cease to exist at the Effective Date and no consideration shall be issued in exchange therefor; provided, that such shares of Union Common Stock shall resume the status of authorized and unissued shares of Union Common Stock. 2.2Exchange Procedures. (a)At the Effective Date, the Continuing Corporation shall deposit, or shall cause to be deposited, with its transfer agent or such other transfer agent or depository or trust institution of recognized standing approved by Union (the “Exchange Agent”), for the benefit of the holders of the Old StellarOne Certificates, certificates representing Continuing Corporation Common Stock (“New Certificates”), together with any dividends or distributions with respect thereto and any cash to be paid hereunder in lieu of fractional shares of Continuing Corporation Common Stock, without any interest thereon (the “Exchange Fund”), to be paid pursuant to Article 1 and this Article 2 in exchange for outstanding shares of StellarOne Common Stock. (b)As promptly as practicable after the Effective Date, and in no event later than five (5) business days thereafter, the Continuing Corporation shall cause the Exchange Agent to send to each former stockholder of record of StellarOne immediately before the Effective Date transmittal materials for use in exchanging such stockholder’s Old StellarOne Certificates for New Certificates based upon the Exchange Ratio. (c)The Continuing Corporation shall cause the New Certificates for shares of Continuing Corporation Common Stock into which shares of StellarOne Common Stock are converted at the Effective Date or dividends or distributions which such stockholder shall be entitled to receive and any cash to be paid in lieu of fractional shares to be paid to such stockholder upon delivery to the Exchange Agent of Old StellarOne Certificates, together with the transmittal materials duly executed and completed in accordance with the instructions thereto.No interest will accrue or be paid on any such cash to be paid pursuant to Section 2.3 or Section2.5. (d)A StellarOne stockholder whose Old StellarOne Certificates have been lost, destroyed, stolen or are otherwise missing shall be entitled to receive New Certificates, dividends or distributions, and cash in lieu of fractional shares, to which such stockholder shall be entitled upon compliance with reasonable conditions imposed by Union pursuant to applicable law and as required in accordance with Union’s standard policy (including the requirement that the shareholder furnish a surety bond or other customary indemnity). (e)Any portion of the Exchange Fund that remains unclaimed by the stockholders of StellarOne for twelve (12) months after the Effective Date shall be returned to the Continuing Corporation (together with any dividends or earnings in respect thereof).Any former stockholders of StellarOne who have not complied with this Article 2 shall thereafter be entitled to look only to the Continuing Corporation, and only as a general creditor thereof, for payment of the consideration deliverable in respect of each share of StellarOne Common Stock such stockholder holds as determined pursuant to this Agreement, without any interest thereon. (f)None of the Exchange Agent, either of the parties hereto or any of their respective Subsidiaries shall be liable to any stockholder of StellarOne for any amount of property delivered to a public official pursuant to applicable abandoned property, escheat or similar laws. 2.3No Fractional Shares. Each holder of shares of StellarOne Common Stock exchanged pursuant to the Merger which would otherwise have been entitled to receive a fraction of a share of Continuing Corporation Common Stock shall receive, in lieu thereof, cash (without interest and rounded to the nearest cent) in an amount equal to such fractional part of a share of Continuing Corporation Common Stock multiplied by the closing sale price of Union Common Stock on the NASDAQ Global Select Market for the trading day immediately preceding the Effective Date. 2.4Anti-Dilution. In the event Union changes (or establishes a record date for changing) the number of shares of Union Common Stock issued and outstanding before the Effective Date as a result of a stock split, stock dividend, recapitalization, reclassification, reorganization or similar transaction,appropriate and proportional adjustments will be made to the Exchange Ratio. 2.5Dividends. No dividend or other distribution payable to the holders of record of StellarOne Common Stock at, or as of, any time after the Effective Date will be paid to the holder of any Old StellarOne Certificates until such holder physically surrenders such certificate (or furnishes a surety bond of a customary indemnity that such certificate is lost, destroyed, stolen or are otherwise missing) for exchange as provided in Section 2.2 of this Agreement, promptly after which time all such dividends or distributions will be paid (without interest). 2.6StellarOne Stock Options and Other Equity-Based Awards. (a)At the Effective Date, each option to purchase shares of StellarOne Common Stock (a “StellarOne Stock Option”) granted under an equity or equity-based compensation plan of StellarOne (a “StellarOne Stock Plan”), shall vest and shall be converted into an option (each, a “Replacement Option”) to acquire, on the same terms and conditions as were applicable under such StellarOne Stock Option (except as provided otherwise in this Section 2.6(a)), the number of shares of Union Common Stock equal to (i) the number of shares of StellarOne Common Stock subject to the StellarOne Stock Option multiplied by (ii) the Exchange Ratio. Such product shall be rounded down to the nearest whole number.The exercise price per share (rounded up to the next whole cent) of each Replacement Option shall equal (y) the exercise price per share of shares of StellarOne Common Stock that were purchasable pursuant to such StellarOne Stock Option divided by (z) the Exchange Ratio.Notwithstanding the foregoing, each StellarOne Stock Option that is intended to be an “incentive stock option” (as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”)) shall be adjusted in accordance with the requirements of Section 424 of the Code and all other options shall be adjusted in a manner that maintains the options exemption from Section 409A of the Code.At the Effective Date, Union shall assume the StellarOne Stock Plans; provided that such assumption shall only be with respect to the Replacement Options and the StellarOne Stock Awards (as defined herein) and shall have no obligation to make any additional grants or awards under the StellarOne Stock Plans. (b)Each restricted stock award granted under a StellarOne Stock Plan (a “StellarOne Stock Award”) which is unvested or contingent and outstanding immediately prior to the Effective Date, shall cease, at the Effective Date, to represent any rights with respect to shares of StellarOne Common Stock and shall be converted without any action on the part of the holder thereof, into a restricted stock award of the Continuing Corporation (a “Continuing Corporation Stock Award”), on the same terms and conditions as were applicable under the StellarOne Stock Awards (but taking into account any changes thereto, including any acceleration of vesting thereof, provided for in the StellarOne Stock Plan or in the related award document by reason of the Merger).The number of shares of Continuing Corporation Common Stock subject to each such Continuing Corporation Stock Award shall be equal to the number of shares of StellarOne Common Stock subject to the StellarOne Stock Award multiplied by the Exchange Ratio, rounded, if necessary, to the nearest whole share of Continuing Corporation Common Stock. 2.7Treasury Warrant. At the Effective Date, each warrant to purchase StellarOne Common Stock originally issued to the United States Department of the Treasury (the “Treasury”) pursuant to the Securities Purchase Agreement incorporated into the Letter Agreement, dated December19,2008, between StellarOne and the Treasury (a “Treasury Warrant”), which is then outstanding and unexercised shall cease to represent a right to acquire StellarOne Common Stock and shall be converted into a warrant to purchase shares of Union Common Stock in an amount and at an exercise price determined in accordance with the terms of such Treasury Warrant. 2.8Withholding Rights. The Exchange Agent will be entitled to deduct and withhold from the Merger consideration otherwise payable pursuant to this Agreement to any person such amounts, if any, as it is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign Tax (as defined in the Agreement) law. To the extent that amounts are so withheld and remitted to the appropriate Governmental Authority (as defined in the Agreement) by the Exchange Agent, such amounts withheld will be treated for all purposes of this Agreement as having been paid to such person in respect of which such deduction and withholding was made by the Exchange Agent. ARTICLE 3 Articles of Incorporation and Bylaws of the Continuing Corporation The Articles of Incorporation and Bylaws of Union as in effect immediately prior to the Effective Date, as such Articles are to be amended pursuant to Section 1.4(a) of the Agreement and as such Bylaws are to be amended as set forth in Exhibit 1.4(b) to the Agreement, will be the Articles of Incorporation and Bylaws of the Continuing Corporation. ARTICLE 4 Conditions Precedent The obligations of StellarOne and Union to effect the Merger as herein provided shall be subject to satisfaction, unless duly waived, of the conditions set forth in the Agreement. ARTICLE 5 Termination This Plan of Merger may be terminated at any time before the Effective Date by the parties hereto as provided in Article 7 of the Agreement. EXHIBIT 1.4(b) To the Agreement and Plan of Reorganization Form of Bylaw Amendments to Bylaws of the Continuing Corporation Article II of the Bylaws shall be amended by adding paragraphs (b) and (c) to Section 4 and by adding a new Section 9 as set forth below. Section4.Chairman of the Board. (a)At the annual meeting of the Board of Directors following each annual meeting of shareholders, the Board of Directors shall elect a Chairman and a Vice Chairman from among its members to preside at meetings of the Board.In their absence, the CEO or the President shall perform the duties of the Chairman. (b)Notwithstanding the foregoing, from and after the Effective Date (as defined in Section 9(a) below) through the third anniversary of the Effective Date, the Chairman of the Board shall be Dr. Raymond D. Smoot, Jr.During the period that Dr. Smoot continues to serve as Chairman of the Board pursuant to the terms of this Section 4(b), he shall also serve as a member of the Executive Committee of the Corporation.The removal of Dr. Smoot, or the failure to appoint or re-elect Dr. Smoot as Chairman of the Board as provided in this Section 4 prior to the third anniversary of the Effective Date, and any determination not to nominate Dr. Smoot as director of the Corporation, prior to the third anniversary of the Effective Date, shall each require the affirmative vote of at least 75% of the full Board of Directors. (c)The provisions of this Section 4 may be modified, amended or repealed, and any Bylaw provision inconsistent with the provisions of this Section 4 may be adopted, only by the affirmative vote of at least 75% of the full Board of Directors.The provisions of paragraphs (b) and (c) of this Section 4 will automatically terminate and be deemed repealed in full effective as of the third anniversary of the Effective Date without any further action by the Board of Directors of the Corporation.In the event of any inconsistency between any provisions of this Section 4 and any other provision of these Bylaws or the Corporation’s other constituent documents, the provisions of this Section 4 shall control. Section9.Board Composition. (a)Effective as of the Effective Date (as defined in the Agreement and Plan of Reorganization, dated as of June 9, 2013, by and between Union First Market Bankshares Corporation and StellarOne Corporation (“StellarOne”), as the same may be amended from time to time (the “Merger Agreement”)), and notwithstanding any other provision of these Bylaws that may be to the contrary, the Board of Directors of the Corporation shall be comprised of nineteen directors, of which eleven shall be members of the Board of Directors of the Corporation prior to the Effective Date chosen by the Corporation prior to the Effective Date (each a “Union Director” and collectively the “Union Directors”), and eight shall be members of the Board of Directors of StellarOne prior to the Effective Date who are designated by StellarOne prior to the Effective Date by StellarOne, subject to the consent of Union which shall not be unreasonably withheld, to serve as directors of the Corporation (each a “StellarOne Director” and collectively the “StellarOne Directors”).The Union Directors and the StellarOne Directors shall be apportioned among the three classes of the Board of Directors of the Corporation in a manner as nearly equal as possible. (b)From and after the Effective Date through the third anniversary of the Effective Date, all vacancies on the Board of Directors of the Corporation created by the cessation of service of a Union Director shall be filled by a nominee proposed to the nominating committee of the Board of Directors of the Corporation by a majority of the remaining Union Directors, and all vacancies on the Board of Directors of the Corporation created by the cessation of service of a StellarOne Director shall be filled by a nominee proposed to the nominating committee of the Board of Directors of the Corporation by a majority of the remaining StellarOne Directors, as applicable. (c)All directors so nominated and appointed or elected to the Board of Directors of the Corporation by proposal of the Union Directors shall be considered “Union Directors” for purposes of this Article II, Section 9, and all directors so nominated and appointed or elected to the Board of Directors of the Corporation by proposal of StellarOne Directors shall be considered “StellarOne Directors” for purposes of this Article II, Section 9. (d)From and after the Effective Date through the third anniversary of the Effective Date, the provisions of this Section 9 may be modified, amended or repealed, and any Bylaw provision inconsistent with the provisions of this Section 9 may be adopted, only by an affirmative vote of the StellarOne Directors.This Section 9 will automatically terminate and be deemed repealed in full effective as of the third anniversary of the Effective Date without any further action by the Board of Directors of the Corporation.In the event of any inconsistency between any provision of this Section 9 and any other provision of these Bylaws or the Corporation’s other constituent documents, the provisions of this Section 9 are intended to control. EXHIBIT 5.8 To the Agreement and Plan of Reorganization AFFILIATE AGREEMENT THIS AFFILIATE AGREEMENT (the “Agreement”), dated as of June 9, 2013, is by and among UNION FIRST MARKET BANKSHARES CORPORATION, a Virginia corporation (“Union”), STELLARONE CORPORATION, a Virginia corporation (“StellarOne”), and the undersigned stockholder of StellarOne (the “Stockholder”).All terms used herein and not defined herein shall have the meanings assigned thereto in the Merger Agreement (defined below). WHEREAS, the Boards of Directors of Union and StellarOne have approved a business combination of their companies through the merger (the “Merger”) of StellarOne with and into Union pursuant to the terms and conditions of an Agreement and Plan of Reorganization, dated as of June 9, 2013, between Union and StellarOne, and a related Plan of Merger (together referred to herein as the “Merger Agreement”); WHEREAS, the Stockholder is the beneficial and registered owner of, and has the sole power to vote or direct the disposition of the number of shares of common stock, par value $1.00 per share, of StellarOne (“StellarOne Common Stock”) set forth opposite the Stockholder’s name on Schedule A hereto (such shares, together with all shares of StellarOne Common Stock subsequently acquired by the Stockholder during the term of this Agreement, are referred to herein as the “Shares”); and WHEREAS, as a condition and inducement to Union and StellarOne entering into the Merger Agreement, the Stockholder has agreed to enter into and perform this Agreement. NOW, THEREFORE, in consideration of the covenants, representations, warranties and agreements set forth herein and in the Merger Agreement, and other good and valuable consideration (including the merger consideration set forth in Article 2 of the Merger Agreement), the receipt and sufficiency of which are acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 1.Agreement to Vote. During the term of this Agreement and at such time as StellarOne conducts the StellarOne Stockholders Meeting, the Stockholder agrees to vote or cause to be voted all of the Shares, and to cause any holder of record of the Shares to vote all such Shares, in person or by proxy: (i) in favor of the Merger Agreement at the StellarOne Stockholders Meeting; and (ii) against (A) any Acquisition Proposal, (B) any action, proposal, transaction or agreement which could reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of StellarOne under the Merger Agreement or of the Stockholder under this Agreement and (C) any action, proposal, transaction or agreement that could reasonably be expected to impede, interfere with, delay, discourage, adversely affect or inhibit the timely consummation of the Merger or the fulfillment of Union’s or StellarOne’s conditions under the Merger Agreement. 2.Covenants of Stockholder. The Stockholder covenants and agrees as follows: (a)Ownership.The Stockholder is the beneficial and registered owner of the Shares as set forth opposite the Stockholder’s name on Schedule A hereto.Except for the Stockholder’s Shares, the Stockholder is not the beneficial or registered owner of any other shares of StellarOne Common Stock or rights to acquire shares of StellarOne Common Stock and for which Stockholder has sole right and power to vote and/or dispose.For purposes of this Agreement, the term “beneficial ownership” shall be interpreted in accordance with Rule 13d-3 under the Securities Exchange Act of 1934. (b)Restrictions on Transfer.During the term of this Agreement, the Stockholder will not sell, pledge, hypothecate, grant a security interest in, transfer or otherwise dispose of or encumber any of the Shares and will not enter into any agreement, arrangement or understanding (other than a proxy for the purpose of voting the Stockholder’s Shares in accordance with Section 1 hereof) which would during that term (i)restrict, (ii)establish a right of first refusal to, or (iii)otherwise relate to, the transfer or voting of the Shares. (c)Authority.The Stockholder has full power, authority and legal capacity to enter into, execute and deliver this Agreement and to perform fully the Stockholder’s obligations hereunder. This Agreement has been duly and validly executed and delivered by the Stockholder and constitutes the legal, valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms. (d)No Breach.None of the execution and delivery of this Agreement nor the consummation by the Stockholder of the transactions contemplated hereby will result in a violation of, or a default under, or conflict with, any contract, loan and credit arrangements, Liens (as defined in Section2(e) below), trust, commitment, agreement, understanding, arrangement or restriction of any kind to which the Stockholder is a party or bound or to which the Shares are subject. (e)No Liens.The Shares and the certificates representing the Shares are now, and at all times during the term of this Agreement, will be, held by the Stockholder, or by a nominee or custodian for the benefit of the Stockholder, free and clear of all pledges, liens, security interests, claims, proxies, voting trusts or agreements, understandings or arrangements or any other encumbrances whatsoever (each, a “Lien”), except for (i)any Liens arising hereunder, and (ii)Liens, if any, which have been disclosed on ScheduleB attached hereto. (f)Consents and Approvals.The execution and delivery of this Agreement by the Stockholder does not, and the performance by the Stockholder of his or her obligations under this Agreement and the consummation by him or her of the transactions contemplated hereby will not, require the Stockholder to obtain any consent, approval, authorization or permit of, or to make any filing with or notification to, any Governmental Authority. (g)Absence of Litigation.There is no suit, action, investigation or proceeding pending or, to the knowledge of the Stockholder, threatened against or affecting the Stockholder or any of his or her affiliates before or by any Governmental Authority that could reasonably be expected to materially impair the ability of the Stockholder to perform his or her obligations hereunder or to consummate the transactions contemplated hereby. (h)No Solicitation.During the term of this Agreement, the Stockholder shall not, nor shall he or she permit any investment banker, attorney or other adviser or representative of the Stockholder to, directly or indirectly, (i)solicit, initiate or encourage the submission of any Acquisition Proposal, or (ii)participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal. (i)Statements.The Stockholder shall not make any statement, written or oral, to the effect that he or she does not support the Merger or that other stockholders of StellarOne should not support the Merger. 3.No Prior Proxies. The Stockholder represents, warrants and covenants that any proxies or voting rights previously given in respect of the Shares are revocable, and that any such proxies or voting rights are hereby irrevocably revoked. 4.Certain Events. The Stockholder agrees that this Agreement and the obligations hereunder shall attach to the Shares and shall be binding upon any person or entity to which legal or beneficial ownership of the Shares shall pass, whether by operation of law or otherwise, including the Stockholder’s successors or assigns.In the event of any stock split, stock dividend, merger, exchange, reorganization, recapitalization or other change in the capital structure of StellarOne affecting the Shares, the number of Shares subject to the terms of this Agreement shall be appropriately adjusted, and this Agreement and the obligations hereunder shall attach to any additional securities of StellarOne issued to or acquired by the Stockholder. 5.Capacity; Obligation to Vote. (a)Notwithstanding anything in this Agreement to the contrary, in the event that the Board of Directors of StellarOne is permitted to engage in negotiations or discussions with any person who made an unsolicited bona fide written Acquisition Proposal in accordance with Section 5.5 of the Merger Agreement, the Stockholder shall be permitted, at the request of the Board of Directors of StellarOne, to respond to inquiries from, and discuss such Acquisition Proposal with, the Board of Directors of StellarOne.With respect to the terms of this Agreement relating to the Shares, this Agreement relates solely to the capacity of the Stockholder as a stockholder or other beneficial owner of the Shares and is not in any way intended to affect or prevent the exercise by the Stockholder of his or her responsibilities as a director or officer of StellarOne, including actions permitted to be taken in compliance with Section 5.5 of the Merger Agreement.The term “Shares” shall not include any securities beneficially owned by the Stockholder as a trustee or fiduciary, and this Agreement is not in any way intended to affect the exercise by the Stockholder of his or her fiduciary responsibility in respect of any such securities. (b)The parties hereto agree that, notwithstanding the provisions contained in Section1 hereof, the Stockholder shall not be obligated to vote as required in Section 1 of this Agreement in the event that (i)Union is in material default with respect to any covenant, representation, warranty or agreement with respect to it contained in the Merger Agreement, or (ii)StellarOne is otherwise entitled to terminate the Merger Agreement. 6.Term; Termination. The term of this Agreement shall commence on the date hereof.This Agreement shall terminate upon the termination of the Merger Agreement in accordance with Article 7 of the Merger Agreement.Other than as provided for herein, following the termination of this Agreement, there shall be no further liabilities or obligations hereunder on the part of the Stockholder, StellarOne or Union, or their respective officers or directors, except that nothing in this Section 6 shall relieve any party hereto from any liability for breach of this Agreement before such termination. 7.Stop Transfer Order. In furtherance of this Agreement, as soon as practicable after the date hereof, the Stockholder shall hereby authorize and instruct StellarOne to instruct its transfer agent to enter a stop transfer order with respect to all of Shares for the period from the date hereof through the date this Agreement is terminated in accordance with Section 6 hereof. 8.Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by the applicable party hereto in accordance with their specific terms or were otherwise breached.Each of the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by the other and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which it is entitled at law or in equity. Each party hereto waives the posting of any bond or security in connection with any proceeding related thereto. 9.Amendments. This Agreement may not be modified, amended, altered or supplemented except by execution and delivery of a written agreement by the parties hereto. 10.Governing Law. This Agreement shall in all respects be governed by and construed in accordance with the laws of the Commonwealth of Virginia without regard to the conflict of law principles thereof. 11.Notices. All notices, requests, claims, demands or other communications hereunder shall be in writing and shall be deemed given when delivered personally, upon receipt of a transmission confirmation if sent by telecopy or like transmission and on the next business day when sent by a reputable overnight courier service as follows: (i) with respect to StellarOne or Union, the applicable address set forth in Section 8.5 of the Merger Agreement, and (ii) with respect to the Stockholder, at the address for the Stockholder shown on the records of StellarOne. 12.Benefit of Agreement; Assignment. (a)This Agreement shall be binding upon and inure to the benefit of, and shall be enforceable by, the parties hereto and their respective personal representatives, successors and assigns, except that the parties hereto may not transfer or assign any of their respective rights or obligations hereunder without the prior written consent of the other parties. (b)The parties hereto agree and designate StellarOne Bank and Union First Market Bank as third-party beneficiaries of this Agreement, with StellarOne Bank and Union First Market Bank each having the right to enforce the terms hereof. 13.Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties in separate counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. 14.Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provisions hereof.Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.Further, the parties agree that a court of competent jurisdiction may reform any provision of this Agreement held invalid or unenforceable so as to reflect the intended agreement of the parties hereto. [Signatures on following page] IN WITNESS WHEREOF, Union First Market Bankshares Corporation, StellarOne Corporation and the Stockholder have caused this Agreement to be duly executed as of the date and year first above written. UNION FIRST MARKET BANKSHARES CORPORATION By: G. William Beale Chief Executive Officer STELLARONE CORPORATION By: O. R. Barham, Jr. President and Chief Executive Officer STOCKHOLDER [NAME] SCHEDULE A Number of Shares Name Common Stock (including restricted stock) Vested Options Unvested Options Total SCHEDULE B Liens AFFILIATE AGREEMENT THIS AFFILIATE AGREEMENT (the “Agreement”), dated as of June 9, 2013, is by and among UNION FIRST MARKET BANKSHARES CORPORATION, a Virginia corporation (“Union”), STELLARONE CORPORATION, a Virginia corporation (“StellarOne”), and the undersigned stockholder of Union (the “Stockholder”).All terms used herein and not defined herein shall have the meanings assigned thereto in the Merger Agreement (defined below). WHEREAS, the Boards of Directors of Union and StellarOne have approved a business combination of their companies through the merger (the “Merger”) of StellarOne with and into Union pursuant to the terms and conditions of an Agreement and Plan of Reorganization, dated as of June 9, 2013, between Union and StellarOne, and a related Plan of Merger (together referred to herein as the “Merger Agreement”); WHEREAS, the Stockholder is the beneficial and registered owner of, and has the sole power to vote or direct the disposition of the number of shares of common stock, par value $1.33 per share, of Union (“Union Common Stock”) set forth opposite the Stockholder’s name on Schedule A hereto (such shares, together with all shares of Union Common Stock subsequently acquired by the Stockholder during the term of this Agreement, are referred to herein as the “Shares”); and WHEREAS, as a condition and inducement to StellarOne and Union entering into the Merger Agreement, the Stockholder has agreed to enter into and perform this Agreement. NOW, THEREFORE, in consideration of the covenants, representations, warranties and agreements set forth herein and in the Merger Agreement, and other good and valuable consideration (including the merger consideration set forth in Article 2 of the Merger Agreement), the receipt and sufficiency of which are acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 1.Agreement to Vote. During the term of this Agreement and at such time as Union conducts the Union Stockholders Meeting, the Stockholder agrees to vote or cause to be voted all of the Shares, and to cause any holder of record of the Shares to vote all such Shares, in person or by proxy: (i) in favor of the amendment to the Union Articles of Incorporation as described in Section 1.4(a) of the Merger Agreement and in favor of the Merger Agreement at the Union Stockholders Meeting; and (ii) against (A) any Acquisition Proposal, (B) any action, proposal, transaction or agreement which could reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of Union under the Merger Agreement or of the Stockholder under this Agreement and (C) any action, proposal, transaction or agreement that could reasonably be expected to impede, interfere with, delay, discourage, adversely affect or inhibit the timely consummation of the Merger or the fulfillment of StellarOne’s or Union’s conditions under the Merger Agreement. 2.Covenants of Stockholder. The Stockholder covenants and agrees as follows: (a)Ownership.The Stockholder is the beneficial and registered owner of the Shares as set forth opposite the Stockholder’s name on Schedule A hereto.Except for the Stockholder’s Shares, the Stockholder is not the beneficial or registered owner of any other shares of Union Common Stock or rights to acquire shares of Union Common Stock and for which Stockholder has sole right and power to vote and/or dispose. For purposes of this Agreement, the term “beneficial ownership” shall be interpreted in accordance with Rule 13d-3 under the Securities Exchange Act of 1934. (b)Restrictions on Transfer.During the term of this Agreement, the Stockholder will not sell, pledge, hypothecate, grant a security interest in, transfer or otherwise dispose of or encumber any of the Shares and will not enter into any agreement, arrangement or understanding (other than a proxy for the purpose of voting the Stockholder’s Shares in accordance with Section 1 hereof) which would during that term (i)restrict, (ii)establish a right of first refusal to, or (iii)otherwise relate to, the transfer or voting of the Shares. (c)Authority.The Stockholder has full power, authority and legal capacity to enter into, execute and deliver this Agreement and to perform fully the Stockholder’s obligations hereunder. This Agreement has been duly and validly executed and delivered by the Stockholder and constitutes the legal, valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms. (d)No Breach.None of the execution and delivery of this Agreement nor the consummation by the Stockholder of the transactions contemplated hereby will result in a violation of, or a default under, or conflict with, any contract, loan and credit arrangements, Liens (as defined in Section2(e) below), trust, commitment, agreement, understanding, arrangement or restriction of any kind to which the Stockholder is a party or bound or to which the Shares are subject. (e)No Liens.The Shares and the certificates representing the Shares are now, and at all times during the term of this Agreement, will be, held by the Stockholder, or by a nominee or custodian for the benefit of the Stockholder, free and clear of all pledges, liens, security interests, claims, proxies, voting trusts or agreements, understandings or arrangements or any other encumbrances whatsoever (each, a “Lien”), except for (i)any Liens arising hereunder, and (ii)Liens, if any, which have been disclosed on ScheduleB attached hereto. (f)Consents and Approvals.The execution and delivery of this Agreement by the Stockholder does not, and the performance by the Stockholder of his or her obligations under this Agreement and the consummation by him or her of the transactions contemplated hereby will not, require the Stockholder to obtain any consent, approval, authorization or permit of, or to make any filing with or notification to, any Governmental Authority. (g)Absence of Litigation.There is no suit, action, investigation or proceeding pending or, to the knowledge of the Stockholder, threatened against or affecting the Stockholder or any of his or her affiliates before or by any Governmental Authority that could reasonably be expected to materially impair the ability of the Stockholder to perform his or her obligations hereunder or to consummate the transactions contemplated hereby. (h)No Solicitation. During the term of this Agreement, the Stockholder shall not, nor shall he or she permit any investment banker, attorney or other adviser or representative of the Stockholder to, directly or indirectly, (i)solicit, initiate or encourage the submission of any Acquisition Proposal, or (ii)participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal. (i)Statements.The Stockholder shall not make any statement, written or oral, to the effect that he or she does not support the Merger or that other stockholders of Union should not support the Merger. 3.No Prior Proxies. The Stockholder represents, warrants and covenants that any proxies or voting rights previously given in respect of the Shares are revocable, and that any such proxies or voting rights are hereby irrevocably revoked. 4.Certain Events. The Stockholder agrees that this Agreement and the obligations hereunder shall attach to the Shares and shall be binding upon any person or entity to which legal or beneficial ownership of the Shares shall pass, whether by operation of law or otherwise, including the Stockholder’s successors or assigns.In the event of any stock split, stock dividend, merger, exchange, reorganization, recapitalization or other change in the capital structure of Union affecting the Shares, the number of Shares subject to the terms of this Agreement shall be appropriately adjusted, and this Agreement and the obligations hereunder shall attach to any additional securities of Union issued to or acquired by the Stockholder. 5.Capacity; Obligation to Vote. (a)Notwithstanding anything in this Agreement to the contrary, in the event that the Board of Directors of Union is permitted to engage in negotiations or discussions with any person who made an unsolicited bona fide written Acquisition Proposal in accordance with Section 5.5 of the Merger Agreement, the Stockholder shall be permitted, at the request of the Board of Directors of Union, to respond to inquiries from, and discuss such Acquisition Proposal with, the Board of Directors of Union.With respect to the terms of this Agreement relating to the Shares, this Agreement relates solely to the capacity of the Stockholder as a stockholder or other beneficial owner of the Shares and is not in any way intended to affect or prevent the exercise by the Stockholder of his or her responsibilities as a director or officer of Union, including actions permitted to be taken in compliance with Section 5.5 of the Merger Agreement.The term “Shares” shall not include any securities beneficially owned by the Stockholder as a trustee or fiduciary, and this Agreement is not in any way intended to affect the exercise by the Stockholder of his or her fiduciary responsibility in respect of any such securities. (b)The parties hereto agree that, notwithstanding the provisions contained inSection 1 hereof, the Stockholder shall not be obligated to vote as required in Section 1 of this Agreement in the event that (i) StellarOne is in material default with respect to any covenant, representation, warranty or agreement with respect to it contained in the Merger Agreement, or (ii) Union is otherwise entitled to terminate the Merger Agreement. 6.Term; Termination. The term of this Agreement shall commence on the date hereof.This Agreement shall terminate upon the termination of the Merger Agreement in accordance with Article 7 of the Merger Agreement.Other than as provided for herein, following the termination of this Agreement, there shall be no further liabilities or obligations hereunder on the part of the Stockholder, Union or StellarOne, or their respective officers or directors, except that nothing in this Section 6 shall relieve any party hereto from any liability for breach of this Agreement before such termination. 7.Stop Transfer Order. In furtherance of this Agreement, as soon as practicable after the date hereof, the Stockholder shall hereby authorize and instruct Union to instruct its transfer agent to enter a stop transfer order with respect to all of Shares for the period from the date hereof through the date this Agreement is terminated in accordance with Section 6 hereof. 8.Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by the applicable party hereto in accordance with their specific terms or were otherwise breached.Each of the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by the other and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which it is entitled at law or in equity. Each party hereto waives the posting of any bond or security in connection with any proceeding related thereto. 9.Amendments. This Agreement may not be modified, amended, altered or supplemented except by execution and delivery of a written agreement by the parties hereto. 10.Governing Law. This Agreement shall in all respects be governed by and construed in accordance with the laws of the Commonwealth of Virginia without regard to the conflict of law principles thereof. 11.Notices. All notices, requests, claims, demands or other communications hereunder shall be in writing and shall be deemed given when delivered personally, upon receipt of a transmission confirmation if sent by telecopy or like transmission and on the next business day when sent by a reputable overnight courier service as follows: (i) with respect to Union or StellarOne, the applicable address set forth in Section 8.5 of the Merger Agreement, and (ii) with respect to the Stockholder, at the address for the Stockholder shown on the records of Union. 12.Benefit of Agreement; Assignment. (a)This Agreement shall be binding upon and inure to the benefit of, and shall be enforceable by, the parties hereto and their respective personal representatives, successors and assigns, except that the parties hereto may not transfer or assign any of their respective rights or obligations hereunder without the prior written consent of the other parties. (b)The parties hereto agree and designate StellarOne Bank and Union First Market Bank as third-party beneficiaries of this Agreement, with StellarOne Bank and Union First Market Bank each having the right to enforce the terms hereof. 13.Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties in separate counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. 14.Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provisions hereof.Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.Further, the parties agree that a court of competent jurisdiction may reform any provision of this Agreement held invalid or unenforceable so as to reflect the intended agreement of the parties hereto. [Signatures on following page] IN WITNESS WHEREOF, Union First Market Bankshares Corporation, StellarOne Corporation and the Stockholder have caused this Agreement to be duly executed as of the date and year first above written. UNION FIRST MARKET BANKSHARES CORPORATION By: G. William Beale Chief Executive Officer STELLARONE CORPORATION By: O. R. Barham, Jr. President and Chief Executive Officer STOCKHOLDER [NAME] SCHEDULE A Number of Shares Name Common Stock (including restricted stock) Vested Options Unvested Options Total SCHEDULE B Liens
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Exhibit 10.1
[logo.jpg]
As of September 15, 2008
Mr. Timothy C. Reusing
420 E. 23rd St.
Apt. 3H
Dear Tim:
The following constitutes the employment agreement (the "Agreement") between you
(the "Executive") and On2 Technologies, Inc. (the "Company"), a Delaware
corporation. This letter sets forth the terms of your employment as General
Counsel and Executive Vice President, Corporate and Business Development.
1. EMPLOYMENT; ACCEPTANCE OF EMPLOYMENT; FUTURE ADVANCEMENT The Company hereby
employs the Executive during the Term (as defined below) on a full-time basis to
render exclusive services to the Company as General Counsel and Executive Vice
President, Corporate and Business Development of the Company and its
subsidiaries. The Executive hereby accepts this employment and will render his
services as required by the Company conscientiously, loyally, competently and to
the best of his talents and abilities throughout the Term.
2. TERM OF AGREEMENT. The initial term of this Agreement shall commence on the
date hereof and terminate three years hence. On or after the two hundred
seventieth (270th) day before the end of the initial Term but prior to the
sixtieth (60th) day before the end of the initial Term, Executive may provide
notice to Company of his offer to renew the Agreement for an additional three
(3) year term, and Company shall be deemed to have accepted the offer unless,
within fifteen (15) days of notice, Company provides Executive with notice that
Company determined not to renew the Agreement. The initial term, as extended by
any renewal term, is referred to herein as the "Term".
3. EXECUTIVE'S DUTIES.
a. The Executive will serve as the chief legal officer and the chief corporate
and business development officer of the Company and its subsidiaries.
Executive's duties will include those services customarily rendered by a chief
legal officer and chief corporate development and business development officer
of a publicly traded company of the size of the Company in the Company's
industry. The Executive will report directly to the Company’s Chief Operating
Officer (“COO”). The Executive shall also perform such other duties and services
as may reasonably be assigned to him from time to time by the COO, consistent
with his position as General Counsel and Executive Vice President, Corporate and
Business Development, in the conduct of the business of the Company.
b. The Executive's services shall be rendered primarily at Company's offices in
Manhattan, New York and at such other locations as the Company may from time to
time reasonably request consistent with its business needs. Travel to such other
Company offices will be at the Company's expense. If you relocate from
Manhattan, your office shall be in your new town of residence, it being
understood that relocation outside of the Eastern Time Zone shall require prior
approval, not to be unreasonably withheld. The Company shall provide office
space for Executive in Manhattan or, in the event Executive relocates,
Executive’s new town of residence
4. EXCLUSIVITY, RESTRICTIVE AGREEMENTS.
a. During his employment, the Executive shall devote all of his business time,
skill and energies exclusively to the business of the Company.
b. The Executive acknowledges that the nature of the services, position and
expertise of the Executive are such that he is capable of competing with the
Company and seriously damaging its business and its prospects to the detriment
of its stockholders and employees. In consideration of the Company's performance
of its obligations under this Agreement, during the Term and thereafter during
the Restricted Period (as defined below) the Executive shall not without the
prior written consent of the Company (i) directly or indirectly enter into the
employ of, or render any advice or services, whether or not for compensation,
to, any Person (as defined below) engaged in any Competitive Business (as
defined below); (ii) directly or indirectly engage in any Competitive Business;
and (iii) directly or indirectly become interested, whether or not for
compensation, in any Competitive Business as an individual, partner,
consultant, advisor or in any other relationship or capacity or, in the case of
any such company whose securities are traded on a national securities exchange
in the United States or otherwise or in the over-the-counter market, acquire,
directly or indirectly, an interest in excess of one percent (1%) of the
outstanding capital stock of such company. The Company's business is worldwide
in scope; accordingly, the Executive agrees that this covenant not to compete
shall not be subject to any geographical limit.
c. For purposes of this Section, any "Competitive Business" shall mean any
business engaged in the design or development of digital compression,
decompression or playback technologies in the computing, telecommunications or
entertainment industries. For the avoidance of doubt, any division, unit,
subsidiary or affiliate of any other business will be deemed a Competitive
Business unless the Executive can demonstrate upon the Company's request that
his employment by, engagement in, or interest in such unit, division, subsidiary
or affiliate does not and will not require him to provide services, information,
advice or relevant knowledge, skill, know-how or contacts to a Competitive
d. For purposes of this Section, "Person" shall mean any corporation,
partnership, trust, individual or any other entity.
e. For all purposes of this Section 4, "Restricted Period" shall be the period
commencing on the date of this agreement, September 15, 2008, and extending
through the expiration of the Term or through the 365th day immediately
following termination of employment by resignation or termination by the
Company, with or without Cause (as defined below).
5. COMPENSATION.
a. During the Term the Executive shall receive base compensation (“Base Salary”)
at the initial rate of $230,000 per year, payable semi-monthly and that rate may
be increased from time to time. Executive’s Base Salary shall be reviewed by the
Compensation Committee of the Board of Directors annually during the Term.
b. The Company will reimburse the Executive for expenses related to its business
actually incurred or paid by the Executive in the performance of his duties
under this Agreement, including without limitation home Internet connectivity
and business phone and cell phone bills, upon presentation of accountings,
expense statements, vouchers or such other supporting information as may
reasonably be required by the Company's policies.
c. The Company shall include Executive at the highest level in any incentive
compensation or management or executive bonus plan(s) or pool currently in
effect or adopted in the future. The terms of Executive’s participation in such
plan(s) (including the potential amount of any bonus or incentive compensation
when measured as a percentage of Base Salary) shall be no less favorable than
any other On2 employee.
d. Executive shall receive a stock option grant convertible into 250,000 shares
of the Company’s common stock, to be granted under the Company’s 2005 Incentive
Compensation Plan. This grant will vest in three equal installments: one-third
(1/3) on the date of the grant, one-third on September 15, 2009, and one-third
on September 15, 2010. Executive shall also receive a restricted stock grant of
50,000 shares of the Company’s common stock, which grant will vest in two equal
installments; one-half (1/2) on September 15, 2009, and one-half on September
15, 2010.
6. EXECUTIVE BENEFITS.
a. During the Term, the Executive shall be entitled to participate in such group
health, retirement, profit sharing, 401(k) and other benefits programs or plans,
qualified or unqualified, including any future stock option, restricted stock,
bonus or other incentive program, which are or become available to other senior
executives of the Company, subject to the policies of the Company with respect
to all of such programs or plans. Nothing in this clause 6a. shall be construed
to create a contractual obligation to provide the Executive with any particular
form or type of benefit or to limit the discretion of the Board of Directors or
Compensation Committee or any other duly authorized or appointed plan
administrator is permitted to exercise under any such benefit programs or plans.
b. During the Term the Executive shall be entitled to four weeks' paid vacation
per year of employment to be scheduled on reasonable notice to the Company and
to be taken, accrued and paid on the same basis as other employees of the
Company.
7. TERMINATION OF EMPLOYMENT FOR DEATH, DISABILITY, OR BY THE COMPANY FOR CAUSE.
a. The Company may terminate employment of Executive for any of the following
reasons, each of which is defined as "Cause:"
i. commission of a felony, any crime of moral turpitude or any act of material
fraud or dishonesty;
ii. repeated failure to satisfactorily perform material services required under
this Agreement in accordance with the requests of the Board of Directors;
iii. willful misconduct or gross negligence in the performance of his duties;
iv. intentional disregard or violation of the legal rights of any employees of
the Company or of the Company's written policies regarding harassment or
discrimination; or
v. a breach of any material provisions of this Agreement (including, but not
limited to, any breach of Sections 4 or 10).
b. If the Company terminates the employment of the Executive for Cause, or if
the Executive resigns during the Term other than for Good Reason, the Company's
obligations under this Agreement to pay further compensation shall cease
forthwith, except that the Company will pay to the Executive, within 30 days
after the date of termination of his employment, in full and complete
satisfaction of all of the Company's obligations under this Agreement: (i) the
Base Salary earned to the date of termination and, subject to Executive’s
submission of all required documentation, reimbursable expenses accrued (but
unpaid) to the date of termination; and (ii) any accrued but unused vacation
days paid at the rate of the Executive's Base Salary. In addition, during the
six months after such termination, the Company will provide all benefits that
would have been provided had Executive’s employment continued, including
medical, disability and life insurance; PROVIDED that, in the case of the death
of the Executive during such six-month period, medical insurance will be
continued for the Executive's spouse and children for the duration of such
period. Nothing contained in this Section 7.b shall be construed to alter the
Executive's rights under any stock option plan pursuant to which options have
been or may be issued to Executive.
c. If the Executive dies during the Term, such death shall be deemed termination
for Cause and the Company's obligation to Executive's estate shall be the same
as those after termination for Cause as defined in Section 7.a above.
d. If, as a result of the Executive's disability or incapacity during the Term
due to any mental or physical illness or condition, the Executive is unable
substantially to perform his duties hereunder for a consecutive 12-calendar week
period, or an aggregate period of 12 calendar weeks during any 12 months (or
such longer period as may be required to comply with the Family Leave Act or
other applicable law) after which any reasonably requested accommodations are
made, the Company shall have the right, upon written notice to the Executive, to
terminate the Executive's employment under this Agreement. Such a termination
shall be deemed termination for Cause as defined in Section 7.a, but shall in no
case become effective until the date on which the Company's long-term disability
plan pays benefits to the Executive.
e. Any alleged breach of this Agreement by either party shall not be deemed a
breach until such time as the breaching party shall have received written notice
from the non-breaching party setting forth the alleged breach ("Alleged Breach
Notice") and the breaching party shall not have cured (if curable) the breach
set forth in the Alleged Breach Notice in the 15 days (10 days for defaults in
payments) after receipt of such Alleged Breach Notice. If the breach set forth
in the Alleged Breach Notice is not curable and has not resulted in a
substantive and material adverse effect on the party sending the Alleged Breach
Notice, the Company and the Executive shall, at the request of the other,
attempt to meet and discuss such alleged breach before resorting to remedies or
rights under this Agreement or otherwise. Notwithstanding the foregoing, this
Section shall not apply to, and the Executive shall have no right to cure, a
breach by him under clauses (i) and (iv) of the definition "Cause" contained in
Section 7.a, above.
8. TERMINATION OTHER THAN FOR CAUSE.
a. If the Company terminates the Executive's employment without Cause, the
Company's obligations under this Agreement shall be as follows:
i. The Company will continue to pay to the Executive, or in the case of death of
the Executive after such termination without Cause to his successors or legal
representatives or to his estate, during the 365 days immediately following such
termination of employment (such period is hereinafter referred to as the
"Severance Period"), his Base Salary on a monthly basis as would have been paid
to the Executive had his employment with the Company continued; provided,
however, that to the extent any payment under this Paragraph 8.i. fails to
satisfy the requirements set forth in Treasury Regulation Section
1.409A-1(b)(9)(iii), the amount shall not be paid to the Executive before the
service, or if earlier, date of death.
ii. The Company shall pay to the Executive his proportionate share of any bonus
compensation to which he would have been entitled had he continued to be
employed until the end of the relevant bonus calculation period. Such bonus
compensation shall be payable in a lump sum within 30 days of determination of
Executive's bonus amount but in any event no later than March 15th following the
taxable year to which such bonus applies, except as permitted under Section 409A
of the Internal Revenue Code (the “Code”); it being intended that the payment
contemplated by this Paragraph 8.ii. comply with the short-term deferral
exception to Section 409A of the Internal Revenue Code under Treasury Regulation
Section 1.409A-1(b)(4) and, to the extent applicable, with Treasury Regulation
iii. The Company will continue to provide all benefits to the Executive during
the Severance Period that would have been provided had Executive’s employment
continued, including medical, disability and life insurance. In the case of the
death of the Executive, medical insurance will be continued for Executive's
spouse and children for the duration of the Severance Period; and
iv. The Company will promptly, subject to the Executive’s submission of
reasonably required documentation, reimburse the Executive for all reimbursable
expenses accrued (but unpaid) to the date of termination; and within 10 business
days after such termination, any accrued but unused vacation days paid at
Executive's Base Salary.
b. If a termination without Cause takes effect prior to the expiration of the
Term, all of the Executive's stock options which would have vested and become
exercisable had the Executive's employment continued to the end of the Term in
which such termination without Cause occurred shall immediately vest and become
exercisable, and the Executive may thereafter exercise all options held by him
during the period ending on the last day on which the Executive may exercise any
such options under the terms of the applicable option plan or 90 days from the
date of termination, whichever is later. Additionally, if a termination without
Cause takes effect prior to the expiration of the Term, all of the Executive's
restricted stock which would have vested had the Executive's employment
continued to the end of the Term in which such termination without Cause has
occurred shall immediately vest.
9. EXECUTIVE’S TERMINATION OF EMPLOYMENT FOR GOOD REASON.
a. If the Executive terminates his employment for Good Reason, the Company's
obligations to pay further compensation to the Executive shall be the same as
its obligations after a termination by the Company other than for Cause, as set
b. "Good Reason" means the occurrence of any of the following:
i. a material diminution in the Executive’s base compensation, authority,
ii. a material diminution in the authority, duties, or responsibilities of the
person or committee to whom the Executive is required to report;
iii. a material diminution in the budget over which the Executive retains
authority;
iv. the Company fails to provide executive office space in Manhattan, New York,
it being understood that in the event that Executive relocates outside of
Manhattan, New York, failure to provide office space in proximity to the
Executive’s principal place of residence shall not constitute grounds for
resignation for Good Reason;
v. a material change in the geographic location at which the Executive must
vi. any other action or inaction that constitutes a material breach by the
For the condition claimed by the Executive to constitute Good Reason, the
Executive must give written notice to the Company of the existence of the
condition within 90 days of the initial existence of the condition, and the
Company must fail to remedy the condition within 15 days after the receipt by
the Company of the Executive’s notice.
a. If the Company undertakes a business combination (including sale of assets,
merger, consolidation or other transaction) that results in (1) the stockholders
of the Company receiving liquid consideration for a majority of the holdings in
the Company and (2) a change in actual control of the Company, then, regardless
of whether the Executive’s employment hereunder is expected to continue after
such transaction, all (i) stock options theretofore granted to the Executive
shall vest and become exercisable 90 days before the transaction is scheduled to
close, and the Executive may thereafter exercise all options held by him during
the period ending on the last day on which the Executive may exercise any such
options under the terms of the applicable option plan, or the day before such
transaction closes, whichever is later and (ii) all restricted stock theretofore
granted to the Executive shall vest.
11. NONDISCLOSURE.
a. Except as required in order to perform his obligations under this Agreement,
Company, directly or indirectly, disclose or divulge to any other person or
entity any of the Company's Confidential Information or Trade Secrets at any
time (during or after the Executive's employment) during which such data or
information continues to constitute Confidential Information or a Trade Secret.
Upon any termination or expiration of his employment, the Executive will
promptly deliver to the Company all data, lists, information, memoranda,
documents and all other property belonging to the Company or containing
Confidential Information or Trade Secrets of the Company.
b. As used in this Agreement:
i. "Confidential Information" of the Company shall mean any valuable,
competitively sensitive data and information related to the Company's business
other than Trade Secrets that are not generally known by or readily available to
the Company's competitors, including, among other things, that which relates to
services performed by the Executive for the Company, or was created or obtained
by the Executive while performing services for the Company or by virtue of the
Executive's relationship with the Company; and
ii. "Trade Secrets" shall mean information or data of the Company, including but
not limited to technical or non-technical data, compilations, programs, devices,
methods, techniques, processes, financial data and financial plans, that: (a)
obtain economic value from their disclosure or use; and (b) are the subject of
To the extent that the foregoing definition is inconsistent with a definition of
"trade secret" mandated under applicable law, the latter definition shall govern
for purposes of interpreting the Executive's obligations under this Agreement.
iii. The obligations set forth in this Section shall not be applicable to any
information which: (i) the Company has authorized the Executive in writing to
publicly disclose, copy or use, but only to the extent of such authorization;
(ii) is generally known or becomes part of the public domain through no fault of
the Executive; (iii) is disclosed to the Company by third parties without
restrictions on disclosure; or (iv) is required to be disclosed in the context
of any administrative or judicial proceedings; PROVIDED that, if the Executive
is requested or becomes legally compelled to disclose any Confidential
Information or Trade Secrets, the Executive will provide the Company with prompt
and the Executive will cooperate with the Company in any effort the Company
undertakes to obtain a protective order or other remedy. If such a protective
order or other remedy is not obtained or the Company waives compliance with this
Section, the Executive will furnish only that portion of the Confidential
Information and Trade Secrets that is legally required and will exercise all
be accorded the Confidential Information to be disclosed. The Company hereby
agrees to indemnify and hold harmless Executive from all costs and expenses,
including attorneys' fees, he incurs in carrying out his obligations under the
proviso provisions of this subsection 10.b.iii and further agrees upon the
written request of Executive to advance to Executive the anticipated cost of
complying with his obligations under such proviso provisions.
12. REPRESENTATIONS AND WARRANTIES. The Executive hereby represents and warrants
that (a) he has the right to enter into this Agreement with the Company and to
grant the rights contained in this Agreement, and (b) the provisions of this
Agreement do not violate any other contracts or agreements that the Executive
has entered into with any other individual or entity.
13. SERVICES OF THE EXECUTIVE. In the course of his employment under this
Agreement, the Executive will have access to Trade Secrets, the disclosure or
unauthorized use of which, the Company seeks to protect and the Executive has
agreed to protect. As a result of benefits accruing to the Executive from his
access to such Trade Secrets, and of the improvement in his knowledge, and
proficiency arising therefrom, the Executive acknowledges that (a) his services
are and will remain special and extraordinary, and have and will have a peculiar
damages in any action at law; (b) he is willing to comply with the restrictions
contained in Sections 4.b and 4.c; (c) the restrictions contained in those
Sections will not impair his ability to earn a living in any businesses other
than those businesses from which he is prohibited during the time of such
restriction; and (d) a material breach of his obligations under Sections 4.b,
4.c or 11 will cause the Company irreparable injury and damage. It is,
therefore, agreed that the Company, in addition to any other remedies, shall be
entitled to injunctive and other equitable relief to enforce its rights under,
and to prevent a breach of, Sections 4.b, 4.c and 10 of this Agreement by the
Executive.
14. ASSIGNABILITY ETC. This Agreement shall be nondelegable and nonassignable by
the Executive, and shall inure to the benefit of the heirs and assigns of the
Company and any entity succeeding to all or substantially all of the business
assets of the Company by merger, consolidation, purchase of assets or otherwise.
15. NOTICES. Any notice pertaining to this Agreement shall be in writing and
shall be served by delivering said notice (i) by hand, (ii) by overnight mail by
a internationally recognized carrier, (iii) by sending it by certified mail,
postage prepaid, return receipt requested, or (iv) by telefax, with notice
confirmed, to the Executive at the address first stated above or his office at
the Company, and to the Company at:
3 Corporate Dr.
Ste. 100
Attn: COO
The addresses for notice may be changed by notice given to the other party
16. MISCELLANEOUS.
decisions of the State of New York applicable without regard to the principles
of conflicts of laws. The parties to this Agreement agree that the state or
federal courts in the State of New York shall have personal jurisdiction over
them with respect to, and shall be the exclusive forum for the resolution of,
any matter or controversy arising from or with respect to this Agreement.
Service of a summons and complaint concerning any such matter or controversy
may, in addition to any other lawful means, be effected by sending a copy of
such summons and complaint by certified mail to the party to be served as
specified in Section 14 of this Agreement or at such other address as the party
to be served shall have provided in writing to the other from time to time in
b. To the extent permitted by law, the Executive and the Company irrevocably
waive trial by jury and any objection which he or it may now or hereafter have
this Agreement brought in the City of New York, and to the extent permitted by
law, the Executive and the Company hereby further irrevocably waive any claim
that any such suit, action or proceeding brought in the City of New York has
c. This Agreement contains the entire understanding of the parties to this
all previous written and oral agreements between the parties with respect to the
subject matter set forth in this Agreement.
d. This Agreement may not be modified or amended except by a writing signed by
e. Any provision of this Agreement that is deemed invalid, illegal or
unenforceability, without affecting in any way the remaining provisions of this
Agreement in such jurisdiction or rendering that or any other provision of this
Agreement invalid, illegal or unenforceable in any other jurisdiction. If the
f. The following provisions of this Agreement shall survive in accordance with
their terms, the expiration or termination of this Agreement for any reason:
Sections 4, 7, 8, 9, 10, 11, 12 and 15.
g. A waiver by either party of any Section, term or condition of this Agreement
in any instance shall not be deemed or construed to be a waiver of such Section,
term or condition for the future or of any subsequent breach thereof, and any
such waiver must be in writing, signed by the party to be charged. All rights
and remedies contained in this Agreement are cumulative, and none of them shall
be construed so as to limit any other right or remedy of either party.
h. This Agreement may be executed in counterparts, all of which shall constitute
i. The headings and titles to the Sections of this Agreement are inserted for
j. All references to Sections shall be to sections and schedules of this
Agreement.
k. All references using male pronouns shall be deemed to include female
pronouns.
l. This Agreement maybe signed in multiple counterparts, each of which shall be
deemed an original. Any executed counterpart returned by email or facsimile
shall be deemed an original executed counterpart.
If the foregoing accurately reflects your understanding, please countersign and
return one counterpart of this Agreement to the Company.
Sincerely yours,
ON2 TECHNOLOGIES, INC.
By:
Name: Matthew C. Frost
Date: September 18, 2008
/s/ Timothy C. Reusing
Timothy C. Reusing
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As filed with the Securities and Exchange Commission on April 23, 2012 Securities Act File No.333- Investment Company Act File No. 811-22702 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-2 (CHECK APPROPRIATE BOX OR BOXES) REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X []PRE-EFFECTIVE AMENDMENT NO._ [] POST-EFFECTIVE AMENDMENT NO._ REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940X AMENDMENT NO. Arden Macro Fund, L.L.C. (Exact name of Registrant as specified in Charter) Arden Asset Management LLC 375 Park Avenue 32nd Floor New York, New York 10152 (Address of principal executive offices) Registrant's Telephone Number, including Area Code: (212) 751-5252 Craig Krawiec Arden Asset Management LLC 375 Park Avenue 32nd Floor New York, New York 10152 (212) 751-5252 (Name and address of agent for service) Copies to: George M. Silfen, Esq. Schulte Roth & Zabel, LLP 919 Third Avenue New York, New York 10022 APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT If any securities being registered on this form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box[X] It is proposed that this filing will become effective: [X] when declared effective pursuant to Section 8(c) If appropriate, check the following box: [ ] This [post-effective] amendment designates a new effective date for a previously filed [post-effective amendment] [registration statement]. [ ] This form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act and the Securities Act registration statement number of the earlier effective registration statement for the same offering is. CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933 TITLE OF SECURITIES BEING REGISTERED AMOUNT BEING REGISTERED PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT AMOUNT OF REGISTRATION FEE Common Shares of Beneficiary Interests The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Arden Macro Master Fund, L.L.C. as the Master Fund in which the Registrant invests substantially all of its assets, has also executed this Registration Statement. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT USE THIS PROSPECTUS TO SELL SECURITIES UNTIL THE REGISTRATION STATEMENT CONTAINING THIS PROSPECTUS, WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. Dated [] Arden Macro Fund, L.L.C. Units of Limited Liability Company Interests Arden Macro Fund, L.L.C. (the "Fund") is a newly formed Delaware limited liability company that is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a non-diversified, closed-end, management investment company. The Fund's investment objective is to seek to achieve capital appreciation with a relatively low correlation to the major equity and fixed income markets. In pursuing its investment objective, the Fund invests substantially all of its assets in Arden Macro Master Fund, L.L.C., a Delaware limited liability company which, in turn, invests its assets primarily in hedge funds, joint ventures, investment companies and other similar investment vehicles that are managed by a select group of portfolio managers that invest in a variety of financial markets and utilize a variety of absolute return investment strategies. The units of limited liability company interests in the Fund ("Units") are not deposits in, obligations of, or guaranteed by Arden Asset Management LLC, Arden Securities LLC ("Arden Securities") or any of their affiliates or by any bank and are not government guaranteed or insured. The investment program of the Fund is speculative and involves substantial risks, including the possible loss of the principal amount invested. See "Investment Practices and Related Risk Factors." TOTAL OFFERING Amount(1) $[ _ ] Sales Load(2) $[ _ ] Proceeds to the Fund(3) $[ _ ] 1 Generally, the minimum initial investment in Units by an investor is $50,000 and subsequent investments must be at least $25,000. These minimums may be reduced for certain investors. 2 Assumes a maximum sales load of 2.5%. The specific amount of the sales load paid with respect to an investor is generally dependent on the size of the investment in the Fund, but will not exceed 2.5% of an investor's investment amount. Subject to that limit, however, the applicable schedule of sales loads may vary among Selling Agents. See "Purchases of Units—Distribution and Member Services" for a further discussion of the sales load, as well as a discussion of compensation that may be received by Arden Securities and Selling Agents in connection with this offering. 3 These estimated proceeds assume the sale of all Units registered under this offering. Arden Securities serves as the distributor of the Units and serves in that capacity on a reasonable best efforts basis, subject to various conditions. There is no termination date for the offering of Units, as the Fund expects to conduct a continuous offering. Monies received from prospective investors in advance of dates when Units may be purchased are held in a non-interest bearing escrow account pending the deposit of such monies with the Fund. (See "Purchases of Units—Purchase Terms" and "Custodian and Escrow Agent.")The principal business address of Arden Securities is Three Canal Plaza, Suite 100, Portland, Maine 04101. Arden Securities may retain broker-dealers (the "Selling Agents") to assist in the distribution of Units. The sales load payable to a Selling Agent is charged as a percentage of an investor's investment amount. The sales load will neither constitute an investment made by the investor in the Fund nor form part of the assets of the Fund. The Fund pays Arden Securities an ongoing quarterly distribution fee (the "Distribution Fee") at an annualized rate of 0.85% of the average net assets of the Fund during the calendar quarter, as compensation for the sale and marketing of Units. Arden Securities also arranges for the provision of certain investor and account maintenance services pursuant to a Member Services Agreement with the Fund for which the Fund pays a quarterly fee at an annualized rate of 0.15% of the average net assets of the Fund during the calendar quarter. (See "Purchases of Units—Distribution and Member Services.")Units will be sold only to investors qualifying as "Eligible Investors," as described in this Prospectus. Neither the Securities and Exchange Commission (the "SEC") nor any other U.S. federal or state governmental agency or regulatory authority has approved or disapproved the merits of an investment in these securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense. This Prospectus sets forth concisely information about the Fund that a prospective investor should know before investing. It includes information required to be included in a prospectus and statement of additional information. Please read it before you invest and keep it for future reference. A statement of additional information, dated [] (the "SAI"), containing additional information about the Fund, has been filed with the SEC. The table of contents of the SAI is on page [ ] of this Prospectus. While the Fund does not maintain a website, you may request a free copy of this Prospectus, the SAI, annual and semi-annual reports to shareholders, when available, and other information about the Fund, and make inquiries by calling (866) 773-7145 or by writing to the Fund. Additional information about the Fund has been filed with the SEC and is available on the SEC's website at www.sec.gov. Arden Asset Management LLC 375 Park Avenue 32nd Floor
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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) October 3, 2011 (October 3, 2011) SINO AMERICAN OIL COMPANY (Exact name of registrant as specified in its charter) NEVADA (State or other jurisdiction of incorporation) 000-52304 (Commission File No.) 5190 Neil Road, Suite 430 Reno, Nevada89502 (Address of principal executive offices and Zip Code) (866) 261-8853 (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 (see General Instruction A.2. below): [] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 7.01 REGULATION FD DISCLOSURE. On October 3, 2011, we issued a press release announcing the formation of Sino American (Australia), our 100% owned subsidiary, to conduct and execute our business plan in Australia. ITEM 9.01EXHIBITS. Exhibit No. Document Description Press release. -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. Dated this 3rd day of October, 2011. SINO AMERICAN OIL COMPANY BY: RONALD HUGHES Ronald Hughes President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Secretary, Treasurer and a member of the Board of Directors -3-
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Exhibit 10.1
Dated as of June 9, 2008
among
FLOW INTERNATIONAL CORPORATION,
as the Borrower,
and
as Documentation Agent,
and
as
TABLE OF CONTENTS
SECTION PAGE
1
1.01 Defined Terms
1
1.02 Other Interpretive Provisions
22
1.03 Accounting Terms
23
1.04 Rounding
24
1.05 Times of Day
24
24
24
2.01 Revolving Loans and Term Loans
24
25
2.03 Letters of Credit
26
2.04 Swing Line Loans
35
2.05 Prepayments
37
38
2.07 Repayment of Loans
39
2.08 Interest
39
2.09 Fees
40
Rate
41
2.11 Evidence of Debt
41
2.12 Payments Generally; Agent’s Clawback
42
44
2.14 Increase in Commitments
45
46
3.01 Taxes
46
3.02 Illegality
48
49
3.04 Increased Costs
49
3.05 Compensation for Losses
50
51
3.07 Survival
51
51
52
53
4.03 Conditions to Term Borrowing
54
55
55
55
i
SECTION PAGE
55
5.04 Binding Effect
55
55
5.06 Litigation
56
5.07 No Default
56
56
5.09 Environmental Compliance
56
5.10 Insurance
57
5.11 Taxes
57
5.12 ERISA Compliance
57
58
58
5.15 Disclosure
58
5.16 Compliance with Laws
58
5.17 Taxpayer Identification Number
59
59
59
59
6.01 Financial Statements
59
60
6.03 Notices
62
6.04 Payment of Obligations
62
62
6.06 Maintenance of Properties
63
6.07 Maintenance of Insurance
63
6.08 Compliance with Laws
63
6.09 Books and Records
63
6.10 Inspection Rights
63
6.11 Use of Proceeds
64
6.12 Additional Guarantors
64
6.13 Collateral Records
64
6.14 Security Interests
64
6.15 Swap Contracts
65
65
7.01 Liens
65
7.02 Investments
66
7.03 Indebtedness
66
7.04 Fundamental Changes
67
7.05 Dispositions
68
7.06 Restricted Payments
68
69
7.08 Transactions With Affiliates
69
7.09 Burdensome Agreements
69
7.10 Use of Proceeds
69
7.11 Financial Covenants
69
ii
SECTION PAGE
70
8.01 Events of Default
70
72
8.03 Application of Funds
72
73
73
74
9.03 Exculpatory Provisions
74
75
9.05 Delegation of Duties
75
9.06 Resignation of Agent
75
76
76
76
77
ARTICLE X. MISCELLANEOUS
77
77
79
81
81
10.05 Payments Set Aside
83
10.06 Successors and Assigns
83
87
10.08 Right of Setoff
88
10.09 Interest Rate Limitation
89
89
89
10.12 Severability
89
10.13 Replacement of Lenders
90
90
91
91
92
92
92
10.20 Amendment and Restatement
92
10.21 Oral Agreements Not Enforceable
93
SCHEDULES
1.01
Special Adjustments to Consolidated Adjusted EBITDA
2.01
Commitments and Applicable Percentages
5.06
Litigation
iii
5.13
7.01
Existing Liens
7.03
Existing Indebtedness
10.02
Agent's Office, Certain Addresses for Notices
EXHIBITS
Form of
A
Loan Notice
B
Swing Line Loan Notice
C-1
Revolving Note
C-2
Term Note
D
Compliance Certificate
E
Guaranty Agreement
F-1
Borrower Pledge Agreement
F-2
Guarantor Pledge Agreement
G-1
Borrower Security Agreement
G-2
Guarantor Security Agreement
H-1
Assignment and Assumption
H-2
Administrative Questionnaire
iv
into as of June 9, 2008, among FLOW INTERNATIONAL CORPORATION, a Washington
Recitals
WHEREAS, Bank of America, N.A. and U.S. Bank National Association, as
lenders, Bank of America, N.A., as administrative agent for such lenders, swing
line lender and L/C issuer, and the Borrower are parties to that certain Credit
Agreement dated as of July 8, 2005 (as amended prior to the date hereof, the
WHEREAS, the Borrower has requested that the Lenders enter into this
Agreement to amend and restate the Existing Credit Agreement (including the
inclusion of additional lenders) and continue to provide a revolving credit
facility to the Borrower and to re-finance amounts owing under the Existing
1.
DEFINITIONS AND ACCOUNTING TERMS
“Acquisition” means the acquisition by Borrower of all or substantially all
of the Equity Interests of OMAX.
“Acquisition Adjustment Amount” has the meaning specified in Schedule 1.01.
“Acquisition Adjustment Calculation Date” has the meaning specified in
Schedule 1.01.
“Acquisition Closing Date” means the date of the consummation of the
Acquisition.
substantially the form of Exhibit H-2 or any other form approved by Agent.
“Agent” or “Administrative Agent” means Bank of America in its capacity as
administrative agent.
forth on Schedule 10.02, or such other address or account as Agent may from time
“Aggregate Commitments” means Aggregate Revolving Commitments and the
Aggregate Term Commitments.
Lenders.
(a) the percentage (carried out to the ninth decimal place) of the Aggregate
time or (b) with respect to matters relating to the Term Commitments and Term
Loans only, the percentage (carried out to the ninth decimal place) of the
Aggregate Term Commitments represented by such Lender’s Term Commitment at such
Section 8(b) or if the Aggregate Revolving Commitments and/or Aggregate Term
annum, based upon the Leverage Ratio as set forth in the most recent Compliance
Certificate received by Agent pursuant to Section 6.02(b):
Consolidated Commitment
Pricing Leverage Fee/Ticking Eurodollar Base Rate Letters of Level
Ratio Fee Rate + + Credit
1
³2.50 .50 % 2.00 % 0 % 2.00 %
2
³1.75:1 but <2.50 .375 % 1.75 % 0 % 1.75 %
3
³1.00:1 but <1.75:1 .25 % 1.50 % 0 % 1.50 %
4
<1.00:1 .25 % 1.25 % 0 % 1.25 %
the request of Required Lenders, Pricing Level 1 shall apply as of the first
Business Day of the month following the date such Compliance Certificate was
which such Compliance Certificate is delivered. The Applicable Rate in effect as
of the Closing Date shall be determined based on the Consolidated Leverage Ratio
in the certificate required under Section 4.01(a)(vii) as a condition precedent
to the initial Credit Extension. Such Applicable Rate shall remain in effect
until the first Business Day immediately following the delivery of the first
Compliance Certificate required under Section 6.02(a). Thereafter, the
Applicable Rate shall be increased or decreased as set forth above based on the
successive Compliance Certificates or, as applicable, the Compliance Certificate
due dates. Notwithstanding the foregoing, however, during the period between the
delivery of the Term Loan Pricing Certificate and the Compliance Certificate
required under Section 6.02(a) immediately following such Term Loan Pricing
Certificate, the Applicable Rate shall be determined based on the Consolidated
Leverage Ratio in the Term Loan Pricing Certificate.
advisor.
required by Section 10(f)(ii)), and accepted by Agent, in substantially the form
of Exhibit H-1 or any other form approved by Agent.
of the Borrower and its Subsidiaries for the fiscal year ended April 30, 2007,
and the related
notes thereto.
change.
“Borrower Pledge Agreement” means the Amended and Restated Pledge Agreement
in favor of Agent dated as of June 9, 2008 made by the Borrower in substantially
the form of Exhibit F-1.
“Borrower Security Agreement” means the Amended and Restated Security
Agreement in favor of Agent dated as of June 9, 2008 made by the Borrower in
substantially the form of Exhibit G-1.
“Borrowing” means a Revolving Borrowing, a Term Borrowing or a Swing Line
market.
“Cash Collateralize” has the meaning specified in Section 2(c)(vii).
(a) with respect to Borrower, an event or series of events by which:
indirectly, of 25% or more of the Equity Interests of Borrower entitled to vote
Equity Interests of Borrower entitled to vote for members of the board of
taking into account all such securities that such Person(s) or group has the
combined voting power of such Equity Interests;
(b) with respect to each Guarantor, an event or series of events by which
Borrower ceases to directly or indirectly own and control all of the Equity
Interests of such Guarantor.
“Collateral Documents” means, collectively, the Borrower Security
Agreement, the Guarantor Security Agreement, the Borrower Pledge Agreement, the
Guarantor Pledge Agreement and all agreements, instruments and documents now or
hereafter executed and delivered in connection with this Agreement, including
without limitation the Indiana Mortgage, pursuant to which Liens are granted or
purported to be granted to Agent in Collateral securing all or part of the
“Commitment” means, as to each Lender, its Revolving Commitment and its
Term Commitment.
Exhibit D.
amortization expense of the Borrower and its Subsidiaries, (iv) other non-cash
(v) in the case of any calculation of “Consolidated Adjusted EBITDA” made as of
any Flow Adjustment Calculation Date, the Flow Add-back Adjustment Amount
corresponding to such date, and (vi) in the event the Acquisition is
consummated, in the case of any calculation of “Consolidated Adjusted EBITDA”
made as of any Acquisition Adjustment Calculation Date, the Acquisition
Adjustment Amount corresponding to such date; minus
increasing Consolidated Net Income for such period, and (iii) in the case of any
calculation of “Consolidated Adjusted EBITDA” made as of any Flow Adjustment
Calculation Date, the Flow Add-away Adjustment Amount corresponding to such
date.
GAAP.
recently ended.
property is bound.
creditors generally.
portion of the Revolving Loans, participations in L/C Obligations or
claims associated therewith.
“Domestic Material Subsidiary” means any Domestic Subsidiary that is not an
Immaterial Subsidiary.
assignee under Section 10(f)(ii)(iii), (v) and (vi) (subject to such consents,
if any, as may be required under Section 10(f)(ii)(iii)).
Eurodollar Rate.
Eurodollar Rate Loan, a rate per annum determined by the Agent pursuant to the
following formula:
Eurodollar Rate =
Eurodollar Base Rate
Where,
LIBOR as designated by the Agent from time to time) at approximately 2:00 p.m.,
Interest Period shall be the rate per annum determined by the Agent to be the
approximately 2:00 p.m. (London time) two Business Days prior to the
marginal reserve requirement) with respect to eurodollar funding (currently
referred to as “eurodollar liabilities”). The Eurodollar Rate for each
“Eurodollar Rate Loan” means each Eurodollar Rate Revolving Loan and each
Eurodollar Rate Term Loan.
the Borrower is located, and (c) any backup withholding tax that is required by
by Bank of America under the Existing Credit Agreement:
Letter of Credit No. Amount Expiration Date
3077450
$ 1,500,000 July 8, 2008
3090317
$ 381,530.46 October 23, 2008
3090317
$ 286,147.85 February 22, 2009
“Flow Add-away Adjustment Amount” has the meaning specified in
Schedule 1.01.
“Flow Add-back Adjustment Amount” has the meaning specified in
Schedule 1.01.
“Flow Adjustment Calculation Date” has the meaning specified in
Schedule 1.01.
United States.
Bank).
corresponding meaning.
“Guarantor Pledge Agreement” means the Pledge Agreement in favor of Agent
to be made by the Guarantors in substantially the form of Exhibit F-2, and to be
entered into by additional Domestic Material Subsidiaries from time to time
thereafter in accordance with this Agreement.
“Guarantor Security Agreement” means the Security Agreement in favor of
Agent to be made by the Guarantors in substantially the form of Exhibit G-2, and
to be entered into by
additional Domestic Material Subsidiaries from time to time thereafter in
“Guarantors” means OMAX (following the consummation of the Acquisition, if
the Acquisition is consummated) and each other Domestic Material Subsidiary from
time to time a party to the Guaranty.
“Guaranty” means the Guaranty Agreement in favor of Lenders, L/C Issuer and
Agent to be made by Guarantors in substantially the form of Exhibit E, and to be
Environmental Law.
“Immaterial Subsidiary” means a Subsidiary that has assets or operations
that are not material to the assets or operations of the Borrower, taken as a
whole, except that a Subsidiary that had assets or operations that were not
material to the assets or operations of the Borrower, taken as a whole, as of
the date of this Agreement but has assets or operations that are material to the
assets or operations of the Borrower, taken as a whole, at any time thereafter
shall not be deemed an Immaterial Subsidiary from and after the date it has
assets or operations that are material to the assets or operations of the
Borrower, taken as a whole.
similar instruments;
on which such trade account payable became due);
recourse;
unpaid dividends; and
“Indemnitees” has the meaning specified in Section 10(d)(ii).
“Indiana Mortgage” means that certain Amended and Restated Mortgage,
Security Agreement, Assignment of Leases and Rents and Fixture Filing made by
Borrower in favor of Agent dated of even date herewith securing certain real
property of Borrower located in Clark County, Indiana.
development costs.
Date.
that:
Investment.
“IP Rights” has the meaning specified in Section 5(r).
of issuance).
Percentage.
Issuer.
amount thereof.
“L/C Fee” has the meaning specified in Section 2(c)(ix).
Agent.
Agent, the L/C Issuer, any Swing Line Lender or any Lender) executing a Loan
Document including, without limitation, each Guarantor and each Person executing
a Collateral Document.
Borrower or the Borrower and its Subsidiaries taken as a whole; (b) an
Loan Document to which it is a party if such impairment materially affects the
ability of the Loan Parties, taken as a whole, fully and timely to perform their
“Maturity Date” means June 9, 2013; provided, however, that if such date is
“Note” means each Revolving Note and each Term Note.
debts, liabilities, obligations, covenants and duties of the Borrower owing to
any Lender or any Affiliate of any Lender and arising under any Swap Contract
permitted by Section 7(c)(iv), whether absolute or contingent, due or to become
due, now existing or hereafter arising, and, in each case, including interest
“OMAX” means OMAX Corporation, a Washington corporation.
Unreimbursed Amounts; and (iii) with respect to Term Loans on any date, the
prepayments of Term Loans occurring on such date.
“Participant” has the meaning specified in Section 10(f)(iv).
or other entity.
Affiliate.
“Post-Acquisition Adjustments” has the meaning specified in
“Pre-Acquisition Adjustments” has the meaning specified in Section 7.11(a).
“Public Lender” has the meaning specified in Section 6(b).
“Register” has the meaning specified in Section 10(f)(iii).
“Required Lenders” means, as of any date of determination, the Required
Revolving Lenders and the Required Term Loan Lenders.
Lenders having more than 66 2/3% of the Aggregate Revolving Commitments or, if
to make L/C Credit Extensions have been terminated pursuant to Section 8(b),
Lenders holding in the aggregate more than 66 2/3% of the Revolving Outstandings
and the portion of the Revolving Outstandings held or deemed held by, any
Required Revolving Lenders.
Lenders having more than 66 2/3% of the Term Outstandings; provided that the
portion of the Term Outstandings held or deemed held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Required Term Loan
Lenders.
the foregoing officers in a notice to the Agent. Any document delivered
such Loan Party.
termination of the Aggregate Revolving Commitments pursuant to Section 2(f)(a),
to Section 8(b).
Revolving Loans to Borrower pursuant to Section 2(a)(a), (b) purchase
exceed the amount set forth opposite such Lender’s name in Part (a) of
“Revolving Outstandings” means the aggregate Outstanding Amount of all
Revolving Loans and Swing Line Loans and all L/C Obligations.
Borrower.
Master Agreement.
Lender).
Section 2.04.
Exhibit B.
Date to and including the earlier of (i) the date that is six (6) months after
the Closing Date and (ii) the date of the Term Borrowing pursuant to
Section 2.01(b); provided, that the Term Availability Date may be sooner
terminated as of the date of termination of the Aggregate Term Commitments
pursuant to Section 2.06(b) and as of the date of termination of the commitment
of each Lender
the same Type and, in the case of Eurodollar Rate Term Loans, having the same
“Term Commitment” means, as to each Lender, its several obligation to make
a Term Loan to the Borrower pursuant to Section 2.01(b) in a principal amount
not to exceed the amount set forth opposite such Lender’s name in Part (b) of
“Term Loan” has the meaning given in Section 2.01(b).
“Term Loan Pricing Certificate” has the meaning given in
“Term Note” means a promissory note made by Borrower in favor of a Lender
evidencing a Term Loan made by such Lender, substantially in the form of
“Term Outstandings” means the aggregate Outstanding Amount of all Term
Loans.
“Total Outstandings” means the Revolving Outstandings plus the Term
Outstandings.
plan year.
“Unreimbursed Amount” has the meaning specified in Section 2(c)(iii)(i).
Loan Document:
to such
including.”
(c) Accounting Terms.
(iii) Consolidation of Variable Interest Entities. All references herein to
variable interest entity that Borrower is required to consolidate
pursuant to FASB Interpretation No. 46 — Consolidation of Variable Interest
(d) Rounding. Any financial ratios required to be maintained by Borrower
number).
applicable).
(f) Letter of Credit Amounts. Unless otherwise specified herein the amount
time.
2.
that after giving effect to any Revolving Borrowing, (i) the Revolving
Revolving Outstandings of any Lender, plus such Lender’s Applicable Percentage
may borrow under this Section 2.01(a), prepay under Section 2.05(a), and
Borrower, on any Business Day during the Term Availability Period, in an
aggregate amount not to exceed the amount of such Lender’s Term Commitment;
provided, however, that Borrower may make only one Term Borrowing and, after
giving effect to such Term Borrowing, the Term Outstandings of any Lender shall
not exceed such Lender’s Term Commitment. Term Loans may be Base Rate Loans or
(b) Borrowings, Conversions and Continuations of Loans.
Loans to Base Rate Revolving Loans, and (ii) on the requested date of any
Borrowing of Base Rate Revolving Loans. Each telephonic notice by the Borrower
Revolving Loans from one Type to the other, a conversion of Term Loans from one
Type to the other, a continuation of Eurodollar Rate Revolving Loans, or a
specified an Interest Period of one month. If the Borrower requests a borrowing
but fails to specify whether it is a Revolving Loan or the Term Loan, the
Borrower will be deemed to have specified a Revolving Loan.
(ii) Following receipt of a Loan Notice, Agent shall promptly notify each
immediately available funds at Agent’s Office not later than 1:00 p.m. on the
applicable conditions set forth in Section 4(b) (and, if such Borrowing is the
initial Credit Extension, Section 4(a)), Agent shall make all funds so received
the account of Borrower on the books of Bank of America with the amount of such
instructions provided to (and reasonably acceptable to) Agent by Borrower;
Revolving Borrowing is given by Borrower, there are
(iii) Except as otherwise provided herein, a Eurodollar Rate Loan may be
(iv) The Agent shall promptly notify the Borrower and the Lenders of the
outstanding, the Agent shall notify the Borrower and the Lenders of any change
(v) After giving effect to all Borrowings, all conversions of Loans from
this Section (c), (1) from time to time on any Business Day during the period
2.3.1.2.1 subject to Section 2.03(b)(iii), the expiry date of such
2.3.1.2.2 the expiry date of such requested Letter of Credit would occur
more than one year after the L/C Expiration Date, unless all the Lenders have
(3) The L/C Issuer shall be under no obligation to issue any Letter of
Credit if:
2.3.1.3.1 any order, judgment or decree of any Governmental Authority or
2.3.1.3.2 the issuance of such Letter of Credit would violate one or more
2.3.1.3.3 except as otherwise agreed by Agent and the L/C Issuer, such
2.3.1.3.4 such Letter of Credit is to be denominated in a currency other
than Dollars; or
2.3.1.3.5 a default of any Lender’s obligations to fund under Section
(c)(iii) exists or any Lender is at such time a Defaulting Lender hereunder,
unless the L/C Issuer has entered into satisfactory arrangements with Borrower
Letter of Credit
Credit.
L/C Issuer and Agent not later than 2:00 p.m. at least two Business Days (or
(2) Promptly after receipt of any L/C Application at the address set forth
in Section 10(b) for receiving L/C Applications and related correspondence, the
of Credit
(3) If Borrower so requests in any applicable L/C Application, the L/C
not later than one year after the L/C Expiration Date; provided, however, that
Non-Extension Notice Date (1) from Agent that the Required Revolving Lenders
Borrower that one or more of the applicable conditions specified in Section 4(b)
permit such extension.
(4) If the Borrower so requests in any applicable L/C Application, the L/C
reinstatement if it has
that is seven Business Days before the Non-Reinstatement Deadline (A) from Agent
reinstatement or (B) from Agent, any Lender or the Borrower that one or more of
reinstatement.
(5) Promptly after its delivery of any Letter of Credit or any amendment to
beneficiary thereof, the L/C Issuer will also deliver to the Borrower and Agent
the minimum and multiples specified in Section (b) for the principal amount of
Aggregate Revolving Commitments and the conditions set forth in Section 4(b)
or Agent pursuant to this Section (c)(iii)(i) may be given by telephone if
notice.
(2) Each Lender shall upon any notice pursuant to Section (c)(iii)(i) make
whereupon, subject to the provisions of Section (c)(iii)(iii), each Lender that
Issuer.
Section 4(b) cannot be satisfied or for any other reason, Borrower shall be
the Default Rate. In such event,
each Lender’s payment to Agent for the account of the L/C Issuer pursuant to
Section (c)(iii)(ii) shall be deemed payment in respect of its participation in
satisfaction of its participation obligation under this Section (c).
(4) Until each Lender funds its Revolving Loan or L/C Advance pursuant to
this Section (c)(iii) to reimburse the L/C Issuer for any amount drawn under any
(5) Each Lender’s obligation to make Revolving Loans or L/C Advances to
contemplated by this Section (c)(iii), shall be absolute and unconditional and
Section (c)(iii) is subject to the conditions set forth in Section 4(b) (other
(6) If any Lender fails to make available to Agent for the account of the
foregoing provisions of this Section (c)(iii) by the time specified in Section
(c)(iii)(ii), the L/C Issuer shall be entitled to recover from such Lender
L/C Issuer submitted to any Lender (through Agent) with respect to any amounts
such payment in accordance with Section (c)(iii), if Agent receives for the
including proceeds of Cash
Collateral applied thereto by Agent), Agent will distribute to such Lender its
Applicable Percentage thereof in the same funds as those received by Agent.
(2) If any payment received by Agent for the account of the L/C Issuer
pursuant to Section (c)(iii)(i) is required to be returned under any of the
circumstances described in Section 10(e) (including pursuant to any settlement
of this Agreement.
including the following:
Subsidiary.
noncompliance with Borrower’s
instructions or other irregularity, Borrower will immediately notify the L/C
Issuer. Borrower shall be conclusively deemed to have waived any such claim
aforesaid.
the approval of Lenders, the Required Revolving Lenders, or the Required
not preclude Borrower’s pursuing such rights and remedies as it may have against
Section (c)(v); provided, however, that anything in such clauses to the contrary
(vii) Cash Collateral. Upon the request of Agent, (i) if the L/C Issuer has
Obligations. Sections 2.05 and 8(b)(iii) set forth certain additional
Section 2.03, Section 2.05 and Section 8.02, “Cash Collateralize” means to
balances pursuant to documentation in form and substance satisfactory to Agent
such cash, deposit accounts and all balances
(ix) L/C Fees. Borrower shall pay to Agent for the account of each Lender
in accordance with its Applicable Percentage an L/C fee (the “L/C Fee”) equal to
determined in accordance with Section 1(f). L/C Fees shall be (i) due and
payable on the first Business Day after the end of each January, April, July and
October, commencing with the first such date to occur after the issuance of such
fronting fee equal to twelve and one-half basis points (0.125%), computed on the
Business Day after the end of each January, April, July and October, in respect
accordance with Section 1(f). In addition, Borrower shall pay directly to the
are nonrefundable.
control.
such Subsidiaries.
Loan”) to Borrower from time to time on any Business Day during the Revolving
Line Loans shall not exceed such Lender’s Revolving Commitment, and provided,
Borrower’s irrevocable notice to Swing Line Lender and the Agent, which may be
given by telephone. Each such notice must be received by Swing Line Lender and
and the Agent of a written Swing Line Loan Notice, appropriately completed and
signed by a Responsible Officer of Borrower. Promptly after receipt by Swing
Line Lender of any telephonic Swing Line Loan Notice, Swing Line Lender will
the Agent (by telephone or in writing) of the contents thereof. Unless Swing
proposed Swing Line Borrowing (A) directing Swing Line Lender not to make such
of Borrower on the books of Swing Line Lender in immediately available funds.
(1) Swing Line Lender at any time in its sole and absolute discretion may
Percentage of the amount specified in such Loan Notice available to the Agent in
immediately available funds for the account of Swing Line Lender at the Agent’s
such amount. The Agent shall remit the funds so received to Swing Line Lender.
the Agent for the account of Swing Line Lender pursuant to Section 2.04(c)(i)
(3) If any Lender fails to make available to the Agent for the account of
of Swing Line Lender submitted to any Lender (through the Agent) with respect to
error.
(4) Each Lender’s obligation to make Revolving Loans or to purchase and
circumstance, including (A)
Swing Line Lender.
(2) If any payment received by Swing Line Lender in respect of principal or
Agent will make such demand upon the request of Swing Line Lender. The
each Lender funds its Base Rate Revolving Loan or risk participation pursuant to
(vi) Payments Directly to Swing Line Lender. Borrower shall make all
(i) The Borrower may, upon notice to the Agent, at any time or from time to
prepayment of Eurodollar Rate Loans shall be in a principal amount of $2,500,000
amount thereof then outstanding. Each such notice shall specify (i) whether the
Loan to be prepaid is a Revolving Loan or a Term Loan, (ii) the date and amount
of such prepayment and (iii) the Type(s) of Loans to be prepaid and (iv) if
The Agent will
amounts required pursuant to Section 3(e). Each such prepayment shall be applied
to the Revolving Loans or Term Loans of the Lenders, as applicable, in
(iii) If for any reason the Revolving Outstandings at any time exceed the
Aggregate Revolving Commitments then in effect, Borrower shall immediately
Section 2.05 unless after the prepayment in full of the Revolving Loans the
effect.
(iv) If for any reason the Term Outstandings at any time exceed the
Aggregate Term Commitments then in effect, Borrower shall immediately prepay
Term Loans in an aggregate amount equal to such excess.
(v) Each such prepayment of the Term Outstandings (whether voluntary or
mandatory) shall be applied to the principal installments thereof in inverse
order of maturity.
(f) Termination or Reduction of Commitments.
(i) Borrower may, upon notice to Agent, terminate the Aggregate Revolving
Revolving Outstandings would exceed the Aggregate Revolving Commitments, and
Commitments, the L/C Sublimit or the Swing Line Sublimit exceeds the amount of
reduced by the amount of such excess. The Agent will promptly notify the Lenders
applied to the
(ii) Borrower may, upon notice to Agent, terminate the Aggregate Term
Commitments, or from time to time permanently reduce the Aggregate Term
Commitments; provided that (i) any such notice shall be received by Agent not
(iii) Borrower shall not terminate or reduce the Aggregate Term Commitments if,
Term Outstandings would exceed the Aggregate Term Commitments. The Agent will
the Aggregate Term Commitments. Any reduction of Aggregate Term Commitments
shall be applied to the Term Commitment of each Lender according to its
termination of the Aggregate Term Commitments shall be paid on the effective
(i) Borrower shall repay to Lenders on the Maturity Date the aggregate
Date.
(iii) Borrower shall repay to Lenders the Term Loans, if any, in quarterly
installments each equal to Eight Hundred Seventy-five Thousand Dollars
($875,000) on the last Business Day of each January, April, July and October,
commencing with the first such date to occur at least 60 days after the date of
the Term Borrowing, and shall repay to Lenders on the Maturity Date the
(ii) (i) If any amount of principal of any Loan is not paid when due
(iii) Interest on each Loan shall be due and payable in arrears on each
(j) of Section (c):
(i) Commitment Fee. Borrower shall pay to Agent for the account of each
Lender in accordance with its Applicable Percentage of the Aggregate Revolving
Commitments, a commitment fee equal to the Applicable Rate times the actual
in arrears on the last Business Day of each January, April, July and October,
last day of the Revolving Availability Period. The commitment fee shall be
(ii) Ticking Fee. The Borrower shall pay to Agent for the account of each
Lender in accordance with its Applicable Percentage of the Aggregate Term
Commitments, a ticking fee equal to the Applicable Rate times the Aggregate Term
Commitments. The ticking fee shall accrue at all times during the Term
last day of the Term Availability Period. The ticking fee shall be calculated
(iii) Other Fees.
(1) Borrower shall pay to Arranger and Agent for their own respective
whatsoever.
(ii) Borrower shall pay to Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified,
reason whatsoever.
(j) Computation of Interest and Fees; Retroactive Adjustments of Applicable
Rate.
(i) All computations of interest for Base Rate Loans when the Base Rate is
made shall, subject to Section (l)(i), bear interest for one day. Each
(ii) If, as a result of any restatement of or other adjustment to the
other Obligations hereunder.
(i) The Credit Extensions made by each Lender shall be evidenced by one or
course of business.
The accounts or records maintained by Agent and each Lender shall be conclusive
absent manifest error of the amount of the Credit Extensions made by Lenders to
Lender and the accounts and records of Agent in respect of such matters, the
accounts and records of Agent shall control in the absence of manifest error.
Upon the request of any Lender made through Agent, Borrower shall execute and
deliver to such Lender (through Agent) (i) a Revolving Note, with appropriate
insertions, payable to the order of such Lender, and in the face amount of such
Lender’s Revolving Commitment, which shall evidence such Lender’s Revolving
Loans in addition to such accounts or records, and (ii) a Term Note, with
appropriate insertions, payable to the order of such Lender, and in the face
amount of such Lender’s Term Commitment, which shall evidence such Lender’s Term
each Lender and Agent shall maintain in accordance with its usual practice
(l) Payments Generally; Agent’s Clawback.
(i) (i) General. All payments to be made by Borrower shall be made without
available funds not later than 2:00 p.m. on the date specified herein. Agent
due hereunder or under any Note, Borrower agrees to maintain on deposit in an
principal, interest or fees under this Agreement or any Note is
of any automatic deduction made pursuant to this Section (l)(i)(ii) showing in
(ii) (i) Funding by Lenders; Presumption by Agent. Unless the Agent shall
Borrowing or Term Borrowing of Eurodollar Rate Loans (or, in the case of a
that such Lender will not make available to the Agent such Lender’s share of
such Revolving Borrowing or Term Borrowing, the Agent may assume that such
Lender has made such share available on such date in accordance with Section (b)
(or, in the case of a Revolving Borrowing of Base Rate Loans, that such Lender
Section (b)) and may, in reliance upon such assumption, make available to the
its share of the applicable Revolving Borrowing or Term Borrowing available to
Agent, then the applicable Lender and Borrower severally agree to pay to Agent
made available to Borrower to but excluding the date of payment to Agent, at
Federal Funds Rate and a rate determined by Agent in accordance with banking
similar fees customarily charged by Agent in connection with the foregoing and
If such Lender pays its share of the applicable Revolving Borrowing or Term
Borrowing to Agent, then the amount so paid shall constitute such Lender’s
Revolving Loan included in such Revolving Borrowing or Term Loan included in
such Term Borrowing, as applicable. Any payment by Borrower shall be without
to make such payment to Agent.
notice of
(iii) Failure to Satisfy Conditions Precedent. If any Lender makes
(iv) Obligations of Lenders Several. The obligations of Lenders hereunder
Line Loans and to make payments pursuant to Section 10(d)(iii) are several and
such participation or to make any payment under Section 10(d)(iii) on any date
participation or to make its payment under Section 10(d)(iii):
(m) Sharing of Payments by Lenders. If any Lender shall, by exercising any
amount of such Revolving Loans, Term Loans or participations and accrued
Loans, Term Loans and subparticipations in L/C Obligations and Swing Line Loans
their respective Revolving Loans, Term Loans and other amounts owing them,
provided that:
Term Loans or subparticipations in L/C Obligations or Swing Line Loans to any
assignee or participant,
such participation.
(n) Increase in Commitments.
the Agent (which shall promptly notify the Lenders), the Borrower may from time
to time, request an increase in the Aggregate Revolving Commitments by an amount
(for all such requests) not exceeding $35,000,000; provided, that (i) any such
such notice, the Borrower (in consultation with the Agent) shall specify the
the Lenders).
(ii) Lender Elections to Increase. Each Lender shall notify Agent within
such time period whether or not it agrees to increase its Revolving Commitment
Revolving Commitment.
(iii) Notification by Agent; Additional Lenders. Agent shall notify the
substance satisfactory to the Agent and its counsel.
(iv) Effective Date and Allocations. If the Aggregate Revolving Commitments
are increased in accordance with this Section, Agent and Borrower shall
allocation of such increase. The Agent shall promptly notify the Borrower and
Date.
such increase, Borrower shall deliver to Agent a certificate of each Loan Party
subsections (a) and (b) of Section
exists. Borrower shall prepay any Revolving Loans outstanding on the Increase
3.
(i) Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes.
for any Taxes. If, however, applicable Laws require Borrower or Agent to
with such Laws as determined by Borrower or Agent, as the case may be, upon the
(2) If Borrower or Agent shall be required by the Code to withhold or
(ii) Payment of Other Taxes by Borrower. Without limiting the provisions of
(iii) Tax Indemnifications.
Borrower shall, and does hereby, indemnify Agent, each Lender and the L/C
withheld or deducted by Borrower or Agent or paid by Agent, such Lender or the
by the relevant Governmental Authority. Borrower shall also, and does hereby,
indemnify Agent, and shall make payment in respect thereof within 10 days after
fails to pay indefeasibly to Agent as required by clause (ii) of this
of any counsel for Borrower or Agent) incurred by or asserted against Borrower
or Agent by any Governmental Authority as a result of the failure by such Lender
other Loan Document against any amount due to Agent under this clause (ii). The
L/C Issuer, the termination of the Aggregate Commitments and the repayment,
(iv) Evidence of Payments. Upon request by Borrower or Agent, as the case
Authority as provided in this Section 3.01, Borrower shall deliver to Agent or
of such payment reasonably satisfactory to Borrower or Agent, as the case may
be.
(1) Each Lender shall deliver to Borrower and to Agent, at the time or
reasonably requested information as will permit Borrower or Agent, as the case
of withholding or deduction, and (C) such Lender’s
resident for tax purposes in the United States, any Lender shall deliver to
Borrower and Agent executed originals of Internal Revenue Service Form W-9 or
reasonably requested by Borrower or Agent as will enable Borrower or Agent, as
(3) Each Lender shall promptly (A) notify Borrower and Agent of any change
any withholding or deduction for taxes from amounts payable to such Lender.
(vi) Treatment of Certain Refunds. Unless required by applicable Laws, at
respect to such refund), provided that Borrower, upon the request of Agent, such
Authority) to Agent, such Lender or the L/C Issuer in the event Agent, such
Authority. This subsection shall not be construed to require Agent, any Lender
Person.
Loans or to
due under Section (e) in accordance with the terms thereof due to such
prepayment or conversion.
(c) Inability to Determine Rates. If Agent determines in connection with
therein.
(d) Increased Costs.
for Indemnified Taxes or Other Taxes covered by Section (a) and the imposition
the L/C Issuer, Borrower will pay to such Lender or the L/C Issuer, as the case
suffered.
suffered.
thereof).
result of:
(ii) any failure by Borrower (for a reason other than the failure of such
purposes of calculating amounts payable by Borrower to Lenders under this
Section (e), each Lender shall be deemed to have funded each Eurodollar Rate
(i) If any Lender requests compensation under Section (d), or Borrower is
to Section (a), or if any Lender gives a notice pursuant to Section (b), then
pursuant to Section (a) or (d), as the case may be, in the future, or eliminate
the need for the notice pursuant to Section (b), as applicable, and (ii) in each
Section 10.13.
(g) Survival. All of Borrower’s obligations under this Article III shall
Obligations hereunder, and the resignation of the Agent.
4.
(i) Agent’s receipt of the following, each of which shall be originals or
(1) executed counterparts of this Agreement, all Collateral Documents and
the Guaranty, sufficient in number for distribution to Agent, each Lender and
Borrower;
(2) the Notes executed by Borrower in favor of each Lender requesting
Notes;
(4) such documents and certifications as Agent may reasonably require to
Adverse Effect;
(5) a favorable opinion of Kirkpatrick & Lockhart Preston Gates Ellis, LLP,
counsel to the Loan Parties, acceptable to Agent, addressed to Agent and each
Lender, as to the matters set forth concerning the Loan Parties and the Loan
Documents in form and substance satisfactory to Agent;
(6) a certificate of a Responsible Officer of each Loan Party either
required;
(7) a certificate signed by a Responsible Officer of Borrower certifying
(A) that the conditions specified in Sections (b)(a) and (b) have been
(C) a calculation of the Consolidated Leverage Ratio based on the unaudited
Subsidiaries for its fiscal quarter ended April 30, 2008;
(8) evidence that all insurance required to be maintained pursuant to the
(9) an ALTA extended coverage lender’s title insurance policy or
unconditional commitment therefor issued by a title insurance company acceptable
to the Agent, for the real property covered by the Indiana Mortgage in an amount
equal to $1,750,000, insuring that fee simple title to such real property is
vested in Borrower, and assuring the Agent that the Indiana Mortgage creates a
valid and enforceable lien on the real property covered thereby as security for
the obligations secured by the Indiana Mortgage prior and superior in right to
any other person, subject only to exceptions approved by Agent in writing; and
(10) such other assurances, certificates, documents, consents or opinions
reasonably may require.
been paid.
(iii) Unless waived by Agent, Borrower shall have paid all fees, charges
and disbursements of counsel to Agent (directly to such counsel if requested by
Agent).
(iv) A favorable standard flood hazard determination for the real property
covered by the Indiana Mortgage issued by LSI Flood Services.
specified in this Section (a), each Lender that has signed this Agreement shall
objection thereto.
(i) The representations and warranties of Borrower and each other Loan
Section (b), the representations and warranties contained in subsections (a) and
(b) of Section 5(e) shall be deemed to refer to
respectively, of Section 6(a).
(iii) Agent and, if applicable, the L/C Issuer or the Swing Line Lender
requirements hereof.
(iv) Agent shall have received, in form and substance satisfactory to it,
that the conditions specified in Sections (b)(a) and (b) have been satisfied on
(c) Conditions to Term Borrowing. The obligation of each Lender to make the
Term Borrowing hereunder is subject to the satisfaction of the following
conditions precedent (in addition to those set forth in Sections 4.01 and 4.02):
(i) The Acquisition Closing Date shall occur (i) substantially
contemporaneous with the Term Borrowing and (i) prior to the end of the Term
Availability Period.
(ii) Agent shall have received each of the following:
(i) (A) The audited consolidated balance sheet of OMAX and its Subsidiaries
for its most recent fiscal year for which such audited balance sheet has been
prepared (but no earlier than the fiscal year ended December 31, 2007); and
(B) the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year (including the notes thereto),
(ii) The unaudited consolidated and consolidating financial statements of
OMAX and its Subsidiaries for their four most recent fiscal quarters and the
shareholder’s equity and cash flows for such fiscal quarters, prepared in
accordance with GAAP.
(iii) Agent shall have received (i) an officer’s certificate in form and
substance satisfactory to Agent with a certified copy of the final principal
Acquisition agreement, (ii) confirmation that the final terms and conditions of
the Acquisition are substantially the same as those terms and conditions
disclosed in Borrower’s Form 8-K filed with the SEC as of December 6, 2007, as
determined by Agent in its discretion, or on terms and conditions otherwise
acceptable to Agent in its discretion, and (iii) a certificate (the “Term Loan
Pricing Certificate”) signed by a Responsible Officer of Borrower certifying a
calculation of the pro forma Consolidated Leverage Ratio including the
Acquisition Adjustment Amount associated with the Acquisition.
5.
REPRESENTATIONS AND WARRANTIES
(a) Existence, Qualification and Power. Each Loan Party and each Subsidiary
(ii) The unaudited consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries dated April 30, 2008, and the related consolidated
audit adjustments.
(iii) Since the date of Borrower’s most recent financial statements filed
with the SEC prior to the Closing Date, there has been no event or circumstance,
(iv) The consolidated and consolidating forecasted balance sheet and
delivered pursuant to Section 6(a)(iii) were prepared in good faith on the basis
condition and performance.
(g) No Default. Neither any Loan Party nor any Subsidiary thereof is in
Loan Document.
(h) Ownership of Property; Liens. Each of Borrower and each Subsidiary has
by Section 7(a).
(i) Environmental Compliance. Borrower and its Subsidiaries conduct in the
and as a result thereof Borrower has reasonably
(j) Insurance. The properties of Borrower and its Subsidiaries are insured
operates.
(k) Taxes. Borrower and its Subsidiaries have filed all Federal, state and
(m) Subsidiaries; Equity Interests. As of the Closing Date, the Borrower
of all Liens. The Borrower has no equity investments in any other corporation or
of the outstanding Equity Interests in the Borrower have been validly issued and
(n) Margin Regulations; Investment Company Act.
(i) Borrower is not engaged and will not engage, principally or as one of
be margin stock.
(ii) None of Borrower, any Person Controlling Borrower, or any Subsidiary
(o) Disclosure. Borrower has disclosed to Agent and Lenders all agreements,
(p) Compliance with Laws. Each Loan Party and each Subsidiary thereof is in
Effect.
(q) Taxpayer Identification Number. Borrower’s true and correct U.S.
(r) Intellectual Property; Licenses, Etc. The Borrower and its Subsidiaries
(s) Rights in Collateral; Priority of Liens. Borrower and each other Loan
Documents, free and clear of any and all Liens in favor of third parties. Except
as otherwise provided in Schedule 5.19, upon the proper filing of UCC financing
statements, and the taking of the other actions required by the Required
Lenders, the Liens granted pursuant to the Collateral Documents will constitute
valid and enforceable first, prior and perfected Liens on the Collateral in
favor of Agent, for the ratable benefit of Agent and Lenders.
6.
AFFIRMATIVE COVENANTS
of the covenants set forth in Sections (a), (b), and (c)) cause each Domestic
Material Subsidiary to:
(a) Financial Statements. Deliver to Agent a sufficient number of copies
statements are fairly stated in all material respects when
each of the first three fiscal quarters of each fiscal year of the Borrower a
case, setting forth in each case in comparative form, as applicable, the figures
Borrower, in form satisfactory to Agent and the Required Lenders, of
(b) Certificates; Other Information. Deliver to Agent a sufficient number
in Sections (a)(a) and (b), a duly completed Compliance Certificate signed by
the Borrower;
(ii) promptly after any request by Agent or any Lender, copies of any
pursuant hereto;
(iv) promptly after the furnishing thereof, copies of any statement or
pursuant to Section (a) or any other clause of this Section (b);
(v) promptly, and in any event within five Business Days after receipt
(vi) promptly, such additional information regarding the business,
with the terms of the Loan Documents, as Agent or any Lender may from time to
time reasonably request.
copies of such documents to the Administrative Agent or any Lender that has not
received an electronic copy from the Administrative Agent and requests the
The Borrower hereby acknowledges that (a) Agent and/or Arranger will make
prominently
Information, they shall be treated as set forth in Section 10(g)); (y) all
(c) Notices. Promptly notify Agent and each Lender:
or any default under, a Contractual Obligation of Borrower or any Domestic
Material Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between Borrower or any Domestic Material Subsidiary and any
development in, any litigation or proceeding affecting Borrower or any Domestic
Material Subsidiary, including pursuant to any applicable Environmental Laws;
practices by the Borrower or any Domestic Material Subsidiary, including any
respect thereto. Each notice pursuant to Section (c)(i) shall describe with
such Indebtedness.
Material Adverse Effect.
(g) Maintenance of Insurance. Maintain with financially sound and reputable
Material Adverse Effect.
(j) Inspection Rights. Permit representatives and independent contractors
Borrower; provided, however, that when an Event of Default exists Agent or any
may do any of the foregoing at the reasonable expense of Borrower at any time
(k) Use of Proceeds. Use the proceeds of the Term Borrowing to finance the
Acquisition and use the proceeds of the other Credit Extensions to refinance
Indebtedness arising under the Existing Credit Agreement, and for working
capital, capital expenditures and other general corporate purposes, in each case
(l) Additional Guarantors. Notify Agent at the time that any Person becomes
a Domestic Material Subsidiary, and promptly thereafter (and in any event within
30 days), cause such Person (including, without limitation, OMAX upon the
consummation of the Acquisition) to (a) become a Guarantor by executing and
delivering to Agent (i) the Guaranty or a supplement to the Guaranty in the form
attached thereto, as applicable, or such other document as Agent shall deem
appropriate for such purpose, (ii) the Guarantor Security Agreement or a
supplement to the Guarantor Security Agreement in the form attached thereto, as
applicable, or such other document as Agent shall deem appropriate for such
purpose, and (iii) the Guarantor Pledge Agreement or a supplement to the
Guarantor Pledge Agreement in the form attached thereto, as applicable, or such
other document as Agent shall deem appropriate for such purpose, and (b) deliver
Section 4(a)(i) and favorable opinions of counsel to such Person (which shall
(m) Collateral Records. To execute and deliver promptly, and to cause each
(n) Security Interests. To, and to cause each other Loan Party to,
of all state and federal laws in order to grant to Agent and Lenders valid and
perfected first priority security interests in the Collateral, with perfection,
in the case of any investment property, deposit account or letter of credit,
being effected by giving Agent control of such investment property or deposit
account or letter of credit, rather than by the filing of a Uniform Commercial
Code (“UCC”) financing statement with respect to such investment property, and
(c) do whatever Agent may reasonably request, from time to time, to effect the
purposes of this Agreement and the other Loan Documents, including filing
notices of liens, UCC financing statements, fixture filings and amendments,
keeping stock records; if expressly requested by Agent, making commercially
(o) Swap Contracts. Borrower shall maintain Swap Contracts that, in the
aggregate, cover not less than fifty percent (50%) of the Term Outstandings
during the period commencing sixty (60) days after the date of the Term
Borrowing pursuant to Section 2.01(b) and, provided no Default or Event of
Default has occurred and is continuing on such date, ending on the second (2nd)
anniversary of the date of such Swap Contracts.
7.
NEGATIVE COVENANTS
Domestic Material Subsidiary to, directly or indirectly:
than the following:
except as contemplated by Section (c)(ii), (iii) the direct or any contingent
of the obligations secured or benefited thereby is permitted by Section (c)(ii);
accordance with GAAP;
an Event of Default under Section 8(a)(viii); and
(ix) Liens securing Indebtedness permitted under Section (c)(v); provided
(i) Investments held by Borrower or such Subsidiary in the form of cash
(ii) advances to officers, directors and employees of Borrower and
business purposes;
(iii) Investments of Borrower in any wholly-owned Subsidiary and
(v) Guarantees to the extent permitted by Section (c);
(vi) The Acquisition, provided that the Acquisition Closing Date occurs
prior to the end of the Term Availability Period;
(vii) in any fiscal year, acquisitions by Borrower of another Person,
business or property if Borrower’s expenditures in respect of such acquisitions
in such fiscal year do not exceed $15,000,000 in the aggregate (excluding the
Acquisition) and, between the Closing Date and the Maturity Date, do not exceed
$30,000,000 in the aggregate (excluding the Acquisition); provided, that
Borrower may not enter into any such acquisition (i) if a Default or Event of
Default shall then exist or would exist after giving effect to such acquisition,
or (ii) the Consolidated Leverage would be greater than 2.5:1 after giving
Indebtedness, except:
(ii) Indebtedness outstanding on the date hereof and listed on
(if any), and other material
the Loan Parties or Lenders than the terms of any agreement or instrument
(iii) Guarantees of Borrower or any Subsidiary in respect of Indebtedness
(iv) obligations (contingent or otherwise) of Borrower or any Subsidiary
defaulting party;
(v) Indebtedness in respect of purchase money obligations for fixed or
capital assets (including those in the form of capital leases and Synthetic
Lease Obligations) within the limitations set forth in Section (a)(ix);
time outstanding shall not exceed $10,000,000
(vi) Indebtedness of OMAX assumed by the Borrower as part of the
Acquisition or Indebtedness incurred by the Borrower in connection with other
acquisitions to the extent permitted under Section 7.02(g); provided, that
Indebtedness incurred by the Borrower for acquisitions permitted under
Section 7.02(g) other than the Acquisition, shall not exceed $15,000,000 in the
aggregate in any fiscal year and shall not exceed $30,000,000 in the aggregate
during the period between the Closing Date and the Maturity Date.
(i) any Subsidiary may merge with (i) Borrower, provided that Borrower
Guarantor, the transferee must either be Borrower or a Guarantor; and
(iii) Borrower may consummate the Acquisition so long as the Acquisition
Closing Date occurs prior to the end of the Term Availability Period.
(iv) Dispositions of property by any Subsidiary to Borrower or to a
(v) Dispositions permitted by Section (d);
years;
(g) Dispositions of the shares or assets of Immaterial Subsidiaries; and
(h) Dispositions of the shares or assets of Subsidiaries listed on
Schedule 7.05,
or issue or sell any Equity Interests (other than sales of common stock of the
Borrower), except that, so long as no Default shall have occurred and be
(i) each Subsidiary may make Restricted Payments to Borrower, Guarantors
(ii) Borrower and each Subsidiary may declare and make dividend payments or
(iii) Borrower and each Subsidiary may purchase, redeem or otherwise
Equity Interests; and
(iv) Borrower may purchase up to Twenty Million Dollars ($20,000,000) of
Borrower’s Equity Interests provided that, after giving effect to any such
transaction, the Consolidated Leverage would not be greater than 2.5:1.
incidental thereto.
(h) Transactions With Affiliates. Enter into any transaction of any kind
Guarantors.
(i) Burdensome Agreements. Enter into any Contractual Obligation (other
permitted under Section (c)(v) solely to the extent any such negative pledge
(j) Use of Proceeds. Use the proceeds of any Credit Extension, whether
(i) Consolidated Leverage Ratio. (i) Permit the Consolidated Leverage Ratio
for any period of four fiscal quarters of the Borrower ending as of any
Acquisition Adjustment Calculation Date to be greater than 3.0:1; or (ii) permit
the Consolidated Leverage Ratio for any other period of four fiscal quarters of
the Borrower to be greater than 2.5:1.
(ii) Consolidated Adjusted EBITDA. Permit Consolidated Adjusted EBITDA, for
any period of four fiscal quarters of the Borrower measured as of the end of any
fiscal quarter of the Borrower, to be less than (a) if the Acquisition has not
been consummated, Twenty Million Dollars ($20,000,000), and (b) if the
Acquisition has been consummated, Twenty-Five Million Dollars ($25,000,000).
(iii) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio, at any time during any period of four fiscal quarters
of the Borrower, to be less than 3.5:1.
8.
Default:
(i) Non-Payment. Borrower or any other Loan Party fails to pay (i) when and
(ii) Specific Covenants. Borrower fails to perform or observe any term,
covenant or agreement contained in any of Sections 6(a), 6(b), 6(c), 6(e), 6(j),
6(k), 6(l), 6.13, 6.14, 7.01 (other than with respect to involuntary liens),
7.02, 7.03, 7.04, 7.05, 7.06, 7.07, 7.10 or 7.11, or any Guarantor fails to
perform or observe any term, covenant or agreement contained in Section 2 of the
Guaranty; or
Loan Document; or
(v) Cross-Default. (i) The Borrower or any Domestic Material Subsidiary
of default under such Swap Contract as to which Borrower or any Domestic
Material Subsidiary is the Defaulting Party (as defined in such Swap Contract)
which the Borrower or any Domestic Material Subsidiary is an Affected Party (as
Borrower or such Domestic Material Subsidiary as a result thereof is greater
proceeding; or
(viii) Judgments. There is entered against the Borrower or any Domestic
in effect; or
(x) Invalidity of Loan Documents. Any Loan Document or any provision
(xi) Change of Control. There occurs any Change of Control with respect to
(xii) Material Adverse Effect. There occurs any event or circumstance that
has a Material Adverse Effect and such Material Adverse Effect is not removed or
corrected within 30 days after the Borrower has written notice thereof from
Agent.
(iii) require that Borrower Cash Collateralize the L/C Obligations (in an
Loan Documents;
or any Lender.
(i) accrued and unpaid L/C Fees and interest on the Loans, L/C Borrowings and
other Obligations and (ii) fees, premiums and scheduled periodic payments due
under any Swap Contract between the Borrower and any Lender or any Affiliate of
any Lender permitted by Section 7(c)(iv) and any interest accrued thereon,
(i) unpaid principal of the Loans and L/C Borrowings (which, in the case of Term
Loans shall be applied to principal payments in inverse order of maturity) and
(ii) breakage, termination or other payments due under any Swap Contract between
the Borrower and any Lender or any Affiliate of any Lender permitted by
Section 7(c)(iv) and any interest accrued thereon, ratably among the Lenders and
Subject to Section 2(c)(iii), amounts used to Cash Collateralize the aggregate
9.
ADMINISTRATIVE AGENT
(a) Appointment and Authorization of Administrative Agent.
(i) Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank
thereto. The provisions of this Article are solely for the benefit of Agent, the
(ii) Agent shall also act as the “collateral agent” under the Loan
appoints and authorizes Agent to act as the agent of such Lender and the L/C
and attorneys-in-fact appointed by Agent pursuant to Section (e) or otherwise
thereof) granted under the Collateral
(c) Exculpatory Provisions. Agent shall not have any duties or obligations
(iv) Agent shall not be liable for any action taken or not taken by it
Sections 8(b) and 10(a)) or (ii) in the absence of its own gross negligence or
Borrower, a Lender or the L/C Issuer. Agent shall not be responsible for or have
Agreement, any other Loan Document or any
(d) Reliance by Administrative Agent. Agent shall be entitled to rely upon,
Documents, the provisions of this Article and Section 10(d) shall continue in
Administrative Agent.
of Credit.
hereunder or thereunder.
none of the Arrangers, Book Managers or Documentation Agents listed on the cover
applicable, as Agent, a Lender or the L/C Issuer hereunder.
proceeding or otherwise.
claims of Lenders, the L/C Issuer and Agent (including any claim for the
L/C Issuer and Agent and their respective agents and counsel and all other
amounts due Lenders, the L/C Issuer and Agent under Sections 2(c)(i) and (j),
2(i) and 10(d)) allowed in such judicial proceeding; and
any other amounts due Agent under Sections 2(i) and 10(d). Nothing contained
(j) Collateral and Guaranty Matters. The Lenders and the L/C Issuer
irrevocably authorize Agent, at its option and in its discretion,
of Credit as to which other arrangements satisfactory to Agent and the L/C
hereunder.
10.
MISCELLANEOUS
case may be, and acknowledged by Agent, and
(i) waive any condition set forth in Section 4(a)(i) without the written
specified in Section 4(a)(i)(iii) or (iv) with respect to which Borrower has
Commitment terminated pursuant to Section 8(b)) without the written consent of
such Lender;
thereby;
this Section (a)) any fees or other amounts payable hereunder or under any other
(v) change Section 2(m) or Section 8(c) in a manner that would alter the
each Lender;
(vi) change any provision of this Section or the definition of “Required
Lenders”, “Required Revolving Lenders”, or “Required Term Lenders” or any other
(vii) release any Guarantor from the Guaranty or release the Liens on all
or consent shall, unless in writing and signed by Agent in addition to the
Lenders required above, affect the rights or duties of Agent under this
(b) Notices; Effectiveness; Electronic Communication.
follows:
(1) if to Borrower, Agent the L/C Issuer or the Swing Line Lender, to the
(2) if to any other Lender, to the address, telecopier number, electronic
(ii) Electronic Communications. Notices and other communications to Lenders
therefor.
(iv) Change of Address, Etc. Each of Borrower, Agent the L/C Issuer and the
(v) Reliance by Agent, L/C Issuer and Lenders. Agent, the L/C Issuer and
each notice purportedly given by or on behalf of
to such recording.
(c) No Waiver; Cumulative Remedies. No failure by any Lender, the L/C
(i) Costs and Expenses. Borrower shall pay (i) all reasonable out of pocket
thereunder and (iii) all out of pocket expenses incurred by Agent, any Lender or
issued hereunder,
(ii) Indemnification by Borrower. Borrower shall indemnify Agent (and any
of whether any Indemnitee is a party thereto,; provided that such indemnity
competent jurisdiction.
(iii) Reimbursement by Lenders. To the extent that Borrower for any reason
with such
to the provisions of Section 2(l)(iv).
without the prior written consent of Agent, the L/C Issuer and
10.6.2.1.1 in the case of an assignment of the entire remaining amount of
less than (1) in the case of a Term Commitment, Two Million Five Hundred
Thousand Dollars ($2,500,000) and (2) in the case of a Revolving Commitment,
Five Million Dollars ($5,000,000) unless, in each case, each of Agent and, so
long as no Event of Default has occurred and is continuing, Borrower otherwise
assigned, except that
addition:
10.6.2.3.1 the consent of Borrower (such consent not to be unreasonably
is to a Lender or an Affiliate of a Lender or an Approved Fund;
10.6.2.3.2 the consent of Agent (such consent not to be unreasonably
withheld or delayed) shall be required if such assignment is of a Term
Commitment prior to the Term Borrowing pursuant to Section 2.01(b) or of a
Revolving Commitment to a Person that is not a Lender having the applicable
Commitment or an Affiliate of such Lender or an Approved Fund with respect to
such Lender;
10.6.2.3.3 the consent of Agent (such consent not to be unreasonably
Commitment after the Term Borrowing pursuant to Section 2.01(b) to a Person that
is not a Lender with a Term Commitment or an Affiliate of such Lender or an
10.6.2.3.4 the consent of the L/C Issuer (such consent not to be
Revolving Commitment or a Revolving Loan; and
10.6.2.3.5 the consent of the Swing Line Lender (such consent not to be
Revolving Commitment or a Revolving Loan.
and deliver to Agent an Assignment and Assumption, together with a processing
deliver to Agent an Administrative Questionnaire.
(5) No Assignment to Borrower. No such assignment shall be made to Borrower
natural person.
Subject to acceptance and recording thereof by Agent pursuant to subsection (c)
to be entitled to the benefits of Sections 3(a), 3(d), 3(e), and (d) with
Revolving Note and/or Term Note to the assignee Lender. Any assignment or
(iii) Register. Agent, acting solely for this purpose as an agent of
waiver or other modification described in the first proviso to Section (a) that
agrees that each Participant shall be entitled to the benefits of Sections 3(a),
Section (h) as though it were a Lender, provided such Participant agrees to be
subject to Section 2(m) as though it were a Lender.
(v) Limitations Upon Participant Rights. A Participant shall not be
(vii) Resignation as L/C Issuer or Swing Line Lender after Assignment.
(g) Treatment of Certain Information; Confidentiality . Each of Agent,
authority, purporting to have jurisdiction over it (including any
connection with the exercise of any
source other than Borrower.
confidential information.
promptly after
(i) Interest Rate Limitation. Notwithstanding anything to the contrary
hereunder.
(k) Survival of Representations and Warranties. All representations and
outstanding.
other jurisdiction.
(i) the Borrower shall have paid to Agent the assignment fee specified in
payments thereafter; and
cease to apply.
ACCORDANCE WITH, THE LAW OF THE STATE OF WASHINGTON.
(ii) SUBMISSION TO JURISDICTION. BORROWER AND EACH OTHER LOAN PARTY
KING COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE DISTRICT OF
AFFECT ANY RIGHT THAT AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO
(iii) WAIVER OF VENUE. BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION (b). NOTHING IN THIS
(p) No Advisory or Fiduciary Responsibility. In connection with all aspects
regarding this Agreement provided by Agent and Arranger are arm’s-length
respective Affiliates, on the one hand, and Agent and Arranger, on the other
legal, accounting, regulatory and tax
other Loan Documents; (ii) (A) Agent and Arranger each is and has been acting
Affiliates, or any other Person and (B) neither Agent nor Arranger has any
(iii) Agent and Arranger and their respective Affiliates may be engaged in a
Agent nor Arranger has any obligation to disclose any of such interests to the
hereby waives and releases any claims that it may have against Agent and
(q) Electronic Execution of Assignments and Certain Other Documents. The
(r) USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
(t) Amendment and Restatement . To the extent this Agreement contains
provisions that are the same as in the Existing Credit Agreement, those
provisions shall be deemed restated in this Agreement. To the extent this
Agreement contains provisions different than those is the Existing Credit
Agreement, the Existing Credit Agreement shall be deemed amended by this
Agreement.
(u) Oral Agreements Not Enforceable. ORAL AGREEMENTS AND ORAL COMMITMENTS
TO LOAN MONEY, EXTEND CREDIT OR FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE
FLOW INTERNATIONAL CORPORATION
By:
Name:
Title:
By:
Name:
Title:
Line Lender
By:
Name:
Title:
Lender
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
Lender
By:
Name:
Title:
By:
Name:
Title:
|
EXHIBIT 10.2
THIRD AMENDMENT TO
“Amendment”) dated as of June 5, 2006 is by and among Advanced Medical Optics,
Bank of America, N.A., as Administrative Agent on behalf of itself and the
Lenders. All capitalized terms used herein but not otherwise defined herein
defined below).
dated as of June 25, 2004 (as amended, modified and supplemented from time to
WHEREAS, the Borrower has requested the Lenders to amend the Credit Agreement as
1. Amendments. The Credit Agreement is amended in the
following respects:
(a) The period at the end of clause (f) in the definition of “Change
of Control” in Section 1.01 of the Credit Agreement is hereby deleted and
replaced with “; or” and a new clause (g) is hereby added following such clause
(f) and shall read as follows:
(g) the occurrence of a “Fundamental Change” or “Change of Control”
(or any comparable term) under, and as defined in, the 2006 Convertible Senior
Subordinated Notes Documents.
(b) Subclause (a)(vi) in the definition of “Consolidated EBITDA” in
(vi) (A) the cash charges related to the conversion of the Existing Convertible
Senior Subordinated Notes into Equity Interests, the cash charges related to the
conversion of the 2004 Convertible Senior Subordinated Notes into Equity
Interests and the cash charges related to the conversion of the 2006 Convertible
Senior Subordinated Notes into Equity Interests, provided that such cash charges
do not exceed $35,000,000 in the aggregate for such period or any future period
and (B) the non-cash charges related to the conversion of the Existing
Convertible Senior Subordinated Notes into Equity Interests, the non-cash
charges related to the conversion of the 2004 Convertible Senior Subordinated
Notes into Equity Interests and the non-cash charges related to the conversion
of the 2006 Convertible Senior Subordinated Notes into Equity Interests,
provided that such non-cash charges do not exceed $130,000,000 in the aggregate
for such period or any future period,
(c) The words “and minus” at the end of subclause (a)(vii) in the
definition of “Consolidated EBITDA” is hereby deleted and replaced with “,” and
new subclauses (a)(viii) and (a)(ix) are hereby added to the definition of
“Consolidated EBITDA” following subclause (a)(vii) and shall read as follows:
(viii) the cash charges related to the rationalization and repositioning
strategy of the Borrower announced prior to the Third Amendment Effective Date
and executed in 2005 and 2006, so long as such cash charges do not exceed
$40,000,000 in the aggregate and (ix) the non-cash charges related to such
rationalization and repositioning strategy of the Borrower and minus
(d) The second parenthetical in clause (a) of the definition of
“Consolidated Interest Charges” in Section 1.01 of the Credit Agreement is
(excluding (A) those certain cash charges related to the conversion of the
Existing Convertible Senior Subordinated Notes into Equity Interests, the cash
Notes into Equity Interests and the cash charges related to the conversion of
the 2006 Convertible Senior Subordinated Notes into Equity Interests, provided
that such cash charges do not exceed $35,000,000 in the aggregate for such
period or any future period and (B) those certain non-cash charges related to
the conversion of the Existing Convertible Senior Subordinated Notes into Equity
Interests, the non-cash charges related to the conversion of the 2004
Convertible Senior Subordinated Notes into Equity Interests and the non-cash
charges related to the conversion of the 2006 Convertible Senior Subordinated
Notes into Equity Interests, provided that such non-cash charges do not exceed
$130,000,000 in the aggregate for such period or any future period)
(e) The definition of “Consolidated Senior Indebtedness” in Section
Consolidated Total Indebtedness less (b) the sum of (i) the Indebtedness under
the Existing Convertible Senior Subordinated Notes, (ii) the Indebtedness under
the 2004 Convertible Senior Subordinated Notes, (iii) the Additional
Subordinated Indebtedness, if any, and (iv) the Indebtedness under the 2006
(f) Clause (h) of the definition of “Excess Cash Flow” in Section
(h) cash charges made during such period related to the conversion of the
Existing Convertible Senior Subordinated Notes, the 2004 Convertible Senior
Subordinated Notes and the 2006 Convertible Senior Subordinated Notes, minus
(g) The definition of “Treasury Management Agreement” in Section 1.01
“Treasury Management Agreement” means any agreement to provide treasury or cash
management services, including deposit accounts, overdraft, credit or debit
card, funds transfer, automated clearinghouse, zero balance accounts, returned
check
2
concentration, controlled disbursement, lockbox, account reconciliation,
reporting and trade finance services and other cash management arrangements.
(h) The following definitions are hereby added in Section 1.01 of the
follows:
“2006 Convertible Senior Subordinated Notes” means those convertible senior
subordinated notes of the Borrower issued pursuant to the 2006 Subordinated
Indenture containing terms and conditions satisfactory to the Administrative
“2006 Convertible Senior Subordinated Notes Documents” means the 2006
Convertible Senior Subordinated Notes, the 2006 Subordinated Indenture and all
other documents executed and delivered in respect of the 2006 Convertible Senior
Subordinated Notes and the 2006 Subordinated Indenture, in each case containing
terms and conditions satisfactory to the Administrative Agent, as the same may
“2006 Subordinated Indenture” means that certain Indenture to be entered into by
the Borrower, as issuer, in fiscal year 2006 containing terms and conditions
thereof.
“Third Amendment Effective Date” means June 5, 2006.
(i) The following language is hereby added at the end of Section 3.05
Notwithstanding the foregoing, amounts shall be payable by the Borrower pursuant
to this Section 3.05 only to the extent any Lender claiming payment hereunder
has notified the Borrower and the Administrative Agent in writing of such
amounts within 60 days after such amounts have been incurred by such Lender.
(j) Section 6.14(a) of the Credit Agreement
(k) A new Section 6.22(d) is hereby added following Section 6.22(c) of
3
(d) All Obligations hereunder and under the other Loan Documents are
within the definitions of “Senior Indebtedness” (or any comparable term) and
“Designated Senior Indebtedness” (or any comparable term) included in the
subordination provisions contained in the 2006 Convertible Senior Subordinated
Notes Documents. There exists no Designated Senior Indebtedness for purposes
of, and as defined in, the 2006 Convertible Senior Subordinated Notes Documents
(other than the Obligations).
(l) The second parenthetical in Section 7.02(f) of the Credit
(including notices from the trustee under the Existing Convertible Senior
Subordinated Notes Documents, the trustee under the 2004 Convertible Senior
Subordinated Notes Documents, the trustee under the 2006 Convertible Senior
Subordinated Notes Documents and the trustee under the documentation governing
any Additional Subordinated Indebtedness)
(m) The proviso in Section 7.11 of the Credit Agreement is hereby
deleted in its entirety and the “;” preceding the proviso in such Section 7.11
is hereby deleted and replaced with a period.
(n) The proviso in Section 8.03(c) of the Credit Agreement is hereby
provided, however it is understood and agreed that the Subsidiaries of the
Borrower shall not Guarantee (x) the Indebtedness under the 2004 Convertible
Senior Subordinated Notes Documents or (y) the Indebtedness under the 2006
Convertible Senior Subordinated Notes Documents and any such Guarantees are
(o) The period at the end of Section 8.03(p) of the Credit Agreement
is hereby deleted and replaced with “; or” and a new Section 8.03(q) is hereby
added following such Section 8.03(p) and shall read as follows:
(q) Indebtedness of the Borrower under the 2006 Convertible Senior
Subordinated Notes in an aggregate principal amount not to exceed $600,000,000.
(p) Section 8.06(f) of the Credit Agreement is hereby amended to read
as follows:
(f) the Borrower may purchase, redeem, retire or otherwise acquire,
directly or indirectly, its own Equity Interests so long as:
(i) after giving effect to any such purchase, redemption, retirement
or acquisition, the Borrower shall have at least $100,000,000 of availability
under the Revolving Credit Facility;
therefrom; and
4
(iii) any of (A) after giving effect to any such purchase, redemption,
retirement or acquisition on a pro forma basis, the Consolidated Total Leverage
Ratio does not exceed 2.0 to 1.0 or (B) after giving effect to any such
purchase, redemption, retirement or acquisition on a pro forma basis, if the
Consolidated Total Leverage Ratio is greater than 2.0 to 1.0, the sum of (1) the
total amount paid by the Borrower for all Equity Interests purchased, redeemed,
retired or acquired plus (2) the total amount of Indebtedness subordinated to
the Obligations that has been prepaid, redeemed, purchased, defeased or
otherwise satisfied prior to the scheduled maturity thereof shall not exceed
$650,000,000 in the aggregate subsequent to the Third Amendment Effective Date;
(q) The period at the end of Section 8.06(g) of the Credit Agreement
is hereby deleted and replaced with “; and” and a new Section 8.06(h) is hereby
added following such Section 8.06(g) and shall read as follows:
(h) after the Borrower has purchased, redeemed, retired or otherwise
acquired its Equity Interests and/or prepaid, redeemed, purchased, defeased or
otherwise satisfied Indebtedness subordinated to the Obligations in an amount up
to $650,000,000 in the aggregate pursuant to Section 8.06(f) and Section
8.16(a)(v), the Borrower may purchase, redeem, retire or otherwise acquire,
(i) no Revolving Credit Loan, Swing Line Loan or Foreign Currency
Fronting Loan is outstanding hereunder (or will be outstanding immediately after
giving effect thereto);
therefrom; and
(iii) after giving effect to any such purchase, redemption, retirement
of acquisition, the sum of (A) the total amount paid by the Borrower for all
Equity Interests purchased, redeemed, retired or acquired pursuant to this
Section 8.06(h) plus (B) the total amount of Indebtedness subordinated to the
Obligations that has been prepaid, redeemed, purchased, defeased or otherwise
satisfied prior to the scheduled maturity thereof pursuant to Section
8.16(a)(vi) shall not exceed $500,000,000 in the aggregate.
(r) Subclause (I) in the second proviso in Section 8.09 of the Credit
(I) the matters referred to clauses (i) — (iv) above contained in the Existing
Convertible Senior Subordinated Notes Documents, the 2004 Convertible Senior
Subordinated Notes Documents, the documentation governing any Additional
Subordinated Indebtedness, the Permitted Senior Unsecured Note Documents or the
2006 Convertible Senior Subordinated Notes Documents,
(s) Section 8.10 of the Credit Agreement is
5
constitute a violation of Regulation U of the FRB or to extend credit to others
(t) Section 8.11(a) of the Credit Agreement is hereby amended to read
as follows:
(i) Prior to the issuance of the 2006 Senior Subordinated Convertible
Notes, permit the Consolidated Total Leverage Ratio as of the end of any fiscal
quarter of the Borrower to be more than the ratio set forth opposite such fiscal
quarter below:
Quarter Ending
Ratio
June 30, 2006
3.75:1.0
September 30, 2006
3.75:1.0
December 31, 2006
3.25:1.0
March 31, 2007
3.25:1.0
June 30, 2007
3.25:1.0
September 30, 2007
3.25:1.0
December 31, 2007
3.25:1.0
March 3l, 2008
3.25:1.0
June 30, 2008
3.25:1.0
3.25:1.0
(ii) Following the issuance of the 2006 Convertible Senior
Subordinated Notes, permit the Consolidated Total Leverage Ratio as of the end
of any fiscal quarter of the Borrower to be more than the ratio set forth
Quarter Ending
Ratio
June 30, 2006
5.50:1.0
September 30, 2006
5.50:1.0
December 31, 2006
5.00:1.0
March 31, 2007
4.75:1.0
June 30, 2007
4.50:1.0
September 30, 2007
4.50:1.0
December 31, 2007
3.75:1.0
March 3l, 2008
3.75:1.0
June 30, 2008
3.75:1.0
6
Quarter Ending
Ratio
September 30, 2008
3.75:1.0
3.50:1.0
(u) Clause (v) of 8.16(a) of the Credit Agreement is hereby amended to
read as follows:
satisfaction prior to the scheduled maturity thereof of any Indebtedness
subordinated to the Obligations so long as:
(A) after giving effect to any such prepayment, redemption, purchase,
defeasance or other satisfaction, the Borrower shall have at least $100,000,000
of availability under the Revolving Credit Facility;
(B) immediately before and after giving effect thereto, no Default or
and
(C) any of (1) after giving effect to any such prepayment, redemption,
purchase, defeasance or other satisfaction on a pro forma basis, the
Consolidated Total Leverage Ratio does not exceed 2.0 to 1.0 or (2) after giving
effect to any such prepayment, redemption, purchase, defeasance or other
satisfaction on a pro forma basis, if the Consolidated Total Leverage Ratio is
greater than 2.0 to 1.0, the sum of (x) the total amount paid by the Borrower
for all Equity Interests purchased, redeemed, retired or acquired plus (y) the
total amount of such Indebtedness that has been prepaid, redeemed, purchased,
defeased or otherwise satisfied shall not exceed $650,000,000 in the aggregate
subsequent to the Third Amendment Effective Date; and
(v) A new clause (vi) is hereby added following clause (v) of 8.16(a)
(vi) after the Borrower has prepaid, redeemed, purchased, defeased or
otherwise satisfied Indebtedness subordinated to the Obligations and/or
purchased, redeemed, retired or otherwise acquired its Equity Interests in an
amount up to $650,000,000 in the aggregate pursuant to Section 8.16(a)(v) and
Section 8.06(f), the prepayment, redemption, purchase, defeasance or other
(A) no Revolving Credit Loan, Swing Line Loan or Foreign Currency
therefrom; and
7
(C) after giving effect to any such prepayment, redemption, purchase,
defeasance or satisfaction, the sum of (1) the total amount paid by the Borrower
for all Equity Interests purchased, redeemed, retired or acquired pursuant to
Section 8.06(h) plus (2) the total amount of such Indebtedness that has been
prepaid, redeemed, purchased, defeased or otherwise satisfied pursuant to this
Section 8.16(a)(vi) shall not exceed $500,000,000 in the aggregate.
(w) Section 8.16(b) of the Credit Agreement is hereby amended to read
as follows:
(b) Amend, modify or change in any manner that would be adverse to the
Lenders any term or condition of any (i) Existing Debt, (ii) Indebtedness under
the Existing Convertible Senior Subordinated Notes Documents, (iii) Indebtedness
under the 2004 Convertible Senior Subordinated Notes Documents, (iv)
documentation governing the Additional Subordinated Indebtedness, (v) the 2006
Convertible Senior Subordinated Notes Documents, or (vi) any other Indebtedness
subordinated to any Obligations, or permit any of its Subsidiaries to do any of
the foregoing other than to prepay any Indebtedness payable to the Borrower;
provided that prepayments shall be permitted in connection with any refinancing
permitted pursuant to Section 8.03; provided further that such refinancing shall
not accelerate any regularly scheduled or required repayment or redemptions.
(x) A new Section 8.21(d) is hereby added following Section 8.21(c)
(d) Incur or permit to exist any Indebtedness (other than Indebtedness
under the Loan Documents) if the instrument governing such Indebtedness states,
or the Borrower otherwise purports to designate, that such Indebtedness is
“Designated Senior Indebtedness” (or any comparable term) as such term is
defined in the 2006 Convertible Senior Subordinated Notes Documents.
(y) The second parenthetical in subclause (i)(A) of Section 9.01(f) of
(other than Indebtedness hereunder, Indebtedness under Swap Contracts and any
Indebtedness referred to in Section 9.01(o), (p), (q), (r) or (s) below)
(z) The period at the end of Section 9.01(r) of the Credit Agreement
is hereby deleted and replaced with “ or” and a new Section 9.01(s) is hereby
added following such Section 9.01(r) and shall read as follows:
(s) 2006 Convertible Senior Subordinated Notes Documents. (i) There
in, the 2006 Convertible Senior Subordinated Notes Documents, (ii) any of the
Obligations for any reason shall cease to be “Designated Senior Indebtedness”
Subordinated Notes Documents, (iii) any Indebtedness other than the Obligations
under, and as defined in, the 2006 Convertible Senior Subordinated Notes
Documents or (iv) the subordination provisions of the 2006 Convertible Senior
Subordinated Notes Documents shall, in whole or in part, terminate, cease to be
holder of any 2006 Convertible Senior Subordinated Notes during such time as any
8
Indebtedness under the 2006 Convertible Senior Subordinated Notes Documents is
outstanding.
the Borrower, the Guarantors, the Required Lenders and the Administrative Agent;
and
(b) receipt by the Administrative Agent, for the account of each
Lender delivering an executed counterpart of this Amendment to the
Administrative Agent, of an amendment fee equal to 0.05% on such Lender’s
Revolving Credit Commitment and any other fees and expenses required to be paid
on or before the date hereof.
3. Miscellaneous.
(a) The Credit Agreement (as amended by this Amendment), and the
agrees that its Guaranty shall continue and remain in full force and effect
after giving effect to this Amendment and that, notwithstanding any contrary
terms in such Guaranty, such Guaranty now applies to the Credit Agreement as
follows:
any Loan Party of this Amendment, other than those of the Lenders and the
Administrative Agent and those that have already been obtained and are in full
9
(e) The Borrower agrees to pay all reasonable costs and expenses of the
10
written.
BORROWER:
a Delaware corporation
By:
/s/ RICHARD A. MEIER
Name:
Richard A. Meier
Title:
President, Eye Care Business, and
Chief Financial Officer
GUARANTORS:
AMO HOLDINGS, INC.,
a Delaware corporation, formerly AMO Holdings, LLC
By:
Name:
Richard A. Meier
Title:
VISX, INCORPORATED,
a Delaware corporation
By:
Name:
Richard A. Meier
Title:
AMO USA, INC.,
a Delaware corporation
By:
Name:
Richard A. Meier
Title:
QUEST VISION TECHNOLOGY, INC.
a California corporation
By:
Name:
Richard A. Meier
Title:
written.
By:
/s/ ANGELA LAU
Name:
Angela Lau
Title:
Assistant Vice President
BANK OF AMERICA, N.A., as Swing Line Lender, L/C Issuer, Foreign Currency
Fronting Lender and Lender
By:
/s/ B. KENNETH BURTON, JR.
Name:
Title:
Vice President
By:
/s/ JANA CHIAT
Name:
Jana Chiat
Title:
Underwriter
THE GOVERNOR & COMPANY OF THE BANK OF IRELAND
By:
/s/ PADRAIG RUSHE
Name:
Padraig Rushe
Title:
Authorised Signatory
By:
/s/ KEVIN HEALY
Name:
Kevin Healy
Title:
Authorised Signatory
By:
Name:
Philip K. Liebscher
Title:
Senior Vice President
By:
/s/ STEPHEN W. DUNNE
Name:
Stephen W. Dunne
Title:
Vice President
By:
/s/ PAUL K. STIMPFL
Name:
Paul K. Stimpfl
Title:
Senior Vice President
AIB PLC
By:
/s/ JOSEPH S. AUGUSTINI
Name:
Joseph s. Augustini
Title:
Vice President
By:
Name:
Roisin O’Connell
Title:
Vice President
By:
Name:
Janice T. Thede
Title:
Vice President
UBS LOAN FINANCE LLC
By:
/s/ RICHARD L. TAVROW
Name:
Richard L. Tavrow
Title:
Director
By:
Name:
Irja R. Otsa
Title:
Associate Director
GE CAPITAL CORPORATION
By:
/s/ PARMINDER ATWAL
Name:
Parminder Atwal
Title:
Duly Authorized Signatory
|
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Ventana Medical Systems, Inc. (Name of Issuer) Common Stock (Title of Class of Securities) 92276H106 (CUSIP Number) Peter D. Goldstein GAMCO Investors, Inc. One Corporate Center Rye, New York 10580-1435 (914) 921-5000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 25, 2008 (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. 1 CUSIP No.92276H106 1 Names of reporting persons I.R.S. identification nos. of above persons (entities only) Gabelli Funds, LLCI.D. No.13-4044523 2 Check the appropriate box if a member of a group (SEE INSTRUCTIONS)(a) (b) 3 Sec use only 4 Source of funds (SEE INSTRUCTIONS) 00-Funds of investment advisory clients 5 Check box if disclosure of legal proceedings is required pursuant to items 2 (d) or 2 (e) 6 Citizenship or place of organization New York Number Of Shares Beneficially Owned By Each Reporting Person With : 7 : : : Sole voting power 922,000(Item 5) : 8 : : : Shared voting power None : 9 : : : Sole dispositive power 922,000(Item 5) :10 : : : Shared dispositive power None 11 Aggregate amount beneficially owned by each reporting person 922,000(Item 5) 12 Check box if the aggregate amount in row (11) excludes certain shares (SEE INSTRUCTIONS) 13 Percent of class represented by amount in row (11) 2.66% 14 Type of reporting person (SEE INSTRUCTIONS) IA 2 CUSIP No. 92276H106 1 Names of reporting persons I.R.S. identification nos. of above persons (entities only) GAMCO Asset Management Inc.I.D. No.13-4044521 2 Check the appropriate box if a member of a group (SEE INSTRUCTIONS)(a) (b) 3 Sec use only 4 Source of funds (SEE INSTRUCTIONS) 00-Funds of investment advisory clients 5 Check box if disclosure of legal proceedings is required pursuant to items 2 (d) or 2 (e) 6 Citizenship or place of organization New York Number Of Shares Beneficially Owned By Each Reporting Person With : 7 : : : Sole voting power 1,521,000 (Item 5) : 8 : : : Shared voting power None : 9 : : : Sole dispositive power 1,563,000 (Item 5) :10 : : : Shared dispositive power None 11 Aggregate amount beneficially owned by each reporting person 1,563,000 (Item 5) 12 Check box if the aggregate amount in row (11) excludes certain shares (SEE INSTRUCTIONS) 13 Percent of class represented by amount in row (11) 4.51% 14 Type of reporting person (SEE INSTRUCTIONS) IA, CO 3 CUSIP No. 92276H106 1 Names of reporting persons I.R.S. identification nos. of above persons (entities only) MJG Associates, Inc.I.D. No.06-1304269 2 Check the appropriate box if a member of a group (SEE INSTRUCTIONS)(a) (b) 3 Sec use only 4 Source of funds (SEE INSTRUCTIONS) 00-Client Funds 5 Check box if disclosure of legal proceedings is required pursuant to items 2 (d) or 2 (e) 6 Citizenship or place of organization Connecticut Number Of Shares Beneficially Owned By Each Reporting Person With : 7 : : : Sole voting power 37,600(Item 5) : 8 : : : Shared voting power None : 9 : : : Sole dispositive power 37,600(Item 5) :10 : : : Shared dispositive power None 11 Aggregate amount beneficially owned by each reporting person 37,600(Item 5) 12 Check box if the aggregate amount in row (11) excludes certain shares (SEE INSTRUCTIONS) 13 Percent of class represented by amount in row (11) 0.11% 14 Type of reporting person (SEE INSTRUCTIONS) CO 4 CUSIP No. 92276H106 1 Names of reporting persons I.R.S. identification nos. of above persons (entities only) Gabelli Securities, Inc.I.D. No.13-3379374 2 Check the appropriate box if a member of a group (SEE INSTRUCTIONS)(a) (b) 3 Sec use only 4 Source of funds (SEE INSTRUCTIONS) 00-Client Funds 5 Check box if disclosure of legal proceedings is required pursuant to items 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 137,448(Item 5) : 8 : : : Shared voting power None : 9 : : : Sole dispositive power 137,448(Item 5) :10 : : : Shared dispositive power None 11 Aggregate amount beneficially owned by each reporting person 137,448(Item 5) 12 Check box if the aggregate amount in row (11) excludes certain shares (SEE INSTRUCTIONS) 13 Percent of class represented by amount in row (11) 0.40% 14 Type of reporting person (SEE INSTRUCTIONS) HC, CO, IA 5 CUSIP No. 92276H106 1 Names of reporting persons I.R.S. identification nos. of above persons (entities only) Gabelli Foundation, Inc.I.D. No.94-2975159 2 Check the appropriate box if a member of a group (SEE INSTRUCTIONS)(a) (b) 3 Sec use only 4 Source of funds (SEE INSTRUCTIONS) WC 5 Check box if disclosure of legal proceedings is required pursuant to items 2 (d) or 2 (e) 6 Citizenship or place of organization NV Number Of Shares Beneficially Owned By Each Reporting Person With : 7 : : : Sole voting power 10,000(Item 5) : 8 : : : Shared voting power None : 9 : : : Sole dispositive power 10,000(Item 5) :10 : : : Shared dispositive power None 11 Aggregate amount beneficially owned by each reporting person 10,000(Item 5) 12 Check box if the aggregate amount in row (11) excludes certain shares (SEE INSTRUCTIONS) 13 Percent of class represented by amount in row (11) 0.03% 14 Type of reporting person (SEE INSTRUCTIONS) 00-Private Foundation 6 CUSIP No. 92276H106 1 Names of reporting persons I.R.S. identification nos. of above persons (entities only) GGCP, Inc.I.D. No.13-3056041 2 Check the appropriate box if a member of a group (SEE INSTRUCTIONS)(a) (b) 3 Sec use only 4 Source of funds (SEE INSTRUCTIONS) WC 5 Check box if disclosure of legal proceedings is required pursuant to items 2 (d) or 2 (e) 6 Citizenship or place of organization New York Number Of Shares Beneficially Owned By Each Reporting Person With : 7 : : : Sole voting power 10,000(Item 5) : 8 : : : Shared voting power None : 9 : : : Sole dispositive power 10,000(Item 5) :10 : : : Shared dispositive power None 11 Aggregate amount beneficially owned by each reporting person 10,000(Item 5) 12 Check box if the aggregate amount in row (11) excludes certain shares (SEE INSTRUCTIONS) X 13 Percent of class represented by amount in row (11) 0.03% 14 Type of reporting person (SEE INSTRUCTIONS) HC, CO 7 CUSIP No. 92276H106 1 Names of reporting persons I.R.S. identification nos. of above persons (entities only) GAMCO Investors, Inc.I.D. No.13-4007862 Check the appropriate box if a member of a group (SEE INSTRUCTIONS)(a) (b) 3 Sec use only 4 Source of funds (SEE INSTRUCTIONS) WC 5 Check box if disclosure of legal proceedings is required pursuant to items 2 (d) or 2 (e) 6 Citizenship or place of organization New York Number Of Shares Beneficially Owned By Each Reporting Person With : 7 : : : Sole voting power 49,000(Item 5) : 8 : : : Shared voting power None : 9 : : : Sole dispositive power 49,000(Item 5) :10 : : : Shared dispositive power None 11 Aggregate amount beneficially owned by each reporting person 49,000(Item 5) 12 Check box if the aggregate amount in row (11) excludes certain shares (SEE INSTRUCTIONS) X 13 Percent of class represented by amount in row (11) 0.14% 14 Type of reporting person (SEE INSTRUCTIONS) HC, CO 8 CUSIP No. 92276H106 1 Names of reporting persons I.R.S. identification nos. of above persons (entities only) Mario J. Gabelli 2 Check the appropriate box if a member of a group (SEE INSTRUCTIONS) (a)(a) (b) 3 Sec use only 4 Source of funds (SEE INSTRUCTIONS) 00 – Funds of Private Entities 5 Check box if disclosure of legal proceedings is required pursuant to items 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 30,000(Item 5) : 8 : : : Shared voting power None : 9 : : : Sole dispositive power 30,000(Item 5) :10 : : : Shared dispositive power None 11 Aggregate amount beneficially owned by each reporting person 30,000(Item 5) 12 Check box if the aggregate amount in row (11) excludes certain shares (SEE INSTRUCTIONS) X 13 Percent of class represented by amount in row (11) 0.09% 14 Type of reporting person (SEE INSTRUCTIONS) IN 9 Item 1.
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